<PAGE>
As filed with the Securities and Exchange Commission on April 27, 2000
Registration No.: 333-____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]
AMENDMENT NO. 26 [X]
LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H
American Legacy III Plus
(Exact Name of Registrant)
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
(Name of Depositor)
1300 South Clinton Street
Post Office Box 1110
Fort Wayne, Indiana 46801
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(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, including Area Code: (219)455-2000
Elizabeth A. Frederick, Esq.
The Lincoln National Life Insurance Company
1300 S. Clinton St.
Post Office Box 1110
Fort Wayne, Indiana 46802
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(Name and Address of Agent for Service)
Copy to:
Mary Jo Ardington, Esq.
The Lincoln National Life Insurance Company
1300 S. Clinton St.
Fort Wayne, Indiana 46802
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of the Registration Statement.
Title of securities being registered:
Interests in a separate account under individual flexible premium deferred
variable annuity contracts.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
SHALL DETERMINE.
<PAGE>
American Legacy III Plus
Lincoln National Variable Annuity Account H
individual variable annuity contracts
Home Office:
Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, IN 46802
www.lincolnlife.com
This Prospectus describes the individual flexible premium deferred variable
annuity contract that is issued by Lincoln National Life Insurance Company
(Lincoln Life). It is primarily for use with nonqualified plans and retirement
plans under Sections 408 (IRAs) and 408A (Roth IRAs) of the tax code. Quali-
fied 403(b) contracts will only be issued for purchase payments that are ei-
ther lump sum transfers or rollovers. Generally, you do not pay federal income
tax on the contract's growth until it is paid out. The contract is designed to
accumulate contract value and to provide retirement income that you cannot
outlive or for an agreed upon time. These benefits may be a variable or fixed
amount or a combination of both. If you die before the annuity commencement
date, we will pay your beneficiary a death benefit. In the alternative, you
may choose to receive a death benefit on the death of the annuitant.
The minimum initial purchase payment for the contract is $25,000 ($10,000 for
contracts owned by Selling Group Individuals. See Charges and other deduc-
tions--Surrender charge). Additional purchase payments may be made to the con-
tract and must be at least $100 per payment ($25 if transmitted electronical-
ly), and at least $300 annually.
You choose whether your contract value accumulates on a variable or a fixed
(guaranteed) basis or both. If all your purchase payments and bonus credits
are in the fixed account, we guarantee your principal and a minimum interest
rate. We limit withdrawals and transfers from the fixed side of the contract.
All purchase payments and bonus credits for benefits on a variable basis will
be placed in Lincoln National Variable Annuity Account H (variable annuity ac-
count [VAA]). The VAA is a segregated investment account of Lincoln Life. You
take all the investment risk on the contract value and the retirement income
for amounts placed into one or more of the contract's variable options. If the
subaccounts you select make money, your contract value goes up; if they lose
money, it goes down. How much it goes up or down depends on the performance of
the subaccounts you select. We do not guarantee how any of the variable op-
tions or their funds will perform. Also, neither the U.S. Government nor any
federal agency insures or guarantees your investment in the contract.
The available funds, listed below, are each part of American Funds Insurance
Series (series) Class 2 Shares, also known as American Variable Insurance Se-
ries:
Global Growth
Global Small Capitalization
Growth
International
New World
Growth-Income
Asset Allocation
Bond
High-Yield Bond
U.S. Government/AAA-Rated Securities
Cash Management
This Prospectus gives you information about the contracts that you should know
before you decide to buy a contract and make purchase payments. You should
also review the prospectus for the funds that is attached, and keep both pro-
spectuses for reference.
Neither the SEC nor any state securities commission has approved this contract
or determined that this Prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.
Lincoln Life offers variable annuity contracts that do not have bonus credits,
and have lower fees. You should carefully consider whether or not this con-
tract is the best product for you.
You can obtain a current Statement of Additional Information (SAI), dated the
same date as this Prospectus, about the contracts which has more information.
Its terms are made part of this Prospectus. For a free copy, write: Lincoln
National Life Insurance Company, P.O. Box 2348, Fort Wayne, Indiana 46801, or
call 1-800-942-5500. The SAI and other information about Lincoln Life and Ac-
count H are also available on the SEC's web site (http://www.sec.gov). There
is a table of contents for the SAI on the last page of this Prospectus.
, 2000
1
<PAGE>
Table of contents
<TABLE>
<CAPTION>
Page
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<S> <C>
Special terms 2
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Expense tables 3
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Summary 5
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Condensed financial information 6
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Investment results 6
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Financial statements 6
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Lincoln National Life Insurance Co. 6
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Fixed side of the contract 6
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Variable annuity account (VAA) 7
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Investments of the variable annuity account 7
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Charges and other deductions 9
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The contracts 11
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</TABLE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Annuity payouts 16
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Federal tax matters 17
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Voting rights 20
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Distribution of the contracts 21
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Return privilege 21
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State regulation 21
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Restrictions under the Texas Optional Retirement Program 21
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Records and reports 21
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Other information 21
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Statement of additional information table of contents for Variable
Annuity Account H American Legacy III Plus 22
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</TABLE>
Special terms
(We have italicized the terms that have special meaning throughout the Pro-
spectus)
Account or variable annuity account (VAA) -- The segregated investment ac-
count, Account H, into which Lincoln Life sets aside and invests the assets
for the variable side of the contract offered in this Prospectus.
Accumulation unit -- A measure used to calculate contract value for the vari-
able side of the contract before the annuity commencement date.
Annuitant -- The person on whose life the annuity benefit payments made after
the annuity commencement date are based and upon whose life a death benefit
may be paid.
Annuity commencement date -- The valuation date when funds are withdrawn or
converted into annuity units or fixed dollar payout for payment of retirement
income benefits under the annuity payout option you select.
Annuity payout -- An amount paid at regular intervals after the annuity com-
mencement date under one of several options available to the annuitant and/or
any other payee. This amount may be paid on a variable or fixed basis, or a
combination of both.
Annuity unit -- A measure used to calculate the amount of annuity payouts for
the variable side of the contract after the annuity commencement date.
Beneficiary -- The person you choose to receive the death benefit that is paid
if you die before the annuity commencement date.
Bonus Credit -- The additional amount credited to the contract for each pur-
chase payment.
Contractowner (you, your, owner) -- The person who has the ability to exercise
the rights within the contract (decides on investment allocations, transfers,
payout option, designates the beneficiary, etc.). Usually, but not always, the
owner is the annuitant.
Contract value -- At a given time before the annuity commencement date, the
total value of all accumulation units for a contract plus the value of the
fixed side of the contract.
Contract year -- Each one-year period starting with the effective date of the
contract and starting with each contract anniversary after that.
Death benefit (EGMDB or Guarantee of Principal) -- The amount payable to your
designated beneficiary if the owner dies before the annuity commencement date.
or, if selected, to the owner if the annuitant dies.
Earnings -- The excess of contract value over the sum of bonus credits and
purchase payments which have not yet been withdrawn from the contract.
Free amount -- The amount that may be withdrawn each year without incurring a
surrender charge.
Lincoln Life (we, us, our) -- The Lincoln National Life Insurance Company.
Purchase payments -- Amounts paid into the contract other than bonus credits.
Series -- American Funds Insurance Series (series), the funds to which you di-
rect purchase payments.
Subaccount or American Legacy III Plus subaccount -- The portion of the VAA
that reflects investments in accumulation and annuity units of a class of a
particular fund available under the contracts. There is a separate subaccount
which corresponds to each class of a fund.
Valuation date -- Each day the New York Stock Exchange (NYSE) is open for
trading.
Valuation period -- The period starting at the close of trading (currently,
normally, 4:00 p.m. New York time) on each day that the NYSE is open for trad-
ing (valuation date) and ending at the close of such trading on the next valu-
ation date.
2
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Expense tables
Summary of Contractowner expenses:
The maximum surrender charge (contingent deferred sales charge)
(as a percentage of purchase payments surrendered/withdrawn): 8.5%
The surrender charge percentage is reduced over time. The later the redemption
occurs, the lower the surrender charge with respect to that surrender or with-
drawal. We may waive this charge in certain situations. See Surrender charges.
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Account H annual expenses for American Legacy III Plus subaccounts:*
(as a percentage of average daily net assets):
<TABLE>
<CAPTION>
With Enhanced Guarantee of
Guaranteed Principal
Minimum Death Death
Benefit Benefit
(EGMDB) .
<S> <C> <C>
Mortality and expense risk charge 1.50% 1.40%
Administrative charge .10% .10%
----- -----
Total annual charge for each American Legacy III
Plus subaccount 1.60% 1.50%
</TABLE>
Annual expenses of the funds for the year ended December 31, 1999:
(as a percentage of each fund's average net assets):
<TABLE>
<CAPTION>
Management 12b-1 Other Total
fees + fees + expenses = expenses
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<S> <C> <C> <C> <C> <C> <C> <C>
1. Global Growth .68% .25% .03% .96%
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2. Global Small Capitalization .78 .25 .03 1.06
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3. Growth .38 .25 .01 .64
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4. International .55 .25 .05 .85
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5. New World** .89 .25 .06 1.20
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6. Growth-Income .34 .25 .01 .60
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7. Asset Allocation .43 .25 .01 .69
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8. Bond .51 .25 .02 .78
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9. High-Yield Bond .50 .25 .01 .76
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10. U.S. Govt./AAA-Rated
Securities .51 .25 .01 .77
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11. Cash Management .44 .25 .01 .70
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</TABLE>
*The VAA is divided into separately-named subaccounts, eleven of which are
available under the contracts. Each subaccount, in turn, invests purchase pay-
ments and bonus credits in shares of a class of its respective fund.
**These expenses are annualized. The fund began operations on June 17, 1999.
3
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Examples
(expenses of the subaccounts and of the funds):
If you surrender your contract at the end of the time period shown, you would
pay the following expenses on a $1,000 investment, assuming a 3% bonus and a
5% annual return:
<TABLE>
<CAPTION>
1 year 3 years
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<S> <C> <C>
1. Global Growth $112 $162
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2. Global Small Capitalization 113 165
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3. Growth 108 152
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4. International 111 159
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5. New World 114 169
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6. Growth-Income 108 151
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7. Asset Allocation 109 154
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8. Bond 110 156
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9. High-Yield Bond 110 156
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10. U.S. Govt./AAA-Rated Securities 110 156
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11. Cash Management 109 154
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If you do not surrender your contract, you would pay the following expenses on
a $1,000 investment, assuming a 3%bonus and a 5% annual return:
<CAPTION>
1 year 3 years
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<S> <C> <C>
1. Global Growth $27 $82
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2. Global Small Capitalization 28 85
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3. Growth 23 72
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4. International 26 79
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5. New World 29 89
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6. Growth-Income 23 71
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7. Asset Allocation 24 74
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8. Bond 25 76
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9. High-Yield Bond 25 76
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10. U.S. Govt./AAA-Rated Securities 25 76
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11. Cash Management 24 74
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</TABLE>
We provide these examples to help you understand the direct and indirect costs
and expenses of the contract. The examples assume that an enhanced death bene-
fit is in effect. Without this benefit, expenses would be lower. If the bonus
credit is higher, your expenses on a $1,000 investment would be slightly high-
er.
For more information, see Charges and other deductions in this Prospectus, and
Management and Organization in the prospectus for the funds. Premium taxes may
also apply, although they do not appear in the examples. We also reserve the
right to impose a charge on transfers between subaccounts and to and from the
fixed account--currently, there is no charge. These examples should not be
considered a representation of past or future expenses. Actual expenses may be
more or less than those shown.
4
<PAGE>
Summary
What kind of contract am I buying? It is an individual annuity contract be-
tween you and Lincoln Life. It may provide for a fixed annuity and/or a vari-
able annuity. This Prospectus describes the variable side of the contract. See
The contracts.
What is the variable annuity account (VAA)? It is a separate account we estab-
lished under Indiana insurance law, and registered with the SEC as a unit in-
vestment trust. VAA assets are allocated to one or more subaccounts, according
to your investment choices. VAA assets are not chargeable with liabilities
arising out of any other business which Lincoln Life may conduct. See Variable
annuity account.
What are my investment choices? Based upon your instruction for purchase pay-
ments, the VAA applies your purchase payments and bonus credits to buy series
shares in one or more of the investment funds of the series: Global Growth,
Global Small Capitalization, Growth, International, New World, Growth-Income,
Asset Allocation, Bond, High-Yield Bond, U.S. Government/AAA-Rated Securities
and Cash Management. In turn, each fund holds a portfolio of securities con-
sistent with its investment policy. See Investments of the variable annuity
account and Description of the series.
Who invests my money? The investment advisor for the series is Capital Re-
search and Management Company (CRMC), Los Angeles, California. CRMC is regis-
tered as an investment advisor with the SEC. See Investments of the variable
annuity account and Investment advisor.
How does the contract work? If we approve your application, we will send you a
contract. When you make purchase payments during the accumulation phase, you
receive bonus credits and you buy accumulation units. If you decide to receive
retirement income payments, your accumulation units are converted to annuity
units. Your retirement income payments will be based on the number of annuity
units you received and the value of each annuity unit on payout days. See The
contracts.
What charges do I pay under the contract? If you withdraw purchase payments,
you pay a surrender charge from 0% to 8.5% of the surrendered or withdrawn
purchase payments, depending upon how many contract years those payments have
been in the contract. We may waive surrender charges in certain situations.
See Surrender charge.
We will deduct any applicable premium tax from purchase payments or contract
value at the time the tax is incurred or at another time we choose.
We apply an annual charge totaling 1.60% to the daily net asset value of the
VAA. This charge includes 0.10% as an administrative charge and 1.50% as a
mortality and expense risk charge. If the enhanced death benefit is not in ef-
fect, the mortality and expense risk charge is 1.40%, for an annual charge to-
taling 1.50%. See Charges and other deductions.
The series pays a management fee to CRMC based on the average daily net asset
value of each fund. See Investments of the variable annuity account--Invest-
ment advisor. Each fund also has a 12b-1 fee and additional operating ex-
penses. These are described in the prospectus for the series.
What purchase payments do I make, and how often? Subject to the minimum and
maximum payment amounts, your payments are completely flexible. See The con-
tracts--Purchase payments.
What is a bonus credit? When purchase payments are made, Lincoln Life will
credit an additional amount to the contract, known as a bonus credit. The
amount of the bonus credit is calculated as a percentage of the purchase pay-
ment. The bonus credit percentage will vary based on the owner's investment,
as defined in this Prospectus. All bonus credits become part of the contract
value at the same time as the corresponding purchase payments. Bonus credits
are not considered to be purchase payments. See The contracts--Bonus credits.
Lincoln Life offers a variety of variable annuity contracts. Other annuity
contracts that we offer have no provision for bonus credits but may have lower
mortality and expense risk charges and/or lower surrender charges. We encour-
age you to talk with your financial advisor and determine which annuity con-
tract is most appropriate for you.
How will my annuity payouts be calculated? If you decide to annuitize, you may
select an annuity option and start receiving retirement income payments from
your contract as a fixed option or variable option or a combination of both.
See Annuity options. Remember that participants in the VAA benefit from any
gain, and take a risk of any loss, in the value of the securities in the
funds' portfolios.
What happens if I die before I annuitize? The enhanced death benefit, if in
effect, will be paid to your beneficiary. If the enhanced death benefit is not
in effect, your beneficiary will receive the guarantee of principal. Your ben-
eficiary has options as to how the death benefit is paid. In addition, you may
choose to receive a death benefit on the death of the annuitant. See Death
benefit before the annuity commencement date.
May I transfer contract value between variable options and between the fixed
side of the contract? Yes, with certain limits. See The contracts--Transfers
between subaccounts on or before the annuity commencement date, Transfers fol-
lowing the annuity commencement date, and Transfers to and from the general
account on or before the annuity commencement date.
5
<PAGE>
May I surrender the contract or make a withdrawal? Yes, subject to contract
requirements and to the restrictions of any qualified retirement plan for
which the contract was purchased. See Surrenders and withdrawals. If you sur-
render the contract or make a withdrawal, certain charges may apply. See
Charges and other deductions. A portion of surrender/withdrawal proceeds may
be taxable. In addition, if you decide to take a distribution before age 59
1/2, a 10% Internal Revenue Service (IRS) tax penalty may apply. A surrender
or a withdrawal also may be subject to 20% withholding. See Federal tax mat-
ters.
Do I get a free look at this contract? Yes. You can cancel the contract within
ten days (in some states longer) of the date you first receive the contract.
You need to return the contract, postage prepaid, to our home office. In most
states you assume the risk of any market drop on purchase payments you allo-
cate to the variable side of the contract. We will not refund any bonus cred-
its credited to your contract value if you elect to cancel your contract. See
Return privilege.
Condensed financial information for the variable annuity account
Because the subaccounts which are available under the contracts did not begin
operation before the date of this Prospectus, financial information for the
subaccounts is not included in this Prospectus or in the SAI.
Investment results
At times, the VAA may compare its investment results to various unmanaged in-
dices or other variable annuities in reports to shareholders, sales literature
and advertisements. The results will be calculated on a total return basis for
various periods, with or without contingent deferred sales charges. Results
calculated without contingent deferred sales charges will be higher. Total re-
turns include the reinvestment of all distributions, which are reflected in
changes in unit value. See the SAI for further information.
Financial statements
The financial statements of the VAA and the statutory-basis financial state-
ments of Lincoln Life are located in the SAI. If you would like a free copy of
the SAI, complete and mail the enclosed card, or call 1-800-942-5500.
Lincoln National Life Insurance Co.
Lincoln Life was founded in 1905 and is organized under Indiana law. We are
one of the largest stock life insurance companies in the United States. We are
owned by Lincoln National Corp. (LNC) which is also organized under Indiana
law. LNC's primary businesses are insurance and financial services.
Fixed side of the contract
Purchase payments and bonus credits allocated to the fixed side of the con-
tract become part of Lincoln Life's general account, and do not participate in
the investment experience of the VAA. The general account is subject to regu-
lation and supervision by the Indiana Insurance Department as well as the in-
surance laws and regulations of the jurisdictions in which the contracts are
distributed.
In reliance on certain exemptions, exclusions and rules, Lincoln Life has not
registered interests in the general account as a security under the Securities
Act of 1933 and has not registered the general account as an investment com-
pany under the Investment Company Act of 1940. Accordingly, neither the gen-
eral account nor any interests in it are regulated under the 1933 Act or the
1940 Act. Lincoln Life has been advised that the staff of the SEC has not made
a review of the disclosures which are included in this Prospectus which relate
to our general account and to the fixed account under the contract. These dis-
closures, however, may be subject to certain provisions of the federal securi-
ties laws relating to the accuracy and completeness of statements made in pro-
spectuses. This Prospectus is generally intended to serve as a disclosure doc-
ument only for aspects of the contract involving the VAA, and therefore con-
tains only selected information regarding the fixed side of the contract. Com-
plete details regarding the fixed side of the contract are in the contract.
Purchase payments and bonus credits allocated to the fixed side of the con-
tract are guaranteed to be credited with a minimum interest rate, specified in
the contract, of at least 3.0%. A purchase payment and corresponding bonus
credit allocated to the fixed side of the contract is credited with interest
beginning on the next calendar day following the date of receipt if all data
is complete. Lincoln Life may vary the way in which it credits interest to the
fixed side of the contract from time to time.
ANY INTEREST IN EXCESS OF 3.0% WILL BE DECLARED IN ADVANCE IN LINCOLN LIFE'S
SOLE DISCRETION, CONTRACTOWNERS BEAR THE RISK THAT NO INTEREST IN EXCESS OF
3.0% WILL BE DECLARED.
6
<PAGE>
Variable annuity account (VAA)
On February 7, 1989, the VAA was established as an insurance company separate
account under Indiana law. It is registered with the SEC as a unit investment
trust under the provisions of the Investment Company Act of 1940 (1940 Act).
The SEC does not supervise the VAA or Lincoln Life. The VAA is a segregated
investment account, meaning that its assets may not be charged with liabili-
ties resulting from any other business that we may conduct. Income, gains and
losses, whether realized or not, from assets allocated to the VAA are, in ac-
cordance with the applicable annuity contracts, credited to or charged against
the VAA. They are credited or charged without regard to any other income,
gains or losses of Lincoln Life. The VAA satisfies the definition of a sepa-
rate account under the federal securities laws. We do not guarantee the in-
vestment performance of the VAA. Any investment gain or loss depends on the
investment performance of the funds. You assume the full investment risk for
all amounts placed in the VAA.
The VAA is used to support other annuity contracts offered by Lincoln Life in
addition to the contracts described in this Prospectus. The other annuity con-
tracts supported by the VAA invest in the same portfolios of the series as the
contracts described in this Prospectus. These other annuity contracts may have
different charges that could affect performance of the subaccount.
Investments of the variable annuity account
You decide the subaccount(s) to which you allocate purchase payments. Bonus
credits are allocated to the subaccounts at the same time and at the same per-
centages as the purchase payments being made. There is a separate subaccount
which corresponds to each class of each fund of the series. You may change
your allocation without penalty or charges. Shares of the funds will be sold
at net asset value with no initial sales charge to the VAA in order to fund
the contracts. The series is required to redeem fund shares at net asset value
upon our request. We reserve the right to add, delete or substitute funds.
Investment advisor
The investment advisor for the series is Capital Research and Management Com-
pany (CRMC), 333 South Hope Street, Los Angeles, California 90071. CRMC is one
of the nation's largest and oldest investment management organizations. As
compensation for its services to the series, the investment advisor receives a
fee from the series which is accrued daily and paid monthly. This fee is based
on the net assets of each fund, as defined under Purchase and Redemption of
Shares, in the prospectus for the series.
With respect to the series, the advisor and/or distributor, or an affiliate
thereof, may compensate 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 series attributable to the contracts
along with certain other variable contracts issued or administered by Lincoln
Life (or an affiliate).
Description of the series
The series was organized as a Massachusetts business trust in 1983 and is reg-
istered as a diversified, open-end management investment company under the
1940 Act. Diversified means not owning too great a percentage of the securi-
ties of any one company. An open-end company is one which, in this case, per-
mits Lincoln Life to sell its shares back to the series when you make a with-
drawal, surrender the contract or transfer from one fund to another. Manage-
ment investment company is the legal term for a mutual fund. These definitions
are very general. The precise legal definitions for these terms are contained
in the 1940 Act.
The series has eleven separate portfolios of funds. Fund assets are segregated
and a shareholder's interest is limited to those funds in which the share-
holder owns shares. The series has adopted a plan pursuant to Rule 18f-3 under
the 1940 Act to permit the series to establish a multiple class distribution
system for all of its portfolios. The series' Board of Trustees may at any
time establish additional funds or classes, which may or may not be available
to the VAA.
Under the multi-class system adopted by the series, shares of each multi-class
fund represent an equal pro rata interest in that fund and, generally, have
identical voting, dividend, liquidation, and other rights, preferences, pow-
ers, restrictions, limitations, qualifications and terms and conditions, ex-
cept that: (1) each class has a different designation; (2) each class of
shares bears its class expenses; (3) each class has exclusive voting rights on
any matter submitted to shareholders that relates solely to its distribution
arrangement; and (4) each class has separate voting rights on any matter sub-
mitted to shareholders in which the interests of one class differ from the in-
terests of any other class. Expenses currently designated as class expenses by
the series' Board of Trustees under the plan pursuant to Rule 18f-3 include,
for example, service fees paid under a 12b-1 plan to cover servicing fees paid
to dealers selling the contracts as well as related expenses incurred by Lin-
coln Life.
Each fund has two classes of shares, designated as Class 1 shares and Class 2
shares. Class 1 and 2 differ primarily in that Class 2 (but not Class 1)
shares are subject to a 12b-1 plan. Only Class 2 shares are available under
the contracts.
Certain funds offered as part of this contract have similar investment objec-
tives and policies to other portfolios managed by the advisor. The investment
results of
7
<PAGE>
the funds, however, may be higher or lower than the other portfolios that are
managed by the advisor. There can be no assurance, and no representation is
made, that the investment results of any of the funds will be comparable to
the investment results of any other portfolio managed by the advisor.
Following are brief summaries of the investment objectives and policies of the
funds. Each fund is subject to certain investment policies and restrictions
which may not be changed without a majority vote of shareholders of that fund.
More detailed information may be obtained from the current prospectus for the
series which is included in this booklet. Please be advised that there is no
assurance that any of the funds will achieve their stated objectives.
1. Global Growth Fund--The fund seeks to make your investment grow over time
by investing primarily in common stocks of companies located around the
world. The fund is designed for investors seeking capital appreciation
through stocks. Investors in the fund should have a long-term perspective
and be able to tolerate potentially wide price fluctuations.
2. Global Small Capitalization Fund--The fund seeks to make your investment
grow over time by investing primarily in stocks of smaller companies lo-
cated around the world that typically have market capitalizations of $50
million to $1.5 billion. The fund is designed for investors seeking capital
appreciation through stocks. Investors in the fund should have a long-term
perspective and be able to tolerate potentially wide price fluctuations.
3. Growth Fund--The fund seeks to make your investment grow by investing pri-
marily in common stocks of companies that appear to offer superior opportu-
nities for growth of capital. The fund is designed for investors seeking
capital appreciation through stocks. Investors in the fund should have a
long-term perspective and be able to tolerate potentially wide price fluc-
tuations.
4. International Fund--The fund seeks to make your investment grow over time
by investing primarily in common stocks of companies located outside the
United States. The fund is designed for investors seeking capital apprecia-
tion through stocks. Investors in the fund should have a long-term perspec-
tive and be able to tolerate potentially wide price fluctuations.
5. New World Fund--The fund seeks to make your investment grow over time by
investing primarily in stocks of companies with significant exposure to
countries which have developing economies and/or markets. The fund may also
invest in debt securities of issuers, including issuers of high-yield,
high-risk bonds, in these countries.
6. Growth-Income Fund--The fund seeks to make your investment grow and provide
you with income over time by investing primarily in common stocks or other
securities which demonstrate the potential for appreciation and/or divi-
dends. The fund is designed for investors seeking both capital appreciation
and income.
7. Asset Allocation Fund--The fund seeks to provide you with high total return
(including income and capital gains) consistent with preservation of capi-
tal over the long-term by investing in a diversified portfolio of common
stocks and other equity securities; bonds and other intermediate and long-
term debt securities, and money market instruments (debt securities matur-
ing in one year or less).
8. Bond Fund--The fund seeks to maximize your level of current income and pre-
serve your capital by investing primarily in bonds. The fund is designed
for investors seeking income and more price stability than stocks, and cap-
ital preservation over the long-term.
9. High-Yield Bond Fund--The fund seeks to provide you with a high level of
current income and secondarily capital appreciation by investing primarily
in lower quality debt securities (rated Ba or BB or below by Moody's In-
vestors Services, Inc. or Standard & Poor's Corporation), including those
of non-U.S. issuers. The fund may also invest in equity securities that
provide an opportunity for capital appreciation.
10. U.S. Government/AAA-Rated Securities Fund--The fund seeks to provide you
with a high level of current income, as well as preserve your investment.
The fund invests primarily in securities that are guaranteed by the "full
faith and credit" pledge of the U.S. Government and securities that are
rated AAA or Aaa by Moody's Investor's Services, Inc. or Standard & Poor's
Corporation or unrated but determined to be of equivalent quality.
11. Cash Management Fund--The fund seeks to provide you an opportunity to earn
income on your cash reserves while preserving the value of your investment
and maintaining liquidity by investing in a diversified selection of high
quality money market instruments.
Sale of fund shares
We will purchase shares of the funds at net asset value and direct them to the
appropriate subaccounts of the VAA. We will redeem sufficient shares of the
appropriate funds to pay annuity payouts, death benefits, surrender/withdrawal
proceeds or for other purposes described in the contract. If you want to
transfer all or part of your investment from one subaccount to another, we may
redeem shares held in the first and purchase shares of the other. The shares
are retired, but they may be reissued later.
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<PAGE>
Shares of the funds are not sold directly to the general public. They are sold
to Lincoln Life, and may be sold to other insurance companies, for investment
of the assets of the subaccounts established by those insurance companies to
fund variable annuity and variable life insurance contracts.
When the series sells shares in any of its funds both to variable annuity and
to variable life insurance separate accounts, it is said to engage in mixed
funding. When the series sells shares in any of its funds to separate accounts
of unaffiliated life insurance companies, it is said to engage in shared fund-
ing.
The series currently engages in mixed and shared funding. Therefore, due to
differences in redemption rates or tax treatment, or other considerations, the
interests of various contractowners participating in a fund could conflict.
The series' Board of Trustees will monitor for the existence of any material
conflicts, and determine what action, if any, should be taken. See the pro-
spectus for the series.
Reinvestment of dividends and capital gain distributions
All dividend and capital gain distributions of the funds are automatically re-
invested in shares of the distributing funds at their net asset value on the
date of distribution. Dividends are not paid out to contractowners as
additional units, but are reflected as changes in unit values.
Addition, deletion or substitution of investments
We reserve the right, within the law, to make additions, deletions and substi-
tutions for the series and/or any funds within the series in which the VAA
participates. (We may substitute shares of other funds for shares already pur-
chased, or to be purchased in the future, under the contract. This substitu-
tion might occur if shares of a fund should no longer be available, or if in-
vestment in any fund's shares should become inappropriate, in the judgment of
our management, for the purposes of the contract.) We cannot substitute shares
of one fund for another without approval by the SEC. We will also notify you.
Charges and other
deductions
We will deduct the charges described below to cover our costs and expenses,
services provided and risks assumed under the contracts. We incur certain
costs and expenses for the distribution and administration of the contracts
and for providing the benefits payable thereunder. More particularly, our ad-
ministrative services include: processing applications for and issuing the
contracts, processing purchases and redemptions of fund shares as required
(including dollar cost averaging, cross-reinvestment, portfolio rebalancing,
and automatic withdrawal services), maintaining records, administering annuity
payouts, furnishing accounting and valuation services (including the calcula-
tion and monitoring of daily subaccount values), reconciling and depositing
cash receipts, providing contract confirmations, providing toll-free inquiry
services and furnishing telephone fund transfer services. The risks we assume
include: the risk that annuitants receiving annuity payouts under contract
live longer than we assumed when we calculated our guaranteed rates (these
rates are incorporated in the contract and cannot be changed); the risk that
death benefits paid will exceed the actual contract value; the risk that more
owners than expected will qualify for waivers of the contingent deferred sales
charge; and the risk that our costs in providing the services will exceed our
revenues from contract charges (which we cannot change). The amount of a
charge may not necessarily correspond to the costs associated with providing
the services or benefits indicated by the description of the charge. For exam-
ple, the contingent deferred sales load collected may not fully cover all of
the sales and distribution expenses actually incurred by us.
Deductions from the VAA for American Legacy III Plus
We deduct from the VAA an amount, computed daily, which is equal to an annual
rate of 1.60% (1.50% for contracts without the EGMDB) of the daily net asset
value. The charge consists of a 0.10% administrative charge and a 1.50% (1.40%
for contracts without the EGMDB) mortality and expense risk charge.
Surrender charge
A surrender charge applies (except as described below) to surrenders and with-
drawals of other purchase payments that have been invested for the periods in-
dicated as follows:
<TABLE>
<CAPTION>
Number of contract anniversaries
since purchase payment was
invested
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Less than At least
2 years 2 3 4 5 6 7 8 9+
Surrender charge as a percentage of
the surrendered or withdrawn
purchase payments 8.5% 8 7 6 5 4 3 2 0
</TABLE>
A surrender charge does not apply to:
1. A surrender or withdrawal of a purchase payment beyond the ninth anniver-
sary since the purchase payment was invested.
2. Withdrawals of contract value during a contract year to the extent that the
total contract value withdrawn during the current contract year does not
exceed the free amount which is equal to the greater of 10% of the current
contract value or 10% of the total purchase payments;
9
<PAGE>
3. Any purchase payments applied to an annuity payout option available within
the contract that have been invested at least 12 months.
4. A surrender or withdrawal of any purchase payments, if such purchase pay-
ments were received more than 12 months prior to the onset of a permanent
and total disability of the contractowner as defined in Section 22(e)(3) of
the tax code, after the effective date of the contract and before the 65th
birthday of the contractowner. For contracts issued in the State of New Jer-
sey, a different definition of permanent and total disability applies.
5. When the surviving spouse assumes ownership of the contract as a result of
the death of the original owner;
6. A surrender or withdrawal of any purchase payments, if such purchase pay-
ments were received more than 12 months prior to admittance of the
contractowner to an accredited nursing home or equivalent health care facil-
ity, where the admittance into the nursing home occurs after the effective
date of the contract and the owner has been confined for at least 90 consec-
utive days.
7. A surrender or withdrawal of any purchase payments, if such purchase pay-
ments were received more than 12 months prior to the diagnosis date of a
terminal illness that is after the effective date of the contract and re-
sults in a life expectancy of less than one year as determined by a quali-
fied professional medical practitioner.
8. A surrender of the contract as a result of the death of the contractowner or
annuitant. However if an annuitant is changed for any reason other than
death of a prior annuitant the surrender charge is not waived. See Death
benefit before annuity commencement date.
9. A surrender or withdrawal of a purchase payment beyond the fifth anniversary
since the purchase payment was invested for any contract issued to employees
and registered representatives of any member of the selling group and their
spouses and minor children, or to officers, directors, trustees or bona-fide
full-time employees and their spouses and minor children, of Lincoln Finan-
cial Group or The Capital Group, Inc. or their affiliated or managed compa-
nies (based upon the contractowner's status at the time the contract was
purchased), ("Selling Group Individuals"), provided the contract was not is-
sued with the assistance of a sales representative under contract with Lin-
coln Life. For the individuals described above, a reduced schedule of sur-
render charges applies.
10. A surrender or annuitization of bonus credits.
For purposes of calculating the surrender charge on withdrawals, Lincoln Life
assumes that:
a. The free amount will be withdrawn from purchase payments on a "first in-
first out (FIFO)" basis.
b. Prior to the ninth anniversary of the contract, any amount withdrawn above
the free amount during a contract year will be withdrawn in the following
order:
1. from purchase payments (on a FIFO basis) until exhausted; then
2. from earnings until exhausted; then
3. from bonus credits.
c.On or after the ninth anniversary of the contract, any amount withdrawn above
the free amount during a contract year will be withdrawn in the following or-
der:
1. from purchase payments (on a FIFO basis) to which a surrender charge no
longer applies until exhausted; then
2. from earnings until exhausted; then
3. from bonus credits attributable to purchase payments to which a surrender
charge no longer applies until exhausted; then
4. from purchase payments (on a FIFO basis) to which a surrender charge still
applies until exhausted; then
5. from bonus credits attributable to purchase payments to which a surrender
charge still applies.
The surrender charge is calculated separately for each contract year's purchase
payments to which a charge applies. The surrender charges associated with sur-
render or withdrawal are paid to us to compensate us for the loss we experience
on contract distribution costs when contractowners surrender or withdraw before
distribution costs have been recovered.
If the contractowner is a corporation or other non-individual (non-natural per-
son), the annuitant or joint annuitant will be considered the contractowner or
joint owner for purposes of determining when a surrender charge does not apply.
Deductions for premium taxes
Any premium tax or other tax levied by any governmental entity as a result of
the existence of the contracts or the VAA will be deducted from the contract
value when incurred, or at another time of our choosing.
The applicable premium tax rates that states and other governmental entities
impose on the purchase of an annuity are subject to change by legislation, by
administrative interpretation or by judicial action. These premium taxes gener-
ally depend upon the law of your state of residence. The tax ranges from zero
to 5.0%.
Other charges and deductions
There are deductions from and expenses paid out of the assets of the underlying
series that are more fully described in the prospectus for the series. Among
these deductions and expenses are 12b-1 fees which reimburse Lincoln Life for
certain expenses incurred in connection with certain administrative and distri-
bution support services provided to the series.
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<PAGE>
Additional information
The administrative and surrender charges described previously may be reduced or
eliminated for any particular contract. However, these charges will be reduced
only to the extent that we anticipate lower distribution and/or administrative
expenses, or that we perform fewer sales or administrative services than those
originally contemplated in establishing the level of those charges. Lower dis-
tribution and administrative expenses may be the result of economies associated
with (1) the use of mass enrollment procedures, (2) the performance of adminis-
trative or sales functions by the employer, (3) the use by an employer of auto-
mated techniques in submitting deposits or information related to deposits on
behalf of its employees or (4) any other circumstances which reduce distribu-
tion or administrative expenses. The exact amount of administrative and surren-
der charges applicable to a particular contract will be stated in that con-
tract.
The contracts
Purchase of contracts
If you wish to purchase a contract, you must apply for it through a sales rep-
resentative authorized by us. The completed application is sent to us and we
decide whether to accept or reject it. If the application is accepted, a con-
tract is prepared and executed by our legally authorized officers. The contract
is then sent to you through your sales representative. See Distribution of the
contracts.
When a completed application and all other information necessary for processing
a purchase order is received, an initial purchase payment and its corresponding
bonus credit will be priced no later than two business days after we receive
the order. While attempting to finish an incomplete application, we may hold
the initial purchase payment for no more than five business days. If the incom-
plete application cannot be completed within those five days, you will be in-
formed of the reasons, and the purchase payment will be returned immediately.
Once the application is complete, the initial purchase payment and its corre-
sponding bonus credit must be priced within two business days.
Who can invest
To apply for a contract, you must be of legal age in a state where the con-
tracts may be lawfully sold and also be eligible to participate in any of the
qualified or nonqualified plans for which the contracts are designed. The
contractowner, joint owner and annuitant cannot be older than age 85.
Purchase payments
Purchase payments are payable to us at a frequency and in an amount selected by
you in the application. The minimum initial purchase payment is $25,000
($10,000 for contracts owned by Selling Group Individuals). The minimum annual
amount for additional purchase payments is $300. The minimum payment to the
contract at any one time must be at least $100 ($25 if transmitted electroni-
cally). Purchase payments in total may not exceed $2 million for an owner or $1
million for each joint owner without Lincoln Life approval. If you stop making
purchase payments, the contract will remain in force as a paid-up contract.
However, we may terminate the contract as allowed by your state's non-forfei-
ture law for individual deferred annuities. Purchase payments may be made or,
if stopped, resumed at any time until the annuity commencement date, the sur-
render of the contract, maturity date or the payment of any death benefit,
whichever comes first. Lincoln Life reserves the right to limit purchase pay-
ments made to the contract.
Bonus Credits
For each purchase payment made into the contract, Lincoln Life will credit the
contract with a bonus credit. The amount of the bonus credit will be added to
the value of the contract at the same time and allocated in the same percentage
as the purchase payment. The amount of the bonus credit is calculated as a per-
centage of the purchase payment made. The bonus credit percentage is based on
the owner's investment at the time each purchase payment is made according to
the following scale:
<TABLE>
<CAPTION>
Owner's Investment Bonus Credit %
<S> <C>
Less than $100,000 3.0%
$100,000-$999,999 4.0%
$1,000,000 or greater 5.0%
</TABLE>
The owner's investment is defined as the sum of:
a.) the account values for any of the following individual Lincoln Life con-
tracts owned by an eligible owner (defined below) marketed under the names
of: The American Legacy Variable Annuity, American Legacy II Variable Annu-
ity, American Legacy III Variable Annuity, American Legacy Shareholder's
Advantage Variable Annuity, American Legacy III C-Share Variable Annuity,
American Legacy III Plus Variable Annuity, or any other annuity Lincoln
Life identifies for this purpose; plus
b.) the amount (in dollars) of an eligible owner's investment in existing mu-
tual funds in The American Funds Group in accordance with the procedures
established by the American Funds Group; plus
c.) the amount of the current purchase payment you are making into the con-
tract.
The American Funds Group will determine which of the mutual funds are included
in this program. Currently, direct purchases of money market funds are exclud-
ed.
In determining the account values for the Lincoln Life annuity contracts, the
variable account values are valued as of the close of market on the last previ-
ous day the market was open and are adjusted for current day transactions. The
fixed account will include interest accrued through the close of market on the
last previous day the market was open.
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<PAGE>
An eligible owner includes you as the owner of your American Legacy III Plus
contract, and, if you provide us with sufficient identifying information (name
and Social Security Number), an eligible owner will also include your spouse,
and any of your children under the age of 21. If the owner of any contract un-
der (a) above is a non-natural owner and if you, your spouse, or any children
of yours under the age of 21 are the named annuitant, then you may include
these account values in the calculation of the owner's investment for non-
qualified contracts and contracts issued in one of the following IRS defined
markets: Roth IRA, Traditional IRA, SEP and 403(b) transfers. The non-natural
owner will include the account values from contracts in all other markets in
its calculations of owner's investment.
If you make an additional purchase payment prior to the first anniversary of
the contract date and that purchase payment increases the owner's investment
to a level that qualifies for a higher bonus credit percentage, then we will
contribute an additional bonus credit into your contract at the time the sub-
sequent purchase payment is made (it will not be contributed retroactively).
The additional bonus credit is determined by multiplying the sum of the prior
purchase payments by the additional bonus credit percentage (the difference
between the percentage applicable to the subsequent purchase payment and the
percentage applicable to prior purchase payments). This additional bonus
credit is not available after the first anniversary of the contract date.
Lincoln Life offers a variety of variable annuity contracts. Other annuity
contracts that we offer have no provision for bonus credits but may have lower
mortality and expense risk charges and/or lower surrender charges. We encour-
age you to talk with your financial advisor and determine which annuity con-
tract is most appropriate for you.
Valuation date
Accumulation and annuity units will be valued once daily at the close of
trading (currently, normally, 4:00 p.m., New York time) on each day the New
York Stock Exchange is open (valuation date). On any date other than a
valuation date, the accumulation unit value and the annuity unit value will
not change.
Allocation of purchase payments and bonus credits
Purchase payments are placed into the VAA's subaccounts, each of which invests
in shares of the class of its corresponding fund of the series, according to
your instructions. Corresponding bonus credits will be allocated to the
subaccount(s) and/or the fixed side of the contract in the same proportion in
which you allocate purchase payments.
The minimum amount which can be put into any one subaccount is $20. Upon allo-
cation to a subaccount, purchase payments and bonus credits are converted into
accumulation units. The number of accumulation units credited is determined by
dividing the amount allocated to each subaccount by the value of an accumula-
tion unit for that subaccount on the valuation date on which the purchase pay-
ment is received at our home office if received before 4:00 p.m., New York
time. If the purchase payment is received at or after 4:00 p.m., New York
time, we will use the accumulation unit value computed on the next valuation
date. The number of accumulation units determined in this way is not changed
by any subsequent change in the value of an accumulation unit. However, the
dollar value of an accumulation unit will vary depending not only upon how
well the underlying fund's investments perform, but also upon the expenses of
the VAA and the underlying funds.
Valuation of accumulation units
Purchase payments and bonus credits allocated to the VAA are converted into
accumulation units. This is done by dividing the amount allocated by the value
of an accumulation unit for the valuation period during which the purchase
payments and bonus credits are allocated to the VAA. The accumulation unit
value for each subaccount was or will be established at the inception of the
subaccount. It may increase or decrease from valuation period to valuation pe-
riod. The accumulation unit value for a subaccount for a later valuation pe-
riod is determined as follows:
(1) The total value of the fund shares held in the subaccount is calculated by
multiplying the number of fund shares owned by the subaccount at the be-
ginning of the valuation period by the net asset value per share of the
fund at the end of the valuation period, and adding any dividend or other
distribution of the fund if an ex-dividend date occurs during the valua-
tion period; minus
(2) The liabilities of the subaccount at the end of the valuation period;
these liabilities include daily charges imposed on the subaccount, and may
include a charge or credit with respect to any taxes paid or reserved for
by us that we determine result from the operations of the VAA; and
(3) The result of (2) is divided by the number of subaccount units outstanding
at the beginning of the valuation period.
The daily charges imposed on a subaccount for any valuation period are equal
to the daily mortality and expense risk charge and the daily administrative
charge multiplied by the number of calendar days in the valuation period. Be-
cause a different daily charge is made for contracts with the EGMDB than for
those without, each of the two types of contracts will have different corre-
sponding accumulation unit values on any given day.
Transfers between subaccounts on or before the annuity commencement date
After the first thirty days from the effective date of the contract, you may
transfer all or a portion of your in-
12
<PAGE>
vestment from one subaccount to another. A transfer involves the surrender of
accumulation units in one subaccount and the purchase of accumulation units in
the other subaccount. A transfer will be done using the respective accumulation
unit values determined at the end of the valuation date on which the transfer
request is received.
Transfers between subaccounts are restricted to twelve per contract year. In
the future, we may allow transfers in excess of twelve, and a $10 fee may be
charged for each transfer. This limit does not apply to transfers made under a
dollar cost averaging, portfolio rebalancing, or cross-reinvestment program
elected on forms available from us. (The SAI contains more information about
these programs.) The minimum amount which may be transferred between
subaccounts is $300 (or the entire amount in the subaccount, if less than
$300). If the transfer from a subaccount would leave you with less than $300 in
the subaccount, we may transfer the total balance of the subaccount.
A transfer may be made by writing to our home office or, if a Telephone Ex-
change Authorization form (available from us) is on file with us, by a toll-
free telephone call or by the Lincoln Life internet site. In order to prevent
unauthorized or fraudulent telephone transfers, we may require the caller to
provide certain identifying information before we will act upon his or her in-
structions. We may also assign the contractowner a Personal Identification Num-
ber (PIN) to serve as identification. We will not be liable for following tele-
phone instructions we reasonably believe are genuine. Telephone requests may be
recorded and written confirmation of all transfer requests will be mailed to
the contractowner on the next valuation date. Telephone transfers will be proc-
essed on the valuation date that they are received when they are received at
our customer service center before 4 p.m. New York time.
When thinking about a transfer of contract value, you should consider the in-
herent risk involved. Frequent transfers based on short-term expectations may
increase the risk that a transfer will be made at an inopportune time.
Lincoln Life may refuse to permit more than twelve transfers in any contract
year and may modify the transfer provisions of the contract. This contract is
not designed for professional market timing organizations or other entities us-
ing programmed and frequent transfers.
Repeated patterns of frequent transfers are disruptive to the operation of the
subaccounts, and should Lincoln Life become aware of such disruptive practices,
Lincoln Life may refuse to permit more than twelve transfers in any contract
year and may modify the transfer provisions of the contract.
Payment or transfer may be delayed as permitted by the 1940 Act.
Transfers to and from the
general account on or before the
annuity commencement date
After the first thirty days from the effective date of your contract, you may
transfer all or any part of the contract value from the subaccount(s) to the
fixed side of the contract. The minimum amount which can be transferred to the
fixed side is $300 or the total amount in the subaccount, if less than $300.
However, if a transfer from a subaccount would leave you with less than $300 in
the subaccount, we may transfer the total amount to the fixed side.
You may also transfer part of the contract value from the fixed side of your
contract to the various subaccount(s) subject to the following restrictions:
(1) the sum of the percentages of fixed value transferred is limited to 25% of
the value of the fixed account in any 12 month period; and (2) the minimum
amount which can be transferred is $300 or the amount in the fixed account.
These transfers cannot be elected more than twelve times every contract year.
We reserve the right to waive these restrictions. These restrictions do not ap-
ply to transfers made under a dollar cost averaging, portfolio rebalancing or
cross-reinvestment program elected on forms available from us. Currently, there
is no charge to you for a transfer. However, we reserve the right to impose a
charge in the future for any transfers to and from the general account.
Transfers after the annuity commencement date
You may transfer all or a portion of your investment in one subaccount to an-
other subaccount or to the fixed side of the contract. Those transfers will be
limited to three times per contract year. Currently, there is no charge for
these transfers. However, we reserve the right to impose a charge. You may also
transfer from a variable annuity payment to a fixed annuity payment. No trans-
fers are allowed from the fixed side of the contract to the subaccounts.
Death benefit before the annuity commencement date
You may designate a beneficiary during your lifetime and change the beneficiary
by filing a written request with our home office. Each change of beneficiary
revokes any previous designation. We reserve the right to request that you send
us the contract for endorsement of a change of beneficiary.
Upon the death of the contractowner, a death benefit will be paid to the bene-
ficiary. Upon the death of a joint owner, the death benefit will be paid to the
surviving joint owner. Upon the death of an annuitant who is not the
contractowner or joint owner, a death benefit may be paid to the contractowner
(and joint owner, if applicable, in equal shares). If the contractowner is a
corporation or other non-individual (non-natural person), the death of the an-
nuitant will be treated as death of the contractowner. Death benefits are tax-
able. See Federal tax matters.
13
<PAGE>
If the death occurs before the annuity commencement date and the enhanced
guaranteed minimum death benefit (EGMDB) is in effect, the death benefit paid
will be the greater of: (1) the contract value as of the day on which Lincoln
Life approves the payment of the claim; or (2) the highest contract value
which the contract attains on any policy anniversary date (including the in-
ception date) (determined before the allocation of any purchase payments on
that policy anniversary) for ages up to, and including, the deceased's age 80.
The highest contract value is increased by purchase payments and is decreased
by partial withdrawals, partial annuitizations, and any premium taxes incurred
on or subsequent to the anniversary date on which the highest contract value
is obtained. If the EGMDB is not in effect, the death benefit will be equal to
the guarantee of principal death benefit, which is equal to the greater of
contract value as of the day Lincoln Life approves the payment of the claim or
the sum of all purchase payments minus any withdrawals, partial annuitizations
or premium taxes incurred.
If there are joint owners, upon the death of the first contractowner, Lincoln
Life will pay a death benefit to the surviving joint owner. The surviving
joint owner will be treated as the primary, designated beneficiary. Any other
beneficiary designation on record at the time of death will be treated as a
contingent beneficiary. If the surviving joint owner is the spouse of the de-
ceased joint owner he/she may continue the contract as sole contractowner.
Upon the death of the spouse who continues the contract, Lincoln Life will pay
a death benefit to the designated beneficiary(s).
Upon the death of a contractowner, joint owner or annuitant, if the surviving
spouse continues the contract, any portion of the death benefit that would
have been payable (if the contract had not been continued) that exceeds the
current contract value will be credited to the contract. This provision ap-
plies only one time for each contract.
If an annuitant who is not the contractowner or joint owner dies, then the
contingent annuitant, if named, becomes the annuitant and no death benefit is
payable on the death of the annuitant. If no contingent annuitant is named,
the contractowner (or younger of joint owners) becomes the annuitant. Alterna-
tively, a death benefit may be paid to the contractowner (and joint owner, if
applicable, in equal shares) if the annuitant named on this contract has not
been changed, unless due to the death of a prior annuitant.
Notification of the election of this death benefit must be received by Lincoln
Life within 75 days of the death of the annuitant. If no contractowner is liv-
ing on the date of death of the annuitant, the death benefit will be available
to the beneficiary. The contract terminates when any death benefit is paid due
to the death of the annuitant. A death benefit payable on the death of the an-
nuitant will not be paid if the annuitant has been changed subsequent to the
effective date of this contract unless the change occurred because of the
death of a prior annuitant.
If the beneficiary is the spouse of the contractowner, then the spouse may
elect to continue the contract as owner.
The value of the death benefit will be determined as of the date on which the
death claim is approved for payment. This payment will occur upon receipt of:
(1) proof (e.g. an original certified death certificate), or any other proof
of death satisfactory to us, of the death; (2) written authorization for pay-
ment; and (3) our receipt of all required claim forms, fully completed. If the
beneficiary is a minor, court documents appointing the guardian/custodian must
be submitted.
When applying for a contract, an applicant can request a contract without the
EGMDB. The EGMDB is not available under contracts used for qualified plans
(other than IRAs or Roth IRAs) or contracts issued to a contractowner, joint
owner or annuitant who is age 80 or older at the time of issuance.
After a contract is issued, the contractowner may discontinue the EGMDB at any
time by completing the Enhanced Guaranteed Minimum Death Benefit Discontinu-
ance form and sending it to Lincoln Life. The benefit will be discontinued as
of the valuation date we receive the request, and we will stop deducting the
charge for the benefit as of that date. See Charges and other deductions. If
you discontinue the benefit, it cannot be reinstated.
The death benefit payable on the death of the annuitant will be distributed in
either a lump sum settlement or under an annuity payout. The annuity payout
must be selected within 60 days after Lincoln Life has approved the death
claim.
If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by us of the claim subject to the laws, regulations and tax
code governing payment of death benefits. This payment may be postponed as
permitted by the Investment Company Act of 1940.
Unless otherwise provided in the beneficiary designation, one of the following
procedures will take place on the death of a beneficiary:
1. If any beneficiary dies before the contractowner, that beneficiary's inter-
est will go to any other beneficiaries named, according to their respective
interests (There are no restrictions on the beneficiary's use of the pro-
ceeds.); and/or
2. If no beneficiary survives the contractowner, the proceeds will be paid to
the contractowner's estate.
Unless the contractowner has already selected a settlement option, the benefi-
ciary may choose the method of payment of the death benefit. The death benefit
payable to the beneficiary or joint owner must be distributed within five
years of the contractowner's date of death unless the beneficiary begins re-
ceiving within one year of the contractowner's death the distribution in the
form of a life annuity or an annuity for a designated period not extending be-
yond the beneficiary's life expectancy.
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Joint ownership
If a contract has joint owners, the joint owners shall be treated as having
equal undivided interests in the contract. Either owner, independently of the
other, may exercise any ownership rights in this contract. Not more than two
owners (an owner and joint owner) may be named and contingent owners are not
permitted.
Surrenders and withdrawals
Before the annuity commencement date, we will allow the surrender of the con-
tract or a withdrawal of the contract value upon your written request, subject
to the rules discussed below. Surrender or withdrawal rights after the annuity
commencement date depend upon the annuity option you select.
The amount available upon surrender/withdrawal is the cash surrender value
(contract value less any applicable charges, fees, and taxes) at the end of
the valuation period during which the written request for surrender/withdrawal
is received at the home office. The minimum amount which can be withdrawn is
$300. Unless a request for withdrawal specifies otherwise, withdrawals will be
made from all subaccounts within the VAA and from the general account in the
same proportion that the amount of withdrawal bears to the total contract val-
ue. Unless prohibited, surrender/ withdrawal payments will be mailed within
seven days after we receive a valid written request at the home office. The
payment may be postponed as permitted by the 1940 Act.
There are charges associated with surrender of a contract or withdrawal of
contract value. You may specify whether these charges are deducted from the
amount you request to be withdrawn or from the remaining contract value. See
Charges and other deductions.
The tax consequences of a surrender/withdrawal are discussed later in this
booklet. See Federal tax matters.
Special restrictions on surrenders/withdrawals apply if your contract is pur-
chased as part of a retirement plan of a public school system or 501(c)(3) or-
ganization under Section 403(b) of the tax code. Beginning January 1, 1989, in
order for a contract to retain its tax-qualified status, Section 403(b) pro-
hibits a withdrawal from a 403(b) contract of post-1988 contributions (and
earnings on those contributions) pursuant to a salary reduction agreement.
However, this restriction does not apply if the annuitant (a) attains age 59
1/2, (b) separates from service, (c) dies, (d) becomes totally and permanently
disabled and/or (e) experiences financial hardship (in which event the income
attributable to those contributions may not be withdrawn). Pre-1989 contribu-
tions and earnings through December 31, 1988, are not subject to the previ-
ously stated restriction. Funds transferred to the contract from a 403(b)(7)
custodial account will also be subject to the restrictions.
Lincoln Life reserves the right to surrender this contract if any withdrawal
reduces the total contract value to a level at which this contract may be sur-
rendered in accordance with applicable law for individual deferred annuities.
Participants in the Texas Optional Retirement Program should refer to the Re-
strictions under the Texas Optional Retirement Program, later in this Prospec-
tus.
Delay of payments
Contract proceeds from the VAA will be paid within seven days, except (i) when
the NYSE is closed (except weekends and holidays); (ii) times when market
trading is restricted or the SEC declares an emergency, and we cannot value
units or the funds cannot redeem shares; or (iii) when the SEC so orders to
protect contractowners.
Reinvestment privilege
You may elect to make a reinvestment purchase with any part of the proceeds of
a surrender/withdrawal, and we will recredit that portion of the
surrender/withdrawal charges attributable to the amount returned. This elec-
tion must be made within 30 days of the date of the surrender/withdrawal, and
the repurchase must be of a contract covered by this Prospectus. A representa-
tion must be made that the proceeds being used to make the purchase have re-
tained their tax-favored status under an arrangement for which the contracts
offered by this Prospectus are designed. The number of accumulation units
which will be credited when the proceeds are reinvested will be based on the
value of the accumulation unit(s) on the next valuation date. This computation
will occur following receipt of the proceeds and request for reinvestment at
the home office. You may utilize the reinvestment privilege only once. No bo-
nus credits will apply when a reinvestment purchase occurs. For tax reporting
purposes, we will treat a surrender/withdrawal and a subsequent reinvestment
purchase as separate transactions. You should consult a tax advisor before you
request a surrender/withdrawal or subsequent reinvestment purchase.
Amendment of contract
We reserve the right to amend the contract to meet the requirements of the
1940 Act or other applicable federal or state laws or regulations. You will be
notified in writing of any changes, modifications or waivers.
Commissions
Commissions are paid to dealers under different commission options. The maxi-
mum commission paid as a percentage of each purchase payment is 6.50%. Alter-
nate commission schedules are available with lower initial commission amounts
based on purchase payments, plus ongoing annual compensation of up to 1.00%.
At times, additional sales incentives (up to an annual continuing 0.10% of
contract value) may be provided to dealers maintaining certain sales volume
levels. Upon annuitization, the commissions paid to dealers are a maximum of
6.00% of account annuitized and/or an
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annual continuing commission of up to 1.00% (or up to 1.10% for dealers main-
taining certain sales volume levels) of statutory reserves. These commissions
are not deducted from purchase payments, bonus credits or contract value; they
are paid by us.
Ownership
As contractowner, you have all rights under the contract. According to Indiana
law, the assets of the VAA are held for the exclusive benefit of all
contractowners and their designated beneficiaries; and the assets of the VAA
are not chargeable with liabilities arising from any other business that we
may conduct. Qualified contracts may not be assigned or transferred. Non-qual-
ified contracts may not be collaterally assigned. We assume no responsibility
for the validity or effect of any assignment. Consult your tax advisor about
the tax consequences of an assignment.
Contractowner questions
The obligations to purchasers under the contracts are those of Lincoln Life.
Questions about your contract should be directed to us at 1-800-942-5500.
Annuity payouts
When you apply for a contract, you may select any annuity commencement date
permitted by law.
The contract provides optional forms of payouts of annuities (annuity op-
tions), each of which is payable on a variable basis, a fixed basis or a com-
bination of both as you specify. The contract provides that all or part of the
contract value may be used to purchase an annuity.
You may elect annuity payouts in monthly, quarterly, semiannual or annual in-
stallments. If the payouts from any subaccount would be or become less than
$50, we have the right to reduce their frequency until the payouts are at
least $50 each. Following are explanations of the annuity options available.
Annuity options
Life Annuity. This option offers a periodic payout during the lifetime of the
annuitant and ends with the last payout before the death of the annuitant.
This option offers the highest periodic payout since there is no guarantee of
a minimum number of payouts or provision for a death benefit for beneficia-
ries. However, there is the risk under this option that the recipient would
receive no payouts if the annuitant dies before the date set for the first
payout; only one payout if death occurs before the second scheduled payout,
and so on.
Life Income with Payouts Guaranteed for Designated Period. This option guaran-
tees periodic payouts during a designated period, usually 10 or 20 years, and
then continues throughout the lifetime of the annuitant. The designated period
is selected by the contractowner.
Joint Life Annuity. This option offers a periodic payout during the joint
lifetime of the annuitant and a designated joint annuitant. The payouts con-
tinue during the lifetime of the survivor.
Joint Life Annuity with Guaranteed Period. This option guarantees periodic
payouts during a designated period, usually 10 or 20 years, and continues dur-
ing the joint lifetime of the annuitant and a designated joint annuitant. The
payouts continue during the lifetime of the survivor. The designated period is
selected by the contractowner.
Joint Life and Two Thirds Survivor Annuity. This option provides a periodic
payout during the joint lifetime of the annuitant and a designated joint annu-
itant. When one of the joint annuitants dies, the survivor receives two thirds
of the periodic payout made when both were alive.
Joint Life and Two-Thirds Survivor Annuity with Guaranteed Period. This option
provides a periodic payout during the joint lifetime of the annuitant and a
joint annuitant. When one of the joint annuitants dies, the survivor receives
two-thirds of the periodic payout made when both were alive. This option fur-
ther provides that should one or both of the annuitants dies during the
elected guaranteed period, usually 10 or 20 years, full benefit payment will
continue for the rest of the guaranteed period.
Unit Refund Life Annuity. This option offers a periodic payout during the
lifetime of the annuitant with the guarantee that upon death a payout will be
made of the value of the number of annuity units (see Variable annuity
payouts) equal to the excess, if any, of: (a) the total amount applied under
this option divided by the annuity unit value for the date payouts begin, mi-
nus (b) the annuity units represented by each payout to the annuitant multi-
plied by the number of payouts paid before death. The value of the number of
annuity units is computed on the date the death claim is approved for payment
by the home office.
General information
Under the annuity options listed above, you may not make withdrawals. Other
options, with or without withdrawal features, may be made available by us. You
may pre-select an annuity payout option as a method of paying the death bene-
fit to a beneficiary. If you do, the beneficiary cannot change this payout op-
tion. At death, options are only available to the extent they are consistent
with the requirements of the contract as well as Sections 72(s) and 401(a)(9)
of the tax code, if applicable. The mortality and expense risk charge of 1.30%
and the charge for administrative services of .10% will be assessed on all
variable annuity payouts, including options that may be offered that do not
have a life contingency and therefore no mortality risk.
The annuity commencement date is usually on or before the contractowner's 90th
birthday. You may change the annuity commencement date, change the annuity op-
tion
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or change the allocation of the investment among subaccounts up to 30 days be-
fore the scheduled annuity commencement date, upon written notice to the home
office. You must give us at least 30 days notice before the date on which you
want payouts to begin. If proceeds become available to a beneficiary in a lump
sum, the beneficiary may choose any annuity payout option.
Unless you select another option, the contract automatically provides for a
life annuity with annuity payouts guaranteed for 10 years (on a fixed, vari-
able or combination fixed and variable basis, in proportion to the account al-
locations at the time of annuitization) except when a joint life payout is re-
quired by law. Under any option providing for guaranteed period payouts, the
number of payouts which remain unpaid at the date of the annuitant's death (or
surviving annuitant's death in case of joint life annuity) will be paid to
your beneficiary as payouts become due.
Variable annuity payouts
Variable annuity payouts will be determined using:
1. The contract value on the annuity commencement date, less any surrender
charges on purchase payments made within twelve months of annuitization and
any applicable premium taxes;
2. The annuity tables contained in the contract;
3. The annuity option selected; and
4. The investment performance of the fund(s) selected.
To determine the amount of payouts, we make this calculation:
1. Determine the dollar amount of the first periodic payout; then
2. Credit the contract with a fixed number of annuity units equal to the first
periodic payout divided by the annuity unit value; and
3. Calculate the value of the annuity units each period thereafter.
Annuity payouts assume an investment return of 3%, 4%, 5% or 6% per year, as
applied to the applicable mortality table. The amount of each payout after the
initial payout will depend upon how the underlying fund(s) perform, relative
to the assumed rate. If the actual net investment rate (annualized) exceeds
the assumed rate, the payment will increase at a rate proportional to the
amount of such excess. Conversely, if the actual rate is less than the assumed
rate, annuity payments will decrease. There is a more complete explanation of
this calculation in the SAI.
Federal tax matters
Introduction
The Federal income tax treatment of the contract is complex and sometimes un-
certain. The Federal income tax rules may vary with your particular circum-
stances. This discussion does not include all the Federal income tax rules
that may affect you and your contract. This discussion also does not address
other Federal tax consequences, or state or local tax consequences, associated
with the contract. As a result, you should always consult a tax advisor about
the application of tax rules to your individual situation.
Taxation of nonqualified annuities
This part of the discussion describes some of the Federal income tax rules ap-
plicable to nonqualified annuities. A nonqualified annuity is a contract not
issued in connection with a qualified retirement plan receiving special tax
treatment under the tax code, such as an IRA or a section 403(b) plan.
Tax deferral on earnings
The Federal income tax law generally does not tax any increase in your con-
tract value until you receive a contract distribution. However, for this gen-
eral rule to apply, certain requirements must be satisfied:
. An individual must own the contract (or the tax law must treat the contract
as owned by the individual).
. The investments of the VAA must be "adequately diversified" in accordance
with IRS regulations.
. Your right to choose particular investments for a contract must be limited.
. The annuity commencement date must not occur near the end of the annuitant's
life expectancy.
Contracts not owned by the individual
If a contract is owned by an entity (rather than an individual) the tax code
generally does not treat it as an annuity contract for Federal income tax pur-
poses. This means that the entity owning the contract pays tax currently on
the excess of the contract value over the purchase payments for the contract.
Examples of contracts where the owner pays current tax on the contract's earn-
ings and bonus credits are contracts issued to a corporation or a trust. Ex-
ceptions to this rule exist. For example, the tax code treats a contract as
owned by an individual if the named owner is a trust or other entity that
holds the contract as an agent for an individual. However, this exception does
not apply in the case of any employer that owns a contract to provide deferred
compensation for its employees.
Investments in the VAA must be diversified
For a contact to be treated as an annuity for Federal income tax purposes, the
investments of the VAA must be "adequately diversified." IRS regulations de-
fine standards for determining whether the investments of the VAA are ade-
quately diversified. If the VAA fails to comply with these diversification
standards, you could be required to pay tax currently on the excess of the
contract value over the contract purchase payments. Although we do not control
the investments of the underlying investment options, we expect that the un-
derlying investment options will comply with the IRS regulations so that the
VAA will be considered "adequately diversified."
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Restrictions
Federal income tax law limits your right to choose particular investments for
the contract. Because the IRS has not issued guidance specifying those limits,
the limits are uncertain and your right to allocate contract value among
subaccounts may exceed those limits. If so, you would be treated as the owner
of the assets of the VAA and thus subject to current taxation on the income,
bonus credits and gains from those assets. We do not know what limits may be
set by the IRS in any guidance that it may issue and whether any such limits
will apply to existing contracts. We reserve the right to modify the contract
without your consent to try to prevent the tax law from considering you as the
owner of the assets of the VAA.
Age at which annuity payouts begin
Federal income tax rules do not expressly identify a particular age by which
annuity payouts must begin. However, those rules do require that an annuity
contract provide for amortization, through annuity payouts, of the contract's
purchase payments, bonus credits and earnings. If annuity payouts under the
contract begin or are scheduled to begin on a date past the annuitant's 85th
birthday, it is possible that the tax law will not treat the contract as an an-
nuity for Federal income tax purposes. In that event, you would be currently
taxable on the excess of the contract value over the purchase payments of the
contract.
Tax treatment of payments
We make no guarantees regarding the tax treatment of any contract or of any
transaction involving a contract. However, the rest of this discussion assumes
that your contract will be treated as an annuity for Federal income tax pur-
poses and that the tax law will not tax any increase in your contract value un-
til there is a distribution from your contract.
Taxation of withdrawals and surrenders
You will pay tax on withdrawals to the extent your contract value exceeds your
purchase payments in the contract. This income (and all other income from your
contract) is considered ordinary income. A higher rate of tax is paid on ordi-
nary income than on capital gains. You will pay tax on a surrender to the ex-
tent the amount you receive extends your purchase payments. In certain circum-
stances, your purchase payments are reduced by amounts received from your con-
tract that were not included in income.
Taxation of annuity payouts
The tax code imposes tax on a portion of each annuity payout (at ordinary in-
come tax rates) and treats a portion as a nontaxable return of your purchase
payments in the contract. We will notify you annually of the taxable amount of
your annuity payout. Once you have recovered the total amount of the purchase
payment in the contract, you will pay tax on the full amount of your annuity
payouts. If annuity payouts end because of the annuitant's death and before the
total amount of the purchase payments in the contract has been received, the
amount not received generally will be deductible.
Taxation of death benefits
We may distribute amounts from your contract because of the death of a
contractowner or an annuitant. The tax treatment of these amounts depends on
whether you or the annuitant dies before or after the annuity commencement
date.
. Death prior to the annuity commencement date--
. If the beneficiary receives death benefits under an annuity payout option,
they are taxed in the same manner as annuity payouts.
. If the beneficiary does not receive death benefits under an annuity payout
option, they are taxed in the same manner as withdrawal.
. Death after the annuity commencement date--
. If death benefits are received in accordance with the existing annuity
payout option, they are excludible from income if they do not exceed the
purchase payments not yet distributed from the contract. All annuity
payouts in excess of the purchase payments not previously received are
includible in income.
. If death benefits are received in a lump sum, the tax law imposes tax on
the amount of death benefits which exceeds the amount of purchase payments
not previously received.
Penalty taxes payable on withdrawals, surrenders, or annuity payouts
The tax code may impose a 10% penalty tax on any distribution from your con-
tract which you must include in your gross income. The 10% penalty tax does not
apply if one of several exceptions exists. These exceptions include withdraw-
als, surrenders or annuity payouts that:
. you receive on or after you reach age 59 1/2,
. you receive because you became disabled (as defined in the tax law),
. a beneficiary receives on or after your death, or
. you receive as a series of substantially equal periodic payments for your
life (or life expectancy).
Special rules if you own more than one annuity contract
In certain circumstances, you must combine some or all of the nonqualified an-
nuity contracts you own in order to determine the amount of an annuity payout,
a surrender or a withdrawal that you must include in income. For example, if
you purchase two or more deferred annuity contracts from the same life insur-
ance company (or its affiliates) during any calendar year,
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the tax code treats all such contracts as one contract. Treating two or more
contracts as one contract could affect the amount of a surrender, withdrawal
or an annuity payout that you must include in income and the amount that might
be subject to the penalty tax described above.
Loans and assignments
Except for certain qualified contracts, the tax code treats any amount re-
ceived as a loan under a contract, and any assignment or pledge (or agreement
to assign or pledge) any portion of your contract value, as a withdrawal of
such amount or portion.
Gifting a contract
If you transfer ownership of your contract to a person other than your spouse
(or to your former spouse incident to divorce), and receive a payment less
than your contract's value, you will pay tax on your contract value to the ex-
tent it exceeds your purchase payments not previously received. The new own-
er's purchase payments in the contract would then be increased to reflect the
amount included in income.
Charges for a contract's death benefit
Your contract may have an EGMDB, for which you pay an annual charge, computed
daily. It is possible that the tax law may treat all or a portion of the EGMDB
charge as a contract withdrawal.
Loss of interest deduction
After June 8, 1997, if a contract is issued to a taxpayer that is not an indi-
vidual, or if a contract is held for the benefit of an entity, the entity will
lose a portion of its deduction for otherwise deductible interest expenses.
This disallowance does not apply if you pay tax on the annual increase in the
contract value. Entities that are considering purchasing a contract, or enti-
ties that will benefit from someone else's ownership of a contract, should
consult a tax advisor.
Qualified retirement plans
We also designed the contracts for use in connection with certain types of re-
tirement plans that receive favorable treatment under the tax code. Contracts
issued to or in connection with a qualified retirement plan are called "quali-
fied contracts." We issue contracts for use with different types of qualified
plans. The Federal income tax rules applicable to those plans are complex and
varied. As a result, this Prospectus does not attempt to provide more than
general information about use of the contract with various types of qualified
plans. Persons planning to use the contract in connection with a qualified
plan should obtain advice from a competent tax advisor.
Types of qualified contracts and terms of contracts
Currently, we may issue contracts in connection with the following types of
qualified plans:
. Individual Retirement Accounts and Annuities ("Traditional IRAs")
. Roth IRAs
. Simplified Employee Pensions ("SEPs")
. Savings Incentive Matched Plan for Employees ("SIMPLE 401(k) plans")
. Public school system and tax-exempt organization annuity plans ("403(b)
plans")
. Qualified corporate employee pension and profit sharing plans ("401(a)
plans") and qualified annuity plans ("403(a) plans")
. Self-employed individual plans ("H.R. 10 plans" or "Keogh Plans")
. Deferred compensation plans of state and local governments and tax-exempt
organizations ("457 plans").
Section 403(b) business will normally be accepted only for purchase payments
qualifying as a 403(b) lump sum transfer or rollover. We may issue a contract
for use with other types of qualified plans in the future.
We will amend contracts to be used with a qualified plan as generally neces-
sary to conform to tax law requirements for the type of plan. However, the
rights of a person to any qualified plan benefits may be subject to the plan's
terms and conditions, regardless of the contract's terms and conditions. In
addition, we are not bound by the terms and conditions of qualified plans to
the extent such terms and conditions contradict the contract, unless we con-
sent.
Tax treatment of qualified contracts
The Federal income tax rules applicable to qualified plans and qualified con-
tracts vary with the type of plan and contract. For example,
. Federal tax rules limit the amount of purchase payments that can be made,
and the tax deduction or exclusion that may be allowed for the purchase pay-
ments. These limits vary depending on the type of qualified plan and the
plan participant's specific circumstances, e.g., the participant's compensa-
tion.
. Under most qualified plans, e.g., 403(b) plans and Traditional IRAs, the an-
nuitant must begin receiving payments from the contract in certain minimum
amounts by a certain age, typically age 70 1/2. However, these "minimum dis-
tribution rules" do not apply to a Roth IRA.
. Loans are allowed under certain types of qualified plans, but Federal income
tax rules prohibit loans under other types of qualified plans. For example,
Federal income tax rules permit loans under some section 403(b) plans, but
prohibit loans under Traditional and Roth IRAs. If allowed, loans are sub-
ject to a variety of limitations, including restrictions as to the loan
amount, the loan's duration, and the manner of repayment. Your contract or
plan may or may not permit loans.
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Tax treatment of payments
Federal income tax rules generally include distributions from a qualified con-
tract in the recipient's income as ordinary income. These taxable distribu-
tions will include purchase payments that were deductible or excludible from
income. Thus, under many qualified contracts the total amount received is in-
cluded in income since a deduction or exclusion from income was taken for pur-
chase payments. There are exceptions. For example, you do not include amounts
received from a Roth IRA in income if certain conditions are satisfied.
Failure to comply with the minimum distribution rules applicable to certain
qualified plans, such as Traditional IRAs, will result in the imposition of an
excise tax. This excise tax generally equals 50% of the amount by which a min-
imum required distribution exceeds the actual distribution from the qualified
plan.
Federal penalty taxes payable on distributions
The tax code may impose a 10% penalty tax on the amount received from the
qualified contract that must be included in income. The tax code does not im-
pose the penalty tax if one of several exceptions applies. The exceptions vary
depending on the type of qualified contract you purchase. For example, in the
case of an IRA, exceptions provide that the penalty tax does not apply to a
withdrawal, surrender or annuity payout:
. received on or after the annuitant reaches age 59 1/2,
. received on or after the annuitant's death or because of the annuitant's
disability (as defined in the tax law),
. received as a series of substantially equal periodic payments for the
annuitant's life (or life expectancy), or
. received as reimbursement for certain amounts paid for medical care.
These exceptions, as well as certain others not described here, generally ap-
ply to taxable distributions from other qualified plans. However, the specific
requirements of the exception may vary.
Transfers and direct rollovers
In many circumstances, money may be moved between qualified contracts and
qualified plans by means of a rollover or transfer. Special rules apply to
such rollovers and transfers. If the applicable rules are not followed, you
may suffer adverse Federal income tax consequences, including paying taxes
which might not otherwise have had to be paid. A qualified advisor should al-
ways be consulted before you move or attempt to move funds between any quali-
fied plan or contract and another qualified plan or contract.
The direct rollover rules apply to certain payments (called "eligible rollover
distributions") from section 401(a) plans, section 403(a) or (b) plans, H.R.
10 plans and contracts used in connection with these types of plans. (The di-
rect rollover rules do not apply to distributions from IRAs or section 457
plans.) The direct rollover rules require that we withhold Federal income tax
equal to 20% of the eligible rollover distribution from the distribution
amount, unless you elect to have the amount directly transferred to certain
qualified plans or contracts. Before we send a rollover distribution, we will
provide the recipient with a notice explaining these requirements and how the
20% withholding can be avoided by electing a direct rollover.
The EGMDB and IRAs
Pursuant to IRS regulations, IRAs may not invest in life insurance contracts.
We do not believe that these regulations prohibit the EGMDB from being pro-
vided under the contracts when we issue the contract as Traditional IRAs or
Roth IRAs. However, the law is unclear and it is possible that the presence of
the EGMDB under a contract issued as a Traditional IRA or Roth IRA could re-
sult in increased taxes to you.
Federal income tax withholding
We will withhold and remit to the IRS a part of the taxable portion of each
distribution made under a contract unless the distributee notifies us at or
before the time of the distribution that tax is not to be withheld. In certain
circumstances, Federal income tax rules may require us to withhold tax. At the
time a withdrawal, surrender or annuity payout is requested, we will give the
recipient an explanation of the withholding requirements.
Tax status of Lincoln Life
Under existing Federal income tax laws, Lincoln Life does not pay tax on in-
vestment income and realized capital gains of the VAA. Lincoln Life does not
expect that it will incur any Federal income tax liability on the income and
gains earned by the VAA. We, therefore, do not impose a charge for Federal in-
come taxes. If Federal income tax law changes and we must pay tax on some or
all of the income and gains earned by the VAA, we may impose a charge against
the VAA to pay the taxes.
Changes in law
The above discussion is based on the tax code, IRS regulations and interpreta-
tions existing on the date of this Prospectus. However, Congress, The IRS and
the courts may modify these authorities, sometimes retroactively.
Voting rights
As required by law, we will vote the series shares held in the VAA at meetings
of the shareholders of the series. The voting will be done according to the
instructions of contractowners who have interests in any subaccounts which in-
vest in classes of funds of the series. If the 1940 Act or any regulation un-
der it should be amended or if present interpretations should change, and if
as a result
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we determine that we are permitted to vote the series shares in our own right,
we may elect to do so.
The number of votes which you have the right to cast will be determined by ap-
plying your percentage interest in a subaccount to the total number of votes
attributable to the subaccount. In determining the number of votes, fractional
shares will be recognized.
Series shares of a class held in a subaccount for which no timely instructions
are received will be voted by us in proportion to the voting instructions
which are received for all contracts participating in that subaccount. Voting
instructions to abstain on any item to be voted on will be applied on a pro-
rata basis to reduce the number of votes eligible to be cast.
Whenever a shareholders meeting is called, each person having a voting inter-
est in a subaccount will receive proxy voting material, reports and other ma-
terials relating to the series. Since the series engages in shared funding,
other persons or entities besides Lincoln Life may vote series shares. See
Sale of fund shares.
Distribution of the contracts
American Funds Distributors, Inc. (AFD), 333 South Hope Street, Los Angeles,
CA 90071, is the distributor and principal underwriter of the contracts. They
will be sold by properly licensed registered representatives of independent
broker-dealers which in turn have selling agreements with AFD and have been
licensed by state insurance departments to represent us. AFD is registered
with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and
is a member of the National Association of Securities Dealers (NASD). Lincoln
Life will offer contracts in all states where it is licensed to do business.
Return privilege
Within the free-look period after you receive the contract, you may cancel it
for any reason by delivering or mailing it postage prepaid, to the home office
at P.O. Box 2348, 1300 South Clinton Street, Fort Wayne, Indiana, 46801. A
contract canceled under this provision will be void. Except as explained in
the following paragraph, we will return the contract value as of the date of
receipt of cancellation, plus any premium taxes, plus mortality and expense
risk charges and administrative charges proportionately attributable to the
bonus credits, less any bonus credits paid into the contract. In addition, if
the contract value on the date of the cancellation is less than the sum of
purchase payments minus withdrawals, we will return both the investment loss
and fund management fees each in an amount that is proportionately attribut-
able to the bonus credits. No contingent deferred sales charge will be as-
sessed. A purchaser who participates in the VAA is subject to the risk of a
market loss during the free-look period.
For contracts written in those states whose laws require that we assume this
market risk during the free-look period, a contract may be canceled, in the
manner specified above, except that we will return only the purchase pay-
ment(s).
State regulation
As a life insurance company organized and operated under Indiana law, we are
subject to provisions governing life insurers and to regulation by the Indiana
Commissioner of Insurance.
Our books and accounts are subject to review and examination by the Indiana
Insurance Department at all times. A full examination of our operations is
conducted by that Department at least every five years.
Restrictions under the Texas Optional Retirement Program
Title 8, Section 830.105 of the Texas Government Code, consistent with prior
interpretations of the Attorney General of the State of Texas, permits partic-
ipants in the Texas Optional Retirement Program (ORP) to redeem their interest
in a variable annuity contract issued under the ORP only upon:
1. Termination of employment in all institutions of higher education as de-
fined in Texas law;
2. Retirement; or
3. Death.
Accordingly, a participant in the ORP will be required to obtain a certificate
of termination from their employer before accounts can be redeemed.
Records and reports
As presently required by the 1940 Act and applicable regulations, we are re-
sponsible for maintaining all records and accounts relating to the VAA. We
have entered into an agreement with the Delaware Management Company, 2005 Mar-
ket Street, Philadelphia, PA 19203, to provide accounting services to the VAA.
We will mail to you, at your last known address of record at the home office,
at least semiannually after the first contract year, reports containing infor-
mation required by that Act or any other applicable law or regulation.
Other information
A Registration Statement has been filed with the SEC, under the Securities Act
of 1933 as amended, for the contracts being offered here. This Prospectus does
not
21
<PAGE>
contain all the information in the Registration Statement, its amendments and
exhibits. Please refer to the Registration Statement for further information
about the VAA, Lincoln Life and the contracts offered. Statements in this Pro-
spectus about the content of contracts and other legal instruments are summa-
ries. For the complete text of those contracts and instruments, please refer
to those documents as filed with the SEC.
We are a member of the Insurance Marketplace Standards Association ("IMSA")
and may include the IMSA logo and information about IMSA membership in our ad-
vertisements. Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and services for individually
sold life insurance and annuities.
Legal proceedings
Lincoln Life is involved in various pending or threatened legal proceedings
arising from the conduct of its business. Most of those proceedings are rou-
tine and in the ordinary course of business. In some instances they include
claims for unspecified or substantial punitive damages and similar types of
relief in addition to amounts for equitable relief. After consultation with
legal counsel and a review of available facts, it is management's opinion that
the ultimate liability, if any, under these suits will not have a material ad-
verse effect on the financial position of Lincoln Life.
Lincoln Life is presently defending several lawsuits in which plaintiffs seek
to represent national classes of policyholders in connection with alleged
fraud, breach of contract and other claims relating to the sale of interest-
sensitive universal and participating whole life insurance policies. As of the
date of this Prospectus, the courts have not certified a class in any of the
suits. Plaintiffs seek unspecified damages and penalties for themselves and on
behalf of the putative class. Although the relief sought in these cases is
substantial, the cases are in the preliminary stages of litigation, and it is
premature to make assessments about potential loss, if any. Management is de-
fending these suits vigorously. The amount of liability, if any, which may ul-
timately arise as a result of these suits cannot be reasonably determined at
this time.
Statement of additional information table of contents for Separate Account H
<TABLE>
<CAPTION>
Item
- ----------------------------------------------------
<S> <C>
General information and history of Lincoln Life B-2
- ----------------------------------------------------
Special terms B-2
- ----------------------------------------------------
Services B-2
- ----------------------------------------------------
Principal underwriter B-2
- ----------------------------------------------------
Purchase of securities being offered B-2
</TABLE>
For a free copy of the SAI please see page one of this booklet.
<TABLE>
<CAPTION>
Item
- --------------------------------------
<S> <C>
Calculation of investment results B-2
- --------------------------------------
Annuity payouts B-5
- --------------------------------------
Advertising and sales literature B-5
- --------------------------------------
Financial statements B-7
</TABLE>
22
<PAGE>
The American Legacy III Plus
Lincoln NationalVariable Annuity Account H (Registrant)
The Lincoln NationalLife Insurance Company (Depositor)
Statement of Additional Information (SAI)
This Statement of Additional Information should be read in conjunction with the
American Legacy III Plus Prospectus of Lincoln National Variable Annuity Ac-
count H dated , 2000.
You may obtain a copy of the American Legacy III Plus Prospectus on request and
without charge.
Please write American Legacy Customer Service, The Lincoln National Life Insur-
ance Company,
P.O. Box 2348, Fort Wayne, Indiana 46801 or call 1-800-942-5500.
Table of Contents
<TABLE>
<CAPTION>
Item Page
- ------------------------------------------
<S> <C>
General information and history
of Lincoln Life B-2
- ------------------------------------------
Special terms B-2
- ------------------------------------------
Services B-2
- ------------------------------------------
Principal underwriter B-2
- ------------------------------------------
Purchase of securities being offered B-2
- ------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Item Page
<S> <C>
Calculation of investment results B-2
Annuity payouts B-5
Advertising and sales literature B-5
Financial statements B-7
</TABLE>
This SAI is not a Prospectus.
The date of this SAI is , 2000.
<PAGE>
General information and
history of the
Lincoln National Life
Insurance Company (Lincoln Life)
The Lincoln National Life Insurance Company (Lincoln Life), organized in 1905,
is an Indiana stock insurance corporation, engaged primarily in the direct in-
surance of life and health insurance contracts and annuities, and is also a
professional reinsurer. Lincoln Life is wholly owned by Lincoln National Cor-
poration (LNC), a publicly held insurance and financial services holding com-
pany domiciled in Indiana.
Special terms
The special terms used in this SAI are the ones defined in the Prospectus. In
connection with the term, valuation date, the New York Stock Exchange is cur-
rently closed on weekends and on these holidays: New Year's Day, Martin Luther
King's Birthday, President's Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day. If any of these holidays oc-
curs on a weekend day, the Exchange may also be closed on the business day oc-
curring just before or just after the holiday.
Services
Independent auditors
The financial statements of the variable annuity account (VAA) and the statu-
tory-basis financial statements of Lincoln Life appearing in this SAI and Reg-
istration Statement have been audited by Ernst & Young LLP, independent audi-
tors, as set forth in their reports also appearing elsewhere in this document
and in the Registration Statement. The financial statements audited by Ernst &
Young LLP have been included in this document in reliance on their reports
given on their authority as experts in accounting and auditing.
Keeper of records
All accounts, books, records and other documents which are required to be
maintained for the VAA are maintained by Lincoln Life or by third parties re-
sponsible to Lincoln Life. We have entered into an agreement with the Delaware
Management Company, 2005 Market Street, Philadelphia, PA 19203, to provide ac-
counting services to the VAA. No separate charge against the assets of the VAA
is made by Lincoln Life for this service.
Principal underwriter
Lincoln Life has contracted with American Funds Distributors, Inc. (AFD), 333
South Hope Street, Los Angeles, California 90071, a licensed broker-dealer, to
distribute the contracts through certain legally authorized sales persons and
organizations (brokers). AFD and its brokers are compensated under a standard
compensation schedule.
Purchase of securities being offered
The contracts are offered to the public through certain securities
broker/dealers who have entered into selling agreements with AFD and whose
personnel are legally authorized to sell annuity products. Although there are
no special purchase plans for any class of prospective buyers, the contingent
deferred sales charge normally assessed upon surrender or withdrawal of con-
tract value will be waived for officers, directors or bona fide full time em-
ployees of Lincoln Financial Group, The Capital Group, Inc., their affiliated
or managed companies, and certain other persons. See Charges and other deduc-
tions in the Prospectus.
Both before and after the annuity commencement date, there are exchange privi-
leges between subaccounts, and from the VAA to the general account subject to
restrictions set out in the Prospectus. See The contracts, in the Prospectus.
No exchanges are permitted between the VAA and other separate accounts.
The offering of the contracts is continuous.
Calculation of investment results
The seven-day yield is determined by calculating the change in unit value for
the base period (the 7-day period ended December 31, 1999); then dividing this
figure by the account value at the beginning of the period; then annualizing
this result by the factor of 365/7. This yield includes all deductions charged
to the contractowner's account, and excludes any realized gains and losses
from the sale of securities.
Standard investment results:
Standard performance is based on a formula to calculate performance that is
prescribed by the SEC. Under rules issued by the SEC, standard performance
must be included in any marketing material that discusses the performance of
the VAA and the subaccounts. This information represents past performance and
does not indicate or represent future performance.
Average annual return for each period is determined by finding the average an-
nual compounded rate of return over each period that would equate the initial
B-2
<PAGE>
amount invested to the ending redeemable value for that period, according to
the following formula:
P(1 + T)n = ERV
Where: P = a hypothetical initial purchase payment of $1,000
T = average annual total return for the period in question
N = number of years
ERV = ending redeemable value (as of the end of the period in question)
of a hypothetical $1,000 purchase payment made at the beginning of
the 1-year, 5-year, or 10-year period in question (or fractional
period thereof)
The formula assumes that: (1) all recurring fees have been charged to the
contractowner accounts; (2) all applicable non-recurring charges (including
any surrender charges) are deducted at the end of the period in question; and
(3) there will be a complete redemption upon the anniversary of the 1-year, 5-
year, or 10-year period in question.
In accordance with SEC guidelines, we will report standard performance back to
the first date that the Fund became available in the VAA. Because standard
performance reporting periods of less than one year could be misleading, we
may report "N/A's" for standard performance until one year after the option
became available in the separate account.
Standard Performance Data:
Period Ending December 31, 1999
<TABLE>
<CAPTION>
10 Years
1- 5- or Since
Year Years Inception
With With With
EGMDB EGMDB EGMDB
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Growth Subaccount (commenced activity 4/30/97)
Global Small Capitalization Subaccount
(commenced activity 4/30/98)
Growth Subaccount (commenced activity 8/1/89)
International Subaccount (commenced activity 5/1/90)
New World Subaccount (commenced activity 6/17/99)
Growth-Income Subaccount (commenced activity 8/1/89)
Asset Allocation Subaccount
(commenced activity 8/1/89)
High-Yield Bond Subaccount
(commenced activity 8/1/89)
Bond Subaccount (commenced activity 1/2/96)
U.S. Gov't./AAA Subaccount (commenced activity
8/1/89)
Cash Management Subaccount
(commenced activity 8/1/89)
</TABLE>
The performance figures shown reflect the cost of the EGMDB option. If
contractowners had chosen to eliminate the EGMDB, their returns would have
been higher.
B-3
<PAGE>
Non-standard investment results:
The VAA may report its results over various periods -- daily, monthly, three-
month, six-month, year-to-date, yearly (fiscal year), three, five, ten years or
more and lifetime -- and compare its results to indices and other variable an-
nuities in sales materials including advertisements, brochures and reports.
Performance information for the periods prior to the date that a fund became
available in the VAA will be calculated based on (1) the performance of the
fund adjusted for contract charges (ie: mortality and expense risk fees, any
applicable administrative charges, and the management and other expenses of the
fund) and (2) the assumption that the subaccounts were in existence for the
same periods as indicated for the fund. It may or may not reflect charges for
any riders (ie: EGMDB) that were in effect during the time periods shown. This
performance is referred to as non-standardized performance data. Such results
may be computed on a cumulative and/or annualized basis. We may also report
performance assuming that you deposited $10,000 into a subaccount at inception
of the underlying fund or 10 years ago (whichever is less). This non-standard
performance may be shown as a graph illustrating how that deposit would have
increased or decreased in value over time based on the performance of the un-
derlying fund adjusted for contract charges. This information represents past
performance and does not indicate or represent future performance. The invest-
ment return and value of a contract will fluctuate so that contractowner's in-
vestment may be worth more or less than the original investment. Cumulative
quotations are arrived at by calculating the change in accumulation unit value
between the first and last day of the base period being measured, and express-
ing the difference as a percentage of the unit value at the beginning of the
base period. Annualized quotations are arrived at by applying a formula which
reflects the level rate of return, which if earned over the entire base period,
would produce the cumulative return.
Non-Standard Performance Data (adjusted for contract expense charges):
Period Ending December 31, 1999
<TABLE>
<CAPTION>
1- 3- 5- 10- Since
YTD year year year year Inception
With With With With With With
EGMDB EGMDB EGMDB EGMDB EGMDB EGMDB
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Growth Subaccount % % %
(commenced activity 4/30/97)
Global Small Capitalization
Subaccount
(commenced activity 4/30/98)
Growth Subaccount
(as if commenced activity 2/8/84)
International Subaccount
(as if commenced activity 5/1/90)
New World Subaccount
(as if commenced activity 6/17/99)
Growth-Income Subaccount
(as if commenced activity 2/8/84)
Asset Allocation Subaccount
(as if commenced activity 8/1/89)
High-Yield Bond Subaccount
(as if commenced activity 2/8/84)
Bond Subaccount
(as if commenced activity 1/2/96)
U.S. Gov't./AAA Subaccount
(as if commenced activity 12/1/85)
Cash Management Subaccount
(as if commenced activity 2/8/84)
</TABLE>
The performance figures shown reflect the cost of the EGMDB option. If
contractowners had chosen to eliminate the EGMDB their returns would have been
higher.
B-4
<PAGE>
Annuity payouts
Variable annuity payouts
Variable annuity payouts will be determined on the basis of: (1) the dollar
value of the contract on the annuity commencement date, less any applicable
premium taxes and surrender charges; (2) the annuity tables contained in the
contract; (3) the type of annuity option selected; and (4) the investment re-
sults of the fund(s) selected. In order to determine the amount of variable
annuity payouts, Lincoln Life makes the following calculation: first, it de-
termines the dollar amount of the first payout; second, it credits the con-
tract with a fixed number of annuity units based on the amount of the first
payout; and third, it calculates the value of the annuity units each period
thereafter. These steps are explained below.
The dollar amount of the first periodic variable annuity payout is determined
by applying the total value of the accumulation units credited under the con-
tract valued as of the annuity commencement date (less any premium taxes and
surrender charges) to the annuity tables contained in the contract. The first
variable annuity payout will be paid 14 days after the annuity commencement
date. This day of the month will become the day on which all future annuity
payouts will be paid. Amounts shown in the tables are based on the 1983 Table
"a" Individual Annuity Mortality Tables, modified, with an assumed investment
return at the rate of 3%, 4%, 5% or 6% per annum. The first annuity payout is
determined by multiplying the benefit per $1,000 of value shown in the con-
tract tables by the number of thousands of dollars of value accumulated under
the contract. These annuity tables vary according to the form of annuity se-
lected and the age of the annuitant at the annuity commencement date. The as-
sumed interest rate stated above is the measuring point for subsequent annuity
payouts. If the actual net investment rate (annualized) exceeds the assumed
rate, the payout will increase at a rate equal to the amount of such excess.
Conversely, if the actual rate is less than the assumed rate, annuity payouts
will decrease. If the assumed rate of interest were to be increased, annuity
payouts would start at a higher level but would decrease more rapidly or in-
crease more slowly.
Lincoln Life may use sex distinct annuity tables in contracts that are not as-
sociated with employer sponsored plans and where not prohibited by law.
At an annuity commencement date, the contract is credited with annuity units
for each subaccount on which variable annuity payouts are based. The number of
annuity units to be credited is determined by dividing the amount of the first
periodic payout by the value of an annuity unit in each subaccount selected.
Although the number of annuity units is fixed by this process, the value of
such units will vary with the value of the underlying fund. The amount of the
second and subsequent periodic payouts is determined by multiplying the
contractowner's fixed number of annuity units in each subaccount by the appro-
priate annuity unit value for the valuation date ending 14 days prior to the
date that payout is due.
The value of each subaccount's annuity unit will be set initially at $1.00.
The annuity unit value for each subaccount at the end of any valuation date is
determined by multiplying the subaccount annuity unit value for the immedi-
ately preceding valuation date by the product of:
(a) The net investment factor of the subaccount for the valuation period for
which the annuity unit value is being determined, and
(b) A factor to neutralize the assumed investment return in the annuity table.
The value of the annuity units is determined as of a valuation date 14 days
prior to the payment date in order to permit calculation of amounts of annuity
payouts and mailing of checks in advance of their due dates. Such checks will
normally be issued and mailed at least three days before the due date.
Proof of age, sex and survival
Lincoln Life may require proof of age, sex, or survival of any payee upon
whose age, sex, or survival payments depend.
Advertising and sales
literature
As set forth in the Prospectus, Lincoln Life may refer to the following orga-
nizations (and others) in its marketing materials:
A.M. Best's Rating System is designed to evaluate the various factors affect-
ing the overall performance of an insurance company in order to provide an
opinion as to an insurance company's relative financial strength and ability
to meet its contractual obligations. The procedure includes both a quantita-
tive and qualitative review of each company. A.M. Best also provides certain
rankings, to which Lincoln Life intends to refer.
Duff & Phelps insurance company claims paying ability (CPA) service provides
purchasers of insurance company policies and contracts with analytical and
statistical information on the solvency and liquidity of major U.S. licensed
insurance companies, both mutual and stock.
EAFE Index is prepared by Morgan Stanley Capital International (MSCI). It mea-
sures performance of equity securities in Europe, Australia and the Far East.
The index reflects the movements of world stock markets by representing the
evolution of an unmanaged portfolio. The EAFE Index offers international di-
versification representing over 1,000 companies across 20 different countries.
B-5
<PAGE>
Lipper Variable Insurance Products Performance Analysis Service is a publisher
of statistical data covering the investment company industry in the United
States and overseas. Lipper is recognized as the leading source of data on
open-end and closed-end funds. Lipper currently tracks the performance of over
5,000 investment companies and publishes numerous specialized reports, includ-
ing reports on performance and portfolio analysis, fee and expense analysis.
Moody's insurance financial strength rating is an opinion of an insurance
company's financial strength and ability to meet financial obligations. The
purpose of Moody's ratings is to provide investors with a simple system of
gradation by which the relative quality of insurance companies may be noted.
Morningstar is an independent financial publisher offering comprehensive sta-
tistical and analytical coverage of open-end and closed-end funds and variable
annuities.
Standard & Poor's insurance claims-paying ability rating is an opinion of an
operating insurance company's financial capacity to meet obligations under an
insurance policy in accordance with the terms. The likelihood of a timely flow
of funds from the insurer to the trustee for the bondholders is a key element
in the rating determination for such debt issues.
Vards (Variable Annuity Research Data Service) provides a comprehensive guide
to variable annuity contract features and historical fund performance. The
service also provides a readily understandable analysis of the comparative
characteristics and market performance of funds inclusive in variable con-
tracts.
Standard & Poor's 500 Index -- A broad-based measurement of U.S. stock-market
performance based on the weighted average performance of 500 common stocks of
leading company's and leading industries; commonly known as the Standard &
Poor's 500 (S&P 500). The selection of stocks, their relative weightings to
reflect differences in the number of outstanding shares, and publication of
the index itself are services of Standard & Poor's Corporation, a financial
advisory, securities rating, and publishing firm.
NASDAQ-OTC Price Index -- this index is based on the National Association of
Securities Dealers Automated Quotations (NASDAQ) and represents all domestic
over-the-counter stocks except those traded on exchanges and those having only
one market maker, a total of some 3,500 stocks. It is market value- weighted
and was introduced with a base of 100.00 on February 5, 1971.
Dow Jones Industrial Average (DJIA) -- price-weighted average of 30 actively
traded blue chip stocks, primarily industrials but currently including Ameri-
can Express Company and American Telephone and Telegraph Company. Prepared and
published by Dow Jones & Company, it is the oldest and most widely quoted of
all the market indicators. The average is quoted in points, not dollars.
In its advertisements and other sales literature for the VAA and the series
funds, Lincoln Life intends to illustrate the advantages of the contracts in a
number of ways:
Compound Interest Illustrations. These will emphasize several advantages of
the variable annuity contract. For example, but not by way of illustration,
the literature may emphasize the potential tax savings through tax deferral;
the potential advantage of the variable annuity account over the fixed ac-
count; and the compounding effect when a client makes regular deposits to his
or her contract.
Internet. An electronic communications network which may be used to provide
information regarding Lincoln Life, performance of the subaccounts and adver-
tisement literature.
Dollar-Cost Averaging. (DCA) -- You may systematically transfer on a monthly
basis amounts from the fixed account or certain variable subaccounts into the
variable subaccounts or the fixed side of the contract. You may elect to par-
ticipate in the DCA program at the time of application or at anytime before
the annuity commencement date by completing an election form available from
us. The minimum amount to be dollar cost averaged is $1,500 over any period
between six and 60 months. Once elected, the program will remain in effect un-
til the earlier of: (1) the annuity commencement date; (2) the value of the
amount being DCA'd is depleted; or (3) you cancel the program by written re-
quest or by telephone if we have your telephone authorization on file. If you
have cancelled the DCA program prior to the end of the selected DCA period,
any remaining contract value in the DCA holding account within the fixed ac-
count, will automatically be transferred to the variable subaccounts selected
by you. Currently, there is no charge for this service. However, we reserve
the right to impose one. A transfer under this program is not considered a
transfer for purposes of limiting the number of transfers that may be made, or
assessing any charges which may apply to transfers. We reserve the right to
discontinue this program at any time. DCA does not assure a profit or protect
against loss.
Automatic Withdrawal Service. (AWS) -- AWS provides an automatic, periodic
withdrawal of contract value to you. You may elect to participate in AWS at
the time of application or at any time before the annuity commencement date by
sending a written request to our home office. The minimum contract value re-
quired to establish AWS is $10,000. You may cancel or make changes to your AWS
program at any time by sending a written request to our home office. If tele-
phone authorization has been elected, certain changes may be made by tele-
phone. Notwithstanding the requirements of the program, any withdrawal must be
permitted by Section 401(a)(9) of the code for qualified plans or permitted
under Section 72 for non-qualified contracts. To
B-6
<PAGE>
the extent that withdrawals under AWS do not qualify for an exemption from the
contingent deferred sales charge, we will assess any applicable surrender
charges on those withdrawals. See Charges and other deductions--Surrender
charge in the Prospectus. Currently, there is no charge for this service. How-
ever, we reserve the right to impose one. If a charge is imposed, it will not
exceed $25 per transaction or 2% of the amount withdrawn, whichever is less.
We reserve the right to discontinue this service at any time.
Cross-reinvestment service -- Under this option, account value in a designated
variable subaccount or the fixed side of the contract that exceeds a certain
baseline amount is automatically transferred to another specific variable
subaccount(s) or the fixed side of the contract at specific intervals. You may
elect to participate in cross-reinvestment at the time of application or at
any time before the annuity commencement date by sending a written request to
our home office or by telephone if we have your telephone authorization on
file. You designate the holding account, the receiving account(s), and the
baseline amount. Cross-reinvestment will continue until we receive authoriza-
tion to terminate the program.
The minimum holding account value required to establish cross-reinvestment is
$10,000. Currently, there is no charge for this service. However, we reserve
the right to impose one. A transfer under this program is not considered a
transfer for purposes of limiting the number of transfers that may be made, or
assessing any charges which may apply to transfers. We reserve the right to
discontinue this service at any time.
Portfolio rebalancing -- Portfolio rebalancing is an option which, if elected
by the contractowner, restores to a pre-determined level the percentage of
contract value allocated to each variable account subaccount (e.g., 20% Money
Market, 50% Growth, 30% International). This pre-determined level will be the
allocation initially selected when the contract was purchased, unless subse-
quently changed. The portfolio rebalancing allocation may be changed at any
time by submitting a request to Lincoln Life.
If portfolio rebalancing is elected, all purchase payments and corresponding
bonus credits allocated to the variable account subaccounts must be subject to
portfolio rebalancing.
Portfolio rebalancing may take place on either a monthly, quarterly, semi-an-
nual or annual basis, as selected by the contractowner. Once the portfolio
rebalancing option is activated, any variable account subaccount transfers ex-
ecuted outside of the portfolio rebalancing option will terminate the portfo-
lio rebalancing option. Any subsequent purchase payment or withdrawal that
modifies the account balance within each variable account subaccount may also
cause termination of the portfolio rebalancing option. Any such termination
will be confirmed to the contractowner. The contractowner may terminate the
portfolio rebalancing option or re-enroll at any time by calling or writing
Lincoln Life.
The portfolio rebalancing program is not available following the annuity com-
mencement date. Currently, there is no charge for this service. However, we
reserve the right to impose one.
Lincoln Financial Group
Lincoln Financial Group is the marketing name for Lincoln National Corporation
(NYSE:LNC) and its affiliates. With headquarters in Philadelphia, Lincoln Fi-
nancial Group has consolidated assets of over $103 billion and annual consoli-
dated revenues of $6.8 billion. Through its wealth accumulation and protection
businesses, the company provides annuities, life insurance, 401(k) plans,
life-health reinsurance, mutual funds, institutional investment management and
financial planning and advisory services.
Lincoln Life's customers. Sales literature for the VAA and the series' funds
may refer to the number of employers and the number of individual annuity cli-
ents which Lincoln Life serves. As of the date of this SAI, Lincoln Life was
serving over 15,000 employers and more than 1.5 million individuals.
Lincoln Life's assets, size. Lincoln Life may discuss its general financial
condition (see, for example, the reference to A.M. Best Company, above); it
may refer to its assets; it may also discuss its relative size and/or ranking
among companies in the industry or among any sub-classification of those com-
panies, based upon recognized evaluation criteria (see reference to A.M. Best
Company above). For example, at year-end 1999 Lincoln Life had statutory ad-
mitted assets of over $79 billion.
Financial Statements
[To be filed by amendment.]
B-7
<PAGE>
LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT H
REGISTRATION STATEMENT ON FORM N-4
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) List of Financial Statements
1. Part A The Table of Condensed Financial Information is included in
Part A of this Registration Statement. (To be filed by amendment)
2. Part B The following Financial Statements for the Variable Account are
included in Part B of this Registration Statement. (To be filed by
amendment)
3. Part B The following Statutory-Basis Financial Statements of The
Lincoln National Life Insurance Company are included in the SAI: (To be
filed by amendment)
<PAGE>
Item 24. (Continued)
(b) List of Exhibits
(1) Resolutions of the Board of Directors of The Lincoln National Life
Insurance Company establishing Separate Account H are incorporated herein
by reference to Registration Statement on Form N-4 (33-27783) filed on
December 5, 1996.
(2) None.
(3)(a) Underwriting Agreement incorporated herein by reference to Registration
Statement on Form N-4 (33-27783) filed on March 31, 1997.
(3)(b) Amendment to Underwriting Agreement incorporated herein by reference to
Registration Statement on Form N-4 (333-18419) filed on March 27, 1998.
(3)(c) Selling Group Agreement incorporated herein by reference to Registration
Statement on Form N-4 (333-18419) filed on March 27, 1998.
(3)(d) Amendment dated October 15, 1999 to Underwriting Agreement incorporated
herein by reference to Registration Statement on Form N-4 (333-63505)
filed on March 28, 2000.
(3)(e) Amendment dated September 1999 to Selling Group Agreement incorporated
herein by reference to Registration Statement on Form N-4 (333-63505)
filed on March 28, 2000.
(3)(f) Amendment dated February 2000 to Selling Group Agreement incorporated
herein by reference to Registration Statement on Form N-4 (333-63505)
filed on March 28, 2000.
(4)(a) Form of Variable Annuity Contract
(5) Form of Application
(6)(a) Articles of Incorporation of The Lincoln National Life Insurance Company
are incorporated herein by reference to Registration Statement on Form N-
4 (333-40937) filed on November 9, 1998
(b) By-laws of The Lincoln National Life Insurance Company are incorporated
herein by reference to Registration Statement on Form N-4 (333-40937)
filed on November 9, 1998.
(7) Not applicable.
(8)(a) Services Agreement between Delaware Management Holdings, Inc., Delaware
Service Company, Inc. and The Lincoln National Life Insurance Company is
incorporated herein by reference to the Registration Statement on Form
S-6 (333-40745) filed on November 21, 1997.
(8)(b) Participation Agreement incorporated herein by reference to Registration
Statement on Form N-4 (333-18419) filed on April 1, 1997.
(8)(c) Amendment to Participation Agreement incorporated herein by reference to
Registration Statement on Form N-4 (333-18419) filed on April 1, 1997.
(d) Amendment dated October 15, 1999 to Participation Agreement incorporated
herein by reference to Registration Statement on Form N-4 (333-63505)
filed on March 28, 2000.
(9) Opinion and consent of Mary Jo Ardington, Counsel of The Lincoln National
Life Insurance Company as to legality of securities being issued. (To be
filed by amendment)
(10) Consent of Ernst & Young LLP, Independent Auditors (To be filed by
amendment)
(11) Not applicable.
(12) Not applicable.
(13) Schedule for Computation for Performance Quotations (To be filed by
amendment)
(14) Not applicable
(15) Other Exhibits:
(a) Organizational Chart of the Lincoln National Insurance
Holding Company System
(b) Books and Records Report is incorporated herein by
reference to Post-Effective Amendment No. 13 on Form N-4
(File No. 33-27783) filed on March 28, 2000.
Item 25.
DIRECTORS AND OFFICERS OF THE DEPOSITOR
Name Positions and Offices with LNL
- ---- ------------------------------
Jon A. Boscia** President and Director
John H. Gotta**** Chief Executive Officer of Life Insurance, Senior Vice
President, and Director
Stephen H. Lewis* Interim Chief Executive Officer of Annuities, Senior
Vice President, and Director
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
Eldon J. Summers* Second Vice President and Treasurer
Richard C. Vaughan** Director
Roy V. Washington* Vice President and Chief Compliance Officer
Janet Chrzan** Senior Vice President, Chief Financial Officer and
Director
*Principal business address is 1300 South Clinton Street, Fort Wayne, Indiana
46802-3506
**Principal business address is Center Square West Tower, 1500 Market Street-
Suite 3900, Philadelphia, PA 19102-2112.
***Principal business address is One Reinsurance Place, 1700 Magnavox Way,
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
<PAGE>
Item 26.
PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
WITH THE DEPOSITOR OR REGISTRANT
See Exhibit 15(a): Organizational Chart of the Lincoln National Insurance
Holding Company System.
Item 27.
NUMBER OF CONTRACTOWNERS
As of February 29, 2000, there were 266,100 (variable and fixed) Contract
Owners under Account H.
Item 28. Indemnification
(a) Brief description of indemnification provisions.
In general, Article VII of the By-Laws of 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 act 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.
Item 29. Principal Underwriter
(a) American Funds Distributors, Inc., is also the Principal Underwriter of
shares of: AMCAP Fund, Inc., American Balanced Fund, Inc., The American Funds
Income Series, The American Funds Tax-Exempt Series I, The American Funds Tax-
Exempt Series II, American High-Income Municipal Bond Fund, Inc., American High-
Income Trust, American Mutual Fund, Inc., The Bond Fund of America, Inc.,
Capital Income Builder, Inc., Capital World Bond Fund, Inc., Capital World
Growth and Income Fund, Inc., The Cash Management Trust of America, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America,
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., New World Fund, Inc., SMALLCAP World Fund, Inc., The
Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Money Fund of America,
U.S. Treasury Money Fund of America and Washington Mutual Investors Fund, Inc.
Lincoln National Variable Annuity Account E, Lincoln Life Flexible Premium
Variable Life Accounts F and J (all registered as investment companies under the
1940 Act) and Lincoln National Flexible Premium Group Variable Annuity Accounts
50, 51, and 52.
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
David L. Abzug Regional Vice President
27304 Park Vista Road
Cagoura Hills, CA 91301
John A. Agar Vice President
1501 N. University, Suite 227A
Little Rock, AR 72207
<PAGE>
Robert B. Aprison Vice President
2983 Bryn Wood Drive
Madison, WI 53711
L William W. Bagnard Vice President
Steven L. Barnes Senior Vice President
5400 Mount Meeker Road, STE 1
Boulder CO 80301-3508
B Carl R. Bauer Assistant Vice President
Michelle A. Bergeron Senior Vice President
4160 Gateswalk Drive
Smyrna, GA 30080
J. Walter Best, Jr. Regional Vice President
9013 Brentmeade Blvd.
Brentwood, TN 37027
Joseph T. Blair Senior Vice President
148 E Shore Ave.
Groton Long Point, CT 06340
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
John A. Blanchard Vice President
6421 Aberdeen Road
Mission Hills, KS 66208
Ian B. Bodell Senior Vice President
P.O. Box 1665
Brentwood, TN 37024-1665
Mick L. Brethower Senior Vice President
29003 Colonial Drive
Georgetown, TX 78628
Alan Brown Regional Vice President
4129 Laclede Avenue
St. Louis, MO 63108
B J. Peter Burns Vice President
Brian C. Casey Regional Vice President
8002 Greentree Road
Bethesda, MD 20817
<PAGE>
Victor C. Cassato Senior Vice President
609 W. Littleton Blvd., Suite 310
Greenwood Village, CO 80120
Christopher J. Cassin Senior Vice President
19 North Grant Street
Hinsdale, IL 60521
Denise M. Cassin Vice President
1301 Stoney Creek Drive
San Ramon, CA 94538
L Larry P. Clemmensen Director
L Kevin G. Clifford Director, President and Co-Chief
Executive Officer
Ruth M. Collier Senior Vice President
29 Landsdowne Drive
Larchmont, NY 10538
S David Coolbaugh Assistant Vice President
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
--------------------- ---------------------
H Carlo O. Cordasco Assistant Vice President
Thomas E. Cournoyer Vice President
2333 Granada Boulevard
Coral Gables, FL 33134
Douglas A. Critchell Senior Vice President
3521 Rittenhouse Street, N.W.
Washington, D.C. 20015
L Carl D. Cutting Vice President
William Daugherty Regional Vice President
1216 Highlander Way
Mechanicsburg, PA 17055
Daniel J. Delianedis Regional Vice President
8689 Braxton Drive
Eden Prairie, MN 55347
Michael A. Dilella Vice President
P.O. Box 661
Ramsey, NJ 07446
G. Michael Dill Senior Vice President
505 E. Main Street
Jenks, OK 74037
<PAGE>
Kirk D. Dodge Senior Vice President
633 Menlo Avenue, Suite 210
Menlo Park, CA 94025
Peter J. Doran Director, Executive Vice President
100 Merrick Road, Suite 216W
Rockville Centre, NY 11570
L Michael J. Downer Secretary
Robart W. Durbin Vice President
74 Sunny Lane
Tiffin, OH 44883
I Lloyd G. Edwards Senior Vice President
L Paul H. Fieberg Sr. Vice President
John Fodor Vice President
15 Latisquama Road
Southborough, MA 01772
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ----------------------
Daniel B. Frick Regional Vice President
845 Western Avenue
Glen Ellyn, IL 60137
Clyde E. Gardner Senior Vice President
Route 2, Box 3162
Osage Beach, MO 65065
B Evelyn K. Glassford Vice President
Jeffrey J. Greiner Vice President
12210 Taylor Road
Plain City, OH 43064
L Paul G. Haaga, Jr. Director
B Mariellen Hamann Assistant Vice President
David E. Harper Senior Vice President
150 Old Franklin School Road
Pittstown, NJ 08867
H Mary Pat Harris Assistant Vice President
Ronald R. Hulsey Vice President
6744 Avalon
Dallas, TX 75214
Robert S. Irish Regional Vice President
1225 Vista Del Mar Drive
Delray Beach, FL 33483
Michael J. Johnston Director
630 Fifth Ave., 36th Floor
New York, NY 10111
B Damien M. Jordan Vice President
Arthur J. Levine Senior Vice President
12558 Highlands Place
Fishers, IN 46038
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
B Karl A. Lewis Assistant Vice President
T. Blake Liberty Regional Vice President
5506 East Mineral Lane
Littleton, CO 80122
Mark J. Lien Regional Vice President
5570 Beechwood Terrace
West Des Moines IA 50266
L Lorin E. Liesy Assistant Vice President
L Susan G. Lindgren Vice President - Institutional
Investment Services
LW Robert W. Lovelace Director
Stephen A. Malbasa Vice President
13405 Lake Shore Blvd.
Cleveland, OH 44110
Steven M. Markel Senior Vice President
5241 South Race Street
Littleton, CO 80121
L J. Clifton Massar Director, Senior Vice President
L E. Lee McClennahan Senior Vice President
S John V. McLaughlin Senior Vice President
Terry W. McNabb Vice President
2002 Barrett Station Road
St. Louis, MO 63131
L R. William Melinat Vice President-Institutional
Investment Services
David R. Murray Vice President
60 Briant Avenue
Sudbury, MA 01776
Stephen S. Nelson Vice President
P.O. Box 470528
Charlotte, NC 28247-0528
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
William E. Noe Regional Vice President
304 River Oaks Road
Brentwood, TN 37027
Peter A. Nyhus Vice President
3084 Wilds Ridge Court
Prior Lake, MN 55372
Eric P. Olson Vice President
62 Park Drive
Glenview, IL 60025
Gary A. Peace Regional Vice President
291 Kaanapali Drive
Napa, CA 94558
Samuel W. Perry Regional Vice President
6133 Calle del Paisano
Scottsdale, AZ 85251
Fredric Phillips Senior Vice President
175 Highland Avenue, 4th Floor
Needham, MA 02494
B Candance D. Pilgrim Assistant Vice President
Carl S. Platou Vice President
7455 80th Place, S.E.
Mercer Island, WA 98040
L John O. Post Senior Vice President
S Richard P. Prior Vice President
Steven J. Reitman Senior Vice President
212 The Lane
Hinsdale, IL 60521
Brian A. Roberts Vice President
244 Lambeau Lane
Glenville, NC 28736
George S. Ross Senior Vice President
55 Madison Avenue
Morristown, NJ 07960
L Julie D. Roth Vice President
L James F. Rothenberg Director
Douglas F. Rowe Vice President
414 Logan Ranch Road
Georgetown, TX 78628
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
Christopher S. Rowey Regional Vice President
9417 Beverlywood Street
Los Angeles, CA 90034
Dean B. Rydquist Senior Vice President
1080 Bay Pointe Crossing
Alpharetta, GA 30005
Richard R. Samson Senior Vice President
4604 Glencoe Avenue, # 4
Marina del Rey, CA 90292
Joseph D. Scarpitti Vice President
31465 St. Andrews
Westlake, OH 44145
L R. Michael Shanahan Director
Brad W. Short Regional Vice President
306 15th Street
Seal Beach, CA 90740
David W. Short Chairman of the Board and
1000 RIDC Plaza, Suite 212 Co-Chief Executive Officer
Pittsburgh, PA 15238
William P. Simon, Jr. Senior Vice President
912 Castlehill Lane
Devon, PA 19333
L John C. Smith Vice President-
Institutional Investment
Services
Rodney G. Smith Vice President
100 N. Central Expressway,
Suite 1214
Richardson, TX 75080
S Sherrie L. Snyder-Senft Assistant Vice President
Anthony L. Soave Regional Vice president
8831 Morning Mist Drive
Clarkston, MI 48348
Therese L. Souiller Assistant Vice President
2652 Excaliber Court
Virginia Beach, VA 23454
Nicholas D. Spadaccini Regional Vice President
855 Markley Woods Way
Cincinnati, OH 45230
L Kristen J. Spazafumo Assistant Vice President
<PAGE>
(b) (1) (2)
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
Daniel S. Spradling Senior Vice President
181 Second Avenue, Suite 228
San Mateo, CA 94401
LW Eric H. Stern Director
B Max D. Stites Vice President
Thomas A. Stout Regional Vice President
1004 Ditchley Road
Virginia Beach, VA 23451
Craig R. Strauser Vice President
3 Dover Way
Lake Oswego, OR 97034
Francis N. Strazzeri Senior Vice President
31641 Saddletree Drive
Westlake Village, CA 91361
L Drew W. Taylor Assistant Vice President
S James P. Toomey Vice President
I Christopher E. Trede Vice President
George F. Truesdail Vice President
400 Abbotsford Court
Charlotte, NC 28270
Scott W. Ursin-Smith Vice President
60 Reedland Woods Way
Tiburon, CA 94920
J. David Viale Regional Vice President
7 Gladstone Lane
Laguna Niguel, CA 92677
Thomas E. Warren Regional Vice President
119 Faubel Street
Sarasota, FL 34242
L J. Kelly Webb Senior Vice President, Treasurer and
Controller
<PAGE>
<TABLE>
<CAPTION>
(b) (1) (2)
<S> <C>
Name and Principal Positions and Offices
Business Address with Underwriter
------------------ ---------------------
Gregory J. Weimer Vice President
206 Hardwood Drive
Venetia PA 15367
B Timothy W. Weiss Director
George J. Wenzel Regional Vice President
3406 Shakespeare Drive
Troy MI 48084
J. D. Wiedmaier Assistant Vice President
3513 Riverstone Way
Chesapeake, VA 23325
Timothy J. Wilson Vice President
113 Farmview Place
Venetia, PA 15367
B Laura L. Wimberly Vice President
H Marshall D. Wingo Director, Senior Vice President
L Robert L. Winston Director, Senior Vice President
William R. Yost Vice President
9320 Overlook Trail
Eden Prairie, MN 55347
Janet M. Young Regional Vice President
1616 Vermont
Houston, TX 77006
Scott D. Zambon Regional Vice President
2887 Player Lane
Tustin Ranch, CA 92782
</TABLE>
- -------------
L Business Address, 333 South Hope Street, Los Angeles, CA 90071
LW Business Address, 11100 Santa Monica Boulevard, 15th Floor, Los Angeles,
CA 90025
B Business Address, 135 South State College Boulevard, Brea, CA 92821
S Business Address, 3500 Wiseman Boulevard, San Antonio, TX 78251
H Business Address, 5300 Robin Hood Road, Norfolk, VA 23513
I Business Address, 8332 Woodfield Crossing Blvd., Indianapolis, IN 46240
(c) Name of Principal Underwriter: American Funds Distributors, Inc.; Net
Underwriting Discounts and Commissions: $15,918,533.87.
Item 30. Location of Accounts and Records
See Exhibit 15(b)
Item 31. Management Services
Not Applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will file a post-effective amendment to this
registration statement as frequently as necessary to ensure that the
audited financial statements in the registration statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted.
(b) Registrant undertakes that it will include either (1) as part of any
application to purchase a Certificate or an Individual Contract offered
by the Prospectus, a space that an applicant can check to request a
Statement of Additional Information, or (2) a post card or a similar
written communication affixed to or included in the Prospectus that the
applicant can remove to send for a Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of Additional Information
and any financial statements required to be made available under this Form
promptly upon written or oral request to Lincoln Life at the address or
phone number listed in the Prospectus.
(d) The Lincoln National Life Insurance Company hereby represents that the fees
and charges deducted under the contract, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred,
and the risks assumed by The Lincoln National Life Insurance Company.
(e) Registrant hereby represents that it is relying on the American Council of
Life Insurance (avail. Nov. 28, 1988) no-action letter with respect to
Contracts used in connection with retirement plans meeting the requirements
of Section 403(b) of the Internal Revenue Code, and represents further that
it will comply with the provisions of paragraphs (1) through (4) set forth
in that no-action letter.
<PAGE>
SIGNATURES
(a) As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has duly caused this Registration Statement to be signed on
its behalf, in the City of Fort Wayne and the State of Indiana on this 27th day
of April, 2000.
LINCOLN NATIONAL VARIABLE ANNUITY
ACCOUNT H -- American Legacy III Plus
(Registrant)
/s/ Kelly D. Clevenger
By: ___________________________
Kelly D. Clevenger
Vice President, LNL
(Title)
By: THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
(Depositor)
/s/ Stephen H. Lewis
By: ___________________________
Stephen H. Lewis
(Signature-Officer of Depositor)
Senior Vice President, LNL
(Title)
(b) As required by the Securities Act of 1933, this Registration Statement has
been signed for the Depositor by the following persons in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- -----
<S> <C> <C>
/s/ Jon A. Boscia President & Director April 27, 2000
- ----------------------- (Principal Executive Officer)
Jon A. Boscia
/s/ Lawrence T. Rowland Executive Vice President and April 27, 2000
- ----------------------- Director
Lawrence T. Rowland
/s/ Keith J. Ryan Vice President and Controller April 27, 2000
- ----------------------- (Principal Accounting Officer)
Keith J. Ryan
/s/ Janet Chrzan Senior Vice President, Chief April 27, 2000
- ----------------------- Financial Officer and Director
Janet Chrzan (Principal Financial Officer)
/s/ John H. Gotta Chief Executive Officer of Life April 27, 2000
- ----------------------- Insurance, Senior Vice President
John H. Gotta and Director
/s/ Stephen H. Lewis Interim Chief Executive Officer April 27, 2000
- ----------------------- of Annuities, Senior Vice
Stephen H. Lewis President and Director
/s/ H. Thomas McMeekin Director April 27, 2000
- -----------------------
H. Thomas McMeekin
/s/ Richard C. Vaughan Director April 27, 2000
- -----------------------
Richard C. Vaughan
</TABLE>
<PAGE>
Abraham Lincoln
XX-0123456
[LOGO OF LINCOLN NATIONAL LIFE INSURANCE CO.]
(A Stock Company)
ANNUITY CONTRACT
Flexible Premium Deferred
Variable Annuity or Variable and Fixed Annuity
With Benefit Payment Options
Nonparticipating
The Lincoln National Life Insurance Company (LNL) agrees to provide the benefits
and other rights described in this Contract in accordance with the terms of this
Contract.
READ THIS CONTRACT CAREFULLY. This is a legal contract between the Owner and
LNL. We want to be sure you understand the features and benefits contained in
this Contract. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.
If you have any questions after reading the Contract, we hope you will contact
your representative or the Home Office of LNL.
NOTICE OF 10-DAY RIGHT TO EXAMINE CONTRACT. Within 10 days after this Contract
is first received, it may be cancelled for any reason without penalty (e.g. no
Contingent Deferred Sales Charge will apply) by delivering or mailing it to the
representative through whom it was purchased or to the Home Office of LNL. Upon
cancellation, LNL will return the Contract Value as of the Valuation Date on
which LNL receives the cancellation request, plus any premium taxes and
mortality and expense risk charges previously deducted from the Contract Value,
minus any Bonus Credits paid into the Contract. If the Contract Value on the
date of cancellation is less than the sum of Purchase Payments minus
withdrawals, LNL will also return the investment loss and fund management fees
proportionately attributable to the Bonus Credits.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED UPON INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE (THE AMOUNT MAY INCREASE OR
DECREASE) AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT (SEE PAGES 7 AND 17).
Signed for The Lincoln National Life Insurance Company at its Home Office
located at 1300 South Clinton Street, Fort Wayne, Indiana 46802.
/s/ Jon A. Boscia
Jon A. Boscia, President Nancy J. Alford, Vice President
Form 30293
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Article Page
<S> <C> <C>
1 Definitions................................................................................................ 4
2 Purchase Payments.......................................................................................... 6
3 Variable Account........................................................................................... 7
4 Fixed Account.............................................................................................. 9
5 Options, Charges and Fees.................................................................................. 9
6 Death Benefits............................................................................................. 13
7 Annuity Payment Options.................................................................................... 16
8 Beneficiary................................................................................................ 19
9 General Provisions......................................................................................... 20
10 Annuity Purchase Rates Under a Variable Payment Option..................................................... 23
11 Annuity Purchase Rates Under a Fixed Payment Option........................................................ 27
</TABLE>
<PAGE>
CONTRACT DATA
Contract Number XX-0123456
Annuitant Abraham Lincoln
Age at Issue 35
Contract Date April 1, 2000
Purchase Payment $25,000.00
Purchase Payment Frequency Flexible
Maturity Date April 1, 2055
OWNER
Abraham Lincoln
Mary Lincoln
BENEFICIARY DESIGNATION
Please refer to the Client Information Profile for beneficiary designation.
VARIABLE ACCOUNT
The Variable Account for this variable annuity Contract is the Lincoln National
Variable Account H. There are currently [eleven] Sub-accounts in the Variable
Account available to the Owner. The Owner may direct Purchase Payments under the
Contract to any of the available Variable Sub-accounts, subject to limitations.
The amounts allocated to each Sub-account will be invested at net asset value in
the shares of one of the Funds of the American Funds Insurance Series (Series).
The Sub-accounts are:
1. [ Growth Fund ]
2. [ International Fund ]
3. [ Global Growth Fund ]
4. [ Growth-Income Fund ]
5. [ Asset Allocation Fund ]
6. [ High-Yield Bond Fund ]
7. [ Bond Fund ]
8. [ U.S. Government/AAA-Rated Securities Fund ]
9. [ Cash Management Fund ]
10. [ Global Small Capitalization Fund ]
11. [ New World Fund ]
12. [ Other Funds made available by LNL ]
See Section 3.01 for provisions governing any limitations, substitutions or
elimination of a Fund.
<PAGE>
OWNER'S INVESTMENT
The Owner's Investment at any given time is equal to the sum of:
a. The account values for any of the following individual LNL contracts owned
by an Eligible Owner (defined below) marketed under the names of: American
Legacy Variable Annuity, American Legacy II Variable Annuity, American
Legacy III Variable Annuity, American Legacy Shareholder's Advantage
Variable Annuity, American Legacy III Plus Variable Annuity, American
Legacy III C Variable Annuity, and any other contracts that may be made
available by LNL in the future for this purpose; plus
b. The amount (in dollars) of an Eligible Owner's Investment in existing
mutual funds in the American Funds Group in accordance with the procedures
established by the American Funds Group; plus
c. The amount of the current Purchase Payments made into this Contract.
An Eligible Owner includes the Owner of this Contract, the spouse of the Owner
of this Contract, and a child under the age of 21 of the Owner of this Contract.
BONUS CREDIT
For purposes of determining the Bonus Credit associated with a Purchase Payment
to this Contract, the following table will be used.
Owner's Investment (as defined above) Bonus Credit %
- -------------------------------------------------- --------------
[ Less than $ 100,000 ] [ 3.0% ]
[ $100,000 or greater, but less than $1,000,000 ] [ 4.0% ]
[ $1,000,000 or greater ] [ 5.0% ]
<PAGE>
ARTICLE 1
DEFINITIONS
1.01
ACCUMULATION UNIT - A unit of measure used in the calculation of the value of a
Variable Sub-account prior to the Annuity Commencement Date.
1.02
ANNUITANT OR JOINT ANNUITANT - The person or persons upon whose life or lives
the annuity benefit payments made after the Annuity Commencement Date will be
based.
1.03
ANNUITY COMMENCEMENT DATE - The Valuation Date on which the Contract Value is
withdrawn for payment of annuity benefits under the Annuity Payment Option
selected.
1.04
ANNUITY PAYMENT DATE - The date on which the Owner is entitled to the first
annuity benefit payment. Subsequent annuity benefit payments will be made on
the same day of the month as the first annuity benefit payment, at the
applicable frequency.
1.05
ANNUITY PAYMENT OPTION - An optional form of payment of the annuity benefits
provided for under this Contract.
1.06
ANNUITY UNIT - A unit of measure used on and after the Annuity Commencement Date
to calculate the amount of a variable annuity benefit payment.
1.07
BENEFICIARY - The person or entity designated by the Owner to receive the Death
Benefit, if any.
1.08
BONUS CREDIT - The additional amount credited to this Contract by LNL for each
Purchase Payment. Bonus Credits are not considered Purchase Payments.
1.09
CODE - The Internal Revenue Code of 1986, as amended.
1.10
CONTINGENT ANNUITANT - Prior to the Annuity Commencement Date, the individual
who will become the Annuitant upon the death of the Annuitant.
1.11
CONTINGENT DEFERRED SALES CHARGE (CDSC) - Charges assessed on premature
surrender of the Contract or a partial withdrawal from the Contract, calculated
according to the Contract provisions.
1.12
CONTRACT - The agreement, between LNL and the Owner, in which LNL provides a
variable annuity.
1.13
<PAGE>
CONTRACT DATE - The date this Contract became effective. The Contract Date is
shown on the Contract Data page(s).
1.14
CONTRACT VALUE - Prior to the Annuity Commencement Date, the sum of the values
attributable to this Contract of the Variable Account and of the Fixed Account
on a given Valuation Date.
1.15
CONTRACT YEAR - Each twelve-month period starting with the Contract Date on the
Contract Data page(s) and starting with each Contract Date anniversary
thereafter.
1.16
DEATH BENEFIT - The amount payable upon death of an Owner, Joint Owner, or an
Annuitant.
1.17
DOLLAR COST AVERAGING (DCA) - An option that allows the automatic transfer of a
portion of the Contract Value in periodic installments from a designated DCA
holding account to one or more of the Variable Sub-accounts available under the
Contract. The periodic installments will be over any DCA period made available
by LNL and selected by the Owner. A designated DCA holding account may be in
the Fixed Account and/or the Variable Account.
1.18
EARNINGS - The excess of the Contract Value over the sum of Bonus Credits and
Purchase Payments which have not yet been withdrawn from this Contract.
1.19
FIXED ACCOUNT - The fixed portion of this Contract which is invested in the
general account of LNL.
1.20
FUND - Any of the underlying investment options available in the Variable
Account.
1.21
HOME OFFICE - The principal office of LNL located at 1300 South Clinton Street,
Fort Wayne, Indiana, 46802, or an institution designated by LNL.
1.22
LNL - The Lincoln National Life Insurance Company.
1.23
MATURITY DATE - The date specified on the Contract Data page(s) of this
Contract.
1.24
NET ASSET VALUE PER SHARE - The market value of a Fund share calculated each day
by taking the closing market value of all securities owned, adding the value of
all other assets (such as cash), subtracting all liabilities, and then dividing
the result (total net assets) by the number of shares outstanding.
1.25
OWNER OR JOINT OWNERS - The one person, two persons or entity who exercise
rights of ownership under this Contract.
<PAGE>
1.26
PURCHASE PAYMENTS - Amounts paid into this Contract by or on behalf of the
Owner.
1.27
QUALIFIED PLAN - A retirement plan qualified for special tax treatment under the
Code, including Sections 401, 403, 408, 408A and 457. All other plans are
considered Non-Qualified.
1.28
SERIES - American Funds Insurance Series, the mutual fund(s) into which the
Contract Value, or a portion thereof, allocated to the Variable Account is
invested.
1.29
VALUATION DATE - Close of the market of each day that the New York Stock
Exchange is open for business.
1.30
VALUATION PERIOD - The period commencing at the close of business on a
particular Valuation Date and ending at the close of business on the next
succeeding Valuation Date.
1.31
VARIABLE ACCOUNT - The segregated investment account into which LNL sets aside
and invests the assets allocated to the Variable Sub-account(s) made available
by LNL and selected by the Owner. The Variable Account for this Variable
Annuity Contract is shown on the Contract Data page(s).
1.32
VARIABLE SUB-ACCOUNT -- That portion of the Variable Account which invests in
shares of a particular Fund in the Series. There is a separate Variable Sub-
account for each particular Fund.
ARTICLE 2
PURCHASE PAYMENTS
2.01 WHERE PAYABLE
All Purchase Payments must be made to LNL at its Home Office or to an agent
designated by LNL.
2.02 AMOUNT AND FREQUENCY
Purchase Payments are made in the amount and at the frequency shown on the
Contract Data Page(s). The Owner may change the frequency or amount of Purchase
Payments subject to LNL's rules in effect at the time of the change. LNL
reserves the right to limit future Purchase Payments into this Contract.
Purchase Payments may be made until the earliest of: the Annuity Commencement
Date, termination of the Contract upon payment of any Death Benefit, surrender
of the Contract, or the Maturity Date.
2.03 BONUS CREDIT
A Bonus Credit is paid into this Contract by LNL for the initial and all
subsequent Purchase Payments made to this Contract. The amount of the Bonus
Credit is calculated as a percentage of the Purchase Payment. The Bonus Credit
percentage is based upon the amount of the Owner's Investment at the time of a
Purchase Payment. Determination of the Owner's Investment and the Bonus Credit
percentage is set forth on the Contract Data page(s).
<PAGE>
If a subsequent Purchase Payment is made on or before the first anniversary of
the Contract Date and that Purchase Payment increases the Owner's Investment to
a level that qualifies Purchase Payments for a Bonus Credit percentage which is
higher than a Bonus Credit percentage paid on the prior Purchase Payment, then
an additional Bonus Credit will be paid into the Contract at the time the
subsequent Purchase Payment is made. The additional Bonus Credit will be
determined by multiplying the sum of the prior Purchase Payments by the
additional Bonus Credit percentage. The additional Bonus Credit percentage will
be the difference between the percentage applicable to the subsequent Purchase
Payment and the percentage applied to the prior Purchase Payments. This
additional Bonus Credit will be paid into the Contract as of the Valuation Date
of the subsequent Purchase Payment, and will not be applied to the Contract
retroactively to the date of the prior Purchase Payment. This additional Bonus
Credit will not be applicable after the first anniversary of the Contract Date.
Bonus Credits will be allocated to the Fixed Account and/or the Variable Sub-
accounts of the Contract at the same time and at the same percentages as the
Purchase Payment being made to the Contract.
Bonus Credits are not considered Purchase Payments.
ARTICLE 3
VARIABLE ACCOUNT
3.01 THE VARIABLE ACCOUNT
The Variable Account is for the exclusive benefit of persons entitled to receive
benefits under variable annuity contracts. The Variable Account will not be
charged with the liabilities arising from any other part of LNL's business.
Subject to any required regulatory approvals, LNL reserves the right to
eliminate the shares of any Fund and substitute the securities of a different
Fund or investment company or mutual fund. Such elimination and substitution
may occur if the shares of a Fund are no longer available for investment or if,
in the judgment of LNL, further investment in any Fund should become
inappropriate in view of the purposes of the Contract. LNL may add a new
Variable Sub-account in order to invest the assets of the Variable Account into
a Fund. LNL will give the Owner written notice of the elimination and
substitution of any Fund within fifteen days after such substitution occurs.
3.02 ALLOCATION OF PURCHASE PAYMENTS INTO THE VARIABLE ACCOUNT
Any Purchase Payment paid into this Contract may be allocated to the Variable
Account. Purchase Payments and corresponding Bonus Credits allocated to the
Variable Account of the Contract will be credited to the Variable Sub-account(s)
made available by LNL and selected by the Owner.
The Owner may allocate Purchase Payments to any of the available Variable Sub-
accounts subject to the following limitations:
a. The minimum amount allocated to any one Variable Sub-account is $20.
b. If the Owner elects to allocate any Purchase Payment to a new Variable
Sub-account not previously selected, that election must be made in writing
to LNL or through voice or electronic instructions, provided LNL has
received the appropriate authorization from the Owner for voice or
electronic instructions in accordance with LNL procedures.
Purchase Payments and corresponding Bonus Credits allocated to each Variable
Sub-account will be invested at net asset value in the shares of one of the
Funds. LNL will use each Purchase Payment and corresponding Bonus Credit to buy
Accumulation Units in the Variable Sub-account(s) selected by the Owner. The
number of Accumulation Units bought will be determined by dividing the amount
allocated to a Variable Sub-account by the dollar value of an Accumulation Unit
in such Variable Sub-account as of the Valuation Date immediately following
receipt of the Purchase Payment at the Home Office. The number of Accumulation
Units held for an Owner in a Variable Sub-account will not be changed by any
change in the dollar value of Accumulation Units in the Variable Sub-account.
3.03 VALUATION OF THE VARIABLE ACCOUNT ALLOCATIONS
The value of the portion of this Contract allocated to the Variable Account at
any time prior to the Annuity Commencement Date is equal to the sum of the
values allocated under this Contract to the Variable Sub-accounts.
<PAGE>
The value of the portion of this Contract allocated to a Variable Sub-account at
any time prior to the Annuity Commencement Date is equal to the Accumulation
Units credited under this Contract to a Variable Sub-account multiplied by the
value of the Accumulation Unit for the respective Variable Sub-account.
Accumulation Units for each Variable Sub-account are valued separately. The
value of a Variable Sub-account Accumulation Unit may increase or decrease from
Valuation Period to Valuation Period. Initially, the value of an Accumulation
Unit was arbitrarily established at the inception of the Variable Sub-account.
The Accumulation Unit value for a Variable Sub-account for any later Valuation
Period is determined as follows:
a. the total value of Fund shares held in the Variable Sub-account is
calculated by multiplying the number of Fund shares owned by the Variable
Sub-account at the beginning of the Valuation Period by the Net Asset Value
Per Share of the Fund at the end of the Valuation Period, and adding any
dividend or other distribution of the Fund if an ex-dividend date occurs
during the Valuation Period; minus
b. the liabilities of the Variable Sub-account at the end of the Valuation
Period (such liabilities include daily charges imposed on the Variable Sub-
account and may include a charge or credit with respect to any taxes paid
or reserved for by LNL that LNL determines as a result of the operation
from the Variable Account); the result divided by
c. the outstanding number of Accumulation Units in the Variable Sub-account at
the beginning of the Valuation Period.
The daily charge imposed on a Variable Sub-account for any Valuation Period
represents the daily mortality and expense risk charge and the daily
administrative charge adjusted for the number of calendar days in the Valuation
Period. On an annual basis, this daily charge will not exceed the level
determined by the Death Benefit option (see Section 6.01) in effect:
for any Valuation Period the Enhanced Guaranteed Minimum Death Benefit (EGMDB)
is in effect, on an annual basis the daily charge will not exceed [1.60%] of
the average daily net assets of the Variable Sub-account;
for any Valuation Period the Guarantee of Principal Death Benefit is in
effect, on an annual basis the daily charge will not exceed [1.50%] of the
average daily net assets of the Variable Sub-account.
For any Valuation Period on or after the Annuity Commencement Date, on an annual
basis the daily charge will not exceed [1.40%] of the average daily net assets
of the Variable Sub-account.
The Accumulation Unit value may increase or decrease the dollar value of
benefits under the Contract. Expenses incurred by LNL will not adversely affect
the dollar value of benefits.
ARTICLE 4
FIXED ACCOUNT
4.01 ALLOCATION OF PURCHASE PAYMENTS INTO THE FIXED ACCOUNT
Any Purchase Payment paid into this Contract may be allocated to the Fixed
Account of the Contract. The Owner may allocate Purchase Payments to the Fixed
Account subject to the following limitations:
a. The minimum amount which may be allocated to the Fixed Account is $2000.
b. If the Owner elects to allocate any Purchase Payment to the Fixed Account
and the Fixed Account was not previously selected, that election must be
made in writing to LNL or through voice or electronic instructions,
provided LNL has received the appropriate authorization from the Owner for
voice or electronic instructions in accordance with LNL procedures.
4.02 CREDITING OF INTEREST ON FIXED ACCOUNT
Prior to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit; or
<PAGE>
c. surrender of this Contract;
LNL guarantees that at the end of each Valuation Period an effective annual
interest rate, adjusted for the number of days in the Valuation Period, will be
credited to the portion of Contract Value, if any, in the Fixed Account at that
time. LNL guarantees that it will credit an effective annual rate of not less
than 3.0% during all years. LNL may credit interest at effective annual rates
in excess of 3.0% at any time.
4.03 AUTOMATIC NONFORFEITURE OPTION
In the event that Purchase Payments are discontinued by the Owner, this Contract
will continue and Purchase Payments may be resumed at any time prior to the
earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit;
c. surrender of this Contract; or
d. the Maturity Date.
LNL reserves the right to surrender this Contract in accordance with the terms
set forth in the standard nonforfeiture law, applicable in the state in which
this Contract was purchased, for individual deferred annuities.
ARTICLE 5
OPTIONS, CHARGES AND FEES
5.01 TRANSFER OPTION
Prior to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit;
c. surrender of this Contract; or
d. the Maturity Date;
the Owner may direct a transfer of a portion of the Contract Value:
a. from one Variable Sub-account to another Variable Sub-account or to the
Fixed Account;
b. from the Fixed Account to one or more Variable Sub-accounts; or
c. from a designated DCA holding account to a Variable Sub-account under a DCA
program;
subject to the restrictions described below.
Such a transfer request must be made in writing to LNL or through voice or
electronic instructions, provided LNL has received the appropriate authorization
from the Owner for voice or electronic instructions in accordance with LNL
procedures.
A transfer from one Variable Sub-account to another Variable Sub-account will
result in the redemption of Accumulation Units in one Variable Sub-account and
the purchase of Accumulation Units in the other Variable Sub-account. A transfer
from a Fixed Account to a Variable Sub-account will result in a withdrawal of
Contract Value from the Fixed Account and the purchase of Accumulation Units in
the Variable Sub-account. Such transfers will be accomplished at Accumulation
Unit values as of the Valuation Date the transfer request is received in the
Home Office.
Transfers will be subject to the following restrictions.
a. Transfers may not be made during the first 30 days after the Contract Date.
<PAGE>
b. Twelve (12) transfers within and/or between the Variable Account and the
Fixed Account may be made per Contract Year. There will be no fee imposed
for these twelve (12) transfers.
c. LNL reserves the right to allow more than twelve (12) transfers per
Contract Year, but in doing so may impose a fee of up to $10.00 for each
transfer after the first twelve (12) transfers in a Contract Year.
Transfers made as a part of an automatic transfer program (such as a DCA
program) will not be counted against these twelve (12) transfers.
d. The minimum single transfer amount from a Variable Sub-account or the Fixed
Account is $300 or the entire amount in the Variable Sub-account or the
Fixed Account, whichever is less. If, after the transfer, the amount
remaining under this Contract in the Variable Sub-account and/or the Fixed
Account from which the transfer is taken is less than $300, the entire
amount held in that Variable Sub-account and/or the Fixed Account will be
transferred with the requested transfer amount.
e. The sum of the percentages transferred from the Fixed Account in any
Contract Year, where the percentages are based upon the value of the Fixed
Account at the time of the current withdrawal, will be limited to 25% of
the value of the Fixed Account. Transfers made as a part of an automatic
transfer program (such as a DCA program) will not be counted against this
25% limit.
f. The minimum transfer amount to a Variable Sub-account is $300.
g. The minimum transfer amount to the Fixed Account is $2000.
If the DCA program is discontinued by the Owner prior to the end of the selected
DCA period, any remaining portion of the Contract Value held in a designated DCA
holding account within the Fixed Account will be transferred automatically to
the Variable Sub-account(s) the Owner selected under the DCA program.
5.02 WITHDRAWAL OPTION
The Owner may withdraw a part of the surrender value of this Contract at any
time prior to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit;
c. surrender of this Contract; or
d. the Maturity Date.
Withdrawals will be subject to the CDSC (see Sections 5.03 and 5.04). However,
the Owner may withdraw up to the Free Amount during a Contract Year without
incurring a CDSC. The remaining value will be subject to the charges as provided
under CDSC (see Section 5.04). The Free Amount is equal to the greater of:
a. 10% of the Contract Value, where the percentages are based upon the
Contract Value at the time of the current withdrawal, to the extent that
the sum of the percentages of the Contract Value withdrawn does not
exceed this 10% maximum; or
b. 10% of the total Purchase Payments (excluding any corresponding Bonus
Credits), where the percentages are based upon the total Purchase
Payments to the Contract at the time of the current withdrawal, to the
extent that the sum of the percentages of the Purchase Payments
withdrawn does not exceed this 10% maximum.
The Free Amount does not apply to a surrender of this Contract.
For purposes of calculating the CDSC on withdrawals, LNL assumes that:
a. The Free Amount will be withdrawn from Purchase Payments on a "first in-
first out" (FIFO) basis.
b. Prior to the [ninth] anniversary of the Contract Date, any amount withdrawn
above the Free Amount during a Contract Year will be withdrawn in the
following order:
1. from Purchase Payments (FIFO) until exhausted; then
<PAGE>
2. from Earnings until exhausted; then
3. from Bonus Credits.
c. On or after the [ninth] anniversary of the Contract Date, any amount
withdrawn above the Free Amount during a Contract Year will be withdrawn in
the following order:
1. from Purchase Payments (FIFO) to which a CDSC no longer applies until
exhausted; then
2. from Earnings until exhausted; then
3. from Bonus Credits corresponding to Purchase Payments to which a CDSC no
longer applies until exhausted; then
4. from Purchase Payments (FIFO) to which a CDSC still applies until
exhausted; then
5. from Bonus Credits corresponding to Purchase Payments to which a CDSC
still applies.
A withdrawal will be effective on the Valuation Date on which LNL receives a
written request for withdrawal at its Home Office. The request may specify from
which Sub-account the withdrawal will be made. If no Sub-account is specified,
LNL will withdraw the amount requested on a pro-rata basis from each Variable
Sub-account and/or the Fixed Account.
Any payment will be mailed from LNL's Home Office within seven days after the
date of withdrawal; however, LNL may be permitted to defer such payment under
the Investment Company Act of 1940, as in effect at the time such request for
withdrawal is received in its Home Office. Any payment from the Fixed Account
may be deferred for a period not to exceed six months after receipt of the
withdrawal request.
Withdrawals from a Variable Sub-account will result in the redemption of
Accumulation Units from this Variable Sub-account. Such withdrawals will be
accomplished at Accumulation Unit values as of the Valuation Date the withdrawal
request is received in the Home Office.
The minimum withdrawal is $300. LNL reserves the right to surrender this
Contract if any withdrawal reduces the total Contract Value to a level at which
this Contract may be surrendered in accordance with the terms set forth in the
standard nonforfeiture law, applicable in the state in which this Contract was
purchased, for individual deferred annuities. LNL may surrender the Contract
for its surrender value (see Sections 5.03 and 5.04).
The Withdrawal Option is not available after the Annuity Commencement Date.
5.03 SURRENDER OPTION
The Owner may surrender this Contract for its surrender value at any time prior
to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit; or
c. the Maturity Date.
This Contract will terminate upon surrender. The surrender will be effective on
the Valuation Date on which LNL receives a written request for surrender at its
Home Office.
The surrender value on the Valuation Date of surrender will be the total
Contract Value, less a CDSC (see Section 5.04).
Any payment will be mailed from LNL's Home Office within seven days after the
date of surrender; however, LNL may be permitted to defer such payment under the
Investment Company Act of 1940, as in effect at the time a request for surrender
is received in its Home Office. Any payment from the Fixed Account may be
deferred for a period not to exceed six months after receipt of the surrender
request.
The Surrender Option is not available after the Annuity Commencement Date.
5.04 CONTINGENT DEFERRED SALES CHARGES (CDSC)
<PAGE>
The CDSC is calculated separately for each Contract Year's Purchase Payments to
which a charge applies. Charges are applied as follows:
Number of Contract Anniversaries CDSC as a percentage of the
since a Purchase Payment has surrendered or withdrawn
been invested Purchase Payment
------------------------ ------------------
None [ 8.5% ]
At least 1 [ 8.5% ]
At least 2 [ 8.0% ]
At least 3 [ 7.0% ]
At least 4 [ 6.0% ]
At least 5 [ 5.0% ]
At least 6 [ 4.0% ]
At least 7 [ 3.0% ]
At least 8 [ 2.0% ]
At least 9 [ 0.0% ]
A CDSC will be waived under certain circumstances (see Section 5.05 for
details).
5.05 WAIVER OF CONTINGENT DEFERRED SALES CHARGES
The withdrawal of a portion of the Contract Value or the surrender of this
Contract, prior to the Annuity Commencement Date, may be subject to a CDSC as
described in Sections 5.02 and 5.03, except that such charges do not apply to
the following:
a. Each withdrawal of the Free Amount (as defined in Section 5.02).
b. The surrender or withdrawal of any Purchase Payment received more than 12
months prior to onset of the "permanent and total disability" of the Owner
or Joint Owner as defined in section 22(e)(3) of the Internal Revenue Code.
Permanent and total disability must occur subsequent to the Contract Date
and prior to the 65th birthday of the disabled Owner or Joint Owner.
c. The surrender or withdrawal of any Purchase Payment received more than 12
months prior to the diagnosis of a terminal illness of the Owner or Joint
Owner. Diagnosis of the terminal illness must be subsequent to the
Contract Date and result in a life expectancy of less than one year, as
determined by a qualified professional medical practitioner.
d. The surrender or withdrawal of any Purchase Payment received more than 12
months prior to the admittance of the Owner or Joint Owner into an
accredited nursing home or equivalent health care facility. Admittance in
such a facility must be subsequent to the Contract Date and continue for 90
consecutive days prior to the surrender or withdrawal.
e. The surrender of this Contract as a result of the death of the Owner, a
Joint Owner, or the Annuitant who has not been changed, unless the
Annuitant was changed due to the death of a prior Annuitant.
f. The annuitization of any Purchase Payment received more than 12 months
prior to the Annuity Commencement Date.
If a non-natural person is the Owner of the Contract, the Annuitant or Joint
Annuitant will be considered the Owner or Joint Owner of the Contract for
purposes of this Section 5.05.
ARTICLE 6
DEATH BENEFITS
6.01 DEATH BEFORE THE ANNUITY COMMENCEMENT DATE
Entitlement.
If there is a single Owner, upon the death of the Owner LNL will pay a Death
Benefit to the designated Beneficiary(s) in accordance with the terms of Article
8. If the designated Beneficiary of the Death Benefit is the surviving spouse
of the deceased Owner, the spouse may elect to continue the Contract as the new
Owner. Upon the death of the spouse who continues the Contract as the new Owner,
LNL will pay a Death Benefit to the
<PAGE>
designated Beneficiary(s) named by the spouse, as the new Owner, in accordance
with the terms of Article 8. If there are no designated Beneficiaries, LNL will
pay a Death Benefit to the Owner's estate.
If there are Joint Owners, upon the death of the first Joint Owner, LNL will pay
a Death Benefit to the surviving Joint Owner. If the surviving Joint Owner is
the spouse of the deceased Joint Owner, then the spouse may elect to continue
the Contract as sole Owner. Upon the death of the Joint Owner who continues the
Contract, LNL will pay a Death Benefit to the designated Beneficiary(s) in
accordance with the terms of Article 8.
If the Annuitant is also the Owner or a Joint Owner, then the Death Benefit paid
upon the death of the Annuitant will be subject to the Contract provisions
regarding death of the Owner or a Joint Owner. If the surviving spouse of the
deceased Annuitant assumes the Contract, the Contingent Annuitant, if any, will
become the Annuitant. If there is no named Contingent Annuitant, the surviving
spouse will become the Annuitant.
If an Annuitant who is not the Owner or a Joint Owner dies, then the Contingent
Annuitant, if named, becomes the Annuitant and no Death Benefit is payable on
the death of the Annuitant. If no Contingent Annuitant is named, the Owner (or
younger Joint Owner) becomes the Annuitant. In lieu of continuing the Contract,
a Death Benefit may be paid to the Owner (and Joint Owner in equal shares, if
applicable) if the Annuitant named on this Contract has not been changed, except
on death of a prior Annuitant, and written notification of the election to
receive the Death Benefit is received by LNL within 75 days of the death of the
Annuitant. If no Owner is living on the date of death of the Annuitant, the
Death Benefit will be paid to the Beneficiary in accordance with Article 8. This
Contract will terminate when any Death Benefit is paid due to the death of the
Annuitant. A Death Benefit payable on the death of the Annuitant will not be
paid if the Annuitant has been changed subsequent to the effective date of this
Contract unless the change occurred because of the death of a prior Annuitant.
If the Owner is a corporation or other non-individual (non-natural person), the
death of the Annuitant will be treated as the death of the Owner.
The Death Benefit will be paid upon approval by LNL, after LNL is in receipt of:
a. due proof, satisfactory to LNL, of the death;
b. written authorization for payment; and
c. all claim forms, fully completed.
Due proof of death may be a certified copy of a death certificate, a certified
copy of a decree of a court of competent jurisdiction as to the findings of
death, or any other proof of death acceptable to LNL.
All Death Benefit payments will be subject to the laws and regulations governing
death benefits.
Notwithstanding any provision of this Contract to the contrary, the payment of
Death Benefits provided under the Contract must be made in compliance with Code
Section 72(s) or 401(a)(9) as applicable, as amended from time to time.
Determination of Amounts.
The Enhanced Guaranteed Minimum Death Benefit (EGMDB) option will be the Death
Benefit option effective as of the Contract Date for the following:
a. Contracts that are either Non-Qualified or are Individual Retirement
Annuities (IRA and Roth IRA) under Code Section 408 or 408A; and
b. Contracts where the Owner, any Joint Owner, and Annuitant are all under the
age of 80 as of the Contract Date.
For all other Contracts, the Guarantee of Principal Death Benefit option will be
effective as of the Contract Date. Each Death Benefit option has a different
level of daily charges (see Section 3.03).
The Death Benefit options are:
1. Enhanced Guaranteed Minimum Death Benefit (EGMDB).
The EGMDB is equal to the greater of:
<PAGE>
a. the current Contract Value as of the date on which the death claim is
approved by LNL for payment; or
b. the highest Contract Value on any Contract Date anniversary (including
the Contract Date itself) prior to the 81st birthday of the deceased
(Owner, Joint Owner, or Annuitant) and prior to the date of death of the
deceased (Owner, Joint Owner or Annuitant); where the highest Contract
Value is increased by Purchase Payments and decreased for partial
withdrawals, partial annuitizations, and premium tax incurred, if any,
subsequent to such Contract Date anniversary on which the highest
Contract Value is obtained.
2. Guarantee of Principal Death Benefit.
The Guarantee of Principal Death Benefit is equal to the greater of:
a. the current Contract Value as of the date on which the death claim is
approved by LNL for payment; or
b. the sum of all Purchase Payments minus all withdrawals, partial
annuitizations, and premium tax incurred, if any.
On or after the Contract Date, but prior to the Annuity Commencement Date, the
Owner (or a spouse who continues the Contract as the Owner) may choose to
terminate the EGMDB option by giving written notice to LNL. The Guarantee of
Principal Death Benefit option will then be effective as of the Valuation Date
on which the written notification to change the Death Benefit option is received
at the Home Office. Termination of the EGMDB option by the Owner or surviving
spouse who assumed the Contract will be permanent and final.
Upon the death of the Owner, Joint Owner, or Annuitant of this Contract, if a
surviving spouse continues the Contract, the excess, if any, of the Death
Benefit over the current Contract Value as of the date on which the death claim
is approved by LNL for payment will be credited into the Contract. This benefit
will only apply one time for each Contract.
If the Owner is a corporation or other non-individual (non-natural person) and
there are Joint Annuitants, upon the death of the first Joint Annuitant to die,
if the Contract is continued, the excess, if any, of the Death Benefit over the
current Contract Value as of the date on which the death claim is approved by
LNL for payment will be credited into the Contract. This benefit will only apply
one time for each Contract.
Payment of Amounts.
The Death Benefit payable on the death of the Owner, or after the death of the
first Joint Owner, or upon the death of the spouse who continues the Contract,
will be distributed to the designated Beneficiary(s) as follows:
a. the Death Benefit must be completely distributed within five years of the
Owner's date of death; or
b. the designated Beneficiary may elect, within the one year period after the
Owner's date of death, to receive the Death Benefit in substantially equal
installments over the life of such designated Beneficiary or over a period
not extending beyond the life expectancy of such designated Beneficiary;
provided that such distributions begin not later than one year after the
Owner's date of death.
The Death Benefit payable upon the death of the Annuitant, if elected by the
Owner or Joint Owner within 75 days of the death of the Annuitant, will be
distributed to the Owner or Joint Owners in either the form of a lump sum or
under an Annuity Payment Option. An Annuity Payment Option must be selected
within 60 days after LNL approves the death claim.
If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by LNL of the claim. This payment may be postponed as permitted
by the Investment Company Act of 1940.
6.02 DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE
The Death Benefit options listed in Section 6.01 are no longer applicable and
the Death Benefit option in effect will terminate.
If the Owner or a Joint Owner dies on or after the Annuity Commencement Date,
any remaining benefits payable will continue to be distributed under the Annuity
Payment Option then in effect. The rights of ownership granted by the Contract
will pass to the Joint Owner, if any, otherwise to the Beneficiary. If there is
no named Beneficiary at the time of the Owner's or last surviving Joint Owner's
death, then the rights of ownership will pass to the Annuitant,
<PAGE>
if still living; otherwise to the Joint Annuitant, if applicable. If no named
Joint Owner, Beneficiary, Annuitant, or Joint Annuitant survives the Owner, any
remaining benefits payable will continue to the Owner's estate.
On receipt of due proof of death, as described in Section 6.01, of the Annuitant
or both Joint Annuitants, any remaining benefits payable under the Annuity
Payment Option will be paid to the Owner or Joint Owner, if living; otherwise,
to the Beneficiary. If there is no Beneficiary, any remaining benefits payable
will continue to the Annuitant's estate.
ARTICLE 7
ANNUITY PAYMENT OPTIONS
7.01 ANNUITY BENEFIT PAYMENTS
An election to receive payments under an Annuity Payment Option must be made by
the Maturity Date. If an Annuity Payment Option is not chosen prior to the
Maturity Date, payments will commence to the Owner on the Maturity Date under
the Annuity Payment Option providing a life annuity with annuity benefit
payments guaranteed for 10 years. The Maturity Date is set forth on the Contract
Data Page(s). Upon written request by the Owner and any Beneficiary who cannot
be changed, the Maturity Date may be deferred. Purchase Payments may be made
until the new Maturity Date.
If the Maturity Date is extended, LNL reserves the right to restrict the
availability of certain Annuity Payment Options.
Any Purchase Payment that is applied to an Annuity Payment Option within 12
months of receipt of the Purchase payment will be subject to a CDSC (see Section
5.05).
7.02 CHOICE OF ANNUITY PAYMENT OPTION
By Owner
Prior to the Annuity Commencement Date, the Owner may choose or change any
Annuity Payment Option. In addition, the Owner may select an Annuity Payment
Option as the distribution method for payment of the Death Benefit to a
Beneficiary. Such selection of a distribution method must be made in writing to
the Home Office and approved by LNL. The Owner may change or revoke, in writing
to the Home Office, any such selection, unless such selection was made
irrevocable.
By Beneficiary
If an Annuity Payment Option has not been previously selected by the Owner as
the distribution option for payment of the Death Benefit to a Beneficiary, then
at the time proceeds are payable to a Beneficiary, a Beneficiary may choose any
Annuity Payment Option that meets the requirements of Code Section 72(s) or
401(a)(9). The Beneficiary then becomes the Annuitant.
A choice or change of an Annuity Payment Option must be made in writing to LNL.
After the Annuity Commencement Date, the Annuity Payment Option may not be
changed.
7.03 ANNUITY PAYMENT OPTIONS
a. Life Annuity / Life Annuity with Certain Period - Fixed and/or variable
annuity benefit payments will be made for the lifetime of the Annuitant
with no Certain Period, or life and a 10 year Certain Period, or life and a
20 year Certain Period.
b. Unit Refund Life Annuity - Variable annuity benefit payments will be made
for the lifetime of the Annuitant with the guarantee that upon death, if:
1) the number of Annuity Units initially purchased (determined by dividing
the total dollar amount applied to purchase this option by the Annuity
Unit value on the Annuity Commencement Date) is greater than;
2) the number of Annuity Units paid as part of each variable annuity
benefit payment multiplied by the number of annuity benefit payments
paid prior to death;
<PAGE>
then a refund payment equal to the number of Annuity Units determined by
(1) minus (2) will be made.
The refund payment value will be determined using the Annuity Unit value on
the Valuation Date on which the death claim is approved by LNL for payment,
after LNL is in receipt of:
(a) due proof of death acceptable to LNL;
(b) written authorization for payment; and
(c) all claim forms, fully completed.
c. Cash Refund Life Annuity - Fixed annuity benefit payments will be made for
the lifetime of the Annuitant with the guarantee that upon death, if:
1) the total dollar amount applied to purchase this option is greater
than;
2) the fixed annuity benefit payment multiplied by the number of annuity
benefit payments paid prior to death;
then a refund payment equal to the dollar amount of (1) minus (2) will be
made.
The refund payment will be paid after the death claim is approved by LNL
for payment, after LNL is in receipt of:
(a) due proof of death acceptable to LNL;
(b) written authorization for payment; and
(c) all claim forms, fully completed.
d. Joint Life Annuity / Joint Life Annuity with Certain Period - Fixed and/or
variable annuity benefit payments will be made during the joint life of the
Annuitant and a Joint Annuitant. Payments will be made for joint life with
no Certain Period, or joint life and a 10-year Certain Period, or joint
life and a 20-year Certain Period. Upon the death of either Annuitant,
annuity benefit payments continue for the life of the surviving Annuitant.
e. Joint Life and Two-Thirds to Survivor Annuity / Joint Life and Two-Thirds
to Survivor Annuity with Certain Period - Fixed and/or variable annuity
benefit payments will be made during the joint life of the Annuitant and a
Joint Annuitant. Upon the death of either Annuitant, two-thirds of the
annuity benefit payment due while both Annuitants were alive will continue
for the life of the surviving Annuitant. Payments will be made for joint
life with no Certain Period, or joint life and a 10-year Certain Period, or
joint life and a 20-year Certain Period.
f. Other options may be available as agreed upon in writing by LNL.
At the time an Annuity Payment Option is selected under the provisions of this
Contract, the Owner may elect to have the total Contract Value applied to
provide a variable annuity benefit payment, a fixed annuity benefit payment, or
a combination fixed and variable annuity benefit payment. If no election is
made, the value of the Owner's Variable Account will be used to provide a
variable annuity benefit payment and the value of the Owner's Fixed Account will
be used to provide a fixed annuity benefit payment.
7.04 DETERMINATION OF THE AMOUNT OF THE FIRST ANNUITY PAYMENT
The amount of annuity benefit payment will depend on the age and sex (except in
cases where unisex rates are required) of the Annuitant(s) as of the Annuity
Commencement Date. A choice may be made to receive payments once each month,
four times each year, twice each year, or once each year.
Article 10 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the first monthly payment for a
unisex variable annuity benefit payment based upon the assumed interest rate
selected by the Owner. The tables show the dollar amount of the first monthly
payment which can be purchased with each $1,000 of Contract Value, after
deduction of any applicable premium taxes. Amounts shown use the 1983 'a'
Individual Annuity Mortality Table, modified, with an assumed interest rate of
3.0%, 4.0%, 5.0% and 6.0% per year. The Owner must select one of the assumed
interest rates for the variable annuity benefit payment prior to the Annuity
Commencement Date. The assumed interest rate may not be changed after the
Annuity Commencement Date.
<PAGE>
Article 11 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the monthly payments for a fixed
annuity benefit payment. The tables show the dollar amount of the guaranteed
monthly payments which can be purchased with each $1,000 of Contract Value,
after deduction of any applicable premium taxes. Amounts shown use the 1983 'a'
Individual Annuity Mortality Table, modified, with an interest rate of 3.0% per
year.
For a 100% fixed annuity benefit payment, the Annuity Payment Date must be at
least 30 days after the Annuity Commencement Date. If any portion of the annuity
benefit payment will be on a variable basis, the Annuity Payment Date will be 14
days after the Annuity Commencement Date. The Annuity Unit value, if applicable,
and Contract Value used to effect annuity benefit payments will be determined as
of the Annuity Commencement Date.
7.05 DETERMINATION OF THE AMOUNT OF VARIABLE ANNUITY PAYMENTS AFTER THE FIRST
PAYMENT
The first variable annuity benefit payment is sub-divided into components, each
of which represents the product of:
a. the percentage elected by the Owner of a specific Variable Sub-account, the
performance of which will determine future variable annuity benefit
payments; and
b. the entire first variable annuity benefit payment.
Each variable annuity benefit payment after the first payment attributable to a
specific Variable Sub-account will be determined by multiplying the Annuity Unit
value for the Variable Sub-account for the date each payment is due by a
constant number of Annuity Units. This constant number for each specific
Variable Sub-account is determined by dividing the component of the first
payment attributable to such Variable Sub-account as described above by the
Annuity Unit value for that Variable Sub-account on the Annuity Commencement
Date. The total variable annuity benefit payment will be the sum of the payments
attributable to each Variable Sub-account. In absence of transfers between
Variable Sub-accounts, the number of Annuity Units attributable to each Variable
Sub-account remains constant, although the Annuity Unit values will vary with
the investment performance of the Funds. The Annuity Unit value may increase or
decrease the dollar value of benefits under the Contract.
The Annuity Unit value for any Valuation Period for any Variable Sub-account is
determined by multiplying the Annuity Unit value for the immediately preceding
Valuation Period by the product of (a) the daily factor raised to a power equal
to the number of days in the current Valuation Period and (b) the Accumulation
Unit value of the same Variable Sub-account for this Valuation Period divided by
the Accumulation Unit value of the same Variable Sub-account for the immediately
preceding Valuation Period. The daily factor is equal to 0.999919020 for a 3%
assumed interest rate, 0.999892552 for a 4% assumed interest rate, 0.999866337
for a 5% assumed interest rate, and 0.999840372 for a 6% assumed interest rate.
The valuation of all assets in the Variable Sub-account will be determined in
accordance with the provisions of applicable laws, rules, and regulations. The
method of determination by LNL of the value of an Accumulation Unit and of any
Annuity Unit will be conclusive upon the Owner and any Beneficiary.
LNL guarantees that the dollar amount of each installment after the first will
not be affected by variations in mortality experience from mortality assumptions
on which the first installment is based. After the Annuity Commencement Date, if
any portion of the annuity benefit payment is a variable annuity benefit
payment, the Owner may direct a transfer of assets from one Variable Sub-account
to another Variable Sub-account or to a fixed annuity benefit payment. Such
transfers will be limited to three (3) times per Contract Year. Assets may not
be transferred from a fixed annuity benefit payment to a variable annuity
benefit payment.
transfer from one Variable Sub-account to another Variable Sub-account will
result in the purchase of Annuity Units in one Variable Sub-account and the
redemption of Annuity Units in the other Variable Sub-account. Such a transfer
will be accomplished at relative Annuity Unit values as of the Valuation Date
the transfer request is received by LNL. The valuation of Annuity Units is
described above. A transfer from a Variable Sub-account to a fixed annuity
benefit payment will result in the redemption of Annuity Units in that Variable
Sub-account and the purchase of a minimum fixed annuity benefit payment based on
the tables in Article 11.
7.06 PROOF OF AGE
Payment will be subject to proof of age that LNL will accept, such as a
certified copy of a birth certificate.
7.07 MINIMUM ANNUITY BENEFIT PAYMENT REQUIREMENTS
<PAGE>
If the Annuity Payment Option chosen results in payments of less than $50 from
any Variable Sub-account and/or a fixed annuity benefit payment of less than
$50, the frequency will be changed so that payments will be at least $50.
7.08 EVIDENCE OF SURVIVAL
LNL has the right to ask for proof that the person (or persons) on whose life
(or lives) the payment is based is alive when each payment is due.
7.09 CHANGE IN ANNUITY PAYMENT OPTION
The Annuity Payment Option may not be changed after the Annuity Commencement
Date.
ARTICLE 8
BENEFICIARY
8.01 DESIGNATION OF BENEFICIARY
The Owner may designate a Beneficiary(s) and a contingent Beneficiary(s).
If there is a single Owner, the designated Beneficiary(s) will receive the Death
Benefit proceeds upon the death of the Owner unless the Beneficiary as the
surviving spouse elects to continue the Contract.
If there are Joint Owners, upon the death of the first Joint Owner, the
surviving Joint Owner will receive the Death Benefit proceeds. The surviving
Joint Owner will be treated as the primary designated Beneficiary. Any other
Beneficiary designation on record at the time of death will be treated as a
contingent Beneficiary.
If the surviving spouse of the deceased continues the Contract as the sole
Owner, then the designated Beneficiary(ies) move up, in the order of their
original designation, to replace the spouse as original Beneficiary, unless the
Beneficiary designation is subsequently changed by the surviving spouse as the
new Owner (see Section 8.02).
If the Annuitant dies and a Death Benefit is paid, the Owner (and Joint Owner if
applicable) will be treated as the primary designated Beneficiary(ies). Any
other Beneficiary designation on record at the time of death will be treated as
a contingent Beneficiary.
Unless otherwise stated in the Beneficiary designation, if there is more than
one Beneficiary they are presumed to share equally.
8.02 CHANGE OF BENEFICIARY
The Owner may change any Beneficiary unless otherwise provided in the previous
designation. A change of Beneficiary will revoke any previous designation. A
change may be made by filing a written request, in a form acceptable to LNL, at
its Home Office. The change will become effective upon receipt of the written
request by LNL at its Home Office.
LNL reserves the right to request the Contract for endorsement of the change.
8.03 DEATH OF BENEFICIARY
Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other
Beneficiaries named, according to their respective interests. If there are no
Beneficiaries, the Beneficiary's interest will pass to a contingent
Beneficiary(s), if any. Prior to the Annuity Commencement Date, if no
Beneficiary or contingent Beneficiary survives the Owner, the Death Benefits
will be paid to the Owner's estate.
Unless otherwise provided in the Beneficiary designation, once a Beneficiary is
receiving Death Benefits or annuity benefit payments under an Annuity Payment
Option, the Beneficiary may name his or her own Beneficiary(s) to receive any
remaining benefits due under the Contract, should the original Beneficiary die
prior to receipt of all benefits. If no Beneficiary is named or the named
Beneficiary predeceases the original Beneficiary, any remaining benefits will
continue to the original Beneficiary's estate. A Beneficiary designation must be
made in writing to the LNL Home Office in a form acceptable to LNL.
<PAGE>
ARTICLE 9
GENERAL PROVISIONS
9.01 THE CONTRACT
The Contract and any riders attached constitute the entire Contract. Only the
President, a Vice President, the Secretary or an Assistant Secretary of LNL has
the power, on behalf of LNL, to change, modify, or waive any provisions of this
Contract.
LNL reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.
Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have their usual and customary meaning except when specifically defined.
9.02 OWNERSHIP
The Owner is the person who has the ability to exercise the rights within this
Contract.
The Owner may name a Joint Owner. Joint Owners will be treated as having equal,
undivided interests in the Contract, including rights of survivorship. Either
Joint Owner, independently of the other, may exercise any ownership rights in
the Contract.
9.03 ANNUITANTS
Prior to the Annuity Commencement Date.
The Owner may name only one Annuitant. If the Owner is an exempt organization
under Code Section 501(c), the Owner may name one Annuitant or two Joint
Annuitants.
If the Owner is a natural person, the Owner has the right to change the
Annuitant at any time by notifying LNL in writing of the change. The new
Annuitant must be under the age of 86 as of the effective date of the change. A
death benefit may not be payable upon the death of the new Annuitant (see
Section 6.01). In addition, the EMGDB is not available to Annuitants age 80 or
older (see Section 6.01).
A Contingent Annuitant may be named, or changed, by notifying LNL in writing.
On or After the Annuity Commencement Date.
The Annuitant or Joint Annuitants may not be changed. Any Contingent Annuitant
designation is no longer applicable and is terminated.
9.04 ASSIGNMENTS
If this Contract is used with a Qualified Plan, the Contract will not be
transferable unless allowed under applicable law. In addition, if this Contract
is used with either a Qualified or Non-Qualified Plan, it may not be sold,
discounted or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose.
9.05 INCONTESTABILITY
This Contract will not be contested by LNL.
9.06 MISSTATEMENT OF AGE AND/OR SEX
If the age and/or sex of the Annuitant(s) has been misstated, the benefits
available under this Contract will be those which the Purchase Payments would
have purchased using the correct age and/or sex. Any underpayment already made
by LNL will be made up immediately and any overpayments already made by LNL will
be charged against the annuity benefit payments falling due after the correction
is made.
9.07 NONPARTICIPATING
<PAGE>
The Contract is nonparticipating and will not share in the surplus earnings of
LNL.
9.08 VOTING RIGHTS
The Owner will have a right to vote only at the meetings of the Funds of the
Variable Account invested in by the Owner due to the Owner's interest in the
Variable Sub-accounts of the Variable Account. Ownership of this Contract will
not entitle any person to vote at any meeting of shareholders of LNL. Votes
attributable to the Contract will be cast in conformity with applicable law.
9.09 OWNERSHIP OF THE ASSETS
LNL will have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.
9.10 REPORTS
Prior to the Annuity Commencement Date, at least once each Contract Year, LNL
will mail a report to the Owner. The report will be mailed to the last address
known to LNL. The report will include a statement of the number of Accumulation
Units credited to the Variable Account under this Contract and the dollar value
of such units as well as a statement of the value of the Fixed Account of this
Contract. The information in the report will be as of a date not more than two
months prior to the date of mailing the report. LNL will also mail to the Owner
at least once in each Contract Year a report of the investments held in the
Variable Sub-accounts under this Contract.
9.11 PREMIUM TAX
State and local government premium tax, if applicable, will be deducted from
Purchase Payments or Contract Value when incurred by LNL or at another time of
LNL's choosing.
9.12 MAXIMUM ISSUE AGE
The Owner (or both Joint Owners, if applicable) and the Annuitant (or both Joint
Annuitants, if applicable) must be under the age of 86 when this Contract is
issued.
<PAGE>
ARTICLE 10
ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION
10.01 A VARIABLE PAYMENT OPTION WITH A 3.0% ASSUMED INTEREST RATE
- --------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
- --------------------------------------------------------------
SINGLE LIFE ANNUITIES
- --------------------------------------------------------------
No 120 240
Period Months Months Unit
Age Certain Certain Certain Refund
- --------------------------------------------------------------
60 $4.33 $4.29 $4.13 $4.10
61 4.43 4.38 4.20 4.17
62 4.53 4.47 4.27 4.24
63 4.64 4.57 4.34 4.32
64 4.75 4.68 4.40 4.40
65 4.87 4.79 4.47 4.48
66 5.00 4.90 4.55 4.57
67 5.15 5.03 4.61 4.67
68 5.30 5.16 4.68 4.77
69 5.46 5.30 4.75 4.87
70 5.64 5.44 4.81 4.98
71 5.83 5.60 4.88 5.10
72 6.03 5.76 4.93 5.22
73 6.25 5.93 4.99 5.35
74 6.50 6.10 5.04 5.48
75 6.76 6.29 5.08 5.62
- --------------------------------------------------------------
- -----------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
- -----------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds to Survivor
- -----------------------------------------------------------------------------
Certain Period Certain Period
- -----------------------------------------------------------------------------
None 120 240 Joint Age None 120 240
- -----------------------------------------------------------------------------
$3.93 $3.93 $3.90 60 $4.34 $4.29 $4.14
4.00 4.00 3.96 61 4.43 4.38 4.20
4.08 4.08 4.03 62 4.53 4.48 4.27
4.17 4.16 4.10 63 4.64 4.58 4.34
4.25 4.25 4.18 64 4.75 4.68 4.41
4.35 4.34 4.25 65 4.88 4.79 4.48
4.45 4.44 4.33 66 5.01 4.91 4.55
4.56 4.55 4.41 67 5.15 5.03 4.61
4.68 4.66 4.49 68 5.30 5.16 4.68
4.80 4.78 4.57 69 5.46 5.29 4.75
4.94 4.91 4.64 70 5.63 5.44 4.81
5.08 5.05 4.72 71 5.81 5.59 4.87
5.23 5.19 4.79 72 6.01 5.74 4.93
5.40 5.34 4.86 73 6.22 5.91 4.98
5.57 5.50 4.93 74 6.45 6.08 5.03
5.77 5.67 4.99 75 6.70 6.25 5.08
- -----------------------------------------------------------------------------
Age Adjustment Table
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
------------- ----------------- ------------- -----------------
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.
<PAGE>
10.02 A VARIABLE PAYMENT OPTION WITH A 4.0% ASSUMED INTEREST RATE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
- ---------------------------------------------------------------
SINGLE LIFE ANNUITIES
- ---------------------------------------------------------------
No 120 240
Period Months Months Unit
Age Certain Certain Certain Refund
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
60 $4.88 $4.83 $4.66 $4.67
61 4.97 4.92 4.72 4.74
62 5.07 5.01 4.79 4.82
63 5.18 5.11 4.85 4.90
64 5.30 5.21 4.92 4.99
65 5.42 5.32 4.99 5.08
66 5.55 5.43 5.05 5.17
67 5.69 5.55 5.12 5.27
68 5.84 5.68 5.18 5.38
69 6.00 5.82 5.25 5.49
70 6.18 5.96 5.31 5.61
71 6.37 6.11 5.37 5.73
72 6.57 6.27 5.42 5.86
73 6.80 6.44 5.47 6.00
74 7.04 6.61 5.52 6.14
75 7.30 6.79 5.56 6.29
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
- -----------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds to Survivor
- -----------------------------------------------------------------------------
Certain Period Certain Period
- -----------------------------------------------------------------------------
None 120 240 Joint Age None 120 240
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$4.47 $4.46 $4.43 60 $4.89 $4.84 $4.67
4.54 4.53 4.49 61 4.98 4.92 4.73
4.61 4.61 4.56 62 5.08 5.01 4.79
4.69 4.69 4.63 63 5.19 5.11 4.86
4.78 4.78 4.70 64 5.30 5.21 4.92
4.88 4.87 4.77 65 5.42 5.32 4.99
4.97 4.96 4.84 66 5.55 5.44 5.05
5.08 5.07 4.92 67 5.69 5.56 5.12
5.20 5.18 4.99 68 5.84 5.68 5.18
5.32 5.30 5.07 69 6.00 5.82 5.25
5.45 5.42 5.14 70 6.17 5.96 5.31
5.59 5.56 5.22 71 6.36 6.10 5.36
5.74 5.70 5.29 72 6.55 6.25 5.42
5.91 5.85 5.35 73 6.76 6.41 5.47
6.08 6.01 5.41 74 6.99 6.58 5.52
6.27 6.17 5.47 75 7.24 6.75 5.56
- -----------------------------------------------------------------------------
</TABLE>
Age Adjustment Table
<TABLE>
<CAPTION>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C>
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.
</TABLE>
<PAGE>
10.03 A VARIABLE PAYMENT OPTION WITH A 5.0% ASSUMED INTEREST RATE
<TABLE>
<CAPTION>
- --------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
- --------------------------------------------------------------
SINGLE LIFE ANNUITIES
- --------------------------------------------------------------
No 120 240
Period Months Months Unit
Age Certain Certain Certain Refund
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
60 $5.45 $5.39 $5.21 $5.26
61 5.55 5.48 5.27 5.33
62 5.64 5.57 5.33 5.41
63 5.75 5.66 5.39 5.49
64 5.86 5.76 5.46 5.58
65 5.98 5.87 5.52 5.67
66 6.11 5.98 5.58 5.77
67 6.25 6.10 5.64 5.87
68 6.40 6.22 5.70 5.98
69 6.56 6.35 5.76 6.10
70 6.73 6.49 5.82 6.22
71 6.92 6.64 5.88 6.35
72 7.13 6.80 5.93 6.48
73 7.35 6.96 5.98 6.62
74 7.60 7.13 6.02 6.77
75 7.86 7.30 6.06 6.93
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
- -------------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds to Survivor
- -------------------------------------------------------------------------------
Certain Period Certain Period
- -------------------------------------------------------------------------------
None 120 240 Joint Age None 120 240
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$5.03 $5.03 $4.99 60 $5.46 $5.40 $5.22
5.10 5.09 5.05 61 5.55 5.48 $5.28
5.17 5.17 5.11 62 5.65 5.57 $5.34
5.25 5.24 5.18 63 5.75 5.67 $5.40
5.33 5.33 5.24 64 5.86 5.77 $5.46
5.42 5.41 5.31 65 5.98 5.87 $5.52
5.52 5.51 5.38 66 6.11 5.98 $5.58
5.62 5.61 5.45 67 6.25 6.10 $5.64
5.73 5.72 5.52 68 6.40 6.22 $5.70
5.85 5.83 5.59 69 6.56 6.35 $5.76
5.98 5.95 5.66 70 6.73 6.49 $5.82
6.12 6.08 5.73 71 6.91 6.63 $5.87
6.27 6.22 5.80 72 7.11 6.78 $5.93
6.43 6.37 5.86 73 7.32 6.94 $5.97
6.61 6.52 5.92 74 7.55 7.10 $6.02
6.80 6.69 5.97 75 7.79 7.26 $6.06
- -------------------------------------------------------------------------------
</TABLE>
Age Adjustment Table
<TABLE>
<CAPTION>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C>
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.
</TABLE>
<PAGE>
10.04 A VARIABLE PAYMENT OPTION WITH A 6.0% ASSUMED INTEREST RATE
<TABLE>
<CAPTION>
- --------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
- --------------------------------------------------------------
SINGLE LIFE ANNUITIES
- --------------------------------------------------------------
No 120 240
Period Months Months Unit
Age Certain Certain Certain Refund
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
60 $6.05 $5.98 $5.78 $5.86
61 6.13 6.06 5.84 5.93
62 6.23 6.14 5.90 6.01
63 6.33 6.23 5.95 6.10
64 6.44 6.33 6.01 6.18
65 6.56 6.43 6.07 6.28
66 6.69 6.54 6.13 6.37
67 6.82 6.65 6.19 6.48
68 6.97 6.78 6.24 6.59
69 7.13 6.90 6.30 6.70
70 7.30 7.04 6.35 6.83
71 7.49 7.18 6.40 6.96
72 7.70 7.33 6.45 7.10
73 7.92 7.49 6.50 7.24
74 8.16 7.65 6.54 7.40
75 8.43 7.82 6.58 7.56
- ------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
- -----------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds to Survivor
- -----------------------------------------------------------------------------
Certain Period Certain Period
- -----------------------------------------------------------------------------
None 120 240 Joint Age None 120 240
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$5.61 $5.61 $5.57 60 $6.05 $5.98 $5.79
5.68 5.67 5.63 61 6.14 6.06 5.84
5.75 5.74 5.69 62 6.23 6.15 5.90
5.82 5.82 5.75 63 6.34 6.24 5.96
5.90 5.89 5.81 64 6.45 6.33 6.01
5.99 5.98 5.87 65 6.56 6.43 6.07
6.08 6.07 5.94 66 6.69 6.54 6.13
6.18 6.17 6.00 67 6.82 6.66 6.19
6.29 6.27 6.07 68 6.97 6.77 6.24
6.41 6.38 6.14 69 7.13 6.90 6.30
6.53 6.50 6.20 70 7.30 7.03 6.35
6.67 6.63 6.27 71 7.48 7.17 6.40
6.81 6.76 6.33 72 7.67 7.32 6.45
6.97 6.90 6.39 73 7.89 7.47 6.50
7.14 7.05 6.44 74 8.11 7.62 6.54
7.33 7.21 6.50 75 8.36 7.79 6.57
- -----------------------------------------------------------------------------
</TABLE>
Age Adjustment Table
<TABLE>
<CAPTION>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C>
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.
</TABLE>
<PAGE>
ARTICLE 11
ANNUITY PURCHASE RATES UNDER A FIXED PAYMENT OPTION
<TABLE>
<CAPTION>
- --------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
- --------------------------------------------------------------
SINGLE LIFE ANNUITIES
- --------------------------------------------------------------
No 120 240
Period Months Months Unit
Age Certain Certain Certain Refund
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
60 $4.42 $4.38 $4.22 $4.18
61 4.52 4.47 4.29 4.26
62 4.62 4.56 4.36 4.34
63 4.73 4.66 4.43 4.42
64 4.85 4.77 4.50 4.51
65 4.97 4.89 4.57 4.60
66 5.11 5.01 4.64 4.69
67 5.25 5.13 4.71 4.79
68 5.41 5.27 4.78 4.90
69 5.57 5.41 4.85 5.01
70 5.75 5.56 4.91 5.13
71 5.95 5.71 4.98 5.25
72 6.16 5.88 5.04 5.38
73 6.38 6.05 5.09 5.52
74 6.63 6.23 5.14 5.66
75 6.90 6.42 5.19 5.81
- --------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
- -----------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds to Survivor
- -----------------------------------------------------------------------------
Certain Period Certain Period
- -----------------------------------------------------------------------------
None 120 240 Joint Age None 120 240
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$4.01 $4.01 $3.98 60 $4.43 $4.38 $4.22
4.09 4.08 4.05 61 4.52 4.47 4.29
4.17 4.16 4.12 62 4.63 4.57 4.36
4.25 4.25 4.19 63 4.74 4.67 4.43
4.34 4.34 4.26 64 4.85 4.78 4.50
4.44 4.43 4.34 65 4.98 4.89 4.57
4.54 4.54 4.42 66 5.11 5.01 4.64
4.66 4.64 4.50 67 5.26 5.13 4.71
4.77 4.76 4.58 68 5.41 5.27 4.78
4.90 4.88 4.66 69 5.57 5.41 4.85
5.04 5.01 4.74 70 5.75 5.55 4.91
5.18 5.15 4.82 71 5.94 5.70 4.98
5.34 5.30 4.89 72 6.14 5.86 5.03
5.51 5.45 4.96 73 6.35 6.03 5.09
5.69 5.62 5.03 74 6.59 6.20 5.14
5.89 5.79 5.09 75 6.84 6.38 5.18
- -----------------------------------------------------------------------------
</TABLE>
Age Adjustment Table
<TABLE>
<CAPTION>
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C>
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.
</TABLE>
<PAGE>
ANNUITY
CONTRACT
Flexible Premium Deferred
Variable Annuity or Variable and Fixed Annuity
With Benefit Payment Options
Nonparticipating
If you have any questions concerning
this Contract, please
contact your Lincoln National Life
representative or the Home Office of LNL.
THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY
1300 South Clinton Street
P.O. Box 2348
Fort Wayne, Indiana 46802
800-942-5500
<PAGE>
<TABLE>
===============================
American The Lincoln National Life
Legacy American Legacy III Plus Insurance Company
III LOGO Annuity Application Fort Wayne, Indiana
===============================
===================================================================================================================================
Instructions:Please type or print. ANY ALTERATIONS TO THIS APPLICATION MUST BE INITIALED BY THE CONTRACT OWNER.
===================================================================================================================================
<S> <C>
1a Rights of Accumulation (If additional space is needed, use Section 12.)
[_] I own an American Funds mutual fund or American Legacy variable annuity, which may entitle me to a reduced sales charge
under the terms of the prospectus. My account numbers are: ____________________________ ___________________________
[_] The registration of some of my shares differs. Their account numbers are (may include spouse and/or children under 21):
Account no. Name SSN
---------------------------------------------- ----------------------------------------------- ------------------------
Account no. Name SSN
---------------------------------------------- ----------------------------------------------- -------------------------
====================================================================================================================================
1b Contract Owner Note: Maximum age of Contract Owner is 80.
_________________________________________________________ Social Security number/TIN [_][_][_]-[_][_]-[_][_][_][_]
Full legal name or trust name*
Date of birth [_][_] [_][_] [_][_] [_] Male [_] Female
_________________________________________________________ Month Day Year
Street address
_________________________________________________________ Home telephone number [_][_][_] [_][_][_]-[_][_][_][_]
City State ZIP
Date of trust* [_][_] [_][_] [_][_] Is trust revocable?*
_________________________________________________________ Month Day Year [_] Yes [_] No
Trustee name*
*This information is required for trusts.
====================================================================================================================================
1c Joint Contract Owner Note: Maximum age of Joint Contract Owner is 80.
Social Security number [_][_][_]-[_][_]-[_][_][_][_]
_________________________________________________________ [_] Male [_] Female
Full legal name Date of birth [_][_] [_][_] [_][_] [_] Spouse [_] Non-Spouse
===================================================================================================================================
2a Annuitant Note: Maximum age of Annuitant is 80. (If no Annuitant is specified, the Contract Owner, or Joint Owner
if younger, will be the Annuitant.)
_________________________________________________________ Social Security number [_][_][_]-[_][_]-[_][_][_][_]
Full legal name
Date of birth [_][_] [_][_] [_][_] [_] Male [_] Female
Month Day Year
_________________________________________________________ Home telephone number [_][_][_] [_][_][_]-[_][_][_][_]
Street address
_________________________________________________________
City State ZIP
- ------------------------------------------------------------------------------------------------------------------------------------
2b Contingent Annuitant Note: Maximum age of Contingent Annuitant is 80.
_________________________________________________________ Social Security number [_][_][_]-[_][_]-[_][_][_][_]
Full legal name
===================================================================================================================================
3 Beneficiary(ies) of Contract Owner (List additional beneficiaries on separate sheet. If listing children, use full legal
names.)
_________________________________________________________ ______________________________ _______________ ________%
Full legal name or trust name* [_] Primary [_] Contingent Relationship to Contract Owner SSN/TIN
_________________________________________________________ ______________________________ _______________ ________%
Full legal name or trust name* [_] Primary [_] Contingent Relationship to Contract Owner SSN/TIN
_________________________________________________________ ______________________________ _______________ ________%
Full legal name or trust name* [_] Primary [_] Contingent Relationship to Contract Owner SSN/TIN
_________________________________________________________ Date of trust* [_][_] [_][_] [_][_] Is trust revocable?*
Executor/Trustee name* Month Day Year [_] Yes [_] No
*This information is required for trusts.
To specify an annuity payment option for your beneficiary, please complete the Beneficiary Payment Options form (29953).
===================================================================================================================================
4 Type of American Legacy Contract
Nonqualified: [_] Initial Contribution OR [_] 1035 Exchange
Tax-Qualified (must complete plan type): [_] Initial Contribution, Tax Year _______ OR [_] Transfer OR [_] Rollover
Plan Type (check one): [_] Roth IRA [_] Traditional IRA [_] Non-ERISA 403(b)* (transfers only) *Indicate plan year-end:
[_][_] [_][_]
Month Day
</TABLE>
Page 1
<PAGE>
<TABLE>
===================================================================================================================================
<S> <C>
5a Allocation (This section must be completed.) 5b Dollar Cost Averaging (Complete only if electing DCA.)
Initial minimum: $25,000 $1,500 minimum required in the Holding Account
Future contributions will follow the allocation below. If Total amount to DCA: $ __________________
DCA option is selected, the entire amount of each future OR
contribution will follow the allocation in Section 5b. MONTHLY amount to DCA: $ __________________
---------------------------------------------------------------
If no allocations are specified in Section 5a or 5b, the OVER THE FOLLOWING PERIOD: __________________
entire amount will be allocated to the Cash Management MONTHS (6-60)
Fund pending instructions from the Contract Owner.
---------------------------------------------------------- -----------------------------------------------------------
Please allocate my contribution of: FROM THE FOLLOWING HOLDING ACCOUNT (check one):
$___________________ OR $___________________
Initial contribution Approximate amount [_] DCA FIXED Account
from previous carrier [_] Cash Management Fund*
[_] U.S. Govt./AAA-Rated Securities Fund*
---------------------------------------------------------- -----------------------------------------------------------
INTO THE FUND(S) BELOW INTO THE FUND(S) BELOW.
---------------------------------------------------------- -----------------------------------------------------------
Use whole percentages Use whole percentages * The holding account and
the DCA fund elected
% Global Growth Fund % Global Growth Fund cannot be the same.
------------------- --------------
% Global Small Capitalizatio Fund % Global Small Capitalization Fund
------------------- --------------
% Growth Fund % Growth Fund
------------------- --------------
% International Fund % International Fund
------------------- --------------
% New World Fund % New World Fund
------------------- --------------
% Growth-Income Fund % Growth-Income Fund
------------------- --------------
% Asset Allocation Fund % Asset Allocation Fund
------------------- --------------
% High-Yield Bond Fund % High-Yield Bond Fund
------------------- --------------
% Bond Fund % Bond Fund
------------------- --------------
% U.S. Govt./AAA-Rated Securities Fund % U.S. Govt./AAA-Rated Securities Fund*
------------------- --------------
% Cash Management Fund % Cash Management Fund*
------------------- --------------
% Fixed Account % Fixed Account
------------------- --------------
% DCA Fixed Account (must complete 5b) % Total (must = 100%)
------------------- ==============
% Total (must = 100%)
===================
------------------------------------------------------- -----------------------------------------------------------
Future contributions will not automatically start a new DCA
program. Instructions must accompany each DCA contribution.
- -----------------------------------------------------------------------------------------------------------------------------------
5c Cross-Reinvestment or Portfolio Rebalancing
To elect either of these options, please complete the Cross-Reinvestment form (28051) or the Portfolio Rebalancing form
(28887).
===================================================================================================================================
6 Automatic Withdrawals
Note: Withdrawals exceeding 10% of the greater of total contract value or premium payments per year may be subject to
contingent deferred sales charges.
- ----------------------------------------------------------------- --------------------------------------------------------------
[_] Please provide me with automatic withdrawals based on [_] Please provide me with automatic withdrawals
_______% (may be between 1-10%) of the greater of total of $ _________________________
contract value or premium payments, payable as follows: OR
[_] Monthly [_] Quarterly [_] Semiannually [_] Annually [_] Monthly [_] Quarterly [_] Semiannually [_] Annually
Begin withdrawals in [_][_] [_][_] Begin withdrawals in [_][_] [_][_]
Month Year Month Year
- ----------------------------------------------------------------- --------------------------------------------------------------
ELECT ONE: [_] Do withhold taxes [_] Do not withhold taxes
ELECT ONE: [_] Send check to address of record OR [_] Send check to the following alternate address:
Note: If no tax withholding selection is made, taxes will be withheld.
For direct deposit into your bank account, _____________________________________________________________
an electronic fund transfer form must be completed
and submitted with a voided check. _____________________________________________________________
_____________________________________________________________
</TABLE>
Page 2
<PAGE>
===============================================================================
7 Automatic Bank Draft
__________________________________________________________________________
Print account holder name(s) EXACTLY as shown on bank records
_______________________________________________________ ATTACH VOIDED CHECK
Bank name ABA number
__________________________________________________________________________
Bank street address City State ZIP
<TABLE>
<S> <C>
Automatic bank draft start date: [_][_] [_][_] [_][_] _____________________________________ $_______________________
Month Day (1-28) Year Checking account number Monthly amount
</TABLE>
I/We hereby request and authorize you to pay and charge to my/our account
checks or electronic fund transfer debits processed by and payable to the
order of Lincoln Life, P.O. Box 2348, Fort Wayne, IN 46801-2348, provided
there are sufficient collected funds in said account to pay the same upon
presentation. It will not be necessary for any officer or employee of
Lincoln Life to sign such checks. I/We agree that your rights in respect to
each such check shall be the same as if it were a check drawn on you and
signed personally by me/us. This authority is to remain in effect until
revoked by me/us, and until you actually receive such notice I/we agree
that you shall be fully protected in honoring any such check or electronic
fund transfer debit. I/We further agree that if any such check or
electronic fund transfer debit be dishonored, whether with or without cause
and whether intentionally or inadvertently, you shall be under no liability
whatsoever even though such dishonor results in the forfeiture of insurance
or investment loss to me/us.
================================================================================
8 Telephone/Internet Authorization (Check box if this option is desired.)
[_] I/We hereby authorize and direct Lincoln Life to accept instructions
via telephone or internet from any person who can furnish proper
identification to exchange units from subaccount to subaccount, change the
allocation of future investments, and/or clarify any unclear or missing
administrative information contained on this application at the time of
issue. I/We agree to hold harmless and indemnify Lincoln Life, American
Funds Distributors, Inc. and their affiliates and any mutual fund managed
by such affiliates and their directors, trustees, officers, employees and
agents for any losses arising from such instructions.
================================================================================
9 Replacement Will the proposed contract replace any existing annuity or life
insurance contract?
ELECT ONE: [_] No [_] Yes If yes, complete the 1035 Exchange or Qualified
Retirement Account Transfer form.
(Attach a state replacement form if required by the state in which the
application is signed.)
__________________________________________________________________________
Company name
__________________________________________________________________________
Plan name Year issued
- --------------------------------------------------------------------------------
Fraud Warning Residents of all states except Virginia and Washington,
please note:
Any person who knowingly, and with intent to defraud any insurance company
or other person, files or submits an application or statement of claim
containing any materially false or deceptive information, or conceals, for
the purpose of misleading, information concerning any fact material
thereto, commits a fraudulent insurance act, which is a crime and subjects
such person to criminal and civil penalties.
================================================================================
10 Signatures
All statements made in this application are true to the best of my/our
knowledge and belief, and I/we agree to all terms and conditions as shown.
I/We acknowledge receipt of current prospectuses for American Legacy III
Plus and American Funds Insurance Series and verify my/our understanding
that all payments and values provided by the contract, when based on
investment experience of the funds in the Series, are variable and not
guaranteed as to dollar amount. Under penalty of perjury, the Contract
Owner(s) certifies that the Social Security (or taxpayer identification)
number(s) is correct as it appears in this application.
_______________________________________________
Signed at (city) State
Date [_][_] [_][_] [_][_]
Month Day Year
___________________________ ____________________
Signature of Contract Owner Joint Contract Owner
(if applicable)
_________________________________________________ Date [_][_] [_][_] [_][_]
Signed at (city) State Month Day Year
---------------------------------------------------------------------------
Signature of Annuitant (Annuitant must sign if Contract Owner is a trust or
custodian.)
================================================================================
FINANCIAL ADVISER MUST COMPLETE REVERSE SIDE (PAGE 4)
================================================================================
Page 3
<PAGE>
===============================================================================
THE FOLLOWING SECTIONS MUST BE COMPLETED BY THE SECURITIES DEALER OR
FINANCIAL ADVISER. Please type or print.
================================================================================
11 Insurance in Force Will the proposed contract replace any existing annuity
or life insurance contract?
ELECT ONE: [_] No [_] Yes If yes, please list the insurance in force on
the life of the proposed Contract Owner(s) and Annuitant(s):
(Attach a state replacement form if required by the state in which the
application was signed.)
$
___________________________________________________________________________
Company name Year issued Amount
================================================================================
12 Additional Remarks
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
================================================================================
13 American Funds/American Legacy Total Account Value (For Rights of
Accumulation purposes.)
My client owns a total of $ ____________________ in the American Funds
mutual funds and/or American Legacy variable annuity products. NOTE: Please
include the deposit amount for the purchase of this contract.
==========================================================================
14 Dealer Information Note: Licensing appointment with Lincoln Life is
required for this application to be processed. If
more than one representative, please indicate
names and percentages in Section 12.
________________________________________ [_][_][_] [_][_][_]-[_][_][_][_]
Registered representative's name (print Registered representative's
as it appears on NASD licensing) telephone number
________________________________________ [_][_][_]-[_][_]-[_][_][_][_]
Client account number at dealer (if Registered representative's SSN
applicable)
__________________________________________________________________________
Dealer's name
___________________________________________________________________________
Branch address City State ZIP
[_] CHECK IF BROKER CHANGE OF ADDRESS
================================================================================
15 Representative's Signature
The representative hereby certifies that he/she witnessed the signature(s)
in Section 10 and that all information contained in this application is
true to the best of his/her knowledge and belief.
___________________________________________________________________________
Signature
================================================================================
Send completed application -- with a check made payable to
Lincoln Life -- to your investment dealer's home office or to:
Lincoln Life By Express Mail: Lincoln Life
P.O. Box 2348 Attention: American Legacy Operations
Fort Wayne, IN 46801-2348 1300 South Clinton Street
Fort Wayne, IN 46802
If you have any questions regarding this application, call Lincoln Life
at 800 942-5500.
Page 4
<PAGE>
PC Docs 12752 3/8/99
ORGANIZATIONAL CHART OF THE
LINCOLN NATIONAL INSURANCE HOLDING COMPANY SYSTEM
All the members of the holding company system are corporations, with
the exception of, Delaware Distributors, L.P and Founders CBO, L.P.
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|--| Lincoln National Management Corporation |
| | 100% - Pennsylvania - Management Company |
|
|--| City Financial Partners Ltd. |
| | 100% - England/Wales - Distribution of life|
| | assurance & pension products |
|
|--| LNC Administrative Services Corporation |
| | 100% - Indiana - Third Party Administrator |
|
|--|Lincoln National Financial Institutions Group, Inc.|
| |(fka The Richard Leahy Corporation) |
| | 100% - Indiana - Insurance Agency |
| |
| |--| The Financial Alternative, Inc. |
| | | 100% - Utah- Insurance Agency |
| |
| |--| Financial Alternative Resources, Inc. |
| | | 100% - Kansas - Insurance Agency |
| |
| |--| Financial Choices, Inc. |
| | | 100% - Pennsylvania - Insurance Agency |
| |
| | | Financial Investment Services, Inc. |
| |--| (fka Financial Services Department, Inc.) |
| | | 100% - Indiana - Insurance Agency |
| |
| | | Financial Investments, Inc. |
| |--| (fka Insurance Alternatives, Inc.) |
| | | 100% - Indiana - Insurance Agency |
| |
| |--| The Financial Resources Department, Inc. |
| | | 100% - Michigan - Insurance Agency |
| |
| |--| Investment Alternatives, Inc. |
| | | 100% - Pennsylvania - Insurance Agency |
| |
| |--| The Investment Center, Inc. |
| | | 100% - Tennessee - Insurance Agency |
| |
| |--| The Investment Group, Inc. |
| | | 100% - New Jersey - Insurance Agency |
<PAGE>
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|--|Lincoln National Financial Institutions Group, Inc.|
| |(fka The Richard Leahy Corporation) |
| | 100% - Indiana - Insurance Agency |
| |
| |--| Personal Financial Resources, Inc. |
| | | 100% - Arizona - Insurance Agency |
| |
| |--| Personal Investment Services, Inc. |
| | 100% - Pennsylvania - Insurance Agency |
|
|--| LincAm Properties, Inc. |
| | 50% - Delaware - Real Estate Investment |
|
| | Lincoln Life and Annuity Distributors, Inc. |
|--| (fka Lincoln Financial Group, Inc.) |
| | 100% - Indiana - Insurance Agency |
| |
| |--| Lincoln Financial Advisors Corporation |
| | | (fka LNC Equity Sales Corporation) |
| | | 100% - Indiana - Broker-Dealer |
| |
| | |Corporate agencies: Lincoln Life and Annuity Distributors, |
| | | Inc. ("LLAD")has subsidiaries of which LLAD owns from |
| | | 80%-100% of the common stock (see Attachment #1). These |
| | | subsidiaries serve as the corporate agency offices for the |
| | | marketing and servicing of products of The Lincoln National |
| | | Life Insurance Company. Each subsidiary's assets are less |
| | | than 1% of the total assets of the ultimate controlling |
| | | person. |
| |
| |--| Professional Financial Planning, Inc. |
| | 100% - Indiana - Financial Planning Services |
|
|--| Lincoln Life Improved Housing, Inc. |
| | 100% - Indiana |
|
|
|--| Lincoln National (China) Inc. |
| | 100% - Indiana - China Representative Office |
|
|
|--| Lincoln National Intermediaries, Inc. |
| | 100% - Indiana - Reinsurance Intermediary |
|
|__| Lincoln National Investments, Inc. |
| | (fka Lincoln National Investment Companies, Inc.)|
| | 100% - Indiana - Holding Company |
| |
| |--| Lincoln National Investment Companies, Inc.|
| | |(fka Lincoln National Investments, Inc.) |
| | | 100% - Indiana - Holding Company |
<PAGE>
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|__| Lincoln National Investments, Inc. |
| | (fka Lincoln National Investment Companies, Inc.)|
| | 100% - Indiana - Holding Company |
| |
| |--| Lincoln National Investment Companies, Inc.|
| | |(fka Lincoln National Investments, Inc.) |
| | | 100% - Indiana - Holding Company |
| | |
| | |--|Delaware Management Holdings, Inc.|
| | | | 100% - Delaware - Holding Company|
| | | |
| | | |--| DMH Corp. |
| | | | | 100% - Delaware - Holding Company |
| | | |
| | | |--| Delaware International Advisers Ltd.|
| | | | | 81.1% - England - Investment Advisor |
| | |
| | |--| Delaware Management Trust Company |
| | | | 100% - Pennsylvania - Trust Service|
| | | |
| | | |__| Delaware International Holdings, Ltd. |
| | | | | 100% - Bermuda - Mktg & Admin Services|
| | | | |
| | | | |--| Delaware International Advisers, Ltd.|
| | | | | 18.9% - England - Investment Advisor |
| | | |
| | | |__| Delvoy, Inc. |
| | | | | 100% - Minnesota - Holding Company |
| | | | |
| | | | |--| Delaware Management Company, Inc. |
| | | | | | 100% - Delaware - Holding Company |
| | | | | | ________________________________________
| | | | | |--|Delaware Management Business Trust |
| | | | | | |100% - Delaware - Investment Advisor |
| | | | | | |consists of: |
| | | | | | |Delaware Management Company Series |
| | | | | | | and Delaware Investment Advisers
Series |
| | | | | |
| | | | | |--| Delaware Distributors, L.P. |
| | | | | | |98%-Delaware-MutualFund Distrib. |
| | | | | | |& Broker/Dealer |
| | | | | | |1%Equity-Delaware Capital |
| | | | |Management, Inc. |
| | | | |1% Equity-Delaware Distributors, |
| | | | |Inc.(G.P) |
| | | | | |
| | | | | |--| Founders Holdings, Inc. |
| | | | | | | 100% - Delaware - General
| | | | | | | Partner |
| | | | | |
| | | | | |--| Founders CBO, L.P. |
| | | | | | |1%-Delaware-Investment |
| | | | | | | Partnership |
| | | | | | |99% held by outside |
| | | | | | |investors |
| | | | | |
| | | | | |--|Founders CBO Corporation|
| | | | |100%-Delaware-Co-Issuer |
| | | | |with Founders CBO |
<PAGE>
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|__| Lincoln National Investments, Inc. |
| | (fka Lincoln National Investment Companies, Inc.)|
| | 100% - Indiana - Holding Company |
| |
| |--| Lincoln National Investment Companies, Inc.|
| | |(fka Lincoln National Investments, Inc.) |
| | | 100% - Indiana - Holding Company |
| | |
| | |--|Delaware Management Holdings, Inc.|
| | | | 100% - Delaware - Holding Company|
| | | |
| | | |--| DMH Corp. |
| | | | | 100% - Delaware - Holding Company |
| | | |
| | | |__| Delvoy, Inc. |
| | | | | 100% - Minnesota - Holding Company |
| | | | |
| | | | |--| Delaware Distributors, Inc.
| | | | | | | 100% - Delaware - General Partner |
| | | | | | |
| | | | | |--| Delaware Distributors, L.P. |
| | | | | | |98%-Delaware-Mutual Fund Distributor & |
| | | | | | |Broker/Dealer |
| | | | | |1% Equity-Delaware Capital |
| | | | | |Management, Inc. |
| | | | | |1% Equity-Delaware Distributors, Inc.|
| | | | | |(G.P) |
| | | | | |
| | | | |--| Delaware Capital Management, Inc. |
| | | | | |(fka Delaware Investment Counselors, Inc.)|
| | | | | | 100% - Delaware - Investment Advisor |
| | | | | | |
| | | | | |--| Delaware Distributors, L.P. |
| | | | | | | 98%-Delaware-Mutual Fund Distributor & |
Broker/Dealer |
| | | | | | |1% Equity-Delaware Capital
| | | | | | | Management, Inc. |
| | | | | | | 1% Equity-Delaware Distributors, |
| | | | | | | Inc. |
| | | | |--| Delaware Service Company, Inc. |
| | | | |100%-Delaware-Shareholder Services & |
| | | | |Transfer Agent |
| | | | | |
| | | | |__| Retirement Financial Services, Inc. |
| | | | | |(fka Delaware Investment & Retirement
| | | | | | Services,Inc.) |
| | | | | | 100% - Delaware - Registered Transfer
| | | | | | Agent & I/A |
| | |
| | |--| Lynch & Mayer, Inc. |
| | | | 100% - Indiana - Investment Adviser |
| | | |
| | | |--| Lynch & Mayer Securities Corp. |
| | | | 100% - Delaware - Securities Broker |
| | |
| | | | Vantage Global Advisors, Inc. |
| | |--| (fka Modern Portfolio Theory Associates, Inc.)|
| | | | 100% - Delaware - Investment Adviser |
<PAGE>
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|__| Lincoln National Investments, Inc. |
| | (fka Lincoln National Investment Companies, Inc.)|
| | 100% - Indiana - Holding Company |
| |
| | | Lincoln Investment Management, Inc. |
| |--| (fka Lincoln National Investment Management Company) |
| | | 100% - Illinois - Mutual Fund Manager and |
| | | Registered Investment Adviser |
|
|--| The Lincoln National Life Insurance Company |
| | 100% - Indiana |
| |
| |--|AnnuityNet, Inc. |
| | | 100% - Indiana - Distribution of annuity products|
| | |
| | |--| AnnuityNet Insurance Agency, Inc. |
| | | | 100% - Indiana - Insurance Agency |
| |
| |--|Lincoln National Insurance Associates, Inc.|
| | | (fka Cigna Associates, Inc.) |
| | | 100% - Connecticut - Insurance Agency |
| | |
| | |--|Lincoln National Insurance Associates of Alabama, Inc. |
| | | | 100% - Alabama - Insurance Agency |
| | |
| | | | Lincoln National Insurance Associates of Massachusetts,|
| | | | Inc. (fka Cigna Associates of Massachusetts, Inc.) |
| | |--| 100% - Massachusetts - Insurance Agency |
| |
| |--|Sagemark Consulting, Inc. |
| | | (fka Cigna Financial Advisors, Inc.) |
| | | 100% - Connecticut - Broker Dealer |
| |
| |--| First Penn-Pacific Life Insurance Company |
| | | 100% - Indiana |
| |
| |--| Lincoln Life & Annuity Company of New York |
| | | 100% - New York |
| |
| |--| Lincoln National Aggressive Growth Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Bond Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Capital Appreciation Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Equity-Income Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| | | Lincoln National Global Asset Allocation Fund, Inc. |
| |--| (fka Lincoln National Putnam Master Fund, Inc.) |
| | | 100% - Maryland - Mutual Fund |
<PAGE>
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|--| The Lincoln National Life Insurance Company |
| | 100% - Indiana |
| |
| | | Lincoln National Growth and Income Fund, Inc. |
| |--| (fka Lincoln National Growth Fund, Inc.) |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Health & Casualty Insurance Company |
| | | 100% - Indiana |
| |
| |--| Lincoln Re, S.A. |
| | | 1% Argentina - General Business Corp |
| | | (Remaining 99% owned by Lincoln National |
| | | Reassurance Company) |
| |
| |--| Lincoln National International Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Managed Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Money Market Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Social Awareness Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Special Opportunities Fund, Inc. |
| | | 100% - Maryland - Mutual Fund |
| |
| |--| Lincoln National Reassurance Company |
| | 100% - Indiana - Life Insurance |
| |
| |--| Lincoln Re, S.A. |
| | | 99% Argentina - General Business Corp |
| | | (Remaining 1% owned by Lincoln National Health|
| | | & Casualty Insurance Company) |
| |
| |--| Special Pooled Risk Administrators, Inc. |
| | 100% - New Jersey - Catastrophe Reinsurance |
| | Pool Administrator |
|
|--| Lincoln National Management Services, Inc. |
| | 100% - Indiana - Underwriting and Management Services |
|
|--| Lincoln National Realty Corporation |
| | 100% - Indiana - Real Estate |
|
|--| Lincoln National Reinsurance Company (Barbados) Limited |
| | 100% - Barbados |
<PAGE>
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|--| Lincoln National Reinsurance Company Limited |
| | (fka Heritage Reinsurance, Ltd.) |
| | 100% ** - Bermuda |
| |
| | | Lincoln National Underwriting Services, Ltd. |
| |--| 90% - England/Wales - Life/Accident/Health Underwriter |
| | | (Remaining 10% owned by Old Fort Ins. Co. Ltd.) |
| |
| | | Servicios de Evaluacion de Riesgos, S. de R.L. de C.V. |
| |--| 51% - Mexico - Reinsurance Underwriter |
| | (Remaining 49% owned by Lincoln National Corp.) |
|
|--| Lincoln National Risk Management, Inc. |
| | 100% - Indiana - Risk Management Services |
|
|--| Lincoln National Structured Settlement, Inc. |
| | 100% - New Jersey |
|
|--| Lincoln National (UK) PLC |
| | 100% - England/Wales - Holding Company |
| |
| |--| Allied Westminster & Company Limited |
| | | (fka One Olympic Way Financial Services Limited) |
| | | 100% - England/Wales - Sales Services |
| |
| |--| Culverin Property Services Limited |
| | | 100% - England/Wales - Property Development Services |
| |
| |--| HUTM Limited |
| | | 100% - England/Wales - Unit Trust Management (Inactive) |
| |
| |--| ILI Supplies Limited |
| | | 100% - England/Wales - Computer Leasing |
| |
| |--| Lincoln Financial Advisers Limited |
| | | (fka: Laurentian Financial Advisers Ltd.) |
| | | 100% - England/Wales - Sales Company |
| |
| |--| Lincoln Financial Group PLC |
| | | (fka: Laurentian Financial Group PLC) |
| | | 100% - England/Wales - Holding Company |
| | |
| | |--| Lincoln ISA Management Limited |
| | | | (fka Lincoln Unit Trust Management Limited; |
| | | | Laurentian Unit Trust Management Limited) |
| | | | 100% - England/Wales - Unit Trust Management |
<PAGE>
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|--| Lincoln National (UK) PLC |
| | 100% - England/Wales - Holding Company |
| |
| |--| Lincoln Financial Group PLC |
| | | (fka: Laurentian Financial Group PLC) |
| | | 100% - England/Wales - Holding Company |
| | |
| | |--| Lincoln Milldon Limited |
| | | |(fka: Laurentian Milldon Limited) |
| | | | 100% - England/Wales - Sales Company |
| | |
| | |--| Laurtrust Limited |
| | | 100% - England/Wales - Pension Scheme Trustee (Inactive) |
| | |
| | |--| Lincoln Management Services Limited |
| | | |(fka: Laurentian Management Services Limited) |
| | | | 100% - England/Wales - Management Services |
| | | |
| | | |--|Laurit Limited |
| | | | |100% - England/Wales - Data Processing Systems |
| |
| |--| Liberty Life Pension Trustee Company Limited |
| | | 100% - England/Wales - Corporate Pension Fund (Dormat) |
| |
| |--| LN Management Limited |
| | | 100% - England/Wales - Administrative Services (Dormat) |
| | |
| | |--| UK Mortgage Securities Limited |
| | | | 100% - England/Wales - Inactive |
| |
| |--| Liberty Press Limited |
| | | 100% - England/Wales - Printing Services |
<PAGE>
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|--| Lincoln National (UK) PLC |
| | 100% - England/Wales - Holding Company |
| |
| |--| Lincoln General Insurance Co. Ltd. |
| | | 100% - Accident & Health Insurance |
| |
| |--|Lincoln Assurance Limited |
| | | 100% ** - England/Wales - Life Assurance |
| | | |
| | | |--|Barnwood Property Group Limited |
| | | | |100% - England/Wales - Property Management Co|
| | | | |
| | | | |--| Barnwood Developments Limited |
| | | | | | 100% England/Wales - Property Development|
| | | | |
| | | | |--| Barnwood Properties Limited |
| | | | | | 100% - England/Wales - Property Investment |
| | | |
| | | |--|IMPCO Properties G.B. Ltd. |
| | | | |100% - England/Wales - Property Investment
| | | | |(Inactive) |
| | | |
| | |--| Lincoln Insurance Services Limited |
| | | | 100% - Holding Company |
| | | |
| | | |--| British National Life Sales Ltd.|
| | | | | 100% - Inactive |
| | | |
| | | |--| BNL Trustees Limited |
| | | | | 100% - England/Wales - Corporate Pension |
| | | | | Fund (Inactive) |
| | | |
| | | |--| Chapel Ash Financial Services Ltd. |
| | | | | 100% - Direct Insurance Sales |
<PAGE>
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
|
|--| Lincoln National (UK) PLC |
| | 100% - England/Wales - Holding Company |
| | |
| |--| Lincoln Unit Trust Managers Limited |
| | | 100% - England/Wales - Investment Management |
| | |
| |--| LIV Limited (fka Lincoln Investment Management Ltd.)|
| | | 100% - England/Wales - Investment Management Services |
| | |
| | |--| CL CR Management Ltd. |
| | | 50% - England/Wales - Administrative Services |
| |
| |--| Lincoln Independent Limited |
| | |(fka: Laurentian Independent Financial Planning Ltd.) |
| | | 100% - England/Wales - Independent Financial Adviser |
| | |
| |--| Lincoln Investment Management Limited |
| | |(fka: Laurentian Fund Management Ltd.) |
| | | 100% - England/Wales - Investment Management |
| |
| |--| LN Securities Limited |
| | | 100% - England/Wales - Nominee Company |
| |
| |--| Niloda Limited |
| | | 100% - England/Wales - Investment Company |
| |
| |--| Lincoln National Training Services Limited |
| | | 100% - England/Wales - Training Company |
| |
| |--| Lincoln Pension Trustees Limited |
| | | 100% - England/Wales - Corporate Pension Fund |
| |
| |--| Lincoln Independent (Jersey) Limited |
| | | (fka Lincoln National (Jersey) Limited) |
| | | 100% - England/Wales - Dormat |
| |
| |--| Lincoln National(Guernsey) Limited |
| | | 100% - England/Wales - Dormat |
| |
| |--| Lincoln SBP Trustee Limited |
| | | 100% - England/Wales |
<PAGE>
| |
| Lincoln National Corporation |
| Indiana - Holding Company |
|
| | Linsco Reinsurance Company |
|--| (fka Lincoln National Reinsurance Company) |
| | 100% - Indiana - Property/Casualty |
|
|
|--| Old Fort Insurance Company, Ltd. |
| | 100% ** - Bermuda |
| |
| | | Lincoln National Underwriting Services, Ltd. |
| |--| 10% - England/Wales - Life/Accident/Health Underwriter |
| | (Remaining 90% owned by Lincoln Natl. Reinsurance Co.) |
| |
| | | Solutions Holdings, Inc. |
| |--| 100% - Delaware - General Business Corporation |
| | |
| | |--|Solutions Reinsurance Limited |
| | | | 100% - Bermuda - Class III Insurance Co|
|
| | Seguros Serfin Lincoln, S.A. |
|--| 49% - Mexico - Insurance |
|
| | Servicios de Evaluacion de Riesgos, S. de R.L. de C.V. |
|--| 49% - Mexico - Reinsurance Underwriter |
| | (Remaining 51% owned by Lincoln Natl. Reinsurance Co.) |
|
|--| Underwriters & Management Services, Inc. |
| 100% - Indiana - Underwriting Services |
Footnotes:
* The funds contributed by the Underwriters were, and continue to be subject
to trust agreements between American States Insurance Company, the grantor,
and each Underwriter, as trustee.
** Except for director-qualifying shares
# Lincoln National Corporation has subscribed for and paid for 100 shares of
Common Stock (with a par value of $1.00 per share) at a price of $10 per
share, as part of the organizing of the fund. As such stock is further
sold, the ownership of voting securities by Lincoln National Corporation
will decline and fluctuate.
<PAGE>
ATTACHMENT #1
LINCOLN LIFE AND ANNUITY DISTRIBUTORS, INC.
CORPORATE AGENCY SUBSIDIARIES
1) Lincoln Financial Group, Inc. (AL)
2) Lincoln Financial and Insurance Services Corporation (Walnut Creek, CA)
3) California Fringe Benefit and Insurance Marketing Corporation
DBA/California Fringe Benefit Company (Walnut Creek, CA)
4) Colorado-Lincoln Financial Group, Inc. (Denver, CO)
5) Lincoln National Financial Services, Inc. (Lake Worth, FL)
6) CMP Financial Services, Inc. (Chicago, IL)
7) Lincoln Financial Group of Northern Indiana, Inc. (Fort Wayne, IN)
8) Financial Planning Partners, Ltd. (Mission, KS)
9) The Lincoln National Financial Group of Louisiana, Inc. (Shreveport,
LA)
10) Benefits Marketing Group, Inc. (D.C. & Chevy Chase, MD)
11) Lincoln Financial Services and Insurance Brokerage of New England, Inc.
(fka: Lincoln National of New England Insurance Agency, Inc.)
(Worcester, MA)
12) Financial Consultants of Michigan, Inc. (Troy, MI)
13) Lincoln Financial Group of Missouri, Inc. (fka: John J. Moore &
Associates, Inc.) (St. Louis, MO)
14) Beardslee & Associates, Inc. (Clifton, NJ)
15) Lincoln Financial Group, Inc. (fka: Resources/Financial, Inc.
(Albuquerque, NM)
16) Lincoln Cascades, Inc. (Portland, OR)
17) Lincoln Financial Group, Inc. (Salt Lake City, (UT)
<PAGE>
Summary of Changes to Organizational Chart:
JANUARY 1, 1995-DECEMBER 31, 1995
SEPTEMBER 1995
a. Lincoln National (Jersey) Limited was incorporated on September 18, 1995.
Company is dormat and was formed for tax reasons per Barbara Benoit,
Assistant Corporate Secretary at Lincoln UK.
JANUARY 1, 1996-DECEMBER 1, 1996
MARCH 1996
a. Delaware Investment Counselors, Inc. changed its name to Delaware Capital
Management, Inc. effective March 29, 1996.
AUGUST 1996
a. Lincoln National (Gernsey) Limited was incorporated on August 9, 1996;
company is dormat and was formed for tax reasons.
SEPTEMBER 1996
a. Morgan Financial Group, Inc. changed its name to Lincoln National Sales
Corporation of Maryland effective September 23, 1996.
OCTOBER 1996
a. Addition of Lincoln National (India) Inc., incorporated as an Indiana
corporation on October 17, 1996.
NOVEMBER 1996
a. Lincoln National SBP Trustee Limited was bought "off the shelf" and was
incorporated on November 26, 1996; it was formed to act ast Trustee for
Lincoln Staff Benefits Plan.
DECEMBER 1996
a. Addition of Lincoln National Investments, Inc., incorporated as an Indiana
corporation on December 12, 1996.
JANUARY 1, 1997-DECEMBER 31, 1997
JANUARY 1997
a. Delaware Management Holdings, Inc., Lynch & Mayer, Inc. and Vantage Global
Advisors, Inc. were transferred via capital contribution to Lincoln
National Investments, Inc. effective January 2, 1997.
b. Lincoln National Investments, Inc. changed its name to Lincoln National
Investment Companies, Inc. effective January 24, 1997.
c. Lincoln National Investment Companies, Inc. changed its named to Lincoln
National Investments, Inc. effective January 24, 1997.
JANUARY 1997 CON'T
<PAGE>
d. The following Lincoln National (UK) subsidiaries changed their name
effective January 1, 1997: Lincoln Financial Group PLC (fka Laurentian
Financial Group PLC); Lincoln Milldon Limited (fka Laurentian Milldon
Limited); Lincoln Management Services Limited (fka Laurentian Management
Services Limited).
FEBRUARY 1997
a. Removal of Lincoln National Financial Group of Philadelphia, Inc. which was
dissolved effective February 25, 1997.
MARCH 1997
a. Removal of Lincoln Financial Services, Inc. which was dissolved effective
March 4, 1997.
APRIL 1997
a. Acquisition of Dougherty Financial Group, Inc. on April 30, 1997. Company
then changed its name to Delvoy, Inc. The acquisition included the mutual
fund group of companies as part of the Voyager acquisition. The following
companies all then were moved under the newly formed holding company,
Delvoy, Inc. effective April 30, 1997: Delaware Management Company, Inc.,
Delaware Distributors, Inc., Delaware Capital Management, Inc., Delaware
Service Company, Inc. and Delaware Investment & Retirement Services, Inc.
b. Acquisition of Voyager Fund Managers, Inc. and Voyager Fund Distributors,
Inc. on April 30, 1997; merger is scheduled for May 31, 1997 for Voyager
Fund Managers, Inc. into Delaware Management Company, Inc. and Voyager Fund
Distributors, Inc. is to merge into Delaware Distributors, L.P.
c. Removal of Aseguradora InverLincoln, S.A. Compania de Seguros y Reaseguros,
Grupo Financiero InverMexico. Stock was sold to Grupo Financiero
InverMexico effective April 18, 1997.
MAY 1997
a. Name change of The Richard Leahy Corporation to Lincoln National Financial
Institutions Group, Inc. effective May 6, 1997.
b. Voyager Fund Managers, Inc. merged into Delaware Management Company, Inc.
effective May 30, 1997 at 10:00 p.m. with Delaware Management Company, Inc.
surviving.
c. On May 31, 1997 at 2:00 a.m., Voyager Fund Distributors, Inc. merged into a
newly formed company Voyager Fund Distributors (Delaware), Inc.,
incorporated as a Delaware corporation on May 23, 1997. Voyager Fund
Distributors (Delaware), Inc. then merged into Delaware Distributors, L.P.
effective May 31, 1997 at 2:01 a.m. Delaware Distributors, L.P. survived.
JUNE 1997
a. Removal of Lincoln National Sales Corporation of Maryland -- company
dissolved June 13, 1997.
b. Addition of Lincoln Funds Corporation, incorporated as a Delaware
corporation on June 10, 1997 at 2:00 p.m.
c. Addition of Lincoln Re, S.A., incorporated as an Argentina company on June
30, 1997.
<PAGE>
JULY 1997
a. LNC Equity Sales Corporation changed its name to Lincoln Financial Advisors
Corporation effective July 1, 1997.
b. Addition of Solutions Holdings, Inc., incorporated as a Delaware
corporation on July 27, 1997.
SEPTEMBER 1997
a. Addition of Solutions Reinsurance Limited, incorporated as a Bermuda
corporation on September 29, 1997.
OCTOBER 1997
a. Removal of the following companies: American States Financial Corporation,
American States Insurance Company, American Economy Insurance Company,
American States Insurance Company of Texas, American States Life Insurance
Company, American States Lloyds Insurance Company, American States
Preferred Insurance Company, City Insurance Agency, Inc. and Insurance
Company of Illinois -- all were sold 10-1-97 to SAFECO Corporation.
b. Liberty Life Assurance Limited was sold to Liberty International Holdings
PLC effective 10-6-97.
c. Addition of Seguros Serfin Lincoln, S.A., acquired by LNC on 10-15-97.
DECEMBER 1997
a. Addition of City Financial Partners Ltd. as a result of its acquisition by
Lincoln National Corporation on December 22, 1997. This company will
distribute life assurance and pension products of Lincoln Assurance
Limited.
b. Removal of Lynch & Mayer Asia, Inc. which was dissolved December 24, 1997.
JANUARY 1998
a. Addition of Cigna Associates, Inc., Cigna Financial Advisors, Inc. and
Cigna Associates of Massachusetts, Inc., acquired by The Lincoln National
Life Insurance Company on January 1, 1998. Cigna Associates of
Massachusetts is 100% owned by Cigna Associates, Inc.
b. Removal of Lincoln National Mezzanine Corporation and Lincoln National
Mezzanine Fund, L.P. Lincoln National Mezzanine Corporation was dissolved
on January 12, 1998 and Lincoln National Mezzanine Fund, L.P. was cancelled
January 12, 1998.
c. Corporate organizational changes took place in the UK group of companies on
January 21, 1998: Lincoln Insurance Services Limited and its subsidiaries
were moved from Lincoln National (UK) PLC to Lincoln Assurance Limited;
Lincoln General Insurance Co. Ltd. was moved from Lincoln Insurance
Services Limited to Lincoln National (UK) PLC.
d. Addition of AnnuityNet, Inc., incorporated as an Indiana corporation on
January 16, 1998 and a wholly-owned subsidiary of The Lincoln National Life
Insurance Company.
JUNE 1998
<PAGE>
a. Name Change of CIGNA Financial Advisors, Inc. to Sagemark Consulting, Inc.
effective June 1, 1998.
b. Name Change of CIGNA Associates, Inc. to Lincoln National Insurance
Associates, Inc. effective June 1, 1998.
c. Addition of Lincoln National Insurance Associates of Alabama, Inc.,
incorporated as a wholly-owned subsidiary of Lincoln National Insurance
Associates, Inc. as an Alabama domiciled corporation.
d. Dissolution of LUTM Nominees Limited effective June 10, 1998.
e. Dissolution of Cannon Fund Managers Limited June 16, 1998.
f. Dissolution of P.N. Kemp Gee & Co. Ltd. June 2, 1998.
JULY 1998
a. Name change of CIGNA Associates of Massachusetts, Inc. to Lincoln National
Insurance Associates of Massachusetts, Inc. effective July 22, 1998.
SEPTEMBER 1998
a. Removal of Lincoln Financial Group of Michigan, Inc., voluntarily dissolved
September 15, 1998.
b. Name change of Lincoln Financial Group, Inc. to Lincoln Life and Annuity
Distributors, Inc. on September 29, 1998.
c. Removal of Lincoln European Reinsurance S.A. -- company dissolved September
30, 1998.
d. Removal of Lincoln Funds Corporation -- company voluntarily dissolved
September 30, 1998.
OCTOBER 1998
a. Addition of AnnuityNet Insurance Agency, Inc., incorporated as an Indiana
corporation October 2, 1998., a wholly-owned subsidiary of AnnuityNet, Inc.
b. Removal of Lincoln National (India) Inc., voluntarily dissolved October 26,
1998.
DECEMBER 1998
a. Removal of The Insurers' Fund, Inc., voluntarily dissolved December 10,
1998.
b. Addition of Lincoln National Management Corporation, a Pennsylvania
corporation and a wholly-owned subsidiary of Lincoln National Corporation,
incorporated on December 17, 1998.
JANUARY 1999
Lincoln Unit Trust Management changed its name on January 5, 1999 to Lincoln ISA
Management Limited.
FEBRUARY 1999
Removal of Lincoln Southwest Financial Group, Inc. -- company's term of
existence expired July 18, 1998.
