AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT
Among
X. XXXX PRICE INTERNATIONAL SERIES, INC.
X. XXXX PRICE INVESTMENT SERVICES, INC.
and
LINCOLN NATIONAL LIFE INSURANCE COMPANY
THIS AMENDMENT NO. 1 TO THE AGREEMENT, made and entered into as of this
16th day of September, 2002 by and among Lincoln National Life Insurance Company
(hereinafter, the "Company"), an Indiana life insurance company, and the X. Xxxx
Price International Series, Inc., a corporation organized under the laws of
Maryland (hereinafter referred to as the "Fund") and X. Xxxx Price Investment
Services, Inc. (hereinafter the "Underwriter"), a Maryland corporation.
WHEREAS, the Company and the Fund are parties to that certain Participation
Agreement dated October 1, 1996 (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement to include provisions
for the Fund to promptly notify the Company of any pricing errors and to
compensate the Company accordingly;
WHEREAS, the parties desire to amend the Agreement in order to amend the
party receiving notice on behalf of the Company; and
NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares Section 1.10(a) of the Agreement is hereby added
as follows:
1.10(a) Any material errors in the calculation of the net asset value, dividends
or capital gain information shall be reported immediately upon discovery to the
Company. If the net asset value is materially incorrect through no fault of the
Company, the Company on behalf of each Account, shall be entitled to an
adjustment to the number of shares purchased or redeemed to reflect the correct
net asset value in accordance with Fund procedures. Any administrative or other
costs or losses incurred for correcting underlying Contract owner accounts shall
be paid in accordance with the attached Schedule B.
-2-
ARTICLE I. Sale of Fund Shares Section 1.6 of the Agreement will be amended to
add the following sentence:
The Company agrees to monitor its Contract owners' accounts for excessive
trading or market timing activity (as defined in the Fund's prospectus) and
agrees to work with the Distributor to deter or such activity.
ARTICLE XI. Notices of the Agreement is hereby amended as follows:
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Company:
Lincoln National Life Insurance Company
0000 X. Xxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Second Vice President
Funds Management
Facsimile: (000) 000-0000
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
COMPANY: LINCOLN NATIONAL LIFE INSURANCE
COMPANY
By its authorized officer
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Title: 2/nd/ Vice President
-------------------------------
Date: 9/20/02
--------------------------------
FUND: X. XXXX PRICE INTERNATIONAL SERIES, INC.
By its authorized officer
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Title: Xxxxx X. Xxxxxxx
Date: 9/19/02
-------------------
UNDERWRITER: X. XXXX PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Title: Xxxxx X. Xxxxxxx
Date: 9/19/02
--------------------------------
Schedule B
Compensating Company for its expenses incurred as a result of a pricing error.
Set forth below is the criteria that must be met before Underwriter will
reimburse Company for expenses incurred due to pricing errors:
. Company must provide a full accounting of expenses;
. A $5,000 cap will be imposed on each occurrence;
. Expenses may include payroll overtime, system fees, postage and
stationery (if separate mailing is required);
. The Company must use its best efforts to mitigate all expenses
which may be reimbursable; and
. Expenses and payroll overtime shall not include any time spent
programming computers or otherwise customizing Companys' systems to
correct the error.
