<PAGE>
Legacy III C-Share
As filed with the Securities and Exchange Commission on June 1, 2000
Registration No.: 811-08441
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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 [_]
AMENDMENT NO. 3 [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
120 Madison Street, Suite 1700
Syracuse, New York 13202
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(Name and Address of Agent for Service)
Copy to:
Mary Jo Ardington, Esq.
Lincoln National Life Insurance Company
1300 S. Clinton St.
Fort Wayne, IN 46802
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING
As soon as practicable after the effective date of the Registration Statement.
Title of Securities: Interests in a separate account under individual
flexible payment deferred variable annuity contracts.
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>
American Legacy III C-Share
Lincoln Life & Annuity Variable Annuity Account H individual variable annuity
contracts
Home Office: Servicing Office:
Lincoln Life & Annuity Company of New York
P.O.Box 2348
120 Madison Street, Suite 1700 1300 South Clinton Street
Syracuse, NY 13202 Fort Wayne, IN 46801
www.lincolnlife-ny.com
This Prospectus describes the individual flexible premium deferred variable
annuity contract that is issued by Lincoln Life & Annuity Company of New York
("LNY"). It is primarily for use with nonqualified plans and retirement plans
under Section 408 (IRAs) of the tax code. Qualified 403(b) contracts will only
be issued for purchase payments that are either lump sum transfers or
rollovers. Generally, you do not pay federal income tax on the contract's
growth until it is paid out. The contract is designed to accumulate contract
value and to provide retirement income that you cannot outlive or for an
agreed upon time. These benefits may be a variable or fixed amount or a combi-
nation of both. If you die before the annuity commencement date, we will pay
your beneficiary a death benefit. In the alternative, you may choose to re-
ceive a death benefit upon the death of the annuitant.
The minimum initial purchase payment for the contract is $25,000. Additional
purchase payments may be made to the contract and must be at least $100 per
payment ($25 if transmitted electronically), and at least $300 annually.
You choose whether your contract value accumulates on a variable or a fixed
(guaranteed) basis or both. If you put all your purchase payments into the
fixed account, we guarantee your principal and a minimum interest rate. We
limit withdrawals and transfers from the fixed side of the contract.
All purchase payments for benefits on a variable basis will be placed in Lin-
coln Life & Annuity Variable Annuity Account H (variable annuity account
[VAA]). The VAA is a segregated investment account of LNY. You take all the
investment risk on the contract value and the retirement income for amounts
placed into one or more of the contract's variable options. If the subaccounts
you select make money, your contract value goes up; if they lose money, it
goes down. How much it goes up or down depends on the performance of the
subaccounts you select. We do not guarantee how any of the variable options or
their funds will perform. Also, neither the U.S. Government nor any federal
agency insures or guarantees your investment in the contract.
The available funds, listed below, are each part of American Funds Insurance
Series (series) Class 2 Shares, also known as American Variable Insurance Se-
ries:
Global Growth
Global Small Capitalization
Growth
International
New World
Growth-Income
Asset Allocation
Bond
High-Yield Bond
U.S. Government/AAA-Rated Securities
Cash Management
This Prospectus gives you information about the contracts that you should know
before you decide to buy a contract and make purchase payments. You should
also review the prospectus for the funds that is attached, and keep both pro-
spectuses for reference.
Neither the SEC nor any state securities commission has approved this contract
or determined that this Prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.
You can obtain a current Statement of Additional Information (SAI), dated the
same date as this Prospectus, about the contracts which has more information.
Its terms are made part of this Prospectus. For a free copy, write: Lincoln
Life & Annuity Company of New York, P.O. Box 2348, Fort Wayne, Indiana 46801,
or call 1-800-942-5500. The SAI and other information about LNY and Account H
are also available on the SEC's web site (http://www.sec.gov). There is a
table of contents for the SAI on the last page of this Prospectus.
, 2000
1
<PAGE>
Table of contents
<TABLE>
<CAPTION>
Page
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<S> <C>
Special terms 2
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Expense tables 3
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Summary 5
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Condensed financial information 6
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Investment results 6
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Financial statements 6
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Lincoln Life & Annuity Company of
New York 6
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Fixed side of the contract 6
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Variable annuity account (VAA) 6
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Investments of the variable annuity account 7
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Charges and other deductions 9
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The contract 9
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</TABLE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Annuity payouts 13
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Federal tax matters 14
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Voting rights 18
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Distribution of the contracts 18
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Return privilege 18
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State regulation 18
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Records and reports 18
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Other information 19
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Statement of additional information table of contents for Variable
Annuity Account H American Legacy III C-Share 20
------------------------------------------------------------------------
</TABLE>
Special terms
(We have italicized the terms that have special meaning throughout the Pro-
spectus.)
Account or variable annuity account (VAA) -- The segregated investment ac-
count, Lincoln Life & Annuity Variable Annuity, Account H, into which LNY sets
aside and invests the assets for the variable side of the contract offered in
this Prospectus.
Accumulation unit -- A measure used to calculate contract value for the vari-
able side of the contract before the annuity commencement date.
Annuitant or Joint Annuitant -- The person or persons on whose life the annu-
ity benefit payments are based and upon whose death a death benefit may be
paid.
Annuity commencement date -- The valuation date when funds are withdrawn or
converted into annuity units or fixed dollar payout for payment of retirement
income benefits under the annuity payout option you select.
Annuity payout -- An amount paid at regular intervals after the annuity com-
mencement 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 for
the variable side of the contract after the annuity commencement date.
Beneficiary -- The person or entity you choose to receive the death benefit
that is paid if you die before the annuity commencement date.
Contingent annuitant -- The person who will become the annuitant upon the
death of the annuitant.
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 the annuitant.
Contract value -- At a given time before the annuity commencement date, the
total value of all accumulation units for a contract plus the value of the DCA
fixed account 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.
DCA fixed account -- An account established to accept purchase payments or
transfers of contract value, that may only be used for dollar cost averaging
purposes. The DCA fixed account is part of the general account of LNY.
Death benefit -- The amount payable to your designated beneficiary if the
owner dies before the annuity commencement date, or, if selected, to the owner
if the annuitant dies.
Lincoln Life -- The Lincoln National Life Insurance Company.
LNY (we, us, our) -- Lincoln Life & Annuity Company of New York.
Purchase payments -- Amounts paid into the contract.
Series -- American Funds Insurance Series (series), the funds to which you di-
rect purchase payments.
Subaccount or American Legacy III C-Share subaccount --The portion of the VAA
that reflects investments in accumulation and annuity units of a class of a
particular fund available under the contracts. There is a separate subaccount
which corresponds to each class of a fund.
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 (valua-
tion date) and ending at the close of such trading on the next valuation date.
2
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Expense tables
Account H annual expenses for American Legacy III C-Share subaccounts:*
(as a percentage of average account value):
<TABLE>
<CAPTION>
Enhanced Guarantee
Guaranteed of
Minimum Principal
Death Benefit Death
(EGMDB) Benefit
<S> <C> <C>
Mortality and expense risk charge 1.55% 1.45%
Administrative charge .10% .10%
----- -----
Total annual charge for each American Legacy III C-
Share subaccount 1.65% 1.55%
</TABLE>
Estimated annual expenses for the funds as of December 31, 1999.
(as a percentage of each fund's average net assets):
<TABLE>
<CAPTION>
Management 12b-1 Other Total
fees + fees + expenses = expenses
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<S> <C> <C> <C> <C> <C> <C> <C>
1. Global Growth .68% .25% .03% .96%
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2. Global Small Capitalization .78 .25 .03 1.06
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3. Growth .38 .25 .01 .64
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4. International .55 .25 .05 .85
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5. New World** .89 .25 .06 1.20
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6. Growth-Income .34 .25 .01 .60
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7. Asset Allocation .43 .25 .01 .69
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8. Bond .51 .25 .02 .78
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9. High-Yield Bond .50 .25 .01 .76
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10. U.S. Govt./AAA-Rated
Securities .51 .25 .01 .77
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11. Cash Management .44 .25 .01 .70
-------------------------------------------------------------------------------
</TABLE>
*The VAA is divided into separately-named subaccounts, eleven of which are
available under the contracts. Each subaccount, in turn, invests purchase pay-
ments in shares of a class of its respective fund.
**These expenses are annualized. The fund began operations on June 17, 1999.
3
<PAGE>
Example
(expenses of the subaccounts and of the funds):
If you surrender your contract at the end of the time period shown, you would
pay the following expenses on a $1,000 investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 year 3 years
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<S> <C> <C>
1. Global Growth $84 $124
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2. Global Small Capitalization 85 127
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3. Growth 81 114
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4. International 83 120
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5. New World 86 131
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6. Growth-Income 80 113
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7. Asset Allocation 81 115
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8. Bond 82 118
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9. High-Yield Bond 82 118
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10. U.S. Govt./AAA-Rated Securities 82 118
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11. Cash Management 81 116
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</TABLE>
We provide this example to help you understand the direct and indirect costs
and expenses of the contract. The example assumes that an EGMDB is in effect.
Without this benefit, expenses would be lower.
For more information, see Charges and other deductions in this Prospectus, and
Management and Organization in the prospectus for the funds. Premium taxes may
also apply, although they do not appear in the examples. This example should
not be considered a representation of past or future expenses. Actual expenses
may be more or less than those shown.
4
<PAGE>
Summary
What kind of contract am I buying? It is an individual annuity contract be-
tween you and LNY. This Prospectus describes the variable side of the con-
tract. See The contract.
What is the variable annuity account (VAA)? It is a separate account we estab-
lished under New York insurance law, and registered with the SEC as a unit in-
vestment trust. VAA assets are allocated to one or more subaccounts, according
to your investment choices. VAA assets are not chargeable with liabilities
arising out of any other business which LNY may conduct. See Variable annuity
account.
What are my investment choices? Based upon your instruction, the VAA applies
your purchase payments to buy series shares in one or more of the investment
funds of the series: Global Growth, Global Small Capitalization, Growth, In-
ternational, New World, Growth-Income, Asset Allocation, Bond, High-Yield
Bond, U.S. Government/AAA-Rated Securities and Cash Management. In turn, each
fund holds a portfolio of securities consistent with its investment policy.
See Investments of the variable annuity account--Description of the series.
Who invests my money? The investment advisor for the series is Capital Re-
search and Management Company (CRMC), Los Angeles, California. CRMC is regis-
tered as an investment advisor with the SEC. See Investments of the variable
annuity account--Investment advisor.
How does the contract work? If we approve your application, we will send you a
contract. When you make purchase payments during the accumulation phase, you
buy accumulation units. If you decide to receive retirement income payments,
your accumulation units are converted to annuity units. Your retirement income
payments will be based on the number of annuity units you received and the
value of each annuity unit on payout days. See The contract.
What charges do I pay under the contract? We will deduct any applicable pre-
mium tax from purchase payments or contract value at the time the tax is in-
curred or at another time we choose.
We apply an annual charge totaling 1.65% to the daily net asset value of the
VAA. This charge includes 0.10% as an administrative charge and 1.55% as a
mortality and expense risk charge. If the enhanced death benefit is not in ef-
fect, the mortality and expense risk charge is 1.45%, for an annual charge to-
taling 1.55%. See Charges and other deductions.
The series pays a management fee to CRMC based on the average daily net asset
value of each fund. See Investments of the variable annuity account--Invest-
ment advisor. Each fund also has a 12b-1 fee and additional operating ex-
penses. These are described in the prospectus for the series.
What purchase payments do I make, and how often? Subject to the minimum and
maximum payment amounts, your payments are completely flexible. See The con-
tract--Purchase payments.
How will my annuity payouts be calculated? If you decide to annuitize, you may
select an annuity option and start receiving retirement income payments from
your contract as a fixed option or variable option or a combination of both.
See Annuity payouts--Annuity options. Remember that participants in the VAA
benefit from any gain, and take a risk of any loss, in the value of the secu-
rities in the funds' portfolios.
What happens if I die before I annuitize? The enhanced death benefit, if in
effect, will be paid to your beneficiary. If the enhanced death benefit is not
in effect, your beneficiary will receive the guarantee of principal death ben-
efit. Your beneficiary has options as to how the death benefit is paid. In the
alternative, you may choose to receive a death benefit upon the death of the
annuitant. See The contract--Death benefit before the annuity commencement
date.
May I transfer contract value between variable options? Yes, with certain lim-
its. See The contract--Transfers between subaccounts on or before the annuity
commencement date and Transfers after the annuity commencement date.
May I surrender the contract or make a withdrawal? Yes, subject to contract
requirements and to the restrictions of any qualified retirement plan for
which the contract was purchased. A portion of surrender/ withdrawal proceeds
may be taxable. In addition, if you decide to take a distribution before age
59 1/2, a 10% Internal Revenue Service (IRS) tax penalty may apply. A surren-
der or a withdrawal also may be subject to 20% withholding. See Federal tax
matters.
Do I get a free look at this contract? Yes. You can cancel the contract within
ten days of the date you first receive the contract. You need to return the
contract, postage prepaid, to our Servicing Office. You assume the risk of any
market drop on purchase payments you allocate to the variable side of the con-
tract. See Return privilege.
5
<PAGE>
Condensed financial information for the variable annuity account
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 in-
dices or other variable annuities in reports to shareholders, sales literature
and advertisements. The results will be calculated on a total return basis for
various periods. Total returns include the reinvestment of all distributions,
which are reflected in changes in unit value. See the SAI for further informa-
tion.
Financial statements
The statutory-basis financial statements of LNY are located in the Statement
of Additional Information (SAI). No financial statements are included for the
VAA because as of December 31, 1999, the account had not yet commenced opera-
tions. If you would like a free copy of the SAI, complete and mail the en-
closed card, or call 1-800-942-5500.
Lincoln Life & Annuity Company of New York
LNY is a life insurance company founded in New York on June 6, 1996. LNY is a
subsidiary of Lincoln Life. Lincoln Life is one of the largest stock life in-
surance companies in the United States. Lincoln Life is owned by Lincoln Na-
tional Corp. (LNC). LNC & Lincoln Life are both organized under Indiana law.
LNC's primary businesses are insurance and financial services.
Fixed side of the contract
Purchase payments allocated to the DCA fixed account of the contract become
part of LNY's general account, and do not participate in the investment expe-
rience of the VAA. The general account is subject to regulation and supervi-
sion by the New York Insurance Department.
In reliance on certain exemptions, exclusions and rules, LNY has not regis-
tered interests in the general account as a security under the Securities Act
of 1933 and has not registered the general account as an investment company
under the Investment Company Act of 1940. Accordingly, neither the general ac-
count nor any interests in it are regulated under the 1933 Act or the 1940
Act. LNY has been advised that the staff of the SEC has not made a review of
the disclosures which are included in this Prospectus which relate to our gen-
eral account and to the DCA fixed account under the contract. These disclo-
sures, however, may be subject to certain provisions of the federal securities
laws relating to the accuracy and completeness of statements made in prospec-
tuses. This Prospectus is generally intended to serve as a disclosure document
only for aspects of the contract involving the VAA, and therefore contains
only selected information regarding the DCA fixed account of the contract.
Complete details regarding the DCA fixed account of the contract are in the
contract.
Purchase payments allocated to the DCA fixed account of the contract are guar-
anteed to be credited with a minimum interest rate, specified in the contract,
of at least 3.0%. A purchase payment allocated to the DCA fixed account of the
contract is credited with interest beginning on the next calendar day follow-
ing the date of receipt if all data is complete. LNY may vary the way in which
it credits interest to the DCA fixed account of the contract from time to
time.
ANY INTEREST IN EXCESS OF 3.0% WILL BE DECLARED IN ADVANCE IN LNY'S SOLE DIS-
CRETION. CONTRACTOWNERS BEAR THE RISK THAT NO INTEREST IN EXCESS OF 3.0% WILL
BE DECLARED.
Variable annuity account (VAA)
On July 24, 1996, the VAA was established as an insurance company separate ac-
count 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 LNY. 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
LNY. The VAA satisfies the definition of a 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.
The VAA is used to support other annuity contracts offered by LNY in addition
to the contracts described in this Prospectus. The other annuity contracts
supported by the VAA invest in the same portfolios of the series as the con-
tracts described in this Prospectus. These other annuity contracts may have
different charges that could affect performance of the subaccount.
6
<PAGE>
Investments of the variable annuity account
You decide the subaccount(s) to which you allocate purchase payments. There is
a separate subaccount which corresponds to each class of each fund of the se-
ries. 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 Capital Research and Management Com-
pany (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.
With respect to the series, the advisor and/or distributor, or an affiliate
thereof, may compensate LNY (or an affiliate) for administrative, distribu-
tion, or other services. It is anticipated that such compensation will be
based on assets of the particular series attributable to the contracts along
with certain other variable contracts issued or administered by LNY (or an af-
filiate).
Description of the series
The series was organized as a Massachusetts business trust in 1983 and is reg-
istered as a diversified, open-end management investment company under the
1940 Act. Diversified means not owning too great a percentage of the securi-
ties of any one company. An open-end company is one which, in this case, per-
mits LNY to sell its shares back to the series when you make a withdrawal,
surrender the contract or transfer from one fund to another. Management in-
vestment 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 eleven separate portfolios of funds. Fund assets are segregated
and a shareholder's interest is limited to those funds in which the share-
holder 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 portfolios. 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, pow-
ers, restrictions, limitations, qualifications and terms and conditions, ex-
cept 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 sub-
mitted to shareholders in which the interests of one class differ from the in-
terests 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 LNY.
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.
Certain funds offered as part of this contract have similar investment objec-
tives and policies to other portfolios managed by the advisor. The investment
results of the funds, however, may be higher or lower than the other portfo-
lios that are managed by the advisor. There can be no assurance, and no repre-
sentation is made, that the investment results of any of the funds will be
comparable to the investment results of any other portfolio managed by the ad-
visor.
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 fund seeks to make your investment grow over time
by investing primarily in common stocks of companies located around the
world. The fund is designed for investors seeking capital appreciation
through stocks. Investors in the fund should have a long-term perspective
and be able to tolerate potentially wide price fluctuations.
2. Global Small Capitalization Fund--The fund seeks to make your investment
grow over time by investing primarily in stocks of smaller companies lo-
cated around the world that typically have market capitalizations of $50
million to $1.5 billion. The fund is designed for investors seeking capital
appreciation through stocks. Investors in the fund should have a long-term
perspective and be able to tolerate potentially wide price fluctuations.
7
<PAGE>
3. Growth Fund--The fund seeks to make your investment grow by investing pri-
marily in common stocks of companies that appear to offer superior opportu-
nities for growth of capital. The fund is designed for investors seeking
capital appreciation through stocks. Investors in the fund should have a
long-term perspective and be able to tolerate potentially wide price fluc-
tuations.
4. International Fund--The fund seeks to make your investment grow over time
by investing primarily in common stocks of companies located outside the
United States. The fund is designed for investors seeking capital apprecia-
tion through stocks. Investors in the fund should have a long-term perspec-
tive and be able to tolerate potentially wide price fluctuations.
5. New World Fund--The fund seeks to make your investment grow over time by
investing primarily in stocks of companies with significant exposure to
countries which have developing economies and/or markets. The fund may also
invest in debt securities of issuers, including issuers of high-yield,
high-risk bonds, in these countries.
6. Growth-Income Fund--The fund seeks to make your investment grow and provide
you with income over time by investing primarily in common stocks or other
securities which demonstrate the potential for appreciation and/or divi-
dends. The fund is designed for investors seeking both capital appreciation
and income.
7. Asset Allocation Fund--The fund seeks to provide you with high total return
(including income and capital gains) consistent with preservation of capi-
tal over the long-term by investing in a diversified portfolio of common
stocks and other equity securities; bonds and other intermediate and long-
term debt securities, and money market instruments (debt securities matur-
ing in one year or less).
8. Bond Fund--The fund seeks to maximize your level of current income and pre-
serve your capital by investing primarily in bonds. The fund is designed
for investors seeking income and more price stability than stocks, and cap-
ital preservation over the long-term.
9. High-Yield Bond Fund--The fund seeks to provide you with a high level of
current income and secondarily capital appreciation by investing primarily
in lower quality debt securities (rated Ba or BB or below by Moody's In-
vestors Services, Inc. or Standard & Poor's Corporation), including those
of non-U.S. issuers. The fund may also invest in equity securities that
provide an opportunity for capital appreciation.
10. U.S. Government/AAA-Rated Securities Fund--The fund seeks to provide you
with a high level of current income, as well as preserve your investment.
The fund invests primarily in securities that are guaranteed by the "full
faith and credit" pledge of the U.S. Government and securities that are
rated AAA or Aaa by Moody's Investor's Services, Inc. or Standard & Poor's
Corporation or unrated but determined to be of equivalent quality.
11. Cash Management Fund--The fund seeks to provide you an opportunity to earn
income on your cash reserves while preserving the value of your investment
and maintaining liquidity by investing in a diversified selection of high
quality money market instruments.
Sale of fund shares
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. Redeemed
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 LNY, 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 fund-
ing.
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 pro-
spectus for the series.
Reinvestment of dividends and capital gain distributions
All dividend and capital gain distributions of the funds are automatically re-
invested 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 substi-
tutions for the series and/or
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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. We cannot substitute shares of one fund for another without ap-
proval by the SEC. We will also notify you.
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 ad-
ministrative services include: processing applications for and issuing the
contracts, processing purchases and redemptions of fund shares as required
(including dollar cost averaging, cross-reinvestment, portfolio rebalancing
and automatic withdrawal services), maintaining records, administering annuity
payouts, furnishing accounting and valuation services (including the calcula-
tion and monitoring of daily subaccount values), reconciling and depositing
cash receipts, providing contract confirmations, providing toll-free inquiry
services and furnishing telephone fund transfer services. The risks we assume
include: the risk that annuitants receiving annuity payouts under contract
live longer than we assumed when we calculated 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; and
the risk that our costs in providing the services will exceed our revenues
from contract charges (which we cannot change). The amount of a charge may not
necessarily correspond to the costs associated with providing the services or
benefits indicated by the description of the charge.
Deductions from the VAA for American Legacy III C-Share
We deduct from the VAA an amount, computed daily, which is equal to an annual
rate of 1.65% (1.55% for contracts without the EGMDB) of the daily net asset
value. The charge consists of a 0.10% administrative charge and a 1.55% (1.45%
for contracts without the EGMDB) mortality and expense risk charge.
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 gen-
erally depend upon the law of your state of residence. The tax ranges from
zero to 3.5%. Currently there is no premium tax levied for New York residents.
Other charges and deductions
There are deductions from and expenses paid out of the assets of the under-
lying series that are more fully described in the prospectus for the series.
Among these deductions and expenses are 12b-1 fees which reimburse LNY or its
affiliate for certain expenses incurred in connection with certain administra-
tive and distribution support services provided to the series.
Additional information
The administrative charge 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 ex-
penses, or that we perform fewer sales or administrative services than those
originally contemplated in establishing the level of those charges. Lower dis-
tribution and administrative expenses may be the result of economies associ-
ated 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 de-
posits on behalf of its employees or (4) any other circumstances which reduce
distribution or administrative expenses. The exact amount of administrative
charges applicable to a particular contract will be stated in that contract.
The contract
Purchase of contract
The contract is available in New York. If you wish to purchase a contract, you
must apply for it through a sales representative authorized by us. The com-
pleted 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 le-
gally authorized officers. The contract is then sent to you through your sales
representative. See Distribution of the contracts.
When a completed application and all other information necessary for process-
ing a purchase order is 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. Once the application is com-
plete, the initial purchase payment must be priced within two business days.
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Who can invest
To apply for a contract, you must be of legal age in New York where the con-
tracts 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, joint owner and annuitant cannot be older than age 89.
Purchase payments
Purchase payments are payable to us at a frequency and in an amount selected
by you in the application. You may change the amount and/or frequency of pur-
chase payments at any time. The minimum initial purchase payment is $25,000.
For any contract issued to employees and registered representatives of any
member of the selling group and their spouses and minor children, or to offi-
cers, directors, trustees or bona-fide full-time employees and their spouses
and minor children, of Lincoln Financial Group or The Capital Group, Inc. or
their affiliated or managed companies (based upon the contractowner's status
at the time the contract was purchased), the minimum initial purchase payment
is $10,000. The minimum annual amount for additional purchase payments is
$300. 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 $2 million for an owner or $1 million for each joint owner without LNY
approval. If you stop making purchase payments, the contract will remain in
force as a paid-up contract. However, we may terminate the contract as allowed
by the New York's non-forfeiture law for individual deferred annuities. Pur-
chase payments may be made or, if stopped, resumed at any time until the annu-
ity commencement date, the surrender of the contract, maturity date or the
payment of any death benefit, whichever comes first. LNY reserves the right to
limit purchase payments made to the contract.
Valuation date
Accumulation and annuity units will be valued once daily at the close of trad-
ing (currently, normally, 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 corre-
sponding fund of the series, accord-
ing to your instructions.
The minimum amount of any purchase payment which can be put into any one
subaccount is $20. Upon allocation to a subaccount, purchase payments are con-
verted 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 Home 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 valua-
tion date. The number of accumulation units determined in this way is not
changed by any subsequent change in the value of an accumulation unit. Howev-
er, 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
Purchase payments allocated to the VAA are converted into accumulation units.
This is done by dividing each purchase payment by the value of an accumulation
unit for the valuation period during which the purchase payment is allocated
to the VAA. The accumulation unit value for each subaccount was or will be es-
tablished at the inception of the subaccount. It may increase or decrease from
valuation period to valuation period. The accumulation unit value for a
subaccount for a later valuation period is determined as follows:
(1) The total value of the fund shares held in the subaccount is calculated by
multiplying the number of fund shares owned by the subaccount at the be-
ginning of the valuation period by the net asset value per share of the
fund at the end of the valuation period, and adding any dividend or other
distribution of the fund if an ex-dividend date occurs during the valua-
tion period; minus
(2) The liabilities of the subaccount at the end of the valuation period;
these liabilities include daily charges imposed on the subaccount, and may
include a charge or credit with respect to any taxes paid or reserved for
by us that we determine result from the operations of the VAA; and
(3) The result of (2) is divided by the number of subaccount units outstanding
at the beginning of the valuation period.
The daily charges imposed on a subaccount for any valuation period are equal
to the daily mortality and expense risk charge and the daily administrative
charge multiplied by the number of calendar days in the valuation period. Be-
cause a different daily charge is made for contracts with the EGMDB than for
those without, each of the two types of contracts will have different corre-
sponding accumulation unit values on any given day.
Transfers between subaccounts on or before the annuity commencement date
After the first thirty days from the effective date of your contract, 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.
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Transfers are limited to twelve (12) per contract year unless otherwise autho-
rized by LNY. This limit does not apply to transfers made under a dollar cost
averaging, portfolio rebalancing, or cross-reinvestment program elected on
forms available from us. (The SAI contains more information about these pro-
grams.) 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 or by the LNY internet site. In order to prevent unautho-
rized or fraudulent telephone transfers, we may require the caller to provide
certain identifying information before we will act upon his or her instruc-
tions. 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 re-
corded 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 cus-
tomer service center before 4 p.m. New York time.
When thinking about a transfer of contract value, you should consider the in-
herent risk involved. Frequent transfers based on short-term expectations may
increase the risk that a transfer will be made at an inopportune time. LNY may
allow more than twelve transfers in any contract year. This contract is not de-
signed for professional market timing organizations or other entities using
programmed and frequent transfers.
Repeated patterns of frequent transfers are disruptive to the operation of the
subaccounts, and should LNY become aware of such disruptive practices, LNY may
refuse to permit such transfers.
Payment or transfer may be delayed as permitted by the 1940 Act.
Transfers after the annuity commencement date
You may transfer all or a portion of your investment in one subaccount to an-
other subaccount of the contract. Those transfers will be limited to three
times per contract year. Currently, there is no charge for these transfers. You
may also transfer from a variable annuity payout to a fixed annuity payout. No
transfers are allowed from the fixed side of the contract to the subaccounts.
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 benefi-
ciary revokes any previous designation. We reserve the right to request that
you send us the contract for endorsement of a change of beneficiary.
Upon the death of the contractowner, a death benefit will be paid to the bene-
ficiary. Upon the death of a joint owner, the death benefit will be paid to the
surviving joint owner. Upon the death of an annuitant who is not the
contractowner or joint owner, a death benefit may be paid to the contractowner
(and joint owner, if applicable, in equal shares). If the contractowner is a
corporation or other non-individual (non-natural person), the death of the an-
nuitant will be treated as death of the contractowner. Death benefits are tax-
able. See Federal tax matters.
If the death occurs before the annuity commencement date and the enhanced guar-
anteed minimum death benefit (EGMDB) is in effect, the death benefit paid will
be the greater of: (1) the contract value as of the day on which LNY approves
the payment of the claim; or (2) the highest contract value which the contract
attains on any contract anniversary date (including the inception date) on ages
up to, and including, the deceased's age 80. The highest contract value is in-
creased by purchase payments and is decreased proportionally by partial with-
drawals, partial annuitizations, and any premium taxes 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 guarantee of
principal death benefit, which is the greater of contract value as of the day
LNY approved the claim, or the sum of all purchase payments decreased propor-
tionally by any withdrawals, partial annuitizations and premium taxes incurred.
If there are joint owners, upon the death of the first contractowner, LNY will
pay a death benefit to the surviving joint owner. 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 ben-
eficiary. If the surviving joint owner is the spouse of the deceased joint
owner he/she may continue the contract as sole contractowner. Upon the death of
the spouse who continues the contract, LNY will pay a death benefit to the des-
ignated beneficiary(s).
Upon the death of a contractowner, joint owner or annuitant, if the surviving
spouse continues the contract, any portion of the death benefit that would have
been payable (if the contract had not been continued) that exceeds the current
contract value will be credited to the contract. This provision applies only
one time for each contract.
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If an annuitant who is not the contractowner or joint owner dies, then the
contingent annuitant, if named, becomes the annuitant and no death benefit is
payable on the death of the annuitant. If no contingent annuitant is named,
the contractowner (or younger of joint owners) becomes the annuitant. Alterna-
tively, the contractowner may elect a death benefit payable to the
contractowner (and joint owner, if applicable, in equal shares) if the annui-
tant named on this contract has not been changed, unless the change occurred
because of the death of a prior annuitant.
Notification of the election of this death benefit must be received by LNY
within 75 days of the death of the annuitant. If no contractowner is living on
the date of death of the annuitant, the death benefit will be available to the
beneficiary. The contract terminates when any death benefit is paid due to the
death of the annuitant. A death benefit payable on the death of the annuitant
will not be paid if the annuitant has been changed subsequent to the effective
date of this contract unless the change occurred because of the death of a
prior annuitant.
If the beneficiary is the spouse of the contractowner, then the spouse may
elect to continue the contract as owner.
The value of the death benefit will be determined as of the date on which the
death claim is approved for payment. This payment will occur upon receipt of:
(1) proof (e.g. an original certified death certificate), or any other proof
of death satisfactory to us, of the death of the owner; (2) written authoriza-
tion for payment; and (3) our receipt of all required claim forms, fully com-
pleted. If the beneficiary is a minor, court documents appointing the
guardian/custodian must be submitted.
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 in which a contractowner, joint owner or annui-
tant, is age 80 or older at the time of issuance.
After a contract is issued, the contractowner may discontinue the EGMDB at any
time by completing the Enhanced Guaranteed Minimum Death Benefit Discontinu-
ance form and sending it to our Servicing Office. The benefit will be discon-
tinued as of the valuation date we receive the request, and we will stop de-
ducting the charge for the benefit as of that date. See Charges and other de-
ductions. If you discontinue the benefit, it cannot be reinstated.
The death benefit payable on the death of the annuitant will be distributed in
either a lump sum settlement or an annuity payout. The annuity payout must be
settled within 60 days after LNY has approved the death claim.
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, regulations and tax
code governing payment of death benefits. This payment may be postponed as
permitted by the 1940 Act.
Payment will be made in accordance with applicable laws and regulations gov-
erning payment of death benefits.
Unless otherwise provided in the beneficiary designation, one of the following
procedures will take place on the death of a beneficiary:
1. If any beneficiary dies before the contractowner, that beneficiary's inter-
est will go to any other beneficiaries named, according to their respective
interests (There are no restrictions on the beneficiary's use of the pro-
ceeds.); or
2. If no beneficiary survives the contractowner, the proceeds will be paid to
the contractowner's estate.
Unless the contractowner has already selected a settlement option, the benefi-
ciary may choose the method of payment of the death benefit. The death benefit
payable to the beneficiary or joint owner must be distributed within five
years of the contractowner's date of death unless the beneficiary begins re-
ceiving within one year of the contractowner's death the distribution in the
form of a life annuity or an annuity for a designated period not extending be-
yond the beneficiary's life expectancy.
Joint ownership
Joint owners shall be treated as having equal undivided interests in the con-
tract. Either owner, independently of the other, may exercise any ownership
rights in this contract. Not more than two owners (an owner and joint owner)
may be named and contingent owners are not permitted.
Surrenders and withdrawals
Before the annuity commencement date, we will allow the surrender of the con-
tract 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.
The amount available upon surrender/withdrawal is the cash surrender value
(contract value less any applicable, fees and taxes) at the end of the valua-
tion period during which the written request for surrender/withdrawal is re-
ceived at the Servicing Office. The minimum amount which can be withdrawn is
$300. Unless a request for withdrawal specifies otherwise, withdrawals will be
made from all subaccounts within the VAA and from the DCA fixed account in the
same proportion that the amount of withdrawal bears to the total contract val-
ue. 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.
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The tax consequences of a surrender/withdrawal are discussed later in this
Prospectus. See Federal tax matters.
Special restrictions on surrenders/withdrawals apply if your contract is pur-
chased as part of a retirement plan of a public school system or 501(c)(3) or-
ganization under Section 403(b) of the tax code. Beginning January 1, 1989, in
order for a contract to retain its tax-qualified status, Section 403(b) pro-
hibits 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 contribu-
tions and earnings through December 31, 1988, are not subject to the previ-
ously stated restrictions. Funds transferred to the contract from a 403(b)(7)
custodial account will also be subject to the restrictions.
We may terminate the contract if withdrawals reduce your contract value below
$2,000 and purchase payments have stopped for a period of 3 full years.
Delay of payments
Contract proceeds from the VAA will be paid within seven days, except (i) when
the NYSE is closed (other than weekends and holidays); (ii) times when market
trading is restricted or the SEC declares an emergency, and we cannot value
units or the funds cannot redeem shares; or (iii) when the SEC so orders to
protect contractowners.
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
Commissions are paid to dealers under different commission options. The maxi-
mum commission paid as a percentage of each purchase payment is 2.50% plus on-
going annual compensation of up to 1.00%. Alternate commission schedules are
available with lower initial commission amounts based on purchase payments. At
times, additional sales incentives (up to an annual continuing 0.10% of con-
tract value) may be provided to dealers maintaining certain sales volume lev-
els. Upon annuitization, the commissions paid to dealers are a maximum of
3.00% of account annuitized and/or an annual continuing commission of up to
1.00% (or up to 1.10% for dealers maintaining certain sales volume levels) of
statutory reserves. 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; and 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. Non-qual-
ified contracts may not be collaterally assigned. We assume no responsibility
for the validity or effect of any assignment. Consult your tax advisor about
the tax consequences of an assignment.
Contractowner questions
The obligations to purchasers under the contracts are those of LNY. 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. 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 in-
stallments. 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 beneficia-
ries. 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 guaran-
tees 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 con-
tinue during the lifetime of the survivor.
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Joint Life Annuity with Guaranteed Period. This option guarantees periodic
payouts during a designated period, usually 10 or 20 years, and continues dur-
ing 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 Life and Two-Thirds Survivor Annuity. This option provides a periodic
payout during the joint lifetime of the annuitant and a designated joint annu-
itant. When one of the joint annuitants dies, the survivor receives two thirds
of the periodic payout made when both were alive.
Joint Life and Two-Thirds Survivor Annuity with Guaranteed Period. This option
provides a periodic payout during the joint lifetime of the annuitant and a
joint annuitant. When one of the joint annuitants dies, the survivor receives
two thirds of the periodic payout made when both were alive. This option fur-
ther provides that should one or both of the annuitants dies during the
elected guaranteed period, usually 10 or 20 years, full benefit payment will
continue for the rest of the guaranteed period.
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 minus
(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
Servicing Office.
General information
Under the annuity options listed above, you may not make withdrawals. Other
options, with or without withdrawal features, may be made available by us. You
may pre-select an annuity payout option as a method of paying the death bene-
fit to a beneficiary. If you do, the beneficiary cannot change this payout op-
tion. At death, 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 tax code, if applicable. The mortality and expense risk charge of 1.30%
and the charge for administrative services of .10% will be assessed on all
variable annuity payouts, including options that may be offered that do not
have a life contingency and therefore no mortality risk.
The annuity commencement date must be on or before the annuitant's 90th birth-
day. You may change the annuity commencement date, change the annuity option
or change the allocation of the investment among subaccounts up to 30 days be-
fore the scheduled annuity commencement date, upon written notice to the Ser-
vicing 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, vari-
able or combination fixed and variable basis, in proportion to the account al-
locations at the time of annuitization) except when a joint life payout is re-
quired 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.
Variable annuity payouts
Variable annuity payouts will be determined using:
1. The contract value on the annuity commencement date less any applicable
premium taxes;
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.
Annuity payouts assume an investment return of 3%, 4% or 5% per year, as ap-
plied to the applicable mortality table. The higher the assumed interest rate
you choose, the higher your initial annuity payment will be. The amount of
each payout after the initial payout will depend upon how the underlying
fund(s) perform, relative to the assumed rate. If the actual net investment
rate (annualized) exceeds the assumed rate, the payment will increase at a
rate proportional to the amount of such excess. Conversely, if the actual rate
is less than the assumed rate, annuity payments will decrease. The higher the
assumed interest rate, the less likely future annuity payments are to in-
crease, or the payments will increase more slowly than if a lower assumed rate
was used. There is a more complete explanation of this calculation in the SAI.
Federal tax matters
Introduction
The Federal income tax treatment of the contract is complex and sometimes un-
certain. The Federal income
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tax rules may vary with your particular circumstances. This discussion does
not include all the Federal income tax rules that may affect you and your con-
tract. This discussion also does not address other Federal tax consequences,
or state or local tax consequences, associated with the contract. As a result,
you should always consult a tax advisor about the application of tax rules to
your individual situation.
Taxation of nonqualified annuities
This part of the discussion describes some of the Federal income tax rules ap-
plicable to nonqualified annuities. A nonqualified annuity is a contract not
issued in connection with a qualified retirement plan receiving special tax
treatment under the tax code, such as an IRA or a section 403(b) plan.
Tax deferral on earnings
The Federal income tax law generally does not tax any increase in your con-
tract value until you receive a contract distribution. However, for this gen-
eral rule to apply, certain requirements must be satisfied:
. An individual must own the contract (or the tax law must treat the contract
as owned by the individual).
. The investments of the VAA must be "adequately diversified" in accordance
with IRS regulations.
. Your right to choose particular investments for a contract must be limited.
. The annuity commencement date must not occur near the end of the annuitant's
life expectancy.
Contracts not owned by the individual
If a contract is owned by an entity (rather than an individual) the tax code
generally does not treat it as an annuity contract for Federal income tax pur-
poses. This means that the entity owning the contract pays tax currently on
the excess of the contract value over the purchase payments for the contract.
Examples of contracts where the owner pays current tax on the contract's earn-
ings are contracts issued to a corporation or a trust. Exceptions to this rule
exist. For example, the tax code treats a contract as owned by an individual
if the named owner is a trust or other entity that holds the contract as an
agent for an individual. However, this exception does not apply in the case of
any employer that owns a contract to provide deferred compensation for its em-
ployees.
Investments in the VAA must be diversified
For a contract to be treated as an annuity for Federal income tax purposes,
the investments of the VAA must be "adequately diversified." IRS regulations
define standards for determining whether the investments of the VAA are ade-
quately diversified. If the VAA fails to comply with these diversification
standards, you could be required to pay tax currently on the excess of the
contract value over the contract purchase payments. Although we do not control
the investments of the underlying investment options, we expect that the un-
derlying investment options will comply with the IRS regulations so that the
VAA will be considered "adequately diversified."
Restrictions
Federal income tax law limits your right to choose particular investments for
the contract. Because the IRS has not issued guidance specifying those limits,
the limits are uncertain and your right to allocate contract value among
subaccounts may exceed those limits. If so, you would be treated as the owner
of the assets of the VAA and thus subject to current taxation on the income
and gains from those assets. We do not know what limits may be set by the IRS
in any guidance that it may issue and whether any such limits will apply to
existing contracts. We reserve the right to modify the contract without your
consent to try to prevent the tax law from considering you as the owner of the
assets of the VAA.
Age at which annuity payouts begin
Federal income tax rules do not expressly identify a particular age by which
annuity payouts must begin. However, those rules do require that an annuity
contract provide for amortization, through annuity payouts, of the contract's
purchase payments and earnings. If annuity payouts under the contract begin or
are scheduled to begin on a date past the annuitant's 85th birthday, it is
possible that the tax law will not treat the contract as an annuity for Fed-
eral income tax purposes. In that event, you would be currently taxable on the
excess of the contract value over the purchase payments of the contract.
Tax treatment of payments
We make no guarantees regarding the tax treatment of any contract or of any
transaction involving a contract. However, the rest of this discussion assumes
that your contract will be treated as an annuity for Federal income tax pur-
poses and that the tax law will not tax any increase in your contract value
until there is a distribution from your contract.
Taxation of withdrawals and surrenders
You will pay tax on withdrawals to the extent your contract value exceeds your
purchase payments in the contract. This income (and all other income from your
contract) is considered ordinary income. A higher rate of tax is paid on ordi-
nary income than on capital gains. You will pay tax on a surrender to the ex-
tent the amount you receive exceeds your purchase payments. In certain circum-
stances, your purchase payments are reduced by amounts received from your con-
tract that were not included in income.
Taxation of annuity payouts
The tax code imposes tax on a portion of each annuity payout (at ordinary in-
come tax rates) and treats a por-
15
<PAGE>
tion as a nontaxable return of your purchase payments in the contract. We will
notify you annually of the taxable amount of your annuity payout. Once you have
recovered the total amount of the purchase payment in the contract, you will
pay tax on the full amount of your annuity payouts. If annuity payouts end be-
cause of the annuitant's death and before the total amount of the purchase pay-
ments in the contract has been received, the amount not received generally will
be deductible.
Taxation of death benefits
We may distribute amounts from your contract because of the death of a
contractowner or an annuitant. The tax treatment of these amounts depends on
whether you or the annuitant dies before or after the annuity commencement
date.
. Death prior to the annuity commencement date--
. If the beneficiary receives death benefits under an annuity payout option,
they are taxed in the same manner as annuity payouts.
. If the beneficiary does not receive death benefits under an annuity payout
option, they are taxed in the same manner as withdrawal.
. Death after the annuity commencement date--
. If death benefits are received in accordance with the existing annuity
payout option, they are excludible from income if they do not exceed the
purchase payments not yet distributed from the contract. All annuity
payouts in excess of the purchase payments not previously received are
includible in income.
. If death benefits are received in a lump sum, the tax law imposes tax on
the amount of death benefits which exceeds the amount of purchase payments
not previously received.
Penalty taxes payable on withdrawals, surrenders, or annuity payouts
The tax code may impose a 10% penalty tax on any distribution from your con-
tract which you must include in your gross income. The 10% penalty tax does not
apply if one of several exceptions exists. These exceptions include withdraw-
als, surrenders or annuity payouts that:
. you receive on or after you reach age 59 1/2,
. you receive because you became disabled (as defined in the tax law),
. a beneficiary receives on or after your death, or
. you receive as a series of substantially equal periodic payments for life (or
life expectancy).
Special rules if you own more than one annuity contract
In certain circumstances, you must combine some or all of the nonqualified an-
nuity contracts you own in order to determine the amount of an annuity payout,
a surrender or a withdrawal that you must include in income. For example, if
you purchase two or more deferred annuity contracts from the same life insur-
ance company (or its affiliates) during any calendar year, the tax code treats
all such contracts as one contract. Treating two or more contracts as one con-
tract could affect the amount of a surrender, withdrawal or an annuity payout
that you must include in income and the amount that might be subject to the
penalty tax described above.
Loans and assignments
Except for certain qualified contracts, the tax code treats any amount received
as a loan under a contract, and any assignment or pledge (or agreement to as-
sign or pledge) any portion of your contract value, as a withdrawal of such
amount or portion.
Gifting a contract
If you transfer ownership of your contract to a person other than your spouse
(or to your former spouse incident to divorce), and receive a payment less than
your contract's value, you will pay tax on your contract value to the extent it
exceeds your purchase payments not previously received. The new owner's pur-
chase payments in the contract would then be increased to reflect the amount
included in income.
Charges for a contract's death benefit
Your contract may have an EGMDB, for which you pay an annual charge, computed
daily. It is possible that the tax law may treat all or a portion of the EGMDB
charge as a contract withdrawal.
Loss of interest deduction
After June 8, 1997, if a contract is issued to a taxpayer that is not an indi-
vidual, or if a contract is held for the benefit of an entity, the entity will
lose a portion of its deduction for otherwise deductible interest expenses.
This disallowance does not apply if you pay tax on the annual increase in the
contract value. Entities that are considering purchasing a contract, or enti-
ties that will benefit from someone else's ownership of a contract, should con-
sult a tax advisor.
Qualified retirement plans
We also designed the contracts for use in connection with certain types of re-
tirement plans that receive favorable treatment under the tax code. Contracts
issued to or in connection with a qualified retirement plan are called "quali-
fied contracts." We issue contracts for use with different types of qualified
plans. The Federal income tax rules applicable to those plans are complex and
varied. As a result, this Prospectus does not attempt to provide more than gen-
eral information about 1use of the contract with various types of qualified
plans. Persons planning to use the contract in connection with a qualified plan
should obtain advice from a competent tax advisor.
16
<PAGE>
Types of qualified contracts and terms of contracts
Currently, we issue contracts in connection with the following types of quali-
fied plans:
. Individual Retirement Accounts and Annuities ("Traditional IRAs")
We currently do not but may, in the future, subject to the approval of the New
York Superintendent of Insurance, issue contracts in connection with:
. Roth IRAs
. Simplified Employee Pensions ("SEPs")
. Savings Incentive Matched Plan for Employees ("SIMPLE 401(k) plans")
. Public School system and tax-exempt organization annuity plans ("403(b)
plans")
. Qualified corporate employee pension and profit sharing plans ("401(a)
plans") and qualified annuity plans ("403(a) plans")
. Self-employed individual plans ("H.R. 10 plans" or "Keogh Plans")
. Deferred compensation plans of state and local governments and tax-exempt
organizations ("457 plans").
We will amend contracts to be used with a qualified plan as generally neces-
sary to conform to tax law requirements for the type of plan. However, the
rights of a person to any qualified plan benefits may be subject to the plan's
terms and conditions, regardless of the contract's terms and conditions. In
addition, we are not bound by the terms and conditions of qualified plans to
the extent such terms and conditions contradict the contract, unless we con-
sent.
Tax treatment of qualified contracts
The Federal income tax rules applicable to qualified plans and qualified con-
tracts vary with the type of plan and contract. For example,
. Federal tax rules limit the amount of purchase payments that can be made,
and the tax deduction or exclusion that may be allowed for the purchase pay-
ments. These limits vary depending on the type of qualified plan and the
plan participant's specific circumstances, e.g., the participant's compensa-
tion.
. Under most qualified plans, e.g., Traditional IRAs, the annuitant must begin
receiving payments from the contract in certain minimum amounts by a certain
age, typically age 70 1/2. However, these "minimum distribution rules" do
not apply to a Roth IRA.
Tax treatment of payments
Federal income tax rules generally include distributions from a qualified con-
tract in the recipient's income as ordinary income. These taxable distribu-
tions will include purchase payments that were deductible or exclud-ible from
income. Thus, under many qualified contracts the total amount received is in-
cluded in income since a deduction or exclusion from income was taken for pur-
chase payments. There are exceptions. For example, you do not include amounts
received from a Roth IRA in income if certain conditions are satisfied.
Failure to comply with the minimum distribution rules applicable to certain
qualified plans, such as Traditional IRAs, will result in the imposition of an
excise tax. This excise tax generally equals 50% of the amount by which a min-
imum required distribution exceeds the actual distribution from the qualified
plan.
Federal penalty taxes payable on distributions
The tax code may impose a 10% penalty tax on the amount received from the
qualified contract that must be included in income. The tax code does not im-
pose the penalty tax if one of several exceptions applies. The exceptions vary
depending on the type of qualified contract you purchase. For example, in the
case of an IRA, exceptions provide that the penalty tax does not apply to a
withdrawal, surrender or annuity payout:
. received on or after the annuitant reaches age 59 1/2,
. received on or after the annuitant's death or because of the annuitant's
disability (as defined in the tax law),
. received as a series of substantially equal periodic payments for the
annuitant's life (or life expectancy), or
. received as reimbursement for certain amounts paid for medical care.
These exceptions, as well as certain others not described here, generally ap-
ply to taxable distributions from other qualified plans. However, the specific
requirements of the exception may vary.
Transfers and direct rollovers
In many circumstances, money may be moved between qualified contracts and
qualified plans by means of a rollover or transfer. Special rules apply to
such rollovers and transfers. If the applicable rules are not followed, you
may suffer adverse Federal income tax consequences, including paying taxes
which might not otherwise have had to be paid. A qualified advisor should al-
ways be consulted before you move or attempt to move funds between any quali-
fied plan or contract and another qualified plan or contract.
The direct rollover rules apply to certain payments (called "eligible rollover
distributions") from section 401(a) plans, section 403(a) or (b) plans, H.R.
10 plans and contracts used in connection with these types of plans. (The di-
rect rollover rules do not apply to distributions from IRAs or section 457
plans.) The direct rollover rules require that Federal income tax equal to 20%
of the eligible rollover distribution from the distribution amount, unless you
elect to have the amount directly transferred to certain qualified plans or
contracts.
17
<PAGE>
The EGMDB and IRAs
Pursuant to IRS regulations, IRAs may not invest in life insurance contracts.
We do not believe that these regulations prohibit the EGMDB from being pro-
vided under the contracts when we issue the contract as Traditional IRAs or
Roth IRAs. However, the law is unclear and it is possible that the presence of
the EGMDB under a contract issued as a Traditional IRA or Roth IRA could re-
sult in increased taxes to you.
Federal income tax withholding
We will withhold and remit to the IRS a part of the taxable portion of each
distribution made under a contract unless the distributee notifies us at or
before the time of the distribution that tax is not to be withheld. In certain
circumstances, Federal income tax rules may require us to withhold tax. At the
time a withdrawal, surrender or annuity payout is requested, we will give the
recipient an explanation of the withholding requirements.
Tax status of Lincoln Life & Annuity Company of New York
Under existing Federal income tax laws, LNY does not pay tax on investment in-
come and realized capital gains of the VAA. LNY does not expect that it will
incur any Federal income tax liability on the income and gains earned by the
VAA. We, therefore, do not impose a charge for Federal income taxes. If Fed-
eral income tax law changes and we must pay tax on some or all of the income
and gains earned by the VAA, we may impose a charge against the VAA to pay the
taxes.
Changes in law
The above discussion is based on the tax code, IRS regulations and interpreta-
tions existing on the date of this Prospectus. However, Congress, the IRS and
the courts may modify these authorities, sometimes retroactively.
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 in-
vest in classes of funds of the series. If the 1940 Act or any regulation un-
der 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 ap-
plying 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.
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 inter-
est in a subaccount will receive proxy voting material, reports and other ma-
terials relating to the series. Since the series engages in shared funding,
other persons or entities besides LNY may vote series shares. See Sale of fund
shares.
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 regis-
tered with the SEC under the Securities Exchange Act of 1934 as a broker-
dealer and is a member of the Association of Securities Dealers (NASD). LNY
will offer contracts in New York State only.
Return privilege
Within the 10 day 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, In-
diana, 46801. A contract canceled under this provision will be void. We will
return the contract value as of the date of cancellation, plus any premium
taxes which had been deducted. No contingent deferred sales charge will be as-
sessed. If this contract is issued as an IRA, the entire amount of purchase
payments will be returned. 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 every five years.
Records and reports
As presently required by the 1940 Act and applicable regulations, we are re-
sponsible for maintaining all rec-
18
<PAGE>
ords 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. Administration services necessary for the
operation of the VAA and the contracts are currently provided by Lincoln Life.
However, neither the assets of Lincoln Life nor the assets of LNC support the
obligations of LNY under the contracts.
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 informa-
tion about the VAA, LNY and the contracts offered. Statements in this Prospec-
tus 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.
We are a member of the Insurance Marketplace Standards Association ("IMSA") and
may include the IMSA logo and information about IMSA membership in our adver-
tisements. Companies that belong to IMSA subscribe to a set of ethical stan-
dards covering the various aspects of sales and services for individually sold
life insurance and annuities.
19
<PAGE>
Statement of additional information table of contents for Separate Account H
<TABLE>
<CAPTION>
Item
-------------------------------------------
<S> <C>
General information and history of LNY B-2
-------------------------------------------
Special terms B-2
-------------------------------------------
Services B-2
-------------------------------------------
Principal underwriter B-2
-------------------------------------------
Purchase of securities being offered B-2
</TABLE>
For a free copy of the SAI please see page one of this booklet.
<TABLE>
<CAPTION>
Item
--------------------------------------
<S> <C>
Calculation of investment results B-2
--------------------------------------
Annuity payouts B-5
--------------------------------------
Advertising and sales literature B-5
--------------------------------------
Financial statements B-7
</TABLE>
20
<PAGE>
The Lincoln National Life Insurance Company
Attn: American Legacy Customer Service
P. O. Box 2348
Fort Wayne, IN 46802
7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7
PLACE
STAMP
HERE
POSTAL SERVICES
WILL NOT
DELIVER
UNLESS STAMPED
<PAGE>
7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7
STATEMENT OF ADDITIONAL INFORMATION REQUEST CARD
AMERICAN LEGACY III C-SHARE
(LINCOLN LIFE & ANNUITY VARIABLE ANNUITY ACCOUNT H)
Please send me a copy of the current Statement of Additional Information
for AMERICAN LEGACY III C-SHARE. (Please print)
Name: ____________________________________________________________________
Address: _________________________________________________________________
City: ______________________________________________________ State: Zip:
<PAGE>
The American Legacy III C-Share
Lincoln Life & Annuity VariableAnnuity 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 C-Share Prospectus of Lincoln Life & Annuity Variable Annu-
ity Account H dated 2000.
You may obtain a copy of the American Legacy III C-Share Prospectus on request
and without charge.
Please write Lincoln Life & Annuity Company of New York, P.O. Box 2348, Fort
Wayne, Indiana 46801 or call 1-800-942-5500.
Table of Contents
<TABLE>
<CAPTION>
Item Page
------------------------------------------
<S> <C>
General information and history
of LNY 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-5
Advertising and sales literature B-5
Financial statements B-7
</TABLE>
This SAI is not a Prospectus.
The date of this SAI is .
<PAGE>
General information and
history of Lincoln Life & Annuity Company of New York ("LNY")
LNY is a life insurance company founded in New York on June 6, 1996. LNY is a
subsidiary of Lincoln Life. Lincoln Life is one of the largest stock life in-
surance companies in the United States. Lincoln Life is owned by Lincoln Na-
tional Corp. (LNC). LNC and Lincoln Life are organized under Indiana law.
LNC's primary businesses are insurance and financial services.
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 (Ex-
change) is currently closed on weekends and on these holidays: New Year's Day,
Martin Luther King's Birthday, President's Day, Good Friday, Memorial Day, In-
dependence 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 statutory-basis financial statements of LNY appearing in this SAI and Reg-
istration Statement have been audited by Ernst & Young LLP, independent audi-
tors, as set forth in their report 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 LNY or by third parties responsible
to LNY. We have entered into an agreement with the Delaware Management Compa-
ny, 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 LNY
for this service. Administrative services necessary for the operation of the
VAA and the contracts are currently provided by Lincoln Life. However, neither
the assets of Lincoln Life nor the assets of LNC support the obligations of
LNY under the contracts.
Principal underwriter
LNY has contracted with American Funds Distributors, Inc. (AFD), 333 South
Hope Street, Los Angeles, California 90071, a licensed broker-dealer, to dis-
tribute the contracts through certain legally authorized sales persons and or-
ganizations (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.
Both before and after the annuity commencement date, there are exchange privi-
leges 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.
Calculation of investment results
The seven-day yield is determined by calculating the change in unit value for
the base period (the 7-day period ended December 31); then dividing this fig-
ure by the account value at the beginning of the period; then annualizing this
result by the factor of 365/7. This yield includes all deductions charged to
the contractowner's account, and excludes any realized gains and losses from
the sale of securities.
Standard investment results:
Standard performance is based on a formula to calculate performance that is
prescribed by the SEC. Under rules issued by the SEC, standard performance
must be included in any marketing material that discusses the performance of
the VAA and the subaccounts. This information represents past performance and
does not indicate or represent future performance.
B-2
<PAGE>
Average annual return for each period is determined by finding the average an-
nual compounded rate of return over each period that would equate the initial
amount invested to the ending redeemable value for that period, according 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 = ending redeemable value (as of the end of the period in question)
of a hypothetical $1,000 purchase payment made at the beginning of the 1-
year, 5-year, or 10-year period in question (or fractional period there-
of)
The formula assumes that: (1) all recurring fees have been charged to the
contractowner accounts; (2) there will be a complete redemption upon the
anniversary of the 1-year, 5-year, or 10-year period in question.
In accordance with SEC guidelines, we will report standard performance back to
the first date that the fund became available in the VAA. Because standard
performance reporting periods of less than one year could be misleading, we
may report "N/A's" for standard performance until one year after the option
became available in the separate account.
Standard performance data:
No figures are provided at this time since the subaccounts of the VAA do not
yet have an operating history.
Non-standard investment results:
The VAA may report its results over various periods--daily, monthly, three-
month, six-month, year-to-date, yearly (fiscal year), three, five, ten years
or more and lifetime--and compare its results to indices and other variable
annuities in sales materials including advertisements, brochures and reports.
Performance information for the periods prior to the date that a fund became
available in the VAA will be calculated based on (1) the performance of the
fund adjusted for contract charges (ie: mortality and expense risk fees, any
applicable administrative charges, and the management and other expenses of
the fund) and (2) the assumption that the subaccounts were in existence for
the same periods as indicated for the fund. It may or may not reflect charges
for any options (ie: EGMDB) that were in effect during the time periods shown.
This performance is referred to as non-standardized performance data. Such re-
sults may be computed on a cumulative and/or annualized basis. We may also re-
port performance assuming you deposited $10,000 into a subaccount at inception
of the underlying fund or 10 years ago (whichever is less). This non-standard
performance may be shown as a graph illustrating how that deposit would have
increased or decreased in value over time based on the performance of the un-
derlying fund adjusted for contract charges. This information represents past
performance and does not indicate or represent future performance. The invest-
ment return and value of a contract will fluctuate so that contractowner's in-
vestment may be worth more or less than the original investment. Cumulative
quotations are arrived at by calculating the change in accumulation unit value
between the first and last day of the base period being measured, and express-
ing 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
reflects the level rate of return, which if earned over the entire base peri-
od, would produce the cumulative return.
B-3
<PAGE>
Non-Standard Performance Data (adjusted for contract expense charges):
Period Ending December 31, 1999
<TABLE>
<CAPTION>
1- 3- 5- 10-
YTD year year year year
With With With With With Since Inception
EGMDB EGMDB EGMDB EGMDB EGMDB With EGMDB
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Growth Subaccount 67.31% 67.31% N/A N/A N/A 36.14%
(commenced activity 4/30/97)
Global Small Capitalization Subaccount 88.71 88.71 N/A N/A N/A 47.37
(commenced activity 4/30/98)
Growth Subaccount 55.08 55.08 38.34% 31.09% 19.40% 17.99
(as if commenced activity 2/8/84)
International Subaccount 73.53 73.53 30.46 23.27 N/A 14.86
(as if commenced activity 5/1/90)
New World Subaccount N/A N/A N/A N/A N/A 17.43
(as if commenced activity 6/17/99)
Growth-Income Subaccount 9.65 9.65 16.49 19.29 12.78 13.97
(as if commenced activity 2/8/84)
Asset Allocation Subaccount 5.43 5.43 11.63 15.10 10.36 10.14
(as if commenced activity 8/1/89)
High-Yield Bond Subaccount 4.07 4.07 4.38 8.70 8.44 9.89
(as if commenced activity 2/8/84)
Bond Subaccount 1.13 1.13 4.00 N/A N/A 4.04
(as if commenced activity 1/2/96)
U.S. Gov't./AAA Subaccount (2.16) (2.16) 3.58 5.05 5.42 5.87
(as if commenced activity 12/1/85)
Cash Management Subaccount 3.12 3.12 3.34 3.44 3.18 4.10
(as if commenced activity 2/8/84)
</TABLE>
The performance figures shown reflect the cost of the Enhanced Guaranteed Mini-
mum Death Benefit. If contractowners had chosen to eliminate the Enhanced Guar-
anteed Minimum Death Benefit, their returns would have been higher.
B-4
<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, LNY 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 pe-
riod 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 con-
tract valued as of the annuity commencement date (less any premium taxes) to
the annuity tables contained in the contract. The first variable annuity pay-
out 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 an Individual Annuity Mortality Table
on file with the New York Superintendent of Insurance, with an assumed invest-
ment return at the rate of 3%, 4% or 5% per annum. The first annuity payout is
determined by multiplying the benefit per $1,000 of value shown in the con-
tract tables by the number of thousands of dollars of value accumulated under
the contract. These annuity tables vary according to the form of annuity se-
lected and the age of the annuitant at the annuity commencement date. The as-
sumed interest rate is the measuring point for subsequent annuity payouts. If
the actual net investment rate (annualized) exceeds the assumed rate, the pay-
out will increase at a rate equal to the amount of such excess. Conversely, if
the actual rate is less than the assumed rate, 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 slow-
ly.
LNY may use sex distinct annuity tables in the contracts, except for those
contracts associated with employer sponsored plans and where 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 appro-
priate 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 an arbi-
trary dollar amount. 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.
Proof of age, sex and survival
LNY may require proof of age, sex, or survival of any payee upon whose age,
sex, or survival payments depend.
Advertising and sales
literature
As set forth in the Prospectus, LNY 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 affect-
ing 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 quantita-
tive and qualitative review of each company. A.M. Best also provides certain
rankings, to which LNY intends to refer.
Duff & Phelps insurance company claims paying ability (CPA) service provides
purchasers of insurance company policies and contracts with analytical and
statistical information 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 mea-
sures performance of equity 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 di-
versification
B-5
<PAGE>
representing over 1,000 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, includ-
ing reports on performance and portfolio analysis, fee and expense analysis.
Moody's insurance financial strength rating is an opinion of an insurance
company's financial strength 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 sta-
tistical and analytical coverage of open-end and closed-end funds and variable
annuities.
Standard & Poor's insurance claims-paying ability rating is an opinion 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 and 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 con-
tracts.
Standard & Poor's 500 Index -- A broad-based measurement of U.S. stock-market
performance based on the weighted average performance of 500 common stocks of
leading company's and leading industries; 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 currently including Ameri-
can 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 series
funds, LNY 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 illustration,
the literature may emphasize the potential tax savings through tax deferral;
the potential advantage of the variable annuity account over the fixed ac-
count; and the compounding effect when a client makes regular deposits to his
or her contract.
Internet. An electronic communications network which may be used to provide
information regarding LNY, performance of the subaccounts and advertisement
literature.
Dollar-Cost Averaging. (DCA) -- You may systematically transfer on a monthly
basis amounts from the DCA fixed account or certain variable subaccounts into
the variable subaccounts. 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 balance needed to
establish the DCA program is $1,500. DCA transfers can take place over any pe-
riod between six and 60 months. Once elected, the program will remain in ef-
fect 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. If
you have cancelled the DCA program prior to the end of the selected DCA peri-
od, any remaining contract value in the DCA holding account within the fixed
account will automatically be transferred to the variable subaccounts selected
by you. A transfer under this program is not considered a transfer for pur-
poses 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. If
the DCA program is in effect, you may not participate in the Automatic With-
drawal Service, cross-reinvestment service, or portfolio rebalancing.
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
B-6
<PAGE>
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. If telephone
authorization has been elected, certain changes may be made by telephone. Not-
withstanding 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. We reserve the right to discontinue this serv-
ice at any time. If the AWS program is in effect, you may not participate in
the DCA program, cross-reinvestment service, or portfolio rebalancing.
Cross-reinvestment service -- Under this option, account value in a designated
variable subaccount of the contract that exceeds a certain baseline amount is
automatically transferred to another specific variable subaccount(s) of the
contract at specific intervals. You may elect to participate in cross-reinvest-
ment 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 con-
tinue until we receive authorization to terminate the program.
The minimum holding account value required to establish cross-reinvestment is
$10,000 and the minimum amount transferred is $50.00. Currently, there is no
charge for this service. However, we reserve the right to impose one. A trans-
fer 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. This program is not available if you are utilizing an automatic deposit
feature. Also you may not use the DCA program, the AWS or portfolio
rebalancing, if you are using this cross-reinvestment service.
Portfolio rebalancing -- Portfolio Rebalancing is an option which, if elected
by the contractowner, restores to a pre-determined level the percentage of con-
tract value allocated to each variable account subaccount. This predetermined
level will be the allocation initially selected when the contract was pur-
chased, unless subsequently changed. The portfolio rebalancing allocation may
be changed at any time by submitting a request to LNY.
If the portfolio rebalancing is elected, all purchase payments allocated to the
variable accounts subaccounts must be subject to portfolio rebalancing.
Portfolio rebalancing may take place on either a monthly, quarterly, semi-an-
nual or annual basis, as selected by the contractowner. Once the portfolio
rebalancing option is activated, any variable account subaccount transfers exe-
cuted outside of the portfolio rebalancing option will terminate the portfolio
rebalancing option. Any subsequent purchase payment or withdrawal that modifies
the account balance within each variable account subaccount may also cause ter-
mination of the portfolio rebalancing option. Any such termination will be con-
firmed to the contractowner. The contractowner may terminate the portfolio
rebalancing option or re-enroll at any time by calling or writing LNY.
The portfolio rebalancing program is not available following the annuity com-
mencement date. This program is not available if you are utilizing the DCA pro-
gram, AWS, or cross-reinvestment service.
Lincoln Financial Group
Lincoln Financial Group is the marketing name for Lincoln National Corporation
(NYSE:LNC) and its affiliates. With headquarters in Philadelphia, Lincoln Fi-
nancial Group has consolidated assets of over $103 billion and annual consoli-
dated revenues of $6.8 billion. Through its wealth accumulation and protection
businesses, the company provides annuities, life insurance, 401(k) plans, life-
health reinsurance, mutual funds, institutional investment management and fi-
nancial planning and advisory services.
LNY'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
LNY serves. As of the date of this SAI, LNY was serving over 400 employer con-
tracts and more than 149,000 individuals.
LNY's assets, size. LNY may discuss its general financial condition (see, for
example, the reference to A.M. Best Company, above); it may refer to its as-
sets; 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). For
example, at year-end 1999 LNY had statutory admitted assets of almost $2.3 bil-
lion.
Financial Statements
[TO BE FILED BY AMENDMENT.]
B-7
<PAGE>
Lincoln Life and Annuity Account H
VARIABLE ANNUITY
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 will be included
in Part A of this Registration Statement when available.
2. Part B The Financial Statements for the Variable Account will be
included in Part B of this Registration Statement when available.
3. Part B The following Statutory-Basis Financial Statements of Lincoln
Life & Annuity Company of New York are included in the SAI: (TO BE FILED BY
AMENDMENT)
Balance Sheets Statutory-Basis--December 31, 1999 and 1998
Statements of Operations Statutory-Basis--Years ended December 31, 1999,
1998 and 1997
Statements of Changes in Capital and Surplus Statutory-Basis--Years ended
December 31, 1999, 1998 and 1997.
Statements of Cash Flows Statutory-Basis--Years ended December 31, 1999, 1998,
and 1997.
Notes to Statutory-Basis Financial Statements--December 31, 1999
Report of Ernst & Young LLP, Independent Auditors
<PAGE>
Item 24. (Continued)
(b) List of Exhibits
(1)(a) Resolutions of the Board of Directors and memorandum authorizing
establishment of the Variable Account are incorporated herein by reference to
Registration Statement on Form N-4 (333-38007) filed on October 16, 1997.
(2) None.
(3)(a) Form of Underwriting Agreement incorporated herein by reference to
Registration Statement on Form N-4 (333-38007) filed on October 12, 1999.
(3)(b) Form of Selling Group Agreement incorporated herein by reference to
Registration Statement on Form N-4 (333-38007) filed on October 12, 1999.
(4) Form of Variable Annuity Contract.
(5) Form of Application
(6) Articles of Incorporation and Bylaws of Lincoln Life & Annuity Company of
New York are incorporated herein by reference to Registration Statement
on Form N-4 (333-10863) filed on 8/27/96.
(7) Not applicable.
(8)(a) Form of Services Agreement between Delaware Management Holdings, Inc.,
Delaware Service Company, Inc. and LNY incorporated herein by reference
to Registration Statement on Form N-4 (333-38007) filed on October 12,
1999.
(8)(b) Form of Fund Participation Agreement incorporated herein by reference to
Registration Statement on Form N-4 (333-38007) filed on October 12, 1999.
(8)(c) Amended and Restated Service Agreement between The Lincoln National Life
Insurance Company and Lincoln Life & Annuity Company of New York
incorporated herein by reference to Registration Statement on Form N-4
(333-38007) filed on October 12, 1999.
(9) Opinion and consent of Robert O. Sheppard, Counsel of Lincoln Life &
Annuity Company of New York as to legality of securities being issued
(TO BE FILED BY AMENDMENT)
(10) Consent of Ernst & Young LLP, Independent 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) Not applicable.
(15) Other Exhibits:
(a) Organizational Chart of the Lincoln National Insurance
Holding Company System
(b) Books and Records Report is incorporated herein by
reference to Registration Statement on Form N-4
(File No. ) filed
The following list contains the officers and directors of Lincoln Life & Annuity
Company of New York who are engaged directly or indirectly in activities
relating to the Lincoln Life & Annuity Variable Annuity Account H as well as the
contracts. The list also shows Lincoln Life & Annuity Company of New York's
executive officers.
Item 25.
<TABLE>
<CAPTION>
Positions and Officers with Lincoln Life &
Name Annuity Company of New York
---- ------------------------------------------
<S> <C>
Joanne B. Collins*....................... President, Treasurer and Director
Troy D. Panning*......................... Second Vice President and Chief Financial
Officer
Roland C. Baker.......................... Director
1301 S. Meyers Road
Oakbrook Terrace, IL 60161
J. Patrick Barrett....................... Director
Chairman & CEO
Carpat Investments
4605 Watergap
Manlius, NY 13104
Thomas D. Bell, Jr. ..................... Director
President & CEO
Young & Rubicam Advertising
285 Madison Avenue
New York, NY 10017
</TABLE>
<PAGE>
DIRECTORS AND OFFICERS OF THE DEPOSITOR
Name Positions and Offices with LNY
---- ------------------------------
Robert D. Bond**................................. Director
Jon A. Boscia***................................. Director
Kathleen R. Gorman*.............................. Assistant Vice President
John H. Gotta*****............................... Director
Barbara S. Kowalczyk***.......................... Director
M. Leanne Lachman................................ Director
Managing Director
Boston Financial
437 Madison Avenue - 18th Floor
New York, NY 10022
Louis G. Marcoccia............................... Director
Senior Vice President
Syracuse University
Skytop Office Building
Skytop Road
Syracuse, NY 13244-5300
John M. Pietruski................................ Director
One Penn Plaza
Suite 3408
New York, NY 10119
Lawrence T. Rowland****.......................... Director
Robert O. Sheppard*.............................. Assistant Vice President
Richard C. Vaughan***............................ Director
C. Suzanne Womack***............................. Secretary
* Principal business address of each person is 120 Madison Street, 17th
Floor, Syracuse, New York 13202.
** Principal business address of each person is 1300 S. Clinton Street, Fort
Wayne, Indiana 46802.
*** Principal business address of each person is Centre Square, West Tower,
1500 Market St., Suite 3900, Philadelphia, PA 19102.
**** Principal business address of each person is 1700 Magnovox Way, One
Reinsurance Place, Fort Wayne, Indiana 46804.
*****Principal business address of each person is 350 Church Street,
Hartford, CT 06103.
<PAGE>
Item 26.
PERSONS CONTROLLED BY OR UNDER COMMON
CONTROL WITH THE DEPOSITOR OR REGISTRANT
See Exhibit 15(a): The Organizational Chart of The Lincoln National
Insurance Holding Company System is hereby incorporated herein by this
reference.
Item 27.
NUMBER OF CONTRACT OWNERS
Not applicable.
Item 28.
INDEMNIFICATION--UNDERTAKING
(a) Brief description of indemnification provisions.
In general, Article VII, Section 2, of the By-Laws of Lincoln Life &
Annuity Co. of NY (LNY) provides that LNY 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 LNY, 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, LNY. Certain additional conditions apply to
indemnification in criminal proceedings.
In particular, separate conditions govern indemnification of directors,
officers, and employees of LNY in connection with suits by, or in the
rights of LNY.
Please refer to Article VII of the By-Laws of LNY (Exhibit No. 6(a)
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.
<PAGE>
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, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America,
Inc., New World Fund, 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., SMALLCAP World 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 and Washington Mutual Investors Fund, Inc.
Lincoln National Variable Annuity Account E, and Lincoln National Flexible
Premium Variable Life Accounts F and J (all registered as investment companies
under the 1940 Act) and Lincoln National Flexible Premium Group Variable Annuity
Accounts 50, 51 and 52 are all segregated investment accounts of Lincoln Life
which also invests in the series. The series also offers shares of the funds to
other segregated investment accounts.
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
David L. Abzug Regional Vice President
27304 Park Vista Road
Agoura Hills, CA 91301
John A. Agar Vice President
1501 N. University,
Suite 227A
Little Rock, AR 72207
<PAGE>
Robert B. Aprison Vice President
2983 Bryn Wood Drive
Madison, WI 53711
L William W. Bagnard Vice President
Steven L. Barnes Senior Vice President
5400 Mount Meeker Road, Suite 1
Boulder CO 80301-3508
B Carl R. Bauer Assistant Vice President
Michelle A. Bergeron Senior Vice President
4160 Gateswalk Drive
Smyrna, GA 30080
J. Walter Best, Jr. Regional Vice President
9013 Brentmeade Blvd.
Brentwood, TN 37027
Joseph T. Blair Senior Vice President
148 E. Shore Ave
Groton Long Point, CT 06340
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
John A. Blanchard Vice President
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President
P.O. Box 1665
Brentwood, TN 37024-1655
Mick L. Brethower Senior Vice President
29003 Colonial Drive
Georgetown, TX 78628
Alan Brown Regional Vice President
4129 Laclede Avenue
St. Louis, MO 63108
B J. Peter Burns Vice President
Brian C. Casey Regional Vice President
8002 Greentree Road
Bethesda, MD 20817
<PAGE>
Victor C. Cassato Senior Vice President
609 W. Littleton Blvd., Suite 310
Greenwood Village, CO 80120
Christopher J. Cassin Senior Vice President
19 North Grant Street
Hinsdale, IL 60521
Denise M. Cassin Vice President
1301 Stoney Creek Drive
San Ramon, CA 94538
L Larry P. Clemmensen Director
L Kevin G. Clifford Director, President and Co-Chief
Executive Officer
Ruth M. Collier Senior Vice President
29 Landsdowne Drive
Larchmont, NY 10538
S David Coolbaugh Assistant Vice President
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
--------------------- ---------------------
H Carlo O. Cordasco Assistant Vice President
Thomas E. Cournoyer Vice President
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Senior Vice President
3521 Rittenhouse Street, N.W.
Washington, D.C. 20015
L Carl D. Cutting Vice President
William Daugherty Regional Vice President
1216 Highlander Way
Mechanicsburg, PA 17055
Daniel J. Delianedis Regional Vice President
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President
P.O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President
505 E. Main Street
Jenks, OK 74037
<PAGE>
Kirk D. Dodge Senior Vice President
633 Menlo Avenue, Suite 210
Menlo Park, CA 94025
Peter J. Doran Director, Senior Vice President
100 Merrick Road, Suite 216W
Rockville Centre, NY 11570
L Michael J. Downer Secretary
Robert W. Durbin Vice President
74 Sunny Lane
Tiffin, OH 44883
I Lloyd G. Edwards Senior Vice President
L Paul H. Fieberg Senior Vice President
John Fodor Vice President
15 Latisquama Road
Southborough, MA 01772
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ----------------------
Daniel B. Frick Regional Vice President
845 Western Avenue
Glen Ellyn, IL 60137
Clyde E. Gardner Senior Vice President
Route 2, Box 3162
Osage Beach, MO 65065
B Evelyn K. Glassford Vice President
Jeffrey J. Greiner Vice President
12210 Taylor Road
Plain City, OH 43064
L Paul G. Haaga, Jr. Director
B Mariellen Hamann Assistant Vice President
David E. Harper Senior Vice President
150 Old Franklin School Road
Pittstown, NJ 08867
H Mary Pat Harris Assistant Vice President
Ronald R. Hulsey Vice President
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President
1225 Vista Del Mar Drive
Delray Beach, FL 33483
Michael J. Johnston Director
630 Fifth Ave., 36th Floor
New York, NY 10111
B Damien M. Jordan Vice President
Arthur J. Levine Senior Vice President
12558 Highlands Place
Fishers, IN 46038
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
B Karl A. Lewis Assistant Vice President
T. Blake Liberty Regional Vice President
5506 East Mineral Lane
Littleton, CO 80122
Mark J. Lien Regional Vice President
5570 Beechwood Terrace
West Des Moines IA 50266
L Lorin E. Liesy Assistant Vice President
L Susan G. Lindgren Vice President - Institutional
Investment Services
LW Robert W. Lovelace Director
Stephen A. Malbasa Vice President
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President
5241 South Race Street
Littleton, CO 80121
L J. Clifton Massar Director, Senior Vice President
L E. Lee McClennahan Senior Vice President
S John V. McLaughlin Senior Vice President
Terry W. McNabb Vice President
2002 Barrett Station Road
St. Louis, MO 63131
L R. William Melinat Vice President-Institutional
Investment Services
David R. Murray Vice President
60 Briant Drive
Sudbury, MA 01776
Stephen S. Nelson Vice President
P.O. Box 470528
Charlotte, NC 28247-0528
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
William E. Noe Regional Vice President
304 River Oaks Road
Brentwood, TN 37207
Peter A. Nyhus Vice President
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Vice President
62 Park Drive
Glenview, IL 60025
Gary A. Peace Regional Vice President
291 Kaanapali Drive
Napa, CA 94558
Samuel W. Perry Regional Vice President
6133 Calle del Paisano
Scottsdale, AZ 85251
Fredric Phillips Senior Vice President
175 Highland Avenue, 4th Floor
Needham, MA 02494
B Candance D. Pilgrim Assistant Vice President
Carl S. Platou Vice President
7455 80th Place, SE
Mercer Island, WA 98040
L John O. Post Senior Vice President
S Richard P. Prior Vice President
Steven J. Reitman Senior Vice President
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Vice President
244 Lambeau Lane
Glenville, NC 28736
George S. Ross Senior Vice President
55 Madison Avenue
Morristown, NJ 07962
L Julie D. Roth Vice President
L James F. Rothenberg Director
Douglas F. Rowe Vice President
414 Logan Ranch Road
Georgetown, TX 78628
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
Christopher S. Rowey Regional Vice President
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Senior Vice President
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Senior Vice President
4604 Glencoe Avenue, #4
Marina del Rey, CA 90292
Joseph D. Scarpitti Vice President
31465 St. Andrews
Westlake, OH 44145
L R. Michael Shanahan Director
Brad W. Short Regional Vice President
306 15th Street
Seal Beach, CA 90740
David W. Short Chairman of the Board and
1000 RIDC Plaza, Suite 212 Co-Chief Executive Officer
Pittsburgh, PA 15238
William P. Simon Senior Vice President
912 Castlehill Lane
Devon, PA 91333
L John C. Smith Vice President-Institutional
Investment Services
Rodney G. Smith Vice President
100 N. Central Expressway,
Suite 1214
Richardson, TX 75080
S Sherrie L. Snyder-Senft Assistant Vice President
Anthony L. Soave Regional Vice President
8831 Morning Mist Drive
Clarkston, MI 48348
Therese L. Souiller Assistant Vice President
2652 Excaliber Court
Virginia Beach, VA 23454
Nicholas D. Spadaccini Regional Vice President
855 Markley Woods Way
Cincinnati, OH 45230
L Kristen J. Spazafumo Assistant Vice President
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
Daniel S. Spradling Senior Vice President
181 Second Avenue, Suite 228
San Mateo, CA 94401
LW Eric H. Stern Director
B Max D. Stites Vice President
Thomas A. Stout Regional Vice President
1004 Ditchley Road
Virginia Beach, VA 23451
Craig R. Strauser Vice President
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Senior Vice President
31641 Saddletree Drive
Westlake Village, CA 91361
L Drew W. Taylor Assistant Vice President
S James P. Toomey Vice President
I Christopher E. Trede Vice President
George F. Truesdail Vice President
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Vice President
60 Reedland Woods Way
Tiburon, CA 94920
J. David Viale Regional Vice President
7 Gladstone Lane
Laguna Niguel, CA 92677
Thomas E. Warren Regional Vice President
119 Faubel Street
Sarasota, FL 34242
L J. Kelly Webb Senior Vice President, Treasurer
and Controller
<PAGE>
<TABLE>
<CAPTION>
(b) (1) (2)
<S> <C>
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
Gregory J. Weimer Vice President
206 Hardwood Drive
Venetia PA 15367
B Timothy W. Weiss Director
George J. Wenzel Regional Vice President
3406 Shakespeare Drive
Troy MI 48084
J.D. Wiedmaier Assistant Vice President
3513 Riverstone Way
Chesapeake, VA 23325
Timothy J. Wilson Vice President
113 Farmview Place
Venetia, PA 15367
B Laura L. Wimberly Vice President
H Marshall D. Wingo Director, Senior Vice President
L Robert L. Winston Director, Senior Vice President
William R. Yost Vice President
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President
1616 Vermont
Houston, TX 77006
Scott D. Zambon Regional Vice President
2887 Player Lane
Tustin Ranch, CA 92782
</TABLE>
-------------
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles,
CA 90025
B Business Address, 135 South State College Boulevard, Brea, CA 92821
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78230
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
(c) Name of Principal Underwriter: American Funds Distributors, Inc.; Net
Underwriting Discounts and Commissions: Not Applicable.
Item 30. Location of Accounts and Records
Exhibit 15(b) is hereby incorporated herein by reference.
Item 31. Management Services
Not Applicable.
Item 32
(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 a 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 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
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 1st day of June,
2000.
Lincoln Life & Annuity Variable
Annuity Account H (Registrant)
By: Lincoln Life & Annuity Company of New York
By: /s/ Joanne B. Collins
-------------------------------------------
Joanne B. Collins, President
Lincoln Life & Annuity Company of New York
(Depositor)
By: /s/ Joanne B. Collins
-------------------------------------------
Joanne B. Collins, President
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Joanne B. Collins President, Treasurer and June 1, 2000
--------------------------------------- Director (Principal
Joanne B. Collins Executive Officer)
/s/ Troy D. Panning Second Vice President and June 1, 2000
--------------------------------------- Chief Financial Officer
Troy D. Panning (Principal Financial Officer
and Principal Accounting
Officer)
--------------------------------------- Director June 1, 2000
Roland C. Baker
/s/ J. Patrick Barrett
--------------------------------------- Director June 1, 2000
J. Patrick Barrett
/s/ Thomas D. Bell, Jr.
--------------------------------------- Director June 1, 2000
Thomas D. Bell, Jr.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert D. Bond
--------------------------------------- Director June 1, 2000
Robert D. Bond
/s/ Jon A. Boscia
--------------------------------------- Director June 1, 2000
Jon A. Boscia
/s/ John H. Gotta
--------------------------------------- Director June 1, 2000
John H. Gotta
/s/ Barbara S. Kowalczyk
--------------------------------------- Director June 1, 2000
Barbara S. Kowalczyk
/s/ M. Leanne Lachman
--------------------------------------- Director June 1, 2000
M. Leanne Lachman
/s/ Louis G. Marcoccia
--------------------------------------- Director June 1, 2000
Louis G. Marcoccia
/s/ John M. Pietruski
--------------------------------------- Director June 1, 2000
John M. Pietruski
/s/ Lawrence T. Rowland
--------------------------------------- Director June 1, 2000
Lawrence T. Rowland
/s/ Richard C. Vaughan
--------------------------------------- Director June 1, 2000
Richard C. Vaughan
</TABLE>
