Exhibit 23(d)(4)
SUB-ADVISORY AGREEMENT
This Sub-Advisory Agreement ("Agreement") executed as of March 1, 2006, is
between Delaware Management Company, a series of Delaware Management Business
Trust, a Delaware statutory trust (the "Adviser"), and Salomon Brothers Asset
Management Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, Lincoln Variable Insurance Products Trust (the "Trust"), on behalf
of the Core Fund (the "Fund") has entered into an Investment Management
Agreement with the Adviser, pursuant to which the Adviser has agreed to provide
certain investment management services to the Fund; and
WHEREAS, the Adviser desires to appoint Sub-Adviser as investment
sub-adviser to provide the investment advisory services to the Fund specified
herein, and Sub-Adviser is willing to serve the 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. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE FUND.
(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 for the Fund which shall at all times meet
the diversification requirements of Section 817(h) of the Internal Revenue Code
of 1986 (the "Code"). The Sub-Adviser will make investment decisions on behalf
of the Fund and place all orders for the purchase and sale of portfolio
securities.
(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of personnel, required
for it to execute its duties faithfully and (ii) administrative facilities,
including bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Fund (excluding
determination of net asset value per share, portfolio accounting and
shareholder accounting services).
(c) The Sub-Adviser shall vote proxies relating to the Fund's investment
securities in accordance with the Sub-Adviser's proxy voting policies and
procedures, and shall 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.
(d) The Sub-Adviser shall exercise conversion or subscription rights, and
respond to tender offers and other consent solicitations ("Corporate Actions")
with respect to the issuers of securities held in the Fund in the manner in
which the Sub-Adviser believes to be in the best interests of the Fund,
provided materials relating to such Corporate Actions have been timely
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received by the Sub-Adviser. Upon sixty (60) days' written notice to the
Sub-Adviser, the Adviser may withdraw the authority granted to the Sub-Adviser
pursuant to this Section.
(e) In the selection of brokers, dealers or futures commission merchants and
the placing of orders for the purchase and sale of portfolio investments for
the Fund, the Sub-Adviser shall use its best efforts to obtain for the 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 the Fund
the most favorable price and execution available, the Sub-Adviser, bearing in
mind the Fund's best interests at all times, shall consider all factors it
deems relevant, including 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 the 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 the Fund and to other clients of the Sub-Adviser as to which the
Sub-Adviser exercises investment discretion.
(f) The Sub-Adviser will provide advice and assistance to the Investment
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 the Fund in accordance with valuation procedures and methods
established by the Trustees.
(g) The Sub-Adviser shall furnish the Adviser and the Board of Trustees with
such information and reports regarding the 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 Fund and to consult with the Adviser regarding the
investment affairs of the Fund.
(h) The Sub-Adviser shall not consult with any other sub-adviser to the Fund
or a sub-adviser to a portfolio that is under common control with the Fund
concerning the assets of the Fund, except as permitted by the policies and
procedures of the Fund.
(i) 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 the Fund; (ii) the
stated investment objectives, policies and restrictions of
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the Fund; (iii) the Investment Company Act of 1940, as amended (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 Fund. The Adviser has
furnished or will furnish the Sub-Adviser with copies of the Fund's
Registration Statement, Prospectus, Statement of Additional Information,
Articles of Incorporation, and Bylaws as currently in effect and agrees during
the continuance of this Agreement to furnish promptly the Sub-Adviser with
copies of any amendments or supplements thereto before or at the time the
amendments or supplements become effective. Until the Adviser delivers any such
amendment or supplement to the Sub-Adviser, the Sub-Adviser shall be fully
protected in relying on the Prospectus and Statement of Additional Information
and any supplements thereto previously furnished to the Sub-Adviser.
(j) The Sub-Adviser shall assist the 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 the Fund with complete
and accurate disclosure for use in the 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. The Sub-Adviser shall be allowed a reasonable period of
time to perform the tasks described in this paragraph.
(k) 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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, Title V of the ▇▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, the
Code of Ethics of the Sub-Adviser and the Trust and certifications as to the
validity of certain information relating to the Sub-Adviser or the Fund that is
included in the 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.
(l) 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 the Fund, the
Trust or the Adviser, including, without limitation, the portfolio holdings of
the Fund.
2. OTHER AGREEMENTS.
The investment management 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.
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3. COMPENSATION TO BE PAID BY THE ADVISER TO THE SUB-ADVISER.
(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 the Fund during the month.
Such fee shall be calculated in accordance with the fee schedule applicable to
the Fund as set forth in Schedule A attached hereto.
(b) The fee shall be paid by the Adviser, and not by the 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.
4. AUTOMATIC TERMINATION.
This Agreement shall automatically terminate, 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.
5. EFFECTIVE PERIOD; TERMINATION AND AMENDMENT OF THIS AGREEMENT.
(a) This Agreement shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as set forth below.
Termination of this Agreement pursuant to this Section 5 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:
(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) This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment or in the event that the investment
advisory contract between the Fund and the Adviser shall have terminated.
(d) 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
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consistent with the 1940 Act as interpreted or permitted by the U.S. Securities
and Exchange Commission ("SEC") and/or its staff.
6. CERTAIN INFORMATION.
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 the 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 the Fund, and (d) the principal officers of the
Sub-Adviser or any portfolio manager of the Fund shall have changed.
7. NONLIABILITY OF SUB-ADVISER.
(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 the
Fund or to any shareholder of the 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 the
Fund meets the diversification requirements of Section 817(h) of the Code, as
required by Section 1 of this Agreement, shall constitute gross negligence per
se under sub-paragraph 7(a) above.
8. INDEMNIFICATION.
The Sub-Adviser agrees to indemnify the Adviser and the Funds for, and hold
them harmless against, any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Sub-Adviser) or litigation (including legal and other expenses) to which the
Adviser or the Funds may become subject as a result of:
(a) any failure by the Sub-Adviser, whether unintentional or in good faith
or otherwise, to adequately diversify the investment program of the Fund
pursuant to the requirements of Section 817(h) of the Code, and the regulations
issued thereunder; or
(b) any untrue statement of a material fact contained in disclosure provided
by the Sub-Adviser for inclusion in the Fund's Registration Statement 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.
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9. CONFIDENTIALITY.
The Adviser and the Fund agree that they will not disclose the securities
holdings of the Fund to third parties, except (i) as required by applicable law
or regulation; (ii) as required by state or federal regulatory authorities; or
(iii) pursuant to the Trust's portfolio holdings policy, which may be amended
by the Trust from time to time.
The Sub-Adviser agrees that in the performance of its obligations under this
Agreement, it will provide certain proprietary materials to the Adviser such as
the Sub-Adviser's compliance procedures, approved lists of Fund investments,
and other materials or information that Sub-Adviser shall prominently label or
otherwise describe as "Confidential" ("Confidential Information"). The Adviser
agrees that it will not disclose such Confidential Information, except (i) as
required by applicable law or regulation; (ii) as required by state or federal
regulatory authorities; (iii) to any of the following parties or as otherwise
reasonably agreed to by the Sub-Adviser in writing:
. Trustees and officers of the Fund;
. Officers and employees of the Adviser and the Administrator;
. Counsel to any of the Fund, Adviser, Administrator or the Independent
Trustees; or
. The independent accountants and any other agent or service provider of
the Fund.
10. RECORDS; RIGHT TO AUDIT.
(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 the Fund's
investments made by the Sub-Adviser that are required to be maintained by the
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 the Fund are
the property of the 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,
and from time to time, to such reasonable periodic, special and other
examinations by the SEC, the Fund's auditors, any representative of the Fund,
the Adviser, or any governmental agency or other instrumentality having
regulatory authority over the Fund.
11. MARKETING MATERIALS.
(a) The Sub-Adviser shall furnish to the Fund, prior to its use, each piece
of advertising, supplemental sales literature or other promotional material in
which the Fund, the Adviser or any of the Adviser's affiliates is named. No
such material shall be used except with prior written permission of the Fund or
its delegate. The Fund agrees to respond to any request for approval
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on a prompt and timely basis. Failure by the Fund 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 Fund. If the
Sub-Adviser makes an unauthorized use of the names, derivatives, logos,
trademarks, service marks or trade names of the Fund or the Adviser, the
parties acknowledge that these entities shall suffer irreparable hardship for
which monetary damages are inadequate and thus, the Fund or the Adviser, as
applicable, will be entitled to injunctive relief.
(b) The Fund shall furnish to the Sub-Adviser, prior to its use, each piece
of advertising, supplemental sales literature or other promotional material in
which the Sub-Adviser or any of its affiliates is named. No such material shall
be used except with prior written permission of the Sub-Adviser or its
delegate. The Sub-Adviser agrees to respond to any request for approval on a
prompt and timely basis. Failure by the Sub-Adviser to respond within ten
(10) calendar days to the Fund shall relieve the Fund of the obligation to
obtain the prior written permission of the Sub-Adviser. If the Adviser or the
Fund makes an unauthorized use of the Sub-Adviser's names, derivatives, logos,
trademarks, service marks or trade names, the parties acknowledge that the
Sub-Adviser shall suffer irreparable hardship for which monetary damages are
inadequate and thus, the Sub-Adviser will be entitled to injunctive relief.
(c) The parties agree that the name of the Sub-Adviser, the names of any
affiliates of the Sub-Adviser and any derivative, logo, trademark, service ▇▇▇▇
or trade name are the valuable property of the Sub-Adviser and its affiliates.
Upon termination of this Agreement, the Adviser and the Fund shall as soon as
practicable cease to use such name(s), derivatives, logos, trademarks, service
marks or trade names.
(d) The parties agree that they shall have no responsibility to ensure the
adequacy of the form or content of such advertising, supplemental sales
literature or other promotional material for purposes of the 1940 Act or other
applicable laws and regulations; provided, however, that each party is
responsible for the accuracy of any information that it gives to the other
party which is included in such advertising, supplemental sales literature or
other promotional material.
12. GOVERNING LAW.
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 as being inconsistent with the 1940 Act.
13. SEVERABILITY/INTERPRETATION.
If any provision of this Agreement is held invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. 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 provision 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.
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14. CERTAIN DEFINITIONS.
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.
15. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original and, all of which, when taken together, shall
consist of one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this instrument to be signed by
their duly authorized representatives, all as of the day and year first above
written.
DELAWARE MANAGEMENT COMPANY, a
series of Delaware Management
Business Trust
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Associate General
Counsel and Assistant
Vice President
SALOMON BROTHERS ASSET
MANAGEMENT INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Director
Accepted and agreed to
as of the day and year
first above written:
CORE FUND, a series of
Lincoln Variable Insurance Products Trust
/s/ Rise ▇.▇. ▇▇▇▇▇▇
---------------------------------------------
Name: Rise ▇.▇. ▇▇▇▇▇▇
Title: Vice President
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SCHEDULE A
Fee Schedule
The Adviser shall pay to the Sub-Adviser compensation at an annual rate as
follows:
.40% on the first $500 million; and
.35% on the amount in excess of $500 million
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