FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is entered into as of this 30th day of April, 2000 among
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK ("Lincoln National"), a life
insurance company organized under the laws of the State of New York, AMERICAN
VARIABLE INSURANCE SERIES ("Series"), an open-end management investment company
organized under the laws of the Common-wealth of Massachusetts, AMERICAN FUNDS
DISTRIBUTORS, INC. ("AFD"), a corporation organized under the laws of the State
of California, and having a business address of 000 Xxxxx Xxxx Xxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, and CAPITAL RESEARCH AND MANAGEMENT COMPANY ("CRMC"),
a corporation organized under the laws of the State of Delaware, and having a
business address of 000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, Lincoln New York proposes to issue to the public, now and in the
future, certain multi-manager variable annuity contracts and variable life
insurance policies ("Contracts") as set forth in Appendix A;
WHEREAS, Lincoln New York has established one or more separate accounts
("Accounts"), as set forth in Appendix B, for the purposes of issuing the
Contracts and has or will register the Account with the United States Securities
and Exchange Commission ("the SEC") as an unit investment trust under the
Investment Company Act of 1.940 ("xxx 0000 Xxx") unless exempt therefrom;
WHEREAS, the Series has received a "Mixed and Shared Funding Order" from
the SEC granting relief from the certain provisions of the 1940 Act and the
rules thereunder to the extent necessary to permit shares of the Series to be
sold to variable annuity and life insurance separate accounts of unaffiliated
insurance companies;
WHEREAS, the Series is divided into various funds ("Funds"), some of which
are set forth in Appendix C, each Fund being subject to certain fundamental
investment policies some of which may not be changed without a majority vote of
the shareholders of such Fund;
WHEREAS, certain Funds will serve as the underlying investments for the
Contracts as set forth in Appendix C;
WHEREAS, AFD, a registered broker-dealer, will provide certain services to
Lincoln New York with regard to the Contracts; and
WHEREAS, CRMC is the investment adviser for the Series.
NOW THEREFORE, in consideration of the foregoing and of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
Lincoln New York, the
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Accounts, the Series, AFD and CRMC hereby agree as follows:
1. The Series and CRMC each represents and warrants to Lincoln New York
that: (i) a registration statement under the Securities Act of 1933 ("1933 Act")
and under the 1940 Act with respect to the Series has been filed with the SEC in
the form previously delivered to Lincoln New York, and copies of any and all
amendments thereto will be forwarded to Lincoln New York at the time that they
are filed with the SEC; (ii) the Series is, and shall be at all times while this
Agreement is in force, lawfully organized, validly existing, and properly
qualified as an open-end management investment company; and (iii) the Series
registration statement and any further amendments or supplements thereto will,
when they become effective, conform in all material respects to the requirements
of the 1933 Act and the 1940 Act, and the rules and regulations of the SEC
thereunder, and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statement therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Series by
Lincoln New York expressly for use therein.
2. The Series will furnish to Lincoln New York such information with
respect to the Series in such form and signed by such of its officers as Lincoln
New York may reasonably request, and will warrant that the statements therein
contained when so signed will be true and correct. The Series will advise
Lincoln New York immediately of. (a) any request by the SEC (i) for amendment of
the registration statement relating to the Series or (ii) for additional
information; (b) the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement of the Series or the initiation of
any proceeding for that purpose; (c) the institution of any proceeding,
investigation or hearing involving the offer or sale of the Contracts or the
Series of which it becomes aware; or (d) the happening of any material event, if
known, which makes untrue any statement made in the registration statement of
the Series or which requires the making of a change therein in order to make any
statement made therein not misleading.
3. The Series will use best efforts to register for sale under the 1933 Act
and, if required, under state securities laws, such additional shares of the
Series as may reasonably be necessary for use as the funding vehicle for the
Contracts.
4. The Series agrees to make Class I and Class 2 shares of all of its Funds
available to the Contracts. To the extent Lincoln New York uses Class 2 shares,
Lincoln Financial Advisors, the principal underwriter of the Contracts, will be
entitled to receive a fee from the Series of .25% per annum of Class 2 assets
attributable to the Contracts to offset Contract marketing expenses for as long
as the Series' Rule 12bI plan remains in effect. Fund shares to be made
available to Accounts for the Contracts shall be sold by the Series and
purchased by Lincoln New York for a given Account at the net asset value
(without the imposition of a sales load) next computed after receipt of each
order by the Series or its designee, as established in accordance with the
provisions of the then current prospectus of the Series. For purposes of this
Xxxxxxxxx 0, Xxxxxxx Xxx Xxxx shall be a designee of the Series for receipt of
such orders from each Account, and receipt by such designee by 4:00 p.m. Eastern
time shall constitute receipt by
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the Series only if the net purchase or redemption orders are transmitted to the
Series by Lincoln New York by 11:00 a.m. Eastern time on the day following
Lincoln New York's receipt of that information. "Business Day" shall mean any
day on which the New York Stock Exchange ("NYSE") is open for trading and on
which the Series calculates its net asset value pursuant to the rules of the
SEC. The Series will make its shares available indefinitely for purchase at the
applicable net asset value per share on those days on which the Series
calculates its net asset value pursuant to the rules of the SEC, and the Series
shall use its best efforts to calculate such net asset value on each day on
which the NYSE is open for trading. The Series shall make the net asset value
per share for each of the Funds available to Lincoln New York (using a mutually
agreed upon format) on a daily basis as soon as reasonably practical after the
Series calculates its net asset value per share, and the Series shall use its
best efforts to make such net asset value per share available by 6:00 p.m.
Eastern time. The Series, and its investment adviser, CRMC, are responsible for
maintaining net asset values for the Funds in accordance with the requirements
of the 1940 Act and its current prospectus. Shares of particular Funds shall be
ordered in such quantities and at such times as determined by Lincoln New York
to be necessary to meet the requirements of the Contracts. Payment for shares
purchased shall be made in federal funds transmitted by wire by 2:00 p.m.
Eastern time as long as the banking system is open for business. If the banking
system is closed, payment will be transmitted the next day that the banking
system is open for business. If payment is received by the Series after 2:00
p.m., Eastern time on such Business Day, Lincoln New York shall, upon the
Series' request, promptly reimburse the Series for any charges, costs, fees,
interest or other expenses incurred in connection with any advances, borrowing,
or overdrafts. The Series will confirm receipt of each trade (using a mutually
agreed upon format by 1:00 p.m. Eastern time on the Business Day the trade is
placed with the Series.
The Series reserves the right to temporarily suspend sales if the Board of
Trustees of the Series deems it appropriate and in the best interests of the
Series or in response to the order of an appropriate regulatory authority.
5. The Contracts funded through the Accounts will provide for the
allocation of net amounts among certain subaccounts for investment in such
shares of the Funds as may be offered from time to time in the Contracts. The
selection of the particular subaccount is to be made by the Contract owner and
such selection may be changed in accordance with the terms of the Contracts.
6. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Fund will be recorded by the Series as instructed by Lincoln New York in an
appropriate title for the corresponding Account or subaccount.
7. The Series shall furnish notice promptly to Lincoln New York (using a
mutually agreed upon format) of any dividend or distribution payable on any
shares underlying subaccounts. Lincoln New York hereby elects to receive all
such dividends and distributions as are payable on shares of a Fund recorded in
the title for the corresponding subaccount in additional shares of that Fund.
The Series shall notify Lincoln New York of the number of shares so issued.
Lincoln New York reserves the right to revoke this election and to receive all
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such income dividends and capital gain distributions in cash.
8. The Series shall redeem its shares in accordance with the terms of its
then current prospectus. For purposes of this Xxxxxxxxx 0, Xxxxxxx Xxx Xxxx
shall be a designee of the Series for receipt of requests for redemption from
each Account, and receipt by such designee by 4:00 p.m. Eastern time shall
constitute receipt by the Series; provided that the Series receives notice of
such request for redemption by 10:00 a.m. Eastern time on the following Business
Day. Lincoln New York shall purchase and redeem the shares of Funds offered by
the then current prospectus of the Series in accordance with the provisions of
such prospectus. The Series agrees to redeem, upon Lincoln New York's request,
any full or fractional shares of the designated portfolio held by Lincoln New
York. Payment shall be made in federal funds transmitted by wire by 2:00 p.m.
Eastern time as long as the banking system is open for business. If the banking
system is closed, payment will be transmitted the next day that the banking
system is open for business. If payment is received by Lincoln Life after 2:00
p.m., Eastern time on such Business Day, the Series shall, upon Lincoln New
York's request, promptly reimburse Lincoln New York for any charges, costs,
fees, interest or other expenses incurred in connection with any advances,
borrowing, or overdrafts. The Series will confirm receipt of each trade (using a
mutually agreed upon format) by 1:00 p.m. Eastern time on the Business Day the
trade is placed with the Series.
9. The Series shall pay all expenses incidental to its performance under
this Agreement. The Series shall see to it that all of its shares are registered
and authorized for issue in accordance with applicable federal and state laws
prior to their purchase for the Accounts. The Series shall bear the expenses for
the cost of registration of its shares, preparation of prospectuses to be sent
to existing Contract owners, proxy materials and reports, the printing and
distribution of such items to each Contract owner who has allocated net amounts
to any Subaccount, the preparation of all statements and notices required from
it by any federal or state law, and taxes on the issue or transfer of the
Series' shares subject to this Agreement. The Series will provide Lincoln New
York, at least once a year, with enough copies of its Statement of Additional
Information to be able to distribute one to each Contract owner or prospective
Contract owner who requests such Statement of Additional Information.
10. Lincoln New York shall bear the expenses for the cost of printing and
distribution of Series prospectuses to be sent to prospective Contract owners.
The Series shall provide, at its expense, such documentation (in camera ready or
other mutually agreeable form) and other assistance as is reasonably necessary
in order for Lincoln New York once each year (or more frequently if the
prospectus for the Series is amended) to have the prospectus or prospectuses for
the Contracts and the Series prospectus printed together in one or more
documents. With respect to any Series prospectus that is printed in combination
with any one or more Contract prospectus (the "Prospectus Booklet"), the Series
shall bear the costs of printing and mailing the Prospectus Booklet to existing
Contract owners based on the ratio of the number of pages of the Series
prospectuses included in the Prospectus Booklet to the number of pages in the
Prospectus Booklet as a whole. WITH RESPECT TO ANY SERIES REPORT THAT IS PRINTED
IN COMBINATION WITH ANY ONE OR MORE REPORTS OF INVESTMENT OPTIONS FOR THE
CONTRACTS (THE "REPORT BOOKLET"), THE SERIES SHALL BEAR THE COSTS OF PRINTING
AND MAILING THE REPORT BOOKLET TO EXISTING
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CONTRACT OWNERS BASED ON THE RATIO OF THE NUMBER OF PAGES OF THE SERIES REPORT
INCLUDED IN THE REPORT BOOKLET TO THE NUMBER OF PAGES IN THE REPORT BOOKLET AS A
WHOLE.
11. Lincoln New York represents and warrants to the Series that any
information furnished in writing by Lincoln New York to the Series for use in
the registration statement of the Series will not result in the registration
statement's failing to conform in all material respects to the requirements of
the 1933 Act and the 1940 Act and the rules and regulations thereunder or
containing any untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
12. Lincoln New York and its affiliates shall make no representations
concerning the Series' shares except those contained in the then current
prospectus of the Series, in such printed information subsequently issued on
behalf of the Series or other funds managed by CRMC as supplemental to the
appropriate fund prospectus, or in materials approved by AFD.
13. Shares of the Series may be offered to separate accounts of various
insurance companies in addition to Lincoln New York. The Series shall comply
with the provisions of Section 8 17 of the Internal Revenue Code of 1986 as
amended and the regulations thereunder ("Section 817").
14. The parties to this Agreement recognize that due to differences in tax
treatment or other considerations, the interests of various Contract owners
participating in one or more Funds might, at some time, be in conflict. Each
party shall report to the other party any potential or existing conflict of
which it becomes aware. The Board of Trustees of the Series shall promptly
notify Lincoln New York of the existence of irreconcilable material conflict and
its implications. If such a conflict exists for which Lincoln New York is
responsible as determined by the Board of Trustees, Lincoln New York will, at
its own expense, take whatever action it deems necessary to remedy such
conflict; in any case, Contract owners will not be required to bear such
expenses.
15. Lincoln New York agrees to indemnify and hold the Series harmless
against, any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and reasonable other expenses) to which the Series
may be subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements arise as a result of Lincoln New York: (a) making untrue
statements of material facts or omitting material fact in the registration
statement, prospectus or sales literature of the Contracts and/or Accounts; (b)
making untrue statements of material facts that the Series includes in its
materials, provided the Series relies on information supplied by Lincoln New
York; (c) engaging in unlawful conduct with respect to the sale of the Contracts
or Fund shares; and (d) materially breaching this Agreement or a representation
or warranty.
16. The Series and CRMC each agrees to indemnify and hold Lincoln New York
harmless against, any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and reasonable other expenses) to which Lincoln New
York may be subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements arise as a result of the Series',
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AFD's or CRMC's (a) making untrue statements of material facts or omitting
material facts in the registration statement, prospectus or sales literature of
the Series; (b) making untrue statements of material facts that the Series
includes in its materials, provided Lincoln New York relies on information
supplied by or on behalf of the Series; (c) engaging in unlawful conduct with
respect to the sale of the Contracts or Fund shares; (d) materially breaching
this Agreement or a representation or warranty; and (e) failing to comply with
the requirements of Section 817 and regulations thereunder.
17. Lincoln New York shall be responsible for assuring that the Accounts
provide pass-through voting privileges to Contract owners so long as and to the
extent that the Securities and Exchange Commission continues to interpret the
1940 Act to require pass-through voting privileges for the Contracts.
18. AFD will be responsible for conducting training activities for Lincoln
New York's wholesalers regarding CRMC's approach to investment management in
connection with Lincoln New York's wholesaler support of the Series. Training
will include initial sessions as to CRMC's investment approach and strategies,
background in CRMC's investment results, information on CRMC's portfolio
counselors managing the Series and general information on CRMC. AFD will provide
such periodic additional training and refresher training as may be requested by
Lincoln New York. AFD will provide speakers and panelists at national sales
meetings conducted by Lincoln New York regarding the Series.
In consideration of the activities performed by AFD for LFA, LFA will pay
AFD.25% on each new Contract purchase payment initially allocated to the Series.
19. The parties understand that there is no intention to create a joint
venture in the subject matter of this Agreement. Accordingly, the night to
terminate this Agreement and to engage in any activity not inconsistent with
this Agreement is absolute. This Agreement will terminate:
(i) By any party at any time upon six months' written notice to the
other parties; or
(ii) at the option of Lincoln New York or the Series, upon ten
calendar days' prior written notice to the other parties, if a
final non-appealable administrative or judicial decision is
entered against any other party which has a material impact on
the Contracts;
(iii) at the option of Lincoln New York, upon ten calendar days' prior
written notice to the other parties, if shares of the Series are
not reasonably available;
(iv) at the option of Lincoln New York, immediately upon written
notice to the other parties, if the Series or CRMC fails to meet
the requirements for either diversification under Section 817 or
registered investment company
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status or if the Board of the Series terminates the Class 2 Plan
of Distribution pursuant to Rule 12b- I under the 1940 Act; or
(v) immediately in the event the Series' shares are not registered,
issued or sold in accordance with applicable state and/or
federal law or such law precludes the use of such shares as an
underlying investment for the Contracts issued or to be issued
by Lincoln New York; in such event prompt notice shall be given
by Lincoln New York or the Series to the other parties.
The effective date for termination pursuant to any notice required under
this Paragraph shall be calculated beginning with the date of receipt of such
notice to all other parties.
20. All notices, consents, waivers, and other communications under this
Agreement must be in writing, and will be deemed to have been duly received (a)
when delivered by hand (with written confirmation of receipt), (b) when sent by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or (c) the day after it is sent by
a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties):
IF TO LINCOLN NEW YORK:
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, CFO/Second Vice President
Facsimile No.: 000-000-0000
IF TO SERIES:
American Variable Insurance Series
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President
Facsimile No.: 000-000-0000
IF TO CRMC:
Capital Research and Management Company
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Senior Vice President and Legal Counsel
Facsimile No.: 000-000-0000
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IF TO AFD:
American Funds Distributors, Inc.
000 X. Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Secretary and Legal Counsel
Facsimile No.: 000-000-0000
21. If this Agreement terminates, any provision of this Agreement necessary
to the orderly windup of business under it will remain in effect as to that
business, after termination.
22. If this Agreement terminates, the Series, at Lincoln New York's option,
will continue to make additional shares of the Series available for all
Contracts existing as of the effective date of termination (under the same terms
and conditions as were in effect prior to termination of this Agreement with
respect to existing Contract owners), unless the Series liquidates or applicable
laws prohibit further sales. Lincoln New York agrees not to redeem shares unless
legitimately required to do so according to a Contract owner's request or under
an order from the SEC.
23. The obligations of the Series under this Agreement are not binding upon
any of the Trustees, officers, employees, or shareholders (except CRMC if it is
a shareholder) of the Series individually, but bind only the Series' assets.
When seeking satisfaction for any liability of the Series in respect of this
Agreement, Lincoln New York and the Account agree not to seek recourse against
said Trustees, officers, employees, or shareholders, or any of them, or any of
their personal assets for such satisfaction. Notwithstanding the foregoing, if
Lincoln New York seeks satisfaction for the Series for any losses, claims,
damages, liabilities or litigation in respect of this Agreement, Lincoln New
York and the Accounts shall also have recourse against AFD and CRMC, which shall
be jointly and severally liable for all amounts due Lincoln New York and not
recovered from the Series.
24. This Agreement shall be construed in accordance with the laws of the
State of California.
25. This Agreement and the parties' rights, duties, and obligations under
this Agreement are not transferable or assignable by any of them without the
express, prior written consent of the other party hereto. Any attempt by a party
to transfer or assign this Agreement or any of its rights, duties or obligations
under this Agreement without such consent is void.
26. The following Paragraphs shall survive any termination of this
Agreement: 4, 7, 8, 15, 16, 19, 20-25.
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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 (ON BEHALF OF THE ACCOUNTS
AND ITSELF)
Attest: /s/ Xxxxxxxx Xxxxxx
By: /s/ Xxxxx X. Xxxxxxx
Its: President
AMERICAN VARIABLE INSURANCE
SERIES
By: /s/ Xxxxxxx Xxxxxx
Attest: /s/ Xxxx Xxxxxx Its: Senior Vice President
AMERICAN FUNDS DISTRIBUTORS, INC.
By: /s/ K.G. Xxxxxxxx
Attest: /s/ Xxxx Xxxxxx Its: President
CAPITAL RESEARCH AND MANAGEMENT
COMPANY
By: /s/ Xxxx Xxxxx
Attest: /s/ Xxxx Xxxxxx Its: Executive Vice President
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APPENDIX A
Lincoln VUL
Lincoln VULdb
Lincoln CVUL
Lincoln CVUL Series III
D-L ChoicePlus variable annuity
MultiFund individual variable annuity
MultiFund group variable annuity
Lincoln SVUL
Lincoln SVUL 11
GVA 1, 11, 000
XXXXXXXX X
Lincoln Life & Annuity Flexible Premium Variable Life Account M
LLANY Separate Account S for Flexible Premium Variable Life Insurance
Lincoln Life Variable Annuity Account N
LLANY Separate Account R for Flexible Premium Variable Life Insurance
Lincoln Life & Annuity Variable Annuity Separate Account L
APPENDIX
American Variable Insurance Series
Global Growth Fund Class 2
Global Small Capitalization Fund Class 2
International Fund Class 2
Growth Fund Class 2
Growth-Income Fund Class 2
High-Yield Bond Fund Class 2
Bond Fund Class 2
U.S. Government/AAA-Rated Securities Fund Class 2
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AMENDMENT
Effective Date: July 15, 2000
APPENDIX A
Lincoln VUL
Lincoln VULdb
Lincoln CVUL
Lincoln CVUL Series III
Lincoln ChoicePlus variable annuity
Lincoln ChoicePlus Access variable annuity
MultiFund individual variable annuity
MultiFund group variable annuity
Lincoln SVUL
Lincoln SVUL II
GVA I, II, III
APPENDIX B
Lincoln Life & Annuity Flexible Premium Variable Life Account M
LLANY Separate Account S for Flexible Premium Variable Life Insurance
Lincoln New York Separate Account N for variable annuities
LLANY Separate Account R for Flexible Premium Variable Life Insurance
Lincoln Life & Annuity Variable Annuity Separate Account L
APPENDIX C
American Variable Insurance Series
Global Growth Fund Class 2
Global Small Capitalization Fund Class 2
International Fund Class 2
Growth Fund Class 2
Growth-Income Fund Class 2
High-Yield Bond Fund Class 2
Bond Fund Class 2
U.S. Government/AAA-Rated Securities Fund Class 2
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LINCOLN LIFE ANNUITY COMPANY (ON BEHALF
OF THE ACCOUNTS AND ITSELF)
Attest:
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
--------------------------- Its: 2nd Vice President and
Chief Financial Officer, Xxxx X. Xxxxxxx
AMERICAN VARIABLE INSURANCE SERIES
Attest:
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
--------------------------- Its: Senior Vice President, Xxxxxxx X. Xxxxxx
AMERICAN FUNDS DISTRIBUTORS, INC.
Attest:
By: /s/ Xxxxx X.Xxxxxxxx
-------------------------------------
--------------------------- Its: President, Xxxxx X. Xxxxxxxx
CAPITAL RESEARCH AND MANAGEMENT COMPANY
Attest:
By: /s/ Xxxx X. Xxxxx, Xx.
-------------------------------------
--------------------------- Its: Executive Vice President,
Xxxx X. Xxxxx, Xx.
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