Exhibit 23(h)(5)
SERVICE AGREEMENT
BETWEEN
DELAWARE MANAGEMENT COMPANY,
A SERIES OF DELAWARE MANAGEMENT BUSINESS TRUST
AND
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
This Agreement ("Service Agreement") sets forth the terms and conditions of the
Service Agreement between Delaware Management Company, a Series of Delaware
Management Business Trust ("Delaware") and The Lincoln National Life Insurance
Company (the "Company"), effective as of the 1st day of May, 2003.
The Company and Lincoln Variable Insurance Products Trust (the "Trust") have
entered into a Fund Participation Agreement, dated May 1, 2003, as may be
amended from time to time, pursuant to which the Company, on behalf of certain
of its separate accounts and those which it administers (together "Separate
Accounts"), has selected the Trust to serve as an investment vehicle under
certain variable annuity and/or variable life insurance contracts ("Variable
Contracts") offered by the Company, of which Trust may be one of several
investment options available under the Variable Contracts. The Trust is divided
into several series of shares, each designated a "Fund". Delaware is the
investment adviser for the Trust.
Delaware recognizes that in the course of soliciting applications for the
Variable Contracts and in servicing owners of the Variable Contracts, the
Company and its agents provide ongoing services respecting Variable Contract
owners' investments in the Trust.
Delaware understands that it benefits from the services that the Company and its
agents provide with respect to the Trust. These services promote retention of
assets in the Trust, which, in turn, provides benefits to Delaware. These
services also contribute to an increase in the assets in the Trust, which, in
turn, results in increased benefits to Delaware.
Accordingly, the following represents the collective intention and understanding
of Delaware and the Company:
The Company and/or its agents agree to provide services to current owners of
Variable Contracts which may include, but not limited to: teleservicing support
in connection with the Trust; delivery of notices; facilitation of the
tabulation of Variable Contract owners' votes in the event of a meeting of the
shareholders; maintenance of Variable Contact records reflecting units purchased
and redeemed and unit balances; provision of support services including
providing information about the Trust and answering questions concerning the
Trust, including questions respecting Variable Contract owners' interests in the
Trust; provision and administration of Variable Contract features for the
benefit of Variable Contract owners participating in the Trust, including
transfers, dollar cost averaging, asset allocation, portfolio rebalancing,
earnings sweep, and pre-authorized deposits and withdrawals; and provision of
other services as may be agreed upon from time to time.
In consideration of the benefits that Delaware derives from such services,
Delaware agrees to pay to the Company a service fee (not from Trust assets but
from the assets of Delaware) at an annual service fee rate set forth in the
attached Exhibit A ("Service Fee Rate"). For purposes of computing the amount
due to the Company under this paragraph, the Company's pro-rata share of a
Fund's daily net asset value will be multiplied by the applicable Service Fee
Rate(s) (calculated on a daily basis). The Company's pro-rata share of a Fund's
daily net asset value represents the ratio of Fund shares owned by the Company
to the Fund's total outstanding shares multiplied by the Fund's daily net asset
value. The Fund's daily net asset value will be the same for purposes of
calculating the service fee as for calculating the management fee under the
advisory agreement with Delaware. The service fee for each day will be
aggregated for each calendar month and paid by Delaware to the Company within
ten (10) calendar days thereafter in a manner prescribed by the Company.
Delaware will provide the Company with supporting documentation of the amount
due for the month in a format agreeable to both parties on the first business
day following the close of the preceding calendar month.
The Service Agreement shall remain in full force and effect until terminated by
either the Company or Delaware upon 60 days' written notice to the other, and
shall terminate automatically upon redemption of all shares held in Separate
Accounts.
Notwithstanding the termination of the Service Agreement, Delaware will continue
to pay the service fees in accordance with the preceding paragraph so long as
net assets of the Company or a Separate Account remain in the Trust and the
Company performs such services, provided such continued payment is permitted in
accordance with applicable law and regulation. The Service Agreement may be
amended only upon mutual agreement of the Company and Delaware in writing.
Nothing in the Service Agreement shall amend, modify or supersede any
contractual terms, obligations or covenants among or between the Company and
Delaware previously or currently in effect.
If the Service Agreement is consistent with your understanding of the matters we
discussed concerning the Company's provision of the services, please sign below:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
Date: 5/20/03 By: /s/ Rise ▇. ▇. ▇▇▇▇▇▇
------------------- ------------------------------------------
Name: Rise ▇. ▇. ▇▇▇▇▇▇
Title: Vice President
DELAWARE MANAGEMENT COMPANY,
A SERIES OF DELAWARE MANAGEMENT BUSINESS TRUST
Date: 7/1/03 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------- ------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Controller & Treasurer
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EXHIBIT A
SERVICE FEE RATES
AGGRESSIVE GROWTH FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2374% 0 - $200,000,000
.1874% on $200,000,001 to $250,000,000
.2374% on $250,000,001 to $400,000,000
.1874% on $400,000,001 and above
BOND FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.3003% 0 - $200,000,000
.2203% on $200,000,001 to $400,000,000
.1203% on $400,000,001 and above
CAPITAL APPRECIATION FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.1874% 0 - $100,000,000
.2374% on $100,000,001 to $500,000,000
.2374% on $500,000,001 and above
EQUITY INCOME FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2574% 0 - $500,000,000
.2074% on $500,000,001 and above
GLOBAL ASSET ALLOCATION FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2674% 0 - $200,000,000
.2674% on $200,000,001 to $400,000,000
.2674% on $400,000,001 and above
GROWTH & INCOME FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2674% 0 - $200,000,000
.1874% on $200,000,001 to $400,000,000
.0874% on $400,000,001 and above
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INTERNATIONAL FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.3874% 0 - $200,000,000
.3374% on $200,000,001 to $400,000,000
.1874% on $400,000,001 and above
MANAGED FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2891% 0 - $200,000,000
.2091% on $200,000,001 to $400,000,000
.1091% on $400,000,001 and above
MONEY MARKET FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.3003% 0 - $200,000,000
.2203% on $200,000,001 to $400,000,000
.1203% on $400,000,001 and above
SOCIAL AWARENESS FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2674% 0 - $200,000,000
.1874% on $200,000,001 to $400,000,000
.0874% on $400,000,001 and above
SPECIAL OPPORTUNITIES FUND
FUND'S DAILY NET ASSET VALUE
ANNUAL RATE (OWNED BY ALL SHAREHOLDERS)
----------------------------------------------------------------------
.2674% 0 - $200,000,000
.1874% on $200,000,001 to $400,000,000
.0874% on $400,000,001 and above
4