<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
--------------------------------------------------------------------------------
Lincoln National Growth and Income Fund, Inc.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
P. O. BOX 1110
1300 SOUTH CLINTON STREET
FORT WAYNE, INDIANA 46801-1110
[insert date]
Dear Contract Owner:
The purpose of this letter is to advise you that you are entitled to provide
The Lincoln National Life Insurance Company ("we" or "us") with instructions on
how to vote shares of the Lincoln National Growth and Income Fund, Inc. (the
"Fund") that we hold under your contract. We hold shares of the Fund in one or
more of our segregated investment accounts in connection with your ownership, or
participation in, an individual or group variable annuity contract or an
individual variable life insurance policy. (For convenience, we refer to both
owners and participants entitled to provide instructions as Contract Owners).
The Fund is seeking approval for certain actions it wishes to take at its Annual
Meeting, and as a Contract Owner, you can instruct us on how to vote shares of
the Fund attributable to you under your contract or policy.
The Annual Meeting of the Stockholder of the Fund will be held at the office
of the Fund at 1300 South Clinton Street, Fort Wayne, Indiana 46802, on
October 27, 2000 at 9:00 a.m. local time. The attached "Statement Regarding the
Annual Meeting of the Stockholder of Lincoln National Growth and Income
Fund, Inc.", (the "Statement") describes in detail the proposed actions for this
Annual Meeting.
Each Contract Owner who had purchase payments under a Contract allocated to
the Fund on August 31, 2000, is receiving by mail a Statement. Each person
entitled to receive this Statement is invited to attend the meeting in person
and give instructions instead of submitting an instruction card.
As you will see from the Statement, there are several issues for which we
need your instructions. For that reason, if you do not expect to attend the
meeting, I urge you to fill in, sign, date, and return the enclosed instruction
card. Please use the self-addressed, postage-paid envelope provided. The number
of shares of the Fund attributable to you will be voted in accordance with the
directions you give on the instruction card provided. If you have any questions,
you may call the toll-free number listed on your proxy card. For
<PAGE>
your convenience, you may also vote by telephone by calling [insert phone
number] or electronically through the Internet at [insert web site address].
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
Kelly D. Clevenger
VICE PRESIDENT
<PAGE>
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
P. O. BOX 1110
1300 SOUTH CLINTON STREET
FORT WAYNE, INDIANA 46801-1110
STATEMENT REGARDING THE ANNUAL MEETING OF THE STOCKHOLDER OF
LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.
[insert date]
This statement is submitted in connection with the solicitation by The
Lincoln National Life Insurance Company ("Lincoln Life") of instructions for
voting at the Annual Meeting of the Stockholder of Lincoln National Growth and
Income Fund, Inc. (the "Fund"). This Proxy Statement and the accompanying
instruction card will be mailed to Contract Owners on or about September 8,
2000.
Lincoln Life is soliciting these instructions from owners of, or
participants in, individual or group variable annuity contracts and owners of
individual variable life insurance policies. (For convenience, we refer to both
owners and participants entitled to provide instructions as Contract Owners.)
Contract Owners holding or participating in the following contracts or policies
are entitled to provide instructions with respect to the Fund shares
attributable to each Contract Owner:
- individual variable annuity contracts funded through Lincoln National
Variable Annuity Account C ("Account C");
- individual flexible premium variable life insurance policies funded
through Lincoln Life Flexible Premium Variable Life Account D ("Account
D");
- individual flexible premium variable life insurance policies funded
through Lincoln Life Flexible Premium Life Account G ("Account G");
- individual flexible premium variable life insurance policies funded
through Lincoln Life Flexible Premium Variable Life Account K ("Account
K");
- group variable annuity contracts funded through Lincoln Life Variable
Annuity Account Q ("Account Q");
- group variable annuity contracts funded through The Lincoln National Life
Insurance Company Separate Account No. 53 ("Account 53").
(For convenience, we refer to all of these accounts collectively as the
Accounts.)
The Annual Meeting of the Stockholder of this Fund will be held at the
office of the Fund at 1300 South Clinton Street, Fort Wayne, Indiana, on
<PAGE>
October 27, 2000 at 9:00 a.m. local time. The purpose of the Annual Meeting is
to consider and act on the following proposals:
- To elect the Board of Directors of the Fund.
- To approve or reject the investment sub-advisory agreement between Lincoln
Investment Management, Inc. ("LIM") and Goldman Sachs Asset Management
("GSAM"), a division of Goldman, Sachs & Co. pursuant to which GSAM has
replaced Vantage Global Advisors, Inc. ("Vantage") as sub-adviser to the
Fund.
- To approve or reject a change in the fundamental investment policy of the
Fund.
- To approve or reject the engagement of Ernst & Young, LLP as the
independent auditors of the Fund.
- To transact any other business which may properly come before the Annual
Meeting.
In addition to the solicitation of instruction cards by mail, officers and
employees of the Fund, without additional compensation, may solicit instruction
cards in person, by telephone, and electronically, including through the
internet. The cost associated with such solicitation and the Annual Meeting will
be borne by the Fund.
Adoption of each Proposal in this statement requires the approval of a
majority of the Fund's outstanding voting securities. Under the Investment
Company Act of 1940, a "majority of the Fund's outstanding voting securities" is
defined as the lesser of (i) 67% of the outstanding voting securities
represented at a meeting at which more than 50% of the outstanding voting
securities are present or represented by proxy or (ii) more than 50% of the
Fund's outstanding voting securities.
If you would like a copy of the Fund's 1999 Annual Report and the June 30,
2000 Semi-Annual Report, call us at 1-800-4LINCOLN, or write to us at P. O. Box
2340 Fort Wayne, Indiana 46801 and we will mail you one free of charge.
The principal office address of the Fund is 1300 South Clinton Street, Fort
Wayne, Indiana 46802. The Investment Adviser is LIM, located at 200 East Berry
Street, Fort Wayne, Indiana 46802. The Administrator (Accounting/Financial
Reporting) is Delaware Management Holdings, Inc., located at 2005 Market Street,
Philadelphia, Pennsylvania 19103.
SECURITIES OWNERSHIP AND VOTING PROCEDURES
At the Annual Meeting of the Stockholder, Lincoln Life will vote the Fund's
shares held in the Accounts, as applicable, in accordance with the
2
<PAGE>
instructions received from Contract Owners whose purchase payments, as of the
Record Date of August 31, 2000, were invested in the Fund by the Accounts.
For all Accounts except Accounts D, G and K, the number of votes which a
Contract Owner may cast when instructing Lincoln Life how to vote is determined
by applying the Contract Owner's percentage interest in the Fund to the total
number of votes attributable to that Fund. In determining the number of votes,
fractional shares will be recognized.
The number of votes which an Account D, G or K Contract Owner may cast when
instructing Lincoln Life how to vote is determined as one vote for each $100 of
cash value.
Fund shares held for the Accounts as to which no timely instructions are
received will be voted by Lincoln Life in proportion to the voting instructions
which are received with respect to that Fund. If voting instructions are
received in a timely manner but contain no voting directions, the votes will be
cast FOR the proposals considered at the meeting. Instructions may also be given
to Lincoln Life by personal attendance at the meeting. Voting instructions to
abstain on any item to be voted upon will be applied on a pro rata basis to
reduce the number of votes eligible to be cast by Accounts C, D, G, K, Q and 53.
A Contract Owner may revoke his instructions by filing with the Secretary of
the Fund, prior to the meeting, either a duly executed instrument of revocation
or a duly executed instruction form dated after the original instructions. In
addition, an instruction form may be revoked by personal attendance at the
meeting and changing the instructions given to Lincoln Life.
AS OF AUGUST 31, 2000, THE FUND HAD OUTSTANDING THE FOLLOWING NUMBER OF
SHARES ENTITLING THE APPLICABLE ACCOUNT C, D, G, K, Q AND 53 CONTRACT OWNERS TO
INSTRUCT LINCOLN LIFE ON THE MANNER IN WHICH TO VOTE THOSE SHARES AT THE FUND'S
MEETING:
<TABLE>
<CAPTION>
TOTAL NUMBER OF
TOTAL NUMBER OF TOTAL NUMBER OF SHARES ENTITLED TO BE
SHARES ENTITLED TO BE SHARES ENTITLED TO BE VOTED BY LINCOLN
VOTED BY LINCOLN VOTED BY LINCOLN LIFE FOR
TOTAL NUMBER OF LIFE FOR ACCOUNTS LIFE FOR ACCOUNTS (UNREGISTERED)
SHARES OUTSTANDING C AND Q D, G AND K ACCOUNT 53
--------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C>
[enter total] [enter total] [enter total] [enter total]
</TABLE>
Lincoln Life is the stockholder of the Fund. No other person beneficially
owns more than 5% of the Fund's outstanding shares, and no director or executive
officer of the Fund owns any separate account units attributable to more than
one-half of one percent of the assets of the Fund.
3
<PAGE>
MATTERS TO BE ACTED UPON
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The Bylaws of the Fund provide that the Board of Directors of the Fund shall
be elected annually unless the Board dispenses with the Annual Meeting. If the
latter occurs, then the Directors continue in office until the next Annual or
Special Meeting is held, at which time an election of Directors is held. The
Board shall consist of no fewer than three (3) nor more than ten (10) persons,
and currently a five-member Board is authorized. Presently, five (5) persons are
serving as Directors of the Fund.
All five (5) persons now serving as Directors of the Fund are also nominees
for election as Directors of the Fund. If elected, each nominee has agreed to
serve. Since the Fund typically dispenses with annual meetings, Directors, once
elected, remain in office unless they resign, are removed, or fail to win
reelection at any subsequently scheduled meetings. THE BOARD RECOMMENDS THAT
CONTRACT OWNERS INSTRUCT LINCOLN LIFE TO VOTE FOR THE ELECTION OF THE FIVE (5)
NOMINEES LISTED BELOW:
<TABLE>
<CAPTION>
YEAR FIRST BECAME
NAME, POSITION(S) WITH FUNDS, PRINCIPAL OCCUPATION AGE FUND DIRECTOR
-------------------------------------------------- -------- -----------------
<S> <C> <C>
*Kelly D. Clevenger 48 1994
Chairman, President and Director
Vice President, The Lincoln National Life
Insurance Company, Fort Wayne, Indiana (Life
Insurer)
John B. Borsch, Jr. 67 1981
Director
Retired; formerly Associate Vice President,
Investments, Northwestern University,
Evanston, Illinois (Educational Institution)
Nancy L. Frisby, CPA 58 1992
Director
Vice President and Chief Financial Officer
DeSoto Memorial Hospital, Arcadia, Florida
*Barbara S. Kowalczyk 49 1993
Director
Senior Vice President and Director, Corporate
Planning and Development, Lincoln National
Corporation, Philadelphia, Pennsylvania
(Insurance Holding Company) Director, Lincoln
Life & Annuity Company of New York, Director,
Lincoln National (U.K.) PLC (Financial
Services Company)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST BECAME
NAME, POSITION(S) WITH FUNDS, PRINCIPAL OCCUPATION AGE FUND DIRECTOR
-------------------------------------------------- -------- -----------------
<S> <C> <C>
Kenneth G. Stella 56 1998
Director
President, Indiana Hospital and Health
Association, Indianapolis, Indiana (Hospital)
</TABLE>
------------------------
* Kelly D. Clevenger, currently Chairman and President of the Fund, is an
"interested person" of the Fund as that term is defined by Section 2(a)(19)
of the Investment Company Act of 1940 (the "1940 Act") by reason of his
being Chairman and President of the Fund and an officer of The Lincoln
National Life Insurance Company. Barbara S. Kowalczyk, Director of the Fund,
is an "interested person" by reason of her being a Senior Vice President of
Lincoln National Corporation.
The following information may assist you in your decision:
KELLY D. CLEVENGER. Mr. Clevenger, who became a Director in 1994, is a
senior actuary with over two decades of experience in life insurance, annuities
and investments with Lincoln Life. Currently he is Vice President of The Lincoln
National Life Insurance Company and in 1994 became President of the Fund and
continues to serve in that capacity. His responsibilities with Lincoln Life have
included, among other things, development and design of life insurance, variable
annuity and reinsurance products. Mr. Clevenger holds both a Bachelor of Science
Degree and a Masters in Actuarial Science from the University of Michigan. He is
a Fellow of the Society of Actuaries and a member of the American Academy of
Actuaries.
JOHN B. BORSCH, JR. Mr. Borsch has been a Director of the Fund since
December 14, 1991. A career financial analyst, he managed the investment
portfolio of Northwestern University, ultimately as its Director of Investments.
Mr. Borsch holds both a Bachelor of Science Degree in Investment Management and
an MBA in Finance from Northwestern University. Although retired from
Northwestern, he remains active in investment circles as a Member of the
Investment Analysts Society of Chicago, Inc.; the Association of Investment
Management Research; and the Institute of Chartered Financial Analysts.
NANCY L. FRISBY. Since August 1999, Ms. Frisby has served as Vice President
and Chief Financial Officer of the Desoto Memorial Hospital, Arcadia, Florida.
From May of 1998 to July of 1999, Ms. Frisby served as Chief Financial Officer
of Bascom Palmer Eye Institute at the University of Miami School of Medicine in
Miami, Florida. From 1974 to 1998, Ms. Frisby was a member of the staff of St.
Joseph Medical Center in Fort Wayne, Indiana, and served as its Vice President
and Chief Financial Officer. Ms. Frisby holds a
5
<PAGE>
Bachelor of Science Degree in accounting from Indiana University/Purdue
University of Fort Wayne, and an MBA in Finance from the University of Notre
Dame. She is an Advanced Member of the Healthcare Financial Management
Association, a member of the American Institute of Certified Public Accountants,
and a former officer of the Fort Wayne Chapter of the Financial Executives
Institute.
BARBARA S. KOWALCZYK. Ms. Kowalczyk, who became a Director in 1993, is an
experienced investment executive. She joined Lincoln Investment Management, Inc.
in 1977 as an Investment Analyst, and served in that organization until 1994,
ultimately as Senior Vice President. Ms. Kowalczyk is currently a Senior Vice
President of Lincoln National Corporation, in charge of strategic planning,
mergers and acquisitions, strategic communications and branding for Lincoln
National Corporation. Ms. Kowalczyk holds both a Bachelor of Science Degree in
Marketing and a Masters in Business Administration (Finance) from Indiana
University. She is a Chartered Financial Analyst and a Member of the Investment
Analysts Society of Chicago, Inc.
KENNETH G. STELLA. Mr. Stella is currently President of Indiana Hospital &
Health Association, Indianapolis, Indiana, having served that institution since
1984. Among his responsibilities for the Association, he serves as the Chief
Executive Officer and is responsible for implementation of all Board of
Director's policies and directives. He provides executive management and
leadership of all Association programs and services. The Association comprises
157 hospitals and health organizations, and it provides advocacy, data,
education, communication and general legal information services to its members.
Mr. Stella holds both a Bachelor of Science Degree and a Master's Degree in
Health Administration from Indiana University. Among other affiliations, he is a
Fellow of the American College of Healthcare Executives, a Member of the Board
of Visitors of the Indiana University School of Nursing, a Member of the Board
of Visitors of the Indiana University School of Public & Environmental Affairs
and a Board Member of the First National Bank and Trust of Kokomo.
Ms. Kowalczyk, Ms. Frisby and Messrs. Borsch, Clevenger and Stella are also
Members of the Board of Managers of Lincoln National Variable Annuity Fund A, an
investment company which is registered with the Securities and Exchange
Commission under the 1940 Act and is a separate account of Lincoln Life. They
each also serve as Directors for each of the other ten (10) Funds in the Lincoln
National Fund complex.
As interested persons who serve as Directors of the Fund and are salaried
officers of Lincoln Life and of Lincoln National Corporation, respectively,
Mr. Clevenger and Ms. Kowalczyk receive no additional remuneration for
6
<PAGE>
their services to the Fund. The Fund pays the compensation and expenses of
Directors who are not "interested persons" of the Fund.
CASH REMUNERATION--DIRECTORS' FEES FROM THE FUND
COMPENSATION OF OUTSIDE DIRECTORS(1)
(FISCAL YEAR 1999)
<TABLE>
<CAPTION>
TOTAL
AGGREGATE COMPENSATION(2) COMPENSATION(3)
NAME OF PERSON FROM THE FUND FROM FUND COMPLEX
-------------- ------------------------- -----------------
<S> <C> <C>
Mr. Borsch 1,400 15,400
Ms. Frisby 1,400 15,400
Mr. Stella 1,400 15,400
</TABLE>
------------------------
1 Mr. Clevenger and Ms. Kowalczyk, inside directors, receive no compensation
from the Fund.
2 The Fund paid outside directors $350 per meeting. During 1999 the Fund held
four meetings.
3 Each of the 11 Funds in the complex paid outside directors $350 per meeting.
During 1999, each Fund except Lincoln National Aggressive Growth Fund, Inc.,
held four meetings. Lincoln National Aggressive Growth Fund, Inc. held five
meetings in 1999.
The Fund has an Audit Committee that recommends to the Board of Directors
the hiring of the Fund's independent auditor and reviews the independent
auditor's reports. During 1999 the Audit Committee, composed of Ms. Frisby and
Messrs. Borsch and Stella, met once. None of the members of the Audit Committee
is an "interested person" of the Fund as defined in Section 2(a)(19) of the 1940
Act ("disinterested Directors"). The Fund has no nominating or compensation
committees.
PROPOSAL NO. 2
TO APPROVE OR REJECT THE INVESTMENT SUB-ADVISORY AGREEMENT BETWEEN LINCOLN
INVESTMENT MANAGEMENT, INC. ("LIM") AND GOLDMAN SACHS ASSET MANAGEMENT ("GSAM"),
A DIVISION OF GOLDMAN, SACHS & CO., PURSUANT TO WHICH GSAM HAS REPLACED VANTAGE
GLOBAL ADVISORS, INC. ("VANTAGE") AS SUB-ADVISER TO THE FUND.
At its August 14, 2000 Board Meeting, the Board, including a majority of the
Directors who are not "interested persons" of the Fund as defined in Section
2(a)(19) of the 1940 Act ("disinterested Directors") unanimously
7
<PAGE>
ratified, and voted to recommend that the stockholder of the Fund approve, the
sub-advisory agreement dated July 1, 2000, between GSAM, the new sub-adviser for
the Fund, and the Fund's Investment Adviser, LIM (the "Agreement"). The Board
previously approved the Agreement at a June 23, 2000 special meeting. A copy of
the Agreement is attached hereto as Exhibit A.
REASONS FOR PROPOSAL
From 1985 through June 30, 2000, Vantage served as the Fund's sub-adviser
pursuant to a sub-advisory agreement with LIM ("Vantage Agreement"). Following a
review of Vantage's investment philosophy, performance, personnel and processes,
LIM, the Fund's investment adviser, and Fund management recommended that the
Board replace Vantage with another sub-adviser at a special meeting of the Board
held on June 23, 2000.
In making this recommendation, LIM and Fund management considered, among
other things, recent personnel changes at Vantage, including the loss of its
Chief Investment Officer who was also a portfolio manager of the Fund, as well
as the loss of another portfolio manager. Given the asset size of the Fund (over
$4 billion as of March 31, 2000), these personnel changes raised questions about
the continuing ability of Vantage to manage the Fund's level of assets. LIM and
Fund management also considered Vantage's performance, which had lagged both its
benchmark (the S&P 500 Index) and its peer group (Morningstar's large blend
category) for the one-, three-, five- and ten-year periods ended March 31, 2000.
Morningstar's large blend category includes almost 1,300 large-cap "blend"
investment options (funds that exhibit a combination of growth and value
characteristics) for variable insurance products.
LIM, in consultation with Fund management, created a list of potential
replacements for Vantage based on the same criteria cited above. Among those
considered was GSAM. Among other things, LIM, in consultation with Fund
management, determined that, all factors considered, GSAM could provide a more
consistent investment performance than Vantage with an increased depth of
personnel, while exposing the Fund to only slightly more investment risk.
Fund management and LIM decided to approach GSAM to act as sub-adviser, in
lieu of Vantage. Fund management and LIM requested that the Board terminate
Vantage as sub-adviser effective on the close of business on June 30, 2000 and
replace Vantage with GSAM effective July 1, 2000, pursuant to the Agreement and
subject to Fund stockholder approval of the Agreement. The Board (including a
majority of the disinterested Directors approved the Agreement between GSAM and
LIM on behalf of the Fund, and terminated the Vantage Agreement. Accordingly,
GSAM has been serving as the Fund's sub-adviser since July 1, 2000. Federal law
provides a 150-day grace period for
8
<PAGE>
obtaining Fund stockholder approval of the Agreement. The grace period began on
July 1, 2000.
GSAM
Similar to Vantage, GSAM manages the Fund using a quantitative investment
approach. Following is a brief description of GSAM's investment process:
GSAM utilizes a "Computer-Optimized, Research-Enhanced" ("CORE") investment
strategy in connection with its management of the Fund. Under the CORE strategy,
the portfolio manager begins with a broad universe of U.S. equity securities and
then uses a proprietary multi-factor model ("Multifactor Model") to assign each
equity security an expected return. The Multi-Factor Model is a rigorous
computerized modeling system for forecasting the returns of individual equity
securities according to fundamental investment characteristics. The Multi-Factor
Model contains variables that measure characteristics such as value, growth,
momentum, and risk (including, but not limited to: book/price ratio, price
momentum and estimate revisions). In addition, unlike many quantitative models,
the Multifactor Model incorporates the stock recommendations of Wall Street
analysts, including those of Goldman Sachs & Co., of which GSAM is a business
unit, as factors in its process.
The weightings assigned to the factors in the Multifactor Model are derived
from a statistical formulation that considers each factor's historical
performance as well as the volatility of its performance. Because the
Multifactor Model includes many disparate factors, GSAM believes that the
Multifactor Model is broader in scope than most conventional quantitative
models.
Because a new manager frequently seeks to "reposition" the portfolio based
on its own investment style, it is not unusual to have a significant amount of
portfolio turnover for a fund when the new manager replaces the current one.
GSAM estimates that in its first year as sub-adviser it would replace about 35%
of the securities held by the Fund. This restructuring may negatively impact
performance of the Fund by approximately 0.4% due to the commissions paid on the
transactions as well as the difference in the ask and bid prices of the
individual securities sold and bought. The 0.4% is an estimate only, and is a
one-time cost associated with the management change.
There are no other registered funds with substantially similar investment
objectives as the Lincoln National Growth and Income Fund for which GSAM acts as
sub-advisor. However, GSAM does manage a non-registered fund and other
portfolios with substantially similar investment objectives.
9
<PAGE>
Goldman Sachs & Co. ("GS & Co.") located at 85 Broad Street, New York, New
York 10004, was founded in 1869 and is the principal United States broker-dealer
subsidiary of the Goldman Sachs Group, Inc. In 1981, GS & Co. became a
registered investment adviser under the Investment Advisers Act of 1940. On
September 1, 1999, the Investment Management Division ("IMD") was established as
a new operating division of GS & Co. IMD includes two major businesses: (1) the
Asset Management Group, which has been providing discretionary investment
advisory services since 1989 to institutional investors; and (2) the Wealth
Management Group. As of March 31, 2000, the Investment Management Division of
GS & Co., which includes GSAM as a business unit, has total assets under
management, administration and/or distribution of $267.8 billion. The following
is a list of GS & Co. Officers and Directors.
<TABLE>
<CAPTION>
GOLDMAN, SACHS & CO. OFFICERS/DIRECTORS
<S> <C>
----------------------------------------------------------------------
Henry M. Paulson, Jr. Chairman and Director
Robert J. Hurst Director
John A. Thain Director
John L. Thornton Director
Sir John Browne Director
John H. Bryan Director
James A. Johnson Director
Dr. Ruth J. Simmons Director
John L. Weinberg Director
David B. Ford Managing Director
John P. McNulty Managing Director
</TABLE>
THE AGREEMENT
Subject to the supervision, direction and control of the Board of Directors
and LIM, GSAM is responsible under the Agreement for continuously furnishing an
investment program for the Fund in accordance with the Fund's investment
objectives, policies and restrictions, and applicable law. The Agreement
provides that GSAM will make investment decisions on behalf of the Fund and
places all orders for the purchase or sale of portfolio securities. The
Agreement allows GSAM to place orders for the purchase and sale of portfolio
investments through brokers, dealers and futures commission merchants of its
choosing, and to consider brokerage and research services in determining and
paying commissions to such entities, to the extent permitted by applicable law
and the policies that the Board or LIM may adopt.
Under the Agreement, LIM pays GSAM, as compensation for services rendered, a
monthly fee computed and paid at the annual rate of 0.15% of 1% of the average
daily net assets of the Fund for the first three months that
10
<PAGE>
GSAM serves as a sub-adviser to the Fund and 0.1333 of 1% of the average daily
net assets of the Fund thereafter.
If this Proposal 2 is approved, the Agreement will continue in effect until
July 1, 2002, and thereafter, from year to year so long as either the
shareholders of the Fund by the affirmative vote of a majority of the
outstanding shares of the Fund, or the Board, including a majority of
disinterested Directors, approve such continuance annually. The Agreement will
terminate automatically in the event of its assignment or in the event LIM's
investment advisory contract with the Fund terminates for any reason. The
Agreement may be terminated without penalty by vote of a majority of the Board
of Directors or by the vote of a majority of the outstanding shares of the Fund
on not more than 60 days' written notice. GSAM or LIM may terminate the
Agreement at any time by not less than 90 days' written notice. The Agreement
provides that in the absence of willful misfeasance, bad faith or gross
negligence on the part of GSAM, or reckless disregard of its obligations and
duties under the Agreement, GSAM shall not be subject to liability to the Fund
or to any shareholder of the Fund for any act or omission in the course of, or
connected with, rendering services hereunder.
The foregoing is a brief description of the Agreement and it is qualified in
its entirety by reference to the full text of the Agreement, a copy of which
appears as Exhibit A hereto.
COMPARISON OF THE AGREEMENT AND THE VANTAGE AGREEMENT
The services provided by GSAM under the Agreement are in many respects
similar to those provided by Vantage under the Vantage Agreement. However, LIM
will assume increased responsibility for Contract Owner support, a service that
LIM had formerly delegated to Vantage pursuant to the Vantage Agreement. In
addition, unlike the Vantage Agreement, the Agreement with GSAM requires LIM to
inform GSAM of any and all applicable state insurance law restrictions on
investments that operate to limit or restrict the investments that the Fund may
otherwise make and to inform GSAM of any changes in such restrictions. The
Agreement also requires LIM to supply GSAM with certain information so that GSAM
can manage the Fund's assets in compliance with Section 817(h) of the Internal
Revenue Code, Treasury Regulation Section 1.817-5, and any Treasury
interpretations thereof, relating to the diversification requirements for
variable annuity, endowment, and life insurance contracts, and any amendments or
other modifications or successor provisions to such sections or regulations.
Under the Agreement, LIM will pay GSAM a sub-advisory fee at a rate
(currently 0.15% of 1%) that is lower than that paid to Vantage under the
Vantage Agreement (0.20% of 1%) in 1999. The lower fee rate paid to GSAM
11
<PAGE>
reflects the allocation of responsibilities between LIM and GSAM under the
Agreement, including the additional responsibilities that LIM has undertaken on
behalf of the Fund and the additional effort that LIM expects to expend to
monitor and coordinate with an unaffiliated sub-adviser. During 1999, LIM paid
$8,919,278 for the services Vantage provided. If the Agreement had been in place
during 1999, LIM would have paid GSAM a total of $6,122,458, which represents a
reduction in sub-advisory fees of 31%. LIM pays all sub-advisory fees out of the
investment management fee that it receives from the Fund. However, LIM's
investment management fee will not change as a result of the appointment of GSAM
as sub-adviser. THUS, APPROVAL OF THIS PROPOSAL 2 WILL NOT RESULT IN A CHANGE IN
THE INVESTMENT MANAGEMENT FEES PAID BY THE FUND AND WILL NOT INCREASE FEES PAID
BY THE CONTRACT OWNERS.
The Vantage Agreement provides for termination upon 30 days' written notice,
while the Agreement provides for termination upon not more than 60 days' written
notice (in the case of the Fund) and at least 90 days' written notice (in the
case of GSAM and LIM). Unlike the Agreement, the Vantage Agreement does not
include provisions expressly setting forth a standard of liability.
BOARD CONSIDERATIONS
In unanimously approving the Agreement and recommending its approval by the
Fund stockholder, the Board considered the recommendation of LIM and Fund
management, including the various factors upon which the recommendation was
based, as discussed above. The Board also considered GSAM's capabilities and
substantial experience in managing equity and fixed income investments, its
investment philosophy and process, the changes GSAM expected to make to the
Fund's portfolio, the terms of the Agreement, GSAM's best execution practices,
its compliance program, and the fees to be paid to GSAM. In addition, the Board
considered the fact that LIM in consultation with Fund management, had compared
GSAM to a peer group of other large cap core products listed on an industry
database of investment managers compiled by Mobius Group, using the composite
performance of portfolios managed by GSAM in a style similar to the Fund. GSAM
outperformed its peer group median over the last one-year, five-year and
ten-year periods ending March 2000 and performed in line with its benchmark
index.
APPROVAL OF AGREEMENT
If the Agreement is not approved, the Agreement will terminate at the end of
the 150 day grace period for obtaining Fund stockholder approval, and the Board
will consider such further action as may be in the best interest of the Fund.
12
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE CONTRACT OWNERS GIVE INSTRUCTIONS
TO APPROVE THE AGREEMENT BETWEEN LIM AND GSAM PURSUANT TO WHICH GSAM HAS
REPLACED VANTAGE AS SUB-ADVISER TO THE FUND.
PROPOSAL NO. 3
TO APPROVE A CHANGE IN THE FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
INVESTMENTS IN SECURITIES OF OTHER INVESTMENT COMPANIES.
Upon approval of this Proposal, the fundamental restriction of the Fund
relating to investments in securities of other investment companies which states
that the Fund may not
PURCHASE SECURITIES OF INVESTMENT COMPANIES EXCEPT IN CONNECTION WITH AN
ACQUISITION, MERGER, CONSOLIDATION OR REORGANIZATION
would be eliminated. The Fund would instead be subject to the following proposed
non-fundamental restriction:
The Fund may not:
INVEST IN SECURITIES OF OTHER INVESTMENT COMPANIES, EXCEPT TO THE EXTENT
PERMITTED BY APPLICABLE LAW AND THE PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION AS AMENDED FROM TIME TO TIME.
The Fund's current fundamental policy concerning the Fund's investment in
the securities of other investment companies is more restrictive than the
applicable restrictions under the 1940 Act which as a general matter imposes
limitations on a fund's ownership of any particular investment company as well
as a limitation on the ownership of all investment companies as a percentage of
fund assets. If this proposal is approved, the Fund would be able to invest in
other open-end investment companies, exchange traded investment companies such
as Standard & Poor's Depository Receipts ("SPDRs") and unit investment trusts to
the extent allowed by the 1940 Act and the Fund's Investment polices. Thus, no
more than 10% of the fund's total assets may be invested in investment
companies, including SPDRs. Investment in these entities may involve duplication
of certain fees and expenses, but the Board believes that the enhanced
flexibility could provide attractive investment opportunities and may assist the
Fund in meeting its investment objectives.
The Board believes that the proposed change to the Fund's fundamental
investment restrictions will enhance investment flexibility and the ability of
GSAM to manage the Fund more efficiently as investment conditions change. In
addition, by reducing to a minimum those policies which can be changed only with
a vote of the stockholder, the Fund will more often be able to avoid
13
<PAGE>
the cost and delay of a shareholder meeting when making changes to investment
policies that the Board considers desirable. However, the Board does not
anticipate that the change will result in a major restructuring of the Fund's
investment portfolio.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE CONTRACT OWNERS GIVE INSTRUCTIONS
TO APPROVE THE CHANGE IN THE FUND'S FUNDAMENTAL POLICY REGARDING INVESTMENT IN
OTHER INVESTMENT COMPANIES.
PROPOSAL NO. 4
APPROVAL OF ENGAGEMENT OF INDEPENDENT
AUDITOR FOR FISCAL YEAR 2000
On February 14, 2000, the Board of Directors of the Fund selected Ernst &
Young LLP to act as independent auditor for the Fund for the 2000 fiscal year.
Unless instructed to the contrary, Lincoln Life intends to vote the Fund's
shares held in the Accounts in favor of the ratification of the engagement of
Ernst & Young LLP as independent auditor for the Fund.
All services performed by Ernst & Young LLP are considered to be audit
services and include: examination of annual financial statements; review and
consultation connected with filings of annual reports to Contract Owners and
with the Securities and Exchange Commission; and consultation about financial
accounting and reporting matters. The selection of Ernst & Young LLP as
independent auditor for the Fund constituted approval by the Board of Directors
of each of the foregoing audit services, and the Board of Directors believes
they have no effect on audit independence.
There will not be an Ernst & Young LLP representative at the meeting.
Stockholder approval of the selection of Ernst & Young LLP as the Fund's
independent auditor was last obtained on April 13, 1998.
Ernst & Young LLP is also the independent auditor for Lincoln Life. The firm
has no direct or indirect financial interest in the fund or in Lincoln Life, nor
any connection with the Fund or Lincoln in the capacity of promoter,
underwriter, voting trustee, director, officer or employee.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE CONTRACT OWNERS GIVE INSTRUCTIONS
TO APPROVE ERNST & YOUNG LLP AS INDEPENDENT AUDITOR FOR THE 2000 FISCAL YEAR.
OTHER BUSINESS
To the knowledge of the Board of Directors for the Fund, there is no other
business to be brought before the Annual Meeting of the Stockholder of the Fund.
However, if other matters do properly come before the meeting, it is
14
<PAGE>
the intention of Lincoln Life to vote the Fund's Account C, D, G, K, Q and 53
shares in accordance with the judgment of the Board of Directors on such
matters.
EXECUTIVE OFFICERS OF THE FUND
<TABLE>
<CAPTION>
YEAR FIRST HELD
NAME, POSITION(S) WITH FUND, PRINCIPAL OCCUPATION AGE POSITION**
------------------------------------------------- -------- ---------------
<S> <C> <C>
*Kelly D. Clevenger 48 1994
Chairman, President and Director
Vice President, The Lincoln National Life
Insurance Company, Fort Wayne, Indiana (Life
Insurer-Parent of Registrant)
*Janet C. Chrzan 51 1995
Senior Vice President and Treasurer
SeniorVice President, Chief Financial Officer
and Director, The Lincoln National Life
Insurance Company
*Eric C. Jones 39 1997
Assistant Vice President and Chief Accounting
Officer,
Assistant Vice President, The Lincoln National
Life Insurance Company
*Cynthia A. Rose 46 1995
Secretary
Assistant Vice President, The Lincoln National
Life Insurance Company
</TABLE>
------------------------
* All of the executive officers of the Fund are "interested persons" of the
Fund, as that term is defined by Section 2(a)(19) of the 1940 Act, by reason
of their being officers of the Fund.
** Date of which individuals became officers of the Fund.
As officers of Lincoln Life or an affiliate, the executive officers receive
no additional remuneration for their services rendered to the Fund. The
executive officers are elected by the Board of Directors to serve until their
respective successors are chosen.
INVESTMENT MANAGEMENT SERVICES
The Fund's Investment Adviser is Lincoln Investment Management, Inc. (LIM),
a wholly owned subsidiary of Lincoln National Investments, Inc. The address for
LIM is 200 E. Berry Street, Fort Wayne, Indiana 46802 and the address for
Lincoln National Investments, Inc. is Centre Square, West Tower, 1500 Market
Street, Suite 3900, Philadelphia, Pennsylvania 19102-2112.
15
<PAGE>
The investment management services are rendered pursuant to an Advisory
Agreement.
In its role as Investment Adviser to the Fund, LIM provides investment
management services to the Fund, and continuously provides the Board of
Directors of the Fund with investment programs for their approval or rejection.
Upon approval of such investment programs by the Board of Directors, LIM
executes the programs by placing orders for the purchase or sale of assets of
the Fund.
Continuation of the Advisory Agreement was last approved for the Growth and
Income Fund on August 2, 1999, by a vote of the Fund's Board of Directors,
including a vote of a majority of Directors who are not parties to the Advisory
Agreement, or "interested persons" (as defined in the 1940 Act) of any such
party. The Advisory Agreement:
(a) Shall continue in effect from year to year only so long as such
continuance is specifically approved at least annually (1) by the Board of
Directors, or (2) by the affirmative vote of the majority of the votes which
may be cast by all Contract Owners. In addition, the terms of the Agreement
and any renewal thereof must be approved by a vote of a majority of the
Directors who are not parties to the Agreement or interested persons of any
such party, or cast in person at a meeting called for the purpose of voting
on such approval.
(b) Shall immediately terminate in the event of its assignment. In
addition, it may be terminated by the Fund at any time, on not less than
sixty (60) days' written notice to Lincoln Life without payment of any
penalty, by a vote of the majority of all the Directors, or by Contract
Owners casting a majority of the votes which may be cast by all Contract
Owners for the Fund.
(c) May be terminated by LIM at any time, with ninety (90) days' notice
to the Fund.
For the Growth and Income Fund, LIM has executed a sub-advisory agreement
between LIM and GSAM. This agreement is subject to approval by Contract Owners
at this meeting.
Under this sub-advisory agreement, the sub-adviser agrees to perform some or
substantially all of the investment management services required to be performed
by LIM. Under the Agreement, LIM remains primarily responsible for providing a
continuous investment program for the Fund, and any costs associated with the
sub-adviser's services will be reimbursed by LIM under the terms of the
sub-advisory agreement.
16
<PAGE>
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICER OF
LINCOLN INVESTMENT MANAGEMENT, INC
<TABLE>
<CAPTION>
DIRECTORS' NAMES PRINCIPAL OCCUPATION
---------------- --------------------
<S> <C>
David A. Berry* Senior Vice President (LIM)
Steven R. Brody* Vice President (LIM)
J. Michael Keefer* Vice President, General Counsel
and Assistant Secretary (LIM)
Charles E. Haldeman** President (LIM)
PRINCIPAL EXECUTIVE OFFICER
---------------------------------
Charles E. Haldeman** President (LIM)
</TABLE>
------------------------
* The address of each of the above is: 200 East Berry Street, Fort Wayne,
Indiana 46802.
** The address for Mr. Haldeman is: 2005 Market Street, 30th Floor,
Philadelphia, Pennsylvania 19103.
Under a contract dated August 15, 1996, Delaware Management Holdings, Inc.
(Delaware Management), and Delaware Service Company, Inc. (Delaware Service),
located at 2005 Market Street, Philadelphia, Pennsylvania 19203, began
performing substantially all of the accounting and financial reporting functions
of the Fund. Delaware Management, Delaware Service, the Fund and Lincoln Life
are all under the common control of Lincoln National Corporation, the ultimate
parent. For fiscal year 1999, fees payable for these services were $1,412,119
for the Fund. These services will continue to be provided after approval of the
new sub-advisory agreement for the Fund.
17
<PAGE>
CONTRACT OWNER PROPOSALS
In accordance with applicable laws and the Bylaws of the Fund, the Fund
dispensed with the Annual Meeting of the Stockholder for 1999.
Under authority granted the Directors by the Bylaws of the Fund, and
pursuant to applicable law, Special Meetings are called as required.
Contract Owners desiring to hold their own proxy solicitations in order to
submit proposals in years in which the Annual Meeting is not held may require
that a Special Meeting be called if they can obtain the written request of
Contract Owners indirectly representing certain stipulated percentages of the
outstanding voting securities of the Fund. More detailed information on these
procedures may be obtained from Fund Management.
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
------------------------------------------------------------------
Kelly D. Clevenger
VICE PRESIDENT
18
<PAGE>
EXHIBIT A
SUB-ADVISORY AGREEMENT
Sub-Advisory Agreement executed as of July 1, 2000, between LINCOLN
INVESTMENT MANAGEMENT, INC., an Illinois corporation (the "Adviser"), and
GOLDMAN SACHS ASSET MANAGEMENT, a division of GOLDMAN, SACHS & CO., a New York
limited partnership (the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed as
follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE FUND.
(a)(i) Subject always to the supervision, direction and control of the
Adviser and Directors ("Directors") of Lincoln National Growth and Income
Fund, Inc. (the "Fund"), a Maryland corporation, which is an eligible investment
fund for certain variable annuity and variable life insurance contracts issued
by The Lincoln National Life Insurance Company (the "Variable Contracts"), the
Sub-Adviser, at its expense, will furnish continuously an investment program for
the Fund which shall at all times comply with all applicable laws and
regulations; provided, however, that with respect to state insurance laws and
regulations, Sub-Adviser shall only be responsible for complying with the
requirements of those insurance laws and regulations that Adviser brings to the
attention of Sub-Adviser by Adviser as provided below. The Sub-Adviser will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities. In the performance of its duties, the
Sub-Adviser will comply with the provisions of the organizational documents and
Bylaws of the Fund and the investment objectives, policies and restrictions of
the Fund as set out in the current prospectus and statement of additional
information of the Fund (as the same may be amended or supplemented from time to
time), and will use its best efforts to safeguard and promote the welfare of the
Fund, and will comply with other policies provided in writing to Sub-Adviser
which the Directors or the Adviser, as the case may be, may from time to time
determine; provided that with respect to policies governing transactions
involving "affiliated persons," as defined by the Investment Company Act of 1940
("Act") (such as those that may be adopted pursuant to Rules 17a-7, 17e-1, and
10f-3 under the Act), the Fund or the Adviser will identify all affiliated
persons of the Adviser and the Fund, other than affiliated persons of the
Sub-Adviser, to whom the policies apply, taking into account all exemptive
orders and no-action relief applicable to the Fund.
A-1
<PAGE>
The Adviser agrees to inform the Sub-Adviser of any and all applicable state
insurance law restrictions on investments that operate to limit or restrict the
investments the Fund may otherwise make, and to inform the Sub-Adviser promptly
of any changes in such restrictions. As a particular service to be rendered by
Sub-Adviser, but not by way of limitation, Sub-Adviser shall, unless otherwise
directed in writing by the Adviser or the Directors, vote proxies relating to
the Fund's portfolio securities and exercise such other rights or privileges
afforded by or relating to the portfolio securities of the Fund, in a manner
consistent with the Fund's investment objectives, policies and restrictions.
(a)(ii) Consistent with its responsibilities set out in
Section 1(a)(i) above, the Sub-Adviser shall manage the Fund's assets so that
the Fund shall comply with Section 817(h) of the Code and Treasury Regulation
Section 1.817-5, and any Treasury interpretations thereof, relating to the
diversification requirements for variable annuity, endowment, and life insurance
contracts, and any amendments or other modifications or successor provisions to
such Sections or Regulations. In determining whether it has managed the Fund's
assets in compliance with the foregoing by the last day of each calendar
quarter, or within the 30 day cure period immediately following the end of the
calendar quarter ("Cure Period"), or such other period required by the Code and
the regulations thereunder in the future, Sub-Adviser shall be entitled to rely
on the following information that Adviser shall supply within the three
(3) business days after the end of each calendar quarter (or other period
required by the Code and the regulations thereunder in the future):
(1) a trial balance from the Fund's books and records as of the calendar
quarter end (or other period required by the Code and the regulations
thereunder in the future);
(2) a detailed holdings report, with the fair market value of each
investment as held on the Fund's books and records as of the calendar
quarter end (or other period required by the Code and the regulations
thereunder in the future); and
(3) a schedule of open futures, forwards, options, and any other notional
principal contracts showing the notional value and fair market value as
held on the Fund's books and records as of the calendar quarter end (or
other period required by the Code and the regulations thereunder in the
future),
it being understood and agreed to by the parties hereto that: (a) the Sub-
Adviser may rely on the foregoing information solely for the purpose of
determining the need to cure, and curing, within the Cure Period any failure
A-2
<PAGE>
by Sub-Adviser to manage the Fund's assets in compliance with such
diversification requirements; (b) the Sub-Adviser may not rely on the foregoing
information if it knows or should know that the information provided by the
Adviser is or may be materially incorrect for any reason and Sub-Adviser fails
to inform the Adviser immediately of the same in writing during the Cure Period;
and (c) as a condition to relying on the foregoing information, the Sub-Adviser
shall, within fifteen (15) business days after receipt of such information,
notify Adviser in writing sent by facsimile, either that the Fund is in
compliance with such diversification requirements using the information supplied
by Adviser or, if the Fund is not in compliance with such diversification
requirements, that it shall take all necessary steps, specifying the same, to
cure such noncompliance within the Cure Period.
(b) The Sub-Adviser, at its expense, will furnish all necessary personnel
and facilities required for it to execute its duties under this Agreement,
including, without limitation, personnel and equipment necessary for the
efficient conduct of the investment affairs of the Fund (excluding determination
of net asset value per share, portfolio accounting and shareholder accounting
services).
(c) In the selection of brokers, dealers or futures commission merchants
(which may include Sub-Adviser or its affiliates) and the placing of orders for
the purchase and sale of portfolio investments for the Fund, the Sub-Adviser
shall use its best efforts to obtain for the Fund the most favorable execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Fund the most favorable execution available, the
Sub-Adviser shall consider all factors it deems relevant, including by way of
illustration: price; the size of the transaction; the nature of the market for
the security; the amount of the commission; the timing of the transaction taking
into account market prices and trends; the reputation, experience and financial
stability of the broker, dealer, or futures commission merchant involved; and
the quality of service rendered by the broker, dealer or futures commission
merchant in other transactions. To the extent consistent with applicable law and
subject to such policies as the Directors or the Adviser may determine (which
policies shall be provided to the Sub-Adviser in writing), the Sub-Adviser may
pay a broker, dealer or futures commission merchant that provides brokerage and
research services to the Sub-Adviser an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission another
broker, dealer or futures commission merchant would have charged for effecting
that transaction, if the Sub-Adviser determines in good faith that such amount
of commission was reasonable in relation to the value of the brokerage and
research services provided by such broker,
A-3
<PAGE>
dealer or futures commission merchant, viewed in terms of either that particular
transaction or the Sub-Adviser's over-all responsibilities with respect to the
Fund and to other clients of the Sub-Adviser as to which the Sub-Adviser
exercises investment discretion.
It is understood that the services provided by such brokers may be useful to
the Sub-Adviser in connection with its services to other clients. Sub-Adviser
may, on occasions when it deems the purchase or sale of a security to be in the
best interest of the Fund as well as its other clients, aggregate, to the extent
permitted by applicable laws and rules, the securities to be sold or purchased.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser in the
manner it considers to be fair and equitable and consistent with its obligations
to the Fund and to such other clients. The Sub-Adviser shall not, however, be
required to aggregate securities orders.
(d) Sub-Adviser shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Sub-Adviser pursuant to this Section 1 other
than as provided in Section 3.
(e) The Adviser agrees to furnish to the Sub-Adviser current prospectuses,
statements of additional information, proxy statements, reports of shareholders,
certified copies of financial statements, charter documents and such other
information with regard to the affairs of the Fund as the Sub-Adviser may
reasonably request. The Sub-Adviser agrees to provide to the Adviser and the
Fund such periodic and special reports and other information regarding its
activities under this Agreement as the Adviser or the Fund may reasonably
request. In addition,the Sub-Adviser shall make its officers and employees
available to the Adviser from time to time at such reasonable times as the
parties may agree to review investment policies of the Fund and to consult with
the Adviser or the Fund regarding the investment affairs of the Fund.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Directors, officers and
employees of the Fund may be a shareholder, director, officer or employee of, or
be otherwise interested in, the Sub-Adviser, and in any person controlled by or
under common control with the Sub-Adviser; and that the Sub-Adviser and any
person controlled by or under common control with the Sub-Adviser may have an
interest in the Fund or the Variable Contracts, or any other investment vehicle
for which the Fund is an eligible investment fund.
A-4
<PAGE>
3. COMPENSATION TO BE PAID BY THE ADVISER TO THE SUB-ADVISER.
The Adviser will pay to the Sub-Adviser as compensation for the Sub-
Adviser's services rendered and for the expenses borne by the Sub-Adviser
pursuant to Section 1, a monthly fee, computed and paid at the annual rate of
.15 of 1% of the average daily net assets of the Fund for the first three
(3) months of the Agreement, and .1333 of 1% of the average daily net assets of
the Fund thereafter.
Such fee shall be paid by the Adviser, and not by the Fund, and without
regard to any reduction in the fees paid by the Fund to the Adviser under its
investment advisory contract as a result of any statutory or regulatory
limitation on investment company expenses or voluntary fee reduction assumed by
the Adviser. Such fee to the Sub-Adviser shall be payable for each month within
ten (10) business days after the end of such month.
If the Sub-Adviser shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment or in the event that the investment
advisory contract between the Adviser and the Fund shall have terminated for any
reason; and, except as permitted by law, this Agreement shall not be amended
unless such amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Directors who are not parties to the Agreement or interested persons of the
Fund or of the Adviser or of the Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution, and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) The Fund may at any time terminate this Agreement by not more than
sixty days' written notice delivered or mailed by registered mail, postage
prepaid, to the Adviser and the Sub-Adviser; or
(b) Unless either (i) the shareholders of the Fund by the affirmative
vote of a majority of the outstanding shares of the Fund or (ii) the Board
A-5
<PAGE>
of Directors, including a majority of the Directors who are not parties to
the Agreement or interested persons of the Fund or of the Adviser or of the
Sub-Adviser, by vote cast in person at a meeting called for the purpose of
voting on such approval, specifically approve at least annually the
continuance of this Agreement, then this Agreement shall automatically
terminate at the close of business on the second anniversary of its
execution, or upon the expiration of one year from the effective date of the
last such continuance, whichever is later; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of the Fund
for their approval and such shareholders fail to approve such continuance of
this Agreement as provided herein, the Sub-Adviser may continue to serve
hereunder in a manner consistent with the Act and the rules and regulations
thereunder; or
(c) The Adviser may at any time terminate this Agreement by not less
than ninety days' written notice delivered or mailed by registered mail,
postage prepaid, to the Sub-Adviser, and the Sub-Adviser may at any time
terminate this Agreement by not less than ninety days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser.
Action by the Fund under Section 5(a) above may be taken either (i) by vote
of a majority of its Directors, or (ii) by the affirmative vote of a majority of
the outstanding shares of the Fund.
Termination of this Agreement pursuant to this Section 5(a) shall be without
the payment of any penalty.
6. CERTAIN INFORMATION.
The Sub-Adviser shall promptly notify the Adviser in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall fail to be
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended from time to time, and under the laws of any jurisdiction in which
the Sub-Adviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement; (b) the Sub-Adviser shall have
been served or otherwise have notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, involving the affairs of the Fund; or (c) any portfolio manager of the
Fund shall have changed.
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding shares" means the affirmative vote, at a duly called and held
A-6
<PAGE>
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission under the Act; the term "specifically approve at least annually"
shall be construed in a manner consistent with the Act and the rules and
regulations thereunder; and the term "brokerage and research services" shall
have the meaning given in the Securities Exchange Act of 1934 and the rules and
regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER.
(a) In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Sub-Adviser, or reckless disregard of its obligations and duties
hereunder, the Sub-Adviser shall not be subject to any liability to the Fund or
to any shareholder of the Fund, for any act or omission in the course of, or
connected with, rendering services hereunder.
(b) Failure by the Sub-Adviser to assure that the investment program for the
Fund meets the diversification requirements of Section 817(h) of the Code, as
required by Section 1(a) of this Agreement, shall constitute gross negligence
per se under sub-paragraph 8(a) above and 9(a) below, except to the extent that
such failure was due either:
(i) to the Sub-Adviser's reasonable reliance, in accordance with
Section 1(a)(ii) hereof, on the information that Adviser provides pursuant
to that Section, which information is subsequently determined in an
administrative or judicial forum to be erroneous and to have materially
contributed to the Fund's failure to meet the diversification requirements,
or
(ii) TO THE UNTIMELY DELIVERY BY THE ADVISER OF THE INFORMATION REQUIRED
BY SECTION 1(a)(ii) HEREOF AND PROVIDED THAT SUCH UNTIMELY DELIVERY
MATERIALLY CONTRIBUTED TO THE FUND'S FAILURE TO MEET THE DIVERSIFICATION
REQUIREMENTS.
A-7
<PAGE>
9. INDEMNIFICATION.
(a) Sub-Adviser agrees to indemnify, defend and hold harmless the Adviser
and the Fund and their respective affiliated persons from and against any and
all claims, demands, actions, losses, damages, liabilities, costs, charges,
counsel fees and expenses of any nature (including amounts paid in settlement
with the written consent of the Sub-Adviser, which consent shall not be
unreasonably withheld) (collectively, "Losses") arising out of the Sub-
Adviser's gross negligence, willful misfeasance, or bad faith or reckless
disregard of its duties and obligations hereunder, except that the Adviser and
the Fund and their respective affiliated persons shall not be entitled to
indemnification from the Sub-Adviser to the extent that the Adviser's gross
negligence, willful misconduct, bad faith or reckless disregard of its duties
and obligations hereunder materially contributed to the Losses.
In addition, Sub-Adviser agrees to indemnify the Adviser and the Fund and
their respective affiliated persons (collectively, "Indemnified Parties") for,
and hold them harmless against all Losses to which the Indemnified Parties or
any of them may become subject under any statute, at common law or otherwise,
insofar as such Losses (or actions in respect thereof) arise as a result of any
failure by the Sub-Adviser, whether unintentional or in good faith or otherwise,
to adequately diversify the investment program of the Fund pursuant to the
requirements of Section 817(h) of the Code, and the regulations issued
thereunder (including, but not by way of limitation, Reg. Sec. 1.817-5,
March 2, 1989, 54 F.R. 8730, 51 F.R. 32633), relating to the diversification
requirements for variable annuity, endowment, and life insurance contracts, in
accordance with Section 1(a)(ii) hereof, provided that the Sub-Adviser shall
have been given prompt written notice concerning any matter for which
indemnification is otherwise afforded hereunder.
(b) Adviser agrees to indemnify, defend and hold harmless Sub-Adviser and
its affiliated persons from and again any and all Losses arising out of the
Adviser's gross negligence, willful misfeasance, or bad faith or reckless
disregard of its duties and obligations hereunder, except that the Sub-Adviser
and its affiliated persons shall not be entitled to indemnification from the
Adviser to the extent that the Sub-Adviser's gross negligence, willful
misconduct, bad faith or reckless disregard of its duties and obligations
hereunder materially contributed to the Losses.
10. RECORDS; RIGHT TO AUDIT.
The Sub-Adviser agrees to maintain in the form and for the period required
by Rule 31a-2 under the Investment Company Act of 1940, all records relating to
the Fund's investments made by Sub-Adviser that are
A-8
<PAGE>
required to be maintained by the Fund pursuant to the requirements of
Rule 31a-1 under the Act. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
Investment Company Act of 1940 which are prepared or maintained by Sub-Adviser
on behalf of the Fund are the property of the Fund and will be surrendered
promptly to the Fund or the Adviser on request.
The Sub-Adviser agrees that all accounts, books and other records maintained
and preserved by it as required hereby will be subject at any time, and from
time to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Fund's auditors, the Fund or any
representative of the Fund, the Adviser, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
11. MARKETING MATERIALS.
The Fund shall furnish to the Sub-Adviser, prior to its use, each piece of
advertising, supplemental sales literature or other promotional material in
which the Sub-Adviser or any of its affiliates is named or in which the Sub-
Adviser's logo is included. No such material shall be used except with the prior
written consent of the Sub-Adviser or its delegate (which consent shall not be
unreasonably withheld); provided, however, that the names "Goldman Sachs,"
"Goldman, Sachs & Co." and/or "Goldman Sachs Asset Management" may be used in
any piece of advertising, supplemental sales literature or other promotional
material without such prior written authorization if no other information about
Sub-Adviser is included in the same piece of advertising, supplemental sales
literature or other promotional material. The Sub-Adviser agrees to respond to
any request for approval on a prompt and timely basis. Failure by the
Sub-Adviser to respond within ten calendar days to the Fund shall relieve the
Fund of the obligation to obtain the prior written permission of the
Sub-Adviser.
The Sub-Adviser shall furnish to the Fund, prior to its use, each piece of
advertising, supplemental sales literature or other promotional material in
which the Fund, the Adviser or any of the Adviser's affiliates is named. No such
material shall be used except with the prior written consent of the Fund or its
delegate (which consent shall not be unreasonably withheld). The Fund agrees to
respond to any request for approval on a prompt and timely basis. Failure by the
Fund to respond within ten calendar days to the Sub-Adviser shall relieve the
Sub-Adviser of the obligation to obtain the prior written permission of the
Fund.
A-9
<PAGE>
12. CONFIDENTIALITY.
All information and advice furnished by either party to the other in
connection with this Agreement shall be treated as confidential and shall not,
without the prior written consent of the other party, be disclosed to third
parties except as permitted by Section 11 of this Agreement, or as required by
law, regulation or other legal process, or in furtherance of this Agreement.
13. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with, the
laws of State of Delaware without regard to the principles of conflicts of law
contained therein; provided, however, that nothing herein shall be construed as
being inconsistent with applicable Federal and state securities laws and any
rules, regulations and orders thereunder.
14. NATURE OF RELATIONSHIP.
This Agreement does not and shall not be deemed to constitute a partnership
or joint venture between the parties, and neither party nor any of its
directors, officers, employees or agents shall, by virtue of the performance of
their obligations under this Agreement, be deemed to be an employee of the
other.
15. SEVERABILITY.
If any provision hereof is, or at any time should become, inconsistent with
any present or future law, rule or regulation of any exchange of any
governmental or regulatory body with relevant jurisdiction, such provision shall
be deemed modified to conform to such law, rule or regulation, but in all other
respects this Agreement shall continue and remain in full force and effect.
16. NON-WAIVER.
A waiver by any party of any of the terms and conditions of this Agreement
in any one instance shall not be deemed or construed to be a waiver of any such
term or condition for the future, nor a waiver of any subsequent breach thereof,
nor shall it be deemed a waiver of performance of any other obligation
hereunder. No waiver of any provision of this Agreement shall be valid unless
agreed to in writing by the party or parties against whom such waiver is sought
to be enforced.
A-10
<PAGE>
IN WITNESS WHEREOF, the parties have caused this instrument to be signed in
duplicate on their behalf by their duly authorized representatives, all as of
the day and year first above written.
LINCOLN INVESTMENT
MANAGEMENT, INC.
/s/ Philip C. Byrde
------------------------------------------------------------------
Name: Philip C. Byrde
Title: Senior Vice President
GOLDMAN SACHS ASSET
MANAGEMENT, a division of
GOLDMAN, SACHS & CO.
/s/ David B. Ford
------------------------------------------------------------------
Name: David B. Ford
Title: Managing Director
Accepted and agreed to as of the day and year
first above written:
LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.
/s/ Kelly D. Clevenger
------------------------------------------------------------------
Name: Kelly D. Clevenger
Title: President
A-11
<PAGE>
PROXY PROXY
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY")
I hereby direct the Company to cast, as designated below, all the votes
attributable to the Company's variable annuity contract which I own, at the
Annual Meeting of the Stockholder of Lincoln National Growth and Income Fund,
Inc., to be held on October 27, 2000 or any adjournment thereof.
BY SUBMITTING THIS ELECTRONIC VOTE, I ACKNOWLEDGE RECEIPT
OF THE NOTICE OF THE ANNUAL MEETING
OF THE STOCKHOLDER AND ACCOMPANYING PROXY STATEMENT
DATED [INSERT DATE]
Upon proper submittal of this form, the votes indicated below will be cast in
the manner directed herein by the Contract Owner and in the Company's discretion
upon such matters as may properly come before the meeting or any adjournment
thereof. IF NO DIRECTION IS MADE, THE VOTES WILL BE CAST FOR THE MATTERS
DESCRIBED IN THE ITEMS LISTED BELOW. If this form is not submitted, or is
submitted not properly executed, such votes will be cast by the Company in the
same proportions as those for which directions have been received from all other
Contract Owners participating in the Fund. This proxy confers authority only
with respect to the meeting (and any adjournment thereof) to which it pertains.
PLEASE MARK AND SUBMIT THIS PROXY INSTRUCTION CARD BY [INSERT DATE]. TO VOTE,
CLICK ON THE APPROPRIATE BOX BELOW. If you have any questions, please contact
the Internet Service Center at www.AnnuityNet.com.
<TABLE>
<CAPTION>
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(As marked below)
1. Election of Directors:
<S> <C> <C> <C>
John B. Borsch, Kelly D. Clevenger,
Nancy L. Frisby, Barbara S. Kowalczyk,
Kenneth G. Stella
</TABLE>
To withhold authority to vote for any individual nominee, type that nominee's
name on the line below.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. To approve a sub-advisory agreement with
Goldman Sachs Asset Management ("GSAM"), a
division of Goldman Sachs & Company,
under the terms described in the Proxy
Statement, pursuant to which GS & Co.
has replaced Vantage Global
Advisors, Inc. as sub-advisor
to the Fund.
3. To approve a change in the fundamental
investment policies of the Fund.
4. To approve the engagement of Ernst & Young LLP
as independent auditors for the Fund as
explained in the proxy statement.
5. To transact such other business as may
properly come before the meeting
</TABLE>
E
<PAGE>
PROXY PROXY
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY")
I, the undersigned, hereby direct the Company to cast, as designated below, all
the votes attributable to the Company's flexible premium variable life insurance
policy which I own, at the Annual Meeting of the Stockholder of Lincoln
National Growth and Income Fund, Inc., to be held on October 27, 2000, or any
adjournment thereof.
VOTE VIA THE INTERNET: [INSERT WEBSITE]
VOTE BY TELEPHONE: [INSERT PHONE NUMBER]
CONTROL NUMBER: [INSERT NUMBER]
I acknowledge receipt of the Notice of the Annual Meeting
of the Stockholder and accompanying Proxy Statement
dated [insert date].
____________________________________________
Signature
____________________________________________
Signature (if held jointly)
, 2000
____________________________________________
Date
PLEASE MARK YOUR VOTE ON THE REVERSE SIDE
VUL
<PAGE>
Upon proper execution of this form, the votes indicated below will be cast in
the manner directed herein by the undersigned Contract Owner and in the
Company's discretion upon such matters as may properly come before the
meeting or any adjournment thereof. IF NO DIRECTION IS MADE, THE VOTES WILL
BE CAST FOR THE MATTERS DESCRIBED IN THE ITEMS LISTED BELOW. If this form is
not returned, or is returned not properly executed, such votes will be cast
by the Company in the same proportions as those for which directions have
been received. This proxy confers authority only with respect to the meeting
(and any adjournment thereof) to which it pertains. PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY INSTRUCTION CARD BY [INSERT DATE], USING THE ENCLOSED
ENVELOPE. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example: / / If
you have any questions, please contact Lincoln Life toll free at
1-800-4LINCOLN at 1-800-454-6265.
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(As marked below)
1. Election of Directors:
John B. Borsch, Kelly D. Clevenger, / / / / / /
Nancy L. Frisby, Barbara S. Kowalczyk,
Kenneth G. Stella
To withhold authority to vote for any individual nominee, print that nominee's
name on the line below.
_____________________________________________________________
FOR AGAINST ABSTAIN
2. To approve a sub-advisory agreement with / / / / / /
Goldman Sachs Asset Management ("GSAM"),
a division of Goldman Sachs & Company,
under the terms described in the Proxy
Statement, pursuant to which GS & Co.
has replaced Vantage Global Advisors, Inc.
as sub-advisor to the Fund.
3. To approve a change in the fundamental / / / / / /
investment policies of the Fund.
4. To approve the engagement of Ernst &
Young LLP as independent auditors for / / / / / /
the Fund as explained in the proxy
statement.
5. To transact such other business as may / / / / / /
properly come before the meeting.
<PAGE>
PROXY PROXY
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY")
I, the undersigned, hereby direct the Company to cast, as designated below, all
the votes attributable to the Company's variable annuity contract which I own,
at the Annual Meeting of the Stockholder of Lincoln National Growth and Income
Fund, Inc., to be held on October 27, 2000 or any adjournment thereof.
VOTE VIA THE INTERNET: [INSERT WEBSITE]
VOTE BY TELEPHONE: [INSERT PHONE NUMBER]
CONTROL NUMBER: [INSERT NUMBER]
I acknowledge receipt of the Notice of the Annual Meeting
of the Stockholder and accompanying Proxy Statement
dated [insert date].
____________________________________________
Signature
____________________________________________
Signature (if held jointly)
, 2000
____________________________________________
Date
PLEASE MARK YOUR VOTE ON THE REVERSE SIDE
VAA
<PAGE>
Upon proper execution of this form, the votes indicated below will be cast in
the manner directed herein by the undersigned Contract Owner and in the
Company's discretion upon such matters as may properly come before the
meeting or any adjournment thereof. IF NO DIRECTION IS MADE, THE VOTES WILL
BE CAST FOR THE MATTERS DESCRIBED IN THE ITEMS LISTED BELOW. If this form is
not returned, or is returned not properly executed, such votes will be cast
by the Company in the same proportions as those for which directions have
been received. This proxy confers authority only with respect to the meeting
(and any adjournment thereof) to which it pertains. PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY INSTRUCTION CARD BY [INSERT DATE], USING THE ENCLOSED
ENVELOPE. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example: / / If
you have any questions, please contact Lincoln Life toll free at
1-800-348-1212.
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(As marked below)
1. Election of Directors:
John B. Borsch, Kelly D. Clevenger, / / / / / /
Nancy L. Frisby, Barbara S. Kowalczyk,
Kenneth G. Stella
To withhold authority to vote for any individual nominee, print that nominee's
name on the line below.
_____________________________________________________________
FOR AGAINST ABSTAIN
2. To approve a sub-advisory agreement / / / / / /
with Goldman Sachs Asset Management ("GSAM"),
a division of Goldman Sachs & Company,
under the terms described in the Proxy
Statement, pursuant to which GS & Co. has
replaced Vantage Global Advisors, Inc. as
sub-advisor to the Fund.
3. To approve a change in the fundamental / / / / / /
investment policies of the Fund.
4. To approve the engagement of Ernst / / / / / /
& Young LLP as independent auditors for
the Fund as explained in the proxy
statement.
5. To transact such other business as may / / / / / /
properly come before the meeting.
<PAGE>
PROXY PROXY
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY")
I, the undersigned, hereby direct the Company to cast, as designated below, all
the votes attributable to my interest in the Company's group variable annuity
contract in which I participate, at the Annual Meeting of the Stockholder of
Lincoln National Growth and Income Fund, Inc., to be held on October 27, 2000 or
any adjournment thereof.
VOTE VIA THE INTERNET: [INSERT WEBSITE]
VOTE BY TELEPHONE: [INSERT PHONE NUMBER]
CONTROL NUMBER: [INSERT NUMBER]
I acknowledge receipt of the Notice of the Annual Meeting
of the Stockholder and accompanying Proxy Statement
dated [insert date].
____________________________________________
Signature
____________________________________________
Signature (if held jointly)
, 2000
____________________________________________
Date
Q&53
PLEASE MARK YOUR VOTE ON THE REVERSE SIDE
<PAGE>
Upon proper execution of this form, the votes indicated below will be cast in
the manner directed herein by the undersigned plan participant and in the
Company's discretion upon such matters as may properly come before the
meeting or any adjournment thereof. IF NO DIRECTION IS MADE, THE VOTES WILL
BE CAST FOR THE MATTERS DESCRIBED IN THE ITEMS LISTED BELOW. If this form is
not returned, or is returned not properly executed, such votes will be cast
by the Company in the same proportions as those for which directions have
been received. This proxy confers authority only with respect to the meeting
(and any adjournment thereof) to which it pertains. PLEASE MARK, SIGN, DATE
AND RETURN THIS PROXY INSTRUCTION CARD BY [INSERT DATE], USING THE ENCLOSED
ENVELOPE. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example: / / If
you have any questions, please contact Lincoln Life toll free at
1-800-348-1212.
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(As marked below)
1. Election of Directors:
John B. Borsch, Kelly D. Clevenger, / / / / / /
Nancy L. Frisby, Barbara S. Kowalczyk,
Kenneth G. Stella
To withhold authority to vote for any individual nominee, print that nominee's
name on the line below.
_____________________________________________________________
FOR AGAINST ABSTAIN
2. To approve a sub-advisory agreement / / / / / /
with Goldman Sachs Asset Management ("GSAM"),
a division of Goldman Sachs & Company,
under the terms described in the Proxy
Statement, pursuant to which GSAM has
replaced Vantage Global Advisors, Inc. as
sub-advisor to the Fund.
3. To approve a change in the fundamental / / / / / /
investment policies of the Fund.
4. To approve the engagement of Ernst / / / / / /
& Young LLP as independent auditors
for the Fund as explained in the proxy
statement.
5. To transact such other business as may / / / / / /
properly come before the meeting.
Q&53
