Exhibit 23(d)(6)
SUB-ADVISORY AGREEMENT
LVIP VALUE OPPORTUNITIES FUND
This Sub-Advisory Agreement ("Agreement") executed as of October 15, 2007,
is between LINCOLN INVESTMENT ADVISORS CORPORATION, a New Hampshire corporation
(the "Adviser"), and COLUMBIA MANAGEMENT ADVISORS, LLC, a Delaware limited
liability company (the "Sub-Adviser").
WHEREAS, Lincoln Variable Insurance Products Trust (the "Trust"), on behalf
of the LVIP Value Opportunities Fund (the "Fund"), has entered into an
Investment Management Agreement, dated April 30, 2007, 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 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. The Sub-Adviser will be an independent contractor and will not have
authority to act for or represent the Trust or Adviser in any way or otherwise
be deemed an agent of the Trust or Adviser except as expressly authorized in
this Agreement or as agreed to in writing by the Trust, Adviser and the
Sub-Adviser.
Pursuant to this agreement Sub-Adviser shall possess full power and
authority on behalf of the Fund and at risk of, and in the name of, Fund (a) to
buy, sell, exchange, convert and otherwise trade in any and all securities and
other assets as Sub-Adviser may select; (b) to instruct any custodian of any
security or other asset of the Fund to deliver securities or assets sold,
exchanged, or otherwise disposed of from the Fund's account; (c) to pay cash
for securities or assets delivered to any trustee or custodian upon acquisition
for the Fund; (d) to consent to any class action, plan or reorganization,
merger, combination, consolidation, liquidation or similar plan with reference
to such securities or other assets; (e) to exercise or dispose of subscription
rights, warrants and fractional shares as it deems to be in Fund's best
interests; (f) to deal through accounts with one or more securities or
commodities brokerage
1
firms, dealers or banks; and (g) generally to perform any other act necessary
to enable Sub-Adviser to carry out its obligations under this Agreement. This
discretionary authority shall remain in full force and effect until Sub-Adviser
receives written notice from the Adviser of its termination. It is understood
and agreed that Sub-Adviser shall have no obligation whatsoever to initiate,
pursue and/or prosecute any claim, proceeding or action on behalf of the Fund
or Adviser.
(b) The Sub-Adviser, at its expense, will furnish (i) all necessary
investment and management facilities, including salaries of Sub-Adviser's
personnel, required for it to execute its duties faithfully and
(ii) administrative facilities, including bookkeeping, clerical personnel and
equipment as Sub-Adviser determines is necessary for Sub-Adviser to execute its
obligations under this Agreement. The Sub-Adviser shall be responsible for
commercially reasonable expenses relating to the printing and mailing of
required supplements to the Fund's registration statement, provided that such
supplements relate solely to a change in control of the Sub-Adviser or any
change in the portfolio manager or managers assigned by the Sub-Adviser to
manage the Fund.
(c) The Sub-Adviser shall vote proxies relating to the Fund's investment
securities in the manner in which the Sub-Adviser believes to be in the best
interests of the Fund, including voting 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. The Trust or Adviser may
withdraw the authority granted to the Sub-Adviser pursuant to this Section at
any time upon written notice. Sub-Adviser's responsibilities with respect to
proxy voting shall be limited to submission of votes, which have been forwarded
to Sub-Adviser in a timely manner by the Adviser's voting agent. Sub-Adviser
shall not have any supervisory responsibility with respect to the Adviser's
voting agent.
(d) The Sub-Adviser will select brokers and dealers to effect all portfolio
transactions subject to the conditions set forth herein (except to the extent
such transactions are effected in accordance with such policies or procedures
as may be established by the Board of Trustees.) 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 seek 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.
The Adviser reserves the right to direct the Sub-Adviser upon written notice
not to execute transactions through any particular broker(s) or dealer(s), and
the Sub-Adviser agrees to comply with such request within ten business days of
receiving written notice. 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
2
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. The Sub-Adviser shall maintain
records it has reasonably determined are adequate to demonstrate compliance
with this section.
On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients of the
Sub-Adviser, the Sub-Adviser to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be purchased or sold to attempt to obtain a more favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in compliance with Section 17(d)
of the Investment Company Act of 1940 and the rules established thereunder,
Section 206 of the Investment Advisers Act of 1940 and any rules established
thereunder, and pursuant to policies adopted by the Sub-Adviser and approved by
the Board of Trustees of the Fund.
(e) The Sub-Adviser will provide reasonable 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.
(f) 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 from time to time,
including attendance at Board of Trustees Meetings, at such reasonable times as
the parties may agree to review the Sub-Adviser's investments on behalf of the
Fund and to consult with the Adviser or the Board of Trustees regarding the
investment affairs of the Fund.
(g) 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.
(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 the Fund; (ii) the
investment objectives, policies and restrictions of the Fund as stated in the
Fund's currently effective Prospectus and Statement of Additional Information
("SAI") as amended from time to time; (iii) the Investment Company
3
Act of 1940, as amended (the "1940 Act") and the Investment Advisers Act of
1940, as amended (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.
(i) The Sub-Adviser shall provide reasonable assistance to the Fund in the
preparation of its registration statement, prospectus, shareholder reports, and
other regulatory filings, or any amendment or supplement thereto (collectively,
"Regulatory Filings") and shall provide the Fund with 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.
(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 reasonably 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 compliance with Rule
38a-1 under the 1940 Act (including compliance with the Federal Securities Laws
as defined under that Rule). 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 the information 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 upon reasonable request to examine and
review the Sub-Adviser's compliance program and its adherence thereto.
2. OTHER AGREEMENTS.
(a) 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. Sub-Adviser will not be
obligated to recommend for the Fund the purchase or sale of securities or other
investments that Sub-Adviser may purchase or sell for the accounts of
Sub-Adviser's other clients.
(b) Adviser and Fund hereby acknowledge that Sub-Adviser is affiliated with
Bank of America Corporation, a diversified financial services company that
directly or through affiliates provides a wide variety of banking, securities,
insurance and other investment services to a broad array of customers.
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.
Solely for the purpose of determining the promptness of payments, payments
shall be considered made upon mailing or wiring pursuant to wiring instructions
provided by the Sub-Adviser. Such fee shall be
4
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 as of the date first written
above, 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. This Agreement shall automatically terminate in the event of
its assignment or in the event of termination of the Investment Management
Agreement.
(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 by the Board of Trustees or by the vote of a majority of the
outstanding voting securities of the Fund as required by the 1940 Act;
provided, however, that this Agreement may be terminated at any time without
the payment of any penalty:
(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) Except to the extent permitted by the 1940 Act or the rules or
regulations thereunder or pursuant to any exemptive relief granted by the
Securities and Exchange Commission ("SEC"), this Agreement may be amended by
the parties only if such amendment, if material, is specifically approved by
the vote of a majority of the outstanding voting securities of the Fund (unless
such approval is not required by Section 15 of the Investment Company Act of
1940 as interpreted by the SEC or its staff) and by the vote of a majority of
the Independent Trustees.
5
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) any portfolio manager of the
Fund shall have changed.
7. NONLIABILITY OF SUB-ADVISER.
(a) Except as may otherwise be provided by the 1940 Act or the Advisers Act,
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, neither the Sub-Adviser nor its officers, directors, employees or
agents shall 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 any disclosure provided by the
Sub-Adviser for inclusion in the 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 7(a) above.
(c) Sub-Adviser shall not be liable for any act or omission of Custodian or
any broker which effects transactions for the Fund. Without limiting the
foregoing, Sub-Adviser does not assume responsibility for the accuracy of
information furnished to it by the Fund, Adviser, Custodian, broker, or by any
person on whom it reasonably relies.
(d) Sub-Adviser does not warrant that the portion of the assets of the Fund
managed by Sub-Adviser will achieve any particular rate of return or that its
performance will match that of any benchmark or index.
8. INDEMNIFICATION.
Notwithstanding Section 7, 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 reasonable legal and other
expenses) to which the Adviser or the Funds may become subject as a result of
any untrue statement of a material fact contained in disclosure provided by the
Sub-Adviser for inclusion in the Fund's Regulatory Filings or any omission of a
material fact required to be stated necessary to make such disclosure not
6
misleading, provided that the Sub-Adviser shall have been given written notice
concerning any matter for which indemnification is claimed under this Section.
9. 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. The Sub-Adviser will use records
or information obtained under this Agreement only for the purposes contemplated
hereby, and will not disclose such records or information in any manner other
than expressly authorized by the Fund, or if disclosure is expressly required
by applicable federal or state regulatory authorities or by this Agreement. 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.
10. CONFIDENTIAL INFORMATION
(a) The Sub-Adviser will use records or information obtained under this
Agreement only for the purposes contemplated hereby, and will not disclose such
records or information in any manner other than expressly authorized by the
Fund, or if disclosure is expressly required by applicable federal or state
regulatory authorities or by this Agreement.
(b) Notwithstanding the foregoing, the Sub-Adviser shall not disclose to any
third party the "non-public portfolio holdings" of the Fund, unless (1) there
is a legitimate business purpose for such disclosure, and (2) such third party
agrees in writing with Sub-Adviser to keep such information confidential and to
not engage in trading based upon such information. "Non-public portfolio
holdings" means holdings which have not first been made public by making a
filing with the Securities and Exchange Commission which is required to include
such portfolio holdings information.
7
11. MARKETING MATERIALS.
(a) 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.
(b) 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 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.
12. GOVERNING LAW.
This Agreement shall be construed and interpreted in accordance with the
laws of the State of Delaware without regard to conflict of law principles, and
the applicable provisions of the 1940 Act or other federal laws and regulations
which may be applicable. To the extent that the applicable law of the State of
Delaware or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act or other federal laws and regulations which may be
applicable, the latter shall control.
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.
14. NOTICES.
Any notice that is required to be given by the parties to each other under
the terms of this Agreement shall be given in writing, delivered, or mailed to
the other party, or transmitted by facsimile to the parties at the following
addresses or facsimile numbers, which may from time to time be changed by the
parties by notice to the other party:
(a)If to the Sub-Adviser:
Columbia Management Advisors, LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxxx Xxxx
Facsimile (000) 000-0000
8
(b)If to the Adviser:
Lincoln Investment Advisors Corporation
Xxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Facsimile (000) 000-0000
15. 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.
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.
LINCOLN INVESTMENT
ADVISORS CORPORATION
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman
COLUMBIA MANAGEMENT ADVISORS, LLC
/s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
9
Accepted and agreed to as of the day and year first above written:
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST,
on behalf of the LVIP Value Opportunities
Fund
/s/ Xxxxx X. Xxxxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman & President
10
SCHEDULE A
Investment Sub-Advisory Fees
Annual Fee as a Percentage of Average
Name of Portfolio Daily Net Assets
----------------- -------------------------------------
LVIP Value Opportunities Fund .75% of first $60 Million
Columbia Management Advisors, LLC .50% of next $90 Million
.40% over $150 Million
11
