485BPOS

As filed with the Securities and Exchange Commission on April 17, 2002

Registration No. 811-03214

Registration No. 333-50817

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 7

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 40

LINCOLN NATIONAL VARIABLE ANNUITY
ACCOUNT C (eAnnuity^®)

(Exact Name of Registrant)

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

(Name of Depositor)

1300 South Clinton Street
Fort Wayne, Indiana 46802

(Address of Depositor’s Principal Executive Offices) (Zip Code)
Depositor’s Telephone Number, including Area Code: (260)455-2000

Elizabeth A. Frederick, Esquire
The Lincoln National Life Insurance Company
1300 S. Clinton Street
Post Office Box 1110
Fort Wayne, Indiana 46802
Telephone No. (260)455-2000

(Name and Address of Agent for Service)

Copies of all communications to:

Brian M. Burke, Esquire
The Lincoln National Life Insurance Company
1300 S. Clinton Street
Post Office Box 1110
Fort Wayne, Indiana 46802

Title of securities being registered:

     Interests in a separate account under individual flexible premium deferred variable annuity contracts.

It is proposed that this filing will become effective (check appropriate box)

     [_] immediately upon filing pursuant to paragraph (b) of Rule 485

     [X] on May 1, 2002, pursuant to paragraph (b) of Rule 485

     [_] 60 days after filing pursuant to paragraph (a)(1) of Rule 485

     [_] on __ pursuant to paragraph (a)(1) of Rule 485

If appropriate, check the following box:

     [_] this post-effective amendment designates a new effective date for a
           previously filed post-effective amendment.

eAnnuity^®

Lincoln National Variable Annuity Account C

individual variable annuity contracts

issued by:	Servicing Office
Lincoln National Life Insurance Co. 1300 South Clinton Street	AnnuityNet, Inc. P.O. Box 691
Fort Wayne, Indiana 46802 www.LincolnLife.com	Leesburg, VA 20178

This prospectus describes an individual flexible premium deferred variable annuity contract (Contract) issued by The Lincoln National Life Insurance Company (Lincoln Life). This Contract may be sold under different names. Most transactions involving this Contract may be performed through Lincoln Life’s Internet Service Center.

The Contract described in this prospectus is offered for both traditional and Roth individual retirement annuities and as a nonqualified Contract. A nonqualified Contract can be owned jointly only by spouses and is purchased with after-tax money.

The Contract offers you the accumulation of Contract Value and payment of periodic annuity benefits. These benefits are paid on a variable basis. Annuity benefits start at the Annuity Commencement Date which you select. If the Contractowner dies before the Annuity Commencement Date, the Contract Value will be paid to the Beneficiary. (See DEATH BENEFIT BEFORE THE ANNUITY COMMENCEMENT DATE.)

The minimum initial Purchase Payment for the Contract is $1,000. The minimum payment to the Contract, after the initial Purchase Payment, is $100 per payment. Lin-coln Life reserves the right to limit the sum of Purchase Payments made under this Contract to $5,000,000.

All Purchase Payments will be placed in Lincoln National Variable Annuity Account C (Variable Annuity Account [VAA]). The VAA is a segregated investment account of Lincoln Life, which is the depositor. Based upon your instructions, the VAA invests Purchase Payments (at net asset value) in specified funds. Both the value of a Contract before the Annuity Commencement Date and the amount of payouts afterward will depend upon the investment performance of the fund(s) you selected. Investments in these funds are neither insured nor guaranteed by the U.S. Government or by any other person or entity.

This prospectus details the information regarding the VAA that you should know before investing. You should read it carefully and it will remain available through Lincoln Life’s Internet Service Center. We have also attached current prospectuses for each of the funds available through the Contract as follows:

American Century Variable Portfolios, Inc.

VP International

Baron Capital Asset Fund Trust (Insurance Class)

Delaware VIP Trust

Delaware VIP Global Bond Series Standard Class

Delaware VIP Large Cap Value Series Standard Class (formerly Delaware Premium Growth & Income Series.)

Delaware VIP Trend Series Standard Class

Janus Aspen Series, Worldwide Growth Portfolio (Institutional shares)

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 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.

Neuberger Berman Advisers Management Trust Portfolios

AMT Partners Portfolio

AMT Mid-Cap Growth Portfolio

Scudder VIT Funds (formerly Deutsche Asset Management VIT Funds)

Equity 500 Index

Small Cap Index

You should read each of these prospectuses carefully before purchasing a Contract and save them for future reference.

A Statement of Additional Information (SAI), dated the same date as this prospectus, concerning the VAA has been filed with the SEC and is incorporated by reference into this prospectus. A table of contents for the SAI appears on the last page of this prospectus. If you have any questions or for a free copy of the SAI send an e-mail request through our Internet Service Center (help@AnnuityServicing.com). The SAI is also available through the SEC website (http://www.sec.gov). In addition, the material incorporated by reference and other information regarding registrants who file electronically with the SEC is available through the SEC website.

These securities have not been approved or disapproved by the Securities and Exchange Commission (SEC) nor has the SEC passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

May 1, 2002.

1

Table of contents

Item	Page
Special terms	2
Expense tables	3
Summary	7
Condensed financial information	8
Investment results	10
Financial statements	10
Lincoln National Life Insurance Co.	10
Variable annuity account (VAA)	10
Investments of the VAA	10
Charges and other deductions	13

Item	Page
The contract	14
Annuity payouts	17
Federal tax matters	18
Voting rights	22
Distribution of the contracts	22
Return privilege	22
State regulation	22
Records and reports	22
Other information	22

Special terms

Account or Variable Annuity Account (VAA)—The segregated investment account, Account C, into which Lincoln Life sets aside and invests the assets for the Contract offered in this prospectus.

Accumulation Unit—A measure used to calculate Contract Value before the Annuity Commencement Date.

Annuitant—The person upon whose life the annuity benefit payments made after the Annuity Commencement Date will be based.

Annuity Commencement Date—The Valuation Date when the funds are withdrawn or converted into Annuity Units for payment of annuity benefits under the Annuity Payout Option selected. For purposes of determining whether an event occurs before or after the Annuity Commencement Date, the Annuity Commencement Date is deemed to begin at close of business on the Valuation Date.

Annuity Payout Option—An optional form of payout of the annuity available under the Contract.

Annuity Payout—An amount paid at regular intervals after the Annuity Commencement Date under one of several options available to the Annuitant and/or any other payee. The amount paid may vary.

Annuity Unit—A measure used to calculate the amount of Annuity Payouts after the Annuity Commencement Date.

Beneficiary—The person whom you designate to receive the Death Benefit, if any, in case of the Contractowner’s death.

Contract (variable annuity contract)—The agreement between you and us providing a variable annuity.

Contractowner (you, your, owner)—The person who has the ability to exercise the rights under the Contract (decides on investment allocations, transfers, payout option, designates the Beneficiary, etc.). Usually, but not always, the owner is also the Annuitant.

Contract Value—At a given time before the Annuity Commencement Date, the total value of all Accumulation Units for a Contract.

Contract Year—Each one-year period starting with the effective date of the Contract and starting with each Contract anniversary after that.

Death Benefit—The amount payable to the Owner’s designated Beneficiary if the Owner dies before the Annuity Commencement Date.

Internet Service Center—The Internet site that Lincoln Life maintains to provide variable annuity contract documents and information to current and prospective annuity Contractowners and through which various transactions may be performed. Certain of these transactions may require faxed or mailed signatures.

Lincoln Life (we, us, our)—The Lincoln National Life Insurance Co.

Purchase Payments—Amounts paid into the Contract.

Subaccount—That portion of the VAA that reflects investments in Accumulation and Annuity Units of a class of a particular fund. A Subaccount corresponds to each fund.

Surrender Charge—Also known as a contingent deferred sales charge, this charge may be assessed upon premature withdrawals or surrender of the Contract and is calculated according to the provisions of the Contract.

Valuation Date—Each day the New York Stock Exchange (NYSE) is open for trading.

Valuation Period—The period commencing at the close of trading (normally 4:00 p.m. EST) on each day that the NYSE is open for trading (in other words, the Valuation Date) and ending at the close of such trading on the next succeeding Valuation Date.

2

Expense tables

Contract owner transaction expenses:

Currently, there is no charge for transfers between funds. However, we reserve the right to impose such charges in the future.

The Surrender Charge percentage is reduced to zero after three years according to the following schedule:

	Contract year
	1	2	3	4 or more
Surrender Charge as % of Contract Value Withdrawn	3%	2%	1%	0%

This charge may be waived in certain cases. See CHARGES AND OTHER DEDUCTIONS.

VAA annual expenses for Subaccounts:

(as a percentage of average account value for each Subaccount)

Annuity Asset Charge (Mortality and expense risk fees and Administrative expense fees): 0.55%

Annual expenses of the Funds for the year ended December 31, 2001:

(as a percentage of each funds’ average net assets and, where indicated, after expense reimbursements):

	Management fees		+	12b-1 fees		+	Other expenses		=	Total expenses
1. American Century VP International	1.26	%		0.00	%		0.00	%		1.26	%
2. Baron Capital Asset (Insurance class)1*	1.00			0.25			0.25			1.50
3. Delaware VIP Global Bond (Standard class)2**	0.64			0.00			0.36			1.00
4. Delaware VIP Large Cap Value (formerly Premium Growth & Income) (Standard class)3**	0.60			0.00			0.08			0.68
5. Delaware VIP Trend (Standard class)4**	0.74			0.00			0.16			0.90
6. Janus Aspen Worldwide Growth (Institutional Shares)	0.65			0.00			0.04			0.69
7. Lincoln National Bond	0.42			0.00			0.11			0.53
8. Lincoln National Capital Appreciation	0.72			0.00			0.06			0.78
9. Lincoln National Equity-Income	0.73			0.00			0.07			0.80
10. Lincoln National Growth and Income	0.32			0.00			0.04			0.36
11. Lincoln National International	0.84			0.00			0.15			0.99
12. Lincoln National Managed	0.38			0.00			0.09			0.47
13. Lincoln National Money Market	0.45			0.00			0.09			0.54
14. Lincoln National Social Awareness	0.34			0.00			0.06			0.40
15. Lincoln National Special Opportunities	0.41			0.00			0.07			0.48
16. Neuberger Berman AMT Mid-Cap Growth	0.84			0.00			0.07			0.91
17. Neuberger Berman AMT Partners	0.82			0.00			0.05			0.87
18. Scudder VIT Equity 500 Index5*	0.20			0.00			0.10			0.30
19. Scudder VIT Small Cap Index5* (formerly Deutsche Asset Management )	0.35			0.00			0.10			0.45

* After waivers and/or reimbursements.

** The total expenses have been restated to reflect the waiver and/or reimbursement dated May 1, 2002 through April 30, 2003.

3

Voluntary fee reimbursements:

The following funds voluntarily waive expenses to the extent necessary to not exceed a maximum total expense ratio.

3 The investment advisor for the Delaware VIP Large Cap Value Series is Delaware Management Company (“DMC”). For the period May 1, 2001 through April 30, 2002, the advisor waived its management fee and/or reimbursed the Series for expenses to the extent that total expenses would not exceed 0.80%. Without such an arrangement, the total operating expense for the Series would have been 0.73% for the fiscal year 2001. Effective May 1, 2002 through April 30, 2003, DMC has contractually agreed to waive its management fee and/or reimburse the Series for expenses to the extent that total expenses will not exceed 0.80%. Under its Management Agreement, the Series pays a management fee based on average daily net assets as follows: 0.65% on the first $500 million, 0.60% on the next $500 million, 0.55% on the next $1,500 million, 0.50% on assets in excess of $2,500 million, all per year. DMC has voluntarily elected to waive its management fee for this Series to 0.60% indefinitely.

5 Under the Advisory Agreement with Deutsche Asset Management, Inc. (the “Advisor”), the fund will pay an advisory fee at an annual percentage rate of 0.20% of the average daily net assets of the Equity 500 Index Fund and 0.35% of the average daily net assets of the Small Cap Index Fund. These fees are accrued daily and paid monthly. The Advisor has voluntarily undertaken to waive its fee and to reimburse the funds for certain expenses so that the fund’s total operating expenses will not exceed 0.30% for the Equity 500 Index Fund and 0.45% for the Small Cap Index Fund. Without the reimbursement to the funds for the year ended December 31, 2001, total expenses would have been 0.31% for the Equity 500 Index Fund and 0.63% for the Small Cap Fund. These reimbursements will be terminated no earlier than December 31, 2002.

Contractual fee reimbursements:

The following Funds contractually waive the management fee to the extent necessary to not exceed a maximum total expense ratio.

1 The Adviser is contractually obligated to reduce its fee to the extent required to limit Baron Capital Asset Fund’s total operating expenses to 1.5% for the first $250 million of assets in the Fund, 1.35% for Fund assets over $250 million and 1.25% for Fund assets over $500 million. Without the expense limitations, total operating expenses for the Fund for the period January 1, 2001 through December 31, 2001 would have been 1.59%.

2 The investment advisor for the Delaware VIP Global Bond Series is Delaware International Advisers Ltd. (“DIAL”). For the period May 1, 2001 through April 30, 2002, the advisor waived its management fee and/or reimbursed the Series for expenses to the extent that total expenses would not exceed 0.85%. Without such an arrangement, the total operating expense for the Series would have been 1.11% for the fiscal year 2001. Effective May 1, 2002 through April 30, 2003, DIAL has contractually agreed to waive its management fee and/or reimburse the Series for expenses to the extent that total expenses will not exceed 1.00%. Under its Management Agreement, the Series pays a management fee based on average daily net assets as follows: 0.75% on the first $500 million, 0.70% on the next $500 million, 0.65% on the next $1,500 million, 0.60% on assets in excess of $2,500 million, all per year.

4 The investment advisor for the Delaware VIP Trend Series is Delaware Management Company (“DMC”). For the period May 1, 2001 through April 30, 2002, the advisor waived its management fee and/or reimbursed the Series for expenses to the extent that total expenses would not exceed 0.85%. Without such an arrangement, the total operating expense for the Series would have been 0.90% for the fiscal year 2001. Effective May 1, 2002 through April 30, 2003, DMC has contractually agreed to waive its management fee and/or reimburse the Series for expenses to the extent that total expenses will not exceed 0.95%. Under its Management Agreement, the Series pays a management fee based on average daily net assets as follows: 0.75% on the first $500 million, 0.70% on the next $500 million, 0.65% on the next $1,500 million, 0.60% on assets in excess of $2,500 million, all per year.

4

Examples

(reflecting expenses of the VAA and of the funds)

If you surrender your Contract at the end of the applicable time period, you would pay the following expenses on a $1,000 investment, assuming a 5% annual return:

	1 year		3 years		5 years		10 years
American Century VP International	$	49	$	68	$	98	$	213
Baron Capital Asset		52		75		110		238
Delaware VIP Global Bond		47		60		84		185
Delaware VIP Large Cap Value (formerly Delaware Premium Growth & Income)		44		50		68		149
Delaware VIP Trend		46		57		79		174
Janus Aspen Worldwide Growth		44		51		68		150
Lincoln National Bond		42		46		60		132
Lincoln National Capital Appreciation		45		53		73		160
Lincoln National Equity Income		45		54		74		162
Lincoln National Growth and Income		41		40		50		112
Lincoln National International		47		60		84		183
Lincoln National Managed		42		44		56		125
Lincoln National Money Market		42		46		60		133
Lincoln National Social Awareness		41		42		53		117
Lincoln National Special Opportunities		42		44		57		126
Neuberger Berman AMT Mid-Cap Growth		46		57		80		175
Neuberger Berman AMT Partners		46		56		78		170
Scudder VIT Equity 500 Index Fund (formerly Deutsche Asset Management)		40		38		47		105
Scudder VIT Small Cap Index Fund (formerly Deutsche Asset Management)		41		43		55		122

5

If you do not surrender your Contract, or if you annuitize, you would pay the following expenses on a $1,000 investment, assuming a 5% annual return:

	1 year		3 years		5 years		10 years
American Century VP International	$	18	$	57	$	98	$	213
Baron Capital Asset		21		64		110		238
Delaware VIP Global Bond		16		49		84		185
Delaware VIP Large Cap Value (formerly Delaware Premium Growth & Income)		13		39		68		149
Delaware VIP Trend		15		46		79		174
Janus Aspen Worldwide Growth		13		39		68		150
Lincoln National Bond		11		34		60		132
Lincoln National Capital Appreciation		14		42		73		160
Lincoln National Equity Income		14		43		74		162
Lincoln National Growth and Income		9		29		50		112
Lincoln National International		16		49		84		183
Lincoln National Managed		10		32		56		125
Lincoln National Money Market		11		35		60		133
Lincoln National Social Awareness		10		30		53		117
Lincoln National Special Opportunities		11		33		57		126
Neuberger Berman AMT Mid-Cap Growth		15		46		80		175
Neuberger Berman AMT Partners		14		45		78		170
Scudder VIT Equity 500 Index Fund (formerly Deutsche Assest Management)		9		27		47		105
Scudder VIT Small Cap Index Fund (formerly Deutsche Assest Management)		10		32		55		122

This table is provided to assist you in understanding the various costs and expenses that you will bear directly or indirectly. The table reflects expenses of the VAA as well as expenses of the underlying funds. For more complete descriptions of the various costs and expenses involved, see Charges and other deductions in this prospectus, and Management of the funds in the Appendix to the funds’ prospectuses. In addition, premium taxes may be applicable, although they do not appear in the table. Also, we reserve the right to impose a charge on transfers between Subaccounts, although we do not currently do so. The examples should not be considered a representation of past or future expenses. Actual expenses may be more or less than those shown.

6

Summary

What type of contract am I buying? It is an individual deferred variable annuity contract issued by Lincoln Life. See The contract. This prospectus provides a general description of the contract. Contracts may vary as required by states.

What is the variable annuity account (VAA)? It is a separate account established under Indiana insurance law, and registered with the SEC as a unit investment trust. The assets of the VAA are allocated to one or more Subaccounts, according to your investment choice. Those assets are not chargeable with liabilities arising out of any other business which Lincoln Life may conduct. See Variable annuity account.

What are my investment choices? Based upon your instructions, the VAA applies contributions to buy shares in one or more of the funds. See Investments of the VAA.

How does the contract work? During the accumulation period, while you are paying in, your Purchase Payments will buy Accumulation Units under the Contract. Should you decide to annuitize (that is, change your Contract to a payout mode rather than an accumulation mode), your Accumulation Units will be converted to Annuity Units. Your periodic Annuity Pay-out will be based upon the number of Annuity Units to which you became entitled at the time you decided to annuitize and the value of each unit on the Valuation Date. See The contracts.

What can I do through the internet service center? Almost every transaction can be accomplished through the Internet Service Center. Only in very rare cases will transactions bypass the Internet Service Center. Documents can be received, accounts can be monitored, funds moved from one Subaccount to another, addresses changed, Beneficiaries changed, funds withdrawn from the Contract, etc. As technology matures, the ease with which transactions can be performed through the Internet Service Center will improve. For security reasons, you may be issued a PIN or password. Also, for legal reasons, certain transactions, such as change of Beneficiary or withdrawal of funds from the Contract, will require the Contractowner to print or write a document, sign it, and mail or fax it to us.

What charges are associated with this contract? If you decide to withdraw Contract Value before your initial Purchase Payment has been in your Contract for a period of three years, you pay a surrender charge of anywhere from 1% to 3% of Contract Value, depending on how many Contract Years have elapsed. We waive the surrender charge in certain situations. See Surrender charges.

If your state assesses a premium tax with respect to your Contract, we will deduct those amounts from Purchase Payments or Contract Value at the time the tax is incurred (or at another time we choose).

Further, we apply an annual charge totaling .55% to the daily net asset value of the VAA. See Charges and other deductions.

Finally, each fund pays a management fee to its investment advisers based upon its average daily net asset value. Each fund also has additional operating expenses associated with the daily operation of the funds. See the Expense tables. These fees and expenses are more fully described in the prospectuses for the funds.

How much must I pay, and how often? In general, Purchase Payments are flexible, although some limitations on the amounts may apply. See The contract—Purchase payments.

How will my annuity payouts be calculated? If you decide to annuitize, you elect an Annuity Payout Option. Once you have done so, your periodic payout will be based upon a number of factors. One factor will be the changing values of the funds in which you have invested. Another factor will be your age at the Annuity Commencement Date. See Annuity payouts. REMEMBER THAT PARTICIPANTS IN THE VAA BENEFIT FROM ANY GAIN, AND TAKE A RISK OF ANY DROP, IN THE VALUE OF THE SECURITIES IN THE FUNDS.

What happens if I die before I annuitize? We will pay the Contract Value to your designated Beneficiary. Your Beneficiary will have certain options for how the money is to be paid out. See Death benefit before the annuity commencement date.

May I transfer contract value between funds? Yes, transfers are generally allowed before the Annuity Commencement Date. Transfers are limited to three times annually after the Annuity Commencement Date. See The contracts—Transfers between subaccounts on or before the annuity commencement date and transfers after the annuity commencement date.

May I surrender the contract or make a withdrawal? Yes, subject to Contract requirements. See Surrenders and withdrawals.

If you surrender the Contract or make a withdrawal, certain charges may be assessed, as discussed above and under Charges and other deductions. In addition, if you take a distribution before age 59¹/₂ the Internal Revenue Service (IRS) may assess a 10% premature withdrawal penalty tax. A surrender or a withdrawal may be subject to 10% withholding. See Federal tax status—Federal income tax withholding.

Do I get a free look at this contract? Yes. If within ten days (or a longer period if required by law) of the date you receive the signed Contract through the Internet Service Center, you cancel the Contract through the Internet Service Center or return it, postage prepaid to the servicing office of Lincoln Life, it will be canceled. During this period, your Purchase Payments will be invested in the Money Market Fund. See Return privilege.

7

Condensed financial information

Accumulation unit values

The following information relating to accumulation unit values and number of accumulation units for each of the 10 years in the period ended December 31, 2001 comes from the VAA’s financial statements. It should be read in conjunction with the VAA’s financial statements and notes which are all included in the SAI. The Contract was first available for sale on August 20, 1998.

	2001		2000		1999				1998
Amer Century VP Intl subaccount Accumulation unit value
· Beginning of period	$	1.283	$	1.551	$	1.000	*
· End of period	$	0.904	$	1.283	$	1.551	*	trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		98		109		2
Baron Capital Asset subaccount Accumulation unit value
· Beginning of period	$	1.286		$ 1.328	$	1.000	*
· End of period	$	1.437		$ 1.286	$	1.328	*	trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		62		49		29
Delaware VIP Global Bond subaccount Accumulation unit value
· Beginning of period	$	1.141	$	1.137	$	1.186			$	1.098	*
· End of period	$	1.129	$	1.141	$	1.137			$	1.186	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		4		2		2				2
Delaware VIP Large Cap Value subaccount Accumulation unit value
(formerly Delaware Prem Growth & Income)
· Beginning of period	$	1.723	$	1.556	$	1.613			$	1.501	*
· End of period	$	1.647	$	1.723	$	1.556			$	1.613	*	trading began
Number of accumulation units												in 1998
· End of period (000’s omitted)		10		8		6				4
Delaware VIP Trend subaccount Accumulation unit value
· Beginning of period	$	2.144	$	2.323	$	1.371			$	1.251	*
· End of period	$	1.805	$	2.144	$	2.323			$	1.371	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		90		113		28				3
Janus Aspen Worldwide Growth subaccount Accumulation unit value
· Beginning of period	$	1.290	$	1.540	$	1.000	*
· End of period	$	0.995	$	1.290	$	1.540	*	trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		285		318		240
Lincoln National Bond subaccount Accumulation unit value
· Beginning of period	$	5.340	$	4.843	$	5.034			$	4.845	*
· End of period	$	5.797	$	5.340	$	4.843			$	5.034	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		5		1		4				1	**
Lincoln National Capital Appreciation subaccount Accumulation unit value
· Beginning of period	$	3.120	$	3.729	$	2.578			$	2.171	*
· End of period	$	2.300	$	3.120	$	3.729			$	2.578	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		79		78		98				4
Lincoln National Equity-Income subaccount Accumulation unit value
· Beginning of period	$	2.794	$	2.540	$	2.403			$	2.224	*
· End of period	$	2.575	$	2.794	$	2.540			$	2.403	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		56		57		4				1
Lincoln National Growth and Income subaccount Accumulation unit value
· Beginning of period	$	12.093	$	13.456	$	11.512			$	10.320	*
· End of period	$	10.676	$	12.093	$	13.456			$	11.512	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		5		4		3				1	**

8

	2001		2000		1999				1998
Lincoln National International subaccount Accumulation unit value
· Beginning of period	$	2.061	$	2.070	$	1.776			$	1.699	*
· End of period	$	1.845	$	2.061	$	2.070			$	1.776	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		10		6		8				2
Lincoln National Managed subaccount Accumulation unit value
· Beginning of period	$	5.535	$	5.645	$	5.268			$	4.921	*
· End of period	$	5.416	$	5.535	$	5.645			$	5.268	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		4		5		5				1
Lincoln National Money Market subaccount Accumulation unit value
· Beginning of period	$	2.770	$	2.626	$	2.521			$	2.482	*
· End of period	$	2.866	$	2.770	$	2.626			$	2.521	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		615		139		75				131
Lincoln National Social Awareness subaccount Accumulation unit value
· Beginning of period	$	6.160	$	6.756	$	5.885			$	5.407	*
· End of period	$	5.542	$	6.160	$	6.756			$	5.885	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		8		9		8				2
Lincoln National Special Opportunities subaccount Accumulation unit value
· Beginning of period	$	9.576	$	8.298	$	8.736			$	8.224	*
· End of period	$	9.726	$	9.576	$	8.298			$	8.736	*	trading began
Number of accumulation units												in 1998.
· End of period (000’s omitted)		3		3		1				1	**
NeubergerBerman AMT Mid-Cap Growth subaccount Accumulation unit value
· Beginning of period	$	1.395	$	1.516	$	1.000	*
· End of period	$	1.046	$	1.395	$	1.516		trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		50		75		15
NeubergerBerman AMT Partners subaccount Accumulation unit value
· Beginning of period	$	1.050	$	1.048	$	1.000	*
· End of period	$	1.015	$	1.050	$	1.048	*	trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		8		7		3
Scudder VIT Equity 500 Index subaccount Accumulation unit value
(formerly Deutsche Asset Management)
· Beginning of period	$	1.040	$	1.152	$	1.000	*
· End of period	$	0.908	$	1.040	$	1.152	*	trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		28		37		15
Scudder VIT Small Cap Index subaccount Accumulation unit value
(formerly Deutsche Asset Management)
· Beginning of period	$	1.130	$	1.184	$	1.000	*
· End of period	$	1.147	$	1.130	$	1.184	*	trading began
Number of accumulation units								in 1999.
· End of period (000’s omitted)		170		156		155

  *These values do not reflect a full year’s experience because they are calculated for the period from the beginning of investment activity of the subaccounts, through December 31. These values reflect actual numbers for the eAnnuity only.

**Units below 500 rounded to 1,000.

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Investment results

At times, the VAA may compare its investment results to various unmanaged indices or other variable annuities in reports to shareholders, sales literature and advertisements. The results will be calculated on a total return basis for various periods, with or without surrender charges. Results calculated without surrender charges will be higher. Total returns include the reinvestment of all distributions, which are reflected in changes in Accumulation Unit value.

The money market subaccount’s yield is based upon investment performance over a 7-day period, which is then annualized.

During exteded periods of low interest rates, the yields of any subaccount investing in a money market fund may also become extremely low and possibly negative.

The money market yield figure and annual performance of the subaccounts are based on past performance and do not indicate or represent future performance.

For additional information about performance calculations, please refer to the SAI.

Financial statements

The financial statements of the VAA and the statutory-basis financial statements of Lincoln Life are located in the SAI. You can request a free copy of the SAI through our Internet Service Center or by a written request to our servicing office.

Lincoln National Life Insurance Co.

The Lincoln National Life Insurance Company (Lincoln Life), organized in 1905, is an Indiana stock insurance corporation, engaged primarily in the direct issuance of life insurance contracts and annuities. Lincoln Life is wholly owned by Lincoln National Corp. (LNC), a publicly held insurance and financial services holding company domiciled in Indiana.

Variable annuity account (VAA)

On June 3, 1981, Lincoln Life established the VAA as an insurance company separate account under Indiana law. The VAA is registered with the SEC as a unit investment trust under the provisions of the Investment Company Act of 1940 (1940 Act), but the SEC does not supervise the VAA or Lincoln Life.

The VAA is a segregated investment account. This means that by law its assets cannot be charged with li abilities resulting from any other business that we may conduct. All income, gains and losses, realized or not, from assets allocated to the VAA are credited to or charged against the VAA. They are credited or charged without regard to any other income, gains or losses of Lincoln Life. Lincoln Life is the issuer of the contracts and the obligations set forth in the contract other than those of the contractholder, are Lincoln Life’s.

We do not guarantee the investment performance of the VAA. Any investment gain or loss depends on the investment performance of the funds. You assume the full investment risk for all amounts placed in the VAA.

The VAA is used to support other annuity contracts offered by Lincoln Life in addition to the contract described in this prospectus.

Investments of the VAA

The VAA consists of several Subaccounts. A separate Subaccount corresponds to each fund. You decide the Subaccount(s) to which you allocate Purchase Payments. Shares of the funds will be sold at net asset value to the VAA in order to fund the Contract. Any transaction you make will take place at the next net asset values determined after the receipt of your transaction request. The funds are required to redeem their shares at net asset value upon our request.

A fund’s prospectus explains how the net asset value for that fund is calculated. You should read the funds’ prospectuses carefully before you invest in this Contract. We reserve the right to add, delete or substitute funds, subject to regulatory approval. All funds may not be available in all states.

Investment advisers

The investment advisers of the funds are:

American Century Variable Portfolios VP International is managed by American Century Investments.

Baron Capital Asset Fund is managed by BAMCO, Inc.

Delaware Group VIP Trust is managed by Delaware Management Company. The Global Bond Series is managed by Delaware International Advisers, Ltd.

Janus Aspen Series Worldwide Growth Fund is managed by Janus Capital Management LLC.

Lincoln National Bond Fund, Lincoln National Managed Fund and Lincoln National Money Market Fund are managed by Delaware Management Company.*

Lincoln National Capital Appreciation Fund is managed by Delaware Management Company* and sub-advised by Janus Capital Management LLC.

Lincoln National Equity Income Fund is managed by Delaware Management Company* and sub-advised by Fidelity Management Trust Co.

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Lincoln National Growth and Income Fund is managed by Delaware Management Company* and sub-advised by Goldman Sachs Asset Management. It is anticipated that the subadviser may change. If a change is made, you will be notified by supplement to the Lincoln National Growth & Income Fund prospectus.

Lincoln National International Fund is managed by Del-aware Management Company* and sub-advised by Delaware International Advisers, Ltd.

Lincoln National Social Awareness Fund and Lincoln National Special Opportunities Fund are managed by Delaware Management Company.**

Neuberger Berman Advisors Management Trust is managed by Neuberger Berman Management, Inc. and sub-advised by Neuberger Berman, LLC.

Scudder VIT Funds are managed by Bankers Trust  Company.

* Delaware Management Company is a series of Delaware Management Business Trust, a registered investment adviser. Prior to May 1, 2002, the Fund was advised by Delaware Lincoln Investment Advisers, which is another series of the Trust and part of the same investment advisory firm.

** Delaware Management Company is a series of Delaware Management Business Trust, a registered investment adviser. Prior to May 1, 2002, the fund was advised by Vantage Investment Advisers, which is another series of the Trust and part of the same investment advisory firm.

Additional information regarding the investment advisers to each of the funds may be found in the Prospectuses for the funds.

As compensation for their services to the fund, the investment advisers receive a fee from the fund, which is accrued daily and paid monthly. This fee is based on the net assets of each fund, as defined under the Purchase and Redemption of Shares, in the Prospectus for the fund.

With respect to a fund, the adviser and/or distributor, or an affiliate thereof, may compensate Lincoln Life (or an affiliate) for administrative, distribution, or other services. We also may receive 12b-1 fees from funds. Some funds may compensate us more than other funds. It is anticipated that such compensation will be based on assets of the particular fund attributable to the contracts along with certain other variable contracts issued or administered by Lincoln Life (or an affiliate).

Descriptions of the Funds

Certain funds offered as part of this contract have similar investment objectives and policies to other portfolios managed by the adviser. The investment results of the funds, however, may be higher or lower than the other portfolios that are managed by the adviser. There can be no assurance, and no representation is made, that the investment results of any of the funds will be comparable to the investment results of any other portfolio managed by the adviser.

Following are brief summaries of the investment objectives and policies of the funds. There is more detailed information in the current prospectuses for the funds.

Each Fund may be subject to certain investment policies and restrictions which may not be changed without a majority vote of shareholders in that Fund.

These definitions are very general. The precise legal definitions for these terms are contained in the Investment Company Act of 1940. You should read each fund prospectus carefully before investing. Please be advised that there is no assurance that any of the funds will achieve its stated objectives.

  1. American Century VP International—The fund seeks capital growth, by investing primarily in an internationally diversified portfolio of common stocks that are considered by management to have prospects for appreciation. The fund will invest primarily in securities of issuers located in developed markets.

  2. Baron Capital Asset Fund—The fund seeks to purchase stocks, judged by the advisor, to have the potential of increasing their value at least 50% over two subsequent years, although that goal may not be achieved.

  3. Delaware VIP Global Bond Series—The fund seeks current income consistent with preservation of principal. Under normal circumstances, the Series will invest at least 80% of its net assets in debt obligations. The Series will invest in issuers located throughout the world.

  4. Delaware VIP Large Cap Value Series (formerly Delaware Premium Growth & Income Series)—The fund seeks capital appreciation with current income as a secondary objective. Under normal circumstances, at least 80% of the Series’ net assets will be in investments of large cap companies. Management considers buying a stock when they believe it is undervalued and has the potential to increase in price as the market realizes its true value.

  5. Delaware VIP Trend Series—The fund seeks long-term capital appreciation by investing primarily in stocks of small growth oriented or emerging companies that, in the management team’s view, are responsive to changes within the marketplace and have the fundamental characteristics to support continued growth.

  6. Janus Aspen Worldwide Growth Fund—The fund seeks long-term growth of capital in a manner consistent with preservation of capital by investing primarily in common stocks of companies of any size throughout the world. The portfolio normally invests in issuers from at least five different countries, including the United States. The portfolio may at times invest in fewer than five countries or even a single country.

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  7. Lincoln National Bond Fund—The fund seeks maximum current income consistent with prudent investment strategy. The fund invests primarily in medium-and long-term corporate and government bonds.

  8. Lincoln National Capital Appreciation Fund—The fund seeks long-term growth of capital in a manner consistent with preservation of capital. The fund primarily buys stock in companies of all sizes that are competing well and with products or services are in high demand. It may also buy some money market securities and bonds, including high risk (junk) bonds.

  9. Lincoln National Equity-Income Fund—The fund seeks reasonable income by investing primarily in income-producing equity securities. The fund invests mostly in high-income stocks and some high-yielding bonds (including junk bonds).

10. Lincoln National Growth and Income Fund—The fund seeks long-term capital appreciation. Dividend income is a secondary consideration. The fund seeks this objective through a broadly diversified portfolio of equity securities of large-cap U.S. companies that are expected to have better prospects for earnings growth than the growth rate of the general domestic economy.

11. Lincoln National International Fund—The fund seeks long-term capital appreciation. The fund trades in securities issued outside the United States—mostly stocks, with an occasional bond or money market security.

12. Lincoln National Managed Fund—The fund seeks maximum long-term total return (capital gains plus income) consistent with prudent investment strategy. The fund invests in a mix of stocks, bonds, and money market securities.

13. Lincoln National Money Market Fund—The fund seeks maximum current income consistent with the preservation of capital. The fund invests in high quality short-term obligations issued by U.S. corporations, the U.S. Government, and federally-chartered banks and U.S. branches of foreign banks.

14. Lincoln National Social Awareness Fund—The fund seeks long-term capital appreciation. The fund buys stocks of established companies which adhere to certain specific social responsibility criteria.

15. Lincoln National Special Opportunities Fund—The fund seeks maximum capital appreciation. The fund primarily invests in mid-size companies whose stocks have significant growth potential. Current income is a secondary consideration.

16. Neuberger Berman AMT Mid-Cap Growth Fund—The fund seeks growth of capital by investing primarily in common stocks of mid-capitalization companies, using a growth-oriented investment approach.

17. Neuberger Berman AMT Partners Fund—The fund seeks capital growth by investing mainly in common stocks of mid-to large capitalization established companies using the value-oriented investment approach.

18. Scudder VIT Equity 500 Index Fund—The fund seeks to replicate, as closely as possible, before expenses, the performance of the Standard & Poor’s 500 Composite Stock Price Index (S&P 500 Index), which emphasizes stocks of large US companies.

19. Scudder VIT Small Cap Index Fund—The fund seeks to match, as closely as possible, before expenses, the performance of the Russell 2000 Small Stock Index (the Russell 2000 Index), which emphasizes stocks of small US companies.

Fund shares

We will purchase shares of the funds at net asset value and direct them to the appropriate subaccounts of the VAA. We will redeem sufficient shares of the appropriate funds to pay annuity payouts, death benefits, surrender/ withdrawal proceeds or for other purposes described in the contract. If you want to transfer all or part of your investment from one subaccount to another, we may redeem shares held in the first and purchase shares of the other. Redeemed shares are retired, but they may be reissued later.

When a fund sells any of its shares both to variable annuity and to variable life insurance separate accounts, it is said to engage in mixed funding. When a fund sells any of its shares to separate accounts of unaffiliated life insurance companies, it is said to engage in shared funding.

The funds currently engage in mixed and shared funding. Therefore, due to differences in redemption rates or tax treatment, or other considerations, the interest of various contractowners participating in a fund could conflict. Each of the fund’s Board of Directors will monitor for the existence of any material conflicts, and determine what action, if any, should be taken. See the Prospectuses for the funds.

Shares of the funds are not sold directly to the general public. They are sold to Lincoln Life, and may be sold to other insurance companies, for investment of the assets of the subaccounts established by those insurance companies to fund variable annuity and variable life insurance contracts.

Reinvestment of dividends and capital gain distributions

All dividend and capital gain distributions of the funds are automatically reinvested in shares of the distributing funds at their net asset value on the date of distribution. Dividends are not paid out to Contractowners as additional Accumulation Units or Annuity Units, but are reflected in changes in unit values.

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Addition, deletion or substitution of investments

We reserve the right, within the law, to add, delete and substitute funds with the VAA. We may also add, delete, or substitute funds only for certain classes of contractowners. New or substitute funds may have different fees and expenses, and may only be offered to certain classes of contractowners.

Substitutions may be made with respect to existing investment or the investment of future purchase payments, or both. We may close subaccounts to allocations of purchase payments at any time in our sole discretion. The funds, which sell their shares to the subaccounts pursuant to participation agreements, also may terminate these agreements and discontinue offering their shares to the subaccounts.

Substitutions might also occur if shares of a fund should no longer be available, or if investment in any fund’s shares should become inappropriate, in the judgment of our management, for the purposes of the contract, or for any other reason in our sole discretion. We will not substitute shares of one fund for another without any necessary approval by the SEC. We will also provide you advance notice.

Charges and other deductions

We will deduct the charges described below to cover our costs and expenses of providing administrative and distribution services and for assuming certain risks under the Contract. The amount of a charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge. For example, the Surrender Charge collected may not fully cover all of the sales and distribution expenses actually incurred by us. Any remaining expenses will be paid from our general account which may consist, among other things, of proceeds derived from mortality and expense risk charges deducted from the account.

We may pay commissions to broker-dealers as a percentage of Purchase Payments. Commission payments will not result in increased charges and other expenses, and thus will not affect your Contract Value.

We may profit from one or more of the fees and charges deducted under the contract. We may use these profits for any corporate purpose, including financing distribution of the contracts.

Deductions from the VAA

We deduct from the VAA an amount, computed daily, which is equal to an annual rate of 0.55% of the daily net asset value. This is our annuity asset charge. The charge compensates us for administrative expenses we incur and for mortality and expense risks we assume. Our administrative expenses include, but are not limited to, bookkeeping costs, the cost of maintaining our Internet Service Center, and the costs associated with sales of the VAA. We assume the risk that annuitants as a class may live longer than expected (mortality risk), and that expenses may be higher than the deductions for those expenses (expense risk). In either case, the loss will fall on us. Conversely, if such deductions exceed our actual expenses, the excess will be profit to us.

Surrender charge

The Surrender Charge percentage applies (except as described below) to surrenders or withdrawals according to the following schedule:

	Contract Year
	1	2	3	4 or more
Surrender Charge as  % of Contract Value Withdrawn	3%	2%	1%	0%

In the case of a withdrawal, the Surrender Charge will be deducted from the remaining Contract Value and will itself be subject to a Surrender Charge.

A Surrender Charge does not apply to:

1. A surrender or withdrawal after the initial payment has been invested at least three full years.

2. Annuitization of the Contract by electing an Annuity Payout Option available within the Contract.

3. A surrender of the Contract as a result of the death of the Contractowner; or in the case of joint Contractowners, the death of one of the Contractowners. The Surrender Charges are not waived as a result of the death of an Annuitant who is not the Contractowner.

If a non-natural person (for example, a corporation) is the Contractowner, the Annuitant will be considered the Contractowner for purposes of (3) above.

Deductions for premium taxes

Any premium tax or other tax levied by any governmental entity as a result of the existence of the Contracts or the VAA will be deducted from the Contract Value when incurred, or at another time of our choosing.

The applicable premium tax rates that states and other governmental entities impose on the purchase of an annuity are subject to change by legislation, by administrative interpretation or by judicial action. These premium taxes will vary, depending upon the law of your state of residence. In those states which tax these premiums, the tax generally ranges from zero to 5.0%.

Other charges and deductions

There are deductions from and expenses paid out of the assets of the underlying funds that are more fully described in the prospectuses for the funds. Among these deductions and expenses are 12b-1 fees which reimburse Lincoln Life for certain expenses incurred in connection with certain administrative and distribution support services provided to the funds.

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Additional information

The Surrender Charges described previously may be reduced or eliminated for any particular Contract. However, these charges will be reduced only to the extent that we anticipate lower distribution and/or administrative expenses, or that we perform fewer sales or administrative services than those originally contemplated in establishing the level of those charges. Lower distribution and administrative expenses may be the result of economies associated with: (1) the Internet Service Center; (2) the use of mass enrollment procedures; (3) the performance of administrative or sales functions by the employer; (4) the use by an employer of automated techniques in submitting deposits or information related to deposits on behalf of its employees; or (5) any other circumstances which reduce distribution or administrative expenses. The exact amount of Surrender Charges applicable to a particular Contract will be stated in that Contract.

The contract

Purchase of contract

If you wish to purchase the Contract, you must apply for it through the Internet Service Center. When we receive the completed application, we decide whether to accept or reject it. If the application is accepted, the Contract is prepared and executed by our legally authorized officers. The Contract is then sent to you through the Internet Service Center. See Distribution of the contracts.

Once a completed application and all other information necessary for processing a purchase order are received, the initial Purchase Payment will be invested in the VAA no later than two business days after we receive the order. While attempting to finish an incomplete application, we may hold the initial Purchase Payment for no more than five business days. If an incomplete application cannot be completed within those five days, you will be informed of the reasons, and the Purchase Payment will be returned immediately (unless you specifically authorize us to keep it until the application is complete). Once the application is complete, the initial Purchase Payment must be invested in the VAA within two business days.

Purchase Payments can be mailed to: Lincoln National Life Insurance Company, P.O. Box 62120, Baltimore, MD 21264-2120.

Who can invest

To apply for the Contract, you must be of legal age—but no older than age 85—in a state where the Contracts may be lawfully sold and also be eligible to participate in any of the qualified or nonqualified plans for which the Contracts are designed.

If you are purchasing the contract through a tax-favored arrangement, including traditional IRAs and Roth IRAs, you should carefully consider the costs and benefits of the contract (including annuity income benefits) before purchasing the contract, since the tax-favored arrangement itself provides tax-sheltered growth.

Replacement of existing insurance

Careful consideration should be given prior to surrendering or withdrawing money from an existing insurance contract. Surrender charges may be imposed on your existing contract and/or a new surrender charge period may be imposed with the purchase of or transfer into a new contract. An investment representative or tax adviser should be consulted prior to making an exchange. Cash surrenders from an existing contract may be subject to tax.

Purchase payments

The minimum initial Purchase Payment is $1,000. Subsequent Purchase payments to the Contract must be at least $100. Lincoln Life reserves the right to limit the sum of Purchase Payments made under this Contract to $5,000,000. Payments may be made or, if stopped, resumed at any time until the Annuity Commencement Date, the surrender of the Contract, the maturity date or the death of the Contractowner (or joint Con-tractowner, if applicable), whichever comes first.

Valuation date

Accumulation Units and Annuity Units will be valued once daily at the close of trading (normally, 4:00 p.m. New York time) on each day the New York Stock Exchange is open (Valuation Date). On any date other than a Valuation Date, the Accumulation Unit value and the Annuity Unit value will not change.

Allocation of purchase payments

Purchase Payments are placed into the VAA’s Subac-counts. Following your allocation instructions, each VAA Subaccount invests in shares of the corresponding funds.

Upon allocation to the appropriate Subaccount, Purchase Payments are converted into Accumulation Units. The number of Accumulation Units credited is determined by dividing the amount allocated to each Subac-count by the value of an Accumulation Unit for that Subaccount on the Valuation Date on which the Purchase Payment is received at our servicing office, if received before 4:00 p.m. New York time. If the Purchase Payment is received at or after 4:00 p.m. New York time, we will use the Accumulation Unit value computed on the next Valuation Date. The number of Accumulation Units determined in this way is not changed by any subsequent change in the value of an Accumulation Unit. However, the dollar value of an Accumulation Unit will vary depending not only upon how well the underlying fund’s investments perform, but also upon the expenses of the VAA and the underlying funds.

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Valuation of accumulation units

The Contract Value at any time prior to the Annuity Commencement Date equals the sum of the values of the Accumulation Units credited in the Subaccounts under the Contract.

The value of a Subaccount on any Valuation Date is the number of Accumulation Units in the Subaccount multiplied by the value of an Accumulation Unit in the Subaccount at the end of the Valuation Period.

Accumulation Units for each Subaccount are valued separately. Initially, the value of an Accumulation Unit was arbitrarily established at the inception of the Subaccount. It may increase or decrease from Valuation

Period to Valuation Period. Accumulation unit values are affected by investment performance of the funds, expenses, and deduction of certain charges. The Accumulation Unit value for a Subaccount for any later Valuation Period is determined as follows:

1. The total value of fund shares held in the Subaccount is calculated by multiplying the number of fund shares owned by the Subaccount at the beginning of the Valuation Period by the net asset value per share of the fund at the end of the Valuation Period, and adding any dividend or other distribution of the fund if an ex-dividend date occurs during the Valuation Period; minus

2. The liabilities of the Subaccount at the end of the Valuation Period (such liabilities include daily charges imposed on the Subaccount, and may include a charge or credit with respect to any taxes paid or reserved for by Lincoln Life that Lincoln Life determines are as a result of the operations from the Variable Account); the result divided by

3. The outstanding number of Accumulation Units in the Subaccount at the beginning of the Valuation Period.

The daily charges imposed on a Subaccount for any Valuation Period represent the annuity asset charge adjusted for the number of calendar days in the Valuation Period. On an annual basis the annuity asset charge will not exceed 0.55%. The Accumulation Unit value and Annuity Unit value may increase or decrease the dollar value of benefits under the Contract. The dollar value of benefits will not be adversely affected by expenses incurred by Lincoln Life.

Transfers between subaccounts on or before the annuity commencement date

You may transfer all or a portion of your investment from one Subaccount to another. A transfer involves the surrender of Accumulation Units in one Subaccount and the purchase of Accumulation Units in another Subac-count. A transfer will be done using the respective Accumulation Unit values determined at the end of the Valuation Date on which the transfer request is received. Currently, there is no charge for a transfer. However, we reserve the right to impose a charge in the future for transfers.

A transfer may be made through our Internet Service Center or by writing to our servicing office. In order to prevent unauthorized or fraudulent Internet transfers, we may require Contractowners to provide certain identifying information before we will act upon their instructions. We may also assign the Contractowner a password to serve as identification. We will not be liable for following instructions we reasonably believe are genuine. Confirmation of all transfer requests will be mailed electronically to the Contractowner on the next

Valuation Date. Internet transfers will be processed on the Valuation Date that they are received when they are received at our Internet Service Center before 4 p.m. EST.

We reserve the right to refuse a transfer if, in the investment advisor’s judgement, we would be unable to invest effectively according to the Fund’s investment objectives as a result of such a transfer. We reserve the right to revise the transfer privilege at any time.

When thinking about a transfer of Contract Value, you should consider the inherent risk involved. Frequent transfers based on short-term expectations may increase the risk that a transfer will be made at an inopportune time. This contract is NOT designed for professional market timing organizations or other entities using programmed and frequent transfers. Repeated patterns of frequent transfers are disruptive to the operation of the subaccounts and should Lincoln Life become aware of such disruptive practices, Lincoln Life may refuse to permit such transfers.

Transfers after the annuity commencement date

You may transfer all or a portion of your investment in one Subaccount to another Subaccount. Those transfers will be limited to three times per Contract Year. Currently, there is no charge for these transfers. However, we reserve the right to impose a charge in the future for transfers.

Death benefit before the annuity commencement date

You may designate a Beneficiary during your lifetime and, unless prohibited by a previous designation, change the Beneficiary by filing a written request with our servicing office, or through our Internet Service Center. Each change of Beneficiary revokes any previous designation.

If there is a single Contractowner and the Con-tractowner dies before the Annuity Commencement Date, the Death Benefit paid to the designated Beneficiary will be the Contract Value as of the day on which Lincoln Life approves the payment of the claim.

The value of the Death Benefit will be determined as of the date on which the death claim is approved for payment. This approval will be granted upon receipt of: (1) proof, satisfactory to us, of the death of the owner; (2) written authorization for payment; and (3) our receipt of all required claim forms, fully completed.

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If a lump sum settlement is requested, the proceeds will be paid within seven days of receipt of satisfactory claim documentation as discussed previously. Contract proceeds from the VAA will be paid within seven days as stated previously, except (i) when the NYSE is closed (except weekends and holidays); (ii) at times when market trading is restricted or the SEC declares an emergency, and we cannot value units or the funds cannot redeem shares; or (iii) when the SEC so orders to 16 protect contract owners. This payment may be postponed as permitted by the 1940 Act.

Payment will be made in accordance with applicable laws and regulations governing payment of Death Benefits. All payments must satisfy the requirements of Internal Revenue Code of 1986, as amended, (Code) section 72(s) or 401(a)(9) as applicable, as amended from time to time. Death benefits are taxable. See Federal tax matters—Taxation of Death Benefits.

Unless otherwise provided in the Beneficiary designation, one of the following procedures will take place on the death of a Beneficiary:

1. If any Beneficiary dies before the Contractowner, that Beneficiary’s interest will go to any other Beneficiaries named, according to their respective interests; and/or

2. If no Beneficiary survives the Contractowner, the proceeds will be paid to the Contractowner’s estate.

The Death Benefit payable to the Beneficiary must be distributed within five years of the Contractowner’s date of death unless the Beneficiary begins receiving within one year of the Contractowner’s death substantially equal installments over a period not extending beyond the Beneficiary’s life expectancy.

If the Beneficiary is the spouse of the Contractowner, then the spouse may elect to continue the Contract as Contractowner. If the Contractowner is a corporation or other non-individual (non-natural person), the death of the Annuitant will be treated as death of the Con-tractowner and the above distribution rules apply.

If there are joint Contractowners, upon the death of the first joint Contractowner, the surviving joint Con- tractowner will receive the Death Benefit. The surviving joint Contractowner will be treated as the primary, designated Beneficiary. Any other Beneficiary designation on record at the time of death will be treated as a contingent Beneficiary.

If the surviving joint Contractowner, as spouse of the deceased joint Contractowner, continues the Contract as the sole owner in lieu of receiving the Death Benefit, then the designated Beneficiary(s) will receive the Death Benefit upon the death of the surviving spouse.

Joint ownership

If a joint Contractowner is named in the application, the joint Contractowners shall be treated as having equal undivided interests in the Contract. Either Contractowner, independently of the other, may exercise any ownership rights in this Contract. Only spouses may be joint Contractowners.

Death of annuitant

If the Annuitant is also the Contractowner or a joint Contractowner, then the Death Benefit will be subject to the provisions of this Contract regarding death of the Contractowner. If the surviving spouse assumes the Contract, the contingent Annuitant becomes the Annuitant. If no contingent Annuitant is named, the surviving spouse becomes the Annuitant.

If an Annuitant who is not the Contractowner or joint Contractowner dies, then the contingent Annuitant, if any, becomes the Annuitant. If no contingent Annuitant is named, the Contractowner (or joint owner if younger) becomes the Annuitant.

Surrenders and withdrawals

Before the Annuity Commencement Date, we will allow the surrender of the Contract or a withdrawal of the Contract Value upon your written request or through our Internet Service Center, subject to the rules discussed below. None of the current annuitization options allow surrender or withdrawal rights after the Annuity Commencement Date.

The Contract Value available upon surrender/withdrawal is the cash surrender value (Contract Value less any applicable Surrender Charge) at the end of the Valuation Period during which the request for surrender/ withdrawal is received at the servicing office or Internet Service Center. Unless a request for withdrawal specifies otherwise, withdrawals will be made from all Subac-counts within the VAA in the same proportion that the amount of withdrawal bears to the total Contract Value. The minimum amount which can be withdrawn is $300, and the remaining Contract Value must be at least $1000. Unless prohibited, surrender/withdrawal payments will be mailed or electronically transferred within seven days after we receive a valid request at the servicing office or through the Internet Service Center. The payment may be postponed as permitted by the Investment Company Act of 1940.

There may be charges associated with surrender of the Contract or withdrawal of Contract Value. These charges are deducted from the amount you request to be withdrawn. See Charges and Other Deductions.

The tax consequences of a surrender or withdrawal are discussed in the section Federal Tax Status of this prospectus.

We reserve the right to terminate the Contract, if your Contract fails to meet minimum Contract Value or payment frequencies as set forth in your state’s nonforfeit-ure law for individual deferred annuities.

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Amendment of contract

We reserve the right to amend the Contract to meet the requirements of the 1940 Act or other applicable federal or state laws or regulations. You will be notified of any changes, modifications or waivers.

Ownership

As Contractowner, you have all rights under the Contract. According to Indiana law, the assets of the VAA are held for the exclusive benefit of all Contractowners and their designated Beneficiaries. The assets of the VAA are not chargeable with liabilities arising from any other business that we may conduct. IRAs may not be assigned or transferred except as permitted by a domestic relations order and upon written notification to us. We assume no responsibility for the validity or effect of any assignment. Consult your tax advisor about the tax consequences of an assignment.

Contractowner questions

The obligations to purchasers under the Contracts are those of Lincoln Life. This prospectus provides a general description of the contract. Contracts may vary as required by states. Questions about your Contract should be directed to us by e-mail to our Internet Service Center or in writing to our servicing office.

Annuity payouts

You may select any Annuity Commencement Date permitted by law provided that the Annuity Commencement Date occurs before the Annuitant’s (or the elder of the joint Annuitants’) 85th birthday. You may select one of the forms of payout of annuities available under the Contract (described below). Annuity payments to you under any of the Annuity Payout Options are made on a monthly basis and may vary in amount.

Annuity options

Life annuity.    This option offers a periodic payout during the lifetime of the Annuitant and ends with the last payout before the death of the Annuitant. This option offers the highest periodic payout since there is no guarantee of a minimum number of payouts or provision for a Death Benefit for Beneficiaries. HOWEVER, THERE IS THE RISK UNDER THIS OPTION THAT THE RECIPIENT WOULD RECEIVE NO PAYOUTS IF THE ANNUITANT DIES BEFORE THE DATE SET FOR THE FIRST PAYOUT; ONLY ONE PAYOUT IF DEATH OCCURS BEFORE THE SECOND SCHEDULED PAYOUT, AND SO ON.

Life Annuity with Guaranteed Period.    This option guarantees periodic payouts during a guaranteed period, usually 10 or 20 years, and then continues throughout the lifetime of the Annuitant. The guaranteed period is selected by the Contractowner.

Joint Life Annuity.    This option offers a periodic pay-out during the joint lifetime of the Annuitant and a designated joint Annuitant. The payouts continue during the lifetime of the survivor.

Joint Life Annuity with Guaranteed Period.    This option guarantees periodic payouts during a guaranteed period, usually 10 or 20 years, and continues during the joint lifetime of the Annuitant and a designated joint Annuitant. The payouts continue during the lifetime of the survivor. The guaranteed period is selected by the Contractowner.

General information

None of the options listed above currently provide withdrawal features permitting the Contractowner to withdraw commuted values as a lump sum payment. We may make available other options, with or without withdrawal features. Options are only available to the extent they are consistent with the requirements of the Contract as well as Sections 72(s) and 401(a)(9) of the Code, if applicable. The annuity asset charge will be assessed on all variable Annuity Payouts, including options that may be offered that do not have a life contingency and therefore no mortality risk.

The Annuity Commencement Date is usually on or before the Annuitant’s 85th birthday. You may change the Annuity Commencement Date or change the Annuity Payout Option up to the scheduled Annuity Commencement Date, through our Internet Service Center or by written notice to the servicing office. You must give us at least 14 days notice before the date on which you want payouts to begin. If proceeds become available to a Beneficiary in a lump sum, the Beneficiary may choose any Annuity Payout Option.

Unless you select another option, the Contract automatically provides for a life annuity with Annuity Payouts guaranteed for 10 years (on a variable basis, in proportion to the Subaccount allocations at the time of annuitization) except when a joint life payout is required by law. Under any option providing for payouts for a guaranteed period, the number of payouts which remain unpaid at the date of the Annuitant’s death (or surviving Annuitant’s death in case of joint life annuity) will be paid to the Contractowner if living, otherwise to your Beneficiary as payouts become due.

Variable annuity payouts

Variable Annuity Payouts will be determined using:

1. The Contract Value on the Annuity Commencement Date;

2. The annuity tables contained in the Contract;

3. The Annuity Payout Option selected; and

4. The investment performance of the funds selected.

We determine the amount of Annuity Payouts by:

1. Determining the dollar amount of the first periodic payout; then

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2. Crediting the Contract with a fixed number of Annuity Units equal to the first periodic payout divided by the Annuity Unit value; and

3. Calculating the value of the Annuity Units each period thereafter.

We assume an investment return of 5% per year, as applied to the applicable mortality table. The amount of each payout after the initial payout will depend upon how the underlying funds perform, relative to the 5% assumed rate. The SAI contains a more complete explanation of this calculation.

Federal tax matters

Introduction

The Federal income tax treatment of the contract is complex and sometimes uncertain. The Federal income tax rules may vary with your particular circumstances. This discussion does not include all the Federal income tax rules that may affect you and your contract. This discussion also does not address other Federal tax consequences (including consequences of sales to foreign individuals or entities), or state or local tax consequences, associated with the contract. As a result, you should always consult a tax adviser about the application of tax rules to your individual situation.

Nonqualified annuities

This part of the discussion describes some of the Federal income tax rules applicable to nonqualified annuities. A nonqualified annuity is a contract not issued in connection with a qualified retirement plan, such as an IRA or a section 403(b) plan, receiving special tax treatment under the tax code. We may not offer nonqualified annuities for all of our annuity products.

Tax deferral on earnings

The Federal income tax law generally does not tax any increase in your contract value until you receive a contract distribution. However, for this general rule to apply, certain requirements must be satisfied:

• An individual must own the contract (or the tax law must treat the contract as owned by an individual).

• The investments of the VAA must be “adequately diversified” in accordance with IRS regulations.

• Your right to choose particular investments for a contract must be limited.

• The annuity commencement date must not occur near the end of the annuitant’s life expectancy.

Contracts not owned by an individual

If a contract is owned by an entity (rather than an individual) the tax code generally does not treat it as an annuity contract for Federal income tax purposes. This means that the entity owning the contract pays tax currently on the excess of the contract value over the pur chase payments for the contract. Examples of contracts where the owner pays current tax on the contract’s earnings, bonus credits and persistency credits are contracts issued to a corporation or a trust. Exceptions to this rule exist. For example, the tax code treats a contract as owned by an individual if the named owner is a trust or other entity that holds the contract as an agent for an individual. However, this exception does not apply in the case of any employer that owns a contract to provide deferred compensation for its employees.

Investments in the VAA must be diversified

For a contract to be treated as an annuity for Federal income tax purposes, the investments of the VAA must be “adequately diversified.” IRS regulations define standards for determining whether the investments of the VAA are adequately diversified. If the VAA fails to comply with these diversification standards, you could be required to pay tax currently on the excess of the contract value over the contract purchase payments. Although we do not control the investments of the underlying investment options, we expect that the underlying investment options will comply with the IRS regulations so that the VAA will be considered “adequately diversified.”

Restrictions

Federal income tax law limits your right to choose particular investments for the contract. Because the IRS. has not issued guidance specifying those limits, the limits are uncertain and your right to allocate contract values among the subaccounts may exceed those limits. If so, you would be treated as the owner of the assets of the VAA and thus subject to current taxation on the income, bonus credits, persistency credits and gains from those assets. We do not know what limits may be set by the IRS. in any guidance that it may issue and whether any such limits will apply to existing contracts. We reserve the right to modify the contract without your consent to try to prevent the tax law from considering you as the owner of the assets of the VAA.

Loss of interest deduction

After June 8, 1997, if a contract is issued to a taxpayer that is not an individual, or if a contract is held for the benefit of an entity, the entity will lose a portion of its deduction for otherwise deductible interest expenses.

Age at which annuity payouts begin

Federal income tax rules do not expressly identify a particular age by which annuity payouts must begin. However, those rules do require that an annuity contract provide for amortization, through annuity payouts, of the contract’s purchase payments, bonus credits, persistency credits and earnings. If annuity payouts under the contract begin or are scheduled to begin on a date past the annuitant’s 85th birthday, it is possible that the tax law will not treat the contract as an annuity for Federal

18

income tax purposes. In that event, you would be currently taxed on the excess of the contract value over the purchase payments of the contract.

Tax treatment of payments

We make no guarantees regarding the tax treatment of any contract or of any transaction involving a contract. However, the rest of this discussion assumes that your contract will be treated as an annuity for Federal income tax purposes and that the tax law will not tax any increase in your contract value until there is a distribution from your contract.

Taxation of withdrawals and surrenders

You will pay tax on withdrawals to the extent your contract value exceeds your purchase payments in the contract. This income (and all other income from your contract) is considered ordinary income (and does not receive capital gains treatment). A higher rate of tax is paid on ordinary income than on capital gains. You will pay tax on a surrender to the extent the amount you receive exceeds your purchase payments. In certain circumstances, your purchase payments are reduced by amounts received from your contract that were not included in income.

Taxation of annuity payouts

The tax code imposes tax on a portion of each annuity payout (at ordinary income tax rates) and treats a portion as a nontaxable return of your purchase payments in the contract. We will notify you annually of the taxable amount of your annuity payout. Once you have recovered the total amount of the purchase payment in the contract, you will pay tax on the full amount of your annuity payouts. If annuity payouts end because of the annuitant’s death and before the total amount in the contract have been distributed, the amount not received will generally be deductible. If you choose the levelized payout option under the I-4Life^® Solution, the tax law may treat you as being in receipt of additional amounts of income and tax the additional amounts.

Taxation of death benefits

We may distribute amounts from your contract because of the death of a contractowner or an annuitant. The tax treatment of these amounts depends on whether you or the annuitant dies before or after the annuity commencement date.

• Death prior to the annuity commencement date—

• If the beneficiary receives death benefits under an annuity payout option, they are taxed in the same manner as annuity payouts.

If the beneficiary does not receive death benefits under an annuity payout option, they are taxed in the same manner as a withdrawal.

• Death after the annuity commencement date—

• If death benefits are received in accordance with the existing annuity payout option, they are excludible from income if they do not exceed the purchase payments not yet distributed from the contract. All annuity payouts in excess of the purchase payments not previously received are includible in income.

• If death benefits are received in a lump sum, the tax law imposes tax on the amount of death benefits which exceeds the amount of purchase payments not previously received.

Penalty taxes payable on withdrawals, surrenders, or annuity payouts

The tax code may impose a 10% penalty tax on any distribution from your contract which you must include in your gross income. The 10% penalty tax does not apply if one of several exceptions exists. These exceptions include withdrawals, surrenders, or annuity payouts that:

• you receive on or after you reach age 59½,

• you receive because you became disabled (as defined in the tax law),

• a beneficiary receives on or after your death, or

• you receive as a series of substantially equal periodic payments for your life (or life expectancy).

Special rules if you own more than one annuity contract

In certain circumstances, you must combine some or all of the nonqualified annuity contracts you own in order to determine the amount of an annuity payout, a surrender, or a withdrawal that you must include in income. For example, if you purchase two or more deferred annuity contracts from the same life insurance company (or its affiliates) during any calendar year, the tax code treats all such contracts as one contract. Treating two or more contracts as one contract could affect the amount of a surrender, a withdrawal or an annuity payout that you must include in income and the amount that might be subject to the penalty tax described previously.

Loans and assignments

Except for certain qualified contracts, the tax code treats any amount received as a loan under your contract, and any assignment or pledge (or agreement to assign or pledge) any portion of your contract value, as a withdrawal of such amount or portion.

Gifting a contract

If you transfer ownership of your contract to a person other than your spouse (or to your former spouse incident to divorce), and receive a payment less than your contract’s value, you will pay tax on your contract value to the extent it exceeds your purchase payments not previously received. The new owner’s purchase payments in the contract would then be increased to reflect the amount included in income.

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Charges for a contract’s death benefit

Your contract automatically includes a basic death benefit. Certain enhancements to the basic death benefit may also be available to you. The cost of the basic death benefit and any enhancements to such death benefit are deducted from your contract. It is possible that the tax law may treat all or a portion of the death benefit charge as a contract withdrawal.

Qualified retirement plans

We also designed the contracts for use in connection with certain types of retirement plans that receive favorable treatment under the tax code. Contracts issued to or in connection with a qualified retirement plan are called “qualified contracts.” We issue contracts for use with various types of qualified plans. The Federal income tax rules applicable to those plans are complex and varied. As a result, this Prospectus does not attempt to provide more than general information about the use of the contract with the various types of qualified plans. Persons planning to use the contract in connection with a qualified plan should obtain advice from a competent tax adviser.

Types of qualified contracts and terms of contracts

Currently, we issue contracts in connection with the following types of qualified plans:

• Individual Retirement Accounts and Annuities (“Traditional IRAs”)

• Roth IRAs

• Traditional IRA that is part of a Simplified Employee Pension Plan(“SEP”)

• SIMPLE 401(k) plans (Savings Incentive Matched Plan for Employees)

• 403(b) plans (public school system and tax-exempt organization annuity plans)

• 401(a) plans (qualified corporate employee pension and profit-sharing plans)

• 403(a) plans (qualified annuity plans)

• H.R. 10 or Keogh Plans (self-employed individual plans)

• 457(b) plans (deferred compensation plans for state and local governments and tax-exempt organizations)

We may issue a contract for use with other types of qualified plans in the future. We may not offer certain types of qualified plans for all of our annuity products.

We will amend contracts to be used with a qualified plan as generally necessary to conform to the tax law requirements for the type of plan. However, the rights of a person to any qualified plan benefits may be subject to the plan’s terms and conditions, regardless of the contract’s terms and conditions. In addition, we are not bound by the terms and conditions of qualified plans to the extent such terms and conditions contradict the contract, unless we consent.

Economic Growth and Tax Relief Reconciliation Act of 2001

The Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) made a number of changes to the rules pertaining to qualified plans. These changes became effective January 1, 2002. Some changes that EGTRRA has introduced are the ability to move money from traditional IRAs to other qualified plans (and from qualified plans to traditional IRAs), increased contribution amounts to qualified plans and catch-up contributions to IRAs. It is important to note that while the contribution limits for federal tax purposes have increased, applicable state law may not permit increased contributions to your IRAs or other qualified plans. Applicable state law may also limit your ability to move your funds among your various qualified plans.

Tax treatment of qualified contracts

The Federal income tax rules applicable to qualified plans and qualified contracts vary with the type of plan and contract. For example,

• Federal tax rules limit the amount of purchase payments that can be made, and the tax deduction or exclusion that may be allowed for the purchase payments. These limits vary depending on the type of qualified plan and the plan participant’s specific circumstances, e.g., the participant’s compensation.

• Under most qualified plans, such as a traditional IRA, the owner must begin receiving payments from the contract minimum amounts by a certain age, typically age 70½. Other qualified plans may allow the participant to take required distributions upon the later of reaching age 70½ or retirement.

• Loans are allowed under certain types of qualified plans, but Federal income tax rules prohibit loans under other types of qualified plans. For example, Federal income tax rules permit loans under some section 403(b) plans, but prohibit loans under Traditional and Roth IRAs. If allowed, loans are subject to a variety of limitations, including restrictions as to the loan amount, the loan’s duration, the rate of interest, and the manner of repayment. Your contract or plan may not permit loans.

Tax treatment of payments

The Federal income tax rules generally include distributions from a qualified contract in the recipient’s income as ordinary income. These taxable distributions will include purchase payments that were deductible or excludible from income. Thus, under many qualified contracts, the total amount received is included in income since a deduction or exclusion from income was taken for purchase payments. There are exceptions. For example, you do not include amounts received from a Roth IRA in income if certain conditions are satisfied.

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Required minimum distributions

Under most qualified plans, you must begin receiving payments from the contract minimum amounts by the later of age 70½ or retirement. You are required to take distributions from your traditional IRAs beginning in the year you reach age 70½. If you own a Roth IRA, you are not required to receive minimum distributions from your Roth IRA during your life.

Failure to comply with the minimum distribution rules applicable to certain qualified plans, such as Traditional IRAs, will result in the imposition of an excise tax. This excise tax equals 50% of the amount by which a minimum required distribution exceeds the actual  distribution from the qualified plan.

The IRS has issued new proposed regulations concerning required minimum distributions. The proposed regulations may impact the distribution method you have chosen and the amount of your distributions. These rules may also change once finalized by the IRS. Please contact your tax adviser regarding any tax  ramifications.

Federal penalty taxes payable on distributions

The tax code may impose a 10% penalty tax on a distribution from a qualified contract that must be included in income. The tax code does not impose the penalty tax if one of several exceptions applies. The exceptions vary depending on the type of qualified contract you purchase. For example, in the case of an IRA, exceptions provide that the penalty tax does not apply to a withdrawal, surrender, or annuity payout:

• received on or after the annuitant reaches age 59½,

• received on or after the annuitant’s death or because of the annuitant’s disability (as defined in the tax law),

• received as a series of substantially equal periodic payments for the annuitant’s life (or life expectancy), or

• received as reimbursement for certain amounts paid for medical care.

These exceptions, as well as certain others not described here, generally apply to taxable distributions from other qualified plans. However, the specific requirements of the exception may vary.

Transfers and direct rollovers

As a result of EGTRRA, you may be able to move funds between different types of qualified plans, such as 403(b) and 457(b) governmental plans, by means of a rollover or transfer. You may be able rollover or transfer amounts between qualified plans and traditional IRAs. These rules do not apply to Roth IRAs and 457(b) nongovernmental tax-exempt plans. There are special rules that apply to rollovers, direct rollovers and transfers (including rollovers or transfers of after-tax amounts). If the applicable rules are not followed, you may incur adverse Federal income tax consequences, including paying taxes which you might not otherwise have had to pay. Before we send a rollover distribution, we will provide a notice explaining tax withholding requirements (see Federal Income Tax Withholding). We are not required to send you such notice for your IRA. You should always consult your tax adviser before you move or attempt to move any funds.

Death benefit and IRAs

Pursuant to IRS regulations, IRAs may not invest in life insurance contracts. We do not believe that these regulations prohibit the death benefit from being provided under the contract when we issue the contract as a Traditional or Roth IRA. However, the law is unclear and it is possible that the presence of the death benefit under a contract issued as a Traditional or Roth IRA could result in increased taxes to you. Certain death benefit options may not be available for all of our products.

Federal income tax withholding

We will withhold and remit to the IRS a part of the taxable portion of each distribution made under a contract unless you notify us prior to the distribution that tax is not to be withheld. In certain circumstances, Federal income tax rules may require us to withhold tax. At the time a withdrawal, surrender, or annuity payout is requested, we will give you an explanation of the withholding requirements.

Certain payments from your contract may be considered eligible rollover distributions (even if such payments are not being rolled over). Such distributions may be subject to special tax withholding requirements. The Federal income tax withholding rules require that we withhold 20% of the eligible rollover distribution from the payment amount, unless you elect to have the amount directly transferred to certain qualified plans or contracts. The IRS requires that tax be withheld, even if you have requested otherwise. Such tax withholding requirements are generally applicable to 401(a), 403(a) or (b), HR 10, and 457(b) governmental plans and contracts used in connection with these types of plans.

Tax status of Lincoln Life

Under existing Federal income tax laws, Lincoln Life does not pay tax on investment income and realized capital gains of the VAA. Lincoln Life does not expect that it will incur any Federal income tax liability on the income and gains earned by the VAA. Therefore, we do not impose a charge for Federal income taxes. If Federal income tax law changes and we must pay tax on some or all of the income and gains earned by the VAA, we may impose a charge against the VAA to pay the taxes.

Changes in the law

The above discussion is based on the tax code, IRS regulations, and interpretations existing on the date of this Prospectus. However, Congress, the IRS, and the courts may modify these authorities, sometimes retroactively.

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Voting rights

As required by law, we will vote the funds shares held in the VAA at meetings of the shareholders of the funds. The voting will be done according to the instructions of Contractowners that have interests in any Subaccounts which invest in the funds. If the Investment Company Act of 1940 or any regulation under it should be amended or if present interpretations should change, and if as a result we determine that we are permitted to vote the funds shares in our own right, we may elect to do so.

The number of votes which the Contractowner has the right to cast will be determined by applying the Con-tractowner’s percentage interest in a Subaccount to the total number of votes attributable to the Subaccount. In determining the number of votes, fractional shares will be recognized.

Shares held in a Subaccount for which no timely instructions are received will be voted by us in proportion to the voting instructions which are received for all Contracts participating in that Subaccount. Voting instructions to abstain on any item to be voted on will be applied on a pro-rata basis to reduce the number of votes eligible to be cast.

Whenever a shareholders meeting is called, we will furnish Contractowners with a voting interest in a Subac-count with proxy voting material, reports and voting instruction forms. Since the funds engage in shared funding, other persons or entities besides Lincoln Life may vote funds shares.

Distribution of the contracts

We are the distributors of the Contracts. They will be sold through the Internet Service Center we maintain for this purpose. We are registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and are a member of the National Association of Securities Dealers (NASD).

Return privilege

Within the free-look period after you receive the Contract, you may cancel it for any reason through our Internet Service Center or by delivering or mailing it, postage prepaid, to Lincoln Financial Direct at P.O. Box 691, Leesburg, VA 20178. A Contract canceled under this provision will be void and your Contract Value will be returned. No Surrender Charge will be assessed.

The Purchase Payments will be invested in the Lincoln National Money Market Fund during the free-look period.

State regulation

As a life insurance company organized and operated under Indiana law, we are subject to provisions governing life insurers and to regulation by the Indiana Commissioner of Insurance.

Our books and accounts are subject to review and examination by the Indiana Insurance Department at all times. That Department conducts a full examination of our operations at least every five years.

Records and reports

As presently required by the 1940 Act and applicable regulations, we are responsible for maintaining all records and accounts relating to the VAA. We have en- tered into an agreement with the Delaware Service Company, 2005 Market Street, Philadelphia, PA 19203, to provide accounting services to the VAA. We will electronically mail to you, at your last known e-mail address, at least semiannually after the first Contract Year, reports containing information required by the 1940 Act or any other applicable law or regulation.

Other information

A registration statement has been filed with the SEC, under the Securities Act of 1933 as amended, for the Contracts being offered here. This prospectus is only a part of that registration statement and, therefore, does not contain all the information in the registration statement, its amendments and exhibits. Please refer to the complete registration statement for further information about the VAA, Lincoln Life and the Contracts offered. Statements in this prospectus about the content of Contracts and other legal instruments are summaries. For the complete text of those Contracts and instruments, please refer to those documents as filed with the SEC.

We are a member of the Insurance Marketplace Standards Association (‘‘IMSA’’) and may include the IMSA logo and information about IMSA membership in our advertisements. Companies that belong to IMSA subscribe to a set of ethical standards covering the various aspects of sales and services for individually sold life insurance and annuities.

During 2001, Lincoln Life sold its reinsurance operation to Swiss Re. See Note 9 of the statutory-basis financial statements of Lincoln Life for additional information regarding the sale.

Legal proceedings

Lincoln Life is involved in various pending or threatened legal proceedings arising from the conduct of its business. Most of these proceedings are routine and in the ordinary course of business. In some instances they

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include claims for unspecified or substantial punitive damages and similar types of relief in addition to amounts for equitable relief.

Lincoln Life has settled its potential liability from the sale of interest sensitive universal and participating whole life insurance policies alleged in class action lawsuits against it. The settlement became final in 2001.

After consultation with legal counsel and a review of available facts, it is management’s opinion that the ultimate liability, if any, under the suits and settlement described above will not have a material adverse effect on the financial position of Lincoln Life.

Statement of Additional Information

Table of contents for the VAA

Item	Page
General information and history of Lincoln Life	B-2
Special terms	B-2
Services	B-2
Purchase of securities being offered	B-2
Calculation of investment results	B-2

Annuity payouts	B-4
Determination of accumulation and annuity unit value	B-5
Advertising and sales literature	B-5
Financial statements	B-7

For a free copy of the SAI please see page one of this prospectus.

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eAnnuity^®

Lincoln National Variable Annuity Account C (VAA) (Registrant)

Lincoln National Life Insurance Company (Depositor)

STATEMENT OF ADDITIONAL INFORMATION (SAI)

This SAI should be read in conjunction with the eAnnuity^® prospectus of the VAA dated May 1, 2002. You may request a free copy of the eAnnuity^® VAA Prospectus from help@AnnuityServicing.com or you may write Annuity Net, Inc., P.O. Box 691, Leesburg, VA 20178.

TABLE OF CONTENTS

ITEM	PAGE
General information and history of Lincoln Life	B-2
Special terms	B-2
Services	B-2
Purchase of securities being offered	B-2
Calculation of investment results	B-2
Annuity payouts	B-4
Determination of accumulation and annuity unit value	B-5
Advertising and sales literature	B-5
Financial statements	B-7

This SAI is not a Prospectus.

The date of this SAI is May 1, 2002.

B-1

General information and history of Lincoln National Life Insurance Co. (Lincoln Life)

The Lincoln National Life Insurance Company (Lincoln Life), organized in 1905, is an Indiana stock insurance corporation, engaged primarily in the direct issuance of life insurance contracts and annuities. Lincoln Life is wholly owned by Lincoln National Corp. (LNC), a publicly held insurance and financial services holding company domiciled in Indiana.

Special terms

The special terms used in this SAI are the ones defined in the prospectus. They are capitalized to make this document more understandable.

Services

Independent auditors

The financial statements of the variable annuity account (VAA) and the statutory-basis financial statements of Lincoln Life appearing in this SAI and Registration Statement have been audited by Ernst & Young LLP, independent auditors, 2300 National City Center, 110 West Berry Street, Fort Wayne, Indiana, 46802, as set forth in their reports also appearing elsewhere in this document and in the Registration Statement. The financial statements audited by Ernst & Young LLP have been included in this document in reliance on their reports given on their authority as experts in accounting and auditing.

Keeper of records

All accounts, books, records and other documents which are required to be maintained for the VAA are maintained by Lincoln Life. No separate charge against the assets of the VAA is made by Lincoln Life for this service. We have entered into an agreement with Delaware Service Co., 2005 Market Street, Philadelphia, PA 19203, to provide accounting services to the VAA.

Principal Underwriter

Lincoln Life is the principal underwriter for the variable annuity contract. We may not offer a Contract continuously or in every state. Lincoln Life retains no underwriting commission from the sale of the Variable Annuity Contracts.

Purchase of securities being offered

The variable annuity contract is offered to the public through Lincoln Life’s Internet Service Center. There are no special purchase plans for any class of prospective buyers. However, under certain limited circumstances described in the prospectus, the Surrender Charges may be waived.

There are exchange privileges between Subaccounts. (See The Contract in the Prospectus.) No exchanges are permitted between the VAA and other separate accounts.

Calculation of investment results

Money Market Fund subaccounts:

At times the VAA may advertise the Money Market subaccount’s yield. The yield refers to the income generated by an investment in the subaccount over a seven-day period. This income is then annualized. The process of annualizing, results when the amount of income generated by the investment during that week, is assumed to be generated each week over a 52-week period and is shown as a percentage of the investment. The yield figure is based on historical earnings and is not intended to indicate future performance.

B-2

The 7-day Money Market yield reported is determined by calculating the change in unit value for the base period (the 7-day period ended December 31, 1999); then dividing this figure by the account value at the beginning of the period; then annualizing. This yield includes all deductions charged to the contractowner’s account, and excludes any realized gains and losses from the sale of securities. The 7-day Money Market yield as of December 31, 2000 was 5.48%.

Total Returns

Standard investment results:

Standard performance is based on a formula to calculate performance that is prescribed by the SEC. Under rules issued by the SEC, standard performance must be included in any marketing material that discusses the performance of the VAA and the subaccounts. This information represents past performance and does not indicate or represent future performance.

Average annual return for each period is determined by finding the average annual compounded rate of return over each period that would equate the initial amount invested to the ending redeemable value for that period, according to the following formula:

P(1+T)ⁿ  =  ERV

Where:	P	=	a hypothetical initial purchase payment of $1,000
	T	=	average annual total return for the period in question
	n	=	number of years
	ERV	=	ending redeemable value (as of the end of the period in question) of a hypothetical $1,000 purchase payment made at the beginning of the 1-year, 5-year, or 10-year period in question (or fractional portion thereof)

The formula assumes that: (1) all recurring fees have been charged to the contractowner accounts; (2) all applicable non-recurring charges (including any surrender charges) are deducted at the end of the period in question; and (3) there will be a complete redemption upon the anniversary of the 1-year, 5-year, or 10-year period in question.

In accordance with SEC guidelines, we will report standard performance back to the first date that the Fund became available in the VAA. Because standard performance reporting periods of less than one year could be misleading, we may report “N/A’s” for standard performance until one year after the option became available in the Separate Account.

Standard performance data as of December 31, 2001

Subaccounts	1-year		5-year		10-year/ since Inception*		Commenced
Americal Century VP International	-31.68	%	N/A		-3.74	%*	01/29/99
Baron Capital Asset	8.37		N/A		12.81	*	01/29/99
Delaware VIP Global Bond	-4.00		0.48	%	2.35	*	05/01/96
Delaware VIP Large Cap Value (formerly Delaware Growth & Income)	-7.28		8.05		9.39	*	05/01/96
Delaware VIP Trend	-18.33		12.90		11.18	*	05/01/96
Janus Aspen Worldwide Growth	-25.18		N/A		-0.51	*	01/29/99
Lincoln National Bond	5.30		6.40		6.51		12/28/81
Lincoln National Capital Appreciation	-28.50		8.80		11.12	*	02/03/94
Lincoln National Equity-Income	-10.62		9.30		12.60	*	02/03/94
Lincoln National Growth and Income	-14.37		7.61		10.51		12/28/81
Lincoln National International	-13.15		4.55		6.75		05/01/91
Lincoln National Managed	-5.09		6.87		8.40		04/27/83
Lincoln National Money Market	0.34		4.43		4.00		01/07/82
Lincoln National Social Awareness	-12.72		8.95		12.55		05/02/88
Lincoln National Special Opportunities	-1.48		8.54		11.03		12/28/81
NB AMT Mid-Cap Growth	-27.31		N/A		1.19	*	01/29/99
NB AMT Partners	-6.26		N/A		0.15	*	01/29/99
Scudder VIT Equity 500 Index (formerly Deutsche Asset Mgmt.)	-15.29		N/A		-3.58	*	01/29/99
Scudder Small Cap Index (formerly Deutsche Asset Mgnt.)	-1.54		N/A		4.44	*	01/29/99

Non-standard investment results:

The VAA may report its results over various periods—daily, monthly, three-month, six-month, year-to-date, yearly (fiscal year), three, five, ten years or more and lifetime—and compare its results to indices and other variable annuities in sales materials including advertisements, brochures and reports. Performance information for the periods prior to the date that a Fund became available in the VAA will be calculated based on (1) the performance of the Fund

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adjusted for Contract charges (ie: mortality and expense risk fees, any applicable administrative charges, and the management and other expenses of the fund) and (2) the assumption that the subaccounts were in existence for the same periods as indicated for the Fund. It may or may not reflect charges for any Riders (ie: EGMDB) that were in effect during the time periods shown. This performance is referred to as non-standardized performance data. Such results may be computed on a cumulative and/or annualized basis. We may also report performance assuming that you deposited $10,000 into a subaccount at inception of the underlying fund or 10 years ago (whichever is less). This non-standard performance may be shown as a graph illustrating how that deposit would have increased or decreased in value over time based on the performance of the underlying fund adjusted for Contract charges. This information represents past performance and does not indicate or represent future performance. The investment return and value of a Contract will fluctuate so that contractowner’s investment may be worth more or less than the original investment. The performance numbers in the following tables do not reflect surrender charge.

Cumulative quotations are arrived at by calculating the change in Accumulation Unit Value between the first and last day of the base period being measured, and expressing the difference as a percentage of the unit value at the beginning of the base period. Annualized quotations are arrived at by applying a formula which reflects the level rate of return, which if earned over the entire base period, would produce the cumulative return.

Non-standard performance data as of December 31, 2001 (Adjusted for Contract Expense Charges):

Subaccounts	YTD		1-year		3-year		5-year		10-year		Since Inception		As if commenced
Americal Century VP International	-29.56	%	-29.56	%	-1.67	%	5.79	%	N/A		6.25	%	05/01/94
Baron Capital Asset	11.72		11.72		13.50		N/A		N/A		22.50		10/01/98
Delaware VIP Global Bond	-1.03		-1.03		-1.63		0.48		N/A		2.35		05/01/96
Delaware VIP Large Cap Value (formerly Delaware Growth & Income)	-4.42		-4.42		0.69		8.05		11.47	%	9.87		07/28/88
Delaware VIP Trend	-15.80		-15.80		9.61		12.90		N/A		13.89		12/27/93
Janus Aspen Worldwide Growth	-22.86		-22.86		1.86		10.48		N/A		15.09		09/13/93
Lincoln National Bond	8.55		8.55		4.82		6.40		6.51		9.59		12/28/81
Lincoln National Capital Appreciation	-26.29		-26.29		-3.73		8.80		N/A		11.12		02/03/94
Lincoln National Equity-Income	-7.85		-7.85		2.33		9.30		N/A		12.60		02/03/94
Lincoln National Growth and Income	-11.72		-11.72		-2.48		7.61		10.51		12.98		12/28/81
Lincoln National International	-10.46		-10.46		1.28		4.55		6.75		6.23		05/01/91
Lincoln National Managed	—2.15		-2.15		0.92		6.87		8.40		9.86		04/27/83
Lincoln National Money Market	3.45		3.45		4.37		4.43		4.00		5.80		01/07/82
Lincoln National Social Awareness	-10.02		-10.02		-1.98		8.95		12.55		13.73		05/02/88
Lincoln National Special Opportunities	1.57		1.57		3.64		8.54		11.03		12.45		12/28/81
NB AMT Mid-Cap Growth	-25.06		-25.06		1.82		N/A		N/A		13.79		11/03/97
NB AMT Partners	-3.36		-3.36		1.10		6.93		N/A		11.77		03/22/94
Scudder VIT Equity 500 Index (formerly Deutsche Asset Mgmt.)	-12.66		-12.66		-1.88		N/A		N/A		5.00		10/01/97
Scudder VIT Small Cap Index (formerly Deutsche Asset Mgnt.)	1.51		1.51		5.00		N/A		N/A		3.83		08/25/97

Annuity payouts

Variable Annuity Payouts

Variable Annuity Payouts will be determined on the basis of: (1)  the value of the Contract on the Annuity Commencement Date; (2)  the annuity tables contained in the Contract; (3)  the type of annuity option selected; and (4)  the investment performance of the eligible Fund(s) selected. In order to determine the amount of variable Annuity Payouts, Lincoln Life makes the following calculation: first, it determines the dollar amount of the first payout; second, it credits the Annuitant with a fixed number of Annuity Units based on the amount of the first payout; and third, it calculates the value of the Annuity Units each period thereafter. These steps are explained below.

The dollar amount of the first variable Annuity Payout is determined by applying the total value to the Accumulation Units credited under the Contract valued as of the Annuity Commencement Date (less any premium taxes to the annuity tables contained in the Contract. The first variable Annuity Payout will be paid within 14 days after) the Annuity Commencement Date. The monthly anniversary of the Annuity Commencement Date will become the date on which all future Annuity Payouts will be calculated. Amounts shown in the tables are based on the 1983(a) Individual Mortality Table modified, with an assumed investment return at the rate of 5% per annum. The first Annuity Payout is determined by multiplying the benefit per $1,000 of value shown in the Contract tables by the number of thousands of dollars of Contract Value under the Contract. These annuity tables vary according to the form of annuity selected and the age of the Annuitant at the Annuity Commencement Date. The 5% interest rate stated above is the measuring point for subsequent Annuity Payouts. If the actual net investment rate (annualized) exceeds 5%, the payment will increase at a rate equal to the amount of such excess. Conversely, if the actual rate is less than 5%,

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Annuity Payouts will decrease. If the assumed rate of interest were to be increased, Annuity Payouts would start at a higher level but would decrease more rapidly or increase more slowly.

Lincoln Life may use sex distinct annuity tables in Contracts where not prohibited by law.

At an Annuity Commencement Date, the Annuitant is credited with Annuity Units for each Subaccount on which variable Annuity Payouts are based. The number of Annuity Units to be credited is determined by dividing the amount of the first payout by the value of an Annuity Unit in each Subaccount selected. Although the number of Annuity Units is fixed by this process, the value of such units will vary with the value of the underlying eligible Funds. The amount of the second and subsequent annuity payouts is determined by multiplying the Contractowner’s fixed number of Annuity Units in each Subaccount by the appropriate Annuity Unit value for the Valuation Date ending on the monthly anniversary of the annuity commencement date.

The value of each Subaccount Annuity Unit was arbitrarily established. The Annuity Unit value for each Subaccount at the end of any Valuation Date is determined as follows:

1. The total value of Fund or Series shares held in the Subaccount is calculated by multiplying the number of shares by the net asset value at end of Valuation Period plus any dividend or other distribution.

2. The liabilities of the Subaccount, including daily charges and taxes, are subtracted

3. The result is divided by the number of Annuity Units in the Subaccount at the beginning of Valuation Period, and adjusted by a factor to neutralize the assumed investment return in the annuity table.

The value of the Annuity Units is determined as of the monthly anniversary of the Annuity Commencement Date to permit calculation of amounts of Annuity Payouts and mailing of checks in advance of their due dates. Such checks will normally be issued and mailed at least three days before the due date.

Proof of age, sex and survival

Lincoln Life may require proof of age, sex or survival of any payee upon whose age, sex or survival payouts depend.

Determination of accumulation and annuity unit value

A description of the days on which Accumulation and Annuity Units will be valued is given in the prospectus. The New York Stock Exchange’s (NYSE) most recent announcement (which is subject to change) states that it will be closed on New Year’s Day, Martin Luther King Day, Washington’s Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. It may also be closed on other days.

Since the portfolios of some of the Funds will consist of securities primarily listed on foreign exchanges or otherwise traded outside the United States, those securities may be traded (and the net asset value of those Funds and Series and of the variable account could therefore be significantly affected) on days when the investor has no access to those Funds and Series.

Advertising and sales literature

In marketing the variable annuity Contracts, we may refer to certain ratings assigned to us under the Rating System of the A.M. Best Co., Oldwick, New Jersey. The objective of Best’s Rating System is to evaluate the various factors affecting the overall performance of an insurance company in order to provide Best’s opinion about that company’s relative financial strength and ability to meet its contractual obligations. The procedure includes both a quantitative and qualitative review of the insurance company. In marketing the Contracts and the underlying funds, we may at times use data published by other nationally-known independent statistical services. These service organizations provide relative measures of such factors as an insurer’s claims paying ability, the features of particular Contracts, and the comparative investment performance of the funds with other portfolios having similar objectives. A few such services are: Duff & Phelps, the Lipper Group, Moody’s, Morningstar, Standard and Poor’s and VARDS.

Marketing materials may employ illustrations of compound interest and dollar-cost averaging, discuss automatic withdrawal services, and describe our customer base, assets, and our relative size in the industry. They may also discuss other features of Lincoln Life, the VAA, the funds and their investment management. Lincoln Life may refer to the following organizations (and others) in its marketing materials:

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A.M. BEST’S RATING SYSTEM evaluates the various factors affecting the overall performance of an insurance company in order to provide an opinion as to an insurance company’s relative financial strength and ability to meet its contractual obligations. The procedure includes both a quantitative and qualitative review of each company.

FITCH provides ratings on over 800 insurance entities in close to 30 countries. The Insurance Group maintains three significant analytical staffing centers in Chicago, London and New York, and also coordinates local analytical resources in other parts of the world on behalf of Fitch’s global office network.

EAFE Index is prepared by Morgan Stanley Capital International (MSCI). It measures performance of securities in Europe, Australasia and the Far East. The index reflects the movements of world stock markets by representing the evolution of an unmanaged portfolio. The EAFE Index offers international diversification with over 1000 companies across 20 different countries.

LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a publisher of statistical data covering the investment company industry in the United States and overseas. Lipper is recognized as the leading source of data on open-end and closed-end funds. Lipper currently tracks the performance of over 5,000 investment companies and publishes numerous specialized reports, including reports on performance and portfolio analysis, fee and expense analysis.

MOODY’S insurance claims-paying rating is a system of rating insurance company’s financial strength, market leadership and ability to meet financial obligations. The purpose of Moody’s ratings is to provide investors with a simple system of gradation by which the relative quality of insurance companies may be noted.

MORNINGSTAR is an independent financial publisher offering comprehensive statistical and analytical coverage of open-end and closed-end funds and variable annuity contracts.

STANDARD & POOR’s CORP. insurance claims-paying ability rating is an assessment of an operating insurance company’s financial capacity to meet obligations under an insurance policy in accordance with the terms. The likelihood of a timely flow of funds from the insurer to the trustee for the bondholders is a key element in the rating determination for such debt issues.

VARDS (Variable Annuity Research Data Service) provides a comprehensive guide to variable annuity contract features and historical fund performance. The service also provides a readily understandable analysis of the comparative characteristics and market performance of funds inclusive in variable contracts.

STANDARD & POOR’S 500 INDEX (S&P 500)—broad-based measurement of changes in stock-market conditions based on the average performance of 500 widely held common stocks; commonly known as the S&P 500. The selection of stocks, their relative weightings to reflect differences in the number of outstanding shares and publication of the index itself are services of Standard & Poor’s Corp., a financial advisory, securities rating and publishing firm.

NASDAQ-OTC Price Index—this index is based on the National Association of Securities Dealers Automated Quotations (NASDAQ) and represents all domestic over-the-counter stocks except those traded on exchanges and those having only one market maker, a total of some 3,500 stocks. It is market value-weighted and was introduced with a base of 100.00 on February 5, 1971.

DOW JONES INDUSTRIAL AVERAGE (DJIA)—price-weighted average of 30 actively traded blue chip stocks, primarily industrials but including American Express Co. and American Telephone and Telegraph Co. Prepared and published by Dow Jones & Co., it is the oldest and most widely quoted of all the market indicators. The average is quoted in points, not dollars.

In its advertisements and other sales literature for the VAA and the eligible Funds, Lincoln Life intends to illustrate the advantages of the Contracts in a number of ways:

Dollar-cost averaging illustrations.    These illustrations will generally discuss the price-leveling effect of making regular purchases in the same subaccounts over a period of time, to take advantage of the trends in market prices of the portfolio securities purchased for those Subaccounts.

Automatic withdrawal service.    A service provided by Lincoln Life, through which a Contractowner may take any distribution allowed by Code Section 401(a)(9) in the case of qualified contracts, or permitted under Code Section 72 in the case of nonqualified contracts, by way of an automatically generated payment.

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Lincoln Financial Group.    Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. With headquarters in Philadelphia, Lincoln Financial Group has consolidated assets of nearly $98 billion and annual consolidated revenues of $6.4 billion. Through its wealth accumulation and protection businesses, the company provides annuities, life insurance, 401(k) plans, managed accounts, mutual funds, institutional investment management and financial planning and advisory services.

Lincoln Life’s customers.    Sales literature for the VAA, the Funds and Series may refer to the number of employers and the number of individual annuity clients which Lincoln Life serves. As of the date of this Prospectus, Lincoln Life serves over 17,000 employers and more than 1.5 million individuals.

Lincoln Life’s assets, size.    Lincoln Life may discuss its general financial condition (see, for example, the reference to A.M. Best Co., above); it may refer to its assets; it may also discuss its relative size and/or ranking among companies in the industry or among any subclassification of those companies, based upon recognized evaluation criteria. For example, at year end 2001, Lincoln Life had statutory admitted assets of over $74 billion.

Sales literature and advertisements may reference these and other similar reports from Best’s or other similar publications which report on the insurance and financial services industries.

We may quote the historical performance of the funds, predating their inclusion in the VAA, provided that the policies and objectives of a fund have remained substantially the same.

Other Information

Due to differences in redemption rates, tax treatment or other considerations, the interests of contractowners under the variable life accounts could conflict with those of contractowners under the VAA. In those cases, where assets from variable life and variable annuity separate accounts are invested in the same fund(s) (i.e., where mixed funding occurs), the Boards of Directors of the fund involved will monitor for any material conflicts and determine what action, if any, should be taken. If it becomes necessary for any separate account to replace shares of any fund with another investment, that fund may have to liquidate securities on a disadvantageous basis. Refer to the Prospectus for each fund for more information about mixed funding.

FINANCIAL STATEMENTS

Financial statements of the VAA and the statutory-basis financial statements of Lincoln Life appear on the following pages.

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Lincoln National Variable Annuity Account C

Statement of assets and liabilities

December 31, 2001

	Investments		Contract Purchases Due From The Lincoln National Life Insurance Company		Total Assets		Mortality & Expense Charges Payable To The Lincoln National Life Insurance Company		Contract Redemptions Due To The Lincoln National Life Insurance Company		Net Assets
AFIS Growth Class 2 Subaccount	$	260,785,407	$	457,030	$	261,242,437	$	21,926	$	—	$	261,220,511
AFIS Growth-Income Class 2 Subaccount		5,154		—		5,154		1		—		5,153
AFIS International Class 2 Subaccount		29,939,954		—		29,939,954		2,471		153,101		29,784,382
AIM International Equity Subaccount		5,179		—		5,179		1		—		5,178
AIM Value Subaccount		5,094		—		5,094		1		—		5,093
American Century VP International Subaccount		281,885		—		281,885		13		193,123		88,749
AVPSF Small Cap Value Class A Subaccount		5,379		—		5,379		1		—		5,378
AVPSF Technology Class B Subaccount		47,456,623		—		47,456,623		4,005		163,956		47,288,662
AVPSF Growth Class B Subaccount		6,687,883		5,032		6,692,915		558		—		6,692,357
Baron Capital Asset Subaccount		67,276,649		552,047		67,828,696		5,603		—		67,823,093
Deutsche Equity 500 Index Subaccount		108,438,264		157,765		108,596,029		9,090		—		108,586,939
Deutsche Small Cap Index Subaccount		22,508,318		175,979		22,684,297		1,881		—		22,682,416
DGPF Trend Subaccount		391,137,613		—		391,137,613		32,692		412,838		390,692,083
DGPF Growth and Income Subaccount		110,807,693		58,722		110,866,415		9,296		—		110,857,119
DGPF Global Bond Subaccount		11,964,620		5,642		11,970,262		985		—		11,969,277
DGPF REIT Subaccount		47,180,658		73,380		47,254,038		3,903		—		47,250,135
DGPF Small Cap Value Service Class Subaccount		37,209,631		453,723		37,663,354		3,102		—		37,660,252
Fidelity VIP Growth Service Class Subaccount		128,527,403		132,067		128,659,470		10,802		—		128,648,668
Fidelity VIP II Contrafund Service Class Subaccount		63,638,031		532		63,638,563		5,309		—		63,633,254
Janus Aspen Worldwide Growth Subaccount		310,393,985		—		310,393,985		25,750		108,747		310,259,488
LN Aggressive Growth Subaccount		296,050,501		160,855		296,211,356		24,810		—		296,186,546
LN Bond Subaccount		402,259,845		15,383		402,275,228		33,138		—		402,242,090
LN Capital Appreciation Subaccount		1,057,519,946		286,128		1,057,806,074		88,528		—		1,057,717,546
LN Equity-Income Subaccount		761,211,459		247,833		761,459,292		63,495		—		761,395,797
LN Global Asset Allocation Subaccount		312,919,941		88,697		313,008,638		25,946		—		312,982,692
LN Growth and Income Subaccount		2,797,746,466		199,411		2,797,945,877		233,376		—		2,797,712,501
LN International Subaccount		313,352,879		—		313,352,879		25,717		985,929		312,341,233
LN Managed Subaccount		675,862,747		—		675,862,747		56,066		468,381		675,338,300
LN Money Market Subaccount		172,131,071		1,272,652		173,403,723		14,253		—		173,389,470
LN Social Awareness Subaccount		1,197,031,791		334,954		1,197,366,745		100,055		—		1,197,266,690
LN Special Opportunities Subaccount		499,972,719		—		499,972,719		41,495		438,791		499,492,433
MFS Capital Opportunities Subaccount		5,151		—		5,151		1		—		5,150
MFS Total Return Subaccount		5,154		—		5,154		1		—		5,153
MFS Utilities Subaccount		4,193,867		143,421		4,337,288		350		—		4,336,938
NB AMT Partners Subaccount		19,244,215		28,511		19,272,726		1,609		—		19,271,117
NB AMT Regency Subaccount		5,359		—		5,359		1		—		5,358
NB AMT Mid-Cap Growth Subaccount		136,992,500		—		136,992,500		11,470		56,911		136,924,119
Putnam Health Sciences Class IB Subaccount		4,652,425		38,977		4,691,402		388		—		4,691,014

	Affiliated		Non-Affiliated
Investments at Cost	$	10,043,330,598	$	1,698,904,581
Investments at Market		9,084,359,580		1,211,053,879

See accompanying notes.

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Lincoln National Variable Annuity Account C

Statement of operations

Year Ended December 31, 2001

	AFIS Growth Class 2 Subaccount			AFIS Growth-Income Class 2 Subaccount
Net Investment Income (Loss):
ŸDividends from investment income	$	1,059,084		$	—
ŸDividends from net realized gains on investments		60,567,457			—
ŸMortality and expense guarantees:
Multi-Fund® (1.002% Fee Rate)		(2,164,026	)		—
Multi-Fund® (1.302% Fee Rate)		(77,688	)		—
eAnnuity™ (.55% Fee Rate)		—			—
Multi-Fund® (1.00% Fee Rate)		(1	)		(1	)
Multi-Fund® (1.30% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.25% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.75% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.95% Fee Rate)		(2	)		(2	)
NET INVESTMENT INCOME (LOSS)		59,384,818			(9	)
Net Realized and Unrealized Gain (Loss) on Investments:
ŸNet realized gain (loss) on investments		(2,596,701	)		—
ŸNet change in unrealized appreciation or depreciation on investments		(103,231,937	)		64
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS		(105,828,638	)		64
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(46,443,820	)	$	55
	Deutsche Equity 500 Index Subaccount			Deutsche Small Cap Index Subaccount
Net Investment Income (Loss):
ŸDividends from investment income	$	906,906		$	128,796
ŸDividends from net realized gains on investments		94,525			1,036,845
ŸMortality and expense guarantees:
Multi-Fund® (1.002% Fee Rate)		(968,412	)		(161,568	)
Multi-Fund® (1.302% Fee Rate)		(31,248	)		(11,407	)
eAnnuity™ (.55% Fee Rate)		(686	)		(1,716	)
Multi-Fund® (1.00% Fee Rate)		(1	)		(1	)
Multi-Fund® (1.30% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.25% Fee Rate)		(1	)		(2	)
Multi-Fund® (1.75% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.95% Fee Rate)		(2	)		(2	)
NET INVESTMENT INCOME (LOSS)		1,077			990,941
Net Realized and Unrealized Gain (Loss) on Investments:
ŸNet realized gain (loss) on investments		(1,947,945	)		(366,718	)
ŸNet change in unrealized appreciation or depreciation on investments		(11,798,667	)		(291,672	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS		(13,746,612	)		(658,390	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(13,745,535	)	$	332,551

See accompanying notes.

C-2

AFIS International Class 2 Subaccount			AIM International Equity Subaccount			AIM Value Subaccount			American Century VP International Subaccount			AVPSF Small Cap Value Class A Subaccount			AVPSF Technology Class B Subaccount			AVPSF Growth Class B Subaccount			Baron Capital Asset Subaccount
$	239,905		$	18		$	7		$	94		$	—		$	—		$	14,616		$	—
	7,237,900			137			102			10,343			—			3,999,942			1,050,684			220,811
	(259,574	)		—			—			—			—			(474,824	)		(65,215	)		(446,618	)
	(8,269	)		—			—			—			—			(10,610	)		(1,275	)		(24,984	)
	—			—			—			(727	)		—			—			—			(399	)
	(1	)		(1	)		(1	)		—			(1	)		(1	)		—			—
	(2	)		(2	)		(2	)		—			(2	)		(2	)		—			—
	(2	)		(2	)		(1	)		—			(2	)		(2	)		—			—
	(2	)		(2	)		(2	)		—			(2	)		(2	)		—			—
	(2	)		(2	)		(2	)		—			(2	)		(2	)		—			—
	7,209,953			146			101			9,710			(9	)		3,514,499			998,810			(251,190	)
	(13,513,306	)		—			—			(34,911	)		—			(13,121,696	)		(960,931	)		(724,101	)
	967,599			(66	)		(105	)		7,856			289			(7,256,061	)		(2,199,302	)		4,439,791
	(12,545,707	)		(66	)		(105	)		(27,055	)		289			(20,377,757	)		(3,160,233	)		3,715,690
$	(5,335,754	)	$	80		$	(4	)	$	(17,345	)	$	280		$	(16,863,258	)	$	(2,161,423	)	$	3,464,500
DGPF Trend Subaccount			DGPF Growth and Income Subaccount			DGPF Global Bond Subaccount			DGPF REIT Subaccount			DGPF Small Cap Value Service Class Subaccount			Fidelity VIP Growth Service Class Subaccount			Fidelity VIP II Contrafund Service Class Subaccount			Janus Aspen Worldwide Growth Subaccount
$	—		$	171,788		$	246,399		$	544,099		$	—		$	—		$	426,896		$	1,643,493
	—			—			—			111,944			—			10,512,995			1,707,585			—
	—			—			(114,631	)		(362,441	)		(118,430	)		(1,347,319	)		(598,869	)		(3,389,047	)
	(3,872,835	)		(955,848	)		(4,107	)		(8,184	)		(4,291	)		(42,931	)		(27,490	)		(68,961	)
	(984	)		(122	)		(15	)		—			—			—			—			(2,191	)
	(108,708	)		(53,250	)		—			(1	)		(1	)		(1	)		(1	)		(1	)
	(1	)		(1	)		—			(2	)		(2	)		(2	)		(2	)		(2	)
	(2	)		(2	)		—			(2	)		(2	)		(2	)		(2	)		(1	)
	(2	)		(2	)		—			(2	)		(2	)		(2	)		(2	)		(2	)
	(2	)		(2	)		—			(2	)		(2	)		(2	)		(2	)		(2	)
	(3,982,534	)		(837,439	)		127,646			285,409			(122,730	)		9,122,736			1,508,113			(1,816,714	)
	(11,628,755	)		(617,580	)		(210,446	)		446,510			(199,246	)		(6,321,527	)		(3,119,597	)		(18,298,416	)
	(69,296,113	)		(3,164,680	)		(108,727	)		1,927,399			1,789,847			(33,527,994	)		(7,305,515	)		(77,664,307	)
	(80,924,868	)		(3,782,260	)		(319,173	)		2,373,909			1,590,601			(39,849,521	)		(10,425,112	)		(95,962,723	)
$	(84,907,402	)	$	(4,619,699	)	$	(191,527	)	$	2,659,318		$	1,467,871		$	(30,726,785	)	$	(8,916,999	)	$	(97,779,437	)

C-3

Lincoln National Variable Annuity Account C

Statement of operations (continued)

Year Ended December 31, 2001

	LN Aggressive Growth Subaccount			LN Bond Subaccount
Net Investment Income (Loss):
ŸDividends from investment income	$	—		$	19,007,216
ŸDividends from net realized gains on investments		81,755,299			—
ŸMortality and expense guarantees:
Multi-Fund® (1.002% Fee Rate)		(3,387,758	)		(3,461,811	)
Multi-Fund® (1.302% Fee Rate)		(45,147	)		(78,260	)
eAnnuity™ (.55% Fee Rate)		—			(166	)
Multi-Fund® (1.00% Fee Rate)		(1	)		(1	)
Multi-Fund® (1.30% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.25% Fee Rate)		(2	)		(1	)
Multi-Fund® (1.75% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.95% Fee Rate)		(2	)		(2	)
NET INVESTMENT INCOME (LOSS)		78,322,385			15,466,971
Net Realized and Unrealized Gain (Loss) on Investments:
ŸNet realized gain (loss) on investments		(9,854,837	)		444,858
ŸNet change in unrealized appreciation or depreciation on investments		(232,105,814	)		9,674,334
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS		(241,960,651	)		10,119,192
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(163,638,266	)	$	25,586,163
	LN Special Opportunities Subaccount			MFS Capital Opportunities Subaccount
Net Investment Income (Loss):
ŸDividends from investment income	$	7,006,502		$	—
ŸDividends from net realized gains on investments		—			—
ŸMortality and expense guarantees:
Multi-Fund® (1.002% Fee Rate)		(4,860,375	)		—
Multi-Fund® (1.302% Fee Rate)		(62,785	)		—
eAnnuity™ (.55% Fee Rate)		(294	)		—
Multi-Fund® (1.00% Fee Rate)		(1	)		(1	)
Multi-Fund® (1.30% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.25% Fee Rate)		(2	)		(1	)
Multi-Fund® (1.75% Fee Rate)		(2	)		(2	)
Multi-Fund® (1.95% Fee Rate)		(2	)		(2	)
NET INVESTMENT INCOME (LOSS)		2,083,039			(8	)
Net Realized and Unrealized Gain (Loss) on Investments:
ŸNet realized gain (loss) on investments		(1,746,454	)		—
ŸNet change in unrealized appreciation or depreciation on investments		3,779,061			61
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS		2,032,607			61
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	4,115,646		$	53

See accompanying notes.

C-4

LN Capital Appreciation Subaccount			LN Equity-Income Subaccount			LN Global Asset Allocation Subaccount			LN Growth and Income Subaccount			LN International Subaccount			LN Managed Subaccount			LN Money Market Subaccount			LN Social Awareness Subaccount
$	—		$	8,724,340		$	1,262,357		$	27,843,005		$	7,078,640		$	21,846,466		$	6,195,835		$	8,043,614
	114,730,056			33,864,070			26,316,144			889,338,475			29,443,669			103,511,962			—			319,893,000
	(12,501,047	)		(7,669,264	)		(3,303,923	)		(29,736,381	)		(3,385,416	)		(6,885,641	)		(1,566,788	)		(12,487,153	)
	(268,106	)		(173,507	)		(48,840	)		(289,465	)		(45,333	)		(93,005	)		(41,512	)		(253,768	)
	(1,194	)		(933	)		—			(335	)		(915	)		(214	)		(2,523	)		(270	)
	(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)
	(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)
	(1	)		(2	)		(2	)		(2	)		(1	)		(2	)		(2	)		(2	)
	(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)
	(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)
	101,959,701			34,744,697			24,225,729			887,155,290			33,090,637			118,379,559			4,585,003			315,195,414
	(4,961,068	)		(1,048,692	)		618,654			25,605,549			(11,043,421	)		421,178			—			(1,157,588	)
	(511,439,122	)		(104,224,417	)		(57,552,322	)		(1,329,052,963	)		(62,340,373	)		(138,648,439	)		—			(463,336,369	)
	(516,400,190	)		(105,273,109	)		(56,933,668	)		(1,303,447,414	)		(73,383,794	)		(138,227,261	)		—			(464,493,957	)
$	(414,440,489	)	$	(70,528,412	)	$	(32,707,939	)	$	(416,292,124	)	$	(40,293,157	)	$	(19,847,702	)	$	4,585,003		$	(149,298,543	)
MFS Total Return Subaccount			MFS Utilities Subaccount			NB AMT Partners Subaccount			NB AMT Regency Subaccount			NB AMT Mid-Cap Growth Subaccount			Putnam Health Sciences Class IB Subaccount
$	—		$	—		$	45,567		$	—		$	—		$	—
	—			—			432,889			—			—			—
	—			(16,504	)		(156,760	)		—			(1,470,182	)		(15,339	)
	—			(933	)		(4,306	)		—			(28,112	)		(181	)
	—			—			(47	)		—			(432	)		—
	(1	)		(1	)		—			(1	)		(1	)		(1	)
	(2	)		(1	)		—			(2	)		(2	)		(2	)
	(2	)		(1	)		—			(2	)		(2	)		(2	)
	(2	)		(2	)		—			(2	)		(2	)		(2	)
	(2	)		(2	)		—			(2	)		(2	)		(2	)
	(9	)		(17,444	)		317,343			(9	)		(1,498,735	)		(15,529	)
	—			(113,206	)		(374,536	)		—			(28,561,257	)		(36,201	)
	64			(432,243	)		(449,577	)		269			(19,840,296	)		(48,677	)
	64			(545,449	)		(824,113	)		269			(48,401,553	)		(84,878	)
$	55		$	(562,893	)	$	(506,770	)	$	260		$	(49,900,288	)	$	(100,407	)

C-5

Lincoln National Variable Annuity Account C

Statements of changes in net assets

Years Ended December 31, 2000 and 2001

	AFIS Growth Class 2 Subaccount			AFIS Growth- Income Class 2 Subaccount
NET ASSETS JANUARY 1, 2000	$	—		$	—
Changes From Operations:
ŸNet investment income (loss)		(641,814	)		—
ŸNet realized gain (loss) on investments		(55,314	)		—
ŸNet change in unrealized appreciation or depreciation on investments		(18,213,688	)		—
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(18,910,816	)		—
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		242,388,332			—
ŸTerminated contracts & transfers to annuity reserves		(35,388,504	)		—
		206,999,828			—
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		1,278,366			—
ŸAnnuity Payments		(36,752	)		—
ŸReceipt (reimbursement) of mortality guarantee adjustment		(4,132	)		—
		1,237,482			—
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		208,237,310			—
TOTAL INCREASE (DECREASE) IN NET ASSETS		189,326,494			—
NET ASSETS AT DECEMBER 31, 2000		189,326,494			—
Changes From Operations:
ŸNet investment income (loss)		59,384,818			(9	)
ŸNet realized gain (loss) on investments		(2,596,701	)		—
ŸNet change in unrealized appreciation or depreciation on investments		(103,231,937	)		64
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(46,443,820	)		55
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		210,016,845			5,098
ŸTerminated contracts & transfers to annuity reserves		(92,483,177	)		—
		117,533,668			5,098
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		977,809			—
ŸAnnuity Payments		(171,697	)		—
ŸReceipt (reimbursement) of mortality guarantee adjustment		(1,943	)		—
		804,169			—
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		118,337,837			5,098
TOTAL INCREASE (DECREASE) IN NET ASSETS		71,894,017			5,153
NET ASSETS AT DECEMBER 31, 2001	$	261,220,511		$	5,153
	Deutsche Equity 500 Index Subaccount			Deutsche Small Cap Index Subaccount
NET ASSETS JANUARY 1, 2000	$	52,899,482		$	4,102,056
Changes From Operations:
ŸNet investment income (loss)		(890,769	)		(43,613	)
ŸNet realized gain (loss) on investments		241,714			(87,012	)
ŸNet change in unrealized appreciation or depreciation on investments		(9,083,472	)		(1,169,080	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(9,732,527	)		(1,299,705	)
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		105,728,336			40,505,309
ŸTerminated contracts & transfers to annuity reserves		(47,140,497	)		(29,286,605	)
		58,587,839			11,218,704
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		707,495			76,899
ŸAnnuity Payments		(87,662	)		(7,069	)
ŸReceipt (reimbursement) of mortality guarantee adjustment		(8,194	)		(1,643	)
		611,639			68,187
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		59,199,478			11,286,891
TOTAL INCREASE (DECREASE) IN NET ASSETS		49,466,951			9,987,186
NET ASSETS AT DECEMBER 31, 2000		102,366,433			14,089,242
Changes From Operations:
ŸNet investment income (loss)		1,077			990,941
ŸNet realized gain (loss) on investments		(1,947,945	)		(366,718	)
ŸNet change in unrealized appreciation or depreciation on investments		(11,798,667	)		(291,672	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(13,745,535	)		332,551
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		60,830,720			20,900,637
ŸTerminated contracts & transfers to annuity reserves		(41,126,442	)		(12,640,547	)
		19,704,278			8,260,090
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		361,363			13,074
ŸAnnuity Payments		(95,509	)		(9,993	)
ŸReceipt (reimbursement) of mortality guarantee adjustment		(4,091	)		(2,548	)
		261,763			533
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		19,966,041			8,260,623
TOTAL INCREASE (DECREASE) IN NET ASSETS		6,220,506			8,593,174
NET ASSETS AT DECEMBER 31, 2001	$	108,586,939		$	22,682,416

See accompanying notes.

C-6

AFIS International Class 2 Subaccount			AIM International Equity Subaccount			AIM Value Subaccount			American Century VP International Subaccount			AVPSF Smalll Cap Value Class A Subaccount			AVPSF Technology Class B Subaccount			AVPSF Growth Class B Subaccount			Baron Capital Asset Subaccount
$	—		$	—		$	—		$	3,613		$	—		$	—		$	—		$	9,553,254
	(72,967	)		—			—			7,017			—			(46,915	)		31,817			(166,320	)
	(1,131,028	)		—			—			158,138			—			(393,017	)		(41,111	)		213,879
	(2,509,012	)		—			—			(3,602	)		—			(24,712,830	)		(914,251	)		(783,013	)
	(3,713,007	)		—			—			161,553			—			(25,152,762	)		(923,545	)		(735,454	)
	66,710,842			—			—			17,951,245			—			110,209,963			8,791,286			26,208,819
	(42,339,414	)		—			—			(17,976,855	)		—			(30,678,779	)		(2,507,793	)		(11,938,328	)
	24,371,428			—			—			(25,610	)		—			79,531,184			6,283,493			14,270,491
	207,734			—			—			—			—			213,707			39,061			—
	(6,138	)		—			—			—			—			(4,688	)		(691	)		—
	(1,362	)		—			—			—			—			(709	)		(438	)		—
	200,234			—			—			—			—			208,310			37,932			—
	24,571,662			—			—			(25,610	)		—			79,739,494			6,321,425			14,270,491
	20,858,655			—			—			135,943			—			54,586,732			5,397,880			13,535,037
	20,858,655			—			—			139,556			—			54,586,732			5,397,880			23,088,291
	7,209,953			146			101			9,710			(9	)		3,514,499			998,810			(251,190	)
	(13,513,306	)		—			—			(34,911	)		—			(13,121,696	)		(960,931	)		(724,101	)
	967,599			(66	)		(105	)		7,856			289			(7,256,061	)		(2,199,302	)		4,439,791
	(5,335,754	)		80			(4	)		(17,345	)		280			(16,863,258	)		(2,161,423	)		3,464,500
	118,729,823			5,098			5,097			3,631,612			5,098			57,600,475			9,057,662			76,373,604
	(104,598,597	)		—			—			(3,665,074	)		—			(48,082,922	)		(5,637,826	)		(35,167,044	)
	14,131,226			5,098			5,097			(33,462	)		5,098			9,517,553			3,419,836			41,206,560
	157,955			—			—			—			—			65,693			39,370			66,636
	(26,300	)		—			—			—			—			(17,164	)		(3,151	)		(2,779	)
	(1,400	)		—			—			—			—			(894	)		(155	)		(115	)
	130,255			—			—			—			—			47,635			36,064			63,742
	14,261,481			5,098			5,097			(33,462	)		5,098			9,565,188			3,455,900			41,270,302
	8,925,727			5,178			5,093			(50,807	)		5,378			(7,298,070	)		1,294,477			44,734,802
$	29,784,382		$	5,178		$	5,093		$	88,749		$	5,378		$	47,288,662		$	6,692,357		$	67,823,093
DGPF Trend Subaccount			DGPF Growth and Income Subaccount			DGPF Global Bond Subaccount			DGPF REIT Subaccount			DGPF Small Cap Value Service Class Subaccount			Fidelity VIP Growth Service Class Subaccount			Fidelity VIP II Contrafund Service Class Subaccount			Janus Aspen Worldwide Growth Subaccount
$	325,648,314		$	117,745,579		$	14,380,127		$	—		$	—		$	55,155,580		$	26,189,067		$	146,927,546
	23,735,379			8,693,420			(12,788	)		(71,463	)		—			8,903,364			4,322,447			37,378,175
	4,634,016			(5,397,930	)		(469,955	)		57,795			—			(203,451	)		(60,890	)		(1,949,207	)
	(103,330,744	)		3,050,486			367,910			1,947,563			—			(33,506,981	)		(9,187,477	)		(133,691,826	)
	(74,961,349	)		6,345,976			(114,833	)		1,933,895			—			(24,807,068	)		(4,925,920	)		(98,262,858	)
	584,449,189			27,459,638			3,732,415			49,505,162			—			185,231,932			68,831,585			666,095,360
	(319,584,789	)		(59,860,071	)		(6,376,471	)		(21,604,159	)		—			(53,333,102	)		(23,008,739	)		(287,584,549	)
	264,864,400			(32,400,433	)		(2,644,056	)		27,901,003			—			131,898,830			45,822,846			378,510,811
	906,813			(179,100	)		9,761			43,523			—			745,808			130,848			1,284,024
	(153,501	)		(122,004	)		(14,207	)		(629	)		—			(50,312	)		(12,136	)		(164,160	)
	3,017			45,318			42,051			(59	)		—			(4,203	)		(1,591	)		(4,607	)
	756,329			(255,786	)		37,605			42,835			—			691,293			117,121			1,115,257
	265,620,729			(32,656,219	)		(2,606,451	)		27,943,838			—			132,590,123			45,939,967			379,626,068
	190,659,380			(26,310,243	)		(2,721,284	)		29,877,733			—			107,783,055			41,014,047			281,363,210
	516,307,694			91,435,336			11,658,843			29,877,733			—			162,938,635			67,203,114			428,290,756
	(3,982,534	)		(837,439	)		127,646			285,409			(122,730	)		9,122,736			1,508,113			(1,816,714	)
	(11,628,755	)		(617,580	)		(210,446	)		446,510			(199,246	)		(6,321,527	)		(3,119,597	)		(18,298,416	)
	(69,296,113	)		(3,164,680	)		(108,727	)		1,927,399			1,789,847			(33,527,994	)		(7,305,515	)		(77,664,307	)
	(84,907,402	)		(4,619,699	)		(191,527	)		2,659,318			1,467,871			(30,726,785	)		(8,916,999	)		(97,779,437	)
	117,794,584			58,983,628			6,075,617			54,496,734			46,840,113			34,789,346			32,365,356			82,586,579
	(158,363,223	)		(35,097,013	)		(5,560,511	)		(39,982,042	)		(10,826,183	)		(38,244,767	)		(27,058,057	)		(102,802,328	)
	(40,568,639	)		23,886,615			515,106			14,514,692			36,013,930			(3,455,421	)		5,307,299			(20,215,749	)
	(28,244	)		289,182			—			222,343			184,821			(47,072	)		59,004			100,532
	(110,892	)		(130,787	)		(14,084	)		(22,328	)		(6,131	)		(59,461	)		(19,490	)		(134,769	)
	(434	)		(3,528	)		939			(1,623	)		(239	)		(1,228	)		326			(1,845	)
	(139,570	)		154,867			(13,145	)		198,392			178,451			(107,761	)		39,840			(36,082	)
	(40,708,209	)		24,041,482			501,961			14,713,084			36,192,381			(3,563,182	)		5,347,139			(20,251,831	)
	(125,615,611	)		19,421,783			310,434			17,372,402			37,660,252			(34,289,967	)		(3,569,860	)		(118,031,268	)
$	390,692,083		$	110,857,119		$	11,969,277		$	47,250,135		$	37,660,252		$	128,648,668		$	63,633,254		$	310,259,488

C-7

Lincoln National Variable Annuity Account C

Statements of changes in net assets (continued)

Years Ended December 31, 2000 and 2001

	LN Aggressive Growth Subaccount			LN Bond Subaccount
NET ASSETS JANUARY 1, 2000	$	391,889,126		$	299,933,414
Changes From Operations:
ŸNet investment income (loss)		19,407,667			13,586,232
ŸNet realized gain (loss) on investments		3,986,137			(2,700,024	)
ŸNet change in unrealized appreciation or depreciation on investments		(60,738,302	)		13,691,896
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(37,344,498	)		24,578,104
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		344,926,722			63,648,953
ŸTerminated contracts & transfers to annuity reserves		(197,351,110	)		(111,476,420	)
		147,575,612			(47,827,467	)
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		377,851			(61,499	)
ŸAnnuity Payments		(189,180	)		(76,794	)
ŸReceipt (reimbursement) of mortality guarantee adjustment		(2,958	)		(132,471	)
		185,713			(270,764	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		147,761,325			(48,098,231	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		110,416,827			(23,520,127	)
NET ASSETS AT DECEMBER 31, 2000		502,305,953			276,413,287
Changes From Operations:
ŸNet investment income (loss)		78,322,385			15,466,971
ŸNet realized gain (loss) on investments		(9,854,837	)		444,858
ŸNet change in unrealized appreciation or depreciation on investments		(232,105,814	)		9,674,334
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(163,638,266	)		25,586,163
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		78,990,804			233,771,068
ŸTerminated contracts & transfers to annuity reserves		(121,481,919	)		(133,948,763	)
		(42,491,115	)		99,822,305
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		143,283			511,136
ŸAnnuity Payments		(131,905	)		(479,930	)
ŸReceipt (reimbursement) of mortality guarantee adjustment		(1,404	)		389,129
		9,974			420,335
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		(42,481,141	)		100,242,640
TOTAL INCREASE (DECREASE) IN NET ASSETS		(206,119,407	)		125,828,803
NET ASSETS AT DECEMBER 31, 2001	$	296,186,546		$	402,242,090
	LN Special Opportunities Subaccount			MFS Capital Opportunities Subaccount
NET ASSETS JANUARY 1, 2000	$	627,230,815		$	—
Changes From Operations:
ŸNet investment income (loss)		99,072,752			—
ŸNet realized gain (loss) on investments		(8,480,056	)		—
ŸNet change in unrealized appreciation or depreciation on investments		(33,928,342	)		—
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		56,664,354			—
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		64,260,180			—
ŸTerminated contracts & transfers to annuity reserves		(247,568,099	)		—
		(183,307,919	)		—
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		(56,075	)		—
ŸAnnuity Payments		(236,170	)		—
ŸReceipt (reimbursement) of mortality guarantee adjustment		(11,552	)		—
		(303,797	)		—
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		(183,611,716	)		—
TOTAL INCREASE (DECREASE) IN NET ASSETS		(126,947,362	)		—
NET ASSETS AT DECEMBER 31, 2000		500,283,453			—
Changes From Operations:
ŸNet investment income (loss)		2,083,039			(8	)
ŸNet realized gain (loss) on investments		(1,746,454	)		—
ŸNet change in unrealized appreciation or depreciation on investments		3,779,061			61
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		4,115,646			53
Changes From Unit Transactions:
Accumulation Units:
ŸContract purchases		102,594,452			5,097
ŸTerminated contracts & transfers to annuity reserves		(107,474,276	)		—
		(4,879,824	)		5,097
Annuity Reserves:
ŸTransfer from accumulation units & between subaccounts		177,194			—
ŸAnnuity Payments		(201,653	)		—
ŸReceipt (reimbursement) of mortality guarantee adjustment		(2,383	)		—
		(26,842	)		—
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS		(4,906,666	)		5,097
TOTAL INCREASE (DECREASE) IN NET ASSETS		(791,020	)		5,150
NET ASSETS AT DECEMBER 31, 2001	$	499,492,433		$	5,150

See accompanying notes.

C-8

LN Capital Appreciation Subaccount			LN Equity- Income Subaccount			LN Global Asset Allocation Subaccount			LN Growth and Income Subaccount			LN International Subaccount			LN Managed Subaccount			LN Money Market Subaccount			LN Social Awareness Subaccount
$	1,840,085,030		$	956,970,903		$	480,889,666		$	4,555,617,017		$	515,787,330		$	911,278,088		$	178,269,199		$	1,868,187,203
	68,345,492			222,888,568			25,655,156			266,078,005			14,351,771			67,336,859			7,338,990			126,705,201
	44,143,213			45,698,592			15,073,820			303,796,068			2,558,320			30,777,160			—			114,816,281
	(441,367,735	)		(200,999,956	)		(68,945,612	)		(997,479,819	)		(26,427,001	)		(117,513,857	)		—			(393,550,391	)
	(328,879,030	)		67,587,204			(28,216,636	)		(427,605,746	)		(9,516,910	)		(19,399,838	)		7,338,990			(152,028,909	)
	825,355,646			139,219,422			54,494,732			459,435,001			168,247,883			71,212,156			399,566,130			254,664,977
	(727,668,575	)		(332,153,434	)		(127,087,576	)		(1,105,242,722	)		(280,030,554	)		(217,403,672	)		(441,361,120	)		(537,464,860	)
	97,687,071			(192,934,012	)		(72,592,844	)		(645,807,721	)		(111,782,671	)		(146,191,516	)		(41,794,990	)		(282,799,883	)
	2,043,290			(606,180	)		(264,628	)		708,584			(114,806	)		223,451			326,054			(88,198	)
	(975,330	)		(529,281	)		(348,665	)		(4,990,137	)		(121,385	)		(432,050	)		(37,497	)		(782,002	)
	(27,437	)		(4,935	)		(26,081	)		(423,590	)		560			(17,526	)		(21,768	)		(8,231	)
	1,040,523			(1,140,396	)		(639,374	)		(4,705,143	)		(235,631	)		(226,125	)		266,789			(878,431	)
	98,727,594			(194,074,408	)		(73,232,218	)		(650,512,864	)		(112,018,302	)		(146,417,641	)		(41,528,201	)		(283,678,314	)
	(230,151,436	)		(126,487,204	)		(101,448,854	)		(1,078,118,610	)		(121,535,212	)		(165,817,479	)		(34,189,211	)		(435,707,223	)
	1,609,933,594			830,483,699			379,440,812			3,477,498,407			394,252,118			745,460,609			144,079,988			1,432,479,980
	101,959,701			34,744,697			24,225,729			887,155,290			33,090,637			118,379,559			4,585,003			315,195,414
	(4,961,068	)		(1,048,692	)		618,654			25,605,549			(11,043,421	)		421,178			—			(1,157,588	)
	(511,439,122	)		(104,224,417	)		(57,552,322	)		(1,329,052,963	)		(62,340,373	)		(138,648,439	)		—			(463,336,369	)
	(414,440,489	)		(70,528,412	)		(32,707,939	)		(416,292,124	)		(40,293,157	)		(19,847,702	)		4,585,003			(149,298,543	)
	229,749,371			168,446,024			29,701,146			288,946,296			144,798,551			67,101,090			233,373,854			159,366,520
	(366,650,385	)		(167,119,665	)		(63,129,850	)		(549,545,270	)		(186,304,184	)		(117,222,269	)		(208,656,267	)		(244,798,431	)
	(136,901,014	)		1,326,359			(33,428,704	)		(260,598,974	)		(41,505,633	)		(50,121,179	)		24,717,587			(85,431,911	)
	(242,466	)		601,197			(66,380	)		1,029,151			(10,182	)		265,324			78,233			72,954
	(626,473	)		(486,752	)		(250,622	)		(3,923,959	)		(98,689	)		(413,654	)		(70,423	)		(562,665	)
	(5,606	)		(294	)		(4,475	)		—			(3,224	)		(5,098	)		(918	)		6,875
	(874,545	)		114,151			(321,477	)		(2,894,808	)		(112,095	)		(153,428	)		6,892			(482,836	)
	(137,775,559	)		1,440,510			(33,750,181	)		(263,493,782	)		(41,617,728	)		(50,274,607	)		24,724,479			(85,914,747	)
	(552,216,048	)		(69,087,902	)		(66,458,120	)		(679,785,906	)		(81,910,885	)		(70,122,309	)		29,309,482			(235,213,290	)
$	1,057,717,546		$	761,395,797		$	312,982,692		$	2,797,712,501		$	312,341,233		$	675,338,300		$	173,389,470		$	1,197,266,690
MFS Total Return Subaccount			MFS Utilities Subaccount			NB AMT Partners Subaccount			NB AMT Regency Subaccount			NB AMT Mid-Cap Growth Subaccount			Putnam Health Sciences Class IB Subaccount
$	—		$	—		$	3,128,641		$	—		$	22,792,195		$	—
	—			—			789,241			—			(1,680,105	)		—
	—			—			(479,071	)		—			(1,279,366	)		—
	—			—			(305,506	)		—			(43,849,956	)		—
	—			—			4,664			—			(46,809,427	)		—
	—			—			28,718,103			—			378,386,955			—
	—			—			(22,537,239	)		—			(151,382,904	)		—
	—			—			6,180,864			—			227,004,051			—
	—			—			47,099			—			516,584			—
	—			—			(1,816	)		—			(34,830	)		—
	—			—			(373	)		—			(1,602	)		—
	—			—			44,910			—			480,152			—
	—			—			6,225,774			—			227,484,203			—
	—			—			6,230,438			—			180,674,776			—
	—			—			9,359,079			—			203,466,971			—
	(9	)		(17,444	)		317,343			(9	)		(1,498,735	)		(15,529	)
	—			(113,206	)		(374,536	)		—			(28,561,257	)		(36,201	)
	64			(432,243	)		(449,577	)		269			(19,840,296	)		(48,677	)
	55			(562,893	)		(506,770	)		260			(49,900,288	)		(100,407	)
	5,098			6,951,175			21,530,622			5,098			99,395,579			6,889,038
	—			(2,097,702	)		(11,106,618	)		—			(116,000,758	)		(2,161,824	)
	5,098			4,853,473			10,424,004			5,098			(16,605,179	)		4,727,214
	—			47,763			4,574			—			17,265			65,792
	—			(1,418	)		(5,893	)		—			(55,048	)		(1,584	)
	—			13			(3,877	)		—			398			(1	)
	—			46,358			(5,196	)		—			(37,385	)		64,207
	5,098			4,899,831			10,418,808			5,098			(16,642,564	)		4,791,421
	5,153			4,336,938			9,912,038			5,358			(66,542,852	)		4,691,014
$	5,153		$	4,336,938		$	19,271,117		$	5,358		$	136,924,119		$	4,691,014

C-9

Lincoln National Variable Annuity Account C

Notes to financial statements

1. Accounting Policies and Account Information

The Variable Account:

Lincoln National Variable Annuity Account C (Variable Account) is a segregated investment account of The Lincoln National Life Insurance Company (the Company) and is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, as a unit investment trust. The Variable Account consists of two products, Multi-Fund^® and eAnnuity^™. The Multi-Fund^® product is an annuity contract offering a guaranteed minimum death benefit (GMBD) rider option. Effective August 20, 1998, the eAnnuity^™ product became available to clients of the Company. The eAnnuity^™ product is an annuity contract that is sold through the internet.

The assets of the Variable Account are owned by the Company. The portion of the Variable Account’s assets supporting the annuity contracts may not be used to satisfy liabilities arising from any other business of the Company.

Basis of Presentation:

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States for unit investment trusts.

Investments:

The assets of the Variable Accounts are divided into variable subaccounts each of which is invested in shares of thirty eight mutual funds (the Funds) of fourteen diversified open-end management investment companies, each Fund with its own investment objective. The Funds are:

American Funds Insurance Series (AFIS):

AFIS Growth Class 2 Fund

AFIS Growth-Income Class 2 Fund

AFIS International Class 2 Fund

AIM Variable Insurance Funds (AIM):

AIM International Equity Fund

AIM Value Fund

American Century Variable Portfolios, Inc. (American Century VP):

American Century VP International Portfolio

Alliance Variable Products Series Fund (AVPSF):

AVPSF Small Cap Value Class A Fund

AVPSF Technology Class B Fund

AVPSF Growth Class B Fund

Baron Capital Funds Trust:

Baron Capital Asset Fund

Deutsche Asset Management VIT Funds Trust (Deutsche):

Deutsche Equity 500 Index Fund

Deutsche Small Cap Index Fund

Delaware Group Premium Fund (DGPF):

DGPF Trend Series

DGPF Growth and Income Series

DGPF Global Bond Series

DGPF REIT Series

DGPF Small Cap Value Service Class Series

Fidelity Variable Insurance Products Fund (Fidelity VIP):

Fidelity VP Growth Portfolio Service Class Portfolio

Fidelity Variable Insurance Products Fund II (Fidelity VIP II):

Fidelity VP II Contrafund Portfolio Service Class Portfolio

Janus Aspen Series:

Janus Aspen Series Worldwide Growth Portfolio

Lincoln National (LN):

LN Aggressive Growth Fund

LN Bond Fund

LN Capital Appreciation Fund

LN Equity-Income Fund

LN Global Asset Allocation Fund

LN Growth and Income Fund

LN International Fund

LN Managed Fund

LN Money Market Fund

LN Social Awareness Fund

LN Special Opportunities Fund

MFS Variable Insurance Trust (MFS):

MFS Capital Opportunities Series

MFS Total Return Series

MFS Utilities Series

Neuberger Berman Advisors Management Trust (NB AMT):

NB AMT Partners Portfolio

NB AMT Regency Portfolio

NB AMT Mid-Cap Growth Portfolio

Putnam Variable Trust:

Putnam Health Sciences Class IB Fund

Investments in the Funds are stated at the closing net asset value per share on December 31, 2001, which approximates fair value. The difference between cost and fair value is reflected as unrealized appreciation or depreciation of investments.

Investment transactions are accounted for on a trade date basis. The cost of investments sold is determined by the average cost method.

C-10

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

Dividends:

Dividends paid to the Variable Account are automatically reinvested in shares of the Funds on the payable date. Dividend income is recorded on the ex-dividend date.

Federal Income Taxes:

Operations of the Variable Account form a part of and are taxed with operations of the Company, which is taxed as a “life insurance company” under the Internal Revenue Code. The Variable Account will not be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended. Using current federal income tax law, no federal income taxes are payable with respect to the Variable Account’s net investment income and the net realized gain on investments.

Annuity Reserves:

Reserves on contracts not involving life contingencies are calculated using an assumed investment rate of 5%. Reserves on contracts involving life contingencies are calculated using a modification of the 1971 Individual Annuitant Mortality Table and an assumed investment rate of 5%.

2. Mortality and Expense Guarantees & Other Transactions with Affiliate

Amounts are paid to the Company for mortality and expense guarantees at a percentage of the current value

of the Variable Account each day. The rates are as follows for the two contract types and the corresponding rider options within the Variable Account:

• Multi-Fund^® at a daily rate of .00274525% (1.002% on an annual basis)

• Multi-Fund^® at a daily rate of .00356712% (1.302% on an annual basis)

• eAnnuity^™ at a daily rate of .00150685% (.55% on an annual basis)

• Multi-Fund^® at a daily rate of .00273973% (1.00% on an annual basis)

• Multi-Fund^® at a daily rate of .00356164% (1.30% on an annual basis)

• Multi-Fund^® at a daily rate of .00342466% (1.25% on an annual basis)

• Multi-Fund^® at a daily rate of .00479452% (1.75% on an annual basis)

• Multi-Fund^® at a daily rate of .00534247% (1.95% on an annual basis)

In addition, $16,950,960 was retained by the Company from the proceeds of the sales of annuity contracts for

contract charges and surrender charges during 2001.

Accordingly, the Company is responsible for all sales, general and administrative expenses applicable to the Variable Account.

C-11

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values

A summary of unit values, units outstanding, and net assets for variable annuity contracts at December 31 follows. Mortality and expense rates (fee rates) listed below are annualized rates.

	Commencement Date	Commencement Unit Value		1997 Unit Value		1998 Unit Value		1999 Unit Value		2000 Unit Value		2001 Unit Value
AFIS Growth Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	5/22/00	$	1.00	$	—	$	—	$	—	$	1.00	$	0.81
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/22/00		1.00		—		—		—		1.00		0.81
Multi-Fund® (1.302% Fee Rate)	5/22/00		1.00		—		—		—		0.99		0.80
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
AFIS Growth-Income Class 2 Fund
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
AFIS International Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	5/22/00		1.00		—		—		—		0.86		0.68
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/22/00		1.00		—		—		—		0.86		0.68
Multi-Fund® (1.302% Fee Rate)	5/22/00		1.00		—		—		—		0.86		0.68
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.02
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.02
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.02
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.01
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.01
AIM International Equity Fund
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.16
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.16
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.16
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.16
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.15
AIM Value Fund
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.00
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
American Century VP International Portfolio
eAnnuity™ (.55% Fee Rate)	1/28/99		1.00		—		—		1.55		1.28		0.90
AVPSF Small Cap Value Class A Fund
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.56
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.55
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.55
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.55
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.54
AVPSF Technology Class B Fund
Multi-Fund® (1.002% Fee Rate)	5/22/00		1.00		—		—		—		0.77		0.57
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/22/00		1.00		—		—		—		0.77		0.57
Multi-Fund® (1.302% Fee Rate)	5/22/00		1.00		—		—		—		0.77		0.56
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.95
AVPSF Growth Class B Fund
Multi-Fund® (1.002% Fee Rate)	5/22/00		1.00		—		—		—		0.90		0.68
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/22/00		1.00		—		—		—		0.90		0.68
Multi-Fund® (1.302% Fee Rate)	5/22/00		1.00		—		—		—		0.90		0.68

C-12

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	Commencement Date	Commencement Unit Value		1997 Unit Value		1998 Unit Value		1999 Unit Value		2000 Unit Value		2001 Unit Value
Baron Capital Asset Fund
Multi-Fund® (1.002% Fee Rate)	8/27/99	$	1.00	$	—	$	—	$	1.21	$	1.16	$	1.29
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.21		1.16		1.29
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.21		1.16		1.28
eAnnuity™ (.55% Fee Rate)	1/28/99		1.00		—		—		1.33		1.29		1.44
Deutsche Equity 500 Index Fund
Multi-Fund® (1.002% Fee Rate)	8/27/99		1.00		—		—		1.09		0.98		0.85
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.09		0.98		0.85
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.09		0.97		0.85
eAnnuity™ (.55% Fee Rate)	1/28/99		1.00		—		—		1.15		1.04		0.91
eAnnuity™ Annuity Reserves (.55% Fee Rate)	1/28/99		1.00		—		—		1.15		1.04		0.91
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Deutsche Small Cap Index Fund
Multi-Fund® (1.002% Fee Rate)	8/27/99		1.00		—		—		1.16		1.11		1.12
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.16		1.11		1.12
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.16		1.10		1.11
eAnnuity™ (.55% Fee Rate)	1/28/99		1.00		—		—		1.18		1.13		1.15
eAnnuity™ Annuity Reserves (.55% Fee Rate)	1/28/99		1.00		—		—		1.18		1.13		1.15
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.69
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.68
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.68
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.68
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.67
DGPF Trend Series
Multi-Fund® (1.002% Fee Rate)					1.19		1.37		2.31		2.13		1.78
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					1.19		1.37		2.31		2.13		1.78
Multi-Fund® (1.302% Fee Rate)	6/23/97		1.02		1.19		1.36		2.29		2.11		1.76
eAnnuity™ (.55% Fee Rate)	8/18/98		1.28		—		1.37		2.32		2.14		1.80
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		1.28		—		1.37		2.32		2.14		1.80
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.54
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.54
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.54
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.54
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.53
DGPF Growth and Income Series
Multi-Fund® (1.002% Fee Rate)					1.46		1.61		1.55		1.71		1.62
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					1.46		1.61		1.55		1.71		1.62
Multi-Fund® (1.302% Fee Rate)	6/23/97		1.32		1.46		1.60		1.54		1.69		1.60
eAnnuity™ (.55% Fee Rate)	8/18/98		1.51		—		1.61		1.56		1.72		1.65
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		1.51		—		1.61		1.56		1.72		1.65
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.05
DGPF Global Bond Series
Multi-Fund® (1.002% Fee Rate)					1.11		1.18		1.13		1.13		1.11
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					1.11		1.18		1.13		1.13		1.11
Multi-Fund® (1.302% Fee Rate)	6/23/97		1.10		1.11		1.18		1.12		1.12		1.10
eAnnuity™ (.55% Fee Rate)	8/18/98		1.10		—		1.19		1.14		1.14		1.13
DGPF REIT Series
Multi-Fund® (1.002% Fee Rate)	5/22/00		1.00		—		—		—		1.17		1.26
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/22/00		1.00		—		—		—		1.17		1.26
Multi-Fund® (1.302% Fee Rate)	5/22/00		1.00		—		—		—		1.17		1.26
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.33
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.33
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.33
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.32
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.32

C-13

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	Commencement Date	Commencement Unit Value		1997 Unit Value		1998 Unit Value		1999 Unit Value		2000 Unit Value		2001 Unit Value
DGPF Small Cap Value Service Class Series
Multi-Fund® (1.002% Fee Rate)	5/29/01	$	1.00	$	—	$	—	$	—	$	—	$	1.02
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/29/01		1.00		—		—		—		—		1.02
Multi-Fund® (1.302% Fee Rate)	5/29/01		1.00		—		—		—		—		1.02
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.58
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.58
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.58
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.57
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.57
Fidelity VIP Growth Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)	8/27/99		1.00		—		—		1.19		1.05		0.85
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.19		1.05		0.85
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.19		1.04		0.85
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Fidelity VIP II Contrafund Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)	8/27/99		1.00		—		—		1.15		1.06		0.92
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.15		1.06		0.92
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.14		1.05		0.91
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.25
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.25
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.25
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.25
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.24
Janus Aspen Worldwide Growth Portfolio
Multi-Fund® (1.002% Fee Rate)	8/27/99		1.00		—		—		1.44		1.20		0.92
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.44		1.20		0.92
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.43		1.19		0.91
eAnnuity™ (.55% Fee Rate)	1/29/99		1.00		—		—		1.54		1.29		0.99
eAnnuity™ Annuity Reserves (.55% Fee Rate)	1/29/99		1.00		—		—		1.54		1.29		0.99
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.09
LN Aggressive Growth Fund
Multi-Fund® (1.002% Fee Rate)					1.69		1.57		2.21		2.13		1.41
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					1.69		1.57		2.21		2.13		1.41
Multi-Fund® (1.302% Fee Rate)	6/23/97		1.43		1.68		1.56		2.19		2.11		1.39
eAnnuity™ (.55% Fee Rate)	8/18/98		1.59		—		1.57		2.22		—		—
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.31
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.30
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.30
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.30
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.30
LN Bond Fund
Multi-Fund® (1.002% Fee Rate)					4.63		5.02		4.81		5.28		5.71
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					4.63		5.02		4.81		5.28		5.71
Multi-Fund® (1.302% Fee Rate)	6/23/97		4.40		4.62		5.00		4.78		5.23		5.63
eAnnuity™ (.55% Fee Rate)	8/18/98		4.84		—		5.03		4.84		5.35		5.80
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		4.84		—		5.03		4.84		5.35		5.80
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.98
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.98

C-14

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	Commencement Date	Commencement Unit Value		1997 Unit Value		1998 Unit Value		1999 Unit Value		2000 Unit Value		2001 Unit Value
LN Capital Appreciation Fund
Multi-Fund® (1.002% Fee Rate)				$	1.88	$	2.57	$	3.71	$	3.09	$	2.27
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					1.88		2.57		3.71		3.09		2.27
Multi-Fund® (1.302% Fee Rate)	6/23/97	$	1.72		1.88		2.56		3.68		3.05		2.23
eAnnuity™ (.55% Fee Rate)	8/18/98		2.20		—		2.58		3.73		3.12		2.30
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		2.20		—		2.58		3.73		3.12		2.30
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.95
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.95
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.95
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.95
LN Equity-Income Fund
Multi-Fund® (1.002% Fee Rate)					2.15		2.40		2.52		2.76		2.54
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					2.15		2.40		2.52		2.76		2.54
Multi-Fund® (1.302% Fee Rate)	6/23/97		1.93		2.15		2.39		2.50		2.74		2.50
eAnnuity™ (.55% Fee Rate)	8/18/98		2.24		—		2.40		2.54		2.79		2.57
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		2.24		—		2.40		2.54		2.79		2.57
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
LN Global Asset Allocation Fund
Multi-Fund® (1.002% Fee Rate)					2.72		3.06		3.37		3.15		2.88
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					2.72		3.06		3.37		3.15		2.88
Multi-Fund® (1.302% Fee Rate)	6/23/97		2.57		2.72		3.04		3.34		3.12		2.84
eAnnuity™ (.55% Fee Rate)	8/18/98		2.91		—		3.06		3.39		—		—
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		2.91		—		3.06		3.39		—		—
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.08
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.08
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.08
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.07
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.07
LN Growth and Income Fund
Multi-Fund® (1.002% Fee Rate)					9.65		11.50		13.38		11.97		10.52
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					9.65		11.50		13.38		11.97		10.52
Multi-Fund® (1.302% Fee Rate)	6/23/97		8.63		9.63		11.44		13.28		11.84		10.38
eAnnuity™ (.55% Fee Rate)	8/18/98		10.45		—		11.51		13.46		12.09		10.68
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		10.45		—		11.51		13.46		12.09		10.68
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
LN International Fund
Multi-Fund® (1.002% Fee Rate)					1.56		1.77		2.06		2.04		1.82
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					1.56		1.77		2.06		2.04		1.82
Multi-Fund® (1.302% Fee Rate)	6/23/97		1.66		1.56		1.76		2.04		2.02		1.79
eAnnuity™ (.55% Fee Rate)	8/18/98		1.67		—		1.78		2.07		2.06		1.85
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		1.67		—		1.78		2.07		2.06		1.85
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.00
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.00
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.99
LN Managed Fund
Multi-Fund® (1.002% Fee Rate)					4.71		5.26		5.61		5.48		5.33
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					4.71		5.26		5.61		5.48		5.33
Multi-Fund® (1.302% Fee Rate)	6/23/97		4.29		4.71		5.24		5.57		5.42		5.26
eAnnuity™ (.55% Fee Rate)	8/18/98		4.95		—		5.27		5.64		5.53		5.42
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		4.95		—		5.27		5.64		5.53		5.42
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.07
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.06

C-15

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	Commencement Date	Commencement Unit Value		1997 Unit Value		1998 Unit Value		1999 Unit Value		2000 Unit Value		2001 Unit Value
LN Money Market Fund
Multi-Fund® (1.002% Fee Rate)				$	2.42	$	2.52	$	2.61	$	2.74	$	2.82
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					2.42		2.52		2.61		2.74		2.82
Multi-Fund® (1.302% Fee Rate)	6/23/97	$	2.37		2.41		2.51		2.59		2.71		2.78
eAnnuity™ (.55% Fee Rate)	8/18/98		2.48		—		2.52		2.63		2.77		2.87
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		2.48		—		2.52		2.63		2.77		2.87
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.01
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.01
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.01
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.00
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.00
LN Social Awareness Fund
Multi-Fund® (1.002% Fee Rate)					4.95		5.88		6.71		6.09		5.46
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					4.95		5.88		6.71		6.09		5.46
Multi-Fund® (1.302% Fee Rate)	6/23/97		4.21		4.94		5.85		6.66		6.03		5.38
eAnnuity™ (.55% Fee Rate)	8/18/98		5.49		—		5.89		6.76		6.16		5.54
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		5.49		—		5.89		6.76		6.16		5.54
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.14
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.14
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.14
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.13
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.13
LN Special Opportunities Fund
Multi-Fund® (1.002% Fee Rate)					8.25		8.72		8.25		9.47		9.58
Multi-Fund® Annuity Reserves (1.002% Fee Rate)					8.25		8.72		8.25		9.47		9.58
Multi-Fund® (1.302% Fee Rate)	6/23/97		7.20		8.24		8.68		8.19		9.37		9.45
eAnnuity™ (.55% Fee Rate)	8/18/98		8.34		—		8.74		8.30		9.58		9.73
eAnnuity™ Annuity Reserves (.55% Fee Rate)	8/18/98		8.34		—		8.74		8.30		9.58		9.73
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.49
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.49
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.49
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.48
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.48
MFS Capital Opportunities Series
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
MFS Total Return Fund
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.11
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.10
MFS Utilities Series
Multi-Fund® (1.002% Fee Rate)	5/29/01		1.00		—		—		—		—		0.79
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/29/01		1.00		—		—		—		—		0.79
Multi-Fund® (1.302% Fee Rate)	5/29/01		1.00		—		—		—		—		0.79
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.84
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.84
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.84
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.83
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.83
NB AMT Partners Portfolio
Multi-Fund® (1.002% Fee Rate)	8/27/99		1.00		—		—		1.01		1.01		0.97
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.01		1.01		0.97
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.01		1.00		0.96
eAnnuity™ (.55% Fee Rate)	1/29/99		1.00		—		—		1.05		1.05		1.01
NB AMT Regency Portfolio
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.52
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.51
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.51
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.51
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.50

C-16

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	Commencement Date	Commencement Unit Value		1997 Unit Value		1998 Unit Value		1999 Unit Value		2000 Unit Value		2001 Unit Value
NB AMT Mid-Cap Growth Portfolio
Multi-Fund® (1.002% Fee Rate)	8/27/99	$	1.00	$	—	$	—	$	1.46	$	1.34	$	1.00
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8/27/99		1.00		—		—		1.46		1.34		1.00
Multi-Fund® (1.302% Fee Rate)	8/27/99		1.00		—		—		1.46		1.34		0.99
eAnnuity™ (.55% Fee Rate)	1/29/99		1.00		—		—		1.52		1.40		1.05
eAnnuity™ Annuity Reserves (.55% Fee Rate)	1/29/99		1.00		—		—		1.52		1.40		1.05
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		10.18
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		10.18
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		10.18
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		10.17
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		10.17
Putnam Health Sciences Class IB Fund
Multi-Fund® (1.002% Fee Rate)	5/29/01		1.00		—		—		—		—		0.95
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	5/29/01		1.00		—		—		—		—		0.95
Multi-Fund® (1.302% Fee Rate)	5/29/01		1.00		—		—		—		—		0.94
Multi-Fund® (1.00% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.30% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.25% Fee Rate)	11/19/01		10.00		—		—		—		—		9.97
Multi-Fund® (1.75% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96
Multi-Fund® (1.95% Fee Rate)	11/19/01		10.00		—		—		—		—		9.96

	1997 Units	1998 Units	1999 Units	2000 Units	2001 Units
AFIS Growth Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—	184,154,139	313,662,711
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	1,128,424	1,970,247
Multi-Fund® (1.302% Fee Rate)	—	—	—	4,949,850	8,301,236
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
AFIS Growth-Income Class 2 Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
AFIS International Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—	23,268,182	42,307,188
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	202,823	370,282
Multi-Fund® (1.302% Fee Rate)	—	—	—	750,887	925,247
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
AIM International Equity Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
AIM Value Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
American Century VP International Portfolio
eAnnuity™ (.55% Fee Rate)	—	—	2,329	108,766	98,203

C-17

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Units	1998 Units	1999 Units	2000 Units	2001 Units
AVPSF Small Cap Value Class A Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
AVPSF Technology Class B Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—	69,406,745	81,913,600
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	179,939	248,531
Multi-Fund® (1.302% Fee Rate)	—	—	—	1,389,921	1,146,481
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
AVPSF Growth Class B Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—	5,810,068	9,650,843
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	36,879	89,795
Multi-Fund® (1.302% Fee Rate)	—	—	—	127,958	59,252
Baron Capital Asset Fund
Multi-Fund® (1.002% Fee Rate)	—	—	7,228,569	18,359,205	50,998,885
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	—	49,520
Multi-Fund® (1.302% Fee Rate)	—	—	658,684	1,448,876	1,337,523
eAnnuity™ (.55% Fee Rate)	—	—	28,950	49,338	62,393
Deutsche Equity 500 Index Fund
Multi-Fund® (1.002% Fee Rate)	—	—	46,984,052	100,922,041	123,651,748
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	151,082	744,211	1,030,817
Multi-Fund® (1.302% Fee Rate)	—	—	1,319,893	2,776,687	2,805,977
eAnnuity™ (.55% Fee Rate)	—	—	15,090	37,472	27,526
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	91,113	107,481	93,772
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
Deutsche Small Cap Index Fund
Multi-Fund® (1.002% Fee Rate)	—	—	3,065,895	11,525,649	19,047,416
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	27,063	85,109	84,201
Multi-Fund® (1.302% Fee Rate)	—	—	141,266	819,108	841,685
eAnnuity™ (.55% Fee Rate)	—	—	154,689	155,791	170,390
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	130,559	130,959	113,633
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
DGPF Trend Series
Multi-Fund® (1.002% Fee Rate)	45,956,994	63,363,770	138,130,035	236,656,424	214,133,351
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	34,917	151,852	436,999	357,827
Multi-Fund® (1.302% Fee Rate)	600,523	1,522,285	2,693,313	5,356,604	4,412,305
eAnnuity™ (.55% Fee Rate)	—	3,182	27,917	113,415	89,313
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	2,327	820
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103

C-18

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Units	1998 Units	1999 Units	2000 Units	2001 Units
DGPF Growth and Income Series
Multi-Fund® (1.002% Fee Rate)	62,514,885	90,934,980	72,068,626	50,851,938	65,103,320
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	450,356	708,417	712,597	531,833	626,677
Multi-Fund® (1.302% Fee Rate)	1,537,440	4,110,801	3,351,154	2,257,802	2,611,137
eAnnuity™ (.55% Fee Rate)	—	4,472	5,628	7,615	9,953
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	—	8,381
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
DGPF Global Bond Series
Multi-Fund® (1.002% Fee Rate)	10,909,411	12,869,495	12,254,866	9,959,467	10,391,629
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8,169	29,923	66,439	103,631	91,609
Multi-Fund® (1.302% Fee Rate)	267,546	372,938	405,781	270,767	283,795
eAnnuity™ (.55% Fee Rate)	—	1,781	1,781	1,995	3,773
DGPF REIT Series
Multi-Fund® (1.002% Fee Rate)	—	—	—	25,198,769	36,697,251
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	39,690	208,861
Multi-Fund® (1.302% Fee Rate)	—	—	—	266,822	541,845
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
DGPF Small Cap Value Service Class Series
Multi-Fund® (1.002% Fee Rate)	—	—	—	—	35,508,354
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	—	189,937
Multi-Fund® (1.302% Fee Rate)	—	—	—	—	1,115,379
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
Fidelity VIP Growth Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	44,655,728	150,874,224	147,021,818
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	107,432	673,442	558,074
Multi-Fund® (1.302% Fee Rate)	—	—	1,635,955	4,152,939	3,348,130
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
Fidelity VIP II Contrafund Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	21,303,355	60,708,211	67,248,666
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	89,289	193,788	233,093
Multi-Fund® (1.302% Fee Rate)	—	—	1,475,097	2,642,459	1,861,364
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
Janus Aspen Worldwide Growth Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	99,942,030	349,677,486	331,309,982
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	214,122	951,303	916,318
Multi-Fund® (1.302% Fee Rate)	—	—	1,912,083	6,256,602	4,478,932
eAnnuity™ (.55% Fee Rate)	—	—	240,176	317,536	284,818
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	73,196	57,389
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103

C-19

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Units	1998 Units	1999 Units	2000 Units	2001 Units
LN Aggressive Growth Fund
Multi-Fund® (1.002% Fee Rate)	198,261,432	204,321,730	175,375,232	233,175,048	208,342,214
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	254,392	401,351	330,037	404,075	399,252
Multi-Fund® (1.302% Fee Rate)	959,741	1,953,110	1,657,816	2,439,570	1,978,470
eAnnuity™ (.55% Fee Rate)	—	3,697	29,720	—	—
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Bond Fund
Multi-Fund® (1.002% Fee Rate)	59,831,709	70,180,846	61,153,697	51,363,134	68,955,262
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	94,219	141,922	160,260	105,843	181,621
Multi-Fund® (1.302% Fee Rate)	245,847	1,159,699	1,022,335	866,221	1,339,739
eAnnuity™ (.55% Fee Rate)	—	425	3,701	1,307	5,344
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	—	1,673
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Capital Appreciation Fund
Multi-Fund® (1.002% Fee Rate)	232,364,458	284,821,773	486,392,137	510,682,818	458,388,826
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	489,214	855,827	1,553,958	1,829,965	1,492,745
Multi-Fund® (1.302% Fee Rate)	1,963,593	4,552,867	8,524,638	8,960,152	7,044,322
eAnnuity™ (.55% Fee Rate)	—	4,421	98,271	78,495	76,780
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	4,928	1,725
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Equity-Income Fund
Multi-Fund® (1.002% Fee Rate)	367,650,522	395,671,340	371,756,833	294,144,130	293,856,934
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	1,261,112	1,357,383	1,624,078	1,164,785	1,207,367
Multi-Fund® (1.302% Fee Rate)	3,400,524	5,897,743	5,811,748	5,124,817	5,213,123
eAnnuity™ (.55% Fee Rate)	—	1,054	4,167	57,173	56,447
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	6,010	5,816
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Global Asset Allocation Fund
Multi-Fund® (1.002% Fee Rate)	158,528,478	155,191,452	140,172,654	118,277,702	106,920,435
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	521,790	623,589	860,132	657,073	546,957
Multi-Fund® (1.302% Fee Rate)	1,061,444	1,887,853	1,696,586	1,387,776	1,237,852
eAnnuity™ (.55% Fee Rate)	—	972	1,338	—	—
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	29,576	—	—
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Growth and Income Fund
Multi-Fund® (1.002% Fee Rate)	356,437,044	353,738,892	333,803,071	284,457,143	260,455,062
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	3,955,002	4,190,720	4,204,627	3,840,017	3,578,156
Multi-Fund® (1.302% Fee Rate)	1,412,921	2,251,670	2,509,728	2,236,085	1,936,345
eAnnuity™ (.55% Fee Rate)	—	224	2,758	4,419	4,686
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	1,836	146
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103

C-20

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Units	1998 Units	1999 Units	2000 Units	2001 Units
LN International Fund
Multi-Fund® (1.002% Fee Rate)	293,362,762	275,656,812	247,685,485	191,132,203	169,787,134
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	502,083	507,630	464,213	342,936	283,438
Multi-Fund® (1.302% Fee Rate)	1,342,514	2,375,268	2,589,188	1,884,345	1,793,385
eAnnuity™ (.55% Fee Rate)	—	2,055	7,514	6,431	9,967
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	17,153	9,366
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Managed Fund
Multi-Fund® (1.002% Fee Rate)	178,408,048	178,767,717	160,214,813	134,226,978	124,771,684
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	511,248	546,451	570,359	530,238	500,282
Multi-Fund® (1.302% Fee Rate)	801,564	1,774,940	1,652,446	1,379,569	1,348,329
eAnnuity™ (.55% Fee Rate)	—	530	4,816	5,442	4,030
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	2,128	2,887
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Money Market Fund
Multi-Fund® (1.002% Fee Rate)	35,963,169	46,571,447	66,318,967	51,218,431	59,147,873
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	56,935	62,459	85,154	181,995	185,121
Multi-Fund® (1.302% Fee Rate)	144,247	644,074	1,836,508	1,035,373	1,490,077
eAnnuity™ (.55% Fee Rate)	—	130,369	75,481	139,463	611,639
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	—	3,594
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Social Awareness Fund
Multi-Fund® (1.002% Fee Rate)	249,012,274	304,203,513	272,682,501	230,568,604	215,412,082
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	524,138	758,710	879,570	746,871	657,200
Multi-Fund® (1.302% Fee Rate)	2,155,674	5,135,886	4,696,813	3,803,334	3,327,644
eAnnuity™ (.55% Fee Rate)	—	1,623	8,398	9,225	8,219
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	600	140
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
LN Special Opportunities Fund
Multi-Fund® (1.002% Fee Rate)	101,002,630	98,734,457	75,094,275	52,172,621	51,523,267
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	137,167	156,387	143,255	106,611	104,060
Multi-Fund® (1.302% Fee Rate)	472,405	899,280	818,870	525,727	513,212
eAnnuity™ (.55% Fee Rate)	—	436	704	3,166	3,197
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	—	3,224
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
MFS Capital Opportunities Series
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103

C-21

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Units	1998 Units	1999 Units	2000 Units	2001 Units
MFS Total Return Series
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
MFS Utilities Series
Multi-Fund® (1.002% Fee Rate)	—	—	—	—	5,284,718
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	—	39,182
Multi-Fund® (1.302% Fee Rate)	—	—	—	—	184,411
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
NB AMT Partners Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	2,629,473	9,052,627	19,392,742
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	12,084	58,107	52,638
Multi-Fund® (1.302% Fee Rate)	—	—	448,914	163,754	413,070
eAnnuity™ (.55% Fee Rate)	—	—	3,020	6,799	8,407
NB AMT Regency Portfolio
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
NB AMT Mid-Cap Growth Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	15,335,744	148,898,533	134,748,309
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	312,694	278,920
Multi-Fund® (1.302% Fee Rate)	—	—	216,008	2,408,492	1,759,446
eAnnuity™ (.55% Fee Rate)	—	—	15,122	74,882	50,190
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	—	6,033	4,186
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103
Putnam Health Sciences Class IB Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—	—	4,828,879
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—	—	64,549
Multi-Fund® (1.302% Fee Rate)	—	—	—	—	62,214
Multi-Fund® (1.00% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.30% Fee Rate)	—	—	—	—	100
Multi-Fund® (1.25% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.75% Fee Rate)	—	—	—	—	103
Multi-Fund® (1.95% Fee Rate)	—	—	—	—	103

C-22

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Net Assets		1998 Net Assets		1999 Net Assets		2000 Net Assets		2001 Net Assets
AFIS Growth Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	$	—	$	—	$	—	$	183,285,850	$	252,963,874
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		1,123,104		1,588,972
Multi-Fund® (1.302% Fee Rate)		—		—		—		4,917,540		6,662,548
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,006
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,005
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,036
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,035
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,035
AFIS Growth-Income Class 2 Fund
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,019
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,041
AFIS International Class 2 Fund
Multi-Fund® (1.002% Fee Rate)		—		—		—		20,038,511		28,897,444
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		174,671		252,917
Multi-Fund® (1.302% Fee Rate)		—		—		—		645,473		628,923
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,002
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,002
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,032
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,031
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,031
AIM International Equity Fund
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,016
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,016
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,047
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,053
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,046
AIM Value Fund
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,000
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		999
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,029
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,036
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,029
American Century VP International Portfolio
eAnnuity™ (.55% Fee Rate)		—		—		3,613		139,556		88,749
AVPSF Small Cap Value Class A Fund
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,056
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,055
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,087
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,086
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,094
AVPSF Technology Class B Fund
Multi-Fund® (1.002% Fee Rate)		—		—		—		53,381,302		46,494,918
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		138,392		141,069
Multi-Fund® (1.302% Fee Rate)		—		—		—		1,067,038		647,606
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		996
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		996
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,026
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,026
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,025
AVPSF Growth Class B Fund
Multi-Fund® (1.002% Fee Rate)		—		—		—		5,249,166		6,590,764
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		33,318		61,323
Multi-Fund® (1.302% Fee Rate)		—		—		—		115,396		40,270
Baron Capital Asset Fund
Multi-Fund® (1.002% Fee Rate)		—		—		8,720,950		21,346,969		65,951,863
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		—		64,040
Multi-Fund® (1.302% Fee Rate)		—		—		793,850		1,677,876		1,717,548
eAnnuity™ (.55% Fee Rate)		—		—		38,454		63,446		89,642

C-23

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Net Assets		1998 Net Assets		1999 Net Assets		2000 Net Assets		2001 Net Assets
Deutsche Equity 500 Index Fund
Multi-Fund® (1.002% Fee Rate)	$	—	$	—	$	51,176,298	$	98,780,272	$	105,223,302
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		164,563		728,417		877,189
Multi-Fund® (1.302% Fee Rate)		—		—		1,436,290		2,707,032		2,371,230
eAnnuity™ (.55% Fee Rate)		—		—		17,383		38,961		24,995
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		104,948		111,751		85,150
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		997
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		997
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,027
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,026
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,026
Deutsche Small Cap Index Fund
Multi-Fund® (1.002% Fee Rate)		—		—		3,568,586		12,767,329		21,321,461
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		31,500		94,278		94,253
Multi-Fund® (1.302% Fee Rate)		—		—		164,256		903,685		935,551
eAnnuity™ (.55% Fee Rate)		—		—		183,150		176,001		195,402
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		154,564		147,949		130,313
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,069
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,068
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,100
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,100
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,099
DGPF Trend Series
Multi-Fund® (1.002% Fee Rate)		54,740,484		86,706,251		319,057,588		503,843,559		382,117,078
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		47,780		350,753		930,374		638,536
Multi-Fund® (1.302% Fee Rate)		714,229		2,073,882		6,175,116		11,285,640		7,768,417
eAnnuity™ (.55% Fee Rate)		—		4,361		64,857		243,132		161,209
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		4,989		1,479
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,054
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,054
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,086
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,085
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,085
DGPF Growth and Income Series
Multi-Fund® (1.002% Fee Rate)		91,334,715		146,455,982		111,489,353		86,706,165		105,625,740
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		657,974		1,140,947		1,102,380		906,814		1,016,740
Multi-Fund® (1.302% Fee Rate)		2,242,679		6,590,469		5,145,087		3,809,238		4,179,333
eAnnuity™ (.55% Fee Rate)		—		7,213		8,759		13,119		16,389
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		—		13,800
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,006
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,005
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,036
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,035
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,035
DGPF Global Bond Series
Multi-Fund® (1.002% Fee Rate)		12,099,923		15,237,020		13,847,956		11,237,344		11,551,949
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		9,060		35,427		75,075		116,928		101,838
Multi-Fund® (1.302% Fee Rate)		296,275		439,529		455,071		302,295		311,231
eAnnuity™ (.55% Fee Rate)		—		2,112		2,025		2,276		4,259
DGPF REIT Series
Multi-Fund® (1.002% Fee Rate)		—		—		—		29,519,239		46,301,003
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		46,495		263,521
Multi-Fund® (1.302% Fee Rate)		—		—		—		311,999		680,355
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,033
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,033
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,064
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,063
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,063

C-24

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Net Assets		1998 Net Assets		1999 Net Assets		2000 Net Assets		2001 Net Assets
DGPF Small Cap Value Service Class Series
Multi-Fund® (1.002% Fee Rate)	$	—	$	—	$	—	$	—	$	36,321,678
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		—		194,287
Multi-Fund® (1.302% Fee Rate)		—		—		—		—		1,138,905
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,058
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,058
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,089
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,089
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,088
Fidelity VIP Growth Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)		—		—		53,085,113		157,904,618		125,333,494
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		127,711		704,823		475,748
Multi-Fund® (1.302% Fee Rate)		—		—		1,942,756		4,329,194		2,834,353
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		997
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		997
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,027
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,026
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,026
Fidelity VIP II Contrafund Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)		—		—		24,399,100		64,214,327		61,717,824
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		102,264		204,980		213,922
Multi-Fund® (1.302% Fee Rate)		—		—		1,687,703		2,783,807		1,696,292
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,025
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,025
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,056
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,055
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,055
Janus Aspen Worldwide Growth Portfolio
Multi-Fund® (1.002% Fee Rate)		—		—		143,507,545		419,176,139		304,976,178
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		307,460		1,140,375		843,486
Multi-Fund® (1.302% Fee Rate)		—		—		2,742,730		7,470,247		4,094,191
eAnnuity™ (.55% Fee Rate)		—		—		369,811		409,581		283,391
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		94,414		57,101
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,010
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,010
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,040
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,040
LN Aggressive Growth Fund
Multi-Fund® (1.002% Fee Rate)		334,483,346		320,118,792		387,458,903		496,307,950		292,876,357
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		429,181		628,813		729,155		860,064		561,247
Multi-Fund® (1.302% Fee Rate)		1,616,614		3,045,683		3,635,002		5,137,939		2,743,699
eAnnuity™ (.55% Fee Rate)		—		5,802		66,066		—		—
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,031
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,030
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,061
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,061
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,060
LN Bond Fund
Multi-Fund®(1.002%Fee Rate)		277,147,745		352,615,382		294,262,077		271,319,552		393,614,910
Multi-Fund®Annuity Reserves (1.002% Fee Rate)		436,433		713,069		771,148		559,101		1,036,741
Multi-Fund® (1.302% Fee Rate)		1,137,023		5,800,262		4,882,266		4,527,644		7,544,676
eAnnuity™ (.55% Fee Rate)		—		2,140		17,923		6,990		30,979
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		—		9,701
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		999
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		999
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,029
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,028
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,028

C-25

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Net Assets		1998 Net Assets		1999 Net Assets		2000 Net Assets		2001 Net Assets
LN Capital Appreciation Fund
Multi-Fund® (1.002% Fee Rate)	$	437,833,856	$	733,000,123	$	1,802,604,486	$	1,576,650,546	$	1,038,407,196
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		921,803		2,202,505		5,759,079		5,649,722		3,381,578
Multi-Fund® (1.302% Fee Rate)		3,694,116		11,663,514		31,355,023		27,373,006		15,743,141
eAnnuity™ (.55% Fee Rate)		—		11,396		366,442		244,942		176,599
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		15,378		3,967
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		996
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		995
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,025
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,025
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,024
LN Equity-Income Fund
Multi-Fund® (1.002% Fee Rate)		790,308,116		949,249,140		938,303,117		813,070,389		745,128,131
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		2,710,910		3,256,478		4,099,123		3,219,688		3,061,499
Multi-Fund® (1.302% Fee Rate)		7,298,358		14,084,621		14,558,081		14,017,090		13,040,719
eAnnuity™ (.55% Fee Rate)		—		2,533		10,582		159,740		145,329
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		16,792		14,974
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,041
LN Global Asset Allocation Fund
Multi-Fund® (1.002% Fee Rate)		431,188,333		474,321,463		472,214,876		373,037,546		307,886,094
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		1,419,239		1,905,915		2,897,621		2,072,352		1,575,007
Multi-Fund® (1.302% Fee Rate)		2,882,535		5,743,627		5,672,387		4,330,914		3,516,463
eAnnuity™ (.55% Fee Rate)		—		2,977		4,535		—		—
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		100,247		—		—
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,008
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,008
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,038
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,037
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,037
LN Growth and Income Fund
Multi-Fund® (1.002% Fee Rate)		3,439,732,725		4,067,007,338		4,466,001,825		3,404,973,611		2,739,919,787
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		38,167,051		48,181,558		56,254,343		45,965,299		37,641,276
Multi-Fund® (1.302% Fee Rate)		13,613,258		25,768,885		33,323,736		26,483,857		20,094,712
eAnnuity™ (.55% Fee Rate)		—		2,577		37,113		53,443		50,026
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		22,197		1,556
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,040
LN International Fund
Multi-Fund® (1.002% Fee Rate)		458,218,383		488,741,223		509,530,537		389,702,566		308,569,919
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		784,229		900,031		954,965		699,218		515,117
Multi-Fund® (1.302% Fee Rate)		2,093,664		4,192,172		5,286,276		3,801,731		3,215,433
eAnnuity™ (.55% Fee Rate)		—		3,649		15,552		13,254		18,393
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		35,349		17,284
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,000
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		999
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,030
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,029
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,029

C-26

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Net Assets		1998 Net Assets		1999 Net Assets		2000 Net Assets		2001 Net Assets
LN Managed Fund
Multi-Fund® (1.002% Fee Rate)	$	841,011,899	$	940,406,297	$	898,850,367	$	735,039,952	$	665,532,240
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		2,410,011		2,874,599		3,199,874		2,903,634		2,668,503
Multi-Fund® (1.302% Fee Rate)		3,772,572		9,294,437		9,200,663		7,475,127		7,094,978
eAnnuity™ (.55% Fee Rate)		—		2,790		27,184		30,121		21,823
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		11,775		15,635
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,007
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,006
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,036
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,036
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,036
LN Money Market Fund
Multi-Fund® (1.002% Fee Rate)		86,979,858		117,212,426		173,091,643		140,386,886		166,949,840
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		137,700		157,196		222,250		498,837		522,519
Multi-Fund® (1.302% Fee Rate)		348,326		1,613,600		4,757,090		2,807,922		4,148,977
eAnnuity™ (.55% Fee Rate)		—		328,646		198,216		386,343		1,752,741
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		—		10,300
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,001
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,001
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,031
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,030
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,030
LN Social Awareness Fund
Multi-Fund® (1.002% Fee Rate)		1,232,525,060		1,787,245,998		1,830,926,133		1,404,937,450		1,175,711,103
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		2,594,303		4,457,548		5,905,868		4,550,953		3,586,972
Multi-Fund® (1.302% Fee Rate)		10,652,908		30,035,684		31,298,463		22,931,061		17,917,128
eAnnuity™ (.55% Fee Rate)		—		9,553		56,739		56,821		45,552
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		3,695		776
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,014
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,014
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,044
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,044
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,043
LN Special Opportunities Fund
Multi-Fund® (1.002% Fee Rate)		833,140,183		861,082,577		619,340,778		494,314,356		493,577,611
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		1,131,452		1,363,879		1,181,500		1,010,094		996,868
Multi-Fund® (1.302% Fee Rate)		3,890,612		7,806,987		6,702,697		4,928,685		4,850,168
eAnnuity™ (.55% Fee Rate)		—		3,811		5,840		30,318		31,095
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		—		31,353
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,049
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,049
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,080
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,080
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,080
MFS Capital Opportunities Series
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,010
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,049
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,040
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,040
MFS Total Return Series
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,011
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,049
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,041
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,041
MFS Utilities Series
Multi-Fund® (1.002% Fee Rate)		—		—		—		—		4,156,337
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		—		30,816
Multi-Fund® (1.302% Fee Rate)		—		—		—		—		144,778
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		984
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		984
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,013
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,013
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,013

C-27

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Net Assets		1998 Net Assets		1999 Net Assets		2000 Net Assets		2001 Net Assets
NB AMT Partners Portfolio
Multi-Fund® (1.002% Fee Rate)	$	—	$	—	$	2,659,658	$	9,128,877	$	18,813,598
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		12,222		58,596		51,066
Multi-Fund® (1.302% Fee Rate)		—		—		453,596		164,468		397,923
eAnnuity™ (.55% Fee Rate)		—		—		3,165		7,138		8,530
NB AMT Regency Portfolio
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,052
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,051
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,091
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,082
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,082
NB AMT Mid-Cap Growth Portfolio
Multi-Fund® (1.002% Fee Rate)		—		—		22,453,334		199,716,981		134,834,667
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		419,415		279,099
Multi-Fund® (1.302% Fee Rate)		—		—		315,934		3,217,667		1,748,313
eAnnuity™ (.55% Fee Rate)		—		—		22,927		104,490		52,484
eAnnuity™ Annuity Reserves (.55% Fee Rate)		—		—		—		8,418		4,377
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		1,018
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		1,018
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,048
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,048
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,047
Putnam Health Sciences Class IB Fund
Multi-Fund® (1.002% Fee Rate)		—		—		—		—		4,566,179
Multi-Fund® Annuity Reserves (1.002% Fee Rate)		—		—		—		—		61,037
Multi-Fund® (1.302% Fee Rate)		—		—		—		—		58,725
Multi-Fund® (1.00% Fee Rate)		—		—		—		—		997
Multi-Fund® (1.30% Fee Rate)		—		—		—		—		997
Multi-Fund® (1.25% Fee Rate)		—		—		—		—		1,027
Multi-Fund® (1.75% Fee Rate)		—		—		—		—		1,026
Multi-Fund® (1.95% Fee Rate)		—		—		—		—		1,026

C-28

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

The following is a summary of the total return rates based on unit values for the year or period ended December 31. Initial total return rates are not annualized.

	1997 Total Return*	1998 Total Return*	1999 Total Return*		2000 Total Return*		2001 Total Return*
AFIS Growth Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—		(0.47	)%	(18.97	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—		(0.47	)%	(18.97	)%
Multi-Fund® (1.302% Fee Rate)	—	—	—		(0.65	)%	(19.21	)%
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		0.59	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		0.55	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		0.56	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		0.50	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		0.48	%
AFIS Growth-Income Class 2 Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		1.13	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		1.09	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		1.10	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		1.05	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		1.02	%
AFIS International Class 2 Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—		(13.88	)%	(20.69	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—		(13.88	)%	(20.69	)%
Multi-Fund® (1.302% Fee Rate)	—	—	—		(14.04	)%	(20.93	)%
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		0.22	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		0.18	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		0.19	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		0.13	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		0.12	%
AIM International Equity Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		1.64	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		1.60	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		1.60	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		1.55	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		1.53	%
AIM Value Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		(0.04	)%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		(0.08	)%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		(0.06	)%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		(0.12	)%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		(0.14	)%
American Century VP International Portfolio
eAnnuity™ (.55% Fee Rate)	—	—			28.31	%	(29.56	)%
AVPSF Small Cap Value Class A Fund
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		5.55	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		5.51	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		5.52	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		5.47	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		5.43	%
AVPSF Technology Class B Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—		(23.09	)%	(26.20	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—		(23.09	)%	(26.20	)%
Multi-Fund® (1.302% Fee Rate)	—	—	—		(23.23	)%	(26.42	)%
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		(0.35	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		(0.39	)%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		(0.38	)%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		(0.43	)%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		(0.46	)%
AVPSF Growth Class B Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—		(9.65	)%	(24.41	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—		(9.65	)%	(24.41	)%
Multi-Fund® (1.302% Fee Rate)	—	—	—		(9.82	)%	(24.64	)%
Baron Capital Asset Fund
Multi-Fund® (1.002% Fee Rate)	—	—	20.65	%	(3.62	)%	11.22	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	20.65	%	(3.62	)%	11.22	%
Multi-Fund® (1.302% Fee Rate)	—	—	20.52	%	(3.91	)%	10.89	%
eAnnuity™ (.55% Fee Rate)	—	—	32.83	%	(3.19	)%	11.72	%

C-29

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Total Return*		1998 Total Return*		1999 Total Return*		2000 Total Return*		2001 Total Return*
Deutsche Equity 500 Index Fund
Multi-Fund® (1.002% Fee Rate)	—		—		8.92	%	(10.14	)%	(13.06	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		8.92	%	(10.14	)%	(13.06	)%
Multi-Fund® (1.302% Fee Rate)	—		—		8.82	%	(10.41	)%	(13.32	)%
eAnnuity™ (.55% Fee Rate)	—		—		15.18	%	(9.73	)%	(12.66	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		—		15.18	%	(9.73	)%	(12.66	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		(0.26	)%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		(0.30	)%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		(0.29	)%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		(0.35	)%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(0.36	)%
Deutsche Small Cap Index Fund
Multi-Fund® (1.002% Fee Rate)	—		—		16.40	%	(4.83	)%	1.05	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		16.40	%	(4.83	)%	1.05	%
Multi-Fund® (1.302% Fee Rate)	—		—		16.27	%	(5.12	)%	0.75	%
eAnnuity™ (.55% Fee Rate)	—		—		18.39	%	(4.57	)%	1.51	%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		—		18.39	%	(4.57	)%	1.51	%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		6.85	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		6.82	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		6.83	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		6.77	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		6.74	%
DGPF Trend Series
Multi-Fund® (1.002% Fee Rate)	20.17	%	14.87	%	68.80	%	(7.83	)%	(16.18	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	20.17	%	14.87	%	68.80	%	(7.83	)%	(16.18	)%
Multi-Fund® (1.302% Fee Rate)	16.40	%	14.55	%	68.29	%	(8.11	)%	(16.43	)%
eAnnuity™ (.55% Fee Rate)	—		6.99	%	69.51	%	(7.73	)%	(15.80	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		6.99	%	69.51	%	(7.73	)%	(15.80	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		5.44	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		5.40	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		5.41	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		5.35	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		5.33	%
DGPF Growth and Income Series
Multi-Fund® (1.002% Fee Rate)	29.72	%	10.24	%	(3.95	)%	10.22	%	(4.85	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	29.72	%	10.24	%	(3.95	)%	10.22	%	(4.85	)%
Multi-Fund® (1.302% Fee Rate)	10.53	%	9.91	%	(4.23	)%	9.89	%	(5.13	)%
eAnnuity™ (.55% Fee Rate)	—		6.82	%	(3.52	)%	10.70	%	(4.42	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		6.82	%	(3.52	)%	10.70	%	(4.42	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		0.56	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		0.52	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		0.54	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		0.48	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		0.46	%
DGPF Global Bond Series
Multi-Fund® (1.002% Fee Rate)	(0.13	)%	6.75	%	(4.56	)%	(0.15	)%	(1.48	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	(0.13	)%	6.75	%	(4.56	)%	(0.15	)%	(1.48	)%
Multi-Fund® (1.302% Fee Rate)	0.26	%	6.43	%	(4.84	)%	(0.45	)%	(1.77	)%
eAnnuity™ (.55% Fee Rate)	—		7.66	%	(4.12	)%	0.32	%	(1.03	)%
DGPF REIT Series
Multi-Fund® (1.002% Fee Rate)	—		—		—		—		26.17	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		—		—		26.17	%
Multi-Fund® (1.302% Fee Rate)	—		—		—		—		25.56	%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		3.33	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		3.29	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		3.29	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		3.24	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		3.21	%

C-30

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Total Return*		1998 Total Return*		1999 Total Return*		2000 Total Return*		2001 Total Return*
DGPF Small Cap Value Service Class Series
Multi-Fund® (1.002% Fee Rate)	—		—		—		—		2.29	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		—		—		2.29	%
Multi-Fund® (1.302% Fee Rate)	—		—		—		—		2.11	%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		5.79	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		5.75	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		5.75	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		5.70	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		5.67	%
Fidelity VIP Growth Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)	—		—		18.88	%	(11.96	)%	(18.55	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		18.88	%	(11.96	)%	(18.55	)%
Multi-Fund® (1.302% Fee Rate)	—		—		18.75	%	(12.22	)%	(18.79	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		(0.27	)%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		(0.31	)%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		(0.30	)%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		(0.35	)%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(0.37	)%
Fidelity VIP II Contrafund Service Class Portfolio
Multi-Fund® (1.002% Fee Rate)	—		—		14.53	%	(7.65	)%	(13.24	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		14.53	%	(7.65	)%	(13.24	)%
Multi-Fund® (1.302% Fee Rate)	—		—		14.41	%	(7.92	)%	(13.50	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		2.54	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		2.50	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		2.50	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		2.45	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		2.42	%
Janus Aspen Worldwide Growth Portfolio
Multi-Fund® (1.002% Fee Rate)	—		—		43.59	%	(16.52	)%	(23.21	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		43.59	%	(16.52	)%	(23.21	)%
Multi-Fund® (1.302% Fee Rate)	—		—		43.44	%	(16.76	)%	(23.44	)%
eAnnuity™ (.55% Fee Rate)	—		—		53.98	%	(16.23	)%	(22.86	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		—		53.98	%	(16.23	)%	(22.86	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		1.04	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		1.01	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		1.03	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		0.96	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		0.95	%
LN Agrressive Growth Fund
Multi-Fund® (1.002% Fee Rate)	21.86	%	(7.13	)%	41.01	%	(3.66	)%	(33.96	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	21.86	%	(7.13	)%	41.01	%	(3.66	)%	(33.96	)%
Multi-Fund® (1.302% Fee Rate)	17.55	%	(7.42	)%	40.61	%	(3.95	)%	(34.15	)%
eAnnuity™ (.55% Fee Rate)	—		(1.47	)%	41.65	%	—		—
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		3.07	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		3.03	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		3.04	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		2.98	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		2.96	%
LN Bond Fund
Multi-Fund® (1.002% Fee Rate)	8.15	%	8.47	%	(4.23	)%	9.78	%	8.06	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	8.15	%	8.47	%	(4.23	)%	9.78	%	8.06	%
Multi-Fund® (1.302% Fee Rate)	5.14	%	8.14	%	(4.52	)%	9.45	%	7.74	%
eAnnuity™ (.55% Fee Rate)	—		4.08	%	(3.79	)%	10.42	%	8.42	%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		4.08	%	(3.79	)%	10.42	%	8.42	%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		(0.08	)%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		(0.13	)%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		(0.11	)%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		(0.18	)%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(0.19	)%

C-31

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Total Return*		1998 Total Return*		1999 Total Return*		2000 Total Return*		2001 Total Return*
LN Capital Appreciation Fund
Multi-Fund® (1.002% Fee Rate)	23.99	%	36.58	%	44.01	%	(16.70	)%	(26.62	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	23.99	%	36.58	%	44.01	%	(16.70	)%	(26.62	)%
Multi-Fund® (1.302% Fee Rate)	9.26	%	36.17	%	43.58	%	(16.94	)%	(26.84	)%
eAnnuity™ (.55% Fee Rate)	—		17.30	%	44.66	%	(16.32	)%	(26.29	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		17.30	%	44.66	%	(16.32	)%	(26.29	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		(0.43	)%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		(0.48	)%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		(0.46	)%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		(0.52	)%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(0.54	)%
LN Equity-Income Fund
Multi-Fund® (1.002% Fee Rate)	29.29	%	11.61	%	5.21	%	9.52	%	(8.27	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	29.29	%	11.61	%	5.21	%	9.52	%	(8.27	)%
Multi-Fund® (1.302% Fee Rate)	11.12	%	11.27	%	4.89	%	9.19	%	(8.54	)%
eAnnuity™ (.55% Fee Rate)	—		7.15	%	5.70	%	10.01	%	(7.85	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		7.15	%	5.70	%	10.01	%	(7.85	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		1.14	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		1.10	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		1.11	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		1.06	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		1.04	%
LN Global Asset Allocation Fund
Multi-Fund® (1.002% Fee Rate)	18.16	%	12.37	%	10.22	%	(6.38	)%	(8.70	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	18.16	%	12.37	%	10.22	%	(6.38	)%	(8.70	)%
Multi-Fund® (1.302% Fee Rate)	5.86	%	12.03	%	9.89	%	(6.66	)%	(8.97	)%
eAnnuity™ (.55% Fee Rate)	—		5.27	%	10.72	%	—		—
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		5.27	%	10.72	%	—		—
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		0.81	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		0.77	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		0.78	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		0.72	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		0.70	%
LN Growth and Income Fund
Multi-Fund® (1.002% Fee Rate)	29.48	%	19.14	%	16.37	%	(10.53	)%	(12.12	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	29.48	%	19.14	%	16.37	%	(10.53	)%	(12.12	)%
Multi-Fund® (1.302% Fee Rate)	11.69	%	18.78	%	16.02	%	(10.80	)%	(12.38	)%
eAnnuity™ (.55% Fee Rate)	—		10.16	%	16.88	%	(10.13	)%	(11.72	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		10.16	%	16.88	%	(10.13	)%	(11.72	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		1.12	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		1.08	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		1.09	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		1.03	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		1.01	%
LN International Fund
Multi-Fund® (1.002% Fee Rate)	4.94	%	13.51	%	16.03	%	(0.89	)%	(10.86	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	4.94	%	13.51	%	16.03	%	(0.89	)%	(10.86	)%
Multi-Fund® (1.302% Fee Rate)	(5.98	)%	13.17	%	15.68	%	(1.18	)%	(11.13	)%
eAnnuity™ (.55% Fee Rate)	—		6.45	%	16.55	%	(0.44	)%	(10.46	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		6.45	%	16.55	%	(0.44	)%	(10.46	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		(0.02	)%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		(0.06	)%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		(0.05	)%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		(0.10	)%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(0.12	)%

C-32

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

	1997 Total Return*		1998 Total Return*		1999 Total Return*		2000 Total Return*		2001 Total Return*
LN Managed Fund
Multi-Fund® (1.002% Fee Rate)	20.46	%	11.59	%	6.65	%	(2.39	)%	(2.59	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	20.46	%	11.59	%	6.65	%	(2.39	)%	(2.59	)%
Multi-Fund® (1.302% Fee Rate)	9.63	%	11.26	%	6.33	%	(2.68	)%	(2.89	)%
eAnnuity™ (.55% Fee Rate)	—		6.42	%	7.14	%	(1.95	)%	(2.15	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		6.42	%	7.14	%	(1.95	)%	(2.15	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		0.66	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		0.62	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		0.63	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		0.57	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		0.56	%
LN Money Market Fund
Multi-Fund® (1.002% Fee Rate)	4.06	%	4.06	%	3.70	%	5.02	%	2.98	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	4.06	%	4.06	%	3.70	%	5.02	%	2.98	%
Multi-Fund® (1.302% Fee Rate)	2.00	%	3.75	%	3.39	%	4.70	%	2.67	%
eAnnuity™ (.55% Fee Rate)	—		1.60	%	4.17	%	5.49	%	3.45	%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		1.60	%	4.17	%	5.49	%	3.45	%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		0.08	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		0.07	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		0.07	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		0.02	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(0.01	)%
LN Social Awareness Fund
Multi-Fund® (1.002% Fee Rate)	36.06	%	18.70	%	14.29	%	(9.25	)%	(10.43	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	36.06	%	18.70	%	14.29	%	(9.25	)%	(10.43	)%
Multi-Fund® (1.302% Fee Rate)	17.37	%	18.34	%	13.95	%	(9.52	)%	(10.70	)%
eAnnuity™ (.55% Fee Rate)	—		7.24	%	14.81	%	(8.83	)%	(10.02	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		7.24	%	14.81	%	(8.83	)%	(10.02	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		1.41	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		1.37	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		1.37	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		1.32	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		1.30	%
LN Special Opportunities Fund
Multi-Fund® (1.002% Fee Rate)	26.81	%	5.73	%	(5.43	)%	14.88	%	1.11	%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	26.81	%	5.73	%	(5.43	)%	14.88	%	1.11	%
Multi-Fund® (1.302% Fee Rate)	14.35	%	5.41	%	(5.71	)%	14.53	%	0.81	%
eAnnuity™ (.55% Fee Rate)	—		4.70	%	(5.02	)%	15.40	%	1.57	%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—		4.70	%	(5.02	)%	15.40	%	1.57	%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		4.93	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		4.89	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		4.89	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		4.84	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		4.81	%
MFS Capital Opportunities Series
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		1.08	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		1.04	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		1.05	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		0.99	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		0.97	%
MFS Total Return Series
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		1.13	%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		1.09	%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		1.10	%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		1.05	%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		1.02	%
MFS Utilities Series
Multi-Fund® (1.002% Fee Rate)	—		—		—		—		(21.35	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—		—		—		—		(21.35	)%
Multi-Fund® (1.302% Fee Rate)	—		—		—		—		(21.49	)%
Multi-Fund® (1.00% Fee Rate)	—		—		—		—		(1.60	)%
Multi-Fund® (1.30% Fee Rate)	—		—		—		—		(1.63	)%
Multi-Fund® (1.25% Fee Rate)	—		—		—		—		(1.62	)%
Multi-Fund® (1.75% Fee Rate)	—		—		—		—		(1.68	)%
Multi-Fund® (1.95% Fee Rate)	—		—		—		—		(1.70	)%

C-33

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

3. Unit Values (continued)

	1997 Total Return*	1998 Total Return*	1999 Total Return*		2000 Total Return*		2001 Total Return*
NB AMT Partners Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	1.15	%	(0.30	)%	(3.80	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	1.15	%	(0.30	)%	(3.80	)%
Multi-Fund® (1.302% Fee Rate)	—	—	1.04	%	(0.60	)%	(4.08	)%
eAnnuity™ (.55% Fee Rate)	—	—	4.83	%	0.15	%	(3.36	)%
NB AMT Regency Portfolio
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		5.16	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		5.12	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		5.13	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		5.07	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		5.04	%
NB AMT Mid-Cap Growth Portfolio
Multi-Fund® (1.002% Fee Rate)	—	—	46.41	%	(8.39	)%	(25.40	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	46.41	%	(8.39	)%	(25.40	)%
Multi-Fund® (1.302% Fee Rate)	—	—	46.26	%	(8.66	)%	(25.62	)%
eAnnuity™ (.55% Fee Rate)	—	—	51.62	%	(7.97	)%	(25.06	)%
eAnnuity™ Annuity Reserves (.55% Fee Rate)	—	—	51.62	%	(7.97	)%	(25.06	)%
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		1.81	%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		1.77	%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		1.78	%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		1.72	%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		1.70	%
Putnam Health Sciences Class IB Fund
Multi-Fund® (1.002% Fee Rate)	—	—	—		—		(5.44	)%
Multi-Fund® Annuity Reserves (1.002% Fee Rate)	—	—	—		—		(5.44	)%
Multi-Fund® (1.302% Fee Rate)	—	—	—		—		(5.61	)%
Multi-Fund® (1.00% Fee Rate)	—	—	—		—		(0.29	)%
Multi-Fund® (1.30% Fee Rate)	—	—	—		—		(0.33	)%
Multi-Fund® (1.25% Fee Rate)	—	—	—		—		(0.32	)%
Multi-Fund® (1.75% Fee Rate)	—	—	—		—		(0.37	)%
Multi-Fund® (1.95% Fee Rate)	—	—	—		—		(0.40	)%

* The total return does not include contract charges deducted from the contract account values.

C-34

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

The following are the investment income ratios for the year or period ended December 31, 2001. Investment income ratios are not annualized.

	Investment Income Ratio(1)
AFIS Growth Class 2 Fund	0.48	%
AFIS Growth-Income Class 2 Fund	—
AFIS International Class 2 Fund	0.90	%
AIM International Equity Fund	0.36	%
AIM Value Fund	0.14	%
American Century VP International Portfolio	0.07	%
AVPSF Small Cap Value Class A Fund	—
AVPSF Technology Class B Fund	—
AVPSF Growth Class B Fund	0.22	%
Baron Capital Asset Fund	—
Deutsche Equity 500 Index Fund	0.92	%
Deutsche Small Cap Index Fund	0.74	%
DGPF Trend Series	—
DGPF Growth and Income Series	0.17	%
DGPF Global Bond Series	2.10	%
DGPF REIT Series	1.48	%
DGPF Small Cap Value Service Class Series	—
Fidelity VIP Growth Service Class Portfolio	—
Fidelity VIP II Contrafund Service Class Portfolio	0.69	%
Janus Aspen Worldwide Growth Portfolio	0.48	%
LN Aggressive Growth Fund	—
LN Bond Fund	5.41	%
LN Capital Appreciation Fund	—
LN Equity-Income Fund	1.12	%
LN Global Asset Allocation Fund	0.38	%
LN Growth and Income Fund	0.93	%
LN International Fund	2.07	%
LN Managed Fund	3.15	%
LN Money Market Fund	3.87	%
LN Social Awareness Fund	0.64	%
LN Special Opportunities Fund	1.43	%
MFS Capital Opportunities Series	—
MFS Total Return Series	—
MFS Utilities Series	—
NB AMT Partners Portfolio	0.29	%
NB AMT Regency Portfolio	—
NB AMT Mid-Cap Growth Portfolio	—
Putnam Health Sciences Class IB Fund	—

(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

C-35

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

4. Purchases and Sales of Investments

The aggregate cost of investments purchased and the aggregate proceeds from investments sold were as follows for 2001.

	Aggregate Cost of Purchases		Aggregate Proceeds from Sales
AFIS Growth Class 2 Fund	$	182,777,536	$	5,505,860
AFIS Growth-Income Class 2 Fund		5,090		—
AFIS International Class 2 Fund		110,138,276		88,513,002
AIM International Equity Fund		5,245		—
AIM Value Fund		5,199		—
American Century VP International Portfolio		3,640,747		3,471,369
AVPSF Small Cap Value Class A Fund		5,090		—
AVPSF Technology Class B Fund		32,822,378		19,579,425
AVPSF Growth Class B Fund		6,787,635		2,337,846
Baron Capital Asset Fund		48,341,349		7,870,632
Deutsche Equity 500 Index Fund		32,434,241		12,624,351
Deutsche Small Cap Index Fund		13,672,971		4,596,705
DGPF Trend Series		20,648,503		64,937,972
DGPF Growth and Income Series		32,546,537		9,399,571
DGPF Global Bond Series		3,557,650		2,933,658
DGPF REIT Series		27,814,560		12,888,011
DGPF Small Cap Value Service Class Series		37,300,482		1,681,452
Fidelity VIP Growth Service Class Portfolio		19,276,837		13,852,272
Fidelity VIP II Contrafund Service Class Portfolio		19,384,676		12,530,301
Janus Aspen Worldwide Growth Portfolio		15,438,398		37,407,894
LN Aggressive Growth Fund		89,372,787		53,710,121
LN Bond Fund		148,148,870		32,444,307
LN Capital Appreciation Fund		125,240,057		161,389,603
LN Equity-Income Fund		78,153,934		42,222,213
LN Global Asset Allocation Fund		27,851,675		37,470,299
LN Growth and Income Fund		916,878,647		293,474,217
LN International Fund		121,664,031		129,212,131
LN Managed Fund		128,673,067		60,105,677
LN Money Market Fund		116,295,145		88,255,954
LN Social Awareness Fund		333,041,412		104,115,681
LN Special Opportunities Fund		30,609,108		32,993,963
MFS Capital Opportunities Series		5,090		—
MFS Total Return Series		5,090		—
MFS Utilities Series		5,785,425		1,046,109
NB AMT Partners Portfolio		16,404,406		5,695,933
NB AMT Regency Portfolio		5,090		—
NB AMT Mid-Cap Growth Portfolio		47,347,620		65,437,839
Putnam Health Sciences Class IB Fund		5,568,696		831,393

C-36

Lincoln National Variable Annuity Account C

Notes to financial statements (continued)

5. Investments

The following is a summary of investments owned at December 31, 2001.

	Shares Outstanding	Net Asset Value		Value of Shares		Cost of Shares
AFIS Growth Class 2 Fund	5,916,184	$	44.08	$	260,785,407	$	382,231,032
AFIS Growth-Income Class 2 Fund	163		31.58		5,154		5,090
AFIS International Class 2 Fund	2,501,249		11.97		29,939,954		31,481,367
AIM International Equity Fund	347		14.91		5,179		5,245
AIM Value Fund	218		23.35		5,094		5,199
American Century VP International Portfolio	42,775		6.59		281,885		276,401
AVPSF Small Cap Value Class A Fund	481		11.18		5,379		5,090
AVPSF Technology Class B Fund	2,767,150		17.15		47,456,623		79,425,514
AVPSF Growth Class B Fund	410,048		16.31		6,687,883		9,801,436
Baron Capital Asset Fund	3,485,837		19.30		67,276,649		62,178,892
Deutsche Equity 500 Index Fund	9,051,608		11.98		108,438,264		125,243,404
Deutsche Small Cap Index Fund	2,097,700		10.73		22,508,318		23,619,070
DGPF Trend Series	15,502,878		25.23		391,137,613		445,372,165
DGPF Growth and Income Series	6,835,761		16.21		110,807,693		115,949,791
DGPF Global Bond Series	1,263,423		9.47		11,964,620		12,731,339
DGPF REIT Series	4,032,535		11.70		47,180,658		43,305,696
DGPF Small Cap Value Service Class Series	1,906,231		19.52		37,209,631		35,419,784
Fidelity VIP Growth Service Class Portfolio	3,838,931		33.48		128,527,403		188,611,953
Fidelity VIP II Contrafund Service Class Portfolio	3,172,384		20.06		63,638,031		77,269,627
Janus Aspen Worldwide Growth Portfolio	10,875,753		28.54		310,393,985		493,187,656
LN Aggressive Growth Fund	31,592,199		9.37		296,050,501		450,549,404
LN Bond Fund	32,495,343		12.38		402,259,845		395,604,175
LN Capital Appreciation Fund	60,924,066		17.36		1,057,519,946		1,268,742,610
LN Equity-Income Fund	49,625,886		15.34		761,211,459		779,782,626
LN Global Asset Allocation Fund	24,880,332		12.58		312,919,941		320,805,102
LN Growth and Income Fund	100,490,157		27.84		2,797,746,466		3,044,135,571
LN International Fund	28,090,800		11.16		313,352,879		362,874,880
LN Managed Fund	48,901,147		13.82		675,862,747		725,320,060
LN Money Market Fund	17,213,107		10.00		172,131,071		172,131,071
LN Social Awareness Fund	46,391,187		25.80		1,197,031,791		1,369,069,200
LN Special Opportunities Fund	19,231,199		26.00		499,972,719		501,537,124
MFS Capital Opportunities Series	380		13.56		5,151		5,090
MFS Total Return Series	277		18.61		5,154		5,090
MFS Utilities Series	262,938		15.95		4,193,867		4,626,110
NB AMT Partners Portfolio	1,274,451		15.10		19,244,215		19,823,524
NB AMT Regency Portfolio	537		9.97		5,359		5,090
NB AMT Mid-Cap Growth Portfolio	8,086,924		16.94		136,992,500		196,391,599
Putnam Health Sciences Class IB Fund	397,643		11.70		4,652,425		4,701,102

6. New Investment Funds and Fund Name Changes

During 2000, the BT Insurance Fund Trust family of funds changed its name to Deutsche Asset Management VIT Funds Trust and the Delaware Group Premium Fund, Inc. family of funds changed its name to Delaware Group Premium Fund (DGPF). Also during 2000, the AFIS Growth Class 2 Fund, the AFIS International Class 2 Fund, the AVPSF Technology Class B Fund, the AVPSF Growth Class B Fund and the DGPF REIT Series became available as investment options for Variable Account contract owners. Accordingly, the 2000 statements of changes in net assets and total return ratios in footnote 3 for these subaccounts are for the period from May 22, 2000 (commencement of operations) to December 31, 2000.

During 2001, the DGPF Small Cap Value Service Class Series, the MFS Utilities Series and the Putnam Health Sciences Class IB Fund became available as investment options for Variable Account contract owners. Accordingly, the 2001 statements of operations and changes in net assets and total return and investment income ratios in footnote 3 for these subaccounts are for the period from May 29, 2001 (commencement of operations) to December 31, 2001. Also, during 2001, the AFIS Growth-Income Class 2 Fund, the AIM International Equity Fund, the AIM Value Fund, the AVPSF Small Cap Value Class A Fund, the MFS Capital Opportunities Series, the MFS Total Return Series and the NB AMT Regency Portfolio became available as investment options for Variable Account contract owners. Accordingly, the 2001 statements of operations and changes in net assets and total return and investment income ratios in footnote 3 for these subaccounts are for the period from November 19, 2001 (commencement of operations) to December 31, 2001.

7. Investment Funds Closed

During 2000, the DGPF Small Cap Value Series, the LN Aggressive Growth Fund and the LN Global Asset Allocation Fund were closed as investment options for Variable Account contract owners of eAnnuity^™.

C-37

Report of Ernst & Young LLP, Independent Auditors

Board of Directors of The Lincoln National Life Insurance Company

and

Contract Owners of Lincoln National Variable Annuity Account C

We have audited the accompanying statement of assets and liabilities of Lincoln National Variable Annuity Account C (“Variable Account”) (comprised of the following subaccounts: American Funds Insurance Series (“AFIS”) Growth Class 2, AFIS Growth-Income Class 2, AFIS International Class 2, AIM Variable Insurance Funds (“AIM”) International Equity, AIM Value, American Century Variable Portfolios International, Alliance Variable Products Series Fund (“AVPSF”) Small Cap Value Class A, AVPSF Technology Class B, AVPSF Growth Class B, Baron Capital Funds Trust Capital Asset, Deutsche Asset Management VIT Funds Trust (“Deustche”) Equity 500 Index, Deutsche Small Cap Index, Delaware Group Premium Fund (“DGPF”) Trend, DGPF Growth and Income, DGPF Global Bond, DGPF REIT, DGPF Small Cap Value Service Class, Fidelity Variable Insurance Products (“Fidelity VIP”) Growth Service Class, Fidelity VIP II Contrafund Service Class, Janus Aspen Worldwide Growth, Lincoln National (“LN”) Aggressive Growth, LN Bond, LN Capital Appreciation, LN Equity-Income, LN Global Asset Allocation, LN Growth and Income, LN International, LN Managed, LN Money Market, LN Social Awareness, LN Special Opportunities, MFS Variable Insurance Trust (“MFS”) Capital Opportunities, MFS Total Return, MFS Utilities, Neuberger Berman Advisers Management Trust (“NB AMT”) Partners, NB AMT Regency, NB AMT Mid-Cap Growth and Putnam Variable Trust (“Putnam”) Health Sciences Class IB) as of December 31, 2001, the related statements of operations for the respective year or period then ended and the statements of changes in net assets for each of the respective two years or periods in the period then ended. These financial statements are the responsibility of the Variable Account’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 2001, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the respective subaccounts constituting the Lincoln National Variable Annuity Account C at December 31, 2001, the results of their operations for the respective year or period then ended and the changes in their net assets for each of the respective two years or periods in the period then ended, in conformity with accounting principles generally accepted in the United States.

Fort Wayne, Indiana

March 1, 2002

C-38

The Lincoln National Life Insurance Company

S-1

The Lincoln National Life Insurance Company

Balance Sheets — Statutory Basis

	December 31
	2001		2000
	(in millions)
Admitted assets
Cash and investments:
Bonds	$	23,421.0	$	21,852.5
Preferred stocks		223.6		261.7
Unaffiliated common stocks		107.6		161.7
Affiliated common stocks		623.5		743.0
Mortgage loans on real estate		4,098.7		4,102.0
Real estate:
Properties occupied by the company		6.2		10.5
Properties held for sale		243.6		261.2
Policy loans		1,708.7		1,723.5
Short-term investments		798.1		1,427.9
Other investments		466.6		485.0
Cash and cash equivalents		1,899.4		20.5
Total cash and investments		33,597.0		31,049.5
Premiums and fees in course of collection		3.1		111.5
Accrued investment income		457.2		444.2
Reinsurance recoverable		550.4		450.7
Funds withheld by ceding companies		154.1		74.4
Company owned policies and contracts		361.4		335.0
Net deferred federal income taxes		180.2		—
Goodwill		33.1		38.4
Other admitted assets		130.9		106.2
Separate account assets		38,636.5		43,904.6
Total admitted assets	$	74,103.9	$	76,514.5

S-2

	December 31
	2001			2000
	(in millions)
Liabilities and capital and surplus
Liabilities:
Policy and contract liabilities:
Future policy benefits and claims	$	28,071.8		$	27,828.0
Dividends payable		65.1			77.7
Other policyholder liabilities		56.0			220.5
Total policy and contract liabilities		28,192.9			28,126.2
Amounts withheld or retained by Company as agent or trustee		869.5			639.8
Funds held under reinsurance treaties		1,693.1			849.6
Asset valuation reserve		454.5			534.1
Interest maintenance reserve		7.7			20.9
Income taxes payable to parent		537.4			20.1
Other liabilities		965.8			516.7
Short-term loan payable to parent company		200.0			199.5
Net transfers due from separate accounts		(967.0	)		(976.1	)
Separate account liabilities		38,634.0			43,904.6
Total liabilities		70,587.9			73,835.4
Capital and surplus:
Common stock, $2.50 par value:

Authorized, issued and outstanding shares—10 million (owned by Lincoln National Corporation)		25.0		25.0
Surplus notes due to Lincoln National Corporation		1,250.0		1,250.0
Paid-in surplus		1,520.4		2,006.1
Unassigned surplus (deficit)		720.6		(602.0	)
Total capital and surplus		3,516.0		2,679.1
Total liabilities and capital and surplus	$	74,103.9	$	76,514.5

See accompanying notes.

S-3

The Lincoln National Life Insurance Company

Statements of Operations — Statutory Basis

	Year ended December 31
	2001			2000		1999
	(in millions)
Premiums and other revenues:
Life and annuity premiums	$	7,681.0		$	7,985.7	$	8,001.4
Accident and health premiums		(286.1	)		115.7		(258.2	)
Net investment income		2,128.4			2,125.5		2,203.2
Amortization of interest maintenance reserve		21.2			21.6		29.1
Commissions and expense allowances on reinsurance ceded		966.1			568.4		472.3
Reserve adjustment on reinsurance ceded		32.0			407.5		(469.6	)
Expense charges on deposit funds		56.7			118.2		146.5
Separate account investment management and administration service fees		574.3			624.8		473.9
Other income		175.2			166.2		88.8
Total revenues		11,348.8			12,133.6		10,687.4
Benefits and expenses:
Benefits and settlement expenses		8,686.7			8,950.3		8,504.8
Underwriting, acquisition, insurance and other expenses		1,691.1			2,466.2		1,618.4
Total benefits paid or provided		10,377.8			11,416.5		10,123.2
Gain from operations before dividends to policyholders, income taxes and net realized gain (loss) on investments		971.0			717.1		564.2
Dividends to policyholders		75.2			80.2		80.3
Gain from operations before federal income taxes and net realized gain (loss) on investments		895.8			636.9		483.9
Federal income taxes		456.5			94.9		85.4
Gain from operations before net realized gain (loss) on investments		439.3			542.0		398.5
Net realized gain (loss) on investments, net of income tax expense and excluding net transfers to the interest maintenance reserve		(260.3	)		27.9		114.4
Net income	$	179.0		$	569.9	$	512.9

See accompanying notes.

S-4

The Lincoln National Life Insurance Company

Statements of Changes in Capital and Surplus — Statutory Basis

	Common Stock		Surplus Notes		Paid-in Surplus			Unassigned Surplus (Deficit)			Total Capital and Surplus
	(in millions)
Balances at January 1, 1999	$	25.0	$	1,250.0	$	1,930.1		$	(640.6	)	$	2,564.5
Net income		—		—		—			512.9			512.9
Increase in difference in cost and admitted investment amounts		—		—		—			(101.9	)		(101.9	)
Increase in nonadmitted assets		—		—		—			(22.9	)		(22.9	)
Decrease in liability for reinsurance in unauthorized companies		—		—		—			26.0			26.0
Gain on reinsurance transaction		—		—		—			71.8			71.8
Increase in asset valuation reserve		—		—		—			(6.4	)		(6.4	)
Paid-in surplus		—		—		12.5			—			12.5
Dividends to Lincoln National Corporation		—		—		—			(530.0	)		(530.0	)
Balances at December 31, 1999		25.0		1,250.0		1,942.6			(691.1	)		2,526.5
Net income		—		—		—			569.9			569.9
Decrease in difference in cost and admitted investment amounts		—		—		—			17.2			17.2
Increase in nonadmitted assets		—		—		—			(21.9	)		(21.9	)
Decrease in liability for reinsurance in unauthorized companies		—		—		—			0.6			0.6
Amortization of gain on reinsurance transaction		—		—		—			(7.9	)		(7.9	)
Change in policy reserve valuation basis		—		—		—			(5.6	)		(5.6	)
Increase in asset valuation reserve		—		—		—			(43.2	)		(43.2	)
Paid-in surplus		—		—		63.5			—			63.5
Dividends to Lincoln National Corporation		—		—		—			(420.0	)		(420.0	)
Balances at December 31, 2000		25.0		1,250.0		2,006.1			(602.0	)		2,679.1
Net income		—		—		—			179.0			179.0
Cumulative effect of adoption of codification		—		—		—			8.7			8.7
Decrease in difference in cost and admitted investment amounts		—		—		—			77.7			77.7
Increase in nonadmitted assets		—		—		—			(162.8	)		(162.8	)
Increase in liability for reinsurance in unauthorized companies		—		—		—			(59.4	)		(59.4	)
Gain on reinsurance transaction		—		—		—			1,027.0			1,027.0
Change in net deferred income taxes		—		—		—			169.8			169.8
Curtailment gain on employee benefit plans		—		—		—			12.4			12.4
Decrease in asset valuation reserve		—		—		—			70.2			70.2
Paid-in surplus		—		—		9.3			—			9.3
Dividends to Lincoln National Corporation		—		—		(495.0	)		—			(495.0	)
Balances at December 31, 2001	$	25.0	$	1,250.0	$	1,520.4		$	720.6		$	3,516.0

See accompanying notes.

S-5

The Lincoln National Life Insurance Company

Statements of Cash Flow — Statutory Basis

	Year ended December 31
	2001			2000			1999
	(in millions)
Operating activities
Premiums, policy proceeds and other considerations received	$	7,579.5		$	8,082.8		$	7,671.1
Allowances and reserve adjustments received (paid) on reinsurance ceded		802.8			610.1			(19.9	)
Investment income received		1,990.1			2,109.8			2,168.6
Separate account investment management and administration service fees received		574.2			624.8			470.6
Benefits paid		(8,723.5	)		(9,843.9	)		(8,699.4	)
Underwriting, acquisition, insurance and other expenses paid		(1,926.6	)		(1,796.4	)		(1,734.5	)
Proceeds related to reinsurance agreements		1,472.8			—			71.8
Federal income taxes paid		(66.6	)		(16.3	)		(81.2	)
Dividends to policyholders		(87.7	)		(82.6	)		(82.8	)
Other income received and expenses paid, net		1,194.0			(48.9	)		252.1
Net cash provided by (used in) operating activities		2,809.0			(360.6	)		16.4
Investing activities
Sale, maturity or repayment of investments		9,473.3			5,845.5			6,557.7
Proceeds from sale of subsidiaries		330.8			—			—
Purchase of investments		(10,841.1	)		(4,719.6	)		(5,940.8	)
Other sources (uses) including reinsured policy loans		13.3			(344.6	)		(497.0	)
Net cash (used in) provided by investing activities		(1,023.7	)		781.3			119.9
Financing activities
Surplus paid-in		9.3			63.5			12.5
Proceeds from borrowings from shareholder		200.0			180.0			205.0
Repayment of borrowings from shareholder		(180.0	)		(205.0	)		(140.0	)
Deposits on deposit type contract funds		(5.5	)		—			—
Withdrawals on deposit type contract funds		(65.0	)		—			—
Dividends paid to shareholder		(495.0	)		(420.0	)		(530.0	)
Net cash provided by (used in) financing activities		(536.2	)		(381.5	)		(452.5	)
Net increase (decrease) in cash and short-term investments		1,249.1			39.2			(316.2	)
Cash and short-term investments at beginning of year		1,448.4			1,409.2			1,725.4
Cash and short-term investments at end of year	$	2,697.5		$	1,448.4		$	1,409.2

See accompanying notes.

S-6

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements

December 31, 2001

1. Summary of Significant Accounting Policies

Organization and Operations

The Lincoln National Life Insurance Company (the “Company”) is a wholly owned subsidiary of Lincoln National Corporation (“LNC”) and is domiciled in Indiana. As of  December 31, 2001, the Company owned 100% of the outstanding common stock of two insurance company subsidiaries and eight non-insurance subsidiaries, including three limited liability companies.

The Company’s principal businesses consist of underwriting annuities and life insurance contracts through multiple distribution channels. The Company is licensed and sells its products in 49 states, Canada and several territories of the United States.

Use of Estimates

The preparation of financial statements of insurance companies requires management to make estimates and assumptions that affect the amounts reported in the statutory-basis financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Indiana Department of Insurance (“Insurance Department”), which practices differ from accounting principles generally accepted in the United States (“GAAP”). The more significant variances from GAAP are as follows:

Investments

Bonds and preferred stocks are reported at cost or amortized cost or fair value based on their National Association of  Insurance Commissioners’ (“NAIC”) rating. For GAAP, the Company’s bonds and preferred stocks are classified as available-for-sale and, accordingly, are reported at fair value with changes in the fair values reported directly in shareholder’s equity after adjustments for related amortization of deferred acquisition costs, additional policyholder commitments and deferred income taxes.

Effective January 1, 2001 if it is determined that a decline in the fair value of a bond is other than temporary, the cost basis of the bond is written down to fair value. The provision for such declines is charged to realized loss. Impairment is considered to have occurred if it is probable that the Company will be unable to collect all amounts due according to the contractual terms of a debt security in effect at the date of aquisition.

All mortgage-backed/asset-backed securities (e.g., CMOs) are adjusted for the effects of changes in prepayment assumptions on the related accretion of discount or amortization of premium of such securities using the retrospective method. If it is determined that a decline in fair value is other than temporary, the cost basis of the security is written down to the undiscounted estimated future cash flows. Prior to April 1, 2001 under GAAP, the Company accounted for the effects of changes in prepayment assumptions in the same manner. Effective April 1, 2001 for GAAP purposes, all securities, purchased or retained, that represent beneficial interests in securitized assets, other than securitized assets that are of high credit quality securities, are adjusted using the prospective method when there is a change in estimated future cash flows. If it is determined that a decline in fair value is other than temporary, the cost basis of the security is written down to its fair value. If high credit quality securities are adjusted, the retrospective method is used.

Derivative instruments that meet the criteria of an effective hedge are valued and reported in a manner that is consistent with the hedged asset or liability. Embedded derivatives are not accounted for separately from the host contract. Under GAAP, all derivatives are reported on the balance sheet at fair value, the effective and ineffective portions of a single hedge are accounted for separately, an embedded derivative within a contract that is not clearly and closely related to the economic characteristics and risks of the host contract is accounted for separately from the host contract and valued and reported at fair value, and the change in fair value for cash flow hedges is credited or charged directly to a separate component of shareholder’s equity rather than to income as required for fair value hedges.

Investments in real estate are reported net of related obligations rather than on a gross basis. Real estate owned and occupied by the Company is classified as a real estate investment rather than reported as an operating asset, and investment income and operating expenses include rent for the Company’s occupancy of those properties. Changes between depreciated cost and admitted asset investment amounts are credited or charged directly to unassigned surplus rather than to income, as would be required under GAAP.

Under a formula prescribed by the NAIC, the Company defers the portion of realized capital gains and losses on sales of fixed income investments, principally bonds and mortgage loans, attributable to changes in the general level of interest rates and amortizes those deferrals over the remaining period to maturity of the individual security sold. The net deferral is reported as the interest maintenance reserve (“IMR”) in the accompanying balance sheets. Realized capital gains and losses are reported in income net of federal income taxes and transfers to the IMR. Under GAAP, realized capital gains and losses are reported in net income, on a pre-tax basis, in the period that the asset giving rise to the gain or loss is sold. Such realized capital gains and losses are reported net of associated amortization of deferred acquisition costs and investment expenses, using the specific identification method.

The asset valuation reserve (“AVR”) provides a valuation allowance for invested assets. The AVR is determined by an NAIC prescribed formula, and is reported as a liability, with changes reflected directly in unassigned surplus. AVR is not recognized for GAAP.

S-7

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

Subsidiaries

The accounts and operations of the Company’s subsidiaries are not consolidated with the accounts and operations of the Company as would be required by GAAP.

Policy Acquisition Costs

The costs of acquiring and renewing business are expensed when incurred. Under GAAP, acquisition costs related to traditional life insurance, to the extent recoverable from future policy revenues, are deferred and amortized over the premium-paying period of the related policies using assumptions consistent with those used in computing policy benefit reserves. For universal life insurance, annuity and other investment-type products, deferred policy acquisition costs, to the extent recoverable from future gross profits, are amortized generally in proportion to the present value of expected gross profits from surrender charges and investment, mortality, expense margins and actual realized gain (loss) on investments.

Nonadmitted Assets

Certain assets designated as “nonadmitted,” principally past-due agents’ balances, furniture and equipment, certain receivables, and other assets not specifically identified as an admitted asset within the NAIC Accounting Practices and Procedures Manual (“NAIC APPM”), are excluded from the accompanying balance sheets and are charged directly to unassigned surplus. Under GAAP, such assets are included in the balance sheet.

Universal Life and Annuity Policies

Revenues for universal life policies and annuity policies consist of the entire premium received. Under GAAP, premiums received in excess of policy charges are not recognized as premium revenue. Death benefits paid, policy and contract withdrawals, and the change in policy reserves on universal life policies and annuity policies are reported as benefits and settlement expenses in the accompanying statements of income. Under GAAP, withdrawals are treated as a reduction of the policy or contract liabilities and benefits represent the excess of benefits paid over the policy account value and interest credited to the account values.

Benefit Reserves

Certain policy reserves are calculated based on statutorily  required interest and mortality assumptions rather than on estimated expected experience or actual account balances as would be required under GAAP.

Reinsurance

Premiums, claims and policy benefits and contract liabilities are reported in the accompanying financial statements net of reinsurance amounts. For GAAP, assets and liabilities related to reinsurance ceded contracts are reported on a gross basis, except for certain reinsurance contracts that provide statutory surplus relief to other insurance companies, for which a right of offset exists.

A liability for reinsurance balances has been provided for  unsecured policy reserves and unearned premiums ceded to reinsurers not authorized by the Insurance Department to assume such business. Changes to those amounts are cred ited or charged directly to unassigned surplus. Under GAAP, an allowance for amounts deemed uncollectible is established through a charge to income.

Commission allowances on business ceded are reported as income when received rather than being deferred and amortized with deferred policy acquisition costs. Business assumed under 100% indemnity reinsurance agreements is accounted for as a purchase for GAAP reporting purposes and the ceding commission represents the purchase price. Under purchase accounting, assets acquired and liabilities assumed are reported at fair value at the date of the transaction and the excess of the purchase price over the sum of the amounts assigned to assets acquired less liabilities assumed is recorded as goodwill and amortized over future periods, not to exceed 40 years, in accordance with benefits expected to be derived from the acquisitions. On a statutory-basis, the ceding commission is expensed when paid and reinsurance premiums and benefits are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts.

Under statutory accounting, the initial gain from a reinsurance transaction is recognized as a separate a component of surplus (net of tax) and is recorded in income over time at the rate that earnings on the reinsured business are expected to emerge. Under GAAP, the gain is recognized as deferred revenue (a liability), net of DAC adjustments and is amortized into earnings over time at the rate that earnings on the reinsured business are expected to emerge.

Certain reinsurance contracts meeting risk transfer requirements under statutory-basis accounting practices have been accounted for using traditional reinsurance accounting; whereas, such contracts are accounted for using deposit accounting under GAAP.

Employee Benefits

For purposes of calculating the Company’s pension and postretirement benefit obligations, only vested participants  and current retirees are included in the valuation. Under GAAP, active participants not currently eligible also would be included.

Deferred Income Taxes

Prior to January 1, 2001, deferred federal income taxes were not provided for differences between the financial statement amounts and tax bases of assets and liabilities. Effective  January 1, 2001, deferred federal income taxes are provided; however, deferred tax assets are limited to 1) the amount of federal income taxes paid in prior years that can be recovered through loss carrybacks for existing temporary differences that reverse by the end of the subsequent calendar year, plus 2) the lesser of the remaining gross deferred tax assets expected to be realized within one year of the balance sheet date or 10% of capital and surplus excluding any net deferred tax assets, EDP equipment and operating software and any net positive goodwill, plus 3) the amount of remaining gross deferred tax assets that can be offset against existing gross deferred tax liabilities. The remaining deferred tax assets are non-admitted. Deferred taxes do not include amounts for state taxes. Under GAAP, states taxes

S-8

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

are included in the computation of deferred taxes, a deferred tax asset is recorded for the amount of gross deferred tax assets expected to be realized in future years, and a valuation allowance is established for deferred tax assets not realizable.

Policyholder Dividends

Policyholder dividends are recognized when declared rather than over the term of the related policies.

Surplus Notes Due to LNC

Surplus notes due to LNC are reported as surplus rather than as liabilities. On a statutory basis, interest on surplus notes is not accrued until approval is received from the Indiana Insurance Commissioner whereas, under GAAP, interest would be accrued periodically based on the outstanding principal and the interest rate.

Statements of Cash Flows

Cash, cash equivalents, and short-term investments in the statements of cash flows represent cash balances and investments with initial maturities of one year or less. Under GAAP, the corresponding caption of cash and cash equivalents include cash balances and investments with initial maturities of three months or less.

A reconciliation of the Company’s capital and surplus and net income (loss), as determined in accordance with statutory accounting practices, to amounts determined in accordance with GAAP is as follows:

	Capital and Surplus						Net Income (Loss)
	December 31						Year ended December 31
	2001			2000			2001			2000			1999
	(in millions)						(in millions)
Amounts reported on a statutory-basis	$	3,516.0		$	2,679.1		$	179.0		$	569.9		$	512.9
GAAP adjustments:
Deferred policy acquisition costs, present value of future profits and goodwill		3,657.5			3,812.6			305.1			287.9			135.0
Policy and contract reserves		(1,946.0	)		(2,129.9	)		(221.9	)		(142.3	)		(97.3	)
Policyholders’ share of earnings and surplus on participating business		(96.2	)		(131.1	)		(3.3	)		(.3	)		(1.8	)
Statutory deferred gain in surplus		(1,042.4	)		(63.9	)		—			—			—
Deferred income taxes		(257.8	)		185.2			310.8			(108.3	)		(117.4	)
Interest maintenance reserve		7.7			20.9			(12.9	)		(51.4	)		(87.2	)
Asset valuation reserve		454.5			534.1			—			—			—
Nonadmitted assets		731.1			196.1			—			—			—
Unrealized gain (loss) on investments		362.0			38.7			—			—			—
Net realized loss on investments		(2.8	)		(156.5	)		48.8			18.9			(32.4	)
Investments in subsidiary companies		567.8			523.3			77.8			61.8			39.1
Surplus notes and related interest		(1,250.0	)		(1,250.0	)		—			—			1.5
Other, net		197.5			(59.8	)		(187.3	)		12.7			129.8
Net increase (decrease)		1,382.9			1,519.7			317.1			79.0			(30.7	)
Amounts reported on a GAAP basis	$	4,898.9		$	4,198.8		$	496.1		$	648.9		$	482.2

Other significant accounting practices are as follows:

Investments

Bonds not backed by other loans are principally stated at amortized cost and the discount or premium is amortized using the scientific method.

Mortgage-backed bonds (e.g., CMO’s) are valued at amortized cost and income is recognized using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. The net investment in the securities is  adjusted to the amount that would have existed had the new effective yield been applied since the acquisition of the securities (i.e., the retrospective method). The Company has elected to use actual cost data as of January 1, 1994 as the cost of applying the retrospective adjustment method to securities purchased prior to that date.

Redeemable preferred stocks, which have the characteristics of debt securities and are rated as medium quality or better, are reported at cost or amortized cost. All other preferred stocks are recorded at market value.

Unaffiliated common stocks are reported at fair value as determined by the Securities Valuation Office of the NAIC and the related net unrealized capital gains (losses) are reported in unassigned surplus along with any adjustment for federal income taxes. Prior to January 1, 2001, the related net unrealized capital gains (losses) were reported in unassigned surplus without any adjustment for federal income taxes.

There are no restrictions on common or preferred stock.

Short-term investments include investments with remaining maturities of one year or less at the date of acquisition and are principally stated at amortized cost.

Cash equivalents are short-term, highly liquid investments with original maturities of three months or less, and are principally stated at amortized cost.

S-9

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

The Company uses various derivative instruments as part of its overall liability-asset management program for certain investments and life insurance and annuity products. The Company values all derivative instruments that qualify for hedge accounting, and meet the criteria of an effective hedge, on a basis consistent with that of the item hedged, with the related net unrealized capital gain or loss reported in unassigned surplus, when applicable, along with any adjustment for federal income taxes. Prior to January 1, 2001, the related net unrealized capital gains and losses were reported in unassigned surplus without any adjustment for federal income taxes. The Company accounts for derivatives securities that do not meet the criteria to qualify for hedge accounting at fair value, and the related changes in fair value are recognized in current operations. The fair values of the Company’s derivative securities are based on industry standard pricing models that are commercially available.

Upon termination, gains and losses on those derivative instruments that qualify for hedge accounting are included in the carrying values of the underlying hedged items or deferred in IMR, where applicable, and are amortized over the remaining lives of the hedged items as adjustments to investment income. Any unamortized gains or losses are recognized when the underlying hedged items are sold.

Hedge accounting is applied as indicated above after the Company determines that the items to be hedged expose the Company to interest rate fluctuations, the widening of bond yield spreads over comparable maturity U.S. government obligations or foreign exchange risk. Moreover, the derivatives used to hedge those exposures are designated as hedges and reduce the indicated risk by demonstrating a high correlation between changes in the value of the derivatives and the items being hedged at both the inception of the hedge and throughout the hedge period. Should such criteria not be met or if the hedged items are sold, terminated or matured, the change in value of the derivatives is included in net income.

The Company’s insurance subsidiaries are reported at their underlying statutory equity. The Company’s noninsurance subsidiaries, which have no significant ongoing operations other than for the Company and its affiliates, are reported based on the underlying GAAP equity of the subsidiaries, adjusted to a statutory basis. The net change in the subsidiaries’ equity is included in the change in net unrealized capital gains or losses. Prior to January 1, 2001, the Company reported its noninsurance subsidiaries based on the underlying GAAP equity of the subsidiaries.

The Company has minor ownership interests in joint ventures and carries these investments based on its interest in the underlying GAAP equity of the investee.

Mortgage loans on real estate are reported at aggregate unpaid balances, less allowances for impairment. A mortgage loan is considered to be impaired, when, based on current information and events, it is probable that the Company will be unable to collect all principal and interest amounts due according to the contractual terms of the mortgage agreement. The impairment is considered to be other than temporary when management determines foreclosure is probable. Then the mortgage loan is written down to fair value and a realized loss is recognized.

Policy loans are reported at unpaid balances.

Real estate occupied by the Company is reported at depreciated cost, net of related obligations. Real estate that the Company has the intent to sell is reported at the lower of depreciated cost or fair value, net of related obligations. Prior to January 1, 2001, real estate, other than that occupied by the Company was reported at the lower of depreciated cost or fair value. Depreciation is calculated on a straight-line basis over the estimated useful lives of the properties.

Realized capital gains and losses on investments sold are determined using the specific identification method. Changes in admitted asset carrying amounts of bonds, mortgage loans and common and preferred stocks, which result from impairment or premium and discount amortization are credited or charged to income. Other changes in the admitted asset carrying amounts of bonds, mortgage loans and common and preferred stocks are credited or charged directly to unassigned surplus.

Loaned Securities

Securities loaned are treated as collateralized financing transactions and a liability is recorded equal to the cash collateral received which is typically greater than the market value of the related securities loaned. In other instances, the Company will hold as collateral securities with a market value at least equal to the securities loaned. Securities held as collateral are not recorded in the Company’s balance sheet in accordance with accounting guidance for secured borrowings and collateral. The Company’s agreements with third parties generally contain contractual provisions to allow for additional collateral to be obtained when necessary. The Company values collateral daily and obtains additional collateral when deemed appropriate.

Goodwill

Goodwill, which represents the excess, subject to certain limitations, of the ceding commission over statutory-basis net assets of business purchased under an assumption reinsurance agreement, is amortized on a straight-line basis over ten years. Goodwill is evaluated periodically for impairment, and if determined to be impaired, is written down to fair value, with the amount of the write down recorded as a realized loss.

Premiums

Life insurance and annuity premiums are recognized as revenue when due. Accident and health premiums are earned pro rata over the contract term of the policies.

Benefits

Life, annuity and accident and health benefit reserves are computed in accordance with actuarial standards. The reserves are based on actuarial assumptions that produce reserves at

S-10

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)

least as great as those called for in any contract provision as to reserve basis and method, and are in accordance with all other contract provisions. The reserves are at least as great as the minimum aggregate amounts required by the Insurance  Department.

The Company waives deduction of deferred fractional premiums on the death of life and annuity policy insureds and returns any premium beyond the date of death. Surrender values on policies do not exceed the corresponding benefit reserves.

Ordinary policies issued substandard are valued on the multiple table reserve basis. A reserve of 50% of the net extra premiums is carried on policies with flat extra premiums.

As of December 31, 2001, the Company has $71.4 million in reserves on $11.2 billion of insurance inforce on the life line of business, for which the gross premiums are less than the net premiums according to the standard of valuation required by the Insurance Department. The Company anticipates investment income as a factor in the premium deficiency calculation.

Tabular interest, tabular reserves less actual reserves released and tabular cost have been determined by formula or from the basic data for such items. Tabular interest on funds not involving life contingencies has been determined by formula or from the basic data for such items.

Net of reinsurance, liabilities related to guaranteed investment contracts are equal to fund balances. Other deposit-type  liabilities, such as supplemental contracts without life contingencies, annuities certain and dividend accumulations, are calculated by discounting the liabilities at prescribed interest rates.

Reinsurance Ceded and Assumed

Reinsurance premiums, benefits paid and claims and claim adjustment expenses are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Certain business is transacted on a funds withheld basis and investment income on investments managed by the Company are reported in net investment income.

The Company enters into reinsurance agreements with other companies in the normal course of business. Prior to the  acquisition of LNC’s reinsurance operations by Swiss Re on December 7, 2001, LNC’s insurance subsidiaries assumed reinsurance from unaffiliated companies. The transaction with Swiss Re involved a series of indemnity reinsurance transactions combined with the sale of certain stock companies that comprised LNC’s reinsurance operations. Assets and liabilities  on the balance sheets, and premiums and benefits on the statements of operations, which result from reinsurance contracts, are netted in accordance with accounting practices prescribed by the Indiana Department of Insurance, including the Swiss Re indemnity reinsurance transactions.

Pension Benefits

Costs associated with the Company’s defined benefit pension plans are systematically accrued during the expected period of active service of the covered employees.

Income Taxes

The Company and eligible subsidiaries have elected to file  consolidated federal and state income tax returns with LNC and certain LNC subsidiaries. Pursuant to an intercompany tax sharing agreement with LNC, the Company provides for income taxes on a separate return filing basis. The tax sharing agreement also provides that the Company will receive benefit for net operating losses, capital losses and tax credits which are not usable on a separate return basis to the extent such items may be utilized in the consolidated income tax returns of LNC.

Stock Options

The Company recognizes compensation expense for its stock option incentive plans using the intrinsic value method of accounting. Under the terms of the intrinsic value method, compensation cost is the excess, if any, of the quoted market price of LNC’s common stock at the grant date, or other measurement date, over the amount an employee or agent must pay to acquire the stock.

Assets Held in Separate Accounts and Liabilities Related to Separate Accounts

Separate account assets and liabilities reported in the accompanying balance sheets represent segregated funds administered and invested for the exclusive benefit of pension and variable life and annuity contractholders and for which the contractholders, rather than the Company, bear the investment risk. Separate account assets and liabilities are reported at fair value. The operations of the separate accounts are not included in the accompanying financial statements. Policy administration and investment management fees charged on separate account policyholder deposits are reported as separate account investment management and administration service fees. Mortality charges on variable universal life contracts are reported as expense charges on deposit funds in the accompanying statements of operations. Fees charged relative to variable life and annuity administration agreements for separate account products sold by other insurance companies and not recorded on the Company’s financial statements are included in separate account investment management and administration service fees.

Reclassifications

Certain amounts reported in the prior years’ statutory-basis financial statements have been reclassified to conform with the presentation adopted in the current year. These reclassifications had no effect on unassigned surplus or net  income of the prior years.

2. Accounting Change and Permitted Statutory Accounting Practice

The Company prepares its statutory-basis financial statements in conformity with accounting practices prescribed or permitted by the State of Indiana. Effective January 1, 2001, the State of Indiana required that insurance companies domiciled in Indiana prepare their statutory-basis financial statements in accordance with the NAIC APPM.

Accounting changes adopted to conform to the provisions of the NAIC APPM are reported as changes in accounting princi - -

S-11

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

2. Accounting Change and Permitted Statutory Accounting Practice (continued)

ples. The cumulative effect of changes in accounting principles is reported as an adjustment to unassigned surplus in the period of the change. The cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. As a result of these changes, the Company reported a change of accounting principle, as an adjustment that increased capital and surplus by $8.7 million as of January 1, 2001. Included in this total adjustment are the following items:

	Increase (Decrease) Surplus
	(in millions)
Deferred tax asset	$	110.8
Employee benefit plans		18.2
AVR beginning value adjustment for other asset changes		9.4
Cost of collection		2.0
Home office real estate		(3.8	)
Mortgage loans impairment		(5.2	)
Derivatives		(9.6	)
Company owned furniture, equipment and plane		(11.7	)
Bonds and stocks		(41.0	)
Tax deficiency reserve		(60.4	)
Total	$	8.7

In 2001, the Company received written approval from the Insurance Department to pay dividends from paid-in surplus, instead of from unassigned surplus, if there is no earned surplus, or an insufficient amount of earned surplus, to pay the requested dividend, subject to the Indiana Insurance Commission’s approval. The Insurance Department also granted the Company permission to retroactively reclassify dividends paid from earned surplus in 2001 to paid-in surplus. Dividends paid in 2001 from paid-in surplus, after the retroactive adjustment, totaled $495.0 million.

The Insurance Department recognizes only statutory accounting practices prescribed or permitted by the State of Indiana for determining and reporting the financial condition and results of operations of an insurance company for determining its solvency under the Indiana Insurance Law. The NAIC APPM has been adopted as a component of prescribed or permitted practices by the state of Indiana, however; Indiana has required the use of particular mortality tables to compute reserves for certain types of life insurance policies, which result in higher reserves than would be required under NAIC APPM. The use of the mortality tables required by Indiana, rather than reserve calculation pursuant to NAIC APPM, resulted in a decrease to gain from operations before federal income taxes and net realized loss on investments for the year ended December 31, 2001 of $68.9 million, and a decrease to capital and surplus as of December 31, 2001 of $162.7 million.

3. Investments

The cost or amortized cost, gross unrealized gains and losses and the fair value of investments in bonds at December 31, 2001, and 2000 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
At December 31, 2001:
Corporate	$	19,283.8	$	665.0	$	488.5	$	19,460.3
U.S. government		325.8		55.9		4.7		377.0
Foreign government		765.6		43.7		3.8		805.5
Mortgage-backed		3,016.0		114.8		22.7		3,108.1
State and municipal		29.8		.3		.6		29.5
	$	23,421.0	$	879.7	$	520.3	$	23,780.4
At December 31, 2000:
Corporate	$	17,205.5	$	430.8	$	542.0	$	17,094.3
U.S. government		324.2		64.2		2.5		385.9
Foreign government		812.6		35.9		27.9		820.6
Mortgage-backed		3,499.0		89.9		34.2		3,554.7
State and municipal		11.2		—		.1		11.1
	$	21,852.5	$	620.8	$	606.7	$	21,866.6

The cost or amortized cost of bonds at December 31, 2001 and 2000 has been reduced by adjustments of $248.7 million and $58.3 million, respectively, to decrease cost or amortized cost as a result of write-downs of these investments due to impairment and/or the Securities Valuation Office of the NAIC (“SVO”) designating certain investments as in or near default.

S-12

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

3. Investments (continued)

A summary of the cost or amortized cost and the fair value of investments in bonds at December 31, 2001, by contractual maturity, is as follows:

	Cost or Amortized Cost		Fair Value
	(in millions)
Maturity:
In 2002	$	711.6	$	723.7
In 2003–2006		4,918.6		5,035.2
In 2007–2011		7,682.8		7,662.6
After 2011		7,092.1		7,250.8
Mortgage-backed securities		3,015.9		3,108.1
Total	$	23,421.0	$	23,780.4

The expected maturities may differ from the contractual maturities in the foregoing table because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Proceeds from sales of investments in bonds during 2001, 2000 and 1999 were $5.6 billion, $2.9 billion and $5.4 billion, respectively. Gross gains during 2001, 2000 and 1999 of $146.3 million, $56.0 million and $95.4 million, respectively, and gross losses of $171.4 million, $116.5 million and $195.5 million, respectively, were realized on those sales.

At December 31, 2001 and 2000, investments in bonds, with an admitted asset value of $21.4 million and $99.9 million, respectively, were on deposit with state insurance departments to satisfy regulatory requirements. At December 31, 2001, the Company held foreign-currency dominated securities with a U.S. dollar equivalent par value of $80.1 million.

At December 31, 2001, the Company held unrated or less-than-investment grade corporate bonds of $1.7 billion, with an aggregate fair value of $1.6 billion. Those holdings amounted to 7.34% of the Company’s investments in bonds and less than 4.89% of the Company’s total admitted assets. The Company performs periodic evaluations of the relative credit standing of the issuers of these bonds.

Unrealized gains and losses on investments in unaffiliated common stocks are reported directly in unassigned surplus. The cost or amortized cost of preferred stock and unaffiliated common stock, gross unrealized gains and losses and the fair value of such investments at December 31, 2001, and 2000 are as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
At December 31, 2001:
Preferred stocks	$	223.6	$	5.5	$	.6	228.5
Unaffiliated common stocks		107.4		15.2		15.1	107.5
At December 31, 2000:
Preferred stocks		261.7		2.9		25.1	239.5
Unaffiliated common stocks		145.7		30.7		14.7	161.7

The cost or amortized cost of preferred stocks at December 31, 2001 and 2000 has been reduced by adjustments of $14.9 million and $7.6 million, respectively, to decrease amortized cost as a result of write-downs of these investments due to impairment and/or the SVO designating certain investments as low or lower quality.

During 2001, the minimum and maximum lending rates for mortgage loans were 6.3% and 10.0%, respectively. At the issuance of a loan, the percentage of loan to value on any one loan does not exceed 79.5%. At December 31, 2000, the Company held mortgages aggregating $5.0 million with interest overdue beyond 180 days (excluding accrued interest). No interest was past due 180 days or more on mortgages at  December 31, 2001. At December 31, 2001 and 2000 impaired loans with a related allowance ($2.5 million and $5.2 million, respectively) for credit losses are $21.7 million and $24.1 million, respectively. The average recorded investment in impaired loans is $23.3 million and $30.l million at December 31, 2001 and 2000, respectively. The Company recognized interest income of $2.8 million during the period the loans were impaired for each of the years ended December 31, 2001 and 2000. At December 31, 2001 and 2000, there was no nonadmitted interest due on these mortgage loans. Mortgage loans balances do not include any taxes, assessments or amounts advanced as of December 31, 2001 or 2000. There are no impaired mortgage loans without an allowance for credit losses at December 31, 2001 or 2000.

All properties covered by mortgage loans have fire insurance at least equal to the excess of the loan over the maximum loan that would be allowed on the land without the building.

The total recorded investment in restructured mortgage loans, at December 31, 2001 and 2000 is $5.2 million and $4.1 million, respectively. The realized capital losses related to these loans were $.7 million and $.5 million at December 31, 2001 and 2000, respectively. The Company accrues interest income on impaired loans to the extent deemed collectible (delinquent less than 90 days) and the loan continues to perform under its original or restructured contractual terms. Interest income on non-performing loans generally is recognized on a cash basis.

S-13

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

3. Investments (continued)

Components of the Company’s investments in real estate are summarized as follows:

	December 31
	2001			2000
	(in millions)
Properties occupied by the Company:
Land	$	1.8		$	2.5
Buildings		4.9			10.5
Less accumulated depreciation		(.5	)		(2.5	)
		6.2			10.5
Properties held for sale:
Land		41.3			45.8
Buildings		219.3			238.3
Other		19.9			16.3
Less accumulated depreciation		(36.9	)		(39.2	)
		243.6			261.2
Total real estate	$	249.8		$	271.7

The major categories of net investment income are as follows:

	Year ended December 31
	2001		2000		1999
	(in millions)
Income:
Bonds	$	1,724.3	$	1,744.3	$	1,840.6
Preferred stocks		22.0		21.3		20.3
Unaffiliated common stocks		2.4		4.9		6.3
Affiliated common stocks		79.8		10.2		7.8
Mortgage loans on real estate		326.5		328.1		321.0
Real estate		42.3		41.4		57.8
Policy loans		111.0		109.8		101.7
Other investments		70.5		58.7		50.6
Cash and short-term investments		58.2		77.9		95.9
Total investment income		2,437.0		2,396.6		2,502.0
Expenses:
Depreciation		10.5		12.8		14.4
Other		298.1		258.3		284.4
Total investment expenses		308.6		271.1		298.8
Net investment income	$	2,128.4	$	2,125.5	$	2,203.2

Nonadmitted accrued investment income at December 31, 2001 amounted to $9.9 million and consists principally of investment income on bonds that is over 90 days past due. No accrued investment income was nonadmitted at December 31, 2000.

Net realized capital gains (losses) on investments are reported net of federal income taxes and amounts transferred to the IMR as follows:

	2001			2000			1999
	(in millions)
Net realized capital gains (losses) on investments	$	(235.1	)	$	(60.3	)	$	20.8
Less amount transferred to IMR (net of related taxes (credits) of $4.3, ($16.0) and ($31.4) in 2001, 2000 and 1999, respectively)		7.9			(29.7	)		(58.3	)
		(243.0	)		(30.6	)		79.1
Less federal income taxes (credits) on realized gains (losses)		17.3			(58.5	)		(35.3	)
Net realized capital gains (losses) net of income tax expense and excluding net transfers to the IMR	$	(260.3	)	$	27.9		$	114.4

S-14

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

4. Subsidiaries

At December 31, 2001, the Company owned 100% of the outstanding common stock of two insurance company subsidiaries: First Penn-Pacific Life Insurance Company (“First Penn”) and Lincoln Life & Annuity Company of New York (“LNY”). At December 31, 2000, the Company also owned 100% of the outstanding common stock of two other insurance subsidiaries, Lincoln National Health & Casualty  Insurance Company and Lincoln National Reassurance Company, which were sold during 2001. A realized loss of $12.5  million was realized on these sales. The Company owns 100% of the outstanding common stock of five non-insurance  company subsidiaries: Lincoln National Insurance Associates (“LNIA”), Lincoln Financial Distributors, Inc. (“LFD”), which was formerly known as Sagemark Consulting, Inc., Wakefield Tower Alpha Limited (“Wakefield”), Lincoln Realty Capital Corporation (“LRCC”) and Lincoln Life & Annuity  Distributors, Inc. (“LLAD”).

Statutory-basis financial information related to the insurance subsidiaries is summarized as follows (in millions):

	December 31, 2001				December 31, 2000
	First Penn		LNY		First Penn		LNY
Cash and invested assets	$	1,487.4	$	1,945.7	$	1,376.9	$	1,947.0
Other assets		81.1		42.4		41.6		41.7
Separate account asset		—		356.4		—		329.8
Total admitted assets	$	1,568.5	$	2,344.5	$	1,418.5	$	2,318.5
Insurance reserves	$	1,415.1	$	1,760.7	$	1,305.3	$	1,772.1
Other liabilities		76.4		36.8		41.8		48.0
Separate account liabilities		—		356.4		—		329.8
Capital and surplus		77.0		190.6		71.4		168.6
Total liabilities and capital and surplus	$	1,568.5	$	2,344.5	$	1,418.5	$	2,318.5

	Year ended
	December 31, 2001						December 31, 2000
	First Penn			LNY			First Penn		LNY
Revenues	$	349.7		$	395.0		$	327.6	$	389.8
Benefits and expenses		343.2			363.4			322.2		341.8
Net realized losses		(8.2	)		(12.2	)		—		(2.2	)
Net income (loss)	$	(1.7	)	$	19.4		$	5.4	$	45.8

LNIA was purchased in 1998 for $.6 million and has an admitted asset value of $2.0 million at December 31, 2001. LFD is a broker dealer that was acquired in connection with a reinsurance transaction completed in 1998 and has an admitted asset value of $7.0 million at December 31, 2001. Wakefield was formed in 1999 to engage in the ownership and management of investments and has an admitted asset value of $280.6 million at December 31, 2001. Wakefield’s assets as of December 31, 2001 consist entirely of investments in bonds. LRCC was formed in 1999 to engage in the management of certain real estate investments. It was capitalized with cash and three real estate investments of $12.7 million and has an admitted asset value of $26.3 million at December 31, 2001. LLAD was formed in 2000 to distribute the Company’s products to its customers and has an admitted asset value of $40.0 million at December 31, 2001.

The carrying value of all affiliated common stocks, was $623.5 and $743.0 million at December 31, 2001 and 2000, respectively. The cost basis of investments in subsidiaries as of December 31, 2001 and 2000 was $750.2 million and $1.1 billion, respectively. Included in the change in differences in cost and admitted investment amounts in the Statement of Changes in Capital and Surplus is a net decrease in the unrealized loss on investments in subsidiaries for the year ended December 31, 2001 of $61.7 million, related to the change in carrying values of the Company’s investments in its subsidiaries and affiliates.

During 2001, 2000 and 1999, the subsidiaries paid dividends to the Company of $74.6 million, $11 million and $5.2 million, respectively.

The Company has no investments in subsidiaries, controlled entities, affiliated entities, joint ventures, partnerships or limited liability companies that exceed 10% of its admitted assets.

The Company did not recognize any impairment write-downs for its investments in subsidiaries during the statement period.

S-15

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

5. Federal Income Taxes

Income before federal income taxes differs from taxable income in 2001 principally due to tax expense on the deferred gain from the sale of the reinsurance operations (see Note 9), offset by tax-exempt investment income and dividends-received tax deductions. In 2000 and 1999, income before federal income taxes differs from taxable income principally due to tax exempt investment income and dividends-received tax deductions.

Capital gains (losses) of $63.7 million, ($174.0 million) and ($151.7 million), were recognized in 2001, 2000 and 1999, respectively. The losses were carried back to recover taxes paid in prior years.

The Company paid (received) $9.6 million, ($42.6 million) and $45.3 million to (from) LNC in 2001, 2000 and 1999, respectively, for federal income taxes.

The components of the net deferred tax asset are as follows:

	December 31, 2001			January 1, 2001
	(in millions)
Gross deferred tax assets	$	797.5		$	721.8
Gross deferred tax liabilities		(156.1	)		(250.2	)
Deferred tax assets non-admitted		(461.2	)		(360.8	)
Net deferred tax asset	$	180.2		$	110.8

The components of income tax expense are as follows:

	2001			2000			1999
	(in millions)
Current federal income tax:
Federal income tax expense on operations		$456.5		$	94.9		$	85.4
Federal income tax expense (credit) on realized gains (losses)		17.3			(58.5	)		(35.3	)
Total current federal income tax in net income		473.8			36.4			50.1
Change in deferred tax:
Change in deferred tax assets		(75.7	)		—			—
Change in deferred tax liabilities		(94.1	)		—			—
Change in non-admitted deferred tax asset		100.4			—			—
Net change in net deferred tax asset		(69.4	)		—			—
Total federal income tax	$	404.4		$	36.4		$	50.1

The Company’s income tax expense differs from the amount obtained by applying the federal statutory rate of 35% to Net Gain from Operations After Dividends to Policyholders for the following reasons:

	2001			2000			1999
	(in millions)
Expected federal income tax expense	$	313.5		$	222.9		$	169.4
Gain from sale of reinsurance agreements		310.0			(2.8	)		25.1
Tax preferred investment income		(99.5	)		(71.9	)		(60.9	)
Income tax credits		(39.0	)		(17.5	)		(16.7	)
Amortization of capitalized software		(14.5	)		(13.6	)		(11.8	)
(Payment) accrual of contingency items		(14.3	)		15.7			21.8
Other amounts		0.3			(37.9	)		(41.5	)
Tax expense on net income before realized capital gains (losses)		456.5			94.9			85.4
Tax on realized capital gains		17.3			(58.5	)		(35.3	)
Total income tax expense	$	473.8		$	36.4		$	50.1

Under prior income tax law, one-half of the excess of a life insurance company’s income from operations over its taxable investment income was not taxed, but was set aside in a special tax account designated as “Policyholders’ Surplus.” The Company has approximately $187 million of untaxed “Policyholders’ Surplus” on which no payment of federal income taxes will be required unless it is distributed as a dividend, or under other specified conditions. Barring the passage of unfavorable legislation, the Company does not believe that any significant portion of the account will be taxed in the foreseeable future and no related tax liability has been recognized. If the entire balance of the account became taxable under the current federal income tax rate, the tax would be approximately $65.5 million. No deferred tax liabilities are recognized related to the Policyholders’ Surplus Account.

6. Reserves and Reinsurance

The balance sheet caption “Reinsurance recoverable” includes amounts recoverable from other insurers for claims paid by the Company of $183.1 and $123.5 million at December 31, 2001 and 2000, respectively.

The balance sheet caption, “Total policy and contract liabilities,” has been reduced for insurance ceded in the amounts of $6.6 billion and $5.2 billion as of December 31, 2001 and 2000, respectively.

Reinsurance transactions, excluding assumption reinsurance, included in the income statement captions, “Life and annuity premiums” and “Accident and health premiums” are as follows:

	Year ended December 31
	2001			2000		1999
	(in millions)
Insurance assumed	$	2,630.9		$	3,952.9	$	2,606.5
Insurance ceded		3,200.8			2,766.6		1,675.1
Net reinsurance premiums	$	(569.9	)	$	1,186.3	$	931.4

S-16

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

6. Reserves and Reinsurance (continued)

The income statement caption, “Benefits and settlement expenses,” is net of reinsurance recoveries of $3.3 billion, $1.9 billion and $2.6 billion for 2001, 2000 and 1999, respectively.

Deferred and uncollected life insurance premiums and annuity considerations included in the balance sheet caption, “Premiums and fees in course of collection,” are as follows:

	December 31, 2001
	Gross			Loading			Net of Loading
	(in millions)
Ordinary new business	$	5.4		$	(7.0	)	$	(1.6	)
Ordinary renewal		(73.5	)		(2.5	)		(76.0	)
Group life		6.9			1.0			7.9
	$	(61.2	)	$	(8.5	)	$	(69.7	)

	December 31, 2000
		Gross		Loading		Net of Loading
	(in millions)
Ordinary new business	$	13.0	$	8.1	$	4.9
Ordinary renewal		57.9		15.7		42.2
Group life		9.7		.2		9.5
	$	80.6	$	24.0	$	56.6

At December 31, 2001, the Company’s annuity reserves and deposit fund liabilities, including separate accounts, which are subject to discretionary withdrawal with adjustment, subject to discretionary withdrawal without adjustment and not subject to discretionary withdrawal provisions are summarized as follows:

	Amount		Percent
	(in millions)
Subject to discretionary withdrawal with adjustment:
With market value adjustment		$2,367.0	4	%
At book value, less surrender charge		2,457.5	5	%
At market value		36,344.6	64	%
Total		41,169.1	73	%
Subject to discretionary withdrawal without adjustment at book value with minimal or no charge or adjustment		12,594.2	22	%
Not subject to discretionary withdrawal		2,906.3	5	%
Total annuity reserves and deposit fund		56,669.6	100	%
Less reinsurance ceded		1,225.3
Net annuity reserves and deposit fund
liabilities, including separate accounts	$	55,444.3

At December 31, 2001, the Company had variable annuity policies and variable universal life policies with guaranteed minimum death benefits as follows:

	Subjected Account Value		Amount of Reserve Held (Net of Reinsurance)		Reinsurance Reserve Credit
	(in millions)
Variable annuity	$	37,843.8	$	46.7	$	9.2
Variable life		114.7		23.8		—
Total	$	37,958.5	$	70.5	$	9.2

7. Capital and Surplus

In 1998, the Company issued two surplus notes to LNC in return for cash of $1.25 billion. The first note, for $500.0 million, issued to LNC, calls for the Company to pay the principal amount of the notes on or before March 31, 2028, with interest to be paid quarterly at an annual rate of 6.56%. Subject to approval by the Indiana Insurance Commissioner, LNC also has a right to redeem the note for immediate repayment in total or in part once per year on the anniversary date of the note, but not before January 5, 2003. Any payment of interest or repayment of principal may be paid only out of the Company’s earnings, only if the Company’s surplus exceeds specified levels ($2.3 billion at December 31, 2001), and subject to approval by the Indiana Insurance Commissioner.

The second note for $750.0 million, issued to LNC, calls for the Company to pay the principal amount of the notes on or before December 31, 2028, with interest to be paid quarterly at an annual rate of 6.03%. Subject to approval by the Indiana Insurance Commissioner, LNC also has a right to redeem the note for immediate repayment in total or in part once per year on the anniversary date of the note, but not before December 18, 2003. Any payment of interest or repayment of principal may be paid only out of the Company’s earnings, only if the Company’s surplus exceeds specified levels ($2.4 billion at December 31, 2001), and subject to approval by the Indiana Insurance Commissioner.

S-17

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

7. Capital and Surplus (continued)

A summary of the terms of these surplus notes follows (in millions):

Date Issued	Principal Amount of Note		Principal Outstanding at December 31, 2001		Current Year Interest Paid		Inception to Date Interest Paid		Accrued Interest at December 31, 2001
January 5, 1998	$	500.0	$	500.0	$	41.0	$	130.7	—
December 18, 1998		750.0		750.0		56.5		137.2	—
Total	$	1,250.0	$	1,250.0	$	97.5	$	267.9	—

Life insurance companies are subject to certain Risk-Based Capital (“RBC”) requirements as specified by the NAIC. Under those requirements, the amount of capital and surplus maintained by a life insurance company is to be determined based on the various risk factors related to it. At December 31, 2001, the Company exceeds the RBC requirements.

The payment of dividends by the Company to LNC is limited and cannot be made except from earned profits of the Company and, in certain circumstances, without prior approval of the Indiana Insurance Commissioner. Ordinary dividends to LNC are restricted to the greater of 2001 statutory basis net income or 10% of statutory basis capital and surplus at December 31, 2001. In 2002, the Company can pay dividends of $300.6 million without the prior approval of the Indiana Insurance Commissioner, based on unassigned surplus available as stated in the December 31, 2001 Annual Statement filed with the Insurance Department (see Note 14).

Total assets have been decreased by $813.6 million for non-admitted assets as required by statutory guidance.

The Company is recognized as an accredited reinsurer in the state of New York, which effectively enables it to conduct reinsurance business with unrelated insurance companies that are domiciled within the state of New York. As a result, in addition to regulatory restrictions imposed by the State of Indiana, the Company is also subject to the regulatory requirements that the State of New York imposes upon accredited reinsurers.

8. Employee Benefit Plans

LNC maintains defined benefit pension plans for its employees (including Company employees) and a defined contribution plan for the Company’s agents. LNC also maintains 401(k) plans, deferred compensation plans, supplemental retirement plans, a salary continuation plan, supplemental executive retirement plan and postretirement medical and life insurance plans for its employees and agents (including the Company’s employees and agents). The aggregate expenses and accumulated obligations for the Company’s portion of these plans are not material to the Company’s statutory-basis Statements of Operations or Balance Sheets for any of the periods shown.

LNC has various incentive plans for employees, agents and directors of LNC and its subsidiaries that provide for the issuance of stock options, stock appreciation rights, restricted stock awards and stock incentive awards. These plans are comprised primarily of stock option incentive plans. Stock options awarded under the stock option incentive plans are granted with an exercise price equal to the market value of LNC stock at the date of grant and, subject to termination of employment, expire ten years from the date of grant. Such options are transferable only upon death. Options granted prior to 1992 are exercisable one year after the date of grant and options issued subsequent to 1991 become exercisable in 25% increments over the four-year period following the option grant anniversary date. A “reload option” feature was added on May 14, 1997. In most cases, persons exercising an option after that date have been granted new options in an amount equal to the number of matured shares tendered to exercise the original option award. The reload options are granted for the remaining term of the related original option and have an exercise price equal to the market value of LNC stock at the date of the reload award. Reload options can be exercised two years after the grant date if the value of the new option has appreciated by at least 25%.

In 2000, as a result of changes in the interpretation of the existing accounting rules for stock options, LNC and the Company decided not to continue issuing stock options to agents that do not meet the stringent definition of a common law employee. In the first quarter of 2000, LNC adopted a stock appreciation right (“SAR”) program as a replacement to the agent stock option program. The first awards under this program were also made in the first quarter of 2000. The SARs under this program are rights on LNC stock that are cash settled and become exercisable in 25% increments over the four year period following the SAR grant date. SARs are granted with an exercise price equal to the market value of LNC stock at the date of grant and, subject to termination of employment, expire five years from the date of grant. Such SARs are transferable only upon death.

LNC recognizes compensation expense for the SAR program based on the fair value method using an option-pricing model. Compensation expense and the related liability are recognized on a straight-line basis over the vesting period of the SARs. The SAR liability is marked-to-market through net income. This accounting treatment causes volatility in income as a result of changes in the market value of LNC stock. LNC hedges this volatility by purchasing call options on LNC stock. Call options hedging the vested SARs are also marked-to-market through net income. The compensation expense and hedge income (expense) do not affect the statutory-basis financial statements of the Company.

S-18

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

8. Employee Benefit Plans (continued)

As of December 31, 2001, there were 4,277,588 and 1,277,275 shares of LNC common stock subject to options granted to Company employees and agents, respectively, under the stock option incentive plans of which 2,718,859 and 806,307, respectively, were exercisable on that date. The exercise prices of the outstanding options range from $13.86 to $56.75. During 2001, 2000 and 1999, 3,175,782, 935,986 and 1,044,078 options became exercisable, respectively, 946,843, 190,100 and 318,421 options were exercised, respectively, and 227,141, 383,364 and 82,024 options forfeited, respectively.

As of December 31, 2001, there were 8,475 and 1,111,467 shares of LNC common stock subject to SARs granted to Company employees and agents, respectively, under the SAR pro gram. Of the SARs granted, 102,297 granted to agents, were exercisable as of that date. The exercise prices of the out standing SARs range from $24.72 to $48.19. During 2001 and 2000, 177,485 and 8,500 SARs became exercisable, respectively, 15,200 and 5,100 SARs were forfeited, respectively and in 2001, 63,388 SARs were exercised. No SARs were exercised in 2000.

Effective July 1, 1999, the Company’s agent postretirement plan was changed to require agents retiring on or after that date to pay the full premium costs. This change to the Plan resulted in a one-time curtailment gain of $1.4 million in 1999.

9. Restrictions, Commitments and Contingencies

Marketing and Compliance Matters

Regulators continue to focus on market conduct and compliance issues. Under certain circumstances, companies operating in the insurance and financial services markets have been held responsible for providing incomplete or misleading sales materials and for replacing existing policies with policies that were less advantageous to the policyholder. The Company’s management continues to monitor the Company’s sales materials and compliance procedures and is making an extensive effort to minimize any potential liability. Due to the uncertainty surrounding such matters, it is not possible to provide a meaningful estimate of the range of potential outcomes at this time; however, it is management’s opinion that such future development will not materially affect the financial position of the Company.

Group Pension Annuities

The liabilities for guaranteed interest and group pension annuity contracts, which are no longer being sold by the Company, are supported by a single portfolio of assets that attempts to match the duration of these liabilities. Due to the long-term nature of group pension annuities and the resulting inability to exactly match cash flows, a risk exists that future cash flows from investments will not be reinvested at rates as high as currently earned by the portfolio. Accordingly, these liabilities may prove to be deficient or excessive. However, it is management’s opinion that such future development will not materially affect the financial position of the Company.

Leases

The Company leases its home office properties through sale-leaseback agreements. The agreements provide for a 25-year lease period with options to renew for six additional terms of five years each. The agreements also provide the Company with the right of first refusal to purchase the properties during the term of the lease, including renewal periods, at a price as defined in the agreements. The Company also has the option to purchase the leased properties at fair market value as defined in the agreements on the last day of the initial 25-year lease ending in 2009 or on the last day of any of the renewal periods. Rental expense on these leases was $28.4 million in 2001. The company receives rental income from affiliates for their use of a portion of the home office properties, which partially offsets rental expense. Such rental income amounted to $3.2 million in 2001. Total rental expense on other operating leases in 2001 was $12.0 million. Total rental expense on all operating leases in 2000 and 1999 was $45.6 million and $44.5 million, respectively. At December 31, 2001, future minimum rental commitments are as follows (in millions):

2002	$	37.9
2003		35.0
2004		34.1
2005		33.1
2006		33.4
Thereafter		64.8
	$	238.3

Information Technology Commitment

In February 1998, the Company signed a seven-year contract with IBM Global Services for information technology services for the Fort Wayne operations. Total costs incurred in 2001, 2000 and 1999 were $62.8 million, $65.1 million and $67.4 million respectively. Future minimum annual costs range from $40.9 million to $56.8 million, however future costs are dependent on usage and could exceed these amounts.

Reinsurance Contingencies

On December 7, 2001, Swiss Re Life & Health America, Inc. (“Swiss Re”) acquired LNC’s reinsurance operation for $2.0 billion. In addition, LNC retained approximately $500.0 million of statutory capital supporting the reinsurance operation. The transaction structure involved a series of indemnity reinsurance transactions combined with the sale of certain stock companies that comprised the LNC’s reinsurance operation. Two of the stock companies sold, Lincoln National Health & Casualty Insurance Company and Lincoln National Reassurance Company, were wholly-owned subsidiaries of the Company. As a result, and because a significant amount of the reinsurance business subject to the indemnity reinsurance transactions was written through the Company, the Company

S-19

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

9. Restrictions, Commitments and Contingencies (continued)

received $1.84 billion of the $2.0 billion proceeds and retained approximately $250.0 million of the statutory capital.            

A pre-tax loss of $12.5 million was recognized by the Company on the sale of the subsidiaries. A statutory gain of $1.5 billion was generated under the indemnity reinsurance agreements. This gain was reported as a direct adjustment to unassigned surplus (net of related income taxes) and recognition of the surplus increase as income will be reported on a net-of-tax basis as earnings emerge from the business reinsured, in accordance with the requirements of Statement on Statutory Accounting Principles No. 61, Life, Deposit-Type, and Accident and Health Reinsurance. During 2001, the Company recognized as income $8.0 million of the deferred gain.

LNC and Swiss Re have not agreed upon the final closing financial statements associated with the December 7, 2001 transactions. There are currently disputed matters of approximately $500.0 million, which relate primarily to personal accident business reserves and recoverables. LNC’s ongoing indemnification to Swiss Re on the underlying reinsurance business is limited to the personal accident business. Pursuant to the purchase agreement, LNC’s exposure is capped at $100.0 million for net future payments under the personal accident programs in excess of $148.0 million, which represents the personal accident liabilities, net of the assets held for reinsurance recoverable at December 31, 2000. Up to $200.0 million of net payments in excess of the net liabilities will be shared on a 50/50 basis between LNC and Swiss Re. LNC has no continuing indemnification risk to Swiss Re on other reinsurance lines of business.

Under the timeframe provided for within the acquisition agreement for dispute resolution, it is probable that the earliest point that these matters will be agreed upon would be the second quarter of 2002. If the parties are unable to reach agreement, and these matters go to arbitration, an ultimate resolution of these matters may take several additional months. Upon reaching agreement as to the final closing financial statements, it is possible that the Company could record adjustments to the realized loss on the sale of subsidiaries, to income, or to the amount of gain reported as a direct adjustment to unassigned surplus. Another aspect of a potential dispute resolution could result in LNC and the Company agreeing to transfer assets to Swiss Re until the adequacy of certain reserves and related recoverables can be determined. In that event, LNC and the Company’s future investment income would be reduced to the extent that any such dispute resolution would result in Swiss Re’s retention of the related investment income during the timeframe that Swiss Re would hold the invested assets. While uncertainty exists as to how these disputed matters will finally be resolved, at the present time the Company believes the amounts reported within the Company’s statutory-basis financial statements as of and for the year ended December 31, 2001 represent the best estimate of the ultimate outcome of Swiss Re’s acquisition of the Company’s reinsurance business.

Other Insurance Ceded and Assumed

On November 1, 1999, the Company closed its previously announced agreement to transfer a block of disability income business to MetLife. Under this indemnity reinsurance agree- ment, the Company transferred $490.8 million of cash to MetLife representing the statutory reserves transferred on this business less $17.8 million of purchase price consideration. In accordance with statutory accounting rules on indemnity  reinsurance, the gain on sale was reported on a net-of-tax  basis as a direct adjustment to surplus. At December 31, 2001, the surplus component of the gain ($64.8 million) related to this transaction is included in the total surplus gain component associated with the aquisition of LNC’s reinsurance operations by Swiss Re and is being recognized in income at the rate that earnings are expected to emerge on this reinsurance business.

The Company cedes insurance to other companies. The portion of risks exceeding the Company’s retention limit is reinsured with other insurers. The Company limits its maximum coverage that it retains on an individual to $10 million. Portions of the Company’s deferred annuity business have also been coinsured with other companies to limit its exposure to interest rate risks. At December 31, 2001, the reserves associated with these reinsurance arrangements totaled $1.1 billion. To cover products other than life insurance, the Company acquires other insurance coverages with retentions and limits that management believes are appropriate for the circumstances. The accompanying financial statements reflect premiums, benefits and reserves for policy benefits, net of insurance ceded. The Company remains liable if its reinsurers are unable to meet their contractual obligations under the  applicable reinsurance agreements.

Proceeds from the sale of common stock of American States Financial Corporation (“American States”) and proceeds from the January 5, 1998 surplus note, were used to finance an indemnity reinsurance transaction whereby the Company and LNY reinsured 100% of a block of individual life insurance and annuity business from CIGNA. In 1999, the Company and CIGNA reached an agreement through arbitration on the final statutory-basis values of the assets and liabilities reinsured. As a result, the Company’s ceding commission for this transaction was reduced by $58.6 million in 1999.

The Company assumes insurance from other companies, including certain affiliates. At December 31, 2001, the Company provided $75.3 million of statutory-basis surplus relief to other insurance companies under reinsurance transactions. The Company retroceded 100% of this accepted surplus relief to its off-shore reinsurance affiliates. Generally, such amounts are offset by corresponding receivables from the ceding company, which are secured by future profits on the reinsured business. However, the Company is subject to the risk that the ceding company may become insolvent and the right of offset would not be permitted.

The regulatory required liability for unsecured reserves ceded to unauthorized reinsurers was $76.1 million and $16.7 million at December 31, 2001 and 2000, respectively. Amounts payable or recoverable for reinsurance on policy and contract liabilities are not subject to periodic or maximum limits. At December 31, 2001, the Company’s reinsurance recoverables are not material and no individual reinsurer owed the Company an amount that was equal to or greater than 3% of the Company’s surplus.

S-20

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

9. Restrictions, Commitments and Contingencies (continued)

In 2001 and 2000, the Company did not commute any ceded reinsurance. During 2001, the Company recorded reinsurance credits on existing policies of $656.9 million as a result of new or amended reinsurance agreements.

Neither the Company nor any of its affiliates control any non-affiliated reinsurers with which they do business. No policies issued by the Company have been reinsured with a foreign company, which is controlled, either directly or indirectly, by a party not primarily engaged in the business of insurance. The Company does not have any reinsurance agreements in effect under which the reinsurer may unilaterally cancel the agreement. At December 31, 2001 there are no reinsurance agreements in effect such that the amount of losses paid or accrued exceed the total direct premium collected.

Surplus would be reduced by $402.4 million at December 31, 2001 if all reinsurance agreements were cancelled. In 2001, the Company established provisions for uncollectible reinsurance on personal accident reinsurance programs in the amount of $105.4 million and the Company wrote off ceded reinsurance balances in the amount of $89.0 million, related to personal accident reinsurance programs based on a refined analysis of the underlying information.

Vulnerability from Concentrations

At December 31, 2001, the Company did not have a material concentration of financial instruments in a single investee or industry. The Company’s investments in mortgage loans principally involve commercial real estate. At December 31, 2001, 30% of such mortgages, or $1.2 billion, involved properties located in Texas and California. Such investments consist of first mortgage liens on completed income-producing properties and the mortgage outstanding on any individual property does not exceed $38.7 million.

At December 31, 2001, the Company did not have a concentration of: 1) business transactions with a particular customer or lender; 2) sources of supply of labor or services used in the business; or 3) a market or geographic area in which business is conducted that makes it vulnerable to an event that is at least reasonably possible to occur in the near term and which could cause a severe impact to the Company’s financial condition. Although the Company does not have any significant concentration of customers, the Company’s annuities division has a long-standing distribution relationship with American Funds Distributors that is significant to the Company. In 2001, the American Legacy Variable Annuity sold through American Funds Distributors accounted for approximately 21% of the Company’s total gross annuity deposits. The relationship with American Funds Distributors is highly valued by the Company. Both the Company and American Funds Distributors are continuously seeking ways to increase sales and to retain the existing business.

Other Contingency Matters

The Company is involved in various pending or threatened legal proceedings, including purported class actions, arising from the conduct of business. Most of these proceedings are routine in the ordinary course of business. The Company maintains professional liability insurance coverage for certain claims in excess of $5.0 million. The degree of applicability of this coverage will depend on the specific facts of each proceeding. In some instances, these proceedings include claims for unspecified or substantial punitive damages and similar types of relief in addition to amounts for alleged contractual liability or requests for equitable relief. After consultation with legal counsel and a review of available facts, it is management’s opinion that these proceedings ultimately will be resolved without materially affecting the financial position of the  Company.

During the fourth quarter of 2000, the Company reached an agreement in principle to settle all class action lawsuits alleging fraud in the sale of non-variable universal life and participating whole life insurance policies. It requires that the Company provide benefits and a claim process to policyholders who purchased non-variable universal life and participating whole life policies between January 1, 1981 and December 31, 1998. The settlement covers approximately 431,000 policies. Owners of approximately 4,300 policies have excluded themselves (opted-out) from the settlement and, with respect to these policies, will not be bound by the settlement. Total charges recorded during 2000 for this settlement were $64.7 million. With the court’s approval of the settlement in the second quarter of 2001 and the expiration in the third quarter of 2001 of the time to file an appeal, the case was concluded for all policyholders not previously opting out. During the third quarter of 2001, settlement was reached with some of the owners of policies who opted-out of the original settlement. Overall, the third quarter developments relating to these matters were slightly favorable when compared to the assumptions underlying the estimates made in 2000 when the related charges were taken; however, there is continuing uncertainty as to the ultimate costs of settling the remaining opt-out cases. It is management’s opinion that such future developments will not materially affect the consolidated financial position of the Company.            

State guaranty funds assess insurance companies to cover losses to policyholders of insolvent or rehabilitated companies. Mandatory assessments may be partially recovered through a reduction in future premium taxes in some states. The Company has accrued for expected assessments net of estimated future premium tax deductions.

Derivatives

The Company has derivatives with off-balance-sheet risks whose notional or contract amounts exceed the credit exposure. The Company has entered into derivative transactions to reduce its exposure to fluctuations in interest rates, the widening of bond yield spreads over comparable maturity U.S. government obligations and foreign exchange risks. In addition, the Company is subject to the risks associated with changes in the value of its derivatives; however, such changes in value generally are offset by changes in the value of the items being hedged by such contracts. The contract or notional amounts of these instruments reflect the extent of involvement in the various types of financial instruments. Outstanding derivatives with off-balance-sheet risks, shown in notional or contract amounts along with their carrying value and estimated fair values, are as follows:

S-21

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

9. Restrictions, Commitments and Contingencies (continued)

				Assets
	Notional or Contracts/Amounts			Carrying Value		Fair Value		Carrying Value	Fair Value
	December 31			December 31				December 31
	2001	2000		2001		2001		2000	2000
	(in millions)
Interest rate derivatives:
Interest rate cap agreements	$1,258.8	$	1,558.8	$	.6	$	.6	$  2.7	$	0.4
Swaptions	1,752.0		1,752.0		.1		.1	8.2		0.9
Interest rate swaps	335.1		708.2		—		21.0	—		38.1
	3,345.9		4,019.0		.7		21.7	10.9		39.4
Foreign currency derivatives:
Foreign currency swaps	94.6		37.5		3.8		5.9	2.6		2.5
	$3,440.5	$	4,056.5	$	4.5	$	27.6	$13.5	$	41.9

A reconciliation of the notional or contract amounts for the significant programs using derivative agreements and contracts at December 31 is as follows:

	Interest Rate Caps						Swaptions
	2001			2000			2001		2000
	(in millions)
Balance at beginning of year	$	1,558.8		$	2,508.8		$	1,752.0	$	1,837.5
Terminations and maturities		(300.0	)		(950.0	)		—		(85.5	)
Balance at end of year	$	1,258.8		$	1,558.8		$	1,752.0	$	1,752.0

	Interest Rate Swaps						Spread-Locks					Financial Futures
	2001			2000			2001		2000			2001		2000
Balance at beginning of year	$	708.2		$	630.9		$	—	$	—		$	—	$	—
New contracts		—			652.2			—		100.0			—		267.2
Terminations and maturities		(373.1	)		(574.9	)		—		(100.0	)		—		(267.2	)
Balance at end of year	$	335.1		$	708.2		$	—	$	—		$	—	$	—

S-22

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

9. Restrictions, Commitments and Contingencies (continued)

	Put Options					Foreign Currency Swaps
	2001		2000			2001			2000
Balance at beginning of year	$	—	$	21.3		$	37.5		$	44.2
New contracts		—		—			80.9			—
Terminations and maturities		—		(21.3	)		(23.8	)		(6.7	)
Balance at end of year	$	—	$	—		$	94.6		$	37.5

Interest Rate Cap Agreements

The interest rate cap agreements, which expire in 2002 through 2006, entitle the Company to receive payments from the counterparties on specified future dates, contingent on future interest rates. For each cap, the amount of such payments, if any, is determined by the excess of a market interest rate over a strike rate specified in the cap agreement multiplied by the notional amount. The purpose of the Company’s interest rate cap agreement program is to hedge against the negative impact of a significant and sustained rise in interest rates in its fixed annuity line of business. At December 31, 2001, the interest rate caps are recorded at market value ($.6 million) in other investments on the balance sheet. All changes in market value are recorded in net realized gain (loss) on investments in the statement of operations. At December 31, 2000, the premiums paid for the interest rate caps were included in other investments (amortized cost of $2.7 million) and were being amortized over the terms of the agreements.

Swaptions

Swaptions, which expire in 2002 and 2003, entitle the Company to receive settlement payments from the counterparties on specified expiration dates, contingent on future interest rates. For each swaption, the amount of such settlement payments, if any, is determined by the present value of the difference between the fixed rate on a market rate swap and the strike rate specified in the swaption agreement multiplied by the notional amount. The purpose of the Company’s swaption program is to hedge against the negative impact of a significant and sustained rise in interest rates in its fixed annuity line of business. At December 31, 2001 the swaptions are recorded at market value ($.1 million) in other investments on the Balance Sheet. All changes in market value are recorded in net realized gain (loss) on investments in the Statement of Operations. At December 31, 2000, the premiums paid for the swaptions were included in other investments (amortized cost of $8.2 million) and were being amortized over the terms of the agreements. Amortization was included in net investment income.

Interest Rate Swap Agreements

The Company uses interest rate swap agreements to hedge its exposure to floating rate bond coupon payments, replicating a fixed rate bond. An interest rate swap is a contractual agreement to exchange payments at one or more times based on the actual or expected price, level, performance or value of one or more underlying interest rates. The Company is required to pay the counterparty the stream of variable interest payments based on the coupon payments from the hedged bonds, and in turn, receives a fixed payment from the counterparty at a predetermined interest rate. The net re ceipts/payments from interest rate swaps are recorded in net investment income. The Company also uses interest rate swap agreements to hedge its exposure to interest rate fluctuations related to the forecasted purchase of assets to support newly acquired blocks of business and certain other portfolios of assets. Once the assets are purchased, the gains (losses) resulting from the termination of the swap agreements are applied to the basis of the assets. The gains (losses) are recognized in earnings over the life of the assets. The interest rate swap agreements for forecasted purchase of assets outstanding at December 31, 2000, related to certain asset portfolio purchases completed in 2001. As a result, no interest rate swap positions hedging forecasted purchases were outstanding at December 31, 2001. Interest rate swaps are valued at amortized cost and recorded in other investments on the balance sheet. All such derivatives instruments owned at December 31, 2001 and 2000 were entered into “at-the-market” and therefore have an amortized cost basis of zero.

Spread-Lock Agreements

Spread-lock agreements provide for a lump sum payment to or by the Company, depending on whether the spread between the swap rate and a specified government security is larger or smaller than a contractually specified spread. Cash payments are based on the product of the notional amount, the spread between the swap rate and the yield of an equivalent maturity government security and the price sensitivity of the swap at that time. The purpose of the Company’s spread-lock agreements program is to protect against widening of spreads. While spread-lock agreements are used periodically, there are no spread-lock agreements outstanding at December 31, 2001 or 2000.

Financial Futures Contracts

The Company used exchange-traded financial futures contracts to hedge against interest rate risks on a portion of its fixed maturity securities. Financial futures contracts obligate the Company to buy or sell a financial instrument at a specified future date for a specified price. They may be settled in cash or through delivery of the financial instrument. Cash settlements on the change in market values of financial futures contracts are made daily. There are no financial futures contracts outstanding at December 31, 2001 or 2000.

Put Options

The Company used put options, combined with various perpetual fixed income securities, and interest rate swaps to replicate fixed income, fixed maturity investments. The risk hedged is a drop in bond prices due to credit concerns with international bond issuers. The put options allowed the Company to put the bonds back to the counterparties at original par. The put options were sold in 2000.

S-23

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

9. Restrictions, Commitments and Contingencies (continued)

Foreign Currency Swaps

The Company uses foreign currency swaps, which are traded over-the-counter, to hedge some of the foreign exchange risk of investments in fixed maturity securities denominated in foreign currencies. A foreign currency swap is a contractual agreement to exchange the currencies of two different countries at a rate of exchange in the future. The carrying value of the Company’s foreign currency swaps ($3.8 million) represents fluctuations in the spot exchange rate from the trade date to December 31, 2001 and is included in other investments on the balance sheet.

Additional Derivative Information

Expenses for the agreements and contracts described above amounted to $3.5 million, $7.3 million and $6.2 million in 2001, 2000 and 1999, respectively. Deferred gains of $31.2 million as of December 31, 2001 were primarily the result of terminated interest rate swaps. The deferred gains are included with the related fixed maturity securities to which the hedge applied and are being amortized over the life of the securities to which the respective hedges applied.

The Company’s exposure to credit risk is the risk of loss from a counterparty failing to perform according to the terms of the contract. That exposure includes settlement risk (i.e., the risk that the counterparty defaults after the Company has delivered funds or securities under terms of the contract) that would result in an accounting loss and replacement cost risk (i.e., the cost to replace the contract at current market rates should the counterparty default prior to settlement date). To limit exposure associated with counterparty nonperformance, the Company enters into master netting agreements with its counterparties.

The Company is required to put up collateral for any futures contracts that are entered into. The amount of collateral that is required is determined by the exchange on which the contract is traded. The Company currently puts up cash and U.S. Treasury Bonds to satisfy this collateral requirement.

The current credit exposure of the Company’s derivative contracts is limited to the fair value at the reporting date. Credit risk is managed by entering into transactions with creditworthy counterparties and obtaining collateral where appropriate and customary. The Company also attempts to minimize its exposure to credit risk through the use of various credit monitoring techniques. All of the net credit exposure for the Company from derivative contracts is with investment grade counterparties.

10. Fair Value of Financial Instruments

The following methodologies and assumptions were used to determine the estimated fair values of the Company’s financial instruments. Considerable judgment is required to develop these fair values. Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of the Company’s financial instruments.

Bonds

Fair values of bonds are based on quoted market prices, where available. For bonds not actively traded, fair values are estimated using values obtained from independent pricing services. In the case of private placements, fair values are estimated by discounting expected future cash flows using a current market rate applicable to the coupon rate, credit quality and maturity of the investments.

Unaffiliated Common Stock and Preferred Stock

Fair values of unaffiliated common and preferred stock are based on quoted market prices, where available. For stock not actively traded, fair values are based on values of issues of comparable yield and quality.

Mortgage Loans on Real Estate

The estimated fair value of mortgage loans on real estate was established using a discounted cash flow method based on credit rating, maturity and future income. The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt service coverage, loan to value, caliber of tenancy, borrower and payment record. Fair values for impaired mortgage loans are based on: 1) the present value of expected future cash flows discounted at the loan’s effective interest rate; 2) the loan’s market price; or 3) the fair value of the collateral if the loan is collateral dependent.

Policy Loans

The estimated fair values of investments in policy loans are calculated on a composite discounted cash flow basis using Treasury interest rates consistent with the maturity durations assumed. These durations are based on historical experience.

Other Investments and Cash and Short-Term Investments

The carrying values for assets classified as other investments, cash and cash equivalents and short-term investments in the accompanying statutory-basis balance sheets approximate their fair value.

Investment-Type Insurance Contracts

The balance sheet caption “policy and contract liabilities” includes contracts that are considered to be investment-type contracts for GAAP purposes (i.e., universal life, annuity and guaranteed interest contracts). The fair values for the majority of these contracts are based on their approximate surrender values. The fair values for the certain guaranteed interest and similar contracts are estimated using discounted cash flow calculations. These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued.

The remainder of the balance sheet caption “policy and contract liabilities” that do not fit the definition of “investment-type insurance contracts” for GAAP are considered insurance contracts. Fair value disclosures are not required for these insurance contracts and fair values have not been determined by the Company. It is the Company’s position that the disclosure

S-24

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

10. Fair Value of Financial Instruments (continued)

of the fair value of these insurance contracts is important because readers of these financial statements could draw inappropriate conclusions about the Company’s capital and surplus determined on a fair value basis. It could be misleading if only the fair value of assets and liabilities defined as financial instruments are disclosed. The Company and other companies in the insurance industry are monitoring the related actions of the various rule-making bodies and attempting to determine an appropriate methodology for estimating and disclosing the “fair value” of their insurance contract liabilities.

Short-Term Debt

The carrying value of short-term debt approximates fair value.

Surplus Notes due to LNC

Fair values for surplus notes are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements.

Derivatives

The Company employs several different methods for determining the fair value of its derivative instruments. Fair values for these contracts are based on current settlement values. These values are based on quoted market prices for the financial futures contracts and industry standard models that are commercially available for all other derivatives.

Investment Commitments

Fair values for commitments to make investments in fixed maturity securities (primarily private placements), mortgage loans on real estate and real estate are based on the difference between the value of the committed investments as of the date of the accompanying balance sheets and the commitment date. These estimates would take into account changes in interest rates, the counterparties’ credit standing and the remaining terms of the commitments.

Separate Accounts

Assets held in separate accounts are reported in the accompanying statutory-basis balance sheets at fair value. The related liabilities are also reported at fair value in amounts equal to the separate account assets. Seed money deposited into the separate account by the Company is included as a separate account asset, but not as a separate account liability.

The carrying values and estimated fair values of the Company’s financial instruments are as follows:

	December 31
	2001						2000
Assets (Liabilities)	Carrying Value			Fair Value			Carrying Value			Fair Value
	(in millions)
Bonds	$	23,421.0		$	23,780.4		$	21,852.5		$	21,866.6
Preferred stocks		223.6			228.5			261.7			239.5
Unaffiliated common stocks		107.6			107.6			161.7			161.7
Mortgage loans on real estate		4,098.7			4,241.0			4,102.0			4,132.8
Policy loans		1,708.7			1,849.2			1,723.5			1,845.0
Other investments		466.6			466.6			485.0			485.0
Cash and short-term investments		2,697.5			2,697.5			1,448.4			1,448.4
Investment-type insurance contracts:
Deposit contracts and certain guaranteed interest contracts		(17,545.0	)		(17,257.7	)		(16,126.3	)		(15,850.5	)
Remaining guaranteed interest and similar contracts		(122.3	)		(128.6	)		(243.8	)		(247.9	)
Short-term debt		(200.0	)		(200.0	)		(199.5	)		(199.5	)
Surplus notes due to LNC		(1,250.0	)		(1,160.7	)		(1,250.0	)		(1,074.5	)
Derivatives		4.5			27.6			13.5			41.9
Investment commitments		—			(5.4	)		—			(2.2	)
Separate account assets		38,636.5			38,636.5			43,904.6			43,904.6
Separate account liabilities		(38,634.0	)		(38,634.0	)		(43,904.6	)		(43,904.6	)

11. Transactions With Affiliates

LLAD has a nearly exclusive general agent’s contract with the Company under which it sells the Company’s products and provides the service that otherwise would be provided by a home office marketing department and regional offices. For providing these selling and marketing services, the Company paid LLAD override commissions of $52.0 million, $57.5 million and $60.4 million in 2001, 2000 and 1999, respectively. LLAD incurred expenses of $34.9 million, $112.9 million and $113.4 million in 2001, 2000 and 1999, respectively, in excess of the override commissions and operating expense allowances received from the Company, which the Company is not required to reimburse.

Cash and short-term investments at December 31, 2001 and 2000 include the Company’s participation in a short-term cash management program with LNC of $297.9 million and $377.7 million, respectively. Related investment income amounted to $13.9 million, $24.0 million and $16.7 million in 2001, 2000 and 1999, respectively. The short-term loan payable to parent company at December 31, 2001 and 2000 represents notes payable to LNC.

The Company provides services to and receives services from affiliated companies, which resulted in a net payment of $78.0

S-25

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

11. Transactions With Affiliates (continued)

million, $65.7 million and $49.4 million in 2001, 2000 and 1999, respectively, which is included in underwriting, acquisition, insurance and other expenses.

The Company cedes and accepts reinsurance from affiliated companies. Premiums in the accompanying statements of income include premiums on insurance business accepted under reinsurance contracts and exclude premiums ceded to other affiliated companies, as follows:

	Year ended December 31
	2001		2000		1999
	(in millions)
Insurance assumed	$	46.4	$	21.2	$	19.7
Insurance ceded		950.7		2,192.1		777.6

The balance sheets include reinsurance balances with affiliated companies as follows:

	December 31
	2001		2000
	(in millions)
Policy and contract liabilities assumed	$	331.1	$	584.4
Policy and contract liabilities ceded		1,311.5		1,682.8
Amounts recoverable on paid and unpaid losses		229.3		286.9
Reinsurance payable on paid losses		20.4		9.3
Funds held under reinsurance treaties—net liability		1,588.3		3,294.6

Substantially all reinsurance ceded to affiliated companies is with unauthorized companies. To take a reserve credit for such reinsurance, the Company holds assets from the reinsurer, including funds held under reinsurance treaties, which totaled $1.0 billion and $814.6 million at December 31, 2001 and 2000, respectively, and is the beneficiary on letters of credit aggregating to $156.6 million and $709.5 million at December 31, 2001 and 2000, respectively. The letters of credit are issued by banks and represent guarantees of performance under the reinsurance agreement. At December 31, 2001 and 2000, LNC guaranteed $156.6 million and $709.5 million, respectively, of these letters of credit. At December 31, 2001 and 2000, the Company has a receivable (included in the foregoing amounts) from affiliated insurance companies in the amount of $75.3 million and $133.7 million, respectively, for statutory surplus relief received under financial reinsurance ceded agreements.

12. Separate Accounts

Separate account assets held by the Company consist primarily of mutual funds, long-term bonds, common stocks and short-term investments and are carried at fair value. Substantially none of the separate accounts have any minimum guarantees and the investment risks associated with market value changes are borne entirely by the policyholder.

Separate account premiums and annuity considerations amounted to $4.4 billion, $5.7 billion and $4.6 billion in 2001, 2000 and 1999, respectively. Reserves for separate accounts with assets at fair value were $37.6 billion and $42.9 billion at December 31, 2001 and 2000, respectively. All reserves are subject to discretionary withdrawal at market value.

A reconciliation of transfers to the Company from the separate accounts is as follows:

	Year ended December 31
	2001			2000			1999
	(in millions)
Transfers as reported in the Summary of Operations of the separate accounts:
Transfers to separate accounts	$	4,440.7		$	5,719.2		$	4,573.2
Transfers from separate accounts		(4,500.8	)		(5,830.0	)		(4,933.8	)
Net transfers from separate accounts as reported in the Summary of Operations in underwriting acquisition and other expenses	$	(60.1	)	$	(110.8	)	$	(360.6	)

S-26

The Lincoln National Life Insurance Company

Notes to Statutory-Basis Financial Statements (continued)

13. Sales, Transfers and Servicing of Financial Assets

As part of the Company’s asset management program, securities are sold and reacquired within 30 days of the sale date to enhance the Company’s yield on its investment portfolio. The details by NAIC designation 3 or below of securities sold during 2001 and reacquired within 30 days of the sale date are:

	Number of Transactions	Book Value of Securities Sold		Cost of Securities Repurchased		Gain (Loss)
	(in millions)
Bonds:
NAIC 3	83.0	$	155.8	$	151.9	$	(.1	)
NAIC 4	249.0		355.9		370.3		(3.7	)
NAIC 5	—		—		27.3		(0.2	)
NR	21.0		41.8		549.4		(4.0	)

14. Reconciliation to Statutory Annual Statement

In connection with the indemnity reinsurance agreements, the Company and Swiss Re also entered into an administrative services agreement whereby Swiss Re provides administrative services, including accounting services to the Company. In connection with the December 31, 2001 statutory financial statements, Swiss Re provided the Company with certain year-end financial information regarding the business that had been reinsured by Swiss Re. Although the Company disagreed with several adjustments made by Swiss Re, the Company was not provided with sufficient information to reverse the effects of these adjustments from the Annual Statement financial statements and related exhibits and schedules. The Company did, however, record an adjustment to reverse the net effect of the disputed items in the Annual Statement filed with the Insurance Department by recognizing miscellaneous revenue and a miscellaneous asset. Because the asset was not specifically identified as an asset within the NAIC APPM, the Company non-admitted the asset in the December 31, 2001 Annual Statement. Subsequent to the Annual Statement filing, the Company obtained additional information regarding the adjustments Swiss Re had made to the statutory financial information provided to the Company. The Company reversed those adjustments prior to completion of the accompanying statutory-basis financial statements. The adjustments that were reversed were principally associated with reinsurance recoverables for paid and unpaid losses.

The following is a reconciliation of amounts previously reported to state regulatory authorities in the 2001 Annual Statement, and as reported in the accompanying statutory-basis financial statements:

	(in millions)
Capital and surplus as reported in the Company’s Annual Statement		$3,096.0
Increase in surplus resulting from reversal of Swiss Re entries		420.0
Capital and surplus as reported in the accompanying audited statutory-basis balance sheet		$3,516.0
Statutory net income as reported in the Company’s Annual Statement	$	67.7
Increase in net income resulting from reversal of Swiss Re entries		111.3
Statutory net income as reported in the accompanying audited statutory-basis statement of operations	$	179.0

S-27

Report of Independent Auditors

Board of Directors

The Lincoln National Life Insurance Company

We have audited the accompanying statutory-basis balance sheets of The Lincoln National Life Insurance Company (the “Company”), a wholly-owned subsidiary of Lincoln National Corporation, as of December 31, 2001 and 2000, and the related statutory-basis statements of operations, changes in capital and surplus and cash flow for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 1 to the financial statements, the Company presents its financial statements in conformity with accounting practices prescribed or permitted by the Indiana Department of Insurance, which practices differ from accounting principles generally accepted in the United States. The variances between such practices and accounting principles generally accepted in the United States and the effects on the accompanying financial statements are also described in Note 1.

In our opinion, because of the effects of the matter described in the preceding paragraph, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States, the financial position of The Lincoln National Life Insurance Company at December 31, 2001 and 2000, or the results of its operations or its cash flow for each of the three years in the period ended December 31, 2001.

However, in our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Lincoln National Life Insurance Company at December 31, 2001 and 2000, and the results of its operations and its cash flow for each of the three years in the period ended December 31, 2001, in conformity with accounting practices prescribed or permitted by the Indiana Department of Insurance.

As discussed in Note 2 to the financial statements, in 2001 the Company changed various accounting policies to be in accordance with the revised NAIC Accounting Practices and Procedures Manual, as adopted by the Indiana Department of Insurance.

February 1, 2002

S-28

PART C--OTHER INFORMATION

Item 24.

(a) LIST OF FINANCIAL STATEMENTS

(1)	Part A	The Table of Condensed Financial Information is included in Part A of this Registration Statement.
(2)	Part B	The following financial statements for the Variable Account are included in Part B of this Registration Statement:
		Statement of Assets and Liabilities--December 31, 2001
		Statement of Operations--Year ended December 31, 2001
		Statements of Changes in Net Assets--Years ended December 31, 2001 and 2000
		Notes to Financial Statements--December 31, 2001
		Report of Ernst & Young LLP, Independent Auditors
(3)	Part B	The following statutory-basis financial statements of the Lincoln National Life Insurance Company are included in Part B of this Registration Statement:
		Balance Sheets--Statutory-Basis--December 31, 2001 and 2000
		Statements of Operations--Statutory-Basis--Years ended December 31, 2001, 2000, and 1999
		Statements of Changes in Capital and Surplus--Statutory-Basis--Years ended December 31, 2001, 2000, and 1999
		Statements of Cash Flows--Statutory-Basis--Years ended December 31, 2001, 2000, and 1999
		Notes to Statutory-Basis Financial Statements--December 31, 2001
		Report of Ernst & Young LLP, Independent Auditors

24 (b) LIST OF EXHIBITS

(1)	Resolution of the Board of Directors of the Lincoln National Life Insurance Company establishing Separate Account C is incorporated herein by reference to the Registration Statement on Form N-4 (File No. 33-25990) filed on April 22, 1998.
(2)	None.
(3)	(a)	Selling Group Agreement between the Lincoln National Life Insurance Company and Sagemark Consulting, Inc. is incorporated herein by reference to the Registration Statement on Form N-4 (File No. 333-50817) filed on October 8, 1999.
	(b)	Selling Group Agreement between the Lincoln National Life Insurance Company and Annuity Net Insurance Agency, Inc. incorporated herein by reference to Post-Effective Amendment No. 6 (File No. 333-50817) filed on April 19, 2001.
(4)	Variable Annuity Contract is incorporated herein by reference to the Registration Statement on Form N-4 (File No. 333-50817) filed on April 20, 2000.
(5)	Variable Annuity Application is incorporated herein by reference to the Registration Statement on Form N-4 (File No. 333-50817) filed on April 20, 2000.
(6)	(a)	Articles of Incorporation of Lincoln National Life Insurance Company are hereby incorporated by reference to the Registration Statement on Form S-6 (File No. 333-40745) filed November 21, 1997.
	(b)	Bylaws of Lincoln National Life Insurance Company are hereby incorporated by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4 (File No. 333-40937) filed on November 9, 1998.
(7)	None.
(8)	(a)	(1)	Services Agreement between Delaware Management Holdings, Inc., Delaware Service Company, Inc. and Lincoln National Life Insurance Company is incorporated herein by reference to the Registration Statement on Form N-1A (File No. 2-80741), Amendment No. 21 filed on April 10, 2000.
	(a)	(2)	Amendment to Services Agreement between Delaware Management Holdings, Inc., Delaware Service Co., and Lincoln National Life Insurance Co. incorporated by reference to Post-Effective Amendment No. 5 (File No. 333-43373) filed on April 4, 2002.
	(b)	Fund Participation Agreement/Amendments for Lincoln National Bond Fund
	(c)	Fund Participation Agreement/Amendments for Lincoln National Capital Appreciation Fund
	(d)	Fund Participation Agreement/Amendments for Lincoln National Equity-Income Fund
	(e)	Fund Participation Agreement/Amendments for Lincoln National Growth and Income Fund
	(f)	Fund Participation Agreement/Amendments for Lincoln National International Fund
	(g)	Fund Participation Agreement/Amendments for Lincoln National Managed Fund
	(h)	Fund Participation Agreement/Amendments for Lincoln National Money Market Fund
	(i)	Fund Participation Agreement/Amendments for Lincoln National Social Awareness Fund
	(j)	Fund Participation Agreement/Amendments for Lincoln National Special Opportunities Fund
	(k)	Fund Participation Agreement/Amendments for Delaware
	(l)	Fund Participation Agreement/Amendments for Twentieth Century
	(m)	Fund Participation Agreement/Amendments for Bankers Trust (BT)
	(n)	Fund Participation Agreement/Amendments for Janus
	(o)	Fund Participation Agreement/Amendments for Neuberger Berman
	(p)	Fund participation agreement/Amendments for Baron Capital
(9)	Opinion and Consent of Mary Jo Ardington, Counsel, is incorporated herein by reference to the Registration Statement filed on Form N-4 (File No. 333-50817) filed on July 17, 1998.
(10)	Consent of Ernst & Young LLP, Independent Auditors.
(11)	Not applicable.
(12)	Not applicable.
(13)	Schedule of Computation is incorporated herein by reference to the Registration Statement filed on Form N-4 (File No. 333-50817) filed on July 17, 1998.
(14)	Not applicable.
(15)	Organizational Chart of Lincoln National Life Insurance Holding Company System is incorporated herein by reference to Pre-Effective Amendment No. 1 (File No. 333-73532) filed on February 8, 2002.
(16)	(a)	Power of Attorney incorporated herein by reference to Initial Filing on Form N-4 (File No. 333-68842) filed on August 31, 2001.
	(b)	Barbara Kowalczyk Power of Attorney incorporated herein by reference to Post Effective Amendment No. 39 (File No. 33-25990) filed on April 11, 2002.

Item 25.

DIRECTORS AND OFFICERS OF THE DEPOSITOR

     The following list contains the officers and directors of The Lincoln National Life Insurance Company who are engaged directly or indirectly in activities relating to Lincoln National Variable Annuity Account C as well as the contracts. The list also shows The Lincoln National Life Insurance Company's executive officers.

Name	Positions and Offices
Jon A. Boscia **	President and Director
Lorry J. Stensrud*	Chief Executive Officer of Annuities, Executive Vice President, and Director
John H. Gotta***	Chief Executive Officer of Life Insurance, Executive Vice President, and Director
Gary W. Parker***	Senior Vice President
Charles E. Haldeman, Jr.****	Director
Cynthia A. Rose*	Secretary and Assistant Vice President
Eldon J. Summers*	Second Vice President and Treasurer
Richard C. Vaughan**	Director
Janet Chrzan*	Senior Vice President, Chief Financial Officer and Director
See Yeng Quek****	Chief Investment Officer and Director
Barbara Kowalczyk**	Director
Elizabeth Frederick*	Second Vice President and General Counsel
Diane Dillman*	Director of Annuities Compliance
Christine Frederick***	Director of Life Compliance

*	Principal business address is 1300 South Clinton Street, Fort Wayne, Indiana 46802-3506
**	Principal business address is Center Square West Tower, 1500 Market Street -- Suite 3900, Philadelphia, PA 19102-2112
***	Principal business address is 350 Church Street, Hartford, CT 06103
****	Principal business address is One Commerce Square, 2005 Market Street, 39th floor, Philadelphia, PA 19103-3682

Item 26.

PERSONS CONTROLLED BY OR UNDER COMMON
CONTROL WITH THE DEPOSITOR OR REGISTRANT

See Exhibit 15: The Organizational Chart of The Lincoln National Insurance Holding Company System.

Item 27.

NUMBER OF CONTRACT OWNERS

As of February 28, 2002 there were 554,571 Contract Owners under Account C.

Item 28.

INDEMNIFICATION--UNDERTAKING

(a)	Brief description of indemnification provisions.
	In general, Article VII of the By-Laws of The Lincoln National Life Insurance Company (Lincoln Life) provides that Lincoln Life will indemnify certain persons against expenses, judgments and certain other specified costs incurred by any such person if he/she is made a party or is threatened to be made a party to a suit or proceeding because he/she was a director, officer, or employee of LNL, as long as he/she acted in good faith and in a manner he/she reasonably believed to be in the best interests of, or not opposed to the best interests of, Lincoln Life. Certain additional conditions apply to indemnification in criminal proceedings.
	In particular, separate conditions govern indemnification of directors, officers, and employees of Lincoln Life in connection with suits by, or in the rights of, Lincoln Life.
	Please refer to Article VII of the By-Laws of Lincoln Life (Exhibit No. 6(b) hereto) for the full text of the indemnification provisions. Indemnification is permitted by, and is subject to the requirements of, Indiana law.
(b)	Undertaking pursuant to Rule 484 of Regulation C under the Securities Act of 1933:
	Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 28(a) above or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any such action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 29.

PRINCIPAL UNDERWRITER

(a)	Lincoln National Variable Annuity Fund A (Group); Lincoln National Variable Annuity Fund A (Individual); Lincoln Life Flexible Premium Variable Life Account D; Lincoln Life Flexible Premium Variable Life Account F; Lincoln Life Flexible Premium Variable Life Account J; Lincoln Life Flexible Premium Variable Life Account K; 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; and Lincoln Life Flexible Premium Variable Life Account S; Lincoln Life Variable Annuity Account T; Lincoln Life Variable Annuity Account W; Lincoln National Variable Annuity Accounts 53
(b)	See Item 25.
(c)	N/A

Item 30.

LOCATION OF ACCOUNTS AND RECORDS

All accounts, books, and other documents except accounting records, required to be maintained by Section 31a of the 1940 Act and the Rules promulgated thereunder are maintained by The Lincoln National Life Insurance Company (“Lincoln Life”), 1300 S. Clinton Street, Fort Wayne, Indiana 46802. The accounting records are maintained by Delaware Management Company, One Commerce Square, 2005 Market Street, Philadelphia, Pennsylvania 19103.

Item 31.

Not applicable.

Item 32. Undertakings

(a)	Registrant undertakes that it will file a post-effective amendment to this registration statement as frequently as necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted.
(b)	Registrant undertakes that it will include either (1) as part of any application to purchase a Certificate or an Individual Contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information.
(c)	Registrant undertakes to deliver any Statement of Additional Information and any financial statement required to be made available under this Form promptly upon request to Lincoln Life at the address or website listed in the Prospectus.
(d)	The Lincoln National Life Insurance company hereby represents that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by The Lincoln National Life Insurance Company.

SIGNATURES

(a) As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Registration Statement and has caused this Post-Effective Amendment No. 7 to the Registration Statement to be signed on its behalf, in the City of Fort Wayne, and State of Indiana on this 17th day of April, 2002.

	LINCOLN NATIONAL VARIABLE ANNUITY Account C–eAnnuity (Registrant)
By:	/s/ Ronald L. Stopher Ronald L. Stopher Vice President, Lincoln National Life Insurance, Co.
	THE LINCOLN NATIONAL LIFE INSURANCE COMPANY (Depositor)
By:	/s/ Jeffrey K. Dellinger Jeffrey K. Dellinger (Signature-Officer of Depositor) Vice President, Lincoln National Life Insurance, Co. (Title)

(b) As required by the Securities Act of 1933, this Amendment to the Registration Statement has been signed by the following persons in their capacities indicated on April 17, 2002.

Signature	Title
*                                                   Jon A. Boscia	President and Director (Principal Executive Officer)
*                                                   Lorry J. Stensrud	Executive Vice President, Chief Executive Officer of Annuities, and Director
*                                                   Janet Chrzan	Senior Vice President, Chief Financial Officer and Director (Principal Accounting Officer and Principal Financial Officer)
*                                                   Barbara S. Kowalczyk	Director
*                                                   John H. Gotta	Executive Vice President, Chief Executive Officer of Life Insurance, and Director
*                                                   Richard C. Vaughan	Director
*                                                   Charles E. Haldeman, Jr.	Director
*                                                   See Yeng Quek	Chief Investment Officer and Director
*By /s/ Steven M. Kluever        Steven M. Kluever	Pursuant to a Power of Attorney

EX-99.10 3 dex9910.htm CONSENT OF INDEPENDENT AUDITORS

Exhibit 10

Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the caption “Independent auditors” in the Post Effective Amendment No. 7 to the Registration Statement (Form N-4 No. 333-50817) and the related Statement of Additional Information appearing therein and pertaining to Lincoln National Variable Annuity Account C, and to the use therein of our reports dated (a) February 1, 2002, with respect to the statutory-basis financial statements of The Lincoln National Life Insurance Company, and (b) March 1, 2002, with respect to the financial statements of Lincoln National Variable Annuity Account C.

/S/    ERNST & YOUNG LLP

Fort Wayne, Indiana

April 12, 2002

EX-99.10

Prepared by R.R. Donnelley Financial -- CONSENT OF INDEPENDENT AUDITORS

  
 

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                        LINCOLN NATIONAL BOND FUND, INC.


          THIS AGREEMENT, made and entered into this 1st day of July, 1998, by
and between Lincoln National Bond Fund, Inc. a corporation organized under the
laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE INSURANCE CO., an
Indiana insurance corporation (the "Company"), on its own behalf and on behalf
of each separate account of the Company named in Schedule 1 to this Agreement as
in effect at the time this Agreement is executed and such other separate
accounts that may be added to Schedule 1 from time to time in accordance with
the provisions of Article XI of this Agreement (each such account referred to as
the "Account"; collectively, the "Accounts").

          WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

          WHEREAS, the Fund filed with the Securities and Exchange Commission
(the "SEC") and the SEC has declared effective a registration statement
(referred to herein as the "Fund Registration Statement" and the prospectus
contained therein, or filed pursuant to Rule 497 under the 1933 Act, referred to
herein as the "Fund Prospectus") on Form N-lA to register itself as an open-end
management investment company (File No. 811-3212) under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the Fund shares (File No. 2-80743)
under the Securities Act of 1933, as amended (the "1933 Act"); and

          WHEREAS, the Company has filed a registration statement with the SEC
to register under the 1933 Act (unless exempt therefrom) certain variable
annuity contracts and/or variable life insurance policies described in Schedule
2 to this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and



          WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

          WHEREAS, the Company has registered or will have registered each
Account with the SEC as a unit investment trust under the 1940 Act before any
Contracts are issued by that Account; and

          WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account
to fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value; and

          WHEREAS, pursuant to Articles of Merger approved by the Company in
1988, the Company succeeded to all the legal rights and responsibilities of
Lincoln National Pension Insurance Company, the signatory to the original
Agreement to Purchase Shares, which this Agreement amends and restates.

          NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Fund agree as follows:


ARTICLE I. SALE OF FUND SHARES

          1.1.  The Fund agrees to sell to the Company those shares which the
Company orders on behalf of the Account, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.

          1.2.  The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

          1.3.  The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis (LL will expect same day
redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
shares to the


                                       2



extent permitted by the 1940 Act, any rules, regulations or orders thereunder,
or the then currently effective Fund Prospectus.

          1.4.         (a)     For purposes of Sections 1.1, 1.2 and 1.3, the
                  Company shall be the agent of the Fund for the limited purpose
                  of receiving redemption and purchase requests from the Account
                  (but not from the general account of the Company), and receipt
                  on any Business Day by the Company as such limited agent of
                  the Fund prior to the time prescribed in the current Fund
                  Prospectus (which as of the date of execution of this
                  Agreement is 4 p.m., E.S.T.) shall constitute receipt by the
                  Fund on that same Business Day, provided that the Fund
                  receives notice of such redemption or purchase request by 9:00
                  a.m., E.S.T. on the next following Business Day. For purposes
                  of this Agreement, "Business Day" shall mean any day on which
                  the New York Stock exchange is open for trading.

                       (b)     The Company shall pay for the shares on the same
                  day that it places an order with the Fund to purchase those
                  Fund shares for an Account. Payment for Fund shares will be
                  made by the Account or the Company in Federal Funds
                  transmitted to the Fund by wire to be received by 11:00 a.m.,
                  E.S.T. on the day the Fund is properly notified of the
                  purchase order for shares. The Fund will confirm receipt of
                  each trade and these confirmations will be received by the
                  Company via Fax or Email by 3:00 p.m. E.S.T. If Federal Funds
                  are not received on time, such funds will be invested, and
                  shares purchased thereby will be issued, as soon as
                  practicable.

                       (c)     Payment for shares redeemed by the Account or the
                  Company will be made in Federal Funds transmitted to the
                  Company by wire on the same day the Fund is notified of the
                  redemption order of shares, except that the Fund reserves the
                  right to delay payment of redemption proceeds, but in no event
                  may such payment be delayed longer than the period permitted
                  under Section 22(e) of the 1940 Act. The Fund shall not bear
                  any responsibility whatsoever for the proper disbursement or
                  crediting of redemption proceeds if securities must be
                  redeemed; the Company alone shall be responsible for such
                  action.

          1.5.  Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.

          1.6.  The Fund shall furnish notice as soon as reasonably practicable
to the Company of any income dividends or capital gain distributions payable on
any shares. The Company, on its behalf and on behalf of the Account, hereby
elects to receive all such dividends and distributions as are payable on any
shares in the form of additional shares of that Fund. The Company reserves the
right, on its behalf and on behalf of the Account, to revoke this election and
to receive all such dividends in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.


                                       3



          1.7.  The Fund shall use its best efforts to make the net asset value
per share available to the Company by 7:00 p.m., E.S.T. each Business Day, and
in any event, as soon as reasonably practicable after the net asset value per
share is calculated, and shall calculate such net asset value in accordance with
the then currently effective Fund Prospectus. The Fund shall not be liable for
any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

          1.8.       (a) The Company may withdraw the Account's investment in
                the Fund only: (i) as necessary to facilitate Contract owner
                requests; (ii) upon a determination by a majority of the Fund
                Board, or a majority of disinterested Fund Board members, that
                an irreconcilable material conflict exists among the interests
                of (x) any Product Owners or (y) the interests of the
                Participating Insurance Companies investing in the Fund; (iii)
                upon requisite vote of the Contractowners having an interest
                in the Fund to substitute the shares of another investment
                company for shares in accordance with the terms of the
                Contracts; (iv) as required by state and/or federal laws or
                regulations or judicial or other legal precedent of general
                application; or (v) at the Company's sole discretion, pursuant
                to an order of the SEC under Section 26(b) of the 1940 Act.

                     (b) The parties hereto acknowledge that the arrangement
                contemplated by this Agreement is not exclusive and that the
                Fund shares may be sold to other insurance companies (subject
                to Section 1.9 hereof) and the cash value of the Contracts may
                be invested in other investment companies.

                     (c) The Company shall not, without prior notice to the Fund
                (unless otherwise required by applicable law), take any action
                to operate the Accounts as management investment companies under
                the 1940 Act.

          1.9.  The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will
not sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II. REPRESENTATIONS AND WARRANTIES

          2.1.  The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or,


                                       4



prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding.

          2.2.  The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

          2.3.  The Fund represents and warrants that it currently qualifies as
a Regulated Investment Company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"). The Fund further represents and warrants that
it will make every effort to continue to qualify and to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

          2.4.  The Fund represents and warrants that it will comply with
Section 817(h) of the Code, and all regulations issued thereunder.

          2.5.  The Company represents that the Contracts are currently and at
the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

          2.6.  The Fund represents that the Fund's investment policies, fees
and expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

          2.7.  The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
             INFORMATION

          3.1.  The Fund shall provide the Company with as many copies of the
current Fund


                                       5



Prospectus as the Company may reasonably request. If requested by the Company in
lieu thereof, the Fund at its expense shall provide to the Company a
camera-ready copy, and electronic version, of the current Fund Prospectus
suitable for printing and other assistance as is reasonably necessary in order
for the Company to have a new Contracts Prospectus printed together with the
Fund Prospectus in one document. See Article V for a detailed explanation of the
responsibility for the cost of printing and distributing Fund prospectuses.

          3.2.  The Fund Prospectus shall state that the Statement of
Additional Information for the Fund is available from the Fund and the Fund
shall provide such Statement free of charge to the Company and to any
outstanding or prospective Contract owner who requests such Statement.

          3.3.  (a)     The Fund at its expense shall provide to the Company a
                camera-ready copy of the Fund's shareholder reports and other
                communications to shareholders (except proxy material), in
                each case in a form suitable for printing, as determined by
                the Company. The Fund shall be responsible for the costs of
                printing and distributing these materials to Contract owners.

                (b)     The Fund at its expense shall be responsible for
                preparing, printing and distributing its proxy material. The
                Company will provide the appropriate Contractowner names and
                addresses to the Fund for this purpose.

          3.4.  The Company shall furnish to the Fund, prior to its use, each
piece of sales literature or other promotional material in which the Fund is
named. No such material shall be used, except with the prior written permission
of the Fund. The Fund agrees to respond to any request for approval on a prompt
and timely basis. Failure of the Fund to respond within 10 days of the request
by the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund.

          3.5.  The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.

          3.6.  The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the


                                       6



Company. The Company agrees to respond to any request for permission on a prompt
and timely basis. If the Company fails to respond within 10 days of a request by
the Fund, then the Fund is relieved of the obligation to obtain the prior
written permission of the Company.

          3.7.  The Fund will provide to the Company at least one complete copy
of all Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

          3.8.  The Company will provide to the Fund at least one complete copy
of all Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, within 20 days after the filing of such
document with the SEC or other regulatory authorities.

          3.9.  Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

          3.10.  For purposes of this Article III, the phrase "sales literature
or other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.

ARTICLE IV. VOTING

          4.1.  Subject to applicable law and the requirements of Article VII,
the Fund shall solicit voting instructions from Contract owners;


                                       7



          4.2.  Subject to applicable law and the requirements of Article VII,
the Company shall:

                     (a)     vote Fund shares attributable to Contract owners in
                accordance with instructions or proxies received in timely
                fashion from such Contract owners;

                     (b)     vote Fund shares attributable to Contract owners
                for which no instructions have been received in the same
                proportion as Fund shares of such Series for which instructions
                have been received in timely fashion; and

                     (c)     vote Fund shares held by the Company on its own
                behalf or on behalf of the Account that are not attributable to
                Contract owners in the same proportion as Fund shares of such
                Series for which instructions have been received in timely
                fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

          All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.



          The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

          The Company is responsible for the cost of printing and distributing
Fund prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contractowners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.


ARTICLE VI. COMPLIANCE UNDERTAKINGS

          6.1.  The Fund undertakes to comply with Subchapter M and Section
817(h) of the


                                       8



Code, and all regulations issued thereunder.

          6.2.  The Company shall amend the Contracts Registration Statements
under the 1933 Act and the Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws of the various states.

          6.3.  The Fund shall amend the Fund Registration Statement under the
1933 Act and the 1940 Act from time to time as required in order to effect for
so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

          6.4.  The Company shall be responsible for assuring that any
prospectus offering a Contract that is a life insurance contract where it is
reasonably possible that such Contract would be deemed a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will describe
the circumstances under which a Contract could be treated as a modified
endowment contract (or policy).

          6.5.  To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b-1 to finance distribution expenses.

          6.6.       (a)     When appropriate in order to inform the Fund of any
                applicable state-mandated investment restrictions with which the
                Fund must comply, the Company shall arrange with the Fund to
                amend Schedule 3, pursuant to the requirements of Article XI.

                     (b)     Should the Fund become aware of any restrictions
                which may be appropriate for inclusion in Schedule 3, the
                Company shall be informed immediately of the substance of
                those restrictions.


ARTICLE VlI. POTENTIAL CONFLICTS

          7.1.  The Company agrees to report to the Board of Directors of the
Fund (the "Board") any potential or existing conflicts between the interests of
Product Owners of all separate accounts investing in the Fund, and to assist the
Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider
any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

          7.2.  If a majority of the Board, or a majority of disinterested
Board Members, determines that a material irreconcilable conflict exists, the
Board shall give prompt notice to all


                                       9



Participating Insurance Companies.

                     (a)     If a majority of the whole Board, after notice to
                the Company and a reasonable opportunity for the Company to
                appear before it and present its case, determines that the
                Company is responsible for said conflict, and if the Company
                agrees with that determination, the Company shall, at its sole
                cost and expense, take whatever steps are necessary to remedy
                the material irreconcilable conflict. These steps could
                include: (i) withdrawing the assets allocable to some or all
                of the affected Accounts from the Fund and reinvesting such
                assets in a different investment vehicle, or submitting the
                question of whether such segregation should be implemented to
                a vote of all affected Contractowners and, as appropriate,
                segregating the assets of any particular group (i.e., variable
                annuity Contractowners, variable life insurance policyowners,
                or variable Contractowners of one or more Participating
                Insurance Companies) that votes in favor of such segregation,
                or offering to the affected Contractowners the option of
                making such a change; and (ii) establishing a new registered
                mutual fund or management separate account; or (iii) taking
                such other action as is necessary to remedy or eliminate the
                material irreconcilable conflict.

                     (b)     If the Company disagrees with the Board's
                determination, the Company shall file a written protest with the
                Board, reserving its right to dispute the determination as
                between just the Company and the Fund and to seek reimbursement
                from the Fund for the reasonable costs and expenses of resolving
                the conflict . After reserving that right the Company, although
                disagreeing with the Board that it (the Company) was responsible
                for the conflict, shall take the necessary steps, under protest,
                to remedy the conflict, substantially in accordance with
                paragraph (a) just above, for the protection of Contractowners.

                     (c)     As between the Company and the Fund, if within 45
                days after the Board's determination the Company elects to press
                the dispute, it shall so notify the Board in writing. The
                parties shall then attempt to resolve the matter amicably
                through negotiation by individuals from each party who are
                authorized to settle the matter. If the matter has not been
                amicably resolved within 60 days from the date of the Company's
                notice of its intent to press the dispute, then before either
                party shall undertake to litigate the dispute it shall be
                submitted to non-binding arbitration conducted expeditiously in
                accordance with the CPR Rules for Non-Administered Arbitration
                of Business Disputes, by a sole arbitrator; PROVIDED, HOWEVER,
                that if one party has requested the other party to seek an
                amicable resolution and the other party has failed to
                participate, the requesting party may initiate arbitration
                before expiration of the 60-day period set out just above.

                   If within 45 days of the commencement of the process to
                select an arbitrator the parties cannot agree upon the
                arbitrator, then he or she will be selected from the CPR
                Panels of Neutrals. The arbitration shall be governed by the
                United States Arbitration Act, 9 U.S.C. Sec. 1-16. The place
                of arbitration shall be Fort Wayne, Indiana. The Arbitrator is
                not empowered to award damages in excess of


                                       10



                compensatory damages.

                     (d)     If the Board shall determine that the Fund or
                another was responsible for the conflict, then the Board shall
                notify the Company immediately of that determination. The Fund
                shall assure the Company that it (the Fund) or that other
                Participating Insurance Company as applicable, shall, at its
                sole cost and expense, take whatever steps are necessary to
                eliminate the conflict.

                     (e)     Nothing in Sections 7.2(b) or 7.2(c) shall
                constitute a waiver of any right of action which the Company
                may have against other Participating Insurance Companies for
                reimbursement of all or part of the costs and expenses of
                resolving the conflict.

          7.3.  If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

          7.4.  For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict. However, in no event will the
Fund be required to establish a new funding medium for any variable contract,
nor will the Company be required to establish a new funding medium for any
Contract, if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.


ARTICLE VIII. INDEMNIFICATION

          8.1.  INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund and each person who controls or is associated with
the Fund (other than another Participating Insurance Company) within the meaning
of such terms under the federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the prior written consent of the Company in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:

                     (a)     arise out of or are based upon any untrue statement
                or alleged untrue statement of any material fact contained in
                the Contracts Registration Statement, Contracts Prospectus,
                sales literature or other promotional material for the Contracts
                or the Contracts themselves (or any amendment or supplement to
                any of the foregoing), or arise out of or are based upon the
                omission or the alleged omission to state therein a material
                fact required to be stated therein or necessary to make the
                statements therein not misleading in light of the circumstances
                in which they were made; provided that this obligation to
                indemnify shall not apply if such


                                       11



                statement or omission or such alleged statement or alleged
                omission was made in reliance upon and in conformity with
                information furnished in writing to the Company by the Fund (or
                a person authorized in writing to do so on behalf of the Fund)
                for use in the Contracts Registration Statement, Contracts
                Prospectus or in the Contracts or sales literature (or any
                amendment or supplement) or otherwise for use in connection
                with the sale of the Contracts or Fund shares; or

                     (b)     arise out of or are based upon any untrue statement
                or alleged untrue statement of a material fact by or on behalf
                of the Company (other than statements or representations
                contained in the Fund Registration Statement, Fund Prospectus
                or sales literature or other promotional material of the Fund
                not supplied by the Company or persons under its control) or
                wrongful conduct of the Company or persons under its control
                with respect to the sale or distribution of the Contracts or
                Fund shares; or

                     (c)     arise out of any untrue statement or alleged untrue
                statement of a material fact contained in the Fund Registration
                Statement, Fund Prospectus or sales literature or other
                promotional material of the Fund or any amendment thereof or
                supplement thereto, or the omission or alleged omission to state
                therein a material fact required to be stated therein or
                necessary to make the statements therein not misleading in light
                of the circumstances in which they were made, if such statement
                or omission was made in reliance upon and in conformity with
                information furnished to the Fund by or on behalf of the
                Company; or

                     (d)     arise as a result of any failure by the Company to
                provide the services and furnish the materials or to make any
                payments under the terms of this Agreement; or

                     (e)     arise out of any material breach by the Company of
                this Agreement, including but not limited to any failure to
                transmit a request for redemption or purchase of Fund shares
                on a timely basis in accordance with the procedures set forth
                in Article I; or

                     (f)     arise as a result of the Company's providing the
                Fund with inaccurate information, which causes the Fund to
                calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

          8.2.  INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and
hold harmless the Company and each person who controls or is associated with the
Company within the meaning of such terms under the federal securities laws and
any officer, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any


                                       12



investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                     (a)     arise out of or are based upon any untrue statement
                or alleged untrue statement of any material fact contained in
                the Fund Registration Statement, Fund Prospectus (or any
                amendment or supplement thereto) or sales literature or other
                promotional material of the Fund, or arise out of or are based
                upon the omission or the alleged omission to state therein a
                material fact required to be stated therein or necessary to make
                the statements therein not misleading in light of the
                circumstances in which they were made; provided that this
                obligation to indemnify shall not apply if such statement or
                omission or alleged statement or alleged omission was made in
                reliance upon and in conformity with information furnished in
                writing by the Company to the Fund for use in the Fund
                Registration Statement, Fund Prospectus (or any amendment or
                supplement thereto) or sales literature for the Fund or
                otherwise for use in connection with the sale of the Contracts
                or Fund shares; or




                     (b)     arise out of or are based upon any untrue statement
                or alleged untrue statement of a material fact made by the Fund
                (other than statements or representations contained in the Fund
                Registration Statement, Fund Prospectus or sales literature or
                other promotional material of the Fund not supplied by the
                Distributor or the Fund or persons under their control) or
                wrongful conduct of the Fund or persons under its control with
                respect to the sale or distribution of the Contracts or Fund
                shares; or

                     (c)     arise out of any untrue statement or alleged untrue
                statement of a material fact contained in the Contract's
                Registration Statement, Contracts Prospectus or sales literature
                or other promotional material for the Contracts (or any
                amendment or supplement thereto), or the omission or alleged
                omission to state therein a material fact required to be stated
                therein or necessary to make the statements therein not
                misleading in light of the circumstances in which they were
                made, if such statement or omission was made in reliance upon
                information furnished in writing by the Fund to the Company (or
                a person authorized in writing to do so on behalf of the Fund);
                or

                     (d)     arise as a result of any failure by the Fund to
                provide the services and furnish the materials under the terms
                of this Agreement (including, but not by way of limitation, a
                failure, whether unintentional or in good faith or otherwise:
                (i) to comply with the diversification requirements specified
                in Sections 2.4 and 6.1 in Article VI of this Agreement; and
                (ii) to provide the Company with accurate information
                sufficient for it to calculate its accumulation and/or annuity
                unit values


                                       13



                in timely fashion as required by law and by the Contracts
                Prospectuses); or

                     (e)     arise out of any material breach by the Fund of
                this Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

          8.3.  INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

          A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

          9.1.  This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

          9.2.  This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those


                                       14



statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.


ARTICLE X. TERMINATION

          10.1. This Agreement shall terminate:

                     (a)     at the option of any party upon 120 days advance
                written notice to the other parties; or

                     (b)     at the option of the Company if shares of the Fund
                are not available to meet the requirements of the Contracts as
                determined by the Company. Prompt notice of the election to
                terminate for such cause shall be furnished by the Company.
                Termination shall be effective ten days after the giving of
                notice by the Company; or

                     (c)     at the option of the Fund upon institution of
                formal proceedings against the Company by the NASD, the SEC, the
                insurance commission of any state or any other regulatory body
                regarding the Company's duties under this Agreement or related
                to the sale of the Contracts, the operation of the Account, the
                administration of the Contracts or the purchase of Fund shares;

                     (d)     at the option of the Company upon institution of
                formal proceedings against the Fund, the investment advisor or
                any sub-investment advisor, by the NASD, the SEC, or any state
                securities or insurance commission or any other regulatory body;
                or

                     (e)     upon requisite vote of the Contract owners having
                an interest in the Fund (unless otherwise required by applicable
                law) and written approval of the Company, to substitute the
                shares of another investment company for the corresponding
                shares of the Fund in accordance with the terms of the
                Contracts; or

                     (f)     at the option of the Fund in the event any of the
                Contracts are not registered, issued or sold in accordance with
                applicable Federal and/or state law; or

                     (g)     at the option of the Company or the Fund upon a
                determination by a majority of the Fund Board, or a majority of
                disinterested Fund Board members, that an irreconcilable
                material conflict exists among the interests of (i) any Product
                owners or (ii) the interests of the Participating Insurance
                Companies investing in the Fund; or

                     (h)     at the option of the Company if the Fund ceases to
                qualify as a Regulated Investment Company under Subchapter M of
                the Code, or under any


                                       15



                successor or similar provision, or if the Company reasonably
                believes, based on an opinion of its counsel, that the Fund may
                fail to so qualify; or

                     (i)     at the option of the Company if the Fund fails to
                meet the diversification requirements specified in Section
                817(h) of the Code and any regulations thereunder; or

                     (j)     at the option of the Fund if the Contracts cease
                to qualify as annuity contracts or life insurance policies, as
                applicable, under the Code, or if the Fund reasonably believes
                that the Contracts may fail to so qualify; or

                     (k)     at the option of the Fund if the Fund shall
                determine, in its sole judgment exercised in good faith, that
                either (1) the Company shall have suffered a material adverse
                change in its business or financial condition; or (2) the
                Company shall have been the subject of material adverse
                publicity which is likely to have a material adverse impact
                upon the business and operations of the Fund; or

                     (l)     at the option of the Company, if the Company shall
                determine, in its sole judgment exercised in good faith, that:
                (1) the Fund shall have suffered a material adverse change in
                its business or financial condition; or (2) the Fund shall have
                been the subject of material adverse publicity which is likely
                to have a material adverse impact upon the business and
                operations of the Company; or

                     (m)     automatically upon the assignment of this Agreement
                (including, without limitation, any transfer of the Contracts
                or the Accounts to another insurance company pursuant to an
                assumption reinsurance agreement) unless the non-assigning party
                consents thereto or unless this Agreement is assigned to an
                affiliate of the Company or the Fund, as the case may be.

          10.2.  NOTICE REQUIREMENT. Except as otherwise provided in Section
10.1, no termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to the other party
of its intent to terminate, which notice shall set forth the basis for such
termination.
Furthermore:

                     (a)     In the event that any termination is based upon the
                provisions of Article VII or the provisions of Section 10.1(a)
                of this Agreement, such prior written notice shall be given in
                advance of the effective date of termination as required by such
                provisions; and

                     (b)     in the event that any termination is based upon the
                provisions of Section 10.1(c) or 10.1(d) of this Agreement, such
                prior written notice shall be given at least ninety (90) days
                before the effective date of termination, or sooner if required
                by law or regulation.

          10.3.  EFFECT OF TERMINATION


                                       16



                     (a)     Notwithstanding any termination of this Agreement
                pursuant to Section 10.1 of this Agreement, the Fund will, at
                the option of the Company, continue to make available additional
                Fund shares for so long after the termination of this Agreement
                as the Company desires, pursuant to the terms and conditions of
                this Agreement as provided in paragraph (b) below, for all
                Contracts in effect on the effective date of termination of this
                Agreement (hereinafter referred to as "Existing Contracts").
                Specifically, without limitation, if the Company so elects to
                make additional Fund shares available, the owners of the
                Existing Contracts or the Company, whichever shall have legal
                authority to do so, shall be permitted to reallocate investments
                in the Fund, redeem investments in the Fund and/or invest in the
                Fund upon the making of additional purchase payments under the
                Existing Contracts.

                     (b)     If Fund shares continue to be made available after
                such termination, the provisions of this Agreement shall remain
                in effect except for Section 10.1(a) and thereafter either the
                Fund or the Company may terminate the Agreement, as so continued
                pursuant to this Section 10.3, upon prior written notice to the
                other party, such notice to be for a period that is reasonable
                under the circumstances but, if given by the Fund, need not be
                for more than six months.

                     (c)     The parties agree that this Section 10.3 shall not
                apply to any termination made pursuant to Article VII, and the
                effect of such Article VII termination shall be governed by the
                provisions set forth or incorporated by reference therein.

ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

          The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts
and to add new classes of variable annuity contracts and variable life insurance
policies to be issued by the Company through new or existing Separate Accounts
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such separate account and each such class of contracts or
policies, unless the context otherwise requires. Any such amendment must be
signed by the parties and must bear an effective date for that amendment.


ARTICLE XII. NOTICES

          Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                     If to the Fund:

                          Lincoln National Bond Fund, Inc.


                                       17



                          1300 South Clinton Street
                          Fort Wayne, Indiana 46802
                          Attn: Kelly D. Clevenger

                     If to the Company:

                          Lincoln National Life Insurance Co.
                          1300 South Clinton Street
                          Fort Wayne, Indiana 46802
                          Attn: Steven M. Kluever





ARTICLE XIII. MISCELLANEOUS

          13.1.  The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

          13.2.  This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

          13.3.  If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.

          13.4.  Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

          13.5.  Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


ARTICLE XIV. PRIOR AGREEMENTS

         This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18



          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                             LINCOLN NATIONAL BOND FUND, INC.




                Signature: /s/ Kelly D. Clevenger
                           -----------------------------------------------

                Name: Kelly D. Clevenger
                      ----------------------------------------------------

                Title: President
                       ---------------------------------------------------




                             LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


                Signature: /s/ Stephen H. Lewis
                           -----------------------------------------------

                Name: Stephen H. Lewis
                      ----------------------------------------------------

                Title: Senior Vice President, Lincoln National Life
                       Insurance Company
                       ---------------------------------------------------


                                       19



                                   SCHEDULE 1



                        Lincoln National Bond Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 1, 1998


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT D

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53


                                       20



                                   SCHEDULE 2



                        Lincoln National Bond Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 1, 1998


MULTI FUND VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

ACCRU CHOICEPLUS

GROUP MULTI FUND

MULTI FUND - NON-REGISTERED


                                       21



                                   SCHEDULE 3



                        Lincoln National Bond Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998


The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 331/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing" as
that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.     An international FUND or a global FUND is sufficiently diversified if
       it is invested in a minimum of three different countries at all times,
       and has invested no more than 50 percent of total assets in any one
       second-tier country and no more than 25 percent of total assets in any
       one third-tier country. First-tier countries are: Germany, the United
       Kingdom, Japan, the United States, France, Canada, and Australia.
       Second-tier countries are all countries not in the first or third tier.
       Third-tier countries are countries identified as "emerging" or
       "developing" by the International Bank for Reconstruction and
       Development ("World Bank") or International Finance Corporation.

b.     A regional FUND is sufficiently diversified if it is invested in a
       minimum of three countries. The name of the fund must accurately
       describe the FUND.

c.     The name of the single country FUND must accurately describe the FUND.

d.     An index FUND must substantially mirror the index.


                                       22



                                  Amendment to
                                   SCHEDULE 1

                        Lincoln National Bond Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                                As of May 1, 1999



LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT D

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

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 53



                                  Amendment to
                                   SCHEDULE 2

                        Lincoln National Bond Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of May 1, 1999



MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

LINCOLN VUL

DELAWARE-LINCOLN CHOICEPLUS

GROUP MULTI-FUND

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.



                                             LINCOLN NATIONAL BOND FUND, INC.


Date:                                        By:
      ----------------------------               ---------------------------
                                                 Kelly D. Clevenger
                                                 President and Chairman




                                             LINCOLN NATIONAL LIFE
                                             INSURANCE COMPANY


Date:                                        By:
      ----------------------------               ---------------------------
                                                 Stephen H. Lewis
                                                 Senior Vice President



                                  Amendment to
                                   SCHEDULE 2

                        Lincoln National Bond Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                             As of October 15, 1999



MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

LINCOLN VUL

DELAWARE-LINCOLN CHOICEPLUS

GROUP MULTI-FUND

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED

LINCOLN VUL-DB-



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                                             LINCOLN NATIONAL BOND FUND, INC.


Date:                                        By:
      ----------------------------               ---------------------------
                                                 Kelly D. Clevenger
                                                 President and Chairman




                                             LINCOLN NATIONAL LIFE
                                             INSURANCE COMPANY


Date:                                        By:
      ----------------------------               ---------------------------
                                                 Stephen H. Lewis
                                                 Senior Vice President




          The Fund Participation Agreement (the "Agreement"), dated July 1,
1998, by and among The Lincoln National Life Insurance Company and Lincoln
National Bond Fund, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

          "WHEREAS, the Company has registered or will have registered each
Account with the SEC (unless exempt therefrom) as a unit investment trust under
the 1940 Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

          "The Company represents and warrants (a) that the Contracts are
          registered under the 1933 Act or will be so registered before the
          issuance thereof (unless exempt therefrom), (b) that the Contracts
          will be issued in compliance in all material respects with all
          applicable Federal and state laws and (c) that the Company will
          require of every person distributing the Contracts that the Contracts
          be offered and sold in compliance in all material respects with all
          applicable Federal and state laws. The Company further represents and
          warrants that it is an insurance company duly organized and validly
          existing under applicable law and that it has legally and validly
          authorized each Account as a separate account under Section 27-1-5-1
          of the Indiana Insurance Code, and has registered or, prior to the
          issuance of any Contracts, will register each Account (unless exempt
          therefrom) as a unit investment trust in accordance with the
          provisions of the 1940 Act to serve as a separate account for its
          Contracts, and that it will maintain such registrations for so long
          as any Contracts issued under them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the
Fund Participation Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.



                                             LINCOLN NATIONAL BOND FUND, INC.


Date:                                        By: /s/ Kelly D. Clevenger
      ----------------------------               ---------------------------
                                             Name: Kelly D. Clevenger
                                             Title: President



                                             LINCOLN NATIONAL LIFE
                                             INSURANCE COMPANY


Date:                                        By: /s/ Stephen H. Lewis
      ----------------------------               ---------------------------
                                             Name: Stephen H. Lewis
                                             Title: Senior Vice President



4144

                                  Amendment to

                                   Schedule 2
                                   ----------
                        Lincoln National Bond Fund, Inc.
       Variable Annuity Contracts and Variable Life Insurance Policies
               Supported by Separate Accounts Listed on Schedule 1
                              As of July 5, 2000

Multi Fund Individual Variable Annuity
- --------------------------------------

eAnnuity
- --------

Emancipator Life
- ----------------

Multi Fund Variable Life
- ------------------------

Lincoln VUL
- -----------

Lincoln ChoicePlus
- ------------------

Lincoln ChoicePlus Access
- -------------------------

Lincoln ChoicePlus Bonus
- ------------------------

Group Multi Fund
- ----------------

Lincoln SVUL
- ------------

Lincoln CVUL
- ------------

Multi Fund - Non-registered
- ---------------------------

Lincoln VUL-DB-
- -------------






IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                                             LINCOLN NATIONAL BOND FUND, INC.


Date:                                        By: /s/ Steven M. Kluever
      ----------------------------               -------------------------------
                                                 Steven M. Kluever
                                                 Second Vice President


                                             LINCOLN NATIONAL LIFE
                                             INSURANCE COMPANY

Date:                                        By: /s/ Stephen H. Lewis
      ----------------------------               -------------------------------
                                                 Stephen H. Lewis
                                                 Senior Vice President



                                  Amendment to
                                   SCHEDULE 2

                        Lincoln National Bond Fund, Inc.
         Variable Annuity Contracts and Variable Life Insurance Policies
               Supported by Separate Accounts Listed on Schedule 1
                               As of July 15, 2001


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

LINCOLN CHOICEPLUS

LINCOLN CHOICEPLUS ACCESS

LINCOLN CHOICEPLUS BONUS

LINCOLN CHOICEPLUS II

LINCOLN CHOICEPLUS II ACCESS

LINCOLN CHOICEPLUS II BONUS

LINCOLN CHOICEPLUS II ADVANCE

GROUP MULTI FUND

LINCOLN SVUL

LINCOLN SVUL II

LINCOLN CVUL

LINCOLN CVUL III

MULTI FUND - NON-REGISTERED

LINCOLN VUL

LINCOLN VUL(DB)

LINCOLN VUL(CV)

LINCOLN VUL(CV2)

VUL MONEYGUARD









IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                             LINCOLN NATIONAL BOND FUND, INC.


Date:                               By:/s/Kelly D. Clevenger
      ------------------              ----------------------------------------
                                       Kelly D. Clevenger
                                       Chairman and President


                             THE LINCOLN NATIONAL LIFE INSURANCE COMPANY


Date:                               By:/s/Steven M. Kluever
      ------------------              ----------------------------------------
                                       Steven M. Kluever
                                       Second Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                LINCOLN NATIONAL CAPITAL APPRECIATION FUND, INC.


               THIS AGREEMENT, made and entered into this 1st day of July,
1998, by and between Lincoln National Capital Appreciation Fund, Inc. a
corporation organized under the laws of Maryland (the "Fund"), and THE
LINCOLN NATIONAL LIFE INSURANCE CO., an Indiana insurance corporation (the
"Company"), on its own behalf and on behalf of each separate account of the
Company named in Schedule 1 to this Agreement as in effect at the time this
Agreement is executed and such other separate accounts that may be added to
Schedule 1 from time to time in accordance with the provisions of Article XI
of this Agreement (each such account referred to as the "Account";
collectively, the "Accounts").

               WHEREAS, the Fund is engaged in business as an open-end
management investment company and was established for the purpose of serving
as the investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts (collectively referred to
as "Variable Insurance Products," the owners of such products being referred
to as "Product owners") to be offered by insurance companies which have
entered into participation agreements with the Fund ("Participating Insurance
Companies"); and

               WHEREAS, the Fund filed with the Securities and Exchange
Commission (the "SEC") and the SEC has declared effective a registration
statement (referred to herein as the "Fund Registration Statement" and the
prospectus contained therein, or filed pursuant to Rule 497 under the 1933
Act, referred to herein as the "Fund Prospectus") on Form N-lA to register
itself as an open-end management investment company (File No. 811-3212) under
the Investment Company Act of 1940, as amended (the "1940 Act"), and the Fund
shares (File No. 2-80743) under the Securities Act of 1933, as amended (the
"1933 Act"); and

               WHEREAS, the Company has filed a registration statement with
the SEC to register under the 1933 Act (unless exempt therefrom) certain
variable annuity contracts and/or variable life insurance policies described
in Schedule 2 to this Agreement as in effect at the time this Agreement is
executed and such other variable annuity contracts and variable life
insurance policies which may be added to Schedule 2 from time to time in
accordance with Article XI of this Agreement (such policies and contracts
shall be referred to herein collectively as the "Contracts," each such
registration statement for a class or classes of contracts listed on Schedule
2 being referred to as the "Contracts Registration Statement" and the
prospectus for each such class or classes being referred to herein as the
"Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract
Owners"); and




               WHEREAS, each Account, a validly existing separate account,
duly authorized by the Company on the date set forth on Schedule 1, sets
aside and invests assets attributable to the Contracts; and

               WHEREAS, the Company has registered or will have registered
each Account with the SEC as a unit investment trust under the 1940 Act
before any Contracts are issued by that Account; and

               WHEREAS, to the extent permitted by applicable insurance laws
and regulations, the Company intends to purchase shares on behalf of each
Account to fund its Contracts and the Fund is authorized to sell such shares
to unit investment trusts such as the Accounts at net asset value;

               NOW, THEREFORE, in consideration of their mutual promises, the
Company and the Fund agree as follows:

ARTICLE I.  SALE OF FUND SHARES

               1.1. The Fund agrees to sell to the Company those shares which
the Company orders on behalf of the Account, executing such orders on a daily
basis in accordance with Section 1.4 of this Agreement.

               1.2. The Fund agrees to make shares available for purchase by
the Company on behalf of the Account at the then applicable net asset value
per share on Business Days as defined in Section 1.4 of this Agreement, and
the Fund shall use its best efforts to calculate AND DELIVER such net asset
value by 7:00 p.m., E.S.T., on each such Business Day. Notwithstanding any
other provision in this Agreement to the contrary, the Board of Directors of
the Fund (the "Fund Board") may suspend or terminate the offering of shares,
if such action is required by law or by regulatory authorities having
jurisdiction or if, in the sole discretion of the Fund Board acting in good
faith and in light of its fiduciary duties under Federal and any applicable
state laws, suspension or termination is necessary and in the best interests
of the shareholders (it being understood that "shareholders" for this purpose
shall mean Product owners).

               1.3. The Fund agrees to redeem, at the Company's request, any
full or fractional shares of the Fund held by the Account or the Company,
executing such requests at the net asset value on a daily basis (LL will
expect same day redemption wires unless unusual circumstances evolve which
cause the Fund to have to redeem securities) in accordance with Section 1.4
of this Agreement, the applicable provisions of the 1940 Act and the then
currently effective Fund Prospectus. Notwithstanding the foregoing, the Fund
may delay redemption of Fund shares to the extent permitted by the 1940 Act,
any rules, regulations or orders thereunder, or the then currently effective
Fund Prospectus.


               1.4      (a) For purposes of Sections 1.1, 1.2 and 1.3, the
                    Company shall be the agent of the Fund for the limited
                    purpose of receiving redemption

                                        2



                    and purchase requests from the Account (but not from the
                    general account of the Company), and receipt on any
                    Business Day by the Company as such limited agent of the
                    Fund prior to the time prescribed in the current Fund
                    Prospectus (which as of the date of execution of this
                    Agreement is 4 p.m., E.S.T.) shall constitute receipt by
                    the Fund on that same Business Day, provided that the
                    Fund receives notice of such redemption or purchase
                    request by 9:00 a.m., E.S.T. on the next following
                    Business Day. For purposes of this Agreement, "Business
                    Day" shall mean any day on which the New York Stock
                    exchange is open for trading.

                        (b) The Company shall pay for the shares on the same
                    day that it places an order with the Fund to purchase
                    those Fund shares for an Account. Payment for Fund shares
                    will be made by the Account or the Company in Federal
                    Funds transmitted to the Fund by wire to be received by
                    11:00 a.m., E.S.T. on the day the Fund is properly
                    notified of the purchase order for shares. The Fund will
                    confirm receipt of each trade and these confirmations
                    will be received by the Company via Fax or Email by 3:00
                    p.m. E.S.T. If Federal Funds are not received on time,
                    such funds will be invested, and shares purchased thereby
                    will be issued, as soon as practicable.

                        (c) Payment for shares redeemed by the Account or the
                    Company will be made in Federal Funds transmitted to the
                    Company by wire on the same day the Fund is notified of
                    the redemption order of shares, except that the Fund
                    reserves the right to delay payment of redemption
                    proceeds, but in no event may such payment be delayed
                    longer than the period permitted under Section 22(e) of
                    the 1940 Act. The Fund shall not bear any responsibility
                    whatsoever for the proper disbursement or crediting of
                    redemption proceeds if securities must be redeemed; the
                    Company alone shall be responsible for such action.

               1.5. Issuance and transfer of Fund shares will be by book
entry only. Stock certificates will not be issued to the Company or the
Account. Purchase and redemption orders for Fund shares will be recorded in
an appropriate ledger for the Account or the appropriate subaccount of the
Account.

               1.6. The Fund shall furnish notice as soon as reasonably
practicable to the Company of any income dividends or capital gain
distributions payable on any shares. The Company, on its behalf and on behalf
of the Account, hereby elects to receive all such dividends and distributions
as are payable on any shares in the form of additional shares of that Fund.
The Company reserves the right, on its behalf and on behalf of the Account,
to revoke this election and to receive all such dividends in cash. The Fund
shall notify the Company of the number of shares so issued as payment of such
dividends and distributions.

               1.7. The Fund shall use its best efforts to make the net asset
value per share available to the Company by 7:00 p.m., E.S.T. each Business Day,
and in any event, as soon as reasonably practicable after the net asset value
per share is calculated, and shall calculate such net asset value in accordance
with the then currently effective Fund Prospectus. The Fund shall not be liable
for

                                        3



any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

              1.8.      (a) The Company may withdraw the Account's investment
                    in the Fund only: (i) as necessary to facilitate Contract
                    owner requests; (ii) upon a determination by a majority
                    of the Fund Board, or a majority of disinterested Fund
                    Board members, that an irreconcilable material conflict
                    exists among the interests of (x) any Product Owners or
                    (y) the interests of the Participating Insurance
                    Companies investing in the Fund; (iii) upon requisite
                    vote of the Contractowners having an interest in the Fund
                    to substitute the shares of another investment company
                    for shares in accordance with the terms of the Contracts;
                    (iv) as required by state and/or federal laws or
                    regulations or judicial or other legal precedent of
                    general application; or (v) at the Company's sole
                    discretion, pursuant to an order of the SEC under Section
                    26(b) of the 1940 Act.

                        (b) The parties hereto acknowledge that the
                    arrangement contemplated by this Agreement is not
                    exclusive and that the Fund shares may be sold to other
                    insurance companies (subject to Section 1.9 hereof) and
                    the cash value of the Contracts may be invested in other
                    investment companies.

                        (c) The Company shall not, without prior notice to
                    the Fund (unless otherwise required by applicable law),
                    take any action to operate the Accounts as management
                    investment companies under the 1940 Act.

              1.9.  The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will
not sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.

ARTICLE II.  REPRESENTATIONS AND WARRANTIES

               2.1. The Company represents and warrants (a) that the
Contracts are registered under the 1933 Act or will be so registered before
the issuance thereof, (b) that the Contracts will be issued in compliance in
all material respects with all applicable Federal and state laws and (c) that
the Company will require of every person distributing the Contracts that the
Contracts be offered and sold in compliance in all material respects with all
applicable Federal and state laws. The Company further represents and
warrants that it is an insurance company duly organized and validly existing
under applicable law and that it has legally and validly authorized each
Account as a separate account under Section 27-1-5-1 of the Indiana Insurance
Code, and has registered or, prior to the issuance of any Contracts, will
register each Account (unless exempt therefrom) as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a separate account
for its Contracts, and that it will maintain such registrations for so long
as any Contracts issued under them are outstanding.

                                                4




               2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund
is and shall remain registered under the 1940 Act for so long as the Fund
shares are sold. The Fund further represents and warrants that it is a
corporation duly organized and in good standing under the laws of Maryland.

              2.3. The Fund represents and warrants that it currently
qualifies as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). The Fund further
represents and warrants that it will make every effort to continue to qualify
and to maintain such qualification (under Subchapter M or any successor or
similar provision), and that it will notify the Company immediately upon
having a reasonable basis for believing that it has ceased to so qualify or
that it might not so qualify in the future.

               2.4. The Fund represents and warrants that it will comply with
Section 817(h) of the Code, and all regulations issued thereunder.

               2.5. The Company represents that the Contracts are currently
and at the time of issuance will be treated as annuity contracts or life
insurance policies, whichever is appropriate, under applicable provisions of
the Code. The Company shall make every effort to maintain such treatment and
shall notify the Fund immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they might
not be so treated in the future.

               2.6. The Fund represents that the Fund's investment policies,
fees and expenses, and operations are and shall at all times remain in
material compliance with the laws of the state of Maryland, to the extent
required to perform this Agreement; and with any state- mandated investment
restrictions set forth on Schedule 3, as amended from time to time by the
Company in accordance with Section 6.6. The Fund, however, makes no
representation as to whether any aspect of its operations (including, but not
limited to, fees and expenses and investment policies) otherwise complies
with the insurance laws or regulations of any state. The Company alone shall
be responsible for informing the Fund of any investment restrictions imposed
by state insurance law and applicable to the Fund.

               2.7. The Fund represents and warrants that it has and
maintains a fidelity bond in accordance with Rule 17g-1 under the 1940 Act.
The Fund will immediately notify the Company in the event the fidelity bond
coverage should lapse at any time.

ARTICLE III.  PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
              INFORMATION

              3.1. The Fund shall provide the Company with as many copies of
the current Fund Prospectus as the Company may reasonably request. If requested
by the Company in lieu thereof, the Fund at its expense shall provide to the
Company a camera-ready copy, and electronic version, of the current Fund
Prospectus suitable for printing and other assistance as is reasonably necessary
in order for the Company to have a new Contracts Prospectus printed together
with the Fund Prospectus in one document. See Article V for a detailed
explanation of the responsibility for

                                        5



the cost of printing and distributing Fund prospectuses.

              3.2. The Fund Prospectus shall state that the Statement of
Additional Information for the Fund is available from the Fund and the Fund
shall provide such Statement free of charge to the Company and to any
outstanding or prospective Contract owner who requests such Statement.

              3.3.  (a) The Fund at its expense shall provide to the Company a
                    camera-ready copy of the Fund's shareholder reports and
                    other communications to shareholders (except proxy
                    material), in each case in a form suitable for printing,
                    as determined by the Company. The Fund shall be
                    responsible for the costs of printing and distributing
                    these materials to Contract owners.

                    (b) The Fund at its expense shall be responsible for
                    preparing, printing and distributing its proxy material.
                    The Company will provide the appropriate Contractowner
                    names and addresses to the Fund for this purpose.

               3.4. The Company shall furnish to the Fund, prior to its use,
each piece of sales literature or other promotional material in which the
Fund is named. No such material shall be used, except with the prior written
permission of the Fund. The Fund agrees to respond to any request for
approval on a prompt and timely basis. Failure of the Fund to respond within
10 days of the request by the Company shall relieve the Company of the
obligation to obtain the prior written permission of the Fund.

               3.5. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund
other than the information or representations contained in the Fund
Registration Statement or Fund Prospectus, as such Registration Statement and
Prospectus may be amended or supplemented from time to time, or in reports or
proxy statements for the Fund, or in sales literature or other promotional
material approved by the Fund, except with the prior written permission of
the Fund. The Fund agrees to respond to any request for permission on a
prompt and timely basis. If the Fund does not respond within 10 days of a
request by the Company, then the Company shall be relieved of the obligation
to obtain the prior written permission of the Fund.

               3.6. The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the
Account or the Contracts other than the information or representations
contained in the Contracts Registration Statement or Contracts Prospectus, as
such Registration Statement and Prospectus may be amended or supplemented
from time to time, or in published reports of the Account which are in the
public domain or approved in writing by the Company for distribution to
Contract owners, or in sales literature or other promotional material
approved in writing by the Company, except with the prior written permission
of the Company. The Company agrees to respond to any request for permission
on a prompt and timely basis. If the Company fails to respond within 10 days
of a request by the Fund, then the Fund is relieved of the obligation to
obtain the prior written permission of the Company.

                                        6



               3.7. The Fund will provide to the Company at least one
complete copy of all Fund Registration Statements, Fund Prospectuses,
Statements of Additional Information, annual and semi-annual reports and
other reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and
all amendments or supplements to any of the above, that relate to the Fund or
Fund shares, within 20 days after the filing of such document with the SEC or
other regulatory authorities.

               3.8. The Company will provide to the Fund at least one
complete copy of all Contracts Registration Statements, Contracts
Prospectuses, Statements of Additional Information, Annual and Semi-annual
Reports, sales literature and other promotional materials, and all amendments
or supplements to any of the above, that relate to the Contracts, within 20
days after the filing of such document with the SEC or other regulatory
authorities.

               3.9. Each party will provide to the other party copies of
draft versions of any registration statements, prospectuses, statements of
additional information, reports, proxy statements, solicitations for voting
instructions, sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all amendments or
supplements to any of the above, to the extent that the other party
reasonably needs such information for purposes of preparing a report or other
filing to be filed with or submitted to a regulatory agency. If a party
requests any such information before it has been filed, the other party will
provide the requested information if then available and in the version then
available at the time of such request.

               3.10. For purposes of this Article III, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use, in a
newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, computer net site, signs or billboards, motion
pictures or other public media), sales literature (I.E., any written
communication distributed or made generally available to customers or the
public, in print or electronically, including brochures, circulars, research
reports, market letters, form letters, seminar texts, or reprints or excerpts
of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration
statements, prospectuses, Statements of Additional Information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under NASD rules, the 1940 Act or the 1933 Act.

ARTICLE IV.  Voting

              4.1   Subject to applicable law and the requirements of Article
VII, the Fund shall solicit voting instructions from Contract owners;

              4.2   Subject to applicable law and the requirements of Article
VII, the Company shall:

                        (a) vote Fund shares attributable to Contract owners
                    in accordance with

                                        7




                    instructions or proxies received in timely fashion from
                    such Contract owners;

                        (b) vote Fund shares attributable to Contract owners
                    for which no instructions have been received in the same
                    proportion as Fund shares of such Series for which
                    instructions have been received in timely fashion; and

                        (c) vote Fund shares held by the Company on its own
                    behalf or on behalf of the Account that are not
                    attributable to Contract owners in the same proportion as
                    Fund shares of such Series for which instructions have
                    been received in timely fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

               All expenses incident to performance by the Fund under this
Agreement (including expenses expressly assumed by the Fund pursuant to this
Agreement) shall be paid by the Fund to the extent permitted by law. Except
as may otherwise be provided in Section 1.4 and Article VII of this
Agreement, the Company shall not bear any of the expenses for the cost of
registration and qualification of the Fund shares under Federal and any state
securities law, preparation and filing of the Fund Prospectus and Fund
Registration Statement, the preparation of all statements and notices
required by any Federal or state securities law, all taxes on the issuance or
transfer of Fund shares, and any expenses permitted to be paid or assumed by
the Fund pursuant to a plan, if any, under Rule 12b-1 under the 1940 Act.

               The Fund is responsible for the cost of printing and
distributing Fund Prospectuses and SAIs to existing Contractowners. (If for
this purpose the Company decided to print the Fund Prospectuses and SAIs in a
booklet or separate booklets containing disclosure for the Contracts  and for
underlying funds other than those of the Fund, then the Fund shall pay only
its proportionate share of the total cost to distribute the booklet to
existing Contractowners.)

               The Company is responsible for the cost of printing and
distributing Fund prospectuses and SAIs for new sales; and Account
Prospectuses and SAIs for existing Contractowners. The Company shall have the
final decision on choice of printer for all Prospectuses and SAIs.

ARTICLE VI.  COMPLIANCE UNDERTAKINGS

              6.1. The Fund undertakes to comply with Subchapter M and
Section 817(h) of the Code, and all regulations issued thereunder.

              6.2. The Company shall amend the Contracts Registration
Statements under the 1933 Act and the Account's Registration Statement under
the 1940 Act from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law.
The Company shall register and qualify the Contracts for sale to the extent

                                        8



required by applicable securities laws of the various states.

              6.3. The Fund shall amend the Fund Registration Statement under
the 1933 Act and the 1940 Act from time to time as required in order to
effect for so long as Fund shares are sold the continuous offering of Fund
shares as described in the then currently effective Fund Prospectus. The Fund
shall register and qualify Fund shares for sale to the extent required by
applicable securities laws of the various states.

              6.4. The Company shall be responsible for assuring that any
prospectus offering a Contract that is a life insurance contract where it is
reasonably possible that such Contract would be deemed a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will
describe the circumstances under which a Contract could be treated as a
modified endowment contract (or policy).

              6.5. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of
Directors, a majority of whom are not interested persons of the Fund,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.

              6.6.      (a)  When appropriate in order to inform the Fund of
                    any applicable state-mandated investment restrictions
                    with which the Fund must comply, the Company shall
                    arrange with the Fund to amend Schedule 3, pursuant to
                    the requirements of Article XI.

                        (b) Should the Fund become aware of any restrictions
                    which may be appropriate for inclusion in Schedule 3, the
                    Company shall be informed immediately of the substance of
                    those restrictions.


ARTICLE VlI.  POTENTIAL CONFLICTS

               7.1. The Company agrees to report to the Board of Directors of
the Fund (the "Board") any potential or existing conflicts between the
interests of Product Owners of all separate accounts investing in the Fund,
and to assist the Board in carrying out its responsibilities under Section
6e-3(T) of the 1940 Act, by providing all information reasonably necessary
for the Board to consider any issues raised, including information as to a
decision to disregard voting instructions of variable contract owners.

               7.2. If a majority of the Board, or a majority of
disinterested Board Members, determines that a material irreconcilable
conflict exists, the Board shall give prompt notice to all Participating
Insurance Companies.

                        (a) If a majority of the whole Board, after notice to
                    the Company and a reasonable opportunity for the Company
                    to appear before it and present its case, determines that
                    the Company is responsible for said conflict, and if the
                    Company

                                        9




                    agrees with that determination, the Company shall, at its
                    sole cost and expense, take whatever steps are necessary
                    to remedy the material irreconcilable conflict. These
                    steps could include: (i) withdrawing the assets allocable
                    to some or all of the affected Accounts from the Fund and
                    reinvesting such assets in a different investment
                    vehicle, or submitting the question of whether such
                    segregation should be implemented to a vote of all
                    affected Contractowners and, as appropriate, segregating
                    the assets of any particular group (i.e., variable
                    annuity Contractowners, variable life insurance
                    policyowners, or variable Contractowners of one or more
                    Participating Insurance Companies) that votes in favor of
                    such segregation, or offering to the affected
                    Contractowners the option of making such a change; and
                    (ii) establishing a new registered mutual fund or
                    management separate account; or (iii) taking such other
                    action as is necessary to remedy or eliminate the
                    material irreconcilable conflict.

                        (b) If the Company disagrees with the Board's
                    determination, the Company shall file a written protest
                    with the Board, reserving its right to dispute the
                    determination as between just the Company and the Fund
                    and to seek reimbursement from the Fund for the
                    reasonable costs and expenses of resolving the conflict .
                    After reserving that right the Company, although
                    disagreeing with the Board that it (the Company) was
                    responsible for the conflict, shall take the necessary
                    steps, under protest, to remedy the conflict,
                    substantially in accordance with paragraph (a) just
                    above, for the protection of Contractowners.

                        (c) As between the Company and the Fund, if within 45
                    days after the Board's determination the Company elects
                    to press the dispute, it shall so notify the Board in
                    writing. The parties shall then attempt to resolve the
                    matter amicably through negotiation by individuals from
                    each party who are authorized to settle the matter. If
                    the matter has not been amicably resolved within 60 days
                    from the date of the Company's notice of its intent to
                    press the dispute, then before either party shall
                    undertake to litigate the dispute it shall be submitted
                    to non-binding arbitration conducted expeditiously in
                    accordance with the CPR Rules for Non-Administered
                    Arbitration of Business Disputes, by a sole arbitrator;
                    PROVIDED, HOWEVER, that if one party has requested the
                    other party to seek an amicable resolution and the other
                    party has failed to participate, the requesting party may
                    initiate arbitration before expiration of the 60-day
                    period set out just above.

                        If within 45 days of the commencement of the process
                    to select an arbitrator the parties cannot agree upon the
                    arbitrator, then he or she will be selected from the CPR
                    Panels of Neutrals. The arbitration shall be governed by
                    the United States Arbitration Act, 9 U.S.C. Sec. 1-16.
                    The place of arbitration shall be Fort Wayne, Indiana.
                    The Arbitrator is not empowered to award damages in
                    excess of compensatory damages.

                        (d) If the Board shall determine that the Fund or
                    another was responsible for the conflict, then the Board
                    shall notify the Company immediately

                                        10



                    of that determination. The Fund shall assure the Company
                    that it (the Fund) or that other Participating Insurance
                    Company as applicable, shall, at its sole cost and
                    expense, take whatever steps are necessary to eliminate
                    the conflict.

                        (e) Nothing in Sections 7.2(b) or 7.2(c) shall
                    constitute a waiver of any right of action which the
                    Company may have against other Participating Insurance
                    Companies for reimbursement of all or part of the costs
                    and expenses of resolving the conflict.

               7.3. If a material irreconcilable conflict arises because of
the Company's decision to disregard Contractowner voting instructions and
that decision represents a minority position or would preclude a majority
vote, the Company shall withdraw (without charge or penalty) the Account's
investment in the Fund, if the Fund so elects.

               7.4. For purposes of this Article, a majority of the
disinterested members of the Board shall determine whether or not any
proposed action adequately remedies any irreconcilable conflict. However, in
no event will the Fund be required to establish a new funding medium for any
variable contract, nor will the Company be required to establish a new
funding medium for any Contract, if in either case an offer to do so has been
declined by a vote of a majority of affected Contractowners.

ARTICLE VIII.  INDEMNIFICATION

               8.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Fund and each person who controls or is
associated with the Fund (other than another Participating Insurance Company)
within the meaning of such terms under the federal securities laws and any
officer, trustee, director, employee or agent of the foregoing, against any
and all losses, claims, damages or liabilities, joint or several (including
any investigative, legal and other expenses reasonably incurred in connection
with, and any amounts paid with the prior written consent of the Company in
settlement of, any action, suit or proceeding or any claim asserted), to
which they or any of them may become subject under any statute or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities:

                        (a) arise out of or are based upon any untrue
                    statement or alleged untrue statement of any material
                    fact contained in the Contracts Registration Statement,
                    Contracts Prospectus, sales literature or other
                    promotional material for the Contracts or the Contracts
                    themselves (or any amendment or supplement to any of the
                    foregoing), or arise out of or are based upon the
                    omission or the alleged omission to state therein a
                    material fact required to be stated therein or necessary
                    to make the statements therein not misleading in light of
                    the circumstances in which they were made; provided that
                    this obligation to indemnify shall not apply if such

                                        11



                    statement or omission or such alleged statement or
                    alleged omission was made in reliance upon and in
                    conformity with information furnished in writing to the
                    Company by the Fund (or a person authorized in writing to
                    do so on behalf of the Fund) for use in the Contracts
                    Registration Statement, Contracts Prospectus or in the
                    Contracts or sales literature (or any amendment or
                    supplement) or otherwise for use in connection with the
                    sale of the Contracts or Fund shares; or

                        (b) arise out of or are based upon any untrue
                    statement or alleged untrue statement of a material fact
                    by or on behalf of the Company (other than statements or
                    representations contained in the Fund Registration
                    Statement, Fund Prospectus or sales literature or other
                    promotional material of the Fund not supplied by the
                    Company or persons under its control) or wrongful conduct
                    of the Company or persons under its control with respect
                    to the sale or distribution of the Contracts or Fund
                    shares; or

                        (c) arise out of any untrue statement or alleged
                    untrue statement of a material fact contained in the Fund
                    Registration Statement, Fund Prospectus or sales
                    literature or other promotional material of the Fund or
                    any amendment thereof or supplement thereto, or the
                    omission or alleged omission to state therein a material
                    fact required to be stated therein or necessary to make
                    the statements therein not misleading in light of the
                    circumstances in which they were made, if such statement
                    or omission was made in reliance upon and in conformity
                    with information furnished to the Fund by or on behalf of
                    the Company; or

                        (d) arise as a result of any failure by the Company
                    to provide the services and furnish the materials or to
                    make any payments under the terms of this Agreement; or

                        (e) arise out of any material breach by the Company
                    of this Agreement, including but not limited to any
                    failure to transmit a request for redemption or purchase
                    of Fund shares on a timely basis in accordance with the
                    procedures set forth in Article I; or

                        (f) arise as a result of the Company's providing the
                    Fund with inaccurate information, which causes the Fund
                    to calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the
willful misfeasance, bad faith, gross negligence or reckless disregard of
duty by the party seeking indemnification.

               8.2. INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify
and hold harmless the Company and each person who controls or is associated
with the Company within the meaning of such terms under the federal
securities laws and any officer, director, employee or agent of the
foregoing, against any and all losses, claims, damages or liabilities, joint
or several (including any

                                        12



investigative, legal and other expenses reasonably incurred in connection
with, and any amounts paid with the prior written consent of the Fund in
settlement of, any action, suit or proceeding or any claim asserted), to
which they or any of them may become subject under any statute or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities:

                        (a) arise out of or are based upon any untrue
                    statement or alleged untrue statement of any material
                    fact contained in the Fund Registration Statement, Fund
                    Prospectus (or any amendment or supplement thereto) or
                    sales literature or other promotional material of the
                    Fund, or arise out of or are based upon the omission or
                    the alleged omission to state therein a material fact
                    required to be stated therein or necessary to make the
                    statements therein not misleading in light of the
                    circumstances in which they were made; provided that this
                    obligation to indemnify shall not apply if such statement
                    or omission or alleged statement or alleged omission was
                    made in reliance upon and in conformity with information
                    furnished in writing by the Company to the Fund for use
                    in the Fund Registration Statement, Fund Prospectus (or
                    any amendment or supplement thereto) or sales literature
                    for the Fund or otherwise for use in connection with the
                    sale of the Contracts or Fund shares; or

                        (b) arise out of or are based upon any untrue
                    statement or alleged untrue statement of a material fact
                    made by the Fund (other than statements or
                    representations contained in the Fund Registration
                    Statement, Fund Prospectus or sales literature or other
                    promotional material of the Fund not supplied by the
                    Distributor or the Fund or persons under their control)
                    or wrongful conduct of the Fund or persons under its
                    control with respect to the sale or distribution of the
                    Contracts or Fund shares; or

                        (c) arise out of any untrue statement or alleged
                    untrue statement of a material fact contained in the
                    Contract's Registration Statement, Contracts Prospectus
                    or sales literature or other promotional material for the
                    Contracts (or any amendment or supplement thereto), or
                    the omission or alleged omission to state therein a
                    material fact required to be stated therein or necessary
                    to make the statements therein not misleading in light of
                    the circumstances in which they were made, if such
                    statement or omission was made in reliance upon
                    information furnished in writing by the Fund to the
                    Company (or a person authorized in writing to do so on
                    behalf of the Fund); or

                        (d) arise as a result of any failure by the Fund to
                    provide the services and furnish the materials under the
                    terms of this Agreement (including, but not by way of
                    limitation, a failure, whether unintentional or in good
                    faith or otherwise: (i) to comply with the
                    diversification requirements specified in Sections 2.4
                    and 6.1 in Article VI of this Agreement; and (ii) to
                    provide the Company with accurate information sufficient
                    for it to calculate its accumulation and/or annuity unit
                    values

                                        13



                    in timely fashion as required by law and by the Contracts
                    Prospectuses); or

                        (e) arise out of any material breach by the Fund of
                    this Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the
willful misfeasance, bad faith, gross negligence or reckless disregard of
duty by the party seeking indemnification.

               8.3. INDEMNIFICATION PROCEDURES. After receipt by a party
entitled to indemnification ("indemnified party") under this Article VIII of
notice of the commencement of any action, if a claim in respect thereof is to
be made by the indemnified party against any person obligated to provide
indemnification under this Article VIII ("indemnifying party"), such
indemnified party will notify the indemnifying party in writing of the
commencement thereof as soon as practicable thereafter, provided that the
omission to so notify the indemnifying party will not relieve it from any
liability under this Article VIII, except to the extent that the omission
results in a failure of actual notice to the indemnifying party and such
indemnifying party is damaged solely as a result of the failure to give such
notice. The indemnifying party, upon the request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment.

               A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article
VIII. The indemnification provisions contained in this Article VIII shall
survive any termination of this Agreement.

ARTICLE IX. APPLICABLE LAW

               9.1. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of the state of
Indiana, without giving effect to the principles of conflicts of law.

               9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those

                                        14




statutes, rules and regulations as the SEC may grant, and the terms hereof
shall be limited, interpreted and construed in accordance therewith.

ARTICLE X. TERMINATION

              10.1. This Agreement shall terminate:

                        (a) at the option of any party upon 120 days advance
                    written notice to the other parties; or

                        (b) at the option of the Company if shares of the
                    Fund are not available to meet the requirements of the
                    Contracts as determined by the Company. Prompt notice of
                    the election to terminate for such cause shall be
                    furnished by the Company. Termination shall be effective
                    ten days after the giving of notice by the Company; or

                        (c) at the option of the Fund upon institution of
                    formal proceedings against the Company by the NASD, the
                    SEC, the insurance commission of any state or any other
                    regulatory body regarding the Company's duties under this
                    Agreement or related to the sale of the Contracts, the
                    operation of the Account, the administration of the
                    Contracts or the purchase of Fund shares;

                        (d) at the option of the Company upon institution of
                    formal proceedings against the Fund, the investment
                    advisor or any sub-investment advisor, by the NASD, the
                    SEC, or any state securities or insurance commission or
                    any other regulatory body; or

                        (e) upon requisite vote of the Contract owners having
                    an interest in the Fund (unless otherwise required by
                    applicable law) and written approval of the Company, to
                    substitute the shares of another investment company for
                    the corresponding shares of the Fund in accordance with
                    the terms of the Contracts; or

                        (f) at the option of the Fund in the event any of the
                    Contracts are not registered, issued or sold in
                    accordance with applicable Federal and/or state law; or

                        (g) at the option of the Company or the Fund upon a
                    determination by a majority of the Fund Board, or a
                    majority of disinterested Fund Board members, that an
                    irreconcilable material conflict exists among the
                    interests of (i) any Product owners or (ii) the interests
                    of the Participating Insurance Companies investing in the
                    Fund; or

                        (h) at the option of the Company if the Fund ceases
                    to qualify as a Regulated Investment Company under
                    Subchapter M of the Code, or under any

                                        15




                    successor or similar provision, or if the Company
                    reasonably believes, based on an opinion of its counsel,
                    that the Fund may fail to so qualify; or

                        (i) at the option of the Company if the Fund fails to
                    meet the diversification requirements specified in
                    Section 817(h) of the Code and any regulations
                    thereunder; or

                        (j) at the option of the Fund if the Contracts cease
                    to qualify as annuity contracts or life insurance
                    policies, as applicable, under the Code, or if the Fund
                    reasonably believes that the Contracts may fail to so
                    qualify; or

                        (k) at the option of the Fund if the Fund shall
                    determine, in its sole judgment exercised in good faith,
                    that either (1) the Company shall have suffered a
                    material adverse change in its business or financial
                    condition; or (2) the Company shall have been the subject
                    of material adverse publicity which is likely to have a
                    material adverse impact upon the business and operations
                    of the Fund; or

                        (l) at the option of the Company, if the Company
                    shall determine, in its sole judgment exercised in good
                    faith, that: (1) the Fund shall have suffered a material
                    adverse change in its business or financial condition; or
                    (2) the Fund shall have been the subject of material
                    adverse publicity which is likely to have a material
                    adverse impact upon the business and operations of the
                    Company; or

                        (m) automatically upon the assignment of this
                    Agreement (including, without limitation, any transfer of
                    the Contracts or the Accounts to another insurance
                    company pursuant to an assumption reinsurance agreement)
                    unless the non-assigning party consents thereto or unless
                    this Agreement is assigned to an affiliate of the Company
                    or the Fund, as the case may be.

              10.2. NOTICE REQUIREMENT. Except as otherwise provided in
Section 10.1, no termination of this Agreement shall be effective unless and
until the party terminating this Agreement gives prior written notice to the
other party of its intent to terminate, which notice shall set forth the
basis for such termination. Furthermore:

                        (a) In the event that any termination is based upon
                    the provisions of Article VII or the provisions of
                    Section 10.1(a) of this Agreement, such prior written
                    notice shall be given in advance of the effective date of
                    termination as required by such provisions; and

                        (b) in the event that any termination is based upon
                    the provisions of Section 10.1(c) or 10.1(d) of this
                    Agreement, such prior written notice shall be given at
                    least ninety (90) days before the effective date of
                    termination, or sooner if required by law or regulation.

         10.3.    EFFECT OF TERMINATION

                                        16




                        (a) Notwithstanding any termination of this Agreement
                    pursuant to Section 10.1 of this Agreement, the Fund
                    will, at the option of the Company, continue to make
                    available additional Fund shares for so long after the
                    termination of this Agreement as the Company desires,
                    pursuant to the terms and conditions of this Agreement as
                    provided in paragraph (b) below, for all Contracts in
                    effect on the effective date of termination of this
                    Agreement (hereinafter referred to as "Existing
                    Contracts"). Specifically, without limitation, if the
                    Company so elects to make additional Fund shares
                    available, the owners of the Existing Contracts or the
                    Company, whichever shall have legal authority to do so,
                    shall be permitted to reallocate investments in the Fund,
                    redeem investments in the Fund and/or invest in the Fund
                    upon the making of additional purchase payments under the
                    Existing Contracts.

                        (b) If Fund shares continue to be made available
                    after such termination, the provisions of this Agreement
                    shall remain in effect except for Section 10.1(a) and
                    thereafter either the Fund or the Company may terminate
                    the Agreement, as so continued pursuant to this Section
                    10.3, upon prior written notice to the other party, such
                    notice to be for a period that is reasonable under the
                    circumstances but, if given by the Fund, need not be for
                    more than six months.

                        (c) The parties agree that this Section 10.3 shall
                    not apply to any termination made pursuant to Article
                    VII, and the effect of such Article VII termination shall
                    be governed by the provisions set forth or incorporated
                    by reference therein.

ARTICLE XI.  APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

               The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the
Contracts and to add new classes of variable annuity contracts and variable
life insurance policies to be issued by the Company through new or existing
Separate Accounts investing in the Fund. The provisions of this Agreement
shall be equally applicable to each such separate account and each such class
of contracts or policies, unless the context otherwise requires. Any such
amendment must be signed by the parties and must bear an effective date for
that amendment.

ARTICLE XII.  NOTICES

               Any notice shall be sufficiently given when sent by registered
or certified mail to the other party(ies) at the address of such party(ies)
set forth below or at such other address as such party(ies) may from time to
time specify in writing to the other party.

                    If to the Fund:

                              Lincoln National Capital Appreciation Fund, Inc.

                                        17




                              1300 South Clinton Street
                              Fort Wayne, Indiana 46802
                              Attn: Kelly D. Clevenger

                    If to the Company:

                              Lincoln National Life Insurance Co.
                              1300 South Clinton Street
                              Fort Wayne, Indiana 46802
                              Attn: Steven M. Kluever


ARTICLE XIII.  MISCELLANEOUS

          13.1. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.

          13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

          13.3. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.

          13.4. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the
SEC, the NASD and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.

          13.5. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate or trust action, as
applicable, by such party, and when so executed and delivered this Agreement
will be the valid and binding obligation of such party enforceable in
accordance with its terms.

ARTICLE XIV.  PRIOR AGREEMENTS

         This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.

                                        18





         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized
officer on the date specified below.

                LINCOLN NATIONAL CAPITAL APPRECIATION FUND, INC.



                      Signature: /s/ Kelly D. Clevenger
                                 _____________________________________________

                      Name: Kelly D. Clevenger
                            --------------------------------------------------
                      Title: President
                             -------------------------------------------------


                  LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


                      Signature: /s/ Stephen H. Lewis
                                 _____________________________________________

                      Name: Stephen H. Lewis
                            --------------------------------------------------
                      Title: Senior Vice President, Lincoln National Life
                             Insurance Company
                             -------------------------------------------------







#73844

                                        19
















                                        20





                                   SCHEDULE 1

                Lincoln National Capital Appreciation Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 1, 1998


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53


                                        21







                                   SCHEDULE 2


                Lincoln National Capital Appreciation Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 1, 1998


MULTI FUND VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

MULTI FUND - NON-REGISTERED


                                        22





                                   SCHEDULE 3


                Lincoln National Capital Appreciation Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998


The California Department of Insurance has established the following
Guidelines for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 33 1/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing"
as that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global
FUNDS are as follows:

a.       An international FUND or a global FUND is sufficiently diversified
         if it is invested in a minimum of three different countries at all
         times, and has invested no more than 50 percent of total assets in
         any one second-tier country and no more than 25 percent of total
         assets in any one third-tier country. First-tier countries are:
         Germany, the United Kingdom, Japan, the United States, France,
         Canada, and Australia. Second-tier countries are all countries not
         in the first or third tier. Third-tier countries are countries
         identified as "emerging" or "developing" by the International Bank
         for Reconstruction and Development ("World Bank") or International
         Finance Corporation.

b.       A regional FUND is sufficiently diversified if it is invested in a
         minimum of three countries. The name of the fund must accurately
         describe the FUND.

c.       The name of the single country FUND must accurately describe the FUND.

d.       An index FUND must substantially mirror the index.



                                        23



                                  Amendment to
                                   SCHEDULE 1


                  Lincoln National Capital Appreciation Fund, Inc.
             Separate Accounts of Lincoln National Life Insurance Company
                               Investing in the Fund
                                 As of May 1, 2000


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

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 Q

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53



                                  Amendment to
                                   SCHEDULE 2


                  Lincoln National Capital Appreciation Fund, Inc.
                          Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                             Listed on Schedule 1
                              As of May 1, 2000


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

LINCOLN VUL

LINCOLN VUL-DB-

LINCOLN SVUL

LINCOLN SVUL II

LINCOLN CVUL

LINCOLN CVUL SERIES III

MULTI FUND - NON-REGISTERED

GROUP VARIABLE ANNUITY (GVA) I, II, III



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly
authorized officer on the date specified below.



                                       LINCOLN NATIONAL CAPITAL
                                       APPRECIATION FUND, INC.



Date: 3/22/2000                           By: /s/ Kelly D. Clevenger
     -------------------------            --------------------------
                                          Kelly D. Clevenger
                                          President and Chairman




                                       LINCOLN NATIONAL LIFE
                                       INSURANCE COMPANY



Date: 3/22/2000                           By: /s/ Steven M. Kluever
     -------------------------            --------------------------
                                          Steven M. Kluever
                                          Second Vice President




                           Amendment to
                            SCHEDULE 2


             Lincoln National Capital Appreciation Fund, Inc.
                        Variable Annuity Contracts
                   and Variable Life Insurance Policies
                     Supported by Separate Accounts
                          Listed on Schedule 1
                         As of October 15, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

LINCOLN VUL

LINCOLN SVUL

LINCOLN C

MULTI FUND - NON-REGISTERED

LINCOLN VUL-DB-



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.



                                       LINCOLN NATIONAL CAPITAL
                                       APPRECIATION FUND, INC.



Date:                                  By:
     -------------------------            --------------------------
                                          Kelly D. Clevenger
                                          President and Chairman




                                       LINCOLN NATIONAL LIFE
                                       INSURANCE COMPANY



Date:                                  By:
     -------------------------            --------------------------
                                          Stephen H. Lewis
                                          Senior Vice President



                               Amendment to
                                SCHEDULE 1


               Lincoln National Capital Appreciation Fund, Inc.
         Separate Accounts of Lincoln National Life Insurance Company
                           Investing in the Fund
                             As of May 1, 1999


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53





                           Amendment to
                            SCHEDULE 2


             Lincoln National Capital Appreciation Fund, Inc.
                        Variable Annuity Contracts
                   and Variable Life Insurance Policies
                     Supported by Separate Accounts
                          Listed on Schedule 1
                         As of May 1, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

LINCOLN VUL

LINCOLN SVUL

LINCOLN C

MULTI FUND - NON-REGISTERED



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.



                                       LINCOLN NATIONAL CAPITAL
                                       APPRECIATION FUND, INC.



Date:                                  By:
     -------------------------            --------------------------
                                          Kelly D. Clevenger
                                          President and Chairman




                                       LINCOLN NATIONAL LIFE
                                       INSURANCE COMPANY



Date:                                  By:
     -------------------------            --------------------------
                                          Stephen H. Lewis
                                          Senior Vice President



      The Fund Participation Agreement (the "Agreement"), dated July 1, 1998,
by and among The Lincoln National Life Insurance Company and Lincoln National
Capital Appreciation Fund, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

      "WHEREAS, the Company has registered or will have registered each
Account with the SEC (unless exempt therefrom) as a unit investment trust
under the 1940 Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

      "The Company represents and warrants (a) that the Contracts are
      registered under the 1933 Act or will be so registered before the issuance
      thereof (unless exempt therefrom), (b) that the Contracts will be issued
      in compliance in all material respects with all applicable Federal and
      state laws and (c) that the Company will require of every person
      distributing the Contracts that the Contracts be offered and sold in
      compliance in all material respects with all applicable Federal and state
      laws.  The Company further represents and warrants that it is an
      insurance company duly organized and validly existing under applicable law
      and that it has legally and validly authorized each Account as a separate
      account under Section 27-1-5-1 of the Indiana Insurance Code, and has
      registered or, prior to the issuance of any Contracts, will register each
      Account (unless exempt therefrom) as a unit investment trust in accordance
      with the provisions of the 1940 Act to serve as a separate account for its
      Contracts, and that it will maintain such registrations for so long as any
      Contracts issued under them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
the Fund Participation Agreement to be executed in its name and behalf by its
duly authorized officer on the date specified below.



                                       LINCOLN NATIONAL CAPITAL
                                       APPRECIATION FUND, INC.



Date:                                  By: /s/ Kelly D. Clevenger
     -------------------------             --------------------------
                                       Name: Kelly D. Clevenger
                                             --------------------------
                                       Title: President
                                              ------------------



                                       LINCOLN NATIONAL LIFE
                                       INSURANCE COMPANY



Date:                                  By: /s/ Stephen H. Lewis
     -------------------------             --------------------------
                                       Name: Stephen H. Lewis
                                             ----------------------------
                                       Title: Senior Vice President
                                              -------------------------



                                  Amendment to
                                   SCHEDULE 1

                Lincoln National Capital Appreciation Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 15, 2001


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

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 NATIONAL VARIABLE ANNUITY ACCOUNT 53



                                  Amendment to
                                   SCHEDULE 2

                Lincoln National Capital Appreciation Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                                  July 15, 2001


MULTIFUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTIFUND VARIABLE LIFE

GROUP MULTIFUND

LINCOLN VUL

LINCOLN VUL(DB)

LINCOLN VUL(CV)

LINCOLN VUL(CV2)

VUL MONEYGUARD

LINCOLN SVUL

LINCOLN SVUL II

LINCOLN CVUL

LINCOLN CVUL SERIES III
MULTI FUND - NON-REGISTERED

GROUP VARIABLE ANNUITY (GVA) I, II, III

LINCOLN CHOICEPLUS II

LINCOLN CHOICEPLUS II ACCESS

LINCOLN CHOICEPLUS II BONUS

LINCOLN CHOICEPLUS II ADVANCE



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                                 LINCOLN NATIONAL CAPITAL
                                 APPRECIATION FUND, INC.


Date:                            By:/s/Kelly D. Clevenger
       -------------------         ---------------------------------------
                                   Kelly D. Clevenger
                                   Chairman and President



                                 THE LINCOLN NATIONAL LIFE INSURANCE COMPANY


Date:                            By:/s/Steven M. Kluever
      --------------------         ---------------------------------------
                                    Steven M. Kluever
                                    Second Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                    LINCOLN NATIONAL EQUITY-INCOME FUND, INC.


               THIS AGREEMENT, made and entered into this 1st day of July, 1998,
by and between Lincoln National Equity-Income Fund, Inc. a corporation organized
under the laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE INSURANCE
CO., an Indiana insurance corporation (the "Company"), on its own behalf and on
behalf of each separate account of the Company named in Schedule 1 to this
Agreement as in effect at the time this Agreement is executed and such other
separate accounts that may be added to Schedule 1 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account"; collectively, the "Accounts").

               WHEREAS, the Fund is engaged in business as an open-end
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts (collectively referred to as
"Variable Insurance Products," the owners of such products being referred to as
"Product owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

               WHEREAS, the Fund filed with the Securities and Exchange
Commission (the "SEC") and the SEC has declared effective a registration
statement (referred to herein as the "Fund Registration Statement" and the
prospectus contained therein, or filed pursuant to Rule 497 under the 1933 Act,
referred to herein as the "Fund Prospectus") on Form N-lA to register itself as
an open-end management investment company (File No. 811-3212) under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Fund shares
(File No. 2-80743) under the Securities Act of 1933, as amended (the "1933
Act"); and

               WHEREAS, the Company has filed a registration statement with the
SEC to register under the 1933 Act (unless exempt therefrom) certain variable
annuity contracts and/or variable life insurance policies described in Schedule
2 to this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and





               WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

               WHEREAS, the Company has registered or will have registered each
Account with the SEC as a unit investment trust under the 1940 Act before any
Contracts are issued by that Account; and

               WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value;

               NOW, THEREFORE, in consideration of their mutual promises, the
Company and the Fund agree as follows:


ARTICLE I.  SALE OF FUND SHARES

               1.1. The Fund agrees to sell to the Company those shares which
the Company orders on behalf of the Account, executing such orders on a daily
basis in accordance with Section 1.4 of this Agreement.

               1.2. The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

               1.3. The Fund agrees to redeem, at the Company's request, any
full or fractional shares of the Fund held by the Account or the Company,
executing such requests at the net asset value on a daily basis (LL will expect
same day redemption wires unless unusual circumstances evolve which cause the
Fund to have to redeem securities) in accordance with Section 1.4 of this
Agreement, the applicable provisions of the 1940 Act and the then currently
effective Fund Prospectus. Notwithstanding the foregoing, the Fund may delay
redemption of Fund shares to the extent permitted by the 1940 Act, any rules,
regulations or orders thereunder, or the then currently effective Fund
Prospectus.


         1.4                 (a) For purposes of Sections 1.1, 1.2 and 1.3, the
                  Company shall be the agent of the Fund for the limited purpose
                  of receiving redemption

                                       2


                  and purchase requests from the Account (but not from the
                  general account of the Company), and receipt on any Business
                  Day by the Company as such limited agent of the Fund prior to
                  the time prescribed in the current Fund Prospectus (which as
                  of the date of execution of this Agreement is 4 p.m., E.S.T.)
                  shall constitute receipt by the Fund on that same Business
                  Day, provided that the Fund receives notice of such redemption
                  or purchase request by 9:00 a.m., E.S.T. on the next following
                  Business Day. For purposes of this Agreement, "Business Day"
                  shall mean any day on which the New York Stock exchange is
                  open for trading.

                           (b) The Company shall pay for the shares on the same
                  day that it places an order with the Fund to purchase those
                  Fund shares for an Account. Payment for Fund shares will be
                  made by the Account or the Company in Federal Funds
                  transmitted to the Fund by wire to be received by 11:00 a.m.,
                  E.S.T. on the day the Fund is properly notified of the
                  purchase order for shares. The Fund will confirm receipt of
                  each trade and these confirmations will be received by the
                  Company via Fax or Email by 3:00 p.m. E.S.T. If Federal Funds
                  are not received on time, such funds will be invested, and
                  shares purchased thereby will be issued, as soon as
                  practicable.

                           (c) Payment for shares redeemed by the Account or the
                  Company will be made in Federal Funds transmitted to the
                  Company by wire on the same day the Fund is notified of the
                  redemption order of shares, except that the Fund reserves the
                  right to delay payment of redemption proceeds, but in no event
                  may such payment be delayed longer than the period permitted
                  under Section 22(e) of the 1940 Act. The Fund shall not bear
                  any responsibility whatsoever for the proper disbursement or
                  crediting of redemption proceeds if securities must be
                  redeemed; the Company alone shall be responsible for such
                  action.

               1.5. Issuance and transfer of Fund shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.

               1.6. The Fund shall furnish notice as soon as reasonably
practicable to the Company of any income dividends or capital gain distributions
payable on any shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any shares in the form of additional shares of that Fund. The Company reserves
the right, on its behalf and on behalf of the Account, to revoke this election
and to receive all such dividends in cash. The Fund shall notify the Company of
the number of shares so issued as payment of such dividends and distributions.

               1.7. The Fund shall use its best efforts to make the net asset
value per share available to the Company by 7:00 p.m., E.S.T. each Business Day,
and in any event, as soon as reasonably practicable after the net asset value
per share is calculated, and shall calculate such net asset value in accordance
with the then currently effective Fund Prospectus. The Fund shall not be liable
for

                                       3


any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

             1.8.         (a) The Company may withdraw the Account's investment
                  in the Fund only: (i) as necessary to facilitate Contract
                  owner requests; (ii) upon a determination by a majority of the
                  Fund Board, or a majority of disinterested Fund Board members,
                  that an irreconcilable material conflict exists among the
                  interests of (x) any Product Owners or (y) the interests of
                  the Participating Insurance Companies investing in the Fund;
                  (iii) upon requisite vote of the Contractowners having an
                  interest in the Fund to substitute the shares of another
                  investment company for shares in accordance with the terms of
                  the Contracts; (iv) as required by state and/or federal laws
                  or regulations or judicial or other legal precedent of general
                  application; or (v) at the Company's sole discretion, pursuant
                  to an order of the SEC under Section 26(b) of the 1940 Act.

                           (b) The parties hereto acknowledge that the
                  arrangement contemplated by this Agreement is not exclusive
                  and that the Fund shares may be sold to other insurance
                  companies (subject to Section 1.9 hereof) and the cash value
                  of the Contracts may be invested in other investment
                  companies.

                           (c) The Company shall not, without prior notice to
                  the Fund (unless otherwise required by applicable law), take
                  any action to operate the Accounts as management investment
                  companies under the 1940 Act.

         1.9. The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II.  REPRESENTATIONS AND WARRANTIES

               2.1. The Company represents and warrants (a) that the Contracts
are registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or, prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding.

                                       4


               2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for so long as the Fund shares
are sold. The Fund further represents and warrants that it is a corporation duly
organized and in good standing under the laws of Maryland.

              2.3. The Fund represents and warrants that it currently qualifies
as a Regulated Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). The Fund further represents and warrants
that it will make every effort to continue to qualify and to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

               2.4. The Fund represents and warrants that it will comply with
Section 817(h) of the Code, and all regulations issued thereunder.

               2.5. The Company represents that the Contracts are currently and
at the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

               2.6. The Fund represents that the Fund's investment policies,
fees and expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

               2.7. The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


ARTICLE III.  PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
              INFORMATION

               3.1. The Fund shall provide the Company with as many copies of
the current Fund Prospectus as the Company may reasonably request. If requested
by the Company in lieu thereof, the Fund at its expense shall provide to the
Company a camera-ready copy, and electronic version, of the current Fund
Prospectus suitable for printing and other assistance as is reasonably necessary
in order for the Company to have a new Contracts Prospectus printed together
with the Fund Prospectus in one document. See Article V for a detailed
explanation of the responsibility for

                                       5


the cost of printing and distributing Fund prospectuses.

               3.2. The Fund Prospectus shall state that the Statement of
Additional Information for the Fund is available from the Fund and the Fund
shall provide such Statement free of charge to the Company and to any
outstanding or prospective Contract owner who requests such Statement.

               3.3.        (a) The Fund at its expense shall provide to the
                  Company a camera-ready copy of the Fund's shareholder reports
                  and other communications to shareholders (except proxy
                  material), in each case in a form suitable for printing, as
                  determined by the Company. The Fund shall be responsible for
                  the costs of printing and distributing these materials to
                  Contract owners.

                           (b) The Fund at its expense shall be responsible for
                  preparing, printing and distributing its proxy material. The
                  Company will provide the appropriate Contractowner names and
                  addresses to the Fund for this purpose.

               3.4. The Company shall furnish to the Fund, prior to its use,
each piece of sales literature or other promotional material in which the Fund
is named. No such material shall be used, except with the prior written
permission of the Fund. The Fund agrees to respond to any request for approval
on a prompt and timely basis. Failure of the Fund to respond within 10 days of
the request by the Company shall relieve the Company of the obligation to obtain
the prior written permission of the Fund.

               3.5. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.



               3.6. The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the Company. The Company agrees to
respond to any request for permission on a prompt and timely basis. If the
Company fails to respond within 10 days of a request by the Fund, then the Fund
is relieved of the obligation to obtain the prior written permission of the
Company.

                                       6


               3.7. The Fund will provide to the Company at least one complete
copy of all Fund Registration Statements, Fund Prospectuses, Statements of
Additional Information, annual and semi-annual reports and other reports, proxy
statements, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments or supplements to
any of the above, that relate to the Fund or Fund shares, within 20 days after
the filing of such document with the SEC or other regulatory authorities.

               3.8. The Company will provide to the Fund at least one complete
copy of all Contracts Registration Statements, Contracts Prospectuses,
Statements of Additional Information, Annual and Semi-annual Reports, sales
literature and other promotional materials, and all amendments or supplements to
any of the above, that relate to the Contracts, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

               3.9. Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

               3.10. For purposes of this Article III, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, computer net site, signs or billboards, motion pictures or
other public media), sales literature (I.E., any written communication
distributed or made generally available to customers or the public, in print or
electronically, including brochures, circulars, research reports, market
letters, form letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
Statements of Additional Information, shareholder reports and proxy materials,
and any other material constituting sales literature or advertising under NASD
rules, the 1940 Act or the 1933 Act.

ARTICLE IV.  Voting

               4.1 Subject to applicable law and the requirements of Article
VII, the Fund shall solicit voting instructions from Contract owners;

               4.2 Subject to applicable law and the requirements of
Article VII, the Company shall:
                                    (a) vote Fund shares attributable to
                  Contract owners in accordance with

                                       7


                  instructions or proxies received in timely fashion from such
                  Contract owners;

                                    (b) vote Fund shares attributable to
                  Contract owners for which no instructions have been received
                  in the same proportion as Fund shares of such Series for
                  which instructions have been received in timely fashion; and

                                    (c) vote Fund shares held by the Company on
                  its own behalf or on behalf of the Account that are not
                  attributable to Contract owners in the same proportion as
                  Fund shares of such Series for which instructions have been
                  received in timely fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

               All expenses incident to performance by the Fund under this
Agreement (including expenses expressly assumed by the Fund pursuant to this
Agreement) shall be paid by the Fund to the extent permitted by law. Except as
may otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.

               The Fund is responsible for the cost of printing and distributing
Fund Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

               The Company is responsible for the cost of printing and
distributing Fund prospectuses and SAIs for new sales; and Account Prospectuses
and SAIs for existing Contractowners. The Company shall have the final decision
on choice of printer for all Prospectuses and SAIs.


ARTICLE VI.  COMPLIANCE UNDERTAKINGS

               6.1. The Fund undertakes to comply with Subchapter M and Section
817(h) of the Code, and all regulations issued thereunder.

               6.2. The Company shall amend the Contracts Registration
Statements under the 1933 Act and the Account's Registration Statement under the
1940 Act from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law. The
Company shall register and qualify the Contracts for sale to the extent

                                       8


required by applicable securities laws of the various states.

               6.3. The Fund shall amend the Fund Registration Statement under
the 1933 Act and the 1940 Act from time to time as required in order to effect
for so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

               6.4. The Company shall be responsible for assuring that any
prospectus offering a Contract that is a life insurance contract where it is
reasonably possible that such Contract would be deemed a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will describe
the circumstances under which a Contract could be treated as a modified
endowment contract (or policy).

               6.5. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of
Directors, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.

               6.6.        (a) When appropriate in order to inform the Fund of
                  any applicable state-mandated investment restrictions with
                  which the Fund must comply, the Company shall arrange with
                  the Fund to amend Schedule 3, pursuant to the requirements
                  of Article XI.

                           (b) Should the Fund become aware of any restrictions
                  which may be appropriate for inclusion in Schedule 3, the
                  Company shall be informed immediately of the substance of
                  those restrictions.


ARTICLE VlI.  POTENTIAL CONFLICTS

               7.1. The Company agrees to report to the Board of Directors of
the Fund (the "Board") any potential or existing conflicts between the
interests of Product Owners of all separate accounts investing in the Fund,
and to assist the Board in carrying out its responsibilities under Section
6e-3(T) of the 1940 Act, by providing all information reasonably necessary
for the Board to consider any issues raised, including information as to a
decision to disregard voting instructions of variable contract owners.

               7.2. If a majority of the Board, or a majority of disinterested
Board Members, determines that a material irreconcilable conflict exists, the
Board shall give prompt notice to all Participating Insurance Companies.

                           (a) If a majority of the whole Board, after notice
                  to the Company and a reasonable opportunity for the Company
                  to appear before it and present its case, determines that the
                  Company is responsible for said conflict, and if the Company

                                       9


                  agrees with that determination, the Company shall, at its sole
                  cost and expense, take whatever steps are necessary to remedy
                  the material irreconcilable conflict. These steps could
                  include: (i) withdrawing the assets allocable to some or all
                  of the affected Accounts from the Fund and reinvesting such
                  assets in a different investment vehicle, or submitting the
                  question of whether such segregation should be implemented to
                  a vote of all affected Contractowners and, as appropriate,
                  segregating the assets of any particular group (i.e., variable
                  annuity Contractowners, variable life insurance policyowners,
                  or variable Contractowners of one or more Participating
                  Insurance Companies) that votes in favor of such segregation,
                  or offering to the affected Contractowners the option of
                  making such a change; and (ii) establishing a new registered
                  mutual fund or management separate account; or (iii) taking
                  such other action as is necessary to remedy or eliminate the
                  material irreconcilable conflict.

                           (b) If the Company disagrees with the Board's
                  determination, the Company shall file a written protest with
                  the Board, reserving its right to dispute the determination as
                  between just the Company and the Fund and to seek
                  reimbursement from the Fund for the reasonable costs and
                  expenses of resolving the conflict. After reserving that
                  right the Company, although disagreeing with the Board that it
                  (the Company) was responsible for the conflict, shall take the
                  necessary steps, under protest, to remedy the conflict,
                  substantially in accordance with paragraph (a) just above, for
                  the protection of Contractowners.

                           (c) As between the Company and the Fund, if within 45
                  days after the Board's determination the Company elects to
                  press the dispute, it shall so notify the Board in writing.
                  The parties shall then attempt to resolve the matter amicably
                  through negotiation by individuals from each party who are
                  authorized to settle the matter. If the matter has not been
                  amicably resolved within 60 days from the date of the
                  Company's notice of its intent to press the dispute, then
                  before either party shall undertake to litigate the dispute it
                  shall be submitted to non-binding arbitration conducted
                  expeditiously in accordance with the CPR Rules for
                  Non-Administered Arbitration of Business Disputes, by a sole
                  arbitrator; PROVIDED, HOWEVER, that if one party has requested
                  the other party to seek an amicable resolution and the other
                  party has failed to participate, the requesting party may
                  initiate arbitration before expiration of the 60-day period
                  set out just above.

                       If within 45 days of the commencement of the process to
                  select an arbitrator the parties cannot agree upon the
                  arbitrator, then he or she will be selected from the CPR
                  Panels of Neutrals. The arbitration shall be governed by the
                  United States Arbitration Act, 9 U.S.C. Sec. 1-16. The place
                  of arbitration shall be Fort Wayne, Indiana. The Arbitrator is
                  not empowered to award damages in excess of compensatory
                  damages.

                                (d) If the Board shall determine that the Fund
                  or another was responsible for the conflict, then the Board
                  shall notify the Company immediately

                                       10


                  of that determination. The Fund shall assure the Company that
                  it (the Fund) or that other Participating Insurance Company as
                  applicable, shall, at its sole cost and expense, take whatever
                  steps are necessary to eliminate the conflict.

                                (e) Nothing in Sections 7.2(b) or 7.2(c) shall
                  constitute a waiver of any right of action which the Company
                  may have against other Participating Insurance Companies for
                  reimbursement of all or part of the costs and expenses of
                  resolving the conflict.

               7.3. If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

               7.4. For purposes of this Article, a majority of the
disinterested members of the Board shall determine whether or not any
proposed action adequately remedies any irreconcilable conflict. However, in
no event will the Fund be required to establish a new funding medium for any
variable contract, nor will the Company be required to establish a new
funding medium for any Contract, if in either case an offer to do so has been
declined by a vote of a majority of affected Contractowners.

ARTICLE VIII.  INDEMNIFICATION

               8.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Fund and each person who controls or is
associated with the Fund (other than another Participating Insurance Company)
within the meaning of such terms under the federal securities laws and any
officer, trustee, director, employee or agent of the foregoing, against any
and all losses, claims, damages or liabilities, joint or several (including
any investigative, legal and other expenses reasonably incurred in connection
with, and any amounts paid with the prior written consent of the Company in
settlement of, any action, suit or proceeding or any claim asserted), to
which they or any of them may become subject under any statute or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities:

                           (a) arise out of or are based upon any untrue
                  statement or alleged untrue statement of any material fact
                  contained in the Contracts Registration Statement, Contracts
                  Prospectus, sales literature or other promotional material for
                  the Contracts or the Contracts themselves (or any amendment or
                  supplement to any of the foregoing), or arise out of or are
                  based upon the omission or the alleged omission to state
                  therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading in
                  light of the circumstances in which they were made; provided
                  that this obligation to indemnify shall not apply if such


                                       11


                  statement or omission or such alleged statement or alleged
                  omission was made in reliance upon and in conformity with
                  information furnished in writing to the Company by the Fund
                  (or a person authorized in writing to do so on behalf of the
                  Fund) for use in the Contracts Registration Statement,
                  Contracts Prospectus or in the Contracts or sales literature
                  (or any amendment or supplement) or otherwise for use in
                  connection with the sale of the Contracts or Fund shares; or

                           (b) arise out of or are based upon any untrue
                  statement or alleged untrue statement of a material fact by or
                  on behalf of the Company (other than statements or
                  representations contained in the Fund Registration Statement,
                  Fund Prospectus or sales literature or other promotional
                  material of the Fund not supplied by the Company or persons
                  under its control) or wrongful conduct of the Company or
                  persons under its control with respect to the sale or
                  distribution of the Contracts or Fund shares; or

                           (c) arise out of any untrue statement or alleged
                  untrue statement of a material fact contained in the Fund
                  Registration Statement, Fund Prospectus or sales literature or
                  other promotional material of the Fund or any amendment
                  thereof or supplement thereto, or the omission or alleged
                  omission to state therein a material fact required to be
                  stated therein or necessary to make the statements therein not
                  misleading in light of the circumstances in which they were
                  made, if such statement or omission was made in reliance upon
                  and in conformity with information furnished to the Fund by or
                  on behalf of the Company; or
                           (d) arise as a result of any failure by the Company
                  to provide the services and furnish the materials or to make
                  any payments under the terms of this Agreement; or

                           (e) arise out of any material breach by the Company
                  of this Agreement, including but not limited to any failure to
                  transmit a request for redemption or purchase of Fund shares
                  on a timely basis in accordance with the procedures set forth
                  in Article I; or

                                    (f) arise as a result of the Company's
                  providing the Fund with inaccurate information, which causes
                  the Fund to calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

               8.2. INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify
and hold harmless the Company and each person who controls or is associated with
the Company within the meaning of such terms under the federal securities laws
and any officer, director, employee or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several (including any


                                       12


investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                           (a) arise out of or are based upon any untrue
                  statement or alleged untrue statement of any material fact
                  contained in the Fund Registration Statement, Fund Prospectus
                  (or any amendment or supplement thereto) or sales literature
                  or other promotional material of the Fund, or arise out of or
                  are based upon the omission or the alleged omission to state
                  therein a material fact required to be stated therein or
                  necessary to make the statements therein not misleading in
                  light of the circumstances in which they were made; provided
                  that this obligation to indemnify shall not apply if such
                  statement or omission or alleged statement or alleged omission
                  was made in reliance upon and in conformity with information
                  furnished in writing by the Company to the Fund for use in the
                  Fund Registration Statement, Fund Prospectus (or any amendment
                  or supplement thereto) or sales literature for the Fund or
                  otherwise for use in connection with the sale of the Contracts
                  or Fund shares; or




                           (b) arise out of or are based upon any untrue
                  statement or alleged untrue statement of a material fact made
                  by the Fund (other than statements or representations
                  contained in the Fund Registration Statement, Fund Prospectus
                  or sales literature or other promotional material of the Fund
                  not supplied by the Distributor or the Fund or persons under
                  their control) or wrongful conduct of the Fund or persons
                  under its control with respect to the sale or distribution of
                  the Contracts or Fund shares; or

                           (c) arise out of any untrue statement or alleged
                  untrue statement of a material fact contained in the
                  Contract's Registration Statement, Contracts Prospectus or
                  sales literature or other promotional material for the
                  Contracts (or any amendment or supplement thereto), or the
                  omission or alleged omission to state therein a material fact
                  required to be stated therein or necessary to make the
                  statements therein not misleading in light of the
                  circumstances in which they were made, if such statement or
                  omission was made in reliance upon information furnished in
                  writing by the Fund to the Company (or a person authorized in
                  writing to do so on behalf of the Fund); or

                           (d) arise as a result of any failure by the Fund to
                  provide the services and furnish the materials under the terms
                  of this Agreement (including, but not by way of limitation, a
                  failure, whether unintentional or in good faith or otherwise:
                  (i) to comply with the diversification requirements specified
                  in Sections 2.4 and 6.1 in Article VI of this Agreement; and
                  (ii) to provide the Company with accurate information
                  sufficient for it to calculate its accumulation and/or annuity
                  unit values

                                       13


                  in timely fashion as required by law and by the Contracts
                  Prospectuses); or

                           (e) arise out of any material breach by the Fund of
                  this Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

               8.3. INDEMNIFICATION PROCEDURES. After receipt by a party
entitled to indemnification ("indemnified party") under this Article VIII of
notice of the commencement of any action, if a claim in respect thereof is to be
made by the indemnified party against any person obligated to provide
indemnification under this Article VIII ("indemnifying party"), such indemnified
party will notify the indemnifying party in writing of the commencement thereof
as soon as practicable thereafter, provided that the omission to so notify the
indemnifying party will not relieve it from any liability under this Article
VIII, except to the extent that the omission results in a failure of actual
notice to the indemnifying party and such indemnifying party is damaged solely
as a result of the failure to give such notice. The indemnifying party, upon the
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.

               A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article VIII.
The indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

               9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

               9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those

                                       14


statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.


ARTICLE X. TERMINATION

         10.1. This Agreement shall terminate:

                                    (a)     at the option of any party upon 120
                   days advance written notice to the other parties; or

                                    (b) at the option of the Company if shares
                   of the Fund are not available to meet the requirements of the
                   Contracts as determined by the Company. Prompt notice of the
                   election to terminate for such cause shall be furnished by
                   the Company. Termination shall be effective ten days after
                   the giving of notice by the Company; or

                                    (c) at the option of the Fund upon
                   institution of formal proceedings against the Company by the
                   NASD, the SEC, the insurance commission of any state or any
                   other regulatory body regarding the Company's duties under
                   this Agreement or related to the sale of the Contracts, the
                   operation of the Account, the administration of the Contracts
                   or the purchase of Fund shares;

                                    (d) at the option of the Company upon
                  institution of formal proceedings against the Fund, the
                  investment advisor or any sub-investment advisor, by the
                  NASD, the SEC, or any state securities or insurance commission
                  or any other regulatory body; or

                                    (e) upon requisite vote of the Contract
                  owners having an interest in the Fund (unless otherwise
                  required by applicable law) and written approval of the
                  Company, to substitute the shares of another investment
                  company for the corresponding shares of the Fund in accordance
                  with the terms of the Contracts; or

                                    (f) at the option of the Fund in the event
                  any of the Contracts are not registered, issued or sold in
                  accordance with applicable Federal and/or state law; or

                                    (g) at the option of the Company or the Fund
                  upon a determination by a majority of the Fund Board, or a
                  majority of disinterested Fund Board members, that an
                  irreconcilable material conflict exists among the interests of
                  (i) any Product owners or (ii) the interests of the
                  Participating Insurance Companies investing in the Fund; or

                           (h) at the option of the Company if the Fund ceases
                  to qualify as a Regulated Investment Company under Subchapter
                  M of the Code, or under any
                                       15


                  successor or similar provision, or if the Company reasonably
                  believes, based on an opinion of its counsel, that the Fund
                  may fail to so qualify; or

                           (i) at the option of the Company if the Fund fails to
                  meet the diversification requirements specified in Section
                  817(h) of the Code and any regulations thereunder; or

                           (j) at the option of the Fund if the Contracts cease
                  to qualify as annuity contracts or life insurance policies, as
                  applicable, under the Code, or if the Fund reasonably believes
                  that the Contracts may fail to so qualify; or

                           (k) at the option of the Fund if the Fund shall
                  determine, in its sole judgment exercised in good faith, that
                  either (1) the Company shall have suffered a material adverse
                  change in its business or financial condition; or (2) the
                  Company shall have been the subject of material adverse
                  publicity which is likely to have a material adverse impact
                  upon the business and operations of the Fund; or

                           (l) at the option of the Company, if the Company
                  shall determine, in its sole judgment exercised in good faith,
                  that: (1) the Fund shall have suffered a material adverse
                  change in its business or financial condition; or (2) the Fund
                  shall have been the subject of material adverse publicity
                  which is likely to have a material adverse impact upon the
                  business and operations of the Company; or

                           (m) automatically upon the assignment of this
                  Agreement (including, without limitation, any transfer of the
                  Contracts or the Accounts to another insurance company
                  pursuant to an assumption reinsurance agreement) unless the
                  non-assigning party consents thereto or unless this Agreement
                  is assigned to an affiliate of the Company or the Fund, as the
                  case may be.

          10.2. NOTICE REQUIREMENT. Except as otherwise provided in Section
10.1, no termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to the other party
of its intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                           (a) In the event that any termination is based upon
                  the provisions of Article VII or the provisions of Section
                  10.1(a) of this Agreement, such prior written notice shall be
                  given in advance of the effective date of termination as
                  required by such provisions; and

                           (b) in the event that any termination is based upon
                  the provisions of Section 10.1(c) or 10.1(d) of this
                  Agreement, such prior written notice shall be given at least
                  ninety (90) days before the effective date of termination, or
                  sooner if required by law or regulation.

         10.3.    EFFECT OF TERMINATION

                                       16


                           (a) Notwithstanding any termination of this Agreement
                  pursuant to Section 10.1 of this Agreement, the Fund will, at
                  the option of the Company, continue to make available
                  additional Fund shares for so long after the termination of
                  this Agreement as the Company desires, pursuant to the terms
                  and conditions of this Agreement as provided in paragraph (b)
                  below, for all Contracts in effect on the effective date of
                  termination of this Agreement (hereinafter referred to as
                  "Existing Contracts"). Specifically, without limitation, if
                  the Company so elects to make additional Fund shares
                  available, the owners of the Existing Contracts or the
                  Company, whichever shall have legal authority to do so, shall
                  be permitted to reallocate investments in the Fund, redeem
                  investments in the Fund and/or invest in the Fund upon the
                  making of additional purchase payments under the Existing
                  Contracts.
                           (b) If Fund shares continue to be made available
                  after such termination, the provisions of this Agreement shall
                  remain in effect except for Section 10.1(a) and thereafter
                  either the Fund or the Company may terminate the Agreement, as
                  so continued pursuant to this Section 10.3, upon prior written
                  notice to the other party, such notice to be for a period that
                  is reasonable under the circumstances but, if given by the
                  Fund, need not be for more than six months.

                           (c) The parties agree that this Section 10.3 shall
                  not apply to any termination made pursuant to Article VII, and
                  the effect of such Article VII termination shall be governed
                  by the provisions set forth or incorporated by reference
                  therein.

ARTICLE XI.  APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

               The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts
and to add new classes of variable annuity contracts and variable life insurance
policies to be issued by the Company through new or existing Separate Accounts
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such separate account and each such class of contracts or
policies, unless the context otherwise requires. Any such amendment must be
signed by the parties and must bear an effective date for that amendment.


ARTICLE XII.  NOTICES

               Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                           If to the Fund:

                    Lincoln National Equity-Income Fund, Inc.


                                       17


                                    1300 South Clinton Street
                                    Fort Wayne, Indiana 46802
                                    Attn: Kelly D. Clevenger

                           If to the Company:

                                    Lincoln National Life Insurance Co.
                                    1300 South Clinton Street
                                    Fort Wayne, Indiana 46802
                                    Attn: Steven M. Kluever




ARTICLE XIII.  MISCELLANEOUS

          13.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

          13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

          13.3. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

          13.4. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

          13.5. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


ARTICLE XIV.  PRIOR AGREEMENTS

         This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18



            IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                    LINCOLN NATIONAL EQUITY-INCOME FUND, INC.



Signature: /s/ Kelly D.Clevenger
          --------------------------------------------------------

Name: Kelly D.Clevenger
      ------------------------------------------------------------

Title: President
       -----------------------------------------------------------


                  LINCOLN NATIONAL LIFE INSURANCE CO. (Company)



Signature: /s/ Stephen H. Lewis
          --------------------------------------------------------

Name: Stephen H. Lewis
      ------------------------------------------------------------

Title: Senior Vice President, Lincoln National Life Insurance Company
       --------------------------------------------------------------


                                       19



                                   SCHEDULE 1

                    Lincoln National Equity-Income Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 1, 1998


Lincoln National Variable Annuity Account C
- -------------------------------------------

Lincoln Life Flexible Premium Variable Life Account K
- -----------------------------------------------------

Lincoln Life Variable Annuity Account Q
- ---------------------------------------

Lincoln National Variable Annuity Account 53
- --------------------------------------------




                                       20




                                   SCHEDULE 2


                   Lincoln National Equity-Income Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 1, 1998


Multi Fund Variable Annuity
- ---------------------------

eAnnuity
- --------

Multi Fund Variable Life
- ------------------------

Group Multi Fund
- ----------------

Multi Fund - Non-registered
- ---------------------------


                                       21

                                   SCHEDULE 3


                    Lincoln National Equity-Income Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998


The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 331/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing" as
that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.       An international FUND or a global FUND is sufficiently diversified if
         it is invested in a minimum of three different countries at all times,
         and has invested no more than 50 percent of total assets in any one
         second-tier country and no more than 25 percent of total assets in any
         one third-tier country. First-tier countries are: Germany, the United
         Kingdom, Japan, the United States, France, Canada, and Australia.
         Second-tier countries are all countries not in the first or third tier.
         Third-tier countries are countries identified as "emerging" or
         "developing" by the International Bank for Reconstruction and
         Development ("World Bank") or International Finance Corporation.

b.       A regional FUND is sufficiently diversified if it is invested in a
         minimum of three countries. The name of the fund must accurately
         describe the FUND.

c.       The name of the single country FUND must accurately describe the FUND.

d.       An index FUND must substantially mirror the index.


                                       22


                                  Amendment to
                                   Schedule 2
                                   ----------

                    Lincoln National Equity-Income Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                             As of October 15, 1999

MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

LINCOLN VUL

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED
           DB
LINCOLN VUL




IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                                          LINCOLN NATIONAL EQUITY-INCOME
                                          FUND, INC.


Date:                                     By: /s/ Kelly D. Clevenger
    -----------------------                  -----------------------------
                                             Kelly D. Clevenger
                                             President and Chairman


                                          LINCOLN NATIONAL LIFE
                                          INSURANCE COMPANY

Date:                                     By: /s/ Stephen H. Lewis
    -----------------------                  -----------------------------
                                             Stephen H. Lewis
                                             Senior Vice President





                                  Amendment to
                                   Schedule 1
                                   ----------

                   Lincoln National Equity-Income Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                             Investing in the Fund
                               As of May 1, 1999


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53





                                  Amendment to
                                   Schedule 2
                                   ----------

                    Lincoln National Equity-Income Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of May 1, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

LINCOLN VUL

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED





IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.

                                          LINCOLN NATIONAL EQUITY-INCOME
                                          FUND, INC.


Date:                                     By:
    -----------------------                  -----------------------------
                                             Kelly D. Clevenger
                                             President and Chairman


                                          LINCOLN NATIONAL LIFE
                                          INSURANCE COMPANY

Date:                                     By:
    -----------------------                  -----------------------------
                                             Stephen H. Lewis
                                             Senior Vice President




     The Fund Participation Agreement (the "Agreement"), dated July 1, 1998, by
and among The Lincoln National Life Insurance Company and Lincoln National
Equity-Income Fund, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

     "WHEREAS, the Company has registered or will have registered each Account
with the SEC (unless exempt therefrom) as a unit investment trust under the 1940
Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

     "The Company represents and warrants (a) that the Contracts are registered
     under the 1933 Act or will be so registered before the issuance thereof
     (unless exempt therefrom), (b) that the Contracts will be issued in
     compliance in all material respects with all applicable Federal and state
     laws and (c) that the Company will require of every person distributing the
     Contracts that the Contracts be offered and sold in compliance in all
     material respects with all applicable Federal and state laws. The Company
     further represents and warrants that it is an insurance company duly
     organized and validly existing under applicable law and that it has legally
     and validly authorized each Account as a separate account under Section
     27-1-5-1 of the Indiana Insurance Code, and has registered or, prior to the
     issuance of any Contracts, will register each Account (unless exempt
     therefrom) as a unit investment trust in accordance with the provisions of
     the 1940 Act to serve as a separate account for its Contracts, and that it
     will maintain such registrations for so long as any Contracts issued under
     them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the
Fund Participation Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.


                                          LINCOLN NATIONAL EQUITY-INCOME
                                          FUND, INC.


Date:                                     By: /s/ Kelly D. Clevenger
    -----------------------                  -----------------------------
                                          Name: Kelly D. Clevenger
                                                -----------------------------
                                          Title: President
                                                -----------------------------

                                          LINCOLN NATIONAL LIFE
                                          INSURANCE COMPANY

Date:                                     By: /s/ Stephen H. Lewis
    -----------------------                  -----------------------------
                                          Name: Stephen H. Lewis
                                               -----------------------------
                                          Title: Senior Vice President
                                               -----------------------------



                                  Amendment to
                                   SCHEDULE 2

                    Lincoln National Equity-Income Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 15, 2001


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GROUP MULTI FUND

LINCOLN VUL

LINCOLN SVUL

LINCOLN CVUL

LINCOLN CVUL III

MULTI FUND - NON-REGISTERED

LINCOLN VUL(DB)




IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                                    LINCOLN NATIONAL EQUITY-INCOME  FUND, INC.


Date:                               By:/s/Kelly D. Clevenger
       -------------------------      ---------------------------------------
                                       Kelly D. Clevenger
                                       Chairman and President

                                    THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date:                               By:/s/Steven M. Kluever
      --------------------------      ----------------------------------------
                                       Steven M. Kluever
                                       Second Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                  LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.


               THIS AGREEMENT, made and entered into this 1st day of July, 1998,
by and between Lincoln National Growth and Income Fund, Inc. a corporation
organized under the laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE
INSURANCE CO., an Indiana insurance corporation (the "Company"), on its own
behalf and on behalf of each separate account of the Company named in Schedule 1
to this Agreement as in effect at the time this Agreement is executed and such
other separate accounts that may be added to Schedule 1 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account"; collectively, the "Accounts").

               WHEREAS, the Fund is engaged in business as an open-end
management investment company and was established for the purpose of serving as
the investment vehicle for separate accounts established for variable life
insurance policies and variable annuity contracts (collectively referred to as
"Variable Insurance Products," the owners of such products being referred to as
"Product owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

               WHEREAS, the Fund filed with the Securities and Exchange
Commission (the "SEC") and the SEC has declared effective a registration
statement (referred to herein as the "Fund Registration Statement" and the
prospectus contained therein, or filed pursuant to Rule 497 under the 1933 Act,
referred to herein as the "Fund Prospectus") on Form N-lA to register itself as
an open-end management investment company (File No. 811-3212) under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Fund shares
(File No. 2-80743) under the Securities Act of 1933, as amended (the "1933
Act"); and

               WHEREAS, the Company has filed a registration statement with the
SEC to register under the 1933 Act (unless exempt therefrom) certain variable
annuity contracts and/or variable life insurance policies described in Schedule
2 to this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and



               WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

               WHEREAS, the Company has registered or will have registered each
Account with the SEC as a unit investment trust under the 1940 Act before any
Contracts are issued by that Account; and

               WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value; and

               WHEREAS, pursuant to Articles of Merger approved by the Company
in 1988, the Company succeeded to all the legal rights and responsibilities of
Lincoln National Pension Insurance Company, the signatory to the original
Agreement to Purchase Shares, which this Agreement amends and restates.

               NOW, THEREFORE, in consideration of their mutual promises, the
Company and the Fund agree as follows:


ARTICLE I.  SALE OF FUND SHARES

               1.1. The Fund agrees to sell to the Company those shares which
the Company orders on behalf of the Account, executing such orders on a daily
basis in accordance with Section 1.4 of this Agreement.

               1.2. The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

               1.3. The Fund agrees to redeem, at the Company's request, any
full or fractional shares of the Fund held by the Account or the Company,
executing such requests at the net asset value on a daily basis (LL will expect
same day redemption wires unless unusual circumstances evolve which cause the
Fund to have to redeem securities) in accordance with Section 1.4 of this
Agreement, the applicable provisions of the 1940 Act and the then currently
effective Fund Prospectus. Notwithstanding the foregoing, the Fund may delay
redemption of Fund shares to the


                                       2


extent permitted by the 1940 Act, any rules, regulations or orders thereunder,
or the then currently effective Fund Prospectus.

               1.4       (a) For purposes of Sections 1.1, 1.2 and 1.3, the

                    Company shall be the agent of the Fund for the limited
                    purpose of receiving redemption and purchase requests from
                    the Account (but not from the general account of the
                    Company), and receipt on any Business Day by the Company as
                    such limited agent of the Fund prior to the time prescribed
                    in the current Fund Prospectus (which as of the date of
                    execution of this Agreement is 4 p.m., E.S.T.) shall
                    constitute receipt by the Fund on that same Business Day,
                    provided that the Fund receives notice of such redemption or
                    purchase request by 9:00 a.m., E.S.T. on the next following
                    Business Day. For purposes of this Agreement, "Business Day"
                    shall mean any day on which the New York Stock exchange is
                    open for trading.

                         (b) The Company shall pay for the shares on the same
                    day that it places an order with the Fund to purchase those
                    Fund shares for an Account. Payment for Fund shares will be
                    made by the Account or the Company in Federal Funds
                    transmitted to the Fund by wire to be received by 11:00
                    a.m., E.S.T. on the day the Fund is properly notified of the
                    purchase order for shares. The Fund will confirm receipt of
                    each trade and these confirmations will be received by the
                    Company via Fax or Email by 3:00 p.m. E.S.T. If Federal
                    Funds are not received on time, such funds will be invested,
                    and shares purchased thereby will be issued, as soon as
                    practicable.

                         (c) Payment for shares redeemed by the Account or the
                    Company will be made in Federal Funds transmitted to the
                    Company by wire on the same day the Fund is notified of the
                    redemption order of shares, except that the Fund reserves
                    the right to delay payment of redemption proceeds, but in no
                    event may such payment be delayed longer than the period
                    permitted under Section 22(e) of the 1940 Act. The Fund
                    shall not bear any responsibility whatsoever for the proper
                    disbursement or crediting of redemption proceeds if
                    securities must be redeemed; the Company alone shall be
                    responsible for such action.

               1.5. Issuance and transfer of Fund shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund shares will be recorded in an
appropriate ledger for the Account or the appropriate subaccount of the Account.

               1.6. The Fund shall furnish notice as soon as reasonably
practicable to the Company of any income dividends or capital gain distributions
payable on any shares. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any shares in the form of additional shares of that Fund. The Company reserves
the right, on its behalf and on behalf of the Account, to revoke this election
and to receive all such dividends in cash. The Fund shall notify the Company of
the number of shares so issued as payment of such dividends and distributions.


                                       3


               1.7. The Fund shall use its best efforts to make the net asset
value per share available to the Company by 7:00 p.m., E.S.T. each Business Day,
and in any event, as soon as reasonably practicable after the net asset value
per share is calculated, and shall calculate such net asset value in accordance
with the then currently effective Fund Prospectus. The Fund shall not be liable
for any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

               1.8.      (a) The Company may withdraw the Account's investment
                    in the Fund only: (i) as necessary to facilitate Contract
                    owner requests; (ii) upon a determination by a majority of
                    the Fund Board, or a majority of disinterested Fund Board
                    members, that an irreconcilable material conflict exists
                    among the interests of (x) any Product Owners or (y) the
                    interests of the Participating Insurance Companies investing
                    in the Fund; (iii) upon requisite vote of the Contractowners
                    having an interest in the Fund to substitute the shares of
                    another investment company for shares in accordance with the
                    terms of the Contracts; (iv) as required by state and/or
                    federal laws or regulations or judicial or other legal
                    precedent of general application; or (v) at the Company's
                    sole discretion, pursuant to an order of the SEC under
                    Section 26(b) of the 1940 Act.

                         (b) The parties hereto acknowledge that the arrangement
                    contemplated by this Agreement is not exclusive and that the
                    Fund shares may be sold to other insurance companies
                    (subject to Section 1.9 hereof) and the cash value of the
                    Contracts may be invested in other investment companies.

                         (c) The Company shall not, without prior notice to the
                    Fund (unless otherwise required by applicable law), take any
                    action to operate the Accounts as management investment
                    companies under the 1940 Act.

               1.9. The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II.  REPRESENTATIONS AND WARRANTIES

               2.1. The Company represents and warrants (a) that the Contracts
are registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and


                                       4


validly existing under applicable law and that it has legally and validly
authorized each Account as a separate account under Section 27-1-5-1 of the
Indiana Insurance Code, and has registered or, prior to the issuance of any
Contracts, will register each Account (unless exempt therefrom) as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
separate account for its Contracts, and that it will maintain such registrations
for so long as any Contracts issued under them are outstanding.

               2.2. The Fund represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for so long as the Fund shares
are sold. The Fund further represents and warrants that it is a corporation duly
organized and in good standing under the laws of Maryland.

               2.3. The Fund represents and warrants that it currently qualifies
as a Regulated Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). The Fund further represents and warrants
that it will make every effort to continue to qualify and to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

               2.4. The Fund represents and warrants that it will comply with
Section 817(h) of the Code, and all regulations issued thereunder.

               2.5. The Company represents that the Contracts are currently and
at the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

               2.6. The Fund represents that the Fund's investment policies,
fees and expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

               2.7. The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
INFORMATION

               3.1. The Fund shall provide the Company with as many copies of
the current Fund


                                       5


Prospectus as the Company may reasonably request. If requested by the Company in
lieu thereof, the Fund at its expense shall provide to the Company a
camera-ready copy, and electronic version, of the current Fund Prospectus
suitable for printing and other assistance as is reasonably necessary in order
for the Company to have a new Contracts Prospectus printed together with the
Fund Prospectus in one document. See Article V for a detailed explanation of the
responsibility for the cost of printing and distributing Fund prospectuses.

               3.2. The Fund Prospectus shall state that the Statement of
Additional Information for the Fund is available from the Fund and the Fund
shall provide such Statement free of charge to the Company and to any
outstanding or prospective Contract owner who requests such Statement.

               3.3.      (a) The Fund at its expense shall provide to the
                    Company a camera-ready copy of the Fund's shareholder
                    reports and other communications to shareholders (except
                    proxy material), in each case in a form suitable for
                    printing, as determined by the Company. The Fund shall be
                    responsible for the costs of printing and distributing these
                    materials to Contract owners.

                         (b) The Fund at its expense shall be responsible for
                    preparing, printing and distributing its proxy material. The
                    Company will provide the appropriate Contractowner names and
                    addresses to the Fund for this purpose.

               3.4. The Company shall furnish to the Fund, prior to its use,
each piece of sales literature or other promotional material in which the Fund
is named. No such material shall be used, except with the prior written
permission of the Fund. The Fund agrees to respond to any request for approval
on a prompt and timely basis. Failure of the Fund to respond within 10 days of
the request by the Company shall relieve the Company of the obligation to obtain
the prior written permission of the Fund.

               3.5. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.

               3.6. The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the


                                       6


Company. The Company agrees to respond to any request for permission on a prompt
and timely basis. If the Company fails to respond within 10 days of a request by
the Fund, then the Fund is relieved of the obligation to obtain the prior
written permission of the Company.

               3.7. The Fund will provide to the Company at least one complete
copy of all Fund Registration Statements, Fund Prospectuses, Statements of
Additional Information, annual and semi-annual reports and other reports, proxy
statements, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments or supplements to
any of the above, that relate to the Fund or Fund shares, within 20 days after
the filing of such document with the SEC or other regulatory authorities.

               3.8. The Company will provide to the Fund at least one complete
copy of all Contracts Registration Statements, Contracts Prospectuses,
Statements of Additional Information, Annual and Semi-annual Reports, sales
literature and other promotional materials, and all amendments or supplements to
any of the above, that relate to the Contracts, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

               3.9. Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

               3.10. For purposes of this Article III, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, computer net site, signs or billboards, motion pictures or
other public media), sales literature (I.E., any written communication
distributed or made generally available to customers or the public, in print or
electronically, including brochures, circulars, research reports, market
letters, form letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, registration statements, prospectuses,
Statements of Additional Information, shareholder reports and proxy materials,
and any other material constituting sales literature or advertising under NASD
rules, the 1940 Act or the 1933 Act.


ARTICLE IV.  Voting

               4.1 Subject to applicable law and the requirements of Article
VII, the Fund shall solicit voting instructions from Contract owners;


                                       7


               4.2 Subject to applicable law and the requirements of Article
VII, the Company shall:

                         (a) vote Fund shares attributable to Contract owners in
                    accordance with instructions or proxies received in timely
                    fashion from such Contract owners;

                         (b) vote Fund shares attributable to Contract owners
                    for which no instructions have been received in the same
                    proportion as Fund shares of such Series for which
                    instructions have been received in timely fashion; and

                         (c) vote Fund shares held by the Company on its own
                    behalf or on behalf of the Account that are not attributable
                    to Contract owners in the same proportion as Fund shares of
                    such Series for which instructions have been received in
                    timely fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.


ARTICLE V. FEES AND EXPENSES

               All expenses incident to performance by the Fund under this
Agreement (including expenses expressly assumed by the Fund pursuant to this
Agreement) shall be paid by the Fund to the extent permitted by law. Except as
may otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.

               The Fund is responsible for the cost of printing and distributing
Fund Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

               The Company is responsible for the cost of printing and
distributing Fund prospectuses and SAIs for new sales; and Account Prospectuses
and SAIs for existing Contractowners. The Company shall have the final decision
on choice of printer for all Prospectuses and SAIs.


ARTICLE VI.  COMPLIANCE UNDERTAKINGS

               6.1. The Fund undertakes to comply with Subchapter M and Section
817(h) of the


                                       8


Code, and all regulations issued thereunder.

               6.2. The Company shall amend the Contracts Registration
Statements under the 1933 Act and the Account's Registration Statement under the
1940 Act from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable law. The
Company shall register and qualify the Contracts for sale to the extent required
by applicable securities laws of the various states.

               6.3. The Fund shall amend the Fund Registration Statement under
the 1933 Act and the 1940 Act from time to time as required in order to effect
for so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

               6.4. The Company shall be responsible for assuring that any
prospectus offering a Contract that is a life insurance contract where it is
reasonably possible that such Contract would be deemed a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will describe
the circumstances under which a Contract could be treated as a modified
endowment contract (or policy).

               6.5. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of
Directors, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-1 to finance distribution expenses.

               6.6.      (a) When appropriate in order to inform the Fund of any
                    applicable state-mandated investment restrictions with which
                    the Fund must comply, the Company shall arrange with the
                    Fund to amend Schedule 3, pursuant to the requirements of
                    Article XI.

                         (b) Should the Fund become aware of any restrictions
                    which may be appropriate for inclusion in Schedule 3, the
                    Company shall be informed immediately of the substance of
                    those restrictions.


ARTICLE VII.  POTENTIAL CONFLICTS

               7.1. The Company agrees to report to the Board of Directors of
the Fund (the "Board") any potential or existing conflicts between the interests
of Product Owners of all separate accounts investing in the Fund, and to assist
the Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider
any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

               7.2. If a majority of the Board, or a majority of disinterested
Board Members, determines that a material irreconcilable conflict exists, the
Board shall give prompt notice to all


                                       9


Participating Insurance Companies.

                         (a) If a majority of the whole Board, after notice to
                    the Company and a reasonable opportunity for the Company to
                    appear before it and present its case, determines that the
                    Company is responsible for said conflict, and if the Company
                    agrees with that determination, the Company shall, at its
                    sole cost and expense, take whatever steps are necessary to
                    remedy the material irreconcilable conflict. These steps
                    could include: (i) withdrawing the assets allocable to some
                    or all of the affected Accounts from the Fund and
                    reinvesting such assets in a different investment vehicle,
                    or submitting the question of whether such segregation
                    should be implemented to a vote of all affected
                    Contractowners and, as appropriate, segregating the assets
                    of any particular group (i.e., variable annuity
                    Contractowners, variable life insurance policyowners, or
                    variable Contractowners of one or more Participating
                    Insurance Companies) that votes in favor of such
                    segregation, or offering to the affected Contractowners the
                    option of making such a change; and (ii) establishing a new
                    registered mutual fund or management separate account; or
                    (iii) taking such other action as is necessary to remedy or
                    eliminate the material irreconcilable conflict.

                         (b) If the Company disagrees with the Board's
                    determination, the Company shall file a written protest with
                    the Board, reserving its right to dispute the determination
                    as between just the Company and the Fund and to seek
                    reimbursement from the Fund for the reasonable costs and
                    expenses of resolving the conflict . After reserving that
                    right the Company, although disagreeing with the Board that
                    it (the Company) was responsible for the conflict, shall
                    take the necessary steps, under protest, to remedy the
                    conflict, substantially in accordance with paragraph (a)
                    just above, for the protection of Contractowners.

                         (c) As between the Company and the Fund, if within 45
                    days after the Board's determination the Company elects to
                    press the dispute, it shall so notify the Board in writing.
                    The parties shall then attempt to resolve the matter
                    amicably through negotiation by individuals from each party
                    who are authorized to settle the matter. If the matter has
                    not been amicably resolved within 60 days from the date of
                    the Company's notice of its intent to press the dispute,
                    then before either party shall undertake to litigate the
                    dispute it shall be submitted to non-binding arbitration
                    conducted expeditiously in accordance with the CPR Rules for
                    Non-Administered Arbitration of Business Disputes, by a sole
                    arbitrator; PROVIDED, HOWEVER, that if one party has
                    requested the other party to seek an amicable resolution and
                    the other party has failed to participate, the requesting
                    party may initiate arbitration before expiration of the
                    60-day period set out just above.

                       If within 45 days of the commencement of the process to
                    select an arbitrator the parties cannot agree upon the
                    arbitrator, then he or she will be selected from the CPR
                    Panels of Neutrals. The arbitration shall be governed by the
                    United States Arbitration Act, 9 U.S.C. Sec. 1-16. The place
                    of arbitration shall be Fort Wayne, Indiana. The Arbitrator
                    is not empowered to award damages in excess of


                                       10


                    compensatory damages.

                         (d) If the Board shall determine that the Fund or
                    another was responsible for the conflict, then the Board
                    shall notify the Company immediately of that determination.
                    The Fund shall assure the Company that it (the Fund) or that
                    other Participating Insurance Company as applicable, shall,
                    at its sole cost and expense, take whatever steps are
                    necessary to eliminate the conflict.

                         (e) Nothing in Sections 7.2(b) or 7.2(c) shall
                    constitute a waiver of any right of action which the Company
                    may have against other Participating Insurance Companies for
                    reimbursement of all or part of the costs and expenses of
                    resolving the conflict.

               7.3. If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

               7.4. For purposes of this Article, a majority of the
disinterested members of the Board shall determine whether or not any proposed
action adequately remedies any irreconcilable conflict. However, in no event
will the Fund be required to establish a new funding medium for any variable
contract, nor will the Company be required to establish a new funding medium for
any Contract, if in either case an offer to do so has been declined by a vote of
a majority of affected Contractowners.


ARTICLE VIII.  INDEMNIFICATION

               8.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Fund and each person who controls or is
associated with the Fund (other than another Participating Insurance Company)
within the meaning of such terms under the federal securities laws and any
officer, trustee, director, employee or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Company in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                         (a) arise out of or are based upon any untrue
                    statement or alleged untrue statement of any material fact
                    contained in the Contracts Registration Statement, Contracts
                    Prospectus, sales literature or other promotional material
                    for the Contracts or the Contracts themselves (or any
                    amendment or supplement to any of the foregoing), or arise
                    out of or are based upon the omission or the alleged
                    omission to state therein a material fact required to be
                    stated therein or necessary to make the statements therein
                    not misleading in light of the circumstances in which they
                    were made; provided that this obligation to indemnify shall
                    not apply if such


                                       11


                    statement or omission or such alleged statement or alleged
                    omission was made in reliance upon and in conformity with
                    information furnished in writing to the Company by the Fund
                    (or a person authorized in writing to do so on behalf of the
                    Fund) for use in the Contracts Registration Statement,
                    Contracts Prospectus or in the Contracts or sales literature
                    (or any amendment or supplement) or otherwise for use in
                    connection with the sale of the Contracts or Fund shares; or

                         (b) arise out of or are based upon any untrue statement
                    or alleged untrue statement of a material fact by or on
                    behalf of the Company (other than statements or
                    representations contained in the Fund Registration
                    Statement, Fund Prospectus or sales literature or other
                    promotional material of the Fund not supplied by the Company
                    or persons under its control) or wrongful conduct of the
                    Company or persons under its control with respect to the
                    sale or distribution of the Contracts or Fund shares; or

                         (c) arise out of any untrue statement or alleged untrue
                    statement of a material fact contained in the Fund
                    Registration Statement, Fund Prospectus or sales literature
                    or other promotional material of the Fund or any amendment
                    thereof or supplement thereto, or the omission or alleged
                    omission to state therein a material fact required to be
                    stated therein or necessary to make the statements therein
                    not misleading in light of the circumstances in which they
                    were made, if such statement or omission was made in
                    reliance upon and in conformity with information furnished
                    to the Fund by or on behalf of the Company; or

                         (d) arise as a result of any failure by the Company to
                    provide the services and furnish the materials or to make
                    any payments under the terms of this Agreement; or

                         (e) arise out of any material breach by the Company of
                    this Agreement, including but not limited to any failure to
                    transmit a request for redemption or purchase of Fund shares
                    on a timely basis in accordance with the procedures set
                    forth in Article I; or

                         (f) arise as a result of the Company's providing the
                    Fund with inaccurate information, which causes the Fund to
                    calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

               8.2. INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify
and hold harmless the Company and each person who controls or is associated with
the Company within the meaning of such terms under the federal securities laws
and any officer, director, employee or agent of the foregoing, against any and
all losses, claims, damages or liabilities, joint or several (including any


                                       12


investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                         (a) arise out of or are based upon any untrue
                    statement or alleged untrue statement of any material fact
                    contained in the Fund Registration Statement, Fund
                    Prospectus (or any amendment or supplement thereto) or sales
                    literature or other promotional material of the Fund, or
                    arise out of or are based upon the omission or the alleged
                    omission to state therein a material fact required to be
                    stated therein or necessary to make the statements therein
                    not misleading in light of the circumstances in which they
                    were made; provided that this obligation to indemnify shall
                    not apply if such statement or omission or alleged statement
                    or alleged omission was made in reliance upon and in
                    conformity with information furnished in writing by the
                    Company to the Fund for use in the Fund Registration
                    Statement, Fund Prospectus (or any amendment or supplement
                    thereto) or sales literature for the Fund or otherwise for
                    use in connection with the sale of the Contracts or Fund
                    shares; or

                         (b) arise out of or are based upon any untrue statement
                    or alleged untrue statement of a material fact made by the
                    Fund (other than statements or representations contained in
                    the Fund Registration Statement, Fund Prospectus or sales
                    literature or other promotional material of the Fund not
                    supplied by the Distributor or the Fund or persons under
                    their control) or wrongful conduct of the Fund or persons
                    under its control with respect to the sale or distribution
                    of the Contracts or Fund shares; or

                         (c) arise out of any untrue statement or alleged untrue
                    statement of a material fact contained in the Contract's
                    Registration Statement, Contracts Prospectus or sales
                    literature or other promotional material for the Contracts
                    (or any amendment or supplement thereto), or the omission or
                    alleged omission to state therein a material fact required
                    to be stated therein or necessary to make the statements
                    therein not misleading in light of the circumstances in
                    which they were made, if such statement or omission was made
                    in reliance upon information furnished in writing by the
                    Fund to the Company (or a person authorized in writing to do
                    so on behalf of the Fund); or

                         (d) arise as a result of any failure by the Fund to
                    provide the services and furnish the materials under the
                    terms of this Agreement (including, but not by way of
                    limitation, a failure, whether unintentional or in good
                    faith or otherwise: (i) to comply with the diversification
                    requirements specified in Sections 2.4 and 6.1 in Article VI
                    of this Agreement; and (ii) to provide the Company with
                    accurate information sufficient for it to calculate its
                    accumulation and/or annuity unit values


                                       13


                    in timely fashion as required by law and by the Contracts
                    Prospectuses); or

                         (e) arise out of any material breach by the Fund of
                    this Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

               8.3. INDEMNIFICATION PROCEDURES. After receipt by a party
entitled to indemnification ("indemnified party") under this Article VIII of
notice of the commencement of any action, if a claim in respect thereof is to be
made by the indemnified party against any person obligated to provide
indemnification under this Article VIII ("indemnifying party"), such indemnified
party will notify the indemnifying party in writing of the commencement thereof
as soon as practicable thereafter, provided that the omission to so notify the
indemnifying party will not relieve it from any liability under this Article
VIII, except to the extent that the omission results in a failure of actual
notice to the indemnifying party and such indemnifying party is damaged solely
as a result of the failure to give such notice. The indemnifying party, upon the
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.

               A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this Article VIII.
The indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

               9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

               9.2. This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those


                                       14


statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.


ARTICLE X. TERMINATION

              10.1. This Agreement shall terminate:

                         (a)  at the option of any party upon 120 days advance
                    written notice to the other parties; or

                         (b)  at the option of the Company if shares of the Fund
                    are not available to meet the requirements of the Contracts
                    as determined by the Company. Prompt notice of the election
                    to terminate for such cause shall be furnished by the
                    Company. Termination shall be effective ten days after the
                    giving of notice by the Company; or

                         (c)  at the option of the Fund upon institution of
                    formal proceedings against the Company by the NASD, the SEC,
                    the insurance commission of any state or any other
                    regulatory body regarding the Company's duties under this
                    Agreement or related to the sale of the Contracts, the
                    operation of the Account, the administration of the
                    Contracts or the purchase of Fund shares;

                         (d)  at the option of the Company upon institution of
                    formal proceedings against the Fund, the investment advisor
                    or any sub- investment advisor, by the NASD, the SEC, or any
                    state securities or insurance commission or any other
                    regulatory body; or

                         (e)  upon requisite vote of the Contract owners having
                    an interest in the Fund (unless otherwise required by
                    applicable law) and written approval of the Company, to
                    substitute the shares of another investment company for the
                    corresponding shares of the Fund in accordance with the
                    terms of the Contracts; or

                         (f)  at the option of the Fund in the event any of the
                    Contracts are not registered, issued or sold in accordance
                    with applicable Federal and/or state law; or

                         (g)  at the option of the Company or the Fund upon a
                    determination by a majority of the Fund Board, or a majority
                    of disinterested Fund Board members, that an irreconcilable
                    material conflict exists among the interests of (i) any
                    Product owners or (ii) the interests of the Participating
                    Insurance Companies investing in the Fund; or

                         (h)  at the option of the Company if the Fund ceases to
                    qualify as a Regulated Investment Company under Subchapter M
                    of the Code, or under any


                                       15


                    successor or similar provision, or if the Company reasonably
                    believes, based on an opinion of its counsel, that the Fund
                    may fail to so qualify; or

                         (i)  at the option of the Company if the Fund fails to
                    meet the diversification requirements specified in Section
                    817(h) of the Code and any regulations thereunder; or

                         (j)  at the option of the Fund if the Contracts cease
                    to qualify as annuity contracts or life insurance policies,
                    as applicable, under the Code, or if the Fund reasonably
                    believes that the Contracts may fail to so qualify; or

                         (k)  at the option of the Fund if the Fund shall
                    determine, in its sole judgment exercised in good faith,
                    that either (1) the Company shall have suffered a material
                    adverse change in its business or financial condition; or
                    (2) the Company shall have been the subject of material
                    adverse publicity which is likely to have a material adverse
                    impact upon the business and operations of the Fund; or

                         (l)  at the option of the Company, if the Company shall
                    determine, in its sole judgment exercised in good faith,
                    that: (1) the Fund shall have suffered a material adverse
                    change in its business or financial condition; or (2) the
                    Fund shall have been the subject of material adverse
                    publicity which is likely to have a material adverse impact
                    upon the business and operations of the Company; or

                         (m)  automatically upon the assignment of this
                    Agreement (including, without limitation, any transfer of
                    the Contracts or the Accounts to another insurance company
                    pursuant to an assumption reinsurance agreement) unless the
                    non-assigning party consents thereto or unless this
                    Agreement is assigned to an affiliate of the Company or the
                    Fund, as the case may be.

              10.2. NOTICE REQUIREMENT. Except as otherwise provided in Section
10.1, no termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to the other party
of its intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                         (a)  In the event that any termination is based upon
                    the provisions of Article VII or the provisions of Section
                    10.1(a) of this Agreement, such prior written notice shall
                    be given in advance of the effective date of termination as
                    required by such provisions; and

                         (b)  in the event that any termination is based upon
                    the provisions of Section 10.1(c) or 10.1(d) of this
                    Agreement, such prior written notice shall be given at least
                    ninety (90) days before the effective date of termination,
                    or sooner if required by law or regulation.

              10.3. EFFECT OF TERMINATION


                                       16


                         (a)  Notwithstanding any termination of this Agreement
                    pursuant to Section 10.1 of this Agreement, the Fund will,
                    at the option of the Company, continue to make available
                    additional Fund shares for so long after the termination of
                    this Agreement as the Company desires, pursuant to the terms
                    and conditions of this Agreement as provided in paragraph
                    (b) below, for all Contracts in effect on the effective date
                    of termination of this Agreement (hereinafter referred to as
                    "Existing Contracts"). Specifically, without limitation, if
                    the Company so elects to make additional Fund shares
                    available, the owners of the Existing Contracts or the
                    Company, whichever shall have legal authority to do so,
                    shall be permitted to reallocate investments in the Fund,
                    redeem investments in the Fund and/or invest in the Fund
                    upon the making of additional purchase payments under the
                    Existing Contracts.

                         (b)  If Fund shares continue to be made available after
                    such termination, the provisions of this Agreement shall
                    remain in effect except for Section 10.1(a) and thereafter
                    either the Fund or the Company may terminate the Agreement,
                    as so continued pursuant to this Section 10.3, upon prior
                    written notice to the other party, such notice to be for a
                    period that is reasonable under the circumstances but, if
                    given by the Fund, need not be for more than six months.

                         (c)  The parties agree that this Section 10.3 shall not
                    apply to any termination made pursuant to Article VII, and
                    the effect of such Article VII termination shall be governed
                    by the provisions set forth or incorporated by reference
                    therein.


ARTICLE XI.  APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

              The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts
and to add new classes of variable annuity contracts and variable life insurance
policies to be issued by the Company through new or existing Separate Accounts
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such separate account and each such class of contracts or
policies, unless the context otherwise requires. Any such amendment must be
signed by the parties and must bear an effective date for that amendment.


ARTICLE XII.  NOTICES

              Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                   If to the Fund:

                            Lincoln National Growth and Income Fund, Inc.


                                       17


                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Kelly D. Clevenger

                   If to the Company:

                            Lincoln National Life Insurance Co.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Steven M. Kluever


ARTICLE XIII.  MISCELLANEOUS

              13.1. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.

              13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

              13.3. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.

              13.4. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

              13.5. Each party represents that the execution and delivery of
this Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate or trust action, as applicable,
by such party, and when so executed and delivered this Agreement will be the
valid and binding obligation of such party enforceable in accordance with its
terms.


ARTICLE XIV.  PRIOR AGREEMENTS

              This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18


              IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                       LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.



                    Signature: /s/ Kelly D. Clevenger
                              ------------------------------------------

                    Name: Kelly D. Clevenger
                         -----------------------------------------------

                    Title: President
                          ----------------------------------------------


                       LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


                    Signature: /s/ Stephen H. Lewis
                              ------------------------------------------

                    Name: Stephen H. Lewis
                         -----------------------------------------------

                    Title: Senior Vice President, Lincoln National Life
                              Insurance Company
                          ----------------------------------------------


                                       19


               The Fund Participation Agreement (the "Agreement"), dated July 1,
1998, by and among The Lincoln National Life Insurance Company and Lincoln
National Growth & Income, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

               "WHEREAS, the Company has registered or will have registered each
Account with the SEC (unless exempt therefrom) as a unit investment trust under
the 1940 Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

               "The Company represents and warrants (a) that the Contracts are
               registered under the 1933 Act or will be so registered before the
               issuance thereof (unless exempt therefrom), (b) that the
               Contracts will be issued in compliance in all material
               respects with all applicable Federal and state laws and (c)
               that the Company will require of every person distributing the
               Contracts that the Contracts be offered and sold in compliance
               in all material respects with all applicable Federal and state
               laws. The Company further represents and warrants that it is
               an insurance company duly organized and validly existing under
               applicable law and that it has legally and validly authorized
               each Account as a separate account under Section 27-1-5-1 of
               the Indiana Insurance Code, and has registered or, prior to
               the issuance of any Contracts, will register each Account
               (unless exempt therefrom) as a unit investment trust in
               accordance with the provisions of the 1940 Act to serve as a
               separate account for its Contracts, and that it will maintain
               such registrations for so long as any Contracts issued under
               them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the
Fund Participation Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.


                                        LINCOLN NATIONAL GROWTH & INCOME
                                        FUND, INC.


Date:                                   By: /s/ Kelly D. Clevenger
     -------------------                   -----------------------------------
                                        Name: Kelly D. Clevenger
                                             ---------------------------------
                                        Title: President
                                             ---------------------------------

                                        LINCOLN NATIONAL LIFE INSURANCE
                                        COMPANY

Date:                                   By: /s/ Stephen H. Lewis
     -------------------                   -----------------------------------
                                        Name: Stephen H. Lewis
                                             ---------------------------------
                                        Title: Senior Vice President
                                              --------------------------------

91945/1YY107!.DOC



4148                               Schedule 1
                                   ----------

                  Lincoln National Growth and Income Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                              As of October 1, 2000


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 Variable Annuity Account Q
- ---------------------------------------

Lincoln National Variable Annuity Account 53
- --------------------------------------------




                                   Schedule 2
                                   ----------

                  Lincoln National Growth and Income Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                               Listed on Schedule 1
                              As of October 1, 2000


Multi Fund Variable Annuity
- ---------------------------

eAnnuity
- --------

Emancipator Life
- ----------------

VUL III
- -------

Multi Fund Variable Life
- ------------------------

Group Multi Fund
- ----------------

Multi Fund - Non-registered
- ---------------------------

Group Variable Annuity (GVA)
- ----------------------------


IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.

                         LINCOLN NATIONAL GROWTH AND INCOME FUND, INC.

                         Signature: /s/ Steven M. Kluever
                                   -------------------------------------
                                       Steven M. Kluever
                                       Second Vice President

                         THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

                         Signature: /s/ Stephen H. Lewis
                                   -------------------------------------
                                       Stephen H. Lewis
                                       Senior Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                    LINCOLN NATIONAL INTERNATIONAL FUND, INC.


          THIS AGREEMENT, made and entered into this 1st day of July, 1998, by
and between Lincoln National International Fund, Inc. a corporation organized
under the laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE INSURANCE
CO., an Indiana insurance corporation (the "Company"), on its own behalf and on
behalf of each separate account of the Company named in Schedule 1 to this
Agreement as in effect at the time this Agreement is executed and such other
separate accounts that may be added to Schedule 1 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account"; collectively, the "Accounts").

          WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

          WHEREAS, the Fund filed with the Securities and Exchange Commission
(the "SEC") and the SEC has declared effective a registration statement
(referred to herein as the "Fund Registration Statement" and the prospectus
contained therein, or filed pursuant to Rule 497 under the 1933 Act, referred to
herein as the "Fund Prospectus") on Form N-lA to register itself as an open-end
management investment company (File No. 811-3212) under the Investment Company
Act of 1940, as amended (the "1940 Act"), and the Fund shares (File No. 2-80743)
under the Securities Act of 1933, as amended (the "1933 Act"); and

          WHEREAS, the Company has filed a registration statement with the SEC
to register under the 1933 Act (unless exempt therefrom) certain variable
annuity contracts and/or variable life insurance policies described in Schedule
2 to this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and



          WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

          WHEREAS, the Company has registered or will have registered each
Account with the SEC as a unit investment trust under the 1940 Act before any
Contracts are issued by that Account; and

          WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value;

          NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Fund agree as follows:


ARTICLE I.  SALE OF FUND SHARES

          1.1. The Fund agrees to sell to the Company those shares which the
Company orders on behalf of the Account, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.

          1.2. The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

          1.3. The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis (LL will expect same day
redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
shares to the extent permitted by the 1940 Act, any rules, regulations or orders
thereunder, or the then currently effective Fund Prospectus.

          1.4  (a)  For purposes of Sections 1.1, 1.2 and 1.3, the Company shall
                    be the agent of the Fund for the limited purpose of
                    receiving redemption


                                       2


               and purchase requests from the Account (but not from the general
               account of the Company), and receipt on any Business Day by the
               Company as such limited agent of the Fund prior to the time
               prescribed in the current Fund Prospectus (which as of the date
               of execution of this Agreement is 4 p.m., E.S.T.) shall
               constitute receipt by the Fund on that same Business Day,
               provided that the Fund receives notice of such redemption or
               purchase request by 9:00 a.m., E.S.T. on the next following
               Business Day. For purposes of this Agreement, "Business Day"
               shall mean any day on which the New York Stock exchange is open
               for trading.

                    (b) The Company shall pay for the shares on the same day
               that it places an order with the Fund to purchase those Fund
               shares for an Account. Payment for Fund shares will be made by
               the Account or the Company in Federal Funds transmitted to the
               Fund by wire to be received by 11:00 a.m., E.S.T. on the day the
               Fund is properly notified of the purchase order for shares. The
               Fund will confirm receipt of each trade and these confirmations
               will be received by the Company via Fax or Email by 3:00 p.m.
               E.S.T. If Federal Funds are not received on time, such funds will
               be invested, and shares purchased thereby will be issued, as soon
               as practicable.

                    (c) Payment for shares redeemed by the Account or the
               Company will be made in Federal Funds transmitted to the Company
               by wire on the same day the Fund is notified of the redemption
               order of shares, except that the Fund reserves the right to delay
               payment of redemption proceeds, but in no event may such payment
               be delayed longer than the period permitted under Section 22(e)
               of the 1940 Act. The Fund shall not bear any responsibility
               whatsoever for the proper disbursement or crediting of redemption
               proceeds if securities must be redeemed; the Company alone shall
               be responsible for such action.

          1.5. Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.

          1.6. The Fund shall furnish notice as soon as reasonably practicable
to the Company of any income dividends or capital gain distributions payable on
any shares. The Company, on its behalf and on behalf of the Account, hereby
elects to receive all such dividends and distributions as are payable on any
shares in the form of additional shares of that Fund. The Company reserves the
right, on its behalf and on behalf of the Account, to revoke this election and
to receive all such dividends in cash. The Fund shall notify the Company of the
number of shares so issued as payment of such dividends and distributions.

          1.7. The Fund shall use its best efforts to make the net asset value
per share available to the Company by 7:00 p.m., E.S.T. each Business Day, and
in any event, as soon as reasonably practicable after the net asset value per
share is calculated, and shall calculate such net asset value in accordance with
the then currently effective Fund Prospectus. The Fund shall not be liable for


                                       3


any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

          1.8.      (a) The Company may withdraw the Account's investment in the
               Fund only: (i) as necessary to facilitate Contract owner
               requests; (ii) upon a determination by a majority of the Fund
               Board, or a majority of disinterested Fund Board members, that an
               irreconcilable material conflict exists among the interests of
               (x) any Product Owners or (y) the interests of the Participating
               Insurance Companies investing in the Fund; (iii) upon requisite
               vote of the Contractowners having an interest in the Fund to
               substitute the shares of another investment company for shares in
               accordance with the terms of the Contracts; (iv) as required by
               state and/or federal laws or regulations or judicial or other
               legal precedent of general application; or (v) at the Company's
               sole discretion, pursuant to an order of the SEC under Section
               26(b) of the 1940 Act.

                    (b) The parties hereto acknowledge that the arrangement
               contemplated by this Agreement is not exclusive and that the Fund
               shares may be sold to other insurance companies (subject to
               Section 1.9 hereof) and the cash value of the Contracts may be
               invested in other investment companies.

                    (c) The Company shall not, without prior notice to the Fund
               (unless otherwise required by applicable law), take any action to
               operate the Accounts as management investment companies under the
               1940 Act.

          1.9. The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II.  REPRESENTATIONS AND WARRANTIES

          2.1. The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or, prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding.


                                       4


          2.2. The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

          2.3. The Fund represents and warrants that it currently qualifies as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund further represents and warrants that it
will make every effort to continue to qualify and to maintain such qualification
(under Subchapter M or any successor or similar provision), and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.

          2.4. The Fund represents and warrants that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.

          2.5. The Company represents that the Contracts are currently and at
the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

          2.6. The Fund represents that the Fund's investment policies, fees and
expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

          2.7. The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


ARTICLE III.  PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
INFORMATION

          3.1. The Fund shall provide the Company with as many copies of the
current Fund Prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund at its expense shall provide to the
Company a camera-ready copy, and electronic version, of the current Fund
Prospectus suitable for printing and other assistance as is reasonably necessary
in order for the Company to have a new Contracts Prospectus printed together
with the Fund Prospectus in one document. See Article V for a detailed
explanation of the responsibility for


                                       5


the cost of printing and distributing Fund prospectuses.

          3.2. The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Fund and the Fund shall provide
such Statement free of charge to the Company and to any outstanding or
prospective Contract owner who requests such Statement.

          3.3. (a) The Fund at its expense shall provide to the Company a
               camera-ready copy of the Fund's shareholder reports and other
               communications to shareholders (except proxy material), in each
               case in a form suitable for printing, as determined by the
               Company. The Fund shall be responsible for the costs of printing
               and distributing these materials to Contract owners.

               (b) The Fund at its expense shall be responsible for preparing,
               printing and distributing its proxy material. The Company will
               provide the appropriate Contractowner names and addresses to the
               Fund for this purpose.

          3.4. The Company shall furnish to the Fund, prior to its use, each
piece of sales literature or other promotional material in which the Fund is
named. No such material shall be used, except with the prior written permission
of the Fund. The Fund agrees to respond to any request for approval on a prompt
and timely basis. Failure of the Fund to respond within 10 days of the request
by the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund.

          3.5. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.


          3.6. The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the Company. The Company agrees to
respond to any request for permission on a prompt and timely basis. If the
Company fails to respond within 10 days of a request by the Fund, then the Fund
is relieved of the obligation to obtain the prior written permission of the
Company.


                                       6


          3.7. The Fund will provide to the Company at least one complete copy
of all Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

          3.8. The Company will provide to the Fund at least one complete copy
of all Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, within 20 days after the filing of such
document with the SEC or other regulatory authorities.

          3.9. Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

          3.10. For purposes of this Article III, the phrase "sales literature
or other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.

ARTICLE IV.  Voting

          4.1 Subject to applicable law and the requirements of Article VII, the
Fund shall solicit voting instructions from Contract owners;

          4.2 Subject to applicable law and the requirements of Article VII, the
Company shall:
                    (a) vote Fund shares attributable to Contract owners in
               accordance with


                                       7


               instructions or proxies received in timely fashion from such
               Contract owners;

                    (b) vote Fund shares attributable to Contract owners for
               which no instructions have been received in the same proportion
               as Fund shares of such Series for which instructions have been
               received in timely fashion; and

                    (c) vote Fund shares held by the Company on its own behalf
               or on behalf of the Account that are not attributable to Contract
               owners in the same proportion as Fund shares of such Series for
               which instructions have been received in timely fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

          All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.

          The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

          The Company is responsible for the cost of printing and distributing
Fund prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contractowners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.


ARTICLE VI.  COMPLIANCE UNDERTAKINGS

          6.1. The Fund undertakes to comply with Subchapter M and Section
817(h) of the Code, and all regulations issued thereunder.

          6.2. The Company shall amend the Contracts Registration Statements
under the 1933 Act and the Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent


                                       8


required by applicable securities laws of the various states.

          6.3. The Fund shall amend the Fund Registration Statement under the
1933 Act and the 1940 Act from time to time as required in order to effect for
so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

          6.4. The Company shall be responsible for assuring that any prospectus
offering a Contract that is a life insurance contract where it is reasonably
possible that such Contract would be deemed a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will describe the
circumstances under which a Contract could be treated as a modified endowment
contract (or policy).

          6.5. To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b-1 to finance distribution expenses.

          6.6.      (a) When appropriate in order to inform the Fund of any
               applicable state-mandated investment restrictions with which the
               Fund must comply, the Company shall arrange with the Fund to
               amend Schedule 3, pursuant to the requirements of Article XI.

                    (b) Should the Fund become aware of any restrictions which
               may be appropriate for inclusion in Schedule 3, the Company shall
               be informed immediately of the substance of those restrictions.

ARTICLE VlI.  POTENTIAL CONFLICTS

          7.1. The Company agrees to report to the Board of Directors of the
Fund (the "Board") any potential or existing conflicts between the interests of
Product Owners of all separate accounts investing in the Fund, and to assist the
Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider
any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

          7.2. If a majority of the Board, or a majority of disinterested Board
Members, determines that a material irreconcilable conflict exists, the Board
shall give prompt notice to all Participating Insurance Companies.

                    (a) If a majority of the whole Board, after notice to the
               Company and a reasonable opportunity for the Company to appear
               before it and present its case, determines that the Company is
               responsible for said conflict, and if the Company


                                       9


               agrees with that determination, the Company shall, at its sole
               cost and expense, take whatever steps are necessary to remedy the
               material irreconcilable conflict. These steps could include: (i)
               withdrawing the assets allocable to some or all of the affected
               Accounts from the Fund and reinvesting such assets in a different
               investment vehicle, or submitting the question of whether such
               segregation should be implemented to a vote of all affected
               Contractowners and, as appropriate, segregating the assets of any
               particular group (i.e., variable annuity Contractowners, variable
               life insurance policyowners, or variable Contractowners of one or
               more Participating Insurance Companies) that votes in favor of
               such segregation, or offering to the affected Contractowners the
               option of making such a change; and (ii) establishing a new
               registered mutual fund or management separate account; or (iii)
               taking such other action as is necessary to remedy or eliminate
               the material irreconcilable conflict.

                    (b) If the Company disagrees with the Board's determination,
               the Company shall file a written protest with the Board,
               reserving its right to dispute the determination as between just
               the Company and the Fund and to seek reimbursement from the Fund
               for the reasonable costs and expenses of resolving the conflict .
               After reserving that right the Company, although disagreeing with
               the Board that it (the Company) was responsible for the conflict,
               shall take the necessary steps, under protest, to remedy the
               conflict, substantially in accordance with paragraph (a) just
               above, for the protection of Contractowners.

                    (c) As between the Company and the Fund, if within 45 days
               after the Board's determination the Company elects to press the
               dispute, it shall so notify the Board in writing. The parties
               shall then attempt to resolve the matter amicably through
               negotiation by individuals from each party who are authorized to
               settle the matter. If the matter has not been amicably resolved
               within 60 days from the date of the Company's notice of its
               intent to press the dispute, then before either party shall
               undertake to litigate the dispute it shall be submitted to
               non-binding arbitration conducted expeditiously in accordance
               with the CPR Rules for Non-Administered Arbitration of Business
               Disputes, by a sole arbitrator; PROVIDED, HOWEVER, that if one
               party has requested the other party to seek an amicable
               resolution and the other party has failed to participate, the
               requesting party may initiate arbitration before expiration of
               the 60-day period set out just above.

                    If within 45 days of the commencement of the process to
               select an arbitrator the parties cannot agree upon the
               arbitrator, then he or she will be selected from the CPR Panels
               of Neutrals. The arbitration shall be governed by the United
               States Arbitration Act, 9 U.S.C. Sec. 1-16. The place of
               arbitration shall be Fort Wayne, Indiana. The Arbitrator is not
               empowered to award damages in excess of compensatory damages.

                    (d) If the Board shall determine that the Fund or another
               was responsible for the conflict, then the Board shall notify the
               Company immediately


                                       10


               of that determination. The Fund shall assure the Company that it
               (the Fund) or that other Participating Insurance Company as
               applicable, shall, at its sole cost and expense, take whatever
               steps are necessary to eliminate the conflict.

                    (e) Nothing in Sections 7.2(b) or 7.2(c) shall constitute a
               waiver of any right of action which the Company may have against
               other Participating Insurance Companies for reimbursement of all
               or part of the costs and expenses of resolving the conflict.

          7.3. If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

          7.4. For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict. However, in no event will the
Fund be required to establish a new funding medium for any variable contract,
nor will the Company be required to establish a new funding medium for any
Contract, if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.


ARTICLE VIII.  INDEMNIFICATION

          8.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund and each person who controls or is associated with
the Fund (other than another Participating Insurance Company) within the meaning
of such terms under the federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the prior written consent of the Company in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:

                    (a) arise out of or are based upon any untrue statement or
               alleged untrue statement of any material fact contained in the
               Contracts Registration Statement, Contracts Prospectus, sales
               literature or other promotional material for the Contracts or the
               Contracts themselves (or any amendment or supplement to any of
               the foregoing), or arise out of or are based upon the omission or
               the alleged omission to state therein a material fact required to
               be stated therein or necessary to make the statements therein not
               misleading in light of the circumstances in which they were made;
               provided that this obligation to indemnify shall not apply if
               such


                                       11


               statement or omission or such alleged statement or alleged
               omission was made in reliance upon and in conformity with
               information furnished in writing to the Company by the Fund (or a
               person authorized in writing to do so on behalf of the Fund) for
               use in the Contracts Registration Statement, Contracts Prospectus
               or in the Contracts or sales literature (or any amendment or
               supplement) or otherwise for use in connection with the sale of
               the Contracts or Fund shares; or

                    (b) arise out of or are based upon any untrue statement or
               alleged untrue statement of a material fact by or on behalf of
               the Company (other than statements or representations contained
               in the Fund Registration Statement, Fund Prospectus or sales
               literature or other promotional material of the Fund not supplied
               by the Company or persons under its control) or wrongful conduct
               of the Company or persons under its control with respect to the
               sale or distribution of the Contracts or Fund shares; or

                    (c) arise out of any untrue statement or alleged untrue
               statement of a material fact contained in the Fund Registration
               Statement, Fund Prospectus or sales literature or other
               promotional material of the Fund or any amendment thereof or
               supplement thereto, or the omission or alleged omission to state
               therein a material fact required to be stated therein or
               necessary to make the statements therein not misleading in light
               of the circumstances in which they were made, if such statement
               or omission was made in reliance upon and in conformity with
               information furnished to the Fund by or on behalf of the Company;
               or

                    (d) arise as a result of any failure by the Company to
               provide the services and furnish the materials or to make any
               payments under the terms of this Agreement; or

                    (e) arise out of any material breach by the Company of this
               Agreement, including but not limited to any failure to transmit a
               request for redemption or purchase of Fund shares on a timely
               basis in accordance with the procedures set forth in Article I;
               or

                    (f) arise as a result of the Company's providing the Fund
               with inaccurate information, which causes the Fund to calculate
               its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

          8.2. INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and
hold harmless the Company and each person who controls or is associated with the
Company within the meaning of such terms under the federal securities laws and
any officer, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any


                                       12


investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                    (a) arise out of or are based upon any untrue statement or
               alleged untrue statement of any material fact contained in the
               Fund Registration Statement, Fund Prospectus (or any amendment or
               supplement thereto) or sales literature or other promotional
               material of the Fund, or arise out of or are based upon the
               omission or the alleged omission to state therein a material fact
               required to be stated therein or necessary to make the statements
               therein not misleading in light of the circumstances in which
               they were made; provided that this obligation to indemnify shall
               not apply if such statement or omission or alleged statement or
               alleged omission was made in reliance upon and in conformity with
               information furnished in writing by the Company to the Fund for
               use in the Fund Registration Statement, Fund Prospectus (or any
               amendment or supplement thereto) or sales literature for the Fund
               or otherwise for use in connection with the sale of the Contracts
               or Fund shares; or


                    (b) arise out of or are based upon any untrue statement or
               alleged untrue statement of a material fact made by the Fund
               (other than statements or representations contained in the Fund
               Registration Statement, Fund Prospectus or sales literature or
               other promotional material of the Fund not supplied by the
               Distributor or the Fund or persons under their control) or
               wrongful conduct of the Fund or persons under its control with
               respect to the sale or distribution of the Contracts or Fund
               shares; or

                    (c) arise out of any untrue statement or alleged untrue
               statement of a material fact contained in the Contract's
               Registration Statement, Contracts Prospectus or sales literature
               or other promotional material for the Contracts (or any amendment
               or supplement thereto), or the omission or alleged omission to
               state therein a material fact required to be stated therein or
               necessary to make the statements therein not misleading in light
               of the circumstances in which they were made, if such statement
               or omission was made in reliance upon information furnished in
               writing by the Fund to the Company (or a person authorized in
               writing to do so on behalf of the Fund); or

                    (d) arise as a result of any failure by the Fund to provide
               the services and furnish the materials under the terms of this
               Agreement (including, but not by way of limitation, a failure,
               whether unintentional or in good faith or otherwise: (i) to
               comply with the diversification requirements specified in
               Sections 2.4 and 6.1 in Article VI of this Agreement; and (ii) to
               provide the Company with accurate information sufficient for it
               to calculate its accumulation and/or annuity unit values


                                       13


               in timely fashion as required by law and by the Contracts
               Prospectuses); or

                    (e) arise out of any material breach by the Fund of this
               Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

          8.3. INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

          A successor by law of the parties to this Agreement shall be entitled
to the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

          9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

          9.2. This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those


                                       14


statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.


ARTICLE X. TERMINATION

          10.1. This Agreement shall terminate:

                    (a) at the option of any party upon 120 days advance written
               notice to the other parties; or

                    (b) at the option of the Company if shares of the Fund are
               not available to meet the requirements of the Contracts as
               determined by the Company. Prompt notice of the election to
               terminate for such cause shall be furnished by the Company.
               Termination shall be effective ten days after the giving of
               notice by the Company; or

                    (c) at the option of the Fund upon institution of formal
               proceedings against the Company by the NASD, the SEC, the
               insurance commission of any state or any other regulatory body
               regarding the Company's duties under this Agreement or related to
               the sale of the Contracts, the operation of the Account, the
               administration of the Contracts or the purchase of Fund shares;

                    (d) at the option of the Company upon institution of formal
               proceedings against the Fund, the investment advisor or any sub-
               investment advisor, by the NASD, the SEC, or any state securities
               or insurance commission or any other regulatory body; or

                    (e) upon requisite vote of the Contract owners having an
               interest in the Fund (unless otherwise required by applicable
               law) and written approval of the Company, to substitute the
               shares of another investment company for the corresponding shares
               of the Fund in accordance with the terms of the Contracts; or

                    (f) at the option of the Fund in the event any of the
               Contracts are not registered, issued or sold in accordance with
               applicable Federal and/or state law; or

                    (g) at the option of the Company or the Fund upon a
               determination by a majority of the Fund Board, or a majority of
               disinterested Fund Board members, that an irreconcilable material
               conflict exists among the interests of (i) any Product owners or
               (ii) the interests of the Participating Insurance Companies
               investing in the Fund; or

                    (h) at the option of the Company if the Fund ceases to
               qualify as a Regulated Investment Company under Subchapter M of
               the Code, or under any


                                       15


               successor or similar provision, or if the Company reasonably
               believes, based on an opinion of its counsel, that the Fund may
               fail to so qualify; or

                    (i) at the option of the Company if the Fund fails to meet
               the diversification requirements specified in Section 817(h) of
               the Code and any regulations thereunder; or

                    (j) at the option of the Fund if the Contracts cease to
               qualify as annuity contracts or life insurance policies, as
               applicable, under the Code, or if the Fund reasonably believes
               that the Contracts may fail to so qualify; or

                    (k) at the option of the Fund if the Fund shall determine,
               in its sole judgment exercised in good faith, that either (1) the
               Company shall have suffered a material adverse change in its
               business or financial condition; or (2) the Company shall have
               been the subject of material adverse publicity which is likely to
               have a material adverse impact upon the business and operations
               of the Fund; or

                    (l) at the option of the Company, if the Company shall
               determine, in its sole judgment exercised in good faith, that:
               (1) the Fund shall have suffered a material adverse change in its
               business or financial condition; or (2) the Fund shall have been
               the subject of material adverse publicity which is likely to have
               a material adverse impact upon the business and operations of the
               Company; or

                    (m) automatically upon the assignment of this Agreement
               (including, without limitation, any transfer of the Contracts or
               the Accounts to another insurance company pursuant to an
               assumption reinsurance agreement) unless the non-assigning party
               consents thereto or unless this Agreement is assigned to an
               affiliate of the Company or the Fund, as the case may be.

          10.2. NOTICE REQUIREMENT. Except as otherwise provided in Section
10.1, no termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to the other party
of its intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                    (a) In the event that any termination is based upon the
               provisions of Article VII or the provisions of Section 10.1(a) of
               this Agreement, such prior written notice shall be given in
               advance of the effective date of termination as required by such
               provisions; and

                    (b) in the event that any termination is based upon the
               provisions of Section 10.1(c) or 10.1(d) of this Agreement, such
               prior written notice shall be given at least ninety (90) days
               before the effective date of termination, or sooner if required
               by law or regulation.

          10.3. EFFECT OF TERMINATION


                                       16


                    (a) Notwithstanding any termination of this Agreement
               pursuant to Section 10.1 of this Agreement, the Fund will, at the
               option of the Company, continue to make available additional Fund
               shares for so long after the termination of this Agreement as the
               Company desires, pursuant to the terms and conditions of this
               Agreement as provided in paragraph (b) below, for all Contracts
               in effect on the effective date of termination of this Agreement
               (hereinafter referred to as "Existing Contracts"). Specifically,
               without limitation, if the Company so elects to make additional
               Fund shares available, the owners of the Existing Contracts or
               the Company, whichever shall have legal authority to do so, shall
               be permitted to reallocate investments in the Fund, redeem
               investments in the Fund and/or invest in the Fund upon the making
               of additional purchase payments under the Existing Contracts.

                    (b) If Fund shares continue to be made available after such
               termination, the provisions of this Agreement shall remain in
               effect except for Section 10.1(a) and thereafter either the Fund
               or the Company may terminate the Agreement, as so continued
               pursuant to this Section 10.3, upon prior written notice to the
               other party, such notice to be for a period that is reasonable
               under the circumstances but, if given by the Fund, need not be
               for more than six months.

                    (c) The parties agree that this Section 10.3 shall not apply
               to any termination made pursuant to Article VII, and the effect
               of such Article VII termination shall be governed by the
               provisions set forth or incorporated by reference therein.

ARTICLE XI.  APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

          The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts
and to add new classes of variable annuity contracts and variable life insurance
policies to be issued by the Company through new or existing Separate Accounts
investing in the Fund. The provisions of this Agreement shall be equally
applicable to each such separate account and each such class of contracts or
policies, unless the context otherwise requires. Any such amendment must be
signed by the parties and must bear an effective date for that amendment.


ARTICLE XII.  NOTICES

          Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                    If to the Fund:

                         Lincoln National International Fund, Inc.


                                       17


                         1300 South Clinton Street
                         Fort Wayne, Indiana 46802
                         Attn: Kelly D. Clevenger

                    If to the Company:

                         Lincoln National Life Insurance Co.
                         1300 South Clinton Street
                         Fort Wayne, Indiana 46802
                         Attn: Steven M. Kluever


ARTICLE XIII.  MISCELLANEOUS

          13.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

          13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

          13.3. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

          13.4. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

          13.5. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


ARTICLE XIV.  PRIOR AGREEMENTS

          This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18


          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                    LINCOLN NATIONAL INTERNATIONAL FUND, INC.


          Signature: /s/ Kelly D. Clevenger
                    ------------------------------------------------------------
          Name: Kelly D. Clevenger
               -----------------------------------------------------------------
          Title: President
                ----------------------------------------------------------------


                    LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


          Signature: /s/ Stephen H. Lewis
                    ------------------------------------------------------------
          Name: Stephen H. Lewis
               -----------------------------------------------------------------
          Title: Senior Vice President, Lincoln National Life Insurance Company
                ----------------------------------------------------------------


#73844


                                       19


                                   SCHEDULE 1

                    Lincoln National International Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 1, 1998


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53

VARIOUS NON-REGISTERED SEPARATE ACCOUNTS


                                       20


                                   SCHEDULE 2


                    Lincoln National International Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 1, 1998


MULTI FUND VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

ACCRU CHOICEPLUS

GROUP MULTI FUND

MULTI FUND - NON-REGISTERED

DIRECTOR


                                       21


                                   SCHEDULE 3


                    Lincoln National International Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998


The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 33 1/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing" as
that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.   An international FUND or a global FUND is sufficiently diversified if it is
     invested in a minimum of three different countries at all times, and has
     invested no more than 50 percent of total assets in any one second-tier
     country and no more than 25 percent of total assets in any one third-tier
     country. First-tier countries are: Germany, the United Kingdom, Japan, the
     United States, France, Canada, and Australia. Second-tier countries are all
     countries not in the first or third tier. Third-tier countries are
     countries identified as "emerging" or "developing" by the International
     Bank for Reconstruction and Development ("World Bank") or International
     Finance Corporation.

b.   A regional FUND is sufficiently diversified if it is invested in a minimum
     of three countries. The name of the fund must accurately describe the FUND.

c.   The name of the single country FUND must accurately describe the FUND.

d.   An index FUND must substantially mirror the index.


                                       22


          The Fund Participation Agreement (the "Agreement"), dated
July 1, 1998, by and among The Lincoln National Life Insurance Company and
Lincoln National International Fund, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

          "WHEREAS, the Company has registered or will have registered each
Account with the SEC (unless exempt therefrom) as a unit investment trust under
the 1940 Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

          "The Company represents and warrants (a) that the Contracts are
          registered under the 1933 Act or will be so registered before the
          issuance thereof (unless exempt therefrom), (b) that the Contracts
          will be issued in compliance in all material respects with all
          applicable Federal and state laws and (c) that the Company will
          require of every person distributing the Contracts that the Contracts
          be offered and sold in compliance in all material respects with all
          applicable Federal and state laws. The Company further represents and
          warrants that it is an insurance company duly organized and validly
          existing under applicable law and that it has legally and validly
          authorized each Account as a separate account under Section 27-1-5-1
          of the Indiana Insurance Code, and has registered or, prior to the
          issuance of any Contracts, will register each Account (unless exempt
          therefrom) as a unit investment trust in accordance with the
          provisions of the 1940 Act to serve as a separate account for its
          Contracts, and that it will maintain such registrations for so long as
          any Contracts issued under them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the
Fund Participation Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.

                                        LINCOLN NATIONAL INTERNATIONAL FUND,
                                        INC.

Date:                                   By: /s/ Kelly D. Clevenger
     ------------------------------        ---------------------------------
                                        Name: Kelly D. Clevenger
                                             -------------------------------
                                        Title: President
                                              ------------------------------

                                        LINCOLN NATIONAL LIFE INSURANCE
                                        COMPANY

Date:                                   By: /s/ Stephen H. Lewis
     ------------------------------        ---------------------------------
                                        Name: Stephen H. Lewis
                                             -------------------------------
                                        Title: Senior Vice President
                                              ------------------------------



                                  Amendment to
                                   SCHEDULE 1

                    Lincoln National International Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 15, 2001


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

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 SEPARATE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53

VARIOUS NON-REGISTERED SEPARATE ACCOUNTS



                                  Amendment to
                                   SCHEDULE 2


                    Lincoln National International Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 15, 2001


MULTI FUND VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

LINCOLN CHOICEPLUS

GROUP MULTI FUND

MULTI FUND - NON-REGISTERED

DIRECTOR

LINCOLN CHOICEPLUS II

LINCOLN CHOICEPLUS II ACCESS

LINCOLN CHOICEPLUS II BONUS

LINCOLN CHOICEPLUS ADVANCE

GVA I, II, III

SVUL

SVUL II

LVUL(DB)

LVUL(CV)

LVUL(CV2)

VUL MONEYGUARD

CVUL

CVUL III





         IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Schedules 1 and 2 to be executed in its name and behalf by its duly
authorized officer on the date specified below.


                                   LINCOLN NATIONAL INTERNATIONALFUND, INC.


Date:                              By:/s/Kelly D. Clevenger
       -------------------------   ---------------------------------------
                                      Kelly D. Clevenger
                                      Chairman and President



                                   THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date:                              By:/s/Steven M. Kluever
      --------------------------   ----------------------------------------
                                      Steven M. Kluever
                                      Second Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                       LINCOLN NATIONAL MANAGED FUND, INC.


       THIS AGREEMENT, made and entered into this 1st day of July, 1998, by and
between Lincoln National Managed Fund, Inc. a corporation organized under the
laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE INSURANCE CO., an
Indiana insurance corporation (the "Company"), on its own behalf and on behalf
of each separate account of the Company named in Schedule 1 to this Agreement as
in effect at the time this Agreement is executed and such other separate
accounts that may be added to Schedule 1 from time to time in accordance with
the provisions of Article XI of this Agreement (each such account referred to as
the "Account"; collectively, the "Accounts").

       WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

       WHEREAS, the Fund filed with the Securities and Exchange Commission (the
"SEC") and the SEC has declared effective a registration statement (referred to
herein as the "Fund Registration Statement" and the prospectus contained
therein, or filed pursuant to Rule 497 under the 1933 Act, referred to herein as
the "Fund Prospectus") on Form N-lA to register itself as an open-end management
investment company (File No. 811-3212) under the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Fund shares (File No. 2-80743) under the
Securities Act of 1933, as amended (the "1933 Act"); and

       WHEREAS, the Company has filed a registration statement with the SEC to
register under the 1933 Act (unless exempt therefrom) certain variable annuity
contracts and/or variable life insurance policies described in Schedule 2 to
this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and


       WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

       WHEREAS, the Company has registered or will have registered each Account
with the SEC as a unit investment trust under the 1940 Act before any Contracts
are issued by that Account; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value; and

       WHEREAS, pursuant to Articles of Merger approved by the Company in 1988,
the Company succeeded to all the legal rights and responsibilities of Lincoln
National Pension Insurance Company, the signatory to the original Agreement to
Purchase Shares, which this Agreement amends and restates.

       NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Fund agree as follows:

ARTICLE I. SALE OF FUND SHARES

       1.1.   The Fund agrees to sell to the Company those shares which the
Company orders on behalf of the Account, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.

       1.2.   The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

       1.3. The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis (LL will expect same day
redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
shares to the


                                       2


extent permitted by the 1940 Act, any rules, regulations or orders thereunder,
or the then currently effective Fund Prospectus.

       1.4           (a)    For purposes of Sections 1.1, 1.2 and 1.3, the
                            Company shall be the agent of the Fund for the
              limited purpose of receiving redemption and purchase requests from
              the Account (but not from the general account of the Company), and
              receipt on any Business Day by the Company as such limited agent
              of the Fund prior to the time prescribed in the current Fund
              Prospectus (which as of the date of execution of this Agreement is
              4 p.m., E.S.T.) shall constitute receipt by the Fund on that same
              Business Day, provided that the Fund receives notice of such
              redemption or purchase request by 9:00 a.m., E.S.T. on the next
              following Business Day. For purposes of this Agreement, "Business
              Day" shall mean any day on which the New York Stock exchange is
              open for trading.

                     (b)    The Company shall pay for the shares on the same day
              that it places an order with the Fund to purchase those Fund
              shares for an Account. Payment for Fund shares will be made by the
              Account or the Company in Federal Funds transmitted to the Fund by
              wire to be received by 11:00 a.m., E.S.T. on the day the Fund is
              properly notified of the purchase order for shares. The Fund will
              confirm receipt of each trade and these confirmations will be
              received by the Company via Fax or Email by 3:00 p.m. E.S.T. If
              Federal Funds are not received on time, such funds will be
              invested, and shares purchased thereby will be issued, as soon as
              practicable.

                     (c)    Payment for shares redeemed by the Account or the
              Company will be made in Federal Funds transmitted to the Company
              by wire on the same day the Fund is notified of the redemption
              order of shares, except that the Fund reserves the right to delay
              payment of redemption proceeds, but in no event may such payment
              be delayed longer than the period permitted under Section 22(e) of
              the 1940 Act. The Fund shall not bear any responsibility
              whatsoever for the proper disbursement or crediting of redemption
              proceeds if securities must be redeemed; the Company alone shall
              be responsible for such action.

       1.5.   Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.


       1.6.   The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income dividends or capital gain distributions payable on any
shares. The Company, on its behalf and on behalf of the Account, hereby elects
to receive all such dividends and distributions as are payable on any shares in
the form of additional shares of that Fund. The Company reserves


                                       3


the right, on its behalf and on behalf of the Account, to revoke this election
and to receive all such dividends in cash. The Fund shall notify the Company of
the number of shares so issued as payment of such dividends and distributions.

       1.7.   The Fund shall use its best efforts to make the net asset value
per share available to the Company by 7:00 p.m., E.S.T. each Business Day, and
in any event, as soon as reasonably practicable after the net asset value per
share is calculated, and shall calculate such net asset value in accordance with
the then currently effective Fund Prospectus. The Fund shall not be liable for
any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

       1.8.          (a)    The Company may withdraw the Account's investment in
              the Fund only: (i) as necessary to facilitate Contract owner
              requests; (ii) upon a determination by a majority of the Fund
              Board, or a majority of disinterested Fund Board members, that an
              irreconcilable material conflict exists among the interests of (x)
              any Product Owners or (y) the interests of the Participating
              Insurance Companies investing in the Fund; (iii) upon requisite
              vote of the Contractowners having an interest in the Fund to
              substitute the shares of another investment company for shares in
              accordance with the terms of the Contracts; (iv) as required by
              state and/or federal laws or regulations or judicial or other
              legal precedent of general application; or (v) at the Company's
              sole discretion, pursuant to an order of the SEC under Section
              26(b) of the 1940 Act.

                     (b)    The parties hereto acknowledge that the arrangement
              contemplated by this Agreement is not exclusive and that the Fund
              shares may be sold to other insurance companies (subject to
              Section 1.9 hereof) and the cash value of the Contracts may be
              invested in other investment companies.

                     (c)    The Company shall not, without prior notice to the
              Fund (unless otherwise required by applicable law), take any
              action to operate the Accounts as management investment companies
              under the 1940 Act.

       1.9.   The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II.  REPRESENTATIONS AND WARRANTIES

       2.1.   The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered


                                       4


and sold in compliance in all material respects with all applicable Federal and
state laws. The Company further represents and warrants that it is an insurance
company duly organized and validly existing under applicable law and that it has
legally and validly authorized each Account as a separate account under Section
27-1-5-1 of the Indiana Insurance Code, and has registered or, prior to the
issuance of any Contracts, will register each Account (unless exempt therefrom)
as a unit investment trust in accordance with the provisions of the 1940 Act to
serve as a separate account for its Contracts, and that it will maintain such
registrations for so long as any Contracts issued under them are outstanding.

       2.2.   The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

       2.3.   The Fund represents and warrants that it currently qualifies as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund further represents and warrants that it
will make every effort to continue to qualify and to maintain such qualification
(under Subchapter M or any successor or similar provision), and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.

       2.4.   The Fund represents and warrants that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.

       2.5.   The Company represents that the Contracts are currently and at the
time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

       2.6.   The Fund represents that the Fund's investment policies, fees and
expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

       2.7.   The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


                                       5


ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
             INFORMATION

       3.1.   The Fund shall provide the Company with as many copies of the
current Fund Prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund at its expense shall provide to the
Company a camera-ready copy, and electronic version, of the current Fund
Prospectus suitable for printing and other assistance as is reasonably necessary
in order for the Company to have a new Contracts Prospectus printed together
with the Fund Prospectus in one document. See Article V for a detailed
explanation of the responsibility for the cost of printing and distributing Fund
prospectuses.

       3.2.   The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Fund and the Fund shall provide
such Statement free of charge to the Company and to any outstanding or
prospective Contract owner who requests such Statement.

       3.3.   (a)    The Fund at its expense shall provide to the Company a
              camera-ready copy of the Fund's shareholder reports and other
              communications to shareholders (except proxy material), in each
              case in a form suitable for printing, as determined by the
              Company. The Fund shall be responsible for the costs of printing
              and distributing these materials to Contract owners.

              (b)    The Fund at its expense shall be responsible for preparing,
              printing and distributing its proxy material. The Company will
              provide the appropriate Contractowner names and addresses to the
              Fund for this purpose.

       3.4.   The Company shall furnish to the Fund, prior to its use, each
piece of sales literature or other promotional material in which the Fund is
named. No such material shall be used, except with the prior written permission
of the Fund. The Fund agrees to respond to any request for approval on a prompt
and timely basis. Failure of the Fund to respond within 10 days of the request
by the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund.

       3.5.   The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.

       3.6.   The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as


                                       6


such Registration Statement and Prospectus may be amended or supplemented from
time to time, or in published reports of the Account which are in the public
domain or approved in writing by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved in writing
by the Company, except with the prior written permission of the Company. The
Company agrees to respond to any request for permission on a prompt and timely
basis. If the Company fails to respond within 10 days of a request by the Fund,
then the Fund is relieved of the obligation to obtain the prior written
permission of the Company.

       3.7.   The Fund will provide to the Company at least one complete copy of
all Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

       3.8.   The Company will provide to the Fund at least one complete copy of
all Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, within 20 days after the filing of such
document with the SEC or other regulatory authorities.

       3.9.   Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.


       3.10.  For purposes of this Article III, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.


                                       7


ARTICLE IV. Voting

       4.1    Subject to applicable law and the requirements of Article VII, the
Fund shall solicit voting instructions from Contract owners;

       4.2    Subject to applicable law and the requirements of Article VII, the
Company shall:

                     (a)    vote Fund shares attributable to Contract owners in
              accordance with instructions or proxies received in timely fashion
              from such Contract owners;

                     (b)    vote Fund shares attributable to Contract owners for
              which no instructions have been received in the same proportion as
              Fund shares of such Series for which instructions have been
              received in timely fashion; and

                     (c)    vote Fund shares held by the Company on its own
              behalf or on behalf of the Account that are not attributable to
              Contract owners in the same proportion as Fund shares of such
              Series for which instructions have been received in timely
              fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES


       All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.

       The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

       The Company is responsible for the cost of printing and distributing Fund
prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contractowners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.


                                       8


ARTICLE VI.  COMPLIANCE UNDERTAKINGS

       6.1.   The Fund undertakes to comply with Subchapter M and Section 817(h)
of the Code, and all regulations issued thereunder.

       6.2.   The Company shall amend the Contracts Registration Statements
under the 1933 Act and the Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws of the various states.

       6.3.   The Fund shall amend the Fund Registration Statement under the
1933 Act and the 1940 Act from time to time as required in order to effect for
so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

       6.4.   The Company shall be responsible for assuring that any prospectus
offering a Contract that is a life insurance contract where it is reasonably
possible that such Contract would be deemed a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will describe the
circumstances under which a Contract could be treated as a modified endowment
contract (or policy).

       6.5.   To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b-1 to finance distribution expenses.

       6.6.          (a)    When appropriate in order to inform the Fund of any
              applicable state-mandated investment restrictions with which the
              Fund must comply, the Company shall arrange with the Fund to amend
              Schedule 3, pursuant to the requirements of Article XI.

                     (b)    Should the Fund become aware of any restrictions
              which may be appropriate for inclusion in Schedule 3, the Company
              shall be informed immediately of the substance of those
              restrictions.

ARTICLE VLI.  POTENTIAL CONFLICTS

       7.1.   The Company agrees to report to the Board of Directors of the Fund
(the "Board") any potential or existing conflicts between the interests of
Product Owners of all separate accounts investing in the Fund, and to assist the
Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider


                                       9


any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

       7.2.   If a majority of the Board, or a majority of disinterested Board
Members, determines that a material irreconcilable conflict exists, the Board
shall give prompt notice to all Participating Insurance Companies.

                     (a)    If a majority of the whole Board, after notice to
              the Company and a reasonable opportunity for the Company to appear
              before it and present its case, determines that the Company is
              responsible for said conflict, and if the Company agrees with that
              determination, the Company shall, at its sole cost and expense,
              take whatever steps are necessary to remedy the material
              irreconcilable conflict. These steps could include: (i)
              withdrawing the assets allocable to some or all of the affected
              Accounts from the Fund and reinvesting such assets in a different
              investment vehicle, or submitting the question of whether such
              segregation should be implemented to a vote of all affected
              Contractowners and, as appropriate, segregating the assets of any
              particular group (i.e., variable annuity Contractowners, variable
              life insurance policyowners, or variable Contractowners of one or
              more Participating Insurance Companies) that votes in favor of
              such segregation, or offering to the affected Contractowners the
              option of making such a change; and (ii) establishing a new
              registered mutual fund or management separate account; or (iii)
              taking such other action as is necessary to remedy or eliminate
              the material irreconcilable conflict.

                     (b)    If the Company disagrees with the Board's
              determination, the Company shall file a written protest with the
              Board, reserving its right to dispute the determination as between
              just the Company and the Fund and to seek reimbursement from the
              Fund for the reasonable costs and expenses of resolving the
              conflict . After reserving that right the Company, although
              disagreeing with the Board that it (the Company) was responsible
              for the conflict, shall take the necessary steps, under protest,
              to remedy the conflict, substantially in accordance with paragraph
              (a) just above, for the protection of Contractowners.

                     (c)    As between the Company and the Fund, if within 45
              days after the Board's determination the Company elects to press
              the dispute, it shall so notify the Board in writing. The parties
              shall then attempt to resolve the matter amicably through
              negotiation by individuals from each party who are authorized to
              settle the matter. If the matter has not been amicably resolved
              within 60 days from the date of the Company's notice of its intent
              to press the dispute, then before either party shall undertake to
              litigate the dispute it shall be submitted to non-binding
              arbitration conducted expeditiously in accordance with the CPR
              Rules for Non-Administered Arbitration of Business Disputes, by a
              sole arbitrator; PROVIDED, HOWEVER, that if one party has
              requested the other party to seek an amicable resolution and the
              other party has failed to participate, the requesting party may
              initiate arbitration before expiration of the 60-day period set
              out just above.


                                       10


                 If within 45 days of the commencement of the process to select
              an arbitrator the parties cannot agree upon the arbitrator, then
              he or she will be selected from the CPR Panels of Neutrals. The
              arbitration shall be governed by the United States Arbitration
              Act, 9 U.S.C. Sec. 1-16. The place of arbitration shall be Fort
              Wayne, Indiana. The Arbitrator is not empowered to award damages
              in excess of compensatory damages.

                     (d)    If the Board shall determine that the Fund or
              another was responsible for the conflict, then the Board shall
              notify the Company immediately of that determination. The Fund
              shall assure the Company that it (the Fund) or that other
              Participating Insurance Company as applicable, shall, at its sole
              cost and expense, take whatever steps are necessary to eliminate
              the conflict.

                     (e)    Nothing in Sections 7.2(b) or 7.2(c) shall
              constitute a waiver of any right of action which the Company may
              have against other Participating Insurance Companies for
              reimbursement of all or part of the costs and expenses of
              resolving the conflict.

       7.3.   If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

       7.4.   For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict. However, in no event will the
Fund be required to establish a new funding medium for any variable contract,
nor will the Company be required to establish a new funding medium for any
Contract, if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.

ARTICLE VIII.  INDEMNIFICATION

       8.1.   INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund and each person who controls or is associated with
the Fund (other than another Participating Insurance Company) within the meaning
of such terms under the federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the prior written consent of the Company in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:


                                       11


                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Contracts Registration Statement, Contracts Prospectus, sales
              literature or other promotional material for the Contracts or the
              Contracts themselves (or any amendment or supplement to any of the
              foregoing), or arise out of or are based upon the omission or the
              alleged omission to state therein a material fact required to be
              stated therein or necessary to make the statements therein not
              misleading in light of the circumstances in which they were made;
              provided that this obligation to indemnify shall not apply if such
              statement or omission or such alleged statement or alleged
              omission was made in reliance upon and in conformity with
              information furnished in writing to the Company by the Fund (or a
              person authorized in writing to do so on behalf of the Fund) for
              use in the Contracts Registration Statement, Contracts Prospectus
              or in the Contracts or sales literature (or any amendment or
              supplement) or otherwise for use in connection with the sale of
              the Contracts or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact by or on behalf of
              the Company (other than statements or representations contained in
              the Fund Registration Statement, Fund Prospectus or sales
              literature or other promotional material of the Fund not supplied
              by the Company or persons under its control) or wrongful conduct
              of the Company or persons under its control with respect to the
              sale or distribution of the Contracts or Fund shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Fund Registration
              Statement, Fund Prospectus or sales literature or other
              promotional material of the Fund or any amendment thereof or
              supplement thereto, or the omission or alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading in light of the
              circumstances in which they were made, if such statement or
              omission was made in reliance upon and in conformity with
              information furnished to the Fund by or on behalf of the Company;
              or

                     (d)    arise as a result of any failure by the Company to
              provide the services and furnish the materials or to make any
              payments under the terms of this Agreement; or

                     (e)    arise out of any material breach by the Company of
              this Agreement, including but not limited to any failure to
              transmit a request for redemption or purchase of Fund shares on a
              timely basis in accordance with the procedures set forth in
              Article I; or

                     (f)    arise as a result of the Company's providing the
              Fund with inaccurate information, which causes the Fund to
              calculate its Net Asset Values incorrectly.


                                       12


This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.2.   INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold
harmless the Company and each person who controls or is associated with the
Company within the meaning of such terms under the federal securities laws and
any officer, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Fund Registration Statement, Fund Prospectus (or any amendment or
              supplement thereto) or sales literature or other promotional
              material of the Fund, or arise out of or are based upon the
              omission or the alleged omission to state therein a material fact
              required to be stated therein or necessary to make the statements
              therein not misleading in light of the circumstances in which they
              were made; provided that this obligation to indemnify shall not
              apply if such statement or omission or alleged statement or
              alleged omission was made in reliance upon and in conformity with
              information furnished in writing by the Company to the Fund for
              use in the Fund Registration Statement, Fund Prospectus (or any
              amendment or supplement thereto) or sales literature for the Fund
              or otherwise for use in connection with the sale of the Contracts
              or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact made by the Fund
              (other than statements or representations contained in the Fund
              Registration Statement, Fund Prospectus or sales literature or
              other promotional material of the Fund not supplied by the
              Distributor or the Fund or persons under their control) or
              wrongful conduct of the Fund or persons under its control with
              respect to the sale or distribution of the Contracts or Fund
              shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Contract's
              Registration Statement, Contracts Prospectus or sales literature
              or other promotional material for the Contracts (or any amendment
              or supplement thereto), or the omission or alleged omission to
              state therein a material fact required to be stated therein or
              necessary to make the statements therein not misleading in light
              of the circumstances in which they were made, if such statement or
              omission was made in reliance upon information furnished in
              writing by the Fund to the Company (or a person authorized in
              writing to do so on behalf of the Fund); or


                                       13


                     (d)    arise as a result of any failure by the Fund to
              provide the services and furnish the materials under the terms of
              this Agreement (including, but not by way of limitation, a
              failure, whether unintentional or in good faith or otherwise: (i)
              to comply with the diversification requirements specified in
              Sections 2.4 and 6.1 in Article VI of this Agreement; and (ii) to
              provide the Company with accurate information sufficient for it to
              calculate its accumulation and/or annuity unit values in timely
              fashion as required by law and by the Contracts Prospectuses); or

                     (e)    arise out of any material breach by the Fund of this
              Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.3.   INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

       A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.

ARTICLE IX. APPLICABLE LAW


                                       14


       9.1.   This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

       9.2.   This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant, and the terms hereof shall be limited, interpreted and construed in
accordance therewith.

ARTICLE X. TERMINATION

       10.1.  This Agreement shall terminate:

                     (a)    at the option of any party upon 120 days advance
              written notice to the other parties; or

                     (b)    at the option of the Company if shares of the Fund
              are not available to meet the requirements of the Contracts as
              determined by the Company. Prompt notice of the election to
              terminate for such cause shall be furnished by the Company.
              Termination shall be effective ten days after the giving of notice
              by the Company; or

                     (c)    at the option of the Fund upon institution of formal
              proceedings against the Company by the NASD, the SEC, the
              insurance commission of any state or any other regulatory body
              regarding the Company's duties under this Agreement or related to
              the sale of the Contracts, the operation of the Account, the
              administration of the Contracts or the purchase of Fund shares;

                     (d)    at the option of the Company upon institution of
              formal proceedings against the Fund, the investment advisor or any
              subinvestment advisor, by the NASD, the SEC, or any state
              securities or insurance commission or any other regulatory body;
              or

                     (e)    upon requisite vote of the Contract owners having an
              interest in the Fund (unless otherwise required by applicable law)
              and written approval of the Company, to substitute the shares of
              another investment company for the corresponding shares of the
              Fund in accordance with the terms of the Contracts; or

                     (f)    at the option of the Fund in the event any of the
              Contracts are not registered, issued or sold in accordance with
              applicable Federal and/or state law; or

                     (g)    at the option of the Company or the Fund upon a
              determination by a


                                       15


              majority of the Fund Board, or a majority of disinterested Fund
              Board members, that an irreconcilable material conflict exists
              among the interests of (i) any Product owners or (ii) the
              interests of the Participating Insurance Companies investing in
              the Fund; or

                     (h)    at the option of the Company if the Fund ceases to
              qualify as a Regulated Investment Company under Subchapter M of
              the Code, or under any successor or similar provision, or if the
              Company reasonably believes, based on an opinion of its counsel,
              that the Fund may fail to so qualify; or

                     (i)    at the option of the Company if the Fund fails to
              meet the diversification requirements specified in Section 817(h)
              of the Code and any regulations thereunder; or

                     (j)    at the option of the Fund if the Contracts cease to
              qualify as annuity contracts or life insurance policies, as
              applicable, under the Code, or if the Fund reasonably believes
              that the Contracts may fail to so qualify; or

                     (k)    at the option of the Fund if the Fund shall
              determine, in its sole judgment exercised in good faith, that
              either (1) the Company shall have suffered a material adverse
              change in its business or financial condition; or (2) the Company
              shall have been the subject of material adverse publicity which is
              likely to have a material adverse impact upon the business and
              operations of the Fund; or

                     (l)    at the option of the Company, if the Company shall
              determine, in its sole judgment exercised in good faith, that: (1)
              the Fund shall have suffered a material adverse change in its
              business or financial condition; or (2) the Fund shall have been
              the subject of material adverse publicity which is likely to have
              a material adverse impact upon the business and operations of the
              Company; or

                     (m)    automatically upon the assignment of this Agreement
              (including, without limitation, any transfer of the Contracts or
              the Accounts to another insurance company pursuant to an
              assumption reinsurance agreement) unless the non-assigning party
              consents thereto or unless this Agreement is assigned to an
              affiliate of the Company or the Fund, as the case may be.

       10.2.  NOTICE REQUIREMENT. Except as otherwise provided in Section 10.1,
no termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to the other party of its
intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                     (a)    In the event that any termination is based upon the
              provisions of Article VII or the provisions of Section 10.1(a) of
              this Agreement, such prior written notice shall be given in
              advance of the effective date of termination as required by such
              provisions; and

                     (b)    in the event that any termination is based upon the
              provisions of


                                       16


              Section 10.1(c) or 10.1(d) of this Agreement, such prior written
              notice shall be given at least ninety (90) days before the
              effective date of termination, or sooner if required by law or
              regulation.

       10.3.  EFFECT OF TERMINATION

                     (a)    Notwithstanding any termination of this Agreement
              pursuant to Section 10.1 of this Agreement, the Fund will, at the
              option of the Company, continue to make available additional Fund
              shares for so long after the termination of this Agreement as the
              Company desires, pursuant to the terms and conditions of this
              Agreement as provided in paragraph (b) below, for all Contracts in
              effect on the effective date of termination of this Agreement
              (hereinafter referred to as "Existing Contracts"). Specifically,
              without limitation, if the Company so elects to make additional
              Fund shares available, the owners of the Existing Contracts or the
              Company, whichever shall have legal authority to do so, shall be
              permitted to reallocate investments in the Fund, redeem
              investments in the Fund and/or invest in the Fund upon the making
              of additional purchase payments under the Existing Contracts.

                     (b)    If Fund shares continue to be made available after
              such termination, the provisions of this Agreement shall remain in
              effect except for Section 10.1(a) and thereafter either the Fund
              or the Company may terminate the Agreement, as so continued
              pursuant to this Section 10.3, upon prior written notice to the
              other party, such notice to be for a period that is reasonable
              under the circumstances but, if given by the Fund, need not be for
              more than six months.

                     (c)    The parties agree that this Section 10.3 shall not
              apply to any termination made pursuant to Article VII, and the
              effect of such Article VII termination shall be governed by the
              provisions set forth or incorporated by reference therein.

ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

       The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts and to add
new classes of variable annuity contracts and variable life insurance policies
to be issued by the Company through new or existing Separate Accounts investing
in the Fund. The provisions of this Agreement shall be equally applicable to
each such separate account and each such class of contracts or policies, unless
the context otherwise requires. Any such amendment must be signed by the parties
and must bear an effective date for that amendment.

ARTICLE XII. NOTICES


                                       17


       Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                        If to the Fund:

                            Lincoln National Managed Fund, Inc.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Kelly D. Clevenger

                        If to the Company:

                            Lincoln National Life Insurance Co.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Steven M. Kluever

ARTICLE XIII.  MISCELLANEOUS

       13.1.  The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       13.2.  This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

       13.3.  If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       13.4.  Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

       13.5.  Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.

ARTICLE XIV. PRIOR AGREEMENTS


                                       18


       This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.



       IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized officer on the date
specified below.

                   LINCOLN NATIONAL MANAGED FUND, INC.


         Signature: /s/ Kelly D. Clevenger
                   -----------------------------------------------------------

         Name: Kelly D. Clevenger
               ---------------------------------------------------------------

         Title: President
                --------------------------------------------------------------


                   LINCOLN NATIONAL LIFE INSURANCE CO. (Company)

         Signature: /s/ Stephen H. Lewis
                   -----------------------------------------------------------

         Name: Stephen H. Lewis
               ---------------------------------------------------------------

         Title: Senior Vice President, Lincoln National Life Insurance Company
                --------------------------------------------------------------


                                       19


       The Fund Participation Agreement (the "Agreement"), dated July 1, 1998,
by and among The Lincoln National Life Insurance Company and Lincoln National
Managed Fund, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

       "WHEREAS, the Company has registered or will have registered each Account
with the SEC (unless exempt therefrom) as a unit investment trust under the
1940 Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

       "The Company represents and warrants (a) that the Contracts are
       registered under the 1933 Act or will be so registered before the
       issuance thereof, (b) that the Contracts will be issued in compliance in
       all material respects with all applicable Federal and state laws and (c)
       that the Company will require of every person distributing the Contracts
       that the Contracts be offered and sold in compliance in all material
       respects with all applicable Federal and state laws. The Company further
       represents and warrants that it is an insurance company duly organized
       and validly existing under applicable law and that it has legally and
       validly authorized each Account as a separate account under Section
       27-1-5-1 of the Indiana Insurance Code, and has registered or, prior to
       the issuance of any Contracts, will register each Account (unless exempt
       therefrom) as a unit investment trust in accordance with the provisions
       of the 1940 Act to serve as a separate account for its Contracts, and
       that it will maintain such registrations for so long as any Contracts
       issued under them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to the
Fund Participation Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.


                                             LINCOLN NATIONAL MANAGED FUND, INC.

Date:                                        By: /s/ Kelly D. Clevenger
      ------------------                         --------------------------
                                             Name: Kelly D. Clevenger
                                                   ------------------------
                                             Title: President
                                                    -----------------------

                                             LINCOLN NATIONAL LIFE INSURANCE
                                             COMPANY

Date:                                        By: /s/ Stephen H. Lewis
      ------------------                         --------------------------
                                             Name: Stephen H. Lewis
                                                   ------------------------
                                             Title: Senior Vice President
                                                    -----------------------



4150
                                   Schedule 1
                                   ----------

                       Lincoln National Managed Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 1, 1998


Lincoln National Variable Annuity Account C
- -------------------------------------------

Lincoln Life Flexible Premium Variable Life Account D
- -----------------------------------------------------

Lincoln Life Flexible Premium Variable Life Account K
- -----------------------------------------------------

Lincoln Life Variable Annuity Account Q
- ---------------------------------------

Lincoln National Variable Annuity Account 53
- --------------------------------------------



                                   Schedule 2
                                   ----------

                       Lincoln National Managed Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 1, 1998


Multi Fund Variable Annuity
- ---------------------------

eAnnuity
- --------

Emancipator Life
- ----------------

Multi Fund Variable Life
- ------------------------

Group Multi Fund
- ----------------

Multi Fund - Non-registered
- ---------------------------



                                   Schedule 3
                                   ----------

                       Lincoln National Managed Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998


The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 331/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing" as
that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.   An international FUND or a global FUND is sufficiently diversified if it is
     invested in a minimum of three different countries at all times, and has
     invested no more than 50 percent of total assets in any one second-tier
     country and no more than 25 percent of total assets in any one third-tier
     country. First-tier countries are: Germany, the United Kingdom, Japan, the
     United States, France, Canada, and Australia. Second-tier countries are all
     countries not in the first or third tier. Third-tier countries are
     countries identified as "emerging" or "developing" by the International
     Bank for Reconstruction and Development ("World Bank") or International
     Finance Corporation.

b.   A regional FUND is sufficiently diversified if it is invested in a minimum
     of three countries. The name of the fund must accurately describe the FUND.

c.   The name of the single country FUND must accurately describe the FUND.

d.   An index FUND must substantially mirror the index.

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                    LINCOLN NATIONAL MONEY MARKET FUND, INC.


       THIS AGREEMENT, made and entered into this 7th day of June, 1998, by and
between Lincoln National Money Market Fund, Inc. a corporation organized under
the laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE INSURANCE CO.,
an Indiana insurance corporation (the "Company"), on its own behalf and on
behalf of each separate account of the Company named in Schedule 1 to this
Agreement as in effect at the time this Agreement is executed and such other
separate accounts that may be added to Schedule 1 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account"; collectively, the "Accounts").

       WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

       WHEREAS, the Fund filed with the Securities and Exchange Commission (the
"SEC") and the SEC has declared effective a registration statement (referred to
herein as the "Fund Registration Statement" and the prospectus contained
therein, or filed pursuant to Rule 497 under the 1933 Act, referred to herein as
the "Fund Prospectus") on Form N-lA to register itself as an open-end management
investment company (File No. 811-3212) under the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Fund shares (File No. 2-80743) under the
Securities Act of 1933, as amended (the "1933 Act"); and

       WHEREAS, the Company has filed a registration statement with the SEC to
register under the 1933 Act (unless exempt therefrom) certain variable annuity
contracts and/or variable life insurance policies described in Schedule 2 to
this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and


       WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

       WHEREAS, the Company has registered or will have registered each Account
with the SEC as a unit investment trust under the 1940 Act before any Contracts
are issued by that Account; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value;

       NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Fund agree as follows:


ARTICLE I. SALE OF FUND SHARES

       1.1.   The Fund agrees to sell to the Company those shares which the
Company orders on behalf of the Account, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.

       1.2.   The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

       1.3.   The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis (LL will expect same day
redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
shares to the extent permitted by the 1940 Act, any rules, regulations or orders
thereunder, or the then currently effective Fund Prospectus.

       1.4           (a)    For purposes of Sections 1.1, 1.2 and 1.3, the
              Company shall be the agent of the Fund for the limited purpose of
              receiving redemption


                                       2


              and purchase requests from the Account (but not from the general
              account of the Company), and receipt on any Business Day by the
              Company as such limited agent of the Fund prior to the time
              prescribed in the current Fund Prospectus (which as of the date
              of execution of this Agreement is 4 p.m., E.S.T.) shall
              constitute receipt by the Fund on that same Business Day,
              provided that the Fund receives notice of such redemption or
              purchase request by 9:00 a.m., E.S.T. on the next following
              Business Day. For purposes of this Agreement, "Business Day"
              shall mean any day on which the New York Stock exchange is open
              for trading.

                     (b)    The Company shall pay for the shares on the same day
              that it places an order with the Fund to purchase those Fund
              shares for an Account. Payment for Fund shares will be made by the
              Account or the Company in Federal Funds transmitted to the Fund by
              wire to be received by 11:00 a.m., E.S.T. on the day the Fund is
              properly notified of the purchase order for shares. The Fund will
              confirm receipt of each trade and these confirmations will be
              received by the Company via Fax or Email by 3:00 p.m. E.S.T. If
              Federal Funds are not received on time, such funds will be
              invested, and shares purchased thereby will be issued, as soon as
              practicable.

                     (c)    Payment for shares redeemed by the Account or the
              Company will be made in Federal Funds transmitted to the Company
              by wire on the same day the Fund is notified of the redemption
              order of shares, except that the Fund reserves the right to delay
              payment of redemption proceeds, but in no event may such payment
              be delayed longer than the period permitted under Section 22(e) of
              the 1940 Act. The Fund shall not bear any responsibility
              whatsoever for the proper disbursement or crediting of redemption
              proceeds if securities must be redeemed; the Company alone shall
              be responsible for such action.

       1.5.   Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.

       1.6. The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income dividends or capital gain distributions payable on any
shares. The Company, on its behalf and on behalf of the Account, hereby elects
to receive all such dividends and distributions as are payable on any shares in
the form of additional shares of that Fund. The Company reserves the right, on
its behalf and on behalf of the Account, to revoke this election and to receive
all such dividends in cash. The Fund shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.

       1.7.   The Fund shall use its best efforts to make the net asset value
per share available to the Company by 7:00 p.m., E.S.T. each Business Day, and
in any event, as soon as reasonably practicable after the net asset value per
share is calculated, and shall calculate such net asset value in accordance with
the then currently effective Fund Prospectus. The Fund shall not be liable for


                                       3


any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

       1.8.          (a)    The Company may withdraw the Account's investment in
              the Fund only: (i) as necessary to facilitate Contract owner
              requests; (ii) upon a determination by a majority of the Fund
              Board, or a majority of disinterested Fund Board members, that an
              irreconcilable material conflict exists among the interests of (x)
              any Product Owners or (y) the interests of the Participating
              Insurance Companies investing in the Fund; (iii) upon requisite
              vote of the Contract owners having an interest in the Fund to
              substitute the shares of another investment company for shares in
              accordance with the terms of the Contracts; (iv) as required by
              state and/or federal laws or regulations or judicial or other
              legal precedent of general application; or (v) at the Company's
              sole discretion, pursuant to an order of the SEC under Section
              26(b) of the 1940 Act.

                     (b)    The parties hereto acknowledge that the arrangement
              contemplated by this Agreement is not exclusive and that the Fund
              shares may be sold to other insurance companies (subject to
              Section 1.9 hereof) and the cash value of the Contracts may be
              invested in other investment companies.

                     (c)    The Company shall not, without prior notice to the
              Fund (unless otherwise required by applicable law), take any
              action to operate the Accounts as management investment companies
              under the 1940 Act.

       1.9.   The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II. REPRESENTATIONS AND WARRANTIES

       2.1.   The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or, prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding.


                                       4


       2.2.   The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

       2.3.   The Fund represents and warrants that it currently qualifies as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund further represents and warrants that it
will make every effort to continue to qualify and to maintain such qualification
(under Subchapter M or any successor or similar provision), and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.

       2.4.   The Fund represents and warrants that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.

       2.5.   The Company represents that the Contracts are currently and at the
time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

       2.6.   The Fund represents that the Fund's investment policies, fees and
expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

       2.7.   The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.

ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
             INFORMATION

       3.1.   The Fund shall provide the Company with as many copies of the
current Fund Prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund at its expense shall provide to the
Company a camera-ready copy, and electronic version, of the current Fund
Prospectus suitable for printing and other assistance as is reasonably necessary
in order for the Company to have a new Contracts Prospectus printed together
with the Fund Prospectus in one document. See Article V for a detailed
explanation of the responsibility for


                                       5



the cost of printing and distributing Fund prospectuses.

       3.2.   The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Fund and the Fund shall provide
such Statement free of charge to the Company and to any outstanding or
prospective Contract owner who requests such Statement.

       3.3.          (a)    The Fund at its expense shall provide to the Company
              a camera-ready copy of the Fund's shareholder reports and other
              communications to shareholders (except proxy material), in each
              case in a form suitable for printing, as determined by the
              Company. The Fund shall be responsible for the costs of printing
              and distributing these materials to Contract owners.

                     (b)    The Fund at its expense shall be responsible for
              preparing, printing and distributing its proxy material. The
              Company will provide the appropriate Contractowner names and
              addresses to the Fund for this purpose.

       3.4.   The Company shall furnish to the Fund, prior to its use, each
piece of sales literature or other promotional material in which the Fund is
named. No such material shall be used, except with the prior written permission
of the Fund. The Fund agrees to respond to any request for approval on a prompt
and timely basis. Failure of the Fund to respond within 10 days of the request
by the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund.

       3.5.   The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.


       3.6.   The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the Company. The Company agrees to
respond to any request for permission on a prompt and timely basis. If the
Company fails to respond within 10 days of a request by the Fund, then the Fund
is relieved of the obligation to obtain the prior written permission of the
Company.


                                       6


       3.7.   The Fund will provide to the Company at least one complete copy of
all Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

       3.8.   The Company will provide to the Fund at least one complete copy of
all Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, within 20 days after the filing of such
document with the SEC or other regulatory authorities.

       3.9.   Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

       3.10.  For purposes of this Article III, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.

ARTICLE IV.  Voting

       4.1    Subject to applicable law and the requirements of Article VII, the
Fund shall solicit voting instructions from Contract owners;

       4.2    Subject to applicable law and the requirements of Article VII, the
Company shall:

                     (a)    vote Fund shares attributable to Contract owners in
              accordance with

                                       7


              instructions or proxies received in timely fashion from such
              Contract owners;

                     (b)    vote Fund shares attributable to Contract owners for
              which no instructions have been received in the same proportion as
              Fund shares of such Series for which instructions have been
              received in timely fashion; and

                     (c)    vote Fund shares held by the Company on its own
              behalf or on behalf of the Account that are not attributable to
              Contract owners in the same proportion as Fund shares of such
              Series for which instructions have been received in timely
              fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

       All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.

       The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)
       The Company is responsible for the cost of printing and distributing Fund
prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contractowners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.


ARTICLE VI.  COMPLIANCE UNDERTAKINGS

       6.1.   The Fund undertakes to comply with Subchapter M and Section 817(h)
of the Code, and all regulations issued thereunder.

       6.2.   The Company shall amend the Contracts Registration Statements
under the 1933 Act and the Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent


                                       8


required by applicable securities laws of the various states.

       6.3.   The Fund shall amend the Fund Registration Statement under the
1933 Act and the 1940 Act from time to time as required in order to effect for
so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

       6.4.   The Company shall be responsible for assuring that any prospectus
offering a Contract that is a life insurance contract where it is reasonably
possible that such Contract would be deemed a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will describe the
circumstances under which a Contract could be treated as a modified endowment
contract (or policy).

       6.5.   To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b-1 to finance distribution expenses.

       6.6.          (a)    When appropriate in order to inform the Fund of any
              applicable state-mandated investment restrictions with which the
              Fund must comply, the Company shall arrange with the Fund to amend
              Schedule 3, pursuant to the requirements of Article XI.

                     (b)    Should the Fund become aware of any restrictions
              which may be appropriate for inclusion in Schedule 3, the Company
              shall be informed immediately of the substance of those
              restrictions.


ARTICLE VlI.  POTENTIAL CONFLICTS

       7.1.   The Company agrees to report to the Board of Directors of the Fund
(the "Board") any potential or existing conflicts between the interests of
Product Owners of all separate accounts investing in the Fund, and to assist the
Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider
any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

       7.2.   If a majority of the Board, or a majority of disinterested Board
Members, determines that a material irreconcilable conflict exists, the Board
shall give prompt notice to all Participating Insurance Companies.

                     (a)    If a majority of the whole Board, after notice to
              the Company and a reasonable opportunity for the Company to appear
              before it and present its case, determines that the Company is
              responsible for said conflict, and if the Company


                                       9


              agrees with that determination, the Company shall, at its sole
              cost and expense, take whatever steps are necessary to remedy the
              material irreconcilable conflict. These steps could include: (i)
              withdrawing the assets allocable to some or all of the affected
              Accounts from the Fund and reinvesting such assets in a different
              investment vehicle, or submitting the question of whether such
              segregation should be implemented to a vote of all affected
              Contractowners and, as appropriate, segregating the assets of any
              particular group (i.e., variable annuity Contractowners, variable
              life insurance policyowners, or variable Contractowners of one or
              more Participating Insurance Companies) that votes in favor of
              such segregation, or offering to the affected Contractowners the
              option of making such a change; and (ii) establishing a new
              registered mutual fund or management separate account; or (iii)
              taking such other action as is necessary to remedy or eliminate
              the material irreconcilable conflict.

                     (b)    If the Company disagrees with the Board's
              determination, the Company shall file a written protest with the
              Board, reserving its right to dispute the determination as between
              just the Company and the Fund and to seek reimbursement from the
              Fund for the reasonable costs and expenses of resolving the
              conflict . After reserving that right the Company, although
              disagreeing with the Board that it (the Company) was responsible
              for the conflict, shall take the necessary steps, under protest,
              to remedy the conflict, substantially in accordance with paragraph
              (a) just above, for the protection of Contractowners.

                     (c)    As between the Company and the Fund, if within 45
              days after the Board's determination the Company elects to press
              the dispute, it shall so notify the Board in writing. The parties
              shall then attempt to resolve the matter amicably through
              negotiation by individuals from each party who are authorized to
              settle the matter. If the matter has not been amicably resolved
              within 60 days from the date of the Company's notice of its intent
              to press the dispute, then before either party shall undertake to
              litigate the dispute it shall be submitted to non-binding
              arbitration conducted expeditiously in accordance with the CPR
              Rules for Non-Administered Arbitration of Business Disputes, by a
              sole arbitrator; PROVIDED, HOWEVER, that if one party has
              requested the other party to seek an amicable resolution and the
              other party has failed to participate, the requesting party may
              initiate arbitration before expiration of the 60-day period set
              out just above.

                 If within 45 days of the commencement of the process to select
              an arbitrator the parties cannot agree upon the arbitrator, then
              he or she will be selected from the CPR Panels of Neutrals. The
              arbitration shall be governed by the United States Arbitration
              Act, 9 U.S.C. Sec. 1-16. The place of arbitration shall be Fort
              Wayne, Indiana. The Arbitrator is not empowered to award damages
              in excess of compensatory damages.

                     (d)    If the Board shall determine that the Fund or
              another was responsible for the conflict, then the Board shall
              notify the Company immediately


                                       10


              of that determination. The Fund shall assure the Company that it
              (the Fund) or that other Participating Insurance Company as
              applicable, shall, at its sole cost and expense, take whatever
              steps are necessary to eliminate the conflict.

                     (e)    Nothing in Sections 7.2(b) or 7.2(c) shall
              constitute a waiver of any right of action which the Company may
              have against other Participating Insurance Companies for
              reimbursement of all or part of the costs and expenses of
              resolving the conflict.

       7.3.   If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

       7.4.   For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict. However, in no event will the
Fund be required to establish a new funding medium for any variable contract,
nor will the Company be required to establish a new funding medium for any
Contract, if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.



ARTICLE VIII.  INDEMNIFICATION

       8.1.   INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund and each person who controls or is associated with
the Fund (other than another Participating Insurance Company) within the meaning
of such terms under the federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the prior written consent of the Company in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Contracts Registration Statement, Contracts Prospectus, sales
              literature or other promotional material for the Contracts or the
              Contracts themselves (or any amendment or supplement to any of the
              foregoing), or arise out of or are based upon the omission or the
              alleged omission to state therein a material fact required to be
              stated therein or necessary to make the statements therein not
              misleading in light of the circumstances in which they were made;
              provided that this obligation to indemnify shall not apply if such


                                       11


              statement or omission or such alleged statement or alleged
              omission was made in reliance upon and in conformity with
              information furnished in writing to the Company by the Fund (or a
              person authorized in writing to do so on behalf of the Fund) for
              use in the Contracts Registration Statement, Contracts Prospectus
              or in the Contracts or sales literature (or any amendment or
              supplement) or otherwise for use in connection with the sale of
              the Contracts or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact by or on behalf of
              the Company (other than statements or representations contained in
              the Fund Registration Statement, Fund Prospectus or sales
              literature or other promotional material of the Fund not supplied
              by the Company or persons under its control) or wrongful conduct
              of the Company or persons under its control with respect to the
              sale or distribution of the Contracts or Fund shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Fund Registration
              Statement, Fund Prospectus or sales literature or other
              promotional material of the Fund or any amendment thereof or
              supplement thereto, or the omission or alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading in light of the
              circumstances in which they were made, if such statement or
              omission was made in reliance upon and in conformity with
              information furnished to the Fund by or on behalf of the Company;
              or
                     (d)    arise as a result of any failure by the Company to
              provide the services and furnish the materials or to make any
              payments under the terms of this Agreement; or

                     (e)    arise out of any material breach by the Company of
              this Agreement, including but not limited to any failure to
              transmit a request for redemption or purchase of Fund shares on a
              timely basis in accordance with the procedures set forth in
              Article I; or

                     (f)    arise as a result of the Company's providing the
              Fund with inaccurate information, which causes the Fund to
              calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.2.   INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold
harmless the Company and each person who controls or is associated with the
Company within the meaning of such terms under the federal securities laws and
any officer, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any


                                       12


investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Fund Registration Statement, Fund Prospectus (or any amendment or
              supplement thereto) or sales literature or other promotional
              material of the Fund, or arise out of or are based upon the
              omission or the alleged omission to state therein a material fact
              required to be stated therein or necessary to make the statements
              therein not misleading in light of the circumstances in which they
              were made; provided that this obligation to indemnify shall not
              apply if such statement or omission or alleged statement or
              alleged omission was made in reliance upon and in conformity with
              information furnished in writing by the Company to the Fund for
              use in the Fund Registration Statement, Fund Prospectus (or any
              amendment or supplement thereto) or sales literature for the Fund
              or otherwise for use in connection with the sale of the Contracts
              or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact made by the Fund
              (other than statements or representations contained in the Fund
              Registration Statement, Fund Prospectus or sales literature or
              other promotional material of the Fund not supplied by the
              Distributor or the Fund or persons under their control) or
              wrongful conduct of the Fund or persons under its control with
              respect to the sale or distribution of the Contracts or Fund
              shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Contract's
              Registration Statement, Contracts Prospectus or sales literature
              or other promotional material for the Contracts (or any amendment
              or supplement thereto), or the omission or alleged omission to
              state therein a material fact required to be stated therein or
              necessary to make the statements therein not misleading in light
              of the circumstances in which they were made, if such statement or
              omission was made in reliance upon information furnished in
              writing by the Fund to the Company (or a person authorized in
              writing to do so on behalf of the Fund); or

                     (d)    arise as a result of any failure by the Fund to
              provide the services and furnish the materials under the terms of
              this Agreement (including, but not by way of limitation, a
              failure, whether unintentional or in good faith or otherwise: (i)
              to comply with the diversification requirements specified in
              Sections 2.4 and 6.1 in Article VI of this Agreement; and (ii) to
              provide the Company with accurate information sufficient for it to
              calculate its accumulation and/or annuity unit values


                                       13


              in timely fashion as required by law and by the Contracts
              Prospectuses); or

                     (e)    arise out of any material breach by the Fund of this
              Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.3.   INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

       A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

       9.1.   This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

       9.2.   This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those


                                       14


statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.


ARTICLE X. TERMINATION

       10.1.  This Agreement shall terminate:

                     (a)    at the option of any party upon 120 days advance
              written notice to the other parties; or

                     (b)    at the option of the Company if shares of the Fund
              are not available to meet the requirements of the Contracts as
              determined by the Company. Prompt notice of the election to
              terminate for such cause shall be furnished by the Company.
              Termination shall be effective ten days after the giving of notice
              by the Company; or

                     (c)    at the option of the Fund upon institution of formal
              proceedings against the Company by the NASD, the SEC, the
              insurance commission of any state or any other regulatory body
              regarding the Company's duties under this Agreement or related to
              the sale of the Contracts, the operation of the Account, the
              administration of the Contracts or the purchase of Fund shares;

                     (d)    at the option of the Company upon institution of
              formal proceedings against the Fund, the investment advisor or any
              sub-investment advisor, by the NASD, the SEC, or any state
              securities or insurance commission or any other regulatory body;
              or

                     (e)    upon requisite vote of the Contract owners having an
              interest in the Fund (unless otherwise required by applicable law)
              and written approval of the Company, to substitute the shares of
              another investment company for the corresponding shares of the
              Fund in accordance with the terms of the Contracts; or

                     (f)    at the option of the Fund in the event any of the
              Contracts are not registered, issued or sold in accordance with
              applicable Federal and/or state law; or

                     (g)    at the option of the Company or the Fund upon a
              determination by a majority of the Fund Board, or a majority of
              disinterested Fund Board members, that an irreconcilable material
              conflict exists among the interests of (i) any Product owners or
              (ii) the interests of the Participating Insurance Companies
              investing in the Fund; or

                     (h)    at the option of the Company if the Fund ceases to
              qualify as a Regulated Investment Company under Subchapter M of
              the Code, or under any


                                       15


              successor or similar provision, or if the Company reasonably
              believes, based on an opinion of its counsel, that the Fund may
              fail to so qualify; or

                     (i)    at the option of the Company if the Fund fails to
              meet the diversification requirements specified in Section 817(h)
              of the Code and any regulations thereunder; or

                     (j)    at the option of the Fund if the Contracts cease to
              qualify as annuity contracts or life insurance policies, as
              applicable, under the Code, or if the Fund reasonably believes
              that the Contracts may fail to so qualify; or

                     (k)    at the option of the Fund if the Fund shall
              determine, in its sole judgment exercised in good faith, that
              either (1) the Company shall have suffered a material adverse
              change in its business or financial condition; or (2) the Company
              shall have been the subject of material adverse publicity which is
              likely to have a material adverse impact upon the business and
              operations of the Fund; or

                     (l)    at the option of the Company, if the Company shall
              determine, in its sole judgment exercised in good faith, that: (1)
              the Fund shall have suffered a material adverse change in its
              business or financial condition; or (2) the Fund shall have been
              the subject of material adverse publicity which is likely to have
              a material adverse impact upon the business and operations of the
              Company; or

                     (m)    automatically upon the assignment of this Agreement
              (including, without limitation, any transfer of the Contracts or
              the Accounts to another insurance company pursuant to an
              assumption reinsurance agreement) unless the non-assigning party
              consents thereto or unless this Agreement is assigned to an
              affiliate of the Company or the Fund, as the case may be.

       10.2.  NOTICE REQUIREMENT. Except as otherwise provided in Section 10.1,
no termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to the other party of its
intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                     (a)    In the event that any termination is based upon the
              provisions of Article VII or the provisions of Section 10.1(a) of
              this Agreement, such prior written notice shall be given in
              advance of the effective date of termination as required by such
              provisions; and

                     (b)    in the event that any termination is based upon the
              provisions of Section 10.1(c) or 10.1(d) of this Agreement, such
              prior written notice shall be given at least ninety (90) days
              before the effective date of termination, or sooner if required by
              law or regulation.

       10.3.  EFFECT OF TERMINATION


                                       16


                     (a)    Notwithstanding any termination of this Agreement
              pursuant to Section 10.1 of this Agreement, the Fund will, at the
              option of the Company, continue to make available additional Fund
              shares for so long after the termination of this Agreement as the
              Company desires, pursuant to the terms and conditions of this
              Agreement as provided in paragraph (b) below, for all Contracts in
              effect on the effective date of termination of this Agreement
              (hereinafter referred to as "Existing Contracts"). Specifically,
              without limitation, if the Company so elects to make additional
              Fund shares available, the owners of the Existing Contracts or the
              Company, whichever shall have legal authority to do so, shall be
              permitted to reallocate investments in the Fund, redeem
              investments in the Fund and/or invest in the Fund upon the making
              of additional purchase payments under the Existing Contracts.

                     (b)    If Fund shares continue to be made available after
              such termination, the provisions of this Agreement shall remain in
              effect except for Section 10.1(a) and thereafter either the Fund
              or the Company may terminate the Agreement, as so continued
              pursuant to this Section 10.3, upon prior written notice to the
              other party, such notice to be for a period that is reasonable
              under the circumstances but, if given by the Fund, need not be for
              more than six months.

                     (c)    The parties agree that this Section 10.3 shall not
              apply to any termination made pursuant to Article VII, and the
              effect of such Article VII termination shall be governed by the
              provisions set forth or incorporated by reference therein.

ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

       The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts and to add
new classes of variable annuity contracts and variable life insurance policies
to be issued by the Company through new or existing Separate Accounts investing
in the Fund. The provisions of this Agreement shall be equally applicable to
each such separate account and each such class of contracts or policies, unless
the context otherwise requires. Any such amendment must be signed by the parties
and must bear an effective date for that amendment.


ARTICLE XII. NOTICES

       Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                        If to the Fund:

                            Lincoln National Money Market Fund, Inc.


                                       17


                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Kelly D. Clevenger

                        If to the Company:

                            Lincoln National Life Insurance Co.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Steven M. Kluever

ARTICLE XIII. MISCELLANEOUS

       13.1.  The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       13.2.  This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

       13.3.  If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       13.4.  Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

       13.5.  Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


ARTICLE XIV. PRIOR AGREEMENTS

       This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18


       IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized officer on the date
specified below.


                        LINCOLN NATIONAL MONEY MARKET FUND, INC.



           Signature: /s/ Kelly D. Clevenger
                      ----------------------------------------------------------

           Name: Kelly D. Clevenger
                 ---------------------------------------------------------------

           Title: President
                  --------------------------------------------------------------


                        LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


           Signature: /s/ Stephen H. Lewis
                      ----------------------------------------------------------

           Name: Stephen H. Lewis
                 ---------------------------------------------------------------

           Title: Senior Vice President, Lincoln National Life Insurance Company
                  --------------------------------------------------------------


                                       19


                                   SCHEDULE 1

                       Lincoln National Money Market Fund
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of June 7, 1998


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT D

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN LIFE FLEXIBLE VARIABLE LIFE ACCOUNT R

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53


                                       20


                                   SCHEDULE 2

                    Lincoln National Money Market Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of June 7, 1998

MULTI FUND VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

VUL I

ACCRU CHOICEPLUS

GROUP MULTI FUND

SVUL I

MULTI FUND - NON-REGISTERED


                                       21


                                   SCHEDULE 3

                       Lincoln National Money Market Fund
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of June 7, 1998


The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 33 1/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing" as
that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.     An international FUND or global FUND is sufficiently diversified if it is
       invested in a minimum of three different countries at all times, and has
       invested no more than 50 percent of total assets in any one second-tier
       country and not more than 25 percent of total assets in any one
       third-tier country. First-tier countries are: Germany, the United
       Kingdom, Japan, the United States, France, Canada, and Australia.
       Second-tier countries are all countries not in the first or third tier.
       Third-tier countries are countries identified as "emerging" or
       "developing" by the International Bank for Reconstruction and Development
       ("World Bank") or International Finance Corporation.

b.     A regional FUND is sufficiently diversified if it is invested in a
       minimum of three countries. The name of the fund must accurately describe
       the FUND.

c.     The name of the single country FUND must accurately describe the FUND.

d.     An index FUND must substantially mirror the index.


                                       22


                                  Amendment to
                                   SCHEDULE 2

                    Lincoln National Money Market Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                             As of October 15, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

VUL I

LINCOLN VUL

DELAWARE-LINCOLN CHOICE PLUS

GROUP MULTI FUND

SVUL I

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED

LINCOLN VUL-DB-


IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                                                LINCOLN NATIONAL MONEY MARKET
                                                FUND, INC.


Date:                                           By:
      ----------------------                        ----------------------------
                                                    Kelly D. Clevenger
                                                    President and Chairman


                                                LINCOLN NATIONAL LIFE
                                                INSURANCE COMPANY

Date:                                           By:
      ----------------------                        ----------------------------
                                                    Stephen H. Lewis
                                                    Senior Vice President


                                  Amendment to
                                   SCHEDULE 1

                    Lincoln National Money Market Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                                As of May 1, 1999


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT D

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT M

LINCOLN VARIABLE ANNUITY ACCOUNT N

LINCOLN VARIABLE ANNUITY ACCOUNT Q

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53


                                  Amendment to
                                   SCHEDULE 2

                    Lincoln National Money Market Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurane Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                                As of May 1, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

VUL I

LINCOLN VUL

DELAWARE-LINCOLN CHOICE PLUS

GROUP MULTI FUND

SVUL I

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED


IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                                                LINCOLN NATIONAL MONEY MARKET
                                                FUND, INC.


Date:                                           By:
      ----------------------                        ----------------------------
                                                    Kelly D. Clevenger
                                                    President and Chairman


                                                LINCOLN NATIONAL LIFE
                                                INSURANCE COMPANY

Date:                                           By:
      ----------------------                        ----------------------------
                                                    Stephen H. Lewis
                                                    Senior Vice President


4151
                                  Amendment to
                                   Schedule 2
                                   ----------

                    Lincoln National Money Market Fund, Inc.
         Variable Annuity Contracts and Variable Life Insurance Policies
               Supported by Separate Accounts Listed on Schedule 1
                               As of July 15, 2000


Multi Fund Individual Variable Annuity
- --------------------------------------

eAnnuity
- --------

Emancipator Life
- ----------------

Multi Fund Variable Life
- ------------------------

VUL I
- -----

Lincoln VUL
- -----------

Lincoln ChoicePlus
- ------------------

Lincoln ChoicePlus Access
- -------------------------

Lincoln ChoicePlus Bonus
- ------------------------

Group Multi Fund
- ----------------

SVUL I
- ------

Lincoln SVUL
- ------------

Lincoln CVUL
- ------------

Multi Fund - Non-registered
- ---------------------------

Lincoln VUL-DB-
- ---------------




IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                                            LINCOLN NATIONAL MONEY MARKET
                                            FUND, INC.


Date:                                       By: /s/ Steven M. Kluever
      ----------------------------              ----------------------------
                                                Steven M. Kluever
                                                Second Vice President



                                            LINCOLN NATIONAL LIFE
                                            INSURANCE COMPANY

Date:                                       By: /s/ Stephen H. Lewis
      ----------------------------              ----------------------------
                                                Stephen H. Lewis
                                                Senior Vice President




                                  Amendment to

                                   SCHEDULE 2

                    Lincoln National Money Market Fund, Inc.

         Variable Annuity Contracts and Variable Life Insurance Policies

               Supported by Separate Accounts Listed on Schedule 1
                               As of July 15, 2001

MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

EMANCIPATOR LIFE

MULTI FUND VARIABLE LIFE

VUL I

LINCOLN VUL

LINCOLN CHOICEPLUS

LINCOLN CHOICEPLUS ACCESS

LINCOLN CHOICEPLUS BONUS

LINCOLN CHOICEPLUS II

LINCOLN CHOICEPLUS II ACCESS

LINCOLN CHOICEPLUS II BONUS

LINCOLN CHOICEPLUS II ADVANCE

GROUP MULTI FUND

SVUL

SVUL I

SVUL II

CVUL

CVUL III

MULTI FUND - NON-REGISTERED

LINCOLN VUL(DB)

LINCOLN VUL(CV)

LINCOLN VUL(CV2)



VUL MONEYGUARD


IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                                     LINCOLN NATIONAL MONEY MARKET FUND, INC.


Date:                                By: /s/ Kelly D. Clevenger
       ----------------------------     ----------------------------------------
                                             Kelly D. Clevenger
                                             Chairman and President

                                     THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date:                                By: /s/ Steven M. Kluever
      -----------------------------     ----------------------------------------
                                             Steven M. Kluever
                                             Second Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                  LINCOLN NATIONAL SOCIAL AWARENESS FUND, INC.


       THIS AGREEMENT, made and entered into this 1st day of July, 1998, by and
between Lincoln National Social Awareness Fund, Inc. a corporation organized
under the laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE INSURANCE
CO., an Indiana insurance corporation (the "Company"), on its own behalf and on
behalf of each separate account of the Company named in Schedule 1 to this
Agreement as in effect at the time this Agreement is executed and such other
separate accounts that may be added to Schedule 1 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account"; collectively, the "Accounts").

       WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

       WHEREAS, the Fund filed with the Securities and Exchange Commission (the
"SEC") and the SEC has declared effective a registration statement (referred to
herein as the "Fund Registration Statement" and the prospectus contained
therein, or filed pursuant to Rule 497 under the 1933 Act, referred to herein as
the "Fund Prospectus") on Form N-lA to register itself as an open-end management
investment company (File No. 811-3212) under the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Fund shares (File No. 2-80743) under the
Securities Act of 1933, as amended (the "1933 Act"); and

       WHEREAS, the Company has filed a registration statement with the SEC to
register under the 1933 Act (unless exempt therefrom) certain variable annuity
contracts and/or variable life insurance policies described in Schedule 2 to
this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and


       WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

       WHEREAS, the Company has registered or will have registered each Account
with the SEC as a unit investment trust under the 1940 Act before any Contracts
are issued by that Account; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value; and

       WHEREAS, pursuant to Articles of Merger approved by the Company in 1988,
the Company succeeded to all the legal rights and responsibilities of Lincoln
National Pension Insurance Company, the signatory to the original Agreement to
Purchase Shares, which this Agreement amends and restates; and

       NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Fund agree as follows:


ARTICLE I. SALE OF FUND SHARES

       1.1.   The Fund agrees to sell to the Company those shares which the
Company orders on behalf of the Account, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.

       1.2.   The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

       1.3.   The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis (LL will expect same day
redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
shares to the


                                       2


extent permitted by the 1940 Act, any rules, regulations or orders thereunder,
or the then currently effective Fund Prospectus.

       1.4           (a)    For purposes of Sections 1.1, 1.2 and 1.3, the
                            Company shall be the agent of the Fund for the
              limited purpose of receiving redemption and purchase requests from
              the Account (but not from the general account of the Company), and
              receipt on any Business Day by the Company as such limited agent
              of the Fund prior to the time prescribed in the current Fund
              Prospectus (which as of the date of execution of this Agreement is
              4 p.m., E.S.T.) shall constitute receipt by the Fund on that same
              Business Day, provided that the Fund receives notice of such
              redemption or purchase request by 9:00 a.m., E.S.T. on the next
              following Business Day. For purposes of this Agreement, "Business
              Day" shall mean any day on which the New York Stock exchange is
              open for trading.

                     (b)    The Company shall pay for the shares on the same day
              that it places an order with the Fund to purchase those Fund
              shares for an Account. Payment for Fund shares will be made by the
              Account or the Company in Federal Funds transmitted to the Fund by
              wire to be received by 11:00 a.m., E.S.T. on the day the Fund is
              properly notified of the purchase order for shares. The Fund will
              confirm receipt of each trade and these confirmations will be
              received by the Company via Fax or Email by 3:00 p.m. E.S.T. If
              Federal Funds are not received on time, such funds will be
              invested, and shares purchased thereby will be issued, as soon as
              practicable.

                     (c)    Payment for shares redeemed by the Account or the
              Company will be made in Federal Funds transmitted to the Company
              by wire on the same day the Fund is notified of the redemption
              order of shares, except that the Fund reserves the right to delay
              payment of redemption proceeds, but in no event may such payment
              be delayed longer than the period permitted under Section 22(e) of
              the 1940 Act. The Fund shall not bear any responsibility
              whatsoever for the proper disbursement or crediting of redemption
              proceeds if securities must be redeemed; the Company alone shall
              be responsible for such action.

       1.5.   Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.

       1.6.   The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income dividends or capital gain distributions payable on any
shares. The Company, on its behalf and on behalf of the Account, hereby elects
to receive all such dividends and distributions as are payable on any shares in
the form of additional shares of that Fund. The Company reserves the right, on
its behalf and on behalf of the Account, to revoke this election and to receive
all such dividends in cash. The Fund shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.


                                       3


       1.7.   The Fund shall use its best efforts to make the net asset value
per share available to the Company by 7:00 p.m., E.S.T. each Business Day, and
in any event, as soon as reasonably practicable after the net asset value per
share is calculated, and shall calculate such net asset value in accordance with
the then currently effective Fund Prospectus. The Fund shall not be liable for
any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

       1.8.          (a)    The Company may withdraw the Account's investment in
              the Fund only: (i) as necessary to facilitate Contract owner
              requests; (ii) upon a determination by a majority of the Fund
              Board, or a majority of disinterested Fund Board members, that an
              irreconcilable material conflict exists among the interests of (x)
              any Product Owners or (y) the interests of the Participating
              Insurance Companies investing in the Fund; (iii) upon requisite
              vote of the Contractowners having an interest in the Fund to
              substitute the shares of another investment company for shares in
              accordance with the terms of the Contracts; (iv) as required by
              state and/or federal laws or regulations or judicial or other
              legal precedent of general application; or (v) at the Company's
              sole discretion, pursuant to an order of the SEC under Section
              26(b) of the 1940 Act.

                     (b)    The parties hereto acknowledge that the arrangement
              contemplated by this Agreement is not exclusive and that the Fund
              shares may be sold to other insurance companies (subject to
              Section 1.9 hereof) and the cash value of the Contracts may be
              invested in other investment companies.

                     (c)    The Company shall not, without prior notice to the
              Fund (unless otherwise required by applicable law), take any
              action to operate the Accounts as management investment companies
              under the 1940 Act.

       1.9.   The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.

ARTICLE II. REPRESENTATIONS AND WARRANTIES

       2.1.   The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or,


                                       4


prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding.

       2.2.   The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

       2.3.   The Fund represents and warrants that it currently qualifies as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund further represents and warrants that it
will make every effort to continue to qualify and to maintain such qualification
(under Subchapter M or any successor or similar provision), and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.

       2.4.   The Fund represents and warrants that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.

       2.5.   The Company represents that the Contracts are currently and at the
time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

       2.6.   The Fund represents that the Fund's investment policies, fees and
expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

       2.7.   The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
             INFORMATION

       3.1.   The Fund shall provide the Company with as many copies of the
current Fund


                                       5


Prospectus as the Company may reasonably request. If requested by the Company in
lieu thereof, the Fund at its expense shall provide to the Company a
camera-ready copy, and electronic version, of the current Fund Prospectus
suitable for printing and other assistance as is reasonably necessary in order
for the Company to have a new Contracts Prospectus printed together with the
Fund Prospectus in one document. See Article V for a detailed explanation of the
responsibility for the cost of printing and distributing Fund prospectuses.

       3.2.   The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Fund and the Fund shall provide
such Statement free of charge to the Company and to any outstanding or
prospective Contract owner who requests such Statement.

       3.3.          (a)    The Fund at its expense shall provide to the Company
              a camera-ready copy of the Fund's shareholder reports and other
              communications to shareholders (except proxy material), in each
              case in a form suitable for printing, as determined by the
              Company. The Fund shall be responsible for the costs of printing
              and distributing these materials to Contract owners.

                     (b)    The Fund at its expense shall be responsible for
              preparing, printing and distributing its proxy material. The
              Company will provide the appropriate Contractowner names and
              addresses to the Fund for this purpose.

       3.4.   The Company shall furnish to the Fund, prior to its use, each
piece of sales literature or other promotional material in which the Fund is
named. No such material shall be used, except with the prior written permission
of the Fund. The Fund agrees to respond to any request for approval on a prompt
and timely basis. Failure of the Fund to respond within 10 days of the request
by the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund.

       3.5.   The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.

       3.6.   The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the


                                       6


Company. The Company agrees to respond to any request for permission on a prompt
and timely basis. If the Company fails to respond within 10 days of a request by
the Fund, then the Fund is relieved of the obligation to obtain the prior
written permission of the Company.

       3.7.   The Fund will provide to the Company at least one complete copy of
all Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

       3.8.   The Company will provide to the Fund at least one complete copy of
all Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, within 20 days after the filing of such
document with the SEC or other regulatory authorities.

       3.9.   Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.


       3.10.  For purposes of this Article III, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.

ARTICLE IV. Voting

       4.1    Subject to applicable law and the requirements of Article VII, the
Fund shall


                                       7


solicit voting instructions from Contract owners;

       4.2    Subject to applicable law and the requirements of Article VII, the
Company shall:
                     (a)    vote Fund shares attributable to Contract owners in
              accordance with instructions or proxies received in timely fashion
              from such Contract owners;

                     (b)    vote Fund shares attributable to Contract owners for
              which no instructions have been received in the same proportion as
              Fund shares of such Series for which instructions have been
              received in timely fashion; and

                     (c)    vote Fund shares held by the Company on its own
              behalf or on behalf of the Account that are not attributable to
              Contract owners in the same proportion as Fund shares of such
              Series for which instructions have been received in timely
              fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

       All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.

       The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

       The Company is responsible for the cost of printing and distributing Fund
prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contractowners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.


ARTICLE VI. COMPLIANCE UNDERTAKINGS

       6.1.   The Fund undertakes to comply with Subchapter M and Section 817(h)
of the


                                       8


Code, and all regulations issued thereunder.

       6.2.   The Company shall amend the Contracts Registration Statements
under the 1933 Act and the Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws of the various states.

       6.3.   The Fund shall amend the Fund Registration Statement under the
1933 Act and the 1940 Act from time to time as required in order to effect for
so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

       6.4.   The Company shall be responsible for assuring that any prospectus
offering a Contract that is a life insurance contract where it is reasonably
possible that such Contract would be deemed a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will describe the
circumstances under which a Contract could be treated as a modified endowment
contract (or policy).

       6.5.   To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b-1 to finance distribution expenses.

       6.6.          (a)    When appropriate in order to inform the Fund of any
              applicable state-mandated investment restrictions with which the
              Fund must comply, the Company shall arrange with the Fund to amend
              Schedule 3, pursuant to the requirements of Article XI.

                     (b)    Should the Fund become aware of any restrictions
              which may be appropriate for inclusion in Schedule 3, the Company
              shall be informed immediately of the substance of those
              restrictions.


ARTICLE VlI. POTENTIAL CONFLICTS

       7.1.   The Company agrees to report to the Board of Directors of the Fund
(the "Board") any potential or existing conflicts between the interests of
Product Owners of all separate accounts investing in the Fund, and to assist the
Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider
any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

       7.2.   If a majority of the Board, or a majority of disinterested Board
Members,


                                       9


determines that a material irreconcilable conflict exists, the Board shall give
prompt notice to all Participating Insurance Companies.

                     (a)    If a majority of the whole Board, after notice to
              the Company and a reasonable opportunity for the Company to appear
              before it and present its case, determines that the Company is
              responsible for said conflict, and if the Company agrees with that
              determination, the Company shall, at its sole cost and expense,
              take whatever steps are necessary to remedy the material
              irreconcilable conflict. These steps could include: (i)
              withdrawing the assets allocable to some or all of the affected
              Accounts from the Fund and reinvesting such assets in a different
              investment vehicle, or submitting the question of whether such
              segregation should be implemented to a vote of all affected
              Contractowners and, as appropriate, segregating the assets of any
              particular group (i.e., variable annuity Contractowners, variable
              life insurance policyowners, or variable Contractowners of one or
              more Participating Insurance Companies) that votes in favor of
              such segregation, or offering to the affected Contractowners the
              option of making such a change; and (ii) establishing a new
              registered mutual fund or management separate account; or (iii)
              taking such other action as is necessary to remedy or eliminate
              the material irreconcilable conflict.

                     (b)    If the Company disagrees with the Board's
              determination, the Company shall file a written protest with the
              Board, reserving its right to dispute the determination as between
              just the Company and the Fund and to seek reimbursement from the
              Fund for the reasonable costs and expenses of resolving the
              conflict . After reserving that right the Company, although
              disagreeing with the Board that it (the Company) was responsible
              for the conflict, shall take the necessary steps, under protest,
              to remedy the conflict, substantially in accordance with paragraph
              (a) just above, for the protection of Contractowners.

                     (c)    As between the Company and the Fund, if within 45
              days after the Board's determination the Company elects to press
              the dispute, it shall so notify the Board in writing. The parties
              shall then attempt to resolve the matter amicably through
              negotiation by individuals from each party who are authorized to
              settle the matter. If the matter has not been amicably resolved
              within 60 days from the date of the Company's notice of its intent
              to press the dispute, then before either party shall undertake to
              litigate the dispute it shall be submitted to non-binding
              arbitration conducted expeditiously in accordance with the CPR
              Rules for Non-Administered Arbitration of Business Disputes, by a
              sole arbitrator; PROVIDED, HOWEVER, that if one party has
              requested the other party to seek an amicable resolution and the
              other party has failed to participate, the requesting party may
              initiate arbitration before expiration of the 60-day period set
              out just above.

                  If within 45 days of the commencement of the process to select
              an arbitrator the parties cannot agree upon the arbitrator, then
              he or she will be selected from the CPR Panels of Neutrals. The
              arbitration shall be governed by the United States


                                       10


              Arbitration Act, 9 U.S.C. Sec. 1-16. The place of arbitration
              shall be Fort Wayne, Indiana. The Arbitrator is not empowered to
              award damages in excess of compensatory damages.

                     (d)    If the Board shall determine that the Fund or
              another was responsible for the conflict, then the Board shall
              notify the Company immediately of that determination. The Fund
              shall assure the Company that it (the Fund) or that other
              Participating Insurance Company as applicable, shall, at its sole
              cost and expense, take whatever steps are necessary to eliminate
              the conflict.

                     (e)    Nothing in Sections 7.2(b) or 7.2(c) shall
              constitute a waiver of any right of action which the Company may
              have against other Participating Insurance Companies for
              reimbursement of all or part of the costs and expenses of
              resolving the conflict.

       7.3.   If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

       7.4.   For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict. However, in no event will the
Fund be required to establish a new funding medium for any variable contract,
nor will the Company be required to establish a new funding medium for any
Contract, if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.


ARTICLE VIII. INDEMNIFICATION

       8.1.   INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund and each person who controls or is associated with
the Fund (other than another Participating Insurance Company) within the meaning
of such terms under the federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the prior written consent of the Company in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Contracts Registration Statement, Contracts Prospectus, sales
              literature or other promotional material for the Contracts or the
              Contracts themselves (or any amendment or supplement to any of


                                       11


              the foregoing), or arise out of or are based upon the omission or
              the alleged omission to state therein a material fact required to
              be stated therein or necessary to make the statements therein not
              misleading in light of the circumstances in which they were made;
              provided that this obligation to indemnify shall not apply if such
              statement or omission or such alleged statement or alleged
              omission was made in reliance upon and in conformity with
              information furnished in writing to the Company by the Fund (or a
              person authorized in writing to do so on behalf of the Fund) for
              use in the Contracts Registration Statement, Contracts Prospectus
              or in the Contracts or sales literature (or any amendment or
              supplement) or otherwise for use in connection with the sale of
              the Contracts or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact by or on behalf of
              the Company (other than statements or representations contained in
              the Fund Registration Statement, Fund Prospectus or sales
              literature or other promotional material of the Fund not supplied
              by the Company or persons under its control) or wrongful conduct
              of the Company or persons under its control with respect to the
              sale or distribution of the Contracts or Fund shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Fund Registration
              Statement, Fund Prospectus or sales literature or other
              promotional material of the Fund or any amendment thereof or
              supplement thereto, or the omission or alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading in light of the
              circumstances in which they were made, if such statement or
              omission was made in reliance upon and in conformity with
              information furnished to the Fund by or on behalf of the Company;
              or

                     (d)    arise as a result of any failure by the Company to
              provide the services and furnish the materials or to make any
              payments under the terms of this Agreement; or

                     (e)    arise out of any material breach by the Company of
              this Agreement, including but not limited to any failure to
              transmit a request for redemption or purchase of Fund shares on a
              timely basis in accordance with the procedures set forth in
              Article I; or

                     (f)    arise as a result of the Company's providing the
              Fund with inaccurate information, which causes the Fund to
              calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.


                                       12


       8.2.   INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold
harmless the Company and each person who controls or is associated with the
Company within the meaning of such terms under the federal securities laws and
any officer, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Fund Registration Statement, Fund Prospectus (or any amendment or
              supplement thereto) or sales literature or other promotional
              material of the Fund, or arise out of or are based upon the
              omission or the alleged omission to state therein a material fact
              required to be stated therein or necessary to make the statements
              therein not misleading in light of the circumstances in which they
              were made; provided that this obligation to indemnify shall not
              apply if such statement or omission or alleged statement or
              alleged omission was made in reliance upon and in conformity with
              information furnished in writing by the Company to the Fund for
              use in the Fund Registration Statement, Fund Prospectus (or any
              amendment or supplement thereto) or sales literature for the Fund
              or otherwise for use in connection with the sale of the Contracts
              or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact made by the Fund
              (other than statements or representations contained in the Fund
              Registration Statement, Fund Prospectus or sales literature or
              other promotional material of the Fund not supplied by the
              Distributor or the Fund or persons under their control) or
              wrongful conduct of the Fund or persons under its control with
              respect to the sale or distribution of the Contracts or Fund
              shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Contract's
              Registration Statement, Contracts Prospectus or sales literature
              or other promotional material for the Contracts (or any amendment
              or supplement thereto), or the omission or alleged omission to
              state therein a material fact required to be stated therein or
              necessary to make the statements therein not misleading in light
              of the circumstances in which they were made, if such statement or
              omission was made in reliance upon information furnished in
              writing by the Fund to the Company (or a person authorized in
              writing to do so on behalf of the Fund); or

                     (d)    arise as a result of any failure by the Fund to
              provide the services and furnish the materials under the terms of
              this Agreement (including, but not by way of limitation, a
              failure, whether unintentional or in good faith or otherwise: (i)


                                       13


              to comply with the diversification requirements specified in
              Sections 2.4 and 6.1 in Article VI of this Agreement; and (ii) to
              provide the Company with accurate information sufficient for it to
              calculate its accumulation and/or annuity unit values in timely
              fashion as required by law and by the Contracts Prospectuses); or

                     (e)    arise out of any material breach by the Fund of this
              Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.3.   INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

       A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

       9.1.   This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.


                                       14


       9.2.   This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant, and the terms hereof shall be limited, interpreted and construed in
accordance therewith.


ARTICLE X. TERMINATION

       10.1.  This Agreement shall terminate:

                     (a)    at the option of any party upon 120 days advance
              written notice to the other parties; or

                     (b)    at the option of the Company if shares of the Fund
              are not available to meet the requirements of the Contracts as
              determined by the Company. Prompt notice of the election to
              terminate for such cause shall be furnished by the Company.
              Termination shall be effective ten days after the giving of notice
              by the Company; or

                     (c)    at the option of the Fund upon institution of formal
              proceedings against the Company by the NASD, the SEC, the
              insurance commission of any state or any other regulatory body
              regarding the Company's duties under this Agreement or related to
              the sale of the Contracts, the operation of the Account, the
              administration of the Contracts or the purchase of Fund shares;

                     (d)    at the option of the Company upon institution of
              formal proceedings against the Fund, the investment advisor or any
              sub- investment advisor, by the NASD, the SEC, or any state
              securities or insurance commission or any other regulatory body;
              or

                     (e)    upon requisite vote of the Contract owners having an
              interest in the Fund (unless otherwise required by applicable law)
              and written approval of the Company, to substitute the shares of
              another investment company for the corresponding shares of the
              Fund in accordance with the terms of the Contracts; or

                     (f)    at the option of the Fund in the event any of the
              Contracts are not registered, issued or sold in accordance with
              applicable Federal and/or state law; or

                     (g)    at the option of the Company or the Fund upon a
              determination by a majority of the Fund Board, or a majority of
              disinterested Fund Board members, that an irreconcilable material
              conflict exists among the interests of (i) any Product owners or
              (ii) the interests of the Participating Insurance Companies
              investing in the Fund; or


                                       15


                     (h)    at the option of the Company if the Fund ceases to
              qualify as a Regulated Investment Company under Subchapter M of
              the Code, or under any successor or similar provision, or if the
              Company reasonably believes, based on an opinion of its counsel,
              that the Fund may fail to so qualify; or

                     (i)    at the option of the Company if the Fund fails to
              meet the diversification requirements specified in Section 817(h)
              of the Code and any regulations thereunder; or

                     (j)    at the option of the Fund if the Contracts cease to
              qualify as annuity contracts or life insurance policies, as
              applicable, under the Code, or if the Fund reasonably believes
              that the Contracts may fail to so qualify; or

                     (k)    at the option of the Fund if the Fund shall
              determine, in its sole judgment exercised in good faith, that
              either (1) the Company shall have suffered a material adverse
              change in its business or financial condition; or (2) the Company
              shall have been the subject of material adverse publicity which is
              likely to have a material adverse impact upon the business and
              operations of the Fund; or

                     (l)    at the option of the Company, if the Company shall
              determine, in its sole judgment exercised in good faith, that: (1)
              the Fund shall have suffered a material adverse change in its
              business or financial condition; or (2) the Fund shall have been
              the subject of material adverse publicity which is likely to have
              a material adverse impact upon the business and operations of the
              Company; or

                     (m)    automatically upon the assignment of this Agreement
              (including, without limitation, any transfer of the Contracts or
              the Accounts to another insurance company pursuant to an
              assumption reinsurance agreement) unless the non-assigning party
              consents thereto or unless this Agreement is assigned to an
              affiliate of the Company or the Fund, as the case may be.

       10.2.  NOTICE REQUIREMENT. Except as otherwise provided in Section 10.1,
no termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to the other party of its
intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                     (a)    In the event that any termination is based upon the
              provisions of Article VII or the provisions of Section 10.1(a) of
              this Agreement, such prior written notice shall be given in
              advance of the effective date of termination as required by such
              provisions; and

                     (b)    in the event that any termination is based upon the
              provisions of Section 10.1(c) or 10.1(d) of this Agreement, such
              prior written notice shall be


                                       16


              given at least ninety (90) days before the effective date of
              termination, or sooner if required by law or regulation.

       10.3.  EFFECT OF TERMINATION

                     (a)    Notwithstanding any termination of this Agreement
              pursuant to Section 10.1 of this Agreement, the Fund will, at the
              option of the Company, continue to make available additional Fund
              shares for so long after the termination of this Agreement as the
              Company desires, pursuant to the terms and conditions of this
              Agreement as provided in paragraph (b) below, for all Contracts in
              effect on the effective date of termination of this Agreement
              (hereinafter referred to as "Existing Contracts"). Specifically,
              without limitation, if the Company so elects to make additional
              Fund shares available, the owners of the Existing Contracts or the
              Company, whichever shall have legal authority to do so, shall be
              permitted to reallocate investments in the Fund, redeem
              investments in the Fund and/or invest in the Fund upon the making
              of additional purchase payments under the Existing Contracts.

                     (b)    If Fund shares continue to be made available after
              such termination, the provisions of this Agreement shall remain in
              effect except for Section 10.1(a) and thereafter either the Fund
              or the Company may terminate the Agreement, as so continued
              pursuant to this Section 10.3, upon prior written notice to the
              other party, such notice to be for a period that is reasonable
              under the circumstances but, if given by the Fund, need not be for
              more than six months.

                     (c)    The parties agree that this Section 10.3 shall not
              apply to any termination made pursuant to Article VII, and the
              effect of such Article VII termination shall be governed by the
              provisions set forth or incorporated by reference therein.

ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

       The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts and to add
new classes of variable annuity contracts and variable life insurance policies
to be issued by the Company through new or existing Separate Accounts investing
in the Fund. The provisions of this Agreement shall be equally applicable to
each such separate account and each such class of contracts or policies, unless
the context otherwise requires. Any such amendment must be signed by the parties
and must bear an effective date for that amendment.

ARTICLE XII. NOTICES

       Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.


                                       17


                        If to the Fund:

                            Lincoln National Social Awareness Fund, Inc.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Kelly D. Clevenger
                        If to the Company:

                            Lincoln National Life Insurance Co.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Steven M. Kluever


ARTICLE XIII. MISCELLANEOUS

       13.1.  The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       13.2.  This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

       13.3.  If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       13.4.  Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

       13.5.  Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


ARTICLE XIV. PRIOR AGREEMENTS

       This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18


       IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized officer on the date
specified below.


                        LINCOLN NATIONAL SOCIAL AWARENESS FUND, INC.


           Signature: /s/ Kelly D. Clevenger
                      ----------------------------------------------------------

           Name: Kelly D. Clevenger
                 ---------------------------------------------------------------

           Title: President
                  --------------------------------------------------------------


                        LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


           Signature: /s/ Stephen H. Lewis
                      ----------------------------------------------------------

           Name: Stephen H. Lewis
                 ---------------------------------------------------------------

           Title: Senior Vice President, Lincoln National Life Insurance Company
                  --------------------------------------------------------------


                                       19


                                  Amendment to
                                   Schedule 2
                                   ----------

                  Lincoln National Social Awareness Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                             As of October 15, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GVA I, II, III

VUL I

LINCOLN VUL

GROUP MULTI FUND

SVUL I

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED

DIRECTOR

LINCOLN VUL-DB-


IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                                               LINCOLN NATIONAL SOCIAL AWARENESS
                                               FUND, INC.


Date:                                          By: /s/ Kelly D. Clevenger
      ----------------------                       ----------------------------
                                                   Kelly D. Clevenger
                                                   President and Chairman


                                               LINCOLN NATIONAL LIFE
                                               INSURANCE COMPANY

Date:                                          By: /s/ Stephen H. Lewis
      ----------------------                       ----------------------------
                                                   Stephen H. Lewis
                                                   Senior Vice President


                                  Amendment to
                                   Schedule 1
                                   ----------

                  Lincoln National Social Awareness Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                             Investing in the Fund
                               As of May 1, 1999


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

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 Q

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT 33

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53


                                  Amendment to
                                   Schedule 2
                                   ----------

                  Lincoln National Social Awareness Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                                As of May 1, 1999


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

eANNUITY

MULTI FUND VARIABLE LIFE

GVA I, II, III

VUL I

LINCOLN VUL

GROUP MULTI FUND

SVUL I

LINCOLN SVUL

LINCOLN CVUL

MULTI FUND - NON-REGISTERED

DIRECTOR


IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                                               LINCOLN NATIONAL SOCIAL AWARENESS
                                               FUND, INC.


Date:                                          By:
      ----------------------                       ----------------------------
                                                   Kelly D. Clevenger
                                                   President and Chairman


                                               LINCOLN NATIONAL LIFE
                                               INSURANCE COMPANY

Date:                                          By:
      ----------------------                       ----------------------------
                                                   Stephen H. Lewis
                                                   Senior Vice President



                                   SCHEDULE 1

                  Lincoln National Social Awareness Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                              As of October 1, 1998


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT K

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT L

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT Q

LINCOLN NATIONAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT 33

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Schedule 1 to be executed in its name and behalf by its duly
authorized officer on the date specified below.

Date:    10/1/98                    Lincoln National Social Awareness Fund, Inc.
     ----------------------

                                  By:      /s/   Kelly D. Clevenger
                                       -----------------------------------------
                                           Kelly D. Clevenger,
                                           President


Date:   10/1/98                     The Lincoln National Life Insurance Company
     ----------------------
                                  By:    /s/   Stephen H. Lewis
                                       -----------------------------------------
                                         Stephen H. Lewis,
                                         Senior Vice President




                                   SCHEDULE 2

                  Lincoln National Social Awareness Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                              As of October 1, 1998

Multi Fund Variable Annuity

eAnnuity

Multi Fund Variable Life

GVA I, II, III

Group Multi Fund

Multi Fund - Non-registered

Director

         IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Schedule A to be executed in its name and behalf by its duly
authorized officer on the date specified below.

Date:  10/1/98                      Lincoln National Social Awareness Fund, Inc.
     ----------------------
                                  By:  /s/    Kelly D. Clevenger
                                     -----------------------------------------
                                       Kelly D. Clevenger,
                                       President


Date:    10/1/98                    The Lincoln National Life Insurance Company
     ----------------------
                                  By:  /s/   Stephen H. Lewis
                                     -----------------------------------------
                                       Stephen H. Lewis,
                                       Senior Vice President




                                   SCHEDULE 3

                  Lincoln National Social Awareness Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998

The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 33 1/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing" as
that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.       An international FUND or a global FUND is sufficiently diversified if
         it is invested in a minimum of three different countries at all times,
         and has invested no more than 50 percent of total assets in any one
         second-tier country and no more than 25 percent of total assets in any
         one third-tier country. First-tier countries are: Germany, the United
         Kingdom, Japan, the United States, France, Canada, and Australia.
         Second-tier countries are all countries not in the first or third tier.
         Third-tier countries are countries identified as "emerging" or
         "developing" by the International Bank for Reconstruction and
         Development (World Bank) or International Finance Corporation.

b.       A regional FUND is sufficiently diversified if it is invested in a
         minimum of three countries. The name of the fund must accurately
         describe the FUND.

c. The name of the single country FUND must accurately describe the FUND.

d. An index FUND must substantially mirror the index.




                                  Amendment to
                                   SCHEDULE 1

                  Lincoln National Social Awareness Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 15, 2001


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

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 NATIONAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT 33

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT 53






                                  Amendment to
                                   SCHEDULE 2

                  Lincoln National Social Awareness Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 15, 2001


MULTI FUND INDIVIDUAL VARIABLE ANNUITY

GROUP MULTI FUND

eANNUITY

MULTI FUND - NON-REGISTERED

MULTI FUND VARIABLE LIFE

GVA I, II, III

LINCOLN VUL

LINCOLN VUL I

LINCOLN VUL(DB)

LINCOLN VUL(CV)

LINCOLN VUL(CV2)

LINCOLN VUL MONEYGUARD

SVUL

SVUL I

SVUL II

CVUL

CVUL III

DIRECTOR

LINCOLN CHOICEPLUS II

LINCOLN CHOICEPLUS II ACCESS

LINCOLN CHOICEPLUS II BONUS

LINCOLN CHOICEPLUS II ADVANCE







IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                                   LINCOLN NATIONAL SOCIAL AWARENESS FUND, INC.


Date:                                  By:/s/Kelly D. Clevenger
       -----------------------         ---------------------------------------
                                          Kelly D. Clevenger
                                          Chairman and President

                                   LINCOLN NATIONAL LIFE INSURANCE COMPANY


Date:                                  By:/s/Steven M. Kluever
      ------------------------         ---------------------------------------
                                          Steven M. Kluever
                                          Second Vice President

EX-99

                              AMENDED AND RESTATED
                          FUND PARTICIPATION AGREEMENT
                 (FORMER TITLE: "AGREEMENT TO PURCHASE SHARES")
                                     BETWEEN
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                LINCOLN NATIONAL SPECIAL OPPORTUNITIES FUND, INC.


       THIS AGREEMENT, made and entered into this 1st day of July, 1998, by and
between Lincoln National Special Opportunities Fund, Inc. a corporation
organized under the laws of Maryland (the "Fund"), and THE LINCOLN NATIONAL LIFE
INSURANCE CO., an Indiana insurance corporation (the "Company"), on its own
behalf and on behalf of each separate account of the Company named in Schedule 1
to this Agreement as in effect at the time this Agreement is executed and such
other separate accounts that may be added to Schedule 1 from time to time in
accordance with the provisions of Article XI of this Agreement (each such
account referred to as the "Account"; collectively, the "Accounts").

       WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

       WHEREAS, the Fund filed with the Securities and Exchange Commission (the
"SEC") and the SEC has declared effective a registration statement (referred to
herein as the "Fund Registration Statement" and the prospectus contained
therein, or filed pursuant to Rule 497 under the 1933 Act, referred to herein as
the "Fund Prospectus") on Form N-lA to register itself as an open-end management
investment company (File No. 811-3212) under the Investment Company Act of 1940,
as amended (the "1940 Act"), and the Fund shares (File No. 2-80743) under the
Securities Act of 1933, as amended (the "1933 Act"); and

       WHEREAS, the Company has filed a registration statement with the SEC to
register under the 1933 Act (unless exempt therefrom) certain variable annuity
contracts and/or variable life insurance policies described in Schedule 2 to
this Agreement as in effect at the time this Agreement is executed and such
other variable annuity contracts and variable life insurance policies which may
be added to Schedule 2 from time to time in accordance with Article XI of this
Agreement (such policies and contracts shall be referred to herein collectively
as the "Contracts," each such registration statement for a class or classes of
contracts listed on Schedule 2 being referred to as the "Contracts Registration
Statement" and the prospectus for each such class or classes being referred to
herein as the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and


       WHEREAS, each Account, a validly existing separate account, duly
authorized by the Company on the date set forth on Schedule 1, sets aside and
invests assets attributable to the Contracts; and

       WHEREAS, the Company has registered or will have registered each Account
with the SEC as a unit investment trust under the 1940 Act before any Contracts
are issued by that Account; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares on behalf of each Account to
fund its Contracts and the Fund is authorized to sell such shares to unit
investment trusts such as the Accounts at net asset value; and

       WHEREAS, pursuant to Articles of Merger approved by the Company in 1988,
the Company succeeded to all the legal rights and responsibilities of Lincoln
National Pension Insurance Company, the signatory to the original Agreement to
Purchase Shares, which this Agreement amends and restates.

       NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Fund agree as follows:


ARTICLE I. SALE OF FUND SHARES

       1.1.   The Fund agrees to sell to the Company those shares which the
Company orders on behalf of the Account, executing such orders on a daily basis
in accordance with Section 1.4 of this Agreement.

       1.2.   The Fund agrees to make shares available for purchase by the
Company on behalf of the Account at the then applicable net asset value per
share on Business Days as defined in Section 1.4 of this Agreement, and the Fund
shall use its best efforts to calculate AND DELIVER such net asset value by 7:00
p.m., E.S.T., on each such Business Day. Notwithstanding any other provision in
this Agreement to the contrary, the Board of Directors of the Fund (the "Fund
Board") may suspend or terminate the offering of shares, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Fund Board acting in good faith and in light of its
fiduciary duties under Federal and any applicable state laws, suspension or
termination is necessary and in the best interests of the shareholders (it being
understood that "shareholders" for this purpose shall mean Product owners).

       1.3.   The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis (LL will expect same day
redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
shares to the


                                       2


extent permitted by the 1940 Act, any rules, regulations or orders thereunder,
or the then currently effective Fund Prospectus.

       1.4           (a)    For purposes of Sections 1.1, 1.2 and 1.3, the
              Company shall be the agent of the Fund for the limited purpose of
              receiving redemption and purchase requests from the Account (but
              not from the general account of the Company), and receipt on any
              Business Day by the Company as such limited agent of the Fund
              prior to the time prescribed in the current Fund Prospectus (which
              as of the date of execution of this Agreement is 4 p.m., E.S.T.)
              shall constitute receipt by the Fund on that same Business Day,
              provided that the Fund receives notice of such redemption or
              purchase request by 9:00 a.m., E.S.T. on the next following
              Business Day. For purposes of this Agreement, "Business Day" shall
              mean any day on which the New York Stock exchange is open for
              trading.

                     (b)    The Company shall pay for the shares on the same day
              that it places an order with the Fund to purchase those Fund
              shares for an Account. Payment for Fund shares will be made by the
              Account or the Company in Federal Funds transmitted to the Fund by
              wire to be received by 11:00 a.m., E.S.T. on the day the Fund is
              properly notified of the purchase order for shares. The Fund will
              confirm receipt of each trade and these confirmations will be
              received by the Company via Fax or Email by 3:00 p.m. E.S.T. If
              Federal Funds are not received on time, such funds will be
              invested, and shares purchased thereby will be issued, as soon as
              practicable.

                     (c)    Payment for shares redeemed by the Account or the
              Company will be made in Federal Funds transmitted to the Company
              by wire on the same day the Fund is notified of the redemption
              order of shares, except that the Fund reserves the right to delay
              payment of redemption proceeds, but in no event may such payment
              be delayed longer than the period permitted under Section 22(e) of
              the 1940 Act. The Fund shall not bear any responsibility
              whatsoever for the proper disbursement or crediting of redemption
              proceeds if securities must be redeemed; the Company alone shall
              be responsible for such action.

       1.5.   Issuance and transfer of Fund shares will be by book entry only.
Stock certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares will be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.

       1.6.   The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income dividends or capital gain distributions payable on any
shares. The Company, on its behalf and on behalf of the Account, hereby elects
to receive all such dividends and distributions as are payable on any shares in
the form of additional shares of that Fund. The Company reserves the right, on
its behalf and on behalf of the Account, to revoke this election and to receive
all such dividends in cash. The Fund shall notify the Company of the number of
shares so issued as payment of such dividends and distributions.


                                       3


       1.7.   The Fund shall use its best efforts to make the net asset value
per share available to the Company by 7:00 p.m., E.S.T. each Business Day, and
in any event, as soon as reasonably practicable after the net asset value per
share is calculated, and shall calculate such net asset value in accordance with
the then currently effective Fund Prospectus. The Fund shall not be liable for
any information provided to the Company pursuant to this Agreement which
information is based on incorrect information supplied by the Company to the
Fund.

       1.8.          (a)    The Company may withdraw the Account's investment in
              the Fund only: (i) as necessary to facilitate Contract owner
              requests; (ii) upon a determination by a majority of the Fund
              Board, or a majority of disinterested Fund Board members, that an
              irreconcilable material conflict exists among the interests of (x)
              any Product Owners or (y) the interests of the Participating
              Insurance Companies investing in the Fund; (iii) upon requisite
              vote of the Contractowners having an interest in the Fund to
              substitute the shares of another investment company for shares in
              accordance with the terms of the Contracts; (iv) as required by
              state and/or federal laws or regulations or judicial or other
              legal precedent of general application; or (v) at the Company's
              sole discretion, pursuant to an order of the SEC under Section
              26(b) of the 1940 Act.

                     (b)    The parties hereto acknowledge that the arrangement
              contemplated by this Agreement is not exclusive and that the Fund
              shares may be sold to other insurance companies (subject to
              Section 1.9 hereof) and the cash value of the Contracts may be
              invested in other investment companies.

                     (c)    The Company shall not, without prior notice to the
              Fund (unless otherwise required by applicable law), take any
              action to operate the Accounts as management investment companies
              under the 1940 Act.

       1.9.   The Fund agrees that Fund shares will be sold only to
Participating Insurance Companies and their separate accounts. The Fund will not
sell Fund shares to any insurance company or separate account unless an
agreement complying with Article VII of this Agreement is in effect to govern
such sales. No Fund shares will be sold to the general public.


ARTICLE II. REPRESENTATIONS AND WARRANTIES


       2.1.   The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and


                                       4


validly existing under applicable law and that it has legally and validly
authorized each Account as a separate account under Section 27-1-5-1 of the
Indiana Insurance Code, and has registered or, prior to the issuance of any
Contracts, will register each Account (unless exempt therefrom) as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
separate account for its Contracts, and that it will maintain such registrations
for so long as any Contracts issued under them are outstanding.

       2.2.   The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

       2.3.   The Fund represents and warrants that it currently qualifies as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund further represents and warrants that it
will make every effort to continue to qualify and to maintain such qualification
(under Subchapter M or any successor or similar provision), and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.

       2.4.   The Fund represents and warrants that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.

       2.5.   The Company represents that the Contracts are currently and at the
time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the future.

       2.6.   The Fund represents that the Fund's investment policies, fees and
expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

       2.7.   The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule 17g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
             INFORMATION

       3.1.   The Fund shall provide the Company with as many copies of the
current Fund


                                       5


Prospectus as the Company may reasonably request. If requested by the Company in
lieu thereof, the Fund at its expense shall provide to the Company a
camera-ready copy, and electronic version, of the current Fund Prospectus
suitable for printing and other assistance as is reasonably necessary in order
for the Company to have a new Contracts Prospectus printed together with the
Fund Prospectus in one document. See Article V for a detailed explanation of the
responsibility for the cost of printing and distributing Fund prospectuses.

       3.2.   The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Fund and the Fund shall provide
such Statement free of charge to the Company and to any outstanding or
prospective Contract owner who requests such Statement.

       3.3.          (a)    The Fund at its expense shall provide to the Company
              a camera-ready copy of the Fund's shareholder reports and other
              communications to shareholders (except proxy material), in each
              case in a form suitable for printing, as determined by the
              Company. The Fund shall be responsible for the costs of printing
              and distributing these materials to Contract owners.

                     (b)    The Fund at its expense shall be responsible for
              preparing, printing and distributing its proxy material. The
              Company will provide the appropriate Contractowner names and
              addresses to the Fund for this purpose.

       3.4.   The Company shall furnish to the Fund, prior to its use, each
piece of sales literature or other promotional material in which the Fund is
named. No such material shall be used, except with the prior written permission
of the Fund. The Fund agrees to respond to any request for approval on a prompt
and timely basis. Failure of the Fund to respond within 10 days of the request
by the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund.

       3.5.   The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund, except with the prior written permission of the Fund. The Fund agrees
to respond to any request for permission on a prompt and timely basis. If the
Fund does not respond within 10 days of a request by the Company, then the
Company shall be relieved of the obligation to obtain the prior written
permission of the Fund.

       3.6.   The Fund shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account
or the Contracts other than the information or representations contained in the
Contracts Registration Statement or Contracts Prospectus, as such Registration
Statement and Prospectus may be amended or supplemented from time to time, or in
published reports of the Account which are in the public domain or approved in
writing by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved in writing by the Company,
except with the prior written permission of the


                                       6


Company. The Company agrees to respond to any request for permission on a prompt
and timely basis. If the Company fails to respond within 10 days of a request by
the Fund, then the Fund is relieved of the obligation to obtain the prior
written permission of the Company.

       3.7.   The Fund will provide to the Company at least one complete copy of
all Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

       3.8.   The Company will provide to the Fund at least one complete copy of
all Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, within 20 days after the filing of such
document with the SEC or other regulatory authorities.

       3.9.   Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, statements of additional
information, reports, proxy statements, solicitations for voting instructions,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

       3.10.  For purposes of this Article III, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.

ARTICLE IV. Voting

       4.1    Subject to applicable law and the requirements of Article VII, the
Fund shall solicit voting instructions from Contract owners;


                                       7


       4.2    Subject to applicable law and the requirements of Article VII, the
Company shall:
                     (a)    vote Fund shares attributable to Contract owners in
              accordance with instructions or proxies received in timely fashion
              from such Contract owners;

                     (b)    vote Fund shares attributable to Contract owners for
              which no instructions have been received in the same proportion as
              Fund shares of such Series for which instructions have been
              received in timely fashion; and

                     (c)    vote Fund shares held by the Company on its own
              behalf or on behalf of the Account that are not attributable to
              Contract owners in the same proportion as Fund shares of such
              Series for which instructions have been received in timely
              fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

       All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of this Agreement, the
Company shall not bear any of the expenses for the cost of registration and
qualification of the Fund shares under Federal and any state securities law,
preparation and filing of the Fund Prospectus and Fund Registration Statement,
the preparation of all statements and notices required by any Federal or state
securities law, all taxes on the issuance or transfer of Fund shares, and any
expenses permitted to be paid or assumed by the Fund pursuant to a plan, if any,
under Rule 12b-1 under the 1940 Act.


       The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company decided to print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contractowners.)

       The Company is responsible for the cost of printing and distributing Fund
prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contractowners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.


ARTICLE VI. COMPLIANCE UNDERTAKINGS

       6.1.   The Fund undertakes to comply with Subchapter M and Section 817(h)
of the


                                       8


Code, and all regulations issued thereunder.

       6.2.   The Company shall amend the Contracts Registration Statements
under the 1933 Act and the Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws of the various states.

       6.3.   The Fund shall amend the Fund Registration Statement under the
1933 Act and the 1940 Act from time to time as required in order to effect for
so long as Fund shares are sold the continuous offering of Fund shares as
described in the then currently effective Fund Prospectus. The Fund shall
register and qualify Fund shares for sale to the extent required by applicable
securities laws of the various states.

       6.4.   The Company shall be responsible for assuring that any prospectus
offering a Contract that is a life insurance contract where it is reasonably
possible that such Contract would be deemed a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will describe the
circumstances under which a Contract could be treated as a modified endowment
contract (or policy).

       6.5.   To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b-1 to finance distribution expenses.

       6.6.          (a)    When appropriate in order to inform the Fund of any
              applicable state-mandated investment restrictions with which the
              Fund must comply, the Company shall arrange with the Fund to amend
              Schedule 3, pursuant to the requirements of Article XI.
                     (b)    Should the Fund become aware of any restrictions
              which may be appropriate for inclusion in Schedule 3, the Company
              shall be informed immediately of the substance of those
              restrictions.


ARTICLE VlI. POTENTIAL CONFLICTS

       7.1.   The Company agrees to report to the Board of Directors of the Fund
(the "Board") any potential or existing conflicts between the interests of
Product Owners of all separate accounts investing in the Fund, and to assist the
Board in carrying out its responsibilities under Section 6e-3(T) of the 1940
Act, by providing all information reasonably necessary for the Board to consider
any issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

       7.2.   If a majority of the Board, or a majority of disinterested Board
Members, determines that a material irreconcilable conflict exists, the Board
shall give prompt notice to all


                                       9


Participating Insurance Companies.

                     (a)    If a majority of the whole Board, after notice to
              the Company and a reasonable opportunity for the Company to appear
              before it and present its case, determines that the Company is
              responsible for said conflict, and if the Company agrees with that
              determination, the Company shall, at its sole cost and expense,
              take whatever steps are necessary to remedy the material
              irreconcilable conflict. These steps could include: (i)
              withdrawing the assets allocable to some or all of the affected
              Accounts from the Fund and reinvesting such assets in a different
              investment vehicle, or submitting the question of whether such
              segregation should be implemented to a vote of all affected
              Contractowners and, as appropriate, segregating the assets of any
              particular group (i.e., variable annuity Contractowners, variable
              life insurance policyowners, or variable Contractowners of one or
              more Participating Insurance Companies) that votes in favor of
              such segregation, or offering to the affected Contractowners the
              option of making such a change; and (ii) establishing a new
              registered mutual fund or management separate account; or (iii)
              taking such other action as is necessary to remedy or eliminate
              the material irreconcilable conflict.

                     (b)    If the Company disagrees with the Board's
              determination, the Company shall file a written protest with the
              Board, reserving its right to dispute the determination as between
              just the Company and the Fund and to seek reimbursement from the
              Fund for the reasonable costs and expenses of resolving the
              conflict . After reserving that right the Company, although
              disagreeing with the Board that it (the Company) was responsible
              for the conflict, shall take the necessary steps, under protest,
              to remedy the conflict, substantially in accordance with paragraph
              (a) just above, for the protection of Contractowners.
                     (c)    As between the Company and the Fund, if within 45
              days after the Board's determination the Company elects to press
              the dispute, it shall so notify the Board in writing. The parties
              shall then attempt to resolve the matter amicably through
              negotiation by individuals from each party who are authorized to
              settle the matter. If the matter has not been amicably resolved
              within 60 days from the date of the Company's notice of its intent
              to press the dispute, then before either party shall undertake to
              litigate the dispute it shall be submitted to non-binding
              arbitration conducted expeditiously in accordance with the CPR
              Rules for Non-Administered Arbitration of Business Disputes, by a
              sole arbitrator; PROVIDED, HOWEVER, that if one party has
              requested the other party to seek an amicable resolution and the
              other party has failed to participate, the requesting party may
              initiate arbitration before expiration of the 60-day period set
              out just above.

                 If within 45 days of the commencement of the process to select
              an arbitrator the parties cannot agree upon the arbitrator, then
              he or she will be selected from the CPR Panels of Neutrals. The
              arbitration shall be governed by the United States Arbitration
              Act, 9 U.S.C. Sec. 1-16. The place of arbitration shall be Fort
              Wayne, Indiana. The Arbitrator is not empowered to award damages
              in excess of


                                       10


              compensatory damages.

                     (d)    If the Board shall determine that the Fund or
              another was responsible for the conflict, then the Board shall
              notify the Company immediately of that determination. The Fund
              shall assure the Company that it (the Fund) or that other
              Participating Insurance Company as applicable, shall, at its sole
              cost and expense, take whatever steps are necessary to eliminate
              the conflict.

                     (e)    Nothing in Sections 7.2(b) or 7.2(c) shall
              constitute a waiver of any right of action which the Company may
              have against other Participating Insurance Companies for
              reimbursement of all or part of the costs and expenses of
              resolving the conflict.

       7.3.   If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) the Account's investment in
the Fund, if the Fund so elects.

       7.4.   For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict. However, in no event will the
Fund be required to establish a new funding medium for any variable contract,
nor will the Company be required to establish a new funding medium for any
Contract, if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.

ARTICLE VIII. INDEMNIFICATION

       8.1.   INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Fund and each person who controls or is associated with
the Fund (other than another Participating Insurance Company) within the meaning
of such terms under the federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid with the prior written consent of the Company in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Contracts Registration Statement, Contracts Prospectus, sales
              literature or other promotional material for the Contracts or the
              Contracts themselves (or any amendment or supplement to any of the
              foregoing), or arise out of or are based upon the omission or the
              alleged omission to state therein a material fact required to be
              stated therein or necessary to make the statements therein not
              misleading in light of the circumstances in which they were made;
              provided that this obligation to indemnify shall not apply if such


                                       11


              statement or omission or such alleged statement or alleged
              omission was made in reliance upon and in conformity with
              information furnished in writing to the Company by the Fund (or a
              person authorized in writing to do so on behalf of the Fund) for
              use in the Contracts Registration Statement, Contracts Prospectus
              or in the Contracts or sales literature (or any amendment or
              supplement) or otherwise for use in connection with the sale of
              the Contracts or Fund shares; or

                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact by or on behalf of
              the Company (other than statements or representations contained in
              the Fund Registration Statement, Fund Prospectus or sales
              literature or other promotional material of the Fund not supplied
              by the Company or persons under its control) or wrongful conduct
              of the Company or persons under its control with respect to the
              sale or distribution of the Contracts or Fund shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Fund Registration
              Statement, Fund Prospectus or sales literature or other
              promotional material of the Fund or any amendment thereof or
              supplement thereto, or the omission or alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading in light of the
              circumstances in which they were made, if such statement or
              omission was made in reliance upon and in conformity with
              information furnished to the Fund by or on behalf of the Company;
              or
                     (d)    arise as a result of any failure by the Company to
              provide the services and furnish the materials or to make any
              payments under the terms of this Agreement; or

                     (e)    arise out of any material breach by the Company of
              this Agreement, including but not limited to any failure to
              transmit a request for redemption or purchase of Fund shares on a
              timely basis in accordance with the procedures set forth in
              Article I; or

                     (f)    arise as a result of the Company's providing the
              Fund with inaccurate information, which causes the Fund to
              calculate its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.2.   INDEMNIFICATION BY THE FUND. The Fund agrees to indemnify and hold
harmless the Company and each person who controls or is associated with the
Company within the meaning of such terms under the federal securities laws and
any officer, director, employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several (including any


                                       12


investigative, legal and other expenses reasonably incurred in connection with,
and any amounts paid with the prior written consent of the Fund in settlement
of, any action, suit or proceeding or any claim asserted), to which they or any
of them may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities:

                     (a)    arise out of or are based upon any untrue statement
              or alleged untrue statement of any material fact contained in the
              Fund Registration Statement, Fund Prospectus (or any amendment or
              supplement thereto) or sales literature or other promotional
              material of the Fund, or arise out of or are based upon the
              omission or the alleged omission to state therein a material fact
              required to be stated therein or necessary to make the statements
              therein not misleading in light of the circumstances in which they
              were made; provided that this obligation to indemnify shall not
              apply if such statement or omission or alleged statement or
              alleged omission was made in reliance upon and in conformity with
              information furnished in writing by the Company to the Fund for
              use in the Fund Registration Statement, Fund Prospectus (or any
              amendment or supplement thereto) or sales literature for the Fund
              or otherwise for use in connection with the sale of the Contracts
              or Fund shares; or


                     (b)    arise out of or are based upon any untrue statement
              or alleged untrue statement of a material fact made by the Fund
              (other than statements or representations contained in the Fund
              Registration Statement, Fund Prospectus or sales literature or
              other promotional material of the Fund not supplied by the
              Distributor or the Fund or persons under their control) or
              wrongful conduct of the Fund or persons under its control with
              respect to the sale or distribution of the Contracts or Fund
              shares; or

                     (c)    arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Contract's
              Registration Statement, Contracts Prospectus or sales literature
              or other promotional material for the Contracts (or any amendment
              or supplement thereto), or the omission or alleged omission to
              state therein a material fact required to be stated therein or
              necessary to make the statements therein not misleading in light
              of the circumstances in which they were made, if such statement or
              omission was made in reliance upon information furnished in
              writing by the Fund to the Company (or a person authorized in
              writing to do so on behalf of the Fund); or

                     (d)    arise as a result of any failure by the Fund to
              provide the services and furnish the materials under the terms of
              this Agreement (including, but not by way of limitation, a
              failure, whether unintentional or in good faith or otherwise: (i)
              to comply with the diversification requirements specified in
              Sections 2.4 and 6.1 in Article VI of this Agreement; and (ii) to
              provide the Company with accurate information sufficient for it to
              calculate its accumulation and/or annuity unit values


                                       13


              in timely fashion as required by law and by the Contracts
              Prospectuses); or

                     (e)    arise out of any material breach by the Fund of this
              Agreement.

This indemnification will be in addition to any liability which the Fund may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.3.   INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

       A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.


ARTICLE IX. APPLICABLE LAW

       9.1.   This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of law.

       9.2.   This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings thereunder,
including such exemptions from those


                                       14


statutes, rules and regulations as the SEC may grant, and the terms hereof shall
be limited, interpreted and construed in accordance therewith.


ARTICLE X. TERMINATION

       10.1.  This Agreement shall terminate:

                     (a)    at the option of any party upon 120 days advance
              written notice to the other parties; or

                     (b)    at the option of the Company if shares of the Fund
              are not available to meet the requirements of the Contracts as
              determined by the Company. Prompt notice of the election to
              terminate for such cause shall be furnished by the Company.
              Termination shall be effective ten days after the giving of notice
              by the Company; or

                     (c)    at the option of the Fund upon institution of formal
              proceedings against the Company by the NASD, the SEC, the
              insurance commission of any state or any other regulatory body
              regarding the Company's duties under this Agreement or related to
              the sale of the Contracts, the operation of the Account, the
              administration of the Contracts or the purchase of Fund shares;

                     (d)    at the option of the Company upon institution of
              formal proceedings against the Fund, the investment advisor or any
              sub- investment advisor, by the NASD, the SEC, or any state
              securities or insurance commission or any other regulatory body;
              or

                     (e)    upon requisite vote of the Contract owners having an
              interest in the Fund (unless otherwise required by applicable law)
              and written approval of the Company, to substitute the shares of
              another investment company for the corresponding shares of the
              Fund in accordance with the terms of the Contracts; or

                     (f)    at the option of the Fund in the event any of the
              Contracts are not registered, issued or sold in accordance with
              applicable Federal and/or state law; or

                     (g)    at the option of the Company or the Fund upon a
              determination by a majority of the Fund Board, or a majority of
              disinterested Fund Board members, that an irreconcilable material
              conflict exists among the interests of (i) any Product owners or
              (ii) the interests of the Participating Insurance Companies
              investing in the Fund; or

                     (h)    at the option of the Company if the Fund ceases to
              qualify as a Regulated Investment Company under Subchapter M of
              the Code, or under any


                                       15


              successor or similar provision, or if the Company reasonably
              believes, based on an opinion of its counsel, that the Fund may
              fail to so qualify; or

                     (i)    at the option of the Company if the Fund fails to
              meet the diversification requirements specified in Section 817(h)
              of the Code and any regulations thereunder; or

                     (j)    at the option of the Fund if the Contracts cease to
              qualify as annuity contracts or life insurance policies, as
              applicable, under the Code, or if the Fund reasonably believes
              that the Contracts may fail to so qualify; or

                     (k)    at the option of the Fund if the Fund shall
              determine, in its sole judgment exercised in good faith, that
              either (1) the Company shall have suffered a material adverse
              change in its business or financial condition; or (2) the Company
              shall have been the subject of material adverse publicity which is
              likely to have a material adverse impact upon the business and
              operations of the Fund; or

                     (l)    at the option of the Company, if the Company shall
              determine, in its sole judgment exercised in good faith, that: (1)
              the Fund shall have suffered a material adverse change in its
              business or financial condition; or (2) the Fund shall have been
              the subject of material adverse publicity which is likely to have
              a material adverse impact upon the business and operations of the
              Company; or

                     (m)    automatically upon the assignment of this Agreement
              (including, without limitation, any transfer of the Contracts or
              the Accounts to another insurance company pursuant to an
              assumption reinsurance agreement) unless the non-assigning party
              consents thereto or unless this Agreement is assigned to an
              affiliate of the Company or the Fund, as the case may be.

       10.2.  NOTICE REQUIREMENT. Except as otherwise provided in Section 10.1,
no termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to the other party of its
intent to terminate, which notice shall set forth the basis for such
termination. Furthermore:

                     (a)    In the event that any termination is based upon the
              provisions of Article VII or the provisions of Section 10.1(a) of
              this Agreement, such prior written notice shall be given in
              advance of the effective date of termination as required by such
              provisions; and

                     (b)    in the event that any termination is based upon the
              provisions of Section 10.1(c) or 10.1(d) of this Agreement, such
              prior written notice shall be given at least ninety (90) days
              before the effective date of termination, or sooner if required by
              law or regulation.

       10.3.  EFFECT OF TERMINATION


                                       16


                     (a)    Notwithstanding any termination of this Agreement
              pursuant to Section 10.1 of this Agreement, the Fund will, at the
              option of the Company, continue to make available additional Fund
              shares for so long after the termination of this Agreement as the
              Company desires, pursuant to the terms and conditions of this
              Agreement as provided in paragraph (b) below, for all Contracts in
              effect on the effective date of termination of this Agreement
              (hereinafter referred to as "Existing Contracts"). Specifically,
              without limitation, if the Company so elects to make additional
              Fund shares available, the owners of the Existing Contracts or the
              Company, whichever shall have legal authority to do so, shall be
              permitted to reallocate investments in the Fund, redeem
              investments in the Fund and/or invest in the Fund upon the making
              of additional purchase payments under the Existing Contracts.

                     (b)    If Fund shares continue to be made available after
              such termination, the provisions of this Agreement shall remain in
              effect except for Section 10.1(a) and thereafter either the Fund
              or the Company may terminate the Agreement, as so continued
              pursuant to this Section 10.3, upon prior written notice to the
              other party, such notice to be for a period that is reasonable
              under the circumstances but, if given by the Fund, need not be for
              more than six months.

                     (c)    The parties agree that this Section 10.3 shall not
              apply to any termination made pursuant to Article VII, and the
              effect of such Article VII termination shall be governed by the
              provisions set forth or incorporated by reference therein.

ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

       The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts and to add
new classes of variable annuity contracts and variable life insurance policies
to be issued by the Company through new or existing Separate Accounts investing
in the Fund. The provisions of this Agreement shall be equally applicable to
each such separate account and each such class of contracts or policies, unless
the context otherwise requires. Any such amendment must be signed by the parties
and must bear an effective date for that amendment.


ARTICLE XII. NOTICES

       Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                        If to the Fund:

                            Lincoln National Special Opportunities Fund, Inc.


                                       17


                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Kelly D. Clevenger

                        If to the Company:

                            Lincoln National Life Insurance Co.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Steven M. Kluever


ARTICLE XIII. MISCELLANEOUS

       13.1.  The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       13.2.  This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

       13.3.  If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       13.4.  Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

       13.5.  Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


ARTICLE XIV. PRIOR AGREEMENTS

       This Amended and Restated Fund Participation Agreement, as of its
effective date, hereby supersedes any and all prior agreements to purchase
shares between Lincoln Life and the Fund.


                                       18


       IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed in its name and behalf by its duly authorized officer on the date
specified below.


                        LINCOLN NATIONAL SPECIAL OPPORTUNITIES FUND, INC.


           Signature: /s/ Kelly D. Clevenger
                      ----------------------------------------------------------

           Name: Kelly D. Clevenger
                 ---------------------------------------------------------------

           Title: President
                  --------------------------------------------------------------


                  LINCOLN NATIONAL LIFE INSURANCE CO. (Company)


           Signature: /s/ Stephen H. Lewis
                      ----------------------------------------------------------

           Name: Stephen H. Lewis
                 ---------------------------------------------------------------

           Title: Senior Vice President, Lincoln National Life Insurance Company
                  --------------------------------------------------------------

                                       19


       The Fund Participation Agreement (the "Agreement"), dated July 1, 1998,
by and among The Lincoln National Life Insurance Company and Lincoln National
Special Opportunity Fund, Inc. is hereby amended as follows:

Page 2, the second paragraph is replaced in its entirety with the following:

       "WHEREAS, the company has registered or will have registered each Account
       with the SEC (unless exempt therefrom) as a unit investment trust under
       the 1940 Act before any Contracts are issued by that Account; and"

Page 5, Article 2.1 is replaced in its entirety with the following:

       "The Company represents and warrants (a) that the Contracts are
       registered under the 1933 Act or will be so registered before the
       issuance thereof, (b) that the Contracts will be issued in compliance in
       all material respects with all applicable Federal and state laws and (c)
       that the Company will require of every person distributing the Contracts
       that the Contracts be offered and sold in compliance in all material
       respects with all applicable Federal and state laws. The Company further
       represents and warrants that it is an insurance company duly organized
       and validly existing under applicable law and that it has legally and
       validly authorized each Account as a separate account under Section
       27-1-5-1 of the Indiana Insurance Code, and has registered or, prior to
       the issuance of any Contracts, will register each Account (unless exempt
       therefrom) as a unti investment trust in accordance with the provisions
       of the 1940 Act to serve as a separate account for its Contracts, and
       that it will maintain such registration for so long as any Contracts
       issued under them are outstanding."

IN WITNESS WHEREOF, each of the parties hereto has cause this Amendment to the
Fund Participation Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.


                                              LINCOLN NATIONAL SPECIAL
                                              OPPORTUNITIES FUND, INC.

Date:                                         By: /s/ Kelly D. Clevenger
      ------------------                          --------------------------
                                              Name: Kelly D. Clevenger
                                                    ------------------------
                                              Title: President
                                                     -----------------------

                                              LINCOLN NATIONAL LIFE INSURANCE
                                              COMPANY

Date:                                         By: /s/ Stephen H. Lewis
      ------------------                          --------------------------
                                              Name: Stephen H. Lewis
                                                    ------------------------
                                              Title: Senior Vice President
                                                     -----------------------



4153
                                   Schedule 1
                                   ----------

                Lincoln National Special Opportunities Fund, Inc.
          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                               As of July 1, 1998


Lincoln National Variable Annuity Account C
- -------------------------------------------

Lincoln Life Flexible Premium Variable Life Account D
- -----------------------------------------------------

Lincoln National Flexible Premium Variable Life Account G
- ---------------------------------------------------------

Lincoln Life Flexible Premium Variable Life Account K
- -----------------------------------------------------

Lincoln Life Variable Annuity Account Q
- ---------------------------------------

Lincoln National Variable Annuity Account 53
- --------------------------------------------




                                   Schedule 2
                                   ----------

                Lincoln National Special Opportunities Fund, Inc.
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                               As of July 1, 1998


Multi Fund Variable Annuity
- ---------------------------

eAnnuity
- --------

Emancipator Life
- ----------------

VUL III
- -------

Multi Fund Variable Life
- ------------------------

Group Multi Fund
- ----------------

Multi Fund - Non-registered
- ---------------------------





                                   Schedule 3
                                   ----------

                Lincoln National Special Opportunities Fund, Inc.
                     State-mandated Investment Restrictions
                             Applicable to the Fund
                               As of July 1, 1998


The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. The borrowing limit for any FUND is 331/3 percent of total assets.
Entering into a reverse repurchase agreement shall be considered "borrowing"
as that term is used herein.

FOREIGN INVESTMENTS - DIVERSIFICATION

The diversification guidelines to be followed by international and global FUNDS
are as follows:

a.   An international FUND or a global FUND is sufficiently diversified if it is
     invested in a minimum of three different countries at all times, and has
     invested no more than 50 percent of total assets in any one second-tier
     country and no more than 25 percent of total assets in any one third-tier
     country. First-tier countries are: Germany, the United Kingdom, Japan, the
     United States, France, Canada, and Australia. Second-tier countries are all
     countries not in the first or third tier. Third-tier countries are
     countries identified as "emerging" or "developing" by the International
     Bank for Reconstruction and Development ("World Bank") or International
     Finance Corporation.

b.   A regional FUND is sufficiently diversified if it is invested in a minimum
     of three countries. The name of the fund must accurately describe the FUND.

c.   The name of the single country FUND must accurately describe the FUND.

d.   An index FUND must substantially mirror the index.

EX-99

                              PARTICIPATION AGREEMENT
                                       AMONG
                         DELAWARE GROUP PREMIUM FUND, INC.
                                        AND
                        LINCOLN NATIONAL LIFE INSURANCE CO.
                                        AND
                             DELAWARE DISTRIBUTORS, LP

     THIS AGREEMENT, made and entered into this Ist day of May, 1996, by and
between DELAWARE GROUP PREMIUM FUND, INC., a corporation organized under the
laws of Maryland (the "Fund"), and LINCOLN NATIONAL LIFE INSURANCE CO., an
Indiana insurance corporation (the "Company"), on its own behalf and on behalf
of each separate account of the Company named in Schedule I to this Agreement as
in effect at the time this Agreement is executed and such other separate
accounts that may be added to Schedule I from time to time in accordance with
the provisions of Article XI of this Agreement (each such account referred to as
the "Account"), and DELAWARE DISTRIBUTORS, LP, a Delaware limited partnership
(the "Distributor").

     WHEREAS, the Fund is engaged in business as an open-end management
investment company and was established for the purpose of serving as the
investment vehicle for separate accounts established for variable life insurance
policies and variable annuity contracts (collectively referred to as "Variable
Insurance Products," the owners of such products being referred to as "Product
owners") to be offered by insurance companies which have entered into
participation agreements with the Fund ("Participating Insurance Companies");
and

     WHEREAS, the common stock of the Fund (the "Fund shares") consists of
separate series ("Series") issuing separate classes of shares ("Series shares"),
each such class representing an interest in a particular managed portfolio of
securities and other assets-, and

     WHEREAS, the Fund filed with the Securities and Exchange Commission (the
"SEC") and the SEC has declared effective a registration statement (referred to
herein as the "Fund Registration Statement" and the prospectus contained
therein, or filed pursuant to Rule 497 under the 1933 Act, referred to herein as
the "Fund Prospectus") on Form N-lA to register itself as an open-end management
investment company (File No. 811-5162) under the Investment Company Act of 1940,
as amended (the " 1940 Act"), and the Fund shares (File No. 3 3 -143 63) under
the Securities Act of 1933, as amended (the "1933 Act"); and

     WHEREAS, the Company has filed a registration statement with the SEC to
register under the 1933 Act certain variable annuity contracts described in
Schedule 2 to this Agreement as in effect at the time this Agreement is executed
and such other variable annuity contracts and variable life insurance policies
which may be added to Schedule 2 from time to time in accordance with Article XI
of this Agreement (such policies and contracts shall be referred to herein
collectively as the "Contracts," each such registration statement for a class or
classes of contracts


                                         1



listed on Schedule 2 being referred to as the "Contracts Registration Statement"
and the prospectus for each such class or classes being referred to herein as
the "Contracts Prospectus," and the owners of the such contracts, as
distinguished from all Product Owners, being referred to as "Contract Owners");
and

     WHEREAS, each Account, a validly existing separate account, duly authorized
by resolution 'of the Board of Directors of the Company on the date set forth on
Schedule 1, sets aside and invests assets attributable to the Contracts; and

     WHEREAS, the Company has registered or will have registered each Account
with the SEC as a unit investment trust under the 1940 Act before any Contracts
are issued by that Account; and

     WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"); and

     WHEREAS, the Distributor and the Fund have entered into an agreement (the
"Fund Distribution Agreement") pursuant to which the Distributor will distribute
Fund shares; and

     WHEREAS, Delaware Management Company, Inc. (the "Investment Manager") is
registered as an investment adviser under the 1940 Act and any applicable state
securities laws and serves as an investment manager to the Fund pursuant to an
agreement; and

     WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Series shares on behalf of each
Account to fund its Contracts and the Distributor is authorized to sell such
Series shares to unit investment trusts such as the Accounts at net asset value;

     NOW, THEREFORE, in consideration of their mutual promises, the Company, the
Fund and the Distributor agree as follows:

ARTICLE 1. SALE OF FUND SHARES

     1. 1. The Distributor agrees to sell to the Company those Series shares
which the Company orders on behalf of the Account, executing such orders on a
daily basis in accordance with Section 1.4 of this Agreement.

     1.2. The Fund agrees to make the shares of its Series available for
purchase by the Company on behalf of the Account at the then applicable net
asset value per share on Business Days as defined in Section 1.4 of this
Agreement, and the Fund shall use its best efforts to calculate such net asset
value by 6:00 p.m., E.S.T., on each such Business Day. Notwithstanding any other


                                         2



provision in this Agreement to the contrary, the Board of Directors of the Fund
(the "Fund Board") may suspend or terminate the offering of Fund shares of any
Series, if such action is required by law or by regulatory authorities having
jurisdiction or if, in THE SOLE discretion of THE FUND BOARD acting in good
faith and in light of its fiduciary duties under Federal and any applicable
state laws, suspension or termination is necessary and in the best interests of
the shareholders of any Series (it being understood that "shareholders" for this
purpose shall mean Product owners).

     1.3. The Fund agrees to redeem, at the Company's request, any full or
fractional shares of the Fund held by the Account or the Company, executing such
requests at the net asset value on a daily basis in accordance with Section 1.4
of this Agreement, the applicable provisions of the 1940 Act and the then
currently effective Fund Prospectus. Notwithstanding the foregoing, the Fund may
delay redemption of Fund shares of any Series to the extent permitted by the
1940 Act, any rules, regulations or orders thereunder, or the then currently
effective Fund Prospectus.

     1.4.

          (a) For purposes of Sections 1. 1, 1.2 and 1.3, the Company shall be
     the agent of the Fund for the limited purpose of receiving redemption and
     purchase requests from the Account (but not from the general account of the
     Company), and receipt on any Business Day by the Company as such limited
     agent of the Fund prior to the time prescribed in the current Fund
     Prospectus (which as of the date of execution of this Agreement is 4 p.m.,
     E.S.T.) shall constitute receipt by the Fund on that same Business Day,
     provided that the Fund receives notice of such redemption or purchase
     request by 11:00 a.m., E.S.T. on the next following Business Day. For
     purposes of this Agreement, "Business Day" shall mean any day on which the
     New York Stock exchange is open for trading.

          (b) The Company shall pay for shares of each Series on the same day
     that it places an order with the Fund to purchase those Series shares for
     an Account. Payment for Series shares will be made by the Account or the
     Company in Federal Funds transmitted to the Fund by wire to be received by
     11: 00 a.m., E. S. T. on the day the Fund is properly notified of the
     purchase order for Series shares. If Federal Funds are not received on
     time, such funds will be invested, and Series shares purchased thereby will
     be issued, as soon as practicable.

          (c) Payment for Series shares redeemed by the Account or the Company
     will be made in Federal Funds transmitted to the Company by wire on the day
     the Fund is notified of the redemption order of Series shares, except that
     the Fund reserves the right to delay payment of redemption proceeds, but in
     no event may such payment be delayed longer than the period permitted under
     Section 22(e) of the 1940 Act. Neither the Fund nor the Distributor shall
     bear any responsibility whatsoever for the proper disbursement or crediting
     of redemption proceeds; the Company alone shall be responsible for such
     action.


                                         3



     1.5. Issuance and transfer of Fund shares will be by book entry only. Stock
certificates will not be issued to the Company or the Account. Purchase and
redemption orders for Fund shares will be recorded in an appropriate ledger for
the Account or the appropriate subaccount of the Account.

     1.6. The Fund shall furnish notice as soon as reasonably practicable to the
Company of any income dividends or capital gain distributions payable on any
Series shares. The Company, on its behalf and on behalf of the Account, hereby
elects to receive all such dividends and distributions as are payable on any
Series shares in the form of additional shares of that Series. The Company
reserves the right, on its behalf and on behalf of the Account, to revoke this
election and to receive all such dividends in cash. The Fund shall notify the
Company of the number of Series shares so issued as payment of such dividends
and distributions.

     1.7. The Fund shall use its best efforts to make the net asset value per
share for each Series available to the Company by 6 p.m., E.S.T. each Business
Day, and in any event, as soon as reasonably practicable after the net asset
value per share for such Series is calculated, and shall calculate such net
asset value in accordance with the then currently effective Fund Prospectus.
Neither the Fund, any Series, the Distributor, nor the Investment Manager nor
any of their affiliates shall be liable for any information provided to the
Company pursuant to this Agreement which information is based on incorrect
information supplied by the Company to the Fund, the Distributor or the
Investment Manager.

     1.8.

          (a)  The Company may withdraw the Account's investment in the Fund
     or a Series only: (I) necessary to facilitate Contract owner requests; (ii)
     upon a determination by a majority of the Fund Board, or a majority of
     disinterested Fund Board members, that an irreconcilable material conflict
     exists among the interests of (x) any Product Owners or (y) the interests
     of the Participating Insurance Companies investing in the Fund; (iii) upon
     requisite vote of the Contractowners having an interest in the affected
     Series to substitute the shares of another investment company for Series
     shares in accordance with the terms of the Contracts; (iv) as required by
     state and/or federal laws or regulations or judicial or other legal
     precedent of general application; or (v) at the Company's sole discretion,
     pursuant to an order of the SEC under Section 26(b) of the 1940 Act.


          (b)  The parties hereto acknowledge that the arrangement contemplated
     by this Agreement is not exclusive and that the Fund shares may be sold to
     other insurance companies (subject to Section 1.9 hereof) and the cash
     value of the Contracts may be invested in other investment companies.


                                         4


          (c)  The Company shall not, without prior notice to the Distributor
     (unless otherwise required by applicable law), take any action to operate
     the Account as a management investment company under the 1940 Act.

     1.9. The Fund and the Distributor agree that Fund shares will be sold only
to Participating Insurance Companies and their separate accounts. The Fund and
the Distributor will not sell Fund shares to any insurance company or separate
account unless an agreement complying with Article VII of this Agreement is in
effect to govern such sales. No Fund shares of any Series will be sold to the
general public.

ARTICLE H. REPRESENTATIONS AND WARRANTIES

     2.1. The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or, prior to the issuance of any Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
separate account for its Contracts, and that it will maintain such registrations
for so long as any Contracts issued under them are outstanding

     2.2. The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act and duly authorized for
issuance in accordance with applicable law and that the Fund is and shall remain
registered under the 1940 Act for so long as the Fund shares are sold. The Fund
further represents and warrants that it is a corporation duly organized and in
good standing under the laws of Maryland.

     2.3. The Fund represents and warrants that it currently qualifies as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"). The Fund further represents and warrants that it
will make every effort to continue to qualify and to maintain such qualification
(under Subchapter M or any successor or similar provision), and that it will
notify the Company immediately upon having a reasonable basis for believing that
it has ceased to so qualify or that it might not so qualify in the future.

     2.4. The Fund represents and warrants that it will comply with Section
817(h) of the Code, and all regulations issued thereunder.

     2.5. The Company represents that the Contracts are currently and at the
time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund and the Distributor immediately upon having a reasonable basis


                                         5



for believing that the Contracts have ceased to be so treated or that they might
not be so treated in the future.

     2.6. The Fund represents that the Fund's investment policies, fees and
expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of Maryland, to the extent required to
perform this Agreement; and with any state- mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

     2.7. The Distributor represents and warrants that it is duly registered as
a broker-dealer under the 1934 Act, a member in good standing of the NASD, and
duly registered as a broker dealer under applicable state securities laws; its
operations are in compliance with applicable law, and it will distribute the
Fund shares according to applicable law.

     2.8. The Distributor, on behalf of the Investment Manager, represents and
warrants that the Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940 and is in compliance with applicable
federal and state securities laws.

     2.9. The Fund represents and warrants that it has and maintains a fidelity
bond in accordance with Rule 17g- I under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.

ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS, SALES MATERIAL AND OTHER
INFORMATION

     3. 1. The Distributor shall provide the Company with as many copies of the
current Fund Prospectus as the Company may reasonably request. If requested by
the Company in lieu thereof, the Fund at its expense shall provide to the
Company a camera-ready copy of the current Fund Prospectus suitable for printing
and other assistance as is reasonably necessary in order for the Company to have
a new Contracts Prospectus printed together with the Fund Prospectus in one
document. See Article V for a detailed explanation of the responsibility for the
cost of printing and distributing Fund prospectuses.

     3.2. The Fund Prospectus shall state that the Statement of Additional
Information for the Fund is available from the Distributor (or, in the Fund's
discretion, the Fund Prospectus shall state that such Statement is available
from the Fund), and the Distributor (or the Fund) shall provide such Statement
free of charge to the Company and to any outstanding or prospective Contract
owner who requests such Statement.

     3.3. (a) The Fund at its expense shall provide to the Company a
camera-ready copy of the Fund's shareholder reports and other communications to
shareholders (except proxy material), in each case in a form suitable for
printing. The Fund shall be responsible for the costs of printing and
distributing these materials to Contract owners.

                                         6



          (b) The Fund at its expense shall be responsible for preparing,
     printing and distributing its proxy material. The Company will provide the
     appropriate Contractowner names and addresses to the Fund for this purpose.

     3.4. The Company shall furnish each piece of sales literature or other
promotional material in which the Fund or the Investment Manager is named to the
Fund or the Distributor prior to its use. No such material shall be used, except
with the prior written permission of the Fund or the Distributor. The Fund and
the Distributor agree to respond to any request for approval on a prompt and
timely basis. Failure of the Fund to respond within 10 days of the request by
the Company shall relieve the Company of the obligation to obtain the prior
written permission of the Fund or the Distributor.

     3.5. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund other than the
information or representations contained in the Fund Registration Statement or
Fund Prospectus, as such Registration Statement and Prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or by
the Distributor, except with the prior written permission of the Fund or the
Distributor. The Fund agrees to respond to any request for permission on a
prompt and timely basis. If neither the Fund nor the Distributor responds within
10 days of a request by the Company, then the Company shall be relieved of the
obligation to obtain the prior written permission of the Fund.

     3.6. The Fund and the Distributor shall not give any information or make
any representations on behalf of the Company or concerning the Company, the
Account or the Contracts other than the information or representations contained
in the Contracts Registration Statement or Contracts Prospectus, as such
Registration Statement and Prospectus may be amended or supplemented from time
to time, or in published reports of the Account which are in the public domain
or approved in writing by the Company for distribution to Contract owners, or in
sales literature or other promotional material approved in writing by the
Company, except with the prior written permission of the Company. The Company
agrees to respond to any request for permission on a prompt and timely basis. If
the Company fails to respond within 10 days of a request by the Fund or the
Distributor, then the Fund and the Distributor are relieved of the obligation to
obtain the prior written permission of the Company.

     3.7. The Fund will provide to the Company at least one complete copy of all
Fund Registration Statements, Fund Prospectuses, Statements of Additional
Information, annual and semi-annual reports and other reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, that relate to the Fund or Fund shares, promptly after the filing of such
document with the SEC or other regulatory authorities.

     3.8. The Company will provide to the Fund at least one complete copy of all
Contracts Registration Statements, Contracts Prospectuses, Statements of
Additional Information, Annual and Semi-annual Reports, sales literature and
other promotional materials, and all amendments or supplements to any of the
above, that relate to the Contracts, promptly after the filing of such document
with the SEC or other regulatory authorities.

                                       7



     3.9. Each party will provide to the other party copies of draft versions of
any registration statements, prospectuses, statements of additional information,
reports, proxy statements, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments or supplements to any of the
above, to the extent that the other party reasonably needs such information for
purposes of preparing a report or other filing to be filed with or submitted to
a regulatory agency. If a party requests any such information before it has been
filed, the other party will provide the requested information if then available
and in the version then available at the time of such request.

     3.10. For purposes of this Article 1111, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (Lie., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales literature or advertising under NASD rules, the 1940 Act or
the 1933 Act.

ARTICLE IV. Voting

     4.1  Subject to applicable law and the order referred to in Article VII,
the Fund shall: solicit voting instructions from Contract owners,

     4.2  Subject to applicable law and the order referred to in Article VII,
     the  Company shall:

          (a) vote Fund  shares of each Series attributable to Contract owners
in accordance with structions or proxies received in timely fashion from such
Contract owners;

          (b) vote Fund shares of each Series attributable to Contract owners
for which no instructions have been received in the same proportion as Fund
shares of such Series for which instructions have been received in timely
fashion; and

          (c) vote Fund shares of each Series held by the Company on its own
behalf or on behalf of the Account that are not attributable to Contract owners
in the same proportion as Fund shares of such Series for which instructions have
been received in timely fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. Fees and EXPENSES

     All expenses incident to performance by the Fund under this Agreement
(including expenses expressly assumed by the Fund pursuant to this Agreement)
shall be paid by the Fund to the extent permitted by law. Except as may
otherwise be provided in Section 1.4 and Article VII of



                                         8


this Agreement, the Company shall not bear any of the expenses for the cost of
registration and qualification of the Fund shares under Federal and any state
securities law, preparation and filing of the Fund Prospectus and Fund
Registration Statement, the preparation of all statements and notices required
by any Federal or state securities law, all taxes on the issuance or transfer of
Fund shares, and any expenses permitted to be paid or assumed by the Fund
pursuant to a plan, if any, under Rule 12b- I under the 1940 Act.

     The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contract owners. (If for this purpose the
Company prints the Fund Prospectuses and SAIs in a booklet containing disclosure
for the Contracts and for underlying funds other than those of the Fund, then
the Fund shall pay only its proportionate share of the total cost to distribute
the booklet to existing Contract owners.)

     The Company is responsible for the cost of printing and distributing Fund
prospectuses and SAIs for new sales; and Account Prospectuses and SAIs for
existing Contract owners. The Company shall have the final decision on choice of
printer for all Prospectuses and SAIs.

ARTICLE VI. COMPLIANCE UNDERTAKINGS

     6. 1. The Fund undertakes to comply with Subchapter M and Section 817(h) of
the Code, and all regulations issued thereunder.

     6.2. The Company shall amend the Contracts Registration Statements under
the 1933 Act and the Account's Registration Statement under the 1940 Act from
time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws of the various states.

     6.3. The Fund shall amend the Fund Registration Statement under the 1933
Act and the 1940 Act from time to time as required in order to effect for so
long as Fund shares are sold the continuous offering of Fund shares as described
in the then currently effective Fund Prospectus. The Fund shall register and
qualify Fund shares for sale to the extent required by applicable securities
laws of the various states.

     6.4. The Company shall be responsible for assuring that any prospectus
offering a Contract that is a life insurance contract where it is reasonably
possible that such Contract would be deemed a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will describe the
circumstances under which a Contract could be treated as a modified endowment
contract (or policy).

     6.5. To the extent that it decides to finance distribution expenses
pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of Directors, a
majority of whom are not interested persons of the Fund, formulate and approve
any plan under Rule 12b- I to finance distribution expenses.

          (a) The Company shall amend Schedule 3 when appropriate in order to
inform the Fund of any applicable state-mandated investment restrictions with
which the Fund must comply.


                                         9


          (b) Should the Fund or the Distributor become aware of any
restrictions which may be appropriate for inclusion in Schedule 3, the Company
shall be informed immediately of the substance of those restrictions.

ARTICLE VII. POTENTIAL CONFLICTS

     7.1. The Company has reviewed a copy of the order (the "Mixed and Shared
Funding Order") dated November 2, 1987 of the Securities and Exchange Commission
under Section 6 of the Act and, in particular, has reviewed the conditions to
the relief set forth in the related Notice As set forth therein, the Company
agrees to report to the Board of Directors of the Fund (the "Board") any
potential or existing conflicts between the interests of Product Owners of all
separate accounts investing in the Fund, and to assist the Board in carrying out
its responsibilities under the conditions of the Mixed and Shared Funding Order
by providing all information reasonably necessary for the Board to consider any
issues raised, including information as to a decision to disregard voting
instructions of variable contract owners.

     7.2. If a majority of the Board, or a majority of disinterested Board
Members, determines that a material irreconcilable conflict exists, the Board
shall give prompt notice to all Participating Insurance Companies.

          (a) If a majority of the whole Board, after notice to the Company and
a reasonable opportunity for the Company to appear before it and present its
case, determines that the Company is responsible for said conflict, and if the
Company agrees with that determination, the Company shall, at its sole cost and
expense, take whatever steps are necessary to remedy the irreconcilable material
conflict. These steps could include: (a) withdrawing the assets allocable to
some or all of the affected Accounts from the Fund or any Series and reinvesting
such assets in a different investment vehicle, including another Series of the
Fund, or submitting the question of whether such segregation should be
implemented to a vote of all affected Contractowners and, as appropriate,
segregating the assets of any particular group (i.e., variable annuity
Contractowners, variable life insurance policyowners, or variable Contractowners
of one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Contractowners the option of making
such a change; and (b) establishing a new registered mutual fund or management
separate account, or taking such other action as is necessary to remedy or
eliminate the irreconcilable material conflict.

          (b) If the Company disagrees with the Board's determination, the
Company shall file a written protest with the Board, reserving its right to
dispute the determination as between just the Company and the Fund. After
reserving that right the Company, although disagreeing with the Board that it
(the Company) was responsible for the conflict, shall take the necessary steps,
under protest, to remedy the conflict, substantially in accordance with
paragraph (a) just above, for the protection of Contractowners.

          (c) As between the Company and the Fund, if within 45 days after the
Board's determination the Company elects to press the dispute, it shall so
notify the Board in writing. The parties shall then attempt to resolve the
matter amicably through negotiation by individuals from each party who are
authorized to settle the controversy.


                                         10



     If the matter has not been amicably resolved within 60 days from the date
of the Company's notice of its intent to press the dispute, then before either
party shall undertake to litigate the dispute it shall be submitted to
non-binding arbitration conducted expeditiously in accordance with the CPR Rules
for Non-Administered Arbitration of Business Disputes, by a sole arbitrator;
PROVIDED, HOWEVER, that if one party has requested the other party to seek an
amicable resolution and the other party has failed to participate, the
requesting party may initiate arbitration before expiration of the 60-day period
set out just above.

     If within 45 days of the commencement of the process to select an
arbitrator the parties cannot agree upon the arbitrator, then he or she will be
selected from the CPR Panels of Neutrals. The arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. Sec. 1-16. The place of arbitration
shall be Fort Wayne, Indiana. The Arbitrator is not empowered to award damages
in excess of compensatory damages.

          (d) If the Board shall determine that the Fund or another insurer was
responsible for the conflict, then the Board shall notify the Company
immediately of that determination. The Fund shall assure the Company that it
(the Fund) or that other insurer, as applicable, shall, at its sole cost and
expense, take whatever steps are necessary to eliminate the conflict.

     7.3.  If a material irreconcilable conflict arises because of the Company's
decision to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
shall withdraw (without charge or penalty) the Account's investment in the Fund,
if the Fund so elects.

     7.4  Subject to the terms of Section 7.2 above, the Company shall carry out
the responsibility to take remedial action in the event of a Board determination
of an irreconcilable material conflict with a view only to the interests of
Contract Owners.

     7.5.  For purposes of this Article, a majority of the disinterested members
of the Board shall determine whether or not any proposed action adequately
remedies any irreconcilable conflict, but in no event will the Fund be required
to establish a new funding medium for any variable contract, nor will the
Company be required to establish a new funding medium for any Contract if an
offer to do so has been declined by a vote of a majority of affected
Contractowners.

ARTICLE VIII. INDEMNIFICATION

     8.1.  INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
hold harmless the Fund, the Distributor and each person who controls or is
associated with the Fund (other than another Participating Insurance Company) or
the Distributor within the meaning of such terms under the federal securities
laws and any officer, trustee, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities:

         (a)  arise out of or are based upon any untrue statement or alleged
     untrue statement of any material fact contained in the Contracts
     Registration Statement, Contracts Prospectus, sales literature or other
     promotional material for the Contracts or the Contracts themselves(or any
     amendment or supplement to any of the foregoing(, or arise out of or are


                                         11


     based upon the omission or the alleged omission to state therein a material
     fact required to be stated therein or necessary to make the statements
     therein not misleading in light of the circumstances in which they were
     made; provided that this obligation to indemnify shall not apply if such
     statement or omission or such alleged statement or alleged omission was
     made in reliance upon and in conformity with information furnished in
     writing to the Company by the Fund or the Distributor (or a person
     authorized in writing to do so on behalf of the Fund or the Distributor)
     for use in the Contracts Registration Statement, Contracts Prospectus or in
     the Contracts or sales literature (or any amendment or supplement) or
     otherwise for use in connection with the sale of the Contracts or Fund
     shares; or

          (b) arise out of or are based upon any untrue statement or alleged
     untrue statement of a material fact by or on behalf of the Company (other
     than statements or representations contained in the Fund Registration
     Statement, Fund Prospectus or sales literature or other promotional
     material of the Fund not supplied by the Company or persons under its
     control) or wrongful conduct of the Company or persons under its control
     with respect to the sale or distribution of the Contracts or Fund shares;
     or

          (c) arise out of any untrue statement or alleged untrue statement of a
     material fact contained in the Fund Registration Statement, Fund Prospectus
     or sales literature or other promotional material of the Fund or any
     amendment thereof or supplement thereto, or the omission or alleged
     omission to state therein a material fact required to be stated therein or
     necessary to make the statements therein not misleading in fight of the
     circumstances in which they were made, if such statement or omission was
     made in reliance upon and in conformity with information furnished to the
     Fund by or on behalf of the Company; or

          (d) arise as a result of any failure by the Company to provide the
     services and furnish the materials or to make any payments under the terms
     of this Agreement; or

          (e) arise out of any material breach by the Company of this Agreement,
     including but not limited to any failure to transmit a request for
     redemption or purchase of Fund shares on a timely basis in accordance with
     the procedures set forth in Article 1; or

          (f) arise as a result of the Company's providing the Fund with
     inaccurate information, which causes the Fund to calculate its Net Asset
     Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

     8.2. INDEMNIFICATION BY THE DISTRIBUTOR. The Distributor agrees to
indemnify and hold harmless the Company and each person who controls or is
associated with the Company within the meaning of such terms under the federal
securities laws and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities:


                                         12


          (a) arise out of or are based upon any untrue statement or alleged
     untrue statement of any material fact contained in the Fund Registration
     Statement, Fund Prospectus (or any amendment or supplement thereto) or
     sales literature or other promotional material of the Fund, or arise out of
     or are based upon the omission or the alleged omission to state therein a
     material fact required to be stated therein or necessary to make the
     statements therein not misleading in light of the circumstances in which
     they were made; provided that this obligation to indemnify shall not apply
     if such statement or omission or alleged statement or alleged omission was
     made in reliance upon and in conformity with information furnished in
     writing by the Company to the Fund or the Distributor for use in the Fund
     Registration Statement, Fund Prospectus (or any amendment or supplement
     thereto) or sales literature for the Fund or otherwise for use in
     connection with the sale of the Contracts or Fund shares; or

          (b) arise out of or are based upon any untrue statement or alleged
     untrue statement of a material fact made by the Distributor or the Fund
     (other than statements or representations contained in the Fund
     Registration Statement, Fund Prospectus or sales literature or other
     promotional material of the Fund not supplied by the Distributor or the
     Fund or persons under their control) or wrongful conduct of the Distributor
     or persons under its control with respect to the sale or distribution of
     the Contracts or Fund shares; or

          (c) arise out of any untrue statement or alleged untrue statement of a
     material fact contained in the Contract's Registration Statement, Contracts
     Prospectus or sales literature or other promotional material for the
     Contracts (or any amendment or supplement thereto), or the omission or
     alleged omission to state therein a material fact required to be stated
     therein or necessary to make the statements therein not misleading in fight
     of the circumstances in which they were made, if such statement or omission
     was made in reliance upon information furnished in writing by the
     Distributor or the Fund to the Company (or a person authorized in writing
     to do so on behalf of the Fund or the Distributor); or

          (d) arise as a result of any failure by the Fund to provide the
     services and furnish the materials under the terms of this Agreement
     (including, but not by way of limitation, a failure, whether unintentional
     or in good faith or otherwise: (i) to comply with the diversification
     requirements specified in Article VI of this Agreement; and (ii) to provide
     the Company with accurate information sufficient for it to calculate its
     accumulation and/or annuity unit values in timely fashion as required by
     law and by the Contracts Prospectuses); or

          (e) arise out of any material breach by the Distributor or the Fund of
     this Agreement.

This indemnification will be in addition to any liability which the Distributor
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

     8.3. INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Article VIII, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the


                                          13


fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.

     A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this Article VIII. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.

ARTICLE IX. APPLICABLE LAW

     9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of laws.

     9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant,
and the terms hereof shall be limited, interpreted and construed in accordance
therewith.

ARTICLE X. TERMINATION

     10.1. This Agreement shall terminate:

          (a)  at the option of any party upon six months advance written notice
     to the other parties; or

          (b)  at the option of the Company if shares of any Series are not
     available to meet the requirements of the Contracts as determined by the
     Company. Prompt notice of the election to terminate for such cause shall be
     furnished by the Company. Termination shall be effective ten days after the
     giving of notice by the Company; or

          (c)  at the option of the Fund upon institution of formal proceedings
     against the Company by the NASD, the SEC, the insurance commission of any
     state or any other regulatory body regarding the Company's duties under
     this Agreement or related to the sale of the Contracts, the operation of
     the Account, the administration of the Contracts or the purchase of Fund
     shares, or an expected or anticipated ruling, judgment or outcome which
     would, in the Fund's reasonable


                                         14


          judgment, materially impair the Company's ability to perform the
     Company's obligations and duties hereunder; or

          (d)  at the option of the Company upon institution of formal
     proceedings against the Fund, the Distributor, the Investment Manager or
     any Sub-Investment Manager, by the NASD, the SEC, or any state securities
     or insurance commission or any other regulatory body regarding the duties
     of the Fund or the Distributor under this Agreement, or an expected or
     anticipated ruling, judgment or outcome which would, in the Company's
     reasonable judgment, materially impair the Fund's or the Distributor's
     ability to perform Fund's or Distributor's obligations and duties
     hereunder; or

          (e)  at the option of the Company upon institution of formal
     proceedings against the Investment Manager or Sub-investment Manager by the
     NASD, the SEC, or any state securities or insurance commission or any other
     regulatory body which would, in the good faith opinion of the Company,
     result in material harm to the Accounts, the Company, or Contractowners.

          (f)  upon requisite vote of the Contract owners having an interest in
     the affected Series (unless otherwise required by applicable law) and
     written approval of the Company, to substitute the shares of another
     investment company for the corresponding Series shares of the Fund in
     accordance with the terms of the Contracts; or

          (g)  at the option of the Fund in the event any of the Contracts are
     not registered, issued or sold in accordance with applicable Federal and/or
     state law; or

          (h)  at the option of the Company or the Fund upon a determination by
     a majority of the Fund Board, or a majority of disinterested Fund Board
     members, that an irreconcilable material conflict exists among the
     interests of (i) any Product owners or (ii) the interests of the
     Participating Insurance Companies investing in the Fund; or

          (i)  at the option of the Company if the Fund ceases to qualify as a
     Regulated Investment Company under Subchapter M of the Code, or under any
     successor or similar provision, or if the Company reasonably believes,
     based on an opinion of its counsel, that the Fund may fail to so qualify;
     or

          (j)   at the option of the Company if the Fund fails to meet the
     diversification requirements specified in Section 817(h) of the Code and
     any regulations thereunder; or

          (k)  at the option of the Fund if the Contracts cease to qualify as
     annuity contracts or life insurance policies, as applicable, under the
     Code, or if the Fund reasonably believes that the Contracts may fail to so
     qualify; or

          (l)  at the option of either the Fund or the Distributor if the Fund
     or the Distributor, respectively, shall determine, in their sole judgment
     exercised in good faith, that either (1) the Company shall have suffered a
     material adverse change in its


                                         15


     business or financial condition; or (2) the Company shall have been the
     subject of material adverse publicity which is likely to have a material
     adverse impact upon the business and operations of either the Fund or the
     Distributor; or

          (m)  at the option of the Company, if the Company shall determine, in
     its sole judgment exercised in good faith, that either: (1) the Fund and
     the Distributor, or either of them, shall have suffered a material adverse
     change in their respective businesses or financial condition; or (2) the
     Fund or the Distributor, or both of them, shall have been the subject of
     material adverse publicity which is likely to have a material adverse
     impact upon the business and operations of the Company; or

          (n)  upon the assignment of this Agreement (including, without
     limitation, any transfer of the Contracts or the Accounts to another
     insurance company pursuant to an assumption reinsurance agreement) unless
     the non-assigning party consents thereto or unless this Agreement is
     assigned to an affiliate of the Distributor.

     10.2. Notice REQUIREMENT. Except as otherwise provided in Section 10. 1, no
termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to all other parties to
this Agreement of its intent to terminate which notice shall set forth the basis
for such termination. Furthermore:

          (a)  In the event that any termination is based upon the provisions of
     Article VII or the provisions of Section 10. 1 (a) of this Agreement, such
     prior written notice shall be given in advance of the effective date of
     termination as required by such provisions; and

          (b)   in the event that any termination is based upon the provisions
     of Section 10. 1 (c) or 10. 1 (d) of this Agreement, such prior written
     notice shall be given at least ninety (90) days before the effective date
     of termination, or sooner if required by law or regulation.

          (c)   in the event that any termination is based upon the provisions
     of Section 10. 1 (e) of this Agreement, such prior written notice shall be
     given at least sixty (60) days before the date of any proposed vote to
     replace the Fund's shares.

     10.3. EFFECT OF TERMINATION

          (a)  Notwithstanding any termination of this Agreement pursuant to
     Section 10.1 of this Agreement, the Fund and the Distributor will, at the
     option of the Company, continue to make available additional Fund shares
     for so long after the termination of this Agreement as the Company desires,
     pursuant to the terms and conditions of this Agreement as provided in
     paragraph (b) below, for all Contracts in effect on the effective date of
     termination of this Agreement (hereinafter referred to as "Existing
     Contracts"). Specifically, without limitation, if the Company so elects to
     make additional Fund shares available, the owners of the Existing Contracts
     or the Company, whichever shall have legal authority to do so, shall be
     permitted to reallocate investments in the Fund, redeem investments in the
     Fund and/or invest in the Fund upon the making of additional purchase
     payments under the Existing Contracts.

               (b)  In the event of a termination of this Agreement pursuant to
     Section 10. 1 of this Agreement, the Fund and the Distributor shall
     promptly notify the Company whether


                                         16


     the Distributor and the Fund will continue to make Fund shares available
     after such termination. If Fund shares continue to be made available after
     such termination, the provisions of this Agreement shall remain in effect
     except for Section 10. 1 (a) and thereafter either the Fund or the Company
     may terminate the Agreement, as so continued pursuant to this Section 10.3,
     upon prior written notice to the other party, such notice to be for a
     period that is reasonable under the circumstances but, if given by the
     Fund, need not be for more than six months.

          (c)  The parties agree that this Section 10.3 shall not apply to any
     termination made pursuant to Article VII or any conditions or undertakings
     incorporated by reference in Article VII and the effect of such Article VII
     termination shall be governed by the provisions set forth or incorporated
     by reference therein.

ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

     The parties to this Agreement may amend the schedules to this Agreement
from time to time to reflect changes in or relating to the Contracts and to add
new classes of variable annuity contracts and variable fife insurance policies
to be issued by the Company through a Separate Account investing in the Fund.
The provisions of this Agreement shall be equally applicable to each such class
of contracts or policies, unless the context otherwise requires.

ARTICLE XII. NOTICES

     Any notice shall be sufficiently given when sent by registered or certified
mail to the other party(ies) at the address of such party(ies) set forth below
or at such other address as such party(ies) may from time to time specify in
writing to the other party.

                              If to the Fund:

                                   Delaware Group Premium Fund, Inc.
                                   Ten Penn Center Plaza
                                   Philadelphia, PA 19103
                                   Attn: Christopher Price

                              If to the Company:

                                   Lincoln National Life Insurance Co.
                                   1300 South Clinton Street
                                   Fort Wayne, Indiana 46802
                                   Attn: Kelly D. Clevenger


                              If to the Distributor:

                                   Delaware Distributors, Inc.
                                   Ten Penn Center Plaza
                                   Philadelphia, PA 19103
                                   Attn: Keith E. Mitchell


                                         17


     ARTICLE XIII. MISCELLANEOUS

     13.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

     13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

     13.3. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.

     13.4. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

     13.5. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


                                         18


IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and behalf by its duly authorized officer on the date
specified below.

DELAWARE GROUP PREMIUM FUND, INC. (Fund)

Date:          By:

                         Name:

                         Title:

LINCOLN NATIONAL LIFE INSURANCE CO. (Company)

Date: 4/30/96            By: /s/ Kelly D. Clevenger

                         Name: Kelly D. Clevenger

                         Title: Vice President

DELAWARE DISTRIBUTORS, LP (Distributor)

Date:          By:

                         Name:

                         Title:

authorized by all necessary corporate or trust action, as applicable, by such
party, and when so executed and delivered this Agreement will be the valid and
binding obligation of such party enforceable in accordance with its terms.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its NAME and behalf by its duly authorized officer on the date
specified below.

DELAWARE GROUP PREMIUM FUND, INC. (Fund)

Date: 5/1/96                       By: /s/ David K. Downes

                                   Name: David K. Downes

                                   Title: Senior Vice President, CAO & CFO

LINCOLN NATIONAL LIFE INSURANCE CO. (Company)

Date:               By:

                                   Name:

                                   Title:

DELAWARE DISTRIBUTORS, LP (Distributor)

Date: 5/1/96                       By: /s/ Keith E. Mitchell

                                   Name: Keith E. Mitchell

                                   Title: President & CEO


                                          19


                                     SCHEDULE I

            Separate Accounts of Lincoln National Life Insurance Company
                               Investing in the Fund
                                 As of May 1, 1996


Lincoln National Variable Annuity Account C

Lincoln Life Flexible Premium Variable Life Account K



                                          20




                                     SCHEDULE 2

                             Variable Annuity Contracts
                        and Variable Life Insurance Policies
                           Supported by Separate Accounts
                                Listed on Schedule I
                                 As of May 1, 1996

          Multi Fund Variable Annuity Contracts

          Multi Fund Variable Life Insurance Contracts



                                          21


                                     SCHEDULE 3

                       State-mandated Investment Restrictions
                               Applicable to the Fund
                                 As of May 1, 1996

The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

Borrowing. Borrowing limits for any variable contract separate account portfolio
are (1) 10% of net asset value when borrowing for any general purpose; and (2)
25% of net asset value when borrowing as a temporary measure to facilitate
redemptions. Net asset value of a portfolio is the market value of all
investments or assets owned less outstanding liabilities of the portfolio at the
time that any new or additional borrowing is undertaken.

FOREIGN INVESTMENTS - DIVERSIFICATION.

1.   A portfolio will be invested in a minimum of five different foreign
countries at all times. However, this minimum is reduced to four when foreign
investments comprise less than 80% of the portfolio's net asset value; to three
when less than 60% of that value; to two when less than 40%; and to one when
less than 20%.

2.   Except as set forth in items 3 and 4 below, a Portfolio will have no more
than 20% of its net asset value invested in securities of issuers located in any
one country.

3.   A Portfolio may have an additional 15% of its net asset value invested in
securities of issuers located in any one of the following countries: Australia,
Canada, France, Japan, the United Kingdom or Germany.

4.   A Portfolio's investments in United States issuers are not subject to the
foreign country diversification guidelines.


                                         22




                              AMENDMENT TO SCHEDULE 1

            Separate Accounts of Lincoln National Life Insurance Company
                               Investing in the Fund
                                 As of May 1, 2000


Lincoln National Variable Annuity Account C

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 National Life Insurance Company Separate Account 53



                              AMENDMENT TO SCHEDULE 2

                           Variable Annuity Contracts and
                          Variable Life Insurance Policies
                          Supported by Separate Accounts
                                Listed on Schedule 1
                                 As of May 1, 2000

Multi Fund-Registered Trademark- Individual Variable Annuity Contract
(Registered and non-registered)

Multi Fund-Registered Trademark- Variable Life Insurance Contract

Group Multi Fund-Registered Trademark- Variable Annuity Contract

Delaware-Lincoln New York ChoicePlus Variable Annuity Contract

VUL I Variable Universal Life Insurance Contract

Lincoln VUL Variable Universal Life Insurance Contract

Lincoln VUL(DB) Variable Universal Life Insurance Contract

eAnnuity(TM) Variable Annuity Contract

SVUL I Variable Universal Life Insurance Contract

Lincoln SVUL Variable Universal Life Insurance Contract

Lincoln SVUL II Variable Universal Life Insurance Contract

Lincoln CVUL Variable Universal Life Insurance Contract

Lincoln CVUL Series III Variable Universal Life Insurance Contract

Group Variable Annuity (GVA) I, II, III



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                              DELAWARE GROUP PREMIUM FUND  (Fund)

Date:                         By: /s/ David K. Downes
     ----------------            -----------------------
                              Name: David K. Downes
                              Title: President/CEO

                              LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date: 3/22/2000               By: /s/ Steven M. Kluever
     ----------------            -----------------------
                                   Steven M. Kluever
                                   Second Vice President

                              DELAWARE DISTRIBUTORS, LP (Distributor), by
                              DELAWARE DISTRIBUTORS, INC., General Partner

Date:                         By: /s/ Bruce Barton
     ----------------            -----------------------
                              Name: Bruce Barton
                              Title: President





                              AMENDMENT TO SCHEDULE 2

                           Variable Annuity Contracts and
                          Variable Life Insurance Policies
                          Supported by Separate Accounts
                                Listed on Schedule 1
                               As of October 15, 1999

Multi Fund-Registered Trademark- Individual Variable Annuity Contracts
(Registered and non-registered)

Multi Fund-Registered Trademark- Variable Life Insurance Contracts

Group Multi Fund-Registered Trademark- Variable Annuity Contracts

Delaware-Lincoln ChoicePlus Variable Annuity Contracts

VUL I Variable Universal Life Insurance Contracts

Lincoln VUL Variable Universal Life Insurance Contracts

eAnnuity(TM) Variable Annuity Contracts

SVUL I Variable Universal Life Insurance Contracts

Lincoln SVUL Variable Universal Life Insurance Contracts

Lincoln CVUL Variable Universal Life Insurance Contracts

Lincoln VUL(DB) Variable Universal Life Insurance Contracts



     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                              DELAWARE GROUP PREMIUM FUND, INC.  (Fund)

Date:                         By: /s/ David K. Downes
     --------------------        -----------------------------
                                  David K. Downes
                                  President/CEO


                              LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date: 3/22/2000               By: /s/ Steven M. Kluever
     --------------------        -----------------------------
                                  Steven M. Kluever
                                  Second Vice President

                              DELAWARE DISTRIBUTORS, LP (Distributor), by
                              DELAWARE DISTRIBUTORS, INC., General Partner

Date:                         By: /s/ Bruce Barton
     --------------------        -----------------------------
                                  Bruce Barton
                                  President



                               AMENDMENT TO SCHEDULE 1

                Separate Accounts of Lincoln Life Insurance Company
                               Investing in the Fund
                                 As of May 1, 1999

Lincoln National Variable Annuity Account C

Lincoln Life Flexible Premium Variable Life Account K

Lincoln Life Flexible Premium Variable Life Account M

Lincoln Life Variable Annuity Account N

Lincoln Life Flexible Premium Variable Life Account R

Lincoln Life Flexible Premium Variable Life Account S

Lincoln National Life Insurance Company Separate Account 53

     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 1 to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                              DELAWARE GROUP PREMIUM FUND, INC (Fund)

Date:  May 26, 1999                By:
     -------------------              --------------------------------
                                        Jeffrey L. Nick
                                        Chairman/President/Chief Executive
                                        Officer

                              LINCOLN NATIONAL LIFE INSURANCE COMPANY

     Date: June 4, 1999            By:
     -------------------              --------------------------------
                                        Kelly D. Clevenger
                                        Vice President

                              DELAWARE DISTRIBUTORS, LP (Distributor), by
                              DELAWARE DISTRIBUTORS, INC., General Partner

     Date: May 26, 1999            By:
     -------------------              --------------------------------
                                         Bruce D. Barton
                                         President and Chief Executive Officer
                                      --------------------------------
                                      --------------------------------




                               AMENDMENT TO SCHEDULE 2

                           Variable Annuity Contracts and
                          Variable Life Insurance Policies
                            Support by Separate Accounts
                                Listed on Schedule 1
                                 As of May 1, 1999


Multi-Fund -Registered Trademark- Individual Variable Annuity Contracts
(Registered and Non-Registered)

Multi-Fund -Registered Trademark- Variable Life Insurance Contracts

Group Multi-Fund -Registered Trademark- Variable Annuity Contracts

Delaware-Lincoln Accru ChoicePlusVariable Annuity Contracts

VUL I Variable Universal Life Insurance Contracts

Lincoln VUL Variable Universal Life Insurance Contracts

e-Annuity tm Variable Annuity Contracts

SVUL I Variable Universal Life Insurance Contracts

Lincoln SVUL Variable Universal Life Insurance Contracts

CVUL Variable Universal Life Insurance Contracts




                             AMENDMENT TO SCHEDULE 2

         Variable Annuity Contracts and Variable Life Insurance Policies
               Supported by Separate Accounts Listed on Schedule 1
                               As of July 15, 2000

Multi Fund-Registered Trademark- Individual Variable Annuity Contract
  (Registered and non-registered)

Multi Fund-Registered Trademark- Variable Life Insurance Contract

Group Multi Fund-Registered Trademark- Variable Annuity Contract

Lincoln ChoicePlus Variable Annuity Contract

Lincoln ChoicePlus Access Variable Annuity Contract

Lincoln ChoicePlus Bonus Variable Annuity Contract

VUL I Variable Universal Life Insurance Contract

Lincoln VUL Variable Universal Life Insurance Contract

Lincoln VUL-DB- Variable Universal Life Insurance Contract

eAnnuity-TM- Variable Annuity Contract

SVUL I Variable Universal Life Insurance Contract

Lincoln SVUL Variable Universal Life Insurance Contract

Lincoln SVUL II Variable Universal Life Insurance Contract

Lincoln CVUL Variable Universal Life Insurance Contract

Lincoln CVUL Series III Variable Universal Life Insurance Contract

Group Variable Annuity (GVA) I, II, III


     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
to Schedule 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                               DELAWARE GROUP PREMIUM FUND  (Fund)

Date:  7-15-2000               By:
     ----------------               -----------------------------------
                               Name:
                               Title:

                               LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date:  7-15-2000               By:  /s/ Steven M. Kluever
     ----------------              ------------------------------------
                                        Steven M. Kluever
                                        Second Vice President

                               DELAWARE DISTRIBUTORS, LP (Distributor), by
                               DELAWARE DISTRIBUTORS, INC., General Partner

Date:  7-15-2000               By:  /s/ Bruce M. Barton
     ----------------              ------------------------------------
                               Name:  Bruce M. Barton
                               Title:



                             AMENDMENT TO SCHEDULE 1

          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                                As of May 1, 2001


Lincoln National Variable Annuity Account C

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 Insurance Company Separate Account 53

Lincoln National Life Insurance Company Separate Account 55

Lincoln National Life Insurance Company Separate Account 56



                             AMENDMENT TO SCHEDULE 2

         Variable Annuity Contracts and Variable Life Insurance Policies
               Supported by Separate Accounts Listed on Schedule 1
                                As of May 1, 2001


Multi Fund(R) Individual Variable Annuity Contract (Registered and
non-registered)

Multi Fund(R) Variable Life Insurance Policy

Group Multi Fund(R) Variable Annuity Contract

Lincoln ChoicePlus Variable Annuity Contract

Lincoln ChoicePlus Access Variable Annuity Contract

Lincoln ChoicePlus Bonus Variable Annuity Contract

Lincoln ChoicePlus II Variable Annuity Contract

Lincoln ChoicePlus II Access Variable Annuity Contract

Lincoln ChoicePlus II Bonus Variable Annuity Contract

Lincoln ChoicePlus Advance Variable Annuity Contract

VUL I Variable Universal Life Insurance Policy

Lincoln VUL(DB) Variable Universal Life Insurance Policy

Lincoln VUL(CV) Variable Universal Life Insurance Policy

Lincoln VUL(CV2) Variable Universal Life Insurance Policy

eAnnuity(TM) Variable Annuity Contract

Lincoln Money Guard Variable Universal Life Policy

Lincoln SVUL Variable Universal Life Insurance Policy

Linconl SVUL I Variable Universal Life Insurance Policy

Lincoln SVUL II Variable Universal Life Insurance Policy

Lincoln CVUL Variable Universal Life Insurance Policy

Lincoln CVUL Series III Variable Universal Life Insurance Policy

Group Variable Annuity (GVA) I, II, III

New Directions Core

New Directions Access

New Directions Access 4

Lincoln Life Director(TM)


                                       2


     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules 1 and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.


                                    DELAWARE GROUP PREMIUM FUND  (Fund)

Date:                               By: /s/ David K. Downes
     ----------------------            -----------------------------------------
                                    Name:   David K. Downes
                                    Title:  President/Chief Executive Officer/
                                            Chief Financial Officer

                                    THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Date:                               By: /s/ Steven M. Kluever
     ----------------------            -----------------------------------------
                                            Steven M. Kluever
                                            Second Vice President

                                    DELAWARE DISTRIBUTORS, LP (Distributor), by
                                    DELAWARE DISTRIBUTORS, INC., General Partner

Date:                               By: /s/ Richard J. Flannery
     ----------------------            -----------------------------------------
                                    Name:   Richard J. Flannery
                                    Title:  President/Chief Executive Officer


                                       3

EX-99

                          FUND PARTICIPATION AGREEMENT


       THIS FUND PARTICIPATION AGREEMENT is made and entered into as of
September 26, 1996 by and between LINCOLN NATIONAL LIFE INSURANCE COMPANY (the
"Company") and TWENTIETH CENTURY SECURITIES, INC. (the "Distributor").

       WHEREAS, the Company offers to the public certain group variable annuity
contracts and group variable life insurance contracts (the "Contracts"); and

       WHEREAS, the Company wishes to offer as investment options under the
Contracts, TCI Balanced and TCI Growth (the "Funds"), both of which are a series
of mutual fund shares registered under the Investment Company Act of 1940, as
amended, and issued by TCI Portfolios, Inc. (the "Issuer"); and

       WHEREAS, on the terms and conditions hereinafter set forth, Distributor
and the Issuer desire to make shares of the Funds available as investment
options under the Contracts and to retain the Company to perform certain
administrative services on behalf of the Funds;

       WHEREAS, the Funds are open-end management investment companies that were
established for the purpose of serving as the investment vehicles for separate
accounts established for variable life insurance policies and variable annuity
contracts (collectively referred to as "Variable Insurance Products", the owners
of such products being referred to as "Contract Owners") to be offered by
insurance companies which have entered into participation agreements with the
Fund ("Participating Insurance Companies"); and

       WHEREAS, the Issuer filed with the Securities and Exchange Commission
(the "SEC") and the SEC has declared effective a registration statement
(referred to herein as the "Fund Registration Statement" and the prospectus
contained therein, or filed pursuant to Rule 497 under the 1933 Act, referred to
herein as the "Fund Prospectus") on Form N-1A to register itself as an open-end
management investment company (File No. 40-811-5188) under the Investment
Company Act of 1940, as amended (the " 1940 Act"), and the Fund shares (File No.
33-14567) under the Securities Act of 1933, as amended (the "1933 Act"); and

       WHEREAS, the Company has filed a registration statement with the SEC to
register under the 1933 Act certain variable annuity contracts described in
Schedule A to this Agreement as in effect at the time this Agreement is executed
and such other variable annuity contracts and variable life insurance policies
which may be added to Schedule A from time to time (each such registration
statement for a class or classes of contracts listed on Schedule A being
referred to as the "Contracts Registration Statement" and the prospectus for
each such class or classes being referred to herein as the "Contracts
Prospectus"); and

       WHEREAS, each Account (defined in Section 7(a) below), a validly existing
separate account, duly authorized by resolution of the Board of Directors of the
Company, set forth on


                                       1


Schedule B sets aside and invests assets attributable to the Contracts; and

       WHEREAS, the Company has registered or will have registered each Account
with the SEC as a unit investment trust under the 1940 Act before any Contracts
are issued by that Account; and

       WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and is a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"); and

       WHEREAS, the Distributor and the Issuer have entered into an agreement
(the "Distribution Agreement") pursuant to which the Distributor will distribute
Fund shares; and

         WHEREAS, Investors Research Corporation (the "Investment Advisor") is
 registered as an investment adviser under the 1940 Act and any applicable state
 securities laws and serves as an investment manager to the Issuer and the Funds
 pursuant to an agreement; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Fund shares on behalf of each
Account to fund its Contracts and the Distributor is authorized to sell such
Fund shares to purchasers such as the Accounts at net asset value;

NOW, THEREFORE, the Company and Distributor agree as follows:

       1.     TRANSACTIONS IN THE FUNDS. Subject to the terms and conditions of
this Agreement, the Distributor will cause the Issuer to make shares of the
Funds available to be purchased, exchanged, or redeemed, by the Company on
behalf of the Accounts through a single account per Fund at the net asset value
applicable to each order. The Funds' shares shall be purchased and redeemed on a
net basis in such quantity and at such time as determined by the Company to
satisfy the requirements of the Contracts for which the Funds serve as
underlying investment media. Dividends and capital gains distributions will be
automatically reinvested in full and fractional shares of the Funds.

       2.     ADMINISTRATIVE SERVICES. The Company shall be solely responsible
for providing all administrative services for the Contract Owners. The Company
agrees that it will maintain and preserve all records as required by law to be
maintained and preserved, and will otherwise comply with all laws, rules and
regulations applicable to the marketing of the Contracts and the provision of
administrative services to the Contract Owners.

       3.     TIMING OF TRANSACTIONS.

       Distributor hereby appoints the Company as its agent and/or agent for the
Funds for the limited purpose of accepting purchase and redemption orders for
Fund shares from the Accounts and/or Contract Owners, as applicable. On each day
the New York Stock Exchange (the "Exchange") is open for trading (each, a
"Business Day"), the Company may receive instructions from the Accounts and/or
Contract Owners for the purchase or redemption of shares of the Funds
("Orders"). Orders received and accepted by the Company prior to the close of
regular trading on the Exchange (the "Close of


                                       2


Trading") on any given Business Day (currently, 4:00 p.m. Eastern time) and
transmitted to the Issuers by 10:00 a.m. Eastern time on the next following
Business Day will be executed at the net asset value determined as of the Close
of Trading on the previous Business Day. Any Orders received by the Company
after the Close of Trading, and all Orders that are transmitted to the Issuers
after 10:00 a.m. Eastern time on the next following Business Day, will be
executed by the Issuers at the net asset value next determined following receipt
of such Order. The day as of which an Order is executed by the Issuers pursuant
to the provisions set forth above is referred to herein as the "Trade Date".

       4.     PROCESSING OF TRANSACTIONS.

       (a)    By 7:00 p.m. Eastern time on each Business Day, Distributor will
provide to the Company, via facsimile or other electronic transmission
acceptable to the Company, the Funds' net asset value, dividend and capital gain
information and, in the case of income funds, the daily accrual for interest
rate factor (mil rate), determined at the Close of Trading.

       (b)    By 10:00 a.m. Eastern time on each Business Day, the Company will
provide to Distributor via facsimile or other electronic transmission acceptable
to Distributor a report stating whether the Orders received by the Company from
Contract Owners by the Close of Trading on the preceding Business Day resulted
in the Accounts being a net purchaser or net seller of shares of the Funds. As
used in this Agreement the phrase "other electronic transmission acceptable to
Distributor" includes the use of remote computer terminals located at the
premises of the Company, its agents or affiliates, which terminals may be linked
electronically to the computer system of Distributor, its agents or affiliates
(hereinafter, "Remote Computer Terminals").

       (c)    Upon the timely receipt from the Company of the report described
in (b) above, the Funds' transfer agent will execute the purchase or redemption
transactions (as the case may be) at the net asset value computed as of the
Close of Trading on the Trade Date. Payment for net purchase transactions shall
be made by wire transfer to the applicable Fund custodial account designated by
the Distributor on the Business Day next following the Trade Date. Such wire
transfers shall be initiated by the Company's bank prior to 4:00 p.m. Eastern
time and received by the Funds prior to 6:00 p.m. Eastern time on the Business
Day next following the Trade Date ("T + 1 "). If payments for a purchase Order
is not timely received, such Order will be executed at the net asset value next
computed following receipt of payment. Payments for net redemption transactions
shall be made by wire transfer by the Issuer to the account designated by the
Company on T + 1; PROVIDED, HOWEVER, the Issuer reserves the right to settle
redemption transactions within the time period set forth in the applicable
Fund's then-current prospectus. On any Business Day when the Federal Reserve
Wire Transfer System is closed, all communication and processing rules will be
suspended for the settlement of Orders. Orders will be settled on the next
Business Day on which the Federal Reserve Wire Transfer System is open and the
original Trade Date will apply.

       5.     PROSPECTUS, PROXY MATERIALS AND OTHER INFORMATION.

       (a)    Distributor shall provide the Company with copies of the Issuer's
proxy materials, periodic fund reports to shareholders and other materials that
are required by law to be sent to the


                                       3


Issuer's shareholders. In addition, Distributor shall provide the Company with a
sufficient quantity of prospectuses and Statements of Additional Information of
the Funds to be used in conjunction with the transactions contemplated by this
Agreement, together with such additional copies of the Issuer's prospectuses and
Statements of Additional Information as may be reasonably requested by Company.
If the Company provides for pass-through voting by the Contract Owners,
Distributor will provide the Company with a sufficient quantity of proxy
materials for each Contract Owner.

       (b)    The cost of preparing, printing and shipping of the prospectuses,
proxy materials, periodic fund reports and other materials of the Issuer to the
Company shall be paid by Distributor or its agents or affiliates; provided, that
if at any time Distributor or its agent reasonably deems the usage by the
Company of such items to be excessive, it may, prior to the delivery of any
quantity of materials in excess of what is deemed reasonable, request that the
Company demonstrate the reasonableness of such usage. If the Distributor
believes the reasonableness of such usage has not been adequately demonstrated,
it may request that the Company pay the cost of printing (including press time)
and delivery of any excess copies of such materials. Unless the Company agrees
to make such payments, Distributor may refuse to supply such additional
materials and Distributor shall be deemed in compliance with this SECTION 5 if
it delivers to the Company at least the number of prospectuses and other
materials as may be required by the Issuers under applicable law.

       (c)    The cost of distribution, if any, of any prospectuses, proxy
materials, periodic fund reports and other materials of the Issuer to the
Contract Owners shall be paid by the Company and shall not be the responsibility
of Distributor or the Issuer.

       (d)    Except with the prior written permission of the Company, the Fund
shall not give any information or make any representations on behalf of the
Company or concerning the Company, the Account or the Contracts other than the
information or representations contained in the Contracts Registration Statement
or Contracts Prospectus, as such Registration Statement and Prospectus may be
amended or supplemented from time to time, or in published reports of the
Account which are in the public domain or approved in writing by the Company for
distribution to Contract Owners, or in Company sales literature or other
promotional material. The Company agrees to respond to any request for
permission on a prompt and timely basis. If the Company fails to respond within
10 business days of a request by the Fund or the Distributor, then the Fund is
relieved of the obligation to obtain the prior written permission of the
Company.

       (e)    For purposes of this SECTION 5, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use, in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, computer net site, signs or billboards, motion pictures or other public
media), sales literature (I.E., any written communication distributed or made
generally available to customers or the public, in print or electronically,
including brochures, circulars, research reports, market letters, form letters,
seminar texts, or reprints or excerpts of any other advertisement, sales
literature, or published article), educational or training materials or other
communications distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, Statements of Additional
Information, shareholder reports and proxy materials, and any other material
constituting sales


                                       4


literature or advertising under NASD rules, the 1940 Act or the 1933 Act.

       6.     COMPENSATION AND EXPENSES.

       (a)    The Accounts shall be the sole shareholder of Fund shares
purchased for the Contract Owners pursuant to this Agreement (the "Record
Owners"). The Company and the Record Owners shall properly complete any
applications or other forms required by Distributor or the Issuer from time to
time.

       (b)    Distributor acknowledges that it will derive a substantial savings
in administrative expenses, such as a reduction in expenses related to postage,
shareholder communications and recordkeeping, by virtue of having a single
shareholder account per Fund for the Accounts rather than having each Contract
Owner as a shareholder In consideration of the Administrative Services and
performance of all other obligations under this Agreement by the Company,
Distributor will pay the Company a fee (the "Administrative Services fee") equal
to 20 basis points (0.20%) per annum of the average aggregate amount invested by
the Company under this Agreement. Distributor's obligation to pay the
Administrative Services Fee shall be suspended with respect to any month during
which the Company's average aggregate investment in the Funds drops below $10
million. Notwithstanding the above, if the Company's average investment in a
single Fund during a month exceeds $5 million, Distributor will pay the Company
the Administrative Services Fee with respect to all amounts invested in such
Fund. If the Company's investment in such Fund drops below $5 million, the
Distributor's obligation to pay the Administrative Services Fee shall be
suspended until the Company's average investment in the Fund exceeds $5 million
or average aggregate investment in the Funds exceeds $10 million. For purposes
of this SECTION 6(b), the average aggregate investment amount of Company's
investment shall include assets of UNUM Life Insurance Company of America and
First UNUM Life Insurance Company acquired by Company.

       (c)    The payments received by the Company under this Agreement are for
administrative and shareholder services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution.

       (d)    For the purposes of computing the payment to the Company
contemplated by this SECTION 6, the average aggregate amount invested by the
Accounts in the Funds over a one month period shall be computed by totaling the
Company's aggregate investment (share net asset value multiplied by total number
of shares of the Funds held by the Company) on each Business Day during the
month and dividing by the total number of Business Days during such month.

       (e)    Distributor will calculate the amount of the payment to be made
pursuant to this Section 6 at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter. The check for such
payment will be accompanied by a statement showing the calculation of the
amounts being paid by Distributor for the relevant months and such other
supporting data as may be reasonably requested by the Company
and shall be mailed to:


                                       5


                            Lincoln National Life Insurance Company
                            1300 South Clinton Street
                            Ft. Wayne, Indiana 46802
                            Attention: Kelly D. Clevenger

       (f)    In the event Distributor reduces its management fee with respect
to any Fund after the date hereof, Distributor may amend the Administrative
Services fee payable with regard to such Fund by providing the Company 30 days'
advance written notice of any such adjustment. The revised Administrative
Services fee shall become effective as of the latter of 30 days from the date of
delivery of the notice or the date prescribed in the notice.

       7.     REPRESENTATIONS AND WARRANTIES.

       (a)    The Company represents and warrants that: (i) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it has established the
Separate Accounts listed on Schedule B (the "Accounts"), each of which is a
separate account under Indiana Insurance law, and has registered each Account as
a unit investment trust under the Investment Company Act of 1940 (the "1940
Act") to serve as an investment vehicle for the Contracts; (iii) each Contract
provides for the allocation of net amounts received by the Company to an Account
for investment in the shares of one of more specified investment companies
selected among those companies available through the Account to act as
underlying investment media; (iv) selection of a particular investment company
is made by the Contract Owner under a particular Contract, who may change such
selection from time to time in accordance with the terms of the applicable
Contract; and (v) the activities of the Company contemplated by this Agreement
comply with all provisions of federal and state insurance, securities, and tax
laws applicable to such activities.

       (b)    Distributor represents and warrants that: (i) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of
Distributor, enforceable in accordance with its terms; and (ii) the investments
of the Funds will at all times be adequately diversified within the meaning of
Section 817(h) of the Internal Revenue Service Code of 1986, as amended (the
"Code"), and the regulations thereunder, and that at all times while this
Agreement is in effect, all beneficial interests in each of the Funds will be
owned by one or more insurance companies or by any other party permitted under
Section 1.817-5(f)(3) of the Regulations promulgated under the Code; and (iii)
each Fund currently qualifies as a Regulated Investment Company under Subchapter
M of the Code. The Distributor further represents and warrants that it will make
every effort to cause the Funds to continue to qualify and to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that it will notify the Company immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future and (iv) that it is registered as a Broker-Dealer under the 1934
Act.


                                       6


       (c)    The Distributor represents and warrants that Fund shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for so long as the Fund shares
are sold. The Distributor further represents and warrants that the Issuer is a
corporation duly organized and in good standing under the laws of Maryland.

       (d)    The Distributor represents and warrants that the Funds have and
maintains a fidelity bond in accordance with Rule 17g- I under the 1940 Act. The
Fund will immediately notify the Company in the event the fidelity bond coverage
should lapse at any time.

       8.     ADDITIONAL COVENANTS AND AGREEMENTS.

       (a)    Each party shall comply with all provisions of federal and state
laws applicable to its respective activities under this Agreement. All
obligations of each party under this Agreement are subject to compliance with
applicable federal and state laws.

       (b)    Each party shall promptly notify the other parties in the event
that it is, for any reason, unable to perform any of its obligations under this
Agreement.

       (c)    The Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to each Account on any Business Day
will be based upon instructions that it received from the Contract Owners in
proper form prior to the Close of Trading of the Exchange on that Business Day.
The Company shall time stamp all Orders or otherwise maintain records that will
enable the Company to demonstrate compliance with SECTION 8(c) hereof

       (d)    The Company covenants and agrees that all Orders transmitted to
the Issuers, whether by telephone, telecopy, or other electronic transmission
acceptable to Distributor, shall be sent by or under the authority and direction
of a person designated by the Company as being duly authorized to act on behalf
of the owner of the Accounts. Absent actual knowledge to the contrary,
Distributor shall be entitled to rely on the existence of such authority and to
assume that any person transmitting Orders for the purchase, redemption or
transfer of Fund shares on behalf of the Company is "an appropriate person" as
used in Sections 8-308 and 8-404 of the Uniform Commercial Code with respect to
the transmission of instructions regarding Fund shares on behalf of the owner of
such Fund shares. The Company shall maintain the confidentiality of all
passwords and security procedures issued, installed or otherwise put in place
with respect to the use of Remote Computer Terminals and assumes full
responsibility for the security therefor. The Company further agrees to be
responsible for the accuracy, propriety and consequences of all data transmitted
to Distributor by the Company by telephone, telecopy or other electronic
transmission acceptable to Distributor.

       (e)    The Company agrees to make every reasonable effort to market its
Contracts. It will use its best efforts to give equal emphasis and promotion to
shares of the Funds as is given to other underlying investments of the Accounts.

       (f)    The Company shall not, without the written consent of Distributor,
make


                                       7


representations concerning the Issuer or the shares of the Funds except those
contained in the thencurrent prospectus and in current printed sales literature
approved by Distributor or the Issuer.

       (g)    Advertising and sales literature with respect to the Issuer or the
Funds prepared by the Company or its agents, if any, for use in marketing shares
of the Funds as underlying investment media to Contract Owners shall be
submitted to Distributor for review and approval before such material is used.
All such materials shall be directed to Dina Tantra, Distributor's advertising
compliance manager (or such other person as Distributor may designate in
writing) by mail at 4500 Main Street Kansas City, Missouri 64111, or by fax at
(816) 3404074. Such materials shall be accompanied by a request for approval or
comments within a reasonable amount of time, which shall not be less than 10
business days from the date delivered to Distributor. The Company agrees to use
reasonable efforts to notify Distributor's advertising compliance manager of the
delivery of such materials (which includes leaving a voice mail message). If
Distributor fails, to respond within the time period set forth in the request
for review, Company may use such material as submitted without further approval
by Distributor. If subsequent to approval by Distributor (or the expiration of
the time period set forth in the request for approval), Distributor reasonably
determines any such material is or has become inaccurate, misleading or
otherwise inappropriate, it may request that the Company modify such advertising
and sales literature, which the Company will do at the next reprinting of any
such materials. If Distributor determines that such material should be modified
immediately, Distributor shall notify the Company of such fact and Company shall
accommodate Distributor's reasonable requests. In such instances, Distributor
shall pay the Company's reasonable out-of-pocket expenses in reprinting any such
advertising and sales materials. Notwithstanding anything contained herein,
Company shall be responsible for the compliance of all advertising and sales
literature prepared by the Company with all applicable federal, state and NASD
requirements

       (h)    The Company will provide to Distributor at least one complete copy
of all registration statements, prospectuses, statements of additional
information, annual and semi-annual reports, proxy statements, and all
amendments or supplements to any of the above that include a description of or
information regarding the Funds promptly after the filing of such document with
the SEC or other regulatory authority.

       (i)    Each party will comply with reasonable requests for information
and documents regarding the Funds or the other party's compliance with its
obligations under this Agreement made by the other party, by the Funds' Board of
Directors or by any appropriate governmental entity or self regulatory
organization.

       9.     USE OF NAMES. Except as otherwise expressly provided for in this
Agreement, neither Distributor nor the Funds shall use any trademark, trade
name, service mark or logo of the Company, or any variation of any such
trademark, trade name, service mark or logo; without the Company's prior written
consent, the granting of which shall be at the Company's sole option. Except as
otherwise expressly provided for in this Agreement the Company shall not use any
trademark, trade name, service mark or logo of the Issuer or Distributor, or any
variation of any such trademarks, trade names, service marks, or logos, without
the prior written consent of either the Issuer or Distributor, as appropriate,
the granting of which shall be at the sole option of Distributor and/or the
Issuer.


                                       8


10.    PROXY VOTING.

       (a)    The Company shall provide pass-through voting privileges to all
Contract Owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the separate accounts of the other Participating Companies
(as defined in SECTION 12(a) below) participating in any Fund calculate voting
privileges in a consistent manner.

       (b)    The Company will distribute to Contract Owners all proxy material
furnished by Distributor and will vote shares in accordance with instructions
received from such Contract Owners. The Company shall vote Fund shares for which
no instructions have been received in the same proportion as shares for which
such instructions have been received. The Company shall not oppose or interfere
with the solicitation of proxies for Fund shares held for such Contract Owners.

       11.    INDEMNITY.

11.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and hold
harmless the Fund, the Distributor and each person who controls or is associated
with the Fund (other than another Participating Insurance Company) or the
Distributor within the meaning of such terms under the .federal securities laws
and any officer, trustee, director, employee or agent of the foregoing, against
any and all losses, claims, expenses, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages or liabilities:

              (a) arise out of or are based upon any untrue statement or alleged
       untrue statement of any material fact contained in the Contracts
       Registration Statement, Contracts Prospectus, sales literature or other
       promotional material for the Contracts or the Contracts themselves (or
       any amendment or supplement to any of the foregoing), or arise out of or
       are based upon the omission or the alleged omission to state therein a
       material fact required to be stated therein or necessary to make the
       statements therein not misleading in light of the circumstances in which
       they were made; provided that this obligation to indemnify shall not
       apply if such statement or omission or such alleged statement or alleged
       omission was made in reliance upon and in conformity with information
       furnished in writing to the Company by the Distributor (or a person
       authorized in writing to do so on behalf of the Fund or the Distributor)
       for use in the Contracts Registration Statement, Contracts Prospectus or
       in the Contracts or sales literature (or any amendment or supplement) or
       otherwise for use in connection with the sale of the Contracts or Fund
       shares; or

              (b) arise out of or are based upon any untrue statement or alleged
       untrue statement of a material fact by or on behalf of the Company (other
       than statements or representations contained in the Fund Registration
       Statement, Fund Prospectus or sales literature or other


                                       9


       promotional material of the Fund not supplied by the Company or persons
       under its control) or wrongful conduct of the Company or persons under
       its control with respect to the sale or distribution of the Contracts or
       Fund shares; or

              (c) arise out of any untrue statement or alleged untrue statement
       of a material fact contained in the Fund Registration Statement Fund
       Prospectus or sales literature or other promotional material of the Fund
       or any amendment thereof or supplement thereto, or the omission or
       alleged omission to state therein a material fact required to be stated
       therein or necessary to make the statements therein not misleading in
       light of the circumstances in which they were made, if such statement or
       omission was made in reliance upon and in conformity with information
       furnished to the Distributor by or on behalf of the Company; or

              (d) arise as a result of any failure by the Company to provide the
       services and furnish the materials or to make any payments under the
       terms of this Agreement; or

              (e) arise out of any material breach by the Company of this
       Agreement, including but not limited to any failure to transmit a request
       for redemption or purchase of Fund shares on a timely basis in accordance
       with the procedures set forth in SECTION 3; or

              (f) arise as a result of the Company's providing the Distributor
       with inaccurate information, which causes the Distributor to calculate
       its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

1.1.2. INDEMNIFICATION BY THE DISTRIBUTOR. The Distributor agrees to indemnify
and hold harmless the Company and each person who controls or is associated with
the Company within the meaning of such terms under the federal securities laws
and any officer, director, employee or agent of the foregoing, against any and
all losses, claims, expenses, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, expenses, damages or liabilities:

              (a) arise out of or are based upon any untrue statement or alleged
       untrue statement of any material fact contained in the Fund Registration
       Statement, Fund Prospectus (or any amendment or supplement thereto) or
       sales literature or other promotional material of the Fund, or arise out
       of or are based upon the omission or the alleged omission to state
       therein a material fact required to be stated therein or necessary to
       make the statements therein not misleading in light of the circumstances
       in which they were made; provided that this obligation to indemnify shall
       not apply if such statement or omission or alleged statement or alleged
       omission was made in reliance upon and in conformity with information
       furnished in writing by


                                       10


       the Company to the Distributor or its affiliates for use in the Fund
       Registration Statement, Fund Prospectus (or any amendment or supplement
       thereto) or sales literature or other promotional material of the Fund or
       otherwise for use in connection with the sale of the Contracts or Fund
       shares; or

              (b) arise out of or are based upon any untrue statement or alleged
       untrue statement of a material fact made by the Distributor (other than
       statements or representations contained in the Fund Registration
       Statement Fund Prospectus or sales literature or other promotional
       material of the Fund not supplied by the Distributor or persons under
       their control) or gross negligence, willful misfeasance or bad faith of
       the Distributor or persons under its control with respect to the sale or
       distribution of the Contracts or Fund shares; or

       (c) arise out of any untrue statement or alleged untrue statement of a
       material fact contained in the Contracts Registration Statement Contracts
       Prospectus or sales literature or other promotional material for the
       Contracts (or any amendment or supplement thereto), or the omission or
       alleged omission to state therein a material fact required to be stated
       therein or necessary to make the statements therein not misleading in
       light of the circumstances in which they were made, if such statement or
       omission was made in reliance upon information furnished in writing by
       the Distributor to the Company (or a person authorized in writing to do
       so on behalf of the Fund or the Distributor); or

              (d) arise as a result of any failure by the Distributor to provide
       the services and furnish the materials under the terms of this Agreement
       (including, but not by way of limitation, a failure, whether
       unintentional or in good faith or otherwise: (i) to comply with the
       diversification requirements specified in SECTION 7(b) of this Agreement;
       and (ii) to provide the Company with accurate information sufficient for
       it to calculate its accumulation and/or annuity unit values in timely
       fashion as required by law and by the this Agreement); or

              (e) arise out of any material breach by the Distributor of this
       Agreement.

This indemnification will be in addition to any liability which the Distributor
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the wilful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

11.3. INDEMNIFICATION PROCEDURES. After receipt by a party entitled to
indemnification ("indemnified party") under this Section 11 of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Section 11 ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter, provided that the omission to so notify the indemnifying party will
not relieve it from any liability under this Section 11, except to the extent
that the omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of the failure
to give such notice. The indemnifying party, upon the request of the indemnified
party, shall retain counsel


                                       11


reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.

       A successor by law of the parties to this Agreement shall be entitled to
the benefits of the indemnification contained in this SECTION 11. The
indemnification provisions contained in this SECTION 11 shall survive any
termination of this Agreement.

       12.    POTENTIAL CONFLICTS.

       (a)    The Company has received a copy of an application for exemptive
relief, as amended, filed by Investors Research and the Issuer on December 21,
1987, with the SEC and the order issued by the SEC in response thereto (the
"Shared Funding Exemptive Order"). The Company has reviewed the conditions to
the requested relief set forth in such application for exemptive relief As set
forth in such application, the Board of Directors of the Issuer (the "Board")
will monitor the Issuer for the existence of any material irreconcilable
conflict between the interests of the Contract Owners of all separate accounts
("Participating Companies") investing in funds of the Issuer. An irreconcilable
material conflict may arise for a variety of reasons, including: (i) an action
by any state insurance regulatory authority; (ii) a change in applicable federal
or state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar
actions by insurance, tax or securities regulatory authorities; (iii) an
administrative or judicial decision in any relevant proceeding; (iv) the manner
in which the investments of any portfolio are being managed; (v) a difference in
voting instructions given by variable annuity Contract Owners and variable life
insurance Contract Owners; or (vi) a decision by an insurer to disregard the
voting instructions of Contract Owners. The Board shall promptly inform the
Company if it determines that an irreconcilable material conflict exists and the
implications thereof.

       (b)    The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in carrying
out its responsibilities under the Shared Funding Exemptive Order by providing
the Board with all information reasonably necessary for the Board to consider
any issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract Owner voting instructions are
disregarded.

       (c)    If a majority of the Board, or a majority of its disinterested
Board members, determines


                                       12


that a material irreconcilable conflict exists with regard to Contract Owner
investments in a Fund, the Board shall give prompt notice to all Participating
Companies. If the Board determines that the Company is responsible for causing
or creating said conflict, the Company shall at its sole cost and expense, and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take such action as is necessary to remedy or
eliminate the irreconcilable material conflict. Such necessary action may
include but shall not be limited to (i) withdrawing the assets allocable to the
Accounts from the Fund and reinvesting such assets in a different investment
medium or submitting the question of whether such segregation should be
implemented to a vote of all affected Contract Owners and as appropriate,
segregating the assets of any appropriate group (i.e., annuity Contract Owners,
life insurance Contract Owners, or variable Contract Owners of one or more
Participating Companies) that votes in favor of such segregation, or offering to
the affected Contract Owners the option of making such a change and (ii)
establishing a new registered management investment company or managed separate
account. Nothing in this SECTION 12(c) shall be construed to waive any cause of
action which may be available to Company against any other Participating
Insurance Company or Companies, or against any other person or entity, in the
event Company determines in good faith that it (Company) is not responsible (or
is not solely responsible) for the material irreconcilable conflict.

       (d)    If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its Contract Owner voting instructions and
said decision represents a minority position or would preclude a majority vote
by all of its Contract Owners having an interest in the Issuer, the Company at
its sole cost, may be required, at the Board's election, to withdraw an Accounts
investment in the Issuer and terminate this Agreement; provided, however, that
such withdrawal and termination shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.

       (e)    For the purpose of this SECTION 12, a majority of the
disinterested Board members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
the Issuer be required to establish a new funding medium for any Contract. The
Company shall not be required by this SECTION 12 to establish a new funding
medium for any Contract if an offer to do so has been declined by vote of a
majority of the Contract Owners materially adversely affected by the
irreconcilable material conflict.

       13.    APPLICABLE LAW. This agreement shall be subject to the provisions
of all applicable securities law, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and regulations
as the SEC may grant, and the terms hereof shall be limited, interpreted and
construed in accordance therewith.

       14.    TERMINATION. This agreement shall terminate as to the sale and
issuance of new Contracts:

       (a)    at the option of either the Company, Distributor or the Issuer
upon six months' advance written notice to the other;


                                       13



       (b)    at the option of the Company if the Funds' shares are not
available for any reason to meet the requirement of Contracts as determined by
the Company. Reasonable advance notice of election to terminate shall be
furnished by Company;

       (c)    at the option of either party upon institution of formal
proceedings against the other party or against the Investment Advisor by the
National Association of Securities Dealers, Inc. (the "NASD"), the SEC or any
other regulatory body which the terminating party reasonably believes will
result in a material harm to the terminating party or the Funds or the Accounts
or the Contract Owners;

       (d)    upon termination of the Distribution Agreement between the Issuer
and Distributor or the Management Agreement between Investors Research and the
Funds. Notice of such termination shall be promptly furnished to the Company.
This subsection (d) shall not be deemed to apply if contemporaneously with such
termination a new contract of substantially similar terms is entered into
between the Issuer and Distributor with respect to the Distribution Agreement or
the Issuer and the Funds with respect to the Management Agreement;

       (e)    upon the requisite vote of Contract Owners having an interest in
the Issuer to substitute for the Issuer's shares the shares of another
investment company in accordance with the terms of Contracts for which the
Issuer's shares had been selected to serve as the underlying investment medium.
The Company will give 60 days' written notice to the Issuer and Distributor of
any proposed vote to replace the Funds' shares;

       (f)    upon assignment of this Agreement unless made with the written
consent of all other parties hereto;

       (g)    if the Issuer's shares are not registered, issued or sold in
conformance with Federal law or such law precludes the use of Fund shares as an
underlying investment medium of Contracts issued or to be issued by the Company.
Prompt notice shall be given by either party should such situation occur,

       (h)    at the option of the Issuer, if the Issuer reasonably determines
in good faith that the Company is not offering shares of the Fund in conformity
with the terms of this Agreement or applicable law;

       (i)    at the option of any party hereto upon a determination that
continuing to perform under this Agreement would, in the reasonable opinion of
the terminating party's counsel, violate any applicable federal or state law,
rule, regulation or judicial order;

       (j)    at the option of the Company or the Fund upon a determination by a
majority of the Fund Board, or a majority of disinterested Fund Board members,
that an irreconcilable material conflict exists among the interests of (i) any
Contract Owners or (ii) the interests of the Participating Insurance Companies
investing in the Fund;


                                       14


       (k)    at the option of the Company if the Fund ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code, or under any
successor or similar provision, or if the Company reasonably believes, based on
an opinion of its counsel, that the Fund may fail to so qualify;

       (l)    at the option of the Company if the Fund fails to meet the
diversification requirements specified in Section 817(h) of the Code and any
regulations thereunder,

       (m)    at the option of either the Fund or the Distributor if the Fund or
the Distributor, respectively, shall determine, in their sole judgment exercised
in good faith, that either (1) the Company shall have suffered a material
adverse change in its business or financial condition; or (2) the Company shall
have been the subject of material adverse publicity which is likely to have a
material adverse impact upon the business and operations of either the Fund or
the Distributor; or

       (n)    at the option of the Company, if the Company shall determine, in
its sole judgment exercised in good faith, that either: (1) the investment
Advisor or Distributor shall have suffered a material adverse change in their
respective businesses or financial condition; or (2) the Investment Advisor or
Distributor shall have been the subject of material adverse publicity which is
likely to have a material adverse impact upon the business and operations of the
Company.

       15.    CONTINUATION OF AGREEMENT.

       (a)    Termination as the result of any cause listed in SECTION 14 shall
not affect the Issuers obligation to furnish its shares to Contracts then in
force for which its shares serve or may serve as the underlying medium (unless
such further sale of Fund shares is proscribed by law or the SEC or other
regulatory body). Following termination, Distributor shall not have any
Administrative Services payment obligation to the Company (except for payment
obligations accrued but not yet paid as of the termination date).

       (b)    Notwithstanding any termination of this Agreement pursuant to
SECTION 14 of this Agreement, the Fund will, at the option of the Company,
continue to make available additional Fund shares for so long after the
termination of this Agreement as the Company desires, pursuant to the terms and
conditions of this Agreement for all Contracts in effect on the effective date
of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, if the Company so elects to make
additional Fund shares available, the owners of the Existing Contracts or the
Company, whichever shall have legal authority to do so, shall be permitted to
redeem investments in the Fund and/or invest in the Fund.

       (c)    If Fund shares continue to be made available after such
termination, the provisions of this Agreement shall remain in effect except as
set forth in SECTION 14(a) and thereafter either the Fund or the Company may
terminate the Agreement, as so continued pursuant to this SECTION 15, upon prior
written notice to the other party, such notice to be for a period that is
reasonable under the circumstances but, if given by the Fund, need not be for
more than six months.


                                       15



       (d)    The parties agree that this Section 15 shall not apply to any
termination made pursuant to Section 12 or any conditions or undertakings
incorporated by reference in Section 12, and the effect of such Section 12
termination shall be governed by the provisions set forth or incorporated by
reference therein.

       16.    NON-EXCLUSIVITY. Each of the parties acknowledges and agrees that
this Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.

       17.    SURVIVAL. The provisions of SECTION 9 (use of names) and Section
11 (indemnity) of this Agreement shall survive termination of this Agreement.

       18.    AMENDMENT. Neither this Agreement, nor any provision hereof, may
be amended, waived, discharged or terminated orally, but only by an instrument
in writing signed by all of the parties hereto.

       19.    NOTICES. All notices and other communications hereunder shall be
given or made in writing and shall be delivered personally, or sent by telex,
telecopier, express delivery or registered or certified mail, postage prepaid,
return receipt requested, to the party or parties to whom they are directed at
the following addresses, or at such other addresses as may be designated by
notice from such party to all other parties.

       To the Company:

                     Lincoln National Life Insurance Company
                     1300 South Clinton Street
                     Ft. Wayne, Indiana 46802
                     Attention: Kelly D. Clevenger
                     (219) 455-5119 (office number)
                     (219) 455-1773 (telecopy number)

       To the Issuer or Distributor:

                     Twentieth Century Mutual Funds
                     4500 Main Street
                     Kansas City, Missouri 64111
                     Attention: Charles A. Etherington, Esq.
                     (816) 3404051 (office number)
                     (816) 3404964 (telecopy number)

Any notice, demand or other communication given in a manner prescribed in this
Section 18 shall be deemed to have been delivered on receipt.


                                       16


       20.    SUCCESSORS AND ASSIGNS. This Agreement may not be assigned without
the written consent of all parties to the Agreement at the time of such
assignment. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns.

       21.    COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.

       22.    SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

       23.    ENTIRE AGREEMENT. This Agreement, including the Attachments
hereto, constitutes the entire agreement between the parties with respect to the
matters dealt with herein, and supersedes all previous agreements, written or
oral, with respect to such matters.


                                       17



       IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.

TWENTIETH CENTURY SECURITIES, INC.      LINCOLN NATIONAL LIFE
                                        INSURANCE COMPANY

 By: /s/ William M. Lyons               By: /s/ Reed P. Miller
     William M. Lyons                   Name: Reed P. Miller
     Executive Vice PRESIDENT           Title: Vice President



                                       18


                                   SCHEDULE A

                           VARIABLE ANNUITY CONTRACTS
                      AND VARIABLE LIFE INSURANCE POLICIES
                         SUPPORTED BY SEPARATE ACCOUNTS
                              LISTED ON SCHEDULE B

Group Variable Annuity I Contracts

Group Variable Annuity II Contracts

Group Variable Annuity III Contracts


                                       19


                                   SCHEDULE B

          SEPARATE ACCOUNTS OF LINCOLN NATIONAL LIFE INSURANCE COMPANY

                              INVESTING IN THE FUND



Lincoln National Variable Annuity Account L


                                       20



                 AMENDMENT NO. 1 TO FUND PARTICIPATION AGREEMENT

       THIS AMENDMENT NO. 1 TO FUND PARTICIPATION AGREEMENT (the "Amendment') is
effective as of February 1, 1999, by and among LINCOLN NATIONAL LIFE INSURANCE
COMPANY (the "Company'), AMERICAN CENTURY INVESTMENT MANAGEMENT, INC ("ACDX),
and AMERICAN CENTURY INVESTMENT SERVICES, INC., F/K/A TWENTIETH CENTURY
SECURITIES, INC. (the "ACIS"). Capitalized terms not otherwise defined herein
shall have the meaning ascribed to them in the Agreement (defined below).

                                    RECITALS

       WHEREAS, the Company and ACIS are parties to that certain Fund
Participation Agreement dated September 26, 1996 (the "Agreement") in connection
with the participation by the Funds in Contracts offered by the Company to its
clients and the parties wish to supplement the Agreement as provided herein;

       WHEREAS, since the date of the Agreement, Twentieth Century Securities,
Inc. has changed its name to American Century Investment Services, Inc.; and

       WHEREAS, since the date of the Agreement, the Funds have changed their
names; and

       WHEREAS, since the date of the Agreement, ACIS has ceased being the
Distributor of the Funds; and

       NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows:

1.     FUNDS UTILIZE . The second "Whereas" clause of the Agreement is hereby
deleted in its entirety and replaced with the following language:

       "WHEREAS, the Company wishes to offer as investment options under certain
       of the Contracts, those mutual funds (each a "Fund" and collectively, the
       "Funds") listed on Schedule B hereto, each such Fund a series of mutual
       fund shares registered under the Investment Company Act of 1940, as
       amended, and issued by American Century Variable Portfolios, Inc.; and"

       2. ASSIGNMENT BY COMPANY. . ACIS hereby assigns all of its rights and
obligations under the Agreement to ACIM, and ACIM hereby accepts such
assignment. The Company hereby consents to such assignment. After the date of
this Amendment, all references to "Distributor" in the Agreement shall be deemed
to refer to ACIM.

       3.     COMPENSATION AND EXPENSES. Section 6(b) of the Agreement is hereby
deleted in its entirety and replaced with the following language:


       (b)    ACIM acknowledges that it derives a substantial savings in
administrative expenses, such as a reduction in expenses related to postage,
shareholder communications and recordkeeping, by virtue of having a single
shareholder account per Fund for the Accounts rather than having each Contract
Owner as a shareholder. In consideration of the Administrative Services and
performance of all other obligations under this Agreement by the, Company, ACIM
will pay the Company a fee (the "Administrative Services Fee') equal to 25 basis
points (0.25%) per annum of the average aggregate amount invested by the Company
under this Agreement, for as long as the average aggregate market value of the
investments by the Company in the Funds exceeds $50 million. In the event the
average aggregate AMOUNT INVESTED BY THE COMPANY DROPS BELOW $50 million, ACIM
shall pay Company 20 basis points (0.20%) per annum of the average aggregate
amount invested by the Company. For purposes of this Section 6(b), the average
aggregate investment amount of Company's investment shall include assets of UNUM
Life Insurance Company of America and First UNUM Life Insurance Company acquired
by Company.

       4.     SCHEDULES. Schedules A and B to the Agreement are hereby deleted
and replaced in their entirety with Schedules A and B attached hereto.

       5      RATIFICATION AND CONFIRMATION OF AGREEMENT. In the event of a
conflict between the terms of this Amendment and the Agreement, it is the
intention of the parties that the terms of this Amendment shall control and the
Agreement shall be interpreted on that basis. To the extent the provisions of
the Agreement have not been amended by this Amendment, the parties hereby
confirm and ratify the Agreement.

       6.     COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.

       7.     FULL FORCE AND EFFECT. . Except as expressly supplemented, amended
or consented to hereby, all of the representations, warranties, terms, covenants
and conditions of the Agreement shall remain unamended and shall continue to be
in full force and effect.


       IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 as
of the date first above written.

LINCOLN NATIONAL LIFE              AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
INSURANCE COMPANY                  By: /s/ Kelly D. Clevenger


                                   Name: Kelly D. Clevenger
                                   Title: Vice President

                                   AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.

                                   By: /s/ William M. Lyons
                                       William M. Lyons
                                       Executive Vice President

                                   AMERICAN CENTURY INVESTMENT SERVICES, INC.

                                   By: /s/ William M. Lyons
                                       William M. Lyons
                                       Executive Vice President


                                                            AS AMENDED EFFECTIVE
                                                                FEBRUARY 1, 1999

                                   SCHEDULE A

                           VARIABLE ANNUITY CONTRACTS
                      AND VARIABLE LIFE INSURANCE POLICIES
                         SUPPORTED BY SEPARATE ACCOUNTS
                              LISTED ON SCHEDULE B

Group Variable Annuity I
Group Variable Annuity II
Group Variable Annuity III
e-Annuity Variable Annuity
Multi Fund Individual Variable Annuity
Multi Fund Group Variable Annuity
CVUL Variable Life


                                                            AS AMENDED EFFECTIVE
                                                                February 1, 1999

                                   SCHEDULE B

          SEPARATE ACCOUNTS OF LINCOLN NATIONAL LIFE INSURANCE COMPANY

                           INVESTING IN CERTAIN FUNDS

                                                  
SEPARATE ACCOUNT NAME                                AMERICAN CENTURY VP FUND(S) UTILIZED

Lincoln National Variable Annuity Account L          VP Balanced; VP Capital Appreciation

Lincoln National Variable Annuity Account C          VP International

Lincoln Life Variable Annuity Account Q              VP International

Lincoln National Variable Annuity Account 53         VP International

Lincoln Life Flexible Premium Variable Life          VP International; VP Income and Growth
Account S





                 AMENDMENT NO. 2 TO FUND PARTICIPATION AGREEMENT

     THIS AMENDMENT NO. 2 TO FUND PARTICIPATION AGREEMENT (the "Amendment") is
effective as of July 15, 2001, by and among LINCOLN NATIONAL LIFE INSURANCE
COMPANY (the "Company") and AMERICAN CENTURY INVESTMENT MANAGEMENT, INC
("ACIM"). Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Agreement (defined below).

                                    RECITALS

     WHEREAS, the Company and ACIS are parties to that certain Fund
Participation Agreement dated September 26, 1996 and amended February 1, 1999
(the "Agreement") in connection with the participation by the Funds in Contracts
offered by the Company to its clients and the parties wish to supplement the
Agreement as provided herein;

     WHEREAS, the parties desire to amend the Agreement in order to add
additional Contracts available under the Agreement.

     NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows:

     1. ADDITION OF CONTRACTS AVAILABLE UNDER THE AGREEMENT. Schedule A is
hereby deleted in its entirety and is replaced with a new Schedule A, attached
hereto.

     2. RATIFICATION AND CONFIRMATION OF AGREEMENT. In the event of a conflict
between the terms of this Amendment and the Agreement, it is the intention of
the parties that the terms of this Amendment shall control and the Agreement
shall be interpreted on that basis. To the extent the provisions of the
Agreement have not been amended by this Amendment, the parties hereby confirm
and ratify the Agreement.

     3. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.

     4. FULL FORCE AND EFFECT. Except as expressly supplemented, amended or
consented to hereby, all of the representations, warranties, terms, covenants
and conditions of the Agreement shall remain unamended and shall continue to be
in full force and effect.



     IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 2 as
of the date first above written.

LINCOLN NATIONAL LIFE                     AMERICAN CENTURY INVESTMENT
INSURANCE COMPANY                         MANAGEMENT, INC.

By: /s/ Steven M. Kluever                 By: /s/ David C. Tucker
   -----------------------------------       -----------------------------------
   Name: Steven M. Kluever                Name: David C. Tucker
        ------------------------------         ---------------------------------
   Title: Second Vice President           Title: SR. Vice President
         -----------------------------          --------------------------------



                                                            AS AMENDED EFFECTIVE
                                                            JULY 15, 2001

                                   SCHEDULE A

                           VARIABLE ANNUITY CONTRACTS
                      AND VARIABLE LIFE INSURANCE POLICIES
                         SUPPORTED BY SEPARATE ACCOUNTS
                              LISTED ON SCHEDULE B

Group Variable Annuity I

Group Variable Annuity II

Group Variable Annuity III

e-Annuity Variable Annuity

CVUL Variable Life

CVUL Series III Variable Life

EX-99

                          FUND PARTICIPATION AGREEMENT

       THIS AGREEMENT made as of the 11th day of May, 1998, by and between BT
Insurance Funds Trust ("TRUST"), a Massachusetts business trust, Bankers Trust
Company ("ADVISER"), a New York banking corporation, and The Lincoln National
Life Insurance Company ("LIFE COMPANY"), a life insurance company organized
under the laws of the State of Indiana.

       WHEREAS, TRUST is registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the ... 40 Act"),
as an open-end, diversified management investment company; and

       WHEREAS, TRUST is comprised of several series funds (each a "Portfolio"),
with those Portfolios currently available being listed on Appendix A hereto; and

       WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts ("Separate
Accounts") of such life insurance companies ("Participating Insurance
Companies"); and

       WHEREAS, TRUST may also offer its shares to certain qualified pension and
retirement plans ("Qualified Plans"); and

       WHEREAS, TRUST has received an order from the SEC, granting Participating
Insurance Companies and their separate accounts exemptions from the provisions
of Sections 9(a), 13(a), 15(a) and 15(b) of the '40 Act, and Rules 6e-2(b)(15)
and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the
Portfolios of the TRUST to be sold to and held by Variable Contract Separate
Accounts of both affiliated and unaffiliated Participating Insurance Companies
and Qualified Plans ("Exemptive Order"); and

       WHEREAS, LIFE COMPANY has established or will establish one or more
Separate Accounts to offer Variable Contracts and is desirous of having TRUST as
one of the underlying funding vehicles for such Variable Contracts; and

       WHEREAS, ADVISER is a "bank" as defined in the Investment Advisers Act of
1940, as amended (the "Advisers Act") and as such is excluded from the
definition of "Investment Adviser" and is not required to register as an
investment adviser pursuant to the Advisers Act; and


                                        1


       WHEREAS, ADVISER serves as the TRUST's investment adviser; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such shares to
LIFE COMPANY at such shares' net asset value;

       NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,
TRUST, and ADVISER agree as follows:

                         Article 1. SALE OF TRUST SHARES

       1.1 TRUST agrees to make available to the Separate Accounts of LIFE
COMPANY shares of the selected Portfolios as listed on Appendix B for investment
of purchase payments of Variable Contracts allocated to the designated Separate
Accounts as provided in TRUST's Registration Statement.

       1.2 TRUST agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.2,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from the
designated Separate Account and receipt by such designee shall constitute
receipt by TRUST; provided that LIFE COMPANY receives the order by 4:00 p.m. New
York time and TRUST receives notice from LIFE COMPANY by telephone or facsimile
(or by such other means as TRUST and LIFE COMPANY may agree in writing) of such
order by 9:00 a.m. New York time on the next Business Day. "Business Day" shall
mean any day on which the New York Stock Exchange is open for trading and on
which TRUST calculates its net asset value pursuant to the rules of the SEC.

       1.3 TRUST agrees to redeem on LIFE COMPANY's request, any -full or
fractional shares of TRUST held by LIFE COMPANY, executing such requests on a
daily basis at the net asset value next computed after receipt by TRUST or its
designee of the request for redemption, in accordance with the provisions of
this Agreement and TRUST's Registration Statement (in the event of a conflict
between the provisions of this Agreement and the Trust's Registration Statement,
the provisions of the Registration Statement shall govern.) For purposes of this
Section 1.3, LIFE COMPANY shall be the designee of TRUST for receipt of requests
for redemption from the designated Separate Account and receipt by such designee
shall constitute receipt by TRUST; provided that LIFE COMPANY receives the
request for redemption by 4:00 p.m. New York time and TRUST receives notice from
LIFE COMPANY by telephone or facsimile (or by such other means as TRUST and LIFE
COMPANY may agree in


                                        2


writing) of such request for redemption by 9:00 a.m. New York time on the next
Business Day.

       1.4 TRUST shall furnish, on or before each ex-dividend date, notice to
LIFE COMPANY of any income dividends or capital gain distributions payable on
the shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's shares in additional shares of the Portfolio. LIFE COMPANY reserves
the right to change such election. TRUST shall notify LIFE COMPANY or its
designee of the number of shares so issued as payment of such dividends and
distributions.

       1.5 TRUST shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value available by 6:30 p.m. New York time.
If TRUST provides LIFE COMPANY with materially incorrect share net asset value
information through no fault of LIFE COMPANY, LIFE COMPANY on behalf of the
Separate Accounts, shall be entitled to an adjustment to the number of shares
purchased or redeemed on each day for which such incorrect information was
provided to reflect the correct share net asset value. Any material error in the
calculation of net asset value per share, dividend or capital gain information
shall be reported promptly upon discovery to LIFE COMPANY.

       1.6 At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, LIFE COMPANY shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. New York time) to determine the net dollar amount
of TRUST shares which shall be purchased or redeemed at that day's closing net
asset value per share. The net purchase or redemption orders so determined
shall be transmitted to TRUST by LIFE COMPANY by 9:00 a.m. New York Time on the
Business Day next following LIFE COMPANY's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof.

       1.7 If LIFE COMPANY's order requests the purchase of TRUST shares, LIFE
COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account by 2:00 pm on the day the order is transmitted by
LIFE COMPANY. If LIFE COMPANY's order requests a net redemption resulting in a
payment of redemption proceeds to LIFE COMPANY, TRUST shall wire the redemption
proceeds to LIFE COMPANY by 2:00 pm that day, unless doing so would require
TRUST to dispose of Portfolio securities or otherwise incur additional costs. In
any event, proceeds shall be wired to LIFE COMPANY within the time period
permitted by the '40 Act or the rules, orders or regulations thereunder, and
TRUST shall notify the


                                        3


person designated in writing by LIFE COMPANY as the recipient for such notice of
such delay by 3:00 p.m. New York Time on the same Business Day that LIFE COMPANY
transmits the redemption order to TRUST. If LIFE COMPANY's order requests the
application of redemption proceeds from the redemption of shares to the purchase
of shares of another Fund advised by ADVISER, TRUST shall so-apply such proceeds
on the same Business Day that LIFE COMPANY transmits such order to TRUST.

       1.8 TRUST agrees that all shares of the Portfolios of TRUST will be sold
only to Participating Insurance Companies which have agreed to participate in
TRUST to fund their Separate Accounts and/or to Qualified Plans, all in
accordance with the requirements of Section 817(h)(4) of the Internal Revenue
Code of 1986, as amended ("Code") and Treasury Regulation 1.817-5. Shares of the
TRUSTs Portfolios will not be sold directly to the general public.

       1.9 TRUST may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the shares of or liquidate any Portfolio of
TRUST if such action is required by law or by regulatory authorities having
jurisdiction or is, in the sole discretion of the Board of Trustees of the TRUST
(the "Board"), acting in good faith and in light of its duties under federal and
any applicable state laws, deemed necessary, desirable or appropriate and in the
best interests of the shareholders of such Portfolios.

       1. 10 Issuance and transfer of Portfolio shares will -be by book entry
only. Stock certificates will not be issued to LIFE COMPANY or the Separate
Accounts. Shares ordered from Portfolio will be recorded in appropriate book
entry titles for the Separate Accounts.

Article II. REPRESENTATIONS AND WARRANTIES

       2.1 LIFE COMPANY represents and warrants that it is an insurance company
duly organized and validly existing under the laws of Indiana and that it has
legally and validly established each Separate Account as a segregated asset
account under such laws, and that LIFE COMPANY, the principal underwriter for
the Variable Contracts, is registered as a broker-dealer under. the Securities
Exchange Act of 1934 (the ... 34 Act").

       2.2 LIFE COMPANY represents and warrants that it has registered or, prior
to any issuance or sale of the Variable Contracts, will register each Separate
Account as a unit investment trust ("UIT") in accordance with the provisions of
the '40 Act and cause each Separate Account to remain so registered to serve as
a segregated asset account for the Variable Contracts, unless an exemption from
registration is available.

       2.3 LIFE COMPANY represents and warrants that the Variable Contracts will
be registered under the Securities Act of 1933 (the "'33 Act") unless an
exemption from registration is available prior to any issuance or sale of the
Variable Contracts, and that


                                        4


the Variable Contracts will be issued and sold in compliance in all material
respects with all applicable federal and state laws (including all applicable
blue sky laws and further that the sale of the variable contracts shall comply
in all material respects with applicable state insurance law suitability
requirements).

       2.4 LIFE COMPANY represents and warrants that the Variable Contracts are
currently and at the time of issuance will be treated as life insurance
policies, endowment or annuity contracts under applicable provisions of the
Code, that it will maintain such treatment and that it will notify TRUST im
mediately Upon having a reasonable basis for believing that the Variable
Contracts have ceased to be so treated or that they might not be so treated in
the future.

       2.5 TRUST represents and warrants that the Fund shares offered and sold
pursuant to this Agreement will be registered under the '33 Act and sold in
accordance with all applicable federal laws, and TRUST shall be registered under
the '40 Act prior to and at the time of any issuance or sale of such shares.
TRUST, subject to Section 1.9 above, shall amend its registration statement
under the '33 Act and the '40 Act from time to time as required in order to
effect the continuous offering of its shares. TRUST shall register and qualify
its shares for sale in accorda n with the laws of the various states only if and
to the extent deemed advisable by TRUST.

       2.6 TRUST and ADVISER each represents and warrants that each Portfolio
will comply with the diversification requirements set forth in Section 817(h) of
the Code, and the rules and regulations thereunder, including without limitation
Treasury Regulation 1.817-5, and will notify LIFE COMPANY immediately upon
having a reasonable basis for believing any Portfolio has ceased to comply and
will immediately take all reasonable steps to adequately diversify the Portfolio
to achieve compliance.

       2.7 TRUST represents and warrants that each Portfolio invested in by the
Separate Account will be treated as a "regulated investment company" under
Subchapter M of the Code, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing it has ceased to so qualify or might not so
qualify in the future.

       2.8 ADVISER represents and warrants that it shall perform its obligations
hereunder in compliance in all material respects with all applicable state and
federal laws.

       2.9 TRUST and ADVISER each represents and warrants that all officers,
employees and agents of the TRUST having access to securities or funds of any
Portfolio shall be covered by a blanket fidelity bond in such minimum amount as
the SEC may prescribe under Section 17 (g) of the '40 act.


                                        5


Article Ill. PROSPECTUS AND PROXY STATEMENTS

       3.1 TRUST shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes and filing fees to which an issuer is subject on the issuance and
transfer of its shares.

       3.2 TRUST or its designee shall provide LIFE COMPANY, free of charge,
with as many copies of the current prospectus (or prospectuses), statements of
additional information, annual and semi-annual reports and proxy statements for
the shares of the Portfolios as LIFE COMPANY may reasonably request for
distribution to existing Variable Contract owners whose Variable Contracts are
funded by such shares. TRUST or its designee shall provide LIFE COMPANY, at LIFE
COMPANY's expense, with as many copies of the current prospectus (or
prospectuses) for the shares as LIFE COMPANY may reasonably request for
distribution to prospective purchasers of Variable Contracts. If requested by
LIFE COMPANY, TRUST or its designee shall provide such documentation [including
a "camera ready" copy of the current prospectus (or prospectuses) for the
Portfolios used in THE LIFE COMPANY'S Variable Contracts as set in type or, at
the request of LIFE COMPANY, as a diskette in the form sent to the financial
printer] and other assistance as is reasonably necessary in order for the
parties hereto once a year [or more frequently if the prospectus (or
prospectuses), for such Portfolios for the shares is supplemented or amended] to
have the prospectus for the Variable Contracts and the prospectus (or
prospectuses) for the TRUST shares printed together in one document. The
expenses of such printing will be apportioned between LIFE COMPANY and TRUST in
proportion to the number of pages of the Variable Contract and TRUST prospectus,
taking account of other relevant factors affecting the expense of printing, such
as covers, columns, graphs and charts; TRUST shall bear the cost of printing the
TRUST prospectus portion of such document for distribution only to owners of
existing Variable Contracts funded by the' TRUST shares and LIFE COMPANY shall
bear the expense of printing the portion of such documents relating to the
Separate Account; provided, however, LIFE COMPANY shall bear all printing
expenses of such combined documents where used for distribution to prospective
purchasers or to owners of existing Variable Contracts not funded by the shares.
In the event that LIFE COMPANY requests that TRUST or its designee provide
TRUST's prospectus in a "camera ready" or diskette format, TRUST shall be
responsible for providing the prospectus (or prospectuses) in the format in
which it is accustomed to formatting prospectuses and shall bear the expense of
providing the prospectus (or prospectuses) in such format (e.g. typesetting
expenses), and LIFE COMPANY shall bear the expense of adjusting or changing the
format to conform with any of its prospectuses.


                                        6


       3.3 TRUST will provide LIFE COMPANY with at least one complete copy of
all prospectuses, statements of additional information, proxy statements,
exemptive applications and all amendments or supplements to any of the above
that relate to the Portfolios and any other material constituting sales
literature or advertising under NASD rules, the 40 Act or the 33 Act within 20
days of the date of such material and annual and semi-annual reports and any
amendments or supplements thereto within 80 days of the date of such report or
amendment or supplement thereto. LIFE COMPANY will provide TRUST with at least
one complete copy of all prospectuses, statements of additional information,
proxy statements, exemptive applications and all amendments or supplements to
any of the above that relate to a Separate Account and its investment in Trust
and any other material constituting sales literature or advertising under NASD
rules, the 40 Act or the 33 Act within 20 days of the date of such material and
annual and semi-annual reports and any amendments within 80 days of the date of
such report or amendment or supplement thereto.

Article IV. SALES MATERIALS

       4.1 LIFE COMPANY will furnish, or will cause to be furnished, to TRUST
and ADVISER, each piece of sales literature or other promotional material in
which TRUST or ADVISER is named, at least ten (10) Business Days prior to its
intended use. No such material will be used if TRUST or ADVISER objects to its
use in writing within seven (7) Business Days after receipt of such material.

       4.2 TRUST and ADVISER will furnish, or will cause to be furnished, to
LIFE COMPANY, each piece of sales literature or other promotional material in
which LIFE COMPANY or its Separate Accounts are named, at least ten (10)
Business Days prior to its intended use. No such material will be used if LIFE
COMPANY objects to its use in writing within seven (7) Business Days after
receipt of such material.

       4.3 TRUST and its affiliates and agents shall not give any information or
make any representations on behalf of LIFE COMPANY or concerning LIFE COMPANY,
the Separate Accounts, or the Variable Contracts issued by LIFE COMPANY, other
than the information or representations contained in a registration statement or
prospectus for such Variable Contracts, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports of
the Separate Accounts or reports prepared for distribution to owners of such
Variable Contracts, or in sales literature or other promotional material
approved by LIFE COMPANY or its designee, except with the written permission of
LIFE COMPANY.

       4.4 LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for


                                        7


TRUST, as such registration statement and prospectus may be amended or
supplemented from time to time, or in sales literature or other promotional
material approved by TRUST or its designee, except with the written permission
of TRUST or ADVISER.

       4.5 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without limitation,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other public media),
sales literature (such as any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees, registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc. ("NASD")
rules, the '40 Act, the '33 Act or rules thereunder.

Article V. POTENTIAL CONFLICTS

       5.1 The parties acknowledge that TRUST has received an order from the SEC
granting relief from various provisions of the '40 Act and the rules thereunder
to the extent necessary to permit TRUST shares to be sold to and held by
Variable Contract separate accounts of both affiliated and unaffiliated
Participating Insurance Companies and Qualified Plans. The Exemptive Order
requires TRUST and each Participating Insurance Company to comply with
conditions and undertakings substantially as provided in this Section 5. The
TRUST will not enter into a participation agreement with any other Participating
Insurance Company unless it imposes the same conditions and undertakings as are
imposed on LIFE COMPANY hereby.

       5.2 The Board will monitor TRUST for the existence of any material
irreconcilable conflict between the interests of Variable Contract owners of all
separate accounts and with participants of Qualified Plans investing in TRUST.
An irreconcilable material conflict may arise for a variety of reasons, which
may include: (a) an action by any state insurance regulatory authority; (b) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling or any similar action by
insurance, tax or securities regulatory authorities; (c) an administrative or
judicial decision in any relevant proceeding; (d) the manner in which the
investments of TRUST are being managed; (e) a difference in voting instructions
given by Variable Contract owners; (f) a decision by a Participating Insurance
Company


                                        8


to disregard the voting instructions of Variable Contract owners and (g) if
applicable, a decision by a Qualified Plan to disregard the voting instructions
of plan participants.

       5.3 LIFE COMPANY will report any potential or existing conflicts of which
it becomes aware to the Board. LIFE COMPANY will be responsible for assisting
the Board in carrying out its duties in this regard by providing the Board with
all information reasonably necessary for the Board to consider any issues
raised. The responsibility includes, but is not limited to, an obligation by the
LIFE COMPANY to inform the Board whenever it has determined to disregard
Variable Contract owner voting instructions. These responsibilities of LIFE
COMPANY will be carried out with a view only to the interests of the Variable
Contract owners.

       5.4 If a majority of the Board or majority of its disinterested Trustees,
determines that a material irreconcilable conflict exists affecting LIFE
COMPANY, LIFE COMPANY, at its expense and to the extent reasonably practicable
(as determined by a majority of the Board's disinterested Trustees), will take
any steps necessary to remedy or eliminate the irreconcilable material conflict,
up to and including; (a) withdrawing the assets allocable to some or all of the
Separate Accounts from TRUST or any Portfolio thereof and reinvesting those
assets in a different investment medium, which may include another Portfolio of
TRUST, or another investment company; (b) submitting the question as to whether
such segregation should be implemented to a vote of all affected Variable
Contract owners and as appropriate, segregating the assets of any appropriate
group (i.e variable annuity, or variable life insurance Contract owners of one
or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Variable Contract owners the option of
making such a change; and (c) establishing a new registered management
investment company (or series thereof) or managed separate account. If a
material irreconcilable conflict arises because of LIFE COMPANY's decision to
disregard Variable Contract owner voting instructions, and that decision
represents a minority position or would preclude a majority vote, LIFE COMPANY
may be required, at the election of TRUST, to withdraw the Separate Account's
investment in TRUST, and no charge or penalty will be imposed as a result of
such withdrawal. The responsibility to take such remedial action shall be
carried out with a view only to the interests of the Variable Contract owners.

       For the purposes of this Section 5.4, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no event will
TRUST or ADVISER (or any other investment adviser of TRUST) be required to
establish a new funding medium for any Variable Contract. Further, LIFE COMPANY
shall not be required by this Section 5.4 to establish a new funding medium for
any Variable Contracts [if any offer to do so has been declined by a vote of a
majority of Variable Contract owners materially and adversely affected by the
irreconcilable material conflict.]


                                        9


       5.5 The Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.

       5.6 LIFE COMPANY shall from time to time submit to the Board such
reports, materials or data as the Board may reasonably request so that the Board
may fully carry out its obligations under this Article V.

Article VI. VOTING

       6.1 LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners so long as and to the extent the SEC continues to
interpret the '40 Act as requiring pass-through voting privileges for Variable
Contract owners. Accordingly, LIFE COMPANY, where applicable, will vote shares
of the Portfolio held in its 40 Act registered Separate Accounts in a manner
consistent with voting instructions timely received from its Variable Contract
owners. LIFE COMPANY will be responsible for assuring that each of its Separate
Accounts that participates in TRUST calculates voting privileges in a manner
consistent with other Participating Insurance Companies. LIFE COMPANY will vote
shares in a registered Separate Account for which it has not received timely
voting instructions in the same proportion as it votes those shares in that
Separate Account for which it has received voting instructions.

       6.2 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or if
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the '40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Exemptive
Order, then TRUST, and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rule 6e-2 and Rule
6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such Rules are
applicable.

Article VII. INDEMNIFICATION

       7.1 INDEMNIFICATION BY LIFE COMPANY. LIFE COMPANY agrees to indemnify and
hold harmless TRUST, ADVISER and each of their Trustees, directors, principals,
officers, employees and agents and each person, if any, who controls TRUST or
ADVISER within the meaning of Section 15 of the '33 Act (collectively, the
"Indemnified Parties") against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of LIFE COMPANY,
which consent shall not be unreasonably withheld) or litigation or threatened
litigation (including reasonable legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of TRUST's shares or the Variable Contracts and:


                                       10


       (a)    arise out of or are based upon any untrue statements or alleged
              untrue statements of any material fact contained in the
              Registration Statement or prospectus or sales literature for the
              Variable Contracts or contained in the Variable Contracts (or any
              amendment or supplement to any of the foregoing), or arise out of
              or are based upon the omission or the alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading, provided that this
              agreement to indemnify shall not apply as to any Indemnified Party
              if such statement or omission or such alleged statement or
              omission was made in reliance upon and in conformity with
              information furnished in writing to LIFE COMPANY by or on behalf
              of TRUST for use in the registration statement or prospectus for
              the Variable Contracts or in the Variable Contracts or sales
              literature (or any amendment or supplement to any of the
              foregoing) or otherwise for use in connection with the sale of the
              Variable Contracts or TRUST shares; or

       (b)    arise out of or result from (i) untrue statements or
              representations (other than statements or representations
              contained in the registration statement, prospectus or sales
              literature of TRUST not supplied by LIFE COMPANY, or persons under
              its control) or (ii) willful misfeasance, bad faith or gross
              negligence of LIFE COMPANY or persons under its control, with
              respect to the sale or distribution of the Variable Contracts or
              TRUST shares; or

       (c)    arise out of any untrue statement or alleged untrue statement of a
              material fact contained in a registration statement, prospectus,
              or sales literature of TRUST or any amendment thereof or
              supplement thereto or the omission or alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading if such statement or
              omission or such alleged statement or omission was made in
              reliance upon and in conformity with information furnished in
              writing to TRUST by or on behalf of LIFE COMPANY; or

       (d)    arise as a result of any failure by LIFE COMPANY to provide
              substantially the services and furnish the materials under the
              terms of this Agreement; or

       (e)    arise out of or result from any material breach of any
              representation and/or warranty made by LIFE COMPANY in this
              Agreement or arise out of or result from any other material breach
              of this Agreement by LIFE COMPANY.


                                       11


       7.2 LIFE COMPANY shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party to the extent that such losses, claims,
damages, liabilities or litigation are attributable to such Indemnified Party's
willful misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations or duties under this Agreement.

       7.3 LIFE COMPANY shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified LIFE COMPANY in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify LIFE COMPANY of
any such claim shall not relieve LIFE COMPANY from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled to participate at
its own expense in the defense of such action. LIFE COMPANY also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from LIFE COMPANY to such party of LIFE
COMPANY's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and LIFE
COMPANY will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.

       7.4 INDEMNIFICATION BY TRUST AND ADVISER. TRUST and ADVISER each agree to
indemnify and hold harmless LIFE COMPANY and each of its directors, officers,
employees, and agents and each person, if any, who controls LIFE COMPANY within
the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties") against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of TRUST or ADVISER (which
consent shall not be unreasonably withheld) or litigation or threatened
litigation (including reasonable legal and other expenses) to which the
Indemnified Parties may become subject under any statute, or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of TRUST's shares for the Variable Contracts and:

(a)    arise out of or are based upon any untrue statement or alleged untrue
       statement of any material fact contained in the registration statement or
       prospectus or sales literature of TRUST (or any amendment or supplement
       to any of the foregoing), or arise out of


                                       12


or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished in writing to ADVISER I or TRUST by or on behalf of LIFE
COMPANY for use in the registration statement or prospectus for TRUST or in
sales literature (or any amendment or supplement to any of the foregoing) or
otherwise for use in connection with the sale of the Variable Contracts or TRUST
shares; or

(b)    arise out of or result from (i) untrue statements or representations

(other than statements or representations contained in the registration
statement, prospectus or sales literature for the Variable Contracts not
supplied by ADVISER or TRUST or persons under its control) or (ii) gross
negligence, bad faith or willful misfeasance of TRUST or ADVISER or persons
under its control, with respect to the sale or distribution of the Variable
Contracts or TRUST shares; or

(c)    arise out of any untrue statement or alleged untrue statement of a

material fact contained in a registration statement, prospectus, or sales
literature covering the Variable Contracts, or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with information
furnished in writing to LIFE COMPANY for inclusion therein by or on behalf of
TRUST; or

(d)    arise as a result of (i) a failure by TRUST or ADVISER to provide

substantially the services and furnish the materials under the terms of this
Agreement; or (ii) a failure by a Portfolio(s) invested in by the Separate
Account to comply with the diversification requirements of Section 817(h) of the
Code; or (iii) a failure by a Portfolio(s) invested in by the Separate Account
to qualify as a

regulated investment company" under Subchapter M of the Code; or


                                       13


(e)    arise out of or result from any material breach of any representation
       and/or warranty made by TRUST or ADVISER in this Agreement or arise out
       of or result from any other material breach of this Agreement by TRUST or
       ADVISER.

       7.5 TRUST and ADVISER shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party to the extent that such
losses, claims, damages, liabilities or litigation are attributable to such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement.

       7.6 TRUST and ADVISER shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified TRUST and ADVISER in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify TRUST and ADVISER
of any such claim shall not relieve TRUST and ADVISER from any liability which
it may have to the Indemnified Party against whom such action is brought
otherwise than on account of this indemnification provision. In case any such
action is brought against the Indemnified Parties, TRUST and ADVISER shall be
entitled to participate at their own expense in the defense thereof. TRUST and
ADVISER also shall be entitled to assume the defense thereof, with counsel
satisfactory to the party named in the action. After notice from TRUST or
ADVISER to such party of TRUST's or ADVISER's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and TRUST and/or ADVISER as the case may be
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.

Article Vill. TERM; TERMINATION

       8.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.

8.2 This Agreement shall terminate in accordance with the following provisions:

(a)    At the option of LIFE COMPANY or TRUST At any time from the date hereof
       upon 180 days' written notice, unless a shorter time is agreed to by the
       parties;


                                       14


(b)    At the option of LIFE COMPANY, if TRUST shares are not reasonably
       available to meet the requirements of the Variable Contracts as
       determined by LIFE COMPANY. Prompt notice of election to terminate shall
       be furnished by LIFE COMPANY, said termination to be effective ten days
       after receipt of notice unless TRUST makes available a sufficient number
       of shares to reasonably meet the requirements of the Variable Contracts
       within said ten-day period;

(c)    At the option of LIFE COMPANY, upon the institution of formal proceedings
       against TRUST or ADVISER or any sub-adviser by the SEC, the NASD, or any
       other regulatory body, the expected or anticipated ruling, judgment or
       outcome of which would, in LIFE COMPANY's reasonable judgment, after
       affording TRUST and ADVISER reasonable opportunity for consultation with
       LIFE COMPANY, materially impair TRUST's ability to meet and perform
       TRUST's obligations and duties hereunder, or result in material harm to
       the Separate Accounts, LIFE COMPANY, or owners of Variable Contracts.
       Prompt notice of election to terminate shall be furnished by LIFE COMPANY
       with said termination to be effective upon receipt of notice;

(d)    At the option of TRUST or ADVISER, upon the institution of formal
       proceedings against LIFE COMPANY by the SEC, the NASD, or any other
       regulatory body, the expected or anticipated ruling, judgment or outcome
       of which would, in TRUST's or ADVISER's reasonable judgment, after
       affording LIFE COMPANY reasonable opportunity for consultation with TRUST
       and ADVISER, materially impair LIFE COMPANY's ability to meet and perform
       its obligations and duties hereunder. Prompt notice of election to
       terminate shall be furnished by TRUST with said termination to be
       effective upon receipt of notice;

(e)    In the event TRUST's shares are not registered, issued or sold in
       accordance with applicable state or federal law, or such law precludes
       the use of such shares as the underlying investment medium of Variable
       Contracts issued or to be issued by LIFE COMPANY. Termination shall be
       effective upon such occurrence without notice;

(f)    At the option of TRUST if the Variable Contracts cease to- qualify as
       annuity contracts or life insurance- contracts, as applicable,


                                       15


under the Code, or if TRUST reasonably believes that the Variable Contracts may
fail to so qualify. Termination shall be effective upon receipt of notice by
LIFE COMPANY;

(g)    At the option of LIFE COMPANY, upon TRUST's or ADVISER's breach of any
       material provision of this Agreement, which breach has not been cured to
       the reasonable satisfaction of LIFE COMPANY within ten days after written
       notice of such breach is delivered to TRUST;

(h)    At the option of TRUST or ADVISER, upon LIFE COMPANY's breach of any
       material provision of this Agreement, which breach has not been cured to
       the satisfaction of TRUST within ten days after written notice of such
       breach is delivered to LIFE COMPANY;

(i)    At the option of TRUST or ADVISER, if the Variable Contracts are not
       registered, issued or sold in accordance with applicable federal and/or
       state law. Termination shall be effective immediately upon such
       occurrence without notice;

At the option of LIFE COMPANY, upon 75 days written notice of a vote of Variable
Contract owners having an interest in a Portfolio and upon written approval of
LIFE COMPANY, to substitute the shares of another investment company for the
corresponding shares of a Portfolio in accordance with the terms of the Variable
Contracts;

(k)    In the event this Agreement is assigned without the prior written consent
       of LIFE COMPANY, TRUST, and ADVISER,

termination shall be effective immediately upon such occurrence without notice.

       8.3 Notwithstanding any termination of this Agreement pursuant to Section
8.2 hereof, TRUST at LIFE COMPANY'S option shall continue to make available
additional TRUST shares, as provided below, for so long as TRUST desires
pursuant to the terms and conditions of this Agreement, for all Variable
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts").

Specifically, without limitation, if TRUST makes additional TRUST shares
available, the owners of the Existing Contracts or LIFE COMPANY, whichever shall
have legal authority to do so, shall be permitted to reallocate investments in
TRUST, redeem investments in TRUST and/or invest in TRUST upon the payment- of
additional premiums under the Existing Contracts. If TRUST shares continue to be
made


                                       16


available after such termination, the provisions of this Agreement shall remain
in effect and thereafter either TRUST or LIFE COMPANY may terminate the
Agreement, as so continued pursuant to this Section 8.3, upon sixty (60) days
prior written notice to the other party.

       8.4 Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts until thirty (30) days after the LIFE COMPANY shall have
notified TRUST of its intention to do so.

Article IX. NOTICES

       Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.

If to TRUST:

BT Insurance Funds Trust c/o First Data Investor Services Group, Inc. One
Exchange Place 53 State Street, Mail Stop BOS865 Boston, MA 02109

AND

c/o BT Alex Brown
One South Street, Mail Stop 1-18-6
Baltimore, MD 21202
Attn: Brian Wixted

If to ADVISER:

Bankers Trust Company
130 Liberty Street, Mail Stop 2355
New York, NY 10006
Attn.: Vinay Mendiratta


                                       17


If to LIFE COMPANY:
Lincoln National Life Insurance
Kelly D. Clevenger
1300 S. Clinton Street
Fort Wayne, IN 46802-3506

       Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.

Article X. MISCELLANEOUS

       10.1 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       10.2 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

       10.3 If any provision of this Agreement shall be held or made invalid by
a -court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       10.4 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders.

       10.5 It is understood and expressly stipulated that neither the
shareholders of shares of any Portfolio nor the Trustees or officers of TRUST or
any Portfolio shall be personally liable hereunder. No Portfolio shall be liable
for the liabilities of any other Portfolio. All persons dealing with TRUST or a
Portfolio must look solely to the property of TRUST or that Portfolio,
respectively, for enforcement of any claims against TRUST or that Portfolio. It
is also understood that each of the Portfolios shall be deemed to be entering
into a separate Agreement with LIFE COMPANY so that it is as if each of the
Portfolios had signed a separate Agreement with LIFE COMPANY and that a single
document is being signed simply to facilitate the execution and administration
of the Agreement.


                                       18


       10.6 Each party shall cooperate with each other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.

       10.7 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.

       10.8 If the Agreement terminates, the parties agree that Article 7 and
Sections 10.5, 10.6 and 10.7 shall remain in effect after termination.

       10.9 No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST,
ADVISER and the LIFE COMPANY.

       10.10 No failure or delay by a party in exercising any right or remedy
under this Agreement will operate as a waiver thereof and no single or partial
exercise of rights shall preclude a further or subsequent exercise. The rights
and remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.

       IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.

BT INSURANCE FUNDS TRUST

By: /s/ Elizabeth Russell
Name: Elizabeth Russell
Title: Secretary


                                       19


BANKERS TRUST COMPANY

By: /s/             Irene S. Greenberg

Name:               Irene S. Greenberg

Title:              Vice President

THE LINCOLN NATIONAL LIFE INSURANCE

COMPANY

By: /s/ Kelly D. Clevenger
Name: Kelly D. Clevenger
Title: Vice President


                                       20


Appendix A

                       BT Insurance Funds Trust Portfolios
                              Equity 500 Index Fund
                              Small Cap Index Fund



                                   APPENDIX B
                                SEPARATE ACCOUNTS
LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE SEPARATE ACCOUNT M
LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE SEPARATE ACCOUNT R



                                 AMENDMENT NO. 2
                                     to the
                          FUND PARTICIPATION AGREEMENT

     AMENDMENT, dated as of May 1, 1999, to the Fund Participation Agreement
dated 11th day of May, 1998 (the "Agreement"), by and between BT Insurance Funds
Trust ("Trust"), Bankers Trust Company ("Adviser"), and The Lincoln National
Life Insurance Company ("Life Company").

     WHEREAS, Trust, Life Company and Adviser wish to revise Appendices A and B
to the Agreement;

     NOW, THEREFORE, in accordance with Section 10.9 of the Agreement, Trust,
Life Company and Adviser hereby agree as follows:


     I.   Appendix A to the Agreement is hereby amended, and restated in its
entirety, by the Appendix A attached to this Amendment.

     2.   Appendix B to the Agreement is hereby amended, and restated in its
entirety, by the Appendix B attached to this Amendment.

     Except as expressly set forth above, all other terms and provisions of the
Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the date and year first above written.

                                        BT INSURANCE FUNDS TRUST

                                        By /s/ Gerald J. Holland
                                        Name: Gerald J. Holland
                                        Title: President

                                        THE LINCOLN NATIONAL LIFE INSURANCE
                                        COMPANY

                                        By: /s/ Kelly D. Clevenger
                                        Name: Kelly D. Clevenger
                                        Title: Vice President

                                        BANKERS TRUST COMPANY

                                        By: /s/ Irene S. Greenberg
                                        Name: Irene S. Greenberg
                                        Title: Vice President



                                   APPENDIX A
                         (Revised effective May 1, 1999)


                       BT INSURANCE FUNDS TRUST PORTFOLIOS

                              Equity 500 Index Fund
                              Small Cap Index Fund
                             EAFE Equity Index Fund




                                   APPENDIX B
                         (Revised effective May 1, 1999)



                                SEPARATE ACCOUNTS

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT N

LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT Q

LINCOLN NATIONAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT 53

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE SEPARATE ACCOUNT M

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE SEPARATE ACCOUNT R

LINCOLN LIFE FLEXIBLE PREMIUM VARIABLE LIFE ACCOUNT S

LINCOLN NATIONAL LIFE INSURANCE COMPANY SEPARATE ACCOUNT 36
     (EFFECTIVE AUGUST 13, 1999)


                             AMENDMENT TO APPENDIX B
                             AS OF NOVEMBER 1, 1998


Lincoln National Variable Annuity Account C
Lincoln Life Flexible Premium Variable Life Account M
Lincoln Life Variable Annuity Account N
Lincoln National Variable Annuity Account Q
Lincoln Life Flexible Premium Variable Life Account R

Lincoln National Life Insurance Company Separate Account 27
Lincoln National Life Insurance Company Separate Account 53

     IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule A to be executed in its name and behalf by its duly authorized officer
on the date specified below.

Date:                              BT INSURANCE FUNDS TRUST

                                   By: Elizabeth Russell,
                                   Secretary

Date:                              BANKERS TRUST COMPANY

                                   By:      Irene S. Greenberg,
                                            Vice President

Date:                              THE LINCOLN NATIONAL LIFE INSURANCE COMPANY,
                                   on behalf of itself and its separate accounts
                                   and as principal underwriter for its separate
                                   accounts

                                   By:      Kelly D. Clevenger,
                                            Vice President




Exhibit A

Funds Available to            Name of Separate Accounts

THE SEPARATE ACCOUNTS         UTILIZING SOME OR ALL OF THE FUNDS

Please amend                  Please add Lincoln Life Flexible
Appendix A of the FPA         Premium Variable Life Account
and Exhibit A of the          S and Lincoln National Life
Admin Services Letter         Insurance Company Separate
to include the EAFE           Account 36
Index Fund



                                 AMENDMENT NO. 4
                                     to the
                          FUND PARTICIPATION AGREEMENT

     AMENDMENT, dated as of May 1, 2001, to the Fund Participation Agreement
dated as of the 1st day of October, 1998 (the "Agreement"), by and between BT
Insurance Funds Trust (now known as Deutsche Asset Management VIT Funds )
("Trust"), Bankers Trust Company ("Adviser"), and Lincoln Life & Annuity Company
of New York ("Life Company").

     WHEREAS, effective May 1, 2001 Deutsche Asset Management, Inc. ("DAMI")
will replace Adviser as investment adviser to the Trust;

     WHEREAS, effective May 1, 2001 Adviser wishes to transfer all of its
rights, responsibilities and duties under the Agreement to ("DAMI");

     WHEREAS, DAMI is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");

     WHEREAS, Trust, Life Company and Adviser wish to revise Appendix A to the
Agreement in its entirety;

     WHEREAS, Trust, Life Company and Adviser wish to revise Appendix B to the
Agreement in its entirety;

     NOW, THEREFORE, in accordance with Section 10.9 of the Agreement, Trust,
Life Company, Adviser and DAMI hereby agree as follows:

     1. Effective May 1, 2001 DAMI will replace Adviser and assume all of the
Adviser's rights, responsibilities and duties under the Agreement.

     2. Life Company agrees to the replacement of Adviser with DAMI

     3. Article IX. NOTICES is hereby amended such that the addresses for Trust
and Adviser are replaced in their entirety with the following:

          If to TRUST:

          Deutsche Asset Management VIT Funds
          c/o PFPC Global Fund Services
          3200 Horizon Drive
          King of Prussia, PA 19406-0903
          Attn: Tom Calabria, Legal Department

          AND

          c/o Deutsche Asset Management Mutual Fund Services
          One South Street, Mail Stop 1-18-6
          Baltimore, MD 21202
          Attn: Richard Hale


          If to ADVISER:

          Deutsche Asset Management, Inc.
          130 Liberty Street, Mail Stop 2355
          New York, NY 10006
          Attn: Legal Department

     4. Appendix A to the Agreement is hereby amended, and restated in its
entirety, by the Appendix A attached to this Amendment.

     5. Appendix B to the Agreement is hereby amended, and restated in its
entirety, by the Appendix B attached to this Amendment.

     Except as expressly set forth above, all other terms and provisions of the
Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the date and year first above written.

                              DEUTSCHE ASSET MANAGEMENT VIT FUNDS

                              By: /s/ Daniel O. Hersch
                                 --------------------------------------------
                              Name: Daniel O. Hersch
                              Title: Secretary

                              LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

                              By: /s/ Steven M. Kluever
                                 ------------------------------------------
                              Name: Steven M. Kluever
                              Title: Second Vice President

                              BANKERS TRUST COMPANY

                              By: /s/ Douglas W. Doucette
                                 --------------------------------------------
                              Name: Douglas W. Doucette
                              Title: Managing Director

                              DEUTSCHE ASSET MANAGEMENT, INC.

                              By: /s/ Marco Veissid
                                 --------------------------------------------
                              Name: Marco Veissid
                              Title: Director


                                   APPENDIX A
                         (Revised effective May 1, 2001)

                       DEUTSCHE ASSET MANAGEMENT VIT FUNDS

           Deutsche Asset Management VIT Funds - Equity 500 Index Fund
           Deutsche Asset Management VIT Funds - Small Cap Index Fund
          Deutsche Asset Management VIT Funds - EAFE Equity Index Fund


                                   APPENDIX B
                         (Revised effective May 1, 2001)

                                SEPARATE ACCOUNTS

1. Lincoln Life & Annuity Variable Annuity Account L

2. Lincoln Life & Annuity Flexible Premium Variable Life Account M

3. Lincoln New York Separate Account N for Variable Annuities

4. LLANY Separate Account R for Flexible Premium Variable Life Insurance

5. LLANY Separate Account S for Flexible Premium Variable Life Insurance

EX-99

                               JANUS ASPEN SERIES

                          FUND PARTICIPATION AGREEMENT

         THIS AGREEMENT is made this 15' day of September, 1998, between JANUS
 ASPEN SERIES, an open-end management investment company organized as. a
 Delaware business trust (the "Trust"), and The Lincoln National Life Insurance
 Company, a life insurance company organized under the laws of the State of
 Indiana (the "Company"), on its own behalf and on behalf of each segregated
 asset account of the Company set forth on Schedule A, as may be amended from
 time to time (the "Accounts").

                                   WITNESSETH:

         WHEREAS, the Trust has registered with the Securities and Exchange
 Commission as an open-end management investment company under the Investment
 Company Act of 1940, as amended (the " 1940 Act"), and has registered the offer
 and sale of its shares under the Securities Act of 1933, as amended (the " 1933
 Act"); and

         WHEREAS, the Trust desires to act as an investment vehicle for separate
 accounts established for variable life insurance policies and variable annuity
 contracts to be offered by insurance companies that have entered into
 participation agreements with the Trust (the "Participating Insurance
 Companies"); and

         WHEREAS, the beneficial interest in the Trust is divided into several
 series of shares, each series representing an interest in a particular managed
 portfolio of securities and other assets (the "Portfolios"); and

         WHEREAS, the Trust has received an order from the Securities and
 Exchange Commission granting Participating Insurance Companies and their
 separate accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a)
 and 15(b) of the 1940 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder,
 to the extent necessary to permit shares of the Trust to be sold to and held by
 variable annuity and variable life insurance separate accounts of both
 affiliated and unaffiliated life insurance companies and certain qualified
 pension and retirement plans (the "Exemptive Order"); and

         WHEREAS, the Company has registered or will register (unless
 registration is not required under applicable law) certain variable life
 insurance policies and/or variable annuity contracts under the 1933 Act (the
 "Contracts"); and

         WHEREAS, the Company has registered or will register (unless
 registration is not required pursuant to Section 3(v)(ii) of the 1940'Act) each
 Account as a unit investment trust under the 1940 Act; and


                                        -1-


          WHEREAS, the Company desires to utilize shares of one or more
Portfolios as an investment vehicle of the Accounts;

          NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:

                                    ARTICLE I
                              SALE OF TRUST SHARES

          1.1 The Trust shall make shares of its Portfolios available to the
 Accounts at the net asset value next computed after receipt of such purchase
 order by the Trust (or its agent), as established in accordance with the
 provisions of the then current prosp~ctus of the Trust.

 Shares of a particular Portfolio of the Trust shall be ordered in such
 quantities and at such times as determined by the Company to be necessary to
 meet the requirements of the Contracts. The Trustees of the Trust (the
 "Trustees") may refuse to sell shares of any Portfolio to any person, or
 suspend or terminate the offering of shares of any Portfolio if such action is
 required by law or by regulatory authorities having jurisdiction or is, in the
 sole discretion of the Trustees acting in good faith and in light of their
 fiduciary duties under federal and any applicable state laws, necessary in the
 best interests of the shareholders of such Portfolio.

          1.2 The Trust will redeem any full or fractional shares of any
 Portfolio when requested by the Company on behalf of an Account at the net
 asset value next computed after receipt by the Trust (or its agent) of the
 request for redemption, as established in accordance with the provisions of the
 then current prospectus. of the Trust. The Trust 'shall make payment for such
 shares in the manner established from time to time by the Trust, but in no
 event shall payment be delayed for a greater period than is permitted by the
 1940 Act.

          1.3 For the purposes of Sections 1.1 and 1.2, the Trust hereby
 appoints the Company as its agent for the limited purpose of receiving and
 accepting purchase and redemption orders resulting from investment in and
 payments under the Contracts. Receipt by the Company shall constitute receipt
 by the Trust provided that i) such orders are received by the Company in good
 order prior to the time the net asset value of each Portfolio is priced in
 accordance with its prospectus and ii) the Trust receives notice of such orders
 by 10:00 a.m. New York time on the next following Business Day. The Trust will
 confirm receipt of each trade in a manner mutually agreeable to the Trust and
 the Company. "Business Day" shall mean any day on which the New York Stock
 Exchange is open for trading and on which the Trust calculates its net asset
 value pursuant to the rules of the Securities and Exchange Commission.

          1.4 Purchase orders that are transmitted to the Trust in accordance
with Section 1.3 shall be paid for no later than 2:00 p.m. New York time on the
same Business Day that the Trust receives notice of the order. The Trust shall
use its best efforts to pay for redemption orders that are transmitted to the
Company in accordance with Section 1.2 no later than 2:30


                                        -2-


 p.m. New York time on the same Business Day that the Trust receives notice of
 the order. Payments shall be made in federal funds transmitted by wire.

          1.5 Issuance and transfer of the Trust's shares will be by book entry
 only. Stock certificates will not be issued to the Company or the Account.
 Shares ordered from the Trust will be recorded in the appropriate title for
 each Account or the appropriate subaccount. of each Account.

          1.6 The Trust shall furnish prompt notice to the Company of any income
 dividends or capital gain distributions payable on the Trust's shares. The
 Company hereby elects to receive all such income dividends and capital gain
 distributions as are payable on a Portfolio's shares in additional shares of
 that Portfolio.. The Company reserves the right, on its behalf and on behalf of
 the Account, to revoke this election and to receive all such dividends in cash.
 The Trust shall notify the Company of the number of shares so issued as payment
 of such dividends and distributions.

          1.7 The Trust shall make the net asset value per share for each
 Portfolio available to the Company on a daily basis as soon as reasonably
 practical after the net asset value per share is calculated and shall use its
 best efforts to make such net asset value per share available by 6 p.m. New
 York time.

          1.8 The Trust agrees that its shares will be sold only to
 Participating Insurance Companies and their separate accounts and to certain
 qualified pension and retirement plans to the extent permitted by the Exemptive
 Order. No shares of any Portfolio will be sold directly to the general public.
 The Company agrees that Trust shares will be used only for the purposes of
 funding the Contracts and Accounts listed in Schedule A, as amended from time
 to time.

          1.9 The Trust agrees that all Participating Insurance Companies shall
 have the obligations and responsibilities regarding pass-through voting (unless
 exempt therefrom) and conflicts of interest corresponding to those contained in
 Section 2.8 and Article IV of this Agreement.

                                   ARTICLE II
                           OBLIGATIONS OF THE PARTIES

          2.1 The Trust shall prepare and be responsible for filing with the
 Securities and Exchange Commission and any state regulators requiring such
 filing all shareholder reports, notices, proxy materials (or similar materials
 such as voting instruction solicitation materials), prospectuses and statements
 of additional information of the Trust. The Trust shall bear the costs of
 registration and qualification of its shares, preparation and Ming of the
 documents listed in this Section 2.1 and all taxes to which an issuer is
 subject on the issuance and transfer of its shares.


                                        -3-


         2.2 At the option of the Company., the Trust shall either (a) provide
 the Company (at the Company's expense) with as many copies of the Trust's
 current prospectus, annual report, semi-annual report and other shareholder
 communications, including any amendments or supplements to any of the
 foregoing, as the Company shall reasonably request; or (b) provide the Company
 with a camera ready copy of such documents in a form suitable for printing. The
 Trust shall be responsible for its pro-rated share of the printing costs. The
 Trust shall provide the Company with a copy of its statement of additional
 information in a form suitable for duplication by the Company. The Trust (at
 its expense) shall provide the Company with copies of any Trust-sponsored proxy
 materials in such quantity as the Company shall reasonably require for
 distribution to Contract owners.

         2.3 The Company shall bear the costs (unless Janus Capital Corporation
 or the Trust, pursuant to the terms of the letter to Company dated September
 15, 1998, is required to bear the costs) of printing and distributing the
 Trust's prospectus, statement of additional information, shareholder reports
 and other shareholder communications to owners of and applicants for policies
 for which the Trust is serving or is to serve as an investment vehicle. The
 Company shall bear the costs of distributing proxy materials (or similar
 materials such as voting solicitation instructions) to Contract owners. The
 Company assumes sole responsibility for ensuring that such materials are
 delivered to Contract owners in accordance with applicable federal and state
 securities laws.

         2.4 The Company agrees and acknowledges that the Trust's adviser, Janus
 Capital Corporation ("Janus Capital"), is the sole owner of the name and mark
 "Janus" and that all use of any designation comprised in whole or part of Janus
 (a "Janus Mark") under this Agreement shall inure to the benefit of Janus
 Capital. Except as provided in Section 2.5, the Company shall not use any Janus
 Mark on its own behalf or on behalf of the Accounts or Contracts in any
 registration statement, advertisement, sales literature or other materials
 relating to the Accounts or Contracts without the prior written consent of
 Janus Capital. Such consent will not be unreasonably withheld and if no written
 objection is received within 10 business days of receipt, approval will be
 deemed given. Upon termination of this Agreement for any reason, the Company
 shall cease all use of any Janus Mark(s) as soon as reasonably practicable.

         2.5 (a) The Company shall furnish or cause to be furnished, to the
 Trust or its designee, a copy of each Contract prospectus or statement of
 additional information in which the Trust or its investment adviser is named
 within 20 days of the filing of such document with the Securities and Exchange
 Commission. The Company shall furnish, or shall cause to be furnished, to the
 Trust or its designee, each piece of sales literature or other promotional
 material in which the Trust or its investment adviser is named, at least ten
 Business Days prior to its use. No such material shall be used if the Trust or
 its designee reasonably objects to such use within fifteen Business Days after
 receipt of such material.

         (b) The Trust shall furnish, or cause to be furnished, to the Company
or its designee, a copy of each Trust prospectus or statement of additional
information in which the


                                        -4-


 Company is named within 20 days of the filing of such document with the
 Securities and Exchange Commission. The Trust shall furnish, or shall cause to
 be furnished, to the Company or its designee, each piece of sales literature or
 other promotional material in which the Company is named, at least ten Business
 Days prior to its use. No such material shall be used if the Company or its
 designee reasonably objects to such use within fifteen Business Days after
 receipt of such material.

          2.6 The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
its investment adviser in connection with the sale of the Contracts other than
information or representations contained in and accurately derived from the
registration statement or prospectus for the Trust shares (as such registration
statement and prospectus may be amended or supplemented from time to time),
reports of the Trust, Trust-sponsored proxy statements, or in sales literature
or other promotional material approved by the Trust or its designee, except as
required by legal process or regulatory authorities or with the written
permission of the Trust or its designee. Such consent will not be unreasonably
withheld and if no written objection is received within 10 business days of
receipt, approval will be deemed given.

         2.7 The Trust shall not give any information or make any
 representations or statements on behalf of the Company or concerning the
 Company, the Accounts or the Contracts other than information or
 representations contained in and accurately derived from the registration
 statement or prospectus for the Contracts (as such registration statement and
 prospectus may be amended or supplemented from time to time), or in materials
 approved by the Company for distribution including sales literature or other
 promotional materials, except as required by legal process or regulatory
 authorities or with the written permission of the Company.

         2.8 So long as, and to the extent that the Securities and Exchange
 Commission interprets the 1940 Act to require pass-through voting privileges
 for variable policyowners, the Company will provide pass-through voting
 privileges to owners of policies whose cash values are invested, through the
 Accounts, in shares of the Trust. The Trust shall require all Participating
 Insurance Companies to calculate voting privileges in the same manner and the
 Company shall be responsible for assuring that the Accounts calculate voting
 privileges in the manner established by the Trust. With respect to each
 Account, the Company will vote shares of the Trust held by the Account and for
 which no timely voting instructions from policyowners are received as well as
 shares it owns that are held by that Account, in the same proportion as those
 shares for which voting instructions are received. The Company and its agents
 will in no way recommend or oppose or interfere with the solicitation of
 proxies for Trust shares held by Contract owners without the prior written
 consent of the Trust, which consent may be withheld in the Trust's sole
 discretion.

         2.9 The Company shall notify the Trust of any applicable state
insurance laws that restrict the Portfolios' investments or otherwise affect the
operation of the Trust and shall notify the Trust of any changes in such laws.


                                        -5-


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

         3.1 The Company represents and warrants that it is an insurance company
 duly organized and validly existing under the laws of the State of Indiana and
 that it has legally and validly established each Account as a segregated asset
 account under such law on the date set forth in Schedule A.

          3.2 The Company represents and warrants that each Account (1) has been
 registered or, prior to any issuance or sale of the Contracts, will be
 registered as a unit investment trust in accordance with the provisions of the
 1940 Act or, alternatively (2) has not been registered in proper reliance upon
 the exclusion from registration under Section 3(c)(ii) of the 1940 Act.

          3.3 The Company represents and warrants that the Contracts or
 interests in the Accounts (1) are or, prior to issuance, will be registered as
 securities under the 1933 Act or, alternatively (2) are not registered because
 they are properly exempt from registration under the 1933 Act or will be
 offered exclusively in transactions that are properly exempt from registration
 under the 1933 Act. The Company further represents and warrants that the
 Contracts will be issued and sold in compliance in all material respects with
 all applicable federal and state laws.

          3.4 The Trust represents and warrants that it is duly organized and
 validly existing under the laws of the State of Delaware.

          3.5 The Trust represents and warrants that the Trust shares offered
 and sold pursuant to this Agreement will be registered under the 1933 Act and
 the Trust shall be registered under the 1940 Act prior to any issuance or sale
 of such shares. The Trust shall amend its registration statement under the 1933
 Act and the 1940 Act from time to time as required in order to effect the
 continuous offering of its shares. The Trust shall register and qualify its
 shares for sale in accordance with the laws of the various states only if and
 to the extent deemed advisable by the Trust.

          3.6 The Trust represents and warrants that the investments of each
 Portfolio will comply with Subchapter M and the diversification requirements
 set forth in Section 817(h) of the Internal Revenue Code of 1986, as amended
 ("Code"), and the rules and regulations thereunder. In the event of a breach of
 this Section 3.6 by the Trust, it will a) immediately notify the Company of the
 breach and b) take the necessary steps to adequately diversify each Portfolio
 so as to achieve compliance within the grace period offered by Regulation
 1.817-5.


                                        -6-


                                   ARTICLE IV
                               POTENTIAL CONFLICTS

         4.1 The parties acknowledge that the Trust's shares may be made
 available for investment to other Participating Insurance Companies. In such
 event, the Trustees will monitor the Trust for the existence of any material
 irreconcilable conflict between the interests of the contract owners of all
 Participating Insurance Companies. An irreconcilable material conflict may
 arise for a variety of reasons, including: (a) an action by any state insurance
 regulatory authority; (b) a change in applicable federal or state insurance,
 tax, or securities laws or regulations, or a public ruling, private letter
 ruling, no-action or interpretative letter, or any similar action by insurance,
 tax, or securities regulatory authorities; (c) an administrative or judicial
 decision in any relevant proceeding; (d) the manner in which the investments of
 any Portfolio are being managed; (e) a difference in voting instructions given
 by variable annuity contract and variable life insurance contract owners; or (f
 a decision by an insurer to disregard the voting instructions of contract
 owners. The Trustees shall promptly inform the Company if they determine that
 an irreconcilable material conflict exists and the implications thereof.

         4.2 The Company agrees to promptly report any potential or existing
 conflicts of which it is aware to the Trustees. The Company will assist the
 Trustees in carrying out their responsibilities under the Exemptive Order by
 providing the Trustees with all information reasonably necessary for the
 Trustees to consider any issues raised including, but not limited to,
 information as to a decision by the Company to disregard Contract owner voting
 instructions.

         4.3 If it is determined by a majority of the Trustees, or a majority of
 its disinterested Trustees, that a material irreconcilable conflict exists that
 affects the interests of Contract owners, the Company shall, in cooperation
 with other Participating Insurance Companies whose contract owners are also
 affected, at its expense and to the extent reasonably practicable (as
 determined by the Trustees) take whatever steps are necessary to remedy or
 eliminate the irreconcilable material conflict, which steps could include: (a)
 withdrawing the assets allocable to some or all of the Accounts from the Trust
 or any Portfolio and reinvesting such assets in a different investment medium,
 including (but not limited to) another Portfolio of the Trust, or submitting
 the question of whether or not such segregation should be implemented to a vote
 of all affected Contract owners and, as appropriate, segregating the assets of
 any appropriate group (i.e., annuity contract owners, life insurance contract
 owners, or variable contract owners of one or more Participating Insurance
 Companies) that votes in favor of such segregation, or offering to the affected
 Contract owners the option of making such a change; and (b) establishing a new
 registered management investment company or managed separate account.

          4.4 If a material irreconcilable conflict arises because of a decision
by the Company To disregard Contract owner voting instruct9ions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to


                                        -7-


 withdraw the affected Account's investment in the Trust and terminate this
 Agreement with respect to such Account; provided, however that such withdrawal
 and termination shall be limited to the extent required by the foregoing
 material irreconcilable conflict as determined by a majority of the
 disinterested Trustees. Any such withdrawal and termination must take place
 within six (6) months after the Trust gives written notice that this provision
 is being implemented. Until the end of such six (6) month period, the Trust
 shall continue to accept and implement orders- by the Company for the purchase
 and redemption of shares of the Trust.

         4.5 If a material irreconcilable conflict arises because a particular
 state insurance regulator's decision applicable to the Company conflicts with
 the majority of other state regulators, then the Company will withdraw the
 affected Account's investment in the Trust and terminate this Agreement with
 respect to such Account within six (6) months after the Trustees inform the
 Company in writing that it has determined that such decision has created an
 irreconcilable material conflict; provided, however, that such withdrawal and
 termination shall be limited to the extent required by the foregoing material
 irreconcilable conflict as determined by a majority of the disinterested
 Trustees. Until the end of such six (6) month period, the Trust shall continue
 to accept and implement orders by the Company for the purchase and redemption
 of shares of the Trust.

         4.6 For purposes of Sections 4.3 through 4.6 of this Agreement, a
 majority of the disinterested Trustees shall determine whether any proposed
 action adequately remedies any irreconcilable material conflict, but in no
 event will the Company be required to establish a new funding medium for the
 Contracts if an offer to do so has been declined by vote of a majority of
 Contract owners materially adversely affected by the irreconcilable material
 conflict. In the event that the Trustees determine that any proposed action
 does not adequately remedy any irreconcilable material conflict, then the
 Company will withdraw the Account's investment in the Trust and terminate this
 Agreement within six (6) months after the Trustees inform the Company in
 writing of the foregoing determination; provided, however, that such withdrawal
 and termination shall be limited to the extent required by any such material
 irreconcilable conflict as determined by a majority of the disinterested
 Trustees.

         4.7 The Company shall at least annually submit to the Trustees such
 reports, materials or data as the Trustees may reasonably request so that the
 Trustees may fully carry out the duties imposed upon them by the Exemptive
 Order, and said reports, materials and data shall be submitted more frequently
 if deemed appropriate by the Trustees.

         4.8 If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
 or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
 1940 Act or the rules promulgated thereunder with respect to mixed or shared
 funding (as defined in the Exemptive Order) on terms and. conditions materially
 different from those contained in the Exemptive Order, then the Trust and/or
 the Participating Insurance Companies, as appropriate, shall take such steps as
 may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule
 6e-3, as adopted, to the extent such rules are applicable.


                                        -8-


                                    ARTICLE V
                                 INDEMNIFICATION

         5.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify and
 hold harmless the Trust and each of its Trustees, officers, employees and
 agents and each person, if any, who controls the Trust within the meaning of
 Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for
 purposes of this Article V) against any and all losses, claims, damages,
 liabilities (including amounts paid in settlement with the written consent of
 the Company) or expenses (including the reasonable costs of investigating or
 defending any alleged loss, claim, damage, liability or expense and reasonable
 legal counsel fees incurred in connection therewith) (collectively, "Losses"),
 to which the Indemnified Parties may become subject under any statute or
 regulation, or at common law or otherwise, insofar as such Losses:

             (a) arise out of or are based upon any untrue statements or
         alleged untrue statements of any material fact contained in a
         registration statement or prospectus for the Contracts or in the
         Contracts themselves or in sales literature generated or approved by
         the Company on behalf of the Contracts or Accounts (or any amendment or
         supplement to any of the foregoing) (collectively, "Company Documents"
         for the purposes of this Article V), or arise out of or are based upon
         the omission or the alleged omission to state therein a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, provided that this indemnity shall not apply as
         to any Indemnified Party if such statement or omission or such alleged
         statement or omission was made in reliance upon-and was accurately
         derived from written information furnished to the Company by or on
         behalf of the Trust for use in Company Documents or otherwise for use
         in connection with the sale of the Contracts or Trust shares; or

             (b) arise out of or result from statements or representations
         (other than statements or representations contained in and accurately
         derived from Trust Documents as defined in Section 5.2(a)) or wrongful
         conduct of the Company or persons under its control, with respect to
         the sale or acquisition of the Contracts or Trust shares; or

             (c) arise out of or result from any untrue statement or
         alleged untrue statement of a material fact contained in Trust
         Documents as defined in Section 5.2(a) or the omission or alleged
         omission to state therein a material fact required to be stated therein
         or necessary to make the statements therein not misleading if such
         statement or omission was made in reliance upon and accurately derived
         from written information furnished to the Trust by or on behalf of the
         Company; or

             (d) arise out of or result from any failure by the Company to
         provide the services or furnish the materials required under the terms
         of this Agreement, or


                                        -9-


             (e) arise out of or result from any material breach of any
         representation and/or warranty made by the Company in this Agreement or
         arise out of or result from any other material breach of this Agreement
         by the Company.

             (f) arise out of (i) a failure by TRUST to substantially
         provide the services and furnish the materials under the terms of this
         Agreement; or (ii) a failure by a Portfolio(s) invested in by the
         Separate Account to comply with the diversification requirements of
         Section 817(h) of the. Code; or (iii) a failure by a Portfolio(s)
         invested in by the Separate Account to qualify as a "regulated
         investment company" under Subchapter M of the code.

          5.2 INDEMNIFICATION BY THE TRUST. The Trust agrees to indemnify and
 hold harmless the Company and each of its directors, officers, employees and
 agents and each person, if any, who controls the. Company within the meaning of
 Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for
 purposes of this Article V) against any and all losses, claims, damages,
 liabilities (including amounts paid in settlement with the written consent of
 the Trust) or expenses (including. the reasonable costs of investigating or
 defending any alleged loss, claim, damage, liability or expense and reasonable
 legal counsel fees incurred in connection therewith) (collectively, "Losses"),
 to which the Indemnified Parties may become subject under any statute or
 regulation, or at common law or otherwise, insofar as such Losses:

             (a) arise out of or are based upon any untrue statements or
          alleged untrue statements of any material fact contained in the
          registration statement or prospectus for the Trust (or any amendment
          or supplement thereto), (collectively, "Trust Documents" for the
          purposes of this Article V), or arise out of or are based upon the
          omission or the alleged omission to state therein a material fact
          required to be stated therein or necessary to make the statements
          therein not misleading, provided that this indemnity shall not apply
          as to any Indemnified Party if such statement or omission or such
          alleged statement or omission was made in reliance upon and was
          accurately derived from written information furnished to the Trust by
          or on behalf of the Company for use -in Trust Documents or otherwise
          for use in connection with the sale of the Contracts or Trust shares;
          or

             (b) arise out of or result from statements or representations
         (other than statements or representations contained in and accurately
         derived from Company Documents) or wrongful conduct of the Trust or
         persons under its control, with respect to the sale -or acquisition of
         the Contracts or Trust shares; or

             (c) arise out of or result from any untrue statement or
         alleged untrue statement of a material fact contained in Company
         Documents or the omission or alleged omission to state therein a
         material fact required to be stated therein or necessary' to make the
         statements therein not misleading if such statement or omission was
         made in reliance upon and accurately derived from written information
         furnished to the Company by or on behalf of the Trust; or


                                        -10-


             (d) arise out of or result from any failure by the Trust to
         provide the services or furnish the materials required under the terms
         of this Agreement; or

             (e) arise out of or result from any material breach of any
         representation and/or warranty made by the Trust in this Agreement or
         arise out of or result from any other material breach of this Agreement
         by the Trust.

          5.3 Neither the Company nor the Trust shall be liable under the
 indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
 to any Losses incurred or assessed against an Indemnified Party that arise from
 such Indemnified Party's willful misfeasance, bad faith or negligence in the
 performance of such Indemnified Party's duties or by reason of such Indemnified
 Party's reckless disregard of obligations "or duties under this Agreement.

          5.4 Neither the Company nor the Trust shall be liable under the
 indemnification provisions of Sections 5.1 or 5.2, as applicable, with respect
 to any claim made against an Indemnified Party unless such Indemnified Party
 shall have notified the other party in writing within a reasonable time after
 the summons, or other first written notification, giving information of the
 nature of the claim shall have been served upon or otherwise received by such
 Indemnified Party (or after such Indemnified Party shall have received notice
 of service upon or other notification to any designated agent), but failure to
 notify the party against whom indemnification is sought of any such claim shall
 not relieve that party from any liability which it may have to the Indemnified
 Party in the absence of Sections 5. 1 and 5.2.

          5.5 In case any such action is brought against the Indemnified
 Parties, the indemnifying party shall be entitled to participate, at its own
 expense, in the defense of such action. The indemnifying party also shall be
 entitled to assume the defense thereof, with counsel reasonably satisfactory to
 the parry named in the action. After notice from the indemnifying party to the
 Indemnified Party of an election to assume such defense, the Indemnified Party
 shall bear the fees and expenses of any additional counsel retained by it, and
 the indemnifying party will not be liable to the Indemnified Party under this
 Agreement for any legal or other expenses subsequently incurred by such party
 independently in connection with the defense thereof other than reasonable
 costs of investigation.

                                   ARTICLE VI

                                   TERMINATION

          6.1 This Agreement may be terminated:

              (a) by either party for any reason, by ninety (90) days
         advance written notice delivered to the other party; or


                                        -11-


             (b) at the option of the Company if shares of the Fund are not
         available to meet the requirements of the Contracts as determined by
         the Company. Prompt notice of the election to terminate for such cause
         shall be famished by the Company. Termination shall be effective ten
         days after the giving of notice by the Company; or

             (c) at the option of the Fund upon institution of formal
         proceedings against the Company by the NASD, the SEC, the insurance
         commission of any state or any other regulatory body regarding the
         Company's duties under this Agreement or related to the sale of the,
         Contracts, the operation of each Account, the administration of the
         Contracts or the purchase of Fund shares, or an expected ruling,
         judgment or outcome which would, -in the Fund's reasonable judgment,
         materially impair the Company's ability to perform the Company's
         obligations and duties hereunder;, or

             (d) at the option of the Company upon institution of formal
         proceedings against the Fund, the Fund's distributor, the Fund's
         investment manager or any subinvestment manager, by the NASD, the SEC,
         or any state securities or insurance commission or any other regulatory
         body regarding the duties of the Fund or its distributor under this
         Agreement, or an expected or anticipated ruling, judgment or outcome
         which- would, in the Company's reasonable judgment, materially impair
         the Fund's or the distributor's ability to perform Fund's or
         distributor's obligations and duties hereunder; or

             (e) at the option of the Company. upon institution of formal
         proceedings against the Fund's investment manager or sub-investment
         manager by the NASD, the SEC, or any state securities or insurance
         commission or any other regulatory body which would, in the good faith
         opinion of the Company, result in material harm to the Accounts, the
         Company, or Contractowners; or

             (f) upon requisite vote of the Contract owners having an
         interest in the affected Portfolios (unless otherwise required by
         applicable law) and written approval of the Company, to substitute the
         shares of another investment company for the corresponding shares of
         the Fund in accordance with the terms of the Contracts; or

             (g) at the option of the Fund in the event any of the
         Contracts are not registered, issued or sold in accordance with
         applicable Federal and/or state law; or

             (h) at the option of the Company or the Fund upon a
         determination by a majority of the Fund Board, or a majority of
         disinterested Fund Board members, that an irreconcilable material
         conflict exists among the interests of (i) any contract owners or (ii)
         the interests of the Participating Insurance Companies investing in the
         Fund; or

             (i) at the. option of the Company if the Fund ceases to
         qualify as a Regulated Investment Company under Subchapter M of the
         Code, on under any


                                        -12-


          successor or similar provision, or if the Company reasonably believes,
          based on an opinion of its counsel, that the Fund may fail to so
          qualify; or

             (j) at the option of the Company if the Fund fails to meet the
         diversification requirements specified in Section 817(h) of the Code
         and any regulations thereunder; or

             (k) at the option of the Fund if the Contracts cease to
         qualify as annuity contracts or life insurance policies, as applicable,
         under the Code, or if the Fund reasonably believes that the Contracts
         may fail to so qualify; or

             (1) at the option of either the Fund or the Distributor if the
         Fund or the Distributor, respectively, shall determine, in their sole
         judgment exercised in good faith, that either (1) the Company shall
         have suffered a material adverse change in its business or financial
         condition; or (2) the Company shall have been the subject of material
         adverse publicity which is Rely to have a material adverse impact upon
         the business and operations of either the Fund or its distributor; or

             (m) at the option of the Company, if the Company shall
         determine, in its sole judgment exercised in good faith, that either:
         (1) the Fund and its distributor, or either of them, shall have
         suffered a material adverse change in their respective businesses or
         financial condition; or (2) the Fund or its distributor, or both of
         them, shall have been the subject of material adverse publicity which
         is likely to have a material adverse impact upon the business and
         operations of the Company; or

             (n) upon the assignment of this Agreement (including, without
         limitation, any transfer of the Contracts or the Accounts to another
         insurance company pursuant to an assumption reinsurance agreement)
         unless the non-assigning party consents thereto or unless this
         Agreement is assigned to an affiliate of the Fund's distributor.

         6.2 Notwithstanding any termination of this Agreement, the Trust
 shall, at the option of the Company, continue to make available additional
 shares of the Trust (or any Portfolio) pursuant to the terms and conditions of
 this Agreement for all Contracts in effect on the effective date of termination
 of this Agreement, [provided that the Company continues to pay the costs set
 forth in Section 2.3].

          6.3 The provisions of Article V shall survive the termination of this
 Agreement, and the provisions of Article IV and Section 2.8 shall survive the
 termination of this Agreement as long as shares of the Trust are held on behalf
 of Contract owners in accordance with Section 6.2.


                                        -13-


                                   ARTICLE V11
                                     NOTICES

         Any notice shall be sufficiently given when sent by registered or
 certified mail to the other party at the address of such party set forth below
 or at such other address as such party may from time to time specify in writing
 to the other party.

                  If to the Trust:

                           Janus Aspen Series
                           100 Fillmore Street
                           Denver, Colorado 80206
                           Attention: General Counsel

                  If to the Company:

                           Lincoln National Life Insurance Co.
                           1300 S. Clinton Street
                           Fort Wayne, IN 46802
                           Attention: Kelly D. Clevenger

                                  ARTICLE VIII
                                  MISCELLANEOUS

         8.1 The captions in this Agreement are included for convenience of
 reference only and in no way define or delineate any of the provisions hereof
 or otherwise affect their construction or effect.

         8.2 This Agreement may be executed simultaneously in two or more
 counterparts, each of which taken together shall constitute one and the same
 instrument.

         8.3 If any provision of this Agreement shall be held or made invalid by
 a court decision, statute, rule or otherwise, the remainder of the Agreement
 shall not be affected thereby.

         8.4 This Agreement shall be construed and the provisions hereof
 interpreted under and in accordance with the laws of State of Colorado.

         8.5 The parties to this Agreement acknowledge and agree that all
 liabilities of the Trust arising, directly or indirectly, under this Agreement,
 of any and every nature whatsoever, shall be satisfied solely out of the assets
 of the Trust and that no Trustee, officer, agent or holder of shares of
 beneficial interest of the Trust shall be personally liable for any such
 liabilities.


                                        -14-


         8.6 Each party shall cooperate with each other party and all
 appropriate governmental authorities (including without limitation the
 Securities and Exchange Cornmission, the National Association of Securities
 Dealers, Inc., and state insurance regulators) and shall permit such
 authorities reasonable access to its books and records in connection with any
 investigation or inquiry relating to this Agreement or the transactions
 contemplated hereby.

         8.7 The rights, remedies and obligations contained in this Agreement
 are cumulative and are in addition to any and all rights, remedies and
 obligations, at law or in equity, which the parties hereto are entitled to
 under state and federal laws.

         8.8 The parties to this Agreement acknowledge and agree that this
 Agreement shall not be exclusive in any respect.

         8.9 Neither this Agreement nor. any rights or obligations hereunder may
 be assigned by either party without the prior written approval of the other
 party.

         8.10 No provisions of this Agreement may be amended or modified in any
 manner except by a written agreement properly authorized and executed by both
 parties.

         IN WITNESS WHEREOF, the parties have caused their duly authorized
 officers to execute this Participation Agreement as of the date and year first
 above written.

                                     JANUS ASPEN SERIES

                                     By: /s/ Bonnie Howe
                                     Name: Bonnie Howe
                                     Title: Assistant Vice President


                                     THE LINCOLN NATIONAL LIFE
                                     INSURANCE COMPANY


                                     By: /s/ Kelly D. Clevenger
                                     Name: Kelly D. Clevenger
                                     Title: Vice President


                                        -15-


                    AMENDMENT TO FUND PARTICIPATION AGREEMENT


         This Amendment to the Fund Participation Agreement ("Agreement") dated
September 15, 1998, as amended, between Janus Aspen Series, an open-end
management investment company organized as a Delaware business trust (the
"Trust"), and The Lincoln National Life Insurance Company, an Indiana life
insurance company (the "Company") is effective as of May 1, 2000.

                                    AMENDMENT

         For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:

         1. Schedule A of this Agreement shall be deleted and replaced with the
attached Schedule A.

         2. All other terms of the Agreement shall remain in full force and
effect.

         IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Amendment as of the date and year first above written.



THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY


By: /s/ Steven M. Kluever
   ----------------------------

Name:  Steven M. Kluever
Title:    Second Vice President


JANUS ASPEN SERIES


By: /s/ Bonnie M. Howe
   ----------------------------

Name:  Bonnie M. Howe
Title:   Assistant Vice President



                                   SCHEDULE A
                   SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS


Name of Separate Account and the             Contracts Funded
Date Established by Board of Directors       By Separate Account
- --------------------------------------       -------------------

Lincoln National Variable                    Multi Fund Individual
Annuity Account C                            Variable Annuity and e Annuity
(Established June 3, 1981)

Lincoln National Variable                    GVA I, II, III
Annuity Account L                            (non-New York)

Lincoln Life Variable                                 Multi Fund Group
Annuity Account Q                            Variable Annuity
                                             (non-New York)

Lincoln National Life Insurance              Director Group
Company Separate Account 34                  Variable Annuity

Lincoln Life Flexible Premium Variable       Lincoln VUL
Life Account M                               Lincoln VUL-DB-

Lincoln Life Flexible Premium Variable       Lincoln SVUL
Life Separate Account R                      Lincoln SVUL II

Lincoln Life Flexible Premium Variable       Lincoln CVUL
Life Account S                               Lincoln CVUL Series III

Lincoln National Variable Annuity            Multi Fund Individual
Account 53                                   Variable Annuity (non-registered)


                    AMENDMENT TO FUND PARTICIPATION AGREEMENT


     This Amendment to the Fund Participation Agreement ("Agreement") dated
September 15, 1998, as amended, between Janus Aspen Series, an open-end
management investment company organized as a Delaware business trust (the
"Trust"), and The Lincoln National Life Insurance Company, an Indiana life
insurance company (the "Company") is effective as of July 15, 2001.

                                    AMENDMENT

     For good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:

     1. Schedule A of this Agreement shall be deleted and replaced with the
attached Schedule A.

     2. All other terms of the Agreement shall remain in full force and effect.

     IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Amendment as of the date and year first above written.

THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY


By: /s/ Steven M. Kluever
   --------------------------------
Name:   Steven M. Kluever
Title:  Second Vice President

JANUS ASPEN SERIES


By: /s/ Bonnie M. Howe
   --------------------------------
Name:   Bonnie M. Howe
Title:  Vice President


                                   SCHEDULE A

                   SEPARATE ACCOUNTS AND ASSOCIATED CONTRACTS



NAME OF SEPARATE ACCOUNT AND THE
DATE ESTABLISHED BY BOARD OF DIRECTORS      CONTRACTS FUNDED BY SEPARATE ACCOUNT
- --------------------------------------      ------------------------------------
                                         
Lincoln National Variable                   Multi Fund Individual
Annuity Account C                           Variable Annuity and e Annuity
(Established June 3, 1981)

Lincoln National Variable                   GVA I, II, III
Annuity Account L                           (non-New York)

Lincoln Life Variable                       Multi Fund Group
Annuity Account Q                           Variable Annuity
                                            (non-New York)

Lincoln National Life Insurance             Director Group Variable Annuity
Company Separate Account 34

Lincoln National Life Insurance             (Service Shares only)
Company Separate Account 64

Lincoln National Life Insurance             (Service Shares only)
Company Separate Account 70

Lincoln Life Flexible Premium               Lincoln VUL
Variable Life Account M                     Lincoln VUL(DB)
                                            Lincoln VUL(CV) (Service Shares only)
                                            Lincoln VUL(CV2) (Service Shares only)
                                            Money Guard (Service Shares only)

Lincoln Life Flexible Premium               Lincoln SVUL
Variable Life Separate Account R            Lincoln SVUL II

Lincoln Life Flexible Premium               Lincoln CVUL
Variable Life Account S                     Lincoln CVUL Series III

Lincoln National Variable Annuity           Multi Fund Individual
Account 53                                  Variable Annuity (non-registered)

Lincoln Life Variable Annuity               Lincoln ChoicePlus II (Service Shares only)
Account N                                   Lincoln ChoicePlus II Access (Service Shares only)
                                            Lincoln ChoicePlus II Bonus (Service Shares only)
                                            Lincoln ChoicePlus II Advance (Service Shares only)

EX-99

                          FUND PARTICIPATION AGREEMENT

       THIS AGREEMENT made as of the 18th day of September, 1998, by and between
NEUBERGER&BERMAN ADVISERS MANAGEMENT TRUST ("TRUST"), a Delaware business trust,
ADVISERS MANAGERS TRUST ("MANAGERS TRUST"), a New York common law trust,
NEUBERGER&BERMAN MANAGEMENT INCORPORATED ("N&B MANAGEMENT"), a New York
corporation, and THE LINCOLN NATIONAL LIFE INSURANCE COMPANY ("LIFE COMPANY"), a
life insurance company organized under the laws of the State of Indiana.

       WHEREAS, TRUST and MANAGERS TRUST are registered with the Securities and
Exchange Commission ("SEC") under the Investment Company Act of 1940, as amended
("40 Act") as open-end, diversified management investment companies; and

       WHEREAS, TRUST is organized as a series fund comprised of several
portfolios ("Portfolios"), the currently available of which are listed on
Appendix A hereto; and

       WHEREAS, MANAGERS TRUST is organized as a series fund, comprised of
several portfolios ("Series"), the currently operational of which are listed on
Appendix A hereto; and

       WHEREAS, each Portfolio of TRUST will invest all of its net investable
assets in a corresponding Series of MANAGERS TRUST; and

       WHEREAS, TRUST was organized to act as the funding vehicle for certain
variable life insurance and/or variable annuity contracts ("Variable Contracts")
offered by life insurance companies through separate accounts of such life
insurance companies ("Participating Insurance Companies") and also offers its
shares to certain qualified pension and retirement plans; and

       WHEREAS, TRUST has received an order from the SEC, dated May 5,1995 (File
No. 812-9164), granting Participating Insurance Companies and their separate
accounts exemptions from the provisions of Sections 9(a), 13(a), 15(a) and 15(b)
of the '40 Act, and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the
extent necessary to permit shares of the Portfolios of the TRUST to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies and certain qualified
pension and retirement plans (the "Order"); and

       WHEREAS, LIFE COMPANY has established or will establish one or more
separate accounts ("Separate Accounts") to offer Variable Contracts and is
desirous of having one or more Portfolios of the TRUST as one or more of the
underlying funding vehicles for such Variable Contracts; and

       WHEREAS, N&B MANAGEMENT is registered with the SEC as an investment
adviser under the Investment Advisers Act of 1940, as amended, and as a
broker-dealer under the Securities Exchange Act of 1934, as amended; and


       WHEREAS, N&B MANAGEMENT is the administrator and distributor of the
shares of each Portfolio of TRUST and investment manager of the corresponding
Series of MANAGERS TRUST; and

       WHEREAS, to the extent permitted by applicable insurance laws and
regulations, LIFE COMPANY intends to purchase shares of TRUST to fund the
aforementioned Variable Contracts and TRUST is authorized to sell such. shares
to LIFE COMPANY at net asset value;

       NOW, THEREFORE, in consideration of their mutual promises, LIFE COMPANY,
TRUST, MANAGERS TRUST and N&B MANAGEMENT agree as follows:

Article 1. SALE OF TRUST SHARES

       1.1    TRUST agrees to make available to the Separate Accounts of LIFE
COMPANY shares of the selected Portfolios as listed in Appendix B for investment
of proceeds from Variable Contracts allocated to the designated Separate
Accounts, such shares to be offered as provided in TRUST's Prospectus.

       1.2    TRUST agrees to sell to LIFE COMPANY those shares of the selected
Portfolios of TRUST which LIFE COMPANY orders, executing such orders on a daily
basis at the net asset value next computed after receipt by TRUST or its
designee of the order for the shares of TRUST. For purposes of this Section 1.2,
LIFE COMPANY shall be the designee of TRUST for receipt of such orders from LIFE
COMPANY and receipt by such designee shall constitute receipt by TRUST; provided
that TRUST receives notice of such order by 9:30 a.m. New York time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which TRUST calculates its net asset
value pursuant to the rules of the SEC.

       1.3    TRUST agrees to redeem for cash, on LIFE COMPANY's request, any
full or fractional shares of TRUST held by LIFE COMPANY, executing such requests
on a daily basis at the net asset value next computed after receipt by TRUST or
its designee of the request for redemption. For purposes of this Section 1.3,
LIFE COMPANY shall be the designee of TRUST for receipt of requests for
redemption from LIFE COMPANY and receipt by such designee shall constitute
receipt by TRUST; provided that TRUST receives notice of such request for
redemption by 9:30 a.m. New York time on the next following Business Day.

       1.4    TRUST shall furnish, on or before the ex-dividend date, notice to
LIFE COMPANY of any income dividends or capital gain distributions payable on
the shares of any Portfolio of TRUST. LIFE COMPANY hereby elects to receive all
such income dividends and capital gain distributions as are payable on a
Portfolio's shares in additional shares of the Portfolio. TRUST shall notify
LIFE COMPANY of the number of shares so issued as payment of such dividends and


                                        2


distributions. LIFE COMPANY reserves the right to elect to receive any such
income dividends or capital gain distributions in cash.

       1.5    TRUST shall make the net asset value per share for the selected
Portfolio(s) available to LIFE COMPANY on a daily basis as soon as reasonably
practicable after the net asset value per share is calculated but shall use its
best efforts to make such net asset value available by 6:00 p.m. New York time.
If TRUST provides LIFE COMPANY with materially incorrect share net asset value
information through no fault of LIFE COMPANY, LIFE COMPANY on behalf of the
Separate Accounts, shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct share net asset value. Any material
error in the calculation of net asset value per share, dividend or capital gain
information shall be reported promptly upon discovery by TRUST or N&B MANAGEMENT
to LIFE COMPANY.

       1.6    At the end of each Business Day, LIFE COMPANY shall use the
information described in Section 1.5 to calculate Separate Account unit values
for the day. Using these unit values, LIFE COMPANY shall process each such
Business Day's Separate Account transactions based on requests and premiums
received by it by the close of trading on the floor of the New York Stock
Exchange (currently 4:00 p.m. New York time) to determine the net dollar amount
of TRUST shares which shall be purchased or redeemed at that day's closing net
asset value per share. The net purchase or redemption orders so determined shall
be transmitted to TRUST by LIFE COMPANY by 9:30 am. New York Time on the
Business Day next following LIFE COMPANY's receipt of such requests and premiums
in accordance with the terms of Sections 1.2 and 1.3 hereof. TRUST shall provide
written confirmations of all purchase or redemption orders of TRUST shares to
LIFE COMPANY by 2:00 p.m. New York time on the Business Day that such purchase
or redemption orders are received by the TRUST in accordance with the terms of
Sections 1.2 and 1.3 hereof.

       1.7    If LIFE COMPANY's order requests the purchase of TRUST shares,
LIFE COMPANY shall pay for such purchase by wiring federal funds to TRUST or its
designated custodial account on the day the order is transmitted by LIFE
COMPANY. If LIFE COMPANY's order requests a net redemption resulting in a
payment of redemption proceeds to LIFE COMPANY, TRUST shall wire the redemption
proceeds to LIFE COMPANY on the day the order is transmitted by LIFE COMPANY,
unless DOING SO WOULD require TRUST to dispose of portfolio securities or
otherwise incur additional costs, but in such event proceeds shall be wired to
LIFE COMPANY within seven days and TRUST shall notify the person designated in
writing by LIFE COMPANY as the recipient for such notice of such delay by 3:00
p.m. New York Time the same Business Day that LIFE COMPANY transmits the
redemption order to TRUST. If LIFE COMPANY's order requests the application of
redemption proceeds from the redemption of shares to the purchase of shares of
another fund administered or distributed by N&B MANAGEMENT, TRUST shall so apply
such proceeds the same Business Day that LIFE COMPANY transmits such order to
TRUST.


                                        3


       1.8    Notwithstanding Section 1.7, TRUST reserves the right to suspend
the right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 40 Act and any rules thereunder.

       1.9    TRUST agrees that all shares of the Portfolios of TRUST will be
sold only to Participating Insurance Companies which have agreed to participate
in TRUST to fund their Separate Accounts and/or to certain qualified pension and
other retirement plans, all in accordance with the requirements of Section
817(h) of the Internal Revenue Code of 1986, as amended ("Code") and Treasury
Regulation 1.817-5. Shares of the Portfolios of TRUST will not be sold directly
to the general public.

       1.10   TRUST may refuse to sell shares of any Portfolio to any person, or
suspend or terminate the offering of the shares of any Portfolio if such action
is required by law or by regulatory authorities having jurisdiction or is, in
the sole discretion of the Board of Trustees of TRUST, acting in good faith and
in light of its fiduciary duties under federal and any applicable state laws,
deemed necessary and in the best interests of the shareholders of such
Portfolios.

Article II. REPRESENTATIONS AND WARRANTIES

       2.1    LIFE COMPANY represents and wan-ants that it is an insurance
company duly organized and validly existing under the laws of Indiana and that
it has legally and validly established each Separate Account as a segregated
asset account under such laws, and that LIFE COMPANY, the principal underwriter
for the Variable Contracts, is registered as a broker-dealer under the
Securities Exchange Act of 1934.

       2.2    LIFE COMPANY represents and wan-ants that it has registered or,
prior to any issuance or sale of the Variable Contracts, will register each
Separate Account as a unit investment trust ("UIT") in accordance with the
provisions of the '40 Act and cause each Separate Account to remain so
registered to serve as a segregated asset account for the Variable Contracts,
unless an exemption from registration is available.

       2.3    LIFE COMPANY represents and warrants that the Variable Contracts
will be registered under the Securities Act of 1933 (the `33 Act"), unless an
exemption from registration is available, prior to any issuance or sale of the
Variable Contracts and that the Variable Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state laws,
including any applicable state insurance law suitability requirement.

       2.4    LIFE COMPANY represents and warrants that the Variable Contracts
are currently and at the time of issuance will be treated as life insurance,
endowment or annuity contracts under applicable provisions of the Code, that it
will maintain such treatment and that it will notify TRUST immediately upon
having a reasonable basis for believing that the Variable Contracts have ceased
to be so treated or that they might not be so treated in the future.


                                        4


       2.5    LIFE COMPANY represents and warrants that it shall deliver such
prospectuses, statements of additional information, proxy statements and
periodic reports of the Trust as may be required to be delivered under
applicable federal or state law and interpretations of federal and state
securities regulators thereunder in connection with the offer and sale of the
Variable Contracts.

       2.6    TRUST represents and warrants that the Portfolio shares offered
and sold pursuant to this Agreement will be registered under the '33 Act and
sold in accordance with all applicable federal and state laws, and TRUST shall
be registered under the '40 Act prior to and at the time of any issuance or sale
of such shares. TRUST shall amend its registration statement under the '33 Act
and the '40 Act from time to time as required in order to effect the continuous
offering of its shares. TRUST shall register and qualify its shares for sale in
accordance with, the laws of the various states only if and to the extent deemed
advisable by TRUST.

       2.7    TRUST represents and warrants that each Portfolio will comply with
the diversification requirements set forth in Section 817(h) of the Code, and
the rules and regulations thereunder, including without limitation Treasury
Regulation 1.817-5, and will notify LIFE COMPANY immediately upon having a
reasonable basis for believing any Portfolio has ceased to comply or might not
so comply and will immediately take all reasonable steps to adequately diversify
the Portfolio to achieve compliance within the grace period afforded by
Regulation 1.8175.

       2.8    TRUST represents and warrants that each Portfolio invested in by
the Separate Account is currently qualified as a "regulated investment company"
under Subchapter M of the Code, that it will make every effort to maintain such
qualification and will notify LIFE COMPANY immediately upon having a reasonable
basis for believing it has ceased to so qualify or might not so qualify in the
future.

Article III. PROSPECTUS AND PROXY STATEMENTS

       3.1    TRUST shall prepare and be responsible for filing with the SEC and
any state regulators requiring such filing all shareholder reports, notices,
proxy materials (or similar materials such as voting instruction solicitation
materials), prospectuses and statements of additional information of TRUST.
TRUST shall bear the costs of registration and qualification of shares of the
Portfolios, preparation and filing of the documents listed in this Section 3.1
and all taxes to which an issuer is subject on the issuance and transfer of its
shares.

       3.2    TRUST will bear the printing costs (or duplicating costs with
respect to the statement of additional information) and mailing costs associated
with the delivery of the following TRUST (or individual Portfolio) documents,
and any supplements thereto, to existing Variable Contract owners of LIFE
COMPANY:


                                        5


              (i)    prospectuses and statements of additional information;

              (ii)   annual and semi-annual reports; and

              (iii)  proxy materials.

              LIFE COMPANY will submit any bills for printing, duplicating
and/or mailing costs, relating to the TRUST (or individual Portfolio) documents
described above, to TRUST for reimbursement by TRUST. LIFE COMPANY shall monitor
such costs and shall use its best efforts to control these costs. LIFE COMPANY
will provide TRUST on a semi-annual basis, or more frequently as reasonably
requested by TRUST, with a current tabulation of the number of existing Variable
Contract owners of LIFE COMPANY whose Variable Contract values are invested in
TRUST. This tabulation will be sent to TRUST in the form of a letter signed by a
duly authorized officer of LIFE COMPANY attesting to the accuracy of the
information contained in the letter. If requested by LIFE COMPANY, the TRUST
shall provide such documentation (including a final copy of the TRUST's
prospectus as set in type or in camera-ready copy) and other assistance as is
reasonably necessary in order for LIFE COMPANY to print together in one document
the current prospectus for the Variable Contracts issued by LIFE COMPANY and the
current prospectus for the TRUST. For purposes of Us Article 111, if LIFE
COMPANY so requests, TRUST will provide a separate prospectus for each TRUST
Portfolio used in a particular Separate Account, provided such prospectus is
contained in the TRUST's currently effective registration statement. Should LIFE
COMPANY wish to print any of these documents in a format different from that
provided by TRUST, LIFE COMPANY shall provide Trust with sixty (60) days' prior
written notice and LIFE COMPANY shall bear the cost associated with any format
change.

       3.3 TRUST will provide, at its expense, LIFE COMPANY with the following
TRUST (or individual Portfolio) documents, and any supplements thereto, with
respect to prospective Variable Contract owners of LIFE COMPANY:

              (i)    camera-ready copy of the current prospectus for printing by
                     the LIFE COMPANY;

              (ii)   camera-ready copies of the individual Portfolio
                     prospectuses filed as part of the TRUST's registration
                     statement;

              (iii)  a copy of the statement of additional information suitable
                     for duplication;

              (iv)   camera-ready copy of proxy material suitable for printing;
                     and

              (v)    camera-ready copy of the annual and semi-annual reports for
                     printing by the LIFE COMPANY.


                                                        6


       3.4    TRUST will provide LIFE COMPANY with at least one complete copy of
all prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to the Portfolios within 20 days
after the filing of each such document with the SEC or other regulatory
authority. LIFE COMPANY will provide TRUST with at least one complete copy of
all prospectuses, statements of additional information, annual and semi-annual
reports, proxy statements, exemptive applications and all amendments or
supplements to any of the above that relate to a Separate Account and the TRUST
within 20 days after the filing of each such document with the SEC or other
regulatory authority.

Article IV. SALES MATERIALS

       4.1    LIFE COMPANY will furnish, or will cause to be furnished, to TRUST
and N&B MANAGEMENT, each piece of sales literature or other promotional material
in which TRUST, MANAGERS TRUST or N&B MANAGEMENT is named, at least ten (10)
Business Days prior to its intended use. No such material will be used if TRUST,
MANAGERS TRUST or N&B MANAGEMENT objects to its use in writing within five (5)
Business Days after receipt of such material.

       4.2    TRUST and N&B MANAGEMENT will furnish, or will cause to be
furnished, to LIFE COMPANY, each piece of sales literature or other promotional
material in which LIFE COMPANY or its Separate Accounts are named, at least ten
(10) Business Days prior to its intended use. No such material will be used if
LIFE COMPANY objects to its use in writing within five (5) Business Days after
receipt of such material.

       4.3    TRUST and its affiliates and agents shall not give any information
or make any representations on behalf of LIFE COMPANY or concerning LIFE
COMPANY, the Separate Accounts, or the Variable Contracts issued by LIFE
COMPANY, other than the information or representations contained in a
registration statement, prospectus or offering statement for such Variable
Contracts, as such registration statement, prospectus or offering statement may
be amended or supplemented from time to time, or in reports of the Separate
Accounts or reports prepared for distribution to owners of such Variable
Contracts, or in sales literature or other promotional material approved by LIFE
COMPANY or its designee, except with the written permission of LIFE COMPANY.

       4.4    LIFE COMPANY and its affiliates and agents shall not give any
information or make any representations on behalf of TRUST or concerning TRUST
other than the information or representations contained in a registration
statement or prospectus for TRUST, as such registration statement and prospectus
may be amended or supplemented from time to time, or in sales literature or
other promotional material approved by TRUST or its designee, except with the
written permission of TRUST.


                                        7


       4.5    For purposes of this Agreement, the phrase "sales literature or
other promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed for use, in
a newspaper, magazine or other periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written communication distributed
or made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts, or
reprints or excerpts of any other advertisement, sales literature, or published
article), educational or training materials or other communications distributed
or made generally available to some or all agents or employees, registration
statements, prospectuses, statements of additional information, shareholder
reports and proxy materials, and any other material constituting sales
literature or advertising under National Association of Securities Dealers, Inc.
rules, the '40 Act or the '33 Act.

Article V. POTENTIAL CONFLICTS

       5.1    The Board of Trustees of TRUST and MANAGERS TRUST (the "Boards")
will monitor TRUST and MANAGERS TRUST, respectively, (collectively the "Funds"),
for the existence of any material irreconcilable conflict between the interests
of the Variable Contract owners of Participating Insurance Company Separate
Accounts investing in the Funds. A material irreconcilable conflict may arise
for a variety of reasons, including: (a) state insurance regulatory authority
action; (b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter ruling, or
any similar action by insurance, tax, or securities regulatory authorities; (c)
an administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of the Funds are being managed; (e) a difference
in voting instructions given by variable annuity and variable life insurance
contract owners or by contract owners of different Participating Insurance
Companies; or (f) a decision by a Participating Insurance Company to disregard
voting instructions of Variable Contract owners.

       5.2    LIFE COMPANY will report any potential or existing conflicts to
the Boards. LIFE COMPANY will provide each appropriate Board with all
information reasonably necessary for it to consider any issues raised in
carrying out its responsibilities under the Conditions set forth in the notice
issued by the SEC for the Funds on April 12, 1995 (the "Notice") (Investment
Company Act Release No. 21003), which LIFE COMPANY has reviewed. LIFE COMPANY
will inform each appropriate Board whenever Variable Contract owner voting
instructions are disregarded by LIFE COMPANY. These responsibilities will be
carried out with a view only to the interests of the Variable Contract owners.

       5.3    If a majority of the Board of a Fund or a majority of its
disinterested trustees or directors, determines that a material irreconcilable
conflict exists, affecting the LIFE COMPANY, LIFE COMPANY, at its expense and to
the extent reasonably practicable (as determined by a


                                        8


majority of disinterested trustees or directors), will take any steps necessary
to remedy or eliminate the material irreconcilable conflict consistent with the
terms and conditions set forth in the Notice.

       If a material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard Variable Contract owner voting instructions, and that
decision represents a minority position or would preclude a majority vote, LIFE
COMPANY may be required, at the election of the relevant Fund, to withdraw its
Separate Account's investment in such Fund, and no charge or penalty will be
imposed as a result of such withdrawal. The responsibility to take such remedial
action shall be carried out with a view only to the interests of the Variable
Contract owners.

       For the purposes of this Section 5.3, a majority of the disinterested
members of the applicable Board shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the relevant Fund or N&B MANAGEMENT (or any other investment adviser of the
Funds) be required to establish a new funding medium for any Variable Contract.

       5.4    Any Board's determination of the existence of an irreconcilable
material conflict and its implications shall be made known promptly and in
writing to LIFE COMPANY.

       5.5    No less than annually, LIFE COMPANY shall submit to the Boards
such reports, materials or data as such Boards may reasonably request so that
the Boards may fully carry out the obligations imposed upon them by these
Conditions. Such reports, materials, and data shall be submitted more frequently
if deemed appropriate by the applicable Boards, provided that such request shall
not be unreasonable.

Article VI. VOTING

       6.1    LIFE COMPANY will provide pass-through voting privileges to all
Variable Contract owners participating in registered Separate Accounts so long
as the SEC continues to interpret the '40 Act as requiring pass-through voting
privileges for such Variable Contract owners. This condition will apply to
UIT-Separate Accounts investing in TRUST and to managed separate accounts
investing in MANAGERS TRUST to the extent a vote is required with respect to
matters relating to MANAGERS TRUST. Accordingly, LIFE COMPANY, where applicable,
will vote shares of a Fund held in its registered Separate Accounts in a manner
consistent with voting instructions timely received from its Variable Contract
owners. LIFE COMPANY will be responsible for assuring that each of its
registered Separate Accounts that participates in any Fund calculates voting
privileges in a manner consistent with other participants as defined in the
Conditions set forth in the Notice ("Participants"). The obligation to calculate
voting privileges in a manner consistent with all other registered Separate
Accounts investing in a Fund will be a contractual obligation of all
Participants under the agreements governing participation in the Funds. Each
Participant will vote shares held in a given registered Separate Account for
which it has not


                                        9


received timely voting instructions, as well as shares it owns, in the same
proportion as its votes those shares in that Account for which it has received
voting instructions.

       6.2    If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or
Rule 6e-3 is adopted, to provide exemptive relief from any provision of the '40
Act or the rules thereunder with respect to mixed and shared funding on terms
and conditions materially different from any exemptions granted in the Order,
then TRUST, MANAGERS TRUST and/or the Participants, as appropriate, shall take
such steps as may be necessary to comply with Rule 6e-2 and Rule 6e-3(T), as
amended, and Rule 6e-3, as adopted, to the extent such Rules are applicable.

Article VII. INDEMNIFICATION

       7.1    Indemnification by LIFE COMPANY. LIFE COMPANY agrees to indemnify
and hold harmless TRUST, MANAGERS TRUST, N&B MANAGEMENT and each of their
Trustees, directors, officers, employees and agents and each person, if any, who
controls TRUST or MANAGERS TRUST or N&B MANAGEMENT within the meaning of Section
15 of the '33 Act (collectively, the "Indemnified Parties" for purposes of this
Article VII) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of LIFE COMPANY, which
consent shall not be unreasonably withheld) or litigation (including reasonable
legal and other expenses), to which the Indemnified Parties may become subject
under any statute, regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the offer, sale or acquisition of TRUST's shares
or the Variable Contracts and:

              (a)    arise out of or are based upon any untrue statements or
                     alleged untruestatements of any material fact contained in
                     the Registration Statement orprospectus for the Variable
                     Contracts or contained in the Variable Contracts (or any
                     amendment or supplement to any of the foregoing), or arise
                     out of or are based upon the omission or the alleged
                     omission to state therein a material fact required to be
                     stated therein or necessary to make the statements therein
                     not misleading, provided that this agreement to indemnify
                     shall not apply as to any Indemnified Party if such
                     statement or omission or such alleged statement or omission
                     was made in reliance upon and in conformity with
                     information furnished to LIFE COMPANY by or on behalf of
                     TRUST for use in the registration statement or prospectus
                     for the Variable Contracts or in the Variable Contracts or
                     sales literature (or any amendment or supplement to any of
                     the foregoing) or otherwise for use in connection with the
                     sale of the Variable Contracts or TRUST shares; or

              (b)    arise out of or as a result of untrue statements or
                     representations (other than statements or representations
                     contained in the registration statement, Sprospectus or
                     sales literature. of TRUST not supplied by LIFE COMPANY,


                                       10


                     or persons under its control) or wilful misfeasance, bad
                     faith or negligence of LIFE COMPANY or persons under its
                     control, with respect to the sale or distribution of the
                     Variable Contracts or TRUST shares; or

              (c)    arise out of any untrue statement or alleged untrue
                     statement of a material fact contained in a registration
                     statement, prospectus, or sales literature of TRUST or any
                     amendment thereof or supplement thereto or the omission or
                     alleged omission to state therein a material fact required
                     to be stated therein or necessary to make the statements
                     therein not misleading if such statement or omission or
                     such alleged statement or omission was made in reliance
                     upon and in conformity with information furnished to TRUST
                     for inclusion therein by or on behalf of LIFE COMPANY; or

              (d)    arise as a result of any failure by LIFE COMPANY to
                     substantially provide the services and furnish the
                     materials under the terms of this Agreement; or

              (e)    arise out of or result from any material breach of any
                     representation and/or warranty made by LIFE COMPANY in this
                     Agreement or arise out of or result from any other material
                     breach of this Agreement by LIFE COMPANY.

       7.2    LIFE COMPANY shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
TRUST, whichever is applicable.

       7.3    LIFE COMPANY shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified LIFE COMPANY in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify LIFE COMPANY of any
such claim shall not relieve LIFE COMPANY from any liability which it may have
to the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, LIFE COMPANY shall be entitled to participate at
its own expense in the defense of such action. LIFE COMPANY also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from LIFE COMPANY to such party of
LIFE COMPANY's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
LIFE COMPANY will not be liable to such party under this Agreement


                                       11


for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.

       7.4    INDEMNIFICATION BY N&B MANAGEMENT. N&B MANAGEMENT agrees to
indemnify and hold harmless LIFE COMPANY and each of its directors, officers,
employees, and agents and each person, if any, who controls LIFE COMPANY within
the meaning of Section 15 of the '33 Act (collectively, the "Indemnified
Parties" for the purposes of this Article VII) against any and all losses,
claims, damages, liabilities (including amounts paid in settlement with the
written consent of N&B MANAGEMENT which consent shall not be unreasonably
withheld) or litigation (including reasonable legal and other expenses) to which
the Indemnified Parties may become subject under any statute, or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the
offer, sale or acquisition of TRUST's shares or the Variable Contracts and:

              (a)    arise out of or are based upon any untrue statement or
                     alleged untrue statement of any material fact contained in
                     the registration statement or prospectus or sales
                     literature of TRUST (or any amendment or supplement to any
                     of the foregoing), or arise out of or are based upon the
                     omission or the alleged omission to state therein a
                     material fact required to be stated therein or necessary to
                     make the statements therein not misleading, provided that
                     this agreement to indemnify shall not apply as to any
                     Indemnified Party if such statement or omission or such
                     alleged statement or omission was made in reliance upon and
                     in* conformity with information famished to N&B MANAGEMENT
                     or TRUST by or on behalf of LIFE COMPANY for use in the
                     registration statement or prospectus for TRUST or in sales
                     literature (or any amendment or supplement to any of the
                     foregoing) or otherwise for use in connection with the sale
                     of the Variable Contracts or TRUST shares; or

              (b)    arise out of or as a result of untrue statements or
                     representations (other than statements or representations
                     contained in the registration statement, prospectus or
                     sales literature for the Variable Contracts not supplied by
                     N&B MANAGEMENT or persons under its control) or wilful
                     misfeasance, bad faith or negligence of TRUST or N&B
                     MANAGEMENT or persons under their control, with respect to
                     the sale or distribution of the Variable Contracts or TRUST
                     shares; or

              (c)    arise out of any untrue statement or alleged untrue
                     statement of a material fact contained in a registration
                     statement, prospectus, or sales literature covering the
                     Variable Contracts, or any amendment thereof or supplement
                     thereto, or the omission or alleged omission to state
                     therein a material fact required to be stated therein or
                     necessary to make the statements therein not


                                       12


                     misleading, if such statement or omission or such alleged
                     statement or omission was made in reliance upon and in
                     conformity with information furnished to LIFE COMPANY for
                     inclusion therein by or on behalf of TRUST; or

              (d)    arise as a result of (i) a failure by TRUST to
                     substantially provide theservices and furnish the materials
                     under the terms of this Agreement; or (ii) a failure by a
                     Portfolio(s) invested in by the Separate Account to comply
                     with the diversification requirements of Section 817(h) of
                     the Code and the regulations thereunder; or (iii) a failure
                     by a Portfolio(s) invested in by the Separate Account to
                     qualify as a "regulated investment company" under
                     Subchapter M of the Code; or

              (e)    arise out of or result from any material breach of any
                     representation and/or warranty made by N&B MANAGEMENT in
                     this Agreement or arise out of or result from any other
                     material breach of this Agreement by N&B MANAGEMENT.

       7.5    N&B MANAGEMENT shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
LIFE COMPANY.

       7.6    N&B MANAGEMENT shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified N&B MANAGEMENT in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify N&B MANAGEMENT of
any such claim shall not relieve N&B MANAGEMENT from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, N&B MANAGEMENT shall be entitled to participate
at its own expense in the defense thereof. N&B MANAGEMENT also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from N&B MANAGEMENT to such party of N&B MANAGEMENT's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and N&B MANAGEMENT
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.


                                       13


Article VIII. TERM; TERMINATION

       8.1    This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions herein.

       8.2    This Agreement shall terminate in accordance with the following
provisions:

              (a)    At the option of LIFE COMPANY or TRUST at any time from the
                     date hereof upon 90 days' notice, unless a shorter time is
                     agreed to by the parties;

              (b)    At the option of LIFE COMPANY, if TRUST shares are not
                     reasonably available to meet the requirements of the
                     Variable Contracts as determined by LIFE COMPANY. Prompt
                     notice of election to terminate pursuant to this Section
                     8.2(b) shall be furnished by LIFE COMPANY, said termination
                     to be effective ten days after receipt of notice unless
                     TRUST makes available a sufficient number of shares to
                     reasonably meet the requirements of the Variable Contracts
                     within said ten-day period;

              (c)    At the option of LIFE COMPANY, upon the institution of
                     formal proceedings against TRUST or N&B MANAGEMENT by the
                     SEC, or any other regulatory body, the expected or
                     anticipated ruling, judgment or outcome of which would, in
                     LIFE COMPANY's reasonable judgment, materially impair
                     TRUST's ability to meet and perform TRUST's obligations and
                     duties hereunder or N&B MANAGEMENT's ability to manage any
                     Portfolio. Prompt notice of such election to terminate
                     shall be furnished by LIFE COMPANY with said termination to
                     be effective upon receipt of notice;

              (d)    At the option of TRUST, upon the institution of formal
                     proceedings against LIFE COMPANY by the SEC, the National
                     Association of Securities Dealers, Inc., or any other
                     regulatory body, the expected or anticipated ruling,
                     judgment or outcome of which would, in TRUST's reasonable
                     judgment, materially impair LIFE COMPANY's ability to meet
                     and perform its obligations and duties hereunder. Prompt
                     notice of election to terminate shall be furnished by TRUST
                     with said termination to be effective upon receipt of
                     notice;

              (e)    In the event TRUST's shares are not registered, issued or
                     sold in accordance with applicable state or federal law, or
                     such law precludes the use of such shares as the underlying
                     investment medium of Variable Contracts issued or to be
                     issued by LIFE COMPANY. Termination shall be effective upon
                     such occurrence without notice;


                                       14


              (f)    At the option of TRUST if the Variable Contracts cease to
                     qualify as annuity contracts or life insurance contracts,
                     as applicable, under the Code, or if TRUST reasonably
                     believes that the Variable Contracts may fail to so
                     qualify. Termination shall be effective upon receipt of
                     notice by LIFE COMPANY;

              (g)    At the option of LIFE COMPANY, upon TRUSTs breach of any
                     material provision of this Agreement which breach has not
                     been cured to the satisfaction of LIFE COMPANY within ten
                     days after written notice of such breach is delivered to
                     TRUST;

              (h)    At the option of TRUST, upon LIFE COMPANY's breach of any
                     material provision of this Agreement which breach has not
                     been cured to the satisfaction of TRUST within ten days
                     after written notice of such breach is delivered to LIFE
                     COMPANY;

              (i)    At the option of TRUST, if the Variable Contracts are not
                     registered (unless an exemption from registration is
                     available), issued or sold in accordance with applicable
                     federal and/or state law. TERMINATION SHALL be effective
                     immediately upon such occurrence without notice;

              (j)    At the option of LIFE COMPANY, with respect to a Portfolio,
                     upon the vote of Variable Contract Owners and written
                     approval of LIFE COMPANY to substitute shares of another
                     investment company for the shares of any Portfolio in
                     accordance with the terms of the Variable Contracts,
                     provided LIFE COMPANY has given TRUST forty-five (45) days'
                     notice of the date of such substitution;

              (k)    In the event this Agreement is assigned without the prior
                     written consent of LIFE COMPANY, TRUST, MANAGERS TRUST and
                     N&B MANAGEMENT, termination shall be effective immediately
                     upon such occurrence without notice;

              (1)    At the option of LIFE COMPANY if a Portfolio fails to
                     satisfy the diversification requirements set forth in
                     Section 2.7 hereof and does not cure such failure within
                     the grace period afforded by Regulation 1.817-5.
                     Termination shall be effective immediately upon notice.

8.3    Notwithstanding any termination of this Agreement pursuant to Section 8.2
hereof, TRUST will continue to make available additional TRUST shares (limited
to shares of the Portfolios designated in Appendix B), as provided below, at the
option of LIFE COMPANY for so


                                       15


long as LIFE COMPANY desires pursuant to the terms and conditions of this
Agreement, for all Variable Contracts in effect on the effective date of
termination of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, without limitation, if LIFE COMPANY so elects for TRUST to make
additional TRUST shares available, the owners of the Existing Contracts or LIFE
COMPANY, whichever shall have legal authority to do so, shall be permitted to
reallocate investments in TRUST, redeem investments in TRUST and/or invest in
TRUST upon the payment of additional premiums under the Existing Contracts. In
the event of a termination of this Agreement pursuant to Section 8.2 hereof,
LIFE COMPANY, as promptly as is practicable under the circumstances, shall
notify TRUST and N&B MANAGEMENT whether LIFE COMPANY elects for TRUST to
continue to make TRUST shares available after such termination. If TRUST shares
continue to be made available after such termination, the provisions of this
Agreement shall remain in effect. The parties agree that this Section 8.3 shall
not apply to any terminations of this Agreement by the TRUST, MANAGERS TRUST or
N&B MANAGEMENT pursuant to Sections 8.2(f),(h),(i) or (k) hereof.

       8.4    Except as necessary to implement Variable Contract owner initiated
transactions, or as required by state insurance laws or regulations, LIFE
COMPANY shall not redeem the shares attributable to the Variable Contracts (as
opposed to the shares attributable to LIFE COMPANY's assets held in the Separate
Accounts), and LIFE COMPANY shall not prevent Variable Contract owners from
allocating payments to a Portfolio that was otherwise available under the
Variable Contracts, until thirty (30) days after the LIFE COMPANY shall have
notified TRUST of its intention to do so.

Article IX. NOTICES

       Any notice hereunder shall be given by registered or certified mail
return receipt requested to the other party at the address of such party set
forth below or at such other address as such party may from time to time specify
in writing to the other party.

                     If to TRUST, MANAGERS TRUST or N&B MANAGEMENT:

                            Neuberger&Berman Management Incorporated
                            605 Third Avenue
                            New York, NY 10 15 8-0006
                            Attention: Ellen Metzger, General Counsel

                     If to LIFE COMPANY:
                            The Lincoln National Life Insurance Company
                            1300 S. Clinton Street
                            Fort Wayne, IN 46802
                            Attention: Kelly D. Clevenger


                                       16


       Notice shall be deemed given on the date of receipt by the addressee as
evidenced by the return receipt.

Article X. MISCELLANEOUS

       10.1   The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       10.2   This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.

       10.3   If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       10.4   This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York. It
shall also be subject to the provisions of the federal securities laws and the
rules and regulations thereunder and to any orders of the SEC granting exemptive
relief therefrom and the conditions of such orders. However, the laws of the
State of New York will not apply to the terms or conditions of any type of
insurance contracts described herein.

       10.5   The parties agree that the assets and liabilities of each Series
are separate and distinct from the assets and liabilities of each other Series.
No Series shall be liable or shall be charged for any debt, obligation or
liability of any other Series. No Trustee, officer or agent shall be personally
liable for such debt, obligation or liability of any Series or Portfolio and no
Portfolio or other investor, other than the Portfolio or other investors
investing in the Series which incurs a debt, obligation or liability, shall be
liable therefor.

       10.6   Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
National Association of Securities Dealers, Inc. and state insurance regulators)
and shall permit such authorities reasonable access to its books and records in
connection with any investigation or inquiry relating to this Agreement or the
transactions contemplated hereby.

       10.7   The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.


                                       17


       10.8   No provision of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by TRUST,
MANAGERS TRUST, N&B MANAGEMENT and the LIFE COMPANY.

       IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Fund Participation Agreement as of the date and year
first above written.

                                          NEUBERGER&BERMAN
                                          ADVISERS MANAGEMENT TRUST

                                          By: /s/ Stanley Egener
                                          Name: Stanley Egener
                                          Title: President

                                          ADVISERS MANAGERS TRUST

                                          By: /s/ Stanley Egener
                                          Name: Stanley Egener
                                          Title: President

                                          NEUBERGER&BERMAN
                                          MANAGEMENT INCORPORATED

                                          By: /s/ Daniel J. Sullivan
                                          Name: Daniel J. Sullivan
                                          Title: Senior Vice President

                                          THE LINCOLN NATIONAL LIFE INSURANCE
                                          COMPANY

                                          By: /s/ Kelly D. Clevenger
                                          Name: Kelly D. Clevenger
                                          Title: Vice President


                                       18


                                                                      APPENDIX A



Neuberger&Berman Advisers                            Corresponding Series of
Management Trust and its Series (Portfolios          Advisers Managers Trust (Series)
- -------------------------------------------          --------------------------------
                                                  
Balanced Portfolio                                   AMT Balanced Investments

Growth Portfolio                                     AMT Growth Investments

Guardian Portfolio                                   AMT Guardian Investments

International Portfolio                              AMT International Investments

Limited Maturity Bond Portfolio                      AMT Limited Maturity Bond Investments

Liquid Asset Portfolio                               AMT Liquid Asset Investments

Mid-Cap Growth Portfolio                             AMT Mid-Cap Growth Investments

Partners Portfolio                                   AMT Partners Investments

Socially Responsive Portfolio                        AMT Socially Responsive Investments



                                       19


                                   APPENDIX B



Separate Accounts                               Selected Portfolios
- -----------------                               -------------------
                                             
Lincoln National Variable Annuity               Partners
Account C                                       Mid-Cap Growth

Lincoln National Variable Annuity               Partners
Account L
                                                Partners
Lincoln Life Variable Annuity Account Q         Mid-Cap Growth

Lincoln National Variable Annuity               Mid-Cap Growth
Account 37
                                                Partners
Lincoln National Variable Annuity
Account 3 8



                                       20


                                AMENDMENT TO THE
                          FUND PARTICIPATION AGREEMENT

         This AMENDMENT, dated as of May 1, 2000, between THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY, a life insurance company organized under the laws of the
State of Indiana ("LIFE COMPANY"), and NEUBERGER BERMAN ADVISERS MANAGEMENT
TRUST, a Delaware business trust ("TRUST"), ADVISERS MANAGERS TRUST, a New York
common law trust ("MANAGERS TRUST"), and NEUBERGER BERMAN MANAGEMENT INC., a New
York corporation ("NB MANAGEMENT"), is made to the Fund Participation Agreement,
dated as of September 18, 1998, among LIFE COMPANY, TRUST, MANAGERS TRUST and NB
MANAGEMENT (the "Agreement"). Terms defined in the Agreement are used herein as
therein defined.

         WHEREAS, the parties wish to amend Appendix B to the Agreement to add
new Separate Accounts.

         NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the parties agree as follows:

1.   Appendix B of the Agreement is hereby deleted and replaced with new
Appendix B attached hereto.

2.   Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect.

3.   This Amendment may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same Amendment.

NEUBERGER BERMAN                             NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST                    MANAGEMENT INC.

By: /s/ Peter E. Sundman                     By: /s/ Daniel J. Sullivan
   -------------------------------              -------------------------------
Name:  Peter E. Sundman                      Name:  Daniel J. Sullivan
Title: President                             Title: Senior Vice President



1


ADVISERS MANAGERS TRUST                      THE LINCOLN NATIONAL
                                             LIFE INSURANCE
                                             COMPANY

By: /s/ Peter E. Sundman                     By: /s/ Steven M. Kluever
   -------------------------------              -------------------------------
Name:  Peter E. Sundman                      Name:  Steven M. Kluever
Title: President                             Title: Second Vice President







2


                                   APPENDIX B



Separate Accounts                                    Selected Portfolios
- -----------------                                    -------------------

Lincoln National Variable Annuity                    Partners
Account C                                            Mid-Cap Growth

Lincoln National Variable Annuity                    Partners
Account L                                            Mid-Cap Growth

Lincoln Life Variable Annuity                        Partners
Account Q                                            Mid-Cap Growth

Lincoln National Variable Annuity                    Mid-Cap Growth
Account 37

Lincoln National Variable Annuity                    Partners
Account 38

Lincoln National Variable Annuity                    Partners
Account 53                                           Mid-Cap Growth

Lincoln National Flexible                            Partners
Premium Life Account M                               Mid-Cap Growth

Lincoln National FlexiblePremium                     Partners
Variable Life Account R                              Mid-Cap Growth

Lincoln National FlexiblePremium                     Partners
Variable Life Account S                              Mid-Cap Growth



3



                    ADDENDUM TO FUND PARTICIPATION AGREEMENT

     This ADDENDUM dated as of May 1, 2000 amends the Fund Participation
Agreement among The Lincoln National Life Insurance Company ("Company"),
Neuberger Berman Advisers Management Trust ("Trust"), Advisers Managers Trust
("Managers Trust"), and Neuberger Berman Management Inc. ("NBMI").

     WHEREAS, the Company, Trust, Managers Trust, and NBMI are parties to a
Fund Participation Agreement ("Agreement") pursuant to which separate accounts
of the Company invest proceeds from variable annuity and/or variable life
insurance policies in the one or more portfolios of the Trust ("Portfolios");
and

     WHEREAS, the Trust, through the Portfolios, currently invests all of its
net investable assets in corresponding series of Managers Trust in a
"master-feeder" structure; and

     WHEREAS, the Boards of Trustees of the Trust and Managers Trust have
approved a transaction to eliminate the current master-feeder structure in
which Trust will receive the portfolio securities held by Managers Trust in
redemption of the interests of Managers Trust held by the Trust (this
transaction is referred to as the "In-Kind Redemption"); and

     WHEREAS, the In-Kind Redemption is currently scheduled to be effected on
or about May 1, 2000 (the date on which the In-Kind Redemption is effected is
referred to as the "Effective Date"); and

     WHEREAS, upon completion of the In-Kind Redemption, the Trust will hold
and invest directly in its own portfolio of securities and Managers Trust will
cease investment operations and be dissolved; and

     WHEREAS, the parties wish to amend the Agreement to reflect the In-Kind
Redemption and the elimination of the master-feeder structure.

     NOW THEREFORE, effective on the Effective Date, the Trust assumes all of
    the rights, obligations, and liabilities of Managers Trust under the
Agreement.

     The undersigned hereby consents to the assignment described in the
preceding paragraph.

THE LINCOLN NATIONAL LIFE                   ADVISERS MANAGERS TRUST
INSURANCE COMPANY
                                            By: /s/ Daniel Sullivan
By: /s/ Steven M. Kluever                   Name:  Daniel Sullivan
Name:  Steven M. Kluever                    Title: Vice President
Title: Second Vice President




NEUBERGER BERMAN ADVISERS                   NEUBERGER BERMAN
MANAGEMENT TRUST                            MANAGEMENT

By: /s/ Daniel Sullivan                     By: /s/ Daniel Sullivan
Name:  Daniel Sullivan                      Name:  Daniel Sullivan
Title: Vice President                       Title: Vice President



                               AMENDMENT #3 TO THE
                          FUND PARTICIPATION AGREEMENT

                  This AMENDMENT, dated as of July 15, 2001, among THE LINCOLN
NATIONAL LIFE INSURANCE COMPANY, a life insurance company organized under the
laws of the State of Indiana ("LIFE COMPANY"), and NEUBERGER BERMAN ADVISERS
MANAGEMENT TRUST, a Delaware business trust ("TRUST") and NEUBERGER BERMAN
MANAGEMENT INC., a New York corporation ("NB MANAGEMENT"), is made to the Fund
Participation Agreement, dated as of September 18, 1998, as amended, among LIFE
COMPANY, TRUST and NB MANAGEMENT (the "Agreement"). Terms defined in the
Agreement are used herein as therein defined.

                  WHEREAS, the parties wish to amend Appendix B to the Agreement
to add new Separate Accounts.

                  NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:

1.   Appendix B of the Agreement is hereby deleted and replaced with new
Appendix B attached hereto.

2.   Except as modified hereby, all other terms and conditions of the Agreement
shall remain in full force and effect.

3.   This Amendment may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same Amendment.

NEUBERGER BERMAN                     NEUBERGER BERMAN
ADVISERS MANAGEMENT TRUST            MANAGEMENT INC.

By: /s/Peter E. Sundman              By: /s/Robert Conti
   --------------------                  ------------------
Name: Peter E. Sundman               Name: Robert Conti
Title:   President                   Title:   Senior Vice President

                                     THE LINCOLN NATIONAL
                                     LIFE INSURANCE
                                     COMPANY

                                     By: /s/Steven M. Kluever
                                        ---------------------
                                     Name:  Steven M. Kluever
                                     Title:    Second Vice President



                                   APPENDIX B



        SEPARATE ACCOUNTS                                                   SELECTED PORTFOLIOS

- ------------------------------------------------------------------------------------------------------------
                                                                  
                                                                     Partners
Lincoln National Variable Annuity Account C                          Mid-Cap Growth
                                                                     Regency

Lincoln National Variable Annuity Account L                          Partners
                                                                     Mid-Cap Growth
                                                                     Regency

Lincoln Life Variable Annuity Account Q                              Partners
                                                                     Mid-Cap Growth
                                                                     Regency

Lincoln National Variable Annuity Account 37                         Mid-Cap Growth

Lincoln National Variable Annuity Account 38                         Partners
                                                                     Regency

Lincoln National Variable Annuity Account 53                         Partners
                                                                     Mid-Cap Growth

Lincoln National FlexiblePremium Life Account M                      Partners
                                                                     Mid-Cap Growth
                                                                     Regency

Lincoln National FlexiblePremium Variable Life Account R             Partners
                                                                     Mid-Cap Growth
                                                                     Regency

Lincoln National FlexiblePremium Variable Life Account S             Partners
                                                                     Mid-Cap Growth
                                                                     Regency

Lincoln Life Variable Annuity Account  N                             Mid-Cap Growth
                                                                     Regency

Lincoln Life Variable Annuity Account W                              Balanced
- ------------------------------------------------------------------------------------------------------------



                                       2

EX-99

                             PARTICIPATION AGREEMENT
                                      AMONG
                     THE LINCOLN NATIONAL LIFE INSURANCE CO.
                                       AND
                            BARON CAPITAL FUNDS TRUST
                                       AND
                               BARON CAPITAL, INC.

              THIS AGREEMENT, made and entered into this 28' day of August, 1998
by and among Baron Capital Funds Trust (and all series thereof) a business trust
organized under the laws of the State of Delaware (the "Fund'), and THE LINCOLN
NATIONAL LIFE INSURANCE CO., an Indiana insurance corporation (the "Company"),
on its own behalf and on behalf of each separate account of the Company named in
Schedule I to this Agreement as in effect at the time this Agreement is executed
and such other separate accounts that may be added to Schedule 1 from time to
time in accordance with the provisions of Article XI of this Agreement (each
such account referred to as the "Account"), and Baron Capital, Inc. (the
"Distributor").

              WHEREAS, the Fund is engaged in business as an open-end management
investment company and has a class of stock (the "Fund Insurance Shares") that
has been established for the purpose of serving as the investment vehicle for
separate accounts established for variable life insurance policies and variable
annuity contracts (collectively referred to as "Variable Insurance Products,"
the owners of such products being referred to as "Product owners") to be offered
by insurance companies which have entered into participation agreements with the
Fund ("Participating Insurance Companies"); and

              WHEREAS, the Fund filed with the Securities and Exchange
Commission (the "SEC") and the SEC has declared effective a registration
statement (referred to herein as the "Fund Registration Statement" and the
prospectus contained therein, or filed pursuant to Rule 497 under the 1933 Act,
referred to herein as the "Fund Prospectus") on Form N-1A to register itself as
an open-end management investment company (File No. 33-40839) under the
Investment Company Act of 1940, as amended (the "1940 Act"), and the Fund
Insurance Shares (File No. 811-85 05) under the Securities Act of 1933, as
amended (the "1933 Act"); and

              WHEREAS, the Company has filed a registration statement with the
SEC to register under the 1933 Act (unless exempt therefrom) certain variable
annuity contracts described in Schedule 2 to this Agreement as in effect at the
time this Agreement is executed and such other variable annuity contracts and
variable life insurance policies which may be added to Schedule 2 from time to
time in accordance with Article XI of this Agreement (such policies and
contracts shall be referred to herein collectively as the "Contracts," each such
registration statement for a class or classes of contracts listed on Schedule 2
being referred to as the "Contracts Registration Statement" and the prospectus
for each such class or classes being referred to herein as the "Contracts
Prospectus," and the owners of the such contracts, as distinguished from all
Product Owners, being referred to as "Contract Owners"); and



              WHEREAS, each Account, a validly existing separate account, duly
authorized by resolution of the Board of Directors of the Company on the date
set forth on Schedule 1, sets aside and invests assets attributable to the
Contracts; and

              WHEREAS, the Company has registered or will have registered each
Account with the SEC as a unit investment trust under the 1940 Act before any
Contracts are issued by that Account; and

              WHEREAS, the Distributor is registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
is a member in good standing of the National Association of Securities Dealers,
Inc. (the "NASD"); and

              WHEREAS, the Distributor and the Fund have entered into an
agreement (the "Fund Distribution Agreement") pursuant to which the Distributor
will distribute the Fund Insurance Shares; and

              WHEREAS, BAMCO, Inc. (the "Investment Manager") is registered as
an investment adviser under the 1940 Act and any applicable state securities
laws and serves as an investment manager to the Fund pursuant to an agreement;
and

              WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase Fund Insurance Shares on behalf of
each Account to fund its Contracts and the Distributor is authorized to sell
such Fund Insurance Shares to unit investment trusts such as the Accounts at net
asset value;

              NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund and the Distributor agree as follows:

ARTICLE 1. SALE OF FUND SHARES

              1.1. The Distributor agrees to sell to the Company those Fund
Insurance Shares, which the Company orders on behalf of each Account, executing
such orders on a daily basis in accordance with Section 1.4 of this Agreement.


                                        2


       1.2. The Fund agrees to make Fund Insurance Shares available for purchase
by the Company on behalf of each Account at the then applicable net asset value
per share on Business Days as defined in Section 1.4 of this Agreement, and the
Fund shall use its best efforts to calculate and deliver such net asset value by
6:00 p.m., E.S.T., on each such Business Day. Notwithstanding any other
provision in this Agreement to the contrary, the Board of Directors of the Fund
(the "Fund Board") may suspend or terminate the offering of shares, if such
action is required by law or by regulatory authorities having jurisdiction or
if, in the sole discretion of the Fund Board acting in good faith and in light
of its fiduciary duties under Federal and any applicable state laws, suspension
or termination is necessary and in the best interests of the shareholders (it
being understood that "shareholders" for this purpose shall mean Product
owners).

       1.3. The Fund agrees to redeem, at the Company's request, any full' or
fractional Fund Insurance Shares held by each Account or the Company, executing
such requests at the net asset value on a daily basis (Company will expect same
day redemption wires unless unusual circumstances evolve which cause the Fund to
have to redeem securities) in accordance with Section 1.4 of this Agreement, the
applicable provisions of the 1940 Act and the then currently effective Fund
Prospectus. Notwithstanding the foregoing, the Fund may delay redemption of Fund
Insurance Shares of any series to the extent permitted by the 1940 Act, any
rules, regulations or orders thereunder, or the then currently effective Fund
Prospectus.

       1.4.   (a) For purposes of Sections 1.1, 1.2 and 1.3, the Company shall
              be the agent of the Fund for the limited purpose of receiving
              redemption and purchase requests from each Account (but not from
              the general account of the Company), and receipt on any Business
              Day by the Company as such limited agent of the Fund prior to the
              time prescribed in the current Fund Prospectus (which as of the
              date of execution of this Agreement is 4 p.m., E.S.T.) shall
              constitute receipt by the Fund on that same Business Day, provided
              that the Fund, or its designee, receives notice of such redemption
              or purchase request by 11:00 a.m., E.S.T. on the next following
              Business Day. For purposes of this Agreement, "Business Day" shall
              mean any day on which the New York Stock exchange is open for
              trading.

              (b) The Company shall pay for the shares on the same day that it
              places an order with the Fund to purchase those Fund Insurance
              Shares for an Account. Payment for Fund Insurance Shares will be
              made by each Account or the Company in Federal Funds transmitted
              to the Fund by wire to be received by 11:00 a.m., E.S.T. on the
              day the Fund is properly notified of the purchase order for
              shares. The Fund will confirm receipt of each trade and these
              confirmations will be received by the Company via Fax or Email by
              1:00 p.m. E.S.T. If Federal Funds are not received on time, such
              funds will be invested, and shares purchased thereby will be
              issued, as soon as practicable.


                                        3


              (c) Payment for shares redeemed by each Account or the Company
              will be made in Federal Funds transmitted to the Company by wire
              on the same day the Fund is notified of the redemption order of
              shares, except that the Fund reserves the right to delay payment
              of redemption proceeds, but in no event may such payment be
              delayed longer than the period permitted under Section 22(e) of
              the 1940 Act. Neither the Fund nor the Distributor shall bear any
              responsibility whatsoever for the proper disbursement or crediting
              of redemption proceeds if securities must be redeemed; the Company
              alone shall be responsible for such action.

       1.5. Issuance and transfer of Fund Insurance Shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Purchase and redemption orders for Fund Insurance Shares will be recorded in an
appropriate ledger for each Account or the appropriate subaccount of each
Account.

       1.6. The Fund shall furnish notice as soon as reasonably practicable to
the Company of any income dividends or capital gain distributions payable on any
shares. The Company, on its behalf and on behalf of each Account, hereby elects
to receive all such dividends and distributions as are payable on any Fund
Insurance Shares in the form of additional shares. The Company reserves the
right, on its behalf and on behalf of each Account, to revoke this election and
to receive all such dividends in cash. The Fund shall notify the Company of the
number of Fund Insurance Shares so issued as payment of such dividends and
distributions.

       1.7. The Fund shall use its best efforts to make the net asset value per
share available to the Company by 6 p.m., E.S.T. each Business Day, and in any
event, as soon as reasonably practicable after the net asset value per share is
calculated, and shall calculate such net asset value in accordance with the then
currently effective Fund Prospectus. Neither the Fund, any Series, the
Distributor, nor the Investment Manager nor any of their affiliates shall be
liable for any information provided to the Company pursuant to this Agreement
which information is based on incorrect information supplied by the Company to
the Fund, the Distributor or the Investment Manager.

       1.8.
                     (a) The Company may withdraw each Account's investment in
              the Fund only: (i) as necessary to facilitate Contract owner
              requests; (ii) upon a determination by a majority of the Fund
              Board, or a majority of disinterested Fund Board members, that an
              irreconcilable material conflict exists among the interests of (x)
              any Product Owners or (y) the interests of the Participating
              Insurance Companies investing in the Fund; (iii) upon requisite
              vote of the Contractowners having an interest in the affected Fund
              to substitute the shares of another investment company for shares
              in accordance with the terms of the Contracts; (iv) as required by
              state and/or federal laws or regulations or judicial or other
              legal precedent of general application; or (v) at the Company's
              sole discretion, pursuant to an order of the SEC under Section
              26(b) of the 1940 Act.


                                        4


                     (b) The parties hereto acknowledge that the arrangement
              contemplated by this Agreement is not exclusive and that the Fund
              Insurance Shares may be sold to other insurance companies (subject
              to Section 1.9 hereof) and the cash value of the Contracts may be
              invested in other investment companies.

                     (c) The Company shall not, without prior notice to the
              Distributor (unless otherwise required by applicable law), take
              any action to operate each Account as a management investment
              company under the 1940 Act.

       1.9. The Fund and the Distributor agree that Fund Insurance Shares will
be sold only to Participating Insurance Companies and their separate accounts.
The Fund and the Distributor will not sell Fund Insurance Shares to any
insurance company or separate account unless an agreement complying with Article
VII of this Agreement is in effect to govern such sales. No Fund Insurance
Shares will be sold to the general public.

ARTICLE II. REPRESENTATIONS AND WARRANTIES

       2.1. The Company represents and warrants (a) that the Contracts are
registered under the 1933 Act or will be so registered before the issuance
thereof, (b) that the Contracts will be issued in compliance in all material
respects with all applicable Federal and state laws and (c) that the Company
will require of every person distributing the Contracts that the Contracts be
offered and sold in compliance in all material respects with all applicable
Federal and state laws. The Company further represents and warrants that it is
an insurance company duly organized and validly existing under applicable law
and that it has legally and validly authorized each Account as a separate
account under Section 27-1-5-1 of the Indiana Insurance Code, and has registered
or, prior to the issuance of any Contracts, will register each Account (unless
exempt therefrom) as a. unit investment trust in accordance with the provisions
of the 1940 Act to serve as a separate account for its Contracts, and that it
will maintain such registrations for so long as any Contracts issued under them
are outstanding.

       2.2. The Fund represents and warrants that Fund Insurance Shares sold
pursuant to this Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law and that the Fund is
and shall remain registered under the 1940 Act for so long as the Fund Insurance
Shares are sold. The Fund further represents and warrants that it is a business
trust duly organized and in good standing under the laws of the State of
Delaware.


                                        5


              2.3. The Fund represents and warrants that it currently qualifies
as a Regulated Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"). The Fund further represents and warrants
that it will make every effort to continue to qualify and to maintain such
qualification (under Subchapter M or any successor or similar provision), and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.

              2.4. The Fund represents and warrants that it will comply with
Section 817(h) of the Code, and all regulations issued thereunder. In the event
of a breach of this Section 3.6 by the Fund, it will a) immediately notify the
Company of the breach and b) to adequately diversify each series so as to
achieve compliance with the grace period offered by Regulation 1.817-5.

              2.5. The Company represents that the Contracts are currently and
at the time of issuance will be treated as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code. The
Company shall make every effort to maintain such treatment and shall notify the
Fund and the Distributor immediately upon having a reasonable basis for
believing that the Contracts have ceased to be so treated or that they might not
be so treated in the future.

              2.6. The Fund represents that the Fund's investment policies, fees
and expenses, and operations are and shall at all times remain in material
compliance with the laws of the state of California, to the extent required to
perform this Agreement; and with any state-mandated investment restrictions set
forth on Schedule 3, as amended from time to time by the Company in accordance
with Section 6.6. The Fund, however, makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses and
investment policies) otherwise complies with the insurance laws or regulations
of any state. The Company alone shall be responsible for informing the Fund of
any investment restrictions imposed by state insurance law and applicable to the
Fund.

              2.7. The Distributor represents and warrants that it is duly
registered as a broker-dealer under the 1934 Act, a member in good standing of
the NASD, and duly registered as a broker dealer under applicable state
securities laws; its operations are in compliance with applicable law, and it
will distribute the Fund Insurance Shares according to applicable law.

              2.8. The Distributor, on behalf of the Investment Manager,
represents and warrants that the Investment Manager is registered as an
investment adviser under the Investment Advisers Act of 1940 and is in
compliance with applicable federal and state securities laws.

              2.9. The Fund represents and warrants that it has and maintains a
fidelity bond in accordance with Rule l7g-1 under the 1940 Act. The Fund will
immediately notify the Company in the event the fidelity bond coverage should
lapse at any time.


                                        6


ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; SALES MATERIAL AND OTHER
INFORMATION

              3.1. The Distributor shall provide the Company with as many
copies of the current Fund Prospectus as the Company may reasonably request. If
requested by the Company in lieu thereof, the Fund at its expense shall provide
to the Company a camera-ready copy, and electronic version, of the current Fund
Prospectus suitable for printing and other assistance as is reasonably necessary
in order for the Company to have a new Contracts Prospectus printed together
with the Fund Prospectus in one document. See Article V for a detailed
explanation of the responsibility for the cost of printing and distributing Fund
prospectuses.

              3.2. The Fund Prospectus shall state that the Statement of
Additional Information for the Fund is available from the Distributor (or, in
the Fund's discretion, the Fund Prospectus shall state that such Statement is
available from the Fund), and the Distributor (or the Fund) shall provide such
Statement free of charge to the Company and to any outstanding or prospective
Contract owner who requests such Statement.

              3.3.   (a) The Fund at its expense shall provide to the Company a
                     camera-ready copy of the Fund's shareholder reports and
                     other communications to shareholders (except proxy
                     material), in each case in a form suitable for printing, as
                     determined by the Company. The Fund shall be responsible
                     for the costs of printing and distributing these materials
                     to Contract owners.

                     (b) The Fund at its expense shall be responsible for
                     preparing, printing and distributing its proxy material.
                     The Company will provide the appropriate Contractowner
                     names and addresses to the Fund for this purpose.

              3.4. The Company shall furnish each piece of sales literature or
other promotional material in which the Fund or the Investment Manager is named
to the Fund or the Distributor prior to its use. No such material shall be used,
except with the prior written permission of the Fund or the Distributor. The
Fund and the Distributor agree to respond to any request for approval on a
prompt and timely basis. Failure of the Fund to respond within 10 days of the
request by the Company shall relieve the Company of the obligation to obtain the
prior written permission of the Fund or the Distributor.

              3.5. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund other
than the information or representations contained in the Fund Registration
Statement or Fund Prospectus, as such Registration Statement and Prospectus may
be amended or supplemented from time to time, or in reports or proxy statements
for the Fund, or in sales literature or other promotional material approved by
the Fund or by the Distributor, except with the prior written permission of the
Fund or the Distributor. The Fund agrees to respond to any request for
permission on a prompt and timely basis. If neither the Fund nor the Distributor
responds within 10 days of a request by the Company, then the Company shall be
relieved of the obligation to obtain the prior written permission of the Fund.


                                        7


              3.6. The Fund and the Distributor shall not give any information
or make any representations on behalf of the Company or concerning the Company,
each Account or the Contracts other than the information or representations
contained in the Contracts Registration Statement or Contracts Prospectus, as
such Registration Statement and Prospectus may be amended or supplemented from
time to time, or in published reports of each Account which are in the public
domain or approved in writing by the Company for distribution to Contract
owners, or in sales literature or other promotional material approved in writing
by the Company, except with the prior written permission of the Company. The
Company agrees to respond to any request for permission on a prompt and timely
basis. If the Company fails to respond within 10 days of a request by the Fund
or the Distributor, then the Fund and the Distributor are relieved of the
obligation to obtain the prior written permission of the Company.

              3.7. The Fund will provide to the Company at least one complete
copy of all Fund Registration Statements, Fund Prospectuses, Statements of
Additional Information, annual and semi-annual reports and other reports, proxy
statements, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments or supplements to
any of the above, that relate to the Fund or Fund Insurance Shares, within 20
days after the filing of such document with the SEC or other regulatory
authorities.

              3.8. The Company will provide to the Fund at least one complete
copy of all Contracts Registration Statements, Contracts Prospectuses,
Statements of Additional Information, Annual and Semi-annual Reports, sales
literature and other promotional materials, and all amendments or supplements to
any of the above, that relate to the Contracts, within 20 days after the filing
of such document with the SEC or other regulatory authorities.

              3.9. Each party will provide to the other party copies of draft
versions of any registration statements, prospectuses, and statements of
additional information, reports, proxy statements, and solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments or supplements to
any of the above, to the extent that the other party reasonably needs such
information for purposes of preparing a report or other filing to be filed with
or submitted to a regulatory agency. If a party requests any such information
before it has been filed, the other party will provide the requested information
if then available and in the version then available at the time of such request.

              3.10. For purposes of this Article III, the phrase "sales
literature or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use, in a newspaper,
magazine or other periodical, radio, television, telephone or tape recording,
videotape display, computer net site, signs or billboards, motion pictures or
other public media), sales literature (i.e. any written communication
distributed or made generally available to customers or the public, in print or
electronically, including brochures, circulars, research reports, market
letters, form letters, seminar texts, or reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications


                                        8


distributed or made generally available to some or all agents or employees,
registration statements, prospectuses, Statements of Additional Information,
shareholder reports and proxy materials, and any other material constituting
sales literature or advertising under NASD rules, the 1940 Act or the 1933 Act.

ARTICLE. IV. Voting

              4.1 Subject to applicable law and the order referred to in Article
VII, the Fund shall: solicit voting instructions from Contract owners;

              4.2 Subject to applicable law and the order referred to in Article
VII, the Company shall:

                     (a) vote Fund Insurance Shares attributable to Contract
                     owners in accordance with instructions or proxies received
                     in timely fashion from such Contract owners;

                     (b) vote Fund Insurance Shares attributable to Contract
                     owners for which no instructions have been received in the
                     same proportion as Fund Insurance Shares of such series for
                     which instructions have been received in timely fashion;
                     and

                     (c) vote Fund Insurance Shares held by the Company on its
                     own behalf or on behalf of each Account that are not
                     attributable to Contract owners in the same proportion as
                     Fund Insurance Shares of such series for which instructions
                     have been received in timely fashion.

The Company shall be responsible for assuring that voting privileges for the
Accounts are calculated in a manner consistent with the provisions set forth
above.

ARTICLE V. FEES AND EXPENSES

All expenses incident to performance by the Fund under this Agreement (including
expenses expressly assumed by the Fund pursuant to this Agreement) shall be paid
by the Fund to the extent permitted by law. Except as may otherwise be provided
in Section 1.4 and Article VII of this Agreement, the Company shall not bear any
of the expenses for the cost of registration and qualification of the Fund
Insurance Shares under Federal and any state securities law, preparation and
filing of the Fund Prospectus and Fund Registration Statement, the preparation
of all statements and notices required by any Federal or state securities law,
all taxes on the issuance or transfer of Fund Insurance Shares, and any expenses
permitted to be paid or assumed by the Fund pursuant to a plan, if any, under
Rule l2b-1 under the 1940 Act.


                                        9


       The Fund is responsible for the cost of printing and distributing Fund
Prospectuses and SAIs to existing Contractowners. (If for this purpose the
Company may print the Fund Prospectuses and SAIs in a booklet or separate
booklets containing disclosure for the Contracts and for underlying funds other
than those of the Fund, then the Fund shall pay only its proportionate share of
the total cost to distribute the booklet to existing Contract owners.)

              The Company is responsible for the cost of printing and
distributing Fund prospectuses and SAIs for new sales; and Account Prospectuses
and SAIs for existing Contractowners. The Company shall have the final decision
on choice of printer for all Prospectuses and SAIs.

ARTICLE VI. COMPLIANCE UNDERTAKINGS

              6.1. The Fund undertakes to comply with Subchapter M and Section
817(h) of the Code, and all regulations issued thereunder.

              6.2. The Company shall amend the Contracts Registration Statements
under the 1933 Act and each Account's Registration Statement under the 1940 Act
from time to time as required in order to effect the continuous offering of the
Contracts or as may otherwise be required by applicable law. The Company shall
register and qualify the Contracts for sale to the extent required by applicable
securities laws of the various states.

              6.3. The Fund shall amend the Fund Registration Statement under
the 1933 Act and the 1940 Act from time to time as required in order to effect
for so long as Fund Insurance Shares are sold the continuous offering of Fund
Insurance Shares as described in the then currently effective Fund Prospectus.
The Fund shall register and qualify Fund Insurance Shares for sale to the extent
required by applicable securities laws of the various states.

              6.4. The Company shall be responsible for assuring that any
prospectus offering a Contract that is a life insurance contract where it is
reasonably possible that such Contract would be deemed a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will describe
the circumstances under which a Contract could be treated as a modified
endowment contract (or policy).

              6.5. To the extent that it decides to finance distribution
expenses pursuant to Rule 12b-1, the Fund undertakes to have a Fund Board of
Directors, a majority of whom are not interested persons of the Fund, formulate
and approve any plan under Rule 12b-I to finance distribution expenses.

              6.6. (a) The Company shall amend Schedule 3 when appropriate in
              order to inform the Fund of any applicable state-mandated
              investment restrictions with which the Fund must comply.


                                       10


                     (b) Should the Fund or the Distributor become aware of any
              restrictions which may be appropriate for inclusion in Schedule 3,
              the Company shall be informed immediately of the substance of
              those restrictions.

ARTICLE VII. POTENTIAL CONFLICTS

              7.1. The Company has reviewed a copy of the order (the "Mixed and
Shared Funding Order") dated June 16, 1998 of the Securities and Exchange
Commission under Section 6c of the Act and, in particular, has reviewed the
conditions to the relief set forth in the related Notice. As set forth therein,
the Company agrees to report to the Board of Directors of the Fund (the "Board")
any potential or existing conflicts between the interests of Product Owners of
all separate accounts investing in the Fund, and to assist the Board in carrying
out its responsibilities under the conditions of the Mixed and Shared Funding
Order by providing all information reasonably necessary for the Board to
consider any issues raised, including information as to a decision to disregard
voting instructions of variable contract owners.

              7.2. If a majority of the Board, or a majority of disinterested
Board Members, determines that a material irreconcilable conflict exists, the
Board shall give prompt notice to all Participating Insurance Companies.

                     (a) If a majority of the whole Board, after notice to the
              Company and a reasonable opportunity for the Company to appear
              before it and present its case, determines that the Company is
              responsible for said conflict, and if the Company agrees with that
              determination, the Company shall, at its sole cost and expense,
              take whatever steps are necessary to remedy the irreconcilable
              material conflict. These steps could include: (a) withdrawing the
              assets allocable to some or all of the affected Accounts from the
              Fund and reinvesting such assets in a different investment
              vehicle, or submitting the question of whether such segregation
              should be implemented to a vote of all affected Contractowners
              and, as appropriate, segregating the assets of any particular
              group (i.e., variable annuity Contractowners, variable life
              insurance policyowners, or variable Contractowners of one or more
              Participating Insurance Companies) that votes in favor of such
              segregation, or offering to the affected Contractowners the option
              of making such a change; and (b) establishing a new registered
              mutual fund or management separate account, or taking such other
              action as is necessary to remedy or eliminate the irreconcilable
              material conflict.

                     (b) If the Company disagrees with the Board's
              determination, the Company shall file a written protest with the
              Board, reserving its right to dispute the determination as between
              just the Company and the Fund. After reserving that right the
              Company, although disagreeing with the Board that it (the Company)
              was responsible for the conflict, shall take the necessary steps,
              under protest, to remedy the conflict, substantially in accordance
              with paragraph (a) just above, for the protection of
              Contractowners.


                                       11


                     (c) As between the Company and the Fund, if within 45 days
              after the Board's determination the Company elects to press the
              dispute, it shall so notify the Board in writing. The parties
              shall then attempt to resolve the matter amicably through
              negotiation by individuals from each party who are authorized to
              settle the matter.

                     If the matter has not been amicably resolved within 60 days
              from the date of the Company's notice of its intent to press the
              dispute, then before either party shall undertake to litigate the
              dispute it shall be submitted to non-binding arbitration conducted
              expeditiously in accordance with the CPR Rules for
              Non-Administered Arbitration of Business Disputes, by a sole
              arbitrator; provided, however, that if one party has requested the
              other party to seek an amicable resolution and the other party has
              failed to participate, the requesting party may initiate
              arbitration before expiration of the 60-day period set out just
              above.

                     If within 45 days of the commencement of the process to
              select an arbitrator the parties cannot agree upon the arbitrator,
              then he or she will be selected from the CPR Panels of Neutrals.
              The arbitration shall be governed by the United States Arbitration
              Act, 9 U.S.C. Sec. 1-16. The place of arbitration shall be Fort
              Wayne, Indiana. The Arbitrator is not empowered to award damages
              in excess of compensatory damages.

                     (d) If the Board shall determine that the Fund or another
              insurer was responsible for the conflict, then the Board shall
              notify the Company immediately of that determination. The Fund
              shall assure the Company that it (the Fund) or that other insurer,
              as applicable, shall, at its sole cost and expense, take whatever
              steps are necessary to eliminate the conflict.

       7.3. If a material irreconcilable conflict arises because of the
Company's decision to disregard Contractowner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company shall withdraw (without charge or penalty) each Account's investment in
the Fund, if the Fund so elects.

       7.4. Subject to the terms of Section 7.2 above, the Company shall carry
out the responsibility to take remedial action in the event of a Board
determination of an irreconcilable material conflict with a view only to the
interests of Contractowners.

       7.5. For purposes of this Article, a majority of the disinterested
members of the Board shall determine whether or not any proposed action
adequately remedies any irreconcilable conflict, but in no event will the Fund
be required to establish a new funding medium for any variable contract, nor
will the Company be required to establish a new funding medium for any


                                       12


Contract if in either case an offer to do so has been declined by a vote of a
majority of affected Contractowners.

ARTICLE VIII. INDEMNIFICATION

              8.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Fund, the Distributor and each person who
controls or is associated with the Fund (other than another Participating
Insurance Company) or the Distributor within the meaning of such terms under the
federal securities laws and any officer, trustee, director, employee or agent of
the foregoing, against any and all losses, claims, damages or liabilities, joint
or several (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement of, any action,
suit or proceeding or any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:

                     (a) arise out of or are based upon any untrue statement or
              alleged untrue statement of any material fact contained in the
              Contracts Registration Statement, Contracts Prospectus, sales
              literature or other promotional material for the Contracts or the
              Contracts themselves (or any amendment or supplement to any of the
              foregoing), or arise out of or are based upon the omission or the
              alleged omission to state therein a material fact required to be
              stated therein or necessary to make the statements therein not
              misleading in light of the circumstances in which they were made;
              provided that this obligation to indemnify shall not apply if such
              statement or omission or such alleged statement or alleged
              omission was made in reliance upon and in conformity with
              information famished in writing to the Company by the Fund or the
              Distributor (or a person authorized in writing to do so on behalf
              of the Fund or the Distributor) for use in the Contracts
              Registration Statement, Contracts Prospectus or in the Contracts
              or sales literature (or any amendment or supplement) or otherwise
              for use in connection with the sale of the Contracts or Fund
              Insurance Shares; or

                     (b) arise out of or are based upon any untrue statement or
              alleged untrue statement of a material fact by or on behalf of the
              Company (other than statements or representations contained in the
              Fund Registration Statement, Fund Prospectus or sales literature
              or other promotional material of the Fund not supplied by the
              Company or persons under its control) or wrongful conduct of the
              Company or persons under its control with respect to the sale or
              distribution of the Contracts or Fund Insurance Shares; or

                     (c) arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Fund Registration
              Statement, Fund Prospectus or sales literature or other
              promotional material of the Fund or any amendment thereof or
              supplement thereto, or the omission or alleged omission to state
              therein a material fact required to be stated therein or necessary
              to make the statements therein not misleading in light of the
              circumstances in which they were made, if such statement or
              omission was made in reliance upon and in conformity with
              information furnished to the Fund by or on behalf of the Company;
              or


                                       13


                     (d) arise as a result of any failure by the Company to
              provide the services and furnish the materials or to make any
              payments under the terms of this Agreement; or

                     (e) arise out of any material breach by the Company of this
              Agreement, including but not limited to any failure to transmit a
              request for redemption or purchase of Fund Insurance Shares on a
              timely basis in accordance with the procedures set forth in
              Article 1; or

                     (f) arise as a result of the Company's providing the Fund
              with inaccurate information, which causes the Fund to calculate
              its Net Asset Values incorrectly.

This indemnification will be in addition to any liability which the Company may
otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

              8.2. INDEMNIFICATION BY THE DISTRIBUTOR. THE Distributor agrees to
indemnify and hold harmless the Company and each person who controls or is
associated with the Company within the meaning of such terms under the federal
securities laws and any officer, director, employee or agent of the foregoing,
against any and all losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any of them may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities:

                     (a) arise out of or are based upon any untrue statement or
              alleged untrue statement of any material fact contained in the
              Fund Registration Statement, Fund Prospectus (or any amendment or
              supplement thereto) or sales literature or other promotional
              material of the Fund, or arise out of or are based upon the
              omission or the alleged omission to state therein a material fact
              required to be stated therein or necessary to make the statements
              therein not misleading in light of the circumstances in which they
              were made; provided that this obligation to indemnify shall not
              apply if such statement or omission or alleged statement or
              alleged omission was made in reliance upon and in conformity with
              information furnished in writing by the Company to the Fund or the
              Distributor for use in the Fund


                                       14


              Registration Statement, Fund Prospectus (or any amendment or
              supplement thereto) or sales literature for the Fund or otherwise
              for use in connection with the sale of the Contracts or Fund
              Insurance Shares; or

                     (b) arise out of or are based upon any untrue statement or
              alleged untrue statement of a material fact made by the
              Distributor or the Fund (other than statements or representations
              contained in the Fund Registration Statement, Fund Prospectus or
              sales literature or other promotional material of the Fund not
              supplied by the Distributor or the Fund or persons under their
              control) or wrongful conduct of the Distributor or persons under
              its control with respect to the sale or distribution of the
              Contracts or Fund Insurance Shares; or

                     (c) arise out of any untrue statement or alleged untrue
              statement of a material fact contained in the Contracts
              Registration Statement, Contracts Prospectus or sales literature
              or other promotional material for the Contracts (or any amendment
              or supplement thereto), or the omission or alleged omission to
              state therein a material fact required to be stated therein or
              necessary to make the statements therein not misleading in light
              of the circumstances in which they were made, if such statement or
              omission was made in reliance upon information furnished in
              writing by the Distributor or the Fund to the Company (or a person
              authorized in writing to do so on behalf of the Fund or the
              Distributor); or

                     (d) arise as a result of any failure by the Fund to provide
              the services and furnish the materials under the terms of this
              Agreement (including, but not by way of limitation, a failure,
              whether unintentional or in good faith or otherwise: (i) to comply
              with the diversification requirements specified in Article VI of
              this Agreement; and (ii) to provide the Company with accurate
              information sufficient for it to calculate its accumulation and/or
              annuity unit values in timely fashion as required by law and by
              the Contracts Prospectuses); or

                     (e) arise out of any material breach by the Distributor or
              the Fund of this Agreement.

This indemnification will be in addition to any liability which the Distributor
may otherwise have; provided, however, that no party shall be entitled to
indemnification if such loss, claim, damage or liability is due to the willful
misfeasance, bad faith, gross negligence or reckless disregard of duty by the
party seeking indemnification.

       8.3 INDEMNIFICATION PROCEDURES. AFTER receipt by a party entitled to
indemnification ("indemnified party") under this Article VIII of notice of the
commencement of any action, if a claim in respect thereof is to be made by the
indemnified party against any person obligated to provide indemnification under
this Article VIII ("indemnifying party"), such indemnified party will notify the
indemnifying party in writing of the commencement thereof as soon as practicable
thereafter,


                                       15


provided that the omission to so notify the indemnifying party will not relieve
it from any liability under this Article VIH, except to the extent that the
omission results in a failure of actual notice to the indemnifying party and
such indemnifying party is damaged solely as a result of the failure to give
such notice. The indemnifying party, upon the request of the indemnified party
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Article VIH. The
indemnification provisions contained in this Article VIII shall survive any
termination of this Agreement.

ARTICLE IX. APPLICABLE LAW

       9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the state of Indiana,
without giving effect to the principles of conflicts of laws.

       9.2. This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant,
and the terms hereof shall be limited, interpreted and construed in accordance
therewith.

ARTICLE X. TERMINATION

       10.1. This Agreement shall terminate:

              (a) at the option of any party upon 120 days advance written
       notice to the other parties; or


                                       16


              (b) at the option of the Company if shares of the Fund are not
       available to meet the requirements of the Contracts as determined by the
       Company. Prompt notice of the election to terminate for such cause shall
       be furnished by the Company. Termination shall be effective ten days
       after the giving of notice by the Company; or

              (c) at the option of the Fund upon institution of formal
       proceedings against the Company by the NASD, the SEC, the insurance
       commission of any state or any other regulatory body regarding the
       Company's duties under this Agreement or related to the sale of the
       Contracts, the operation of each Account, the administration of the
       Contracts or the purchase of Fund Insurance Shares, or an expected or
       anticipated ruling, judgment or outcome which would, in the Fund's
       reasonable judgment, materially impair the Company's ability to perform
       the Company's obligations and duties hereunder; or

              (d) at the option of the Company upon institution of formal
       proceedings against the Fund, the Distributor, the Investment Manager or
       any Sub Investment Manager, by the NASD, the SEC, or any state securities
       or insurance commission or any other regulatory body regarding the duties
       of the Fund or the Distributor under this Agreement, or an expected or
       anticipated ruling, judgment or outcome which would, in the Company's
       reasonable judgment, materially impair the Fund's or the Distributor's
       ability to perform Fund's or Distributor's obligations and duties
       hereunder; or

              (e) at the option of the Company upon institution of formal
       proceedings against the Investment Manager or Sub-investment Manager by
       the NASD, the SEC, or any state securities or insurance commission or any
       other regulatory body which would, in the good faith opinion of the
       Company, result in material harm to the Accounts, the Company, or
       Contractowners.

              (f) upon requisite vote of the Contract owners having an interest
       in the affected Series (unless otherwise required by applicable law) and
       written approval of the Company, to substitute the shares of another
       investment company for the corresponding shares of the Fund in accordance
       with the terms of the Contracts; or

              (g) at the option of the Fund in the event any of the Contracts
       are not registered, issued or sold in accordance with applicable Federal
       and/or state law; o


                                       17


              (h) at the option of the Company or the Fund upon a determination
       by a majority of the Fund Board, or a majority of disinterested Fund
       Board members, that an irreconcilable material conflict exists among the
       interests of (i) any Product owners or (ii) the interests of the
       Participating Insurance Companies investing in the Fund; or

              (i) at the option of the Company if the Fund ceases to qualify as
       a Regulated Investment Company under Subchapter M of the Code, or under
       any successor or similar provision, or if the Company reasonably
       believes, based on an opinion of its counsel, that the Fund may fail to
       so qualify; or

              (j) at the option of the Company if the Fund fails to meet the
       diversification requirements specified in Section 817(h) of the Code and
       any regulations thereunder; or

              (k) at the option of the Fund if the Contracts cease to qualify as
       annuity contracts or life insurance policies, as applicable, under the
       Code, or if the Fund reasonably believes that the Contracts may fail to
       so qualify; or

              (1) at the option of either the Fund or the Distributor if the
       Fund or the Distributor, respectively, shall determine, in their sole
       judgment exercised in good faith, that either (1) the Company shall have
       suffered a material adverse change in its business or financial
       condition; or (2) the Company shall have been the subject of material
       adverse publicity which is likely to have a material adverse impact upon
       the business and operations of either the Fund or the Distributor; or

              (m) at the option of the Company, if the Company shall determine,
       in its sole judgment exercised in good faith, that either: (1) the Fund
       and the Distributor, or either of them, shall have suffered a material
       adverse change in their respective businesses or financial condition; or
       (2) the Fund or the Distributor, or both of them, shall have been the
       subject of material adverse publicity which is likely to have a material
       adverse impact upon the business and operations of the Company; or

              (n) upon the assignment of this Agreement (including, without
       limitation, any transfer of the Contracts or the Accounts to another
       insurance company pursuant to an assumption reinsurance agreement) unless
       the nonassigning party consents thereto or unless this Agreement is
       assigned to an affiliate of the Distributor.

       10.2. NOTICE REQUIREMENT. Except as otherwise provided in Section 10.1,
no termination of this Agreement shall be effective unless and until the party
terminating this Agreement gives prior written notice to all other parties to
this Agreement of its intent to terminate which notice shall set forth the basis
for such termination. Furthermore:


                                       18


              (a) In the event that any termination is based upon the provisions
       of Article VII or the provisions of Section 10.1 (a) of this Agreement,
       such prior written notice shall be given in advance of the effective date
       of termination as required by such provisions; and

              (b) in the event that any termination is based upon the provisions
       of Section 10.1 (c) or 10.1 (d) of this Agreement, such prior written
       notice shall be given at least ninety (90) days before the effective date
       of termination, or sooner if required by law or regulation.

              (c) in the event that any termination is based upon the provisions
       of Section 10.1 (e) of this Agreement, such prior written notice shall
       all be given at least sixty (60) days before the date of any proposed
       vote to replace the Fund's shares

10.3. EFFECT OF TERMINATION

              (a) Notwithstanding any termination of this Agreement pursuant to
       Section 10.1 of this Agreement, the Fund and the Distributor will, at
       the option of the Company, continue to make available additional Fund
       Insurance Shares for so long after the termination of this Agreement as
       the Company desires, pursuant to the terms and conditions of this
       Agreement as provided in paragraph (b) below, for all Contracts in effect
       on the effective date of termination of this Agreement (hereinafter
       referred to as "Existing Contracts"). Specifically, without limitation,
       if the Company so elects to make additional Fund Insurance Shares
       available, the owners of the Existing Contracts or the Company, whichever
       shall have legal authority to do so, shall be permitted to reallocate
       investments in the Fund, redeem investments in the Fund and/or invest in
       the Fund upon the making of additional purchase payments under the
       Existing Contracts.

              (b) In the event of a termination of this Agreement pursuant to
       Section 10.1 of this Agreement, the Fund and the Distributor shall
       promptly notify the Company whether the Distributor and the Fund will
       continue to make Fund Insurance Shares available after such termination.
       If Fund Insurance Shares continue to be made available after such
       termination, the provisions of this Agreement shall remain in effect
       except for Section 10.1 (a) and thereafter either the Fund or the
       Company may terminate the Agreement, as so continued pursuant to this
       Section 10.3, upon prior written notice to the other party, such notice
       to be for a period that is reasonable under the circumstances but, if
       given by the Fund, need not be for more than six months.

              (c) The parties agree that this Section 10.3 shall not apply to
       any termination made pursuant to Article VII or any conditions or
       undertakings incorporated by reference in Article VII, and the effect of
       such Article VII termination shall be governed by the provisions set
       forth or incorporated by reference therein.


                                       19


ARTICLE XI. APPLICABILITY TO NEW ACCOUNTS AND NEW CONTACTS

              The parties to this Agreement may amend the schedules to this
Agreement from time to time to reflect changes in or relating to the Contracts
and to add new classes of variable annuity contracts and variable life insurance
policies to be issued by the Company through an Account investing in the Fund.
The provisions of this Agreement shall be equally applicable to each such class
of contracts or policies, unless the context otherwise requires.

ARTICLE XII. NOTICES

              Any notice shall be sufficiently given when sent by registered or
certified mail to the other party(ies) at the address of such party(ies) set
forth below or at such other address as such party(ies) may from time to time
specify in writing to the other party.

                     If to the Fund:

                     Baron Capital Funds Trust
                     767 Fifth Avenue
                      New York, New York, 10153
                     Attn: David E. Kaplan
                     cc: Linda S. Martinson, Esq.

                     If to the Company:

                            The Lincoln National Life Insurance Co.
                            1300 South Clinton Street
                            Fort Wayne, Indiana 46802
                            Attn: Kelly D. Clevenger

                     If to the Distributor:

                     Baron Capital, Inc.
                     767 Fifth Avenue
                     New York, New York, 10153
                     Attn: David E. Kaplan
                     cc: Linda S. Martinson, Esq.


                                       20


ARTICLE XIII. MISCELLANEOUS

       13.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.

       13.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which together shall constitute one and the same
instrument.

       13.3 If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.

       13.4. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.

       13.5. Each party represents that the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly authorized by all necessary corporate or trust action, as applicable, by
such party, and when so executed and delivered this Agreement will be the valid
and binding obligation of such party enforceable in accordance with its terms.


                                       21


              IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                     Baron Capital Funds Trust

Date:         Signature: /s/ Morty Schaja

              Name: Morty Schaja

              Title: Senior Vice President & Chief Operating Officer

                     LINCOLN NATIONAL LIFE INSURANCE CO.


Date: 9-14-98 Signature: /s/ Kelly D. Clevenger

              Name: Kelly D. Clevenger

              Title: Vice President


                     Baron Capital, Inc.

Date: 9-16-93 Signature: /s/ Linda S. Martinson

              Name: Linda S. Martinson

              Title: Vice President & General Counsel


                                       22


                                   SCHEDULE 1

          Separate Accounts of Lincoln National Life Insurance Company
                              Investing in the Fund
                              As of August 28, 1998


LINCOLN NATIONAL VARIABLE ANNUITY ACCOUNT C

LINCOLN NATIONAL VARIABLE ANNUITY-ACCOUNT L

LINCOLN LIFE VARIABLE ANNUITY ACCOUNT


                                       23


                                   SCHEDULE 2

                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                              As of August 28, 1998

MULTI-FUND-REGISTERED TRADEMARK- VARIABLE ANNUITY (INDIVIDUAL AND GROUP
ANNUITIES)

eANNUITY (INDIVIDUAL ANNUITY)

LINCOLN LIFE GROUP VARIABLE ANNUITY - GVA (GROUP VARIABLE ANNUITY)


                                       24


                                   SCHEDULE 3

                     State-mandated Investment Restrictions
                             Applicable to the Fund
                              As of August 28, 1998

The California Department of Insurance has established the following Guidelines
for an underlying portfolio of a Separate Account:

BORROWING. Borrowing limits for any variable contract separate account portfolio
are (1) 10% of net asset value when borrowing for any general purpose; and (2)
25% of net asset value when borrowing as a temporary measure to facilitate
redemptions. Net asset value of a portfolio is the market value of all
investments or assets owned less outstanding liabilities of the portfolio at the
time that any new or additional borrowing is undertaken.

FOREIGN INVESTMENTS - DIVERSIFICATION.

1.     A portfolio will be invested in a minimum of five different foreign
countries at all times. However, this minimum is reduced to four when foreign
investments comprise less than 80% of the portfolio's net asset value; to three
when legs than 60% of that value; to two when less than 40%; and to one when
less than 20%.

2.     Except as set forth in items 3 and 4 below, a Portfolio will have no more
than 20% of its net asset value invested in securities of issuers located in any
one country.

3.     A Portfolio may have an additional 15% of its net asset value invested in
securities of issuers located in any one of the following countries: Australia,
Canada, France, Japan, the United Kingdom or Germany.

4.     A Portfolio's investments in United States issuers are not subject to the
foreign country diversification guidelines.


                                       25



     The Participation Agreement (the "Agreement"), dated August 28, 1998, by
and among Baron Capital Funds Trust (and all series thereof) a business trust
organized under the laws of the State of Delaware and The Lincoln National Life
Insurance Co., an Indiana insurance corporation, is hereby amended as follows:

     Schedule 2 of the Agreement is hereby deleted in its entirety and replaced
with the following:


                                   SCHEDULE 2
                         Amended as of October 15, 1999

                            Cumulative Listing of the
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule 1
                         Amended as of October 15, 1999


Multi Fund Individual Variable Annuity

eAnnuity

Group Variable Annuity

Lincoln VUL

Group Multi Fund Variable Annuity

Lincoln SVUL

Lincoln CVUL

Multi Fund - Non-registered - Variable Annuity

Lincoln VUL(DB)



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.


                                            BARON CAPITAL FUNDS TRUST

Date:                                       By:
     ------------------------------            ---------------------------------
                                            Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------

                                            BARON CAPITAL, INC.

Date:                                       By:
     ------------------------------            ---------------------------------
                                            Name:
                                                 -------------------------------
                                            Title:
                                                  ------------------------------


                                            LINCOLN NATIONAL LIFE INSURANCE CO.

Date:                                       By:
     ------------------------------            ---------------------------------
                                            Name: Steven M. Kluever
                                                 -------------------------------
                                            Title: Second Vice President
                                                  ------------------------------






     The Participation Agreement (the "Agreement'), dated August 28, 1998, by
and among Baron Capital Funds Trust (and all series thereof) a business trust
organized under the laws of the State of Delaware and The Lincoln National Life
Insurance Co., an Indiana insurance corporation, is hereby amended as follows:

     Schedule 1 and Schedule 2 of the Agreement are hereby deleted in their
entirety and replaced with the following:

                                   SCHEDULE I

                            Cumulative Listing of the
          Separate Accounts of Lincoln National Life Insurance Company
                             Investing in the Trust
                            Amended As of May 1, 1999

Lincoln National Variable Annuity Account C

Lincoln National Variable Annuity Account L

Lincoln Life Flexible Premium Variable Life Account M

Lincoln Life Variable Annuity Account Q

Lincoln Life Flexible Premium Variable Life Account R

Lincoln Life Flexible Premium Variable Life Account S

Lincoln National Variable Annuity Account 53





                                   SCHEDULE 2
                            Amended as of May 1, 1999

                            Cumulative Listing of the
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on Schedule I
                            Amended as of May 1, 1999

Multi Fund Individual Variable Annuity

eAnnuity

Group Variable Annuity

Lincoln VUL

Group Multi Fund Variable Annuity

Lincoln SVUL

Lincoln CVUL

Multi Fund - Non-registered - Variable Annuity





IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedules I and 2 to be executed in its name and behalf by its duly authorized
officer on the date specified below.

                                        BARON CAPITAL FUNDS TRUST

Date: 10/13/99                          By: /s/ Peggy Wong
                                        Name: Peggy Wong
                                        Title: CFO & Treasurer

                                        BARON CAP
Date: 10/13/99                          By: /s/ Linda S. Martinson
                                        Name: Linda S. Martinson
                                        Title: Vice President & General Counsel

                                        LINCOLN NATIONAL LIFE INSURANCE CO.

Date:                                   By: /s/ Steven M. Kluever
                                        Name: Steven M. Kluever
                                        Title: Second Vice President




     The Participation Agreement (the "Agreement"), dated August 28, 1998, by
and among Baron Capital Funds Trust (and all series thereof) a business trust
organized under the laws of the State of Delaware and The Lincoln National Life
Insurance Co., an Indiana insurance corporation, is hereby amended as follows:

     Schedule 2 of the Agreement is hereby deleted in its entirety and replaced
with the following:


                                   SCHEDULE 2
                           Amended as of July 15, 2001

                            Cumulative Listing of the
                           Variable Annuity Contracts
                      and Variable Life Insurance Policies
                         Supported by Separate Accounts
                              Listed on May 1, 1999


Multi Fund Individual Variable Annuity

eAnnuity

Group Variable Annuity

Lincoln VUL

Lincoln VUL(DB)

Group Multi Fund Variable Annuity

Lincoln SVUL

Lincoln CVUL

Lincoln CVUL Series III

Multi Fund - Non-registered - Variable Annuity



IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Schedule 2 to be executed in its name and behalf by its duly authorized officer
on the date specified below.

                            BARON CAPITAL FUNDS TRUST

Date:                                  By: /s/ Peggy Wong
      ----------------------------         -------------------------------------
                                       Name: Peggy Wong
                                             -----------------------------------
                                       Title: CFO & Treasurer
                                              ----------------------------------


                                       BARON CAPITAL, INC.

Date:                                  By: /s/ Linda S. Martinson
      ----------------------------         -------------------------------------
                                       Name: Linda S. Martinson
                                             -----------------------------------
                                       Title: Vice President & General Counsel
                                              ----------------------------------


                                       LINCOLN NATIONAL LIFE INSURANCE CO.

Date:                                  By: /s/ Steven M. Kluever
      ----------------------------         -------------------------------------
                                       Name: Steven M. Kluever
                                       Title: Second Vice President