[LETTERHEAD OF LINCOLN
NATIONAL LIFE INSURANCE CO.]
Servicing Office: P.O. Box 9740, Portland, ME 04104-5001
GROUP VARIABLE
ANNUITY CONTRACT NO.: EFFECTIVE DATE:
CONTRACTHOLDER:
(Herein referred to as "You" or "Your")
THIS CONTRACT WAS DELIVERED IN THE State/Commonwealth of and is subject to the
laws of that jurisdiction.
Lincoln Life by this Contract agrees to provide benefits for Participants in
accordance with the terms and conditions of the Contract. The entire Contract
consists of the provisions on the following pages, and the Application,
including any amendments, schedules, or endorsements.
IN WITNESS HEREOF, Xxxxxxx Life has executed this Contract at Fort Xxxxx,
Indiana on this day of , 20 ,
and caused this Contract to be in full force as of its Effective Date as set
forth above.
/s/ Xxx X. Xxxxxx /s/ Xxxxx X. Xxxxxxxxx
----------------------- ----------------------------------
Xxx X Xxxxxx, President Xxxxx X. Xxxxxxxxx, Vice President
Non-Participating
PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
1
TABLE OF CONTENTS
I. CONTRACT SPECIFICATIONS
II. DEFINITIONS
III. CONTRIBUTIONS
IV. GUARANTEED INTEREST DIVISION
V. VARIABLE INVESTMENT DIVISION
VI. TRANSFERS BETWEEN DIVISIONS AND SUB-ACCOUNTS
VII. WITHDRAWALS AND DISTRIBUTIONS
VIII. DEATH BENEFITS
IX. PAYOUT ANNUITIES
X. LOANS
XI. DISCONTINUANCE AND TERMINATION OF CONTRACT
XII. GENERAL PROVISIONS
2
ARTICLE I - CONTRACT SPECIFICATIONS
1.1 MINIMUM CONTRIBUTION AMOUNT: Your minimum annual Contribution on behalf of
all Participants under this Contract shall be twenty thousand dollars
($20,000). This minimum figure is for aggregate annual Contributions, not
for each Participant.
1.2 SEPARATE ACCOUNT: Lincoln National Variable Annuity Account L
1.3 DIVISIONS AVAILABLE UNDER THIS CONTRACT:
A. Guaranteed Interest Division
B. Variable Investment Division
1.4 LIMITATIONS ON TRANSFERS AND WITHDRAWALS DURING THE ACCUMULATION PERIOD:
Unlimited transfer requests may be made by a Participant each calendar
year.
1.5 ANNUAL ADMINISTRATION CHARGE:
Twenty-five dollars ($25) per Participant.
Twenty-five dollars ($25) per Participant who allocates a contribution,
during the year ending on a Participation Anniversary, to any one (1) or
more of the Sub-Accounts established in the Variable Investment Division.
1.6 ANNUAL MORTALITY AND EXPENSE RISK CHARGE APPLICABLE TO VARIABLE INVESTMENT
DIVISION SUB-ACCOUNTS: Annual rate of one percent (1.00%).
1.7 LOAN SET-UP CHARGE: Fifty dollars ($50) per loan
1.8 PLAN NAME:
1.9 EMPLOYER:
1.10 SYSTEMATIC WITHDRAWAL SET-UP CHARGE: Thirty dollars ($30.00). If the
total Account balance is twenty-five thousand dollars ($25,000), or
greater, such amount will be waived.
3
ARTICLE II - DEFINITIONS
2.1 ACCUMULATION UNIT: An accounting unit of measure used to record amounts of
increases to, decreases from and accumulations in each Sub-Account during
the Accumulation Period.
2.2 ACCUMULATION UNIT VALUE: The dollar value of an Accumulation Unit in each
Sub-Account on any Valuation Date.
2.3 ACCUMULATION PERIOD: The period commencing on a Participant's
Participation Date and terminating when the Participant's Account balance
is reduced to zero, either through withdrawal(s), conversion to an annuity,
imposition of charges, payment of a Death Benefit or a combination thereof.
2.4 ANNUITANT: The person receiving annuity payments under the terms of this
Contract.
2.5 ANNUITY COMMENCEMENT DATE: The date on which Lincoln Life makes the first
annuity payment to the Annuitant as required by the Retired Life
Certificate. This date, as well as the date each subsequent annuity
payment is made, will be the first day of a calendar month.
2.6 ANNUITY CONVERSION AMOUNT: The amount of a Participant's Account applied
toward the purchase of an Annuity.
2.7 ANNUITY CONVERSION FACTOR: The factor applied to the Annuity Conversion
Amount in determining the dollar amount of an annuitant's annuity payments
for Guaranteed Annuities or the initial payment for Variable Annuities.
2.8 ANNUITY PAYMENT CALCULATION DATE: For Guaranteed Annuities, this is the
first day of a calendar month. For Variable Annuities, this is the
Valuation Date ten (10) business days prior to the first day of a calendar
month.
2.9 ANNUITY PERIOD: The period concurrent with or following the Accumulation
Period, during which an Annuitant's annuity payments are made.
2.10 ANNUITY UNIT: An accounting unit of measure that is used in calculating
the amounts of annuity payments to be made from each Sub-Account during the
Annuity Period.
2.11 ANNUITY UNIT VALUE: The dollar value of an Annuity Unit in each Sub-
Account on any Valuation Date.
4
2.12 BENEFICIARY: The person(s) designated to receive a Participant's Account
balance in the event of the Participant's death during the Accumulation
Period or the person(s) designated to receive any applicable remainder of
an annuity in the event of the Annuitant's death during the Annuity Period.
2.13 BUSINESS DAY: A day on which Lincoln Life and the New York Stock Exchange
are customarily open for business.
2.14 CERTIFICATE: An Active Life Certificate is issued to each Participant
outlining the basic provisions of the Contract. A Retired Life Certificate
is issued to each Annuitant outlining the basic provisions of his Annuity.
2.15 CONTRIBUTIONS: All amounts deposited by You or the Participant under this
Contract including any amount transferred from another contract.
2.16 DIVISION(S): The Guaranteed Interest Division and/or the Variable
Investment Division named in Section 1.3.
2.17 GENERAL ACCOUNT: All assets of Lincoln Life other than those in the
Separate Account specified in Section 1.2 or any other separate account.
2.18 GROSS WITHDRAWAL AMOUNT: The amount by which a Participant's Account is
reduced when a withdrawal occurs, including any applicable Contingent
Deferred Sales Charge and Annual Administration Charge.
2.19 GUARANTEED ANNUITY: An annuity for which Lincoln Life guarantees the
amount of each payment as long as the annuity is payable.
2.20 GUARANTEED INTEREST DIVISION: The Division maintained by Lincoln Life for
these and other contracts for which Lincoln Life guarantees the principal
amount and interest credited thereto, subject to any fees and charges as
set forth in this Contract. Amounts allocated to the Guaranteed Interest
Division are part of the General Account.
2.21 LINCOLN LIFE: Lincoln National Life Insurance Company, at its home office
in Fort Xxxxx, Indiana. All correspondence and inquiries should be
submitted to Lincoln Life's Servicing Office: P.O. Box 9740, Portland ME
04101-5001.
2.22 NET CONTRIBUTIONS: The sum of all Contributions credited to a Participant
Account less any net Withdrawal Amounts, outstanding loan (including
principal and due and accrued interest) and amounts converted to a Payout
Annuity.
2.23 NET WITHDRAWAL AMOUNT: The amount paid to a Participant when a withdrawal
occurs.
5
2.24 PARTICIPANT: A person who has enrolled under this Contract and maintains a
Participant's Account.
2.25 PARTICIPANT'S ACCOUNT: An account maintained for a Participant during the
Accumulation Period, the total balance of which equals the Participant's
Account balance in the Variable Investment Division plus the Participant's
Account balance in the Guaranteed Interest Division.
2.26 PARTICIPATION ANNIVERSARY: For each Participant, a date at one year
intervals from that Participant's Participation Date. If an anniversary
occurs on a non-Business Day, it is treated as occurring on the next
Business Day.
2.27 PARTICIPATION DATE: A date assigned to each Participant corresponding to
the date on which the first Contribution on behalf of that Participant
under this Contract is received by Lincoln Life. A Participant will receive
a new Participation Date if such Participant makes a Total Withdrawal as
defined in Section 7.2 and Contributions on behalf of the Participant are
resumed under any Contract.
2.28 PARTICIPATION YEAR: A period beginning with one Participation Anniversary
and ending the day before the next Participation Anniversary, except for
the first Participation Year that begins with the Participation Date.
2.29 PAYOUT ANNUITY: A series of payments paid under the terms of this Contract
to a person. A Payout Annuity may be either a Guaranteed Annuity or a
Variable Annuity.
2.30 PENDING ALLOCATION ACCOUNT: An account established under the Variable
Investment Division that invests unallocated contributions in shares of a
money market mutual fund. Lincoln Life does not guarantee the principal
amount or investment results.
2.31 PLAN: The Plan named in Section 1.8 that qualifies for federal tax
benefits under Section 403(b) of the Internal Revenue Code of 1986 and
under which this Contract is authorized.
2.32 SEPARATE ACCOUNT: The Lincoln National Variable Annuity Account L is a
group of assets segregated from Lincoln Life's General Account whose
income, gains and losses, realized or unrealized, are credited to or
charged against the Separate Account without regard to other income, gains
or losses of Lincoln Life. Additional information is provided in Section
12.15.
2.33 SUB-ACCOUNT(S): An account established in the Variable Investment Division
that invests in shares of a corresponding mutual fund.
6
2.34 VALUATION DATE: A Business Day. Accumulation and Annuity Units are computed
on each Valuation Date as of the close of trading on the New York Stock
Exchange.
2.35 VALUATION PERIOD: A period used in measuring the investment experience of
each Sub-Account. The Valuation Period begins at the close of trading on
the New York Stock Exchange on one Valuation Date and ends at the
corresponding time on the next Valuation Date.
2.36 VARIABLE ANNUITY: An annuity with payments that increase or decrease in
accordance with the investment results of the selected Sub-Account(s).
2.37 VARIABLE INVESTMENT DIVISION: The Division specified in Section 1.3 that is
maintained by Lincoln Life for this and other Section 403(b) Lincoln Life
contracts for which Lincoln Life does not guarantee the principal amount or
investment results. Amounts allocated to the Variable Investment Division
are part of the Separate Account.
2.38 YOU or YOUR: The Contractholder named on the face page of this Contract.
7
ARTICLE III - CONTRIBUTIONS
3.1 INITIAL CONTRIBUTION: The initial Contribution for a Participant will be
credited to the Participant's Account no later than two (2) Business Days
after it is received by Lincoln Life if it is preceded or accompanied by a
completed enrollment form containing all the information necessary for
processing the Participant's Contribution.
3.2 ALLOCATION OF CONTRIBUTIONS: Participant Contributions will be allocated to
the Divisions and Sub-Accounts according to the percentages requested by
the Participant. The allocation percentage can be any whole percent and may
be changed on an unlimited basis per year. You or the Participant shall
notify Lincoln Life in writing in a form acceptable to Lincoln Life or by
telephone in accordance with procedures published by Lincoln Life of such
changes.
3.3 PAYMENT OF SUBSEQUENT CONTRIBUTIONS: You shall forward Contributions to
Lincoln Life specifying the amount being contributed on behalf of each
Participant. You shall forward such Contributions and provide such
allocation information in accordance with procedures established by Lincoln
Life. The Contributions shall be allocated among the Guaranteed Interest
Division and each Sub-Account in accordance with the percentage information
provided by the Participant subject to the terms of the Plan.
3.4 CHARACTERIZATION OF TRANSFER CONTRIBUTIONS: For all Contributions
transferred from another Contract, Xxxxxxx Life must be provided with the
following information in a form acceptable to Lincoln Life:
(a) The source of the Contributions transferred (e.g., salary reduction,
employer match or post-tax Contributions). Lincoln Life will record
all such transferred amounts where no source information is provided
as salary reduction Contributions.
(b) Identification of Contributions transferred as Contributions made or
earnings credited:
(i) prior to January 1, 1987;
(ii) during 1987 and 1988; or
(iii) subsequent to December 31, 1988.
Amounts not so identified will be treated as attributable to period
(iii) for purposes of Sections 7.4 and 7.5.
8
3.5 MAXIMUM CONTRIBUTION: Total and overall limitations on Contributions in a
calendar year for a Participant are subject to the limits imposed under
Sections 402(g), 403(b) and 415 of the Internal Revenue Code of 1986 (the
Code), as it may be amended from time to time. Xxxxxxx Life assumes no
responsibility for monitoring these limits for a Participant.
Elective deferrals made under the terms of a salary reduction agreement
must not exceed the annual limits on elective deferrals as provided in IRC
Section 402(g). Contributions in excess of such amounts may be distributed
upon request of the Contractholder and Participant by Xxxxxxx Life as
permitted by law.
3.6 VALUATION: A Guaranteed Interest Division Contribution will be allocated as
of the Business Day that Xxxxxxx Life receives the Contribution and Xxxxxxx
Life will credit interest beginning with the next calendar day following
the Business Day that Lincoln Life receives the Contribution.
For a Variable Investment Division Sub-Account Contribution, Lincoln Life
will credit a Participant's Account with the number of Accumulation Units
for each Sub-Account selected by the Participant with the number of
Accumulation Units equal to the Contribution Amount divided by the
Accumulation Unit Value which is next computed following Xxxxxxx Life's
receipt of the Contribution.
3.7 ANNUAL ADMINISTRATION CHARGE: Lincoln Life will deduct the amount stated in
Section 1.5 from each Participant's Account each year on the last Business
Day of the month in which his Participation Anniversary occurs unless the
Contractholder pays the charge in a single payment. If the Participant's
Account balance is less than this amount on that day, Lincoln Life will
deduct the entire balance from his Account.
When a Total Withdrawal of a Participant's Account, as defined in Section
7.2, occurs on a date other than the last Business Day of the month in
which his Participation Anniversary occurs, Xxxxxxx Life will first deduct
the amount stated in Section 1.5 from his Participant's Account.
ANNUAL ADMINISTRATION CHARGE: Lincoln Life will deduct the amount stated in
Section 1.5 on a pro-rata basis from the Participant's Variable Investment
Division Account balance each year on the last Business Day of the month in
which his Participation Anniversary occurs unless the Contractholder pays
the charge in a single payment. If the Participant's Variable Investment
Division Account balance is less than this amount on that day, Lincoln Life
will deduct the entire balance from his Variable Investment Division
Account.
When a Participant requests, on a date other than the last Business Day of
the month in which his Participation Anniversary occurs,
9
(a) a withdrawal, or
(b) a transfer,
from the Variable Investment Division, which would leave a remaining
balance of less than the Annual Administration Charge defined in Section
1.5, Lincoln Life will first deduct the amount stated in Section 1.5 from
the Participant's Variable Investment Division Account balance prior to the
Withdrawal or Transfer.
3.8 UNALLOCATED CONTRIBUTION: If a properly completed enrollment form has not
been received for a Participant, Lincoln Life will deposit such
Contributions to the Pending Allocation Account as described in ARTICLE II-
DEFINITIONS, unless such Contributions are designated to another Account in
accordance with the Plan.
Lincoln Life will follow up with the Contractholder monthly for a period of
ninety (90) days for enrollment information for Participants with deposits
in the Pending Allocation Account.
Within two (2) business days of receipt of a completed enrollment form, the
Participant's Account balance in the Pending Allocation Account will be
transferred to the Divisions and/or Sub-Accounts according to the
percentages requested by the Participant. When the completed enrollment
form is received, the Participation Date will be the date on which the
first Contribution on behalf of the Participant was deposited into the
Pending Allocation Account.
If an enrollment form is not received after the ninety (90) day notice, a
Participant's Account balance in the Pending Allocation Account will be
refunded to the Contractholder within one hundred five (105) days of the
date of the initial Contribution. Contributions received after a refund
while there is still no allocation information, will be deposited to the
Pending Allocation Account.
The Pending Allocation Account will only be used for the purpose mentioned
above; Participants may not direct a portion of their Contributions to this
Account. Contributions deposited in the Pending Allocation Account will not
be afforded the same rights as Contributions under this Contract. The
following Articles and/or Sections under this Contract will not be
applicable: (i) Section 3.7 ANNUAL ADMINISTRATION CHARGE, (ii) ARTICLE VI -
TRANSFERS BETWEEN DIVISION AND SUB-ACCOUNTS, (iii) ARTICLE VII -WITHDRAWALS
AND DISTRIBUTIONS, (iv) ARTICLE IX - PAYOUT ANNUITIES, and (v) ARTICLE X -
LOANS.
10
ARTICLE IV - GUARANTEED INTEREST DIVISION
4.1 PARTICIPANT'S ACCOUNT BALANCE IN GUARANTEED INTEREST DIVISION: The dollar
value of a Participant's Account balance in the Guaranteed Interest
Division as of a date will be equal to the sum of:
(a) Contributions allocated, on behalf of the Participant, to the
Guaranteed Interest Division on or prior to that date, and
(b) Xxxxxxx transferred, on behalf of the Participant, to the Guaranteed
Interest Division from the Variable Investment Division on or prior to
that date, less any;
(c) Gross Withdrawal Amounts from the Guaranteed Interest Division, on
behalf of the Participant, on or prior to that date; and
(x) Xxxxxxx transferred, on behalf of the Participant, to the Variable
Investment Division on or prior to that date; and
(e) Applicable charges to the Participant's Account on or prior to that
date; and
(f) Annuity Conversion Amounts, on behalf of the Participant, on or prior
to that date, plus any;
(g) Interest credited to the Participant's Account balance in the
Guaranteed Interest Division on or prior to that date.
4.2 INTEREST: Lincoln Life will credit interest each day to the portion of the
Participant's Account balance in the Guaranteed Interest Division, using
the previous day's ending balance. The rate of interest credited each day,
if compounded for three hundred sixty-five (365) days, yields the annual
interest rate in effect for the day.
Lincoln Life will declare in advance a guaranteed interest rate which will
be effective for all amounts in the Participant's Account balance in the
Guaranteed Interest Division during the designated year. This rate will
never be less than three percent (3%). However, this minimum rate will not
be considered for purposes of Section 10.6 (EFFECT OF LOAN ON PARTICIPANT'S
ACCOUNT) under this Contract.
Lincoln Life may also declare in advance separate interest rate guarantees
which are in excess of the guaranteed interest rate for some or all of the
Participant's Account balance in the Guaranteed Interest Division for
specific period(s) during the designated year.
11
ARTICLE V - VARIABLE INVESTMENT DIVISION
5.1 PARTICIPANT'S ACCOUNT BALANCE IN THE VARIABLE INVESTMENT DIVISION: The
Participant's Account balance in the Variable Investment Division is equal
to the sum of the dollar value of a Participant's Account balance in each
Sub-Account as of the end of a Valuation Period which will be equal to the
product of:
(a) The Participant's number of Accumulation Units as of the end of that
Valuation Period; times
(b) The Accumulation Unit Value as of the end of that Valuation Period.
5.2 ACCUMULATION UNITS: The number of Accumulation Units a Participant has in
a Sub-Account as of the end of any Valuation Period is the number of
Accumulation Units the Participant had in that Sub-Account as of the end of
the preceding Valuation Period; plus
(a) The number of Accumulation Units attributable to amounts deposited to
or transferred to that Sub-Account during the current Valuation
Period; minus
(b) The number of Accumulation Units attributable to amounts transferred
from, converted to an annuity, removed as a charge, paid as a death
benefit, or withdrawn from that Sub-Account during the current
Valuation Period.
5.3 ACCUMULATION UNIT VALUE: The Accumulation Unit Value for each Sub-Account
was set initially at ten dollars ($10), except for the Index Account which
was set at nine and nine hundred six one thousands ($9.9060) of a dollar.
Subsequent Accumulation Unit Values are determined by multiplying;
(a) The Net Investment Factor for the current Valuation Period by;
(b) The Accumulation Unit Value as of the end of the immediately preceding
Valuation Period.
5.4 NET INVESTMENT FACTOR: The Net Investment Factor is used to measure the
investment experience of a Sub-Account net of the Mortality and Expense
Risk Charge as defined in Section 5.5. The Net Investment Factor for a
Valuation Period is equal to (a) divided by (b) with the result multiplied
by (c) and adjusted by the amount per share of any taxes which are incurred
by Xxxxxxx Life because of the existence of the Sub-Account;
12
where (a) is;
the net asset value per share of the underlying mutual fund held by
the Sub-Account as of the end of the Valuation Period, plus;
the amount per share of any dividend or capital gain distribution from
the underlying mutual fund held by the Sub-Account during the
Valuation Period,
where (b) is;
the net asset value per share of the underlying mutual fund held by
the Sub-Account as of the end of the immediately preceding Valuation
Period,
where (c) is;
one (1.00) minus the Annual Mortality and Expense Risk Charge shown in
Section 1.6 to the n/365th power where n equals the number of calendar
days since the immediately preceding Valuation Date.
5.5 MORTALITY AND EXPENSE RISK CHARGE: This charge is imposed to compensate
Lincoln Life for its assumption of mortality and expense risks under this
Contract. This charge is shown on an annualized basis in Section 1.6 and
is deducted on a daily basis as described in Section 5.4. This charge may
not be increased without the approval of a majority of all affected Lincoln
Life contractholders.
13
ARTICLE VI - TRANSFERS BETWEEN DIVISIONS AND SUB-ACCOUNTS
6.1 TRANSFERS DURING ACCUMULATION PERIOD: Subject to the limitations stated in
Section 1.4, Participants may transfer all or part of their Account balance
in any Division or Sub-Account to another Division or Sub-Account.
You or the Participant may make a transfer request by notifying Lincoln
Life in writing in a form acceptable to Lincoln Life or by telephone in
accordance with procedures published by Lincoln Life.
6.2 TRANSFERS DURING ANNUITY PERIOD: An Annuitant may not transfer any part of
the Annuitant's Annuity Conversion Amount.
14
ARTICLE VII - WITHDRAWALS AND DISTRIBUTIONS
7.1 WITHDRAWALS DURING THE ACCUMULATION PERIOD: During the Accumulation
Period, a Participant may withdraw from any or all Divisions, subject to
the restrictions stated in Section 7.4, all or part of the Participant's
Account balance in the Division or Sub-Accounts remaining after reductions
for any applicable Annual Administration Charge (imposed on Total
Withdrawals), Contingent Deferred Sales Charge (CDSC), premium taxes and
outstanding loan, including the loan security thereon. Annuity Conversion
Amounts are not considered withdrawals.
All withdrawal requests must be submitted in a form acceptable to Lincoln
Life and must indicate the amount and the Division(s) from which the
withdrawal is to be made.
Lincoln Life reserves the right to delay payment of Guaranteed Interest
Division withdrawal amounts per Section 12.8.
7.2 TOTAL WITHDRAWALS: A Total Withdrawal of a Participant's Account will
occur when a Participant who has no outstanding loans
(a) requests the liquidation of his entire Account balance, or
(b) requests an amount such that the amount requested plus any CDSC as
defined in Section 7.6 results in a remaining Participant's Account
balance being less than the applicable Annual Administration Charge as
defined in Section 1.5, in which case, the request is treated as if it
were a request for liquidation of the Participant's entire Account
balance.
The Participant's Active Life Certificate must be surrendered to Lincoln
Life when a Total Withdrawal of a Participant's Account occurs.
A Participant refund under the Free-look provisions of Section 12.17 is not
considered a Total Withdrawal under this Article.
7.3 PARTIAL WITHDRAWALS: A Partial Withdrawal of a Participant's Account will
occur when:
(a) A Participant who has an outstanding loan makes a withdrawal; or
(b) A Participant who has no outstanding loans, requests an amount less
than a total withdrawal.
15
7.4 WITHDRAWAL REQUIREMENTS FOR SECTION 403(b) PLANS: Withdrawals are subject
to the requirements set forth in Section 403(b) of the Code and regulations
thereof.
(a) Withdrawal Requests for Participants under Section 403(b) Plans
Subject to Title I of ERISA: You must make withdrawal requests on
behalf of Participants. All withdrawal requests will require Your
written authorization and written documentation specifying the portion
of the Participant's Account balance which is available for
distribution to the Participant.
(b) Withdrawal Requests for Participants under Section 403(b) Plans not
---
Subject to Title I of ERISA: Any portion of the Participant's Account
balance that has been recorded by Xxxxxxx Life as a salary reduction
contribution made and/or earnings credited prior to January 1, 1989,
(including transferred amounts recorded as such pursuant to Section
3.4), may be withdrawn for any reason. Any portion of the
Participant's Account balance that has been recorded by Xxxxxxx Life
as a salary reduction Contribution made and/or earnings credited after
December 31, 1988, (including transferred amounts recorded as such
pursuant to Section 3.4), are subject to the withdrawal restrictions
stated in Section 403(b) of the Code. Participants must certify to
Lincoln Life (and provide supporting information, if requested), that
an event permitting withdrawal has occurred and that Lincoln Life may
rely on such representation in granting the withdrawal request.
7.5 MINIMUM DISTRIBUTION REQUIREMENTS FOR SECTION 403(b) PLANS: Section
403(b)(10) of the Code and regulations thereunder require that
distributions be made from this Contract in a manner which satisfies
requirements similar to the requirements of Section 401(a)(9) including
the incidental death benefit requirements of Section 401(a)(9)(G).
(1) Section 401(a)(9) requires that:
(a) the Participant's Account be distributed not later than the
required beginning date; or
(b) the Participant's Account be distributed not later than the
required beginning date, over the life of the Participant or over
the lives of the Participant and a designated Beneficiary.
(2) A Participant may choose to have the Participant's Account distributed
in one of the following manners:
(a) As a lump sum payment;
16
(b) As an annuity meeting the requirements of Section 401(a)(9) of
the Code;
(c) As an annual distribution where the amount distributed each
calendar year is at least an amount equal to the quotient
obtained by dividing: (a) the amount of the Participant's
Account required to be distributed as of December 31 of the
calendar year immediately preceding the calendar year for which
the distribution is being made; by (b) the life expectancy of the
Participant, or the life expectancy of the Participant and the
Beneficiary; or
(d) A combination of the above.
With respect to (c) and (d) above, the life expectancy of the Participant
and a surviving spouse Beneficiary may be recalculated, but not more
frequently than annually. A non-spouse Beneficiary's life expectancy may
not be recalculated.
7.6 CONTINGENT DEFERRED SALES CHARGE (CDSC): The following schedule of CDSC
shall apply to all Withdrawal Amounts.
(a) WHEN A WITHDRAWAL IS REQUESTED AND ONE OR THE CDSC WILL EQUAL:
MORE OF THE FOLLOWING CONDITIONS IS MET:
The Participant has died 0%
The Participant has incurred a disability for 0%
which he is receiving Social Security payments
The Participant has attained age fifty-nine 0%
and one-half (59 1/2)
The Participant has separated from service 0%
with the Contractholder and is age fifty-five
(55)
The Participant has separated from service 0%
with the Contractholder
The Participant has demonstrated a financial 0%
hardship need
17
The Participant has requested a withdrawal 0%
which will not exceed twenty percent (20%) of
his Participant's Account Balance and no
other withdrawal has been made in that
calendar year
(b) For all other amounts subject to a CDSC, the CDSC will be in
accordance with the schedule below.
During Participation Year CDSC Percent
1-6 5%
7 4%
8 3%
9 2%
10 1%
11 and later 0%
Lincoln Life requires reasonable proof necessary to verify that the
withdrawal meets the conditions described above in Section 7.6(a) and such
proof must be submitted with the withdrawal request. If You or the
Participant do not furnish the proof requested by Xxxxxxx Life, the CDSC
stated in Section 7.6(b) shall apply.
The CDSC on any withdrawal may be reduced or eliminated but only to the
extent that Lincoln Life anticipates that it will incur lower sales
expenses or perform fewer sales services due to economies arising from (i)
the size of the particular group, (ii) an existing relationship with the
Contractholder, (iii) the utilization of mass enrollment procedures, or
(iv) the performance of sales functions by the Contractholder or an
employee organization which Lincoln Life would otherwise be required to
perform.
In no event will the CDSC, when added to any CDSC previously imposed due to
a Participant withdrawal, exceed eight and one-half percent (8.5%) of the
cumulative Contributions to a Participant's Account.
7.7 SYSTEMATIC WITHDRAWAL OPTION: Any Participant who: (a) is at least age
fifty-nine and one-half (59 1/2), or (b) is disabled and receiving Social
Security disability benefits, or (c) is separated from service with the
Contractholder may elect this option. A Participant must also have a
vested Participant Account balance of at least ten thousand dollars
$10,000) of pre-tax Contributions under this Contract at the date of the
election.
Amounts held for a spousal payee under a Qualified Domestic Relations Order
(QDRO) shall be recognized as eligible for the Systematic Withdrawal
Option.
18
Any spousal payee who wishes to elect this distribution option must also
meet the minimum ten thousand dollars ($10,000). Account balance
requirement and either the age or disability requirement as discussed
above.
A Participant may elect to receive monthly, quarterly, semi-annual, or
annual payments in a flat amount or payments on a monthly basis for an
interest equivalency amount. An interest equivalency amount is an
approximation of the interest earned between each payment period based upon
the interest rate in effect at the beginning of each respective payment
period. This amount will be determined by Xxxxxxx Life. (See Attachment I
for illustration.) A Participant may change the frequency, payment type,
or payment amount of his Systematic Withdrawal Option by submitting a
request in writing on a form acceptable to Lincoln Life. A Participant may
make such a change only once during each calendar year.
A Participant may at any time direct Lincoln Life to cease payments under
this option provided the request is made in writing. A Participant who
chooses to stop receiving systematic withdrawals may not request that any
systematic withdrawal payments begin again until the next calendar year.
Systematic withdrawals shall be withdrawn from amounts allocated to the
Guaranteed Interest Division of the Participant's Account balance. If the
balance of the Guaranteed Interest Division is not sufficient to meet the
payment amount requested, the Participant, in writing, may direct Lincoln
Life on a form acceptable to Lincoln Life to transfer the appropriate
amount to the Guaranteed Interest Division; otherwise, such payment will
cease.
Lincoln Life will deduct the Systematic Withdrawal Set-Up Charge indicated
in Section 1.10 from the Participant's Account balance each time a
Systematic Withdrawal Option is established. The applicable CDSC, if any,
will be assessed on each systematic withdrawal payment.
Payments under this option shall stop upon the earliest of the following
events:
(a) On the date of the Participant's death. A Beneficiary who is a spouse
may elect this option by requesting it in writing on a form acceptable
to Lincoln Life, unless election of this form of benefit would violate
any other requirements of this contract. The spousal Beneficiary must
meet the ten thousand dollar ($10,000) minimum Account balance
requirement prior to electing the Systematic Withdrawal Option; or
(b) When there is an insufficient Participant Account balance after
deducting the applicable CDSC and Annual Administration Charge, if
any, to pay the amount requested; or
19
(c) The Participant fails to meet the requirements of the Systematic
Withdrawal Option as outlined above in the first (1st) paragraph of
this Section.
If a disabled or terminated Participant, who is currently receiving a
Systematic Withdrawal Option payment, returns to service with the
Contractholder, the Contractholder or Participant must notify Lincoln Life
in writing within thirty (30) days from the date of return to service.
Lincoln Life reserves the right to discontinue the Systematic Withdrawal
Option payment under these circumstances.
If a Participant wishes to exercise this option under another Lincoln Life
Annuity Contract, such request shall be considered separate from this
Contract and shall follow the Systematic Withdrawal Option rules under that
Annuity Contract, if permitted.
Lincoln Life may, at its option, discontinue the Systematic Withdrawal
Option under this Contract at any time provided You are given at least
thirty (30) days advance written notice.
7.8 DIRECT ROLLOVER OPTION: Beginning January 1, 1993, a Participant or
Beneficiary may elect this option for any distribution that qualifies as an
Eligible Rollover Distribution as defined by Section 402(c) of the Internal
Revenue Code and that meets all the following requirements:
(1) The distribution must be paid directly to either a single Individual
Retirement Account or to a single Tax Deferred Annuity. The check,
wire, or other form of remittance shall be made payable to the
trustee, custodian, or financial institution sponsoring the Individual
Retirement Account or Tax Deferred Annuity. The form of remittance
will not be an instrument that can be negotiated by the Participant.
(2) The Participant must provide, in a form acceptable to Lincoln Life,
all information necessary to make the payment to an Individual
Retirement Account or Tax Deferred Annuity.
(3) The Participant or Beneficiary may not revoke a request for payment
under this option for any payment after Lincoln Life has received a
written request for a direct rollover.
20
ARTICLE VIII - DEATH BENEFITS
8.1 DEATH BENEFIT DURING THE ACCUMULATION PERIOD: If death of the Participant
occurs during the Accumulation Period, Lincoln Life will pay the
Beneficiary, if one is living, the greater of the following amounts:
(a) The Net Contributions, or
(b) The Participant's Account balance less any outstanding loan (including
principal and due and accrued interest).
Lincoln Life will calculate the Death Benefit as of the end of the
Valuation Period during which it receives both satisfactory notification of
the Participant's death, pursuant to Section 8.2, and the election of a
form of benefit pursuant to Section 8.3. If no election is made pursuant
to Section 8.3 within sixty (60) days following Xxxxxxx Life's receipt of
satisfactory notice of death, the Death Benefit will be calculated as of
the end of the Valuation Period during which that sixtieth (60th) day
occurs.
If Xxxxxxx Life makes a withdrawal payment pursuant to a Participant
request prior to receiving notice that the Participant has died, but
subsequent to the Participant's death, Lincoln Life will deduct that
payment from each of (a) and (b) above in calculating the Death Benefit.
8.2 NOTIFICATION OF DEATH: Lincoln Life must be notified of a Participant's
death no later than six (6) months from the Participant's date of death in
order for the Beneficiary to receive the Death Benefit amount described in
Section 8.1(a) above. Such notification must be in a form satisfactory to
Lincoln Life. Beneficiaries for whom notification of a Participant's death
is received more than six (6) months after the Participant's date of death
shall receive the Death Benefit amount described in Section 8.1(b) above.
8.3 PAYMENT OF DEATH BENEFIT: Within sixty (60) calendar days after Xxxxxxx
Life receives satisfactory notification of the Participant's death, the
Beneficiary must make an election to have the Death Benefit applied in one
of the following ways:
(a) As a lump sum payment to the Beneficiary; or
(b) Towards an annuity to be distributed in substantially equal
installments over the life expectancy of the Beneficiary or a period
certain not exceeding the life expectancy of the Beneficiary; or
(c) A combination of the above.
21
A Beneficiary who does not make an election pursuant to this section within
sixty (60) days after Xxxxxxx Life receives notification of the
Participant's death will receive a lump sum payment calculated in
accordance with Section 8.1(b) above.
If the Beneficiary is someone other than the spouse of the deceased
Participant, the Code provides that the Beneficiary may not elect an
annuity which would commence later than December 31 of the calendar year
following the calendar year of the Participant's death. If a non-spousal
Beneficiary elects to receive payment in a single lump sum, such payment
must be received no later than December 31 of the fourth (4th) calendar
year following the calendar year of the Participant's death.
If the Beneficiary is the surviving spouse of the deceased Participant,
under the Code, distributions are not required to begin earlier than
December 31 of the calendar year in which the Participant would have
attained age seventy and one-half (70-1/2). If the surviving spouse dies
before the date on which annuity distributions commence, then, for purposes
of the Death Benefit, the surviving spouse shall be deemed to be the
Participant.
If there is no living named Beneficiary on file with Lincoln Life at the
time of a Participant's death, Lincoln Life will pay the Death Benefit to
the Participant's estate in a single lump sum upon receipt of satisfactory
proof of the Participant's death, but not later than December 31 of the
fourth (4th) calendar year following the calendar year of the Participant's
death. Valuation of the Death Benefit shall occur as of the end of the
Valuation Period during which due proof of the Participant's death is
received by Lincoln Life.
8.4 DEATH DURING THE ANNUITY PERIOD: If the Annuitant dies during the Annuity
Period, the Beneficiary, if any, or the Annuitant's estate will receive the
amount payable, if any, according to the in-force annuity options. Any
remaining Participant's Account balance will be paid in accordance with the
provisions of this Article.
22
ARTICLE IX - PAYOUT ANNUITIES
9.1 ELECTION OF PAYOUT ANNUITY OPTION: A Participant eligible to receive a
distribution under the Code or a Beneficiary of a deceased Participant may
notify Lincoln Life in writing in a form acceptable to Lincoln Life that
the Participant or the Beneficiary is electing to convert all or part of
the Participant's Account balance or Death Benefit to a Payout Annuity
option available under this Contract. Upon being notified of such an
election, Lincoln Life shall calculate the amount to be converted to a
Payout Annuity as either the Participant's Account balance, or a portion
thereof, or the Death Benefit as of the initial Annuity Payment Calculation
Date, as appropriate, less the charge for premium taxes, if any.
If the Participant's Account balance or the Beneficiary's Death Benefit is
less than two thousand dollars ($2,000) or if the amount of the first
scheduled payment is less than twenty dollars ($20), Lincoln Life may, at
its option, cancel the Payout Annuity and pay the Participant or
Beneficiary his entire Account balance or Death Benefit in a lump sum.
9.2 GUARANTEED ANNUITY: The payment amount is determined by dividing the
Annuitant's Annuity Conversion Amount in the Guaranteed Interest Division
as of the initial Annuity Payment Calculation Date by the applicable
Annuity Conversion Factor as defined in Section 9.4.
9.3 VARIABLE ANNUITY: The initial payment amount of the Annuitant's Variable
Annuity for each Sub-Account is determined by dividing his Annuity
Conversion Amount in each Sub-Account as of the initial Annuity Payment
Calculation Date by the applicable Annuity Conversion Factor as defined in
Section 9.4.
The amount of the Annuitant's subsequent Variable Annuity payment for each
Sub-Account is determined by:
(a) Dividing the Annuitant's initial Variable Annuity payment amount by
the Annuity Unit Value for that Sub-Account selected for his interest
rate option as described in Section 9.4 as of his initial Annuity
Payment Calculation Date; and
(b) Multiplying the resultant number of annuity units by the Annuity Unit
Values for the Sub-Account selected for his interest rate option for
his respective subsequent Annuity Payment Calculation Dates.
The Annuity Unit Value for all Sub-Accounts for all interest rate options
will initially be set at ten dollars ($10). Each subsequent Annuity Unit
Value for a Sub-Account for an interest rate option is determined by:
23
Dividing the Accumulation Unit Value for the Sub-Account as of the
subsequent Annuity Payment Calculation Date (APCD) by the Accumulation
Unit Value for the Sub-Account as of the immediately preceding APCD,
Dividing the resultant factor by one (1.00) plus the interest rate
option to the n/365 power where n is the number of days from the
immediately preceding APCD to the subsequent APCD, and
Multiplying this factor times the Annuity Unit Value as of the
immediately preceding APCD.
9.4 BASIS OF ANNUITY CONVERSION FACTORS:
(a) Guaranteed Annuities - The maximum Annuity Conversion Factors that may
be used by Lincoln Life under this Contract are based on the 1983
Individual Annuity Mortality Table, set back four (4) years, and an
interest rate of three percent (3.0%). From time to time, lower
conversion factors may be used by Lincoln Life. (Lowering the
conversion factor will increase the amount of the annuity payment.)
(b) Variable Annuities - The Annuity Conversion Factors which are used to
determine the initial payments are based on the 1983 Individual
Annuity Mortality Table, set back four (4) years, and an interest rate
in an integral percentage ranging from zero to six percent (0 to
6.00%) as selected by the Annuitant.
9.5 PAYOUT ANNUITY OPTIONS: The following Payout Annuity options are
available:
(a) Life
(b) Life with payments guaranteed for ten (10), fifteen (15) or twenty
(20) years
(c) Joint and Survivor
(d) Payments guaranteed for ten (10), fifteen (15) or twenty (20) years
(e) Other offered by Xxxxxxx Life.
To the extent option (d) is elected for a Variable Annuity, the Annuitant
may request at any time during the payment period that the present value of
any remaining installments be paid in one lump sum. However, any lump sum
so elected will be treated as a withdrawal during the Accumulation Period
subject to the applicable CDSC stated in Section 7.6.
9.6 RETIRED LIFE CERTIFICATE: Once an annuity option is selected by a
Participant, or the Beneficiary of a deceased Participant, Xxxxxxx Life
will issue to the Annuitant an appropriate Certificate evidencing Lincoln
Life's obligations.
24
ARTICLE X - LOANS
10.1 GENERAL: During a Participant's Accumulation Period, the Participant, if
permitted by the applicable Section 403(b) Plan, may apply for a loan under
this Contract by completing a loan application available from Lincoln Life.
Loans are secured by the Participant's Account balance in the Guaranteed
Interest Division.
10.2 RESTRICTIONS ON LOAN AMOUNT: The amount and terms of a loan are subject to
the restrictions imposed under Section 72(p) of the Code, as it may be
amended from time to time.
Additionally, the initial amount of a Participant's loan may not exceed
ninety percent (90%) of the Participant's Account balance in the Guaranteed
Interest Division.
10.3 MINIMUM LOAN AMOUNT: The initial amount of a loan must be at least one
thousand dollars ($1,000).
10.4 NUMBER OF LOANS OUTSTANDING: A Participant may have only one loan
outstanding at any time and may not establish more than one loan in any six
(6) month period. However, a Participant may renegotiate an outstanding
loan balance once during the term of the loan.
10.5 LOAN INTEREST RATE: The initial interest rate on a loan will be the lesser
of (a) the rate being credited in the Guaranteed Interest Division as of
the date of the loan and (b) the Xxxxx'x Corporate Bond Yield Average,
rounded to the nearest five basis points (0.05%) for the first month in
the calendar quarter which precedes the date of the loan. The loan
interest rate will remain fixed for the term of the loan, unless the
initial interest rate on a hypothetical new loan to the Participant would
be lower than the Participant's actual loan rate by more than fifty basis
points (0.50%). In such case, the loan interest rate will be reduced to
such lower rate as of the first day that such lower rate would
hypothetically be effective.
10.6 EFFECT OF LOAN ON PARTICIPANT'S ACCOUNT: When a Participant takes a loan,
Xxxxxxx Life will subdivide his Participant's Account balance in the
Guaranteed Interest Division by establishing a loan reserve account in an
amount initially equal to the initial loan amount. Funds held in the loan
reserve account are held as security for the loan and will accrue interest
at a rate which is three percent (3.0%) below the loan interest rate. To
the extent that the loan interest rate is subsequently reduced, the rate
credited to funds in the loan reserve account will also be reduced in order
to maintain the three percent (3.0%) differential.
As the Participant makes repayments to Lincoln Life on the loan, an amount
equal to the principal component of the repayment, plus the interest
accrued in the loan
25
reserve account, will be transferred from his loan reserve account back to
his Participant's Account balance in the Guaranteed Interest Division.
In addition, an amount equal to ten percent (10%) of the principal of the
loan will be held as security to cover the interest and the CDSC, should
the Participant fail to make the required quarterly payments of principal
and interest. This amount will earn interest at the interest rate in
effect in the Guaranteed Interest Division but will not be available for
withdrawals. As the principal is reduced, the amount held as security will
also be reduced.
10.7 DEFAULT IN LOAN REPAYMENT: If a Participant fails to make any quarterly
principal and interest payment within thirty (30) days of the payment due
date, his loan will be in default and Lincoln Life will deduct from his
loan reserve account and from his Participant's Account balance in the
Guaranteed Interest Division the principal, due and accrued interest, and a
loan default charge of 5% and any CDSC thereon, as of the default date.
Lincoln Life will also recharacterize the principal and due and accrued
interest as a withdrawal.
10.8 RESERVATION OF RIGHTS BY XXXXXXX LIFE: Lincoln Life reserves the right to:
(a) Delay making a loan for up to six (6) months from the date the loan
application is received; or
(b) With ninety (90) days written notice to You, amend any portion of the
loan specifications with regard to applications for new loans; or
(c) With ninety (90) days written notice to You, discontinue making new
loans under this Contract.
10.9 LOAN SET-UP CHARGE: Lincoln Life will charge a Participant the amount
specified in Section 1.7 each time a loan is established. The amount will
be withdrawn from the Participant's Account balance.
26
ARTICLE XI - DISCONTINUANCE AND TERMINATION OF CONTRACT
11.1 CONTRACT DISCONTINUANCE BY CONTRACTHOLDER: You may discontinue this
Contract by written notice to Lincoln Life. This contract will be deemed
discontinued on the later of the date You specify or the date the written
notice is received by Lincoln Life.
11.2 CONTRACT DISCONTINUANCE BY XXXXXXX LIFE: Lincoln Life may, at its option,
discontinue this Contract in whole or in part if (a) You fail to meet the
Minimum Contribution Amount specified in Section 1.1 or (b) a modification
in this Contract is necessary in order to comply with Federal or State
requirements, including the Employee Retirement Income Security Act of
1974, and You refuse to accept a substantially similar contract offered by
Lincoln Life that incorporates such modification. Discontinuance pursuant
to this Section shall be effective as of a date specified by Lincoln Life,
provided You are given at least fifteen (15) days advance written notice in
which to cure any remediable defaults. Discontinuance by Xxxxxxx Life
supersedes any date established under Section 11.1.
11.3 EFFECT OF DISCONTINUANCE: As of the date this Contract is discontinued
under either 11.1 or 11.2 above:
(a) No further Contributions will be accepted by Xxxxxxx Life.
(b) Participants will be allowed to request withdrawals subject to the
restrictions set forth in Section 403(b) of the Code and regulations
thereof.
(c) Participants will be allowed to request transfers from each Sub-
Account of the Variable Investment Division to the Guaranteed Interest
Division. Transfers from the Guaranteed Interest Division to the
Variable Investment Division are not allowed. Transfers among the
Sub-Accounts of the Variable Investment Division are not allowed.
(d) Participants will not be allowed to request loans.
(e) Lincoln Life will send written notice to each Participant's last known
address stating that the Contract is discontinued and that the
Participant's remaining Account balance may be distributed in either
(i) a lump sum payment, (ii) a Payout Annuity conversion amount, or
(iii) some combination of (i) and (ii).
Such form of payment will be distributed at the earlier of:
(1) the Participant's attainment of age fifty-nine and one-half (59
1/2), or
27
(2) the Participant's separation from service, or
(3) the Participant has died, or
(4) the Participant has incurred a disability for which he is
receiving Social Security payments, or
(5) the date the Participant directs Lincoln Life to transfer the
entire value of the Participant's Account to another 403(b)
funding vehicle.
The Participant's remaining Account balance shall be the balance
remaining after (i) the repayment of any, if applicable, outstanding
loans including principal, due and accrued interest, and (ii) any
applicable CDSC or Annual Administration Charge that applies to the
Participant's Account.
11.4 CONTRACT TERMINATION: This Contract will terminate when there are no
participant Account balances under this Contract.
28
ARTICLE XII - GENERAL PROVISIONS
12.1 CONTRACT: This Contract, together with Your attached Application and any
riders, constitutes the entire Contract between You and Lincoln Life.
Lincoln Life is not a party to any Plan document, and is not responsible
for the validity of any Plan or actions taken by You under that Plan. The
terms of this Contract shall govern with respect to the rights and
obligations of Lincoln Life, notwithstanding any contrary provisions or
conditions of any trust or plan.
Lincoln Life may rely on any action or information provided by You under
the terms of this Contract and shall be relieved and discharged from any
further liability to any party in acting at the direction and upon the
authority of You. All statements made by You shall be deemed
representations and not warranties.
Xxxxxxx Life may deactivate this Contract by prohibiting new Contributions
and/or new Participants after the date of deactivation. Lincoln Life will
give You not less than ninety (90) days notice of the date of deactivation.
12.2 CONTRACT AMENDMENTS: Lincoln Life may amend this Contract at any time by
amendment or replacement. Such amendments will not, without Your consent,
adversely alter (a) the minimum interest rate set forth in Section 4.2, (b)
the maximum annuity conversion factors under Section 9.4, or (c) the amount
or terms of any annuity benefit already selected under Section 9.1 prior to
the effective date of the change. No change in this Contract will
adversely affect the rights of a Participant with respect to Contributions
received or annuities purchased before the effective date of the change
unless:
(a) Such amendments are made in order to comply with rulings, regulations
and laws applicable to the program provided by this Contract; or
(b) Your consent to the Amendment is obtained.
Lincoln Life will give You not less than ninety (90) days notice prior to
the effective date of any change made in accordance with this Section.
12.3 CONTRACT INTERPRETATION: Whenever the context so requires, the plural
includes the singular, the singular the plural and the masculine the
feminine.
12.4 INFORMATION, REPORTS AND DETERMINATIONS: You shall furnish Lincoln Life
with such facts and information as Lincoln Life may require for the
administration of this Contract, including, upon request, the original or
photocopy of any pertinent records You keep. All information that You
furnish to Lincoln Life pursuant to this Contract, including the
information pertaining to Contributions described in Article III, shall be
legible, accurate and satisfactory in
29
form to Lincoln Life. Such information shall be sent to a location
designated by Lincoln Life.
You shall make any determination required under this Contract pursuant to
the terms of the Contract or required under ERISA and shall report that
determination in writing to Lincoln Life. Such determination shall be
conclusive for the purpose of this Contract. Lincoln Life shall be fully
protected in relying on the reports and other information furnished by You
and need not inquire as to the accuracy or completeness of such reports
and information.
12.5 MISSTATEMENTS: If Lincoln Life provides a benefit under this Contract
based upon misstated or omitted information, including but not limited to
misstatement of age, Xxxxxxx Life will make adjustments to the benefit to
reflect the correct information. Lincoln Life is relieved and discharged
from any liability and responsibility with respect to benefits provided in
reliance upon information You furnish.
12.6 ASSIGNMENT: You may not assign this Contract without Xxxxxxx Life's prior
written consent. A Participant or Beneficiary under this Contract may not,
unless permitted by law, assign or encumber any payment due under this
Contract.
12.7 MARKET EMERGENCIES: If transactions are to be made to or from the
Variable Investment Division, Lincoln Life may not suspend the right of
redemption or delay payment for more than seven (7) calendar days after
tender for redemption, except for (1) any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings);
(2) any period when trading in the markets normally utilized is
restricted, or an emergency exists as determined by the Securities and
Exchange Commission, so that disposal of investments or determination of
the Accumulation Unit Value is not reasonably practicable; or (3) for such
other periods as the Securities and Exchange Commission by order may
permit for the protection of the Participants.
12.8 DEFERRAL PERIODS: If a withdrawal is to be made from the Guaranteed
Interest Division, Lincoln Life may defer the payment for the period
permitted by the law of the state in which this Contract was delivered but
not more than six (6) months after a written election is received by
Xxxxxxx Life. During the period of deferral, interest at the then current
interest rate(s) will continue to be credited to a Participant's Account
in the Guaranteed Interest Division.
12.9 DEDUCTIONS FOR PREMIUM TAXES: Lincoln Life will deduct from Participant
Account balances any premium tax levied as a result of the existence of
Participant Accounts by any state or other governmental entity.
12.10 FACILITY OF PAYMENT: If any person is, in the judgment of Xxxxxxx Life,
physically or mentally incapable of personally receiving and giving a
valid receipt for any payment due him under this Contract, Lincoln Life
may, unless and until
30
claim shall have been made by a duly appointed legal guardian or
conservator of the person and property of such person, make such payment
or any part thereof to such other person or institution which, in the
judgment of Lincoln Life, is then contributing toward or providing for the
care and maintenance of such person. In no event will any such payment
exceed the maximum allowed under the applicable law of the state in which
this Contract is delivered. Such payment shall fully discharge Lincoln
Life of its obligations to the extent of the payment.
Lincoln Life will make any payment which has become due to a Participant
or an Annuitant and has not been paid prior to his death, to the
Participant's Beneficiary or Beneficiaries, his executors or
administrators. If no Beneficiary or personal representative has been
named, Xxxxxxx Life may make payment to any one or more of the surviving
members of the following classes of relatives; spouse, children,
grandchildren, brothers, sisters, and parents. Such payment shall fully
discharge Lincoln Life for all liability to the extent of the payment.
12.11 EVIDENCE OF SURVIVAL: When a benefit payment is contingent upon the
survival of any person, evidence of such person's survival must be
furnished to Lincoln Life, either by such person's endorsement of the
check drawn for such payment, or by other satisfactory means.
12.12 NON-WAIVER: The failure on Lincoln Life's part to perform or insist upon
the strict performance of any provision or condition of this Contract
shall neither constitute a waiver of Lincoln Life's rights to perform or
require performance of such provision or condition, nor stop Xxxxxxx Life
from exercising any other rights it may have in such provision, condition,
or otherwise in this Contract or any Plan.
12.13 RECEIPT OF NOTICE: Whenever Lincoln Life receives information
establishing any right or conferring any benefit upon any Participant or
Beneficiary, such receipt shall be deemed to take place on any Business
Day that such information is received.
12.14 SEPARABILITY OF PROVISIONS: If any provision of this Contract is
determined to be invalid, the remainder of the provisions shall remain in
full force and effect.
12.15 THE SEPARATE ACCOUNT: The Separate Account is registered and operated as
a Unit Investment Trust under the Investment Company Act of 1940. As such,
the assets of each Sub-Account are invested in a registered management
investment company (mutual fund).
The Separate Account will be legally separated from Xxxxxxx Life's other
accounts. The Separate Account's assets will, at the time during the year
that adjustments in the reserves are made, have a value of at least equal
to the reserves and other contract liabilities with respect to the
Separate Account, and at all other
31
times, will have a value approximately equal to, or in excess of, such
reserves and liabilities. The portion of the assets having a value equal
to, or approximately equal to, the reserves and contract liabilities will
not be chargeable with liabilities arising out of any other business which
Lincoln Life may conduct.
Lincoln Life reserves the right, subject to compliance with applicable
law, including approval by You or the Participants if required by law, (1)
to create additional Sub-Accounts, (2) to combine or eliminate Sub-
Accounts, (3) to transfer assets from one Sub-Account to another, (4) to
transfer assets to the General Account and other separate accounts, (5) to
cause the deregistration and subsequent re-registration of the Separate
Account under the Investment Company Act of 1940, (6) to operate the
Separate Account under a committee and to discharge such committee at any
time, and (7) to eliminate any voting rights which You or Participants may
have with respect to the Separate Account, (8) to amend the Contract to
meet the requirements of the Investment Company Act of 1940 or other
federal securities laws and regulations, (9) to operate the Separate
Account in any form permitted by law, (10) to substitute shares of another
fund for the shares held by a Sub-Account, and (11) to make any change
required by the Internal Revenue Code, the Employee Retirement Income
Security Act of 1974, or the Securities Act of 1933, to the extent not
provided in Section 12.2.
12.16 PAYMENT OF BENEFITS: Lincoln Life shall make payment of benefits under
this Contract directly to a Participant or Beneficiary at the last known
address on file with Lincoln Life.
12.17 FREE-LOOK PERIOD: A Participant will receive an Active Life Certificate
upon Lincoln Life's receipt of a duly completed participation enrollment
form. If the Participant chooses not to participate under this Contract,
he may exercise his Free-look right by sending a written notice to Lincoln
Life that he does not wish to participate under this Contract within ten
(10) days after the date the Certificate is received by the Participant.
For purposes of determining the date on which the Participant has sent
written notice, the postmark date will be used.
If a Participant exercises his Free-look right in accordance with the
foregoing procedure, Lincoln Life will refund in full the Participant's
aggregate Contributions less aggregate withdrawals, or if greater, with
respect to Contributions to the Variable Investment Division, the
Participant's Account balance in the Variable Investment Division on the
date the canceled Certificate is received by Lincoln Life.
32
ATTACHMENT I
SYSTEMATIC WITHDRAWAL OPTION
The formula for the interest equivalency amount (IEA) is:
29.5/366
IEA = ACCT.BAL x ( (1 + I ) - 1)
WHERE:
IEA is the Interest Equivalency Amount.
ACCT. BAL. is the Participant's Account balance at
the later of: the beginning of the contract
year and the most recent date on which the
credited interest rate changed.
I is the interest rate currently being credited
to the contract
EXAMPLE: The Account balance at the beginning of the year is
one hundred thousand dollars ($100,000) and the interest rate
credited to the contract is six percent (6.00%). The Interest
Equivalency Amount for each month of the current year is:
29.5/366
IEA = $100,000 x (1.06 - 1)
= $470.76
33
