Exhibit 8(b)
FUND PARTICIPATION AGREEMENT
----------------------------
THIS AGREEMENT, effective this 24th day of July, 2000 among LINCOLN LIFE &
ANNUITY COMPANY OF NEW YORK ("LNY") a life insurance company organized under the
laws of the State of New York, on its own behalf and on behalf of LINCOLN LIFE &
ANNUITY VARIABLE ANNUITY ACCOUNT H OF LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
(the "Account"), a separate account established by LNY in accordance with the
laws of the State of New York, and AMERICAN VARIABLE INSURANCE SERIES (the
"Series"), an open-end management investment company organized under the laws of
the State of Massachusetts.
WITNESSETH:
WHEREAS, the Account has been established by LNY pursuant to the New York
Insurance Law in connection with certain variable annuity contracts
("Contracts") proposed to be issued to the public by LNY; and
WHEREAS, the Account has been registered as a unit investment trust under
the Investment Company Act of 1940; and
WHEREAS, the income, gains and losses, whether or not realized, from assets
allocated to the Account are, in accordance with the applicable Contracts, to be
credited to or charged against the Account without regard to other income, gains
or losses of LNY; and
WHEREAS, the Account is subdivided into various subaccounts ("Subaccounts")
under which income, gains and losses, whether or not realized, from assets
allocated to each such Subaccount are, in accordance with the applicable
Contracts, to be credited to or charged against such Subaccounts without regard
to other income, gains, or losses of other Subaccounts or of LNY; and
WHEREAS, the Series is divided into various funds ("Funds"), each Fund
being subject to certain fundamental investment policies and restrictions which
may not be changed without a majority vote of the shareowners of such Fund; and
WHEREAS, certain Funds will serve as the underlying investment medium for
certain Subaccounts; and
WHEREAS, American Funds Distributors, Inc., the principal underwriter for
the Contracts to be funded by the Account, is a broker-dealer registered as such
under the Securities Exchange Act of 1934;
1
NOW THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
LNY, the Account and the Series, hereby agree as follows:
1. The Contracts funded through the Account will provide for the allocation
of net amounts among certain Subaccounts for investment in such shares of the
Funds as may be offered from time to time in the prospectus of the Contracts.
The selection of the particular Subaccount is to be made by the contract owner
and such selection may be changed in accordance with the terms of the Contracts.
2. Fund shares to be made available to certain Subaccounts shall be sold by
the respective Funds and purchased by LNY for the corresponding Subaccount at
the net asset value (without the imposition of a sales load) next computed after
receipt of each order, as established in accordance with the provisions of the
then current prospectus of the Series. Shares of particular Funds shall be
ordered in such quantities and at such times as determined by LNY to be
necessary to meet the requirements of the Contracts. Orders or payments for
shares purchased will be sent promptly to the Series and will be made in the
manner established from time to time by the Series.
The Series reserves the right to delay transfer of its shares until the
payment check has cleared. The Series reserves the right to suspend sales if the
Board of Trustees of the Series deems it appropriate and in the best interests
of the Series or in response to the order of an appropriate regulatory
authority.
3. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Fund will be recorded in an appropriate title for the corresponding Subaccount
by LNY.
4. The Series shall furnish notice promptly to LNY of any dividend or
distribution payable on any shares underlying Subaccounts. All of such dividends
and distributions as are payable on shares of a Fund recorded in the title for
the corresponding Subaccount shall be automatically reinvested in additional
shares of that Fund. The Series shall notify LNY of the number of shares so
issued. LNY will provide the Series a list of contract owners upon written
notice from the Series' Board.
5. The Series shall pay all expenses incidental to its performance under
this Agreement. The Series shall see to it that all of its shares are registered
and authorized for issue in accordance with applicable federal and state laws
prior to their purchase for the Subaccount. The Series shall bear the expenses
for the cost of registration of its shares, preparation of its prospectuses,
proxy materials and reports, the printing and distribution of such items to each
contract owner who has allocated net amounts to any Subaccount, the preparation
of all statements and notices required by any federal or state law, or taxes on
the issue or transfer of the Series' shares subject to this Agreement.
2
6. LNY shall make no representations concerning the Series' shares except
those contained in the then current prospectus of the Series and in printed
information subsequently issued on behalf of the Series as supplemental to such
prospectus.
7. Shares of the Series may be offered to separate accounts of various
insurance companies in addition to LNY. The parties to this Agreement recognize
that, due to differences in tax treatment or other considerations, the interests
of various Contract (or policy) owners participating in one or more Funds might,
at some time, be in conflict.
Each party shall report to the other party any potential or existing
conflict of which it becomes aware. The Board of Trustees of the Series shall
promptly notify LNY of the existence of an irreconcilable material conflict and
its implications. If such a conflict exists, LNY will, at its own expense, take
whatever action is deemed necessary to remedy such conflict; in any case,
contract owners will not be required to bear such expenses.
8. LNY shall be responsible for assuring that the Account calculates pass-
through voting privileges of contract owners in a manner consistent with the
method of calculating pass-through voting privileges set forth in the current
Contract prospectuses.
9. The Series agrees to comply with the diversification requirements of IRC
817(h) and any regulations therefor.
10. This Agreement shall terminate:
a. at the option of LNY or of the Series upon six months' advance
written notice to the other;
b. at the option of LNY upon institution of formal proceedings against
the Series by the Securities and Exchange Commission;
c. upon requisite vote of the contract owners having an interest in a
particular Subaccount to substitute the shares of another investment
company for the corresponding Series shares in accordance with the
terms of the Contracts for which those Series shares had been
selected to serve as the underlying investment medium. LNY will give
30 days' prior written notice to the Series for the date of any
proposed vote to replace Series shares; and
d. in the event the Series' shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law
precludes the use of such shares as an underlying investment for the
Contracts issued or to be issued by LNY; in such event prompt notice
shall be given by LNY or the Series to the other.
11. If this Agreement terminates, any provision of this Agreement necessary
to the orderly windup of business under it will remain in effect as to that
business, after termination.
3
12. The obligations of the Series under this Agreement are not binding upon
any of the Trustees, officers, employees or shareholders of the Series
individually, but bind only the Series' assets. When seeking satisfaction for
any liability of the Series in respect of this Agreement, LNY and the Account
agree not to seek recourse against said Trustees, officers, employees or
shareholders, or any of them, or any of their personal assets for such
satisfaction.
13. This Agreement shall be construed in accordance with the laws of the
State of California.
14. The Series shall take all necessary and appropriate actions to ensure
that the plan of distribution adopted by the Class 2 shares of the Funds
pursuant to rule 12b-1 under the Investment Company Act of 1940 is administered
and operated in accordance with all applicable rules and regulations promulgated
by the Commission which are either currently in effect or which may be adopted
from time to time.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK for itself and on behalf of Lincoln
Life & Annuity Variable Annuity Account H
Attest:
/s/ By:/s/
--------------------------- ------------------------------------
AMERICAN VARIABLE INSURANCE SERIES
Attest:
/s/ By:/s/
--------------------------- ------------------------------------
4
