GROUP VARIABLE
ANNUITY CONTRACT NO.: [00000] EFFECTIVE DATE: [7/1/97]
CONTRACTHOLDER: [ ABC Hospital]
(herein referred to as "You" or "Your")
THIS CONTRACT WAS DELIVERED IN THE State of New York and is subject to the laws
of that jurisdiction.
Lincoln Life & Annuity Company of New York (herein referred to as "LL&A") 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, including any amendments, schedules, or
endorsements.
This Contract is issued in consideration of the payment of contributions
provided for herein, and your Application, a copy of which is attached hereto
when issued.
IN WITNESS HEREOF, LL&A has issued this Contract at Syracuse, New York on this
day of , 19 , and caused this Contract to be in full
force as of its Effective Date as set forth above.
/s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
Assistant Secretary President
THE ANNUAL MORTALITY AND EXPENSE RISK CHARGE UNDER THIS CONTRACT IS 1.20% AND
THE ASSUMED INTEREST RATE FOR A VARIABLE ANNUITY WILL RANGE FROM 0% TO 6%. SEE
SECTIONS 5.5 AND 9.3 FOR FURTHER INFORMATION.
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. ANNUITIES
X. LOANS
XI. DISCONTINUANCE AND TERMINATION OF CONTRACT
XII. GENERAL PROVISIONS
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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: VA-L
1.3 DIVISIONS AVAILABLE UNDER THIS CONTRACT:
A. Guaranteed Interest Division
B. Variable Investment Division: Asset Manager Account (Fidelity's
VIPF II: Asset Manager Portfolio) Balanced Account (American
Century Variable Portfolios, Inc. American Century VP Balanced)
Growth I Account (Fidelity's VIPF: Growth Portfolio) Growth II
Account (American Century Variable Portfolios, Inc. American
Century VP Capital Appreciation) Index Account (Dreyfus Life and
Annuity Index Fund, Inc.) International Stock Account (X. Xxxx
Price International Series, Inc.) Small Cap Account (Dreyfus
Variable Investment Fund: Small Cap Portfolio)
1.4 LIMITATIONS ON TRANSFERS AND WITHDRAWALS DURING THE ACCUMULATION
PERIOD:
OPTION 1: Unlimited transfer requests may be made by a Participant in one
(1) calendar year.
OPTION 2: Unlimited transfer requests may be made between Sub-Accounts by a
Participant in one (1) calendar year.
OPTION 3: During any one (1)calendar year, a Participant may make one (1)
transfer from the Guaranteed Interest Division to the Variable
Investment Division, or one (1)withdrawal from the Guaranteed
Interest Division in an amount not to exceed twenty percent (20%)
of the Participant's Account balance in the Guaranteed Interest
Division.
1.5 ANNUAL ADMINISTRATION CHARGE:
OPTION 1: [Twenty-five dollars ($25)] per Participant
OPTION 2: [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
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1.6 ANNUAL MORTALITY AND EXPENSE RISK CHARGE APPLICABLE TO VARIABLE
INVESTMENT DIVISION: Annual rate of one and two-tenths percent (1.20%).
1.7 PLAN NAME: [ ABC Hospital Plan ]
1.8 EMPLOYER: [ ABC Hospital ]
1.9 PENDING ALLOCATION ACCOUNT: An account established under the Variable
Investment Division that invests unallocated contributions in shares of
a money market mutual fund. LL&A life does not guarantee the principal
amount or investment results.
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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 LL&A 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 Guarantee d Annuities or the initial payment for Variable
Annuities.
2.8 ANNUITY PAYMENT CALCULATION DATE: For Variable Annuities, this is a
Valuation Date ten (10) business days prior to an annuity payment date.
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.
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.
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2.13 BUSINESS DAY: A day on which LL&A 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 LL&A: Lincoln Life & Annuity Company of New York, at its Home Office in
Syracuse, New York.
2.18 GENERAL ACCOUNT: All assets of LL&A other than those in the Separate
Account specified in Section 1.2 or any other separate account.
2.19 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.
2.20 GUARANTEED ANNUITY: An annuity for which LL&A guarantees the amount of
each payment as long as the annuity is payable.
2.21 GUARANTEED INTEREST DIVISION: The Division maintained by LL&A for this
and other contracts for which LL&A 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 .
2.22 NET WITHDRAWAL AMOUNT: The amount paid to a Participant when a
withdrawal occurs.
2.23 PARTICIPANT: A person who has enrolled under this Contract and
maintains a Participant's Account.
2.24 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.
2.25 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.
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2.26 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 LL&A. 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.
2.27 PARTICIPATION YEAR: A period beginning with one Participation
Anniversary and ending the day before the next Participation
Anniversary, except for the first Participation Year which begins with
the Participation Date.
2.28 PENDING ALLOCATION ACCOUNT: An account established under the Variable
Investment Division that invests unallocated contributions in shares of
a money market mutual fund. LL&A does not guarantee the principal
amount or investment results.
2.29 PLAN: The Plan named in Section 1.8 which qualifies for federal tax
benefits under Section 401(a) of the Internal Revenue Code of 1986 and
under which this Contract is authorized.
2.30 SEPARATE ACCOUNT: The VA-L Separate Account is a group of assets
segregated from LL&A'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 LL&A.
Additional information is provided in Section 12.15.
2.31 SUB-ACCOUNT(S): An account established in the Variable Investment
Division which invests in shares of a corresponding mutual fund.
2.32 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.
2.33 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 a nd ends
at the corresponding time on the next Valuation Date.
2.34 VARIABLE ANNUITY: An annuity with payments that increase or decrease in
accordance with the investment results of the selected Sub-Account(s).
2.35 VARIABLE INVESTMENT DIVISION: The Division specified in Section 1.3
which is maintained by LL&A for this and other LL&A contracts for which
LL&A does not guarantee the principal amount or investment results.
Amounts allocated to the Variable Investment Division are part of the
Separate Account.
2.36 YOU OR YOUR: The Contractholder named on the face page of this
Contract.
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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 Business
Days after it is received by LL&A 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 percentages must be whole
numbers and may be changed on an unlimited basis. You or the
Participant shall notify LL&A in a form acceptable to LL&A of such
changes. Upon receipt by LL&A, the change will be effective for all
Contributions received concurrently with the allocation change form and
for all future Contributions.
3.3 PAYMENT OF SUBSEQUENT CONTRIBUTIONS: You shall forward Contributions to
LL&A 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
LL&A. 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 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),and 415 of the Internal Revenue Code of 1986 (the
Code), as it may be amended from time to time. LL&A assumes no
responsibility for monitoring these limits for the Plan, the Employer
or a Participant.
3.5 VALUATION: A Guaranteed Interest Division Contribution will be
allocated as of the Business Day that LL&A receives the Contribution
and LL&A will credit interest beginning with the next calendar day
following the Business Day that LL&A receives the Contribution
For a Variable Investment Division Sub-Account Contribution, LL&A 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 LL&A's receipt
of the Contribution.
OPTION 1:
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3.6 ANNUAL ADMINISTRATION CHARGE: LL&A 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,
LL&A will deduct the entire balance from his Account.
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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, LL&A will first
deduct the amount stated in Section 1.5 from his Participant's Account.
OPTION 2:
---------
ANNUAL ADMINISTRATION CHARGE: LL&A 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, LL&A 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,
(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, LL&A 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.
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3.7 UNALLOCATED CONTRIBUTION: If a properly completed enrollment form has
not been received for a Participant, LL&A 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.
LL&A 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 3.6
ANNUAL ADMINISTRATION CHARGE, (ii) ARTICLE VI - TRANSFERS BETWEEN
DIVISION AND SUB-ACCOUNTS, (iii) ARTICLE VII - WITHDRAWALS AND
DISTRIBUTIONS, (iv) ARTICLE IX - ANNUITIES, and (v) ARTICLE X - LOANS.
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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 Division on or prior to that
date, and Participant, to the Guaranteed Interest
(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: LL&A 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.
LL&A 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%)].
LL&A 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.
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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 initial Accumulation Unit Value for each
Sub-Account was set when the Sub-account was established. The
Accumulation Unit Value may increase or decrease from one Valuation
Period to the next. 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.
For further information concerning Accumulation Unit Value, please
consult the section in the prospectus for the Contract entitled
"Determination of Accumulation Unit Value."
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 LL&A 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 LL&A 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.
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ARTICLE VI - TRANSFERS BETWEEN DIVISIONS AND SUB-ACCOUNTS
6.1 TRANSFERS DURING ACCUMULATION PERIOD: Subject to the limitations
stated in Section 1.4 and subject to the provisions of the Plan,
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 must provide transfer requests to LL&A in a
form acceptable to LL&A.
6.2 TRANSFERS DURING ANNUITY PERIOD: An Annuitant may not transfer any
part of the Annuitant's Annuity Conversion Amount.
6.3 PLAN RESTRICTIONS: A Participant's right to request transfers may be
subject to limitations imposed by the Plan.
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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.
The amount available for withdrawal is subject to all applicable law.
Liquidation of the Participant's Account balance to meet the withdrawal
amount will be made on a pro-rata basis from the Guaranteed Interest
Division and the Sub-Accounts unless the Participant specifies
otherwise. Amounts to be liquidated from the Guaranteed Interest
Division will be withdrawn on a first-in first-out basis in the event
that Contributions from different contribution periods earn different
interest rates. The Contributions from the first contribution period
will be withdrawn before Contributions from the second contribution
period.
All withdrawal requests must be submitted in a form acceptable to LL&A
and must indicate the amount and the Division(s) from which the
withdrawal is to be made.
LL&A reserves the right to delay payment of Guaranteed Interest
Division withdrawal amounts per Section 12.9.
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 LL&A
when a Total Withdrawal of a Participant's Account occurs.
A Participant refund under the Free-look provisions of Section 12.18 is
not considered a Total Withdrawal under this Article.
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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.
OPTION 1:
---------------------------
7.4 CONTINGENT DEFERRED SALES CHARGE: The following schedule of CDSC
shall apply to all Withdrawal Amounts.
(a) WHEN A WITHDRAWAL IS THE CDSC
REQUESTED AND ONE OR WILL EQUAL:
MORE OF THE FOLLOWING
CONDITIONS IS MET:
SUB-OPTIONS:
---------------------------
A1: The Participant has died 0%
A2: The Participant has incurred 0%
a disability for which he is
receiving Social Security
payments
A3: The Participant has incurred 0%
a disability for at least a
six (6) month period which
continues to prevent him from
performing each of the material
duties of his regular occupation
A4: The Participant has attained age 0%
fifty-nine and one-half (59 1/2)
A5: The Participant has separated 0%
from service with the Contract-
holder and is age fifty-five (55)
A6: The Participant has separated 0%
from service with the Contract-
holder
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A7: The Participant has demonstrated 0%
a financial hardship need
A8: A Participant has requested a 0%
withdrawal which will not exceed
twenty percent (20%) of his
Participant's Account balance
and no other withdrawal has been
made in that calendar year
A9: and the Participant has [5] years of 0%
participation service.
SUB-OPTIONS:
---------------------------
B1: (b) For all other amounts subject
to a CDSC, the CDSC will equal: 6%
B2: (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%
LL&A may request any reasonable proof necessary to verify that the withdrawal
meets the conditions described above in Section 7.4(a). However, all financial
hardship withdrawals will require the Contractholder's written documentation
authorizing such request. If You or the Participant do not furnish the proof
requested by LL&A, the CDSC stated in Section 7.4(b) shall apply.
The CDSC on any withdrawal may be reduced or eliminated but only to the extent
that LL&A 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 LL&A 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.
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OPTION 2:
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7.4 LIMITATIONS ON WITHDRAWALS FROM THE GUARANTEED INTEREST
DIVISION: A Participant may make a withdrawal from the Guaranteed
Interest Division for a specified percentage of their Participant's
Account balance based on the following schedule:
(a) WHEN A WITHDRAWAL IS THE PERCENTAGE OF
REQUESTED AND ONE OR THE PARTICIPANT'S
MORE OF THE FOLLOWING ACCOUNT BALANCE
CONDITIONS IS MET: AVAILABLE IS:
SUB-OPTIONS:
--------------
A1: The Participant has died 100%
A2: The Participant has incurred 100%
a disability for which he is
receiving Social Security
payments
A3: The Participant has incurred a 100%
disability for at least a six
(6) month period which continues
to prevent him from performing
each of the material duties of
his regular occupation
A4: The Participant has attained age 100%
fifty-nine and one-half (59 1/2)
A5: The Participant has separated from 100%
service with the Contractholder
A6: The Participant has demonstrated 100%
a financial hardship need
A7: The Participant has separated from 100%
service with the Contractholder
and is age fifty-five (55)
A8: and the Participant has [5] years of 100%
participation service.
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A9: (b) In addition, during any one (1) calendar year, a Participant
may make one (1) withdrawal or transfer from the Guaranteed
Interest Division in an amount not to exceed twenty percent (20%)
of the Guaranteed Interest Division Account balance. Any
Participant stating their intention to liquidate their Guaranteed
Interest Division Account balance, however, may make one (1)
withdrawal or transfer for five (5) consecutive calendar years from
their Guaranteed Interest Division Account balance in the following
percentage:
Percentage of
Year Request Received Guaranteed Interest
by LL&A Division Available
1 20%
2 25%
3 33 1/3%
4 50%
5 100%
The five (5) consecutive withdrawals or transfers may not be
submitted more frequently than twelve (12) months apart. LL&A also
reserves the right to require that any Participant stating their
intention to liquidate their Guaranteed Interest Division Account
balance stop contributions to the Contract.
(c) There are no limitations on withdrawals from the Variable
Investment Division.
LL&A may request any reasonable proof necessary to verify that the
withdrawal meets the conditions described above in Section 7.4(a).
However, all financial hardship withdrawals will require the
Contractholder's written documentation authorizing such request.
7.5 DISTRIBUTION OPTIONS: A Participant may choose, subject to the
requirements of Section 7.4, to have the Participant's Account
distributed in one (1) of the following forms: (a) as a lump sum
payment; (b) an annuity conversion in accordance with Article IX: or
(c) a combination of the above.
7.6 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 Code and is subject to the withdrawal limitations stated in Section
7.4 and that meets all the following requirements:
(1) The distribution must be paid directly to either a single
Individual Retirement Account or to a qualified pension plan 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 qualified pension plan. The form
of remittance will not be an instrument that can be negotiated by
the Participant.
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(2) The Participant must provide, in a form acceptable to LL&A, all
information necessary to make the payment to an Individual
Retirement Account or qualified pension plan.
(3) The Participant or Beneficiary may not revoke a request for
payment under this option for any payment after LL&A has received a
written request for a direct rollover.
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ARTICLE VIII - DEATH BENEFITS
8.1 DEATH BENEFIT DURING THE ACCUMULATION PERIOD: If death of the
Participant occurs during the Accumulation Period, LL&A will pay a
benefit to the Beneficiary, in accordance with the provisions of the
Plan, if one is living, the greater of the following amounts:
(a) The sum of all Contributions, less any Net Withdrawal Amounts, any
outstanding loan (including principal and due and accrued interest)
and Annuity Conversion Amounts, or
(b) The Participant's Account balance less any outstanding loan
(including principal and due and accrued interest).
LL&A 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 LL&A'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 LL&A 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, LL&A will deduct that payment from each of
(a) and (b) above in calculating the Death Benefit.
8.2 NOTIFICATION OF DEATH: LL&A 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. The six (6) month period may be extended in
situations where giving notice was not possible. Such notification must
be in a form satisfactory to LL&A. 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 LL&A
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.
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A Beneficiary who does not make an election pursuant to this section
within sixty (60) days after LL&A 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 one (1) year after 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 31st 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 31st 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 LL&A at the time
of a Participant's death, LL&A 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 31st 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 LL&A.
If any of the provisions of this Section 8.3 are not in accordance with
the Plan, then the Plan requirements shall be deemed to supersede such
provisions.
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.
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ARTICLE IX - ANNUITIES
9.1 ELECTION OF ANNUITY OPTION: A Participant eligible to receive a
distribution under the Code or a Beneficiary of a deceased Participant
may notify LL&A in writing in a form acceptable to LL&A that the
Participant or the Beneficiary is electing to convert all or part of
the Participant's Account balance or Death Benefit to an annuity option
available under this Contract. Upon being notified of such an election,
LL&A shall calculate the amount to be converted to an 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), LL&A may, at
its option, cancel the 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 Values for each Sub-Account were initially set at ten
dollars ($10). Each subsequent Annuity Unit Value for the Sub-Account
selected for an interest rate option is determined by:
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.
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Dividing the resultant factor by one (1.00) plus the interest rate
option to the n/365th 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.
The expenses actually experienced or the mortality actually experienced
by LL&A shall not adversely affect the dollar amount of Variable
Annuity payments to any Annuitant for whom Variable Annuity payments
have commenced.
9.4 BASIS OF ANNUITY CONVERSION FACTORS:
Annuity benefits at their time of commencement will not be less than
those that would be provided by the application of an amount to
purchase any single consideration immediate annuity contract offered by
LL&A at the time to the same class of Annuitants.
(a) Guaranteed Annuities - The maximum Annuity Conversion Factors
which may be used by LL&A 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 LL&A. (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 ANNUITY OPTIONS: The following 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 LL&A.
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 7.4. The CDSC will be determined as of the date a lump sum is
elected by the Annuitant.]
9.6 RETIRED LIFE CERTIFICATE: Once an annuity option is selected by a
Participant, or the Beneficiary of a deceased Participant, LL&A will
issue to the Annuitant an appropriate Certificate evidencing LL&A's
obligations.
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ARTICLE X - LOANS
10.1 GENERAL: During a Participant's Accumulation Period, the Participant,
if permitted under the Plan, , may apply for a loan under this Contract
by completing a loan application available from LL&A. Loans are secured
by the Participant's Account balance in the Guaranteed Interest
Division.
10.2 RESTRICTIONS ON LOAN AMOUNT: The maximum amount of each loan, when
added to the outstanding balance of all other loans to the Participant,
shall not exceed the lesser of:
(a) fifty thousand dollars ($50,000) reduced by the excess (if any)
of the highest outstanding balance of loans from the Plan to the
Participant during the one (1) year period ending on the day before
the date on which such loan is made, minus the outstanding balance
of loans from the Plan to the Participant on the date on which such
loan was made, or
(b) if the Plan is not subject to Title I of ERISA, the greater of
(i) ten thousand dollars ($10,000) and (ii) one-half (1/2) of the
present value of the vested benefits of the Participant under such
Plan, or
(c) if the Plan is subject to Title I of ERISA, one-half (1/2) of the
present value of the vested benefits of the Participant under such
Plan.
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.
The term of the loan shall not exceed five (5) years unless the loan is
used to acquire or construct the principal residence of the
Participant. Level amortization of the loan (with payments not less
frequently than quarterly) is required over the term of the loan.
The above terms are subject to the restrictions imposed under Section
72(p) of the Code, as it may be amended from time to time.
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 (1) loan
outstanding at any time and may not establish more than one (1) 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, plus one percent (1%), or (b) the
Xxxxx'x Corporate Bond Yield Average, rounded to the nearest
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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 but in no event will it decrease less than the guaranteed
minimum interest rate as specified in Section 4.2.
10.6 EFFECT OF LOAN ON PARTICIPANT'S ACCOUNT: When a Participant takes a
loan, LL&A 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%) below the loan interest
rate but will never be less than the minimum interest rate as specified
in Section 4.2. 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%) differential. As the Participant makes repayments to LL&A on the
loan, an amount equal to the principal component of the repayment, plus
the interest accrued in the loan 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-one (31) days of
the payment due date that payment will be in default. For tax purposes,
a default will be treated as a withdrawal of contributions under the
Contract. The Participant may elect to repay the outstanding loan
principal and interest until such time as the original loan term ends.
10.8 LOAN FORECLOSURE: LL&A will foreclose on a loan in default by
liquidating the value in the Participant's Guaranteed Interest Division
to pay off the loan. The amount liquidated shall equal the sum of:
(1) the outstanding loan balance which includes unpaid principal and
interest due and accrued, and
[(2) any CDSC that applies unless the Participant meets conditions of
Section 7.4(a)-(b).]
But in no event shall the amount liquidated exceed the Participant's
value in the Guaranteed Interest Division.
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As provided for by Federal tax law, LL&A may foreclose on the loan as
soon as one or more of the following events has occurred:
(a) the Participant has attained age fifty-nine and one-half (59 1/2);
(b) the Participant has died;
(c) the Participant has incurred a disability for which he is
receiving Social Security payments;
(d) the Participant has separated from service with the
Contractholder; or
(e) the Participant has a financial hardship.
However, in no event will LL&A foreclose on a loan in default until the
original loan term ends.
LL&A will notify the Participant at least thirty-one (31) days in
advance of the effective date of such Loan Foreclosure to provide the
Participant an opportunity to take action to remove the loan from its
default status.
On the effective date of such Loan Foreclosure, LL&A will deduct from
the Participant's loan reserve account and from his Participant's
Account balance in the Guaranteed Interest Division an amount
sufficient to pay off the loan principal and interest due and accrued.
10.9 DEFERRAL PERIODS: LL&A may defer the payment of a loan for a period
permitted by the law of the state in which this Contract was delivered
but not more than six (6) months after a written request for the loan
was received.
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ARTICLE XI - DISCONTINUANCE AND TERMINATION OF CONTRACT
11.1 CONTRACT DISCONTINUANCE BY CONTRACTHOLDER: You may discontinue
this Contract by written notice to LL&A. This Contract will be deemed
discontinued on the later of the date You specify or the date the
written notice is received by LL&A.
11.2 CONTRACT DISCONTINUANCE BY LL&A: LL&A 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 LL&A that incorporates such modification. Discontinuance pursuant to
this Section shall be effective as of a date specified by LL&A,
provided You are given at least thirty-one (31) days advance written
notice in which to cure any remediable defaults. Discontinuance by LL&A
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 LL&A and no further
withdrawals may be made.
(b) The Annual Administration Charge will be deducted from each
Participant's Account.
(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.
OPTION 1
--------
(e) LL&A will determine the value of the Participant's remaining
Account balance, subject to the CDSC schedule in accordance with
Section 7.4, held in the Guaranteed Interest Division and will send
the Contractholder a lump sum check.
The first payment, the value attributable to the Guaranteed
Interest Division, will be sent to the Contractholder within thirty
(30) days from the date this Contract is discontinued. The entire
value attributable to the Sub-Accounts held in the Variable
Investment Division will be sent to the Contractholder within (7)
business days from the date the Contract is discontinued.
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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.
OPTION 2
--------
(e) LL&A will determine the value of the Participant's remaining
Account balance, subject to the five (5) consecutive year payout
schedule in accordance with Section 7.4, held in the Guaranteed
Interest Division and will send the Contractholder a check each
year for five (5) consecutive calendar years.
The first payment, the value attributable to the Guaranteed
Interest Division, will be sent to the Contractholder within thirty
(30) days from the date this Contract is discontinued. The entire
value attributable to the Sub-Accounts held in the Variable
Investment Division will be sent to the Contractholder within (7)
business days from the date the Contract is discontinued.
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 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.
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ARTICLE XII - GENERAL PROVISIONS
12.1 CONTRACT: This Contract, together with Your attached Application and
any riders, constitutes the entire Contract between You and LL&A. LL&A
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 LL&A, notwithstanding any contrary provisions or
conditions of any trust or plan.
LL&A 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.
12.2 DEACTIVATION: LL&A may prohibit new Contributions and/or new
Participants under this Contract when LL&A discontinues accepting new
Contributions and/or new Participants for the class of Contractholders
covered by this Contract. This is termed deactivation. LL&A may
deactivate this Contract for the following reasons: (1) fewer than one
hundred (100) Participants are covered by the Contract for the entire
prior twelve (12) month period; or (2) LL&A discontinues offering this
Contract form to the public. In the event of a deactivation, the CDSC
in Section 7.4 shall not apply to any Total Withdrawals or partial
Withdrawals. LL&A will give You not less than ninety (90) days notice
of the date of deactivation.
12.3 CONTRACT AMENDMENTS: LL&A 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.
LL&A will give You not less than ninety (90) days notice prior to the
effective date of any change made in accordance with this Section.
12.4 CONTRACT INTERPRETATION: Whenever the context so requires, the plural
includes the singular, the singular the plural and the masculine the
feminine.
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12.5 INFORMATION, REPORTS AND DETERMINATIONS: You shall furnish LL&A
with such facts and information as LL&A 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 LL&A pursuant to this Contract, shall be legible,
accurate and satisfactory in form to LL&A. Such information shall be
sent to a location designated by LL&A.
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 LL&A. Such determination shall be
conclusive for the purpose of this Contract. LL&A 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.
12.6 MISSTATEMENTS: If LL&A provides a benefit under this Contract based
upon misstated or omitted information, including but not limited to
misstatement of age, LL&A will make adjustments to the benefit to
reflect the correct information using an interest rate of six percent
(6%) per annum. LL&A is relieved and discharged from any liability and
responsibility with respect to benefits provided in reliance upon
information You furnish.
12.7 ASSIGNMENT: You may not assign this Contract without LL&A'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.
12.8 MARKET EMERGENCIES: If transactions are to be made to or from the
Variable Investment Division, LL&A 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.
12.9 DEFERRAL PERIODS: If a withdrawal is to be made from the Guaranteed
Interest Division, LL&A 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 LL&A.
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.
12.10 DEDUCTIONS FOR PREMIUM TAXES: LL&A 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.
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12.11 FACILITY OF PAYMENT: If any person is, in the judgment of LL&A,
physically or mentally incapable of personally receiving and giving a
valid receipt for any payment due him under this Contract, LL&A may,
unless and until 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 LL&A, 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 LL&A of its obligations to the extent of the payment.
LL&A 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, LL&A 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 LL&A for all liability to the extent of the payment.
12.12 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 LL&A, either by such person's endorsement of the check
drawn for such payment, or by other satisfactory means.
12.13 NON-WAIVER: The failure on LL&A's part to perform or insist upon the
strict performance of any provision or condition of this Contract shall
neither constitute a waiver of LL&A's rights to perform or require
performance of such provision or condition, nor stop LL&A from
exercising any other rights it may have in such provision, condition,
or otherwise in this Contract or any Plan.
12.14 RECEIPT OF NOTICE: Whenever LL&A 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.
12.15 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.
12.16 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 LL&A'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 times, will have a value
approximately equal to, or in excess of, such reserves and liabilities.
The portion of the assets having a
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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 LL&A may conduct.
LL&A 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, (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 12.3.
12.17 PAYMENT OF BENEFITS: LL&A shall make payment of benefits under this
Contract directly to a Participant or Beneficiary at the last known
address on file with LL&A.
12.18 FREE-LOOK PERIOD: A Participant will receive an Active Life
Certificate upon LL&A'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 LL&A 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, LL&A 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 LL&A.
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