SUB-ADVISORY AGREEMENT
(for Fund of Funds)
This Sub-Advisory Agreement ("Agreement") executed as of May 1, 2005, is
between Delaware Management Company, a series of Delaware Management Business
Trust, a Delaware statutory trust (hereinafter the "Adviser"), and Wilshire
Associates Incorporated, a company (the "Sub-Adviser");
---------------------
WHEREAS, the Lincoln Variable Insurance Products Trust ("Trust") on behalf
of the Funds listed in Schedule A to this Agreement (each, a "Fund"), has
entered into an Investment Management Agreement, dated May 1, 2005, with the
Adviser, pursuant to which the Adviser has agreed to provide certain investment
management services to each Fund; and
WHEREAS, the Adviser desires to appoint the Sub-Adviser as investment
sub-adviser to provide investment advisory and asset allocation services
("Advisory Services") to each of the Funds, and the Sub-Adviser is willing to
serve each Fund in such capacity.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:
1. The Adviser hereby appoints the Sub-Adviser to provide the Advisory
Services specified in this Agreement for each Fund, and the Sub-Adviser hereby
accepts such appointment and agrees to render the services.
2. (a) Subject to the direction and control of the Board of Trustees (the
"Trustees") of the Trust, the Sub-Adviser, at its expense, will furnish
continuously an investment program of Advisory Services to each Fund, which
program shall at all times meet the diversification requirements of Section
817(h) of the Internal Revenue Code of 1986 (the "Code"). Such investment
program shall include, without limitation and consistent with the investment
objectives, policies and restrictions applicable to each Fund, the Sub-Adviser's
determination of the portion of each Fund's assets to be invested in: (i) mutual
funds selected by The Lincoln National Life Insurance Company, the Funds'
sponsor, (ii) direct portfolio securities and other investments, and (iii) cash.
The Sub-Adviser will make investment decisions on behalf of each Fund and place
all orders for the purchase and sale of such investments.
(b) The Sub-Adviser shall, at its expense, furnish (i) all necessary
investment and management facilities, including, without limitation, salaries of
personnel, required for it to execute its duties faithfully and (ii)
administrative facilities, including, without limitation, bookkeeping, clerical
personnel and equipment necessary for the efficient conduct of the investment
affairs of each Fund (excluding determination of net asset value per share,
portfolio accounting and shareholder accounting services).
(c) In the selection of brokers, dealers or futures commission merchants
and the placing of orders for the purchase and sale of portfolio investments for
each Fund, the Sub-Adviser shall use its best efforts to obtain for each Fund
the most favorable price and execution available, except to the extent it may be
permitted to pay higher brokerage commissions for brokerage and
research services as described below. In using its best efforts to obtain for
each Fund the most favorable price and execution available, the Sub-Adviser,
bearing in mind each Fund's best interests at all times, shall consider all
factors it deems relevant, including, without limitation and by way of
illustration: price; the size of the transaction; the nature of the market for
the security; the amount of the commission; the timing of the transaction taking
into account market prices and trends; the reputation, experience and financial
stability of the broker, dealer, or futures commission merchant involved; and
the quality of service rendered by the broker, dealer or futures commission
merchant in other transactions. Subject to such policies as the Trustees may
determine, the Sub-Adviser shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused a Fund to pay a broker, dealer or futures commission
merchant that provides brokerage and research services to the Sub-Adviser an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission another broker, dealer or futures commission
merchant would have charged for effecting that transaction, if the Sub-Adviser
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker, dealer or futures commission merchant, viewed in terms of either that
particular transaction or the Sub-Adviser's over-all responsibilities with
respect to each Fund and to other clients of the Sub-Adviser as to which the
Sub-Adviser exercises investment discretion.
(d) The Sub-Adviser shall: (i) vote proxies, exercise conversion or
subscription rights, and respond to tender offers and other consent
solicitations ("Corporation Action") with respect to the issuers of securities
held in each Fund in the manner in which the Sub-Adviser believes to be in the
best interests of each Fund, provided materials relating to such Corporation
Actions have been timely received by the Sub-Adviser; (ii) will submit reports
regarding such Corporation Actions, including, without limitation, a copy of any
policies regarding such Corporation Actions, in a form reasonably satisfactory
to the Adviser and the Funds in order to comply with any applicable federal or
state reporting requirements; and (iii) review its proxy voting activities on a
periodic basis with the Trustees. Upon sixty (60) days' written notice to the
Sub-Adviser, the Trustees may withdraw the authority granted to the Sub-Adviser
pursuant to this Section.
(e) The Sub-Adviser will provide advice and assistance to the Adviser as to
the determination of the fair value of certain investments where market
quotations are not readily available for purposes of calculating net asset value
of each Fund in accordance with valuation procedures and methods established by
the Trustees.
(f) The Sub-Adviser shall furnish the Adviser and the Board of Trustees
with such information and reports regarding each Fund's investments as the
Adviser deems appropriate or as the Board of Trustees shall reasonably request.
The Sub-Adviser shall make its officers and employees available to the Adviser
from time to time at such reasonable times as the parties may agree to review
investment policies of the Funds and to consult with the Adviser regarding the
investment affairs of the Funds.
(g) The Sub-Adviser shall not consult with any other sub-adviser to a Fund
or a sub-adviser to a portfolio that is under common control with the Funds
concerning the assets of the Funds, except as permitted by the policies and
procedures of the Funds.
(h) In the performance of its duties, the Sub-Adviser shall be subject to,
and shall perform in accordance with, the following: (i) provisions of the
organizational documents of the Trust that are applicable to each Fund; (ii) the
stated investment objectives, policies and restrictions of each Fund; (iii) the
Investment Company Act of 1940 (the "1940 Act") and the Investment Advisers Act
of 1940 (the "Advisers Act"); (iv) any written instructions and directions of
the Trustees, the Adviser or Fund management; and (v) its general fiduciary
responsibility to the Funds.
(i) The Sub-Adviser shall assist each Fund in the preparation of its
registration statement, prospectus, shareholder reports, marketing materials and
other regulatory filings, or any amendment or supplement thereto (collectively,
"Regulatory Filings") and shall provide each Fund with disclosure for use in
each Fund's Regulatory Filings, including, without limitation, any requested
disclosure related to the Sub-Adviser's investment management personnel,
portfolio manager compensation, Codes of Ethics, firm description, investment
management strategies and techniques, and proxy voting policies.
(j) The Sub-Adviser shall furnish the Adviser, the Board of Trustees and/or
the Chief Compliance Officer of the Trust and/or the Adviser with such
information, certifications and reports as such persons may deem appropriate or
may request from the Sub-Adviser regarding the Sub-Adviser's compliance with
Rule 206(4)-7 of the Advisers Act and the Federal Securities Laws, as defined in
Rule 38a-1 under the 1940 Act. Such information, certifications and reports
shall include, without limitation, those regarding the Sub-Adviser's compliance
with the Xxxxxxxx-Xxxxx Act of 2002, Title V of the Xxxxx-Xxxxx-Xxxxxx Act, the
Code of Ethics of the Sub-Adviser and the Trust and certifications as to the
validity of certain information included in each Fund's Regulatory Filings. The
Sub-Adviser shall make its officers and employees (including its Chief
Compliance Officer) available to the Adviser and/or the Chief Compliance Officer
of the Trust and/or the Adviser from time to time to examine and review the
Sub-Adviser's compliance program and its adherence thereto.
3. The Advisory Services provided by the Sub-Adviser under this Agreement
are not to be deemed exclusive, and the Sub-Adviser shall be free to render
similar or different services to others so long as its ability to render the
services provided for in this Agreement shall not be impaired thereby.
4. (a) As compensation for the services to be rendered by the Sub-Adviser
under the provisions of this Agreement, the Adviser will pay to the Sub-Adviser
a fee each month based on the average daily net assets of each Fund during the
month. Such fee shall be calculated in accordance with the fee schedule
applicable to each Fund as set forth in Schedule A attached hereto.
(b) The fee shall be paid by the Adviser, and not by a Fund, and without
regard to any reduction in the fees paid by the Fund to the Adviser under its
management contract as a result of any statutory or regulatory limitation on
investment company expenses or voluntary fee
reduction assumed by the Adviser. Such fee to the Sub-Adviser shall be payable
for each month within 10 business days after the end of such month. If the
Sub-Adviser shall serve for less than the whole of a month, the foregoing
compensation shall be prorated.
5. This Agreement shall automatically terminate with respect to a Fund,
without the payment of any penalty, in the event of its assignment or in the
event that the investment advisory contract between the Adviser and the Fund
shall have terminated for any reason
6. (a) This Agreement shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter for each Fund (unless
terminated automatically as set forth in Section 5) until terminated as set
forth below. Termination of this Agreement pursuant to this Section 6 shall be
without the payment of any penalty.
(b) This Agreement shall continue in effect for a period of more than two
years from the date hereof only so long as continuance is specifically approved
at least annually in conformance with the 1940 Act; provided, however, that this
Agreement may be terminated at any time with respect to a Fund:
(i) by the Board of Trustees of the Trust or by the vote of a majority
of the outstanding voting securities of the Fund;
(ii) by the Adviser on 60 days' written notice to the Sub-Adviser; or
(iii) by the Sub-Adviser on 60 days' written notice to the Adviser.
(c) No amendment to this Agreement shall be effective unless (i) there is
written consent of the parties to this Agreement and (ii) the amendment is
approved in a manner consistent with the 1940 Act as interpreted or permitted by
the U.S. Securities and Exchange Commission ("SEC") and/or its staff.
7. The Sub-Adviser shall promptly notify the Adviser in writing of the
occurrence of any of the following events: (a) the Sub-Adviser shall fail to be
registered as an investment adviser under the Advisers Act and under the laws of
any jurisdiction in which the Sub-Adviser is required to be registered as an
investment adviser in order to perform its obligations under this Agreement, (b)
the Sub-Adviser has a reasonable basis for believing that a Fund has ceased to
qualify or might not qualify as a regulated investment company under Subchapter
M of the Code, (c) the Sub-Adviser shall have been served or otherwise have
notice of any action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, public board or body, involving the affairs of a
Fund, and (d) the principal officers of the Sub-Adviser or any portfolio manager
of a Fund shall have changed.
8. (a) In the absence of willful misfeasance, bad faith or gross negligence
on the part of the Sub-Adviser, or reckless disregard of its obligations and
duties hereunder, the Sub-Adviser shall not be subject to any liability to a
Fund or to any shareholder of a Fund, for any act or omission in the course of,
or connected with, rendering services hereunder.
(b) Failure by the Sub-Adviser to assure that the investment program for a
Fund meets the diversification requirements of Section 817(h) of the Code, as
required by Section 2(a) of this Agreement, shall constitute gross negligence
per se under sub-paragraph 8(a) above.
(c) Failure by the Sub-Adviser to assure that any disclosure provided by
the Sub-Adviser for inclusion in a Fund's Regulatory Filings does not (i)
contain any untrue statement of a material fact or (ii) omit to state a material
fact required to be stated necessary to make such disclosure not misleading,
shall constitute gross negligence per se under sub-paragraph 8(a) above.
9. The Sub-Adviser shall indemnify and hold harmless the Adviser and its
officers, directors, trustees, employees and agents from and against any and all
liabilities, losses, claims, damages and expenses, including, without
limitation, reasonable attorneys' fees and expenses, of any kind or nature
directly or indirectly resulting from or out of any gross negligence, willful
misfeasance, bad faith or reckless disregard in fulfilling its obligations under
this Agreement.
In addition to the foregoing, the Sub-Adviser agrees to indemnify the
Adviser and each Fund for, and hold them harmless against, any and all losses,
claims, damages, liabilities (including, without limitation, amounts paid in
settlement with the written consent of the Sub-Adviser) or litigation
(including, without limitation, legal and other expenses) to which the Adviser
or a Fund may become subject as a result of:
(i) any failure by the Sub-Adviser, whether unintentional or in good faith
or otherwise, to adequately diversify the investment program of a Fund pursuant
to the requirements of Section 817(h) of the Code, and the regulations issued
thereunder; or
(ii) any untrue statement of a material fact contained in disclosure
provided by the Sub-Adviser for inclusion in a Fund's Regulatory Filings or any
omission of a material fact required to be stated necessary to make such
disclosure not misleading;
provided that the Sub-Adviser shall have been given written notice concerning
any matter for which indemnification is claimed under this Section.
10. (a) The Sub-Adviser agrees to maintain in the form and for the period
required by Rule 31a-2 under the 1940 Act, all records relating to each Fund's
investments made by the Sub-Adviser that are required to be maintained by a Fund
pursuant to the requirements of Rule 31a-1 under the 1940 Act. The Sub-Adviser
agrees that all records that it maintains on behalf of a Fund are the property
of that Fund, and the Sub-Adviser will surrender promptly to the Fund any such
records upon the Fund's request; provided, however, that the Sub-Adviser may
retain a copy of such records. In addition, for the duration of this Agreement,
the Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any such records as are required to be maintained by it pursuant to
this Agreement and shall transfer all such records to any entity designated by
the Adviser upon the termination of this Agreement.
(b) The Sub-Adviser agrees that all accounts, books and other records
maintained and preserved by it as required hereby will be subject at any time to
such reasonable periodic, special
and other examinations by the SEC, each Fund's auditors, any representative of a
Fund, the Adviser, or any governmental agency or other instrumentality having
regulatory authority over the Funds.
11. (a) The Sub-Adviser hereby consents to the use of its name and the
names of its business affiliates which are , in the
------------------------
Trust's Registration Statement, other disclosure documents, shareholder
communications, advertising, sales literature and similar communications.
(b) The Sub-Adviser shall not use the name of the Trust, any Fund, the
Adviser or any affiliate of the Adviser (other than that of any affiliate of the
Sub-Adviser that is an affiliate of the Adviser solely by reason of the
sub-adviser's affiliation with the Fund) in any materials related to the Trust
or a Fund distributed to third parties, including, without limitation, each
Fund's shareholders, without prior review and written approval by the Funds or
the Adviser, as applicable. Each Fund and the Adviser agree to respond to any
request for approval on a prompt and timely basis. Failure by a Fund or the
Adviser to respond within ten (10) calendar days to the Sub-Adviser shall
relieve the Sub-Adviser of the obligation to obtain the prior written permission
of the Funds. Upon termination of this Agreement, the Sub-Adviser, shall, to the
extent applicable and as soon as is reasonably possible, cease to use the actual
or fictitious name(s), xxxx(s), derivatives(s) and/or logo(s) of the Trust, any
Fund and the Adviser.
(c) Except as expressly provided under this Agreement, neither the
Sub-Adviser nor any of its officers or employees shall act upon or disclose to
any person any material non-public information with respect to a Fund, the Trust
or the Adviser, including, without limitation, the portfolio holdings of a Fund.
12. This Agreement shall be governed by the laws of the State of Delaware,
without regard to conflict of law principles; provided, however, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act.
13. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors. Where the effect of a requirement of the 1940 Act reflected in any
provisions of this Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
14. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities, " "interested persons," and "assignment"
shall have the meaning defined in the 1940 Act, and subject to such orders or
no-action letters as may be granted by the SEC and/or its staff.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized representatives as of the day and year first
above written.
DELAWARE MANAGEMENT COMPANY, a series of
Delaware Management Business Trust
By:
------------------------------------
Name:
Title:
WILSHIRE ASSOCIATES INCORPORATED
By:
------------------------------------
Name:
Title:
Accepted and agreed to
as of the day and year
first above written:
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST,
on behalf of the Funds listed on Schedule A
--------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
SCHEDULE A
This SCHEDULA A lists the Funds for which the Sub-Adviser shall provide
services pursuant to this Agreement and the fee rate schedule (annual rate) for
each Fund:
Fund Name Sub-Advisory Fee Schedule
--------- -------------------------
Conservative Profile Fund
Moderate Profile Fund
Moderately Aggressive Profile Fund
Aggressive Profile Fund
