<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1999
1933 Act Registration No. 333-40937
1940 Act Registration No. 811-08517
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 4
/X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 6 /X/
LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N
(EXACT NAME OF REGISTRANT)
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
1300 South Clinton Street, P.O. Box 1110, Fort Wayne, Indiana 46802
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE
(219) 455-2000
<TABLE>
<S> <C>
Elizabeth A. Frederick, Esquire Kimberly J. Smith, Esquire
1300 S. Clinton St. Sutherland Asbill &
Ft. Wayne, IN 46802 Brennan LLP
1275 Pennsylvania Ave. N.W.
Washington, DC 20004
(NAME AND ADDRESS OF
AGENT FOR SERVICE)
</TABLE>
Title of Securities: Interests in a separate account under individual flexible
payment deferred variable annuity contracts.
It is proposed that this filing will become effective:
/X/ immediately upon filing pursuant to paragraph (b) of Rule 485
/ / on May 1, 1999, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on pursuant to paragraph (a)(1) of Rule 485
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
("LINCOLN LIFE")
DELAWARE-LINCOLN CHOICEPLUS VARIABLE ANNUITY CONTRACTS
LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N
SUPPLEMENT DATED DECEMBER 17, 1999 TO THE PROSPECTUS DATED MAY 1, 1999
This supplement describes certain changes to the VARIABLE ANNUITY ACCOUNT
("VAA"), available for allocation of PURCHASE PAYMENTS under the
Delaware-Lincoln ChoicePlus Variable Annuity Contracts noted above (the
"Contracts"). Please retain this supplement with your Contract prospectus for
your reference. Unless otherwise stated, italicized terms have the same
definitions as in the prospectus.
ON FEBRUARY 22, 2000, LINCOLN LIFE IS CLOSING 8 INVESTMENT OPTIONS UNDER THE
CONTRACTS. SEE "DELETION OF INVESTMENTS OPTIONS AVAILABLE UNDER THE CONTRACTS"
ON PAGE 4 BELOW.
ADDITIONS TO THE INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACTS
ON OR ABOUT FEBRUARY 22, 2000, 14 additional investment options (each a "New
Fund" and together the "New Funds") will be available under the Contracts. At
that time, the New Funds may not be available in all states. Please contact your
investment dealer for current information. The New Funds are listed below:
AIM Variable Insurance Funds, Inc.:
- - AIM V.I. Capital Appreciation Fund
American Variable Insurance Series (Class 2):
- - AVIS Global Small Capitalization Fund
- - AVIS Growth Fund
- - AVIS International Fund
- - AVIS Growth-Income Fund
Delaware Group Premium Fund, Inc.:
- - Delaware Premium Select Growth Series
Franklin Templeton Variable Insurance Products Trust (Class 2):
- - Franklin Small Cap Securities Fund
- - Franklin Mutual Shares Securities Fund
- - Templeton Global Growth Fund
Templeton Variable Products Series Fund (Class 2):
- - Templeton International Fund
Alliance Variable Products Series Fund (Class B):
- - Alliance Premier Growth Portfolio
- - Alliance Growth and Income Portfolio
- - Alliance Growth Portfolio
- - Alliance Technology Portfolio
1
<PAGE>
EXPENSE TABLES
All Expense Table information regarding Summary of contractowner expenses,
Annual contract fee, and VAA annual expenses also applies to the New Funds. The
following Expense Table information regarding the New Funds should be added to
the annual expenses of the funds for the year-ended December 31, 1998 included
in the Contract prospectus:
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
FEES EXPENSES EXPENSES
(AFTER ANY + + (AFTER ANY = (AFTER ANY
WAIVER/ 12B-1 WAIVER/ WAIVER/
REIMBURSEMENTS) FEES REIMBURSEMENTS) REIMBURSEMENTS)
--------------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
AIM V.I. Capital Appreciation.................... 0.62% 0.00% 0.05% 0.67%
AVIS Global Small Capitalization (class 2)(1).... 0.79 0.25 0.03 1.07
AVIS Growth (class 2)............................ 0.40 0.25 0.01 0.66
AVIS International (class 2)..................... 0.57 0.25 0.09 0.91
AVIS Growth-Income (class 2)..................... 0.35 0.25 0.01 0.61
Delaware Premium Select Growth(2)................ 0.68 0.00 0.17 0.85
Franklin Small Cap (class 2)(3).................. 0.75 0.25 0.02 1.02
Franklin Mutual Shares (class 2)(3).............. 0.75 0.25 0.05 1.05
Templeton Global Growth (class 2)(3)............. 0.83 0.25 0.05 1.13
Templeton International (class 2)(4)............. 0.69 0.25 0.17 1.11
Alliance Premier Growth(5)....................... 0.97 0.25 0.09 1.31
Alliance Growth and Income....................... 0.63 0.25 0.10 0.98
Alliance Growth.................................. 0.75 0.25 0.12 1.12
Alliance Technology(5)........................... 0.81 0.25 0.14 1.20
</TABLE>
(1) These expenses are annualized. The fund began operations on April 30, 1998.
(2) The Select Growth Series had not commenced operations as of December 31,
1998. Expenses shown are based on estimated and annualized amounts. Actual
expenses may be greater or less than shown. The investment advisor for the
Select Growth Series is Delaware Management Company, Inc. ("Delaware
Management"). Effective May 1, 1999 through April 30, 2000, the investment
advisor for the Series of DGPF has agreed voluntarily to waive its
management fees and reimburse the Series for expenses to the extent that
total expenses will not exceed 0.85% for the Select Growth Series. The fee
ratio shown above has been restated, if necessary, to reflect the new
voluntary limitations which took effect on May 1, 1999. The declaration of a
voluntary expense limitation does not bind the investment adviser to declare
future expense limitations with respect to the Fund.
(3) Because Franklin Templeton Variable Insurance Products Trust Class 2 shares
are new, the figures above (other than 12b-1 fees) are estimates based on
the historical expenses of each fund's Class 1 shares. Class 2 shares have a
distribution plan, which is described in the funds' prospectuses. The fund
administration fee is a direct expense for the Mutual Shares Securities
Fund; Franklin Small Cap and Templeton Global Growth Funds pay for similar
services indirectly through the management fee.
(4) Class 2 Shares have a distribution plan which is describe in the funds
prospectus.
(5) Management Fees are stated net of waivers and/or reimbursements. Absent fee
waivers and/or reimbursements, the fee paid to Alliance by the Portfolio, as
a percentage of average net assets, would have been: 1.00% for Premier
Growth and Technology.
2
<PAGE>
THE NEW FUNDS: Information about the New Funds, including their investment
objectives and investment management, is contained below:
AIM V.I. CAPITAL APPRECIATION FUND -- Seeks growth of capital through investment
in common stocks, with emphasis on medium- and small-sized growth companies. The
investment advisor will be particularly interested in companies that are likely
to benefit from new or innovative products, services or processes as well as
those that have experienced above average, long-term growth in earnings and have
excellent prospects for future growth. A I M Advisors, Inc. serves as the Fund's
investment advisor.
AVIS GLOBAL SMALL CAPITALIZATION FUND (CLASS 2) -- Seeks to make your investment
grow over time by investing primarily in stocks of smaller companies located
around the world that typically have market capitalizations of $50 million to
$1.2 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. Capital Research and
Management Company serves as the Fund's investment advisor.
AVIS GROWTH FUND (CLASS 2) -- Seeks to make your investment grow by investing
primarily in common stocks of companies that appear to offer superior
opportunities 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
fluctuations. Capital Research and Management Company serves as the Fund's
investment advisor.
AVIS INTERNATIONAL FUND (CLASS 2) -- 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 appreciation
through stocks. Investors in the fund should have a long-term perspective and be
able to tolerate potentially wide price fluctuations. Capital Research and
Management Company serves as the Fund's investment advisor.
AVIS GROWTH-INCOME FUND (CLASS 2) -- 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
dividends. The fund is designed for investors seeking both capital appreciation
and income. Capital Research and Management Company serves as the Fund's
investment advisor.
DELAWARE PREMIUM SELECT GROWTH SERIES -- Seeks long-term capital appreciation by
primarily investing in common stocks of companies that have the potential for
high earnings growth. Companies of any size are considered, as long as they are
larger than $300 million in market capitalization. Delaware Management Company
serves as the Fund's investment advisor.
FRANKLIN SMALL CAP SECURITIES FUND (CLASS 2) -- Seeks long-term capital growth.
It invests primarily in equity securities of U.S. small cap growth companies.
Small cap companies are generally those with market cap values of less than $1.5
billion at time of purchase. Franklin Advisers, Inc. serves as the Fund's
investment advisor.
FRANKLIN MUTUAL SHARES SECURITIES FUND (CLASS 2) -- Seeks capital appreciation
with income as a secondary goal. It invests primarily in equity securities of
companies that the manager believes are available at market prices less than
their actual value based on certain recognized or objective criteria. Franklin
Mutual Advisers, LLC serves as the Fund's investment advisor.
TEMPLETON GLOBAL GROWTH FUND (CLASS 2) -- Seeks long-term capital growth. It
invests primarily in equity securities of companies in various nations
throughout the world, including the U.S. and emerging markets. Templeton Global
Advisors Limited serves as the Fund's investment advisor.
TEMPLETON INTERNATIONAL FUND (CLASS 2) -- Seeks long-term capital growth. It
invests primarily in equity securities of companies outside the United States,
including emerging markets. Templeton Investment Counsel, Inc. serves as the
Fund's investment advisor.
ALLIANCE PREMIER GROWTH PORTFOLIO (CLASS B) -- Seeks long-term growth of capital
by pursuing aggressive investment policies. The portfolio invests predominantly
in the equity securities of a limited number of large, carefully selected,
high-quality U.S. companies that are judged likely to achieve superior earnings
growth. Alliance Capital Management, L.P. serves as the Fund's investment
advisor.
ALLIANCE GROWTH AND INCOME PORTFOLIO (CLASS B) -- Seeks reasonable current
income and reasonable appreciation through investments primarily in
dividend-paying common stocks of good quality. The portfolio also may invest in
fixed-income securities and convertible securities. Alliance Capital Management,
L.P. serves as the Fund's investment advisor.
ALLIANCE GROWTH PORTFOLIO (CLASS B) -- Seeks to provide long-term growth of
capital. Current income is only an incidental consideration. The portfolio
invests primarily in equity securities of companies with favorable earnings
outlooks, which have long-term growth rates that are expected to exceed that of
the U.S. economy over time. Alliance Capital Management, L.P. serves as the
Fund's investment advisor.
ALLIANCE TECHNOLOGY PORTFOLIO (CLASS B) -- Seeks to emphasizes growth of capital
and invests for capital appreciation. Current income is only an incidental
consideration. The portfolio may seek income by writing listed call
3
<PAGE>
options. The portfolio invests primarily in securities of companies expected to
benefit from technological advances and improvements (i.e., companies that use
technology extensively in the development of new or improved products or
processes). Alliance Capital Management, L.P. serves as the Fund's investment
advisor.
Some advisors and/or distributors, or an affiliate may compensate Lincoln Life
(or an affiliate) for administrative, distribution, or other services. It is
anticipated that such compensation will be based on assets of the particular
fund attributable to the contracts along with certain other variable contracts
issued or administered by Lincoln Life (or an affiliate).
ADDITIONAL INFORMATION ABOUT THE NEW FUNDS, THEIR INVESTMENT POLICIES, RISKS,
FEES AND EXPENSES AND ALL OTHER ASPECTS OF THEIR OPERATIONS, CAN BE FOUND IN THE
PROSPECTUSES FOR THE NEW FUNDS, WHICH WILL BE AVAILABLE FROM LINCOLN LIFE ON OR
BEFORE FEBRUARY 22, 2000. THESE PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE
INVESTING. THERE IS NO ASSURANCE THAT ANY NEW FUND WILL ACHIEVE ITS STATED
OBJECTIVES.
DELETION OF INVESTMENT OPTIONS AVAILABLE UNDER THE CONTRACTS
The following eight investment options will no longer be available for
allocation of PURCHASE PAYMENTS under Contracts issued on or after February 22,
2000. However, contract owners who purchased a Contract prior to February 22,
2000 may continue to allocate PURCHASE PAYMENTS or CONTRACT VALUE to these
investment options.
Delaware Group Premium Fund, Inc.:
- - Delaware Premium Devon Series
- - Delaware Premium International Equity Series
Dreyfus Variable Investment Fund:
- - Dreyfus Small Cap Portfolio
Kemper Variable Series:
- - Kemper Small Cap Growth Portfolio
- - Kemper Government Securities Portfolio
Liberty Variable Investment Trust:
- - Colonial U.S. Growth & Income Fund
OCC Accumulation Trust:
- - OCC Global Equity Portfolio
- - OCC Managed Portfolio
ADDITIONAL INFORMATION
Effective June 1, 1999, the Liberty Variable Investment Trust, Colonial U.S.
Stock Fund, changed to Liberty Variable Investment Trust, Colonial U.S. Growth &
Income Fund.
On Page 19 under "Commissions", the first sentence has been replaced in its
entirety with the following:
The commissions paid to dealers are a maximum of 7.0% of each PURCHASE PAYMENT.
ACQUISITIONS AND SALES OF SUBSIDIARIES
In October 1999, the Company and LLANY transferred a block of direct individual
disability income business to MetLife. Under the indemnity reinsurance
agreement, MetLife will provide administrative services and assume liability for
the Company's approximately $65 million of annual disability income premium. At
closing, the Company transferred cash equal to statutory reserves, net of ceding
commissions of approximately $500 million.
4
<PAGE>
Part A - Prospectus
Incorporated herein by reference to Post-Effective Amendment No. 3
dated May 1, 1999
<PAGE>
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
("LINCOLN LIFE")
DELAWARE-LINCOLN CHOICEPLUS VARIABLE ANNUITY CONTRACTS
LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N
SUPPLEMENT DATED DECEMBER 17, 1999 TO THE
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1999
This supplement provides performance information in conjunction with certain
changes to the VARIABLE ANNUITY ACCOUNT available for allocation of PURCHASE
PAYMENTS under the Delaware-Lincoln ChoicePlus Variable Annuity Contracts noted
above (the "Contracts"). Please retain this supplement with your Contract
Statement of Additional Information for your reference. Unless otherwise stated,
italicized terms have the same definitions as in the prospectus.
The following eight investment options will no longer be available for
allocation of PURCHASE PAYMENTS under Contracts issued on or after February 22,
2000. However, Contract owners who purchased a Contract prior to February 22,
2000 may continue to allocate PURCHASE PAYMENTS or CONTRACT VALUE to these
investment options. The eight investment options are:
Delaware Group Premium Fund, Inc.:
- - Delaware Premium Devon Series
- - Delaware Premium International Equity Series
Dreyfus Variable Investment Fund:
- - Dreyfus Small Cap Portfolio
Kemper Variable Series:
- - Kemper Government Securities Portfolio
- - Kemper Small Cap Growth Portfolio
Liberty Variable Investment Trust:
- - Colonial U.S. Growth & Income Fund
OCC Accumulation Trust:
- - OCC Global Equity Portfolio
- - OCC Managed Portfolio
ON OR ABOUT FEBRUARY 22, 2000, 14 additional investment options will be
available under the Contracts: AIM
Variable Insurance Funds, Inc.: AIM V.I. Capital Appreciation Fund; American
Variable Insurance Series (Class 2): AVIS Global Small Capitalization Fund, AVIS
Growth Fund; AVIS International Fund and; AVIS Growth-Income Fund; Delaware
Group Premium Fund, Inc.: Delaware Premium Select Growth Series; Franklin
Templeton Variable Insurance Products Trust (Class 2): Franklin Small Cap
Securities Fund; Franklin Mutual Shares Securities Fund and; Templeton Global
Growth Fund; Templeton Variable Products Series Fund (Class 2): Templeton
International Fund; Alliance Variable Products Series Fund (Class B): Alliance
Premier Growth Portfolio; Alliance Growth and Income Portfolio; Alliance Growth
Portfolio and; Alliance Technology Portfolio (together the "New Funds"). Each
New Fund is available through a new subaccount in the VAA. ADDITIONAL
INFORMATION ABOUT THE NEW FUNDS, THEIR INVESTMENT POLICIES, RISKS, FEES AND
EXPENSES AND ALL OTHER ASPECTS OF THEIR OPERATIONS, CAN BE FOUND IN THE
PROSPECTUSES FOR THE NEW FUNDS, WHICH WILL BE AVAILABLE FROM LINCOLN LIFE ON OR
BEFORE FEBRUARY 22, 2000. THESE PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE
INVESTING. THERE IS NO ASSURANCE THAT ANY NEW FUND WILL ACHIEVE ITS STATED
OBJECTIVES.
The following performance information should be added to the performance
information included in the Contract Statement of Additional Information.
<PAGE>
SUBACCOUNT PERFORMANCE
The Average Annual Total Return is not available for the new subaccounts,
because they will not commence operations until approximately February 22, 2000.
HISTORICAL FUND PERFORMANCE ADJUSTED FOR VAA AND CONTRACT FEES AND CHARGES.
Performance information for the periods prior to the date the subaccounts
commenced operations will be calculated based on the performance of the New
Funds and the assumption that the subaccounts were in existence for the same
periods as those indicated for the New Funds, with the Contract charges that
were in effect during the time periods shown. This performance information is
referred to as nonstandardized performance data. THIS INFORMATION REPRESENTS
PAST PERFORMANCE AND DOES NOT INDICATE OR REPRESENT FUTURE PERFORMANCE. The
investment return and Principal value of a Contract will fluctuate so that
contractowner's investment may be worth more or less than the original
investment.
The following information is hereby added to the Nonstandard performance data --
Subaccounts of Account N table:
TYPE OF PERFORMANCE DATA
<TABLE>
<CAPTION>
YTD 1-YEAR 3-YEAR 5-YEAR 10-YEAR AS IF
SUBACCOUNTS 12/31/98 12/31/98 (12/31/98) (12/31/98) (12/31/98) LIFETIME COMMENCED
- ----------- ------------ -------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
AIM V.I. Cap. Appr............ 17.64% 17.64% 15.19% 15.63% N/A 17.13% 05/05/93
AVIS Global Small Cap......... N/A N/A N/A N/A N/A 1.31% 04/30/98
AVIS Growth................... 33.36% 33.36% 23.74% 19.80% 17.23% 15.85% 02/08/84
AVIS International............ 19.24% 19.24% 13.51% 10.46% N/A 9.52% 05/01/90
AVIS Growth-Income............ 16.45% 16.45% 18.68% 17.21% 14.12% 14.26% 02/08/84
DGPF Select Growth............ N/A N/A N/A N/A N/A N/A 05/03/99
Franklin Small Cap............ (2.45%) (2.45%) 12.79% N/A N/A 12.78% 11/01/95
Franklin Mutual Shares........ (1.40%) (1.40%) N/A N/A N/A 7.98% 11/08/96
Templeton International....... 7.69% 7.69% 13.89% 10.01% N/A 12.34% 05/01/92
Templeton Global Growth....... 7.35% 7.35% 12.77% N/A N/A 10.62% 03/15/94
Alliance Premier Growth....... 45.55% 45.55% 32.25% 25.76% N/A 23.38% 06/26/92
Alliance Growth & Income...... 18.91% 18.91% 22.51% 19.20% N/A 14.10% 01/14/91
Alliance Growth............... 26.62% 26.62% 26.96% N/A N/A 27.63% 09/15/94
Alliance Technology........... 61.11% 61.11% N/A N/A N/A 22.61% 01/11/96
</TABLE>
<PAGE>
Part B - Statement of Additional Information ("SAI")
Incorporated herein by reference to Post-Effective Amendment No. 3
dated May 1, 1999
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) List of Financial Statements
1. Part A -- The Table of Condensed Financial Information was included in
Part A of the Post-Effective Amendment to the Registration Statement and
is incorporated herein by reference to Post-Effective Amendment No. 3
(File No. 333-40937) filed on April 29, 1999.
2. Part B -- The following Financial Statements for the Variable Account
were included in Part B of the Post-Effective Amendment to the
Registration Statement and are incorporated herein by reference to
Post-Effective Amendment No. 3 (File No. 333-40937) filed on
April 29, 1999.
Statement of Assets and Liability -- December 31, 1998
Statement of Operations -- Year ended December 31, 1998
Statements of Changes in Net Assets -- Year ended December 31, 1998
Notes to Financial Statements --
Report of Ernst & Young LLP, Independent Auditors
Part B -- The following statutory-basis financial statements of The
Lincoln National Life Insurance Company were included in the SAI
of the Post-Effective Amendment and are incorporated herein by
reference to Post-Effective Amendment No. 3 (File No. 333-40937) filed
on April 29, 1999.
Balance Sheets -- Statutory Basis -- December 31, 1998, 1997 and 1996
Statements of Operations -- Statutory Basis -- Years ended December 31,
1998, 1997, and 1996
Statements of Changes in Capital and Surplus -- Statutory Basis -- Years
ended December 31, 1998, 1997, and 1996
Statements of Cash Flows -- Statutory Basis -- Years ended December 31,
1998, 1997 and 1996.
Notes to Statutory-Basis Financial Statements.
Report of Ernst & Young LLP, Independent Auditors
(b) Exhibits
(1)
Resolution of Board of Directors and Memorandum from the President Of The
Lincoln National Life Insurance Company authorizing establishment of the
Variable Account are incorporated herein by reference to Registration
Statement on Form N-4 (333-40937) filed on November 24, 1997.
(2)
Not Applicable.
(3)
(a) Selling Agreement is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(b) Wholesale Agreement is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(c) Amendment to Selling Group is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(d) Amendment to Schedule A of Selling Group dated October 15, 1999
(e) "Form of" Amendment to Wholesale Agreement
(4)
The Lincoln National Life Insurance Company Variable Annuity Contract is
incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-4 (333-40937) filed on September 3,
1998.
(a) Settlement Contract Rider is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(b) Form of Income Contract Rider is incorporated herein by reference to
Pre-Effective Amendment No. 1 to the Registration Statement on Form
N-4 (333-40937) filed on September 3, 1998.
(c) Nursing Care Waiver of Surrender/Withdrawal Charges Rider is
incorporated herein by reference to Post-Effective Amendment No. 3
(333-40937) filed on April 29, 1999
(d) Section 403(b) Annuity Endorsement is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(e) Section 457 Government Deferred Compensation Plan Endorsement is
incorporated herein by reference to Post-Effective Amendment No. 3
(333-40937) filed on April 29, 1999
(f) IRA Contract Amendment is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(g) Roth IRA Endorsement is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(h) Contract Amendment is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(5)
Application for the Contract is incorporated herein by reference
to Registration Statement on Form N-4 (333-40937) filed on November 24,
1997.
(6)
(a) Articles of Incorporation of The Lincoln National Life Insurance
Company are incorporated herein by reference to Registration
Statement on Form N-4 (33-27783) filed on December 5, 1996.
(b) By-Laws of The Lincoln National Life Insurance Company are
incorporated herein by reference to Post-Effective Amendment No. 1
to Registration Statement on Form N-4 (333-40937) Filed on
November 9, 1998.
(7)
Not Applicable.
(8) Fund Participation Agreements
Agreements between The Lincoln National Life Insurance Company and:
(i) AIM Variable Insurance Funds, Inc. is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(a) Amendment to AIM FPA is incorporated herein by reference
to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999.
(b) Exhibit to AIM FPA is incorporated herein by reference
to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999.
(c) Amendment No. 3 to AIM FPA dated October 14, 1999.
(ii)BT Insurance Funds Trust is incorporated herein by reference
to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(a) Amendment to BT FPA is incorporated herein by reference
to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999.
C-1
<PAGE>
(iii)
Delaware Group Premium Fund, Inc. is incorporated herein by reference
to Registration Statement on Form N-4 (File No. 33-25990) filed on
April 22, 1998.
(a) Amendment to Schedule 2 Dated October, 15 1999.
(b) Amendment to Schedule 1 dated May 1, 1999.
(iv)Dreyfus Variable Investment Fund is incorporated herein by reference
to Registration Statement on Form N-4 (333-05815) filed on September
26, 1996.
(v) Form of Agreement Investors Fund Series is incorporated herein by
reference to Registration Statement on Form N-4 (333-40937) filed
November 9, 1998.
(vi) Liberty Variable Investment Trust is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(vii)
Lincoln National Bond Fund, Inc. is incorporated herein by reference
to Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(a) Amendment to Bond FPA is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999.
(viii)
Lincoln National Money Market Fund, Inc. is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(a) Amendment to MM FPA is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999.
(ix)Variable Insurance Products Fund is incorporated herein by reference
to Registration Statement on Form N-4 (File No. 333-04999) filed on
September 26, 1996.
(x) Variable Insurance Products Fund III is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(xi)MFS-Registered Trademark- Variable Insurance Trust is incorporated
herein by reference to Post-Effective Amendment No. 3 (333-40937)
filed on April 29, 1999
(xii)
OCC Accumulation Trust is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999.
(a) Amendment to OCC FPA is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999.
(b) Service agreement between Delaware Management Holdings, Inc.,
Delaware Services Company, Inc. and Lincoln National Life Insurance
Company is incorporated herein by reference to the registration
statement of Lincoln National Flexible Premium Variable Life Account
F, Form S-6 (333-40745) filed November 21, 1997.
(xiii) American Variable Insurance Series FPA.
(xiv) "Form of" Alliance FPA.
(xv) Templeton FPA
(a) Amendment to Templeton FPA dated May 1, 1999.
(b) Amendment to Templeton FPA dated October 15, 1999.
(C) Amendment to Templeton FPA dated December, 1999.
(9)
Opinion and Consent of Jeremy Sachs, Senior Counsel of The Lincoln
National Life Insurance Company are incorporated herein by reference to
Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4
(333-40937) filed on September 3, 1998.
(10)
Consent of Ernst & Young LLP, Independent Auditors
(11)
Not Applicable.
(12)
Not Applicable.
(13)
Schedule for Computation of Performance Results.
(14)
Not Applicable.
(15)
(a) Organizational Chart of The Lincoln National Insurance Holding
Company System is incorporated herein by reference to Post-Effective
Amendment No. 3 (333-40937) filed on April 29, 1999
(b) Books and Records Report is incorporated herein by reference to
Post-Effective Amendment No. 3 (333-40937) filed on April 29, 1999
(16)
(a) Power of Attorney - Gabriel L. Shaheen is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(16)
(b) Power of Attorney - Lawrence T. Rowland is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(16)
(c) Power of Attorney - Keith J. Ryan
(16)
(d) Power of Attorney - H. Thomas McMeekin is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(16)
(e) Power of Attorney - Richard C. Vaughn is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(16)
(f) Power of Attorney - Jon A. Boscia is incorporated herein by
reference to Post-Effective Amendment No. 3 (333-40937) filed on
April 29, 1999
(g) Power of Attorney - Todd R. Stephenson.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
NAME POSITIONS AND OFFICES WITH DEPOSITOR
- ------------------------------ ---------------------------------------------
Jon A. Boscia** President and Director
John H. Gotta**** Senior Vice President
Stephen H. Lewis* Senior Vice President
C-2
<PAGE>
<TABLE>
<S> <C>
H. Thomas McMeekin***** Director
Cynthia A. Rose* Secretary and Assistant Vice President
Lawrence T. Rowland*** Executive Vice President and Director
Keith J. Ryan* Vice President, Controller and Chief Accounting
Officer
Todd R. Stephenson* Senior Vice President, Chief Financial Officer
and Assistant Treasurer
Eldon J. Summers* Second Vice President and Treasurer
Richard C. Vaughan** Director
Roy V. Washington* Vice President and Chief Compliance Officer
</TABLE>
* Principal business address is 1300 South Clinton Street, Fort
Wayne, Indiana 46802-3506.
** Principal business address is Centre Square, West Tower
1500 Market St., Suite 3900 Philadelphia, PA 19102-2112
*** Principal business address is 1700 Magnovox Way, One Reinsurance
Place, Fort Wayne, Indiana 46804-1538.
**** Principal business address is 350 Church Street, Hartford, CT
06103.
***** Principal business address is One Commerce Square, 2005 Market
Street, 39th Floor, Philadelphia, PA 19103
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
See Exhibit 15(a): Organizational Chart of The Lincoln National Life
Insurance Holding Company System.
ITEM 27. NUMBER OF PURCHASERS
As of October 31, 1999 there were 4,584 contract owners under Lincoln Life
Variable Annuity Account N.
ITEM 28. INDEMNIFICATION
(a) Brief description of indemnification provisions.
In general, Article VII of the By-Laws of The Lincoln National Life
Insurance Company (LNL) provides that LNL 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 LNL, 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, LNL. Certain additional conditions apply to
indemnification in criminal proceedings.
In particular, separate conditions govern indemnification of directors,
officers, and employees of LNL in connection with suits by, or in the right
of, LNL.
Please refer to Article VII of the By-Laws of LNL (Exhibit No. 6(b) hereto)
for the full text of the indemnification provisions. Indemnification is
permitted by, and is subject to the requirements of, Indiana 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.
C-3
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITER
(a) Lincoln National Variable Annuity Fund A (Group); Lincoln National Variable
Annuity Fund A (Individual); Lincoln National Variable Annuity Account C;
Lincoln National Flexible Premium Variable Life Account D; Lincoln National
Flexible Premium Variable Life Account F; Lincoln Life Flexible Premium
Variable Life Account J; Lincoln Life Flexible Premium Variable Life Account
K; Lincoln National Variable Annuity Account L; Lincoln Life Flexible
Premium Variable Life Account M; Lincoln Life Flexible Premium Variable Life
Account R; Lincoln Life Flexible Premium Variable Life Account S; Lincoln
Life Variable Annuity Account Q; Lincoln Nation Variable Annuity Account 53.
(b) See Item 25.
(c) Commissions and other compensations received by The Lincoln National Life
Insurance Company from Lincoln Life Variable Annuity Account N during the
fiscal year which ended December 31, 1998.
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Net Underwriting
Name of Principal Discounts and Compensation Brokerage
Underwriter Commissions on Redemption Commissions Compensation
- ----------------- ---------------- ------------- ----------- ------------
<S> <C> <C> <C> <C>
The Lincoln National
Life Insurance Company None $7,306 None 0
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
See Exhibit 15(b): Books and Records Report.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Registrant undertakes that it will file a post effective amendment to this
Registration Statement under the Securities Act of 1933 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 (i) a postcard or similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information or
(ii) a space in the Contract application or order to purchase that an
applicant can check to request a Statement of Additional Information.
(c) Registrant undertakes to deliver promptly, upon written or oral request made
to The Lincoln National Life Insurance Company at the address or phone
number listed in the Prospectus, any Statement of Additional Information and
any financial statements required by Form N-4 to be made available to
applicants or owners.
(d) The Lincoln National Life Insurance Company hereby represents that the fees
and charges deducted under the Contracts, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred,
and the risks assumed by The Lincoln National Life Insurance Company.
(e) Registrant 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.
(f) For Contracts sold in connection with the Texas Optional Retirement Program,
Registrant is relying on Rule 6c-7 and represents that paragraphs (a)
through (d) of that rule have been complied with.
C-4
<PAGE>
SIGNATURES
(a) As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Amendment and has caused the Amendment
to the Registration Statement to be signed on its behalf, in the City of Fort
Wayne, and State of Indiana on this 17th day of December, 1999.
LINCOLN LIFE VARIABLE ANNUITY
ACCOUNT N (Delaware-Lincoln ChoicePlus)
(Registrant)
By: /s/ DENIS G. SCHWARTZ
-----------------------------------
Denis G. Schwartz
SECOND VICE PRESIDENT, LNL
(TITLE)
By: THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
(Depositor)
By: /s/ STEPHEN H. LEWIS
-----------------------------------
Stephen H. Lewis
(SIGNATURE-OFFICER OF DEPOSITOR)
SENIOR VICE PRESIDENT, LNL
(TITLE)
<PAGE>
(b) As required by the Securities Act of 1933, this Amendment to the
Registration Statement has been signed for the Depositor by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- -------------------------------------- --------------------
<C> <S> <C>
*
------------------------------------
Lawrence T. Rowland Executive Vice President and Director December 17, 1999
** Vice President and Controller, December 17, 1999
------------------------------------ (Principal Accounting Officer)
Keith J. Ryan
**
------------------------------------ Senior Vice President, December 17, 1999
Todd R. Stephenson Chief Financial Officer
and Assistant Treasurer (Principal
Financial Officer)
*
------------------------------------
H. Thomas McMeekin Director December 17, 1999
*
------------------------------------
Richard C. Vaughan Director December 17, 1999
/s/ JON A. BOSCIA
------------------------------------
Jon A. Boscia President and Director December 17, 1999
(Principal Executive Officer)
*By: /s/ STEVEN M. KLUEVER Pursuant to a Power of Attorney December 17, 1999
------------------------------------ filed with amendment No. 3 to
Steven M. Kluever the Registration Statement
**By: /s/ STEVEN M. KLUEVER Pursuant to a Power of Attorney December 17, 1999
------------------------------------ filed with amendment No. 4 to
Steven M. Kluever the Registration Statement
</TABLE>
<PAGE>
Amendment to Schedule A
To the Selling Group Agreement
Between
The Company and The Broker
Effective November 22, 1999
The following is a list of Contracts that Broker has been granted authority
by the Company to sell:
1. Lincoln National Life Insurance Company
Multi-Fund-Registered Trademark- Variable Annuity Contracts
(Lincoln National Variable Annuity Account C)
2. Lincoln National Life Insurance Company
Variable Universal Life III Contracts
(Lincoln Life Flexible Premium Variable Life Account G)
3. Lincoln National Life Insurance Company
Multi-Fund-Registered Trademark- Variable Life
(Lincoln Life Flexible Premium Variable Life Account K)
4. Lincoln National Life Insurance Company
VUL I
(Lincoln Life Flexible Premium Variable Life Account M)
5. Lincoln National Life Insurance Company
Delaware-Lincoln ChoicePlus
Delaware-Lincoln ChoicePlus XL
(Lincoln Life Variable Annuity Account N)
6. Lincoln National Life Insurance Company
Group Multi-Fund-Registered Trademark-
(Lincoln Life Variable Annuity Account Q)
7. Lincoln National Life Insurance Company
SVUL
(Lincoln Life Flexible Premium Variable Life Account R)
8. Lincoln National Life Insurance Company
eAnnuity-TM- Variable Annuity Contracts
(Lincoln National Variable Annuity Account C)
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule A to be executed in its name and behalf by its duly authorized officer
specified below.
THE LINCOLN NATIONAL LIFE LINCOLN FINANCIAL INSURANCE
COMPANY [COMPANY] ADVISORS, INC. [BROKER]
By: /s/ Kelly D. Clevenger By: /s/ Richard C. Boyles
-------------------------------- ----------------------------------
Kelly D. Clevenger Richard C. Boyles
Vice President 2nd Vice President &
Controller
<PAGE>
FORM OF
AMENDMENT TO
SCHEDULE 1.d
Separate Account Subaccounts
Available under the Contracts
Subject to the Wholesaling Agreement
Effective February 22, 2000
<TABLE>
<CAPTION>
Name of Separate Account Subaccounts
- ------------------------ -----------
<S> <C>
Lincoln Life Variable Annuity Account N AIM V.I. Capital Appreciation
AIM V.I. Growth Subaccount
AIM V.I. Value Subaccount
AIM V.I. International Equity Subaccount
Alliance Premier Growth Subaccount
Alliance Growth and Income Subaccount
Alliance Growth Subaccount
Alliance Technology Subaccount
AVIS Global Small Capitalization Subaccount
AVIS Growth Subaccount
AVIS International Subaccount
AVIS Growth-Income Subaccount
BT Insurance Trust Equity 500 index Subaccount
Delaware Group Aggressive Growth
Delaware Group Growth & Income Subaccount
Delaware Group Devon Subaccount
Delaware Group Social Awareness Subaccount
Delaware Group REIT Subaccount
Delaware Group Small Cap Value Subaccount
Delaware Group Trend Subaccount
Delaware Group International Equity Subaccount
Delaware Group Emerging Markets Subaccount
Delaware Group Delchester Subaccount
Dreyfus Variable Fund Small Cap Subaccount
Fidelity VIP Equity-Income Subaccount
Fidelity VIP Growth Subaccount
Fidelity VIP Overseas Subaccount
Fidelity VIP III Growth Opportunities Subaccount
Kemper Variable Series Govt. Securities Subaccount
Kemper Variable Series Small Cap Growth Subaccount
Liberty Variable Trust Colonial U.S. Growth & Income
Subaccount
Liberty Variable Trust Newport Tiger Subaccount
Lincoln National Bond Subaccount
Lincoln National Money Market Subaccount
MFS Variable Trust Total Return Subaccount
MFS Variable Trust Utilities Subaccount
MFS Variable Trust Emerging Growth Subaccount
MFS Variable Trust Research Subaccount
OCC Trust Global Equity Subaccount
OCC Trust Managed Subaccount
Templeton Franklin Small Cap Securities Subaccount
Templeton Mutual Shares Securities Subaccount
Templeton International Subaccount
Templeton Global Growth Subaccount
</TABLE>
<PAGE>
AMENDMENT TO
SCHEDULE 1.g
Contracts Subject to Wholesaling Agreement
Effective November 29, 1999
<TABLE>
<CAPTION>
SEC (`33 Act)
Marketing Policy Registration Name of
Name of Contract Form No. No. Separate Account
- ---------------- -------- --- ----------------
<S> <C> <C> <C>
Delaware-Lincoln Choice Plus AN425-LL* 333-40937 Lincoln Life Variable
Annuity Account N
Delaware-Lincoln Choice Plus XL AN425-LL* 333-62819 Lincoln Life Variable
Annuity Account N
</TABLE>
*There are multiple versions by state.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1.d and 1.g to be executed in its name and behalf by its duly
authorized officer on the date specified below.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Date:
------------------------------------ -----------------
Name: G. Michael Antrobus
Title: Second Vice President
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.
(General Partner)
By: Date:
------------------------------------ -----------------
Name: Wayne A. Stork
Title: Chairman, President and
Chief Executive Officer
<PAGE>
FORM OF
AMENDMENT TO
SCHEDULE 9.a
COMPENSATION SCHEDULE
EFFECTIVE NOVEMBER 29, 1999
Compensation Payable by Lincoln to DELAWARE for Wholesaling Activity
- --------------------------------------------------------------------
Both ChoicePlus and ChoicePlus XL pay the same wholesaling allowances, which
vary by year of deposit. All wholesaling allowances are paid as a percent of new
deposits; no trail of any kind is paid.
<TABLE>
<CAPTION>
Year of Deposit Allowance*
- --------------- ----------
(Calendar Year) (Percent of New Deposit)
<S> <C>
1998 0.75%
1999 2.08%
2000 1.41%
2001 1.00%
2002 0.75%
</TABLE>
Compensation will be paid to DELAWARE according to then current Lincoln
practice, but no less frequently than weekly.
On all business produced through the LFA distribution system, the allowance
shown in the table above will be reduced by the estimated cost of the bonus
program for LFA producers. The amount will be determined annually prior to the
beginning of the calendar year.
* To the extent that the full gross dealer compensation available under
compensation options 1, 2, or 3 as shown below is not paid to a broker/dealer,
the difference between what is paid and the amount available under options 1, 2,
or 3 will be paid to DELAWARE. This is in addition to the percentage shown in
the table above.
To the extent more than the full gross dealer compensation available under
compensation options 1, 2, or 3 as shown below is paid to a broker/dealer, the
excess over the amount available under options 1, 2, or 3 will be paid to
LINCOLN. This will be a deduction from the percentage shown in the table above.
<TABLE>
<CAPTION>
Option Age 80 or Less Ages 81-85 Ages 86-90
------ -------------- ---------- ----------
<S> <C> <C> <C>
1 6.50% 4.50% 3.00%
2 4.00% 2.50% 1.50%
3 4.75% 3.25% 2.25%
</TABLE>
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 9.a to be executed in its name and behalf by its duly authorized
officer on the date specified below.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Date:
------------------------------------ -----------------
Name: G. Michael Antrobus
Title: Second Vice President
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.
(General Partner)
By: Date:
------------------------------------ -----------------
Name: Wayne A. Stork
Title: Chairman, President and
Chief Executive Officer
<PAGE>
AMENDMENT NO. 3
PARTICIPATION AGREEMENT
The Participation Agreement (the "Agreement"), dated June 16, 1998, by and
among AIM Variable Insurance Funds, Inc., a Maryland corporation, A I M
Distributors, Inc., a Delaware Corporation and The Lincoln National Life
Insurance Company, an Indiana life insurance company, is hereby amended as
follows:
Schedule A of the Agreement is hereby deleted in its entirety and replaced
with the following:
SCHEDULE A
<TABLE>
<CAPTION>
FUNDS AVAILABLE UNDER SEPARATE ACCOUNTS POLICIES/CONTRACTS FUNDED BY THE
THE POLICIES UTILIZING SOME OR SEPARATE ACCOUNTS
ALL OF THE FUNDS
<S> <C> <C>
AIM V.I. Capital Appreciation Fund Lincoln Life Variable Annuity - The Lincoln National Life Insurance Company:
AIM V.I. Diversified Income Fund Account N Flexible Premium Variable Annuity Contracts
AIM V.I. Growth Fund AN425LL
AIM V.I. International Equity Fund Lincoln Life Flexible Premium and state variations thereof
AIM V.I. Value Fund Variable Life Account M
- The Lincoln National Life Insurance Company:
Lincoln Life Flexible Premium Flexible Premium Variable Life Insurance
Variable Life Account R Policy LN605LULN615LULN617LULN680
and state variations thereof
- The Lincoln National Life Insurance Company:
Flexible Premium Variable Life Insurance
Policy On the Lives of Two Insureds LN650LL
and state variations thereof
</TABLE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule A to be executed in its name and behalf of its duly authorized officer
on the date specified below. All other terms and provisions of the Agreement not
amended herein shall remain in full force and effect.
Effective Date: 10-14-99
AIM VARIABLE INSURANCE FUNDS, INC.
Attest: By:
Name: Nancy L.Martin Name: Robert H. Graham
Title: Assistant Secretary Title: President
(SEAL)
SAAGR\PAA51AV1.doc
100699(1)hg 1 of 2
<PAGE>
A I M DISTRIBUTORS, INC.
Attest: By:
Name: Nancy L. Martin Name: Michael J. Cemo
Title: Assistant Secretary Title: President
(SEAL)
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Attest: By:
Name: Steven M. Kluever Name: Kelly D. Clevenger
Title: Assistant Vice President Title: Vice President
(SEAL)
SAAGR\PAA51AV1, doc
100699(1)hg 2 of 2
<PAGE>
AMENDMENT TO SCHEDULE 2
Variable Annuity Contracts and
Variable Life Insurance Policies
Supported by Separate Accounts
Listed on Schedule 1
As of October 15, 1999
Multi Fund-Registered Trademark- Individual Variable Annuity Contracts
(Registered and non-registered)
Multi Fund-Registered Trademark- Variable Life Insurance Contracts
Group Multi Fund-Registered Trademark- Variable Annuity Contracts
Delaware-Lincoln ChoicePlus Variable Annuity Contracts
VUL I Variable Universal Life Insurance Contracts
Lincoln VUL Variable Universal Life Insurance Contracts
eAnnuity-TM- Variable Annuity Contracts
SVUL I Variable Universal Life Insurance Contracts
Lincoln SVUL Variable Universal Life Insurance Contracts
Lincoln CVUL Variable Universal Life Insurance Contracts
Lincoln VULDB Variable Universal Life Insurance Contracts
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.
DELAWARE GROUP PREMIUM FUND, INC. (Fund)
Date: By:
----------------- --------------------
LINCOLN NATIONAL LIFE INSURANCE COMPANY
Date: By:
----------------- --------------------
Steven M. Kluever
Second Vice President
DELAWARE DISTRIBUTORS, LP (Distributor), by
DELAWARE DISTRIBUTORS, INC., General Partner
Date: By:
----------------- --------------------
<PAGE>
AMENDMENT TO SCHEDULE 1
Separate Accounts of Lincoln Life Insurance Company
Investing in the Fund
As of May 1, 1999
Lincoln National Variable Annuity Account C
Lincoln Life Flexible Premium Variable Life Account K
Lincoln Life Flexible Premium Variable Life Account M
Lincoln Life Variable Annuity Account N
Lincoln Life Flexible Premium Variable Life Account R
Lincoln Life Flexible Premium Variable Life Account S
Lincoln National Life Insurance Company Separate Account 53
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 1 to be executed in its name and behalf by its duly authorized officer
on the date specified below.
DELAWARE GROUP PREMIUM FUND, INC (Fund)
Date: May 26, 1999 By:
---------------- -----------------------------------
Jeffrey L. Nick
Chairman/President/Chief Executive Officer
LINCOLN NATIONAL LIFE INSURANCE COMPANY
Date: June 4, 1999 By:
---------------- -----------------------------------
Kelly D. Clevenger
Vice President
DELAWARE DISTRIBUTORS, LP (Distributor), by
DELAWARE DISTRIBUTORS, INC., General Partner
Date: May 26, 1999 By:
---------------- -----------------------------------
Bruce D. Barton
President and Chief Executive Officer
<PAGE>
AMENDMENT TO SCHEDULE 2
Variable Annuity Contracts and
Variable Life Insurance Policies
Support by Separate Accounts
Listed on Schedule 1
As of May 1, 1999
Multi-Fund-Registered Trademark- Individual Variable Annuity Contracts
(Registered and Non-Registered)
Multi-Fund-Registered Trademark- Variable Life Insurance Contracts
Group Multi-Fund-Registered Trademark- Variable Annuity Contracts
Delaware-Lincoln Accru ChoicePlusVariable Annuity Contracts
VUL I Variable Universal Life Insurance Contracts
Lincoln VUL Variable Universal Life Insurance Contracts
e-Annuity-TM- Variable Annuity Contracts
SVUL I Variable Universal Life Insurance Contracts
Lincoln SVUL Variable Universal Life Insurance Contracts
CVUL Variable Universal Life Insurance Contracts
<PAGE>
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this 15th day of October, 1999 among
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY ("Lincoln National"), a life
insurance company organized under the laws of the State of Indiana, AMERICAN
VARIABLE INSURANCE SERIES ("Series"), an open-end management investment company
organized under the laws of the Commonwealth of Massachusetts, AMERICAN FUNDS
DISTRIBUTORS, INC. ("AFD"), a corporation organized under the laws of the State
of California, and having a business address of 333 South Hope Street, Los
Angeles, California 9007 1, and CAPITAL RESEARCH AND MANAGEMENT COMPANY
("CRMC"), a corporation organized under the laws of the State of Delaware, and
having a business address of 333 South Hope Street, Los Angeles, California
90071.
WITNESSETH:
WHEREAS, Lincoln National proposes to issue to the public, now and in
the future, certain multi-manager variable annuity contracts and variable life
insurance policies ("Contracts") as set forth in Appendix A;
WHEREAS, Lincoln National has established one or more separate
accounts ("Accounts"), as set forth in Appendix B, for the purposes of issuing
the Contracts and has or will register the Account with the United States
Securities and Exchange Commission ("the SEC") as an unit investment trust under
the Investment Company Act of 1940 ("the 1940 Act") unless exempt therefrom;
WHEREAS, the Series has received a "Mixed and Shared Funding Order"
from the SEC granting relief from the certain provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit shares of the Series to be
sold to variable annuity and life insurance separate accounts of unaffiliated
insurance companies;
WHEREAS, the Series is divided into various funds ("Funds"), some of
which are set forth in Appendix C, each Fund being subject to certain
fundamental investment policies some of which may not be changed without a
majority vote of the shareholders of such Fund;
WHEREAS, certain Funds will serve as the underlying investments for
the Contracts as set forth in Appendix C;
WHEREAS, AFD. a registered broker-dealer. will provide certain
services to Lincoln National with regard to the Contracts; and
WHEREAS, CRMC is the investment adviser for the Series.
NOW THEREFORE, in consideration of the foregoing and of mutual
covenants and conditions set forth herein and for other good and valuable
consideration, Lincoln National, the Accounts, the Series, AFD and CRMC hereby
agree as follows:
1
<PAGE>
1. The Series and CRMC each represents and warrants to Lincoln
National that: (i) a registration statement under the Securities Act of 1933
("1933 Act") and under the 1940 Act with respect to the Series has been filed
with the SEC in the form previously delivered to Lincoln National, and copies of
any and all amendments thereto will be forwarded to Lincoln National at the time
that they are filed with the SEC; (ii) the Series is, and shall be at all times
while this Agreement is in force, lawfully organized, validly existing, and
properly qualified as an open-end management investment company; and (iii) the
Series registration statement and any further amendments or supplements thereto
will, when they become effective, conform in all material respects to the
requirements of the 1933 Act and the 1940 Act, and the rules and regulations of
the SEC thereunder, and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statement therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Series by Lincoln National expressly for use therein.
2. The Series will furnish to Lincoln National such information with
respect to the Series in such form and signed by such of its officers as Lincoln
National may reasonably request, and will warrant that the statements therein
contained when so signed will be true and correct. The Series will advise
Lincoln National immediately of: (a) any request by the SEC (i) for amendment of
the registration statement relating to the Series or (ii) for additional
information; (b) the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement of the Series or the initiation of
any proceeding for that purpose; (c) the institution of any proceeding,
investigation or hearing involving the offer or sale of the Contracts or the
Series of which it becomes aware; or (d) the happening of any material event, if
known, which makes untrue any statement made in the registration statement of
the Series or which requires the making of a change therein in order to make any
statement made therein not misleading.
3. The Series will use best efforts to register for sale under the
1933 Act and, if required, under state securities laws, such additional shares
of the Series as may reasonably be necessary for use as the funding vehicle for
the Contracts.
4. The Series agrees to make Class I and Class 2 shares of all of its
Funds available to the Contracts. To the extent Lincoln National uses Class 2
shares, it will be entitled to a fee from the Series of .25% per annum of Class
2 assets attributable to the Contracts to offset Contract marketing expenses for
as long as the Series' Rule 12b I plan remains in effect. Fund shares to be made
available to Accounts for the Contracts shall be sold by the Series and
purchased by Lincoln National for a given Account at the net asset value
(without the imposition of a sales load) next computed after receipt of each
order by the Series or its designee, as established in accordance with the
provisions of the then current prospectus of the Series. For purposes of this
Paragraph 4, Lincoln National shall be a designee of the Series for receipt of
such orders from each Account, and receipt by such designee by 4:00 p.m. Eastern
time shall constitute receipt by the Series only if the net purchase or
redemption orders are transmitted to the Series by Lincoln National by 10:00
a.m. Eastern time on the day following Lincoln National's receipt of that
information. "Business Day" shall mean any day on which the New
2
<PAGE>
York Stock Exchange ("NYSE") is open for trading and on which the Series
calculates its net asset value pursuant to the rules of the SEC. The Series will
make its shares available indefinitely for purchase at the applicable net asset
value per share on those days on which the Series calculates its net asset value
pursuant to the rules of the SEC, and the Series shall use its best efforts to
calculate such net asset value on each day on which the NYSE is open for
trading. The Series shall make the net asset value per share for each of the
Funds available to Lincoln National (using a mutually agreed upon format) on a
daily basis as soon as reasonably practical after the Series calculates its net
asset value per share, and the Series shall use its best efforts to make such
net asset value per share available by 6:00 p.m. Eastern time. The Series, and
its investment adviser, CRMC, are responsible for maintaining net asset values
for the Funds in accordance with the requirements of the 1940 Act and its
current prospectus. Shares of particular Funds shall be ordered in such
quantities and at such times as determined by Lincoln National to be necessary
to meet the requirements of the Contracts. Payment for shares purchased shall be
made in federal funds transmitted by wire by 2:00 p.m. Eastern time as long as
the banking system is open for business. If the banking, system is closed,
payment will be transmitted the next day that the banking system is open for
business. If payment is received by the Series after 2:00 p.m., Eastern time on
such Business Day, Lincoln National shall, upon the Series' request, promptly
reimburse the Series for any charges, costs, fees, interest or other expenses
incurred in connection with any advances, borrowing, or overdrafts. The Series
will confirm receipt of each trade (using a mutually agreed upon format) by 1:00
p.m. Eastern time on the Business Day the trade is placed with the Series.
The Series reserves the right to temporarily suspend sales if the
Board of Trustees of the Series deems it appropriate and in the best interests
of the Series or in response to the order of an appropriate regulatory
authority.
5. The Contracts funded through the Accounts will provide for the
allocation of net amounts among certain subaccounts for investment in such
shares of the Funds as may be offered from time to time in the Contracts. The
selection of the particular subaccount is to be made by the Contract owner and
such selection may be changed in accordance with the terms of the Contracts.
6. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Fund will be recorded by the Series as instructed by Lincoln National in an
appropriate title for the corresponding Account or subaccount.
7. The Series shall furnish notice promptly to Lincoln National (using
a mutually agreed upon format) of any dividend or distribution payable on any
shares underlying subaccounts. Lincoln National hereby elects to receive all
such dividends and distributions as are payable on shares of a Fund recorded in
the title for the corresponding subaccount in additional shares of that Fund.
The Series shall notify Lincoln National of the number of shares so issued.
Lincoln National reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash.
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<PAGE>
8. The Series shall redeem its shares in accordance with the terms of
its then current prospectus. For purposes of this Paragraph 8, Lincoln National
shall be a designee of the Series for receipt of requests for redemption from
each Account, and receipt by such designee by 4:00 p.m. Eastern time shall
constitute receipt by the Series; provided that the Series receives notice of
such request for redemption by 10:00 a.m. Eastern time on the following Business
Day. Lincoln National shall purchase and redeem the shares of Funds offered by
the then current prospectus of the Series in accordance with the provisions of
such prospectus. The Series agrees to redeem, upon Lincoln National's request,
any full or fractional shares of the designated portfolio held by Lincoln
National. Payment shall be made in federal funds transmitted by wire by 2:00
p.m. Eastern time as long as the banking system is open for business. If the
banking system is closed, payment will be transmitted the next day that the
banking system is open for business. If payment is received by Lincoln Life
after 2:00 p.m., Eastern time on such Business Day, the Series shall, upon
Lincoln National's request, promptly reimburse Lincoln National for any charges,
costs, fees, interest or other expenses incurred in connection with any
advances, borrowing, or overdrafts. The Series will confirm receipt of each
trade (using a mutually agreed upon format) by 1:00 p.m. Eastern time on the
Business Day the trade is placed with the Series.
9. The Series shall pay all expenses incidental to its performance
under this Agreement. The Series shall see to it that all of its shares are
registered and authorized for issue in accordance with applicable federal and
state laws prior to their purchase for the Accounts. The Series shall bear the
expenses for the cost of registration of its shares, preparation of prospectuses
to be sent to existing Contract owners, proxy materials and reports, the
printing and distribution of such items to each Contract owner who has allocated
net amounts to any Subaccount, the preparation of all statements and notices
required from it by any federal or state law, and taxes on the issue or transfer
of the Series' shares subject to this Agreement. The Series will provide Lincoln
National, at least once a year, with enough copies of its Statement of
Additional Information to be able to distribute one to each Contract owner or
prospective Contract owner who requests such Statement of Additional
Information.
10. Lincoln National shall bear the expenses for the cost of printing
and distribution of Series prospectuses to be sent to prospective Contract
owners. The Series shall provide, at its expense, such documentation (in camera
ready or other mutually agreeable form) and other assistance as is reasonably
necessary in order for Lincoln National once each year (or more frequently if
the prospectus for the Series is amended) to have the prospectus or prospectuses
for the Contracts and the Series prospectus printed together in one or more
documents. With respect to any Series prospectus that is printed in combination
with any one or more Contract prospectus (the "Prospectus Booklet"), the Series
shall bear the costs of printing and mailing the Prospectus Booklet to existing
Contract owners based on the ratio of the number of pages of the Series
prospectuses included in the Prospectus Booklet to the number of pages in the
Prospectus Booklet as a whole. With respect to any Series report that is printed
in combination with any one or more reports of investment options for the
Contracts (the "Report Booklet"), the Series shall bear the costs of printing
and mailing the Report Booklet to existing Contract owners based on the ratio of
the number of pages of the Series report included in the Report Booklet to the
number of pages in the Report Booklet as a whole.
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<PAGE>
11. Lincoln National represents and warrants to the Series that any
information furnished in writing by Lincoln National to the Series for use in
the registration statement of the Series will not result in the registration
statement's failing to conform in all material respects to the requirements of
the 1933 Act and the 1940 Act and the rules and regulations thereunder or
containing any untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
12. Lincoln National and its affiliates shall make no representations
concerning the Series' shares except those contained in the then current
prospectus of the Series, in such printed information subsequently issued on
behalf of the Series or other funds managed by CRMC as supplemental to the
appropriate fund prospectus, or in materials approved by AFD.
13. Shares of the Series may be offered to separate accounts of
various insurance companies in addition to Lincoln National. The Series shall
comply with the provisions of Section 817 of the Internal Revenue Code of 1986
as amended and the regulations thereunder ("Section 817").
14. The parties to this Agreement recognize that due to differences in
tax treatment or other considerations, the interests of various Contract owners
participating in one or more Funds might, at some time, be in conflict. Each
party shall report to the other party any potential or existing conflict of
which it becomes aware. The Board of Trustees of the Series shall promptly
notify Lincoln National of the existence of irreconcilable material conflict and
its implications. If such a conflict exists for which Lincoln National is
responsible as determined by the Board of Trustees, Lincoln National will, at
its own expense, take whatever action it deems necessary to remedy such
conflict; in any case, Contract owners will not be required to bear such
expenses.
15. Lincoln National agrees to indemnify and hold the Series harmless
against, any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and reasonable other expenses) to which the Series
may be subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements arise as a result of Lincoln National: (a) making untrue
statements of material facts or omitting material fact in the registration
statement, prospectus or sales literature of the Contracts and/or Accounts; (b)
making untrue statements of material facts that the Series includes in its
materials, provided the Series relies on information supplied by Lincoln
National, (c) engaging in unlawful conduct with respect to the sale of the
Contracts or Fund shares; and (d) materially breaching this Agreement or a
representation or warranty.
16. The Series and CRMC each agrees to indemnify and hold Lincoln
National harmless against, any and all losses, claims, damages, liabilities or
litigation (Including reasonable legal and reasonable other expenses) to which
Lincoln National may be subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof) or settlements arise as a result of the Series', AFD's or
CRMC's (a) making untrue statements of material facts or omitting material facts
in the registration statement, prospectus or sales literature of the Series; (b)
making untrue statements of material facts that the Series includes in its
materials, provided Lincoln National relies on information supplied by or on
behalf of the Series; (c) engaging in unlawful conduct
5
<PAGE>
with respect to the sale of the Contracts or Fund shares; (d) materially
breaching this Agreement or a representation or warranty; and (e) failing to
comply with the requirements of Section 817 and regulations thereunder.
17. Lincoln National shall be responsible for assuring that the
Accounts provide passthrough voting privileges to Contract owners so long as and
to the extent that the Securities and Exchange Commission continues to interpret
the 1940 Act to require pass through voting privileges for the Contracts.
18. AFD will be responsible for conducting training activities for
Lincoln National's wholesalers regarding CRMC's approach to investment
management in connection with Lincoln National's wholesaler support of the
Series. Training will include initial sessions as to CRMC's investment approach
and strategies, background in CRMC's investment results, information on CRMC's
portfolio counselors managing the Series and general information on CRMC. AFD
will provide such periodic additional training and refresher training as may be
requested by Lincoln National. AFD will provide speakers and panelists at
national sales meetings conducted by Lincoln National regarding the Series.
In consideration of the activities performed by AFD for Lincoln
National, Lincoln National will pay AFD .25 % on each new Contract purchase
payment.
19. The parties understand that there is no intention to create a
joint venture in the subject matter of this Agreement. Accordingly, the right to
terminate this Agreement and to engage in any activity not inconsistent with
this Agreement is absolute. This Agreement will terminate:
(i) By any party at any time upon six months' written notice to
the other parties; or
(ii) at the option of Lincoln National or the Series, upon ten
calendar days' prior written notice to the other parties, if
a final non-appealable administrative or judicial decision
is entered against any other party which has a material
impact on the Contracts;
(iii) at the option of Lincoln National, upon ten calendar days'
prior written notice to the other parties, if shares of the
Series are not reasonably available;
(iv) at the option of Lincoln National, immediately upon written
notice to the other parties, if the Series or CRMC falls to
meet the requirements for either diversification under
Section 817 or registered investment company status or if
the Board of the Series terminates the Class 2 Plan of
Distribution pursuant to Rule 12b-I under the 1940 Act; or
(v) immediately in the event the Series' shares are not
registered, issued or sold in accordance with applicable
state and/or federal law or such law
6
<PAGE>
precludes the use of such shares as an underlying investment
for the Contracts issued or to be issued by Lincoln
National; in such event prompt notice shall be given by
Lincoln National or the Series to the other parties.
The effective date for termination pursuant to any notice required
under this Paragraph shall be calculated beginning with the date of receipt of
such notice to all other parties.
20. All notices, consents, waivers, and other communications under
this Agreement must be in writing, and will be deemed to have been duly received
(a) when delivered by hand (with written confirmation of receipt), (b) when sent
by facsimile (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) the day after it is
sent by a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties):
IF TO LINCOLN NATIONAL:
The Lincoln National Insurance Company
1300 South Clinton Street
Fort Wayne, Indiana 46801
Attention: Steven M. Kluever, Second Vice President
Facsimile No.: 219-455-1773
IF TO SERIES:
American Variable Insurance Series
333 S. Hope Street, 55 th Floor
Los Angeles, California 90071
Attention: Michael J. Downer, Senior Vice President
Facsimile No.: 213-486-9041
IF TO CRMC:
Capital Research and Management Company
333 S. Hope Street, 55th Floor
Los Angeles, CA 90071
Attention: Michael J. Downer, Senior Vice President and Legal Counsel
Facsimile No.: 213-486-9041
IF TO AFD:
American Funds Distributors, Inc.
333 S. Hope Street, 34th Floor
Los Angeles, California 90071
Attention: Michael J. Downer, Secretary and Legal Counsel
Facsimile No.: 213-486-9041
21. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
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<PAGE>
22. If this Agreement terminates, the Series, at Lincoln National's
option, will continue to make additional shares of the Series available for all
Contracts existing as of the effective date of termination (under the same terms
and conditions as were in effect prior to termination of this Agreement with
respect to existing Contract owners), unless the Series liquidates or applicable
laws prohibit further sales. Lincoln National agrees not to redeem shares unless
legitimately required to do so according to a Contract owner's request or under
an order from the SEC.
23. The obligations of the Series under this Agreement are not binding
upon any of the Trustees, officers, employees, or shareholders (except CRMC if
it is a shareholder) of the Series individually, but bind only the Series'
assets. When seeking satisfaction for any liability of the Series in respect of
this Agreement, Lincoln National and the Account agree not to seek recourse
against said Trustees, officers, employees, or shareholders, or any of them, or
any of their personal assets for such satisfaction. Notwithstanding the
foregoing, if Lincoln National seeks satisfaction for the Series for any losses,
claims, damages, liabilities or litigation in respect of this Agreement, Lincoln
National and the Accounts shall also have recourse against AFD and CRMC< which
shall be jointly and severally liable for all amounts due Lincoln National and
not recovered from the Series.
24. This Agreement shall be construed in accordance with the laws of
the State of California.
25. This Agreement and the parties' rights, duties, and obligations
under this Agreement are not transferable or assignable by any of them without
the express, prior written consent of the other party hereto. Any attempt by a
party to transfer or assign this Agreement or any of its rights, duties or
obligations under this Agreement without such consent is void.
26. The following Paragraphs shall survive any termination of this
Agreement: 4, 7, 8, 15, 16, 19, 20-25.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested as of the date first above written.
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (ON BEHALF OF THE
ACCOUNTS AND ITSELF)
Attest: By:
Its:
8
<PAGE>
AMERICAN VARIABLE INSURANCE
SERIES
Attest:
By:
Its: Senior Vice President
AMERICAN FUNDS DISTRIBUTORS, INC.
Attest:
By:
Its: President
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
Attest:
By:
Its: Executive Vice President
9
<PAGE>
Appendix A
Lincoln VUL
Lincoln VULdb
Lincoln CVUL D
L ChoicePlus variable annuity
MultiFund individual variable annuity
MultiFund group variable annuity Lincoln SVUL
Appendix B
Lincoln Life Flexible Premium Variable Life Account M
Lincoln Life Flexible Premium Variable Life Account S
Lincoln Life Variable Annuity Account N
Lincoln National Variable Annuity Account C
Lincoln Life Variable Annuity Account Q
Lincoln Life Flexible Premium Variable Life Account R
Appendix C
American Variable Insurance Series
Global Growth Fund Class 2
Global Small Capitalization Fund Class 2
International Fund Class 2
Growth Fund Class 2
Growth Income Fund Class 2
High Yield Bond Fund Class 2
10
<PAGE>
CLASS B MASTER
PARTICIPATION AGREEMENT
AMONG
[INSURANCE COMPANY]
[CONTRACTS DISTRIBUTOR,]
ALLIANCE CAPITAL MANAGEMENT L.P.
AND
ALLIANCE FUND DISTRIBUTORS, INC.
DATED AS OF
[ ]
<PAGE>
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the _ day of ________ 199__
("Agreement"), by and among [Insurance Company], a _________ - life insurance
company ("Insurer") (on behalf of itself and its "Separate Account," defined
below); [Contracts Distributor], a corporation ("Contracts Distributor"), the
principal underwriter with respect to the Contracts referred to below; Alliance
Capital Management L.P., a Delaware limited partnership ("Adviser"), the
investment adviser of the Fund referred to below; and Alliance Fund
Distributors, Inc., a Delaware corporation ("Distributor"), the Fund's principal
underwriter (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and Alliance Variable Products Series
Fund, Inc. (the "Fund") desire that Class B shares of the Fund's [Name
Portfolios] (the "Portfolios"; reference herein to the "Fund" includes reference
to each Portfolio to the extent the context requires) be made available by
Distributor to serve as underlying investment media for [those combination fixed
and variable annuity contracts of Insurer that are the subject of Insurer's Form
N-4 registration statement filed with the Securities and Exchange Commission
(the "SEC"), File No. ____________the "Contracts"),] to be offered through
Contracts Distributor and other registered broker-dealer firms as agreed to by
Insurer and Contracts Distributor; and WHEREAS the Contracts provide for the
allocation of net amounts received by Insurer to separate series (the
"Divisions"; reference herein to the "Separate Account" includes reference to
each Division to the extent the context requires) of the Separate Account for
investment in Class B
1
<PAGE>
shares of corresponding Portfolios of the Fund that are made available through
the Separate Account to act as underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Fund and Distributor will make Class B shares of the
Portfolios available to Insurer for this purpose at net asset value and with no
sales charges, all subject to the following provisions:
SECTION 1. ADDITIONAL PORTFOLIOS
The Fund has and may, from time to time, add additional Portfolios, which
will become subject to this Agreement, if, upon the written consent of each of
the Parties hereto, they are made available as investment media for the
Contracts.
SECTION 2. PROCESSING TRANSACTIONS
2.1 TIMELY PRICING AND ORDERS.
The Adviser or its designated agent will provide closing net asset value,
dividend and capital gain information for each Portfolio to Insurer at the close
of trading on each day (a "Business Day") on which (a) the New York Stock
Exchange is open for regular trading, (b) the Fund calculates the Portfolio's
net asset value and (c) Insurer is open for business. The Fund or its designated
agent will use its best efforts to provide this information by 6:00 p.m.,
Eastern time. Insurer will use these data to calculate unit values, which in
turn will be used to process transactions that receive that same Business Day's
Separate Account Division's unit values. Such Separate Account processing will
be done the same evening, and corresponding orders with
2
<PAGE>
respect to Fund shares will be placed the morning of the following Business Day.
Insurer will use its best efforts to place such orders with the Fund by 10: 00
a.m., Eastern time.
2.2 TIMELY PAYMENTS.
Insurer will transmit orders for purchases and redemptions of Fund shares
to Distributor, and will wire payment for net purchases to a custodial account
designated by the Fund on the day the order for Fund shares is placed, to the
extent practicable. Payment for net redemptions will be wired by the Fund to an
account designated by Insurer on the same day as the order is placed, to the
extent practicable, and in any event be made within six calendar days after the
date the order is placed in order to enable Insurer to pay redemption proceeds
within the time specified in Section 22(e) of the Investment Company Act of
1940, as amended (the " 1940 Act").
2.3 REDEMPTION IN KIND.
The Fund reserves the right to pay any portion of a redemption in kind of
portfolio securities, if the Fund's board of directors (the "Board of
Directors") determines that it would be detrimental to the best interests of
shareholders to make a redemption wholly in cash.
2.4 APPLICABLE PRICE.
The Parties agree that Portfolio share purchase and redemption orders
resulting from Contract owner purchase payments, surrenders, partial
withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the close
of regular trading on the New York Stock Exchange on the Business Day that
Insurer receives such orders and processes such transactions, which, Insurer
agrees shall occur not earlier than the Business Day prior to Distributor's
receipt of the corresponding orders for purchases and
3
<PAGE>
redemptions of Portfolio shares. For the purposes of this section, Insurer shall
be deemed to be the agent of the Fund for receipt of such orders from holders or
applicants of contracts, and receipt by Insurer shall constitute receipt by the
Fund. All other purchases and redemptions of Portfolio shares by Insurer, will
be effected at the net asset values next computed after receipt by Distributor
of the order therefor, and such orders will be irrevocable. Insurer hereby
elects to reinvest all dividends and capital gains distributions in additional
shares of the corresponding Portfolio at the record-date net asset values until
Insurer otherwise notifies the Fund in writing, it being agreed by the Parties
that the record date and the payment date with respect to any dividend or
distribution will be the same Business Day.
SECTION 3. COSTS AND EXPENSES
3.1 GENERAL.
Except as otherwise specifically provided herein, each Party will bear
all expenses incident to its performance under this Agreement.
3.2 REGISTRATION.
The Fund will bear the cost of its registering as a management investment
company under the 1940 Act and registering its shares under the Securities Act
of 1933, as amended (the " 1933 Act"), and keeping such registrations current
and effective; including, without limitation, the preparation of and filing with
the SEC of Forms N-SAR and Rule 24f-2 Notices respecting the Fund and its shares
and payment of all applicable registration or filing fees with respect to any of
the foregoing. Insurer will bear the cost of registering the Separate Account as
a unit investment trust under the 1940 Act and registering units of interest
under the Contracts under the 1933 Act and keeping such registrations
4
<PAGE>
current and effective; including, without limitation, the preparation and filing
with the SEC of Forms N-SAR and Rule 24-2 Notices respecting the Separate
Account and its units of interest and payment of all applicable registration or
filing fees with respect to any of the foregoing.
3.3 OTHER (NON-SALES-RELATED) EXPENSES.
The Fund will bear the costs of preparing, filing with the SEC and
setting for printing the Fund's prospectus, statement of additional information
and any amendments or supplements thereto (collectively, the "Fund Prospectus"),
periodic reports to shareholders, Fund proxy material and other shareholder
communications and any related requests for voting instructions from
Participants (as defined below). Insurer will bear the costs of preparing,
filing with the SEC and setting for printing, the Separate Account's prospectus,
statement of additional information and any amendments or supplements thereto
(collectively, the "Separate Account Prospectus"), any periodic reports to
owners, annuitants or participants under the Contracts (collectively,
"Participants"), and other Participant communications. The Fund and Insurer each
will bear the costs of printing in quantity and delivering to existing
Participants the documents as to which it bears the cost of preparation as set
forth above in this Section 3.3, it being understood that reasonable cost
allocations will be made in cases where any such Fund and Insurer documents are
printed or mailed on a combined or coordinated basis. If REQUESTED by Insurer,
the Fund will provide annual Prospectus text to Insurer on diskette for printing
and binding with the Separate Account Prospectus.
3.4 OTHER SALES-RELATED EXPENSE .
Expenses of distributing the Portfolio's shares and the Contracts will be
paid by Contracts Distributor and other parties, as they shall determine by
separate agreement.
5
<PAGE>
3.5 PARTIES TO COOPERATE .
The Adviser, Insurer, Contracts Distributor, and Distributor each agrees
to cooperate with the others, as applicable, in arranging to print, mail and/or
deliver combined or coordinated prospectuses or other materials of the Fund and
Separate Account.
SECTION 4. LEGAL COMPLIANCE
4.1 TAX LAWS.
(a) The Adviser will use its best efforts to qualify and to maintain
qualification of each Portfolio as a regulated investment company ("RIC") under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Adviser or Distributor will notify Insurer immediately upon having a
reasonable basis for believing that a Portfolio has ceased to so qualify or that
it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the
Contracts will be treated as [annuity] contracts under applicable provisions of
the Code and that it will make every effort to maintain such treatment. Insurer
will notify the Fund and Distributor immediately upon having a reasonable basis
for believing that any of the Contracts have ceased to be so treated or that
they might not be so treated in the future.
(c) The Fund will use its best efforts to comply and to maintain each
Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the
Code, and the Fund, Adviser or Distributor will notify Insurer
6
<PAGE>
immediately upon having a reasonable basis for believing that a Portfolio has
ceased to so comply or that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the
Separate Account is a "segregated asset account" and that interests in the
Separate Account are offered exclusively through the purchase of or transfer
into a "variable contract," within the meaning of such terms under Section
817(h) of the Code and the regulations thereunder. Insurer will make every
effort to continue to meet such definitional requirements, and it will notify
the Fund and Distributor immediately upon having a reasonable basis for
believing that such requirements have ceased to be met or that they might not be
met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with
Subchapter M of the Code and will use its best efforts to manage to be in
compliance with Section 817(h) of the Code and regulations thereunder. The Fund
has adopted and will maintain procedures for ensuring that the Fund is managed
in compliance with Subchapter M and Section 8 17(h) and regulations thereunder.
(f) Should the Distributor or Adviser become aware of a failure of
Fund, or any of its Portfolios, to be in compliance with Subchapter M of the
Code or Section 817(h) of the Code and regulations thereunder, they represent
and agree that they will immediately notify Insurer of such in writing.
4.2 INSURANCE AND CERTAIN OTHER LAWS.
(a) The Adviser will use its best efforts to cause the Fund to comply
with any applicable state insurance laws or regulations, to the extent
specifically requested in writing by Insurer. If it cannot comply, it will so
notify Insurer in writing.
7
<PAGE>
(b) Insurer represents and warrants that (i) it is an insurance
company duly organized, validly existing and in good standing under the laws of
the State of [ ] and has full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains the
Separate Account as a segregated asset account under [State Law], and (iii) the
Contracts comply in all material respects with all other applicable federal and
state laws and regulations.
(c) Insurer and Contracts Distributor represent and warrant that
Contracts Distributor is a business corporation duly organized, validly
existing, and in good standing under the laws of the State of [ ] and has full
corporate power, authority and legal right to execute, deliver, and perform its
duties and comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power, authority and legal
right to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
(e) Distributor represents and warrants that the Fund is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Maryland and has full power, authority, and legal right to execute,
deliver, and perform its duties and comply with its obligations under this
Agreement.
(f) Adviser represents and warrants that it is a limited partnership,
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has full power, authority,
8
<PAGE>
and legal fight to execute, deliver, and perform its duties and comply with its
obligations under this Agreement.
4.3 SECURITIES LAWS.
(a) Insurer represents and warrants that (i) interests in the Separate
Account pursuant to the Contracts will be registered under the 1933 Act to the
extent required by the 1933 Act and the Contracts will be duly authorized for
issuance and sold in compliance with [State] law, (ii) the Separate Account is
and will remain registered under the 1940 Act to the extent required by the 1940
Act, (iii) the Separate Account does and will comply in all material respects
with the requirements of the 1940 Act and the rules thereunder, (iv) the
Separate Account's 1933 Act registration statement relating to the Contracts,
together with any amendments thereto, will, at all times comply in all material
respects with the requirements of the 1933 Act and the rules thereunder, and (v)
the Separate Account Prospectus will at all times comply in all material
respects with the requirements of the 1933 Act and the rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund
shares sold pursuant to this Agreement will be registered under the 1933 Act to
the extent required by the 1933 Act and duly authorized for issuance and sold in
compliance with Maryland law, (ii) the Fund is and will remain registered under
the 1940 Act to the extent required by the 1940 Act, (iii) the Fund will amend
the registration statement for its shares under the 1933 Act and itself under
the 1940 Act from time to time as required in order to effect the continuous
offering of its shares, (iv) the Fund does and will comply in all material
respects with the requirements of the 1940 Act and the rules thereunder, (v) the
Fund's 1933 Act registration statement, together with any amendments thereto,
will at all times comply in all material respects with the requirements of the
1933 Act and rules thereunder, and (vi)
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<PAGE>
the Fund Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) The Fund will register and qualify its shares for sale in
accordance with the laws of any state or other jurisdiction only if and to the
extent reasonably deemed advisable by the Fund, Insurer or any other life
insurance company utilizing the Fund.
(d) Distributor and Contracts Distributor each represents and warrants
that it is registered as a broker-dealer with the SEC under the Securities
Exchange Act of 1934, as amended, and is a member in good standing of the
National Association of Securities Dealers Inc. (the "NASD").
4.4 Notice OF CERTAIN PROCEEDINGS AND OTHER CIRCUMSTANCES.
(a) Distributor or the Fund shall immediately notify Insurer of (i)
the issuance by any court or regulatory body of any stop order, cease and desist
order, or other similar order with respect to the Fund's registration statement
under the 1933 Act or the Fund Prospectus, (ii) any request by the SEC for any
amendment to such registration statement or Fund Prospectus, (iii) the
initiation of any proceedings for that purpose or for any other purpose relating
to the registration or offering of the Fund's shares, or (iv) any other action
or circumstances that may prevent the lawful offer or sale of Fund shares in any
state or jurisdiction, including, without limitation, any circumstances in which
(x) the Fund's shares are not registered and, in all material respects, issued
and sold in accordance with applicable state and federal law or (y) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer. Distributor and the Fund will make
every reasonable effort to prevent the issuance of any such stop order, cease
and desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
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(b) Insurer and Contracts Distributor shall immediately notify the
Fund of (i) the issuance by any court or regulatory body of any stop order,
cease and desist order or similar order with respect to the Separate Account's
registration statement under the 1933 Act relating to the Contracts or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment to
such registration statement or Separate Account Prospectus, (iii) the initiation
of any proceedings for that purpose or for any other purpose relating to the
registration or offering of the Separate Account interests pursuant to the
Contracts, or (iv) any other action or circumstances that may prevent the lawful
offer or sale of said interests in any state or jurisdiction, including, without
limitation, any, circumstances in which said interests are not registered and,
in all material respects, issued and sold in accordance with applicable state
and federal law. Insurer and Contracts Distributor will make every reasonable
effort to prevent the issuance of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain the lifting thereof at
the earliest possible time.
4.5 INSURER TO PROVIDE DOCUMENT
Upon request, Insurer will provide the Fund and the Distributor one
complete copy of SEC registration statements, Separate Account Prospectuses,
reports, any preliminary and final voting instruction solicitation material,
applications for exemptions, requests for no-action letters, and amendments to
any of the above, that relate to the Separate Account or the Contracts,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
4.6 Fund TO PROVIDE DOCUMENTS.
Upon request, the Fund will provide to Insurer one complete copy of SEC
registration statements, Fund Prospectuses, reports, any preliminary and final
proxy material, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to the
11
<PAGE>
Fund or its shares, contemporaneously with the filing of such document with the
SEC or other regulatory authorities.
SECTION 5. MIXED AND SHARED FUNDING
5.1 General.
The Fund has obtained an order exempting it from certain provisions of
the 1940 Act and rules thereunder so that the Fund is available for investment
by certain other entities, including, without limitation, separate accounts
funding variable life insurance policies and separate accounts of insurance
companies unaffiliated with Insurer ("Mixed and Shared Funding Order"). The
Parties recognize that the SEC has imposed terms and conditions for such orders
that are substantially identical to many of the provisions of this Section 5.
5,2 DISINTERESTED DIRECTORS.
The Fund agrees that its Board of Directors shall at all times consist of
directors a majority of whom (the "Disinterested Directors") are not interested
persons of Adviser or Distributor within the meaning of Section 2(a)(19) of the
1940 Act.
5.3 MONITORING FOR MATERIAL IRRECONCILABLE CONFLICTS.
The Fund agrees that its Board of Directors will monitor for the
existence of any material irreconcilable conflict between the interests of the
participants in all separate accounts of life insurance companies utilizing the
Fund, including the Separate Account. Insurer agrees to inform the Board of
Directors of the Fund of the existence of or any potential for any such material
irreconcilable conflict of which it is aware. The concept of a "material
irreconcilable conflict" is not
12
<PAGE>
defined by the 1940 Act or the rules thereunder, but the Parties recognize that
such a conflict may arise for a variety of reasons, including, without
limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private letter ruling,
no-action or interpretative letter, or any similar action by insurance, tax or
securities regulatory authorities;
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract participants or by participants of
different life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to
disregard the voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its
responsibilities by providing the Board of Directors with all information
reasonably necessary for the Board of Directors to consider any issue raised,
including information as to a decision by Insurer to disregard voting
instructions of Participants.
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<PAGE>
5.4 CONFLICT REMEDIES.
(a) It is agreed that if it is determined by a majority of the members
of the Board of Directors or a majority of the Disinterested Directors that a
material irreconcilable conflict exists, Insurer and the other life insurance
companies utilizing the Fund will, at their own expense and to the extent
reasonably practicable (as determined by a majority of the Disinterested
Directors), take whatever steps are necessary to remedy or eliminate the
material irreconcilable conflict, which steps may include, but are not limited
to:
(i) withdrawing the assets allocable to some or all of the separate
accounts from the Fund or any Portfolio and reinvesting such
assets in a different investment medium, including another
Portfolio of the Fund, or submitting the question whether such
segregation should be implemented to a vote of all affected
participants and, as appropriate, segregating the assets of any
particular group (e.g., annuity contract owners or participants,
life insurance contract owners or all contract owners and
participants of one or more life insurance companies utilizing the
Fund) that votes in favor of such segregation, or offering to the
affected contract owners or participants the option of making such
a change; and
(ii) establishing a new registered investment company of the type
defined as a "Management Company" in Section 4(3) of the 1940 Act
or a new separate account that is operated as a Management
Company.
(b) If the material irreconcilable conflict arises because of
Insurer's decision to disregard Participant voting instructions and that
decision represents a minority position or would preclude a
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<PAGE>
majority vote, Insurer may be required, at the Fund's election, to withdraw the
Separate Account's investment in the Fund. No charge or penalty will be imposed
as a result of such withdrawal. Any such withdrawal must take place within six
months after the Fund gives notice to Insurer that this provision is being
implemented, and until such withdrawal Distributor and the Fund shall continue
to accept and implement orders by Insurer for the purchase and redemption of
shares of the Fund.
(c) If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to Insurer conflicts with the
majority of other state regulators, then Insurer will withdraw the Separate
Account's investment in the Fund within six months after the Fund's Board of
Directors informs Insurer that it has determined that such decision has created
a material irreconcilable conflict, and until such withdrawal Distributor and
Fund shall continue to accept and implement orders by Insurer for the purchase
and redemption of shares of the Fund,
(d) Insurer agrees that any remedial action taken by it in resolving
any material irreconcilable conflict will be carried out at its expense and with
a view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors
will determine whether or not any proposed action adequately remedies any
material irreconcilable conflict. In no event, however, will the Fund or
Distributor be required to establish a new funding medium for any Contracts.
Insurer will not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of a
majority of Participants materially adversely affected by the material
irreconcilable conflict.
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<PAGE>
5.5 NOTICE TO INSURER.
The Fund will promptly make known in writing to Insurer the Board of
Directors' determination of the existence of a material irreconcilable conflict,
a description of the facts that give rise to such conflict and the implications
of such conflict.
5.6 INFORMATION REQUESTED BY BOARD OF DIRECTORS.
Insurer and the Fund will at least annually submit to the Board of
Directors of the Fund such reports, materials or data as the Board of Directors
may reasonably request so that the Board of Directors may fully carry out the
obligations imposed upon it by the provisions hereof, and said reports,
materials and data will be submitted at any reasonable time deemed appropriate
by the Board of Directors. All reports received by the Board of Directors of
potential or existing conflicts, and all Board of Directors actions with regard
to determining the existence of a conflict, notifying life insurance companies
utilizing the Fund of a conflict, and determining whether any proposed action
adequately remedies a conflict, will be properly recorded in the minutes of the
Board of Directors or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
5.7 COMPLIANCE WITH SEC RULES.
If, at any time during which the Fund is serving an investment medium for
variable life insurance policies, 1940 Act Rules 6e-3(T) or, if applicable, 6e-2
are amended or Rule 6e-3 is adopted to provide exemptive relief with respect to
mixed and shared funding, the Parties agree that they will comply with the terms
and conditions thereof and that the terms of this Section 5 shall be deemed
modified if and only to the extent required in order also to comply with the
terms and conditions of such exemptive relief that is afforded by any of said
rules that are applicable.
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<PAGE>
SECTION 6. TERMINATION
6.1 EVENTS OF TERMINATION.
Subject to Section 6.4 below, this Agreement will terminate as to a
Portfolio:
(a) at the option of Insurer or Distributor upon at least six months
advance written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance
written notice to the other parties, and (ii) approval by (x) a majority of the
disinterested Directors upon a finding that a continuation of this Contract is
contrary to the best interests of the Fund, or (y) a majority vote of the shares
of the affected Portfolio in the corresponding Division of the Separate Account
(pursuant to the procedures set forth in Section II of this Agreement for voting
Trust shares in accordance with Participant instructions).
(c) at the option of the Fund upon institution of formal proceedings
against Insurer or Contracts Distributor by the NASD, the SEC, any state
insurance regulator or any other regulatory body regarding Insurer's obligations
under this Agreement or related to the sale of the Contracts, the operation of
the Separate Account, or the purchase of the Fund shares, if, in each case, the
Fund reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on the Portfolio to be terminated; or
(d) at the option of Insurer upon institution of formal proceedings
against the Fund, Adviser, or Distributor by the NASD, the SEC, or any state
insurance regulator or any other
17
<PAGE>
regulatory body regarding the Fund's, Adviser's or Distributor's obligations
under this Agreement or related to the operation or management of the Fund or
the purchase of Fund shares, if, in each case, Insurer reasonably determines
that such proceedings, or the facts on which such proceedings would be based,
have a material likelihood of imposing material adverse consequences on Insurer,
Contracts Distributor or the Division corresponding to the Portfolio to be
terminated; or
(e) at the option of any Party in the event that (i) the Portfolio's
shares are not registered and, in all material respects, issued and sold in
accordance with any applicable state and federal law or (ii) such law precludes
the use of such shares as an underlying investment medium of the Contracts
issued or to be issued by Insurer; or
(f) upon termination of the corresponding Division's investment in the
Portfolio pursuant to Section 5 hereof, or
(g) at the option of Insurer if the Portfolio ceases to qualify as a
RIC under Subchapter M of the Code or under successor or similar provisions; or
(h) at the option of Insurer if the Portfolio fails to comply with
Section 817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer if Insurer reasonably believes that any
change in a Fund's investment adviser or investment practices will materially
increase the risks incurred by Insurer.
6.2 FUNDS TO REMAIN AVAILABLE.
Except (i) as necessary to implement Participant-initiated transactions,
(ii) as required by state insurance laws or regulations, (iii) as required
pursuant to Section 5 of this Agreement, or (iv) with
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<PAGE>
respect to any Portfolio as to which this Agreement has terminated, Insurer
shall not (x) redeem Fund shares attributable to the Contracts, or (y) prevent
Participants from allocating payments to or transferring amounts from a
Portfolio that was otherwise available under the Contracts, until, in either
case, 90 calendar days after Insurer shall have notified the Fund or Distributor
of its intention to do so.
6.3 SURVIVAL OF WARRANTIES AND INDEMNIFICATIONS.
All warranties and indemnifications will survive the termination of this
Agreement.
6.4 CONTINUANCE OF AGREEMENT FOR CERTAIN PURPOSES.
Notwithstanding any termination of this Agreement, the Distributor shall
continue to make available shares of the Portfolios pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (the "Existing Contracts"), except as otherwise
provided under Section 5 of this Agreement. Specifically, and without
limitation, the Distributor shall facilitate the sale and purchase of shares of
the Portfolios as necessary in order to process premium payments, surrenders and
other withdrawals, and transfers or reallocations of values under Existing
Contracts.
SECTION 7. PARTIES TO COOPERATE RESPECTING TERMINATION
The other Parties hereto agree to cooperate with and give reasonable
assistance to Insurer in taking all necessary and appropriate steps for the
purpose of ensuring that the Separate Account owns no shares of a Portfolio
after the Final Termination Date with respect thereto.
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<PAGE>
SECTION 8. ASSIGNMENT
This Agreement may not be assigned by any Party, except with the written
consent of each other Party.
SECTION 9. CLASS B DISTRIBUTION PAYMENT
From time to time during the term of this Agreement the Distributor may
make payments to the Contracts Distributor pursuant to a distribution plan
adopted by the Fund with respect to the Class B shares of the Portfolios
pursuant to Rule 12b- I under the 1940 Act (the "Rule 12b- I Plan) in
consideration of the Contracts Distributor's furnishing distribution services
relating to the Class B shares of the Portfolios and providing administrative,
accounting and other services, including personal service and/or the maintenance
of Participant accounts, with respect to such shares. The Distributor has no
obligation to make any such payments, and the Contracts Distributor waives any
such payment, until the Distributor receives monies therefor from the Fund. Any
such payments made pursuant to this Section 9 shall be subject to the following
terms and conditions:
(a) Any such payments shall be in such amounts as the Distributor may
from time to time advise the Contracts Distributor in writing but in any event
not in excess of the amounts permitted by the Rule l2b-1 Plan. Such payments may
include a service fee in the amount of.25 of 1% per annum of the average daily
net assets of the Fund attributable to the Class B shares of a Portfolio held by
clients of the Contracts Distributor. Any such service fee shall be paid solely
for personal service and/or the maintenance of Participant accounts.
(b) The provisions of this Section 9 relate to a plan adopted by the
Fund pursuant to Rule 12b-1. In accordance with Rule 12b-1, any person
authorized to direct the disposition of
20
<PAGE>
monies paid or payable by the Fund pursuant to this Section 9 shall provide the
Fund's Board of Directors, and the Directors shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
(c) The provisions of this Section 9 shall remain in effect for not
more than a year and thereafter for successive annual periods only so long as
such continuance is specifically approved at least annually in conformity with
Rule 12b- I and the 1940 Act. The provisions of this Section 9 shall
automatically terminate in the event of the assignment (as defined by the 1940
Act) of this Agreement, in the event the Rule 12b-I Plan terminates or is not
continued or in the event this Agreement terminates or ceases to remain in
effect. In addition, the provisions of this Section 9 may be terminated at any
time, without penalty, by either the Distributor or the Contracts Distributor
with respect to any Portfolio on not more than 60 days' nor less than 30 days'
written notice delivered or mailed by registered mail, postage prepaid, to the
other party.
SECTION 10. NOTICES
Notices and communications required or permitted by Section 2 hereof will
be given by means mutually acceptable to the Parties concerned. Each other
notice or communication required or permitted by this Agreement will be given to
the following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
Insurer
[address]
[Contracts Distributor]
[address]
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<PAGE>
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York NY 10 105
Attn.: Edmund P. Bergan
FAX: (212) 969-2290
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York NY 10 105 Attn:
Edmund P. Bergan
FAX: (212) 969-2290
SECTION 11. VOTING PROCEDURES
Subject to the cost allocation procedures set forth in Section 3 hereof,
Insurer will distribute all proxy material furnished by the Fund to Participants
and will vote Fund shares in accordance with instructions received from
Participants. Insurer will vote Fund shares that are (a) not attributable to
Participants or (b) attributable to Participants, but for which no instructions
have been received, in the same proportion as Fund shares for which said
instructions have been received from Participants. Insurer agrees that it will
disregard Participant voting instructions only to the extent it would be
permitted to do so pursuant to Rule 6e-3 (T)(b)(1 5)(Iii) under the 1940 Act if
the Contracts were variable life insurance policies subject to that rule. Other
participating life insurance companies utilizing the Fund will be responsible
for calculating voting privileges in a manner consistent with that of Insurer,
as prescribed by this Section 11.
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<PAGE>
SECTION 12. FOREIGN TAX CREDITS
The Adviser agrees to consult in advance with Insurer concerning any
decision to elect or not to elect pursuant to Section 853 of the Code to pass
through the benefit of any foreign tax credits to the Fund's shareholders.
SECTION 13. INDEMNIFICATION
13.1 Of Fund, DISTRIBUTOR AND ADVISER BY INSURE .
(a) Except to the extent provided in Sections 13. l(b) and 13. I(c),
below, Insurer agrees to indemnify and hold harmless the Fund, Distributor and
Adviser, each of their directors and officers, and each person, if any, who
controls the Fund, Distributor or Adviser within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 13. 1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Insurer) or
actions in respect thereof (including, to the extent reasonable, legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or actions are related to the sale, acquisition, or holding
of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement, of any material fact contained in the Separate
Account's 1933 Act registration statement, the Separate Account
Prospectus, the Contracts or, to the extent prepared by Insurer or
Contracts Distributor, sales literature or advertising for the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact
23
<PAGE>
required to be stated therein or necessary to make the statements
therein not misleading; provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
Insurer or Contracts Distributor by or on behalf of the Fund,
Distributor or Adviser for use in the Separate Account's 1933 Act
registration statement, the Separate Account Prospectus, the
Contracts, or sales literature or advertising (or any amendment or
supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained Fund's 1933 Act registration statement, Fund Prospectus,
sales literature or advertising of the Fund, or any amendment or
supplement to any of the foregoing, not supplied for use therein
by or on behalf of Insurer or Contracts Distributor) or the
negligent, illegal or fraudulent conduct of Insurer or Contracts
Distributor or persons under their control (including, without
limitation their employees and "Associated Persons," as that term
is defined in paragraph (m) of Article I of the NASD's By-Laws),
in connection with the sale or distribution of the Contracts or
Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933
Act registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any of
the foregoing, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the
24
<PAGE>
statements therein not misleading if such a statement or omission
was made in reliance upon and in conformity with information
furnished to the Fund, Adviser or Distributor by or on behalf of
Insurer or Contracts Distributor for use in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or
advertising of the Fund, or any amendment or supplement to any of
the foregoing; or
(iv) arise as a result of any failure by Insurer or Contracts
Distributor to perform the obligations, provide the services and
furnish the materials required of them under the terms of this
Agreement.
(b) Insurer shall not be liable under this Section 13.1 with respect
to any losses, claims, damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance by that Indemnified Party of its duties or
by reason of that Indemnified Party's reckless disregard of obligations or
duties under this Agreement or to Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 13.1 with respect
to any action against an Indemnified Party unless the Fund, Distributor or
Adviser shall have notified Insurer in writing within a reasonable time after
the summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Insurer of any such action shall not relieve
Insurer from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 13. 1. In
case any such action is brought against an Indemnified Party, Insurer shall be
entitled to participate, at its own
25
<PAGE>
expense, in the defense of such action. Insurer also shall be entitled to assume
the defense thereof, with counsel approved by the Indemnified Party named in the
action, which approval shall not be unreasonably withheld. After notice from
Insurer to such Indemnified Party of Insurer's election to assume the defense
thereof, the Indemnified Party will cooperate fully with Insurer and shall bear
the fees and expenses of any additional counsel retained by it, and Insurer will
not be liable to such Indemnified Party under this Agreement for any legal or
other expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
13.2 INDEMNIFICATION OF INSURER AND CONTRACTS DISTRIBUTOR BY ADVISER.
(a) Except to the extent provided in Sections 13.2(d) and 13,2(e),
below, Adviser agrees to indemnify and hold harmless Insurer and Contracts
Distributor, each of their directors and officers, and each person, if any, who
controls Insurer or Contracts Distributor within the meaning of Section 15 of
the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 13.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of Adviser) or
actions in respect thereof (including, to the extent reasonable, legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or actions are related to the sale, acquisition, or holding of the Fund's shares
and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Fund's 1933
Act registration statement, Fund Prospectus, sales literature or
advertising of the Fund or, to the extent not prepared by Insurer
or Contracts Distributor, sales literature or advertising for the
Contracts
26
<PAGE>
(or any amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided
that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity
with information furnished to Distributor, Adviser or the Fund by
or on behalf of Insurer or Contracts Distributor for use in the
Fund's 1933 Act registration statement, Fund Prospectus, or in
sales literature or advertising (or any amendment or supplement to
any of the foregoing); or
(ii) arise out of or as a result of any other statements or
representations (other than statements or representations
contained in the Separate Account's 1933 Act registration
statement, Separate Account Prospectus, sales literature or
advertising for the Contracts, or any amendment or supplement to
any of the foregoing, not supplied for use therein by or on behalf
of Distributor, Adviser, or the Fund) or the negligent, illegal or
fraudulent conduct of the Fund, Distributor, Adviser or persons
under their control (including, without limitation, their
employees and Associated Persons), in connection with the sale or
distribution of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Separate
Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the foregoing,
or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to
27
<PAGE>
make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with
information furnished to Insurer or Contracts Distributor by or on
behalf of the Fund, Distributor or Adviser for use in the Separate
Account's 1933 Act registration statement, Separate Account
Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the foregoing;
or
(iv) arise as a result of any failure by the Fund, Adviser or
Distributor to perform the obligations, provide the services and
furnish the materials required of them under the terms of this
Agreement;
(b) Except to the extent provided in Sections 13.2(d) and 13.2(e)
hereof, Adviser agrees to indemnify and hold harmless the Indemnified Parties
from and against any and all losses, claims, damages, liabilities (including
amounts paid in settlement thereof with, except as set forth in Section 13.2(c)
below, the written consent of Adviser) or actions in respect thereof (including,
to the extent reasonable, legal and other expenses) to which the Indemnified
Parties may become subject directly or indirectly under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
actions directly or indirectly result from or arise out of the failure of any
Portfolio to operate as a regulated investment company in compliance with (i)
Subchapter M of the Code and regulations thereunder and (1i) Section 917(h) of
the Code and regulations thereunder (except to the extent that such failure is
caused by Insurer), including, without limitation, any income taxes and related
penalties, rescission charges, liability under state law to Contract owners or
Participants asserting liability against Insurer or Contracts Distributor
pursuant to the Contracts, the costs of any ruling and closing agreement or
other settlement with the Internal Revenue Service, and the cost of
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<PAGE>
any substitution by Insurer of shares of another investment company or portfolio
for those of any adversely affected Portfolio as a funding medium for the
Separate Account that Insurer deems necessary or appropriate as a result of the
noncompliance.
(c) The written consent of Adviser referred to in Section 13.2(b)
above shall not be required with respect to amounts paid in connection with any
ruling and closing agreement or other settlement with the Internal Revenue
Service.
(d) Adviser shall not be liable under this Section 13.2 with respect
to any losses, claims, damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance by that Indemnified Party of its duties or
by reason of such Indemnified Party's reckless disregard of its obligations and
duties under this Agreement or to Insurer, Contracts Distributor or the Separate
Account.
(e) Adviser shall not be liable under this Section 13.2 with respect
to any action against an Indemnified Warty unless Insurer or Contracts
Distributor shall have notified Adviser in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Adviser of any such action shall not relieve
Adviser from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 13.2. In
case any such action is brought against an Indemnified Party, Adviser will be
entitled to participate, at its own expense, in the defense of such action.
Adviser also shall be entitled to assume the defense thereof (which shall
include, without limitation, the conduct of any ruling request and
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<PAGE>
closing agreement or other settlement proceeding with the Internal Revenue
Service), with counsel approved by the Indemnified Party named in the action,
which approval shall not be unreasonably withheld. After notice from Adviser to
such Indemnified Party of Adviser's election to assume the defense thereof, the
Indemnified Party will cooperate fully with Adviser and shall bear the fees and
expenses of any additional counsel retained by it, and Adviser will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
13.3 EFFECT OF NOTICE.
Any notice given by the indemnifying Party to an Indemnified Party
referred to in Section 13. l(c) or 13.2(e) above of participation in or control
of any action by the indemnifying Party will in no event be deemed to be an
admission by the indemnifying Party of liability, culpability or responsibility,
and the indemnifying Party will remain free to contest liability with respect to
the claim among the Parties or otherwise.
SECTION 13. APPLICABLE LAW
This Agreement will be construed and the provisions hereof interpreted
under and in accordance with New York law, without regard for that state's
principles of conflict of laws.
SECTION 14. EXECUTION IN COUNTERPARTS
This Agreement may be executed simultaneously in two or more counterparts, each
of which taken together will constitute one and the same instrument.
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<PAGE>
Section 15. SEVERABILITY
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
SECTION 16. RIGHTS CUMULATIVE
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, that the Parties are entitled to under federal and state
laws.
SECTION 17. RESTRICTIONS ON SALES OF FUND SHARES
Insurer agrees that the Fund will be permitted (subject to the other
terms of this Agreement) to make its shares available to separate
accounts of other life insurance companies.
SECTION 18. HEADING
The Table of Contents and headings used in this Agreement are for
purposes of reference only and shall not limit or define the meaning of the
provisions of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
[INSURANCE COMPANY,]
By:
Name:
Title:
[CONTRACTS DISTRIBUTOR,]
By:
Name:
Title:
ALLIANCE CAPITAL MANAGEMENT LP
By: Alliance Capital Management
Corporation,
its General Partner
By:
Name:
Title:
ALLIANCE FUND DISTRIBUTORS, INC.
By:
Name:
Title:
00250.292 #64330
SAW Legal\Drew\Agreernen\AVP Class B Master Part Agr
32
<PAGE>
PARTICIPATION AGREEMENT
AMONG TEMPLETON VARIABLE PRODUCTS SERIES FUND,
FRANKLIN TEMPLETON DISTRIBUTORS, INC. AND
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
THIS AGREEMENT made as of May 22, 1998, among Templeton Variable Products
Series Fund (the "Trust"), an open-end management investment company organized
as a business trust under Massachusetts law, Franklin Templeton Distributors,
Inc., a California corporation, the Trust's principal underwriter
("Underwriter"), and The Lincoln National Life Insurance Company, a life
insurance company organized as a corporation under Indiana law (the "Company"),
on its own behalf and on behalf of each segregated asset account of the Company
set forth in Schedule A, as may be amended from time to time (the "Accounts").
WITNESSETH:
WHEREAS, -the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and has an
effective registration statement relating to the offer and sale of the various
series of its Shares under the Securities Act of 1933, as amended (the "1933
Act");
WHEREAS, the Trust and the Underwriter desire that Trust shares be used as
an investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts to be offered by life
insurance companies which have entered into fund participation agreements with
the Trust (the "Participating Insurance Companies");
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets, and certain of those series, named in
Schedule B, (the "Portfolios") are to be made available for purchase by the
Company for the Accounts; and
WHEREAS, the Trust has received an order from the SEC, dated November 16,
1993 (File No. 812-8546), granting Participating Insurance Companies and their
separate accounts exemptions from, the provisions of Sections 9(a), 13(a), 15(a)
and 15(b) of the 1940 Act, and Rules 6e-2 (b) 0 5) and 6e-3 M (b) (15)
thereunder, to the extent necessary to permit shares of the Trust to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Shared Funding Exemptive Order");
<PAGE>
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act unless an exemption from registration
under the 1940 Act is available and the Trust has been so advised; and has
registered or will register certain variable annuity contracts and variable life
insurance policies, listed on Schedule C attached hereto (the "Contracts"),
under which the portfolios are to be made available as investment vehicles under
the 1933 Act unless such interests under the Contracts in the Accounts are
exempt from registration under the 1933 Act and the Trust has been so advised;
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such account on Schedule A hereto, to set aside
and invest assets attributable to one or more Contracts; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (NASD"); and
WHEREAS, each investment adviser listed on Schedule B (each, an "Adviser")
is duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended ("Advisers Act");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on behalf
of each Account to fund certain of the aforesaid Contracts and the Underwriter
is authorized to sell such shares to unit investment trusts such as each Account
at net asset value;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE 1.
PURCHASE AND REDEMPTION OF TRUST PORTFOLIO SHARES
1.1. For purposes of this Article 1, the Company shall be the Trust's
agent for receipt of purchase orders and requests for redemption relating to
each Portfolio from each Account, provided that the Company notifies the Trust
of such purchase orders and requests for redemption by 9:00 a.m. Eastern time on
the next following Business Day, as defined in Section 1.3.
1.2. The Trust agrees to make shares of the Portfolios available to the
Accounts for purchase at the net asset value per share next computed after
receipt of
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<PAGE>
a purchase order by the Trust (or its agent), as established in accordance with
the provisions of the then current prospectus of the Trust describing Portfolio
purchase procedures on those days on which the Trust calculates its net asset
value pursuant to rules of the SEC, and the Trust shall use its best efforts to
calculate Such net asset value on each day on which the New York Stock Exchange
("NYSE") is open for trading. The Company will transmit orders from time to time
to the Trust for the purchase of shares of the Portfolios. The Trustees of the
Trust (the "Trustees") may refuse to sell shares of any Portfolio to any person,
or suspend or terminate the offering of shares of any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction or if, in
the sole discretion of the Trustees acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, such action is
deemed in the best interests of the shareholders of such Portfolio.
1.3 The Company shall submit payment for the purchase of shares of a
Portfolio on behalf of an Account no later than 2:00 P.M. Eastern time on the
next Business Day after the Trust receives the purchase order. Payment shall be
made in federal funds transmitted by wire to the Trust or its designated
custodian. Upon receipt by the Trust of the federal funds so wired, such funds
shall cease to be the responsibility of the Company and shall become the
responsibility of the Trust for this purpose. "Business Day" shall mean any day
on which the NYSE is open for trading and on which the Trust calculates its net
asset value pursuant to the rules of the SEC.
1.4 The Trust will redeem for cash any full or fractional shares of any
Portfolio, when requested by the Company on behalf of an Account, at the net
asset value next computed after receipt by the Trust (or its agent) of the
request for redemption, as established in accordance with the provisions of the
then current prospectus of the Trust describing Portfolio redemption procedures.
Redemption with respect to a Portfolio will normally be paid to the Company for
an Account in federal funds transmitted by wire to the Company before 2:00 p.m.
Eastern time on the next Business Day after the receipt of the request for
redemption. Such payment may be delayed if, for example, the Portfolio's cash
position so requires as when portfolio securities must be sold, or if
extraordinary market conditions exist, but in no event shall Payment be delayed
for a greater period than is permitted by the 1940 Act.
1.5 Payments for the purchase of shares of the Trust's Portfolios by the
Company under Section 1.3 and payments for the redemption of shares of the
Trust's Portfolios under Section 1.4 may be netted against one another on any
Business Day for the purpose of determining the amount of any wire transfer on
that Business Day.
1.6 issuance and transfer of the Trust's Portfolio shares will be by book
entry only. Stock certificates will not be issued to the Company or the Account.
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<PAGE>
Portfolio Shares purchased from the Trust will be recorded in the appropriate
title for each Account or the appropriate subaccount of each Account.
1.7 The Trust Shall furnish, on or before the ex-dividend date, notice to
the Company of any income dividends or capital gain distributions payable on the
shares of any Portfolio of the Trust. The Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's shares in additional shares of the Portfolio. The Trust shall notify
the Company of the number of shares so issued as payment of such dividends and
distributions.
1.8 The Trust shall calculate the net asset value of each Portfolio on
each Business Day, as defined in Section 1.3. The Trust shall make the net asset
value per share for each Portfolio available to the Company or its designated
agent on a daily basis as soon as reasonably practical after the net asset value
per share is calculated (normally by 6:30 p.m. Eastern time).
1.9 The Trust agrees that its Portfolio shares will be sold only to
Participating Insurance Companies and their separate accounts and to certain
qualified pension and retirement plans to the extent permitted by the Shared
Funding Exemptive Order. No shares of any Portfolio will be sold directly to the
general public. The Company agrees that it will use Trust shares only for the
purposes of funding the Contracts through the Accounts listed in Schedule A, as
amended from time to time.
1.10 The Company agrees that all net amounts available under the Contracts
shall be invested in (I) the Company's general account, (ii) investment
companies currently available as funding vehicles for the Contracts and
appearing on Schedules B and D to this Agreement, or (iii) other investment
companies, provided that the Company shall have given the Trust and the
Underwriter sixty (60) days' advance written notice of its intention to add such
other investment companies.
1.11 The Trust agrees that all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.10 and
Article IV of this Agreement.
1.12 Each party to this Agreement shall have the right to rely on
information or confirmations provided by any other party (or by any affiliate of
any other party), and shall not be liable in the event that an error results
from any incorrect information or confirmations supplied by any other party. If
an error is made in reliance upon incorrect information or confirmations, any
amount required to make a Contract owner's account whole shall be borne by the
party who provided the incorrect information or confirmation.
ARTICLE 11.
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<PAGE>
OBLIGATIONS OF THE PARTIES; FEES AND EXPENSE
2.1 The Trust Shall prepare and be responsible for filing with the SEC and any
state regulators requiring such filing all shareholder reports, notices, proxy
materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of the Trust.
The Trust shall bear the costs of registration -and qualification of its shares
of the Portfolios, preparation and filing of the documents listed in this
Section 2.1 and all taxes to which an issuer is subject on the issuance and
transfer of its shares.
2.2 At the option of the Company, the Trust or the Underwriter shall
either (a) provide the Company with as many copies of portions of the Trust's
current prospectus, annual report, semi-annual report and other shareholder
communications, including any amendments or supplements to any of the foregoing,
pertaining specifically to the Portfolios as the Company shall reasonably
request; or (b) provide the Company with a camera ready copy of such documents
in a form suitable for printing and from which information relating to series of
the Trust other than the Portfolios has been deleted to the extent practicable.
The Trust or the Underwriter shall provide the Company with a copy of its
current statement of additional information, including any amendments or
supplements, in a form suitable for duplication by the Company. Expenses of
furnishing such documents for marketing purposes shall be borne by the Company
and expenses of furnishing such documents for current contract owners invested
in the Trust shall be borne by the Trust or the Underwriter. The Company assumes
sole responsibility for ensuring that such materials are delivered to Contract
owners in accordance with applicable federal and state securities laws.
2.3 The Trust shall bear the costs of preparation, solicitation and
mailing Trust-sponsored proxy materials (or similar materials such as voting
solicitation instructions) to Contract owners, and the Company (at its expense)
shall. provide all necessary information for and otherwise fully cooperate with
the proxy distribution process. The Company shall bear the cost of distributing
all other proxy materials (or similar materials such as voting solicitation
instructions). The Company assumes sole responsibility for ensuring that such
materials are delivered to Contract owners in accordance with applicable federal
and state securities laws.
2.4 If and to the extent required by law, the Company shall: (i) solicit
voting instructions from Contract owners; (I!) vote the Trust shares in
accordance with the instructions received from Contract owners; and (iii) vote
Trust shares held in a separate account for which no instructions have been
received in the same proportion as Trust shares of such Portfolio in that
separate account for which instructions have been received, so long as and to
the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners. The
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<PAGE>
Company reserves the right to vote Trust shares held in any segregated asset
account in its own right, to the extent permitted by law.
2.5 Except as provided in se section 2.7, the Company shall not use any
designation comprised in whole or part of the names or marks "Franklin" or
"Templeton" or any other Trademark relating to the Trust or Underwriter without
prior written consent, and upon termination of this Agreement for any reason,
the Company shall cease all use of any such name or mark as soon as reasonably
practicable.
2.6 Except as provided in section 2.7, the Trust or Underwriter shall not
use any designation comprised in whole or in part of the names or marks
"Lincoln" or "Lincoln Life" or any other Trademark relating to the Company
without prior written consent, and upon termination of this Agreement for any
reason, the Trust or the Underwriter shall cease all use of any such name or
mark as soon as reasonably practicable.
2.7 The Company shall furnish, or cause to be furnished to the Trust or
its designee, at least one complete copy of each registration statement,
prospectus, statement of additional information, retirement plan disclosure
information or other disclosure documents or similar information, as applicable
(collectively "disclosure documents"), as well as any report, solicitation for
voting instructions, sales literature and other promotional materials, and all
amendments to any of the above that relate to the Contracts or the Accounts and
their investment in the Trust prior to its first use with investors. The Company
shall furnish, or shall cause to be furnished, to the Trust or its designee each
piece of sales literature or other promotional material in which the Trust or an
Adviser is named, at least 10 Business Days prior to its use. No such material
shall be used if the Trust or its designee reasonably objects to such use within
seven Business Days after receipt of such material. For purposes of this
paragraph, "sales literature or other promotional material" includes, but is not
limited to, portions of the following that use any Trademark related to the
Trust or Underwriter or refer to the Trust or affiliates of the Trust:
advertisements (such as material published or designed for use in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display signs or billboards, motion pictures or electronic
communication or other public media), sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, seminar texts, reprints or excerpts or any other advertisement, sales
literature or published article or electronic communication), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and disclosure documents,
shareholder reports and proxy materials.
The Trust shall furnish or cause to be furnished, to the Company or its
designee each piece of sales literature or other promotional material (as
defined above) in which the Company's products are promoted is named, at least
10 Business Days prior to
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its use. No such material shall be used if the Company or its designee
reasonably objects to such use within five Business Days after receipt of such
material. In addition, in marketing literature regarding the Trust, the Trust
and the Underwriter may include the Company's name in a list of insurance
companies whose separate accounts invest in the Trust, provided the Company
receives a copy of such literature three (3) business days in advance of first
use and does not affirmatively object.
2.8 The Company and its agents shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust,
the Underwriter or an Adviser in connection with the sale of the Contracts other
than information or representations contained in and accurately derived from the
registration statement or prospectus for the Trust shares (as such registration
statement and prospectus may be amended or supplemented from time to time),
annual and semi-annual reports of the Trust, Trust-sponsored proxy statements,
or in sales literature or other promotional material approved by the Trust or
its designee, except as required by legal process or regulatory authorities or
with the written permission of the Trust or its designee.
2.9 The Trust shall use its best efforts to provide the Company, on a
timely basis, with such information about the Trust, the Portfolios and each
Adviser, in such form as the Company may reasonably require, as the Company
shall reasonably request in connection with the preparation of disclosure
documents and annual and semi-annual reports pertaining to the Contracts.
2.10 The Trust shall not give any information or make any representations
or statements on behalf of the Company or concerning the Company, the Accounts
or the Contracts other than information or representations contained in and
accurately derived from disclosure documents for the Contracts (as such
disclosure documents may be amended or supplemented from time to time), or in
materials approved by the Company for distribution including sales literature or
other promotional materials, except as required by legal process or regulatory
authorities or with the written permission of the Company.
2.11 The Trust Shall require all Participating Insurance Companies to
calculate voting privileges as set forth in section 2.4 and the Company shall be
responsible for assuring that the Accounts calculate voting privileges in the
manner established by the Trust. The Company will in no way recommend or oppose
or interfere with the solicitation of proxies for Portfolio shares held to fund
the Contracts without the prior written consent of the Trust, which consent may
be withheld in the Trust's sole discretion.
2.12 The Trust and Underwriter Shall pay no fee or other compensation to
the Company under this Agreement except as provided on Schedule E, if attached.
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Nevertheless, the Trust or the Underwriter or an affiliate may make payments
(other than pursuant to a Rule 12b-1 Plan) to the Company or its affiliates or
to the Contracts' underwriter in amounts agreed to by the Underwriter in writing
and such payments may be made out of fees otherwise payable to the Underwriter
or its affiliates, profits of the Underwriter or its affiliates, or other
resources available to the Underwriter or its affiliates.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 The Company represents and warrants that it is an insurance company
duly organized and validly existing under the laws of its state of incorporation
and that it has legally and validly established each Account as a segregated
asset account under such law as of the date set forth in Schedule A.
3.2 The Company represents and warrants that, with respect to each
Account, (1) the Company has registered or, prior to any issuance or sale of
the Contracts, will register the Account as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated asset
account for the Contracts, or (2) if the Account is exempt from registration
as an investment company under Section 3(c) of the 1940 Act, the Company will
make every effort to maintain such exemption and will notify the Trust and
the Adviser immediately upon having a reasonable basis for believing that
such exemption no longer applies or might not apply in the future.
3.3 The Company represents and warrants that, with respect to each
Contract, (1) the Contract will be registered under the 1933 Act, or (2) if the
Contract is exempt from registration under Section 3(a)(2) of the 1933 Act or
under Section 4(2) and Regulation D of the 1933 Act, the Company will make every
effort to maintain such exemption and will notify the Trust and the Adviser
immediately upon having a reasonable basis for believing that such exemption no
longer applies or might not apply in the future. The Company further represents
and warrants that the Contracts will be sold by broker dealers, or their
registered representatives, who are registered with the SEC under the 1934 Act
and who are members in good standing of the NASD; the Contracts will be issued
and sold in compliance in all material respects with all applicable federal and
state laws; and the sale of the Contracts shall comply in all material respects
with applicable state insurance suitability requirements.
For any unregistered Accounts which are exempt from registration under
the '40 Act in reliance upon Sections YOM or 3(c)(7) thereof, the Company
represents and warrants that:
(a) each Account and sub-account thereof has a principal underwriter
which is
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registered as a broker-dealer under the Securities Exchange Act of
1934, as amended;
(b) Trust shares are and will continue to be the only investment
securities held by the corresponding Account sub-accounts; and
(c) with regard to each Portfolio, Company, on behalf of the
corresponding sub-account, will:
(1) seek instructions from all Contract owners with regard to the
voting of all proxies with respect to Trust shares and vote
such proxies only in accordance with such instructions or vote
such shares held by it in the same proportion as the vote of
all other holders of such shares; and
(2) refrain from substituting shares of another security for such
shares unless the SEC has approved such substitution in the
manner provided in Section 26 of the '40 Act. 1
3.4 The Trust represents and warrants that it is duly organized and
validly existing under the laws of the State of Massachusetts and that it does
and will comply in all material respects with the 1940 Act and the rules and
regulations thereunder.
3.5 The Trust represents and warrants that the Portfolio shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act and
the Trust shall be registered under the 1940 Act prior to and at the time of any
issuance or sale of such shares. The Trust shall amend its registration
statement under the 1933 Act and the 1940 Act from time to time as required in
order to effect the continuous offering of its shares. The Trust Shall register
and qualify its shares for sale in accordance with the laws of the various
states only if and to the extent deemed advisable by the Trust or the
Underwriter.
3.6 The Trust represents and warrants that (i) the investments of each
Portfolio will comply with the diversification requirements for variable
annuity, endowment or life insurance contracts set forth in Section 817(h) of
the Internal Revenue Code of 1986, as amended ("Code"), and the rules and
regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and that (ii) it has adopted such diversification policies,
as reflected in its registration statement, and has contractually obligated each
Portfolio's investment adviser to comply with Trust policies. The Trust will
notify the Company immediately upon having a reasonable basis for believing any
Portfolio has ceased to comply or might not so comply and will in that event
immediately take all
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reasonable steps to adequately diversify the Portfolio to achieve compliance
within the grace period afforded by Regulation 1.817-5.
3.7 The Trust represents and warrants that it is currently qualified as a
"regulated investment company" under Subchapter M of the Code, that it will make
every effort to maintain such qualification and will notify the Company
immediately upon having a reasonable basis for believing it has ceased to so
qualify or might not so qualify in the future.
3.8 The Trust and Underwriter each represents and warrants that should
it ever desire to make any payments to finance distribution expenses pursuant
to Rule 12b-1 under the 1940 Act, the Trustees, including a majority who are
not "interested persons" of the Trust under the 1940 Act ( "disinterested
Trustees"), will formulate and approve any plan under Rule 12b-1 to finance
distribution expenses.
3.9 The Trust represents and warrants that it, its directors, officers,
employees and others dealing with the money or securities, or both, of a
Portfolio shall at all times be covered by a blanket fidelity bond or similar
coverage for the benefit of the Trust in an amount not less that the minimum
coverage required by Rule 17g-I or other regulations under the 1940 Act. Such
bond shall include coverage for larceny and embezzlement and be issued by a
reputable bonding company.
3.10 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals or entities
dealing with the money and/or securities of the Trust are and shall be at all
times covered by a blanket fidelity bond or similar coverage for the benefit of
the Trust, in an amount not less than $5 million. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company. The Company agrees to make all reasonable efforts to see that
this bond or another bond containing these provisions is always in effect, and
agrees to notify the Trust and the Underwriter in the event that Such coverage
no longer applies.
3.11 The Underwriter represents that each Adviser is duly organized and
validly existing under applicable corporate law and that it is registered and
will during the term of this Agreement remain registered as an investment
adviser under the Advisers Act.
3.12 The Trust currently intends for one or more Classes to make payments
to finance its distribution expenses, including service fees, pursuant to a Plan
adopted under Rule 12b-1 under the 1940 Act ("Rule 12b-1"), although it may
determine to discontinue such practice in the future. To the extent that any
Class of the Trust finances its distribution expenses pursuant to a Plan adopted
under Rule 12b-1, the Trust undertakes to comply with any then current SEC and
SEC staff interpretations concerning Rule 12b-1 or any successor provisions.
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ARTICLE IV.
POTENTIAL CONFLICTS
4.1 The parties acknowledge that a Portfolio's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. An irreconcilable material conflict may arise
for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a Change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract
owners. The Trust shall promptly inform the Company of any determination by the
Trustees that an irreconcilable material conflict exists and of the implications
thereof.
4.2 The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Shared Funding
Exemptive Order by providing the Trustees with all information reasonably
necessary for the Trustees to consider any issues raised including, but not
limited to, information as to a decision by the Company to disregard Contract
owner voting instructions. All communications from the Company to the Trustees
may be made in care of the Trust.
4.3 If it is determined by a majority of the Trustees, or a majority of
the disinterested Trustees, that a material irreconcilable conflict exists that
affects the interests of Contract owners, the Company shall, in cooperation with
other Participating insurance Companies whose contract owners are also affected,
at its own expense and to the extent reasonably practicable (as determined by
the Trustees) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from the Trust or any Portfolio
and reinvesting Such assets in a different investment medium, including (but not
limited to) another Portfolio of the Trust, or submitting the question of
whether or not such withdrawal should be implemented to a vote of all affected
Contract owners and, as appropriate, withdrawal of the assets of any appropriate
group (i.e. , annuity contract owners, life insurance policy owners, or variable
contract owners of one or more Participating Insurance Companies) that votes in
favor of such withdrawal, or offering to the affected Contract owners the option
of making such a change; and (b) establishing a new registered
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management investment company or managed separate account.
4.4 if a material irreconcilable conflict arises because of a decision by
the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable conflict
as determined by a majority of the disinterested Trustees. Any such withdrawal
and termination must take place within six (6) months after the Trust gives
written notice that this provision is being implemented. Until the end of such
six (6) month period, the Trust shall continue to accept and implement orders by
the Company for the purchase and redemption of shares of the Trust.
4.5 if a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with a
majority of other state regulators, then the Company will withdraw the affected
Account's investment in the Trust and terminate this Agreement with respect to
such Account within six (6) months after the Trustees inform the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees. Until the
end of such six (6) month period, the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of the
Trust.
4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a majority
of the disinterested Trustees shall determine whether any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Company or Trust be required to establish a new funding medium for the
Contracts. In the event that the Trustees determine that any proposed action
does not adequately remedy any irreconcilable material conflict, then the
Company will withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Trustees inform the Company in writing
of the foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested
Trustees.
4.7 The Company shall at least annually Submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon them by the Shared Funding
Exemptive order, and said reports, materials and data shall be submitted more
frequently if reasonably deemed appropriate by the Trustees.
12
<PAGE>
4.8 If and to the extent that Rule 6e-2 and Rule 6e-3M are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940
Act or the rules promulgated thereunder with respect to mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then the Trust and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable.
ARTICLE V.
INDEMNIFICATION
5.1 INDEMNIFICATION BY THE COMPANY
(a) The Company agrees to indemnify and hold harmless the
Trust and each of its Trustees, officers, employees and agents and
each person, if any, who controls the Trust within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties"
and individually the "Indemnified Party" for purposes of this
Article V) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent. of
the Company, which consent shall not be unreasonably withheld) or
expenses (including the reasonable costs of investigating or
defending any alleged loss, claim, damage, liability or expense and
reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may
become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses are related to the sale or
acquisition of Trust Shares or the Contracts and
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in
a disclosure document for the Contracts or in the Contracts
themselves or in sales literature generated or approved by the
Company on behalf of the Contracts or Accounts (or any
amendment or supplement to any of the foregoing)
(collectively, "Company Documents" for the purposes of this
Article V), or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, provided that this indemnity shall not
apply as to any Indemnified Party if such statement or
omission or Such alleged statement or omission was made in
reliance upon and was accurately derived from
13
<PAGE>
written information furnished to the Company by or on behalf
of the Trust for use in Company Documents or otherwise for use
in connection with the sale of the Contracts or Trust shares;
or
(ii) arise out of or result from statements or
representations (other than statements or representations
contained in and accurate1y derived from Trust Documents as
defined in Section 5.2 (a)(0) or wrongful conduct of the
Company or persons under its control, with respect to the sale
or acquisition of the Contracts or Trust shares; or
(III) arise out of or result from any untrue statement or
alleged untrue statement of a material fact contained in Trust
Documents as defined in Section 5.2(a)(i) or the omission or
alleged -omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading if such statement or omission was made
in reliance upon and accurately derived from written
information furnished to the Trust by or on behalf of the
Company; or
(iv) arise out of or result from any failure by the
Company to provide the services or furnish the materials
required under the terms of this Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company.
(b) The Company shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party
would otherwise be subject by reason of such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such
Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Trust or Underwriter, whichever is
applicable. The Company shall also not be liable under this
indemnification provision with respect to any claim made against an
indemnified Party unless such Indemnified Party shall have notified
the Company in writing within a reasonable time after the summons
or other first legal process giving information of the nature of
the claim shall have been served upon such indemnified Party (or
14
<PAGE>
after such Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify the Company
of any Such claim shall not relieve the Company from any liability
which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification
provision. in case any such action is brought against the
Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also
shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Company
will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs
of investigation.
(c) The Indemnified Parties will promptly notify the Company
of the commencement of any litigation or proceedings against them
in connection with the issuance or sale of the Trust Shares or the
Contracts or the operation of the Trust.
5.2 INDEMNIFICATION BY THE UNDERWRITER
(a) The Underwriter agrees to indemnify and hold harmless the Company,
the underwriter of the Contracts and each of its directors and officers and
each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" and
individually an "Indemnified Party" for purposes of this Section 5.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter, which
consent shall not be unreasonably withheld) or expenses (including the
reasonable costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses") to which the Indemnified
Parties become subject under any statute, at common law or otherwise,
insofar as such Losses are related to the sale or acquisition of the Trust's
Shares or the Contracts and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the Registration
Statement,
15
<PAGE>
prospectus or sales literature of the Trust (or any amendment or
supplement to any of the foregoing) (collectively, the "Trust Documents")
or arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission of such alleged statement or omission was made in
reliance upon and in conformity with information furnished to the
Underwriter or Trust by or on behalf of the Company for use in the
Registration Statement or prospectus for the Trust or in sales literature
(or any amendment or supplement) or otherwise for use in connection with
the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the disclosure
documents or sales literature for the Contracts not supplied by the
Underwriter or persons under its control) or wrongful conduct of the
Trust, Adviser or Underwriter or persons under their -control, with
respect to the sale or distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a disclosure document or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement or
statements therein not misleading, if such statement or omission was made
in reliance upon information furnished to the Company by or on behalf of
the Trust; or
(iv) arise as a result of any failure by the Trust to provide the
services and furnish the materials under the terms of this Agreement
(including a failure, whether unintentional or in good faith or otherwise,
to comply with the qualification representation specified in Section 3.7
Of this Agreement and the diversification requirements specified in
Section 3.6 of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in this Agreement
or arise out of or result from any other material breach of this Agreement
by the Underwriter; as limited by and in accordance with the provisions of
Sections 5.2(b) and 5.2(c) hereof.
(b) The Underwriter shall not be liable under this indemnification
provision with respect to any Losses to which an Indemnified Party would
otherwise be subject by reason of such Indemnified Party's willful misfeasance,
bad faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of
16
<PAGE>
such Indemnified Party's reckless disregard of obligations and duties under this
Agreement or to each Company or the Account, whichever is applicable.
(c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom Such action is brought otherwise than
on account of this indemnification provision. in case any such action is brought
against the Indemnified Parties, the Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to Such party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party Shall bear the expenses of any additional counsel retained by it, and the
Underwriter will not be liable to Such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
(d) The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of each Account.
5.3 INDEMNIFICATION BY THE TRUST
(a) The Trust agrees to indemnify and hold harmless the Company, and each
of its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 5.3) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Trust, which consent shall not be unreasonably withheld) or
litigation (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements result from the gross negligence, bad faith or willful
misconduct of the Board or any member thereof, are related to the operations of
the Trust, and arise -out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise out
of or result from any other material
17
<PAGE>
breach of this Agreement by the Trust; as limited by and in accordance with the
provisions of Section 5.3(b) and 5.3(c) hereof. It is understood and expressly
stipulated that neither the holders of shares of the Trust nor any Trustee,
officer, agent or employee of the Trust shall be personally liable hereunder,
nor shall any resort to be had to other private property for the satisfaction of
any claim or obligation hereunder, but the Trust only shall be liable.
(b) The Trust shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against any Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company, the Trust, the Underwriter or each Account, whichever is
applicable.
(c) The Trust shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claims shall have been served upon such Indemnified Party (or
after such Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Trust of any such claim shall not
relieve the Trust from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Trust will be entitled to participate, at its own
expense, in the defense thereof. The Trust also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Trust to such party of the Trust's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Trust will not be liable to such
party under this Agreement for any legal or other expenses subsequently incurred
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.
(d) The Company and the Underwriter agree promptly to notify the Trust of
the commencement of any litigation or proceedings against it any of its
respective officers or directors in connection with the Agreement, the issuance
or sale of the Contracts, with respect to the operation of either the Account,
- -or the sale or acquisition of share of the Trust.
ARTICLE V1.
TERMINATION
18
<PAGE>
6.1 This Agreement may be terminated by any party in its entirety or with
respect to one, some or all Portfolios or any reason by ninety (90) days advance
written notice delivered to the other parties, and shall terminate immediately
in the event of its assignment, as that term is used in the 1940 Act.
6.2 This Agreement may be terminated immediately by either the Trust or
the Underwriter following consultation with the Trustees upon written notice to
the Company if :
(a) the Company notifies the Trust or the Underwriter that the
exemption from registration under Section 3(c) of the 1940 Act no longer
applies, or might not apply in the future, to the unregistered Accounts,
or that the exemption from registration under Section 4(2) or Regulation D
promulgated under the 1933 Act no longer applies or might not apply in the
future, to interests under the unregistered Contracts; Or
(b) either one or both of the Trust or the Underwriter respectively,
shall determine, in their sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its business,
operations, financial condition or prospects since the date of this
Agreement or is the subject of material adverse publicity.
6.3 This Agreement may be terminated immediately by the Company upon
written notice to the Trust and the Underwriter:
(a) if the Company Shall determine, in its sole judgment exercised
in good faith, that either the Trust or the Underwriter has suffered a
material adverse change in its business, operations, financial conditions
or prospects since the date of this Agreement or is the subject of
material adverse publicity; or
(b) if the Trust and Underwriter fail to promptly remedy a breach of
section 3.6 hereof.
6.4 If this Agreement is terminated for any reason, except under Article
IV (Potential Conflicts) above, the Trust shall, at the option of the Company,
continue to make available additional shares of any Portfolio and redeem shares
of any Portfolio pursuant to all of the terms and conditions of this Agreement
for all Contracts in effect on the effective date of termination of this
Agreement. If this Agreement is terminated pursuant to Article IV, the
provisions of Article IV shall govern.
6.5 The provisions of Articles 11 (Representations and Warranties) and V
(Indemnification) shall survive the termination of this Agreement. All other
applicable provisions of this Agreement shall survive the termination of this
Agreement,
19
<PAGE>
as long as shares of the Trust are held on behalf of Contract owners in
accordance with Section 6.4, except that the Trust and the Underwriter shall
have no further obligation to sell Trust shares with respect to Contracts issued
after termination.
6.6 The Company shall not redeem Trust shares attributable to the
Contracts (as opposed to Trust shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii) as
permitted by an order of the SEC pursuant to Section 26(b) of the 1940 Act. Upon
request, the Company will promptly furnish to the Trust and the Underwriter the
opinion of counsel for the Company (which counsel shall be reasonably
satisfactory to the Trust and the Underwriter) to the effect that any redemption
pursuant to clause (ii) above is a Legally Required Redemption. Furthermore,
except in cases where permitted under the terms of the Contracts, the Company
shall not prevent Contract owners from allocating payments to a Portfolio that
was otherwise available under the Contracts without first giving the Trust or
the Underwriter 90 days notice of its intention to do so.
ARTICLE VII.
NOTICES.
Any notice Shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such Party may from time to time specify in
writing to the other party.
If to the Trust or the Underwriter:
Templeton Variable Products Series Fund or
Franklin Templeton Distributors, Inc.
500 E. Broward Boulevard
Fort Lauderdale, FL 33394-3091
Attention: Barbara J. Green, Trust Secretary
WITH A COPY TO
Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, CA 94404
Attention: Karen L. Skidmore, Senior Corporate Counsel
If to the Company:
20
<PAGE>
The Lincoln National Life Insurance Company
1300 South Clinton Street, 2H-02
Fort Wayne, IN 46802
Attention: Kelly D. Clevenger, Vice President
ARTICLE VIIII.
MISCELLANEOUS
8.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
8.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
8.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Florida. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of Such orders. Copies of any such orders
shall be promptly forwarded by the Trust to the Company.
8.5 The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any Such
liabilities.
8.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD, and
state insurance regulators) and Shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
8.7 Each party hereto shall treat as confidential the names and addresses
of the Contract owners and all information reasonably identified as confidential
in writing by any other party hereto, and, except as permitted by this Agreement
or as required by legal process or regulatory authorities, shall not disclose,
disseminate, or utilize
21
<PAGE>
such names and addresses and other confidential information until such time as
they may come into the public domain, without the express written consent of the
affected party. Without limiting the foregoing, no party hereto shall disclose
any information that such party has been advised is proprietary, except such
information that such party is required to disclose by any appropriate
governmental authority (including, without limitation, the SEC, the NASD, and
state securities and insurance regulators).
8.8 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
8.9 The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect, except as provided in
Section 1.10.
8.10 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written approval of the other party.
8.11 No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Participation Agreement as of the date and year first
above written.
The Company:
The Lincoln National Life Insurance Company
-------------------------------------------
By its authorized officer
By:
Name:
Title:
The Trust:
Templeton Variable Products Series Fund
---------------------------------------
By its authorized officer
By:
Name:
Title:
22
<PAGE>
The Underwriter:
Franklin Templeton Distributors, Inc.
-------------------------------------
By its authorized officer
By:
Name:
Title:
SCHEDULE A
SEPARATE ACCOUNTS OF
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
1. Lincoln Life Flexible Premium Variable Life Account R
Date Established:
SEC Registration Number: 333-43107
2. Lincoln Life Variable Life Account M
Date Established:
SEC Registration Number: 333-42479
23
<PAGE>
SCHEDULE B
TRUST PORTFOLIOS AND CLASSES AVAILABLE
Templeton Variable Products Series Adviser
---------------------------------- -------
Templeton Asset Allocation Fund Templeton Investment Counsel, Inc.
-Class 1
Templeton international Fund Templeton Investment Counsel, Inc.
-Class 1
Templeton Stock Fund Templeton Investment Counsel, Inc.
-Class 1
24
<PAGE>
SCHEDULE C
VARIABLE ANNUITY CONTRACTS
ISSUED BY LINCOLN NATIONAL LIFE INSURANCE COMPANY
REPRESENTATIVE
CONTRACT FORM NUMBER
1. Lincoln Life Flexible Premium Variable Life Account R
Title: SVUL I Form: LN650LL
SEC Registration Number: 333-43107
2. Lincoln Life Variable Account M
Title: VUL I Form: LN605LL
SEC Registration Number: 333-42479
25
<PAGE>
SCHEDULE D
OTHER PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
AIM Capital Appreciation Fund
AIM Diversified income Fund
AIM V.I. Growth Fund
AIM V.I. Value Fund
BT Equity 500 Index Fund
Delaware Emerging Markets Series
Delaware Small Cap Value Series
Delaware Trend Series
Fidelity VIP Equity-Income Portfolio
Fidelity VIP 11 Asset Manager Portfolio
Fidelity VIP 11 Investment Grade Bond Portfolio
Lincoln National Money Market Fund
MFS Emerging Growth Series
MFS Total Return Series
MFS Utilities Series
OpCap Global Equity Portfolio
OpCap Managed Portfolio
26
<PAGE>
FRANKLIN TEMPLETON 777 Mariners Island Blvd.
P.O. Box 7777
San Mateo, CA 94403-7777
let 1-800/632-2301
May 18,1999
Steven M. Kluever
Assistant Vice President
Lincoln National Life Insurance Company
1300 South Clinton Street, 4C01
Fort Wayne, IN 46802
Re: Amendment to Fund Participation Agreement with the Templeton
Variable Products Series Fund
Dear Steve:
Enclosed for your records is an original copy of the Amendment to Fund
Participation Agreement by and among The Lincoln National Life
Insurance Company, Franklin Templeton Distributors, Inc. and the
Templeton Variable Products Series Fund.
If you have any questions, feel free to contact me at (650) 312-6244.
Sincerely,
Isaac Ruiz
Variable Insurance Products Paralegal
Enclosures
cc: Scott Campbell
Karen L. Skidmore
Mark Jensen
<PAGE>
AMENDMENT TO FUND PARTICIPATION AGREEMENT
EFFECTIVE AS OF MAY 1, 1999
The Lincoln National Life Insurance Company, Templeton Variable
Products Series Fund and Franklin Templeton Distributors, Inc. hereby amend
their Fund Participation Agreement dated as of May 22, 1998 (the "Agreement"),
by:
Replacing Schedules A, B and C of the Agreement with Amended Schedule A-C,
attached;
2. Replacing Schedule D of the Agreement with Amended Schedule D, attached; and
3. Adding Schedule E, attached.
IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Amendment to Fund Participation Agreement, to be
effective as of the date first stated above.
The Lincoln National Life Templeton Variable Products
Insurance Company Series Fund
- ------------------------- ----------------------------
By its authorized officer By its authorized officer
By: By:
Name: Name:
Title: Title:
Franklin Templeton
Distributors, Inc.
----------------------------
By its authorized officer
By:
Name:
Title:
<PAGE>
1
SCHEDULE A-C
(Cumulative Combined)
AMENDED PURSUANT TO FUND PARTICIPATION AGREEMENT AMENDMENT
EFFECTIVE AS OF MAY 1, 1999
VARIABLE UNIVERSAL LIFE POLICIES
VARIABLE ANNUITY CONTRACTS
ISSUED BY THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
-----------------------------------------------------
<TABLE>
<CAPTION>
Contract 1 Contract 2 Contract 3
<S> <C> <C> <C>
Contract/Product SVUL I VUL I Lincoln VUL
Name
Registered (Y/N) Yes Yes Yes
SEC Registration 811-08579 811-08557 811-08557
Number
Representative Form LN650LL LN605LL LN660
Numbers LN615 LN615
LN660 LN605
Separate Account Lincoln Life Flexible Lincoln Life Flexible Lincoln Life Flexible
Name Premium Variable Life Premium Variable Life Premium Separate
Account
Account R Account M M
SEC Registration 333-43107 333-42479 333-42479
Number
Templeton Variable Templeton Asset Templeton Asset Templeton International
Products Series Allocation Fund - Class Allocation Fund - Class Fund - Class 2 (Templeton
Portfolios and Classes 1 (Templeton 1 (Templeton Investment Investment Counsel, Inc.)
Available Under the Investment Counsel, Counsel, Inc.)
Contract (Adviser) Inc.) Templeton Stock Fund -
Templeton International Class 2 (Templeton
Templeton International Fund - Class I Investment Counsel, Inc.)
Fund -Class 1 (Templeton Investment
(Templeton Investment Counsel, Inc.)
Counsel, Inc.)
Templeton Stock Fund -
Templeton Stock Fund Class I (Templeton
- Class 1 (Templeton Investment Counsel,
Investment Counsel, Inc.)
Inc.)
</TABLE>
<PAGE>
2
SCHEDULE A-C (CONTINUED)
AMENDED PURSUANT TO FUND PARTICIPATION AGREEMENT AMENDMENT
EFFECTIVE AS OF MAY 1, 1999
VARIABLE UNIVERSAL LIFE POLICIES
VARIABLE ANNUITY CONTRACTS
ISSUED BY THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
-----------------------------------------------------
<TABLE>
<CAPTION>
Contract 4 Contract 5 Contract 6
<S> <C> <C> <C>
Contract/Product CVUL Lincoln SVUL
Name
Registered (Y/N) Yes Yes
SEC Registration 811-08579
Number
Representative Form LN920 LN650
Numbers LN921
Separate Account Lincoln Life Flexible Lincoln Life Flexible
Name Premium Variable Life Premium Variable Life
Account S Account R
SEC Registration 333-72875 333-43107
Number
Templeton Variable Templeton Asset Templeton International
Products Series Allocation Fund - Class Fund - Class 2
Portfolios and Classes 2 (Templeton (Templeton Investment
Available Under the Investment Counsel, Counsel, Inc.)
Contract (Adviser) Inc.)
Templeton Stock Fund -
Templeton International Class 2 (Templeton
Fund - Class 2 Investment Counsel,
(Templeton Investment Inc.)
Counsel, Inc.)
Templeton Stock Fund
- Class 2 (Templeton
Investment Counsel,
Inc.)
</TABLE>
<PAGE>
3
SCHEDULE D
AMENDED PURSUANT TO FUND PARTICIPATION AGREEMENT AMENDMENT
EFFECTIVE AS OF MAY 1, 1999
OTHER PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
----------------------------------------------
AIM Capital Appreciation Fund
AIM Diversified Income Fund
AIM V.I. Growth Fund
AIM V.I. Value Fund
AIM International Fund
American Century International
American Century Income and Growth
Baron Capital Asset Fund
BT Equity 500 Index Fund RT Small Cap Index Fund
BT EAFE Index Fund
Delaware Emerging Markets Series
Delaware Small Cap Value Series
Delaware Trend Series
Delaware Delchester Series
Delaware Devon Series
Delaware International Series
Delaware REIT Series
Fidelity VIP Equity-Income Portfolio
Fidelity VIP II Asset Manager Portfolio
Fidelity VIP H Investment Grade Bond Portfolio
Fidelity VIP Growth
Fidelity VIP II Contrafund
Fidelity VIP III Growth Opportunities
Janus Aspen Aggressive Growth
Janus Aspen Balanced
Janus Aspen Worldwide
<PAGE>
4
SCHEDULE D (CONTINUED)
AMENDED PURSUANT TO FUND PARTICIPATION AGREEMENT AMENDMENT
EFFECTIVE AS OF MAY 1, 1999
OTHER PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
----------------------------------------------
Lincoln National Money Market Fund
Lincoln National Bond Fund
Lincoln National Capital Appreciation Fund
Lincoln National Equity-Income Fund
Lincoln National Social Awareness Fund
Lincoln National Global Asset Allocation Fund
MFS Emerging Growth Series
MFS Total Return Series
MFS Utilities Series
MFS Capital Opportunities Series
MFS Research
Neuberger Berman Partners Fund
Neuberger Berman Midcap Growth Fund
OpCap Global Equity Portfolio
OpCap Managed Portfolio
Oppenheimer Mainstreet Growth and Income Fund
<PAGE>
5
SCHEDULE E
AMENDED PURSUANT TO FUND PARTICIPATION AGREEMENT AMENDMENT
EFFECTIVE AS OF MAY 1, 1999
RULE 12B-1 PLANS
COMPENSATION SCHEDULE
---------------------
Each Portfolio named below shall pay the following amounts pursuant to the
terms and conditions referenced below under its Class 2 Rule 12b- I
Distribution Plan, stated as a percentage per year of Class 2's average daily
net assets represented by shares of Class 2.
<TABLE>
<CAPTION>
Portfolio Name Maximum Annual Payment Rate
- -----------------------------------------------------------------------------
<S> <C>
TEMPLETON ASSET ALLOCATION FUND 0.25%
TEMPLETON INTERNATIONAL FUND 0.25%
TEMPLETON STOCK FUND 0.25%
</TABLE>
Agreement Provisions
--------------------
If the Company, on behalf of any Account, purchases Trust Portfolio
shares ('Eligible Shares") which are subject to a Rule 12b- 1 Plan adopted
under the 1940 Act (the "Plan" '), the Company may participate in the Plan.
To the extent the Company or its affiliates, agents or designees
(collectively "you") you provide administrative and other services which assist
in the promotion and distribution of Eligible Shares or Variable Contracts
offering Eligible Shares, the Underwriter, the Trust or their affiliates
(collectively, "we") may pay you a Rule 12b- I fee. "Administrative and other
services" may include, but are not limited to, furnishing personal services to
owners of Contracts which may invest in Eligible Shares ("Contract Owners"),
answering routine inquiries regarding a Portfolio, coordinating responses to
Contract Owner inquiries regarding the Portfolios, maintaining such accounts or
providing such other enhanced services as a Trust Portfolio or Contract may
require, maintaining customer accounts and records, or providing other services
eligible for service fees as defined under NASD rules. Your acceptance of such
compensation is your acknowledgment that eligible services have been rendered.
All Rule 12b- I fees, shall be based on the value of Eligible Shares owned by
the Company on behalf of its Accounts, and shall be calculated on the basis and
at the rates set forth in the Compensation Schedule stated above. The aggregate
annual fees paid pursuant to each Plan shall not exceed the amounts stated as
the "annual maximums" in the Portfolio's prospectus, unless an increase is
approved by shareholders as provided in the Plan. These maximums shall be a
specified percent of the value of a Portfolio's net assets attributable to
Eligible Shares owned by the Company on behalf of its Accounts (determined in
the same manner as the Portfolio uses to compute its net assets as set forth in
its effective Prospectus).
<PAGE>
6
You shall furnish us with such information as shall reasonably be
requested by the Trust's Boards of Trustees ("Trustees") with respect to the
Rule 12b- I fees paid to you pursuant to the Plans. We shall furnish to the
Trustees, for their review on a quarterly basis, a written report of the
amounts expended under the Plans and the purposes for which such expenditures
were made.
The Plans and provisions of any agreement relating to such Plans must
be approved annually by a vote of the Trustees, including the Trustees who are
not interested persons of the Trust and who have no financial interest in the
Plans or any related agreement ("Disinterested Trustees"). Each Plan may be
terminated at any time by the vote of a majority of the Disinterested Trustees,
or by a vote of a majority of the outstanding shares as provided in the Plan,
on sixty (60) days' written notice, without payment of any penalty. The Plans
may also be terminated by any act that terminates the Underwriting Agreement
between the Underwriter and the Trust, and/or the management or administration
agreement between Franklin Advisers, Inc. or Templeton Investment Counsel, Inc.
or their affiliates and the Trust. Continuation of the Plans is also
conditioned on Disinterested Trustees being ultimately responsible for
selecting and nominating any new Disinterested Trustees. Under Rule 12b-1, the
Trustees have a duty to request and evaluate, and persons who are party to any
agreement related to a Plan have a duty to furnish, such information as may
reasonably be necessary to an informed determination of whether the Plan or any
agreement should be implemented or continued. Under Rule 12b-1, the Trust is
permitted to implement or continue Plans or the provisions of any agreement
relating to such Plans from year- to-year only if, based on certain legal
considerations, the Trustees are able to conclude that the Plans will benefit
each affected Trust Portfolio and class. Absent such yearly determination, the
Plans must be terminated as set forth above. In the event of the termination of
the Plans for any reason, the provisions of this Schedule E relating to the
Plans will also terminate.
Any obligation assumed by the Trust pursuant to this Agreement shall be limited
in all cases to the assets of the Trust and no person shall seek satisfaction
thereof from shareholders of the Trust. You agree to waive payment of any
amounts payable to you by Underwriter under a Plan until such time as the
Underwriter has received such fee from the Fund.
The provisions of the Plans shall control over the provisions of the
Participation Agreement, including this Schedule E, in the event of any
inconsistency.
You agree to provide complete disclosure as required by all applicable statutes,
rules and regulations of all rule 12b-1 fees received from us in the prospectus
of the contracts.
<PAGE>
AMENDMENT TO FUND PARTICIPATION AGREEMENT
The Lincoln National Life Insurance Company, Templeton Variable Products
Series Fund and Franklin Templeton Distributors, Inc. hereby amend their Fund
Participation Agreement dated as of May 22, 1998, and as amended on May 1, 1999
by:
1. Replacing Schedule A-C of the Agreement with Amended Schedule A-C,
attached;
2. Replacing Schedule D of the Agreement with Amended Schedule D,
attached;
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment to Fund Participation Agreement, to be effective as of
October 15, 1999.
<TABLE>
<S> <C>
Lincoln National Life Insurance Company Templeton Variable Products Series Fund
- --------------------------------------- ---------------------------------------
By its authorized officer By its authorized officer
By: By:
--------------------------------------- ---------------------------------------
Name: Steven M. Kluever Name: Karen L. Skidmore
Title: Second Vice President Title: Assistant Vice President and
Assistant Secretary
Franklin Templeton Distributors, Inc.
---------------------------------------
By its authorized officer
By:
---------------------------------------
Name: Deborah Gatzek
Title: Senior Vice President and
Assistant Secretary
</TABLE>
1
<PAGE>
SCHEDULE A-C
CONTRACTS ISSUED BY LINCOLN NATIONAL LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
CONTRACT 1 CONTRACT 2 CONTRACT 3
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONTRACT/PRODUCT SVUL I VUL I Lincoln VUL
NAME AND TYPE
REGISTERED (Y/N) Yes Yes Yes
SEC REGISTRATION 811-08579 811-08557 811-08557
NUMBER -1940
ACT
REPRESENTATIVE LN650LL LN605LL LN660
FORM NUMBERS LN615 LN615
LN660 LN605
SEPARATE ACCOUNT Lincoln Life Flexible Lincoln Life Flexible Lincoln Life Flexible
NAME/DATE Premium Variable Life Premium Variable Life Premium Separate Account
ESTABLISHED Account R Account M M
SEC REGISTRATION 333-43107 333-42479 333-42479
NUMBER - 1933
ACT
TEMPLETON Templeton Asset Templeton Asset Templeton International
VARIABLE Allocation Fund - Class 1 Allocation Fund - Class 1 Fund - Class 2
PRODUCTS SERIES Templeton Investment Templeton Investment Templeton Investment
FUND ("TVP") - Counsel, Inc. Counsel, Inc. Counsel, Inc.
PORTFOLIOS AND
CLASSES - ADVISER Templeton International Templeton International Templeton Stock Fund -
Fund - Class 1 Fund - Class 1 Class 2
Templeton Investment Templeton Investment Templeton Investment
Counsel, Inc. Counsel, Inc. Counsel, Inc.
Templeton Stock Fund - Templeton Stock Fund -
Class 1 Class 1
Templeton Investment Templeton Investment
Counsel, Inc. Counsel, Inc.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
SCHEDULE A-C
CONTRACTS ISSUED BY LINCOLN NATIONAL LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
CONTRACT 4 CONTRACT 5 CONTRACT 6
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONTRACT/PRODUCT CVUL Lincoln SVUL VULDB
NAME AND TYPE
REGISTERED (Y/N) Yes Yes Yes
SEC REGISTRATION 811-08579 811-08557
NUMBER - 1940
ACT
REPRESENTATIVE LN920 LN650 LN680
FORM NUMBERS LN921
SEPARATE ACCOUNT Lincoln Life Flexible Lincoln Life Flexible Lincoln Life Flexible
NAME/DATE Premium Variable Life Premium Variable Life Premium Variable Life
ESTABLISHED Account S Account R Account M
SEC REGISTRATION 333-72875 333-43107 333-40745
NUMBER - 1933
ACT
TEMPLETON Templeton Asset Templeton International TVP - Templeton
VARIABLE Allocation Fund - Class 2 Fund - Class 2 International Fund - Class
PRODUCTS SERIES Templeton Investment Templeton Investment 2 (Templeton Investment
FUND ("TVP") - Counsel, Inc. Counsel, Inc. Counsel, Inc.)
PORTFOLIOS AND
CLASSES - ADVISER Templeton International Templeton Stock Fund - TVP - Templeton Stock
Fund - Class 2 Class 2 Fund - Class 2 -
Templeton Investment Templeton Investment Templeton Investment
Counsel, Inc. Counsel, Inc. Counsel, Inc.
Templeton Stock Fund -
Class 2
Templeton Investment
Counsel, Inc.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
SCHEDULE D
OTHER PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
AIM Diversified Income Fund
AIM V.I. Growth Fund
AIM V.I. Value Fund
AIM International Fund
American Century International
American Century Income and Growth
American Variable Insurance Series
1) Global Small Capitalization Fund - Class 2
2) Growth Fund - Class 2
3) Growth-Income Fund - Class 2
Baron Capital Asset Fund
BT Equity 500 Index Fund
BT Small Cap Index Fund
BT EAFE Index Fund
Delaware Emerging Markets Series
Delaware Small Cap Value Series
Delaware Trend Series
Delaware Delchester Series
Delaware Devon Series
Delaware International Series
Delaware REIT Series
Fidelity VIP Equity-Income Portfolio
Fidelity VIP II Asset Manager Portfolio
Fidelity VIP II Investment Grade Bond Portfolio
Fidelity VIP Growth
Fidelity VIP II Contrafund
Fidelity VIP III Growth Opportunities
Janus Aspen Aggressive Growth
Janus Aspen Balanced
Janus Aspen Worldwide
5
<PAGE>
SCHEDULE D
OTHER PORTFOLIOS AVAILABLE UNDER THE CONTRACTS
Lincoln National Money Market Fund
Lincoln National Bond Fund
Lincoln National Capital Appreciation Fund
Lincoln National Equity-Income Fund
Lincoln National Social Awareness Fund
Lincoln National Global Asset Allocation Fund
MFS Emerging Growth Series
MFS Total Return Series
MFS Utilities Series
MFS Capital Opportunities Series
MFS Research
Neuberger Berman Partners Fund
Neuberger Berman Midcap Growth Fund
OpCap Global Equity Portfolio
OpCap Managed Portfolio
Oppenheimer Mainstreet Growth and Income Fund
6
<PAGE>
REDACTED
AMENDMENT TO FUND PARTICIPATION AGREEMENT
The Lincoln National Life Insurance Company, Templeton Variable Products
Series Fund and Franklin Templeton Distributors, Inc. hereby amend their Fund
Participation Agreement dated as of May 22, 1998, and as amended on May 1, 1999,
and October 15, 1999 (the "Agreement") by:
1. Adding Franklin Templeton Variable Insurance Products Trust, an open-end
management investment company organized as a business trust under
Massachsetts law, as a party to the Agreement between and among
Templeton Variable Products Series Fund (the "Trust"), an open-end
management investment company organized as a business trust under
Massachusetts law, Franklin Templeton Distributors, Inc., a California
corporation, the Trust's principal underwriter (the "Underwriter") and
Lincoln National Life Insurance Company, a life insurance company
organized as a corporation under Indiana law (the "Company"). Both
Templeton Variable Products Series Fund and Franklin Templeton Variable
Insurance Products Trust shall hereinafter be referred to as the
"Trust."
2. Adding Section, "Agreement"
AGREEMENT
1.0 Form of Agreement. This Agreement shall also create a separate
agreement for each Trust and the Underwriter as though each Trust and
the Underwriter had executed an identical Fund Participation Agreement
with the Company. No rights, responsibilities or liabilities arising
under the Agreement as it pertains to one Trust shall be enforceable
by or against any party to the Agreement as it pertains to another
Trust.
3. Adding Franklin Templeton Variable Insurance Products Trust to Article
VII, "Notices"
If to the Company:
Franklin Templeton Variable Insurance Products Trust
777 Mariners Island Blvd.
San Mateo, CA 94404
Attention: Karen Skidmore, Assistant Vice President,
Assistant Secretary
4. Replacing Schedule A-C of the Agreement with Amended Schedule A-C,
(REDACTED);
5. Replacing Schedule D of the Agreement with Amended Schedule D,
(REDACTED);
6. Replacing Schedule E of the Agreement with Amended Schedule E,
(REDACTED).
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment to Fund Participation Agreement, to be effective as of
December 1, 1999.
<PAGE>
REDACTED
<TABLE>
<S> <C>
Lincoln National Life Insurance Company Templeton Variable Products Series Fund
- --------------------------------------- ---------------------------------------
By its authorized officer By its authorized officer
By: By:
------------------------------------ -------------------------------------------
Name: Name: Karen L. Skidmore
Title: Title: Assistant Vice President and
Assistant Secretary
Franklin Templeton Variable Insurance Products Fund
---------------------------------------------------
By its authorized officer
By:
-------------------------------------------
Name: Karen L. Skidmore
Title: Assistant Vice President and
Assistant Secretary
Franklin Templeton Distributors, Inc.
-------------------------------------
By its authorized officer
By:
-------------------------------------------
Name: Deborah Gatzek
Title: Senior Vice President
</TABLE>
<PAGE>
Exhibit 10
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" in the Post Effective Amendment No. 3 to the Registration Statement
(Form N-4 No. 333-40937), which is incorporated by reference into
Post-Effective Amendment No. 4, and the related Statement of Additional
Information appearing therein and pertaining to Lincoln Life Variable Annuity
Account N, and to the use therein of our reports dated (a) February 1, 1999,
with respect to the statutory-basis financial statements of The Lincoln
National Life Insurance Company, and (b) March 30, 1999, with respect to the
financial statements of Lincoln Life Variable Annuity Account N.
/s/ Ernst & Young, LLP
Fort Wayne, Indiana
December 13, 1999
<PAGE>
B. NON-STANDARDIZED QUOTATIONS
This schedule presents the formulas and calculation employed in
producing non-standardized investment results. Amount and Compound Growth
Rate calculations are shown for all base periods disclosed.
The formula for calculating the current Amount of an originally invested
$10,000 for a particular base period is:
CP - (X / Y) * $10,000
where:
CP = Amount at End of Base Period
X = Accumulation Unit Value at End of Base Period
Y = Accumulation Unit Value at Beginning of Base Period
The formula for calculating the Compound Growth Rate for a particular
base period is:
(1 / N)
GR = (X / Y) - 1
where:
GR = Annualized Return
X = Accumulation Unit Value at End of Base Period
Y = Accumulation Unit Value at Beginning of Base Period
N = Number of Years of Fund Performance Being Evaluated
Separate Account N - Standardized 1 Year Returns
ONE YEAR RETURNS PERIOD ENDING 9/30/99
<TABLE>
<CAPTION>
AVIS Growth-Income 12b(1)
<S> <C>
Fund Value $1,236.09
Fee $1.25
Surr Charge $60.00
Final value $1,174.84
Annual Return 17.48%
</TABLE>
Calculation of Annual Return
Final Value = 1,000 * ( 9-30-99 Unit Value/ 9-30-98 Unit Value) - Annual Fee -
Surrender Charge
Annual Return = Final Value / 1,000 - 1
Unit Values
<TABLE>
<CAPTION>
Date AVIS Growth-Income 12b(1)
<S> <C> <C>
9/30/98 8.396399
9/30/99 10.378679
Table
Separate Account N - Standardized 5 Year Returns
</TABLE>
FIVE YEAR RETURNS PERIOD ENDING 9/30/99
<TABLE>
<CAPTION>
AVIS Growth-Income 12b(1)
<S> <C>
Year One $1,230.95
Fee $1.25
Final Value $1,229.70
Year two $1,414.18
Fee $1.25
Final Value $1,412.93
Year Three $1,850.93
Fee $1.25
Final Value $1,849.68
Year Four $1,820.77
Fee $1.25
Final Value $1,819.52
Year Five $2,249.08
Fee $1.25
Surr Charge $20.00
$2,227.83
17.38%
</TABLE>
Calculation of Annual Return
Final Value Year One = 1,000 * ( 9-30-95 Unit Value/ 9-30-94 Unit Value) -
Annual Fee Year One
Final Value Year Two = Final Value Year One * ( 9-30-96 Unit Value/ 9-30-95 Unit
Value) - Annual Fee Year Two
<PAGE>
Final Value Year Three = Final Value Year Two * ( 9-30-97 Unit Value/ 9-30-96
Unit Value) - Annual Fee Year Three
Final Value Year Four = Final Value Year Three * ( 9-30-98 Unit Value/ 9-30-97
Unit Value) - Annual Fee Year Four
Final Value Year Five = Final Value Year Four * ( 9-30-99 Unit Value/ 9-30-98
Unit Value) - Annual Fee Year Five - Surrender Charge
Annual Return = (Final Value Year Five / 1000) ^ (1/5) - 1
<TABLE>
<CAPTION>
Unit Values
Date AVIS Growth-Income 12b(1)
<S> <C> <C>
9/30/94 4.599567
9/30/95 5.661854
9/30/96 6.511259
9/30/97 8.529720
9/30/98 8.396399
9/30/99 10.378679
</TABLE>
Separate Account N - Standardized 10 Year Returns
TEN YEAR/LIFETIME RETURNS PERIOD ENDING 9/30/99
<TABLE>
<CAPTION>
AVIS Growth-Income 12b(1)
<S> <C>
Year One $878.37
Fee $1.25
Final Value $877.12
Year two $1,090.93
Fee $1.25
Final Value $1,089.68
Year Three $1,188.01
Fee $1.25
Final Value $1,186.76
Year Four $1,321.52
Fee $1.25
Final Value $1,320.27
Year Five $1,389.29
Fee $1.25
Surr Charge $1,388.04
Year Six $1,708.61
Fee $1.25
Final Value $1,707.36
Year Seven $1,963.50
Fee $1.25
Final Value $1,962.25
Year Eight $2,570.54
Fee $1.25
Final Value $2,569.29
Year Nine $2,529.13
Fee $1.25
Final Value $2,527.88
Year Ten $3,124.68
Fee $1.25
<PAGE>
<S> <C>
Surr Charge $0.00
Final Value $3,123.43
And Return 12.06%
</TABLE>
Separate Account N - Standardized 10 Year/Lifetime Returns
Calculation of Annual Return
For the AVIS Growth-Income 12b(1) Fund
Final Value Year One = 1,000 * ( 9-30-90 Unit Value/ 9-30-89 Unit Value) -
Annual Fee Year One
Final Value Year Two = Final Value Year One * ( 9-30-91 Unit Value/ 9-30-90 Unit
Value) - Annual Fee Year Two
Final Value Year Three = Final Value Year Two * ( 9-30-92 Unit Value/ 9-30-91
Unit Value) - Annual Fee Year Three
Final Value Year Four = Final Value Year Three * ( 9-30-93 Unit Value/ 9-30-92
Unit Value) - Annual Fee Year Four
Final Value Year Five = Final Value Year Four * ( 9-30-94 Unit Value/ 9-30-93
Unit Value) - Annual Fee Year Five
Final Value Year Six = Final Value Year Five * ( 9-30-95 Unit Value/ 9-30-94
Unit Value) - Annual Fee Year Five
Final Value Year Seven = Final Value Year Six * ( 9-30-96 Unit Value/ 9-30-95
Unit Value) - Annual Fee Year Five
Final Value Year Eight = Final Value Year Seven * ( 9-30-97 Unit Value/ 9-30-96
Unit Value) - Annual Fee Year Five
Final Value Year Nine = Final Value Year Eight * ( 9-30-98 Unit Value/ 9-30-97
Unit Value) - Annual Fee Year Five
Final Value Year Ten = Final Value Year Nine * ( 9-30-99 Unit Value/ 9-30-98
Unit Value) - Annual Fee Year Five - Surrender Charge
Annual Return = (Final Value Year Ten / 1,000) ^ (1/10) - 1
<TABLE>
<CAPTION>
Unit Values
Date AVIS Growth-Income 12b(1)
<S> <C> <C>
9/30/89 3.295621
9/30/90 2.894774
9/30/91 3.600430
9/30/92 3.925310
9/30/93 4.371053
9/30/94 4.599567
9/30/95 5.661854
9/30/96 6.511259
9/30/97 8.529720
9/30/98 8.396399
9/30/99 10.378679
Period (in years) 10.0000
</TABLE>
Non-Standardized Performance - Separate Account N
<TABLE>
<CAPTION>
Accumulated Amounts
Base Period
Years Start Date End Date
<S> <C> <C> <C>
1 9/30/98 9/30/99 $1,236.09
2 9/30/97 9/30/99 $1,216.77
3 9/30/96 9/30/99 $1,593.96
4 9/30/95 9/30/99 $1,833.09
5 9/30/94 9/30/99 $2,256.45
Life 2/8/84 9/30/99 $7,615.44
</TABLE>
Accumulated Amounts = (End Date Unit Value / Start Date Unit Value) * 1,000
Compound Growth Rate
<PAGE>
<TABLE>
<CAPTION>
Base Period
Years Start Date End Date
<S> <C> <C> <C>
1 9/30/98 9/30/99 23.61%
2 9/30/97 9/30/99 10.31%
3 9/30/96 9/30/99 16.81%
4 9/30/95 9/30/99 16.36%
5 9/30/94 9/30/99 17.68%
Life 2/8/84 9/30/99 13.85%
</TABLE>
One Year Return = ( 9-30-99 Unit Value/ 9-30-98 Unit Value) - 1
Two Year Return = ( 9-30-99 Unit Value/ 9-30-97 Unit Value) ^ (1/2) - 1
Three Year Return = ( 9-30-99 Unit Value/ 9-30-96 Unit Value) ^ (1/3) - 1
Four Year Return = ( 9-30-99 Unit Value/ 9-30-95 Unit Value) ^ (1/4) - 1
Five Year Return = ( 9-30-99 Unit Value/ 9-30-94 Unit Value) ^ (1/5) - 1
Life Return = ( 9-30-99 Unit Value/ Inception Date Unit Value) ^ (1/period) - 1
Non-Standardized Performance - Separate Account N
<TABLE>
<CAPTION>
Unit Values AVIS Growth-Income 12b(1)
<S> <C>
9/30/99 10.378679
9/30/98 8.396399
9/30/97 8.529720
9/30/96 6.511259
9/30/95 5.661854
9/30/94 4.599567
</TABLE>
Life Returrns AVIS Growth-Income 12b(1)
<TABLE>
<CAPTION>
<S> <C>
Inception Date 2/8/84
Unit Value 1.362846
Period(years) 15.6411
Table
</TABLE>
<PAGE>
POWER OF ATTORNEY
I undersigned officer of The Lincoln National Life Insurance Company, hereby
revoke all powers of attorney authorizing any person to act as attorney-in-fact
relative to Lincoln Life Variable Annuity Account N (Delaware-Lincoln
ChoicePlus), which were previously executed by me and do hereby severally
constitute and appoint Kelly D. Clevenger, Jeffrey K. Dellinger, and Steven M.
Kluever, my true and lawful attorneys-in-fact, with full power in each of them
to sign for me, in my name and in the capacities indicated below, any and all
amendments to Registration Statement No. 333-40937 filed with the Securities and
Exchange Commission under the Securities Act of 1933, on behalf of the Company
in its own name or in the name of one of its Separate Accounts, hereby ratifying
and confirming my signature as it may be signed by any of my attorneys-in-fact
to any such amendment to that Registration Statement. The power of attorney was
signed on April 29, 1999.
SIGNATURE TITLE
/s/ Keith J. Ryan
- --------------------------- Vice President and Controller
Keith J. Ryan (Principal Accounting Officer)
STATE OF INDIANA)
)SS:
COUNTY OF ALLEN)
Subscribed and sworn to before me this
29th day of April, 1999.
/s/ Janet L. Lindenberg
-----------------------
Notary public
Commission Expires: 7-10-2001
<PAGE>
POWER OF ATTORNEY
I undersigned officer of The Lincoln National Life Insurance Company, hereby
revoke all powers of attorney authorizing any person to act as attorney-in-fact
relative to Lincoln Life Variable Annuity Account N (Delaware-Lincoln
ChoicePlus), which were previously executed by me and do hereby severally
constitute and appoint Kelly D. Clevenger, Jeffrey K. Dellinger, and Steven M.
Kluever, my true and lawful attorneys-in-fact, with full power in each of them
to sign for me, in my name and in the capacities indicated below, any and all
amendments to Registration Statement No. 333-40937 filed with the Securities and
Exchange Commission under the Securities Act of 1933, on behalf of the Company
in its own name or in the name of one of its Separate Accounts, hereby ratifying
and confirming my signature as it may be signed by any of my attorneys-in-fact
to any such amendment to that Registration Statement. The power of attorney was
signed on April 30, 1999.
SIGNATURE TITLE
/s/ Todd R. Stephenson
- -------------------------- Senior Vice President, Chief Financial Officer
Todd R. Stephenson and Assistant Treasurer
(Principal Financial Officer)
STATE OF INDIANA)
)SS:
COUNTY OF ALLEN)
Subscribed and sworn to before me this
30th day of April, 1999.
/s/ Kimberly J. DeLong
----------------------
Notary public
Commission Expires: 1-29-2007
