<PAGE>
As filed with the Securities and Exchange Commission on October 16, 1997
Registration No.: 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
LINCOLN LIFE & ANNUITY VARIABLE ANNUITY ACCOUNT H
(Exact Name of Registrant)
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
(Name of Depositor)
120 Madison Street, Suite 1700
Syracuse, NY 13202
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(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (315) 428-8400
ROBERT O. SHEPPARD, ESQ.
120 Madison Street, Suite 1700
Syracuse, NY 13202
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(Name and Address of Agent for Service)
Copy to:
Susan S. Krawczyk
Sutherland, Asbill & Brennan, L.L.P.
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
Title of securities being registered:
Interests in a separate account under individual flexible premium deferred
variable annuity contracts.
DECLARATION PURSUANT TO RULE 24f-2
An indefinite amount of securities is being registered under the Securities Act
of 1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940.
-------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>
LINCOLN LIFE & ANNUITY VARIABLE ANNUITY ACCOUNT H
CROSS REFERENCE SHEET
(PURSUANT TO RULE 495 OF REGULATION C
UNDER THE SECURITIES ACT OF 1933)
RELATING TO ITEMS REQUIRED BY FORM N-4
N-4 ITEM CAPTION IN PROSPECTUS (PART A)
- -------- ------------------------------
1. Cover Page
2. Special terms
3. (a) Expense Table
(b) Synopsis
(c) Synopsis
(d) Not Applicable
4. (a) Condensed Financial Information
(b) Investment Results
(c) Financial Statements
5. (a) Cover Page; The Lincoln National Life Insurance Company
(b) Variable Annuity Account; Investments of the Variable Annuity
Account; Cover Page
(c) Investments of the Variable Annuity Account; Investment Advisor;
Description of the Series
(d) Cover Page
(e) Voting Rights
(f) Not Applicable
6. (a) Charges and Other Deductions
(b) Charges and Other Deductions
(c) Charges and Other Deductions
(d) The Contracts - Commissions
(e) Charges and Other Deductions
(f) Charges and Other Deductions
(g) Not Applicable
7. (a) The Contracts; Investments of the Variable Annuity Account; Annuity
Payouts; Voting Rights; Return Privilege
(b) Investments of the Variable Annuity Account; The Contracts; Cover
Page
(c) The Contracts
(d) The Contracts
<PAGE>
CROSS REFERENCE SHEET TO ITEMS REQUIRED BY FORM N-4
N-4 ITEM CAPTION IN PROSPECTUS (PART A)
- -------- ------------------------------
8. (a) Annuity Payouts
(b) Annuity Payouts
(c) Annuity Payouts
(d) Annuity Payouts
(e) Annuity Payouts
(f) The Contracts; Annuity Payouts
9. (a) The Contracts; Annuity Payouts
(b) The Contracts; Annuity Payouts
10. (a) The Contracts; Cover Page; Charges and Other Deductions
(b) The Contracts; Investments of the Variable Annuity Account
(c) The Contracts
(d) Distribution of the Contracts
11. (a) The Contracts
(b) Restrictions Under the Texas Optional Retirement Program
(c) The Contracts
(d) The Contracts
(e) Return Privilege
12. (a) Federal Tax Status
(b) Cover Page; Federal Tax Status
(c) Federal Tax Status
13. Legal Proceedings
14. Table of Contents to the Statement of Additional
Information (SAI) for Lincoln National Variable
Annuity Account H American Legacy III
<PAGE>
CAPTION IN STATEMENT OF ADDITIONAL
N-4 ITEM INFORMATION (PART B) (continued)
- -------- ----------------------------------
15. Cover Page for Part B
16. Cover Page for Part B
17. (a) Not Applicable
(b) Not Applicable
(c) General Information and History of The Lincoln
National Life Insurance Company (Lincoln Life)
<PAGE>
CROSS REFERENCE SHEET TO ITEMS REQUIRED BY FORM N-4
CAPTION IN STATEMENT OF ADDITIONAL
N-4 ITEM INFORMATION (PART B)
- -------- ----------------------------------
18. (a) Not Applicable
(b) Not Applicable
(c) Services
(d) Not Applicable
(e) Not Applicable
(f) Not Applicable
19. (a) Purchase of Securities Being Offered
(b) Purchase of Securities Being Offered
20. (a) Not Applicable
(b) Principal Underwriters
(c) Not Applicable
(d) Not Applicable
21. Calculation of Investment Results
22. Annuity Payouts
23. (a) Financial Statements -- Lincoln National Variable
Annuity Account H
(b) Financial Statements -- The Lincoln National Life
Insurance Company
<PAGE>
AMERICAN LEGACY III
LINCOLN LIFE & ANNUITY VARIABLE ANNUITY
ACCOUNT H INDIVIDUAL VARIABLE ANNUITY CONTRACTS
issued by:
Lincoln Life & Annuity Company of New York
120 Madison Street, Suite 1700
Syracuse, New York 13202
This Prospectus describes the individual flexible premium deferred variable
annuity contract (contract or variable annuity contract) issued by Lincoln
Life & Annuity Company of New York (Lincoln Life). It is for use with the
following retirement plans qualified for special tax treatment (qualified
plans) under the Internal Revenue Code of 1986, as amended (the code):
1. Public school systems and certain tax-exempt organizations [403(b)];
2. Qualified corporate employee pension and profit-sharing trusts and
qualified annuity plans;
3. Corresponding plans of self-employed individuals (H.R. 10 or Keogh);
4. Individual retirement annuities (IRA);
5. Government deferred compensation plans (457);
6. Simplified employee pension plans (SEP); and
7. SIMPLE 401(k) and SIMPLE IRA plans. Consult your investment dealer as to
the availability of this contract for SIMPLE IRA's.
Section 403(b) business under number (1.) will normally be accepted only for
purchase payments qualifying as 403(b) lump sum transfers or rollovers.
The contract described in this Prospectus is also offered to plans established
by persons who are not entitled to participate in one of the previously
mentioned plans (nonqualified contracts). A nonqualified contract can be owned
jointly only by spouses.
The contract provides for the accumulation of contract value and payment of
periodic annuity benefits. These benefits may be paid on a variable or fixed
basis or a combination of both. Annuity benefits start at an annuity
commencement date which you select. If the contractowner dies before the
annuity commencement date, the greater of: (1) the contract value; or (2) the
enhanced guaranteed minimum death benefit (EGMDB) or, if the EGMDB is not then
in effect, the guaranteed minimum death benefit (GMDB), will be paid to the
beneficiary. Special rules apply to a jointly owned contract. (See Death
benefit before annuity commencement date.) The EGMDB is not available under
contracts used for qualified plans (other than IRAs) or if the contractowner's
issue age is 75 or more.
The minimum initial purchase payment for the contract is:
1. $1,500 for a nonqualified plan and a 403(b) transfer/rollover or
2. $300 for a qualified plan.
The minimum payment to the contract is $100 per payment ($25 if transmitted
electronically), subject to a $300 annual minimum.
All investments (purchase payments) for benefits on a variable basis will be
placed in Lincoln Life & Annuity Variable Annuity Account H (variable annuity
account [VAA]). The VAA is a segregated investment account of Lincoln Life,
which is the depositor. Based upon your instructions, the VAA invests purchase
payments (at net asset value) in Class 2 shares of one or more specified funds
of the American Variable Insurance Series (series): Global Growth Fund, Growth
Fund, Growth-Income Fund, International Fund, Asset Allocation Fund, High-
Yield Bond Fund, Bond Fund, U.S. Government/AAA-Rated Securities Fund, and
Cash Management Fund. Both the value of a contract before the annuity
commencement date and the amount of payouts afterward will depend upon the
investment performance of the fund(s) selected. Investments in these funds are
neither insured nor guaranteed by the U.S. Government or by any other person
or entity.
Purchase payments for benefits on a fixed basis will be placed in the fixed
side of the contract, which is part of our General Account. However, this
Prospectus deals only with those elements of the contracts relating to the
VAA, except where reference to the fixed side is made.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus details the information regarding the VAA that you should know
before investing. This booklet also includes a current Prospectus of the
series. Both should be read carefully before investing and kept for future
reference.
The contract described in this Prospectus is available only in New York.
A statement of additional information (SAI), dated , 1997, concerning
the VAA has been filed with the SEC and is incorporated by this reference into
this Prospectus. If you would like a free copy, complete and mail the enclosed
card, or call 1-800-942-5500. A table of contents for the SAI appears on the
last page of this Prospectus.
This Prospectus is dated , 1997.
1
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
- -------------------------------------------------
<S> <C>
Special terms 3
- -------------------------------------------------
Expense tables 5
- -------------------------------------------------
Synopsis 7
- -------------------------------------------------
Condensed financial information 9
- -------------------------------------------------
Investment results 9
- -------------------------------------------------
Financial statements 9
- -------------------------------------------------
Lincoln Life & Annuity Company of New York 9
- -------------------------------------------------
Variable annuity account (VAA) 9
- -------------------------------------------------
Investments of the variable annuity account 9
- -------------------------------------------------
Charges and other deductions 11
- -------------------------------------------------
The contracts 13
- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Page
- ------------------------------------------------------------------------
<S> <C>
Annuity payouts 17
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Federal tax status 18
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Voting rights 19
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Distribution of the contracts 20
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Return privilege 20
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State regulation 20
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Records and reports 20
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Other information 20
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Statement of additional information table of contents for Variable
Annuity Account H American Legacy III 21
- ------------------------------------------------------------------------
</TABLE>
2
<PAGE>
SPECIAL TERMS
(Throughout this Prospectus, in order to make the following discussion more
understandable to you, we have italicized the special terms.)
Account or variable annuity account (VAA) -- The segregated investment account,
Account H, into which Lincoln Life sets aside and invests the assets for the
variable side of contract offered in this Prospectus.
Accumulation unit -- A measure used to calculate contract value for the
variable side of the contract before the annuity commencement date. See The
contracts.
Advisor or investment advisor -- Capital Research and Management Co. (CRMC),
which provides investment management services to the series. See Investment
advisor.
Annuitant -- The person upon whose life the annuity benefit payments made after
the annuity commencement date will be based.
Annuity commencement date -- The valuation date when the funds are withdrawn or
converted into annuity units or fixed dollar payout for payment of annuity
benefits under the annuity payout option selected. For purposes of determining
whether an event occurs before or after the annuity commencement date, the
annuity commencement date is deemed to begin at close of business on the
valuation date.
Annuity payout option -- An optional form of payout of the annuity available
within the contract. See Annuity payouts.
Annuity payout -- An amount paid at regular intervals after the annuity
commencement date under one of several options available to the annuitant
and/or any other payee. This amount may be paid on a variable or fixed basis,
or a combination of both.
Annuity unit -- A measure used to calculate the amount of annuity payouts after
the annuity commencement date. See Annuity payouts.
Beneficiary -- The person whom you designate to receive the death benefit, if
any, in case of the contractowner's death.
Cash surrender value -- Upon surrender, the contract value less any applicable
charges, fees and taxes.
Code -- The Internal Revenue Code of 1986, as amended.
Contract (variable annuity contract) -- The agreement between you and us
providing a variable annuity.
Contractowner (you, your, owner) -- The person who has the ability to exercise
the rights within the contract (decides on investment allocations, transfers,
payout option, designates the beneficiary, etc.). Usually, but not always, the
owner is also the annuitant.
Contract value -- At a given time, the total value of all accumulation units
for a contract plus the value of the fixed side of the contract.
Contract year -- Each one-year period starting with the effective date of the
contract and starting with each contract anniversary after that.
Death benefit -- The amount payable to your designated beneficiary if the owner
dies before the annuity commencement date. See The contracts.
Depositor -- Lincoln Life & Annuity Company of New York
Enhanced guaranteed minimum death benefit (EGMDB) -- The EGMDB is the greater
of: (1) contract value as of the day on which Lincoln Life approves the payment
of a death benefit claim; or (2) the highest contract value on any policy
anniversary date (including the inception date) from the time the EGMDB takes
effect up to and including the contractowner's age 75. The highest contract
value so determined is then increased by purchase payments and decreased by
partial withdrawals, partial annuitizations, and any premium taxes made,
effected or incurred subsequent to the anniversary date on which the highest
contract value is obtained.
Flexible premium deferred contract -- An annuity contract with an initial
purchase payment, allowing additional purchase payments to be made, and with
annuity payouts beginning at a future date.
Fund -- Any of the underlying investment options available in the series in
which your purchase payments are invested.
Guaranteed minimum death benefit (GMDB) -- The GMDB is equal to the sum of all
purchase payments minus any withdrawals, partial annuitizations and premium
taxes incurred. See Death benefit before the annuity commencement date.
Home office -- The headquarters of Lincoln Life & Annuity Company of New York,
located at 120 Madison Street, Suite 1700, Syracuse, New York 13202.
Lincoln Life (we, us, our) -- Lincoln Life & Annuity Company of New York.
Purchase payments -- Amounts paid into the contract.
Series -- American Variable Insurance Series (series), the funds in which
purchase payments are invested.
Servicing Office--The headquarters of The Lincoln National Life Insurance
Company located at 1300 South Clinton Street, Fort Wayne, Indiana 46801.
Statement of additional information (SAI) -- A document required by the SEC to
be provided upon request to a prospective purchaser of a contract, you. This
free document gives more information about Lincoln Life, the VAA and the
variable annuity contract.
Subaccount or American Legacy III subaccount -- That portion of the VAA that
reflects investments in accumulation and annuity units of a subaccount
investing in a class of a particular fund available under the contracts. There
is a separate subaccount which corresponds to each class of a fund.
3
<PAGE>
Surrender -- A contract right that allows you to terminate your contract and
receive your cash surrender value. See The contracts.
Valuation date -- Each day the New York Stock Exchange (NYSE) is open for
trading.
Valuation period -- The period starting at the close of trading (currently 4:00
p.m. New York time) on each day that the NYSE is open for trading (valuation
date) and ending at the close of such trading on the next valuation date.
Withdrawal -- A contract right that allows you to obtain a portion of your cash
surrender value.
4
<PAGE>
EXPENSE TABLES
CONTRACTOWNER TRANSACTION EXPENSES:
The maximum contingent deferred sales charge
(as a percentage of purchase payments surrendered/withdrawn): 6%
The contingent deferred sales charge percentage is reduced over time. The later
a redemption occurs, the lower the contingent deferred sales charge with
respect to that surrender or withdrawal. See Contingent deferred sales charges.
(Note: This charge may be waived in certain cases. See Contingent deferred
sales charges.)
- --------------------------------------------------------------------------------
VARIABLE ANNUITY ACCOUNT H ANNUAL EXPENSES FOR AMERICAN LEGACY III SUBACCOUNTS:
(as a percentage of average account value for each subaccount):
<TABLE>
<CAPTION>
For each subaccount* For each subaccount*
with EGMDB without EGMDB
<S> <C> <C>
Mortality and expense risk fees 1.30% 1.15%
Administrative charge .10% .10%
----- -----
Total annual expenses for American
Legacy III subaccounts 1.40% 1.25%
</TABLE>
ANNUAL EXPENSES OF THE FUNDS FOR THE YEAR ENDED NOVEMBER 30, 1997:**
(as a percentage of each fund's average net assets):
<TABLE>
<CAPTION>
Management 12b-1 Other Total
fees + fees + expenses = expenses
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. Global Growth % % % %
- -----------------------------------------------------------------------
2. Growth
- -----------------------------------------------------------------------
3. International
- -----------------------------------------------------------------------
4. Growth-Income
- -----------------------------------------------------------------------
5. Asset Allocation
- -----------------------------------------------------------------------
6. High-Yield Bond
- -----------------------------------------------------------------------
7. Bond
- -----------------------------------------------------------------------
8. U.S. Govt./AAA-Rated
Securities
- -----------------------------------------------------------------------
9. Cash Management
- -----------------------------------------------------------------------
</TABLE>
* The VAA is divided into separately-named subaccounts, nine of which are
available under the contracts. Each subaccount, in turn, invests purchase
payments in shares of a class of its respective fund.
** The expenses shown are for the Class 2 shares of the Series, which were
first issued commencing , 1997. Expenses shown have been annualized,
based on actual expenses incurred since the inception date for the Class 2
shares.
5
<PAGE>
EXAMPLES
(reflecting expenses both of the American Legacy III subaccounts and of the
funds)
If you surrender your contract at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming a 5% annual
return:
<TABLE>
<CAPTION>
1 year 3 years
- --------------------------------------------------------------------------------------------
<S> <C> <C>
1. Global Growth* $84 $125
- --------------------------------------------------------------------------------------------
2. Growth 81 115
- --------------------------------------------------------------------------------------------
3. International 84 123
- --------------------------------------------------------------------------------------------
4. Growth-Income 81 115
- --------------------------------------------------------------------------------------------
5. Asset Allocation 82 117
- --------------------------------------------------------------------------------------------
6. High-Yield Bond 82 117
- --------------------------------------------------------------------------------------------
7. Bond 82 118
- --------------------------------------------------------------------------------------------
8. U.S. Govt./AAA-Rated Securities 82 118
- --------------------------------------------------------------------------------------------
9. Cash Management 82 116
- --------------------------------------------------------------------------------------------
If you do not surrender your contract or you annuitize, you would pay the
following expenses on a $1,000 investment, assuming a 5% annual return:
<CAPTION>
1 year 3 years
- --------------------------------------------------------------------------------------------
<S> <C> <C>
1. Global Growth* $24 $75
- --------------------------------------------------------------------------------------------
2. Growth 21 65
- --------------------------------------------------------------------------------------------
3. International 24 73
- --------------------------------------------------------------------------------------------
4. Growth-Income 21 65
- --------------------------------------------------------------------------------------------
5. Asset Allocation 22 67
- --------------------------------------------------------------------------------------------
6. High-Yield Bond 22 67
- --------------------------------------------------------------------------------------------
7. Bond 22 68
- --------------------------------------------------------------------------------------------
8. U.S. Govt./AAA-Rate Securities 22 68
- --------------------------------------------------------------------------------------------
9. Cash Management 22 66
- --------------------------------------------------------------------------------------------
</TABLE>
* These expenses are estimated amounts for the current fiscal year.
All of the figures provided under the subheading Annual expenses of the funds
and part of the data used to produce the figures in the examples were supplied
by the underlying portfolio company (series) through the VAA's principal
underwriter, American Funds Distributors, Inc. We have not independently
verified this information.
These examples are provided to assist you in understanding the various costs
and expenses that you will bear directly or indirectly depending on whether or
not the EGMDB is in effect. These examples reflect expenses both of the VAA for
the American Legacy III subaccounts and of the nine funds. These examples
reflect expenses assuming that the EGMDB is in effect. If the EGMDB is NOT in
effect, these expenses will be lower.
For more complete descriptions of the various costs and expenses involved, see
Charges and other deductions in this Prospectus, and Fund Organization and
Management in the Prospectus for the series. Premium taxes may also be
applicable, although they do not appear in the examples. In addition, we
reserve the right to impose a charge on transfers between subaccounts as well
as to and from the fixed account, although we do not currently do so. THESE
EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. These examples are
unaudited.
6
<PAGE>
SYNOPSIS
WHAT TYPE OF CONTRACT AM I BUYING? It is an individual annuity contract issued
by Lincoln Life. It may provide for a fixed annuity and/or a variable annuity.
This Prospectus is intended to provide disclosure only about the variable
portion of the contract. See The contracts.
WHAT IS THE VARIABLE ANNUITY ACCOUNT (VAA)? It is a segregated asset account
established under New York insurance law, and registered with the SEC as a
unit investment trust. The assets of the VAA are allocated to one or more
subaccounts, according to your investment choice. Those assets are not
chargeable with liabilities arising out of any other business which Lincoln
Life may conduct. See Variable annuity account.
WHAT ARE MY INVESTMENT CHOICES? Through its various subaccounts, the VAA uses
your purchase payments to purchase series shares, at your direction, in one or
more of the following investment funds of the series: Global Growth, Growth,
International, Growth-Income, Asset Allocation, High-Yield Bond, Bond, U.S.
Government/AAA-Rated Securities, and Cash Management. In turn, each fund holds
a portfolio of securities consistent with its own particular investment
policy. See Investments of the variable annuity account and Description of the
series.
WHO INVESTS MY MONEY? The investment advisor for the series is CRMC, Los
Angeles, California. CRMC is a long-established investment management
organization, and is registered as an investment advisor with the SEC. See
Investments of the variable annuity account and Investment advisor.
HOW DOES THE CONTRACT WORK? Once we approve your application, you will be
issued your individual annuity contract. During the accumulation period, while
you are paying in, your purchase payments will buy accumulation units under
the contract. Should you decide to annuitize (that is, change your contract to
a payout mode rather than an accumulation mode), your accumulation units will
be converted to annuity units. Your periodic annuity payout will be based upon
the number of annuity units to which you became entitled at the time you
decided to annuitize and the value of each unit on the valuation date. See The
contracts.
WHAT CHARGES ARE ASSOCIATED WITH THIS CONTRACT? Should you decide to withdraw
contract value before your purchase payments have been in your contract for a
certain minimum period, you will incur a contingent deferred sales charge of
anywhere from 1% to 6%, depending upon how many full contract years those
payments have been in the contract. (Note: This sales charge is not assessed
upon: (1) the first four withdrawals of contract value during a contract year
to the extent that the sum of the percentages of the contract value withdrawn
by the withdrawals does not exceed 10% (for this purpose, the percentages are
based on the contract value at the time of the current withdrawal; also, this
10% withdrawal exception does not apply to a surrender of a contract); (2)
automatic withdrawals in total not in excess of 10% of the contract value
during a contract year, made by non-trustee contractowners who are at least 59
1/2; (3) electing an annuity payout option available within this contract; (4)
upon the death of the owner; (5) 90 days of continuous confinement of the
owner after the contract effective date in an accredited nursing home or
equivalent health care facility; (6) the occurrence after the contract
effective date of a terminal illness of the owner that results in a life
expectancy of less than one year as determined by a qualified professional
medical practitioner; (7) where total and permanent disability occurs after
the contract effective date and before the contractowner's 65th birthday; or
(8) when the surviving spouse assumes ownership of the contract as a result of
the death of the original owner (in such case, the CDSC would be waived on the
contract value as of the date which the surviving spouse assumed contract
ownership); however, this does not apply if the spouses were joint owners. If
a joint owner exists on a contract, both the owner and joint owner must meet
one of the exceptions for waiver of the contingent deferred sales charge.)
If your state assesses a premium tax with respect to your contract, then at
the time the tax is incurred (or at such other time as we may choose), we will
deduct those amounts from purchase payments or contract value, as applicable.
We assess annual charges in the aggregate amount of 1.40% against the daily
net asset value of the VAA, including that portion of the account attributable
to your purchase payments. These charges consist of 0.10% as an administrative
charge and 1.30% as a mortality and expense risk charge. If the EGMDB is not
in effect, the mortality and expense risk charge is 1.15%, resulting in an
aggregate charge against the VAA of 1.25%. For a complete discussion of the
charges associated with the contract, see Charges and other deductions.
The series pays a fee to its investment advisor, CRMC, based upon the average
daily net asset value of each fund in the series. See Investments of the
variable annuity account--Investment advisor. The class of shares of each
series available under the contracts also bears expenses pursuant to a 12b-1
plan. In addition, there are other expenses associated with the daily
operation of the series. These are more fully described in the Prospectus for
the series.
HOW MUCH MUST I PAY, AND HOW OFTEN? Subject to the minimum and maximum
payments stated on the first page of the Prospectus, the amount and frequency
of your payments are completely flexible. See The contracts--Purchase
payments.
HOW WILL MY ANNUITY PAYOUTS BE CALCULATED? If you decide to annuitize, you
elect an annuity payout option. Once you have done so, your periodic payout
will be based upon a number of factors. If you participate in the VAA, the
changing values of the funds in which
7
<PAGE>
you have invested will be one factor. See Annuity
payouts. REMEMBER THAT PARTICIPANTS IN THE VAA BENEFIT FROM ANY GAIN, AND TAKE
A RISK OF ANY DROP, IN THE VALUE OF THE SECURITIES IN THE FUNDS' PORTFOLIOS.
WHAT HAPPENS IF I DIE BEFORE I ANNUITIZE? If the EGMDB is in effect, the
beneficiary whom you designate will receive either the EGMDB or the then
current value of the contract, whichever is greater. If the EGMDB is not in
effect, the beneficiary will receive either the GMDB or the then current value
of the contract, whichever is greater. Your beneficiary will have certain
options for how the money is to be paid out. See Death benefit before the
annuity commencement date.
MAY I TRANSFER CONTRACT VALUE BETWEEN FUNDS IN THE SERIES? Yes; however, there
are limits on how often you may do so. See The contracts-Transfers between
subaccounts on or before the annuity commencement date and Transfers following
the annuity commencement date.
MAY I TRANSFER CONTRACT VALUE FROM THE FIXED TO THE VARIABLE SIDE OF THE
CONTRACT, AND VICE-VERSA? Yes, subject once again to specific restrictions in
the contract. See The contracts--Transfers to and from the General Account on
or before the annuity commencement date.
MAY I SURRENDER THE CONTRACT OR MAKE A WITHDRAWAL? Yes, subject to contract
requirements and to restrictions imposed under certain qualified retirement
plans for which the contract is purchased. See Surrenders and withdrawals.
If you surrender the contract or make a withdrawal, certain charges may be
assessed, as discussed above and under Charges and other deductions. In
addition, the Internal Revenue Service (IRS) may assess a 10% premature
withdrawal penalty tax. A surrender or a withdrawal may be subject to 20%
withholding. See Federal tax status and withholding.
DO I GET A FREE LOOK AT THIS CONTRACT? Yes. If within ten days (or a longer
period if required by law) of the date you first receive the contract you
return it, postage prepaid to the servicing office of Lincoln Life, it will be
canceled. However, during this period, you assume the risk of a market drop
with respect to purchase payments which you allocate to the variable side of
the contract. See Return privilege.
8
<PAGE>
CONDENSED FINANCIAL INFORMATION
Because the subaccounts which are available under the contracts did not begin
operation before the date of this Prospectus, financial information for the
subaccounts is not included in this Prospectus or in the SAI.
INVESTMENT RESULTS
At times, the VAA may compare its investment results to various unmanaged
indices or other variable annuities in reports to contractholders, sales
literature and advertisements. The results will be calculated on a total return
basis for various periods, with or without contingent deferred sales charges.
Results calculated without contingent deferred sales charges will be higher.
Total returns include the reinvestment of all distributions on fund shares,
which are reflected in changes in unit value. See the SAI for further
information.
FINANCIAL STATEMENTS
The financial statements for Lincoln Life are located in the SAI. If you would
like a free copy of the SAI, complete and mail the enclosed card, or call 1-
800-942-5500.
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
Lincoln Life is a life insurance company chartered under New York law on June
6, 1996. Lincoln Life's principal executive offices are located at 120 Madison
Street, Suite 1700, Syracuse, New York 13202. Lincoln Life is licensed to sell
life insurance policies and annuity contracts in New York.
Lincoln Life is a subsidiary of The Lincoln National Life Insurance Company.
The Lincoln National Life Insurance Company is a stock life insurance company
incorporated under the laws of Indiana on June 12, 1905. The Lincoln National
Life Insurance Company is principally engaged in offering life insurance
policies and annuity policies, and ranks among the largest United States stock
life insurance companies in terms of assets and life insurance in force.
The Lincoln National Life Insurance Company is wholly owned by Lincoln National
Corporation ("LNC"), a publicly held insurance holding company incorporated
under Indiana law on January 5, 1968. The principal offices of The Lincoln
National Life Insurance Company are located at 1300 South Clinton Street, Fort
Wayne, Indiana 46801. Through subsidiaries, LNC engages primarily in the
issuance of life insurance and annuities, property casualty insurance, and
other financial services. Administrative services necessary for the operation
of the Separate Account and the Contracts are currently provided by The Lincoln
National Life Insurance Company. However, neither the assets of The Lincoln
National Life Insurance Company nor the assets of LNC support the obligations
of Lincoln Life under the contracts.
VARIABLE ANNUITY ACCOUNT (VAA)
On July 24, 1996, the VAA was established as an insurance company separate
account under New York law. It is registered with the SEC as a unit investment
trust under the provisions of the Investment Company Act of 1940 (1940 Act).
The SEC does not supervise the VAA or Lincoln Life. The VAA is a segregated
investment account, meaning that its assets may not be charged with liabilities
resulting from any other business that we may conduct. Income, gains and
losses, whether realized or not, from assets allocated to the VAA are, in
accordance with the applicable annuity contracts, credited to or charged
against the VAA. They are credited or charged without regard to any other
income, gains or losses of Lincoln Life. The VAA is used to support annuity
contracts other than the contract described in this Prospectus. The VAA
satisfies the definition of separate account under the federal securities laws.
We do not guarantee the investment performance of the VAA. Any investment gain
or loss depends on the investment performance of the funds. You assume the full
investment risk for all amounts placed in the VAA.
INVESTMENTS OF THE VARIABLE ANNUITY ACCOUNT
You choose the subaccount(s) to which you allocate purchase payments. There is
a separate subaccount which corresponds to each class of each fund of the
series. You may change your allocation without penalty or charges. Shares of
the funds will be sold at net asset value with no initial sales charge to the
VAA in order to fund the contracts. The series is required to redeem fund
shares at net asset value upon our request. We reserve the right to add, delete
or substitute funds.
INVESTMENT ADVISOR
The investment advisor for the series is CRMC, 333 South Hope Street, Los
Angeles, California 90071. CRMC is one of the nation's largest and oldest
investment management organizations. As compensation for its services to the
series, the investment advisor receives a fee from the series which is accrued
daily and paid monthly. This fee is based on the net assets of each fund, as
defined under Purchase and Redemption of Shares, in the Prospectus for the
series.
DESCRIPTION OF THE SERIES
The series was organized as a Massachusetts business trust in 1983 and is
registered as a diversified, open-
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end management investment company under the 1940 Act. Diversified means not
owning too great a percentage of the securities of any one company. An open-
end company is one which, in this case, permits Lincoln Life to sell shares
back to the series when you make a withdrawal, surrender the contract or
transfer from one fund to another. Management investment company is the legal
term for a mutual fund. These definitions are very general. The precise legal
definitions for these terms are contained in the 1940 Act.
The series has nine separate portfolios of funds. Fund
assets are segregated and a shareholder's interest is limited to those funds
in which the shareholder owns shares. The series has adopted a plan pursuant
to Rule 18f-3 under the 1940 Act to permit the series to establish a multiple
class distribution system for all of its funds. The series' Board of Trustees
may at any time establish additional funds or classes, which may or may not be
available to the VAA.
Under the multi-class system adopted by the series, shares of each multi-class
fund represent an equal pro rata interest in that fund and, generally, have
identical voting, dividend, liquidation, and other rights, preferences,
powers, restrictions, limitations, qualifications and terms and conditions,
except that: (1) each class has a different designation; (2) each class of
shares bears its class expenses; (3) each class has exclusive voting rights on
any matter submitted to shareholders that relates solely to its distribution
arrangement; and (4) each class has separate voting rights on any matter
submitted to shareholders in which the interests of one class differ from the
interests of any other class. Expenses currently designated as class expenses
by the series' Board of Trustees under the plan pursuant to Rule 18f-3
include, for example, service fees paid under a 12b-1 plan to cover servicing
fees paid to dealers selling the contracts as well as related expenses
incurred by Lincoln Life.
Each fund has two classes of shares, designated as Class 1 shares and Class 2
shares. Class 1 and 2 differ primarily in that Class 2 (but not Class 1)
shares are subject to a 12b-1 plan. Only Class 2 shares are available under
the contracts.
Following are brief summaries of the investment objectives and policies of the
funds. Each fund is subject to certain investment policies and restrictions
which may not be changed without a majority vote of shareholders of that fund.
More detailed information may be obtained from the current Prospectus for the
series which is included in this booklet. PLEASE BE ADVISED THAT THERE IS NO
ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE THEIR STATED OBJECTIVES.
1. Global Growth Fund--The investment objective is to achieve long-term growth
of capital by investing in securities of issuers domiciled around the
world. The fund will invest primarily in common stocks but may invest in
other securities such as preferred stock, debt securities and securities
convertible into common stock.
2. Growth Fund--This fund seeks to provide growth of capital. Whatever current
income is generated by the fund is likely to be incidental to the objective
of capital growth. Ordinarily, accomplishment of the fund's objective of
capital growth will be sought by investing primarily in common stocks or
securities with common stock characteristics.
3. International Fund--The investment objective is long-term growth of capital
by investing primarily in securities of issuers domiciled outside the
United States.
4. Growth-Income Fund--The investment objective is growth of capital and
income. In the selection of securities for investment, the possibilities of
appreciation and potential dividends are given more weight than current
yield. Ordinarily, the assets of the Growth-Income Fund consist principally
of a diversified group of common stocks, but other types of securities may
be held when deemed advisable including preferred stocks and corporate
bonds, including convertible bonds.
5. Asset Allocation Fund--This fund seeks total return (including income and
capital gains) and preservation of capital over the long-term by investing
in a diversified portfolio of securities. These securities can include
common stocks and other equity-type securities (such as convertible bonds
and preferred stocks), bonds and other intermediate and long-term fixed-
income securities and money market instruments (debt securities maturing in
one year or less).
6. High-Yield Bond Fund--The investment objective is a fully managed,
diversified bond portfolio. It seeks high current income and secondarily
seeks capital appreciation. This fund will generally be invested
substantially in intermediate and long-term corporate obligations, with
emphasis on higher yielding, higher risk, lower rated or unrated
securities.
7. Bond Fund--This fund seeks a high level of current income as is consistent
with the preservation of capital by investing in a broad variety of fixed
income securities including: marketable corporate debt securities, loan
participations, U.S. Government Securities, mortgage-related securities,
other asset-backed securities and cash or money market instruments.
8. U.S. Government/AAA-Rated Securities Fund--This fund seeks a high level of
current income consistent with prudent investment risk and preservation of
capital by investing primarily in a combination of securities guaranteed by
the U.S. Government and other debt securities rated AAA or Aaa.
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9. Cash Management Fund--The investment objective is high yield while
preserving capital by investing in a diversified selection of money market
instruments.
SALE OF FUND SHARES BY THE SERIES
We will purchase shares of the funds at net asset value and direct them to the
appropriate subaccounts of the VAA. We will redeem sufficient shares of the
appropriate funds to pay annuity payouts, death benefits, surrender/withdrawal
proceeds or for other purposes described in the contract. If you want to
transfer all or part of your investment from one subaccount to another, we may
redeem shares held in the first and purchase shares of the other. The shares
are retired, but they may be reissued later.
Shares of the funds are not sold directly to the general public. They are sold
to Lincoln Life and The Lincoln National Life Insurance Company, and may be
sold to other insurance companies, for investment of the assets of the
subaccounts established by those insurance companies to fund variable annuity
and variable life insurance contracts.
When the series sells shares in any of its funds both to variable annuity and
to variable life insurance separate accounts, it is said to engage in mixed
funding. When the series sells shares in any of its funds to separate accounts
of unaffiliated life insurance companies, it is said to engage in shared
funding.
The series currently engages in mixed and shared funding. Therefore, due to
differences in redemption rates or tax treatment, or other considerations, the
interests of various contractowners participating in a fund could conflict. The
series' Board of Trustees will monitor for the existence of any material
conflicts, and determine what action, if any, should be taken. See the
Prospectus for the series.
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
All dividend and capital gain distributions of the funds are automatically
reinvested in shares of the distributing funds at their net asset value on the
date of distribution. Dividends are not paid out to contractowners as
additional units, but are reflected as changes in unit values.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
We reserve the right, within the law, to make additions, deletions and
substitutions for the series and/or any funds within the series in which the
VAA participates. (We may substitute shares of other funds for shares already
purchased, or to be purchased in the future, under the contract. This
substitution might occur if shares of a fund should no longer be available, or
if investment in any fund's shares should become inappropriate, in the judgment
of our management, for the purposes of the contract.) No substitution of the
shares attributable to your account may take place without notice to you and
before approval of the SEC, in accordance with the 1940 Act.
CHARGES AND OTHER DEDUCTIONS
We will deduct the charges described below to cover our costs and expenses,
services provided and risks assumed under the contracts. We incur certain costs
and expenses for the distribution and administration of the contracts and for
providing the benefits payable thereunder. More particularly, our
administrative services include: processing applications for and issuing the
contracts, payments, transfers and redemptions (including dollar cost
averaging, cross-reinvestment, and automatic withdrawal services), maintaining
records, administering annuity payouts, furnishing accounting and valuation
services (including the calculation and monitoring of daily subaccount values),
reconciling and depositing cash receipts, providing contract confirmations,
providing toll-free inquiry services and furnishing telephone transfer
services. The risks we assume include: the risk that the actual life-span of
persons receiving annuity payouts under contract guarantees will exceed the
assumptions reflected in our guaranteed rates (these rates are incorporated in
the contract and cannot be changed); the risk that death benefits paid under
the EGMDB, will exceed the actual contract value; the risk that more owners
than expected will qualify for waivers of the contingent deferred sales charge;
and the risk that our costs in providing the services will exceed our revenues
from contract charges (which cannot be changed by us). The amount of a charge
may not necessarily correspond to the costs associated with providing the
services or benefits indicated by the designation of the charge. For example,
the contingent deferred sales load collected may not fully cover all of the
sales and distribution expenses actually incurred by us.
DEDUCTIONS FROM THE VAA FOR AMERICAN LEGACY III
We deduct from the VAA an amount, computed daily, which is equal to an annual
rate of 1.40% (1.25% for contracts without the EGMDB) of the daily net asset
value. The charge consists of a 0.10% administrative charge and a 1.30% (1.15%
for contracts without the EGMDB) mortality and expense risk charge.
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CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge applies (except as described below) to
surrenders and withdrawals of other purchase payments that have been invested
for the periods indicated as follows:
<TABLE>
<CAPTION>
Number of complete contract years
that a purchase payment has been
invested
- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Less than At least
2 years 2 3 4 5 6 7+
Contingent deferred
sales charge as a
percentage of the
surrendered or
withdrawn purchase
payments 6% 5 4 3 2 1 0
</TABLE>
A contingent deferred sales charge does not apply to:
1. A surrender or withdrawal of purchase payments that have been invested at
least seven full contract years.
2. The first four withdrawals of contract value during a contract year to the
extent that the sum of the percentages of the contract value withdrawn by
the withdrawals does not exceed 10% of contract value (for this purpose,
the percentages are based on the contract value at the time of the current
withdrawal; also, this 10% withdrawal exception does not apply to a
surrender of a contract);
3. Automatic withdrawals in total not in excess of 10% of the contract value
during a contract year, made by non-trustee contractowners who are at least
59 1/2;
4. Electing an annuity payment option available within the contract;
5. A surrender of a contract or withdrawal of contract value as a result of
the permanent and total disability of the owner as defined in Section
22(e)(3) of the code, subsequent to the effective date of the contract and
before the 65th birthday of the owner;
6. When the surviving spouse assumes ownership of the contract as a result of
the death of the original owner (in such case, the contingent deferred
sales charge would be waived on the value of the contract as of the date
which the surviving spouse assumed the contract ownership). However, this
waiver does not apply if the spouses were joint owners; and any applicable
contingent deferred sales charges will be deducted.
7. A surrender of a contract as a result of 90 days of continuous confinement
of the contractowner in an accredited nursing home or equivalent health
care facility;
8. A surrender of a contract as a result of terminal illness of the
contractowner that results in a life expectancy of less than one year as
determined by a qualified professional medical practitioner;
9. A surrender of the contract as a result of the death of the contractowner.
However, the contingent deferred sales charge is not waived as a result of
the death of an annuitant who is not the contractowner; and
10. A surrender of a contract or withdrawal of contract value of a contract
issued to employees and registered representatives of any member of the
selling group and their spouses and minor children, or to officers,
directors, trustees or bona-fide full-time employees of Lincoln National
Corp. or The Capital Group, Inc. or their affiliated or managed companies
(based upon the contractowner's status at the time the contract was
purchased).
If a joint owner exists on a contract, both the owner and joint owner must
meet one of the exceptions for waiver of the contingent deferred sales charge.
The contingent deferred sales charge is calculated separately for each
contract year's purchase payments to which a charge applies. (FOR PURPOSES OF
CALCULATING THIS CHARGE, WE ASSUME THAT PURCHASE PAYMENTS ARE WITHDRAWN ON A
FIRST IN-FIRST OUT BASIS, AND THAT ALL PURCHASE PAYMENTS ARE WITHDRAWN BEFORE
ANY EARNINGS ARE WITHDRAWN.) The contingent deferred sales charges associated
with surrender or withdrawal are paid to us to compensate us for the loss we
experience on contract distribution costs when contractowners surrender or
withdraw before distribution costs have been recovered.
DEDUCTIONS FOR PREMIUM TAXES
Any premium tax or other tax levied by any governmental entity as a result of
the existence of the contracts or the VAA will be deducted from the contract
value when incurred, or at another time of our choosing.
The applicable premium tax rates that states and other governmental entities
impose on the purchase of an annuity are subject to change by legislation, by
administrative interpretation or by judicial action. These premium taxes
generally depend upon the law of your state of residence.
OTHER CHARGES AND DEDUCTIONS
There are deductions from and expenses paid out of the assets of the
underlying series that are more fully described in the Prospectus for the
series. Among these deductions and expenses are 12b-1 fees which reimburse
Lincoln Life for certain expenses incurred in connection with certain
administrative and distribution support services provided to the series.
ADDITIONAL INFORMATION
The administrative and contingent deferred sales charges described previously
may be reduced or eliminated for any particular contract. However, these
charges will be reduced only to the extent that we anticipate lower
distribution and/or administrative expenses, or that we perform fewer sales or
administrative services than those originally contemplated in establishing the
level of those charges.
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Lower distribution and administrative expenses may be the result of economies
associated with (1) the use of mass enrollment procedures, (2) the performance
of administrative or sales functions by the employer, (3) the use by an
employer of automated techniques in submitting deposits or information related
to deposits on behalf of its employees or (4) any other circumstances which
reduce distribution or administrative expenses. The exact amount of
administrative and contingent deferred sales charges applicable to a particular
contract will be stated in that contract.
THE CONTRACTS
PURCHASE OF CONTRACTS
If you wish to purchase a contract, you must apply for it through a sales
representative authorized by us. The completed application is sent to us and we
decide whether to accept or reject it. If the application is accepted, a
contract is prepared and executed by our legally authorized officers. The
contract is then sent to you through your sales representative. See
Distribution of the contracts.
If a completed application and all other information necessary for processing a
purchase order are received, an initial purchase payment will be priced no
later than two business days after we receive the order. While attempting to
finish an incomplete application, we may hold the initial purchase payment for
no more than five business days. If the incomplete application cannot be
completed within those five days, you will be informed of the reasons, and the
purchase payment will be returned immediately (unless you specifically
authorize us to keep it until the application is complete). Once the
application is complete, the initial purchase payment must be priced within two
business days.
WHO CAN INVEST
To apply for a contract, you must be of legal age in a state where the
contracts may be lawfully sold and also be eligible to participate in any of
the qualified or nonqualified plans for which the contracts are designed. The
contractowner cannot be older than age 85.
PURCHASE PAYMENTS
Purchase payments are payable to us at a frequency and in an amount selected by
you in the application. The minimum initial purchase payment is $1,500 for
nonqualified contracts and Section 403(b) transfers/rollovers; and $300 for
qualified contracts. The minimum annual amount for subsequent purchase payments
is $300 for nonqualified and qualified contracts. The minimum payment to the
contract at any one time must be at least $100 ($25 if transmitted
electronically). Purchase payments in total may not exceed $1 million for an
owner or $500,000 for each joint owner. If you stop making purchase payments,
the contract will remain in force as a paid-up contract subject to our right to
terminate the contract in accordance with New York's non-forfeiture law for
individual deferred annuities. Payments may be made or, if stopped, resumed at
any time until the annuity commencement date, the surrender of the contract,
maturity date or the death of the contractowner (or joint owner, if
applicable), whichever comes first.
VALUATION DATE
Accumulation and annuity units will be valued once daily at the close of
trading (currently 4:00 p.m., New York time) on each day the New York Stock
Exchange is open (valuation date). On any date other than a valuation date, the
accumulation unit value and the annuity unit value will not change.
ALLOCATION OF PURCHASE PAYMENTS
Purchase payments are placed into the VAA's subaccounts, each of which invests
in shares of the class of its corresponding fund of the series, according to
your instructions.
The minimum amount of any purchase payment which can be put into any one
subaccount is $20 under the contract. Upon allocation to the appropriate
subaccount, purchase payments are converted into accumulation units. The number
of accumulation units credited is determined by dividing the amount allocated
to each subaccount by the value of an accumulation unit for that subaccount on
the valuation date on which the purchase payment is received at our servicing
office if received before 4:00 p.m., New York time. If the purchase payment is
received at or after 4:00 p.m., New York time, we will use the accumulation
unit value computed on the next valuation date. The number of accumulation
units determined in this way is not changed by any subsequent change in the
value of an accumulation unit. However, the dollar value of an accumulation
unit will vary depending not only upon how well the underlying fund's
investments perform, but also upon the expenses of the VAA and the underlying
funds.
VALUATION OF ACCUMULATION UNITS
Accumulation units for each subaccount are valued separately. Initially, the
value of each accumulation unit was set at $1.00. Thereafter, the value of an
accumulation unit in any subaccount on any valuation date equals the value of
an accumulation unit in that subaccount as of the preceding valuation date
multiplied by the net investment factor of that subaccount for the current
valuation period.
The net investment factor is an index used to measure the investment
performance of a subaccount from one valuation date to the next. The net
investment factor for any subaccount for any valuation date reflects the change
in the net asset value per share of the fund held in the subaccount from one
valuation period to the next, adjusted for the daily deduction of the
administrative and mortality and expense risk charges from assets in the
subaccount. If any ex-dividend date occurs during
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the valuation period, the per share amount of any dividend or capital gain
distribution is taken into account. Also, if any taxes need to be reserved, a
per share charge or credit for any taxes reserved for, which is determined by
us to have resulted from the operations of the subaccount, is taken into
account.
Because a different daily charge is made for contracts with the EGMDB than for
those without, a different net investment factor is calculated for each of the
two types of contracts, resulting in different corresponding accumulation unit
values on any given day.
TRANSFERS BETWEEN SUBACCOUNTS ON OR BEFORE THE ANNUITY COMMENCEMENT DATE
You may transfer all or a portion of your investment from one subaccount to
another. A transfer involves the surrender of accumulation units in one
subaccount and the purchase of accumulation units in the other subaccount. A
transfer will be done using the respective accumulation unit values determined
at the end of the valuation date on which the transfer request is received.
Currently, there is no charge for a transfer. However, we reserve the right to
impose a charge in the future for transfers.
Transfers between subaccounts are restricted to six times every contract year.
We reserve the right to waive this six-time limit. This limit does not apply
to transfers made under a dollar cost averaging or cross-reinvestment program
elected on forms available from us. (The SAI contains more information about
these programs.) The minimum amount which may be transferred between
subaccounts is $300 (or the entire amount in the subaccount, if less than
$300). If the transfer from a subaccount would leave you with less than $300
in the subaccount, we may transfer the total balance of the subaccount.
A transfer may be made by writing to our servicing office or, if a Telephone
Exchange Authorization form (available from us) is on file with us, by a toll-
free telephone call. Currently, there is no charge to you for a transfer. In
order to prevent unauthorized or fraudulent telephone transfers, we may
require the caller to provide certain identifying information before we will
act upon their instructions. We may also assign the contractowner a Personal
Identification Number (PIN) to serve as identification. We will not be liable
for following telephone instructions we reasonably believe are genuine.
Telephone requests may be recorded and written confirmation of all transfer
requests will be mailed to the contractowner on the next valuation date.
Telephone transfers will be processed on the valuation date that they are
received when they are received at our customer service center before 4 p.m.
New York time.
When thinking about a transfer of contract value, you should consider the
inherent risk involved. Frequent transfers based on short-term expectations
may increase the risk that a transfer will be made at an inopportune time.
TRANSFERS TO AND FROM THE
GENERAL ACCOUNT ON OR BEFORE THE
ANNUITY COMMENCEMENT DATE
You may transfer all or any part of the contract value from the subaccount(s)
to the fixed side of the contract. The minimum amount which can be transferred
to the fixed side is $300 or the total amount in the subaccount, if less than
$300. However, if a transfer from a subaccount would leave you with less than
$300 in the subaccount, we may transfer the total amount to the fixed side.
You may also transfer all or any part of the contract value from the fixed
side of your contract to the various subaccount(s) subject to the following
restrictions: (1) the sum of the percentages of fixed value transferred is
limited to 25% of the value of the fixed side in any 12 month period; (2) the
minimum amount which can be transferred is $300 or the amount in the fixed
account; and (3) a transfer cannot be made during the first 30 days after the
issue date of the contract.
These transfers cannot be elected more than six times every contract year. We
reserve the right to waive these restrictions. These restrictions do not apply
to transfers made under a dollar cost averaging or cross-reinvestment program
elected on forms available from us. Currently, there is no charge to you for a
transfer. However, we reserve the right to impose a charge in the future for
any transfers to and from the General Account.
TRANSFERS AFTER THE ANNUITY COMMENCEMENT DATE
You may transfer all or a portion of your investment in one subaccount to
another subaccount or to the fixed side of the contract. Those transfers will
be limited to three times per contract year. Currently, there is no charge for
these transfers. However, we reserve the right to impose a charge. No
transfers are allowed from the fixed side of the contract to the subaccounts.
Transfers after the annuity commencement date will be processed based as the
formula outlined in the SAI.
DEATH BENEFIT BEFORE THE ANNUITY COMMENCEMENT DATE
You may designate a beneficiary during your lifetime and change the
beneficiary by filing a written request with our servicing office. Each change
of beneficiary revokes any previous designation. We reserve the right to
request that you send us the contract for endorsement of a change of
beneficiary.
If the contractowner dies before the annuity commencement date and the EGMDB
is in effect, the death benefit paid to your designated beneficiary will be
the greater of: (1) the contract value as of the day on which Lincoln Life
approves the payment of the claim; or (2) the highest contract value which the
contract attains on any policy anniversary date (including the inception date)
on ages
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up to, and including, the contractowner's age 75. The highest contract value is
increased by purchase payments and is decreased by partial withdrawals, partial
annuitizations, and any premium taxes made, effected or incurred subsequent to
the anniversary date on which the highest contract value is obtained. If the
EGMDB is not in effect, the death benefit will be equal to the greater of
contract value or the GMDB. The GMDB is equal to the sum of all purchase
payments minus any withdrawals, partial annuitizations or premium taxes
incurred.
If there are joint owners, upon the death of the first owner, the surviving
owner may continue the contract (subject to federal tax rules) or surrender the
contract. Any applicable contingent deferred sales charge will not be waived on
a surrender. The provisions above regarding death benefit on the death of the
contractowner will apply upon the subsequent death of the surviving joint
owner.
The value of the death benefit will be determined as of the date on which the
death claim is approved for payment. This approval will occur upon receipt of:
(1) proof, satisfactory to us, of the death of the owner; (2) written
authorization for payment; and (3) our receipt of all required claim forms,
fully completed.
When applying for a contract, an applicant can request a contract without the
EGMDB. The EGMDB is not available under contracts used for qualified plans
(other than IRAs) or contracts issued to a contractowner who is age 75 or older
at the time of issuance.
After a contract is issued, the contractowner may discontinue the EGMDB at any
time by sending a written request to Lincoln Life. The benefit will be
discontinued effective as of the valuation date we receive the request, and we
will cease deducting the charge for the benefit as of that date. See Charges
and other deductions. If you discontinue the benefit, it cannot be reinstated.
If the death benefit becomes payable, the beneficiary may elect to receive
payment of the death benefit either in the form of a lump sum settlement or an
annuity payout. Federal tax law requires that an annuity election be made no
later than 60 days after we receive satisfactory notice of death.
If a lump sum settlement is requested, the proceeds will be mailed within seven
days of receipt of satisfactory claim documentation as discussed previously,
subject to the laws and regulations governing payment of death benefits. If an
election has not been made by the end of the 60-day period, a lump sum
settlement will be made to the beneficiary at that time. This payment may be
postponed as permitted by the 1940 Act.
Payment will be made in accordance with applicable laws and regulations
governing payment of death benefits.
Unless otherwise provided in the beneficiary designation submitted by
contractowners, one of the following rules will apply on the death of a
beneficiary:
1. If any beneficiary dies before the contractowner, that beneficiary's
interest will go to any other beneficiaries named, according to their
respective interests (There are no restrictions on the beneficiary's use of
the proceeds.); and/or
2. If no beneficiary survives the contractowner, the proceeds will be paid to
the contractowner's estate.
The death benefit payable to the beneficiary must be distributed within five
years of the contractowner's date of death unless the beneficiary begins
receiving within one year of the contractowner's death substantially equal
installments over a period not extending beyond the beneficiary's life
expectancy. If a lump sum settlement is elected, the proceeds will be mailed
within seven days of approval by us of the claim, subject to the laws and
regulations governing payment of death benefits. This payment may be postponed
as permitted by the Investment Company Act of 1940.
If the beneficiary is the spouse of the contractowner, then the spouse may
elect to continue the contract as owner. If the contractowner is a corporation
or other non-individual (non-natural person), the death of the annuitant will
be treated as death of the contractowner and the above distribution rules
apply.
If there are joint owners, upon the death of the first joint owner, the
surviving joint owner will receive the death benefit. The surviving joint owner
will be treated as the primary, designated beneficiary. Any other beneficiary
designation on record at the time of death will be treated as a contingent
beneficiary.
If the surviving joint owner, as spouse of the decreased joint owner, continues
the contract as the sole owner in lieu of receiving the death benefit, then the
designated beneficiary(s) will receive the death benefit upon the death of the
surviving spouse.
JOINT OWNERSHIP
If a joint owner is named in the application, the joint owners shall be treated
as having equal undivided interests in the contract. Either owner,
independently of the other, may exercise any ownership rights in this contract.
Only spouses may be joint owners. See above for rules governing the payment of
death benefit upon the death of a joint owner.
DEATH OF ANNUITANT
If the annuitant is also the contractowner or a joint owner, then the death
benefit provided will be the death benefit subject to the provisions of the
contract regarding death of the contractowner. If the surviving spouse assumes
the contract, the contingent annuitant becomes the annuitant. If no contingent
annuitant is named, the surviving spouse becomes the annuitant.
15
<PAGE>
If an annuitant who is not the contractowner or joint owner dies, then the
contingent annuitant, if any, becomes the annuitant, and no death benefit is
paid. If no contingent annuitant is named, the contractowner (or joint owner if
younger) becomes the annuitant.
SURRENDERS AND WITHDRAWALS
Before the annuity commencement date, we will allow the surrender of the
contract or a withdrawal of the contract value upon your written request,
subject to the rules discussed below. Surrender or withdrawal rights after the
annuity commencement date depend upon the annuity option you select.
Special restrictions on surrenders/withdrawals apply if your contract is
purchased as part of a retirement plan of a public school system or 501(c)(3)
organization under Section 403(b) of the code. Beginning January 1, 1989, in
order for a contract to retain its tax-qualified status, Section 403(b)
prohibits a withdrawal from a 403(b) contract of post-1988 contributions (and
earnings on those contributions) pursuant to a salary reduction agreement.
However, this restriction does not apply if the annuitant (a) attains age 59
1/2, (b) separates from service, (c) dies, (d) becomes totally and permanently
disabled and/or (e) experiences financial hardship (in which event the income
attributable to those contributions may not be withdrawn).
Pre-1989 contributions and earnings through December 31, 1988, are not subject
to the previously stated restriction. Funds transferred to the contract from a
403(b)(7) custodial account will be subject to the restrictions.
The contract value available upon surrender/withdrawal is the cash surrender
value at the end of the valuation period during which the written request for
surrender/ withdrawal is received at the home office. Unless a request for
withdrawal specifies otherwise, withdrawals will be made from all subaccounts
within the VAA and from the General Account in the same proportion that the
amount of the withdrawal bears to the total contract value. The minimum amount
which can be withdrawn is $300, and the remaining contract value must be at
least $300. Unless prohibited, surrender/withdrawal payments will be mailed
within seven days after we receive a valid written request at the servicing
office. The payment may be postponed as permitted by the 1940 Act.
There are charges associated with surrender of a contract or withdrawal of
contract value. You may specify whether these charges are deducted from the
amount you request to be withdrawn or from the remaining contract value. See
Charges and other deductions.
The tax consequences of a surrender/withdrawal are discussed later in this
prospectus. See Federal tax status.
We reserve the right to terminate the contract, if your contract fails to meet
minimum contract value or payment frequencies as set forth in New York's non-
forfeiture law for individual deferred annuities.
REINVESTMENT PRIVILEGE
You may elect to make a reinvestment purchase with any part of the proceeds of
a surrender/withdrawal, and we will recredit the surrender/withdrawal charges
previously deducted. This election must be made within 30 days of the date of
the surrender/withdrawal, and the repurchase must be of a contract covered by
this Prospectus. A representation must be made that the proceeds being used to
make the purchase have retained their tax-favored status under an arrangement
for which the contracts offered by this Prospectus are designed. The number of
accumulation units which will be credited when the proceeds are reinvested will
be based on the value of the accumulation unit(s) on the next valuation date.
This computation will occur following receipt of the proceeds and request for
reinvestment at the home office. You may utilize the reinvestment privilege
only once. For tax reporting purposes, we will treat a surrender/withdrawal and
a subsequent reinvestment purchase as separate transactions. You should consult
a tax advisor before you request a surrender/withdrawal or subsequent
reinvestment purchase.
AMENDMENT OF CONTRACT
We reserve the right to amend the contract to meet the requirements of the 1940
Act or other applicable federal or state laws or regulations. You will be
notified in writing of any changes, modifications or waivers.
COMMISSIONS
The commissions paid to dealers are a maximum of 4.75% of each purchase
payment; plus an annual continuing commission of up to 0.40% of contract value.
At times, additional sales incentives (up to 0.25% of purchase payments and an
annual continuing 0.10% of contract value) may be provided to dealers
maintaining certain sales volume levels. Upon annuitization, an annual
continuing commission of up to 0.80% (or up to 0.90% for dealers maintaining
certain sales volume levels) of statutory reserves can be paid to dealers.
These commissions are not deducted from purchase payments or contract value;
they are paid by us.
OWNERSHIP
As contractowner, you have all rights under the contract. According to New York
law, the assets of the VAA are held for the exclusive benefit of all
contractowners and their designated beneficiaries. The assets of the VAA are
not chargeable with liabilities arising from any other business that we may
conduct. Qualified contracts may not be assigned or transferred except as
permitted by the Employee Retirement Income Security Act (ERISA) of 1974 and
upon written notification to us. We assume no responsibility for the validity
or effect of any assignment. Consult your tax advisor about the tax
consequences of an assignment.
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<PAGE>
CONTRACTOWNER QUESTIONS
The obligations to purchasers under the contracts are those of Lincoln Life.
Questions about your contract should be directed to us at 1-800-942-5500.
ANNUITY PAYOUTS
When you apply for a contract, you may select any annuity commencement date
permitted by law. (PLEASE NOTE THE FOLLOWING EXCEPTION: Contracts issued under
qualified employee pension and profit-sharing trusts [described in Section
401(a) and tax exempt under Section 501(a) of the code] and qualified annuity
plans [described in Section 403(a) of the code], including H.R.10 trusts and
plans covering self-employed individuals and their employees, provide for
annuity payouts to start at the date and under the option specified in the
plan.)
The contract provides optional forms of payouts of annuities (annuity options),
each of which is payable on a variable basis, a fixed basis or a combination of
both as you specify. The contract provides that all or part of the contract
value may be used to purchase an annuity.
You may elect annuity payouts in monthly, quarterly, semiannual or annual
installments. If the payouts from any subaccount would be or become less than
$50, we have the right to reduce their frequency until the payouts are at least
$50 each. Following are explanations of the annuity options available.
ANNUITY OPTIONS
LIFE ANNUITY. This option offers a periodic payout during the lifetime of the
annuitant and ends with the last payout before the death of the annuitant. This
option offers the highest periodic payout since there is no guarantee of a
minimum number of payouts or provision for a death benefit for beneficiaries.
HOWEVER, THERE IS THE RISK UNDER THIS OPTION THAT THE RECIPIENT WOULD RECEIVE
NO PAYOUTS IF THE ANNUITANT DIES BEFORE THE DATE SET FOR THE FIRST PAYOUT; ONLY
ONE PAYOUT IF DEATH OCCURS BEFORE THE SECOND SCHEDULED PAYOUT, AND SO ON.
LIFE INCOME WITH PAYOUTS GUARANTEED FOR DESIGNATED PERIOD. This option
guarantees periodic payouts during a designated period, usually 10 or 20 years,
and then continues throughout the lifetime of the annuitant. The designated
period is selected by the contractowner.
JOINT LIFE ANNUITY. This option offers a periodic payout during the joint
lifetime of the annuitant and a designated joint annuitant. The payouts
continue during the lifetime of the survivor.
JOINT LIFE ANNUITY WITH GUARANTEED PERIOD. This option guarantees periodic
payouts during a designated period, usually 10 or 20 years, and continues
during the joint lifetime of the annuitant and a designated joint annuitant.
The payouts continue during the lifetime of the survivor. The designated period
is selected by the contractowner.
JOINT-AND-TWO-THIRDS SURVIVOR ANNUITY. This option provides a periodic payout
during the joint lifetime of the annuitant and a designated joint annuitant.
When one of the joint annuitants dies, the survivor receives two thirds of the
periodic payout made when both were alive.
UNIT REFUND LIFE ANNUITY. This option offers a periodic payout during the
lifetime of the annuitant with the guarantee that upon death a payout will be
made of the value of the number of annuity units (see Variable annuity payouts)
equal to the excess, if any, of: (a) the total amount applied under this option
divided by the annuity unit value for the date payouts begin, divided by (b)
the annuity units represented by each payout to the annuitant multiplied by the
number of payouts paid before death. The value of the number of annuity units
is computed on the date the death claim is approved for payment by the home
office.
GENERAL INFORMATION
None of the options listed above currently provide withdrawal features,
permitting the contractowner to withdraw commuted values as a lump sum payment.
Other options, with or without withdrawal features, may be made available by
us. Options are only available to the extent they are consistent with the
requirements of the contract as well as Sections 72(s) and 401(a)(9) of the
code, if applicable. The mortality and expense risk charge and the charge for
administrative services will be assessed while variable annuity payouts are in
effect, including options that may be offered that do not have a life
contingency and therefore no mortality risk.
The annuity commencement date is usually on or before the contractowner's 85th
birthday. You may change the annuity commencement date, change the annuity
option or change the allocation of the investment among subaccounts up to 30
days before the scheduled annuity commencement date, upon written notice to the
servicing office. You must give us at least 30 days notice before the date on
which you want payouts to begin. If proceeds become available to a beneficiary
in a lump sum, the beneficiary may choose any annuity payout option.
Unless you select another option, the contract automatically provides for a
life annuity with annuity payouts guaranteed for 10 years (on a fixed, variable
or combination fixed and variable basis, in proportion to the account
allocations at the time of annuitization) except when a joint life payout is
required by law. Under any option providing for guaranteed period payouts, the
number of payouts which remain unpaid at the date of the annuitant's death (or
surviving annuitant's death in case of joint life annuity) will be paid to your
beneficiary as payouts become due.
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<PAGE>
VARIABLE ANNUITY PAYOUTS
Variable annuity payouts will be determined using:
1. The contract value on the annuity commencement date;
2. The annuity tables contained in the contract;
3. The annuity option selected; and
4. The investment performance of the fund(s) selected.
To determine the amount of payouts, we make this calculation:
1. Determine the dollar amount of the first periodic payout; then
2. Credit the contract with a fixed number of annuity units equal to the first
periodic payout divided by the annuity unit value; and
3. Calculate the value of the annuity units each period thereafter.
We assume an investment return of 4% per year, as applied to the applicable
mortality table. The amount of each payout after the initial payout will depend
upon how the underlying fund(s) perform, relative to the 4% assumed rate. There
is a more complete explanation of this calculation in the SAI.
FEDERAL TAX STATUS
This section is a discussion of the Federal income tax rules applicable to the
contracts as of the date of this Prospectus. More information is provided in
the SAI. THESE DISCUSSIONS AND THOSE IN THE SAI ARE NOT INTENDED AS TAX ADVICE.
This section does not discuss the Federal tax consequences resulting from every
possible situation. No attempt has been made to consider any applicable state,
local, or foreign tax law, other than the imposition of any state premium taxes
(See Deductions for premium taxes). If you are concerned about the tax
implications with respect to the contracts, you should consult a tax advisor.
The following discussion is based upon our understanding of the present Federal
income tax laws as they are currently interpreted by the IRS. No representation
is made about the likelihood of continuation of the present Federal income tax
laws or their current interpretations by the IRS.
TAXATION OF NONQUALIFIED CONTRACTS
You are generally not taxed on increases in the value of your contract until a
distribution occurs. This distribution can be in the form of a lump sum payout
received by requesting all or part of the cash surrender value (i.e.
surrenders/withdrawals) or as annuity payouts. For this purpose, the assignment
or pledge of, or the agreement to assign or pledge, any portion of the value of
a contract will be treated as a distribution. A transfer of ownership of a
contract, or designation of an annuitant (or other beneficiary) who is not also
the contractowner, may also result in tax consequences. The taxable portion of
a distribution (in the form of a lump sum payout or an annuity) is taxed as
ordinary income. In general, a contractowner who is not a natural person (for
example, a corporation), subject to limited exceptions, will be taxed on any
increase in the contract's cash value over the investment in the contract
during the taxable year, even if no distribution occurs. [See Section 72(u) of
the code.] The next discussion applies to contracts owned by natural persons.
In the case of a surrender under the contract or withdrawal of contract value,
generally amounts received are first treated as taxable income to the extent
that the cash value of the contract immediately before the surrender exceeds
the investment in the contract at that time. Any additional amount withdrawn is
not taxable. The investment in the contract generally equals the portion, if
any, of any purchase payment made by or on behalf of an individual under a
contract which is not excluded from the individual's gross income.
Even though the tax consequences may vary depending on the form of annuity
payout selected under the contract, the contractowner of an annuity payout
generally is taxed on the portion of the annuity payout that exceeds the
investment in the contract. For variable annuity payouts, the taxable portion
is determined by a formula that establishes a specific dollar amount of each
payout that is not taxed. The dollar amount is determined by dividing the
investment in the contract by the total number of expected periodic payouts.
For fixed annuity payouts, there generally is no tax on the portion of each
payout that represents the same ratio that the investment in the contract bears
to the total expected value of payouts for the term of the annuity; the
remainder of each payout is taxable. For individuals, the entire distribution
(whether fixed or variable) will be fully taxable once the recipient is deemed
to have recovered the dollar amount of the investment in the contract.
There may be imposed a penalty tax on distributions equal to 10% of the amount
treated as taxable income. The penalty tax is not imposed in certain
circumstances, which generally are distributions:
1. Received on or after the contractowner attains age 59 1/2;
2. Made as a result of death or disability of the contractowner;
3. Received in substantially equal periodic payments such as a life annuity
(subject to special recapture rules if the series of payouts is subsequently
modified);
4. Under a qualified funding asset in a structured settlement;
5. Under an immediate annuity contract as defined in the code; and/or
6. Under a contract purchased in connection with the termination of certain
retirement plans.
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<PAGE>
TAXATION OF QUALIFIED CONTRACTS
The contracts may be purchased in connection with the following types of tax-
favored retirement plans:
1. Contracts purchased for employees of public school systems and certain tax-
exempt organizations, qualified under Section 403(b) of the code (normally
for transfers or rollovers only);
2. Pension and profit-sharing plans of self-employed individuals (H.R. 10 or
Keogh plans) or corporations, qualified under Section 401(a) or 403(a) of
the code;
3. IRAs, qualified under Section 408 of the Code;
4. Deferred compensation plans of state or local governments, qualified under
Section 457 of the code;
5. SEPs, qualified under Section 408(k) of the code; and/or
6. Simple retirement accounts, qualified under Section 401(k)(11) of the code,
commonly referred to as SIMPLE or SIMPLE 401(k) plans and SIMPLE IRA plans.
The tax rules applicable to these plans, including restrictions on
contributions and benefits, taxation of distributions and any tax penalties,
vary according to the type of plan and its terms and conditions. Participants
under such plans, as well as contractowners, annuitants and beneficiaries,
should be aware that the rights of any person to any benefits under such plans
may be subject to the terms and conditions of the plans themselves, regardless
of the terms and conditions of the contracts. Purchasers of contracts for use
with any qualified plan, as well as plan participants, should consult counsel
and other advisors as to the suitability of the contracts to their specific
needs, and as to applicable code limitations and tax consequences.
MULTIPLE CONTRACTS
All contracts entered into after October 21, 1988, and issued by the same
insurance company (or its affiliates) to the same contractowner during any
calendar year will be treated as a single contract for tax purposes.
INVESTOR CONTROL
The Treasury Department has indicated that guidelines may be issued under which
a variable annuity contract will not be treated as an annuity contract for tax
purposes if the contractowner has excessive control over the investments
underlying the contract. They may consider the number of investment options or
the number of transfer opportunities available between options as relevant when
determining excessive control. The issuance of those guidelines may require us
to impose limitations on your right to control the investment. We do not know
whether any such guidelines would have a retroactive effect.
Section 817(h) of the code and the related regulation that the Treasury
Department has adopted require that assets underlying a variable annuity
contract be adequately diversified. The regulations provide that a variable
annuity contract which does not satisfy the diversification standards will not
be treated as an annuity contract, unless the failure to satisfy the
regulations was inadvertent, the failure is corrected, and the contractowner or
we pay an amount to the Internal Revenue Service. The amount will be based on
the tax that would have been paid by the contractowner if the income, for the
period the contract was not diversified, had been received by the
contractowner. If the failure to diversify is not corrected in this manner, the
contractowner of an annuity contract will be deemed the owner of the underlying
securities and will be taxed on the earnings of his or her account. We believe,
under our interpretation of the code and regulations thereunder, that the
investments underlying this contract meet these diversification standards.
WITHHOLDING
Generally, pension and annuity distributions are subject to withholding for the
recipient's Federal income tax liability at rates that vary according to the
type of distribution and the recipient's tax status. Recipients, however,
generally are provided the opportunity to elect not to have tax withheld from
distributions. Under the Unemployment Compensation Amendments of 1992 (UCA),
20% income tax withholding may apply to eligible rollover distributions. All
taxable distributions from qualified plans (except IRAs) and Section 403(b)
annuities are eligible rollover distributions, except (1) annuities paid out
over life or life expectancy, (2) installments paid for a period spanning 10
years or more, and (3) required minimum distributions. The UCA imposes a
mandatory 20% income tax withholding on any eligible rollover distribution that
the contractowner does not elect to have paid in a direct rollover to another
qualified plan, Section 403(b) annuity or individual retirement account.
Distributions from Section 457 plans are subject to the general wage
withholding rules.
VOTING RIGHTS
As required by law, we will vote the series shares held in the VAA at meetings
of the shareholders of the series. The voting will be done according to the
instructions of contractowners who have interests in any subaccounts which
invest in classes of funds of the series. If the 1940 Act or any regulation
under it should be amended or if present interpretations should change, and if
as a result we determine that we are permitted to vote the series shares in our
own right, we may elect to do so.
The number of votes which you have the right to cast will be determined by
applying your percentage interest in a subaccount to the total number of votes
attributable to the subaccount. In determining the number of votes, fractional
shares will be recognized.
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<PAGE>
Series shares of a class held in a subaccount for which no timely instructions
are received will be voted by us in proportion to the voting instructions which
are received for all contracts participating in that subaccount. Voting
instructions to abstain on any item to be voted on will be applied on a pro-
rata basis to reduce the number of votes eligible to be cast.
Whenever a shareholders meeting is called, each person having a voting interest
in a subaccount will receive proxy voting material, reports and other materials
relating to the series. Since the series engages in shared funding, other
persons or entities besides Lincoln Life may vote series shares. See Sale of
fund shares by the series.
DISTRIBUTION OF THE CONTRACTS
American Funds Distributors, Inc. (AFD), 333 South Hope Street, Los Angeles, CA
90071, is the distributor and principal underwriter of the contracts. They will
be sold by properly licensed registered representatives of independent broker-
dealers which in turn have selling agreements with AFD and have been licensed
by the New York insurance department to represent us. AFD is registered with
the SEC under the Securities Exchange Act of 1934 as a broker-dealer and is a
member of the National Association of Securities Dealers (NASD). Lincoln Life
will offer contracts in the state of New York where it is licensed to do
business.
RETURN PRIVILEGE
Within the free-look period after you receive the contract, you may cancel it
for any reason by delivering or mailing it postage prepaid, to the servicing
office at P.O. Box 2348, 1300 South Clinton Street, Fort Wayne, Indiana, 46801.
A contract canceled under this provision will be void. With respect to the
fixed portion of a contract, we will return purchase payments. With respect to
the VAA, we will return the contract value as of the date of receipt of the
cancellation, plus any premium taxes which had been deducted. No contingent
deferred sales charge will be assessed. A PURCHASER WHO PARTICIPATES IN THE VAA
IS SUBJECT TO THE RISK OF A MARKET LOSS DURING THE FREE-LOOK PERIOD.
STATE REGULATION
As a life insurance company organized and operated under New York law, we are
subject to provisions governing life insurers and to regulation by the New York
Superintendent of Insurance.
Our books and accounts are subject to review and examination by the New York
Insurance Department at all times. A full examination of our operations is
conducted by that Department at least once every five years.
RECORDS AND REPORTS
As presently required by the 1940 Act and applicable regulations, we are
responsible for maintaining all records and accounts relating to the VAA. We
have entered into an agreement with the Delaware Management Company, 2005
Market Street, Philadelphia, PA 19203, to provide accounting services to the
VAA. We will mail to you, at your last known address of record at the servicing
office, at least semiannually after the first contract year, reports containing
information required by that Act or any other applicable law or regulation.
OTHER INFORMATION
A Registration Statement has been filed with the SEC, under the Securities Act
of 1933 as amended, for the contracts being offered here. This Prospectus does
not contain all the information in the Registration Statement, its amendments
and exhibits. Please refer to the Registration Statement for further
information about the VAA, Lincoln Life and the contracts offered. Statements
in this Prospectus about the content of contracts and other legal instruments
are summaries. For the complete text of those contracts and instruments, please
refer to those documents as filed with the SEC.
The series also offers shares of the funds to other segregated investment
accounts.
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STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS FOR VARIABLE
ANNUITY ACCOUNT H AMERICAN LEGACY III
<TABLE>
<CAPTION>
Item
- -----------------------------------------
<S> <C>
General information and history of
Lincoln Life
- -----------------------------------------
Special terms
- -----------------------------------------
Services
- -----------------------------------------
Principal underwriter
- -----------------------------------------
Purchase of securities being offered
</TABLE>
<TABLE>
<CAPTION>
Item
----------------------------------
<S> <C>
Calculation of investment results
----------------------------------
Annuity payouts
----------------------------------
Federal tax status
----------------------------------
Advertising and sales literature
----------------------------------
Financial statements
</TABLE>
For a free copy of the SAI please see page one of this booklet.
21
<PAGE>
THE AMERICAN LEGACY III
LINCOLN LIFE & ANNUITY VARIABLE ANNUITY ACCOUNT H (REGISTRANT)
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK (DEPOSITOR)
STATEMENT OF ADDITIONAL INFORMATION (SAI)
This Statement of Additional Information should be read in conjunction with the
American Legacy III Prospectus of Lincoln Life & Annuity Variable Annuity Ac-
count H dated , 1997.
You may obtain a copy of the American Legacy III Prospectus on request and
without charge.
Please write
.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page
- ------------------------------------------
<S> <C>
GENERAL INFORMATION AND HISTORY
OF LINCOLN LIFE B-2
- ------------------------------------------
SPECIAL TERMS B-2
- ------------------------------------------
SERVICES B-2
- ------------------------------------------
PRINCIPAL UNDERWRITER B-2
- ------------------------------------------
PURCHASE OF SECURITIES BEING OFFERED B-2
- ------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Item Page
<S> <C>
CALCULATION OF INVESTMENT RESULTS B- 2
ANNUITY PAYOUTS B- 6
FEDERAL TAX STATUS B- 6
ADVERTISING AND SALES LITERATURE B- 9
FINANCIAL STATEMENTS B-11
</TABLE>
THIS SAI IS NOT A PROSPECTUS.
The date of this SAI is , 1997.
<PAGE>
GENERAL INFORMATION AND
HISTORY OF
LINCOLN LIFE & ANNUITY
COMPANY OF NEW YORK (LINCOLN LIFE)
Lincoln Life is a life insurance company chartered under New York law on June
6, 1996. Lincoln Life's principal executive offices are located at 120 Madison
Street, Suite 1700, Syracuse, New York 13202. Lincoln Life is licensed to sell
life insurance policies and annuity contracts in New York.
Lincoln Life is a subsidiary of The Lincoln National Life Insurance Company.
The Lincoln National Life Insurance Company is a stock life insurance company
incorporated under the laws of Indiana on June 12, 1905. The Lincoln National
Life Insurance Company is principally engaged in offering life insurance poli-
cies and annuity policies, and ranks among the largest United States stock life
insurance companies in terms of assets and life insurance in force.
The Lincoln National Life Insurance Company is wholly owned by Lincoln National
Corporation ("LNC"), a publicly held insurance holding company incorporated un-
der Indiana law on January 5, 1968. The principal offices of The Lincoln Na-
tional Life Insurance Company are located at 1300 South Clinton Street, Fort
Wayne, Indiana 46801. Through subsidiaries, LNC engages primarily in the issu-
ance of life insurance and annuities, property casualty insurance, and other
financial services. Administrative services necessary for the operation of the
Separate Account and the Contracts are currently provided by The Lincoln Na-
tional Life Insurance Company. However, neither the assets of The Lincoln Na-
tional Life Insurance Company nor LNC support the obligations of Lincoln Life
under the contracts.
SPECIAL TERMS
The special terms used in this SAI are the ones defined in the Prospectus. In
connection with the term, valuation date, the New York Stock Exchange is
currently closed on weekends and on these holidays: New Year's Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day. If any of these holidays occurs on a weekend day, the
Exchange may also be closed on the business day occurring just before or just
after the holiday.
SERVICES
INDEPENDENT AUDITORS
The financial statements of Lincoln Life appearing in this SAI and Registration
Statement have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports also appearing elsewhere in this document and in the
Registration Statement. The financial statements audited by Ernst & Young LLP
have been included in this document in reliance on their report given on their
authority as experts in accounting and auditing.
KEEPER OF RECORDS
All accounts, books, records and other documents which are required to be
maintained for the VAA are maintained by Lincoln Life or by third parties
responsible to Lincoln Life. We have entered into an agreement with the
Delaware Management Company, 2005 Market Street, Philadelphia, PA 19203, to
provide accounting services to the VAA. No separate charge against the assets
of the VAA is made by Lincoln Life for this service.
PRINCIPAL UNDERWRITER
Lincoln Life has contracted with American Funds Distributors, Inc. (AFD), 333
South Hope Street, Los Angeles, California 90071, a licensed broker-dealer, to
distribute the contracts through certain legally authorized sales persons and
organizations (brokers). AFD and its brokers are compensated under a standard
compensation schedule.
PURCHASE OF SECURITIES BEING OFFERED
The contracts are offered to the public through certain securities
broker/dealers who have entered into selling agreements with AFD and whose
personnel are legally authorized to sell annuity products. Although there are
no special purchase plans for any class of prospective buyers, the contingent
deferred sales charge normally assessed upon surrender or withdrawal of
contract value will be waived for officers, directors or bona fide full time
employees of LNC, The Capital Group, Inc., their affiliated or managed
companies, and certain other persons. See Contingent deferred sales charges in
the Prospectus.
Both before and after the annuity commencement date, there are exchange
privileges between subaccounts, and from the VAA to the General Account subject
to restrictions set out in the Prospectus. See The contracts, in the
Prospectus. No exchanges are permitted between the VAA and other separate
accounts.
The offering of the contracts is continuous.
B-2
<PAGE>
CALCULATION OF INVESTMENT RESULTS
(A) AVERAGE ANNUAL TOTAL RETURN:
The average annual total return shows the average annual total returns for a
hypothetical contract with the enhanced guaranteed minimum death benefit
(EGMDB) and without the EGMDB for required periods, based upon a hypothetical
initial purchase payment of $1,000, and calculated according to the formula
provided after the examples. Required periods are 1, 5 and 10 years, or, if the
separate account had been in operation less than any of these periods, since
inception. Since the separate account did not commence activity until 1997, the
figures below are calculated as if the separate account had commenced activity
at the same time as the underlying funds.
B-3
<PAGE>
Further, since the class of shares of the funds in which the subaccounts invest
was not created until after December 31, 1996, the figures below are based on
the performance of the class of shares of the funds issued since the funds
commenced operations in 1989, as adjusted to reflect the fees and expenses
chargeable against assets attributable to shares of Class 2.
AVERAGE ANNUAL TOTAL RETURN
Period Ending December 31, 1997
<TABLE>
<CAPTION>
10-year
1-year period 5-year period period
With Without With Without With Without
EGMDB EGMDB EGMDB EGMDB EGMDB EGMDB
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Growth Subaccount % % N/A% N/A% N/A% N/A%
(as if commenced activity )
Growth Subaccount
(as if commenced activity 2/8/84)
International Subaccount
(as if commenced activity 5/1/90)
Growth-Income Subaccount
(as if commenced activity 2/8/84)
Asset Allocation Subaccount
(as if commenced activity 8/1/89)
High-Yield Bond Subaccount
(as if commenced activity 2/8/84)
Bond Subaccount N/A N/A N/A N/A
(as if commenced activity 1/2/96)
U.S. Gov't./AAA Subaccount
(as if commenced activity 12/1/85)
Cash Management Subaccount
(as if commenced activity 2/8/84)
</TABLE>
*The lifetime of each subaccount is less than the complete period indicated.
See the date the subaccount commenced activity under its name.
The length of the periods and the last day of each period used in the above ta-
ble are set out in the table headings and in the footnotes above.
The average annual total return for each period is determined by finding the
average annual compounded rate of return over that period that would equate the
initial amount invested to the ending redeemable value for that period, accord-
ing to the following formula--
P(1 + T)n = ERV
Where: P = a hypothetical initial purchase payment of $1,000
T = average annual total return for the period in question
n = number of years
ERV = redeemable value (as of the end of the period in question) of a hypothet-
ical $1,000 purchase payment made at the beginning of the 1-year, 5-
year, or 10-year period in question (or fractional portion thereof)
The formula assumes that: 1) all recurring fees have been charged to
contractowner accounts; 2) all applicable non-recurring charges are deducted at
the end of the period in question; and 3) there will be a complete redemption
at the end of the period in question.
B-4
<PAGE>
(B) NON-STANDARDIZED INVESTMENT RESULTS:
The VAA may illustrate its results over various periods and compare its results
to indices and other variable annuities in sales materials including
advertisements, brochures and reports. Such results may be computed on a
cumulative and/or annualized basis.
Cumulative quotations are arrived at by calculating the change in the
Accumulation Unit Value between the first and last day of the base period being
measured, and expressing the difference as a percentage of the unit value at
the beginning of the base period.
Annualized quotations are arrived at by applying a formula which determines the
level rate of return which, if earned over the entire base period, would
produce the cumulative return.
NON-STANDARDIZED INVESTMENT RESULTS
SUBACCOUNTS OF ACCOUNT H*
$10,000 INVESTED IN
THIS FUND THROUGH
AMERICAN LEGACY III
THIS MANY YEARS AGO...
...WOULD HAVE GROWN TO THIS AMOUNT ON DECEMBER 31, 1996**
<TABLE>
<CAPTION>
With EGMDB
-------------------------------------------------------------------
Growth Growth-Income High-Yield Bond Cash Management
- -------------------------------------------------------------------------------------------------------
Number Compound Compound Compound Compound
of Growth Growth Growth Growth
Years Periods Amount Rate Amount Rate Amount Rate Amount Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 12/31/96-12/31/97 $ % $ % $ % $ %
2 12/31/95-12/31/97 11,152 11.52 11,680 16.80 11,136 11.36 10,337 3.37
3 12/31/94-12/31/97 14,624 20.93 15,284 23.63 13,340 15.50 10,733 3.60
4 12/31/93-12/31/97 14,456 13.07 15,344 15.34 12,264 7.04 10,966 3.12
5 12/31/92-12/31/97 16,543 13.41 16,955 14.11 14,049 8.87 11,077 2.59
Lifetime of fund 02/08/84-12/31/97
<CAPTION>
Without EGMDB
-------------------------------------------------------------------
Growth Growth-Income High-Yield Bond Cash Management
- -------------------------------------------------------------------------------------------------------
Number Compound Compound Compound Compound
of Growth Growth Growth Growth
Years Periods Amount Rate Amount Rate Amount Rate Amount Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 12/31/96-12/31/97 $ % $ % $ % $ %
2 12/31/95-12/31/97 11,169 11.69 $11,697 16.97 $11,153 11.53 $10,352 3.52
3 12/31/94-12/31/97 14,668 21.11 15,329 23.81 13,382 15.68 10,764 3.75
4 12/31/93-12/31/97 14,521 13.24 15,416 15.52 12,319 7.20 11,017 3.28
5 12/31/92-12/31/97 16,642 13.58 17,056 14.28 14,131 9.03 11,142 2.74
Lifetime of fund 02/08/84-12/31/97
</TABLE>
*Although the subaccounts for the contracts did not commence activity until
, these figures are calculated as if the subaccounts had commenced
activity at the same time as the corresponding underlying funds.
**For purposes of determining these investment results, American Legacy III's
1.40% annual asset charge and administrative fee for those contracts with EGMDB
and 1.25% for those contracts without EGMDB have been taken into account.
However, these examples do not assume redemption at the end of the period.
B-5
<PAGE>
<TABLE>
<CAPTION>
With EGMDB Without EGMDB
------------------- -------------------
U.S. Govt/AAA U.S. Govt/AAA
- -------------------------------------------------------------------------------
Number Compound Compound
of Growth Growth
Years Periods Amount Rate Amount Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 12/31/96-12/31/97 $ % $ %
2 12/31/95-12/31/97 10,142 1.42 10,157 1.57
3 12/31/94-12/31/97 11,513 7.30 11,548 7.46
4 12/31/93-12/31/97 10,832 2.70 10,880 2.85
5 12/31/92-12/31/97 11,848 4.33 11,916 4.48
Lifetime of fund 12/01/85-12/31/97
<CAPTION>
Asset Allocation Asset Allocation
------------------- -------------------
Number Compound Compound
of Growth Growth
Years Periods Amount Rate Amount Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 12/31/96-12/31/97 $ % $ %
2 12/31/95-12/31/97 11,390 13.90 11,407 14.07
3 12/31/94-12/31/97 14,520 20.50 14,564 20.68
4 12/31/93-12/31/97 14,242 12.51 14,307 12.68
5 12/31/92-12/31/97 15,467 11.52 15,562 11.69
Lifetime of fund 08/01/89-12/31/97 19,666 9.55 19,886 9.71
<CAPTION>
International International
------------------- -------------------
Number Compound Compound
of Growth Growth
Years Periods Amount Rate Amount Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 12/31/96-12/31/97 $ % $ %
2 12/31/95-12/31/97 11,562 15.62 11,580 15.80
3 12/31/94-12/31/97 12,817 13.21 12,855 13.38
4 12/31/93-12/31/97 12,851 8.72 12,908 8.88
5 12/31/92-12/31/97 16,985 14.16 17,086 14.33
Lifetime of fund 05/01/89-12/31/97 17,205 8.48 17,378 8.64
<CAPTION>
Bond Bond
------------------- -------------------
Number Compound Compound
of Growth Growth
Years Periods Amount Rate Amount Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 12/31/96-12/31/97 $ % $ %
Lifetime of fund 01/02/96-12/31/97 10,412 4.14 10,428 4.29
<CAPTION>
Global Growth Global Growth
------------------- -------------------
Number Compound Compound
of Growth Growth
Years Periods Amount Rate Amount Rate
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lifetime of fund -12/31/97 $ % $ %
</TABLE>
B-6
<PAGE>
ANNUITY PAYOUTS
VARIABLE ANNUITY PAYOUTS
Variable annuity payouts will be determined on the basis of: (1) the dollar
value of the contract on the annuity commencement date; (2) the annuity tables
contained in the contract; (3) the type of annuity option selected; and (4) the
investment results of the fund(s) selected. In order to determine the amount of
variable annuity payouts, Lincoln Life makes the following calculation: first,
it determines the dollar amount of the first payout; second, it credits the
contract with a fixed number of annuity units based on the amount of the first
payout; and third, it calculates the value of the annuity units each period
thereafter. These steps are explained below.
The dollar amount of the first periodic variable annuity payout is determined
by applying the total value of the accumulation units credited under the
contract valued as of the annuity commencement date (less any premium taxes) to
the annuity tables contained in the contract. The first variable annuity payout
will be paid 14 days after the annuity commencement date. This day of the month
will become the day on which all future annuity payouts will be paid. Amounts
shown in the tables are based on the 1983 Table "a" Individual Annuity
Mortality Tables, modified, with an assumed investment return at the rate of 4%
per annum. The first annuity payout is determined by multiplying the benefit
per $1,000 of value shown in the contract tables by the number of thousands of
dollars of value accumulated under the contract. These annuity tables vary
according to the form of annuity selected and the age of the annuitant at the
annuity commencement date. The 4% interest rate stated above is the measuring
point for subsequent annuity payouts. If the actual net investment rate
(annualized) exceeds 4%, the payout will increase at a rate equal to the amount
of such excess. Conversely, if the actual rate is less than 4%, annuity payouts
will decrease. If the assumed rate of interest were to be increased, annuity
payouts would start at a higher level but would decrease more rapidly or
increase more slowly.
Lincoln Life may use sex distinct annuity tables in contracts that are not
associated with employer sponsored plans and where not prohibited by law.
At an annuity commencement date, the contract is credited with annuity units
for each subaccount on which variable annuity payouts are based. The number of
annuity units to be credited is determined by dividing the amount of the first
periodic payout by the value of an annuity unit in each subaccount selected.
Although the number of annuity units is fixed by this process, the value of
such units will vary with the value of the underlying fund. The amount of the
second and subsequent periodic payouts is determined by multiplying the
contractowner's fixed number of annuity units in each subaccount by the
appropriate annuity unit value for the valuation date ending 14 days prior to
the date that payout is due.
The value of each subaccount's annuity unit will be set initially at $1.00. The
annuity unit value for each subaccount at the end of any valuation date is
determined by multiplying the subaccount annuity unit value for the immediately
preceding valuation date by the product of:
(a) The net investment factor of the subaccount for the valuation period for
which the annuity unit value is being determined, and
(b) A factor to neutralize the assumed investment return in the annuity table.
The value of the annuity units is determined as of a valuation date 14 days
prior to the payment date in order to permit calculation of amounts of annuity
payouts and mailing of checks in advance of their due dates. Such checks will
normally be issued and mailed at least three days before the due date.
If you select a variable annuity payout, you may transfer all or a portion of
your investment in one subaccount to another subaccount or to the fixed side of
the contract. Transfers after the annuity commencement date will be limited to
three times per contract year.
A transfer from one subaccount to another subaccount will result in the
purchase of annuity units in one subaccount and the redemption of annuity units
in the other subaccount. Such a transfer will be accomplished at relative
annuity unit values as of the valuation date we receive the transfer request.
The valuation of annuity units is discussed above. A transfer from one
subaccount to a fixed annuity payout will result in the redemption of annuity
units in one subaccount and the purchase of a minimum fixed annuity payout as
discussed in the contract. After the annuity commencement date, no transfers
can be made from the fixed side of the contract to the subaccounts.
PROOF OF AGE, SEX AND SURVIVAL
Lincoln Life may require proof of age, sex, or survival of any payee upon whose
age, sex, or survival payments depend.
FEDERAL TAX STATUS
GENERAL
The operations of the VAA form a part of, and are taxed with, the operations of
Lincoln Life under the Internal Revenue Code of 1986, as amended (the Code).
VAA investment income and realized net capital gains on the assets of the VAA
are reinvested and taken
B-7
<PAGE>
into account in determining the accumulation and annuity unit values. As a
result, such investment income and realized net capital gain are automatically
retained as part of the reserves under the contract. Under existing federal
income tax law, Lincoln Life believes that the VAA investment income and
realized net capital gain are not taxed to the extent they are retained as part
of the reserves under the contract. Accordingly, Lincoln Life does not
anticipate that it will incur any federal income tax liability attributable to
the VAA, and therefore it does not intend to make any provision for such taxes.
However, if changes in the federal tax laws or interpretations thereof result
in Lincoln Life's being taxed on income or gain attributable to the VAA, then
Lincoln Life may impose a charge against the VAA (with respect to some or all
(contracts) in order to make provision for payment of such taxes.
TAX STATUS OF NON-QUALIFIED CONTRACTS
Section 817(h) of the code provides that separate account investments (or the
investments of a mutual fund the shares of which are owned by separate accounts
of insurance companies) underlying the contract be adequately diversified in
accordance with Treasury regulations in order for the contract to qualify as an
annuity contract under Section 72 of the code. The VAA, through each of the
funds, intends to comply with the diversification requirements prescribed in
regulations, which affect how the assets in each of the funds in which the VAA
invests may be invested. Capital Research and Management Company is not
affiliated with Lincoln Life and Lincoln Life does not have control over the
series, or its investments. However, Lincoln Life believes that each fund in
which the VAA owns shares will meet the diversification requirements and that
therefore the contracts will be treated as annuities under the code.
The regulations relating to diversification requirements do not provide
guidance concerning the extent to which contractowners may direct their
investments to particular subaccounts of a separate account. When guidance is
provided, the contract may need to be modified to comply with that guidance.
For these reasons, Lincoln Life reserves the right to modify the contract as
necessary to prevent the contractowner from being considered the owner of the
assets of the VAA.
In addition to the requirements of Section 817(h), code Section 72(s) provides
that contracts will not be treated as annuity contracts for purposes of Section
72 unless the contract provides that (1) if any contractowner dies on or after
the annuity starting date prior to the time the entire interest in the contract
has been distributed, the remaining portion of such interest must be
distributed at least as rapidly as under the method of distribution in effect
at the time of the contractowner's death; and (2) if any contractowner dies
prior to the annuity starting date, the entire interest must be distributed
within five years after the death of the contractowner. These requirements are
considered satisfied if any portion of the contractowner's interest that is
payable to or for the benefit of a designated beneficiary is distributed over
that designated beneficiary's life, or a period not extending beyond the
designated beneficiary's life expectancy, and if that distribution begins
within one year of the contractowner's death. The designated beneficiary must
be a natural person. No regulations interpreting these requirements have yet
been issued. Thus, no assurance can be given that the provisions contained in
contracts satisfy all such code requirements. However, Lincoln Life believes
that such provisions in such contracts meet these requirements. Lincoln Life
intends to review such provisions and modify them as necessary to assure that
they comply with the requirements of Section 72(s) when clarified by
regulations or otherwise.
TAX STATUS OF CONTRACTS USED WITH CERTAIN PLANS
The rules governing the tax treatment of contributions and distributions under
qualified plans, as set forth in the code and applicable rulings and
regulations, are complex and subject to change. These rules also vary according
to the type of plan and the terms and conditions of the plan itself. Therefore,
no attempt is made herein to provide more than general information about the
use of contracts with the various types of plans, based on Lincoln Life's
understanding of the current federal tax laws as interpreted by the Internal
Revenue Service. Purchasers of contracts for use with such a plan and plan
participants and beneficiaries should consult counsel and other competent
advisers as to the suitability of the plan and the contract to their specific
needs, and as to applicable code limitations and tax consequences. Participants
under such plans, as well as contractowners, annuitants, and beneficiaries,
should also be aware that the rights of any person to any benefits under such
plans may be subject to the terms and conditions of the plans themselves
regardless of the terms and conditions of the contract.
Following are brief descriptions of the various types of plans and of the use
of contracts in connection therewith.
PUBLIC SCHOOL SYSTEMS AND 501(C)(3) ORGANIZATIONS [SECTION 403(B) PLANS]
Payments made to purchase annuity contracts by public school systems or code
Section 501(c)(3) organizations for their employees are excludable from the
gross income of the employee to the extent that aggregate payments for the
employee do not exceed the exclusion allowance provided by Section 403(b) of
the code, the over-all limits for excludable contributions of Section 415 of
the code or the limit on elective contributions. Furthermore, the investment
results of
B-8
<PAGE>
the fund credited to the account are not taxable until benefits are received
either in the form of annuity payouts, in a single sum or a withdrawal.
If an employee's individual account is surrendered, usually the full amount
received would be includable in income for that year at ordinary rates.
QUALIFIED CORPORATE EMPLOYEE'S PENSION AND PROFIT-SHARING TRUSTS AND QUALIFIED
ANNUITY PLANS [SECTION 401(A) PLANS]
Payments made by a corporate employer and the increments on all payments for
qualified corporate plans are not taxable as income to the employee until
distributed. However, the employee may be required to include these amounts in
gross income prior to distribution if the qualified plan or trust loses its
qualification. Corporate plans qualified under Sections 401(a) or 403(a) of the
code are subject to extensive rules, including limitations on maximum
contributions or benefits. For plan years beginning after December 31, 1996,
tax exempt organizations (except state and local governments) may have 401(k)
plans.
Distributions of amounts in excess of non-deductible employee contributions are
generally taxable as ordinary income. If an employee or beneficiary receives a
lump-sum distribution, that is, if the employee or beneficiary receives in a
single tax year the total amounts payable with respect to that employee, and
the benefits are paid as a result of the employee's death or separation from
service or after the employee attains 59 1/2, taxable gain may be eligible for
special lump sum averaging treatment. These special tax rules are not available
in all cases.
SELF-EMPLOYED INDIVIDUALS (H.R. 10 OR KEOGH)
Under code provisions, self-employed individuals may establish plans commonly
known as H.R. 10 or Keogh plans for themselves and their employees. The tax
consequences to participants under such plans depend upon the plan itself. Such
plans are subject to special rules in addition to those applicable to qualified
corporate plans; therefore, purchasers of the contracts for use with H.R. 10
plans should seek competent advice as to suitability of plan documents and the
funding contracts.
INDIVIDUAL RETIREMENT ANNUITIES (IRA)
Under Section 408 of the code, individuals may participate in a retirement
program known as Individual Retirement Annuity (IRA). An individual may make an
annual IRA contribution of up to the lesser of $2,000 (or $4,000 if IRAs are
maintained for both the individual and his nonworking spouse) or 100% of
compensation. However, IRA contributions may be non-deductible in whole or in
part if (1) the individual or his spouse is an active participant in certain
other retirement programs and (2) the income of the individual (or of the
individual and his spouse) exceeds a specified amount. Distributions from
certain other IRA plans or qualified plans may be rolled over to an IRA on a
tax deferred basis without regard to the limit on contributions, provided
certain requirements are met. Distributions from IRA's are subject to certain
restrictions. Deductible IRA contributions and all IRA earnings will be taxed
as ordinary income when distributed. The failure to satisfy certain code
requirements with respect to an IRA may result in adverse tax consequences.
DEFERRED COMPENSATION PLANS (457 PLANS)
Under the code provisions, employees and independent contractors (participants)
performing services for state and local governments and certain tax-exempt
organizations may establish deferred compensation plans. While participants in
such plans may be permitted to specify the form of investment in which their
plan accounts will participate, all such investments are owned by the
sponsoring employer and are subject to the claims of its creditors. Plans of
state and local governments established on August 20, 1996, or later, must hold
all assets and income in trust (or custodial accounts or an annuity contract)
for the exclusive benefit of participants and their beneficiaries. Section 457
plans that were in existence before August 20, 1996 are allowed until January
1, 1999 to meet this requirement. The amounts deferred under a plan which meet
the requirements of Section 457 of the code are not taxable as income to the
participant until paid or otherwise made available to the participant or
beneficiary. Deferrals are taxed as compensation from the employer when they
are actually or constructively received by the employee. As a general rule, the
maximum amount which can be deferred in any one year is the lesser of $7,500,
as increased for cost of living adjustments, or 33 1/3% of the participant's
includable compensation. However, in limited circumstances, up to $15,000 may
be deferred in each of the last three years before retirement.
SIMPLIFIED EMPLOYEE PENSION PLANS
[SECTION 408(K)]
An employer may make contributions on behalf of employees to a simplified
employee pension plan ("SEP") established prior to January 1, 1997, as provided
by Section 408(k) of the code. The contributions and distribution dates are
limited by the code provisions. All distributions from the plan will be taxed
as ordinary income. Any distribution before the employee attains age 59 1/2
(except in the event of death or disability) or the failure to satisfy certain
other code requirements may result in adverse tax consequences. For tax years
after 1996, salary
B-9
<PAGE>
reduction SEPs (SAR/SEP) may no longer be established. However, SAR/SEPs in
existence prior to January 1, 1997 may continue to receive contributions.
SAVINGS INCENTIVE MATCHED PLAN FOR EMPLOYEES (SIMPLE)
Employers with 100 or fewer employees, who earned $5,000.00 during the
preceding year, may establish SIMPLEs. For tax years beginning after December
31, 1996, SIMPLE plans are available and may be in the form of an IRA or part
of a 401(k) plan. Under a SIMPLE IRA, employees are permitted to make elective
contributions to an IRA, stated as a percentage of the employee's compensation,
but not to exceed $6,000.00 annually as indexed. Such deferrals are not subject
to income tax until withdrawn. Withdrawals made by an employee in the first two
years of the employee's participation are subject to a 25 percent penalty.
Later withdrawals are subject to penalties applicable to IRAs. Under a SIMPLE
401(k), employee deferrals are limited to no more than $6,000.00 annually.
Employer contributions are usually required for each type of SIMPLE.
TAX ON DISTRIBUTIONS FROM
QUALIFIED CONTRACTS
The following rules generally apply to distributions from contracts purchased
in connection with the plans discussed above, other than 457 plans.
The portion, if any, of any contribution under a contract made by or on behalf
of an individual which is not excluded from the employee's gross income
(generally, the employee's own non-deductible contributions) constitutes his
investment in the contract. If a distribution is made in the form of annuity
payouts, the employee's investment in the contract (adjusted for certain refund
provisions) divided by his life expectancy (or other period for which annuity
payouts are expected to be made) constitutes a return of capital each year. The
dollar amount of annuity payouts received in any year in excess of such return
is taxable as ordinary income. However, all distributions will be fully taxable
once the employee is deemed to have recovered the dollar amount of his
investment in the contract. Notwithstanding the above, if the employee's
annuity starting date was on or before July 1, 1986 and if his investment in
the contract will be recovered within three years of his annuity starting date,
no amount is included in income until he has fully recovered such investment.
Rules generally provide that all distributions which are not received as an
annuity will be taxed as a pro rata distribution of taxable and non-taxable
amounts (rather than as a distribution first of non-taxable amounts).
If a surrender of or withdrawal from the contract is effected and a
distribution is made in a single payment, the proceeds may qualify for special
lump-sum distribution treatment under certain qualified plans, as discussed
above. Otherwise, the amount by which the payment exceeds the investment in the
contract (adjusted for any prior withdrawals) allocated to that payment, if
any, will be taxed as ordinary income in the year of receipt.
Distributions from Section 401(a) plans, Section 403(b) plans, IRAs, SEPs and
Keoghs will be subject to (1) a 10% penalty tax if made before age 59 1/2
unless certain other exceptions apply, and (2) except during 1997, 1998 and
1999, a 15% penalty tax on combined annual distributions in excess of $150,000
(as indexed), subject to various special rules. Failure to meet certain minimum
distribution requirements for the above plans, as well as for Section 457
plans, will result in a 50% excise tax. Various other adverse tax consequences
may also be potentially applicable in certain circumstances to these types of
plans.
Upon an annuitant's death, the taxation of benefits payable to his beneficiary
generally follow these same principles, subject to a variety of special rules.
OTHER CONSIDERATIONS
It should be understood that the foregoing comments about the federal tax
consequences under these contracts are not exhaustive and that special rules
are provided with respect to other tax situations not discussed herein.
Further, the foregoing discussion does not address any applicable state, local,
or foreign tax laws. In recent years, numerous changes have been made in the
federal income tax treatment of contracts and retirement plans, which are not
fully discussed above. Before an investment is made in any of the above plans,
a tax adviser should be consulted.
ADVERTISING AND SALES
LITERATURE
As set forth in the Prospectus, Lincoln Life may refer to the following
organizations (and others) in its marketing materials:
A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors affecting
the overall performance of an insurance company in order to provide an opinion
as to an insurance company's relative financial strength and ability to meet
its contractual obligations. The procedure includes both a quantitative and
qualitative review of each company. A.M. Best also provides certain rankings,
to which Lincoln Life intends to refer.
DUFF & PHELPS insurance company claims paying ability (CPA) service provides
purchasers of insurance policies and contracts with analytical and statistical
information
B-10
<PAGE>
on the solvency and liquidity of major U.S. licensed insurance companies, both
mutual and stock.
EAFE INDEX is prepared by Morgan Stanley Capital International (MSCI). It
measures performance of securities in Europe, Australia and the Far East. The
index reflects the movements of world stock markets by representing the
evolution of an unmanaged portfolio. The EAFE Index offers international
diversification with over 1000 companies across 20 different countries.
LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a publisher
of statistical data covering the investment company industry in the United
States and overseas. Lipper is recognized as the leading source of data on
open-end and closed-end funds. Lipper currently tracks the performance of over
5,000 investment companies and publishes numerous specialized reports,
including reports on performance and portfolio analysis, and fee and expense
analysis.
MOODY'S insurance claims-paying rating is a system of rating on insurance
company's financial strength, market leadership, and ability to meet financial
obligations. The purpose of Moody's ratings is to provide investors with a
simple system of gradation by which the relative quality of insurance companies
may be noted.
MORNINGSTAR is an independent financial publisher offering comprehensive
statistical and analytical coverage of open-end and closed-end funds and
variable annuities.
STANDARD & POOR'S insurance claims-paying ability rating is an assessment of an
operating insurance company's financial capacity to meet obligations under an
insurance policy in accordance with the terms. The likelihood of a timely flow
of funds from the insurer to the trustee for the bondholders is a key element
in the rating determination for such debt issues.
VARDS (VARIABLE ANNUITY RESEARCH DATA SERVICE) provides a comprehensive guide
to variable annuity contract features and historical fund performance. The
service also provides a readily understandable analysis of the comparative
characteristics and market performance of funds inclusive in variable
contracts.
STANDARD & POOR'S INDEX -- is a broad-based measurement of changes in stock-
market conditions based on the average performance of 500 widely held common
stocks; commonly known as the Standard & Poor's 500 (S&P 500). The selection of
stocks, their relative weightings to reflect differences in the number of
outstanding shares, and publication of the index itself are services of
Standard & Poor's Corporation, a financial advisory, securities rating, and
publishing firm.
NASDAQ-OTC PRICE INDEX -- this index is based on the National Association of
Securities Dealers Automated Quotations (NASDAQ) and represents all domestic
over-the-counter stocks except those traded on exchanges and those having only
one market maker, a total of some 3,500 stocks. It is market value- weighted
and was introduced with a base of 100.00 on February 5, 1971.
DOW JONES INDUSTRIAL AVERAGE (DJIA) -- price-weighted average of 30 actively
traded blue chip stocks, primarily industrials but including American Express
Company and American Telephone and Telegraph Company. Prepared and published by
Dow Jones & Company, it is the oldest and most widely quoted of all the market
indicators. The average is quoted in points, not dollars.
In its advertisements and other sales literature for the VAA and the funds,
Lincoln Life intends to illustrate the advantages of the contracts in a number
of ways:
COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several advantages of the
variable annuity contract. For example, but not by way of limitation, the
literature may emphasize the potential savings through tax deferral; the
potential advantage of the variable annuity account over the fixed account; and
the compounding effect when a client makes regular deposits to his or her
contract.
The following features or services may also be discussed in or utilized in con-
nection with sales literature for the VAA.
INTERNET. An electronic communications network which may be also used to
provide information regarding Lincoln Life, performance of the subaccounts and
advertisement literature.
DOLLAR-COST AVERAGING. (DCA) -- You may systematically transfer on a monthly
basis amounts from certain subaccounts into the subaccounts or the fixed side
of the contract. You may elect to participate in the DCA program at the time of
application or at anytime before the annuity commencement date by completing an
election form available from us. The minimum amount to be dollar cost averaged
is $10,000 over any period between six and 60 months. Once elected, the program
will remain in effect until the earlier of: (1) the annuity commencement date;
(2) the value of the amount being DCA'd is depleted; or (3) you cancel the
program by written request or by telephone if we have your telephone
authorization on file. Currently, there is no charge for this service. However,
we reserve the right to impose one. A transfer under this program is not
considered a transfer for purposes of limiting the number of transfers that may
be made, or assessing any charges which may apply to transfers. We reserve the
right to discontinue this program at any time. DCA does not assure a profit or
protect against loss.
B-11
<PAGE>
AUTOMATIC WITHDRAWAL SERVICE. (AWS) -- AWS provides an automatic, periodic
withdrawal of contract value to you. You may elect to participate in AWS at the
time of application or at any time before the annuity commencement date by
sending a written request to our servicing office. The minimum contract value
required to establish AWS is $10,000. You may cancel or make changes to your
AWS program at any time by sending a written request to our servicing office.
Notwithstanding the requirements of the program, any withdrawal must be
permitted by Section 401(a)(9) of the code for qualified plans or permitted
under Section 72 for non-qualified contracts. To the extent that withdrawals
under AWS do not qualify for an exemption from the contingent deferred sales
charge, we will assess any applicable surrender charges on those withdrawals.
See Contingent deferred sales charges. Currently, there is no charge for this
service. However, we reserve the right to impose one. If a charge is imposed,
it will not exceed $25 per transaction or 2% of the amount withdrawn, whichever
is less. We reserve the right to discontinue this service at any time.
CROSS-REINVESTMENT SERVICE -- Under this option, account value in a designated
variable subaccount or the fixed side of the contract that exceeds a certain
baseline amount is automatically transferred to another specific variable
subaccount(s) or the fixed side of the contract at specific intervals. You may
elect to participate in cross-reinvestment at the time of application or at any
time before the annuity commencement date by sending a written request to our
servicing office or by telephone if we have your telephone authorization on
file. You designate the holding account, the receiving account(s), and the
baseline amount. Cross-reinvestment will continue until we receive
authorization to terminate the program.
The minimum holding account value required to establish cross-reinvestment is
$10,000. Currently, there is no charge for this service. However, we reserve
the right to impose one. A transfer under this program is not considered a
transfer for purposes of limiting the number of transfers that may be made, or
assessing any charges which may apply to transfers. We reserve the right to
discontinue this service at any time.
LINCOLN LIFE'S CUSTOMERS. Sales literature for the VAA and the series' funds
may refer to the number of employers and the number of individual annuity
clients which Lincoln Life serves.
LINCOLN LIFE'S ASSETS, SIZE. Lincoln Life may discuss its general financial
condition (see, for example, the reference to A.M. Best Company, above); it may
refer to its assets; it may also discuss its relative size and/or ranking among
companies in the industry or among any sub-classification of those companies,
based upon recognized evaluation criteria (see reference to A.M. Best Company
above).
FINANCIAL STATEMENTS
Financial statements for Lincoln Life appear on the following pages.
B-12
<PAGE>
(
LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H
REGISTRATION STATEMENT ON FORM N-4
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) List of Financial Statements
1. Part A The Table of Condensed Financial Information is included in
Part A of this Registration Statement. (TO BE FILED BY AMENDMENT)
2. Part B The following Financial Statements for the Variable Account are
included in Part B of this Registration Statement. (TO BE FILED BY
AMENDMENT)
3. Part B The following Statutory Financial Statements and Schedules of
Lincoln Life & Annuity Company of New York are included in the SAI:
(TO BE FILED BY AMENDMENT)
<PAGE>
Item 24. (Continued)
(b) List of Exhibits
(1) Resolutions of the Board of Directors of Lincoln Life & Annuity Company
of New York establishing Separate Account H.
(2) None.
(3)(a) Underwriting Agreement. (TO BE FILED BY AMENDMENT)
(4) Form of Variable Annuity Contract.
(5) Form of Application.
(6) Articles of Incorporation and Bylaws of Lincoln Life & Annuity
Company of New York.
(7) Not applicable.
(8) Form of Services Agreement between Lincoln Life & Annuity Company of New
York and the Delaware Management Company.
(8)(a) Form of Participation Agreement (TO BE FILED BY AMENDMENT)
(9) Opinion and consent of Bob Sheppard, Lincoln Life & Annuity Company of
New York as to legality of securities being issued. (TO BE FILED BY
AMENDMENT)
(10) Consent of auditors. (TO BE FILED BY AMENDMENT)
(11) Not applicable.
(12) Not applicable.
(13) Schedule for computation for performance quotations. (TO BE FILED BY
AMENDMENT)
14(a) Financial Data Schedule (TO BE FILED BY AMENDMENT)
15 Other Exhibits
(a) Organizational Chart
(b) Books and Records Report (TO BE FILED BY AMENDMENT)
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
Name Positions and Offices with Lincoln Life
- ---- ---------------------------------------
<S> <C>
Philip L. Holstein* President, Treasurer and Director
David N. Becker Second Vice President and Appointed Actuary
1300 South Clinton Street
Fort Wayne, IN 46802-3506
Kathy E. Bowman* Second Vice President
Garrett W. Cooper* Second Vice President
Catherine M. King* Second Vice President
David J. Miller* Second Vice President
Troy D. Panning* Second Vice President and Chief Financial Officer
Karen Ritgert* Second Vice President
</TABLE>
<PAGE>
Item 26.
PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
WITH THE DEPOSITOR OR REGISTRANT
See Exhibit 15(a): Organizational Chart of the Lincoln National Insurance
Holding Company System.
Item 27.
NUMBER OF CONTRACTOWNERS
As of _________________, there were _______ (variable and fixed) contract
owners under Account H.
Item 28. Indemnification
(a) Brief description of indemnification provisions.
In general, Article VII of the By-Laws of Lincoln Life & Annuity
Company of New York (Lincoln Life) provides that Lincoln Life will
indemnify certain persons against expenses, judgments and certain other
specified costs incurred by any such person if he/she is made a party
or is threatened to be made a party to a suit or proceeding because
he/she was a director, officer, or employee of Lincoln Life, as long as
he/she acted in good faith and in a manner he/she reasonably believed
to be in the best interests of, or not opposed to the best interests
of, Lincoln Life. Certain additional conditions apply to
indemnification in criminal proceedings.
In particular, separate conditions govern indemnification of directors,
officers, and employees of Lincoln Life in connection with suits by, or
in the right of, Lincoln Life.
Please refer to Article VII of the By-Laws of Lincoln Life (Exhibit No.
6(b) hereto) for the full text of the indemnification provisions.
Indemnification is permitted by, and is subject to the requirements of,
New York law.
(b) Undertaking pursuant to Rule 484 of Regulation C under the Securities
Act of 1933:
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item
28(a) above or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any such action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter 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 Act and will be governed by the final
adjudication of such issue.
Item 29. Principal Underwriter
(a) American Funds Distributors, Inc., is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American
Funds Income Series, The American Funds Tax-Exempt Series I, The
American Funds Tax-Exempt Series II American High-Income Municipal Bond
Fund, Inc., American High-Income Trust, American Mutual Fund, Inc., The
Bond Fund of America, Inc., Capital Income Builder, Inc., Capital World
Bond Fund, Inc., Capital World Growth and Income Fund, Inc., The Cash
Management Trust of America, EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of
America, Inc., Intermediate Bond Fund of America, The Investment
Company of America, Limited Term Tax-Exempt Bond Fund of America, The
New Economy Fund, New Perspective Fund, Inc., The Tax-Exempt Bond Fund
of America, Inc., The Tax-Exempt Money Fund of America, The U.S.
Treasury Money Fund of America, Washington Mutual Investors Fund, Inc.
and SMALLCAP World Fund, Inc.
(b)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
*David L. Abzug Regional Vice President
5657 Lemona Avenue
Van Nuys, CA 91411
John A. Agar Regional Vice President
1501 N. University Drive
Little Rock, AR 72207
<PAGE>
Robert B. Aprison Vice President
2983 Bryn Wood Drive
Madison, WI 53711
%Richard Armstrong Assistant Vice President
*William W. Bagnard Vice President
Steven L. Barnes Senior Vice President
8000 Town Line Avenue South
Suite 204
Minneapolis, MN 55438
Michelle A. Bergeron Vice President
4160 Gateswalk Drive
Smyrna, GA 30080
<PAGE>
Item 29. Principal Underwriter (continued)
(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ---------------------
Joseph T. Blair Senior Vice President
27 Drumlin Road
West Simsbury, CT 06092
John A. Blanchard Regional Vice President
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President
3100 West End Avenue, Suite 870
Nashville, TN 37215
Michael L. Brethower Vice President
108 Hagen Court
Georgetown, TX 78628
C. Alan Brown Regional Vice President
4619 McPherson Avenue
St. Louis, MO 63108
*Daniel C. Brown Senior Vice President
@J. Peter Burns Vice President
Brian C. Casey Regional Vice President
9508 Cable Drive
Kensington, MO 20895
Victor C. Cassato Vice President
609 W. Littelton Blvd. - Suite 310
Littleton, CO 80121
Christopher J. Cassin Senior Vice President
111 West Chicago Street - Suite G3
Hinsdale, IL 60521
Denise M. Cassin Regional Vice President
1301 Stoney Creek Drive
San Ramon, CA 94538
<PAGE>
*Larry P. Clemmensen Director
*Kevin G. Clifford Director, Senior Vice President
Ruth M. Collier Vice President
145 West 67th Street, #12K
New York, NY 10023
Thomas E. Cournoyer Vice President
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Vice President
4116 Woodbine St.
Chevy Chase, MD 20815
*Carl D. Cutting Vice President
Dan J. Delianedis Regional Vice President
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President
P.O. Box 661
Ramsey, NJ 07446
<PAGE>
Item 29. Principal Underwriters (continued)
(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- --------------------- ---------------------
G. Michael Dill Senior Vice President
505 East Main St.
Jenks, OK 74037
Kirk D. Dodge Regional Vice President
3034 Parkridge Drive
Ann Arbor, MI 48103
Peter J. Doran Senior Vice President
1205 Franklin Avenue
Garden City, NY 11530
*Michael J. Downer Secretary
Robert W. Durbin Vice President
74 Sunny Lane
Tiffin, OH 44883
&Lloyd G. Edwards Vice President
*Paul H. Fieberg Senior Vice President
John Fodor Regional Vice President
15 Latisquama Road
Southborough, MA 01772
*Mark P. Freeman, Jr. Director and President
Clyde E. Gardner Senior Vice President
Route 2, Box 3162
Osage Beach, MO 65065
#Evelyn K. Glassford Vice President
Jeffrey J. Greiner Regional Vice President
12210 Taylor Road
Plain City, OH 43064
<PAGE>
David E. Harper Senior Vice President
R.D.1, Box 210, Rte 519
Frenchtown, NJ 08825
Ronald R. Hulsey Vice President
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President
1225 Vista Del Mar Dr.
Delray Beach, FL 33483
*Robert L. Johansen Vice President and Controller
Michael J. Johnston Chairman of the Board
630 Fifth Ave., 36th Floor
New York, NY 10111-0121
V. John Kriss Senior Vice President
P. O. Box 274
Surfside, CA 90743
Arthur J. Levine Vice President
12558 Highlands Place
Fishers, IN 46038
<PAGE>
Item 29. Principal Underwriters (continued)
(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ------------------------
#Karl A. Lewis Assistant Vice President
T. Blake Liberty Regional Vice President
1940 Blake St., Ste. 303
Denver, CO 80202
*Lorin E. Liesy Assistant Vice President
*Susan G. Lindgren Vice President - Institutional
Investment Services Division
+Robert W. Lovelace Director
Stephen A. Malbasa Regional Vice President
13405 Lake Shore Boulevard
Cleveland, OH 44110
Steven M. Markel Vice President
5241 South Race St.
Littleton, CO 80121
*John C. Massar Director and Senior Vice President
*E. Lee McClennahan Senior Vice President
%John V. McLaughlin Senior Vice President
Terry W. McNabb Vice President
2002 Barrett Station Road
St. Louis, MO 63131
*R. William Melinat Vice President
Institutional Investment
Services Division
David R. Murray Vice President
25701 S. E. 32nd Place
Issaquah, WA 98027
<PAGE>
Stephen S. Nelson Vice President
P.O. Box 470528
Charlotte, NC 28247-0528
William E. Noe Regional Vice President
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Regional Vice President
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Regional Vice President
62 Park Drive
Glenview, IL 60025
Ric Phillips Vice President
32 Ridge Avenue
Newton Centre, MA 02161
#Candance D. Pilgrim Assistant Vice President
<PAGE>
Item 29. Principal Underwriters (continued)
- -------
(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ---------------------
Carl S. Platou Regional Vice President
4021 96th Avenue, SE
Mercer Island, WA 98040
*John O. Post, Jr. Vice President
%Richard P. Prior Assistant Vice President
Steven J. Reitman Vice President
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Regional Vice President
12025 Delmahoy Drive
Charlotte, NC 28277
George S. Ross Vice President
55 Madison Avenue
Morristown, NJ 07960
*Julie D. Roth Vice President
*James F. Rothenberg Director
Douglas F. Rowe Regional Vice President
30008 Oakland Hills Drive
Georgetown, TX 78628
Christopher Rowey Regional Vice President
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Vice President
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Vice President
4604 Glencoe Ave., Suite 4
Marina Del Ray, CA 90292
<PAGE>
Joe D. Scarpitti Regional Vice President
31465 St. Andrews
Westlake, OH 44145
*Daniel B. Seivert Assistant Vice President
*R. Michael Shanahan Director
David W. Short Director and Senior Vice President
1000 RIDC Plaza, Suite 212
Pittsburgh, PA 15238
William P. Simon, Jr. Vice President
554 Canterbury Lane
Berwyn, PA 19312
*John C. Smith Vice President
Institutional Investment Services
Division
*Mary E. Smith Vice President
Institutional Investment Services
Division
Rodney G. Smith Regional Vice President
100 N. Central Expressway
Suite 1214
Richardson, TX 75080
Nicholas D. Spadaccini Regional Vice President
855 Markley Woods Way
Cincinnati, OH 45230
<PAGE>
Item 29. Principal Underwriters (continued)
- --------
(b) (continued)
(1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------ ---------------------
Daniel S. Spradling Senior Vice President
#4 West Fourth Avenue, Suite 406
San Mateo, CA 94402
Thomas A. Stout Regional Vice President
12913 Kendale Lane
Bowie, MD 20715
Craig R. Strausser Regional Vice President
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Regional Vice President
31641 Saddletree Drive
Westlake Village, CA 91361
Drew Taylor Assistant Vice President
%James P. Toomey Assistant Vice President
&Christopher E. Trede Assistant Vice President
George F. Truesdail Vice President
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Regional Vice President
60 Reedland Woods Way
Tiburon, CA 94920
*David M. Ward Vice President
Institutional Investment Services
Division
Thomas E. Warren Regional Vice President
1701 Starling Drive
Sarasota, FL 34231
*J. Kelly Webb Senior Vice President and Treasurer
<PAGE>
Gregory J. Weimer Regional Vice President
125 Surrey Drive
Canonsburg, PA 15317
#Timothy W. Weiss Director
N. Dexter Williams Vice President
25 Whitside Court
Danville, CA 94526
Timothy J. Wilson Regional Vice President
113 Farmview Place
Venetia, PA 15367
#Laura L. Wimberly Assistant Vice President
*Marshall D. Wingo Director and Senior Vice President
*Robert L. Winston Director and Senior Vice President
Laurie B. Wood Regional Vice President
3500 W. Camino de Urania
Tucson, AZ 85741
William Yost Regional Vice President
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President
1616 Vermont
Houston, TX 77006
Scott D. Zombon Regional Vice President
320 Robinson Drive
Tustin Ranch, CA 92782
*Business Address, 333 South Hope Street, Los Angeles, CA 90071
+Business Address, 11100 Santa Monica Blvd., Los Angeles, CA 90025
#Business Address, 135 South State College Blvd., Brea, CA 92821
%Business Address, 8000 IH-10, Suite 1400, San Antonio, TX 78230
@Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
&Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
Item 32. Undertakings
- ---------------------
(a) Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted.
(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a Certificate or an Individual Contract offered by
the Prospectus, a space that an applicant can check to request a Statement
of Additional Information, or (2) a post card or similar written
communication affixed to or included in the Prospectus that the applicant
can remove to send for a Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional Information
and any financial statements required to be made available under this Form
promptly upon written or oral request to Lincoln Life & Annuity Company of
New York at the address or phone number listed in the Prospectus.
(d) Lincoln Life & Annuity Company of New York hereby represents that the fees
and charges deducted under the contract, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred,
and the risks assumed by Lincoln Life & Annuity Company of New York.
(e) Registrant hereby represents that it is relying on the American Council of
Life Insurance (avail. Nov. 28, 1988) no-action letter with respect to
Contracts used in connection with retirement plans meeting the requirements
of Section 403(b) of the Internal Revenue Code, and represents further that
it will comply with the provisions of paragraphs (1) through (4) set forth
in that no-action letter.
<PAGE>
SIGNATURES
(a) As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has caused this Registration Statement to be signed
on its behalf, in the City of Syracuse, and State of New York on this 16th day
of October, 1997.
Lincoln Life & Annuity Variable Annuity Account
H (Registrant)
By: /s/ Philip L. Holstein
-------------------------------------------
Philip L. Holstein, President
Lincoln Life & Annuity Company of New York
(Depositor)
By: /s/ Philip L. Holstein
-------------------------------------------
Philip L. Holstein, President
(b) As required by the Securities Act of 1933, this Registration Statement
has been signed for the Depositor by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ Philip L. Holstein President, Treasurer and Director October 16, 1997
- ----------------------------- (Principal Executive Officer) ------------------
Philip L. Holstein
/s/ Jon A. Boscia Director October 16, 1997
- ----------------------------- ------------------
Jon A. Boscia
/s/ Richard C. Vaughan Director October 16, 1997
- ----------------------------- ------------------
Richard C. Vaughan
/s/ Troy D. Panning Second Vice President and Chief October 16, 1997
- ----------------------------- Financial Officer (Principal Financial ------------------
Troy D. Panning Officer and Principal Accounting Officer)
Director
- ----------------------------- ------------------
Thomas D. Bell, Jr.
/s/ Roland C. Baker Director October 16, 1997
- ----------------------------- ------------------
Roland C. Baker
/s/ Harry L. Kavetas Director October 16, 1997
- ----------------------------- ------------------
Harry L. Kavetas
/s/ Barbara Steury Kowalczyk Director October 16, 1997
- ----------------------------- ------------------
Barbara Steury Kowalczyk
/s/ Marguerite Leanne Lachman Director October 16, 1997
- ----------------------------- ------------------
Marguerite Leanne Lachman
/s/ John M. Pietruski Director October 16, 1997
- ----------------------------- ------------------
John M. Pietruski
Director
- ----------------------------- ------------------
Lawrence T. Rowland
/s/ John L. Steinkamp Director October 16, 1997
- ----------------------------- ------------------
John L. Steinkamp
/s/ J. Patrick Barrett Director October 13, 1997
- ----------------------------- ------------------
J. Patrick Barrett
/s/ Louis G. Marcoccia Director October 16, 1997
- ----------------------------- ------------------
Louis G. Marcoccia
</TABLE>
<PAGE>
Exhibit 1
ESTABLISHMENT OF SEPARATE INVESTMENT ACCOUNT
OF
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
Pursuant to the authority given me by Resolution Number 96-21 adopted by
the Board of Directors of Lincoln Life & Annuity Company of New York (the
"Company") on July 24, 1996, I establish a separate investment account
designated as "Lincoln Life & Annuity Variable Annuity Account H" (the
"Account"). The Account is to be used in connection with the issuance by the
Company of variable annuity policies (the "Policies"). The Account will be
registered as a unit investment trust with the Securities and Exchange
Commission ("SEC") and shall invest in shares of the investment companies which
are registered with the SEC. The establishment and operation of the Account will
be in accordance with the applicable provisions of New York Insurance Law and
all rules and regulations issued pursuant thereto ("New York Insurance Law"),
and subject to the approval of the Superintendent of the Insurance Department of
the State of New York. The Account's investment objectives, policies, and
limitations shall be in accordance with (1) the registration statement for the
policies filed with the SEC under the Securities Act of 1933, and (2) applicable
provisions of New York Insurance Law and any other applicable legal
requirements.
/s/ Philip L. Holstein
------------------------------
Philip L. Holstein, President
Dated:
July 24, 1996
- -------------
<PAGE>
Exhibit 1
I, C. Suzanne Womack, hereby certify that I am the duly elected and
qualified Secretary of Lincoln Life & Annuity Company of New York, and that the
following is a true and correct copy of the resolution adopted by the Board of
Directors at their meeting of July 24, 1996, and that such resolution is in full
force and effect as of the date hereof:
RESOLVED, That the chief executive officer of Lincoln Life & Annuity
Company of New York (the "Company") is hereby authorized in his discretion from
time to time to establish in his discretion from time to time to establish one
or more separate investment accounts in accordance with the provisions of the
New York Insurance Law, for such purpose or purposes as he may determine and as
may be appropriate under the New York Insurance Law; and
RESOLVED FURTHER, That if in the opinion of legal counsel of the Company,
it is necessary or desirable to register any of such accounts under the
Investment Company Act of 1940 or to register a security issued by any such
account under the Securities Act of 1933, or to make application for exemption
from registration, the chief executive officer or such other officers as he may
designate are hereby authorized to accomplish any such registration or to make
any such application for exemption, and to perform all other acts as may be
desirable or necessary in connection with the conduct of business of the Company
with respect to any such account.
/s/ C. Suzanne Womack
------------------------------
C. Suzanne Womack, Secretary
Dated:
July 24, 1996
- -------------
<PAGE>
EXHIBIT 4
ABRAHAM LINCOLN
XX-0123456
LINCOLN LIFE \TM\
ANNUITY CONTRACT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY OR VARIABLE AND FIXED ANNUITY
BENEFIT PAYMENT OPTIONS
NONPARTICIPATING
The Lincoln Life & Annuity Company of New York (LL&A) agrees to provide the
benefits and other rights described in this Contract in accordance with the
terms of this Contract.
NOTICE OF 10-DAY RIGHT TO EXAMINE CONTRACT. WITHIN 10 DAYS AFTER THIS CONTRACT
IS FIRST RECEIVED, IT MAY BE CANCELLED FOR ANY REASON WITHOUT PENALTY (E G, NO
CONTINGENT DEFERRED SALES CHARGE WILL BE DEDUCTED) BY DELIVERING OR MAILING IT
TO THE HOME OFFICE OF LL&A AT 120 MADISON STREET, SUITE 1700 SYRACUSE, NEW YORK,
13202. UPON CANCELLATION, LL&A WILL RETURN THE VALUE OF ANY PAYMENTS MADE TO THE
VARIABLE ACCOUNT AND/OR ANY PURCHASE PAYMENT PAID UNDER THE FIXED PORTION THE
CONTRACT.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT SEE PAGES 5 AND 10.
Signed for Lincoln Life & Annuity Company of New York at its Home Office in
Syracuse, New York.
PRESIDENT ASSISTANT SECRETARY
Page 1
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
1 DEFINITIONS 4
2 PURCHASE PAYMENTS, OPTIONS AND BENEFITS 5
3 ANNUITY PAYMENT OPTION BENEFITS 9
4 BENEFICIARY 11
5 GENERAL PROVISIONS 12
6 ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION 13
7 ANNUITY PURCHASE RATES UNDER A FIXED PAYMENT OPTION 14
8 GUARANTEED VALUES FOR FIXED ALLOCATIONS 15
Page 2
<PAGE>
CONTRACT DATA
CONTRACT NUMBER XX-0123456
ANNUITANT ABRAHAM LINCOLN
AGE AT ISSUE 35
CONTRACT DATE APRIL 1, 1969
PURCHASE PAYMENT $1,500.00
PURCHASE PAYMENT FREQUENCY MONTHLY
MATURITY DATE APRIL 1, 2039
OWNER
ABRAHAM LINCOLN
MARY LINCOLN
TODD LINCOLN
BENEFICIARY DESIGNATION
PLEASE REFER TO THE CLIENT INFORMATION PROFILE FOR BENEFICIARY DESIGNATION.
VARIABLE ACCOUNT
THERE ARE CURRENTLY NINE SUB-ACCOUNTS IN THE VARIABLE ACCOUNT AVAILABLE TO THE
OWNER. THE OWNER MAY DIRECT PURCHASE PAYMENTS UNDER THE CONTRACT TO ANY OF THE
AVAILABLE SUB-ACCOUNTS, SUBJECT TO LIMITATIONS. THE AMOUNTS ALLOCATED TO EACH
SUB-ACCOUNT WILL BE INVESTED AT NET ASSET VALUE IN THE SHARES OF ONE OF THE
FUNDS OF THE AMERICAN VARIABLE INSURANCE SERIES (SERIES). THE FUNDS ARE:
1. [GROWTH FUND]
2. [INTERNATIONAL FUND]
3. [GLOBAL GROWTH FUND]
4. [GROWTH-INCOME FUND]
5. [ASSET ALLOCATION FUND]
6. [HIGH-YIELD BOND FUND]
7. [BOND FUND]
8. [U.S. GOVERNMENT/AAA-RATED SECURITIES FUND]
9. [CASH MANAGEMENT FUND]
10. [OTHER FUNDS MADE AVAILABLE BY LL&A].
SEE SECTION 2.03 FOR PROVISIONS GOVERNING ANY LIMITATIONS, SUBSTITUTION
OR ELIMINATION OF FUNDS.
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ARTICLE I
DEFINITIONS
1.01
ACCOUNT or VARIABLE ACCOUNT -- The segregated investment account into which
Lincoln Life & Annuity Company of New York sets aside and invests the variable
assets attributable to this Variable Annuity Contract.
1.02
ACCUMULATION UNIT -- A unit of measure used to calculate the variable Contract
Value during the accumulation period.
1.03
ANNUITANT -- The person upon whose life the annuity benefit payments made after
the Annuity Commencement Date will be based.
1.04
ANNUITY COMMENCEMENT DATE -- The Valuation Date when the funds are withdrawn for
payment of annuity benefits under the Annuity Payment Option selected.
1.05
ANNUITY PAYMENT OPTION -- An optional form of payment of the annuity provided
for under this Contract.
1.06
ANNUITY UNIT -- A unit of measure used after the Annuity Commencement Date to
calculate the amount of variable annuity payments.
1.07
BENEFICIARY -- The person or entity designated by the Owner to receive the Death
Benefit, if any, payable upon the death of the Owner.
1.08
CODE -- The Internal Revenue Code (IRC) of 1986, as amended.
1.09
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Charges assessed on premature
surrender of the Contract, calculated according to the Contract provisions.
1.10
CONTRACT -- The agreement, between LL&A and the Owner, providing a variable
annuity.
1.11
CONTRACT VALUE -- The sum of the values of all the Accumulation Units
attributable to this Contract at a given time and the value of monies in the
Fixed Account.
1.12
CONTRACT YEAR -- The period from the anniversary of the date on your Contract
Data Page 3 to the anniversary of the Contract in the following year.
1.13
DEATH BENEFIT -- The amount payable to the Owner's designated Beneficiary upon
death of the Owner.
1.14
FUND -- Underlying investment options available in the Series.
1.15
FIXED ACCOUNT -- The fixed portion of this Contract which is invested in the
general account of LL&A.
1.16
HOME OFFICE -- The principal office of LL&A located at 120 Madison Street, Suite
1700, Syracuse, New York, 13202.
1.17
LL&A -- Lincoln Life & Annuity Company of New York.
1.18
MATURITY DATE -- The date specified on Page 3 of this Contract.
1.19
OWNER -- The individual or entity who exercises rights of ownership under this
contract.
1.20
PURCHASE PAYMENTS -- Amounts paid into this Contract.
1.21
QUALIFIED PLAN -- A retirement plan qualified for special tax treatment under
the Internal Revenue Code of 1986, as amended, including Sections 401, 403, 408
and 457. All other plans are considered Non-Qualified.
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1.22
SERIES -- American Variable Insurance Series, the mutual fund into which
Purchase Payments allocated to the Variable Account are invested.
1.23
SUB-ACCOUNT -- That portion of the Variable Account which pertains to
investments in the Accumulation Units and Annuity Units of a particular Fund.
1.24
VALUATION DATE -- Close of the market of each day that the New York Stock
Exchange is open for business.
1.25
VALUATION PERIOD -- The period commencing at the close of business on a
particular Valuation Date and ending at the close of business on the next
succeeding Valuation Date.
ARTICLE 2
PURCHASE PAYMENTS, OPTIONS,
AND BENEFITS
2.01 WHERE PAYABLE
All Purchase Payments must be made to LL&A at its Home Office.
2.02 AMOUNT AND FREQUENCY
Purchase Payments are made in an amount and at the frequency shown on page 3.
The Owner may change the frequency or amount of Purchase Payments subject to
LL&A's rules in effect at the time of the change.
The minimum initial Purchase Payment is $1,500 for Non-Qualified Plans and $300
for Qualified Plans. The minimum annual amount of subsequent Purchase Payments
is $300 for either Non-Qualified Plans or Qualified Plans. The minimum payment
to the Contract at any one time must be at least $25.00 if transmitted
electronically: otherwise the minimum amount is $100.00.
Purchase Payments may be made until the earliest of the Annuity Commencement
Date, the surrender of the Contract, Maturity Date or payment of any Death
Benefit.
2.03 VARIABLE ACCOUNT
Purchase Payments under the Contract may be allocated to the Lincoln Life &
Annuity Variable Annuity Account H (Variable Account) and/or to the Fixed
Account of the Contract. The Variable Account is for the exclusive benefit of
persons entitled to receive benefits under variable annuity contracts. The
Variable Account will not be charged with the liabilities arising from any other
part of LL&A's business. The Owner may direct Purchase Payments under the
Contract to any of the available Sub-accounts subject to the following
limitations. A minimum payment to any one Sub-account must be at least $20. If
the Owner elects to direct Purchase Payments to a new Sub-account not previously
selected, the election must be in writing to LL&A or by telephone transfer
provided LL&A has received the appropriate authorization. The amounts allocated
to each Sub-account will be invested at net asset value in the shares of one of
the Funds of the American Variable Insurance Series (Series). The Funds are
shown on Page 3 of the Contract.
LL&A reserves the right to eliminate the shares of any Fund and substitute the
securities of a different Fund or investment company or mutual fund if the
shares of a Fund are no longer available for investment, or, if in the judgment
of LL&A, further investment in any Fund should become inappropriate in view of
the purposes of the Contract. LL&A may add a new Sub-account in order to invest
the assets of the Variable Account into a Fund. LL&A shall give the Owner
written notice of the elimination and substitution of any Fund within fifteen
days after such substitution occurs.
LL&A shall use each Purchase Payment allocated to the Variable Account by the
Owner to buy Accumulation Units in the Sub-account(s) selected by the Owner. The
number of Accumulation Units bought shall be determined by dividing the amount
directed to the Sub-account by the dollar value of an Accumulation Unit in such
Sub-account as of the point of the next valuation of such Sub-account
immediately following receipt of the Purchase Payment at the Home Office of
LL&A. The number of Accumulation Units held for the Variable Account of an Owner
shall not be changed by any change in the dollar value of Accumulation Units in
any Sub-account.
2.04 VALUATION OF ACCUMULATION UNITS
The variable Contract Value of an Owner's Contract at any time prior to the
Annuity Commencement Date equals the sum of the values of the Accumulation Units
credited in the Variable Account under the Contract.
The value of a Sub-account is the number of units in the Sub-account multiplied
by the value of an Accumulation Unit in the sub-account.
Accumulation Units for each Sub-account are valued separately. Initially, the
value of an Accumulation Unit was set at $1.00. Thereafter. the value of an
Accumulation Unit in any Sub-account on any Valuation Date equals the value of
an Accumulation Unit in that Sub-account as of the immediately preceding
Valuation Date, multiplied by the "Net Investment Factor" of that Sub-account
for the current Valuation Period.
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The Net Investment Factor is an index which measures the investment performance
of a Sub-account from one Valuation Period to the next. The Net Investment
Factor for any Sub-account for any Valuation Period is equal to (1) divided by
(2) and subtracting (3) from the result, where:
1. is the result of:
a. the net asset value per share of the Fund held in the Sub-account,
determined at the end of the current Valuation Date; plus
b. the per share amount of any dividend or capital gain distribution made
by the Fund in the Sub-account, if the "ex-dividend" date occurs during
the Valuation Period; plus or minus
c. a per share charge or credit for any taxes reserved for;
2. is the net asset value per share of the Fund held in the Sub-account,
determined at the end of the prior Valuation Date;
3. is a daily factor representing the mortality and expense risk and
administrative charge deducted from the Sub-account adjusted for the number
of days in the Valuation Period. On an annual basis, this charge will not
exceed 1.40%. For any period in which the Enhanced Guaranteed Minimum Death
Benefit (see Section 2.12) is not in effect, this charge will not exceed
1.25% on an annual basis.
The Accumulation Unit value and Annuity Unit value may increase or decrease the
dollar value of benefits under the Contract. The dollar value of benefits will
not be adversely affected by expenses incurred by LL&A.
2.05 FIXED ALLOCATIONS
Purchase Payments under the Contract may be allocated to the Variable Account
and/or to the Fixed Account of the Contract. A minimum allocation to the Fixed
Account must be at least $20.
2.06 CREDITING OF INTEREST ON FIXED ALLOCATIONS
Interest shall be credited daily on all Purchase Payments that are allocated to
the Fixed Account of this Contract.
Prior to: the Maturity Date; the Annuity Commencement Date; payment of any Death
Benefit; or surrender of this Contract; whichever occurs first, LL&A guarantees
that it will credit interest on fixed allocations at an effective annual rate
not less than 3.0% during all years. A table of guaranteed values for the fixed
allocations may be found in Article 8.
LL&A may credit interest at rates in excess of the guaranteed rates at any time.
2.07 AUTOMATIC NONFORFEITURE OPTION
In the event that Purchase Payments are stopped, this Contract will continue as
a paid-up Contract until the earlier of: the Maturity Date, surrender of the
Contract, payment of any Death Benefit, or the Annuity Commencement Date.
Purchase Payments may be resumed at any time prior to: the Maturity Date,
surrender of the Contract, payment of any Death Benefit, or the Annuity
Commencement Date. LL&A reserves the right to surrender this Contract in
accordance with the terms set forth in the nonforfeiture law, applicable in your
state, for individual deferred annuities.
2.08 TRANSFERS
Prior to the earlier of: the Maturity Date; surrender of the Contract; payment
of any Death Benefit; or the Annuity Commencement Date, the Owner may direct a
transfer of assets from one Sub-account to another Sub-account or to the Fixed
Account of the Contract. The Owner may also direct a transfer of assets from
the Fixed Account of the Contract to one or more Sub-accounts of the Variable
Account, subject to the limitations described below. Such a transfer request
must be in writing or by telephone provided LL&A has received the appropriate
authorization from the Owner. Amounts transferred to the Sub-account(s) will
purchase Accumulation Units as described in Section 2.03.
A transfer will result in the purchase of Accumulation Units in one Sub-account
and the redemption of Accumulation Units in the other Sub-account. Such a
transfer will be accomplished at relative Accumulation Unit values as of the
Valuation Date the transfer request is received. The valuation of
Accumulation Units is described in Section 2.04.
LL&A reserves the right to impose a charge in the future for transfers between
Sub-accounts.
The minimum transfer amount is $300 or the entire amount in the Sub-
account/Fixed Account, whichever is less. If after the transfer, the amount
remaining under this Contract in the Sub-account/Fixed Account from which the
transfer is taken is less than $300, the entire amount held in that Sub-
account/Fixed Account will be transferred with the transfer amount.
For transfers between Sub-accounts and from the Sub-account(s) to the Fixed
Account of the Contract, there are no restrictions on the maximum amount which
may be transferred. For transfers from the Fixed Account of the Contract to the
Variable Account, the sum of the percentages of fixed value transferred will be
limited to 25% in any 12 month period. Transfers cannot be made during the first
30 days after the Contract Date and no more than six transfers will be allowed
in any Contract Year. LL&A reserves the right to waive any of these
restrictions.
2.09 WITHDRAWAL OPTION
The Owner may withdraw a part of the surrender value of
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this Contract, subject to the charges outlined under Surrender Option (see
Section 2.10). The first four partial withdrawals of Contract Value during a
Contract Year will be free of Contingent Deferred Sales Charges to the extent
that the sum of the percentages of the Contract Value withdrawn, where the
percentages are based upon the Contract Value at the time of the current
withdrawal, does not exceed 10%. This 10% withdrawal exemption from CDSC does
not apply to a surrender of a Contract. Withdrawals will be treated as
"first in-first out (FIFO)" for purposes of calculating the Contingent Deferred
Sales Charge (see Section 2.11). Withdrawal will be effective on the Valuation
Date on which LL&A receives a written request at its Home Office.
The remaining value will be subject to the charges as provided under Surrender
Option (see Section 2.10). The request should specify from which Sub-account the
withdrawal will be made. If no Sub-account is specified, LL&A will withdraw, on
a pro-rata basis from each Sub-account, the amount requested. Any cash payment
will be mailed from LL&A's Home Office within seven days after the date of
withdrawal; however, LL&A may be permitted to defer such payment under the
Investment Company Act of 1940, as in effect at the time such request for
withdrawal is received.
For purposes of this Section, the Fixed Account of the Contract is considered a
Sub-account.
The Withdrawal Option is not available after the Annuity Commencement Date.
The minimum withdrawal is $300. LL&A reserves the right to surrender this
Contract if any withdrawal reduces the total Contract Value to a level in which
this Contract may be surrendered in accordance with the terms set forth in the
nonforfeiture law, applicable in your state, for individual deferred annuities.
LL&A may surrender the Contract for its surrender value.
2.10 SURRENDER OPTION
The Owner may surrender this Contract for its surrender value. On surrender,
this Contract terminates. Surrender will be effective on the Valuation Date on
which LL&A receives a written request at its Home Office. The surrender value
will be the total Contract Value on the Valuation Date, less a Contingent
Deferred Sales Charge.
Any cash payment will be mailed from LL&A's Home Office within seven days after
the date or surrender; however, LL&A may be permitted to defer such payment
under the Investment Company Act of 1940, as in effect at the time a request for
surrender is received in its Home Office.
The Surrender Option is not available after the Annuity Commencement Date.
2.11 CONTINGENT DEFERRED SALES CHARGE
The Contingent Deferred Sales Charge (CDSC) is calculated separately for each
Contract Year's Purchase Payments to which a charge applies. Charges are applied
as follows:
NUMBER OF COMPLETE CDSC AS A PERCENTAGE
CONTRACT YEARS THAT OF THE SURRENDERED
A PURCHASE PAYMENT OR WITHDRAWN
HAS BEEN INVESTED PURCHASE PAYMENTS
LESS THAN
2 YEARS 6%
AT LEAST
2 YEARS 5%
AT LEAST
3 YEARS 4%
AT LEAST
4 YEARS 3%
AT LEAST
5 YEARS 2%
AT LEAST
8 YEARS 1%
AT LEAST
7+ YEARS 0%
A CDSC will be waived under certain circumstances (see Section 2.14 for
details).
For purposes of calculating CDSC, LL&A assumes that Purchase Payments are
withdrawn on a "first in-first out (FIFO)" basis, and that all Purchase Payments
are withdrawn before any earnings are withdrawn.
2.12 DEATH BENEFITS
BEFORE THE ANNUITY COMMENCEMENT DATE
ENTITLEMENT
If there is a single Owner, upon the death of the Owner LL&A will pay a Death
Benefit to the designated Beneficiary(s). If the designated Beneficiary of the
Death Benefit is the surviving spouse of the deceased Owner, the designated
Beneficiary may elect to continue the Contract as the new Owner in lieu of
receiving the Death Benefit. If there are no designated Beneficiaries, LL&A
will pay a Death Benefit to the Owner's estate. Upon the death of the designated
Beneficiary who continues the Contract as the new Owner, LL&A will pay a Death
Benefit to the designated Beneficiary(s) named by the spouse as new Owner.
If there are Joint Owners, upon the death of the first Joint Owner, LL&A will
pay a Death Benefit to the surviving Joint Owner. The surviving Joint Owner, as
the spouse of the deceased Joint Owner, may elect to continue the Contract as
sole Owner in lieu of receiving the Death Benefit. Upon the death of the Joint
Owner who continues the Contract, LL&A will pay a Death Benefit to the
designated Beneficiary(s).
The Death Benefit will be paid if LL&A is in receipt of: (1) proof, satisfactory
to LL&A, of the death; (2) written authorization for payment; and (3) all claim
forms, fully completed.
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Due proof of death may be a certified copy of a death certificate, a certified
copy of the statement of death from the attending physician, a certified copy of
a decree of a court of competent jurisdiction as to the findings of death, or
any other proof of death acceptable to LL&A.
All Death Benefit payments will be subject to the laws and regulations governing
death benefits.
Notwithstanding any provision of this Contract to the contrary, no payment of
Death Benefits provided under the Contract will be allowed that does not satisfy
the requirements of Code Section 72(s) or 401(a)(9) as applicable, as amended
from time to time.
DETERMINATION OF AMOUNTS
This Contract provides a Death Benefit equal to an Enhanced Guaranteed Minimum
Death Benefit (EGMDB) or the Guarantee of Principal.
The EGMDB is equal to the greater of:
a. the current Contract Value as of the date on which the death claim is
approved by LL&A for payment; or
b. the highest Contract Value at the time of Fund valuation on any policy
anniversary date (including the inception date) on ages up to, and including,
the Owner's age 75. The highest Contract Value is increased by Purchase
Payments and is decreased by partial withdrawals, partial annuitizations, and
premium tax made, effected, or incurred subsequent to such anniversary date
on which the highest Contract Value is obtained.
The Guarantee of Principal is equal to the greater of:
a. the current Contract Value as of the date on which the death claim is
approved by LL&A for payment; or
b. the sum of all Purchase Payments minus withdrawals, partial annuitizations,
and premium tax incurred.
The EGMDB will not be in effect if this Contract is issued to an Owner with an
attained age of 75 or greater at issue. Under these circumstances, there will be
no EGMDB provided and the Death Benefit is equal to the Guarantee of Principal.
The EGMDB will only be in effect, unless terminated by the Owner, for Non-
Qualified Contracts and Contracts sold as Individual Retirement Annuities (IRA)
under Code Section 408(b). For all other Contracts the EGMDB will not be in
effect and the Death Benefit is equal to the Guarantee of Principal.
Upon the death of the sole Owner, this Contract provides a Death Benefit of an
EGMDB, if still in effect. If the EGMDB was not available at issue of the
Contract or has been terminated at any time, then the Death Benefit will be
equal to the Guarantee of Principal.
If the designated Beneficiary, as the surviving spouse of the deceased Owner,
continues the Contract as the new Owner in lieu of receiving the Death Benefit,
then upon the death of the new Owner this Contract will provide a Death Benefit
of an EGMDB, if still in effect. If the EGMDB was not available at issue of the
Contract or has been terminated at any time, then the Death Benefit will be
equal to the Guarantee of Principal.
If there are Joint Owners, upon the death of the first Joint Owner, this
Contract will provide a Death Benefit of an EGMDB, if still in effect upon this
death, to the surviving Joint Owner. If the EGMDB was not available at issue of
the Contract or has been terminated at any time, this Contract will provide a
Death Benefit equal to the Guarantee of Principal to the surviving Joint Owner.
If the surviving Joint Owner, as the spouse of the deceased Joint Owner,
continues the Contract in lieu of receiving the Death Benefit, then the EGMDB,
if in effect at the time of the death of the first Joint Owner, will continue in
effect unless it has been terminated. Upon the death of the surviving Joint
Owner this Contract will provide a Death Benefit of the EGMDB, if still in
effect. If the EGMDB was not available at issue of the Contract or has been
terminated at any time, then the Death Benefit will be equal to the Guarantee of
Principal.
At any time prior to the Annuity Commencement Date, an Owner may choose to
terminate the EGMDB by giving written notice to LL&A, and will then have no
EGMDB. The EGMDB will terminate on the next Valuation Date following receipt of
the written notice in the LL&A Home Office and the Death Benefit will then be
the Guarantee of Principal. Termination of the EGMDB by the Owner will be
permanent and final.
If the Owner is a corporation or other non-individual (non-natural person), the
death of the Annuitant will be treated as the death of the Owner. The EGMDB, if
applicable, will apply on the death of the Annuitant only in this situation.
PAYMENT OF AMOUNTS
The Death Benefit payable on the death of the Owner, or after the death of the
first Joint Owner, or upon the death of the spouse who continues the Contract,
will be distributed to the designated Beneficiary(s) as follows:
a. the Death Benefit must be completely distributed within five years of the
Owner's date of death; or
b. the designated Beneficiary may elect, within the one year period after the
Owner's date of death, to receive the Death Benefit in substantially equal
installments over the life of such designated
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Beneficiary or over a period not extending beyond the life expectancy of
such designated Beneficiary; provided that such distributions begin not
later than one year after the Owner's date of death.
If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by LL&A of the claim. This payment may be postponed as
permitted by the Investment Company Act of 1940.
ON OR AFTER THE ANNUITY COMMENCEMENT DATE
If the Owner dies on or after the Annuity Commencement Date, any remaining
benefits payable will continue to be distributed under the Annuity Payment
Option then in effect. All of the Owner's rights granted by the Contract will
pass to the Joint Owner, if any; otherwise to the Beneficiary.
If there is no named Beneficiary at the time of the Owner's death, then the
Owner's rights will pass to the Annuitant, if still living; otherwise to the
Joint Annuitant, if applicable. If no named Beneficiary, Annuitant, or Joint
Annuitant survives the Owner, any remaining annuity benefit payments will
continue to the Owner's estate.
2.13 DEATH OF ANNUITANT
BEFORE THE ANNUITY COMMENCEMENT DATE
If the Annuitant is also the Owner or a Joint Owner, then the Death Benefit paid
will be subject to the Contract provisions regarding death of the Owner. If the
surviving spouse of the Owner/Annuitant assumes the Contract, the Contingent
Annuitant becomes the Annuitant. If no Contingent Annuitant is named, the
surviving spouse becomes the Annuitant.
If an Annuitant who is not the Owner or Joint Owner dies, then the Contingent
Annuitant, if any, becomes the Annuitant. If no Contingent Annuitant is named,
the Owner (or the younger of the Joint Owners) becomes the Annuitant.
ON OR AFTER THE ANNUITY COMMENCEMENT DATE
On receipt of due proof of death, as described in Section 2.12, of the
Annuitant or both Joint
Annuitants, any remaining annuity benefit payments under the Annuity Payment
Option will be paid to the Owner if living; otherwise, to the Beneficiary. If
there is no Beneficiary, any remaining benefit payments will continue to the
Annuitant's estate.
2.14 WAIVER OF CONTINGENT DEFERRED SALES CHARGES
A surrender of this Contract or withdrawal of Contract Value prior to the
Annuity Commencement Date may be subject to a Contingent Deferred Sales Charge
as described in Sections 2.09 and 2.10, except that such charges do not apply
to: (1) the first four withdrawals of Contract Value during a Contract Year to
the extent that the sum of the percentages of the Contract Value withdrawn by
the first four withdrawals, where the percentages are based on the Contract
Value at the time of the current withdrawal, does not exceed 10% (this 10%
withdrawal exemption from CDSC does not apply to a surrender of a Contract); (2)
a surrender of the Contract as a result of "permanent and total disability" of
the Owner as defined in section 22(e)(3) of the Internal Revenue Code subsequent
to the effective date of this Contract and prior to the 65/th/ birthday of the
Owner; (3) a surrender of this Contract as a result of 90 days of continuous
confinement of the Owner, where the 90 day period begins subsequent to the
effective date of this Contract, in an accredited nursing home or equivalent
health care facility; (4) a surrender of this Contract as a result of the onset
of a terminal illness of the Owner subsequent to the effective date of this
Contract that results in a life expectancy of less than one year as determined
by a qualified professional medical practitioner; (5) a surrender of the
Contract as a result of the death of the Owner or a Joint Owner; (6)
annuitization.
The Contingent Deferred Sales Charge will only be waived if LL&A is in receipt
of proof, satisfactory to LL&A, of the exception.
If a non-natural person is the Owner of the Contract, the Annuitant will be
considered the Owner of the Contract for purposes of this Section 2.14.
ARTICLE 3
ANNUITY PAYMENT OPTION
BENEFITS
3.01 ANNUITY PAYMENTS
An election to receive payments under an Annuity Payment Option must be made by
the Maturity Date.
If an Annuity Payment Option is not chosen prior to the Maturity Date, payments
will commence to the Owner on the Maturity Date under the Annuity Payment Option
providing a Life Annuity with annuity payments guaranteed for 10 years.
The Maturity Date is set forth on Page 3. Upon written request by the Owner and
any Beneficiary who cannot be changed, the Maturity Date may be deferred.
Purchase Payments may be made until the new Maturity Date.
3.02 CHOICE OF ANNUITY PAYMENT OPTION
By Owner
Prior to the Annuity Commencement Date, the Owner may choose or change any
Annuity Payment Option. For a 100% fixed annuity payment, the Annuity
Commencement Date must be at least thirty days prior to the time annuity
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payments are to begin.
By Beneficiary
At the time proceeds are payable to a Beneficiary, a Beneficiary may choose or
change any Annuity Payment Option that meets the requirements of Code Section
72(s) or 401(a)(9) if proceeds are available to the Beneficiary in a lump sum.
The Beneficiary then becomes the Annuitant.
A choice or change must be in writing to LL&A.
After the Annuity Commencement Date, the Annuity Payment Option may not be
changed.
3.03 ANNUITY PAYMENT OPTIONS
a. Life Annuity / Life Annuity with Guaranteed Period -- Payments will be made
for the lifetime of the Annuitant with no certain period, or life and a 10
year certain period. or life and a 20 year certain period.
b. Unit Refund Life Annuity -- Payments will be made for the lifetime of the
Annuitant with the guarantee that upon death a payment will be made of the
value of the number of Annuity Units equal to the excess, if any, of (a)
over (b) where (a) is the total amount applied under the option divided by
the Annuity Unit Value at the Annuity Commencement Date and (b) is the
product of the number of Annuity Units represented by each payment and the
number of payments paid prior to death.
c. Joint Life Annuity / Joint Life Annuity with Guaranteed Period -- Payments
will be made during the joint life of the Annuitant and a Joint Annuitant
of the Owner's choice. Payments will be made for life with no certain
period, or life and a 10 year certain period, or life and a 20 year certain
period. Payments continue for the life of the survivor at the death of the
Annuitant or Joint Annuitant.
d. Other options may be available as agreed upon in writing by LL&A.
At the time an Annuity Payment Option is selected under the provisions of this
Contract, the Owner may elect to have the total Contract Value applied to
provide a variable annuity payment, a fixed annuity payment, or a combination
fixed and variable annuity payment. If no election is made, the value of the
Owner's Variable Account shall be used to provide a variable annuity payment,
and the value of the Owner's Fixed Account shall be used to provide a fixed
annuity payment.
The amount of annuity payment will depend on the age and sex (except in cases
where unisex rates are required) of the Annuitant as of the Annuity Commencement
Date. A choice may be made to receive payments once each month, four times each
year, twice each year, or once each year. The Contract Value and Annuity Unit
value used to effect benefit payments will be calculated as of the Annuity
Commencement Date. If any portion of the annuity payment will be on a variable
basis, the first payment will be made fourteen days after the Annuity
Commencement Date.
Article 6 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the first monthly payment under a
variable annuity payment option. The tables show the dollar amount of the first
monthly payment which can be purchased with each $1,000 of Contract Value, after
deduction of any applicable premium taxes. Amounts shown use the 1983 'a'
Individual Annuity Mortality Table, modified, with an assumed rate of return of
4% per year.
Article 7 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the monthly payments under a fixed
annuity payment option. The tables show the dollar amount of the guaranteed
monthly payments which can be purchased with each $1,000 of Contract Value,
after deduction of any applicable premium taxes.
Amounts shown use the 1983 'a' Individual Annuity Mortality Table, modified,
with an interest rate of 2.75% per year.
3.04 DETERMINATION OF THE AMOUNT OF VARIABLE ANNUITY PAYMENTS AFTER THE FIRST
PAYMENT
The first variable annuity payment is sub-divided into components each of which
represents the product of: (a) the percentage elected by the Contract Owner of a
specific Sub-account the performance of which will determine future variable
annuity payments, and (b) the entire first variable annuity payment. Each
variable annuity payment after the first payment attributable to a specific Sub-
account will be determined by multiplying the Annuity Unit value for that Sub-
account for the date each payment is due by a constant number of Annuity Units.
This constant number for each specific Sub-account is determined by dividing the
component of the first payment attributable to such Sub-account as described
above by the Annuity Unit value for that Sub-account on the Annuity Commencement
Date. The total variable annuity payment will be the sum of the payments
attributable to each Sub-account.
The Annuity Unit value for any Valuation Period for any Sub-account is
determined by multiplying the Annuity Unit value for the immediately preceding
Valuation Period by the product of (a) 0.9998926 raised to a power equal to the
number of days in the current Valuation Period and (b) the Net Investment Factor
of the Sub-account for the Valuation Period for which the Annuity Unit value is
being determined.
The valuation of all assets in the Sub-account shall be determined in accordance
with the provisions of applicable laws, rules, and regulations. The method of
determination by
Page 10
<PAGE>
LL&A of the value of an Accumulation Unit and of an Annuity Unit will be
conclusive upon the Owner and any Beneficiary.
LL&A guarantees that the dollar amount of each installment after the first shall
not be affected by variations in mortality experience from mortality assumptions
on which the first installment is based.
After the Annuity Commencement Date, if any portion of the annuity payment is a
variable annuity payment, the Owner may direct a transfer of assets from one
Sub-account to another Sub-account or to a fixed annuity payment. Such transfers
will be limited to three (3) times per Contract Year. Assets may not be
transferred from a fixed annuity payment to a variable annuity payment.
A transfer from one Sub-account to another Sub-account will result in the
purchase of Annuity Units in one Sub-account and the redemption of Annuity Units
in the other Sub-account. Such a transfer will be accomplished at relative
Annuity Unit values as of the Valuation Date the transfer request is received.
The valuation of Annuity Units is described above. A transfer from one Sub-
account to a fixed annuity payment will result in the redemption of Annuity
Units in one Sub-account and the purchase of a minimum fixed annuity payment
based on the tables in Article 7.
3.05 PROOF OF AGE
Payment will be subject to proof of age that LL&A will accept such as a
certified copy of a birth certificate.
3.06 MINIMUM ANNUITY PAYMENT REQUIREMENTS
If the Annuity Payment Option chosen results in payments of less than $50 per
Sub-account, the frequency will be changed so that payments will be at least
$50.
For the purposes of this Section, the fixed annuity payment of the Contract is
considered a Sub-account.
3.07 EVIDENCE OF SURVIVAL
LL&A has the right to ask for proof that the person on whose life the payment is
based is alive when each payment is due.
3.08 CHANGE IN ANNUITY PAYMENT OPTION
The Annuity Payment Option may not be changed after the Annuity Commencement
Date.
ARTICLE 4
BENEFICIARY
4.01 DESIGNATION
The Owner may designate a Beneficiary(s). If there is a single Owner, the
designated Beneficiary(s) will receive the Death Benefit proceeds upon the death
of the Owner.
If there are Joint Owners, upon the death of the first Joint Owner, the
surviving Joint Owner will receive the Death Benefit proceeds. The surviving
Joint Owner will be treated as the primary, designated Beneficiary. Any other
Beneficiary designation on record at the time of death will be treated as a
contingent beneficiary.
If the surviving Joint Owner, as spouse of the deceased Joint Owner, continues
the Contract as the sole Owner in lieu of receiving the Death Benefit proceeds,
then the designated Beneficiary(s) will receive the Death Benefit proceeds upon
the death of the surviving spouse.
Unless otherwise stated in the Beneficiary designation, if there is more than
one Beneficiary they are presumed to share equally.
4.02 CHANGE
The Owner may change any Beneficiary unless otherwise provided in the previous
designation.
A change of Beneficiary will revoke any previous designation.
A change may be made by filing a written request, in a form acceptable to LL&A,
at its Home Office. The change will become effective upon receipt of the
written request by LL&A at its Home Office.
LL&A reserves the right to request the Contract for endorsement of the change.
4.03 DEATH OF BENEFICIARY
Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other
Beneficiaries named, according to their respective interests. If there are no
Beneficiaries, the Beneficiary's interest will pass to a Contingent
Beneficiary(s). if any. Prior to the Annuity Commencement Date, if no
Beneficiary or Contingent Beneficiary survives the Owner, the Death Benefits
will be paid to the Owner's estate.
Once a Beneficiary is entitled to Death Benefits or other payments, the
Beneficiary may name his or her own Beneficiary(s) to receive any remaining
benefits due under the Contract, should the original Beneficiary die prior to
receipt of all benefits. If no Beneficiary is named or the named Beneficiary
predeceases the original Beneficiary, any remaining benefits will continue to
the original Beneficiary's estate. This designation must be made to the LL&A
Home Office.
ARTICLE 5
Page 11
<PAGE>
GENERAL PROVISIONS
5.01 THE CONTRACT
The Contract and any riders attached constitute the entire Contract. Only the
President, a Vice President, the Secretary or an Assistant Secretary of LL&A has
the power, on behalf of LL&A, to change, modify, or waive any provisions of this
Contract.
LL&A reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.
Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have their usual and customary meaning except when specifically defined.
5.02 OWNERSHIP
The Owner is the person who has the ability to exercise the rights within this
Contract.
The Owner may only name his or her spouse as a Joint Owner. Joint Owner(s)
shall be treated as having equal, undivided interests in the contract, including
rights of survivorship. Either Joint Owner, independently of the other, may
exercise any ownership rights in the Contract.
Prior to the Annuity Commencement Date, the Owner has the right to change the
Annuitant at any time by notifying LL&A in writing of the change. The
Annuitant may not be changed in a Contract owned by a non-natural person. The
Owner may also name a Contingent Annuitant by notifying LL&A in writing. The
Contingent Annuitant designation is no longer applicable after the Annuity
Commencement Date.
5.03 ASSIGNMENTS
If this Contract is used with a Qualified Plan, the Contract will not be
transferable. It may not be sold, assigned, discounted or pledged as collateral
for a loan or as security for the performance of an obligation or for any other
purpose.
5.04 INCONTESTABILITY
This Contract will not be contested by LL&A.
5.05 MISSTATEMENT OF AGE AND/OR SEX
If the age and/or sex of the Annuitant has been misstated, the benefits
available under this Contract will be those which the Purchase Payments would
have purchased using the correct age and/or sex. Any underpayment already made
by LL&A shall be made up immediately and any overpayments already made by LL&A
shall be charged against the annuity payments falling due after the correction
is made. Any amounts so paid or charged will be adjusted based on an interest
rate of 6% per annum.
5.06 NONPARTICIPATING
The Contract is nonparticipating and will not share in the surplus earnings of
LL&A.
5.07 VOTING RIGHTS
The Owner shall have a right to vote at the meetings of the Series. Ownership of
this Contract shall not entitle any person to vote at any meeting of
shareholders of LL&A. Votes attributable to the Contract shall be cast in
conformity with applicable law.
5.08 OWNERSHIP OF THE ASSETS
LL&A shall have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.
5.09 REPORTS
Prior to the Annuity Commencement Dale, at least once each Contract Year LL&A
shall mail a report to the Owner. The report shall be mailed to the last address
known to LL&A. The report shall include a statement of the number of
Accumulation Units credited to the Variable Account under this Contract and the
dollar value of such units as well as a statement of the value of the Fixed
Account of this Contract. The information in the report shall be as of a date
not more than two months prior to the date of mailing the report. LL&A shall
also mail to the Owner at least once in each Contract Year a report of the
investments held in the Sub-accounts under this Contract.
5.10 PREMIUM TAX
State and local government premium tax, if applicable, will be deducted from
Purchase Payments or Contract Value. This will be deducted when incurred by LL&A
or at another time of LL&A's choosing.
5.11 MAXIMUM ISSUE AGE
This Contract will not be issued to Owners over the age of 85. This also applies
to Joint Owners, if any.
Page 12
<PAGE>
ARTICLE 6
ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
No 120 240
Period Months Months Cash
Age Certain Certain Certain Refund
60 $4.78 $4.73 $4.56 $4.56
61 4.87 4.81 4.63 4.53
62 4.97 4.90 4.69 4.71
63 5.07 5.00 4.75 4.78
64 5.19 5.10 4.82 4.87
65 5.30 5.21 4.88 4.95
66 5.43 5.32 4.95 5.04
67 5.57 5.44 5.01 5.14
68 5.72 5.56 5.08 5.24
69 5.88 5.70 5.14 5.34
70 6.05 5.84 5.20 5.46
71 6.23 5.99 5.26 5.57
72 6.44 6.14 5.31 5.69
73 6.66 6.30 5.36 5.82
74 6.89 6.47 5.40 5.96
75 7.15 6.65 5.44 6.10
</TABLE>
JOINT AND SURVIVOR ANNUITIES
<TABLE>
<CAPTION>
Joint and Full to Survivor Joint and Two-Thirds Survivor
Certain Period Certain Period
Joint
None 120 240 Age None 120 240
<S> <C> <C> <C> <C> <C> <C>
$4.37 $4.37 $4.34 60 $4.78 $4.74 $4.57
4.44 4.44 4.40 61 4.88 4.82 4.63
4.52 4.51 4.46 62 4.97 4.91 4.69
4.60 4.59 4.53 63 5.08 5.00 4.76
4.68 4.68 4.60 64 5.19 5.10 4.82
4.77 4.77 4.67 65 5.31 5.21 4.88
4.87 4.86 4.74 66 5.44 5.32 4.95
4.98 4.96 4.82 67 5.57 5.44 5.01
5.09 5.07 4.89 68 5.72 5.56 5.08
5.21 5.19 4.96 69 5.87 5.69 5.14
5.34 5.31 5.04 70 6.04 5.83 5.20
5.47 5.44 5.11 71 6.22 5.97 5.25
5.62 5.58 5.18 72 6.42 6.12 5.31
5.78 5.73 5.24 73 6.62 6.28 5.36
5.96 5.88 5.30 74 6.85 6.44 5.40
6.14 6.05 5.36 75 7.09 6.61 5.44
</TABLE>
Age Adjustment Table
<TABLE>
<CAPTION>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C>
Before 1920 +2 1960-1969 -3
1920-1929 +1 1970-1979 -4
1930-1939 0 1980-1989 -5
1940-1949 -1 1990-1999 -6
1950-1959 -2 ETC. ETC.
</TABLE>
Page 13
<PAGE>
ARTICLE 7
ANNUITY PURCHASE RATES UNDER A FIXED PAYMENT OPTION
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
No 120 240
Period Months Months Cash
Age Certain Certain Certain Refund
60 $4.37 $4.33 $4.17 $4.13
61 4.47 4.42 4.24 4.21
62 4.58 4.52 4.31 4.29
63 4.69 4.62 4.38 4.38
64 4.81 4.73 4.46 4.46
65 4.94 4.85 4.53 4.56
66 5.08 4.97 4.61 4.66
67 5.22 5.10 4.68 4.76
68 5.38 5.24 4.75 4.87
69 5.55 5.39 4.82 4.98
70 5.73 5.54 4.89 5.11
71 5.93 5.70 4.95 5.23
72 6.14 5.87 5.02 5.37
73 6.38 6.04 5.07 5.51
74 6.63 6.23 5.12 5.66
75 6.90 6.42 5.17 5.82
</TABLE>
JOINT AND SURVIVOR ANNUITIES
<TABLE>
<CAPTION>
Joint and Full to Survivor Joint and Two-Thirds Survivor
Certain Period Certain Period
Joint
None 120 240 Age None 120 240
<S> <C> <C> <C> <C> <C> <C>
$3.96 $3.95 $3.98 60 $4.38 $4.34 $4.22
4.03 4.08 4.05 61 4.48 4.47 4.29
4.12 4.16 4.12 62 4.58 4.57 4.36
4.21 4.25 4.19 63 4.69 4.67 4.43
4.30 4.34 4.26 64 4.81 4.78 4.50
4.40 4.43 4.34 65 4.94 4.89 4.57
4.51 4.54 4.42 66 5.08 5.01 4.64
4.62 4.64 4.50 67 5.22 5.13 4.71
4.74 4.76 4.58 68 5.38 5.27 4.78
4.87 4.88 4.66 69 5.55 5.41 4.85
5.01 5.01 4.74 70 5.73 5.55 4.91
5.16 5.15 4.82 71 5.92 5.70 4.98
5.32 5.30 4.89 72 6.12 5.86 5.03
5.49 5.45 4.96 73 6.34 6.03 5.09
5.68 5.62 5.03 74 6.58 6.20 5.14
5.88 5.79 5.09 75 6.84 6.38 5.18
</TABLE>
Age Adjustment Table
<TABLE>
<CAPTION>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C>
Before 1920 +2 1960-1969 -3
1920-1929 +1 1970-1979 -4
1930-1939 0 1980-1989 -5
1940-1949 -1 1990-1999 -6
1950-1959 -2 ETC. ETC.
</TABLE>
Page 14
<PAGE>
ARTICLE 8
GUARANTEED ACCUMULATED VALUES AND SURRENDER VALUES
FOR FIXED ALLOCATIONS*
<TABLE>
<CAPTION>
$1,000 Annual Contribution $100 Monthly Contribution
Guaranteed Guaranteed Guaranteed Guaranteed
End of Accumulated Surrender End of Accumulated Surrender
Year Value Value Year Value Value
<S> <C> <C> <C> <C> <C>
1 $ 1,030.00 $ 970.00 1 $ 1,219.41 $ 1,147.41
2 2,090.90 1,970.90 2 2,475.41 2,331.41
3 3,183.63 3,013.63 3 3,769.08 3,565.08
4 4,309.14 4,099.14 4 5,101.56 4,849.56
5 5,468.41 5,228.41 5 6,474.02 6,186.02
6 6,662.46 6,402.46 6 7,887.66 7,575.66
7 7,892.34 7,622.34 7 9,343.70 9,019.70
8 9,159.11 8,889.11 8 10,843.42 10,519.42
9 10,463.88 10,193.88 9 12,388.14 12,064.14
10 11,807.80 11,537.80 10 13,979.19 13,655.19
11 13,192.03 12,922.03 11 15,617.98 15,293.98
12 14,617.79 14,347.79 12 17,305.93 16,981.93
13 16,086.32 15,816.32 13 19,044.52 18,720.52
14 17,598.91 17,328.91 14 20,835.27 20,511.27
15 19,156.88 18,886.88 15 22,679.74 22,355.74
16 20,761.59 20,491.59 16 24,579.54 24,255.54
17 22,414.44 22,144.44 17 26,536.34 26,212.34
18 24,116.87 23,846.87 18 28,551.84 28,227.84
19 25,870.37 25,600.37 19 30,627.81 30,303.81
20 27,676.49 27,406.49 20 32,766.06 32,442.06
21 29,536.78 29,266.78 21 34,968.45 34,644.45
22 31,452.88 31,182.88 22 37,236.91 36,912.91
23 33,426.47 33,156.47 23 39,573.43 39,249.43
24 35,459.26 35,189.26 24 41,980.05 41,656.05
25 37,553.04 37,283.04 25 44,458.86 44,134.86
26 39,709.63 39,439.63 26 47,012.04 46,688.04
27 41,930.92 41,660.92 27 49,641.81 49,317.81
28 44,218.85 43,948.85 28 52,350.48 52,026.48
29 46,575.42 46,305.42 29 55,140.41 54,816.41
30 49,002.68 48,732.68 30 58,014.03 57,690.03
31 51,502.76 51,232.76 31 60,973.86 60,649.86
32 54,077.84 53,807.84 32 64,022.49 63,698.49
33 56,730.18 56,460.18 33 67,162.58 66,838.58
34 59,462.08 59,192.08 34 70,396.87 70,072.87
35 62,275.94 62,005.94 35 73,728.18 73,404.18
36 65,174.22 64,904.22 36 77,159.44 76,835.44
37 68,159.45 67,889.45 37 80,693.64 80,369.64
38 71,234.23 70,964.23 38 84,333.86 84,009.86
39 74,401.26 74,131.26 39 88,083.29 87,759.29
40 77,663.30 77,393.30 40 91,945.20 91,621.20
41 81,023.20 80,753.20 41 95,922.96 95,598.96
42 84,483.89 84,213.89 42 100,020.07 99,696.07
43 88,048.41 87,778.41 43 104,240.08 103,916.08
44 91,719.86 91,449.86 44 108,586.69 108,262.69
45 95,501.46 95,231.46 45 113,063.71 112,739.71
</TABLE>
Guaranteed Accumulated values and Guaranteed Surrender values may be more
or less than shown in the table because of the variable of the day of
receipt or tne Purchase Payment at the Home Office from period to period
and the crediting of interest to the Annuitant's account on a daily basis.
Values shown are based upon contributions equally spaced with interest
occurring at the beginning of the year. These values do not provide for
premium tax,
Page 15
<PAGE>
if any.
Page 16
<PAGE>
ANNUITY
CONTRACT
DEFERRED VARIABLE ANNUITY OR VARIABLE AND FIXED ANNUITY
BENEFIT PAYMENT OPTIONS
NONPARTICIPATING
If you have any questions concerning
this Contract, please
contact your LL&A
representative or the Home Office of LL&A.
LINCOLN LIFE & ANNUITY
COMPANY OF NEW YORK
120 MADISON STREET
SUITE 1700
SYRACUSE, NEW YORK 13202
800-893-7168
Page 17
<PAGE>
EXHIBIT 5
AMERICAN
LEGACY III
LOGO
Applicants signing in New York must use this form.
(NY) VARIABLE ANNUITY APPLICATION LINCOLN LIFE & ANNUITY
COMPANY OF NEW YORK
Instructions: Please type or print. Any alterations to this application MUST BE
INITIALED BY THE CONTRACT OWNER.
<TABLE>
<S><C> <C>
1a CONTRACT OWNER ___________________________________ Social Security number/TIN
(if no Annuitant is specified in section Full legal name __|__|__-__|__-__|__|__|__ [_]Male
2a, the Contract Owner, or Joint Contract ___________________________________ [_]Female
Owner if younger, will be the Annuitant) Street address [_]Trustee
NOTE: MAXIMUM AGE OF CONTRACT OWNER ___________________________________ Date of birth __|__ __|__ __|__
IS 85. City State ZIP Month Day Year
1b JOINT CONTRACT OWNER ___________________________________ Social Security number/TIN
(Joint Contract Owner Full legal name __|__|__-__|__-__|__|__|__ [_]Male
may only be ___________________________________ [_]Female
a spouse) Street address
___________________________________ Date of birth __|__ __|__ __|__
NOTE: MAXIMUM AGE OF JOINT CONTRACT City State ZIP Month Day Year
OWNER IS 85.
2a ANNUITANT ___________________________________ Social Security number/TIN
(complete only if Full legal name __|__|__-__|__-__|__|__|__ [_]Male
different from ___________________________________ [_]Female
Contract Owner) Street address
___________________________________ Date of birth __|__ __|__ __|__
NOTE: MAXIMUM AGE OF City State ZIP Month Day Year
ANNUITANT IS 85.
</TABLE>
<TABLE>
<S><C>
2b CONTINGENT ANNUITANT
NOTE: MAXIMUM AGE OF CONTINGENT
ANNUITANT IS 85. _____________________________________________________________________________
Full legal name Relationship to Contract Owner
</TABLE>
3 BENEFICIARY(IES) OF CONTRACT OWNER (list additional beneficiaries on separate
sheet)
<TABLE>
<S> <C> <C> <C> <C>
____________________________________________ ___________________________________ _______________ _________________
PRIMARY: Full legal name Relationship to Contract Owner SSN/TIN %
CONTINGENT: Full legal name Relationship to Contract Owner SSN/TIN %
__ _________________________________________ DATE OF TRUST:_____ / ______ / _______
TRUSTS ONLY: Executor/Trustee Month Day Year
</TABLE>
<TABLE>
<S><C> <C>
4 TYPE OF CONTRACT NONQUALIFIED: [_] Initial Contribution OR [_] 1035 Exchange TAX-QUALIFIED (MUST COMPLETE PLAN TYPE):
[_] Initial Contribution, Tax year 19____ OR [_] Transfer [_] Rollover
PLAN TYPE
(CHECK ONE): [_] IRA [_] 401(k)* [_] 401(a)______________ [_] Other*______________ [_] 457 [_] 403(b)(TRANSFERS ONLY)
(SPECIFY) (SPECIFY)
</TABLE>
*INDICATE PLAN
YEAR-END: _______ / _______
Month Day
<PAGE>
5a ALLOCATION PLEASE ALLOCATE MY CONTRIBUTION OF
Initial minimums: $ __________________________AS FOLLOWS
Nonqualified/403(b) -$1,500.00 _______ % Global Growth Fund
Qualified - $300.00 _______ % Growth Fund
_______ % International Fund
THE CURRENT ALLOCATION WILL APPLY _______ % Growth-Income Fund
TO FUTURE CONTRIBUTIONS UNLESS _______ % Asset Allocation Fund
OTHERWISE SPECIFIED. _______ % High-Yield Bond Fund
_______ % Bond Fund
If no allocations are
specified, the entire amount will _______ % U.S. Govt./AAA-Rated
be allocated to the Cash Securities Fund
Management Fund pending _______ % Cash Management Fund
instructions from the Contract
Owner. _______ % Fixed Account
USE WHOLE PERCENTAGES % TOTAL (MUST = 100%)
=======
5b DOLLAR COST AVERAGING
<TABLE>
<S> <C> <C>
USE WHOLE PERCENTAGES:
Total amount to DCA: $_________________ _______ % Global Growth Fund
OR (Min. $10,000) _______ % Growth Fund
MONTHLY amount to DCA: $_________________ _______ % International Fund
_______ % Growth-Income Fund
OVER THE FOLLOWING PERIOD: _______ % Asset Allocation Fund
___________________MONTHS
(6-60) _______ % High-Yield Bond Fund
NOTE: Period can be 6-60 _______ % Bond Fund
months with
a minimum of $10,000 _______ % U.S. Govt./AAA-Rated
In the holding account. Securities Fund*
_______ % Cash Management Fund*
INTO THE FUND(S) AT THE RIGHT -----> _______ % Fixed Account*
% TOTAL (MUST = 100%)
FROM THE FOLLOWING =======
HOLDING ACCOUNT (CHECK
ONE):
[_] DCA Fixed Account*
[_] Cash Management Fund*
[_] U.S. Govt./AAA-Rated Securities Fund*
* The DCA holding account
and the DCA fund elected
cannot be the same.
</TABLE>
5 CROSS-REINVESTMENT To initiate the cross-reinvestment program, complete the
appropriate form (available from your broker or financial planner).
<TABLE>
<S><C>
6 AUTOMATIC BANK DRAFT
To: __________________________________________________ ____________________ ATTACH VOIDED CHECK
Bank Name ABA Number
____________________________________________ __________________ ________________ ___________
Bank street address City State ZIP
Automatic bank draft
start date: __|__ __|__ __|__ _________________________ $ ____________________
Month Day (1-28) Year Checking account number Monthly amount
</TABLE>
I/We hereby request and authorize you to pay and charge to my/our account
checks or electronic fund transfers debits processed by and payable to the
order of Lincoln Life & Annuity Company of New York, P.O. Box 2348, Fort
Wayne, IN 46801-2348, provided there are sufficient collected funds in said
account to pay the same upon presentation. It will not be necessary for any
officer or employee if Lincoln Life& Annuity Company of New York to sign such
checks. I/We agree that your rights in respect to each such check shall be
the same as if it were a check drawn on you and signed personally by me/us.
This authority is to remain in effect until revoked by me/us, and until you
actually receive such notice I/we agree that you shall be fully protected in
honoring any such check or electronic fund transfer debit. I/We further agree
that if any such check or electronic fund transfer debit be dishonored whether
with or without cause and whether intentionally or inadvertently, you shall be
under no liability whatsoever even though such dishonor results in the
forfeiture of insurance or investment loss to me/us.
<TABLE>
<S> <C> <C>
______________________________________________ ___________________________________________ Date __|__ __|__ __|__
Signature(s) EXACTLY as shown on bank records Month Day Year
______________________________________________ ___________________________________________
Print full legal name
Litho in USA CGD/LL/3370
(C) American Funds Distributors, Inc.
Form 28617-NY 0897 Lit. No. LEGIIIAP-001-0497
</TABLE>
<PAGE>
7 AUTOMATIC WITHDRAWAL A $10,000 minimum account balance is required. NOTE:
WITHDRAWALS MAY NOT EXCEED 10% PER YEAR OF TOTAL CONTRACT VALUE.
____ Please provide me with automatic withdrawals based On 10% of total
contract value
OR
____ Please provide me with automatic withdrawals of $ ______________________
The withdrawal(s) should be made (check one): [_] Monthly [_] Quarterly
[_] Semiannually [_] Annually.
Begin withdrawals in __|__ __|__
Month Year
ELECT ONE: [_] Do withhold taxes [_] Do not withhold taxes
NOTE: IF NO SELECTION IS MADE, TAXES WILL BE WITHHELD.
ELECT ONE: [_] Send check to address of record
OR
[_] Send check to the following alternate address:
For direct deposit into your bank account, an electronic fund transfer form
must be completed and submitted with a voided check.
__________________________________________________________________________
8 TELEPHONE TRANSFER [_] YES, I/we hereby authorize and direct Lincoln Life &
Annuity Company of New York to accept telephone instructions from any person
who can furnish proper identification to exchange units from subaccount to
subaccount and/or change the allocation of future investments. I/We agree to
hold harmless and indemnify Lincoln Life & Annuity Company of New York,
American Funds Distributors, Inc. and their affiliates and any mutual fund
managed by such affiliates and their directors, trustees, officers, employees
and agents for any losses arising from such instructions.
9 REPLACEMENT Will the proposed contract replace any existing annuity or
insurance contract?
ELECT ONE: [_] No [_] Yes IF YES, COMPLETE THE 1035 EXCHANGE OR QUALIFIED
RETIREMENT ACCOUNT TRANSFER FORM.
Company name _____________________________ Plan name _____________________
Year issued ___________ (ATTACH A REPLACEMENT FORM IF REQUIRED BY YOUR STATE.)
10 SIGNATURES
All statements made in this application (including on the reverse side) are
true to the best of my/our knowledge and belief, and I/we agree to all terms
and conditions as shown on the front and back. I/we further agree that this
application is part at the annuity contract. I/We acknowledge receipt of
current prospectuses for American Legacy III and American Variable Insurance
Series and verify my/our understanding that ALL PAYMENTS AND VALUES PROVIDED
BY THE CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF THE FUNDS IN THE
SERIES, ARE VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. Under penalty of
perjury, the Contract Owner(s) certifies that the Social Security (or
taxpayer identification) number(s) is correct as it appears in this
application. Any person who knowingly and with intent to defraud any
insurance company or other person, files or submits an application for
insurance or statement of claim containing any materially false or deceptive
information, or conceals, for the purpose of misleading, information
concerning any fact material thereto, commits a fraudulent insurance act,
which is a crime and subjects such person to criminal and civil penalties.
_____________________________________________________________________________
Signed at (city) State County
_________________________________________________
SIGNATURE OF CONTRACT OWNER/JOINT CONTRACT OWNER (IF APPLICABLE)
Date __|__ __|__ __|__
Month Day Year
_____________________________________________________________________________
Signed at (city) State County
_____________________________________________________________________________
Signature of Annuitant (Annuitant must sign it Contract Owner is a trust or
custodian)
Date __|__ __|__ __|__
Month Day Year
THE FOLLOWING SECTIONS MUST BE COMPLETED BY THE SECURITIES DEALER OR FINANCIAL
PLANNER.
Please type or print.
<PAGE>
11 INSURANCE IN FORCE Does this contract replace or change any other life
insurance or annuity in this or any other company?
ELECT ONE: [_] NO [_] YES IF YES, PLEASE LIST THE INSURANCE IN FORCE ON
THE LIFE OF THE PROPOSED CONTRACT OWNER(S) AND ANNUITANT(S):
Company name _______________________________ Year issued _________________
Amount ______________________________ Accidental death amount ____________
12 ADDITIONAL REMARKS ________________________________________________________
___________________________________________________________________________
13 DEALER INFORMATION NOTE: LICENSING APPOINTMENT WITH LINCOLN LIFE & ANNUITY
COMPANY OF NEW YORK IS REQUIRED FOR THIS
APPLICATION TO BE PROCESSED.
<TABLE>
<S> <C>
_______________________________________________ __|__|__-__|__|__-__|__|__ ___________________________________
Registered representative's name print Registered representative's Dealer's name
as it appears on NASD telephone number
_______________________________________________ __|__|__-__|__ __|__|__|__ ___________________________________
Client account number at dealer Social Security number Branch address [_] Check if broker
change of address
_________________________________
City State ZIP
</TABLE>
14 REPRESENTATIVE'S SIGNATURE The representative hereby certifies that he/she
witnessed the signature(s) in section 10 and that
all information contained in this application is
true to the best of his/her knowledge and belief.
___________________________________________________________________
Signature
Send completed application - with a check made payable to Lincoln Life & Annuity
Company of New York - to your investment dealer's home office or to:
AMERICAN LINCOLN LIFE By Express Mail:
LEGACY III P.O. Box 2348 LINCOLN LIFE
LOGO Fort Wayne, IN 46801-2348 Attention: American Legacy
Operations
1300 South Clinton Street
Fort Wayne, IN 46802
<PAGE>
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
I, C. Suzanne Womack, hereby certify that I am the Secretary of
Lincoln Life & Annuity Company of New York and that the attached is a true,
complete and correct copy of the bylaws of said Company as adopted by its Board
of Directors, and that such bylaws are in full force and effect as of the date
hereof.
/s/ C. Suzanne Womack
--------------------------------------
C. Suzanne Womack, Secretary
Dated: July 24, 1996
<PAGE>
BYLAWS
OF
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
A New York Company
ARTICLE I
Shareholders
Section 1. Annual Meeting. An annual meeting of the shareholders shall be
held at a time and place, specified by the board of directors, on the first
Wednesday of May in each year for the purpose of electing directors for the
terms hereinafter provided and for the transaction of such other business as may
properly come before the meeting. If such date shall be a legal holiday in the
state of New York, the annual meeting shall be held on the next succeeding
business day not such a legal holiday at the corporation's principal office at
9:00 a.m.
Section 2. Special Meetings. Special meetings of the shareholders may be
called by the chief executive officer, by the board of directors, or by
shareholders holding not less than 25% of all votes entitled to be cast on any
issue to be considered at the special meeting who sign, date and deliver to the
secretary of the corporation one or more written demands for the meeting
describing the purpose or purposes for which it is to be held. Only business
within the purpose or purposes described in the meeting notice may be conducted
at a special shareholders meeting.
Section 3. Place of Meetings. All meetings of shareholders shall be held at
the principal office of the corporation in the state of New York, or at such
other place, either within or without the state of New York, as may be specified
in the respective notices, or waivers of notice, of such meetings.
Section 4. Notice of Meetings. A written or printed notice, stating the
place, day and hour of the meeting, and in the case of a special meeting or when
required by law or by the charter or these bylaws, the purpose or purposes for
which the meeting is called, shall be delivered or mailed by the secretary, or
by the officer or persons calling the meeting, at least thirty (30) days but no
more than fifty (50) days before the date of the meeting, or such other time
period required by law for a special meeting for election of directors, to each
shareholder of record entitled to vote at such meeting at such address as
appears upon the stock records of the corporation.
Section 5. Waiver of Notice. Notice of any meeting of shareholders may be
waived in writing by any shareholder if the waiver sets forth in reasonable
detail the purpose or purposes for which the meeting is called and the time and
place thereof. Attendance at any meeting in person, or by proxy when the
instrument of proxy sets forth in reasonable detail the purpose or purposes for
which the meeting is called, without protesting prior to the conclusion of the
meeting the lack of notice of such meeting, shall constitute a waiver of notice
of such meeting.
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Section 6. Quorum. Unless otherwise provided by the charter or by these
bylaws or by law, at any meeting of shareholders a majority of the outstanding
shares entitled to vote at such meeting, represented in person or by proxy,
shall constitute a quorum. If less than a majority of such shares are
represented at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
Section 7. Adjourned Meetings. At any adjourned meeting at which a quorum
shall be represented, any business may be transacted as might have been
transacted at the meeting as originally notified. If a new record date is or
must be established pursuant to law, notice of the adjourned meeting must be
given to persons who are shareholders as of the new record date.
Section 8. Voting at Shareholders' Meetings.
Subsection 1. Voting Rights. Unless otherwise provided by the charter or by
these bylaws or by law, every shareholder shall have the right at every
shareholders' meeting to one vote for each share standing in his or her
name on the books of the corporation on the date established by the board
of directors as the record date for determination of shareholders entitled
to vote at such meeting; provided that such date shall not be more than
fifty (50) nor less than ten (10) days preceding the date of the meeting.
If such date is not established by the board of directors, such date shall
be at the close of business on the day next preceding the day on which
notice is given, or, if no notice is given, the day on which the meeting is
held. Any shareholder acquiring title to a share after the record date has
been established shall upon written request to the shareholder of record be
entitled to receive from the shareholder of record a proxy, with power of
substitution, to vote that share.
Subsection 2. Prohibition Against Voting Shares. No share shall be
voted at any meeting:
(a) upon which any installment is due and unpaid; or
(b) which belongs to this corporation.
Subsection 3. Voting of Shares Owned by Corporations and Fiduciaries.
Shares of this corporation standing in the name of another corporation may
be voted by such officer, agent or proxy as the board of directors of such
other corporation may appoint, or as the bylaws of such other corporation
may direct, or in the absence of such direction, or the inability of the
fiduciaries to act in accordance therewith, the following provisions shall
apply:
(a) where shares are held jointly by three (3) or more fiduciaries,
such shares shall be voted in accordance with the will of the
majority.
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(b) where the fiduciaries, or a majority of them cannot agree, or
where they are equally divided upon the question of voting such
shares, any court of general equity jurisdiction may, upon
petition filed by any of such fiduciaries, or by any party in
interest, direct the voting of such shares as it may deem to be
for the best interests of the beneficiaries, and such shares
shall be voted in accordance with such direction.
Subsection 4. Voting of Jointly Held Shares. Shares issued and held in
the name of two or more persons shall be voted in accordance with the will of
the majority, and if a majority of them cannot agree, or if they are equally
divided as to the voting of such shares, the shares shall be divided equally
between or among such persons for voting purposes.
Subsection 5. Proxies. A shareholder may vote either in person or by
proxy executed in writing by the shareholder or a duly authorized attorney-in-
fact. No proxy shall be valid after eleven (11) months from the date of its
execution, unless a longer time is expressly provided therein.
Section 9. Order of Business. The order of business at each
shareholders' meeting shall be established by the person presiding at the
meeting.
Section 10. Required Votes. A majority of the votes entitled to vote
on a matter represented at a meeting of shareholders at which a quorum is
present shall be required to take action on the matter except for elections of
directors which shall require a plurality of votes cast at a meeting of
shareholders by the holders of shares entitled to vote in the election, unless a
different number is required by the articles of incorporation, these bylaws or
by law.
ARTICLE II
Board of Directors
Section 1. Number. Election and Term of Directors. The business of
the corporation shall be managed by a board of directors composed of 13 members.
The directors shall be elected annually by the shareholders by a plurality of
votes, each for a term of one year, and shall hold office until their successors
are elected and have qualified or until their earlier death, resignation,
disqualification or removal. No decrease in the number of directors shall
shorten the term of any incumbent director.
A notice of the election of directors (setting forth the names of the nominees
and any other information required by law) shall be filed with the office of the
Superintendent of the Insurance Department of the State of New York at least
ten days before the date of election of directors.
Section 2. Qualifications of Directors. A majority of the directors
must, during their entire teams of service, be citizens of the United States,
and at least three of the directors shall reside in the state
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<PAGE>
of New York. At least one third of the directors shall be persons who are not
officers or employees of the corporation or officers or employees of any entity
controlling, controlled by or under common control with the corporation and who
are not beneficial owners of a controlling interest in the voting stock of the
corporation or any such entity.
Section 3. Regular Meetings. A regular meeting of the board of directors
shall be held without other notice than this bylaw immediately after, and at the
same place as, the annual meeting of shareholders, or within thirty days
thereafter upon notice in the manner provided by these bylaws for calling
special meetings of the board. The board of directors may provide by resolution
the time and place, either within or without the state of New York, for the
holding of additional regular meetings without other notice than such
resolution. In lieu of a regular meeting of the board of directors, any action
required or permitted to be taken therein may be taken without a meeting in the
manner described in Section 10 of this Article.
Section 4. Special Meetings. Special meetings of the board of directors
may be called by the chairman of the board, or in his absence or incapacity or
if such office is vacant, by the president. The secretary shall call special
meetings of the board of directors when requested in writing to do so by any
member thereof. All special meetings of the board of directors shall be held at
the principal office of the corporation in the state of New York, or at such
other place, either within or without the state of New York, as may be
unanimously designated by the board of directors, and upon notice provided by
these bylaws.
Section 5. Notice of Meetings. Unless otherwise provided by these bylaws,
notice of any meeting of the board of directors shall be given not less than two
days before the date fixed for such meeting by oral, telefax, telegraphic,
telephonic, electronic or written communication stating the time and place
thereof and delivered to each member of the board of directors or telegraphed or
mailed to such director at his or her address as it appears on the books of the
corporation.
Section 6. Waiver of Notice. A director may sign a written waiver of
notice either before the time of the meeting, at the time of the meeting or
after the time of the meeting, if the waiver sets forth in reasonable detail the
purpose or purposes for which the meeting is called and the time and place
thereof. A director's attendance at, or participation in, a meeting waives any
required notice to the director of the meeting.
Section 7. Vacancies. A vacancy in the board of directors caused by an
increase in the number of directors or otherwise (except death, resignation,
removal or disqualification), shall be filled by a majority vote of the
remaining members of the board until the next annual meeting of the
shareholders. A vacancy in the board of directors caused by death, resignation,
removal, disqualification or otherwise shall be filled by a majority vote of the
remaining members of the board for the unexpired term of the directorship.
Whenever any directors of the corporation shall have resigned and successors
shall have been chosen pursuant to the provisions of these bylaws, such
successors shall not take office nor exercise their
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<PAGE>
duties until ten days after written notice of their election shall have been
filed in the office of the Superintendent of the Insurance Department of the
State of New York.
Section 8. Quorum. The attendance of not less than a majority of the whole
board of directors shall be necessary to constitute a quorum for the transaction
of any business except the filling of vacancies, but if fewer than a majority of
the directors is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice. At least one
director who is not an officer or employee of the corporation or an officer or
employee of any entity controlling, controlled by or under common control with
the corporation and who is not a beneficial owner of a controlling interest in
the corporation or any such entity must be included in any quorum for the
transaction of business.
Section 9. Required Votes. The vote of a majority of the directors present
at any meeting at the time of the vote, if a quorum is present at such time,
shall be the act of the board of directors, unless a greater number is required
by the charter or by these bylaws or by law.
Section 10. Action Without a Meeting. Unless otherwise provided in the
charter, any action required or permitted to be taken at any meeting of the
board of directors or of any committee thereof may be taken without a meeting
if, a written consent to such action is signed by all members of the board or of
such committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the board or committee.
Section 11. Meeting by Conference Call. Unless otherwise provided by the
charter, any or all members of the board of directors or of a committee
designated by the board may participate in a meeting of the board or committee
by means of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time,
and participation in this manner shall constitute presence in person at the
meeting.
Section 12. Removal of Directors. Any or all members of the board of
directors may be removed, with or without cause, at a meeting of shareholders
called for that purpose by a vote of three-fourths of the shares of the
corporation outstanding and entitled to vote. A director may be removed only at
a meeting called for that purpose and the notice of the meeting must state that
the purpose, or one of the purposes, of the meeting is removal of the director.
Section 13. Other Duties of Directors. The board of directors shall keep a
record of the attendance of directors at meetings thereof, and the secretary
shall annually, for and on behalf of the board of directors, make a report
showing the names of the directors, the number of regular and special meetings
of the board, the number of meetings attended, and the number of meetings from
which each director was absent, which report shall be read at, and incorporated
in the minutes of, each annual meeting of shareholders.
Section 14. Annual Statement of Condition. The board of directors, or a
committee therefrom, shall examine the corporation once each year and submit a
complete statement of the condition of the corporation to the Superintendent of
the Insurance Department of the State of New York.
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<PAGE>
ARTICLE III
Board Committees
Section 1. Committees. The board of directors may, by resolution adopted by
a majority of the entire board, from time to time, designate from among its
members an executive committee, an investment committee or one or more other
committees, each of which shall have five or more members who are directors and
shall serve until the meeting of the board of directors held immediately after
the next annual meeting of the shareholders. The board of directors shall, by
resolution adopted by the majority of the whole board from time to time,
designate from among its members an independent director's committee which shall
be comprised solely of directors who are not officers or employees of the
corporation or officers or employees of any entity controlling, controlled by or
under common control with the corporation and who are not beneficial owners of a
controlling interest in the voting stock of the corporation or any such entity.
Each committee shall exercise such authority of the board of directors as
provided by law, these bylaws, and provided in the resolution establishing the
committee; however, no such committee shall (1) authorize distributions, except
to authorize or approve a reacquisition of shares if done according to a formula
or method prescribed by the board of directors; (2) approve or propose to
shareholders, action required by law to be approved by shareholders; (3) fill
vacancies on the board of directors or any committee thereof; (4) amend the
charter; (5) adopt, amend, or repeal the bylaws; (6) approve a plan of merger
not requiring shareholder approval; or (7) amend or repeal any resolution of the
board which by its terms is not so amendable or repealable.
Section 2. Executive Committee. The executive committee may exercise all
the authority of the board of directors in the management of the corporation
during the interval between the meetings of the board, except that reserved for
the independent directors committee.
Section 3. Independent Directors Committee. The independent directors
committee shall have the responsibility for recommending the selection of
independent certified public accountants, reviewing the company's financial
condition, the scope and results of the independent audit and any internal
audits, nominating candidates for director for election by shareholders,
evaluating the performance of the principal officers of the corporation and
recommending to the board of directors the selection and compensation of such
officers.
Section 4. Investment Committee. The board of directors may, by resolution
adopted by a majority of the whole board, from time to time designate from among
its members an investment committee, which shall consist of five members who
shall serve until the meeting of the board of directors held immediately after
the next annual meeting of the shareholders.
The investment committee shall have and possess all the rights and powers
of the board of directors to make, supervise and direct the investments of the
corporation, to sell, assign, exchange,
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<PAGE>
lease, or otherwise dispose of such investments, and to do and perform all
things deemed necessary and proper in relation to such investments. The
investment committee shall have the further right and power to delegate its
powers and duties to such officers, employees and agents, including investment
advisers, of the corporation as it may select and appoint in its discretion,
subject to such policies, plans, standards, limitations and objectives as the
investment committee may prescribe from time to time.
The investment committee shall keep a record of its proceedings, shall
submit a report of its action to the board of directors at its next meeting and
as otherwise may be required by law or by the board, shall adopt its own rules
of procedure, and shall take such other actions as may be required from time to
time by law.
Section 5. Qualification of Committee Members. Unless a greater number is
required by the charter or by these bylaws or by law, at least one-third of the
members of each committee shall be a person or persons who are not officers or
employees of the corporation or officers or employees of any entity controlling,
controlled by or under common control with the corporation and who are not
beneficial owners of a controlling interest in the voting stock of the
corporation or any such entity.
Section 6. Quorum. The attendance of not less than a majority of the
members of a committee shall be necessary to constitute a quorum for the
transaction of any business, but if fewer than a majority of the directors is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice. At least one director who is
not an officer or employee of the corporation or an officer or employee of any
entity controlling, controlled by or under common control with the corporation
and who is not a beneficial owner of a controlling interest in the voting stock
of the corporation or any such entity, must be included in any quorum for the
transaction of business.
ARTICLE IV
Officers
Section 1. Elected Officers. The elected officers of the corporation shall
be a president, secretary, and a treasurer, and may also include a chairman of
the board, one or more vice presidents of a class or classes as the board of
directors may determine, and such other officers as the board of directors may
determine. Any two or more offices may be held by the same person except the
offices of president and secretary.
Section 2. Appointed Officers. The appointed officers of the corporation
may include one or more second vice presidents, assistant vice presidents,
assistant treasurers, and assistant secretaries.
Section 3. Election or Appointment and Term of Office. The elected officers
of the corporation shalt be elected annually by the board of directors, each for
a term of one year, at the regular meeting
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of the board of directors held immediately after the annual meeting of the
shareholders. The appointed officers of the corporation shall be appointed
annually by the chief executive officer immediately following the regular board
meeting held after each annual meeting of shareholders. Additional officers may
be elected at any regular or special meeting of the board of directors to serve
until the regular meeting of the board held immediately after the next annual
meeting of the shareholders and additional officers may be appointed by the
chief executive officer at any time to serve until the next annual appointment
of officers. Each officer shall hold office for a term of one year until his or
her successor, if any, is elected or appointed and has qualified or until his or
her earlier death, resignation, retirement or removal.
Section 4. Removal. Any officer may be removed by the board of directors
and any appointed officer may be removed by the chief executive officer, with or
without cause, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
Section 5. Vacancies. A vacancy in the office of president, secretary or
treasurer because of death, resignation. retirement, removal or otherwise, shall
be filled by the board of directors, and a vacancy in any other elected office
may be filled by the board of directors.
Section 6. Chief Executive Officer. If the elected officers of the
corporation include both a chairman of the board and a president, the board of
directors shall designate one of such officers to be the chief executive officer
of the corporation. If the office of chairman of the board is vacant, the
president shall be chief executive officer of the corporation. The chief
executive officer of the corporation shall be, subject to the board of
directors, in general charge of the affairs of the corporation.
Section 7. Chairman of the Board. The chairman of the board shall preside
at all meetings of the shareholders and of the board of directors at which he
may be present and shall have such other powers and duties as may be determined
by the board of directors.
Section 8. President. The president shall have such powers and duties as
may be determined by the board of directors. In the absence of the chairman of
the board, or if such office is vacant, the president shall have all the powers
of the chairman of the board and shall perform all his or her duties.
Section 9. Vice Presidents. A vice president shall perform such duties as
may be assigned by the chief executive officer or the board of directors. In the
absence of the president and in accordance with such order of priority as may be
established by the board of directors, a vice president may perform the duties
of the president, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the president.
Section 10. Second Vice Presidents and Assistant Vice Presidents. A
second vice president and an assistant vice president shall perform such duties
as may be assigned by the chief executive officer or the board of directors.
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Section 11. Secretary. The secretary shall (a) keep the minutes of the
shareholders' and board of directors' meetings in one or more books provided for
that purpose, (b) see that all notices are duly given in accordance with the
provisions of these bylaws or as required by law, (c) be custodian of the
corporate records and of the seal of the corporation and see that the seal of
the corporation is affixed to all documents, the execution of which on behalf of
the corporation under its seal is duly authorized, and (d) in general perform
all duties incident to the office of secretary and such other duties as may be
assigned by the chief executive officer or the board of directors.
Section 12. Assistant Secretaries. In the absence of the secretary, an
assistant secretary shall have the power to perform his or her duties including
the certification, execution and attestation of corporate records and corporate
instruments. Assistant secretaries shall perform such other duties as may be
assigned to them by the chief executive officer or the board of directors.
Section 13. Treasurer. The treasurer shall (a) have charge and custody of
all kinds and securities of the corporation, (b) receive and give receipts for
monies due and payable to the corporation from any source whatsoever, (c)
deposit all such monies in the name of the corporation in such depositories as
are selected in the manner designated by the board of directors, and (d) in
general perform all duties incident to the office of treasurer and such other
duties as may be assigned by the chief executive officer or the board of
directors. If required by the board of directors, the treasurer shall give a
bond for the faithful discharge of his duties in such form and with such surety
or sureties as the board of directors shall determine.
Section 14. Assistant Treasurers. In the absence of the treasurer, an
assistant treasurer shall have the power to perform his or her duties. Assistant
treasurers shall perform such other duties as may be assigned to them by the
chief executive officer or the board of directors.
Section 15. Positions and Titles. The chief executive officer may establish
such positions and appoint persons to them with such titles as he or she may
deem necessary. He or she may also fix the duties of such positions and may
discharge persons from them.
ARTICLE V
Corporate Instruments, Loans, Books and Records
Section 1. Corporate Instruments. The board of directors may authorize any
officer or officers to execute and deliver any instrument in the name of or on
behalf of the corporation, and such authority may be general or confined to
specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the board of directors. Such authority may be general or
confined to specific instances.
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Section 3. Loans to Officers and Directors. Neither the corporation, nor
any of its directors or officers acting for and on its behalf, shall directly or
indirectly loan any of its funds, monies, capital or other property to any
director or officer of the corporation. This section shall not apply to loans
upon a policy of insurance issued by the corporation not in excess of the net
cash surrender value thereof.
Section 4. Books and Records. The corporation shall keep at its principal
office correct and complete books of account and minutes of the proceedings of
its shareholders, directors and board committees, and shall likewise keep at its
principal office a complete and accurate list of shareholders, giving the names
and addresses of all shareholders and the number of shares held by each.
ARTICLE VI
Stock Certificates and Transfer of Shares
Section 1. Certificates for Shares. Each shareholder shall be entitled to a
certificate, signed by the president or a vice president and the secretary or an
assistant secretary of the corporation, certifying the number of shares owned by
him or her in the corporation. If such certificate is countersigned by the
written signature of a transfer agent other than the corporation or an employee
of the corporation, the signatures of the officers of the corporation may be
facsimiles. If such certificate is countersigned by the written signature of a
registrar other than the corporation or an employee of the corporation, the
signatures of the transfer agent and the officers of the corporation may be
facsimiles. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he or she
were such officer, transfer agent, or registrar at the date of its issue.
Certificates representing shares of the corporation shall be in such form
consistent with the laws of the state of New York as shall be determined by the
board of directors. All certificates for shares shall be consecutively numbered
or otherwise identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and the date of issue,
shall be entered on the stock transfer records of the corporation.
Section 2. Lost, Destroyed or Wrongfully Taken Certificates. Any person
claiming a certificate of stock to have been lost, destroyed or wrongfully
taken, and who requests the issuance of a new certificate before the corporation
has notice that the certificate alleged to have been lost, destroyed or
wrongfully taken has been acquired by a bona fide purchaser, shall make an
affidavit of the fact and shall give the corporation and its transfer agents and
registrars a bond of indemnity with unlimited liability, in form and with one or
more corporate sureties satisfactory to the chief executive officer or treasurer
of the corporation (except that the chief executive officer or treasurer may
authorize the acceptance of a bond of different amount, or a bond With personal
surety thereon, or a personal agreement of indemnity), whereupon in the
discretion of the chief executive officer or the
11
<PAGE>
treasurer and except as otherwise provided by law a new certificate may be
issued of the same tenor and for the same number of shares as the one alleged to
have been lost, destroyed or wrongfully taken. In lieu of a separate bond of
indemnity in each case, the chief executive officer or the treasurer may accept
an assumption of liability under a blanket bond issued in favor of the
corporation and its transfer agents and registrars by one or more corporate
sureties satisfactory to the chief executive officer or treasurer.
Section 3. Transfer of Shares. Transfer of shares of the corporation
shall be made on the stock transfer records of the corporation by the holder of
record thereof or by his or her legal representative, who shall furnish proper
evidence of authority to transfer, or by his or her attorney thereunto
authorized by power of attorney duly executed and filed with the corporation,
and, except as otherwise provided in these bylaws, upon surrender for
cancellation of the certificates for such shares.
Section 4. Transfer Agent and Registrars. The board of directors by
resolution may appoint a transfer agent or agents or a registrar or registrars
of transfer, or both. All such appointments shall confer such powers, rights,
duties and obligations consistent with the laws of the state of New York as the
board of directors shall determine. The board of directors may appoint the
treasurer of the corporation and one or more assistant treasurers to serve as
transfer agent or agents.
ARTICLE VII
Indemnification
Section 1. Actions by a Third Party. To the extent permitted or required
by the laws of New York, the corporation shall indemnify any person who is or
was a party, or is threatened to be made a defendant or respondent to a
proceeding, including any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
actions by or in the right of the corporation), and whether formal or informal,
who is or was a director, officer, or employee of the corporation or who, while
a director, officer, or employee of the corporation, is or was serving at the
corporation's request as a director, officer, partner, trustee, employee, or
agent of another foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise, whether for profit or not,
against:
(a) action, suit or any reasonable expenses (including attorneys' fees)
actually and necessarily incurred as a result of such action, suit or
proceeding, or any appeal therein, if such person is wholly successful
on the merits or otherwise in the defense of such action, suit or
proceeding, or
(b) judgments. settlements, penalties, fines (including excise taxes
assessed with respect to employee benefit plans) and reasonable
expenses (including attorneys' fees) actually and necessarily incurred
as a result of such action, suit or proceeding, or any appeal therein,
12
<PAGE>
where such person is not wholly successful on the merits or otherwise
in the defense of the action, suit or proceeding if:
(i) the individual's conduct was in good faith; and
(ii) the individual reasonably believed:
(A) in the case of conduct in the individual's capacity as a
director, officer or employee of the corporation, that the
individual's conduct was in the corporation's best
interests; and
(B) in all other cases, that the individual's conduct was not
opposed to the corporation's best interests; and
(iii) in the case of any criminal proceeding, the individual also had
no reasonable cause to believe the individual's conduct was unlawful.
The termination of a proceeding by a judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent is not, of itself,
determinative that the director, officer, or employee did not meet the standard
of conduct described in this section.
Section 2. Actions by or in the Right of the Corporation. To the extent
permitted or required by the laws of New York, the corporation shall indemnify
any person who is or was a party or is threatened to be made a defendant or
respondent, to a proceeding, including any threatened, pending or completed
action, suit or proceeding, by or in the right of the corporation to procure a
judgment in its favor, by reason of the fact that such person is or was a
director, officer, or employee of the corporation or is or was serving at the
request of the corporation as a director, officer, partner, trustee, employee,
or agent of another foreign or domestic corporation, partnership, joint venture,
trust, employee benefit plan, or other enterprise, whether for profit or not,
against any reasonable expenses (including attorneys' fees) actually and
necessarily incurred by such person in connection with the defense or settlement
of such action, suit or proceeding, or any appeal therein:
(a) if such person is wholly successful on the merits or otherwise in the
defense of such proceeding, or
(b) if not wholly successful:
(i) the individual's conduct was in good faith; and
(ii) the individual reasonably believed:
(A) in the case of conduct in the individual's capacity as a
director, officer, or employee of the corporation, that the
individual's conduct was in the corporation's best
interests; and
13
<PAGE>
(B) in all other cases that the individual's conduct was not
opposed to the corporation's best interests,
except that no indemnification shall be made in respect of a threatened
action or pending action which is settled or otherwise disposed of, or any
claim, issue, or matter as to which such person shall have been adjudged to
be liable to the corporation unless and only to the extent that the court
in which such action or suit was brought or, if no action was brought, any
court of competent jurisdiction shall determine upon application, that
despite the adjudication of liability but in view of all circumstances of
the case, such person is fairly and reasonably entitled to indemnification
for such expenses which such court shall deem proper.
Section 3. Methods of Determining Whether Standards for Indemnification
Have Been Met. Any indemnification under Sections 1 or 2 of this Article
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, or employee is proper in the circumstances because he has met the
applicable standards of conduct set forth in Section 1 or 2. In the case of
directors of the corporation, such determination shall be made by any one of the
following procedures:
(a) by the board of directors by a majority vote of a quorum consisting of
directors not at the time parties to the proceeding;
(b) if a quorum of the board of directors cannot be obtained under (a) or,
even if obtainable, a quorum of disinterested directors so directs:
(i) by the board upon the written opinion of independent legal
counsel that indemnification is proper in the circumstances
because the applicable standard of conduct set forth in
Section 1 or 2 of this Article has been met by such director
or officer, or,
(ii) by the shareholders upon a finding that the director or
officer has met the applicable standard of conduct set forth
in section 1 or 2 of this Article.
Section 4. Advancement of Defense Expenses. The corporation may pay for or
reimburse the reasonable expenses incurred by a director, officer, or employee
who is a party to a proceeding described in Section 1 or 2 of this Article in
advance of the final disposition of said proceeding if:
(a) the director, officer, or employee furnishes the corporation a written
affirmation of his good faith belief that he has met the standard of
conduct described in Section 1 or 2; and
(b) the director, officer, or employee furnishes the corporation a written
undertaking, executed personally or on his behalf; to repay the
advance if it is ultimately determined that the director, officer, or
employee is not entitled to indemnification, or, where
14
<PAGE>
indemnification is granted, to the extent the expenses so advanced by
the corporation, or allowed by a court, exceed the indemnification to
which such person is entitled and
(c) a determination is made that the facts then known to those making the
determination pursuant to Section 3 of this Article VII would not
preclude indemnification under Section 1 or 2.
The undertaking required by this Section must be an unlimited general obligation
of the director, officer, or employee.
Section 5. Non-Exclusiveness of Indemnification. To the extent permitted by
the laws of New York, the indemnification and advancement of expenses provided
for or authorized by this Article does not exclude any other fights to
indemnification or advancement of expenses that a person may have under:
(a) the corporation's charter or these bylaws;
(b) any resolution of the board of directors or the shareholders of the
corporation;
(c) an agreement providing for indemnification or
(d) otherwise as provided by law, provided that no indemnification may be
made to or on behalf of any director, officer or employee if a
judgment or other final adjudication adverse to the director, officer
or employee establishes that his acts were committed in bad faith or
were the result of active and deliberate dishonesty and were material
to the cause of action so adjudicated, or that he personally gained in
fact a financial profit or other advantage to which he was not legally
entitled.
Such indemnification shall continue as to a person who has ceased to be a
director, officer, or employee, and shall inure to the benefit of the heirs and
personal representatives of such person.
If any expenses or other amounts are paid by way of indemnification, otherwise
than by court order or action by the shareholders the corporation shall, not
later than the next annual meeting of shareholders unless such meeting is held
within three months from the date of such payment, and in any event, within
fifteen months from the date of such payment, mail to its shareholders of record
at the time entitled to vote for the election of directors a statement
specifying the persons paid, the amounts paid, and the nature and status at the
time of such payment of the litigation or threatened litigation.
Section 6. Notice of Indemnification. No payment of indemnification or
advancement shall be made under this Article unless a notice has been filed with
the Superintendent of the Insurance Department of the State of New York not less
than 30 days prior to such payment, specifying the payee(s), the amount(s), the
manner in which such payment is authorized, the nature and status (at
15
<PAGE>
the time of such notice) of the litigation or threatened litigation and any
other information required by law.
ARTICLE VIII
Fiscal Year
The fiscal year of the corporation shall begin on the first day of January
of each year and end upon the last day of December next succeeding
ARTICLE IX
Amendments
These bylaws may be altered, amended or repealed and new bylaws may be
made by the shareholders and by the board of directors provided that any such
alteration, amendment or repeal is approved by the Superintendent of the
Insurance Department of the State of New York. Any bylaw adopted, altered,
amended or repealed by the board of directors may be amended or repealed by the
shareholders entitled to vote therein.
16
<PAGE>
SHORT CERTIFICATE
STATE OF NEW YORK
INSURANCE DEPARTMENT
EDWARD J. MUHL
SUPERINTENDENT OF INSURANCE
It is hereby certified that the annexed copy of Declaration of Intention and
Charter of LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK, of Syracuse, New York, as
filed in this Department June 6, 1996,
has been compared with the original on file in this Department and that it is a
correct transcript therefrom and of the whole of said original.
/s/ Frank M. D'Amia
In Witness Whereof, I have hereunto set
my hand and affixed the official seal of
this Department at the City of Albany,
this 30th day of July, 1996.
Special Deputy Superintendent
<PAGE>
- --------------------------------------------------------------------------------
TRIPLICATE
STATE OF NEW YORK-INSURANCE DEPARTMENT
----------
Albany, New York
June 6, 1996
$1,000.00
Received from Lincoln Life & Annuity Company of New York........................
One Thousand............................................................Dollars,
in payment of tax provided by section 180, Tax Law, as amended by Chapter 794,
Laws of 1923.
One-twentieth of one per centum upon $2,000,000.00 of shares with
par value..............................................................$1,000.00
By Frank M. D'Amia
------------------------------------------
Special Deputy Superintendent of Insurance
- --------------------------------------------------------------------------------
<PAGE>
DECLARATION OF INTENTION
AND CHARTER OF
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
DECLARATION
We, the undersigned, all being natural persons over the age of eighteen, and a
majority of us being citizens of the United States, and at least three of us
being residents of the State of New York, do hereby declare our intention to
form a stock insurance corporation pursuant to the provisions of the Insurance
Law of the State of New York for the purpose of doing the kinds of insurance
business authorized by paragraphs 1, 2 and 3 of Section 1113 (a) of the
Insurance Law of the State of New York, under the name Lincoln Life & Annuity
Company of New York, and we do hereby make, sign, acknowledge and file this
Declaration of Intention and adopt and set forth the proposed Charter of such
corporation for the aforesaid purpose, as follows:
CHARTER
ARTICLE I
---------
NAME
----
The name of the corporation shall be Lincoln Life & Annuity Company of
New York.
ARTICLE II
----------
1
<PAGE>
PRINCIPAL OFFICE
The principal office of the corporation shall be located in the City
of Syracuse County of Onondaga and State of New York.
ARTICLE III
-----------
POWERS
------
The corporation shall have the power to transact life insurance, annuities
and accident and health insurance business as described in paragraphs 1,2 and 3
of Section 1113(a) of the Insurance Law of the State of New York, as amended, to
wit:
(1) Life insurance, meaning every insurance upon the lives of human beings,
and every insurance appertaining thereto, including the granting of
endowment benefits, in the event of death by accident, additional benefits
to safeguard the contract from lapse, accelerated payments of part or all
of the death benefits to safeguard the contract from lapse, accelerated
payments of part or all of the death benefit or a special surrender value
upon diagnosis (A) of terminal illness defined as a life expectancy of
twelve months or less, or (B) of a medical condition requiring
extraordinary medical care or treatment regardless of life expectancy, or
provide a special surrender value, upon total and permanent disability of
the insured, and optional modes of settlement of proceeds. "Life insurance"
also includes additional benefits to safeguard the contract against lapse
in the event of unemployment of the insured. Amounts paid the corporation
for life insurance and proceeds applied under optional modes of settlement
or under dividend options may be allocated by the corporation to one or
more separate accounts pursuant to section four thousand two hundred forty
of the New York Insurance Law;
(2) Annuities, meaning all agreements to make periodical payments for a
period certain or where the making or continuance of all or some of a
series of such payments, or the amount of any such payment, depends upon
the continuance of human life, except payments made under the authority of
paragraph one hereof. Amounts paid the corporation to provided annuities
and proceeds applied under optional modes of settlement or under dividend
options may be allocated by the corporation to one or more separate
accounts pursuant to section four thousand two hundred forty of the New
York Insurance Law;
(3) Accident and health insurance, meaning (A) insurance against death or
personal injury by accident or by any specified kind or kinds of accident
and insurance against sickness, ailment or bodily injury, including
insurance providing disability benefits pursuant to article.
2
<PAGE>
nine of the New York State Workers' Compensation Law, except as specified
in item (B) hereof; and (B) non-cancellable disability insurance, meaning
insurance against disability resulting from sickness, ailment or bodily
injury (but excluding insurance solely against accidental injury) under any
contract which does not give the corporation the option to cancel or
otherwise terminate the contract at or after one year from its effective
date or renewal date;
and any amendments to such paragraphs or provisions in substitution therefor
which may be hereafter adjusted. The corporation shall also have the power to
effect reinsurance of risks taken by it, and to assume by way of reinsurance
similar risks taken by other insurers and reinsurers. In addition, the
corporation shall have the power to transact any other kind or kinds of business
to the extent now or hereafter permitted for life insurance companies under the
Insurance Law of the State of New York and necessarily or properly incidental to
the kind or kinds of insurance business which the corporation is authorized to
do.
ARTICLE IV
----------
EXERCISE OF CORPORATE POWERS
----------------------------
Section 1. The corporate powers shall be exercised by a Board of
Directors and by a President and by one or more Vice Presidents, a Secretary and
a Treasurer and by such other officers and such committees as the Board of
Directors maya elect or appoint. The Directors shall have all of the
qualifications, powers and authority and shall be subject to all of the
limitations as set forth in the Insurance Law of the State of New York.
Section 2. The Board of Directors shall have the power to make,
alter, amend or repeal the bylaws of the corporation (except in those cases
where stockholder action is required by law).
ARTICLE V
---------
NUMBER OF DIRECTORS
-------------------
The number of Directors shall be thirteen.
ARTICLE VI
----------
PROVISIONS CONCERNING DIRECTORS AND OFFICERS
--------------------------------------------
3
<PAGE>
Section 1. An election of directors shall be held annually at a place
and time specified by the Board of Directors on the first Wednesday of May, if
not a legal holiday in the state of New York, and, if such day is a legal
holidy, then on the next succeeding business day not a legal holiday at the
corporation's principal office at 9:00 a.m. Each Director shall serve until his
successor is elected and qualified.
Section 2. The President, one or more Vice Presidents, a Secretary and
a Treasurer shall be elected annually by the Directors at the first meeting of
the Board of Directors held after the election of the Directors as provided in
Section 1 of this Article VI. Each of such officers shall hold office until the
election of his successor. All other officers shall be elected or appointed by
the Board of Directors, or in such manner as the By-laws may prescribe.
Section 3. Whenever any vacancy or vacancies shall occur in the Board
of Directors by death, resignation, removal or otherwise, a majority of the
remaining members of the Board of Directors, at a meeting called for that
purpose, or at any regular meeting, shall elect a Director or Directors to fill
the vacancy or vacancies thus occasioned, and each Director so elected shall
serve until his successor is elected and is qualified. If, because of any
vacancy or vacancies in the Board of Directors, the number of Directors shall be
less than thirteen, the corporation shall not for that reason be dissolved, but
every Director shall continue to hold office and discharge his duties until his
successor shall have been elected and qualified.
Section 4. Vacancies in any office may be filled for the remainder of
the term in which the same shall occur by a majority vote of the Board of
Directors.
Section 5. At all times, a majority of Directors shall be citizens and
residents of the United States, not less than three Directors shall be residents
of New York and no Director shall be less than twenty-one years of age. Not less
than one-third of the Board of Directors shall be persons who are not officers
or employees of the corporation or any entity controlling, controlled by, or
under common control with the corporation and who are not beneficial owners of a
controlling interest in the voting stock of the corporation or any such entity.
Directors need not be stockholders.
ARTICLE VII
-----------
INITIAL DIRECTORS
-----------------
4
<PAGE>
The names and post office residence addresses of the Directors who
shall serve until the first annual meeting of stockholders and until their
successors are duly elected are:
5
<PAGE>
Names Addresses
- ----- ---------
Robert Alvin Anker 3601 West Hamilton Road
Fort Wayne, Indiana 46804
Roland Charles Baker 1230 N. State Parkway
Apartment 23-C
Chicago, Illinois 60610
John Patrick Barrett 4605 Watergap
Manlius, New York 13104
Thomas D. Bell, Jr. 2 Lakewood Circle South
Greenwich, Connecticut 06830
Jon Andrew Boscia 4715 Creek Ridge Place
Fork Wayne, Indiana 46835
Harry Louis Kavetas 52 Woodbury Place
Rochester, New York 14618
Barbara Steury Kowalczyk 4745 Hartman Road
Fort Wayne, Indiana 46807
Marguerite Leanne Lachinan 870 United Nations Plaza
Apartment 8-C
New York, New York 10017
John Michael Pietruski 27 Paddock Lane
Colts Neck, New Jersey 07722
Gabriel L. Shaheen 2101 Sycamore Hills Drive
Fort Wayne, Indiana 46804
John Lyman Steinkamp 4910 Oak Creek Court
Fort Wayne, Indiana 46835
Richard Charles Vaughan 1618 Sycamore Hill Drive
Fort Wayne, Indiana 46804
Michael Dean Wilkins 5605 Albany Court
Fort Wayne, Indiana 46835
ARTICLE VIII
------------
DURATION
---------
The duration of the existence of the corporation shall be perpetual.
6
<PAGE>
ARTICLE IX
----------
CAPITAL
-------
The amount of the capital of the corporation shall be two million
dollars ($2,000,000), which shall consist of twenty thousand (20,000) shares of
Common Stock with a par value of one hundred dollars ($100.00) per share.
ARTICLE X
---------
EXCULPATION
-----------
No Director shall be personally liable to the corporation or any of
its stockholders for damages for any breach of duty as a Director; provided,
however, that the foregoing provision shall not eliminate or limit the
liability of a Director if a judgment or other final adjudication adverse to
him or her establishes that his or her acts or omissions were in bad faith or
involved intentional misconduct or were acts or omissions (i) which he or she
knew or reasonably should have known violated the New York Insurance Law or (ii)
which violated a specific standard of care imposed on Directors directly, and
not by reference, by a provision of the New York Insurance Law (or any
regulations promulgated thereunder) or (iii) which constituted a knowing
violation of any other law, or establishes that he or she personally gained in
fact a financial profit or other advantage to which he or she was not legally
entitled.
IN WITNESS WHEREOF, the undersigned hereby make, sign and acknowledge
this Declaration of Intention and charter.
/S/ Robert A. Anker
- ---------------------------------
Robert Alvin Anker
STATE OF INDIANA )
)ss:
COUNTY OF ALLEN )
On May 9, 1996, before me personally came Robert Alvin Anker, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/S/Linda Zimmer Smith
--------------------------------------
Notary Public
7
<PAGE>
LINDA ZIMMER SMITH, Notary Public
Allen County, State of Indiana
/s/ Rolland Baker My Commission Expires 1/18/00
- ----------------------------------
Roland Charles Baker
STATE OF ILLINOIS )
) ss:.
COUNTY OF DUPAGE )
May 8, 1996, before me personally came Roland Charles Baker, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Denise Karen Hauser
---------------------------------
Notary Public
OFFICIAL SEAL
DENISE KAREN HAUSER
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 6-16-99
/s/ J. Patrick Barrett
- ----------------------------------
John Patrick Barrett
STATE OF INDIANA )
) ss:.
COUNTY OF ALLEN )
May 9, 1996, before me personally came John Patrick Barrett, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
---------------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
/s/ Thomas D. Bell Jr. MY COMMISSION EXPIRES 12-20-97
- ----------------------------------
Thomas D. Bell Jr.
STATE OF INDIANA )
) ss:.
COUNTY OF ALLEN )
8
<PAGE>
On May 9, 1996, before me personally came Thomas D. Bell, Jr., to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
---------------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
MY COMMISSION EXPIRES 12-20-97
/s/ Jon Andrew Boscia
- ----------------------------------
Jon Andrew Boscia
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
On May 9, 1996, before me personally came Jon Andrew Boscia, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
---------------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
/s/ Harry L. Kavetas MY COMMISSION EXPIRES 12-20-97
- ----------------------------------
Harry Louis Kavetas
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
On May 9, 1996, before me personally came Harry Louis Kavetas, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
---------------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
/s/ Barbara Steury Kowalczyk MY COMMISSION EXPIRES 12-20-97
- ----------------------------------
Barbara Steury Kowalczyk
9
<PAGE>
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
On May 9, 1996, before me personally came Barbara Steury Kowalczyk, to
me personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
-----------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
/s/ M. Leanne Lachman RESIDENT OF DEKALB COUNTY
- ----------------------------- MY COMMISSION EXPIRES 12-20-97
Marguerite Leanne Lachman
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
On May 9, 1996, before me personally came Marguerite Leanne Lachman,
to me personally known and known to me to be the person who executed the
foregoing instrument, and he duly acknowledged before me that he executed the
same.
/s/ Mary L. Lung
-----------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
/s/ John Michael Pietruski RESIDENT OF DEKALB COUNTY
- ----------------------------- MY COMMISSION EXPIRES 12-20-97
John Michael Pietruski
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
On May 9, 1996, before me personally came John Michael Pietruski, to
me personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
-----------------------------
Notary Public
MARY L. LUNG
10
<PAGE>
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
/s/ Gabriel Shaheen MY COMMISSION EXPIRES 12-20-97
- ----------------------------------
Gabriel Shaheen
STATE OF INDIANA )
) ss:.
COUNTY OF ALLEN )
On May 9, 1996, before me personally came Gabriel Shaheen, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
---------------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
/s/ John L. Steinkamp MY COMMISSION EXPIRES 12-20-97
- ----------------------------------
John Lyman Steinkamp
STATE OF INDIANA )
) ss:.
COUNTY OF ALLEN )
On May 7, 1996, before me personally came John Lyman Steinkamp, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
---------------------------------
Notary Public
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
/s/ Richard C. Vaughan MY COMMISSION EXPIRES 12-20-97
- ----------------------------------
Richard Charles Vaughan
STATE OF INDIANA )
) ss:.
COUNTY OF ALLEN )
On May 7, 1996, before me personally came Richard Charles Vaughan, to
me personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
11
<PAGE>
/s/ Sharlene K. Geer
--------------------------------
Notary Public
/s/ Michael Dean Wilkins MY COMMISSION EXPIRES 2-29-00
- -------------------------------
Michael Dean Wilkins
STATE OF INDIANA )
)ss:.
COUNTY OF ALLEN )
On May 7, 1996, before me personally came Michael Dean Wilkins, to me
personally known and known to me to be the person who executed the foregoing
instrument, and he duly acknowledged before me that he executed the same.
/s/ Mary L. Lung
--------------------------------
Notary Public
My Commission Expires: 12-20-97
MARY L. LUNG
NOTARY PUBLIC
RESIDENT OF DEKALB COUNTY
MY COMMISSION EXPIRES 12-20-97
12
<PAGE>
EXHIBIT 8
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement") is made as of August 15, 1996, by
and among Delaware Management Holdings, Inc., a Delaware corporation
("Holdings"), Delaware Service Company, Inc., a Delaware corporation and a
wholly owned subsidiary of Holdings ("Delaware"), Lincoln Life & Annuity Company
of New York, a New York insurance corporation ("Lincoln Life").
The parties hereto, in consideration of the mutual covenants hereinafter
expressed, agree as follows:
ARTICLE 1
DEFINITIONS
-----------
Section 1.1 Definitions. The following terms shall have the respective
-----------
meanings set forth in this Section 1.1 for all purposes of this Agreement except
where the application of such definitions is limited by reference in this
Section 1.1 to a specific Article of this Agreement (such definitions to be
equally applicable to both the singular and plural forms of the terms herein
defined):
"Accounting Schedule" means Schedule 1.1(a) hereto, which sets forth the
---------------
accounting services to be rendered pursuant to this Agreement, as such Schedule
may be amended from time to time pursuant to Section 15.1.
"Accounting Services" means the services listed in the Accounting Schedule
with respect to the Accounts.
"Accounts" means the Separate Accounts.
"Affiliate" means, with respect to any entity, any other entity
controlling, controlled by or under common control with such entity.
"Business Day" means a day on which the New York Stock Exchange is open for
trading.
"Calculation Losses" means any losses suffered by a Contractowner, Third
Party Administrator, or Separate Account directly caused by an error in a Unit
Value, or by the delivery to Lincoln Life of a or Unit Value after the
applicable deadline provided for in Section 2.1; provided, however, that such
losses shall not include any consequential damages.
"Contractowner" means the present or former owner of an insurance or
annuity contract supported by a Separate Account, or any beneficiary or
annuitant thereof.
- 1 -
<PAGE>
"Delaware" has the meaning set forth in the preamble to this Agreement.
"Delaware Affiliate" means Holdings and any entity that is directly or
indirectly controlled by Holdings.
"Fee Schedule" means Schedule 5.1 hereto, as such Schedule may be amended
------------
from time to time pursuant to Section 15.1.
"Holdings" has the meaning set forth in the preamble to this Agreement.
"Lincoln Affiliate" means any Affiliate of Lincoln Life other than a
Delaware Affiliate.
"Lincoln Life" has the meaning set forth in the preamble to this Agreement.
"Renewal Term" means each successive one-year term occurring after the
expiration of the initial term of this Agreement as described in Section 10.1.
"Separate Account" means a separate account of Lincoln Life identified as
such on the Accounting Schedule, and any additional separate account or sub-
account of Lincoln Life or any Lincoln Affiliate (or of any other person if
Lincoln Life or any Lincoln Affiliate has administrative responsibilities with
respect to such separate account or sub-account pursuant to any reinsurance
agreement or otherwise) designated in accordance with Section 4.1.
"Third Party Administrator" means an administrator of insurance or annuity
contracts acting on behalf of Contractowners.
"Unit Value" means the daily unit value per unit of the respective Separate
Accounts or sub-accounts thereof for each Business Day, all determined in
accordance with the terms of the Cutover Schedule and with any applicable
prospectus or regulatory requirement.
"Value Calculation Services" means those Accounting Services consisting of
or incidental to the calculation and communication of Unit Values in accordance
with the terms of this Agreement.
ARTICLE 2
SCOPE OF SERVICES
-----------------
Section 2.1 Scope of Services. Delaware shall provide the Accounting
-----------------
Services to Lincoln Life with respect to each of the Separate Accounts, all in
accordance with the terms of this Agreement. Without limiting the generality of
the foregoing, Delaware, no later than 6:00 p.m. (New York City time) on each
Business Day, shall in accordance with the terms of this Agreement provide to
Lincoln Life the Value Calculation Services for each of the Accounts. In the
event of any error in the Value Calculation Services, the parties hereto will
follow the
- 2 -
<PAGE>
procedures set forth in Schedule 2.1, without prejudice to any other rights
------------
described in this Agreement.
ARTICLE 3
LINCOLN LIFE'S SUPPORT OBLIGATIONS
----------------------------------
Section 3.1 Provision of Data. Lincoln Life shall use its best
-----------------
efforts to provide or cause to be provided to Delaware the data identified in
Schedule 3.1 during the periods and in accordance with the procedures identified
- ------------
in such Schedule, it being understood that Delaware shall not be responsible for
any Calculation Losses or other claims, suits, hearings, actions, damages,
liabilities, fines, penalties, costs, losses or expenses, including reasonable
attorney's fees, which any party may sustain or incur, directly or indirectly,
in each case to the extent caused by or arising from Lincoln Life's failure to
provide such data in accordance with such Schedule 3.1.
------------
Section 3.2 Data to Be Provided by Third Parties. With respect to
------------------------------------
each of the mutual funds identified in Schedule 3.2 as an available investment
------------
of one or more of the Separate Accounts and each third party service provider
identified in such Schedule, Lincoln Life shall direct each of the managers of
such funds or such service provider, as the case may be, to provide or cause to
be provided to Delaware the data identified in Schedule 3.2 in accordance with
------------
the procedures and time deadlines identified in such Schedule.
ARTICLE 4
NEW ACCOUNTS; NEW INVESTMENT MANAGERS
-------------------------------------
Section 4.1 Additional Accounts. Lincoln Life may from time to time
-------------------
designate (i) one or more additional separate accounts to constitute Separate
Accounts for all purposes of this Agreement, or (ii) one or more newly
established sub-accounts of any Separate Account. Such designation shall be:
(a) subject to Delaware's consent, which shall not be unreasonably
withheld; provided, that such consent shall be considered to be
unreasonably withheld if Delaware does not make reasonable
efforts to accept such new separate accounts and sub-accounts,
which efforts shall include, but not be limited to, reasonable
consideration of the expansion of Delaware's infrastructure to
handle such new separate accounts and sub-accounts; and
(b) evidenced by a writing executed by Lincoln Life and Delaware
setting forth the name of such separate account or new sub-
account, the applicable rate under the Fee Schedule that shall
apply to the Accounting Services for such separate account or new
sub-account, the effective date of the designation thereof as a
Separate Account or new sub-account, and any other matters the
parties wish to include.
- 3 -
<PAGE>
Notwithstanding clause (b) of the preceding sentence, if Delaware's performance
of the Accounting Services for such additional Separate Accounts or sub-accounts
of such Separate Accounts would, in Delaware's reasonable opinion, result in
higher costs than the costs Delaware incurs for providing the Accounting
Services to the current Accounts, then the affected parties hereto shall
negotiate in good faith an addendum to the Fee Schedule for such additional
Separate Accounts and sub-accounts and Delaware shall not be deemed to have
unreasonably withheld its consent under clause (b) of this Section 5.1 until
such addendum has been agreed to. Except as otherwise specified in such writing,
Delaware shall provide to Lincoln Life with respect to a Separate Account or new
sub-account, the same Accounting Services as are specified in the Accounting
Schedule with respect to the other Separate Accounts or sub-account of a
Separate Account, as the case may be.
Section 4.2 New Investment Managers. If new investment managers are added
-----------------------
to provide investment advisory services to any of the Accounts, and Delaware's
performance of the Accounting Services is, as a result thereof, significantly
more costly to Delaware, the affected parties shall negotiate in good faith an
addendum to the Fee Schedule for such Accounts.
ARTICLE 5
FEES
----
Section 5.1 Accrual of Fees. Lincoln Life shall pay fees for the
---------------
Accounting Services for each of the Separate Accounts at the respective rates
per annum determined in accordance with the Fee Schedule. Fees accrued pursuant
to this Section 5.1 shall be payable in arrears on a monthly basis.
Section 5.2 Payment of Fees by Lincoln Life. Delaware shall submit to
-------------------------------
Lincoln Life an invoice for each month for all of the fees payable pursuant to
Section 5.1 with respect to each of the Separate Accounts, which invoice shall
be itemized to show the portion of such fees allocable to each of the Separate
Accounts in accordance with the Fee Schedule. Subject to the terms of this
Agreement, invoices for such fees shall be payable within 30 days of receipt.
ARTICLE 6
STANDARD OF CARE; INDEMNIFICATION
---------------------------------
Section 6.1 Standard of Care. Delaware shall provide the Accounting
----------------
Services with a level of care equal to or greater than the level of care at
which it performs similar functions for mutual funds that are sponsored or
managed by any Delaware Affiliate, and in any event, Delaware shall always
exercise reasonable care in performing the Accounting Services.
- 4 -
<PAGE>
Section 6.2 Indemnification
---------------
(a) Indemnification by Lincoln Life. Lincoln Life shall indemnify, defend
-------------------------------
and hold harmless Delaware and any Delaware Affiliate, and the directors,
officers and employees of the foregoing (each individually, a "Delaware
Indemnified Party"), against any and all claims, suits, hearings, actions,
damages, liabilities, fines, penalties, costs, losses or expenses, including
reasonable attorney's fees, which any Delaware Indemnified Party may sustain or
incur, directly or indirectly, in each case to the extent caused by or arising
from (i) the negligence, recklessness or intentional misconduct of Lincoln Life
or any Lincoln Affiliate, or any director, officer or employee thereof, in the
performance of this Agreement; or (ii) the failure of Lincoln Life to comply
with the terms of this Agreement.
(b) Indemnification by Delaware. Subject to Section 3.1, Delaware shall
---------------------------
indemnify, defend and hold harmless Lincoln Life, the Lincoln Affiliates and the
directors, officers and employees of the foregoing (each individually, a
"Lincoln Indemnified Party") against any and all claims, suits, hearings,
actions, damages, liabilities, fines, penalties, costs, losses (including but
not limited to (a) Calculation Losses reimbursed by Lincoln Life and (b) any
market fluctuation losses incurred by Lincoln Life in effecting such
reimbursement) or expenses, including reasonable attorney's fees, which any
Lincoln Indemnified Party may sustain or incur, directly or indirectly, in each
case to the extent caused by or arising from (i) the negligence, recklessness or
intentional misconduct of Delaware or any Delaware Affiliate, or any director,
officer or employee thereof, in the performance of this Agreement; or (ii) the
failure of Delaware to comply with the terms of this Agreement.
(c) Procedures. Subject to the provisions of Section 6.2(d), promptly
----------
after receipt by a Delaware Indemnified Party or a Lincoln Indemnified Party
(each, an "Indemnified Party") of notice of the commencement of any action,
proceeding, investigation or claim by any Contractowner or other third party (a
"Proceeding"), the Indemnified Party shall, if a claim in respect thereof is to
be made pursuant to this Section 6.2 against another party to this Agreement
(the "Indemnifying Party"), notify the Indemnifying Party in writing of the
commencement thereof; but the failure so to notify the Indemnifying Party shall
not relieve the Indemnifying Party from any liability under this Section 6.2,
except to the extent that such failure to notify actually prejudices the
Indemnifying Party. In case any such Proceeding shall be brought against an
Indemnified Party, the Indemnifying Party shall be entitled to participate in
and to assume the defense thereof, with counsel satisfactory to the Indemnified
Party, and after notice from the Indemnifying Party to the Indemnified Party of
the Indemnifying Party's election to assume the defense thereof, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, that (i) if, in the reasonable judgment of the Indemnified Party, it is
advisable for the Indemnified Party to be represented by separate counsel other
than counsel for the Indemnifying Party, the Indemnified Party shall have the
right to employ a single counsel to represent the Indemnified Party, in which
event the reasonable fees and expenses of such separate single counsel shall be
borne by the
- 5 -
<PAGE>
Indemnifying Party, and (ii) in the case of any Proceeding brought by any
governmental authority, the Indemnifying Party shall have the right to
participate in, but not to assume the defense of, such Proceeding. The
Indemnifying Party shall not be obligated under any settlement agreement relat
ing to any Proceeding under this Section 6.2 to which it has not consented in
writing, which consent shall not be unreasonably withheld.
(d) Preserving Rights with Respect to Calculation Losses. Notwithstanding
----------------------------------------------------
Section 6.2(c), Lincoln Life may in its sole discretion elect to reimburse a
Contractowner, Third Party Administrator or Separate Account for Calculation
Losses out of Lincoln Life's own funds and such reimbursement shall have no
effect on the respective indemnification obligations of the parties pursuant to
Section 6.2(a) and (b).
(e) Overpayments. The parties agree that there may be circumstances in
------------
which it would not be commercially reasonable for Lincoln Life to seek
reimbursement from one or more Contractowners of overpayments made them, taking
into account relevant factors such as industry practice; the amount of such
overpayments; the number of Contractowners overpaid; the cost of seeking
reimbursement; and the implications for customer relations of seeking
reimbursement. In the event of any overpayment to a Contractowner for which
Lincoln Life intends to seek indemnification from Delaware pursuant to Section
6.2(b) without seeking reimbursement from the Contractowner, the parties shall
negotiate in good faith as to what effect, if any, the determination not to seek
such reimbursement should have under the circumstances on the rights of Lincoln
Life or the Funds to indemnification for the amounts overpaid.
ARTICLE 7
INSURANCE COVERAGE
------------------
Section 7.1 Insurance. Delaware and Holdings shall maintain insurance
---------
coverage at a level at least equal to the insurance coverage held by each of
them at the time this Agreement becomes effective.
ARTICLE 8
FORCE MAJEURE AND DISASTER RECOVERY PLAN
----------------------------------------
Section 8.1 Force Majeure; Disaster Recovery Plan. No party shall be
-------------------------------------
liable to any other party for any damages caused by delays beyond its reasonable
control, including, without limita tion, those delays occasioned by fire,
strike, labor dispute, acts of the other party, acts of any common carrier,
pricing service, corporate action service, or telephone network, acts of the
power supply company or its networks, restrictions by civil or military
authorities, acts of nature, or unforeseen transportation failures. In the
event of any such delay, the hindered party shall promptly notify the other
parties and, upon the giving of such notice, the period of time for performance
of obligations hereunder affected by such delays will be extended by the same
number of days as the delay. Notwithstanding the foregoing, Delaware shall
maintain and implement a customary disaster recovery plan and such plan shall be
reasonably acceptable to
- 6 -
<PAGE>
Lincoln Life and the Funds. This Article 8 shall not excuse any failure to
perform, or extend the time for performance of, any obligation of Delaware under
this Agreement to the extent that such failure or delay would have been avoided
by compliance with such disaster recovery plan, or by the use of reasonable,
readily available alternatives.
ARTICLE 9
EFFECTIVENESS
-------------
Section 9.1 Effectiveness.
-------------
This Agreement shall become effective upon the date first set
forth above ("Effective Date").
ARTICLE 10
TERM AND TERMINATION
--------------------
Section 10.1 Term. The initial term of this Agreement shall end on
----
the fourth anniversary of the Effective Date and this Agreement shall be
automatically renewed for subsequent Renewal Terms thereafter unless sooner
terminated under Section 10.2.
Section 10.2 Termination. Subject to the procedures set forth in
-----------
Article 11 and to Section 10.3, this Agreement may be terminated as follows:
(a) by Lincoln Life or Delaware in each case upon notice to
each of the other parties at least 180 days prior to the
expiration of the initial term or any Renewal Term, with
such termination to become effective upon such
expiration; and
(b) by Lincoln Life or Delaware upon 30 days notice to each
of the other parties, for any material breach of this
Agreement unless such breach is cured within such notice
period.
For the purpose of this Section 10.2(b) only, a "material breach" shall include,
but not be limited to, the failure by Delaware to provide Accounting Services
hereunder of a quality reasonably determined by Lincoln Life to be consistent
with a superior level of service in the industry.
Section 11.3 Effect of Termination by a Fund. In the event one or more
-------------------------------
Funds shall terminate this Agreement, this Agreement shall nonetheless continue
in full force and effect between and among those parties who have not terminated
this Agreement.
- 7 -
<PAGE>
ARTICLE 11
PROCEDURES UPON TERMINATION
---------------------------
Section 11.1 Obligations Upon Termination. Upon termination of this
----------------------------
Agreement by any party under Article 10, each party shall be obligated to
cooperate with each other party to provide for the transfer of all
responsibilities, duties and obligations of this Agreement as may be necessary
to ensure the orderly, undisrupted business of each party. Such cooperation
shall include, but not be limited to, returning all papers, documents, materials
or equipment to the party owning such materials. In the event that this
Agreement is terminated by Lincoln Life under Section 10.2(b), Lincoln Life
shall have the right to require Delaware to continue performing all or any part
of its responsibilities, duties and obligations under this Agreement until the
earlier of (a) 210 days following the date notice of such termination was given,
or (b) the date that is 30 days after notice from Lincoln Life that Delaware
shall cease such performance. For this purpose, (a) the terms of this Agreement
(including without limitation the obligation of Lincoln Life to pay Delaware's
fees under Article 5, and the obligation of Delaware to continue to exercise the
standard of care required under Section 6.1 shall remain in effect with respect
to the period in which Delaware is obligated to continue such performance, and
(b) if any portion of Delaware's responsibilities, duties and obligations during
such period are not so extended as required by Lincoln Life, the parties shall
mutually agree in good faith on a reduction of fees which reflects the
termination of such responsibilities, duties and obligations.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
------------------------------
Each party represents and warrants to the other parties as follows:
Section 12.1 Organization and Authority. Such party is duly organized,
--------------------------
validly existing and in good standing as a corporation under the laws of the
state indicated on the first page of this Agreement, with the requisite
authority and power, in conformity with applicable laws, rules and regulations,
to execute and deliver this Agreement and to perform its obligations hereunder.
Such party has taken all necessary action to authorize such execution, delivery
and performance.
Section 12.2 No Conflict with Laws. The execution, delivery and
---------------------
performance of this Agreement by such party do not conflict with or violate any
laws applicable to such party, any provision of its constituent documents, any
order or judgment of any court or governmental agency applicable to it or any of
its assets or any contractual restriction binding on it or its assets.
Section 12.3 Obligation. This Agreement constitutes a legal, valid and
----------
binding obligation of such party, enforceable in accordance with its terms,
subject to applicable bankruptcy, insol vency, reorganization, moratorium and
similar laws relating to the enforcement of creditors' rights generally and
subject to principles of equity.
- 8 -
<PAGE>
ARTICLE 13
PARENT GUARANTY
---------------
Section 13.1 Parent Guaranty. Holdings hereby unconditionally guarantees
---------------
the full and punctual performance of the covenants, agreements and obligations
of Delaware under this Agreement, including but not limited to the payment when
due of all amounts that may from time to time be payable by Delaware pursuant to
Section 6.2(b) (the "Guaranteed Obligations").
Section 13.2 Guaranty Unconditional. The obligations of Holdings
----------------------
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released or discharged by:
(a) any extension, settlement, compromise, waiver or release in
respect of any obligation of Delaware under this Agreement;
(b) any modification or amendment of or supplement to this Agreement;
(c) any change in the corporate existence, structure or ownership of
Delaware, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting Delaware or its assets; or
(d) any other act or omission to act or delay of any kind by
Delaware, Lincoln Life, any Fund or any other person which would, but for
the provisions of this paragraph (d), constitute a legal or equitable
discharge of Holding's obligations hereunder;
provided, however, that in the event of any extension, settlement, compromise,
waiver or release of any obligation of Delaware under this Agreement, or any
modification or amendment of or supplement to this Agreement, the guaranty
provided for in this Article 13 shall apply to the obligations of Delaware as so
extended, settled, compromised, waived, released, modified, amended or
supplemented.
Section 13.3 Discharge Only Upon Payment or Performance in Full;
---------------------------------------------------
Reinstatement in Certain Circumstances. Holding's obligations hereunder shall
- --------------------------------------
remain in full force and effect until the Guaranteed Obligations shall have been
paid or performed in full. If at any time any payment of Guaranteed Obligations
by Delaware under this Agreement is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of Delaware or
otherwise, Holding's obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
Section 13.4 Waiver by Holdings. Holdings irrevocably waives acceptance
------------------
hereof, presentment, demand, protest and any notice not provided for herein, as
well as any requirement that at any time any action be taken by any person
against Delaware or any other person.
- 9 -
<PAGE>
Section 13.5 Subrogation. Upon making any payment with respect to
-----------
Delaware hereunder, Holdings shall be subrogated to the rights of the payee
against Delaware with respect to such payment; provided that Holdings shall not
enforce payment by way of subrogation until all Guaranteed Obligations have been
paid or performed in full.
ARTICLE 14
DISPUTE RESOLUTION
------------------
Before commencing litigation of any dispute arising out of or relating to
this Agreement, the parties shall attempt in good faith to resolve the dispute
by the following means:
Section 14.1 Negotiation. The parties shall in good faith attempt to
-----------
resolve any dispute arising out of or relating to this Agreement promptly by
negotiations between executives who have authority to settle the controversy. A
party may give the other parties written notice of any dispute not resolved in
the normal course of business. Within 20 days after delivery of that notice,
executives of the affected parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the dispute. If the matter has
not been resolved within 60 days of the disputing party's notice, or if the
parties fail to meet within 20 days, either party may initiate mediation of the
controversy or claim as provided in Section 14.2. If a negotiator intends to be
accompanied at a meeting by an attorney, the other negotiator shall be given at
least 3 Business Days' notice of that intention and may also be accompanied by
an attorney.
Section 14.2 Mediation. If the dispute has not been resolved by
---------
negotiation as provided in Section 14.1, the parties shall endeavor for an
additional period of 60 days to settle the dispute by mediation under the then-
current Center for Public Resources (CPR) Model Procedure for Mediation of
Business Disputes. The neutral third party will be selected from the CPR Panel
of Neutrals. If the parties encounter difficulty in agreeing on a neutral, they
will seek the assistance of CPR in the selection process.
Section 14.3 Confidentiality. All activities under this Article 14 are
---------------
confidential and shall be treated as compromise and settlement negotiations for
purposes of the Federal Rules of Evidence and state rules of evidence.
ARTICLE 15
MISCELLANEOUS
-------------
Section 15.1 Amendment. This Agreement, including any Exhibits or
---------
Schedules, may be amended, modified or supplemented only in writing signed by
Delaware, Lincoln Life and any Fund affected thereby. This Agreement shall be
binding upon all successors, assigns or transferees of the parties to this
Agreement.
- 10 -
<PAGE>
Section 15.2 Assignment. This Agreement and the rights, duties and
----------
obligations of the parties hereto shall not be assignable by any party, except
assignment to successors in the case of mergers, sales of all or substantially
all of the assets of such party or transfer of ownership by reorganization or
similar restructuring to a successor in interest to the business of such party,
without the prior written consent of the other parties, and any purported
assignment in the absence of such consent shall be void.
Section 15.3 Notices. All notices given or submitted pursuant to this
-------
Agreement shall be made in writing and shall be deemed given when (a) deposited
with the United States Postal Service, postage prepaid, registered or certified
mail, return receipt requested; (b) deposited with a nationally recognized
overnight mail delivery service; (c) sent by facsimile with electronic
confirmation of delivery or with a copy sent by mail as described in (a) or (b)
above; or (d) delivered in person; all to the last address of record of each
party being notified.
Any notice under this Agreement to Lincoln Life shall be given to:
ATTN: Troy D. Panning
2nd Vice President and Chief Financial Officer
Lincoln Life & Annuity Company of New York
Syracuse, NY 13202
Phone: (315) 428-8411
Facsimile: (315) 428-8419
Any notice under this Agreement to Delaware or Holdings shall be given to:
ATTN: Michael J. Bishof
Vice President and Treasurer
Delaware Management Company
1818 Market Street; 7th Floor
Philadelphia, PA 19103
Phone: (215) 255-2852
Facsimile: (215) 255-1645
With a copy to:
Richard J. Flannery
Managing Director, Corporate
& Tax Affairs
Delaware Management Company
2005 Market Street
Philadelphia, PA 19103
- 11 -
<PAGE>
Phone: (215) 255-1244
Facsimile: (215) 255-2822
Any party may, by means of written notice in compliance with this Section
15.3, change the address or the identity of the person to whom any notice, or
copy thereof, is to be sent.
Section 15.4 Severability. If any provision of this Agreement, as applied
------------
to any party or to any circumstances, shall be found by a court of competent
jurisdiction to be void, invalid or unenforceable, the same shall in no way
affect any other provision of this Agreement, the application of any such
provision in any other circumstances, or the validity or enforceability of this
Agreement; provided, however, that nothing in this Section 15.4 shall adversely
affect the fundamental benefits received by the parties under this Agreement.
Section 15.5 Waiver. A waiver by any party of any of the terms and
------
conditions of this Agreement in any one instance shall not be deemed or
construed to be waiver of any such term or condition for the future, or of any
subsequent breach thereof, nor shall it be deemed a waiver of performance of any
other obligation hereunder. No waiver of any provision of this Agreement shall
be valid unless agreed to in writing by the party or parties against whom such
waiver is sought to be enforced.
Section 15.6 Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties hereto relating to the subject matter of this
Agreement and supersedes all prior and collateral agreements, understandings,
statements and negotiations of the parties.
Section 15.7 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without giving
effect to the conflict of law provisions thereof.
Section 15.8 Section and Paragraph Headings. The titles of the sections
------------------------------
and paragraphs of this Agreement are for convenience only and shall not in any
way affect the interpretation of any provision or condition of this Agreement.
Section 15.9 Counterparts. This Agreement may be executed in counterparts
------------
which, taken together, shall constitute the whole of the Agreement as between
the parties.
- 12 -
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
LINCOLN LIFE:
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
By: _______________________________
Philip L. Holstein
Title: President and Treasurer
Date: __________________________
HOLDINGS:
DELAWARE MANAGEMENT HOLDINGS, INC.
By: /s/ David K. Downes
--------------------
Title: Executive Vice President &
Chief Operating Officer
Date: August 15, 1996
DELAWARE:
DELAWARE SERVICE COMPANY, INC.
By: /s/ Michael P. Bishof
----------------------
Title: Vice President & Treasurer
- 13 -
<PAGE>
Date: August 15, 1996
- 14 -
<PAGE>
EXHIBIT A
---------
INVESTMENT COMPANIES
- 15 -
<PAGE>
EXHIBIT A
---------
INVESTMENT COMPANIES
Lincoln National Aggressive Growth Fund, Inc.
Lincoln National Bond Fund, Inc.
Lincoln National Capital Appreciation Fund, Inc.
Lincoln National Equity-Income Fund, Inc.
Lincoln National Global Asset Allocation Fund, Inc.
Lincoln National Growth and Income Fund, Inc.
Lincoln National International Fund, Inc.
Lincoln National Managed Fund, Inc.
Lincoln National Money Market Fund, Inc.
Lincoln National Social Awareness Fund, Inc.
Lincoln National Special Opportunities Fund, Inc.
- 16 -
<PAGE>
EXHIBIT B
---------
FORM OF WRITTEN ACKNOWLEDGEMENT OF CUTOVER DATE
- 17 -
<PAGE>
EXHIBIT B
---------
FORM OF ACKNOWLEDGMENT OF CUTOVER DATE
--------------------------------------
This acknowledgement is executed pursuant Section 4.2 of that certain
Services Agreement (the "Agreement") dated as of July __, 1996 by and among
Delaware Management Holdings, Inc., Delaware Service Company, Inc., Lincoln
National Life Insurance Company, Lincoln National Aggressive Growth Fund, Inc.,
Lincoln National Bond Fund, Inc., Lincoln National Capital Appreciation Fund,
Inc., Lincoln National Equity-Income Fund, Inc., Lincoln National Global Asset
Allocation Fund, Inc., Lincoln National Growth and Income Fund, Inc., Lincoln
National International Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln
National Money Market Fund, Inc., Lincoln National Social Awareness Fund, Inc.,
and Lincoln National Special Opportunities Fund, Inc. Capitalized terms used
herein have the same meaning as in the Agreement.
Each of the parties signing this acknowledgment below hereby agrees
that the Test Period for Phase __ terminated on ________________ __, 1996. The
Cutover Date for providing the Accounting Service for Phase __ is
_________________ __, 1996.
LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: __________________________________
Title: _______________________________
Date: ________________________________
DELAWARE SERVICE COMPANY, INC.
By: __________________________________
Title: _______________________________
Date: ________________________________
[EACH FUND]
- 18 -
<PAGE>
By: __________________________________
Title: _______________________________
Date: ________________________________
- 19 -
<PAGE>
SCHEDULE 1.1 (a)
----------------
ACCOUNTING SCHEDULE
- 20 -
