SERIES PARTICIPATION AGREEMENT
THIS AGREEMENT, is hereby entered into by and among THE LINCOLN NATIONAL
LIFE 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 FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT G ("Account"), a
segregated account established by Lincoln National in accordance with the
laws of the State of Indiana, and AMERICAN VARIABLE INSURANCE SERIES
("Series"), an open-end management investment company organized under the
laws of the State of Massachusetts. This Agreement is effective as of the
date on which the Securities and Exchange Commission declared effective the
initial registration under the Securities Act of 1933 pertaining to policies
issued through the account.
WITNESSETH:
WHEREAS, the Account has been established by Lincoln National pursuant to
the Indiana Insurance Code in connection with certain variable life insurance
policies ("Policies") 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 (the "1940 Act"); and
WHEREAS, the income, gains and losses, whether or not realized, from assets
allocated to the Account are, in accordance with the applicable Policies, 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 Policies, 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 Series is divided into various funds ("Funds"), each Fund
being subject to separate investment policies and restrictions which may not be
changed without a majority vote of the shareholders of such Funds; and
WHEREAS, certain Funds will serve as the underlying investment medium for
certain Subaccounts; and
WHEREAS, Lincoln National, the principal underwriter for the Policies 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 Series hereby agree as follows:
1. The Policies funded through the Account will provide for the
allocation of net amounts among certain Subaccounts for investment in such
shares of the Funds as may be offered from time to time in the prospectus of the
Policies. The selection of the particular Subaccount is to be made by the Policy
owner, and such selection may be changed or premiums may be transferred among
Subaccounts in accordance with the terms of the Policies.
2. Series shares to be made available to certain Subaccounts shall be
sold by the respective Funds 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 by the Series, as
established in accordance with the provisions of the then current prospectus of
the Series. Orders concerning a particular Fund shall be placed for such
quantities and at such times as determined by Lincoln National to be necessary
to meet the requirements of the Policies. Premium payments or withdrawal
requests received by Lincoln National (or its designated agent) shall be deemed
to have been received by the Series' transfer agent for purposes of computing
the share price for corresponding purchases and redemptions of shares of the
Series; PROVIDED that such payments or requests are communicated to the Series'
transfer agent not later than the time, and in the manner, designated by the
Series' transfer agent, on the business day next following such receipt by
Lincoln National (or its designated agent).
The Series reserves the right to delay any transfer of its shares until
the payment check has cleared. The Series reserves the right to suspend sales if
the Board of Trustees of the Series deems it appropriate and in the best
interests of the Series or in response to the order of an appropriate regulatory
authority.
3. Transfer of the Series' shares will be by book entry only. No stock
certificates will be issued to the Account. Shares ordered from a particular
Fund will be
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recorded in an appropriate title for the corresponding Subaccount on the books
of Lincoln National. Lincoln National will provide to the Series a list of
Policy owners (and their addresses) upon written notice from any officer of the
Series or member of the Series' Board.
4. The Series 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 Fund recorded in
the, title for the corresponding Subaccount shall be automatically reinvested in
additional shares of that Fund. The Series shall notify Lincoln National of the
number of shares so issued.
5. The Series shall pay all its 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 by Lincoln National for the Subaccount. The
Series shall bear the expenses for the cost of registration of its shares,
preparation of its prospectuses, proxy materials and reports, the printing and
distribution of such items to each Policy 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 imposed upon the Fund on the issue or transfer of
the Series' shares subject to this Agreement.
6. Lincoln National or its agents shall make no representations
concerning the Series' shares except those contained in the then current
prospectus of the Series and in printed information subsequently issued on
behalf of the Series or approved in writing by the Series as supplemental to
such prospectus.
7. It is understood among the parties to this Agreement that shares of
the Series may be offered to separate accounts of various insurance companies in
addition to Lincoln National and in connection with insurance policies or
contracts other than the Policies (this practice is herein described as "mixed
and shared funding"). It is also understood among the parties that shares of the
Fund may be offered to other persons identified in paragraph f of Temporary
Regulation Section 1.817-5T. The Series and CRMC filed an application and an
amendment thereto (file number 812-6393) (the "Application") for an order of the
Securities and Exchange Commission, pursuant to Section 6(c) of the 1940 Act
exempting the Series and Capital Research and Management Company and certain
life insurance companies from
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certain provisions of the 1940 Act and the rules thereunder to the extent
necessary to permit shares of the Series to be sold in connection with mixed and
shared funding. The order was granted in SEC release no. IC-15899 (the "Order"),
subject to certain conditions contained in the Application, (the "Conditions").
The following is a summary of the Conditions as set forth in the Notice of
Application and Opportunity for Hearing (SEC release no. IC-15233):
(a) A majority of the Board of the Series shall consist of persons who are not
"interested persons" of the Series as defined by the 0000 Xxx.
(b) The Board of the Series will monitor the Series for the existence of any
material irreconcilable conflict between the interests of policy (or contract)
owners of all separate accounts investing in the Series.
(c) Lincoln National shall report any potential or existing conflict to the
Series' Board.
(d) The Board of the Series shall promptly notify Lincoln National in writing of
any irreconcilable material conflict and its implications.
(e) If an irreconcilable material conflict exists, Lincoln National shall, to
the extent practicable, take whatever steps are necessary to eliminate such a
conflict.
(f) Lincoln National shall consider whether disclosure in the prospectus of the
Policies regarding potential risks of mixed and shared funding is appropriate.
(g) Lincoln National shall vote shares of the Series in accordance with
instructions received from the Policy owners whose Policy cash values are
invested in shares of the Series. Lincoln National shall vote shares of the
Series for which no instructions have been received in the same proportion as
shares of the Series for which instructions have been received from Policy
owners.
(h) Lincoln National and the Series shall undertake to comply with any material
applicable regulation of the Securities and Exchange Commission which may be
adopted relating to mixed and shared funding (including applying for any
additional exemptive relief, if necessary).
(i) The Series prospectus shall disclose that (1) shares of the Series are
offered to insurance company
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separate accounts funding both variable annuity and variable life insurance
contracts, (2) interests of various contract owners participating in a Fund
might be in conflict, and (3) the Board will monitor for the existence of any
material conflicts and determine what action, if any, should be taken.
Lincoln National hereby agrees to comply with all the Conditions,
as applicable, and the Series reaffirms its undertaking to comply with the
Conditions. The provisions of this Section are not subject to termination
pursuant to section 9 of this Agreement and shall remain in effect for as long
as necessary to satisfy the Conditions.
8. The Series agrees to comply with the diversification requirements of Internal
Revenue Code section 817(h) and any regulations thereunder.
9. This Agreement shall terminate:
a. at the option of Lincoln National or of the Series upon NINE MONTHS'
advance written notice to the other;
b. at the option of Lincoln National upon institution of formal
enforcement proceedings against the Series by the Securities and Exchange
Commission;
c. upon a majority vote of the Policy owners having an interest in a
particular Subaccount to substitute the shares of another investment company for
the corresponding Series shares in accordance with the terms of the Policies for
which those Series shares had been selected to serve as the underlying
investment medium. Lincoln National will give 30 days' prior written notice to
the Series of the date of any proposed vote to substitute Series shares; and
d. in the event the Series' shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such law precludes the
use of such shares as an underlying investment for the Policies issued or to be
issued by Lincoln National. In such event, prompt notice shall be given by
Lincoln National or the Series to the other.
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10. Each notice required by this Agreement shall be given in writing and
delivered via certified mail - return receipt requested.
11. The obligations of the Series under this Agreement are not binding upon
any of the Trustees, officers, employees, agents or shareholders of the Series
individually, but bind only the Series' assets. Lincoln National and the
Account agree to look solely to the assets of the Series for the satisfaction of
any liability of the Series with respect to this Agreement and will not seek
recourse against the members of the Board of Trustees of the Series, or its
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 LIFE INSURANCE COMPANY FOR ITSELF AND ON BEHALF OF LINCOLN
NATIONAL FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT G
Attest: /s/ Xxxx X. Xxxxxxxxx
By: /s/ Xxxxxx X. Xxxxx
AMERICAN VARIABLE INSURANCE SERIES
Attest: /s/ Xxxxxxx X Xxxxxxxxxx
By: /s/ illegible
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