SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
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COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
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Lincoln National Aggressive Growth Fund, Inc.
Lincoln National Bond Fund, Inc.
Lincoln National Capital Appreciation Fund, Inc.
Lincoln National Equity-Income Fund, Inc.
Lincoln National Global Asset Allocation Fund, Inc.
Lincoln National Growth and Income Fund, Inc.
Lincoln National International Fund, Inc.
Lincoln National Managed Fund, Inc.
Lincoln National Money Market Fund, Inc.
Lincoln National Social Awareness Fund, Inc.
Lincoln National Special Opportunities Fund, Inc.
(Name of Registrants)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
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Lincoln National Aggressive Growth Fund, Inc.
Lincoln National Bond Fund, Inc.
Lincoln National Capital Appreciation Fund, Inc.
Lincoln National Equity-Income Fund, Inc.
Lincoln National Global Asset Allocation Fund, Inc.
Lincoln National Growth and Income Fund, Inc.
Lincoln National International Fund, Inc.
Lincoln National Managed Fund, Inc.
Lincoln National Money Market Fund, Inc.
Lincoln National Social Awareness Fund, Inc.
Lincoln National Special Opportunities Fund, Inc.
(Each a "Fund," collectively, the "Funds")
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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October 15, 2002
Dear Contract Owner:
We are writing to notify you of a Special Meeting of Stockholders of the
Funds. The meeting will be held on Monday, December 9, 2002, at 9:00 a.m.,
local time, in the offices of the Funds at 1300 South Clinton Street, Fort
Wayne, Indiana 46802. The attached Proxy Statement describes in detail the
proposed agenda items for the meeting.
You are entitled to provide us with instructions for voting shares of each
Fund that The Lincoln National Life Insurance Company or Lincoln Life & Annuity
Company of New York holds to fund your variable annuity contract or variable
life insurance policy. (For convenience, we refer to both contract owners and
policy participants as "Contract Owners.") You should read the enclosed Proxy
Statement carefully and submit your voting instructions.
The following Proposals will be considered and acted upon at the meeting:
Funds Affected Proposal
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All Funds 1.To re-elect the Directors to serve on the Boards of Directors of the Funds until the next annual meeting, if
any, or until their successors shall have been duly elected and qualified.
All Funds 2.To approve a reorganization to change each Fund from a Maryland corporation to a series of a Delaware
business trust.
All Funds 3.To approve a proposal that would permit the Funds to enter into or materially change sub-advisory
agreements with sub-advisers without obtaining stockholder approval. (This advisory structure is referred
to as a "multi-manager" arrangement.)
All Funds 4.To approve a new investment management agreement between the Funds and their current investment
adviser, Delaware Management Company (the "Adviser"), a series of Delaware Management Business
Trust ("DMBT").
All Funds 5.To approve the amendment of certain fundamental investment restrictions to modernize the Funds'
investment restrictions.
All Funds 6.To approve the elimination of certain fundamental investment restrictions to modernize the Funds'
investment restrictions.
All Funds 7.To transact such other business as may properly come before the meeting.
We realize that you may not be able to attend the meeting to provide voting
instructions in person. However, we do need your instructions. You can provide
voting instructions by mail, telephone or through the Internet, as explained in
the enclosed Proxy Statement. If you decide later to attend the meeting, you
may revoke your proxy and provide voting instructions in person. The number of
shares of each Fund attributable to you will be voted in accordance with your
instructions.
If you have any questions about the meeting, please feel free to call (800)
4LINCOLN (454-6265).
By Order of the Funds' Boards of
Directors
/s/ Cynthia A. Rose
Cynthia A. Rose
Secretary
2
Lincoln National Aggressive Growth Fund, Inc.
Lincoln National Bond Fund, Inc.
Lincoln National Capital Appreciation Fund, Inc.
Lincoln National Equity-Income Fund, Inc.
Lincoln National Global Asset Allocation Fund, Inc.
Lincoln National Growth and Income Fund, Inc.
Lincoln National International Fund, Inc.
Lincoln National Managed Fund, Inc.
Lincoln National Money Market Fund, Inc.
Lincoln National Social Awareness Fund, Inc.
Lincoln National Special Opportunities Fund, Inc.
(Each a "Fund," collectively, the "Funds")
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PROXY STATEMENT
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Special Meeting of Stockholders
To be held on December 9, 2002
This Proxy Statement is being furnished to you in connection with the
solicitation by The Lincoln National Life Insurance Company ("Lincoln Life")
and Lincoln Life & Annuity Company of New York ("Lincoln New York") of voting
instructions for a special meeting of stockholders of the Funds. As you know,
we hold shares of the Funds in one or more segregated accounts in connection
with your ownership, or participation in, an individual or group variable
annuity contract or an individual variable life insurance policy. (For
convenience, contract owners and policy participants are referred to
collectively as "Contract Owners"). The Funds are seeking approval for certain
actions they wish to take, and you are entitled to instruct us on how to vote
shares of the Funds attributable to you under your contract or policy.
The meeting will be held on Monday, December 9, 2002, at 9:00 a.m., local
time, in the offices of the Funds at 1300 South Clinton Street, Fort Wayne,
Indiana 46802. The date of the first mailing of the proxy cards and this Proxy
Statement to Contract Owners will be on or about October 15, 2002. If you have
any questions about the meeting, please feel free to call us toll free at (800)
4LINCOLN (454-6265).
The following Proposals will be considered and acted upon at the meeting:
Funds Affected Proposal
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All Funds 1.To re-elect the Directors to serve on the Boards of Directors of the Funds until the next annual meeting, if
any, or until their successors shall have been duly elected and qualified.
All Funds 2.To approve a reorganization to change each Fund from a Maryland corporation to a series of a Delaware
business trust.
All Funds 3.To approve a proposal that would permit the Funds to enter into or materially change sub-advisory
agreements with sub-advisers without obtaining stockholder approval. (This advisory structure is referred
to as a "multi-manager" arrangement.)
All Funds 4.To approve a new investment management agreement between the Funds and their current investment
adviser, Delaware Management Company (the "Adviser"), a series of Delaware Management Business
Trust ("DMBT").
All Funds 5.To approve the amendment of certain fundamental investment restrictions to modernize the Funds'
investment restrictions.
All Funds 6.To approve the elimination of certain fundamental investment restrictions to modernize the Funds'
investment restrictions.
All Funds 7.To transact such other business as may properly come before the meeting.
3
Adoption of Proposals 4, 5 and 6 requires the approval of a majority of each
relevant Fund's outstanding voting securities. Under the Investment Company Act
of 1940 ("1940 Act"), a "majority of the Fund's outstanding voting securities"
is defined as the lesser of (i) 67% of the outstanding voting securities
represented at a meeting at which more than 50% of the outstanding voting
securities are present or represented by proxy or (ii) more than 50% of the
Fund's outstanding voting securities. Proposals 1, 2 and 3 require the approval
of a simple majority of the shares represented at the meeting.
In connection with the meeting, we are soliciting voting instructions from
Contract Owners of the following segregated investment accounts of Lincoln Life:
Lincoln National Variable Annuity Account C;
Lincoln Life Flexible Premium Variable Life Account D;
Lincoln Life Flexible Premium Variable Life Account G;
Lincoln Life Flexible Premium Variable Life Account K;
Lincoln National Variable Annuity Account L;
Lincoln Life Flexible Premium Variable Life Account M;
Lincoln Life Variable Annuity Account N;
Lincoln Life Variable Annuity Account Q;
Lincoln Life Flexible Premium Variable Life Account R;
Lincoln Life Flexible Premium Variable Life Account S;
Lincoln Life Variable Annuity Account W;
Lincoln National Life Separate Account 33; and
Lincoln National Life Separate Account 53.
We are also soliciting voting instructions from Contract Owners of the
following segregated investment accounts of Lincoln New York:
Lincoln Life & Annuity Variable Annuity Account L;
Lincoln Life & Annuity Flexible Premium Variable Life Account M;
Lincoln New York Separate Account N for Variable Annuities;
LLANY Separate Account R for Flexible Premium Variable Life; and
LLANY Separate Account S for Flexible Premium Variable Life.
The segregated investment accounts of Lincoln Life and Lincoln New York are
collectively referred to as "the Accounts."
In addition to the solicitation of proxy cards by mail, officers and
employees of the Funds, without additional compensation, may solicit proxy
instructions in person, by telephone, and electronically, including through the
Internet. The Funds may engage a third-party vendor to solicit proxies from
Contract Owners for an approximate fee, including out-of-pocket expenses,
ranging between $0 and $50,000. The cost associated with the solicitation and
the meeting will be borne by the Funds. The Contract Owners of the Funds are
invited to provide voting instructions only on those Proposals that apply to
their Fund(s).
If you would like to receive a copy of the Funds' 2001 Annual Report, call
(800) 4LINCOLN (454-6265) or write to P. O. Box 2340, Fort Wayne, Indiana 46801
and you will be mailed one free of charge, or you can access the Annual Report
or Semi-Annual Report at
HTTP://WWW.LINCOLNLIFE.COM/PRODUCTS/ANNUITIES/MF/REPORTS.HTM.
The principal offices of the Funds are located at 1300 South Clinton Street,
Fort Wayne, Indiana 46802. The Adviser, Delaware Management Company, is located
at 2005 Market Street, Philadelphia, Pennsylvania 19103, and the Funds' service
providers for certain accounting functions and financial reporting, Delaware
Management Holdings, Inc. and Delaware Service Company, Inc., are also located
at 2005 Market Street, Philadelphia, Pennsylvania 19103.
The Boards of Directors of the Funds recommend that you provide voting
instructions to APPROVE each Proposal.
4
VOTING PROCEDURES*
Contract Owners are urged to designate their choices on each of the matters
to be acted upon by using one of the following three methods:
1. BY INTERNET
. Read the Proxy Statement.
. Go to the voting link found on your proxy card.
. Enter the control number found on your proxy card.
. Follow the instructions using your proxy card as a guide.
. (Do not mail the proxy card if you provide voting instructions by
Internet.)
2. BY MAIL
. Date, sign, and return the enclosed proxy card in the envelope provided,
which requires no postage if mailed in the United States.
3. BY TELEPHONE**
. Read the Proxy Statement.
. Call the toll-free number found on your proxy card.
. Enter the control number found on your proxy card.
. Follow the recorded instructions using your proxy card as a guide.
. (Do not mail the proxy card if you provide voting instructions by
telephone.)
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* If you provide voting instructions through the Internet voting site, by mail
or by telephone, your instructions must be received no later than 11:59 p.m.
local time on December 4, 2002.
** Telephone voting is only available to Contract Owners who wish to provide
voting instructions as to all Funds in the same manner and at the same time.
Contract Owners who wish to provide separate voting instructions for each
Fund may do so only if they vote by mail or through the Internet.
At the meeting, Lincoln Life and Lincoln New York will vote each Fund's
shares held in the Accounts, as applicable, in accordance with the instructions
received from Contract Owners whose purchase payments, as of the Record Date of
September 20, 2002, were invested in the Fund by the Accounts. For all
Accounts, except Lincoln Life Accounts D, G, K, M, R and S and Lincoln New York
Accounts M, R or S, the number of votes which a Contract Owner may cast when
instructing us how to vote is determined by applying the Contract Owner's
percentage interest in the Fund to the total number of votes attributable to
that Fund. In determining the number of votes, fractional shares will be
recognized. The number of votes which a Lincoln Life Account D, G, K, M, R or S
or a Lincoln New York M, R or S Contract Owner may cast when instructing us how
to vote is determined as one vote for each $100 of cash value.
Lincoln Life and Lincoln New York will vote Fund shares held by the Accounts
for which no timely instructions are received in proportion to the voting
instructions which are received with respect to the Fund. If voting
instructions are received in a timely manner but contain no voting directions,
the votes will be cast FOR the Proposals considered at the meeting. Contract
Owners, of course, may provide voting instructions in person at the meeting.
Abstentions with respect to any Proposal will count as present for purposes of
establishing a quorum, but will not count as votes cast.
Any Contract Owner who provides voting instructions has the power to revoke
the instructions, by mail (addressed to the Secretary of the Funds at the
offices of the Funds) or in person at the meeting, by executing superseding
voting instructions or by submitting a notice of revocation to the Fund. All
properly executed and unrevoked voting instructions received in time for the
meeting will be voted as specified in the instructions or, if no specification
is made, FOR each Proposal referred to in this Proxy Statement.
The votes will be formally counted at the scheduled meeting and, if the
meeting is adjourned, at any later meeting.
5
Proposal No. 1--All Funds
To Elect the Boards of Directors
Why are Directors being elected?
The Bylaws of each Fund provide that the Board of Directors will be elected
annually unless the Board dispenses with the annual stockholders' meeting. If
the latter occurs, then the Directors continue in office until the next annual
or special meeting is held, at which time an election of Directors is held.
Each Board shall consist of no fewer than three (3) nor more than ten (10)
persons, and currently a five-member Board is authorized. Presently, five (5)
persons are serving as Directors of the Funds.
All five (5) persons now serving as Directors are also nominees for election
as Directors of the Funds. If elected, each nominee has agreed to serve. Since
the Funds typically dispense with annual meetings, Directors, once elected,
remain in office unless they resign, are removed, or fail to win re-election at
any subsequently scheduled meeting.
Who are the Director nominees?
The table below provides biographical information on each Director standing
for re-election. Each "interested person," as defined in the 1940 Act, is
indicated by an asterisk (*). Directors who are not interested persons are
referred to as Independent Directors.
Interested Directors
Term of Number of
Position(s) Office and Principal Occupation(s) Funds in Fund
Name, Address and Date of Held with Length of During the Past Five Complex Overseen
Birth the Funds Time Served Years by Director
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KELLY D. CLEVENGER *....... Chairman, Chairman since Vice President, The Lincoln 12
1300 S. Clinton Street President and August 1995; National Life Insurance
Fort Wayne, IN 46802 Director President and Company. Vice President,
DOB: 07/25/52 Director since Lincoln Retirement Services
November 1994 Company, LLC; Second Vice
President, Lincoln Life &
Annuity Company of New York
BARBARA S. KOWALCZYK*...... Director Director since Senior Vice President, 12
Centre Square, West Tower November 1993 Corporate Planning and
1500 Market St., Suite 3900 Development, Lincoln National
Philadelphia, PA 19102 Corporation (insurance holding
DOB: 04/07/51 company); Senior Vice
President, Lincoln National
Management Corporation
Other
Name, Address and Date of Directorships
Birth Held by Director
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KELLY D. CLEVENGER *....... Lincoln Retirement Services
1300 S. Clinton Street Company, LLC
Fort Wayne, IN 46802
DOB: 07/25/52
BARBARA S. KOWALCZYK*...... Lincoln National Management
Centre Square, West Tower Corporation; The Lincoln
1500 Market St., Suite 3900 National Life Insurance
Philadelphia, PA 19102 Company; Lincoln Financial
DOB: 04/07/51 Group Foundation, Inc.; Lincoln
Life & Annuity Company of
New York; Lincoln National
(UK) PLC (financial services
company)
- --------
* Kelly D. Clevenger, currently Chairman and President of the Funds, is an
interested person of the Funds by reason of his being Chairman and President
of the Funds and an officer of Lincoln Life and Lincoln New York. Barbara S.
Kowalczyk, Director of the Funds, is an interested person of the Funds by
reason of her being a Senior Vice President of Lincoln National Corporation.
Independent Directors
Number of
Funds in Fund
Position(s) Term of Office Principal Occupation(s) Complex Other
Name, Address and Date of Held with and Length of During the Past Five Overseen by Directorships
Birth the Funds Time Served Years Director Held by Director
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JOHN B. BORSCH, JR...... Director Director since Retired; formerly Associate Vice 12 n/a
1300 S. Clinton Street December 1981 President, Investments,
Fort Wayne, IN 46802 Northwestern University
DOB: 06/09/33
6
Number of
Funds in Fund
Position(s) Term of Office Principal Occupation(s) Complex Other
Name, Address and Date of Held with and Length of During the Past Five Overseen by Directorships
Birth the Funds Time Served Years Director Held by Director
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NANCY L. FRISBY......... Director Director since Vice President and Chief 12 n/a
1300 S. Clinton Street April 1992 Financial Officer, DeSoto
Fort Wayne, IN 46802 Memorial Hospital; formerly
DOB: 11/10/41 Chief Financial Officer,
Bascom Palmer Eye Institute,
University of Miami School of
Medicine; formerly Vice
President and Chief Financial
Officer, St. Joseph Medical
Center, Inc.
KENNETH G. STELLA....... Director Director since President, Indiana Hospital & 12 First National Bank & Trust
1300 S. Clinton Street February 1998 Health Association
Fort Wayne, IN 46802
DOB: 08/20/43
The following information may assist you in your decision:
INTERESTED DIRECTORS
. Kelly D. Clevenger. Mr. Clevenger, who became a Director in 1994, is a
senior actuary with over two decades of experience in life insurance,
annuities and investments with Lincoln Life. Currently he is Vice
President of Lincoln Life and in 1994 became President of the Funds and
continues to serve in that capacity. His responsibilities with Lincoln
Life have included, among other things, development and design of life
insurance, variable annuity and reinsurance products. Mr. Clevenger holds
both a Bachelor of Science Degree and a Masters in Actuarial Science from
the University of Michigan. He is a Fellow of the Society of Actuaries and
a member of the American Academy of Actuaries.
. Barbara S. Kowalczyk. Ms. Kowalczyk, who became a Director in 1993, is an
experienced investment executive. She joined Lincoln Investment
Management, Inc. in 1977 as an Investment Analyst, and served in that
organization until 1994, ultimately as Senior Vice President. Ms.
Kowalczyk is currently a Senior Vice President of Lincoln National
Corporation, in charge of strategic planning, mergers and acquisitions,
strategic communications and branding for Lincoln National Corporation.
Ms. Kowalczyk holds both a Bachelor of Science Degree in Marketing and a
Masters in Business Administration (Finance) from Indiana University. She
is a Chartered Financial Analyst and a Member of the Investment Analysts
Society of Chicago, Inc.
INDEPENDENT DIRECTORS
. John B. Borsch, Jr. Mr. Borsch has been a Director of the Funds since
December 14, 1981. A career financial analyst, he managed the investment
portfolio of Northwestern University, ultimately as its Director of
Investments. Mr. Borsch holds both a Bachelor of Science Degree Investment
Management and an MBA in Finance from Northwestern University. Although
retired from Northwestern, he remains active in investment circles as a
Member of the Investment Analysts Society of Chicago, Inc., the
Association of Investment Management Research, and the Institute of
Chartered Financial Analysts.
. Nancy L. Frisby. Ms. Frisby has been a Director of the Funds since April
15, 1992. Since August 1999, Ms. Frisby has served as Vice President and
Chief Financial Officer of the DeSoto Memorial Hospital, Arcadia, Florida.
From May, 1998 to July, 1999, Ms. Frisby served as Chief Financial Officer
of Bascom Palmer Eye Institute at the University of Miami School of
Medicine in Miami, Florida. From 1974 to 1998, Ms. Frisby was a member of
the staff of St. Joseph Medical Center in Fort Wayne, Indiana, and served
as its Vice President and Chief Financial Officer. Ms. Frisby holds a
Bachelor of Science Degree in accounting from Indiana University/Purdue
University of Fort Wayne, and an MBA in Finance from the University of
Notre Dame. She is an Advanced Member of the Healthcare Financial
Management Association, a member of the American Institute of Certified
Public Accountants, and a former officer of the Fort Wayne Chapter of the
Financial Executives Institute.
. Kenneth G. Stella. Mr. Stella became a Director of the Funds on February
10, 1998. Mr. Stella is currently President of Indiana Hospital & Health
Association, Indianapolis, Indiana, ("Association") having served that
institution since 1984.
7
Among his responsibilities for the Association, he serves as the Chief
Executive Officer and is responsible for implementation of all Board of
Director's policies and directives. He provides executive management and
leadership of all Association programs and services. The Association
comprises 157 hospitals and health organizations, and it provides
advocacy, data, education, communication and general legal information
services to its members. Mr. Stella holds both a Bachelor of Science
Degree and a Master's Degree in Health Administration from Indiana
University. Among other affiliations, he is a Fellow of the American
College of Healthcare Executives, a Member of the Board of Visitors of the
Indiana University School of Nursing, a Member of the Board of Visitors of
the Indiana University School of Public & Environmental Affairs and a
Board Member of the First National Bank and Trust.
Ms. Kowalczyk, Ms. Frisby and Messrs. Borsch, Clevenger and Stella are also
Members of the Board of Managers of Lincoln National Variable Annuity Fund A,
an investment company which is registered with the Securities and Exchange
Commission ("SEC") under the 1940 Act and is a separate account of Lincoln Life
("Fund A").
Do the Directors also have an ownership interest in the Funds?
As of June 30, 2002, the dollar range of equity securities owned
beneficially by each Director in the Funds and in any registered investment
companies overseen by the Directors within the same family of investment
companies as the Funds is as follows:
Interested Directors
Aggregate Dollar Range of Equity
Securities in all Registered Investment
Companies Overseen By Director In
Dollar Range of Equity Securities Family of Investment Companies
Name of Director in the Funds (as of June 30, 2002) (as of June 30, 2002)
- -----------------------------------------------------------------------------------------------
Kelly D. Clevenger.. International Fund-$1-$10,000 $10,001-$50,000
Aggressive Growth Fund--$1-$10,000
Barbara S. Kowalczyk None None
Independent Directors
Aggregate Dollar Range of Equity
Securities in all Registered Investment
Companies Overseen By Director In
Dollar Range of Equity Securities Family of Investment Companies
Name of Director in the Funds (as of June 30, 2002) (as of June 30, 2002)
- -------------------------------------------------------------------------------------------------------
John B. Borsch, Jr. Lincoln National Variable Annuity Fund A-- $10,001-$50,000
$10,001-$50,000
Nancy L. Frisby.... Growth and Income Fund-$10,001-$50,000 Over $100,000
Managed Fund--$10,001-$50,000
Aggressive Growth Fund--$10,001-$50,000
Social Awareness Fund--$10,001-$50,000
Special Opportunities Fund--$10,001-$50,000
Capital Appreciation Fund--$50,001-$100,000
Kenneth G. Stella.. None None
- -------------------------------------------------------------------------------------------------------
What are the Directors paid for their Board service?
As interested persons who are salaried officers of Lincoln Life and of
Lincoln National Corporation, respectively, Mr. Clevenger and Ms. Kowalczyk
receive no additional remuneration for their Board service. The Funds pay the
compensation and expenses of the Independent Directors.
The following table provides the Independent Directors' aggregate
compensation from each Fund and their total compensation from the Funds and
Fund A (collectively, the "Lincoln National Fund Complex") for the period
January 1, 2001 through December 31, 2001.
Compensation of Independent Directors
(Fiscal Year 2001)
Aggregate Compensation Total Compensation(2)
Director from each Fund(1) From Fund Complex
----------------------------------------------------------------
John B. Borsch, Jr. $1,621 $19,452
Nancy L. Frisby $1,564 $18,769
Kenneth G. Stella $1,058 $12,694
------------------- ---------------------- ---------------------
(1)Each Fund paid each Independent Director $350 per meeting, plus
expenses. During 2001, the Funds held four meetings.
(2)Fund A and each of the 11 Lincoln National Funds paid outside
directors $350 per meeting.
8
The Board of Directors for each of the Funds has established an Audit
Committee, which is responsible for overseeing the Funds' financial reporting
process on behalf of the Board of Directors and to report the result of their
activities to the Board. The Audit Committee operates according to a written
charter and will assist and act as a liaison with each of the Board of
Directors in fulfilling the Board's responsibilities relating to oversight of
fund accounting, each Fund's system of control, process for monitoring legal
compliance, quality and integrity of the financial statements, financial
reports, and audits. The members of the Audit Committee include all of the
Independent Directors: John B. Borsch, Jr., Nancy L. Frisby, and Kenneth G.
Stella. None of the members of the Audit Committee is an interested person of
the Funds. There were two Audit Committee meetings held during 2001. The Board
does not have a valuation, nominating, or compensation committee.
What vote is required to elect the directors?
Proposal No. 1 requires the affirmative vote of a simple majority of each
Fund's shares represented at the meeting. In the approval of the Board of
Directors, each Fund votes separately, and Contract Owners are being asked to
provide voting instructions for the Board of their respective Fund(s) only. The
Boards of Directors recommend that you provide instructions to APPROVE the
Proposal.
Proposal No. 2--All Funds
To Approve the Reorganization
to Change Each Fund From a Maryland Corporation
to a Series of a Delaware Business Trust
What is the Proposal?
The Boards of Directors recommend that you provide voting instructions to
approve a change in the organization of each Fund from a Maryland corporation
to a series of a Delaware business trust. This proposed change will be referred
to in this Proxy Statement as the "Reorganization." The Boards of Directors
have approved a Plan of Reorganization (the "Plan"), substantially in the form
attached to this Proxy Statement as Exhibit A. The Plan provides for the
Reorganization, which involves the continuation of each Fund (referred to in
this Proposal as a "Corporation") in the form of a newly created series (a
"Series") of the Lincoln Variable Insurance Products Trust, a Delaware business
trust (the "Trust"). Each Fund would have a series name that corresponds to the
Fund's current name. For example, the "Lincoln National Growth and Income Fund,
Inc." would become the "Growth and Income Fund," a series of the Trust.
Stockholder approval is required for the Reorganization under Maryland law and
the Corporations' governing documents.
Each Series of the Trust will have the same investment objective, policies
and restrictions as the corresponding Corporation. This means that the
investment policies and restrictions of each Series will reflect the results of
the Contract Owners' vote on Proposals 1, and 3 through 6 of this Proxy
Statement. The Directors, officers and employees will be the same (although
Board members of a Delaware business trust are called Trustees), and will
operate the Series in the same manner as they previously operated the
Corporations. On the closing date of the Reorganization, you will hold a
beneficial interest in shares of a Series that is equivalent to your beneficial
interest in shares of the corresponding Corporation. Essentially, your
investment will not change, and the Reorganization will have no material impact
on your economic interests as a Contract Owner. If approved by stockholders,
the Reorganization is expected to take effect in the second quarter of 2003.
How will the Reorganization affect the way my Fund is governed?
The Directors have determined that mutual funds formed as Delaware business
trusts have certain advantages over those funds organized as Maryland
corporations. Under Delaware law, funds are able to simplify their operations
by reducing administrative burdens. Delaware law allows greater flexibility in
drafting a fund's governing documents, which can result in greater efficiencies
of operation and savings for a fund and its stockholders. For example, a fund
organized as a Delaware business trust can structure its governing documents to
enable it to more easily obtain desired Board or stockholder approvals, and can
potentially accomplish certain actions, such as Fund reorganizations or
liquidations, without first seeking stockholder approval. In addition, the
governing documents can provide that a new share class may be added without
first seeking stockholder approval. Furthermore, there is a well-established
body of corporate legal precedent that may be relevant in deciding issues
pertaining to the Trust.
9
The following chart provides a summary of certain important similarities and
differences between (a) the Delaware business trust, its Declaration of Trust,
Bylaws and Delaware law and (b) the Maryland corporations, their Articles of
Incorporation, Bylaws and Maryland law. Please note that the chart does not
provide a complete list of the similarities or differences.
Surviving Delaware Business Disappearing Maryland
Trusts of the Funds Corporations of the Funds
- ------------------------------------------------------------------------------------------------------------------------------
Quorum of stockholders..................................... 1/3 of shares entitled to vote Majority of shares entitled to vote
- ------------------------------------------------------------------------------------------------------------------------------
Stockholder Vote Necessary to Authorize Most Actions....... Majority of quorum Majority of quorum
- ------------------------------------------------------------------------------------------------------------------------------
Can the Fund issue an unlimited number of shares........... Yes No
- ------------------------------------------------------------------------------------------------------------------------------
Do the Directors/Trustees have broad authority to amend the
governing documents without stockholder approval?........ Yes No
- ------------------------------------------------------------------------------------------------------------------------------
Termination of the Fund possible without stockholder
approval?................................................ Yes No
- ------------------------------------------------------------------------------------------------------------------------------
Can the Directors/Trustees amend the Bylaws without
stockholder approval?.................................... Yes Yes
- ------------------------------------------------------------------------------------------------------------------------------
Can the Directors/Trustees act without a meeting?.......... Yes Yes
- ------------------------------------------------------------------------------------------------------------------------------
Can Directors/Trustees effect a merger with another entity
without stockholder approval?............................ Yes No
- ------------------------------------------------------------------------------------------------------------------------------
What are the procedures and consequences of the reorganization?
Upon completion of the Reorganization, the Trust, on behalf of each Series,
will continue the business of the Corporations, and each Series will have the
same investment objective and policies as exist on the date of the
Reorganization (including any changes approved at this stockholders meeting),
and will hold the same portfolio of securities previously held by the
corresponding Corporation. Each Series will be operated under substantially
identical overall management, investment management, distribution and
administrative arrangements as those of the corresponding Corporation.
Each Series would be created solely for the purpose of becoming the
successor fund to, and carrying on the business of, the corresponding
Corporation. Each Series would be a "shell" fund. To accomplish the
Reorganization, a nominal share of each Series will be issued to each
corresponding Corporation in order to permit each Corporation, through its
Board, to vote on organization matters as the sole stockholder of each new
Series. Thereafter, the Plan provides that each Corporation will transfer all
of its portfolio securities and any other assets, subject to its liabilities,
to the Trust for each corresponding Series. In exchange for these assets and
liabilities, the Trust, on behalf of each Series, will issue Series shares to
the corresponding Corporation, which then will distribute those shares pro rata
to Lincoln Life or Lincoln New York, as applicable, to fund your variable
annuity contract and/or variable life insurance policy.
Through the noted procedure, you will receive exactly the same beneficial
interest in shares of a Series as you previously held in the corresponding
Corporation. In other words, you will be beneficially entitled to exactly the
same number and dollar amount of shares of a Series as you previously were
entitled to in the corresponding Corporation. The net asset value of each share
of the Series will be the same as that of the Corporation on the date of the
Reorganization. You will retain the beneficial right to any declared but
undistributed dividends or other distributions payable on the shares of each
Corporation that you may have had as of the effective date of the
Reorganization. As soon as is practicable after the date of the Reorganization,
the Corporation will be dissolved. The Funds will bear the expenses of the
Reorganization.
The 1940 Act generally requires that stockholders of a mutual fund, among
other things, elect the fund's directors and approve the fund's investment
management agreement. These requirements will apply to the Trust. Technically,
any required elections and approvals will be accomplished by a vote of the
Corporations, as sole stockholder of each Series prior to the effective date of
the Reorganization. Therefore, if Contract Owners provide voting instructions
to approve the Reorganization, they will effectively:
. Authorize the election of the Trustees for the Trust;
. Authorize the approval of the investment management agreement between the
Trust, on behalf of each Series, and the Adviser;
. Authorize the approval of any applicable sub-advisory agreements between
the Trust, on behalf of each Series, and a corresponding Corporation's
sub-adviser; and
. Authorize the approval of the multi-manager arrangement (if Proposal 3 is
approved by stockholders).
10
In each case, a Series will have the same advisory agreements and
multi-manager arrangement as the corresponding Corporation. The Board members
also will be the same. This means that each Series will reflect the results of
the Contract Owners' vote on the relevant Proposals in this Proxy Statement.
For a comparison of the Funds' current expenses and the pro forma expenses
if the Reorganization is approved, see Exhibit B to this Proxy Statement.
The Directors may terminate the Plan and abandon the Reorganization at any
time prior to the effective date of the Reorganization if they determine that
such actions are in the best interests of the Contract Owners. If the
Reorganization is not approved, or if the Directors abandon the Reorganization,
the Corporations will continue to operate as corporations under the laws of the
State of Maryland.
Are there any tax consequences for stockholders or Contract Owners?
The Reorganization is designed to be a tax free transaction for federal
income tax purposes so that you will not experience a taxable gain or loss in
connection with the Reorganization. Generally, the basis and holding period of
your shares that you beneficially own in a Series will be the same as the basis
and holding period of the shares that you beneficially own in the corresponding
Corporation. Consummation of the Reorganization is subject to receipt of a
legal opinion from the Dechert law firm, counsel to the Trust and the
Corporations, that, under the Internal Revenue Code of 1986, the transfer of
the assets of each Corporation to the Trust in exchange for the shares of the
Series, the transfer of such shares to the holders of shares of the
Corporation, and the dissolution of the Corporation pursuant to the Plan, will
not result in the recognition of any gain or loss for federal income tax
purposes to the Corporation, the Trust, Contract Owners, or the stockholders of
either the Corporation or the Trust.
On what basis did the Corporations' Boards approve the Reorganization?
For the reasons set forth below, the Directors of the Boards of each
Corporation, including the Independent Directors, have unanimously determined
that the proposed Reorganization is in the best interests of the Corporations'
stockholders and Contract Owners and that the interests of those stockholders
and Contract Owners will not be diluted as a result of the Reorganization. The
Board of each Corporation has adopted a resolution that declares that the
proposed transaction is advisable on substantially the terms and conditions set
forth in the Plan.
As described above, as part of a restructuring program, it has been proposed
that each Corporation be reorganized from a Maryland corporation to a series of
a Delaware business trust. Each Corporation's Board has determined that it is
advisable and in the best interest of the Corporation and its stockholders and
Contract Owners to effect the proposed Reorganization, and has requested and
evaluated any such information as was reasonably necessary to make this
determination. In reaching this conclusion, each Corporation's Board considered
a number of factors, including the following:
. The terms and conditions of the Reorganization;
. The identical investment objectives and identical policies and
restrictions of the Corporation in relation to those of the corresponding
new Series, subject to stockholder approval of Proposal No. 5 and Proposal
No. 6, which, if approved, would amend or eliminate certain investment
restrictions of the Corporation;
. The federal tax consequences of the proposed Reorganization to the
Corporation and its stockholders and Contract Owners, and that a legal
opinion will be rendered that no recognition of income, gain or loss for
federal income tax purposes will occur with respect to the Corporation and
its stockholders and Contract;
. Owners as a result of the proposed Reorganization;
. That the interests of stockholders and Contract Owners of the Corporation
will not be diluted as a result of the proposed Reorganization;
. That the expenses of the proposed Reorganization will be borne by the
Corporation;
. That the proposed Reorganization will not substantially increase fund
operating expenses or stockholder or Contract Owner fees; and
. That no sales charge will be imposed in connection with the proposed
Reorganization.
11
Based upon these and other factors, the Directors of each Corporation,
including the Independent Directors, have unanimously determined that the
proposed Reorganization is advisable and in the best interests of the
Corporation and its stockholders and Contract Owners; and that the interests of
those stockholders and Contract Owners will not be diluted as a result of the
proposed Reorganization. Therefore, the Boards of Directors recommend that the
Corporations' stockholders vote to approve the Plan.
What vote is required to approve the Reorganization of the Funds into the
Delaware business trust?
Proposal No. 2 requires the affirmative vote of a simple majority of each
Corporation's shares represented at the meeting. In the approval of
Reorganization, each Fund votes separately, and Contract Owners are being asked
to provide voting instructions for the Reorganization of their respective
Fund(s) only. The Boards of Directors recommend that you provide instructions
to APPROVE the Proposal.
Proposal No. 3--All Funds
To Approve a Proposal to Permit the Funds
to Enter into a Multi-Manager Arrangement
What is the Proposal?
The Funds' Boards of Directors recommend that you provide voting
instructions to approve a proposal to permit the Funds to enter into, and
materially amend, sub-advisory agreements with each of the sub-advisers as
retained by the Adviser and the Funds to manage the Funds without obtaining
stockholder approval. This advisory structure is referred to as a
"multi-manager" arrangement. Submission of this Proposal is required under the
terms of an order that the Funds expect to receive from the SEC. The SEC order
would grant exemptive relief from the provisions of the 1940 Act and its rules,
as discussed below.
Approval by each Board, including a majority of the Independent Directors,
will continue to be required prior to entering into a new sub-advisory
agreement with respect to any Fund and amending an existing sub-advisory
agreement with respect to any Fund. However, if the Contract Owners approve
this multi-manager arrangement, a stockholder vote will not be required to
approve sub-advisory agreements and material changes to them. In addition, each
Fund will comply with SEC requirements including, if required, only entering
into a sub-advisory agreement with a sub-adviser that is not an "affiliated
person" (as defined in Section 2(a)(3) of the 1940 Act) of the Adviser or the
Fund, other than by reason of serving as a sub-adviser to the Fund. If approved
by stockholders, the multi-manager arrangement is expected to take effect on
the later of the day the SEC issues the required order or January 1, 2003.
How would the multi-manager arrangement benefit the Funds?
The Boards believe that it is appropriate and in the best interests of each
Fund's stockholders to provide the Adviser and the Boards with maximum
flexibility to recommend, supervise and evaluate sub-advisers without incurring
the unnecessary delay or expense of obtaining stockholder approval. This
process will allow each Fund to operate more efficiently. Currently, to appoint
a sub-adviser or to materially amend a sub-advisory agreement, the Fund must
call and hold a stockholder meeting, create and distribute proxy materials, and
solicit proxy voting instructions from the Contract Owners. Further, if a
sub-adviser is acquired, the Fund currently must seek approval of a new
sub-advisory agreement from its stockholders, even where there will be no
change in the persons managing a Fund. This process is time-consuming and
costly, and these costs are generally borne entirely by the respective Fund
with a consequent reduction in investment return. Without the delay inherent in
holding a stockholder meeting, the Adviser and a Fund's Board would be able to
act more quickly and with less expense to appoint a sub-adviser when the Board
and the Adviser believe that the appointment would benefit a Fund.
In its capacity as investment adviser to each Fund, the Adviser currently
oversees and monitors the performance of each Fund's sub-adviser. The Adviser
is also responsible for determining whether to recommend to a Fund's Board that
a particular sub-advisory agreement be entered into or terminated. A
determination of whether to recommend the termination of a sub-advisory
agreement depends on a number of factors, including, but not limited to, the
sub-adviser's performance record while managing a Fund.
By investing in a Fund, a stockholder and Contract Owners in effect hire the
Adviser to manage that Fund's assets directly or to hire an external
sub-adviser under the Adviser's supervision. Accordingly, the Boards believe
that stockholders and Contract Owners expect that the Adviser and the Boards
take responsibility for overseeing each Fund's sub-advisers and for
recommending their hiring, termination and replacement.
12
Thus, in light of the contractual arrangements under which the Adviser has
been engaged as an investment adviser and under which the sub-advisers serve as
sub-advisers, and in light of the Adviser's experience in recommending and
monitoring sub-advisers, the Boards believe that it is appropriate to allow the
recommendation, supervision and evaluation of sub-advisers to be conducted by
the Adviser. The Boards also believe that this approach would be consistent
with expectations of stockholders and Contract Owners that the Adviser will use
its expertise to recommend to a Fund's Board qualified candidates to serve as
sub-advisers.
The Boards will continue to provide oversight of the sub-advisory selection
and engagement process. The Boards, including a majority of the Independent
Directors, will continue to evaluate and consider for approval all new or
amended sub-advisory agreements. In addition, under the 1940 Act and the terms
of the sub-advisory agreements, the Boards, including a majority of the
Independent Directors, are required to annually review and consider for renewal
each of these agreements after the initial term. Upon entering into, renewing
or amending a sub-advisory agreement, the Adviser and the sub-adviser have a
legal duty to provide to the applicable Board information on pertinent factors.
Stockholder approval of this Proposal will not result in an increase or
decrease in the total amount of investment management fees paid by the Funds to
the Adviser. When engaging sub-advisers and entering into and amending
sub-advisory agreements, the Adviser has negotiated and will continue to
negotiate fees with these sub-advisers. Because these fees are paid by the
Adviser, and not directly by each Fund, any fee reduction negotiated by the
Adviser may benefit the Adviser, and any increase will be a detriment to the
Adviser. The fees paid to the Adviser by the Funds and the fees paid to
sub-advisers by the Adviser are considered by the Boards in approving and
renewing the advisory and sub-advisory agreements. Any increase in fees paid by
a Fund to the Adviser would continue to require stockholder approval.
Based on the factors discussed above as well as other factors, the Boards
found that each Fund would benefit from a multi-manager arrangement.
Accordingly, the Directors, including the Independent Directors, unanimously
voted to approve the multi-manager arrangement subject to SEC and stockholder
approval.
What are the terms of the proposed SEC order?
The Funds will file an application with the SEC requesting an order for
relief from the provisions of Section 15(a) of the 1940 Act and Rule 18f-2
thereunder. These provisions of the 1940 Act require that stockholders approve
advisory agreements, including the sub-advisory agreements, on behalf of a Fund
and approve any material amendment to such agreements. While there can be no
assurance, the Funds expect the SEC to issue the order. If the stockholders
approve this Proposal, the Funds would be authorized to evaluate, select and
retain new sub-advisers, or materially amend an existing sub-advisory
agreement, without obtaining further approval of the affected Fund's
stockholders or Contract Owners.
Under the terms of the proposed SEC order, the Funds will continue to be
subject to several conditions imposed by the SEC. For instance, as requested in
this Proposal, stockholder approval is required before the Funds may implement
the multi-manager arrangement permitting them to enter into and materially
amend sub-advisory agreements. Furthermore, within 90 days of hiring a new
sub-adviser, the affected Fund must provide its stockholders and associated
Contract Owners with an information statement that contains information about
the sub-adviser, the sub-advisory agreement, and the sub-advisory fee. Another
condition will require that a majority of each Board consist of Independent
Directors and that the nomination of new or additional Independent Directors be
at the discretion of the then-existing Independent Directors.
As of the date of the Proxy Statement, the Adviser is not aware of any
reason why a Fund's current sub-adviser will not continue to serve in its
capacity under terms substantially identical to the existing sub-advisory
agreement.
What vote is required to approve the multi-manager arrangement?
Proposal No. 3 requires the affirmative vote of a majority simple of each
Fund's shares represented at the meeting. The Boards of Directors recommend
that you provide instructions to APPROVE the Proposal.
13
Proposal No. 4 -- All Funds
To Approve a New Investment Management Agreement
What is the Proposal?
The Boards of Directors recommend that you provide voting instructions to
approve a new investment management agreement dated January 1, 2003, (the "New
Management Agreement"), between each Fund and the Adviser. A copy of the New
Management Agreement is attached to this Proxy Statement as Exhibit C. The New
Management Agreement will replace each Fund's current advisory agreement (the
"Current Management Agreement").
Why are the stockholders being asked to approve the New Management Agreement?
Stockholders are being asked to approve the New Management Agreement in
order to (a) modernize the terms of the Funds' advisory arrangements and (b)
reallocate certain expenses from the Adviser to the Funds. In addition, for the
Bond Fund, the Growth and Income Fund, the Managed Fund, the Money Market Fund,
the Social Awareness Fund and the Special Opportunities Fund (collectively, the
"Subject Funds"), stockholders are being asked to approve the New Management
Agreement in order to re-institute advisory fee rates for the Subject Funds
that were in effect prior to a fee waiver that became effective January 1, 2002.
As described below, a Special Committee of the Boards and the Boards
determined that the language of the Current Management Agreements is amenable
to different interpretations concerning accounting-related expenses. In light
of the facts and circumstances, the relevant parties agreed to settle
completely the questions that had arisen as a result of the different
interpretations upon the terms and in the manner provided in an agreement
executed in 2002 (the "Fee Agreement"). The Special Committee had reviewed and
recommended the Fee Agreement to the full Boards, and the full Boards approved
the Fee Agreement without modification. The Fee Agreement included, among other
things, reimbursements and a fee waiver for the Subject Funds, effective from
January 1, 2002 until such date as stockholder/Contract Owner approval of an
advisory agreement setting forth a revised fee arrangement is obtained.
As previously noted, stockholders of the Subject Funds are being asked to
approve the New Management Agreement in order to re-institute certain advisory
fee rates. This measure is the result of a comprehensive fee review that the
officers of the Funds ("Fund Management") undertook in 2001, in connection with
the various potential interpretations of the Current Management Agreements, to
determine whether Fund-related fee and expense items from 1996 to 2001 were
paid by the appropriate party. Fund Management, as part of its review,
considered fees that the Subject Funds paid for accounting services rendered
pursuant to an accounting services agreement dated August 15, 1996 (the
"Accounting Agreement"). Subsequent to Fund Management's review, the Funds'
Boards of Directors formed a Special Committee comprised solely of the Funds'
Independent Directors to, among other things, review the results of the fee
review, including the payments of accounting-related expenses. The Special
Committee engaged independent legal counsel to assist it in evaluating the
matters before it. The Special Committee conducted an independent, good faith,
and diligent investigation, reviewed pertinent documents supplied by Fund
Management, Fund counsel and independent counsel, and considered all relevant
factors and ultimately recommended to the Boards that the Fee Agreement be
approved.
In accordance with the Fee Agreement, the Subject Funds were, among other
things, reimbursed for certain accounting-related expenses. In addition, a
portion of the advisory fees otherwise payable by the Subject Funds under the
terms of the Current Management Agreements were waived in the aggregate amount
of $1,019,000 annually, allocated among the Subject Funds based upon their
relative net asset values, effective from January 1, 2002 until such date as
stockholder/Contract Owner approval of an advisory agreement setting forth a
revised fee arrangement was obtained. In consideration of the noted
arrangements, the Funds (pursuant to the Fee Agreement) released the Adviser
and its affiliated persons from any and all liability relating to fees and
expenses paid by the Funds from January 1, 1996 through December 31, 2001,
including, but not limited to, accounting-related expenses. This proxy Proposal
4 is intended, in part, to re-institute the waived portion of the advisory fees
for the Subject Funds.
Although not requiring stockholder approval, the Boards have approved an
Administration Agreement between the Funds and Lincoln Life that would become
effective should stockholders approve the New Management Agreement. The
aggregate fees and expenses charged to each Fund pursuant to the New Management
Agreement and the Administration Agreement would be higher than the fees and
expenses charged to that Fund pursuant to that Fund's Current Management
Agreement.
14
The 1940 Act requires that any material changes to a mutual fund's
investment management agreement be approved by the vote of a majority of the
outstanding voting securities of that fund. The changes recommended in this
Proposal would constitute material changes to the Funds' Current Management
Agreements. Accordingly, the Funds are seeking stockholder approval of the New
Management Agreement.
What are the qualifications of the Adviser?
The Adviser is a series of DMBT, a multi-series business trust registered
with the SEC as an investment adviser. DMBT's address is 2005 Market Street,
Philadelphia, Pennsylvania 19103. DMBT or its predecessors have served as
investment advisers to mutual funds for over sixty years. DMBT provides
investment management services to the registered investment companies of the
Delaware Investments Family of Funds; institutional clients, such as pension
plans, endowments and foundations; insurance companies; offshore and on-shore
collateralized bond obligation funds and a limited partnership. The Adviser,
either directly or through a sub-adviser, provides portfolio management and
investment advice to the Funds and certain administrative services to the
Funds, subject to the supervision of the Funds' Boards of Directors. The
Adviser serves as an investment adviser to other mutual funds that have similar
investment objectives to the Funds; these other funds are set forth in Exhibit
D to this Proxy Statement. DMBT is an indirect wholly-owned subsidiary of
Lincoln National Investments, Inc., which is located at 1500 Market Street,
Philadelphia, Pennsylvania 19102. Lincoln National Investments, Inc. is a
wholly-owned subsidiary of Lincoln National Corporation, which is located at
1500 Market Street, Philadelphia, Pennsylvania 19102.
DMBT's Trustees and Principal Executive Officers
Director Address Principal Occupation
- ---------------------------------------------------------------------------------------------------------
William E. Dodge... 2005 Market Street Executive Vice President of Delaware Management
Philadelphia, PA 19103 Business Trust
David K. Downes.... 2005 Market Street Trustee, Executive Vice President, Chief Financial Officer and
Philadelphia, PA 19103 Chief Operating Officer of Delaware Management
Business Trust
Jude T. Driscoll*.. 2005 Market Street Executive Vice President of Delaware Management
Philadelphia, PA 19103 Business Trust
John B. Fields..... 2005 Market Street Trustee of Delaware Management Business Trust
Philadelphia, PA 19103
Richard J. Flannery 2005 Market Street Trustee, Executive Vice President, General Counsel and
Philadelphia, PA 19103 Chief Administrative Officer of Delaware Management
Business Trust
- --------
* Due to the recent resignation of DMBT's Chief Executive Officer, Mr.
Driscoll also is serving as interim Chief Executive Officer until that
position has been filled.
What are the terms of the Current Management Agreements?
Subject to the supervision, direction and control of each Fund's Board of
Directors, the Adviser is responsible under its Current Management Agreement
with each Fund for continuously furnishing an investment program for the Fund
in accordance with the Fund's investment objectives, investment strategies,
investment restrictions, and applicable law. Each Current Management Agreement
provides that the Adviser will make investment decisions on behalf of each Fund
and place all orders for the purchase or sale of portfolio securities. The
Agreement allows the Adviser to place orders for the purchase and sale of
portfolio investments through brokers and dealers of its choosing, in
conformity with the brokerage policy set forth in each Fund's Registration
Statement.
The Adviser also agrees to provide each Fund with certain general
administrative services and to coordinate matters relating to the operation of
each Fund.
15
Each Fund's Current Management Agreement was originally executed on and last
submitted to a stockholder vote on the dates indicated in the following table:
Date Agreement Date Last Submitted
Lincoln National Fund Originally Executed to a Stockholder Vote
----------------------------------------------------------------------
Aggressive Growth Fund...... September 23, 1993 November 1, 1994
Bond Fund................... December 14, 1981 August 17, 1982
Capital Appreciation Fund... September 23, 1993 November 1, 1994
Equity-Income Fund.......... September 23, 1993 November 1, 1994
Growth and Income Fund...... December 14, 1981 August 17, 1982
Global Asset Allocation Fund May 31, 1987 August 16, 1988
International Fund.......... November 16, 1990 April 15, 1992
Managed Fund................ March 3, 1983 August 16, 1983
Money Market Fund........... December 14, 1981 August 17, 1982
Social Awareness Fund....... January 29, 1988 August 16, 1988
Special Opportunities Fund.. December 14, 1981 August 17, 1982
For services under the Current Management Agreements, the Adviser is
entitled to receive a monthly fee from each Fund. The table below shows the
annual rate for calculating this fee, as well as the aggregate amount of fees
each Fund paid to the Adviser for serving as the Fund's investment adviser for
the Funds' last fiscal year ended December 31, 2001.
Aggregate Fees Paid
Annual Rate as a Percent of For Fiscal Year Ended
Lincoln National Fund Average Daily Net Assets December 31, 2001
- ---------------------------------------------------------------------------------------------------------------
Aggressive Growth Fund...... .75 of 1% of the first $200 million; .70 of 1% of the next
$200 million; .65 of 1% of the excess over $400 million $2,914,057
Bond Fund................... .48 of 1% of the first $200 million; .40 of 1% of the next
$200 million; and .30 of 1% in excess over $400 million 1,920,922
Capital Appreciation Fund... .75 of 1% of the first $500 million; .70 of 1% of the excess
over $500 million 9,649,668
Equity-Income Fund.......... .75 of 1% of the first $500 million; .70 of 1% of the excess
over $500 million 5,969,794
Growth and Income Fund...... .48 of 1% of the first $200 million; .40 of 1% of the next
$200 million; and .30 of 1% in excess over $400 million 9,893,475
Global Asset Allocation Fund .75 of 1% of the first $200 million; .70 of 1% of the next
$200 million; and .68 of 1% of the excess over $400 million 2,498,600
International Fund.......... .90 of 1% of the first $200 million; .75 of 1% of the next
$200 million; and .60 of 1% in excess over $400 million 2,925,794
Managed Fund................ .48 of 1% of the first $200 million; .40 of 1% of the next
$200 million; and .30 of 1% in excess over $400 million 2,686,898
Money Market Fund........... .48 of 1% of the first $200 million; .40 of 1% of the next
$200 million; and .30 of 1% in excess over $400 million 1,428,840
Social Awareness Fund....... .48 of 1% of the first $200 million; .40 of 1% of the next
$200 million; and .30 of 1% in excess over $400 million 4,581,293
Special Opportunities Fund.. .48 of 1% of the first $200 million; .40 of 1% of the next
$200 million; and .30 of 1% in excess over $400 million 2,144,808
How does the proposed New Management Agreement differ from the Current
Management Agreements?
The New Management Agreement and the Current Management Agreements are
similar in many respects. In accordance with each of the Agreements, the
Adviser is responsible for managing a Fund's portfolio investments and
reporting to the Fund's Board of Directors. However, there are noted
differences between the two forms of Agreement. These differences include,
among others:
Administration. The administrative services provided under the Current
Management Agreements and the New Management Agreement differ. Each Current
Management Agreement provides that "[t]he Adviser will administer the Fund's
corporate affairs . . . and, in connection therewith, shall furnish the Fund
with office space and all necessary office facilities, equipment and personnel,
and shall provide all necessary executive and other personnel (including
certain of its officers and employees) for managing the investments and affairs
of the Fund." Thus, under the Current Management Agreements, the Adviser is
generally responsible for the administrative functions of the Funds.
16
The relevant provisions in the New Management Agreement contrast with the
Current Management Agreements. Under the New Management Agreement, with limited
exception, "[e]ach Fund shall conduct its own business and affairs and shall
bear the expenses and salaries necessary and incidental thereto . . . ." A Fund
could (1) utilize its directors, officers and employees; (2) utilize the
facilities and personnel of the Adviser or its affiliates; or (3) enter into
agreements with third parties, either affiliated or non-affiliated, to perform
any of these functions. With the second and third alternatives, the Adviser or
an affiliate of the Adviser may provide services to the Funds, and the Funds
may be charged directly for the services provided by the Adviser or the
affiliate's internal personnel. With all of these alternatives, the Funds would
be responsible for paying for such services (in addition to the investment
advisory fee).
Broker-Dealer Selection. Both the Current Management Agreement and New
Management Agreement require the Funds' Adviser to seek best execution in
selecting broker-dealers to execute the Funds' portfolio transactions. The
Current Management Agreement and New Management Agreement differ regarding the
treatment of transactions with affiliated parties of the Adviser. Certain
Current Management Agreements provide that the Adviser may not place orders
"with any affiliated person of the Adviser." The New Management Agreement does
not contain a similar prohibition regarding transactions with affiliated
persons, and thus would permit execution of trades with any broker subject to
compliance with any applicable law.
Right to Audit. Certain Current Management Agreements allow "employees or
legal representatives" of a Fund to "audit the books and records of the Adviser
which relate to Fund transactions. . . ." The New Management Agreement does not
contain a similar explicit provision permitting audits.
Dispute Resolution. Certain Current Management Agreements provide that prior
to proceeding to trial over any dispute, the parties must first deliver notice
of the dispute to the opposing party, and within twenty days after delivery of
the notice, attempt to meet and resolve the dispute. If the parties do not meet
and resolve the dispute or the dispute is not resolve within 120 days, the
parties must endeavor to settle the dispute by minitrial under the then current
Center For Public Resources Model Minitrial Procedures. The New Management
Agreement does not contain a similar requirement.
Fees and Expenses. While the advisory fee rates the Funds would pay pursuant
to the New Management Agreement would be the same as the advisory fee rates
that the Funds currently pay under the Current Management Agreements, the Funds
would pay additional fees and expenses under the new arrangement. One reason
for this difference is that certain expenses under the New Management Agreement
would be reallocated from the Adviser to the Funds.
Each Current Management Agreement generally provides that, in connection
with its administration of the affairs of the Fund, the Adviser will bear (i)
the salaries and expenses of all personnel, except the fees and expenses of
Independent Directors; and (ii) all expenses incurred by the Adviser in
connection with administering the Fund's business other than those assumed by
the Fund in the Agreement. In turn, each Fund generally assumes the following
expenses under its Current Management Agreement: (a) the fee of the Adviser;
(b) the compensation and expenses of Independent Directors; (c) the fees and
expenses of the custodian of the Fund's assets and of the transfer and dividend
disbursing agent; (d) the fees and expenses of independent accountants for the
Fund; (e) brokerage commissions and securities transaction costs incurred by
the Fund; (f) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies; (g) the fees of any trade association of
which the Fund may be a member; (h) the cost of stock certificates representing
shares of the Fund; (i) the fees and expenses involved in registering and
maintaining registrations of the Fund and its shares with the SEC, and
qualifying its shares under state securities laws, including the preparation
and printing of the Fund's registration statements and prospectuses; (j)
expenses of stockholders' and directors' meetings and of preparing and printing
proxy material and mailing reports to stockholders; (k) the charges and
expenses of outside legal counsel for the Fund; and (l) expenses of any
extraordinary nature which are not incurred in the ordinary course of the
Fund's business.
In contrast, the New Management Agreement provides that, "[e]ach Fund shall
conduct its own business and affairs and shall bear the expenses and salaries
necessary and incidental thereto, including, but not in limitation of the
foregoing, the costs incurred in: the maintenance of its corporate existence;
the maintenance of its own books, records and procedures; dealing with its own
shareholders; the payment of dividends; transfer of shares, including issuance,
redemption and repurchase of shares; preparation of share certificates; reports
and notices to shareholders; calling and holding of shareholders' meetings;
miscellaneous office expenses; brokerage commissions; custodian fees; legal and
accounting fees; taxes; and federal and state registration fees." Thus, under
the terms of the New Management Agreement, the Fund would be responsible for
paying certain fees and expenses directly, including, without limitation, those
related to the maintenance of its books, records and procedures, including
corporate secretary services; general accounting oversight; preparation of tax
returns and reports; and, legal services provided by the Adviser or an
affiliate of the Adviser.
17
As noted earlier, the Funds, under the New Management Agreement, may enter
into agreements with third parties, either affiliated or non-affiliated, to
perform any of these administrative services. The Boards have approved an
Administration Agreement between the Funds and Lincoln Life that would become
effective should stockholders approve the New Management Agreement. Pursuant to
the Administration Agreement, Lincoln Life would provide various administrative
services to the Funds, and the Funds would be charged a fee for such services
in addition to the advisory fee under the New Management Agreement.
The aggregate fees and expenses charged to each Fund pursuant to the New
Management Agreement and the Administration Agreement would be higher than the
fees and expenses charged to that Fund pursuant to that Fund's Current
Management Agreement.
In addition, with respect to the Subject Funds, upon approval of the New
Management Agreement, the Adviser would re-institute certain advisory fee rates
that were formerly in place under the Current Management Agreements. As part of
the Fee Agreement, a portion of the advisory fees otherwise payable by the
Subject Funds under the terms of the Current Management Agreements were waived
in the aggregate amount of $1,019,000 annually, allocated among the Subject
Funds based upon their relative net asset values, effective from January 1,
2002. The New Management Agreement re-institutes the waived portion of the
advisory fees effective as of the date of the New Management Agreement.
In summary, the aggregate fees and expenses charged to each Fund pursuant to
the New Management Agreement and the Administration Agreement would be higher
than the fees and expenses charged to that Fund pursuant to that Fund's Current
Management Agreement. Each Fund's current expenses and pro forma expenses
(assuming this Proposal is approved) are set forth in Exhibit B to this Proxy
Statement.
Duration of Agreement. The Current Management Agreements and the New
Management Agreement have the same duration and termination provisions. Each
Agreement states that it will continue in effect for two years, and thereafter,
from year to year so long as either the stockholders of each Fund by the
affirmative vote of a majority of the outstanding shares of that Fund, or its
Board, including a majority of Independent Directors, approve such continuance
annually. Each Agreement may be terminated by a Fund without penalty, either by
vote of the Board of Directors or a majority of the outstanding shares of that
Fund, on not more than 60 days' written notice. Each Agreement also may be
terminated by the Adviser without penalty on 60 days' written notice.
Standard of Care. Both the Current Management Agreement and the New
Management Agreements provide for the same standard of care for the Adviser.
Each Agreement provides that in the absence of willful misfeasance, bad faith,
or gross negligence on the part of the Adviser, or reckless disregard of its
obligations and duties, the Adviser shall not be liable to a Fund or to any
stockholder of a Fund for any act or omission in the course of, or connected
with, rendering services under the Agreement.
On what basis did the Funds' Boards approve the New Management Agreement?
In evaluating the New Management Agreement, the Funds' Boards of Directors
considered comprehensive materials. The Boards considered detailed management
fee and expense information for each Fund and for peer funds for 2001. They
considered the Adviser's management fee for the management of comparable mutual
funds in the Delaware Investments family of mutual funds. The Boards also
evaluated the profitability to the Adviser and its affiliates that results from
their association with the Funds.
The Boards believe that the additional fees and expenses are necessary to
address the increasing expenses of operating a mutual fund. Certain expenses
either did not exist or were very minimal at the time of the inception of the
Funds, such as pricing services. Also, the regulatory burden has increased for
mutual funds with a resulting increase in legal and compliance costs. Further,
the expenses associated with recruiting and retaining qualified investment and
service professionals in this increasingly competitive industry have grown.
The Boards believe that the proposed increase in operating expenses is fair
and reasonable and will not result in inappropriate levels of profitability for
the Adviser and its affiliates. Further, the additional resources may enhance
both investment services and administration services to the Funds. Quality,
long-term service and qualified investment and service professionals may help
to achieve solid investment performance.
In addition, the Directors evaluated a wide range of information of the type
they regularly consider when determining to continue a Fund's advisory
agreement as in effect from year to year. Among other things, the Directors
evaluated information about:
. The Adviser and its personnel (including particularly the personnel with
responsibilities for providing services to the Fund), resources and
investment process;
18
. The terms of the New Management Agreement;
. The scope and quality of the services that the Adviser has been providing
to each Fund;
. The investment performance of each Fund and of similar funds managed by
other advisers over various periods;
. The advisory fee rates payable to the Adviser by each Fund and by other
funds and client accounts managed by the Adviser, and payable by similar
funds managed by other advisers;
. The total expense ratio of each Fund and of similar funds managed by other
advisers;
. Compensation payable by each Fund to affiliates of the Adviser for other
services;
. The profitability to the Adviser and its affiliates; and
. The Adviser's use of each Fund's portfolio brokerage transactions to
obtain research benefiting the Fund or other Adviser clients at a cost
that may be in excess of the amount other brokers would charge or to
reduce certain out-of-pocket expenses otherwise payable by the Fund.
After carefully considering the information described above, the Directors,
including the Independent Directors, unanimously voted to approve the New
Management Agreement and to recommend that each Fund's stockholders vote to
approve the New Management Agreement.
What vote is required to approve the New Management Agreement?
Proposal No. 4 requires the affirmative vote of a "majority of the
outstanding voting securities" of each Fund. Each Fund votes separately, and
Contract Owners are being asked to approve the New Management Agreement for
their respective Fund(s) only. The Boards of Directors recommend that you
provide instructions to APPROVE the Proposal.
Proposal No. 5 -- All Funds
To Approve the Amendment of Certain Fundamental Investment Restrictions to
Modernize The Funds' Investment Restrictions
Why are the Funds proposing to make changes in certain fundamental investment
restrictions?
Each Fund is subject to investment restrictions which establish percentage
and other limits that govern that Fund's investment activities. Under the 1940
Act, investment restrictions relating to certain activities are required to be
"fundamental," which means that any changes to those restrictions require
stockholder approval. The Funds, in their discretion, are permitted to deem
other restrictions fundamental, and they may also adopt "non-fundamental"
restrictions, which can be changed by the Boards of Directors without
stockholder approval. Any change in a Fund's investment restrictions, whether
fundamental or not, would be approved by the Boards and reflected in the Fund's
prospectus or other offering documents.
Unlike investment objectives and policies, which are often different for
each Fund, investment restrictions for Funds tend to be the same or similar,
because they are based on legal or regulatory requirements that apply to all
Funds. Over the years, however, as new Funds were created or added to the
Lincoln National Funds, investment restrictions relating to the same activities
were expressed in a variety of different ways. Some Funds are subject to
investment restrictions that were adopted in response to regulatory, business
or industry conditions that no longer exist. In addition, a number of Funds
adopted fundamental restrictions in response to state laws and regulations that
no longer apply because they were preempted by the National Securities Markets
Improvement Act of 1996 ("NSMIA"). As a result, a number of the Funds'
fundamental restrictions are no longer required to be fundamental, and some
previously required restrictions are no longer required.
The Directors, together with the Funds' management, the Adviser, and the
Funds' sub-advisers, have analyzed the current fundamental investment
restrictions of each Fund and have concluded that seven new standardized
fundamental investment restrictions should be adopted for the appropriate
Funds. The Boards believe that a modern, standardized list of fundamental
investment restrictions will enhance the ability of the Funds to achieve their
objectives because the Funds will have greater investment management
flexibility to respond to changes in market, industry or regulatory conditions.
In addition, standardized restrictions are expected to enable the Funds to
operate more efficiently and to more easily monitor compliance with investment
restrictions. In light of these factors, among others, the Boards found that
each Fund would benefit from the proposed fundamental investment restriction
changes, and therefore approved the changes subject to stockholder approval.
19
The fundamental investment restrictions are generally found in each Fund's
Statement of Additional Information ("SAI"). Accordingly, if stockholders
approve the proposed fundamental investment restrictions for each Fund, then
each Fund's SAI will be updated to reflect the standardized investment
restrictions.
The seven new proposed fundamental investment restrictions are described
below. Exhibit E contains a list of the current fundamental investment
restrictions for each Fund which are proposed to be amended. That Exhibit
includes the current restrictions relating to the activities which are the
subject of the new proposed restrictions, and stockholders and Contract Owners
are encouraged to compare the current and proposed restrictions.
What are the risks of making the changes to the Funds' fundamental investment
restrictions?
The proposed changes will not affect the Funds' investment objectives.
Although the proposed changes will provide the Funds with greater flexibility
to respond to future investment opportunities, the Boards do not anticipate
that the changes, individually or in the aggregate, will result in a material
change in the level of investment risk associated with investment in the Funds.
The Boards also do not anticipate that the proposed changes will materially
affect the manner in which the Funds are managed.
Which fundamental investment restrictions are proposed to be amended?
Each of the fundamental investment restrictions proposed to be amended, as
well as the reason for each proposal, is outlined below.
(A)PROPOSAL--CONCENTRATION OF INVESTMENTS IN SAME INDUSTRY (All Funds)
If the proposed amendment is approved by the stockholders, the fundamental
investment restriction would read that each Fund may not:
Make investments that will result in the concentration (as that term may be
defined in the 1940 Act, any rule or order thereunder, or official
interpretation thereof) of its investments in the securities of issuers
primarily engaged in the same industry, provided that this restriction does
not limit the Fund from investing in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities, or in tax-exempt
securities or certificates of deposit.
Under the 1940 Act, funds' restrictions regarding the concentration of
investments in securities of companies in the same industry must be
fundamental. A fund concentrates its investments, according to the SEC, if it
invests more than 25% of its assets (exclusive of certain investments, such as
U.S. Government securities and tax-exempt securities) in a particular industry
or group of industries. The Funds' current fundamental investment restrictions
on concentration generally provide that a Fund concentrates its investments if
it invests more than 25% of its total assets in a particular industry or group
of industries. The Funds' current fundamental restrictions relating to industry
concentration are set forth on pages E-1 and E-7 of Exhibit E.
The proposed investment restriction will standardize the concentration
restriction for the Funds and is intended to provide flexibility for the Funds
to respond to changes in the SEC's position on concentration of investments or
to other relevant legal, regulatory or market developments without the delay or
expense of a stockholder vote.
Adoption of the proposed fundamental investment restriction will not
materially affect the way the Funds are currently managed or operated.
(B)PROPOSAL--BORROWING MONEY AND ISSUING SENIOR SECURITIES (All Funds)
If the proposed amendment is approved by the stockholders, the investment
restriction would read that each Fund may not:
Borrow money or issue senior securities, except as the 1940 Act, any
rule or order thereunder, or official interpretation thereof, may permit.
The limitations on borrowing and issuing senior securities are generally
designed to protect stockholders and their investments by restricting a fund's
ability to subject its assets to any claims of creditors or senior security
holders who would be entitled to dividends or rights on liquidation of the fund
that take precedence over the rights of stockholders. Borrowing money and
issuing senior securities are related activities under the 1940 Act in that, if
a fund fails to adhere to the restrictions applicable to borrowing, the fund
will be considered to have issued an impermissible senior security. Under the
1940 Act, a fund's investment restrictions relating to borrowing and senior
securities must be fundamental.
20
Borrowing. Under the 1940 Act, a mutual fund is permitted to borrow up to 5%
of its total assets for temporary purposes from any person so long as the
borrowing is privately arranged, and also to borrow from banks, provided that
if such bank borrowings exceed 5%, the fund must have assets totaling at least
300% of the borrowing when the amount of the borrowing is added to the fund's
other assets. The effect of this latter provision is to allow a fund to borrow
from banks amounts up to one-third (33 1/3%) of its total assets (including the
amount borrowed). Funds typically borrow money to meet redemptions to avoid
being forced to sell portfolio securities before they would have otherwise been
sold. This technique allows a fund greater flexibility to buy and sell
portfolio securities for investment or tax considerations, rather than for cash
flow considerations.
The Funds' current restrictions on borrowing limit the amount each Fund may
borrow to 5% of its assets (except that the borrowing restriction is 10% for
the Lincoln National Global Asset Allocation Fund, 25% for the Lincoln National
Equity-Income Fund, and 33 1/3% for the Lincoln National Aggressive Growth
Fund, and except for the Lincoln National Capital Appreciation Fund, which does
not have a fundamental restriction regarding borrowing). The Funds' current
fundamental investment restrictions relating to borrowing money are set forth
on pages E-4 and E-9 of Exhibit E. For each of the Funds, borrowing is
permitted only as a temporary or emergency measure. Since the Funds' investment
restrictions are more restrictive than current law, the proposed change would
give the Funds' investment advisers and sub-advisers, as applicable, maximum
flexibility in managing each Fund's assets.
Senior Securities. SEC staff interpretations under the 1940 Act allow mutual
funds such as the Funds to engage in several types of transactions which might
be considered to raise "senior securities" or "leveraging" concerns, so long as
the funds meet certain collateral requirements, which are designed to protect
stockholders. Some of the transactions that may raise senior security concerns
include short sales, certain options and futures transactions, reverse
repurchase agreements and securities transactions that obligate a fund to pay
money at a future date (these transactions may be referred to collectively as
"Leveraging-Type Transactions"). Funds that engage in Leveraging-Type
Transactions must set aside money or securities or engage in certain offsetting
securities transactions to meet the SEC staff's collateralization requirements.
Consistent with SEC staff positions, the senior security restrictions for
the Funds specifically permit the Funds to engage in certain transactions that
raise senior security concerns, but express the authority in various ways. The
Funds' current fundamental investment restrictions relating to issuing senior
securities are set forth on pages E-5 and E-9 of Exhibit E. Stockholders of
each Fund are being asked to approve a new standardized fundamental investment
restriction that covers senior securities and which is designed to reflect all
current regulatory requirements.
In the event that this Proposal is approved, the Funds would have greater
borrowing authority than they currently have (except for the Lincoln National
Aggressive Growth Fund, which currently provides for the maximum borrowing
allowed under the 1940 Act, and the Lincoln National Capital Appreciation Fund,
which does not have a fundamental restriction that limits borrowing) and the
authority to enter into Leveraging-Type Transactions. As a result, the Funds
may be subject to additional costs and risks. For example, the costs of
borrowing can reduce a Fund's total return. Further, upon engaging in
Leveraging-Type Transactions, such Funds could experience increased risks due
to the effects of leveraging. The SEC staff's collateralization requirements
are designed to address such risks.
The proposed investment restriction will establish a standardized borrowing
and senior securities restriction which is written to provide flexibility for
the Funds to respond to legal, regulatory or market developments. Adoption of
the new restriction, however, will not materially affect the way such Funds are
currently managed or operated.
(C)PROPOSAL--UNDERWRITING (All Funds)
If the proposed amendment is approved by the stockholders, the investment
restriction would read that each Fund may not:
Underwrite the securities of other issuers, except that the Fund may
engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be
considered to be an underwriter under the Securities Act of 1933.
Each Fund is currently subject to a fundamental investment restriction
prohibiting it from acting as an underwriter of the securities of other
issuers. Under the 1940 Act, a fund's restriction relating to underwriting must
be fundamental. A person or company is generally considered an underwriter
under the federal securities laws if it participates in the public distribution
of securities of other issuers, usually by purchasing the securities from the
issuer and re-selling the securities to the public. Underwriters are subject to
stringent regulatory requirements and often are exposed to substantial
liability. Thus, virtually all mutual funds operate in a manner that allows
them to avoid acting as underwriters.
21
From time to time, a mutual fund may purchase a security for investment
purposes which it later sells or re-distributes to institutional investors or
others under circumstances where the fund could possibly be considered to be an
underwriter under the technical definition of underwriter contained in the
securities laws. The current underwriting restriction for most Funds
specifically permits such re-sales. The Boards, consistent with SEC staff
interpretations, believe that the Funds legally would not be regulated as
underwriters in these circumstances.
The proposed investment restriction is substantially similar to the current
restriction for most of the Funds. The Funds' current fundamental investment
restrictions relating to underwriting are set forth on pages E-2 and E-8 of
Exhibit E. The new restriction is proposed for each Fund because it will help
to achieve the goal of standardization and modernization of the language of the
investment restrictions among all Funds. Adoption of the proposed restriction
will not affect the way the Funds are currently managed or operated.
(D)PROPOSAL--INVESTMENTS IN REAL ESTATE (All Funds)
If the proposed amendment is approved by the stockholders, the investment
restriction would read that each Fund may not:
Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments and provided that this restriction does
not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests
therein.
Under the 1940 Act, a fund's restrictions regarding investments in real
estate must be fundamental. The Funds currently have fundamental investment
restrictions prohibiting the purchase or sale of real estate. Most Funds'
fundamental investment restrictions permit investments in companies that deal
in real estate or investments in securities that are secured by real estate.
The Lincoln National Equity-Income Fund also permits the Fund to purchase or
sell real estate if acquired as a result of ownership of securities or other
instruments. The Funds' current fundamental investment restrictions relating to
investments in real estate are set forth on pages E-2 and E-8 of Exhibit E.
The proposed amendment grants the Funds maximum flexibility in light of
current regulatory requirements. Although the Funds are required to have a
fundamental restriction with respect to investments in real estate, the Funds'
current restrictions are more constrained than current legal requirements.
The proposed amendment enables the Funds to invest in a wide-range of real
estate-related investments, many in which the Funds may already invest under
the current restriction, including investments in companies which invest in
real estate, securities which represent interests in a real estate and
securities secured by real estate. In addition, each Fund would be able to own
real estate directly as a result of the exercise of its rights in connection
with debt obligations it owns. In such cases, the ability to acquire and
dispose of real estate may serve to protect the Fund during times where an
issuer of debt securities is otherwise unable to meet its obligations. This
enhanced flexibility could assist the Funds in achieving their investment
objectives.
To the extent the Funds hold real estate-related securities, they will be
subject to the risks associated with the real estate market. These risks may
include declines in the value of real estate, changes in general or local
economic conditions, overbuilding, difficulty in completing construction,
increased competition, changes in zoning laws, increases in property taxes and
operating expenses, and variations in rental income. Generally, increases in
interest rates will increase the costs of obtaining financing, which may result
in a decrease in the value of such investments. In addition, in order to
enforce their rights in the event of a default of these securities, the Funds
may be required to participate in various legal proceedings or take possession
of and manage real estate assets securing the issuer's obligations on the
securities. This could increase the Funds' operating expenses and adversely
affect the Funds' net asset value.
The proposed investment restriction is designed to standardize the language
of the real estate restriction among the various Funds. The proposed investment
restriction will permit the Funds to purchase securities which have payments of
interest or principal that are secured by mortgages or other rights to real
estate in the event of default. This investment restriction will also enable
the Funds to invest in companies within the real estate industry, provided such
investments are consistent with a Fund's investment objectives and policies.
Adoption of the proposed restriction will not materially affect the way the
Funds are managed or operated.
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(E)PROPOSAL--INVESTMENT IN COMMODITIES OR COMMODITY ISSUES (All Funds)
If the proposed amendment is approved by the stockholders, the investment
restriction would read that each Fund may not:
Purchase or sell physical commodities, unless acquired as a result of
ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from investing in securities that
are secured by physical commodities or engaging in transactions
involving financial commodities, such as financial options, financial
futures contracts, options on financial futures contracts, and financial
forward contracts.
The Funds are generally subject to fundamental investment restrictions
limiting the purchase or sale of commodities or commodity contracts. Under the
1940 Act, restrictions regarding commodities must be fundamental. The most
common types of commodities are physical commodities such as wheat, cotton,
rice and corn. However, under federal law, futures contracts are considered to
be commodities and, therefore, financial futures contracts, such as futures
contracts related to currencies, stock indices or interest rates, are
considered to be commodities. If a fund buys a financial futures contract, it
obtains the right to receive (or, if the fund sells the contract, the fund is
obligated to pay) the cash difference between the contract price for an
underlying asset or index, and the future market price, if the market price is
higher. If the future price is lower, the fund is obligated to pay (or, if the
fund sold the contract, the fund is entitled to receive) the amount of the
decrease. Funds often desire to invest in financial futures contracts and
options related to such contracts for hedging or other investment reasons.
The Funds' current fundamental investment restrictions pertaining to
investing in commodities are set forth on pages E-3 and E-9 of Exhibit E. The
proposed restriction, while continuing to prohibit the purchase of physical
commodities, would clarify that each Fund could purchase and sell options,
futures contracts and options on futures contracts, and financial forward
contracts. Such strategies are generally accepted under modern portfolio theory
and are regularly used by many mutual funds and other institutional investors.
To the extent a Fund invests in these derivative instruments, the Fund will
be subject to certain risks. These risks include possible default by the other
party to the transaction, illiquidity, and to the extent the Fund's view as to
certain market movements is incorrect, the risk that the use of such
transactions could result in losses greater than if they had not been used. The
use of options may result in losses to a Fund, force the sale or purchase of
securities at inopportune times or for prices other than current market values,
limit the amount of appreciation a Fund can realize on its investments or cause
a Fund to hold a security it might otherwise sell. The ability of each Fund to
engage in futures contracts and options on futures will be subject to
applicable rules of the Commodity Futures Trading Commission ("CFTC"). Under
current CFTC rules, a Fund would not be permitted to enter into a futures
transaction if it would cause the aggregate amount of initial margin deposit
and related option premiums for non-hedging purposes to exceed 5% of the value
of its assets.
The proposed restriction would standardize the language of the restriction
among the various Funds and provide appropriate flexibility for the Funds to
invest in financial futures contracts and related options. As proposed, the
restriction is broad enough to permit investment in financial futures
instruments for either investment or hedging purposes, and this is broader than
many of the Funds' current restrictions. Using financial futures instruments
can involve substantial risks, and will be utilized only if the Adviser
determines that such investments are advisable and such practices are
authorized by the Boards. Adoption of the restriction will not materially
affect the way the Funds are currently managed or operated.
(F)PROPOSAL--LENDING (All Funds)
If the proposed amendment is approved by the stockholders, the investment
restriction would read that each Fund may not:
Make loans of any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties,
provided that this limitation does not apply to purchases of debt
obligations, to repurchase agreements, and to investments in loans,
including assignments and participation interests.
The Lincoln National Aggressive Growth Fund, the Lincoln National Capital
Appreciation Fund, and the Lincoln National Equity-Income Fund are currently
subject to fundamental investment restrictions limiting their ability to make
loans which are similar to the proposed fundamental investment restriction. The
remaining Funds' fundamental investment restrictions generally prohibit
lending, but do permit the Funds to enter into repurchase agreements and engage
in securities lending. The Funds' current fundamental investment restrictions
relating to lending are set forth on pages E-3 and E-8 of Exhibit E. The
proposed restriction would, to a large extent, standardize and clarify the
language of the restriction among the various Funds.
The proposal would continue to allow the Funds to invest in certain debt
securities or repurchase agreements, which could be characterized as the making
of loans. This proposal would continue to permit the Funds to engage in
securities lending, which is common in the mutual fund industry and involves
the temporary lending of portfolio securities to parties who use the securities
for the settlement of securities transactions. The collateral delivered to a
Fund in connection with such a transaction is then invested to provide the Fund
with additional income. The main risk in lending securities, as with other
extensions of credit, is the possibility
23
that the borrower may fail to honor its obligations, causing a loss for the
Fund. To help protect against this risk, the SEC only permits loans of a mutual
fund's securities up to one-third of its assets, including any collateral
received from the loan, provided that loans are 100% collateralized by cash or
cash equivalents on a marked to market basis.
The Funds would also be permitted to lend other assets subject to the
percentage limitation established by the SEC. Nevertheless, adoption of the
Proposal would not materially affect the way that the Funds are currently
managed or operated.
(G) PROPOSAL--DIVERSIFICATION (All Funds)
If the proposed amendment is approved by the stockholders, the investment
restriction would read that each Fund may not:
With respect to 75% of its total assets, invest in a security if, as a
result of such investment: (a) more than 5% of its total assets would be
invested in the securities of any one issuer or (b) the Fund would hold
more than 10% of the outstanding voting securities of any one issuer;
except that these restrictions do not apply to (i) securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities
or (ii) securities of other investment companies.
Most of the Funds have a fundamental investment restriction relating to
diversification that sets forth diversification requirements that are
substantially similar to the proposed restriction. The Funds' current
fundamental investment restrictions relating to diversification are set forth
on pages E-6 and E-10 of Exhibit E. The proposed fundamental investment
restriction concerning portfolio diversification would standardize the language
of this restriction among the various Funds. It is not expected to affect the
way in which the Funds are managed, the investment performance of the Funds, or
the securities or instruments in which the Funds invest.
Each of the Funds is a "diversified" mutual fund as defined in the 1940 Act,
except for the Special Opportunities Fund, which is technically a
"non-diversified" fund. While the Special Opportunities Fund is technically a
non-diversified fund, the SEC staff has stated that a mutual fund that
registers as a non-diversified fund, but operates as a diversified fund for
more than three years is a de facto diversified fund and is required to obtain
shareholder approval to operate again as a non-diversified fund. The Special
Opportunities Fund has operated as a diversified fund for more than three
years; therefore, according the SEC staff, the Fund should be viewed as a
diversified fund. If this Proposal is approved, the Fund would become
registered as a diversified fund in line with its operations during at least
the past three years.
In addition to complying with the noted diversification requirements, the
Money Market Fund will continue to comply with the more restrictive
diversification requirements under the 1940 Act that apply to all money market
funds.
What vote is required to approve the reclassification of the investment
restrictions?
Each of the Sub-Proposals requires the affirmative vote of a "majority of
the outstanding voting securities" of each Fund. Each Fund votes separately,
and Contract Owners are being asked to approve the proposed standardized
investment restrictions for their respective Fund(s) only. The Boards of
Directors recommend that you provide instructions to APPROVE each Sub-Proposal
5(A) through 5(G).
Proposal No. 6 -- All Funds
To Approve the Elimination of Certain Fundamental Investment Restrictions to
Modernize The Funds' Investment Restrictions
Why are the Funds proposing to eliminate certain investment restrictions?
The Funds are subject to certain investment restrictions which govern the
Funds' investment activities. Under the 1940 Act, certain investment
restrictions are required to be "fundamental" which means that they can only be
changed by a stockholder vote. In addition to the 1940 Act requirements, an
investment company may designate additional restrictions that may be changed by
the Board of Directors without stockholder approval.
Certain legal and regulatory requirements applicable to mutual funds have
changed since the Funds' inception. For example, certain restrictions imposed
by state laws and regulations were preempted by NSMIA and, therefore, are no
longer applicable to mutual funds. The Funds currently are subject to
fundamental investment restrictions that are either more restrictive than
required under current law, or are no longer required to be classified as
fundamental. Accordingly, the Directors recommend that the Funds' stockholders
approve the elimination of these fundamental restrictions. The Directors
believe that the proposed changes will provide the Funds with flexibility to
respond to future legal, regulatory, market and technical changes. The
Directors believe that eliminating these fundamental investment restrictions
will permit the Funds to minimize the costs and delays associated with holding
future stockholder meetings to amend restrictions that become outdated or
inappropriate.
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The seven fundamental investment restrictions which are proposed to be
eliminated are described below. Exhibit F contains the current fundamental
investment restrictions that are proposed to be eliminated for each Fund.
What are the risks of eliminating these investment restrictions from the Funds'
fundamental restrictions?
The proposed changes will not affect any Fund's investment objectives.
Although the proposed changes will provide each Fund with greater flexibility
to respond to future investment opportunities, the Funds' Boards do not
anticipate that the changes, individually or in the aggregate, will result in a
material change in the level of investment risk associated with the Funds'
investments. The Boards also do not anticipate that the proposed changes will
materially affect the manner in which the Funds are managed or operated.
What fundamental investment restrictions are proposed to be eliminated?
Each of the fundamental investment restrictions proposed to be eliminated,
as well as the reason for each proposal, is outlined below.
(A)PROPOSAL--INVESTMENTS IN OTHER INVESTMENT COMPANIES (Aggressive Growth,
Bond, Capital Appreciation, Global Asset Allocation, International, Managed,
Money Market, Social Awareness and Special Opportunities funds)
All of the Funds (except for the Lincoln National Equity-Income Fund and the
Lincoln National Growth and Income Fund) restrict the Funds' purchase of
securities of other investment companies, except in connection with a merger,
consolidation or reorganization (some of the Funds also list an acquisition).
The Lincoln National Aggressive Growth Fund and the Lincoln National
International Fund further provide that the Fund may invest up to 5% of its
total assets in the securities of any one investment company, but it may not
own more than 3% of the securities of any investment company or more than 10%
of its total assets in the securities of other investment companies. The Funds'
current fundamental investment restrictions relating to investing in the
securities of other investment companies are set forth on pages F-1 and F-4 of
Exhibit F.
This restriction was based on the requirements formerly imposed by state
"blue sky" regulators as a condition to registration. As a result of NSMIA,
this restriction is no longer required. However, each Fund remains subject to
the limitations on investments in other investment companies imposed on all
mutual funds under the 1940 Act. To the extent that the Funds do invest in the
shares of other investment companies, they will incur additional expenses due
to the duplication of fees and expenses as a result of investing in other
mutual funds.
(B)PROPOSAL--SELLING SECURITIES SHORT (Aggressive Growth, Bond, Global Asset
Allocation, Growth and Income, International, Managed, Money Market, Social
Awareness and Special Opportunities funds)
All of the Funds (except for the Lincoln National Capital Appreciation Fund
and the Lincoln National Equity-Income Fund) have investment restrictions
prohibiting the short sales of securities. The Lincoln National Aggressive
Growth Fund and the Lincoln National Global Asset Allocation Fund allow short
sales of securities under certain circumstances. The Funds' current fundamental
investment restrictions relating to short sales of securities are set forth on
pages F-2 and F-5 of Exhibit F.
Short-sale transactions occur when a Fund sells a borrowed security and
agrees to return the same security to the lender. The restriction on selling
securities short was based on the requirements formerly imposed by state "blue
sky" regulators as a condition to registration. As a result of NSMIA, this
restriction is no longer required, and the Boards propose that it be eliminated
from the Funds' fundamental investment restrictions.
The Funds, however, would remain subject to applicable provisions of the
1940 Act relating to short-sale transactions. Consistent with the 1940 Act, a
Fund generally would be permitted only to engage in short-sale transactions (1)
"against the box," in which case the Fund owns or has the right to obtain
securities identical to those sold short and (2) when the Fund's possible
short-sale liabilities are covered by segregated liquid assets.
(C)PROPOSAL--MARGIN TRANSACTIONS (Bond, Global Asset Allocation, Growth and
Income, International, Managed, Money Market, Social Awareness and Special
Opportunities funds)
All of the Funds (except for the Lincoln National Aggressive Growth Fund,
the Lincoln National Capital Appreciation Fund and the Lincoln National
Equity-Income Fund) are subject to fundamental investment restrictions relating
to margin transactions. These restrictions prohibit the Funds from purchasing
securities on margin, except for short-term loans as are necessary for the
clearance of purchases of portfolio securities. The Lincoln National Global
Asset Allocation Fund further permits margin payments in connection with
options on financial futures contracts. The Funds' current fundamental
investment restrictions relating to margin transactions are set forth on pages
F-2 and F-5 of Exhibit F.
25
"Margin transactions" involve the purchase of securities with money borrowed
from a broker, with cash or eligible securities being used as collateral
against the loan. The Funds originally adopted this restriction to comply with
certain state securities law requirements. However, the restriction is no
longer required to be a fundamental restriction. The Funds' potential use of
margin transactions beyond transactions in financial futures and options and
for the clearance of purchases and sales of securities, including the use of
margin in ordinary securities transactions, is generally limited by the current
position taken by the SEC staff that margin transactions with respect to
securities are prohibited under Section 18 of the 1940 Act because they create
senior securities. The Funds' ability to engage in margin transactions is also
limited by its investment policies, which generally permit the Funds to borrow
money in limited circumstances.
(D)PROPOSAL--PLEDGING FUND ASSETS (Bond, Global Asset Allocation, Growth and
Income, International, Managed, Money Market, Social Awareness and Special
Opportunities funds)
All of the Funds (except for the Lincoln National Aggressive Growth Fund,
the Lincoln National Capital Appreciation Fund and the Lincoln National
Equity-Income Fund) have fundamental investment restrictions prohibiting the
pledging of fund assets except to secure borrowings. Each Fund's borrowings are
not to exceed 5% of the Fund's assets for all of the Funds that have a
fundamental investment restriction relating to the pledging of fund assets
(except the Lincoln National Global Asset Allocation Fund which may not pledge
more than 15% of its total assets.) The Funds' current fundamental restrictions
on pledging of fund assets are set forth on pages F-3 and F-6 of Exhibit F.
Certain state securities laws impose limitations on the Funds' ability to
pledge their assets, but these limitations are less restrictive than the Funds'
current restrictions and are not required to be a fundamental restriction. For
these reasons, the Boards of the Funds believe that the Funds' current
restrictions are unnecessarily restrictive and should be eliminated.
This proposal would enable the Funds to pledge up to one-third of their
total assets in connection with Fund borrowings; other activities which could
be deemed to be pledges or other encumbrances, such as collateral arrangements
with respect to certain forward commitments, futures contracts and options
transactions, would not be restricted.
The enhanced flexibility could assist the Funds in achieving their
investment objectives. Further, the Funds' current limits on pledging may
conflict with each Fund's ability to borrow money to meet redemption requests
or for extraordinary or emergency purposes. This conflict arises because banks
may require borrowers such as the Funds to pledge assets in order to
collateralize the amount borrowed. These collateral requirements are typically
for amounts at least equal to, and often larger than, the principal amount of
the loan. The Funds' current restrictions, however, could be read to prevent
these types of collateral arrangements, and could therefore have the effect of
reducing the amount that the Funds may borrow in these situations.
Pledging assets does entail certain risks. To the extent that the Funds
pledge their assets, the Funds may have less flexibility in liquidating their
assets. If a large portion of the Funds' assets were involved, the Funds'
ability to meet redemption requests or other obligations could be delayed.
(E)PROPOSAL--ILLIQUID AND RESTRICTED SECURITIES (Aggressive Growth, Bond,
Capital Appreciation, Global Asset Allocation, Growth and Income,
International, Managed, Money Market, Social Awareness and Special
Opportunities funds)
Each Fund has a fundamental investment restriction that limits its ability
to invest in illiquid securities and to purchase restricted securities (except
the Lincoln National Equity-Income Fund, which has no fundamental restriction
regarding illiquid or restricted securities and the Lincoln National Capital
Appreciation Fund and the Lincoln National Global Asset Allocation Fund which
have no fundamental restrictions regarding illiquid securities). Illiquid
securities are securities that may not be readily sold within seven days at the
price at which they are being accounted. Similarly, restricted securities are
subject to certain contractual or other restrictions on their resale.
Restricted securities are often considered to be illiquid because their
disposition is difficult or requires more than seven days. The Boards recommend
that both of these fundamental investment restrictions be eliminated. These
restrictions originated under certain state securities laws and are no longer
required by the states. The SEC does not require a fund's illiquid securities
restriction to be fundamental. In addition, there is no SEC requirement that a
fund have a fundamental investment restriction relating to restricted
securities.
Illiquid Securities. Under the current fundamental investment restrictions,
each Fund (except the Lincoln National Equity-Income Fund, the Lincoln National
Capital Appreciation Fund and the Lincoln National Global Asset Allocation
Fund) is prevented from investing more than 10% of its assets in securities
that are illiquid (the restriction is 15% for the Lincoln National Aggressive
Growth Fund). The Funds' current fundamental investment restrictions on
illiquid securities are set forth on pages F-1 and F-4 of Exhibit F.
26
Under the 1940 Act, a mutual fund is required to maintain a high degree of
liquidity in its portfolio to ensure that the fund is able to meet stockholder
requests for redemptions. Current regulatory interpretations of the requirement
provide that a mutual fund may not invest more than 15% of its assets (10% in
the case of a money market mutual fund, such as the Lincoln National Money
Market Fund) in "illiquid securities." However, the Funds are unable to take
advantage of this SEC position because their existing restrictions relating to
investments in illiquid securities are both fundamental and contain a lower
percentage limitation (except for the Lincoln National Money Market Fund, which
has a 10% limitation, and the Lincoln National Aggressive Growth Fund which has
a 15% limitation as required by current regulations). Eliminating this as a
fundamental restriction would enable each Fund to both take advantage of the
current SEC position and to respond to future SEC changes in this area without
the delay and expense of a stockholder vote, thereby providing each Fund with
additional investment flexibility. Although each Fund's restriction relating to
illiquid securities would no longer be fundamental, each Fund would continue to
be subject to the SEC rules and regulations in this area.
Restricted Securities. The Funds (except the Lincoln National Equity-Income
Fund) have adopted fundamental investment restrictions relating to the purchase
of restricted securities. The Funds' current fundamental investment
restrictions relating to restricted securities are set forth on pages F-1 and
F-4 of Exhibit F. Current SEC rules have substantially increased the types of
restricted securities that may be considered liquid. The most common form of
liquid restricted securities are "Rule 144A securities." Elimination of this
restriction would provide the Funds with greater flexibility to invest in
restricted securities.
Elimination of these restrictions should not have an impact on the
day-to-day management of any Fund as each Fund does not currently intend to
increase the percentages in which the Fund invests in either illiquid or
restricted securities.
(F)PROPOSAL--PURCHASE OF PUT AND CALL OPTIONS (Bond, Growth and Income,
International, Managed, Money Market, Social Awareness and Special
Opportunities funds)
All of the Funds (except for the Lincoln National Aggressive Growth Fund,
the Lincoln National Capital Appreciation Fund, the Lincoln National
Equity-Income Fund, and the Lincoln National Global Asset Allocation Fund) have
a fundamental investment restriction relating to the purchase of put and call
options. The majority of these Funds prohibit the purchase of puts, calls or
combinations thereof, except some Funds may write and purchase put and call
options and effect closing transactions in connection with options trading, as
set forth in the Funds' Statement of Additional Information. The Funds' current
fundamental investment restrictions relating to the purchase of put and call
options are set forth on pages F-2 and F-5 on Exhibit F.
The 1940 Act does not require the Funds to have a fundamental restriction on
options and futures contracts. Certain state securities laws impose limitations
on the Funds' ability to engage in options transactions and puts, calls,
straddles and spreads, but these limitations are less restrictive than the
Funds' current restrictions, and are not required to be fundamental
restrictions. For these reasons, the Boards believe that the Funds' current
restrictions are unnecessarily restrictive and should be eliminated.
This proposal is intended to ensure that the Funds will have adequate
flexibility to enter into hedging and other transactions utilizing financial
futures contracts and put and call options when doing so is permitted by the
Funds' other investment policies. The Boards believe that the use of these
instruments is best regulated by means other than fundamental investment
restrictions. Eliminating this investment restriction will allow the Funds to
respond to developments in the securities markets without the expense of
holding a stockholder meeting. The Boards do not expect this change to have any
material impact on the Funds' current operations.
(G)PROPOSAL--INVESTMENTS IN COMPANIES FOR THE PURPOSE OF ACQUIRING CONTROL
(Bond, Global Asset Allocation, Growth and Income, International, Managed,
Money Market, Social Awareness and Special Opportunities funds)
All of the Funds (except for the Lincoln National Aggressive Growth Fund,
the Lincoln National Capital Appreciation Fund and the Lincoln National
Equity-Income Fund) have a fundamental investment restriction regarding
investing in companies for the purpose of acquiring control. The Funds' current
fundamental investment restrictions relating to investing in companies for the
purpose of acquiring control are set forth on pages F-3 and F-6 of Exhibit F.
The restrictions on investing in a security for the purpose of obtaining or
exercising control over the issuer was based on the requirements formerly
imposed by state "blue sky" regulators as a condition to registering a fund's
securities. As a result of NSMIA, this restriction is no longer required and
the Boards propose that it be eliminated from the Funds' investment
restrictions. Eliminating this restriction would make it clear that the Funds
could freely exercise their rights as a stockholder of the various companies in
which they invest. These rights may include the right to actively oppose or
support management of such companies.
The Boards believe that this ability will allow the Funds maximum
flexibility to protect the value of the Funds' investments through influencing
the management of companies in which they invest. The Boards believe that the
Funds should be allowed to freely communicate their views as a stockholder on
matters of policy to management, the board of directors, and other stockholders
when a policy may affect the value of a Fund's investment. Activities in which
the Funds may engage might include the Funds,
27
either individually or with others, seeking changes in a company's goals,
management, or board of directors, seeking the sale of some or all of a
company's assets, or voting to participate in or oppose a takeover effort with
respect to the company. Although the Boards believe that the Funds may
currently engage in many if not all of these activities without necessarily
violating this restriction, they believe that eliminating the restriction will
eliminate any potential obstacle to the Funds in protecting their interests as
a stockholder. The Funds would remain subject to applicable provisions of the
1940 Act that restrict the ability of an investment company to invest for
control.
What vote is required to approve the elimination of the investment restrictions?
Each of the Sub-Proposals requires the affirmative vote of a "majority of
the outstanding voting securities" of each Fund. Each Fund votes separately,
and Contract Owners are being asked to approve the proposed elimination of the
noted investment restrictions of their respective Fund(s) only. The Boards of
Directors recommend that you provide instructions to APPROVE each Sub-Proposal
6(A) through 6(G).
General Information
Who are the Funds' executive officers?
The table below provides certain information regarding the executive
officers of the Funds (other than the nominees for election as Director). Each
executive officer other than Frederick J. Crawford and William P. Flory, Jr.
has been an officer of the Funds for at least the last five years.
Executive Officers of the Funds *
Number of
Funds in
Position(s) Term of Office Fund Complex
Name, Address and Date of Held with the and Length of Principal Occupation(s) Overseen by
Birth Funds Time Served ** During the Past Five Years Director
- -----------------------------------------------------------------------------------------------------------------------------
KELLY D. CLEVENGER Chairman, Chairman since Vice President, The Lincoln National 12
1300 S. Clinton Street President and August 1995; Life Insurance Company. Vice
Fort Wayne, IN 46802 Director President and Director President, Lincoln Retirement Services
DOB: 07/25/52 since November 1994 Company, LLC; Second
Vice President, Lincoln Life &
Annuity Company of New York
FREDERICK J. CRAWFORD Vice President and Vice President and Vice President and Treasurer, N/A
Centre Square, West Tower, Treasurer Treasurer since Lincoln National Corporation;
1500 Market Street, Suite 3900 January 2001 formerly President and Market
Philadelphia, PA 19102 Manager, Greater Cincinnati Region,
DOB: 08/03/63 Bank One, N.A.
CYNTHIA A. ROSE Secretary Secretary since Secretary and Assistant Vice N/A
1300 S. Clinton Street February 1995 President, The Lincoln National Life
Fort Wayne, IN 46802 Insurance Company; formerly
DOB: 04/24/54 Assistant Secretary, Lincoln National
Corporation
WILLIAM P. FLORY, JR. Assistant Chief Accounting Assistant Vice President, The Lincoln N/A
1300 S. Clinton Street Vice President and Officer since May National Life Insurance Company;
Fort Wayne, IN 46802 Chief Accounting 2002 formerly Vice President, MetLife
DOB: 09/02/61 Officer Investors; formerly Assistant
Vice President, MetLife Investors;
formerly Accounting Manager,
Transamerica Life Companies
STEVEN M. KLUEVER Second Second Vice President Second Vice President, The Lincoln N/A
1300 S. Clinton Street Vice President since August 1999; National Life Insurance Company;
Fort Wayne, IN 46802 Assistant Second Vice President, Lincoln Life &
DOB: 08/04/62 Vice President since Annuity Company of New York
August 1997
Other
Principal Occupation(s) Directorships
During the Past Five Years Held by Director
- ---------------------------------------------------------
Vice President, The Lincoln National Lincoln Retirement
Life Insurance Company. Vice Services Company,
President, Lincoln Retirement Services LLC
Company, LLC; Second
Vice President, Lincoln Life &
Annuity Company of New York
Vice President and Treasurer, N/A
Lincoln National Corporation;
formerly President and Market
Manager, Greater Cincinnati Region,
Bank One, N.A.
Secretary and Assistant Vice N/A
President, The Lincoln National Life
Insurance Company; formerly
Assistant Secretary, Lincoln National
Corporation
Assistant Vice President, The Lincoln N/A
National Life Insurance Company;
formerly Vice President, MetLife
Investors; formerly Assistant
Vice President, MetLife Investors;
formerly Accounting Manager,
Transamerica Life Companies
Second Vice President, The Lincoln N/A
National Life Insurance Company;
Second Vice President, Lincoln Life &
Annuity Company of New York
- --------
* All of the executive officers of the Funds are "interested persons" of the
Funds, as that term is defined by Section 2(a)(19) of the 1940 Act, by
reason of their being officers of the Funds.
** Date on which individuals became officers of the Funds.
What is the share ownership of each Fund?
As of September 20, 2002, the Funds had outstanding the following number of
shares entitling the applicable Contract Owners to instruct Lincoln Life or
Lincoln New York, as appropriate, on the manner in which to vote those shares
at the Funds' special meeting.
28
Total Number Total Number Total Number Total Number Total Number
of Shares of Shares of Shares of Shares of Shares
Entitled to Entitled to Entitled to Entitled to Entitled to
be Voted by be Voted by be Voted by be Voted by be Voted by
Total Lincoln Life Lincoln Life Lincoln Lincoln Lincoln Life
Number for Accounts for Accounts New York New York (Unregistered
of Shares C, L, N, D, G, K, for Accounts for Accounts Accounts 33
Lincoln National Fund Outstanding Q and W M, R and S L and N M, R and S and 53)
- ----------------------------------------------------------------------------------------------------------
Aggressive Growth Fund 33,703,542 30,977,578 757,207 1,043,862 446 924,449
Bond Fund 53,517,163 47,133,127 5,422,028 875,512 86,297 199
Capital Appreciation Fund 55,920,183 52,898,972 1,603,747 25,551 4,988 1,386,925
Equity-Income Fund 49,817,762 47,564,581 1,664,012 392 2,474 586,303
Global Asset Allocation Fund 23,145,273 22,473,858 307,309 545 2,856 360,705
Growth and Income Fund 91,922,423 88,698,581 1,680,542 21,728 0 1,521,571
International Fund 26,756,031 26,146,185 607,003 1,281 1,371 191
Managed Fund 44,894,413 44,051,891 315,592 0 0 526,930
Money Market Fund 52,882,125 39,288,938 11,348,526 1,871,039 373,386 236
Social Awareness Fund 44,385,598 42,369,557 643,853 112,278 529 1,259,381
Special Opportunities Fund 20,083,277 18,527,527 1,247,281 0 0 308,469
The stockholders of each Fund are Lincoln Life and, except for the Managed
Fund and the Special Opportunities Fund, Lincoln New York. No other person
beneficially owns more than 5% of a Fund's outstanding shares, and no director
or executive officer of a Fund owns any separate account units attributable to
more than one-half of one percent of the assets of the Fund.
Information About the Independent Public Accountants
Each Fund's financial statement for the most recent fiscal year was audited
by Ernst & Young, LLP, the Funds' independent accountants. Each Fund's Audit
Committee also received the written disclosures and the letter from its
independent auditors required by Independence Standards Board No. 1, and
discussed with a representative of Ernst & Young the independent auditor's
independence. The Board of each Fund has selected Ernst & Young as the
independent accountant for each Fund's fiscal year ending December 31, 2002.
Ernst & Young has assured the Funds that it has no material direct or indirect
financial interest in the Funds. There will not be a representative of Ernst &
Young at the meeting.
Audit Fees. The aggregate fees billed by Ernst & Young for professional
services rendered for audit of the Funds' annual financial statements for the
most recent fiscal year totalled $179,500.
Financial Information Systems Design and Implementation Fees. There were no
financial information systems design and implementation services rendered by
Ernst & Young for the Funds' most recent fiscal year ended December 31, 2001 to
the Funds or the Funds' Adviser, or entities that control, are controlled by,
or are under common control with the Adviser and that provide services to the
Funds.
All Other Fees. There were $3,517,830 in fees billed by Ernst & Young for
the most recent fiscal year for services provided to the Funds' Adviser, and
entities that control, are controlled by or are under common control with the
Adviser and that provide services to the Funds.
Other Business
To the knowledge of the Funds' Boards of Directors, there is no other
business to be brought before the special joint meeting of the stockholders of
the Funds. However, if other matters do properly come before the meeting, it is
the intention of Lincoln Life and Lincoln New York, as appropriate, to vote
each Fund's shares in accordance with the judgment of the Fund's Board on such
matters.
Contract Owner Proposals
In accordance with applicable laws and the Bylaws of the Funds, the Funds
dispensed with the annual meetings of the stockholders for 2002. Under
authority granted the Directors by the Bylaws of the Funds, and pursuant to
applicable law, special meetings are called as required. Contract Owners
desiring to hold their own proxy solicitations in order to submit proposals in
years in which the annual meeting is not held may require that a special
meeting be called if they can obtain the written request of Contract Owners
indirectly representing certain stipulated percentages of the outstanding
voting securities of each Fund. Proposals must be received a reasonable time
before the Funds begin to print and mail the proxy materials for the meeting.
More detailed information on these procedures may be obtained from Lincoln Life
or Lincoln New York.
By Order of the Funds' Boards of
Directors
/s/ Cynthia A. Rose
Cynthia A. Rose
Secretary
29
Exhibit A
Form of Plan of Reorganization
THIS PLAN OF REORGANIZATION dated as of ______ ____ __, 2002, is by and
between the Lincoln Variable Insurance Products Trust (the "Acquiring Trust")
on behalf of its series (each an "Acquiring Fund") and the Lincoln National
Aggressive Growth Fund, Inc., the Lincoln National Bond Fund, Inc., the Lincoln
National Capital Appreciation Fund, Inc., the Lincoln National Equity-Income
Fund, Inc., the Lincoln National Global Asset Allocation Fund, Inc., the
Lincoln National Growth and Income Fund, Inc., the Lincoln National
International Fund, Inc., the Lincoln National Managed Fund, Inc., the Lincoln
National Money Market Fund, Inc., the Lincoln National Social Awareness Fund,
Inc., and the Lincoln National Special Opportunities Funds, Inc. (each an
"Acquired Fund").
The Acquiring Trust is a business trust organized and existing under the
laws of the State of Delaware, having been formed on __________, owning no
interest in land in Delaware, and having an authorized unlimited number of
shares of beneficial interest with no par value. The Acquiring Trust is
registered under the Investment Company Act of 1940 as an open-end management
investment company. It is comprised of eleven series.
Each Acquired Fund is a corporation organized and existing under the laws of
the State of Maryland. Each Acquired Fund has been incorporated on the date,
and has the authorized number of shares with a par value, as specified in the
following chart. Each Acquired Fund owns no interest in land in Maryland. Each
Acquired Fund is registered under the Investment Company Act of 1940 as an
open-end management investment company. Each Acquired Fund is comprised of a
single portfolio.
Acquired Fund (a Maryland
corporation) Incorporation Date Authorized Shares Par Value
- --------------------------------------------------------------------------------------------------------------
Lincoln National Aggressive
Growth Fund, Inc. July 9, 1993 50,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Bond
Fund, Inc. June 10, 1981 50,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Capital
Appreciation Fund, Inc. July 9, 1993 100,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Equity-
Income Fund, Inc. July 9, 1993 100,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Global
Asset Allocation Fund, Inc. March 26, 1987 50,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Growth
and Income Fund, Inc. June 11, 1981 150,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National
International Fund, Inc. October 22, 1987 100,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Managed
Fund, Inc. February 17, 1983 100,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Money
Market Fund, Inc. June 10, 1981 50,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Social
Awareness Fund, Inc. January 17, 1986 100,000,000 $0.01
- -----------------------------------------------------------------------------------------------------------
Lincoln National Special
Opportunities Fund, Inc. September 18, 1981 50,000,000 $0.01
- ----------------------------- ------------------------- ------------------------- -------------------------
Each Acquiring Fund, a series of the Acquiring Trust, is a "shell" that has
been organized to hold the assets of a corresponding Acquired Fund. Each
Acquiring Fund has had no assets and has carried on no business activities
prior to the consummation of this transaction. Each Acquired Fund and the
corresponding Acquiring Fund have the same investment objectives and policies.
The following chart shows each Acquiring Fund and its corresponding Acquired
Fund.
A-1
Acquiring Fund,
a series of the Acquiring Trust Corresponding Acquired Fund
(a Delaware business trust) (a Maryland corporation)
- -----------------------------------------------------------------------------------
Aggressive Growth Fund Lincoln National Aggressive Growth Fund, Inc.
- -----------------------------------------------------------------------------------
Bond Fund Lincoln National Bond Fund, Inc.
- -----------------------------------------------------------------------------------
Capital Appreciation Fund Lincoln National Capital Appreciation Fund, Inc.
- -----------------------------------------------------------------------------------
Equity-Income Fund Lincoln National Equity-Income Fund, Inc.
- -----------------------------------------------------------------------------------
Global Asset Allocation Fund Lincoln National Global Asset Allocation Fund, Inc.
- -----------------------------------------------------------------------------------
Growth and Income Fund Lincoln National Growth and Income Fund, Inc.
- -----------------------------------------------------------------------------------
International Fund Lincoln National International Fund, Inc.
- -----------------------------------------------------------------------------------
Managed Fund Lincoln National Managed Fund, Inc.
- -----------------------------------------------------------------------------------
Money Market Fund Lincoln National Money Market Fund, Inc.
- -----------------------------------------------------------------------------------
Social Awareness Fund Lincoln National Social Awareness Fund, Inc.
- -----------------------------------------------------------------------------------
Special Opportunities Fund Lincoln National Special Opportunities Fund, Inc.
Delaware Management Company (the "Adviser") is the investment adviser to
both the Acquired Funds and the Acquiring Funds. The Adviser is registered as
an investment adviser under the Investment Advisers Act of 1940.
The members of the Board of Trustees of the Acquiring Trust and the members
of the Board of Directors of each Acquired Fund are the same persons
(collectively, the "Board"). The Board has determined that it is in the best
interests of the Acquiring Trust, the Acquiring Funds, the Acquired Funds and
the stockholders and beneficial owners of the Acquired Funds to combine the
Acquired Funds and the Acquiring Funds in the manner set forth below.
The Acquiring Trust, the Acquiring Funds, and the Acquired Funds intend that
the transactions contemplated herein each qualify as a "plan of reorganization"
within the meaning of Section 368(a)(1) of the Internal Revenue Code of 1986,
as amended (the "Code").
ARTICLE I
The Effective Time
The Effective Time of the Reorganization ("Effective Time") shall be at 4:01
p.m. Eastern Standard Time on April 30, 2003, or such other time as shall be
specified by the Board or the appropriate officers of the Acquiring Trust
pursuant to authority granted by the Board.
In the event that trading on the New York Stock Exchange or on another
exchange or market on which securities or other investments held by the
Acquiring Funds or Acquired Funds is disrupted on the date of the Effective
Time so that, in the judgment of the Board (or appropriate officers acting
under the authority of the Board), accurate appraisal of the net assets of the
Acquiring Funds or the Acquired Funds is impracticable, the Effective Time
shall be postponed until the first business day after the day on which trading
on such exchange or in such market shall have been resumed without disruption.
The Reorganization
At the Effective Time, the assets and liabilities, whether known or unknown,
of each Acquired Fund will become the assets and liabilities of the
corresponding Acquiring Fund and the separate existence of the Acquired Fund
will cease. The assets of each Acquired Fund to be acquired by the
corresponding Acquiring Fund shall consist of all assets and property,
including, without limitation, all cash, securities, commodities and futures
interests and dividends or interests receivable that are owned by the Acquired
Fund and any deferred or prepaid expenses shown as an asset on the books of the
Acquired Fund. Each Acquiring Fund shall also assume all of the liabilities of
the corresponding Acquired Fund, whether accrued or contingent, known or
unknown, existing at the Effective Time. At the Effective Time, holders of each
class of shares of each Acquired Fund representing interests in the
corresponding Acquired Fund ("Acquired Fund Shares") shall become holders of
the same class of shares of such stock representing interests in the Acquiring
Fund ("Acquiring Fund Shares"). In addition, the appropriate officers of the
Acquiring Trust shall amend the Acquiring Trust's Declaration of Trust to
reflect the reclassification of Acquired Fund Shares as Acquiring Fund Shares.
A-2
ARTICLE II
Transfer of Assets
Provided that all of the conditions precedent to the Reorganization
described in Article III are fulfilled, then at the Effective Time, all of the
assets of each Acquired Fund will be transferred to the corresponding Acquiring
Fund in exchange for Acquiring Fund Shares and all of the liabilities of the
Acquired Fund will be assumed by the Acquiring Fund.
Exchange of Stock
At the Effective Time, each Acquired Fund will exchange each outstanding
Acquired Fund Shares of each class for a number of corresponding Acquiring Fund
Shares of the same class as set forth below. The number of full and fractional
Acquiring Fund Shares to be issued to holders of Acquired Fund Shares will be
determined on the basis of the relative net asset values of the Acquired Fund
and the corresponding Acquiring Fund as of 4:00 p.m. Eastern Standard Time on
the day of the Effective Time. The number of Acquiring Fund Shares to be issued
to each holder of Acquired Fund Shares shall be determined by multiplying the
number of Acquired Fund Shares to be exchanged by the stockholder by a
fraction, the denominator of which is the net asset value per share of
Acquiring Fund Shares and the numerator of which is the net asset value per
share of Acquired Fund Shares. The net asset value of the Acquired Fund and the
net asset value of the Acquiring Fund shall be determined in accordance with
methods set forth in the Acquired Fund's and Acquiring Trust's, respectively,
current Form N-lA registration statement and valuation procedures then in
effect. In the alternative, the officers of each the Acquired Fund and the
corresponding Acquiring Fund may set the net asset value per share at the
Effective Time.
Promptly after the Effective Time, the Acquiring Trust shall cause to be
registered on its transfer agency books in the name of each record holder of
Acquired Fund Shares immediately prior to the Reorganization, without any
action on the part of such record holder, the number of Acquiring Fund Shares
(and fractional interests in such shares) issued to such record holder in the
Reorganization.
ARTICLE III
Other Conditions Precedent to the Reorganization
To the extent required by the Acquired Fund's Bylaws, the Board will call a
meeting of the holders of the Acquired Fund Shares in order to submit to such
holders the Plan of Reorganization for their approval or disapproval. Prior to
the Effective Time, the holders of the Acquired Fund Shares shall meet and
approve the Plan of Reorganization in accordance with the provisions of each
Acquired Fund's Bylaws.
Prior to any meeting of the holders of Acquired Fund Shares, each Acquired
Fund shall distribute to such holders entitled to vote at such meeting a proxy
statement and other proxy materials (including voting instruction forms) that
comply in all material respects with the applicable provisions of Section 14(a)
of the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder.
Prior to the Effective Time, the Acquiring Trust and the Acquired Funds will
receive an opinion of tax counsel substantially to the effect that:
1. The acquisition, pursuant to the Plan of Reorganization, by an Acquiring
Fund of the assets of the corresponding Acquired Fund in exchange for
Acquiring Fund Shares will constitute a reorganization within the
meaning Section 368(a)(1)(F) of the Code;
2. No gain or loss will be recognized by an Acquired Fund upon the transfer
of all of its assets to the Acquiring Fund;
3. The tax basis of the assets of an Acquired Fund in the hands of the
Acquiring Fund will be the same as the tax basis of such assets in the
hands of the Acquired Fund immediately prior to the transfer;
4. The holding period of the assets of an Acquired Fund transferred to the
Acquiring Fund will include the period during which such assets were
held by the Acquired Fund;
5. No gain or loss will be recognized by an Acquiring Fund upon its receipt
of the assets of the Acquired Fund in exchange for shares of the
Acquiring Fund;
A-3
6. No gain or loss will be recognized by the holders of Acquired Fund
Shares upon their receipt of Acquiring Fund Shares in exchange for their
Acquired Fund Shares;
7. The basis of the Acquiring Fund Shares received by holders of Acquired
Fund Shares will be the same as the basis of the Acquired Fund Shares
exchanged therefor; and
8. The holding period of Acquiring Fund Shares received by holders of
Acquired Fund Shares will include the holding period of the Acquired
Fund Shares exchanged therefor, provided that, at the time of the
exchange, the Acquired Fund Shares were held as capital assets.
ARTICLE IV
Miscellaneous
At any time prior to the Effective Time, the Plan of Reorganization may be
terminated by the Board (or appropriate officers of the Acquiring Trust or any
Acquired Fund acting under the authority of the Board) or be abandoned. In
either event, the Plan of Reorganization shall become void and have no effect,
without liability on the part of an Acquired Fund, an Acquiring Fund, the
Acquiring Trust or the holders of Acquired Fund Shares or Acquiring Fund Shares.
The Plan of Reorganization and all amendments hereto shall be governed by
and construed in accordance with the laws of the State of Delaware.
A-4
EXHIBIT B
PRO FORMA FINANCIAL INFORMATION
CURRENT AND PRO FORMA ANNUAL FUND OPERATING EXPENSES+
Aggressive Growth Fund Bond Fund
Pro Pro Pro Pro Pro Pro
Current* Forma** Forma*** Forma**** Current* Forma** Forma*** Forma****
- -----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees....................... 0.72% 0.72% 0.72% 0.72% 0.42% 0.42% 0.40% 0.42%
Distribution and/or Service (12b-1)
Fees................................ none none none none none none none none
Other Expenses........................ 0.09% 0.11% 0.09% 0.11% 0.11% 0.13% 0.11% 0.13%
Total Annual Fund Operating Expenses..... 0.81% 0.83% 0.81% 0.83% 0.53% 0.55% 0.51% 0.55%
- -----------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund Equity-Income Fund
Pro Pro Pro Pro Pro Pro
Current* Forma** Forma*** Forma**** Current* Forma** Forma*** Forma****
- -----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees....................... 0.72% 0.72% 0.72% 0.72% 0.73% 0.73% 0.73% 0.73%
Distribution and/or Service (12b-1)
Fees................................ none none none none none none none none
Other Expenses........................ 0.06% 0.06% 0.06% 0.06% 0.07% 0.08% 0.07% 0.08%
Total Annual Fund Operating Expenses..... 0.78% 0.78% 0.78% 0.78% 0.80% 0.81% 0.80% 0.81%
- -----------------------------------------------------------------------------------------------------------------
Growth and Income Fund Global Asset Allocation Fund
Pro Pro Pro Pro Pro Pro
Current* Forma** Forma*** Forma**** Current* Forma** Forma*** Forma****
- -----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees....................... 0.32% 0.32% 0.31% 0.32% 0.73% 0.73% 0.73% 0.73%
Distribution and/or Service (12b-1)
Fees................................ none none none none none none none none
Other Expenses........................ 0.04% 0.04% 0.04% 0.04% 0.23% 0.26% 0.23% 0.26%
Total Annual Fund Operating Expenses..... 0.36% 0.36% 0.35% 0.36% 0.96% 0.99% 0.96% 0.99%
- -----------------------------------------------------------------------------------------------------------------
International Fund Managed Fund
Pro Pro Pro Pro Pro Pro
Current* Forma** Forma*** Forma**** Current* Forma** Forma*** Forma****
- -----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees....................... 0.84% 0.84% 0.84% 0.84% 0.38% 0.38% 0.36% 0.38%
Distribution and/or Service (12b-1)
Fees................................ none none none none none none none none
Other Expenses........................ 0.15% 0.17% 0.15% 0.17% 0.09% 0.10% 0.09% 0.10%
Total Annual Fund Operating Expenses..... 0.99% 1.01% 0.99% 1.01% 0.47% 0.48% 0.45% 0.48%
- -----------------------------------------------------------------------------------------------------------------
Money Market Fund Social Awareness Fund
Pro Pro Pro Pro Pro Pro
Current* Forma** Forma*** Forma**** Current* Forma** Forma*** Forma****
- -----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees....................... 0.45% 0.45% 0.43% 0.45% 0.34% 0.34% 0.32% 0.34%
Distribution and/or Service (12b-1)
Fees................................ none none none none none none none none
Other Expenses........................ 0.09% 0.11% 0.09% 0.11% 0.06% 0.06% 0.06% 0.06%
Total Annual Fund Operating Expenses..... 0.54% 0.56% 0.52% 0.56% 0.40% 0.40% 0.38% 0.40%
- -----------------------------------------------------------------------------------------------------------------
B-1
Special Opportunities Fund
Pro Pro Pro
Current* Forma** Forma*** Forma****
- ---------------------------------------------------------------------------------
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees....................... 0.41% 0.41% 0.40% 0.41%
Distribution and/or Service (12b-1)
Fees................................ none none none none
Other Expenses........................ 0.07% 0.08% 0.07% 0.08%
Total Annual Fund Operating Expenses..... 0.48% 0.49% 0.47% 0.49%
- ---------------------------------------------------------------------------------
- --------
+ The Annual Fund Operating Expenses shown (both current and pro forma) do not
reflect separate account expenses, including sales loads, that you may pay.
* Annual Fund Operating Expenses for the fiscal year ending December 31, 2001.
** Annual Fund Operating Expenses assuming the approval of both proposal 2
(reorganization into Delaware business trust) and proposal 4 (approval of
new investment management agreement)
***Annual Fund Operating Expenses assuming the approval of only proposal 2
(reorganization into Delaware business trust)
****Annual Fund Operating Expenses assuming the approval of only proposal 4
(approval of new investment management agreement)
B-2
EXHIBIT C
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, made by and between each of the Lincoln National Aggressive
Growth Fund, Inc., Lincoln National Bond Fund, Inc., Lincoln National Capital
Appreciation Fund, Inc., Lincoln National Equity-Income Fund, Inc., Lincoln
National Growth and Income Fund, Inc., Lincoln National Global Asset Allocation
Fund, Inc., Lincoln National International Fund, Inc., Lincoln National Managed
Fund, Inc., Lincoln National Money Market Fund, Inc., Lincoln National Social
Awareness Fund, Inc., and Lincoln National Special Opportunities Fund, Inc.
(each individually, a "Fund" and, collectively, the "Funds"), each of which is
a Maryland corporation, and DELAWARE MANAGEMENT COMPANY, a series of Delaware
Management Business Trust, a Delaware business trust (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, each of the Funds has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, each Fund engages in the business of investing and reinvesting its
assets in securities; and
WHEREAS, the Investment Manager is registered under the Investment Advisers
Act of 1940 as an investment adviser and engages in the business of providing
investment management services; and
WHEREAS, each Fund and the Investment Manager desire to enter into this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. Each Fund hereby employs the Investment Manager to manage the investment
and reinvestment of each Fund's assets and to administer its affairs, subject
to the direction of the Fund's Board of Directors and officers for the period
and on the terms hereinafter set forth. The Investment Manager hereby accepts
such employment and agrees during such period to render the services and assume
the obligations herein set forth for the compensation herein provided. The
Investment Manager shall for all purposes herein be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized, have
no authority to act for or represent the Funds in any way, or in any way be
deemed an agent of the Funds. The Investment Manager shall regularly make
decisions as to what securities and other instruments to purchase and sell on
behalf of each Fund and shall effect the purchase and sale of such investments
in furtherance of each Fund's objectives and policies. The Investment Manager
shall furnish the Board of Directors of each Fund with such information and
reports regarding each Fund's investments as the Investment Manager deems
appropriate or as the Board of Directors of each Fund may reasonably request.
2. Each Fund shall conduct its own business and affairs and shall bear the
expenses and salaries necessary and incidental thereto, including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of
shares, including issuance, redemption and repurchase of shares; preparation of
share certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; taxes; and federal and state
registration fees. In conducting its own business and affairs, each Fund may
utilize its directors, officers and employees; may utilize the facilities and
personnel of the Investment Manager and its affiliates; and may enter into
agreements with third parties, either affiliated or non-affiliated, to perform
any of these functions. In the conduct of the respective businesses of the
parties hereto and in the performance of this Agreement, each Fund, the
Investment Manager and its affiliates may share facilities common to each,
which may include, without limitation, legal and accounting personnel, with
appropriate proration of expenses between them. Directors, officers and
employees of the Investment Manager or its affiliates may be directors,
trustees and/or officers of any of the investment companies within the Lincoln
Financial Group family. Directors, officers and employees of the Investment
Manager or its affiliates who are directors, trustees, and/or officers of these
investment companies shall not receive any compensation from such investment
companies for acting in such dual capacity.
3. (a) Subject to the primary objective of obtaining the best execution, the
Investment Manager may place orders for the purchase and sale of portfolio
securities and other instruments with such broker/dealers selected who provide
statistical, factual and financial information and services to the Funds, to
the Investment Manager, to any sub-adviser (as defined in Paragraph 5 hereof, a
"Sub-Adviser") or to any other fund for which the Investment Manager or any
Sub-Adviser provides investment advisory services and/or with broker/dealers
who sell shares of the Fund or who sell shares of any other investment company
(or series thereof) for which the Investment Manager or any Sub-Adviser
provides investment advisory services. Broker/dealers who sell shares of any
investment companies or series thereof for which the Investment Manager or
Sub-Adviser provides investment advisory services shall only receive orders for
the purchase or sale of portfolio securities to the extent that the placing of
such orders is in compliance with the Rules of the Securities and Exchange
Commission and NASD Regulation, Inc.
C-1
(b) Notwithstanding the provisions of subparagraph (a) above and subject to
such policies and procedures as may be adopted by the Board of Directors and
officers of each Fund, the Investment Manager may cause a Fund to pay a member
of an exchange, broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission another member of
an exchange, broker or dealer would have charged for effecting that
transaction, in such instances where the Investment Manager has determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the Investment
Manager's overall responsibilities with respect to the Fund and to other
investment companies (or series thereof) and other advisory accounts for which
the Investment Manager or any Sub-Adviser exercises investment discretion.
4. As compensation for the services to be rendered to each Fund by the
Investment Manager under the provisions of this Agreement, each Fund shall pay
monthly to the Investment Manager exclusively from that Fund's assets, a fee
based on the average daily net assets of that Fund during the month. Such fee
shall be calculated in accordance with the fee schedule applicable to that Fund
as set forth in Schedule A hereto.
If this Agreement is terminated prior to the end of any calendar month with
respect to a particular Fund, the management fee for such Fund shall be
prorated for the portion of any month in which this Agreement is in effect with
respect to such Fund according to the proportion which the number of calendar
days during which the Agreement is in effect bears to the number of calendar
days in the month, and shall be payable within 10 calendar days after the date
of termination.
5. The Investment Manager may, at its expense, select and contract with one
or more investment advisers registered under the Investment Advisers Act of
1940 ("Sub-Advisers") to perform some or all of the services for a Fund for
which it is responsible under this Agreement. The Investment Manager will
compensate any Sub-Adviser for its services to the Fund. The Investment Manager
may terminate the services of any Sub-Adviser at any time with the approval of
the Board of Directors. At such time, the Investment Manager shall assume the
responsibilities of such Sub-Adviser unless and until a successor Sub-Adviser
is selected and the approval of the Board and any requisite shareholder
approval is obtained. The Investment Manager will continue to have
responsibility for all advisory services furnished by any Sub-Adviser.
6. The services to be rendered by the Investment Manager to each Fund under
the provisions of this Agreement are not to be deemed to be exclusive, and the
Investment Manager shall be free to render similar or different services to
others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
7. The Investment Manager, its trustees, officers, employees, agents and
shareholders may engage in other businesses, may render investment advisory
services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to any
Fund or to any other investment company, corporation, association, firm or
individual.
8. It is understood and agreed that so long as the Investment Manager and/or
its advisory affiliates shall continue to serve as each Fund's investment
adviser, other investment companies as may be sponsored or advised by the
Investment Manager or its affiliates shall have the right to adopt and to use
the words "Delaware," "Delaware Investments" or "Delaware Group" in their names
and in the names of any series or class of shares of such investment companies.
9. In the absence of willful misfeasance, bad faith, gross negligence, or a
reckless disregard of the performance of its duties as the Investment Manager
to each Fund, the Investment Manager shall not be subject to liability to the
Fund or to any shareholder of the Fund for any action or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security, or otherwise.
10. This Agreement shall be executed and become effective as of the date
written below, and shall become effective with respect to each Fund as of the
effective date set forth in Schedule A for that Fund, if approved by the vote
of a majority of the outstanding voting securities of that Fund. It shall
continue in effect for an initial period of two years for each Fund and may be
renewed thereafter only so long as such renewal and continuance is specifically
approved at least annually by the Board of Directors or by the vote of a
majority of the outstanding voting securities of that Fund and only if the
terms and the renewal hereof have been approved by the vote of a majority of
the Directors of the Fund who are not parties hereto or interested persons of
any such party ("Independent Directors"), cast in person at a meeting called
for the purpose of voting on such approval. Notwithstanding the foregoing, this
Agreement may be terminated as to any Fund by the Fund at any time, without the
payment of a penalty, on not more than sixty days' written notice to the
Investment Manager of the Fund's intention to do so, pursuant to action by the
Board of Directors of the Fund or pursuant to the vote of a majority of the
outstanding voting securities of the affected Fund. The Investment Manager may
terminate this Agreement as to any Fund at any time, without the payment of a
penalty, on sixty days' written notice to the Fund of its intention to do so.
Upon termination of this Agreement as to a Fund, the obligations of all the
parties hereunder shall cease and terminate as of the date of such termination,
except for any obligation to respond for a breach of this Agreement committed
prior to such termination, and except for the obligation of the Fund to pay to
the Investment Manager the fee provided in Paragraph 4 hereof, prorated to the
date of termination. This Agreement shall automatically terminate in the event
of its assignment.
C-2
11. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
12. For the purposes of this Agreement, the terms "vote of a majority of the
outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers and duly attested as of the 1st day of
January, 2003.
DELAWARE MANAGEMENT COMPANY, a
Series of Delaware Management
Business Trust
By: ______________________________
Name:
Title:
LINCOLN NATIONAL AGGRESSIVE
GROWTH FUND, INC.
LINCOLN NATIONAL BOND FUND, INC.
LINCOLN NATIONAL CAPITAL
APPRECIATION FUND, INC.
LINCOLN NATIONAL EQUITY-INCOME
FUND, INC.
LINCOLN NATIONAL GROWTH AND
INCOME FUND, INC.
LINCOLN NATIONAL GLOBAL ASSET
ALLOCATION FUND, INC.
LINCOLN NATIONAL INTERNATIONAL
FUND, INC.
LINCOLN NATIONAL MANAGED FUND,
INC.
LINCOLN NATIONAL MONEY MARKET
FUND, INC.
LINCOLN NATIONAL SOCIAL AWARENESS
FUND, INC.
LINCOLN NATIONAL SPECIAL
OPPORTUNITIES FUND, INC.
By: ______________________________
Name:
Title:
C-3
SCHEDULE A
THIS SCHEDULE A to the Investment Management Agreement between each of the
Lincoln National Aggressive Growth Fund, Inc., Lincoln National Bond, Fund,
Inc., Lincoln National Capital Appreciation Fund, Inc., Lincoln National
Equity-Income Fund, Inc., Lincoln National Growth and Income Fund, Inc.,
Lincoln National Global Asset Allocation Fund, Inc., Lincoln National
International Fund, Inc., Lincoln National Managed Fund, Inc., Lincoln National
Money Market Fund, Inc., Lincoln National Social Awareness Fund, Inc., and
Lincoln National Special Opportunities Fund, Inc. (individually, "Fund"), and
DELAWARE MANAGEMENT COMPANY, a series of Delaware Management Business Trust
(the "Investment Manager") (the "Agreement"), lists the Funds for which the
Investment Manager provides investment management services pursuant to this
Agreement, the management fee rate schedule for each Fund and the date on which
the Agreement became effective for each Fund:
Management Fee Schedule
(as a percentage of average
daily net assets)
Fund Name Annual Rate Effective Date
--------- --------------------------- --------------
Lincoln National Aggressive Growth Fund, Inc. .75 of 1% of the first $200 million; January 1, 2003
.70 of 1% of the next $200 million; and
.65 of 1% of the excess over $400 million
Lincoln National Bond Fund, Inc. .48 of 1% of the first $200 million; January 1, 2003
.40 of 1% of the next $200 million; and
.30 of 1% of the excess over $400 million
Lincoln National Capital Appreciation Fund, Inc. .75 of 1% of the first $500 million; and January 1, 2003
.70 of 1% of the excess over $500 million
Lincoln National Equity-Income Fund, Inc. .75 of 1% of the first $500 million; and January 1, 2003
.70 of 1% of the excess over $500 million
Lincoln National Growth and Income Fund, Inc. .48 of 1% of the first $200 million; January 1, 2003
.40 of 1% of the next $200 million; and
.30 of 1% of the excess over $400 million
Lincoln National Global Asset Allocation Fund, Inc. .75 of 1% of the first $200 million; January 1, 2003
.70 of 1% of the next $200 million; and
.68 of 1% of the excess over $400 million
Lincoln National International Fund, Inc. .90 of 1% of the first $200 million; January 1, 2003
.75 of 1% of the next $200 million; and
.60 of 1% of the excess over $400 million
Lincoln National Managed Fund, Inc. .48 of 1% of the first $200 million; January 1, 2003
.40 of 1% of the next $200 million; and
.30 of 1% of the excess over $400 million
Lincoln National Money Market Fund, Inc. .48 of 1% of the first $200 million; January 1, 2003
.40 of 1% of the next $200 million; and
.30 of 1% of the excess over $400 million
Lincoln National Social Awareness Fund, Inc. .48 of 1% of the first $200 million; January 1, 2003
.40 of 1% of the next $200 million; and
.30 of 1% of the excess over $400 million
Lincoln National Special Opportunities Fund, Inc. .48 of 1% of the first $200 million; January 1, 2003
.40 of 1% of the next $200 million; and
.30 of 1% of the excess over $400 million
C-4
EXHIBIT D
OTHER INVESTMENT COMPANY CLIENTS OF DMC
DMC serves as investment adviser to the following investment companies, at
the fee rates set forth below, which had the indicated net assets at August 31,
2002.
Approximate
Assets
Name of Other Funds Having (in millions as of
Name of Lincoln National Fund Similar Investment Objectives Advisory Fee Rate August 31, 2002)
- ------------------------------------ ------------------------------- ---------------------------- ------------------
Lincoln National Aggressive Growth Delaware VIP Trend Series 0.75% on the first $440.1 million
Fund, Inc. $500 million
0.70% on the next
$500 million
0.65% on the next
$1.5 billion
0.60% on assets in excess of
$2.5 billion +
Delaware VIP Growth 0.75% on the first $93.1 million
Opportunities Series $500 million
0.70% on the next
$500 million
0.65% on the next
$1.5 billion
0.60% on assets in excess of
$2.5 billion ++
Lincoln National Bond Fund, Inc. No Comparable Fund
Lincoln National Capital Delaware VIP U.S. Growth Series 0.65% on the first $11.3 million
Appreciation Fund, Inc. $500 million
0.60% on the next
$500 million
0.55% on the next
$1.5 billion
0.50% on assets in excess of
$2.5 billion +++
Lincoln National Equity-Income Delaware VIP Large Cap Value 0.65% on the first $277.1 million
Fund, Inc. Series (formerly Delaware VIP $500 million
Growth and Income) 0.60% on the next
$500 million
0.55% on the next
$1.5 billion
0.50% on assets in excess of
$2.5 billion +++
Lincoln National Global Asset No Comparable Fund
Allocation Fund, Inc.
Lincoln National Growth and Income Delaware VIP Devon Series 0.65% on the first $22.8 million
Fund, Inc. $500 million
0.60% on the next
$500 million
0.55% on the next
$1.5 billion
0.50% on assets in excess of
$2.5 billion +++
Lincoln National International Fund, No Comparable Fund
Inc.
D-1
Approximate
Assets
Name of Other Funds Having (in millions as of
Name of Lincoln National Fund Similar Investment Objectives Advisory Fee Rate August 31, 2002)
- ----------------------------------- -------------------------------- ---------------------------- ------------------
Lincoln National Managed Fund, Inc. Delaware VIP Balanced Series 0.65% on the first $62.1 million
$500 million
0.60% on the next
$500 million
0.55% on the next
$1.5 billion
0.50% on assets in excess of
$2.5 billion +++
Lincoln National Money Market Delaware VIP Cash Reserve Series 0.45% on the first $39.7 million
Fund, Inc. $500 million
0.40% on the next
$500 million
0.35% on the next
$1.5 billion
0.30% on assets in excess of
$2.5 billion +++
Lincoln National Social Awareness Delaware VIP Social Awareness 0.75% on the first $17 million
Fund, Inc. Series $500 million
0.70% on the next
$500 million
0.65% on the next
$1.5 billion
0.60% on assets in excess of
$2.5 billion ++++
Lincoln National Special No Comparable Fund
Opportunities Fund, Inc.
- --------
+ The advisor is waiving fees and paying expenses through April 30, 2003, to
the extent necessary to limit annual operating expenses, exclusive of 12b-1
Plan fees, taxes, interest, brokerage commissions and extraordinary
expenses, to 0.95% of average daily net assets.
++ The advisor is waiving fees and paying expenses through April 30, 2003, to
the extent necessary to limit annual operating expenses, exclusive of 12b-1
Plan fees, taxes, interest, brokerage commissions and extraordinary
expenses, to 0.90% of average daily net assets.
+++The advisor is waiving fees and paying expenses through April 30, 2003, to
the extent necessary to limit annual operating expenses, exclusive of 12b-1
Plan fees, taxes, interest, brokerage commissions and extraordinary
expenses, to 0.80% of average daily net assets.
++++The advisor is waiving fees and paying expenses through April 30, 2003, to
the extent necessary to limit annual operating expenses, exclusive of 12b-1
Plan fees, taxes, interest, brokerage commissions and extraordinary
expenses, to 0.85% of average daily net assets.
D-2
EXHIBIT E
FUNDAMENTAL INVESTMENT RESTRICTIONS TO BE AMENDED
- -----------------------------------------------------------------------------------------------------------------
Current Aggressive Growth Bond Fund Capital Appreciation Equity-Income
Restriction Fund
- -----------------------------------------------------------------------------------------------------------------
Industry The Fund may not purchase The Fund may not The Fund may not The Fund may not
Concentration any security (other than invest more than 25% invest more than 25% purchase the
securities issued or of its total assets in of the value of its securities of any
guaranteed by the U.S. the securities of assets in any issuer (other than
Government or its agencies issuers in any one particular industry. securities issued or
or instrumentalities) if, industry. For guaranteed by the
immediately after and as a purposes of this U.S. Government or
result of such investment restriction, gas, any of its agencies or
(a) more than 5% of the electric, water and instrumentalities) if,
value of its total assets telephone utilities are as a result, more than
would be invested in treated as separate 25% of its total assets
securities of the issuer, industries. would be invested in
except that, as to 25% of its the securities of
total assets, up to 10% of companies whose
its total assets may be principal business
invested in securities issued activities are in the
or guaranteed as to same industry.
payment of interest and
principal by a foreign
government or its agencies
or instrumentalities or by a
multinational agency, or
(b) it would hold more than
10% of the voting
securities of the issuer, or
(c) more than 25% of the
value of its assets would be
invested in a single
industry. Each of the
electric utility, natural gas
distribution, natural gas
pipeline, combined electric
and natural gas utility, and
telephone industries shall
be considered as a separate
industry for this purpose.
- -----------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------
Current Global Asset Growth and Income
Restriction Allocation Fund Fund
- -------------------------------------------------------------
Industry The Fund may not The Fund may not
Concentration invest more than 25% invest more than 25%
of the value of its of its total assets in
total assets in any one the securities of
industry. issuers in any one
industry. For
purposes of this
restriction, gas,
electric, water and
telephone utilities are
treated as separate
industries.
- -------------------------------------------------------------
E-1
- -------------------------------------------------------------------------------------------------------------
Current Aggressive Growth Bond Fund Capital Appreciation Equity-Income Fund
Restriction
- -------------------------------------------------------------------------------------------------------------
Real Estate The Fund may not The Fund may not The Fund may not The Fund may not
buy or sell real estate purchase or sell real invest directly in real purchase or sell real
or commodities or estate or interests estate or interests in estate unless acquired
commodity contracts; therein, although it real estate; however, as a result of
however, it may may purchase the Fund may own ownership of
invest in debt securities of issuers debt or equity securities or other
securities secured by which engage in real securities issued by instruments (but this
real estate or interests estate operations or companies engaged in shall not prevent the
therein, or issued by securities which are those businesses. Fund from investing
companies which secured by interests in in securities or other
invest in real estate or real estate. instruments backed by
interests therein, real estate or
including real estate securities of
investment trusts, and companies engaged in
may purchase or sell the real estate
currencies (including business).
forward currency
contracts) and
financial futures
contracts and options
thereon.
- -------------------------------------------------------------------------------------------------------------
Underwriting The Fund may not The Fund may not The Fund may not act The Fund may not
engage in the business underwrite the as an underwriter of underwrite securities
of underwriting securities of other securities issued by issued by others,
securities of other issuers, except insofar others, except to the except to the extent
issuers, except to the as the Fund may be extent that the Fund that the Fund may be
extent that the deemed an may be deemed an considered an
disposal of an underwriter under the underwriter in underwriter within the
investment position Securities Act of 1933 connection with the meaning of the
may technically cause in disposing of disposition of its Securities Act of 1933
the Fund to be portfolio securities. portfolio securities. in the disposition of
considered an restricted securities.
underwriter as that
term is defined under
the Securities Act of
1933, as amended.
- -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------
Current Global Asset Growth and Income
Restriction Allocation Fund Fund
- ------------------------------------------------------------
Real Estate The Fund may not The Fund may not
purchase or sell real purchase or sell real
estate, although it may estate or interests
purchase securities therein, although it
which are secured by may purchase
or represent interests securities of issuers
in real estate. which engage in real
estate operations or
securities which are
secured by interests in
real estate.
- ------------------------------------------------------------
Underwriting The Fund may not The Fund may not
underwrite securities underwrite the
issued by other securities of other
persons except to the issuers, except insofar
extent that, in as the Fund may be
connection with deemed an
disposition of its underwriter under the
portfolio investments, Securities Act of 1933
it may be deemed to in disposing of
be an underwriter portfolio securities.
under certain federal
securities laws.
- ------------------------------------------------------------
E-2
- ---------------------------------------------------------------------------------------------------------------
Current Aggressive Growth Bond Fund Capital Appreciation Equity-Income
Restriction Fund
- ---------------------------------------------------------------------------------------------------------------
Lending The Fund may not make The Fund may not The Fund may not The Fund may not
loans in an aggregate make loans except lend any security or lend any security or
amount in excess of one- that it may lend its make any other loan make any other loan
third of its total assets, portfolio securities if if, as a result, more if, as a result, more
taken at the time any loan such loans are fully than 25% of the than 33 1/3% of its
is made, provided that collateralized and Fund's total assets total assets would be
entering into certain such loans of would be lent to other lent to other parties,
repurchase agreements securities do not parties (but this but this limitation
and purchasing debt exceed 15% of its limitation does not does not apply to
securities shall not be total assets at any one apply to purchases of purchases of debt
deemed loans for the time. See Lending of commercial paper, securities or to
purposes of this Portfolio Securities. debt securities or repurchase
restriction. The purchase of debt repurchase agreements.
securities (including agreements).
loan participation
certificates) and the
entry into repurchase
agreements are not
considered the
making of loans.
- ---------------------------------------------------------------------------------------------------------------
Commodities The Fund may not buy or The Fund may not The Fund may not The Fund may not
Or Commodity sell real estate or purchase or sell purchase or sell purchase or sell
Futures commodities or commodities or physical commodities physical commodities
commodity contracts; commodity futures other than foreign unless acquired as a
however, it may invest in contracts, except currencies unless result of ownership of
debt securities secured by financial futures acquired as a result of securities or other
real estate or interests contracts and options ownership of instruments (but this
therein, or issued by thereon. securities (but this shall not prevent the
companies which invest in limitation shall not Fund from purchasing
real estate or interests prevent the Fund from or selling options and
therein, including real purchasing or selling futures contracts or
estate investment trusts, options, futures, from investing in
and may purchase or sell swaps and forward securities or other
currencies (including contracts or from instruments backed
forward currency investing in securities by physical
contracts) and financial or other instruments commodities).
futures contracts and backed by physical
options thereon. commodities).
- ---------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------
Current Global Asset Growth and Income
Restriction Allocation Fund Fund
- ----------------------------------------------------------
Lending The Fund may not The Fund may not
make loans, except by make loans except
purchase of debt that it may lend its
obligations in which portfolio securities if
the Fund may invest such loans are fully
consistent with its collateralized and
investment policies, such loans of
by entering into securities do not
repurchase exceed one-third of
agreements with its total assets at any
respect to not more one time. See
than 25% of its total Lending of Portfolio
assets (taken at Securities. The
current value), or purchase of debt
through the lending securities including
of its portfolio loan participation
securities with certificates and the
respect to not more entry into repurchase
than 25% of its agreements are not
assets. considered the
making of loans.
- ----------------------------------------------------------
Commodities The Fund may not The Fund may not
Or Commodity purchase or sell purchase or sell
Futures commodities or commodities or
commodity contracts, commodity futures
except that the Fund contracts, except
may write and financial futures
purchase options on contracts and options
financial futures thereon.
contracts.
- ----------------------------------------------------------
E-3
- --------------------------------------------------------------------------------------------------------------------------------
Current Aggressive Growth Bond Fund Capital Appreciation Equity-Income Fund Global Asset
Restriction Allocation Fund
- --------------------------------------------------------------------------------------------------------------------------------
Borrow Money The Fund may not The Fund may not The Fund may not The Fund may not
borrow money, except borrow money, except borrow money, except borrow money in
from banks for for temporary or that the Fund (a) may excess of 10% of the
temporary or emergency purposes borrow money for value (taken at the
emergency purposes and not exceeding 5% temporary or lower of cost or
not in excess of one- (taken at the lower emergency purposes current value) of its
third of the value of cost or current value) (not for leveraging or total assets (not
its total assets. of its total assets (not investment) or including the amount
including the amounts (b) engage in reverse borrowed) at the time
borrowed). repurchase the borrowing is
agreements, provided made, and then only
that (a) and (b) in from banks as a
combination temporary measure to
(borrowings) do not facilitate the meeting
exceed 25% of its of redemption
total assets (including requests (not for
the amount borrowed) leverage) which might
less liabilities (other otherwise require the
than borrowings). Any untimely disposition
borrowings that come of portfolio
to exceed 25% of the investments or for
value of the Fund's extraordinary or
total assets by reason emergency purposes.
of a decline in net Such borrowings will
assets will be reduced be repaid before any
within three days additional investments
(exclusive of Sundays are purchased.
and holidays) to the
extent necessary to
comply with the 25%
limitation.
- --------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------
Current Growth and Income
Restriction Fund
- -------------------------------------
Borrow Money The Fund may not
borrow money, except
for temporary or
emergency purposes
and not exceeding 5%
(taken at the lower of
cost or current value)
of its total assets (not
including the amounts
borrowed).
- -------------------------------------
E-4
- ----------------------------------------------------------------------------------------------------------------
Current Aggressive Growth Bond Fund Capital Appreciation Equity-Income Fund
Restriction
- ----------------------------------------------------------------------------------------------------------------
Issue Senior The Fund may not The Fund may not The Fund may not The Fund may not
Securities issue senior securities, issue senior securities issue senior securities, issue senior securities,
except as permitted as defined in the 1940 except as permitted except as permitted
under the 1940 Act. Act except insofar as under the 1940 Act. under the 1940 Act.
the Fund may be
deemed to have issued
a senior security by
borrowing money in
accordance with
restrictions described
above. (For the
purpose of this
restriction, collateral
arrangements with
respect to the writing
of options and initial
margin deposits for
futures contracts and
the purchase or sale of
futures contracts are
not deemed to be the
issuance of a senior
security.)
- ----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------
Current Global Asset Growth and Income
Restriction Allocation Fund Fund
- -----------------------------------------------------------
Issue Senior The Fund may not The Fund may not
Securities issue any class of issue senior securities
securities which is as defined in the 1940
senior to the Fund's Act except insofar as
stock. (For purposes the Fund may be
of this restriction, deemed to have issued
collateral a senior security by
arrangements with borrowing money in
respect to the writing accordance with the
of options are not restrictions described
deemed to be the previously. (For the
issuance of a senior purpose of this
security.) restriction, collateral
arrangements with
respect to the writing
of options and initial
margin deposits for
futures contracts and
the purchase or sale of
futures contracts are
not deemed to be the
issuance of a senior
security.)
- -----------------------------------------------------------
E-5
- -----------------------------------------------------------------------------------------------------------------
Current Aggressive Growth Bond Fund Capital Equity-Income Fund
Restriction Appreciation
- -----------------------------------------------------------------------------------------------------------------
Diversification The Fund may not The Fund may not The Fund may not With respect to 75%
purchase any security hold more than 10% own more than 10% of the Fund's total
(other than securities of the outstanding of the outstanding assets, the Fund may
issued or guaranteed by voting securities of voting securities of not purchase the
the U.S. Government or any one issuer. any one issuer and, as securities of any
its agencies or to 75% of the value issuer (other than
instrumentalities) if, The Fund may not of the total assets of securities issued or
immediately after and invest in the the Fund, purchase guaranteed by
as a result of such securities of any one the securities of any the U.S. Government
investment (a) more issuer unless at least one issuer (except or any of its agencies
than 5% of the value of 75% of the value of cash item and or instrumentalities)
its total assets would be the Fund's total assets government securities if, as a result,
invested in securities of is represented by: as defined under the (a) more than 5%
the issuer, except that, (a) U.S. Government 1940 Act), if of the Funds' total
as to 25% of its total obligations, cash and immediately after and assets would be
assets, up to 10% of its cash items, as a result of such invested in the
total assets may be (b) securities of other purchase the value of securities of that
invested in securities investment the holdings of the issuer, or (b) the Fund
issued or guaranteed as companies, and Fund in the securities would hold more than
to payment of interest (c) securities of of such issuer 10% of the
and principal by a issuers as to each of exceeds 5% of the outstanding voting
foreign government or which, at the time the value of the Fund's securities of that
its agencies or investment was made, total assets. (With issuer.
instrumentalities or by a the Fund's respect to the
multinational agency, or investment in the remaining 25% of the
(b) it would hold more issuer did not exceed Fund's total assets,
than 10% of the voting 5% of the Fund's the Fund does not
securities of the issuer, total assets. anticipate that any
or (c) more than 25% of more than 15% of the
the value of its assets Fund's total assets
would be invested in a would be invested in
single industry. Each of the securities of a
the electric utility, single issuer at any
natural gas distribution, time, other than those
natural gas pipeline, of the U.S.
combined electric and Government, its
natural gas utility, and agencies and
telephone industries instrumentalities.)
shall be considered as a
separate industry for
this purpose.
- -----------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------
Current Global Asset Growth and Income
Restriction Allocation Fund Fund
- ---------------------------------------------------------------
Diversification The Fund may not The Fund may not
acquire more than invest in the
10% of the voting securities of any one
securities of any issuer unless at least
issuer. 75% of the value of
the Fund's total assets
The Fund may not is represented by:
invest in securities of (a) U.S. Government
any issuer if, obligations, cash and
immediately after cash items,
such investment, (b) securities of other
more than 5% of the investment
total assets of the companies, and
Fund (taken at current (c) securities of
value) would be issuers as to each of
invested in the which, at the time the
securities of such investment was made,
issuer; provided that the Fund's
this limitation does investment in the
not apply to securities issuer did not exceed
issued by the U.S. 5% of the Fund's
Government or its total assets.
agencies or
instrumentalities
(U.S. Government
obligations).
- ---------------------------------------------------------------
E-6
- -------------------------------------------------------------------------------------------------------
Current International Fund Managed Fund Money Market
Restriction
- -------------------------------------------------------------------------------------------------------
Industry The Fund may not invest The Fund may not invest The Fund may not invest
Concentration more than 25% of its total more than 25% of its total more than 25% of its total
assets in the securities of assets in the securities of assets in the securities of
issuers in any one industry. issuers in any one industry. issuers in any one industry.
For purposes of this For purposes of this For purposes of this
restriction, gas, electric, restriction, gas, electric, restriction, gas, electric,
water and telephone utilities water and telephone water and telephone utilities
are treated as separate utilities are treated as are treated as separate
industries; also, the term separate industries. industries. This restriction
industry does not include the does not apply to
U.S. Government, or its obligations issued by banks
agencies or (excluding foreign branches
instrumentalities. However, of U.S. banks and U.S.
a foreign government branches of foreign banks)
(including its agencies, or issued or guaranteed by
instrumentalities, or a the U.S. Government, its
country Fund) is deemed to agencies and
be one industry. instrumentalities.
- -------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------
Current Social Awareness Special Opportunities
Restriction
- -----------------------------------------------------------------------
Industry The Fund may not invest The Fund may not invest
Concentration more than 25% of its total more than 25% of its total
assets in the securities of assets in the securities of
issuers in any one industry. issuers in any one industry.
For purposes of this For purposes of this
restriction, gas, electric, restriction, gas, electric,
water and telephone water and telephone
utilities are treated as utilities are treated as
separate industries. separate industries.
- -----------------------------------------------------------------------
E-7
- -------------------------------------------------------------------------------------------------------
Current International Fund Managed Fund Money Market
Restriction
- -------------------------------------------------------------------------------------------------------
Real Estate The Fund may not The Fund may not The Fund may not
purchase or sell real estate purchase or sell real estate purchase or sell real estate
or interests therein or interests therein, or interests therein,
(including real estate although it may purchase although it may purchase
limited partnership securities of issuers which securities of issuers which
programs), although it may engage in real estate engage in real estate
purchase securities of operations or securities operations or securities
issuers which engage in which are secured by which are secured by
real estate operations or interests in real estate. interests in real estate.
securities which are
secured by interests in real
estate.
- -------------------------------------------------------------------------------------------------------
Underwriting The Fund may not The Fund may not The Fund may not
underwrite the securities of underwrite the securities of underwrite the securities of
other issuers, except other issuers, except other issuers, except
insofar as the Fund may be insofar as the Fund may be insofar as the Fund may be
deemed an underwriter deemed an underwriter deemed an underwriter
under the Securities Act of under the Securities Act of under the Securities Act of
1933 in disposing of 1933 in disposing of 1933 in disposing of
portfolio securities. portfolio securities. portfolio securities.
- -------------------------------------------------------------------------------------------------------
Lending The Fund may not make The Fund may not make The Fund may not make
loans except that it may loans except that it may loans except that it may
lend its portfolio securities lend its portfolio securities lend its portfolio securities
if such loans are fully if such loans are fully if such loans are fully
collateralized and such collateralized and such collateralized and such
loans of securities do not loans of securities do not loans of securities do not
exceed 25% of its total exceed 15% of its total exceed one-third of its total
assets at any one time. See assets at any one time. See assets at any one time. See
Strategic Portfolio Lending of Portfolio Lending of Portfolio
Transactions--Lending of Securities. The purchase of Securities. The purchase of
Securities. The purchase of debt securities (including debt securities (including
debt securities and the loan participation loan participation
entry into repurchase certificates) and the entry certificates) and the entry
agreements are not into repurchase agreements into repurchase agreements
considered the making of are not considered the are not considered the
loans. making of loans. making of loans.
- -------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------
Current Social Awareness Special Opportunities
Restriction
- --------------------------------------------------------------------------
Real Estate The Fund may not purchase The Fund may not purchase
or sell real estate or or sell real estate or
interests therein, although it interests therein, although it
may purchase securities of may purchase securities of
issuers which engage in issuers which engage in
real estate operations or real estate operations or
securities which are securities which are
secured by interests in real secured by interests in real
estate. estate.
- --------------------------------------------------------------------------
Underwriting The Fund may not The Fund may not
underwrite the securities of underwrite the securities of
other issuers, except insofar other issuers, except insofar
as the Fund may be deemed as the Fund may be deemed
an underwriter under the an underwriter under the
Securities Act of 1933 in Securities Act of 1933 in
disposing of portfolio disposing of portfolio
securities. securities.
- --------------------------------------------------------------------------
Lending The Fund may not make The Fund may not make
loans except that it may loans except that it may
lend its portfolio securities lend its portfolio securities
if such loans are fully if such loans are fully
collateralized and such collateralized and such
loans of securities do not loans of securities do not
exceed one-third of its total exceed one-third of its total
assets at any one time. See assets at any one time. See
Lending of Portfolio Lending of Portfolio
Securities. The purchase of Securities. The purchase of
debt securities including debt securities (including
loan participation loan participation
certificates and the entry certificates) and the entry
into repurchase agreements into repurchase agreements
are not considered the are not considered the
making of loans. making of loans.
- --------------------------------------------------------------------------
E-8
- -----------------------------------------------------------------------------------------------------------
Current Restriction International Fund Managed Fund Money Market
- -----------------------------------------------------------------------------------------------------------
Commodities The Fund may not The Fund may not The Fund may not
Or Commodity purchase or sell purchase or sell purchase or sell
Futures commodities or commodities or commodities or
commodity futures commodity futures commodity futures
contracts. contracts, except financial contracts.
futures contracts and
options thereon.
- -----------------------------------------------------------------------------------------------------------
Borrow Money The Fund may not borrow The Fund may not borrow The Fund may not borrow
money, except for money, except for money, except for
temporary or emergency temporary or emergency temporary or emergency
purposes and not purposes and not purposes and not
exceeding 5% (taken at the exceeding 5% (taken at the exceeding 5% (taken at the
lower of cost or current lower cost or current lower cost or current
value) of its total assets value) of its total assets value) of its total assets
(not including the amounts (not including the amounts (not including the amounts
borrowed). borrowed). borrowed).
- -----------------------------------------------------------------------------------------------------------
Issue Senior The Fund may not issue The Fund may not issue The Fund may not issue
Securities senior securities as defined senior securities as defined senior securities as defined
in the 1940 Act except in the 1940 Act except in the 1940 Act except
insofar as the Fund may be insofar as the Fund may be insofar as the Fund may be
deemed to have issued a deemed to have issued a deemed to have issued a
senior security by senior security by senior security by
borrowing money in borrowing money in borrowing money in
accordance with the accordance with accordance with
"Borrow Money" restrictions described restrictions described
restriction. (For purposes above. (For the purpose of above.
of this restriction, this restriction, collateral
collateral arrangements for arrangements with respect
entering into repurchase to the writing of options
agreements and lending and initial margin deposits
portfolio securities are not for futures contracts and
deemed to be the issuance the purchase or sale of
of a senior security.) futures contracts are not
deemed to be the issuance
of a senior security.)
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Current Restriction Social Awareness Special Opportunities
- -----------------------------------------------------------------------------
Commodities The Fund may not The Fund may not
Or Commodity purchase or sell purchase or sell
Futures commodities or commodities or
commodity futures commodity futures
contracts, except financial contracts, except financial
futures contracts and futures contracts and
options thereon. options thereon.
- -----------------------------------------------------------------------------
Borrow Money The Fund may not borrow The Fund may not borrow
money, except for money, except for
temporary or emergency temporary or emergency
purposes and not purposes and not
exceeding 5% (taken at the exceeding 5% (taken at the
lower of cost or current lower of cost or current
value) of its total assets value) of its total assets
(not including the amounts (not including the amounts
borrowed). borrowed).
- -----------------------------------------------------------------------------
Issue Senior The Fund may not issue The Fund may not issue
Securities senior securities as defined senior securities as defined
in the 1940 Act except in the 1940 Act except
insofar as the Fund may be insofar as the Fund may be
deemed to have issued a deemed to have issued a
senior security by senior security by
borrowing money in borrowing money in
accordance with accordance with the
restrictions described restrictions described
previously. (For the above. (For the purpose of
purpose of this restriction, this restriction, collateral
collateral arrangements arrangements with respect
with respect to the writing to the writing of options
of options and initial and initial margin deposits
margin deposits for futures for futures contracts and
contracts and the purchase the purchase or sale of
or sale of futures contracts futures contracts are not
are not deemed to be the deemed to be the issuance
issuance of a senior of a senior security.)
security.)
- -----------------------------------------------------------------------------
E-9
- -----------------------------------------------------------------------------------------------------
Current Restriction International Fund Managed Fund
- -----------------------------------------------------------------------------------------------------
Diversification The Fund may not hold The Fund may not hold
more than 10% of the more than 10% of the
outstanding voting outstanding voting
securities of any one issuer. securities of any one issuer.
The Fund may not invest in The Fund may not invest in
the securities of a single the securities of any one
issuer, unless the following issuer unless at least 75%
conditions are met: At least of the value of the Fund's
75% of the value of the total assets is represented
Fund's total assets must be by: (a) U.S. Government
represented by: (a) U.S. obligations, cash and cash
Government obligations, items, (b) securities of
cash and cash items, other investment
(b) securities of other companies, and
investment companies, and (c) securities of issuers as
(c) securities of issuers as to each of which, at the
to each of which, at the time the investment was
time the investment was made, the Fund's
made, the Fund's investment in the issuer did
investment in the issuer did not exceed 5% of the
not exceed 5% of the Fund's total assets.
Fund's total assets. The
Fund does not anticipate
that any more than 15% of
the Fund's total assets
would be invested in the
securities of a single issuer
at any time, other than
those of the U.S.
Government, its agencies
and instrumentalities.
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Current Restriction Money Market Social Awareness
- -----------------------------------------------------------------------------------------------------
Diversification The Fund may not invest The Fund may not hold
more than 5% of its total more than 10% of the
assets in the securities of outstanding voting
any one issuer (excluding securities of any one issuer.
the U.S. Government, its
agencies and The Fund may not invest in
instrumentalities) except to the securities of any one
the extent permitted by issuer unless at least 75%
Rule 2a-7 under the 1940 of the value of the Fund's
Act [Note: Under a three- total assets is represented
day safe harbor exception by: (a) U.S. Government
to Rule 2a-7, the Fund may obligations, cash and cash
invest up to a total of 25% items, (b) securities of
of its total assets in the other investment
securities of a single issuer companies, and
for a maximum of three (c) securities of issuers as
business days, if the to each of which, at the
highest quality standards of time the investment was
the Rule are satisfied and made, the Fund's
other conditions are met. investment in the issuer did
This exception allows the not exceed 5% of the
portfolio manager to Fund's total assets.
efficiently invest large
inflows of cash into the
Fund.]
The Fund may not
purchase common stock,
preferred stock, warrants or
other equity or voting
securities.
- -----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------
Current Restriction Special Opportunities
- ----------------------------------------------------------------------
Diversification As of the end of each
quarter, at least 50% of the
value of the Fund's total
assets must be represented
by: (a) U.S Government
obligations, cash and cash
items, (b) securities of
other investment
companies (subject to the
"Invest In Securities Of
Other Investment
Companies" restriction),
and (c) securities of issuers
as to each of which, either
at the time the investment
was made or at the end of
such quarter, the Fund's
investment in the issuer did
not exceed 5% of the value
of the Fund's total assets or
10% of the outstanding
voting securities of the
issuer.
- ----------------------------------------------------------------------
E-10
EXHIBIT F
FUNDAMENTAL INVESTMENT RESTRICTIONS TO BE ELIMINATED
Current Restriction Aggressive Growth Bond Fund
- -------------------------------------------------------------------------------------------------------------
Restricted And Illiquid Securities The Fund may not The Fund may not
acquire securities invest more than 10%
subject to restrictions of its total assets in
on disposition or securities (including
securities for which repurchase
there is no readily agreements and non-
available market, or negotiable time
enter into repurchase deposits maturing in
agreements or more than seven days)
purchase time deposits which are subject to
maturing in more than legal or contractual
seven days, if restrictions upon
immediately after and resale or are otherwise
as a result, the value not readily
of such securities marketable.
would exceed, in the
aggregate 15% of its
total assets.
- -------------------------------------------------------------------------------------------------------------
Invest In Securities Of Other Investment Companies The Fund may not The Fund may not
invest in securities of purchase securities of
other investment investment companies
companies except as except in connection
may be acquired as with an acquisition,
part of a merger, merger, consolidation
consolidation, or reorganization.
reorganization or
acquisition of assets
and except that it may
invest up to 5% of its
total assets in the
securities of any one
investment company,
but may not own more
than 3% of the
securities of any
investment company
or invest more than
10% of its total assets
in the securities of
other investment
companies.
Current Restriction Capital Appreciation Equity-Income Fund Global Asset Allocation
Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Restricted And Illiquid Securities The Fund may not The Fund may not
invest more than 5% invest more than 5%
of its net assets in of its net assets in
securities restricted as securities restricted as
to resale. to resale.
- ----------------------------------------------------------------------------------------------------------------------------------
Invest In Securities Of Other Investment Companies The Fund may not The Fund may not
invest in the securities invest in the securities
of other investment of other investment
companies, except as companies, except as
they may be acquired they may be acquired
as part of a merger, as part of a merger of
consolidation or consolidation or
acquisition of assets. acquisition of assets.
Current Restriction Growth and Income
Fund
- ------------------------------------------------------------------------------------
Restricted And Illiquid Securities The Fund may not
invest more than 10%
of its total assets in
securities (including
repurchase
agreements maturing
in more than seven
days) which are
subject to legal or
contractual
restrictions upon
resale or are otherwise
not readily
marketable.
- ------------------------------------------------------------------------------------
Invest In Securities Of Other Investment Companies
F-1
Current Restriction Aggressive Growth Bond Fund Capital Appreciation Equity-Income Fund
- -----------------------------------------------------------------------------------------------------------------------
Selling Securities Short The Fund may not The Fund may not
make short sales of make short sales of
securities or maintain securities.
a short position if,
when added together
more than 25% of the
value of its net assets
would be (a) deposited
as collateral for the
obligation to replace
securities borrowed to
effect short sales and
(b) allocated to
segregated accounts in
connection with short
sales.
- -----------------------------------------------------------------------------------------------------------------------
Purchase Puts, Calls Or The Fund may not
Combinations purchase puts, calls or
combinations thereof,
except the Fund may
write and purchase put
and call options and
effect closing
transactions as
described under
Options Trading.
- -----------------------------------------------------------------------------------------------------------------------
Margin Transactions The Fund may not
purchase securities on
margin, except for
such short-term loans
as are necessary for
the clearance of
purchases of portfolio
securities.
Current Restriction Global Asset Allocation Growth and Income
Fund Fund
- ------------------------------------------------------------------------------
Selling Securities Short The Fund may not The Fund may not
make short sales of make short sales of
securities or maintain securities.
a short sale position
unless, at all times it
owns an equal amount
of such securities or
owns securities which,
without payment of
any further
consideration, are
convertible into or
exchangeable for
securities of the same
issue as, and equal in
amount to, the
securities sold short.
- ------------------------------------------------------------------------------
Purchase Puts, Calls Or The Fund may not
Combinations purchase puts, calls or
combinations thereof,
except the Fund may
write and purchase put
and call options and
effect closing
transactions as
described under
Options Trading.
- ------------------------------------------------------------------------------
Margin Transactions The Fund may not The Fund may not
purchase securities on purchase securities on
margin, except such margin, except for
short-term credits as such short-term loans
may be necessary for as are necessary for
the clearance of the clearance of
purchases and sales of purchases of portfolio
securities, and except securities.
that it may make
margin payments in
connection with
options on financial
futures contracts.
F-2
Current Aggressive Growth Bond Fund Capital Appreciation Equity-Income Fund Global Asset Allocation
Restriction Fund
- --------------------------------------------------------------------------------------------------------------------------
Pledging Fund The Fund may not The Fund may not
Assets pledge its assets or pledge, hypothecate,
assign or otherwise mortgage or otherwise
encumber them except encumber its assets in
to secure borrowings excess of 15% of its
effected within the total assets (taken at
limitations set forth in current value) and
the "Borrow Money" then only to secure
restriction. (For borrowings permitted
purposes of this by the "Borrow
restriction, collateral Money" restriction.
arrangements with The deposit of
respect to the writing underlying securities
of options and and other assets in
collateral escrow and other
arrangements with collateral
respect to initial arrangements in
margin for futures connection with the
contracts are not writing of put or call
deemed to be pledges options and collateral
of assets.) arrangements with
respect to margin for
options on financial
futures contracts are
not deemed to be
pledges or other
encumbrances.
- --------------------------------------------------------------------------------------------------------------------------
Invest In The Fund may not The Fund may not
Companies For invest in companies make investments for
The Purpose Of for the purpose of, or the purpose of gaining
Acquiring with the effect of control of a
Control acquiring control. company's
management.
Current Growth and Income
Restriction Fund
- ---------------------------------------
Pledging Fund The Fund may not
Assets pledge its assets or
assign or otherwise
encumber them except
to secure borrowings
effected within the
limitations set forth in
the "Borrow Money"
restriction. (For
purposes of this
restriction, collateral
arrangements with
respect to the writing
of options and
collateral
arrangements with
respect to initial
margin for futures
contracts are not
deemed to be pledges
of assets.)
- ---------------------------------------
Invest In The Fund may not
Companies For invest in companies
The Purpose Of for the purpose of, or
Acquiring with the effect of,
Control acquiring control.
F-3
- -------------------------------------------------------------------------------------------------------------
Current Restriction International Fund Managed Fund Money Market
- -------------------------------------------------------------------------------------------------------------
Restricted And Illiquid The Fund may not invest The Fund may not invest The Fund may not invest
Securities more than 10% of its total more than 10% of its total more than 10% of its total
assets in securities assets in securities assets in securities
(including repurchase (including repurchase (including repurchase
agreements maturing in agreements and non- agreements and non-
more than seven days) negotiable time deposits negotiable time deposits
which are subject to legal maturing in more than maturing in more than
or contractual restrictions seven days) which are seven days) which are
upon resale, are not listed subject to legal or subject to legal or
on a securities exchange, contractual restrictions contractual restrictions
or are otherwise not upon resale or are upon resale or are
readily marketable. otherwise not readily otherwise not readily
marketable. marketable.
- -------------------------------------------------------------------------------------------------------------
Invest In Securities Of The Fund may not The Fund may not The Fund may not
Other Investment Companies purchase securities of purchase securities of purchase securities of
other investment investment companies investment companies
companies, except to the except in connection with except in connection with
limited extent described an acquisition, merger, an acquisition, merger,
under Additional consolidation or consolidation or
Investment Strategies and reorganization. reorganization.
Risks--Investment
Company Shares, and in
connection with an
acquisition, merger,
consolidation or
reorganization.
The Fund may not invest
more than 10% of its total
assets in investment
companies or more than
5% of its total assets in
the securities of any one
investment company, nor
may it own more than 3%
of the outstanding voting
securities of any such
company.
- ----------------------------------------------------------------------------------
Current Restriction Social Awareness Special Opportunities
- ----------------------------------------------------------------------------------
Restricted And Illiquid The Fund may not invest The Fund may not invest
Securities more than 10% of its total more than 10% of its total
assets in securities assets in securities
(including repurchase (including repurchase
agreements maturing in agreements maturing in
more than seven days) more than seven days)
which are subject to legal which are subject to legal
or contractual restrictions or contractual restrictions
upon resale or are upon resale or are
otherwise not readily otherwise not readily
marketable. marketable.
- ----------------------------------------------------------------------------------
Invest In Securities Of The Fund may not The Fund may not
Other Investment Companies purchase securities of purchase securities of
other investment investment companies
companies except in except in connection with
connection with an an acquisition, merger,
acquisition, merger, consolidation or
consolidation or reorganization.
reorganization.
F-4
- ---------------------------------------------------------------------------------------------------------
Current Restriction International Fund Managed Fund Money Market
- ---------------------------------------------------------------------------------------------------------
Selling Securities The Fund may not make The Fund may not make The Fund may not make
Short short sales of securities. short sales of securities. short sales of securities.
- ---------------------------------------------------------------------------------------------------------
Purchase Puts, Calls The Fund may not The Fund may not The Fund may not
Or Combinations purchase puts, calls or purchase puts, calls or purchase or write put and
combinations thereof. combinations thereof, call options.
except the Fund may write
and purchase put and call
options and effect closing
transactions as described
under Options Trading.
- ---------------------------------------------------------------------------------------------------------
Margin Transactions The Fund may not The Fund may not The Fund may not
purchase securities on purchase securities on purchase securities on
margin, except for such margin, except for such margin, except for such
short-term loans as are short-term loans as are short-term loans as are
necessary for the clearance necessary for the clearance necessary for the clearance
of purchases of portfolio of purchases of portfolio of purchases of portfolio
securities. securities. securities.
- ---------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Current Restriction Social Awareness Special Opportunities
- ----------------------------------------------------------------------------
Selling Securities The Fund may not make The Fund may not make
Short short sales of securities. short sales of securities.
- ----------------------------------------------------------------------------
Purchase Puts, Calls The Fund may not The Fund may not
Or Combinations purchase puts, calls or purchase puts, calls or
combinations thereof, combinations thereof,
except the Fund may write except the Fund may write
and purchase put and call and purchase put and call
options and effect closing options and effect closing
transactions as described transactions as described
under Options Trading. under Options Trading.
- ----------------------------------------------------------------------------
Margin Transactions The Fund may not The Fund may not
purchase securities on purchase securities on
margin, except for such margin, except for such
short-term loans as are short term loans as are
necessary for the clearance necessary for the clearance
of purchases of portfolio of purchases of portfolio
securities. securities.
- ----------------------------------------------------------------------------
F-5
- ------------------------------------------------------------------------------------------------------------
Current Restriction International Fund Managed Fund Money Market
- ------------------------------------------------------------------------------------------------------------
Pledging Fund Assets The Fund may not pledge The Fund may not pledge The Fund may not pledge
its assets or assign or its assets or assign or its assets or assign or
otherwise encumber them otherwise encumber them otherwise encumber them
except to secure except to secure except to secure
borrowings effected borrowings effected borrowings effected
within the limitations set within the limitations set within the limitations set
forth in the "Borrow forth in the "Borrow forth in the "Borrow
Money" restriction. Money" restriction. (For Money" restriction.
purposes of this
restriction, collateral
arrangements with
respect to the writing of
options and collateral
arrangements with
respect to initial margin
for futures contracts are
not deemed to be pledges
of assets.)
- ------------------------------------------------------------------------------------------------------------
Invest In Companies For The Fund may not invest The Fund may not invest The Fund may not invest
The Purpose Of Acquiring in companies for the in companies for the in companies for the
Control purpose of, or with the purpose of, or with the purpose of, or with the
effect of, acquiring effect of acquiring effect of acquiring
control. control. control.
- ------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Current Restriction Social Awareness Special Opportunities
- --------------------------------------------------------------------------------
Pledging Fund Assets The Fund may not pledge The Fund may not pledge
its assets or assign or its assets or assign or
otherwise encumber them otherwise encumber them
except to secure except to secure
borrowings effected borrowings effected
within the limitations set within the limitations set
forth in the "Borrow forth in the "Borrow
Money" restriction. (For Money" restriction. (For
purposes of this purposes of this
restriction, collateral restriction, collateral
arrangements with arrangements with
respect to the writing of respect to the writing of
options and collateral options and collateral
arrangements with arrangements with
respect to initial margin respect to initial margin
for futures contracts are for futures contracts are
not deemed to be pledges not deemed to be pledges
of assets.) of assets.)
- --------------------------------------------------------------------------------
Invest In Companies For The Fund may not invest The Fund may not invest
The Purpose Of Acquiring in companies for the in companies for the
Control purpose of, or with the purpose of exercising
effect of, acquiring control.
control.
- --------------------------------------------------------------------------------
F-6
VOTING INSTRUCTION CARD
VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
-----------------------------------
CONTROL NUMBER: 999 9999 9999 999
----------------------------------
999999 0 999999+000 LNY_SAL
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
[GRAPHIC REMOVED HERE] -------------------------------------------
Signature
-------------------------------------------
Signature (if held jointly)
[GRAPHIC REMOVED HERE]
--------------------------------------------,2002
[GRAPHIC REMOVED HERE] Date LNF_12517
FUND FUND FUND
- ---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
-------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
-------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:[_]
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
01 John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby [_] [_] [_]
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- --------------------------------------------------------------------------------
[GRAPHIC REMOVED HERE]
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] -------------- Bond Fund [_] [_] [_] [_] --------------
Capital Appreciation [_] [_] [_] [_] -------------- Equity-Income [_] [_] [_] [_] --------------
Global Asset [_] [_] [_] [_] -------------- Growth and Income [_] [_] [_] [_] --------------
International [_] [_] [_] [_] -------------- Managed [_] [_] [_] [_] --------------
Money Market [_] [_] [_] [_] -------------- Social Awareness [_] [_] [_] [_] --------------
Special Opportunities [_] [_] [_] [_] --------------
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] -------------- Bond Fund [_] [_] [_] [_] --------------
Capital Appreciation [_] [_] [_] [_] -------------- Equity-Income [_] [_] [_] [_] --------------
Global Asset [_] [_] [_] [_] -------------- Growth and Income [_] [_] [_] [_] --------------
International [_] [_] [_] [_] -------------- Managed [_] [_] [_] [_] --------------
Money Market [_] [_] [_] [_] -------------- Social Awareness [_] [_] [_] [_] --------------
Special Opportunities [_] [_] [_] [_] --------------
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE
ENCLOSED ENVELOPE.
ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE COUNTED.
If you have any questions, please contact Lincoln New York toll free at
1-800-893-7168.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
----------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
----------------------------------------------------
999999 0 999999+000 LNL_S53
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
-------------------------------------------
Signature
-------------------------------------------
Signature (if held jointly)
--------------------------------------------,2002
Date LNF_12517
FUND FUND FUND
- ---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:[_]
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby [_] [_] [_]
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- --------------------------------------------------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or materially
change sub-advisory agreements with sub-advisers without obtaining
stockholder approval. (This advisory structure is referred to as a
"multi-manager" arrangement.)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
4. To approve a new investment management agreement between the Funds and their
current investment adviser, Delaware Management Company, a series of Delaware
Management Business Trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS. (5A.
Amendment to Fundamental Restrictions on Concentration ofInvestments in the
Same Industry; 5B. Amendment of Fundamental Restrictions on Borrowing Money
and Issuing Senior Securities; 5C. Amendment to Fundamental Restrictions on
Underwriting; 5D. Amendment to Fundamental Restrictions on Investments in
Real Estate; 5E. Amendment to Fundamental Restrictions on Investment in
Commodities or Commodity Issues; 5F. Amendment to Fundamental Restrictions
on Lending; 5G. Amendment to Fundamental Restrictions on Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] -------------- Bond Fund [_] [_] [_] [_] --------------
Capital Appreciation [_] [_] [_] [_] -------------- Equity-Income [_] [_] [_] [_] --------------
Global Asset [_] [_] [_] [_] -------------- Growth and Income [_] [_] [_] [_] --------------
International [_] [_] [_] [_] -------------- Managed [_] [_] [_] [_] --------------
Money Market [_] [_] [_] [_] -------------- Social Awareness [_] [_] [_] [_] --------------
Special Opportunities [_] [_] [_] [_] --------------
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on Selling
Securities Short; 6C. Elimination of Fundamental Restrictions on Margin
Transactions; 6D. Elimination of Fundamental Restrictions on Pledging Fund
Assets; 6E. Elimination of Fundamental Restrictions on Illiquid and
Restricted Securities; 6F. Elimination of Fundamental Restrictions on
Purchase of Put and Call Options; 6G. Elimination of Fundamental Restrictions
on Investments in Companies for the Purpose of Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] -------------- Bond Fund [_] [_] [_] [_] --------------
Capital Appreciation [_] [_] [_] [_] -------------- Equity-Income [_] [_] [_] [_] --------------
Global Asset [_] [_] [_] [_] -------------- Growth and Income [_] [_] [_] [_] --------------
International [_] [_] [_] [_] -------------- Managed [_] [_] [_] [_] --------------
Money Market [_] [_] [_] [_] -------------- Social Awareness [_] [_] [_] [_] --------------
Special Opportunities [_] [_] [_] [_] --------------
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE
ENCLOSED ENVELOPE.
ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE COUNTED.
If you have any questions, please contact Lincoln Life toll free at
1-800-454-6265.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
-----------------------------------
CONTROL NUMBER: 999 9999 9999 999
-----------------------------------
999999 0 999999+000 eAnnuity
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
-----------------------------------------------------
Signature
-----------------------------------------------------
Signature (if held jointly)
------------------------------------------------,2002
Date LNF_12517
FUND FUND FUND
- ---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR' that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby [_] [_] [_]
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- --------------------------------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or materially
change sub-advisory agreements with sub-advisers without obtaining
stockholder approval. (This advisory structure is referred to as a
"multi-manager" arrangement.)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
4. To approve a new investment management agreement between the Funds and their
current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS. (5A.
Amendment to Fundamental Restrictions on Concentration of Investments in the
Same Industry; 5B. Amendment of Fundamental Restrictions on Borrowing Money
and Issuing Senior Securities; 5C. Amendment to Fundamental Restrictions on
Underwriting; 5D. Amendment to Fundamental Restrictions on Investments in
Real Estate; 5E. Amendment to Fundamental Restrictions on Investment in
Commodities or Commodity Issues; 5F. Amendment to Fundamental Restrictions
on Lending; 5G. Amendment to Fundamental Restrictions on Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] -------------- Bond Fund [_] [_] [_] [_] --------------
Capital Appreciation [_] [_] [_] [_] -------------- Equity-Income [_] [_] [_] [_] --------------
Global Asset [_] [_] [_] [_] -------------- Growth and Income [_] [_] [_] [_] --------------
International [_] [_] [_] [_] -------------- Managed [_] [_] [_] [_] --------------
Money Market [_] [_] [_] [_] -------------- Social Awareness [_] [_] [_] [_] --------------
Special Opportunities [_] [_] [_] [_] --------------
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on Selling
Securities Short; 6C. Elimination of Fundamental Restrictions on Margin
Transactions; 6D. Elimination of Fundamental Restrictions on Pledging Fund
Assets; 6E. Elimination of Fundamental Restrictions on Illiquid and
Restricted Securities; 6F. Elimination of Fundamental Restrictions on
Purchase of Put and Call Options; 6G. Elimination of Fundamental Restrictions
on Investments in Companies for the Purpose of Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] -------------- Bond Fund [_] [_] [_] [_] --------------
Capital Appreciation [_] [_] [_] [_] -------------- Equity-Income [_] [_] [_] [_] --------------
Global Asset [_] [_] [_] [_] -------------- Growth and Income [_] [_] [_] [_] --------------
International [_] [_] [_] [_] -------------- Managed [_] [_] [_] [_] --------------
Money Market [_] [_] [_] [_] -------------- Social Awareness [_] [_] [_] [_] --------------
Special Opportunities [_] [_] [_] [_] --------------
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE
ENCLOSED ENVELOPE.
ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE COUNTED.
If you have any questions, please contact the Internet Service Center at
www.AnnuityNet.com.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF LINCOLN LIFE & ANNUITY COMPANY
OF NEW YORK (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to
vote all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
----------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
----------------------------------------------------
999999 0 999999+000 LNY_VAA
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
----------------------------------------------------
Signature
----------------------------------------------------
Signature (if held jointly)
---------------------------------------------- ,2002
Date LNF_12517
FUND FUND FUND
---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella [_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ----------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without obtaining
stockholder approval. (This advisory structure is referred to as a
"multi-manager" arrangement.)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
4. To approve a new investment management agreement between the Funds and their
current investment adviser, Delaware Management Company, a series of Delaware
Management Business Trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments in
the Same Industry; 5B. Amendment of Fundamental Restrictions on Borrowing
Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] ______________ Bond Fund [_] [_] [_] ______________
Capital Appreciation [_] [_] [_] ______________ Equity-Income [_] [_] [_] ______________
Global Asset [_] [_] [_] ______________ Growth and Income [_] [_] [_] ______________
International [_] [_] [_] ______________ Managed [_] [_] [_] ______________
Money Market [_] [_] [_] ______________ Social Awareness [_] [_] [_] ______________
Special Opportunities [_] [_] [_] ______________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other Investment
Companies; 6B. Elimination of Fundamental Restrictions on Selling Securities
Short; 6C. Elimination of Fundamental Restrictions on Margin Transactions; 6D.
Elimination of Fundamental Restrictions on Pledging Fund Assets; 6E. Elimination
of Fundamental Restrictions on Illiquid and Restricted Securities; 6F.
Elimination of Fundamental Restrictions on Purchase of Put and Call Options;
6G. Elimination of Fundamental Restrictions on Investments in Companies for the
Purpose of Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] ______________ Bond Fund [_] [_] [_] ______________
Capital Appreciation [_] [_] [_] ______________ Equity-Income [_] [_] [_] ______________
Global Asset [_] [_] [_] ______________ Growth and Income [_] [_] [_] ______________
International [_] [_] [_] ______________ Managed [_] [_] [_] ______________
Money Market [_] [_] [_] ______________ Social Awareness [_] [_] [_] ______________
Special Opportunities [_] [_] [_] ______________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING
THE ENCLOSED ENVELOPE.
ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE COUNTED.
If you have any questions, please contact Lincoln New York
toll free at 1-888-868-2583.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
----------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
----------------------------------------------------
999999 0 999999+000 LNL_VAA
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
----------------------------------------------------
Signature
----------------------------------------------------
Signature (if held jointly)
---------------------------------------------- ,2002
Date LNF_12517
FUND FUND FUND
---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
-----------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
-----------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby [_] [_] [_]
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ---------------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or materially
change sub-advisory agreements with sub-advisers without obtaining
stockholder approval. (This advisory structure is referred to as a
"multi-manager" arrangement.)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
4. To approve a new investment management agreement between the Funds and their
current investment adviser, Delaware Management Company, a series of Delaware
Management Business Trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments in
the Same Industry; 5B. Amendment of Fundamental Restrictions on Borrowing
Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_]______________ Bond Fund [_] [_] [_] [_]______________
Capital Appreciation [_] [_] [_] [_]______________ Equity-Income [_] [_] [_] [_]______________
Global Asset [_] [_] [_] [_]______________ Growth and Income [_] [_] [_] [_]______________
International [_] [_] [_] [_]______________ Managed [_] [_] [_] [_]______________
Money Market [_] [_] [_] [_]______________ Social Awareness [_] [_] [_] [_]______________
Special Opportunities [_] [_] [_] [_]______________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other Investment
Companies; 6B. Elimination of Fundamental Restrictions on Selling Securities
Short; 6C. Elimination of Fundamental Restrictions on Margin Transactions; 6D.
Elimination of Fundamental Restrictions on Pledging Fund Assets; 6E. Elimination
of Fundamental Restrictions on Illiquid and Restricted Securities; 6F.
Elimination of Fundamental Restrictions on Purchase of Put and Call Options;
6G. Elimination of Fundamental Restrictions on Investments in Companies for the
Purpose of Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_]______________ Bond Fund [_] [_] [_] [_]______________
Capital Appreciation [_] [_] [_] [_]______________ Equity-Income [_] [_] [_] [_]______________
Global Asset [_] [_] [_] [_]______________ Growth and Income [_] [_] [_] [_]______________
International [_] [_] [_] [_]______________ Managed [_] [_] [_] [_]______________
Money Market [_] [_] [_] [_]______________ Social Awareness [_] [_] [_] [_]______________
Special Opportunities [_] [_] [_] [_]______________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING
INSTRUCTION USING THE ENCLOSED ENVELOPE.
ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE COUNTED.
If you have any questions, please contact Lincoln Life
toll free at 1-800-348-1212, Ext. 2077.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to
vote all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her policy
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
----------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
----------------------------------------------------
999999 0 999999+000 LNL_VUL
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
----------------------------------------------------
Signature
----------------------------------------------------
Signature (if held jointly)
---------------------------------------------- ,2002
Date LNF_12517
FUND FUND FUND
---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
-----------------------------------------------------
To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
-----------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
01 John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
[_] [_] [_]
To withhold authority to vote for any individual nominee, mark the
"For All Except" box and write the nominee's number and name on the line
provided below.
- --------------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or materially
change sub-advisory agreements with sub-advisers without obtaining
stockholder approval. (This advisory structure is referred to as a
"multi-manager" arrangement.)
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
4. To approve a new investment management agreement between the Funds and their
current investment adviser, Delaware Management Company, a series of Delaware
Management Business Trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments in
the Same Industry; 5B. Amendment of Fundamental Restrictions on Borrowing Money
and Issuing Senior Securities; 5C. Amendment to Fundamental Restrictions on
Underwriting; 5D. Amendment to Fundamental Restrictions on Investments in Real
Estate; 5E. Amendment to Fundamental Restrictions on Investment in Commodities
or Commodity Issues; 5F. Amendment to Fundamental Restrictions on Lending; 5G.
Amendment to Fundamental Restrictions on Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_]______________ Bond Fund [_] [_] [_] [_]______________
Capital Appreciation [_] [_] [_] [_]______________ Equity-Income [_] [_] [_] [_]______________
Global Asset [_] [_] [_] [_]______________ Growth and Income [_] [_] [_] [_]______________
International [_] [_] [_] [_]______________ Managed [_] [_] [_] [_]______________
Money Market [_] [_] [_] [_]______________ Social Awareness [_] [_] [_] [_]______________
Special Opportunities [_] [_] [_] [_]______________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other Investment
Companies; 6B. Elimination of Fundamental Restrictions on Selling Securities
Short; 6C. Elimination of Fundamental Restrictions on Margin Transactions; 6D.
Elimination of Fundamental Restrictions on Pledging Fund Assets; 6E. Elimination
of Fundamental Restrictions on Illiquid and Restricted Securities; 6F.
Elimination of Fundamental Restrictions on Purchase of Put and Call Options;
6G. Elimination of Fundamental Restrictions on Investments in Companies for the
Purpose of Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_]______________ Bond Fund [_] [_] [_] [_]______________
Capital Appreciation [_] [_] [_] [_]______________ Equity-Income [_] [_] [_] [_]______________
Global Asset [_] [_] [_] [_]______________ Growth and Income [_] [_] [_] [_]______________
International [_] [_] [_] [_]______________ Managed [_] [_] [_] [_]______________
Money Market [_] [_] [_] [_]______________ Social Awareness [_] [_] [_] [_]______________
Special Opportunities [_] [_] [_] [_]______________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION
USING THE ENCLOSED ENVELOPE.
ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE COUNTED.
If you have any questions, please contact Lincoln Life
toll free at 1-877-200-8213.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF LINCOLN LIFE & ANNUITY
COMPANY OF NEW YORK (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her policy
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
----------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
----------------------------------------------------
999999 0 999999+000 LNY_VUL
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
----------------------------------------------------
Signature
----------------------------------------------------
Signature (if held jointly)
---------------------------------------------- ,2002
Date LNF_12517
FUND FUND FUND
---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
----------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
----------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors: FOR ALL WITHHOLD ALL FOR ALL EXCEPT
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella [_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
- ----------------------------------------------
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_] Capital Appreciation [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_] Growth and Income [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_] Money Market [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_]__________
Capital Appreciation [_] [_] [_] [_]___________
Global Asset [_] [_] [_] [_]___________
International [_] [_] [_] [_]___________
Money Market [_] [_] [_] [_]___________
Special Opportunities [_] [_] [_] [_]___________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_]___________
Equity-Income [_] [_] [_] [_]___________
Growth and Income [_] [_] [_] [_]___________
Managed [_] [_] [_] [_]___________
Social Awareness [_] [_] [_] [_]___________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT
RESTRICTIONS. (6A. Elimination of Fundamental Restrictions on Investments
in Other Investment Companies; 6B. Elimination of Fundamental Restrictions
on Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_]__________
Capital Appreciation [_] [_] [_] [_]___________
Global Asset [_] [_] [_] [_]___________
International [_] [_] [_] [_]___________
Money Market [_] [_] [_] [_]___________
Special Opportunities [_] [_] [_] [_]___________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_]___________
Equity-Income [_] [_] [_] [_]___________
Growth and Income [_] [_] [_] [_]___________
Managed [_] [_] [_] [_]___________
Social Awareness [_] [_] [_] [_]___________
7. The Company will vote upon such other business as may properly come
before the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln New York toll free at
1-877-200-8213.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
---------------------------------
CONTROL NUMBER: 999 9999 9999 999
---------------------------------
999999 0 999999+000 LNL_VAA1
I acknowledge receipt of the notice of the Special Meeting of the
Stockholders and accompanying Proxy Statement dated October 15, 2002.
----------------------------------------------------------------------------
Signature
----------------------------------------------------------------------------
Signature (if held jointly)
, 2002
----------------------------------------------------------------------
Date LNF_12517
FUND FUND FUND
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
- ---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
- ---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
[_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ----------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln Life toll free at
1-800-454-6265.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
-----------------------------------------------------
CONTROL NUMBER: 999 9999 9999 999
-----------------------------------------------------
999999 0 999999+000 LNL_Q&L
I acknowledge receipt of the notice of the Special
Meeting of the Stockholders and accompanying Proxy
Statement dated October 15, 2002.
----------------------------------------------------
Signature
----------------------------------------------------
Signature (if held jointly)
-----------------------------------------------,2002
Date LNF_12517
FUND FUND FUND
- ---- ---- ----
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
- --------------------------------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box. (No other vote is
necessary.)
- --------------------------------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X]
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella [_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- --------------------------------------------------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln Life toll free at
1-800-341-0441.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
- ---------------------------------------
CONTROL NUMBER: 999 9999 9999 999
- ---------------------------------------
999999 0 999999+000 LNL_Q&L1
I acknowledge receipt of the notice of the Special Meeting of the
Stockholders and accompanying Proxy Statement dated October 15, 2002.
----------------------------------------------------------------------------
Signature
----------------------------------------------------------------------------
Signature (if held jointly)
, 2002
----------------------------------------------------------------------
Date LNF_12517
FUND FUND FUND
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
- ---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
- ---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
[_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ----------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln Life toll free at
1-800-454-6265.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
- ----------------------------------------
CONTROL NUMBER: 999 9999 9999 999
- ----------------------------------------
999999 0 999999+000 LNL_VAA3
I acknowledge receipt of the notice of the Special Meeting of the
Stockholders and accompanying Proxy Statement dated October 15, 2002.
----------------------------------------------------------------------------
Signature
----------------------------------------------------------------------------
Signature (if held jointly)
, 2002
----------------------------------------------------------------------
Date LNF_12517
FUND FUND FUND
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
- ---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
- ---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
[_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ----------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln Life toll free at
1-800-458-0822.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
- ----------------------------------------
CONTROL NUMBER: 999 9999 9999 999
- ----------------------------------------
999999 0 999999+000 LNL_VAA4
I acknowledge receipt of the notice of the Special Meeting of the
Stockholders and accompanying Proxy Statement dated October 15, 2002.
----------------------------------------------------------------------------
Signature
----------------------------------------------------------------------------
Signature (if held jointly)
, 2002
----------------------------------------------------------------------
Date LNF_12517
FUND FUND FUND
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
- ---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
- ---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
[_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ----------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln Life toll free at
1-888-868-2583.
VOTING INSTRUCTION CARD VOTING INSTRUCTION CARD
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, Indiana 46802
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 9, 2002
THESE INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY (THE "COMPANY").
Revoking any prior instructions, the undersigned instructs the Company to vote
all the shares of the Lincoln National Funds that are listed below (each a
"Fund," collectively, the "Funds") that are attributable to his or her contract
or interest therein and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002, or any adjournment
thereof.
VOTE VIA THE INTERNET: https://vote.proxy-direct.com
VOTE VIA TELEPHONE: 1-866-837-1894
- ----------------------------------------
CONTROL NUMBER: 999 9999 9999 999
- ----------------------------------------
999999 0 999999+000 LNL_VULS
I acknowledge receipt of the notice of the Special Meeting of the
Stockholders and accompanying Proxy Statement dated October 15, 2002.
----------------------------------------------------------------------------
Signature
----------------------------------------------------------------------------
Signature (if held jointly)
, 2002
----------------------------------------------------------------------
Date LNF_12517
FUND FUND FUND
Fundname drop-in 1 Fundname drop-in 2 Fundname drop-in 3
Fundname drop-in 4 Fundname drop-in 5 Fundname drop-in 6
Fundname drop-in 7 Fundname drop-in 8 Fundname drop-in 9
Fundname drop-in 10 Fundname drop-in 11
Upon proper execution of this card, the Company is instructed to vote on the
Proposals described in the Proxy Statement as specified below, and, in the
Company's discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof. If this card is signed and returned but no
instruction choice is given for a Proposal, we will vote your proportionate
shares "FOR" that Proposal (with respect to election of directors, we will vote
your proportionate shares "FOR ALL" named nominees). If this card is not
returned, or is returned not properly executed, the Company will vote such
shares in the same proportion as it votes the shares for which it has received
instructions.
- ---------------------------------------------------------
[_] To vote FOR all Funds on all Proposals mark this box.
(No other vote is necessary.)
- ---------------------------------------------------------
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [_]
1. Election of Directors:
01. John B. Borsch, Jr. 02. Kelly D. Clevenger 03. Nancy L. Frisby
04. Barbara S. Kowalczyk 05. Kenneth G. Stella
FOR ALL WITHHOLD ALL FOR ALL EXCEPT
[_] [_] [_]
To withhold authority to vote for any individual nominee, mark the "For All
Except" box and write the nominee's number and name on the line provided below.
- ----------------------------------------
2. To approve a reorganization to change each Fund from a Maryland corporation
to a series of a Delaware business trust.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_] Bond Fund [_] [_] [_]
Equity-Income [_] [_] [_] Global Asset [_] [_] [_]
International [_] [_] [_] Managed [_] [_] [_]
Social Awareness [_] [_] [_] Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
3. To approve a proposal that would permit the Funds to enter into or
materially change sub-advisory agreements with sub-advisers without
obtaining stockholder approval. (This advisory structure is referred to as
a "multi-manager" arrangement.)
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
4. To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a series of
Delaware Management Business Trust.
FOR AGAINST ABSTAIN
Aggressive Growth [_] [_] [_]
Equity-Income [_] [_] [_]
International [_] [_] [_]
Social Awareness [_] [_] [_]
FOR AGAINST ABSTAIN
Bond Fund [_] [_] [_]
Global Asset [_] [_] [_]
Managed [_] [_] [_]
Special Opportunities [_] [_] [_]
FOR AGAINST ABSTAIN
Capital Appreciation [_] [_] [_]
Growth and Income [_] [_] [_]
Money Market [_] [_] [_]
5. To approve the amendment of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(5A. Amendment to Fundamental Restrictions on Concentration of Investments
in the Same Industry; 5B. Amendment of Fundamental Restrictions on
Borrowing Money and Issuing Senior Securities; 5C. Amendment to Fundamental
Restrictions on Underwriting; 5D. Amendment to Fundamental Restrictions on
Investments in Real Estate; 5E. Amendment to Fundamental Restrictions on
Investment in Commodities or Commodity Issues; 5F. Amendment to Fundamental
Restrictions on Lending; 5G. Amendment to Fundamental Restrictions on
Diversification)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
6. To approve the elimination of certain FUNDAMENTAL INVESTMENT RESTRICTIONS.
(6A. Elimination of Fundamental Restrictions on Investments in Other
Investment Companies; 6B. Elimination of Fundamental Restrictions on
Selling Securities Short; 6C. Elimination of Fundamental Restrictions on
Margin Transactions; 6D. Elimination of Fundamental Restrictions on
Pledging Fund Assets; 6E. Elimination of Fundamental Restrictions on
Illiquid and Restricted Securities; 6F. Elimination of Fundamental
Restrictions on Purchase of Put and Call Options; 6G. Elimination of
Fundamental Restrictions on Investments in Companies for the Purpose of
Acquiring Control)
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Aggressive Growth [_] [_] [_] [_] ____________
Capital Appreciation [_] [_] [_] [_] ____________
Global Asset [_] [_] [_] [_] ____________
International [_] [_] [_] [_] ____________
Money Market [_] [_] [_] [_] ____________
Special Opportunities [_] [_] [_] [_] ____________
FOR AGAINST ABSTAIN FOR ALL EXCEPT
Bond Fund [_] [_] [_] [_] ____________
Equity-Income [_] [_] [_] [_] ____________
Growth and Income [_] [_] [_] [_] ____________
Managed [_] [_] [_] [_] ____________
Social Awareness [_] [_] [_] [_] ____________
7. The Company will vote upon such other business as may properly come before
the meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS VOTING INSTRUCTION USING THE ENCLOSED
ENVELOPE. ALL VOTING INSTRUCTION CARDS RECEIVED BY DECEMBER 4, 2002 WILL BE
COUNTED.
If you have any questions, please contact Lincoln Life at
1-860-466-1561.
[Form of Internet Site]
Shareholder Login
Shareholder: ALAMO SAMPLE CARD FOR
LINCOLN NATIONAL AGGRESSIVE GROWTH FUND, INC.
280 OSER AVE
HAUPPAUGE, NY 11788
Account: 1234567890 / 517-XXXX-XXXX-011
Previous vote: No Previous Vote Collected
Lincoln National Aggressive Growth Fund, Inc.
- -------------------------------------------------------------------------------------------------------------------------
1.01 Elect John B. Borsch, Jr. to the Board of Directors [ ] For [ ] Withhold
- -------------------------------------------------------------------------------------------------------------------------
1.02 Elect Kelly D. Clevenger to the Board of Directors [ ] For [ ] Withhold
- -------------------------------------------------------------------------------------------------------------------------
1.03 Elect Nancy L. Frisby to the Board of Directors [ ] For [ ] Withhold
- -------------------------------------------------------------------------------------------------------------------------
1.04 Elect Barbara S. Kowalczyk to the Board of Directors [ ] For [ ] Withhold
- -------------------------------------------------------------------------------------------------------------------------
1.05 Elect Kenneth G. Stella to the Board of Directors [ ] For [ ] Withhold
- -------------------------------------------------------------------------------------------------------------------------
2 To approve a plan of reorganization to change the Fund from a [ ] For [ ] Withhold [ ] Abstain
Maryland Corporation to a series of a Delaware business trust.
- -------------------------------------------------------------------------------------------------------------------------
3 To approve a proposal to permit the Fund to enter into or [ ] For [ ] Withhold [ ] Abstain
materially change sub-advisory agreements with sub-advisers
without obtaining shareholder approval. (This advisory structure
is referred to as a "multi-manager" arrangement.)
- -------------------------------------------------------------------------------------------------------------------------
4 To approve a new investment management agreement between the [ ] For [ ] Withhold [ ] Abstain
Funds and their current investment adviser, Delaware Management
Company, a series of Delaware Management Business Trust.
- -------------------------------------------------------------------------------------------------------------------------
5A To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Industry Concentration.
- -------------------------------------------------------------------------------------------------------------------------
5B To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Borrowing Money and Issuing Senior
Securities.
- -------------------------------------------------------------------------------------------------------------------------
5C To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Underwriting.
- -------------------------------------------------------------------------------------------------------------------------
5D To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Investments in Real Estate.
- -------------------------------------------------------------------------------------------------------------------------
5E To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Investments in Commodities or Commodity
Issues.
- -------------------------------------------------------------------------------------------------------------------------
5F To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Lending.
- -------------------------------------------------------------------------------------------------------------------------
5G To approve the amendment of the Fund's fundamental Investment [ ] For [ ] Withhold [ ] Abstain
Restriction concerning Diversification.
- -------------------------------------------------------------------------------------------------------------------------
6A Eliminate the fundamental Investment Restriction on Investing in [ ] For [ ] Withhold [ ] Abstain
Other Investment Companies.
- -------------------------------------------------------------------------------------------------------------------------
6B Eliminate the fundamental Investment Restriction on Selling [ ] For [ ] Withhold [ ] Abstain
Securities Short.
- -------------------------------------------------------------------------------------------------------------------------
6C Eliminate the fundamental Investment Restriction on Margin [ ] For [ ] Withhold [ ] Abstain
Transactions.
- -------------------------------------------------------------------------------------------------------------------------
6D Eliminate the fundamental Investment Restriction on Pledging Fund [ ] For [ ] Withhold [ ] Abstain
Assets.
- -------------------------------------------------------------------------------------------------------------------------
6E Eliminate the fundamental Investment Restriction on Illiquid and [ ] For [ ] Withhold [ ] Abstain
Restricted Securities.
- -------------------------------------------------------------------------------------------------------------------------
6F Eliminate the fundamental Investment Restriction on Purchase of [ ] For [ ] Withhold [ ] Abstain
Put and Call Options.
- -------------------------------------------------------------------------------------------------------------------------
6G Eliminate the fundamental Investment Restriction on Investments [ ] For [ ] Withhold [ ] Abstain
in Companies for the Purpose of Acquiring Control.
- -------------------------------------------------------------------------------------------------------------------------
The Company will vote upon such other business as may properly come
before the meeting or any adjournment thereof.
Enter your e-mail address here if you would like an e-mail confirmation of your
vote. |-------------------------------------|
| |
|-------------------------------------|
Answers have been marked according to your last recorded vote.
Please change responses as appropriate before submission. If you have questions
regarding any of the proposals, please call (631) 231-7900.
[ ] Cancel [ ] Vote Now
[Form of Confirmation]
Thank you. Your voting instructions have been submitted for processing.
If necessary, you can revisit Internet Voting site any time before the Meeting
Date on Monday, December 9, 2002 at 9:00 AM (EST) to submit new voting
instructions.
This is the summary of your voting instructions delivered to Lincoln Funds. You
may print this page for your records.
Lincoln National Aggressive Growth Fund, Inc.
- ----------------------------------------------------------------------------------------------------------
Instructions submitted on [Date] at [Time] AM/PM[ET]
Transaction Code: XXXXXXXX
Person's Vote
- ----------------------------------------------------------------------------------------------------------
1.01 Elect John B. Borsch, Jr. to the Board of Directors
- ----------------------------------------------------------------------------------------------------------
1.02 Elect Kelly D. Clevenger to the Board of Directors
- ----------------------------------------------------------------------------------------------------------
1.03 Elect Nancy L. Frisby to the Board of Directors
- ----------------------------------------------------------------------------------------------------------
1.04 Elect Barbara S. Kowalczyk to the Board of Directors
- ----------------------------------------------------------------------------------------------------------
1.05 Elect Kenneth G. Stella to the Board of Directors
- ----------------------------------------------------------------------------------------------------------
2 To approve a plan of reorganization to change the Fund from
a Maryland Corporation to a series of a Delaware business trust.
- ----------------------------------------------------------------------------------------------------------
3 To approve a proposal to permit the Fund to enter into or materially
change sub-advisory agreements with sub-advisers without obtaining
shareholder approval. (This advisory structure is referred to as a
"multi-manager" arrangement.)
- ----------------------------------------------------------------------------------------------------------
4 To approve a new investment management agreement between the Funds and
their current investment adviser, Delaware Management Company, a
series of Delaware Management Business Trust.
- ----------------------------------------------------------------------------------------------------------
5A To approve the amendment of the Fund's fundamental Investment
Restriction concerning Industry Concentration.
- ----------------------------------------------------------------------------------------------------------
5B To approve the amendment of the Fund's fundamental Investment
Restriction concerning Borrowing Money and Issuing Senior Securities.
- ----------------------------------------------------------------------------------------------------------
5C To approve the amendment of the Fund's fundamental Investment
Restriction concerning Underwriting.
- ----------------------------------------------------------------------------------------------------------
5D To approve the amendment of the Fund's fundamental Investment
Restriction concerning Investments in Real Estate.
- ----------------------------------------------------------------------------------------------------------
5E To approve the amendment of the Fund's fundamental Investment
Restriction concerning Investments in Commodities or Commodity Issues.
- ----------------------------------------------------------------------------------------------------------
5F To approve the amendment of the Fund's fundamental Investment
Restriction concerning Lending.
- ----------------------------------------------------------------------------------------------------------
5G To approve the amendment of the Fund's fundamental Investment
Restriction concerning Diversification.
- ----------------------------------------------------------------------------------------------------------
6A Eliminate the fundamental Investment Restriction on Investing in
Other Investment Companies.
- ----------------------------------------------------------------------------------------------------------
6B Eliminate the fundamental Investment Restriction on Selling
Securities Short.
- ----------------------------------------------------------------------------------------------------------
6C Eliminate the fundamental Investment Restriction on Margin
Transactions.
- ----------------------------------------------------------------------------------------------------------
6D Eliminate the fundamental Investment Restriction on Pledging Fund
Assets.
- ----------------------------------------------------------------------------------------------------------
6E Eliminate the fundamental Investment Restriction on Illiquid and
Restricted Securities.
- ----------------------------------------------------------------------------------------------------------
6F Eliminate the fundamental Investment Restriction on Purchase of
Put and Call Options.
- ----------------------------------------------------------------------------------------------------------
6G Eliminate the fundamental Investment Restriction on Investments in
Companies for the Purpose of Acquiring Control.
- ----------------------------------------------------------------------------------------------------------
The Company will vote upon such other business as may properly come
before the meeting or any adjournment thereof.
- ----------------------------------------------------------------------------------------------------------
If you wish to vote another card, please click here.
[Form of Legal Page]
LINCOLN NATIONAL FUNDS
1300 South Clinton Street
Fort Wayne, IN 46802
These instructions are solicited on behalf of The
Lincoln National Life Insurance Company or Lincoln
Life & Annuity Company of New York, as applicable
(hereafter referred to individually as the "Company").
I hereby instruct the Company to vote, as designated below, all of the shares
of the Lincoln National Funds that are attributable to my contract, policy or
interest therein, and held in the Company separate account, at the Special
Meeting of the Stockholders to be held on December 9, 2002,
or any adjournment thereof.
By submitting this electronic vote, I acknowledge receipt
of the Notice of the Special Meeting
of the Stockholders and accompanying Proxy Statement dated October 15, 2002.