Exhibit 8(b)
FUND PARTICIPATION AGREEMENT
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THIS AGREEMENT, entered into on this lst day of October, 1986 among LINCOLN
NATIONAL PENSION INSURANCE COMPANY ("Lincoln National"), a life insurance
company organized under the laws of the State of Indiana for itself and on
behalf of LINCOLN NATIONAL SEPARATE ACCOUNT E ("Account"), a separate account
established by Lincoln National in accordance with the laws of the State of
Indiana, and AMERICAN PATHWAY FUND ("Fund"), an open-end management investment
company organized under the laws of the State of Massachusetts.
WITNESSETH:
WHEREAS, the Account has been established by Lincoln National pursuant to
the Indiana Insurance Code in connection with certain flexible premium variable
annuity contracts ("Contracts") proposed to be issued to the public by Lincoln
National; and
WHEREAS, the Account is being 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 such Account without regard to other income,
gains or losses of Lincoln National; 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 Lincoln National;
and
WHEREAS, the Fund is divided into various series ("Series"), each Series
being subject to separate investment policies and restrictions which may not be
changed without a majority vote of the shareowners of such Series; and
WHEREAS, certain Series 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;
NOW THEREFORE, in consideration of the foregoing and. of mutual covenants
and conditions set forth herein and for other good and valuable consideration,
Lincoln National, the Account, and the Fund, 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 Series as may be offered from
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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. No representation is made as to the number or amount of such Contracts
to be sold. American Fund Distributors, Inc. will make reasonable efforts to
market such Contracts and will comply with all applicable federal or state laws
in connection therewith.
3. Fund shares to be made available to certain Subaccounts shall be sold
by the respective Series and purchased by Lincoln National 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 Fund. Shares of a particular
Series shall be ordered in such quantities and at such times as determined by
Lincoln National to be necessary to meet the requirements of the Contracts.
Orders or payments for shares purchased will be sent promptly to the Fund and
will be made in the manner established from time to time by the Fund.
The Fund reserves the right to delay transfer of its shares until the
payment check has cleared. The Fund reserves the right to suspend sales if the
Board of Trustees of the Fund deems it appropriate and in the best interests of
the Fund or in response to the order of an appropriate regulatory authority.
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4. Transfer of the Fund's shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Series will be recorded in an appropriate title for the corresponding Subaccount
by Lincoln National.
5. The Fund shall furnish notice promptly to Lincoln National of any
dividend or distribution payable on any shares underlying Subaccounts. All of
such dividends and distributions as are payable on shares of a Series recorded
in the title for the corresponding Subaccount shall be automatically reinvested
in additional shares of that Series. The Fund shall notify Lincoln National of
the number of shares so issued.
6. The Fund shall pay all expenses incident to its performance under this
Agreement. The Fund 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 Fund 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
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or transfer of the Fund's shares subject to this Agreement.
7. Lincoln National shall make no representations concerning the Fund's
shares except those contained in the then current prospectus of the fund and in
printed information subsequently issued on behalf of the Fund as supplemental to
such prospectus.
8. From the effective date of this agreement, shares of the Fund will be
offered exclusively to Anchor National's - American Pathway II - Separate
Account and to LNP's Separate Account E for the purpose of funding variable
annuity contracts. This exclusivity will apply as long as American Funds
Distributors, Inc. remains the sole distributor of the Contracts. Shares of the
Fund may be offered to variable life insurance separate accounts of various
insurance companies in addition to Lincoln National. The Parties recognize
that, due to differences in tax treatment or other considerations, the interests
of various Contract (or policy) Owners participating in one or more Series
might, at some time, be in conflict. Lincoln National shall consider whether
disclosure in the Contract prospectus regarding the potential risks of mixed and
shared funding is appropriate. Each Party shall report to the other Party any
potential or existing conflicts of which it becomes aware. The Board of
Trustees of the Fund shall promptly notify Lincoln National of the existence of
an irreconcilable material conflict and its implications. If such a conflict
exists, Lincoln National will, at its own expense, take whatever action is
necessary to remedy such conflict; in any case, Contract Owners will not be
required to bear such expenses.
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9. Lincoln National 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 prospectus for American Pathway II.
10. This Agreement shall terminate:
a. at the option of Lincoln National or of the Fund upon nine
months' advance written notice to the other;
b. at the option of Lincoln National upon institution of formal
proceedings against the Fund 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 Fund shares in
accordance with the terms of the Contracts for which those Fund
shares had been selected to serve as the underlying investment
medium. Lincoln National will give 30 days' prior written notice
to the Fund of the date of any proposed vote to replace Fund
shares; and
d. in the event the Fund's 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 Policies issued or to be issued by Lincoln National,
prompt notice shall be given by Lincoln National or the Fund to
the other.
11. The obligations of the Fund under this Agreement are not binding upon
any of the Trustees, officers, employees, agents or shareholders of the Fund
individually, but bind only the Fund's assets. Lincoln National and the Account
agree to look solely to the assets of the Fund for the satisfaction of any
liability of the Fund in respect of this Agreement and will
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not seek recourse against the Fund's Trustees, officers, employees, agents or
shareholders, or any of them, or any of their personal assets for such
satisfaction.
12. This Agreement shall be construed in accordance with the laws of the
state of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested as of the date first above written.
LINCOLN NATIONAL PENSION INSURANCE
COMPANY FOR ITSELF AND ON BEHALF OF
LINCOLN NATIONAL SEPARATE ACCOUNT E
Attest:
__________________________________ By: ______________________________________
AMERICAN PATHWAY FUND
Attest:
__________________________________ By: ______________________________________
Xxxx X. Xxxxx, Xx.
Vice President
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