Exhibit 23(d)(8)
SUB-ADVISORY AGREEMENT
Sub-Advisory Agreement ("Agreement") dated as of April 30, 2007, is by and
between Lincoln Investment Advisors Corporation, a New Hampshire corporation
(the "Adviser") and Pyramis Global Advisors, LLC, a Delaware limited liability
company (the "Sub-Adviser").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is agreed
as follows:
1. SERVICES TO BE RENDERED BY SUB-ADVISER TO THE FUND.
a. The LVIP FI Equity-Income Fund (the "Fund") is a series of the Lincoln
Variable Insurance Products Trust (the "Trust"), a Delaware statutory
trust. The Fund is an eligible investment fund for Lincoln National
Variable Annuity Account C (the "Separate Account"). Subject always to
the control of 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, as amended (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 in accordance with the provisions of the organizational
documents and By-laws of the Trust and the stated investment objective,
policies and restrictions of the Fund as set forth in the Fund's
prospectus. Adviser will provide the Sub-Adviser with copies of the
organizational documents of the Trust and the Fund's prospectus, and any
amendments to those items as may occur from time to time. Sub-Adviser
will use its best efforts to safeguard and promote the welfare of the
Fund, and to comply with other policies which the Trustees or the
Adviser may from time to time determine and communicate in writing to
the Sub-Adviser. 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.
Sub-Adviser understands and agrees that in addition to the Separate
Account, the Fund may also be used as an eligible investment fund for
other variable annuity and/or variable life insurance separate accounts.
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 and
shareholder accounting services).
As a particular service to be rendered by Sub-Adviser, but not by way of
limitation, Sub-Adviser shall vote proxies relating to the Fund's
portfolio securities.
c. In the selection of brokers and dealers 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 or dealer involved; and the quality of
service rendered by the broker or dealer in other transactions. Subject
to such policies as the Trustees of the Trust 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 or dealer 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 or dealer 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 or
dealer, 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.
d. The Sub-Adviser shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Sub-Adviser pursuant to Section 1
other than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders of the Fund or Trustees,
officers and employees of the Trust may be a shareholder, director, trustee,
officer or employee of, or be otherwise interested in, the Sub-Adviser, and in
any person controlled by or under common control with the Sub-Adviser; and that
the Sub-Adviser and any person controlled by or under common control with the
Sub-Adviser may have an interest in the Fund or the Variable Annuity, or any
other investment vehicle for which the Fund is an eligible investment fund.
3. COMPENSATION TO BE PAID BY THE ADVISER TO THE SUB-ADVISER
The Adviser will pay to the Sub-Adviser as compensation for the
Sub-Adviser's services rendered and for the expenses born by the Sub-Adviser
pursuant to Section 1, a fee, computed and paid at the annual rate of:
0.45% on the first $250,000,000
0.40% on the next $500,000,000
0.35% on the excess over $750,000,000
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Such 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 shall be payable for each month within ten (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. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.
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; and this Agreement shall not be amended unless such amendment be
approved at a meeting by affirmative vote of a majority of the outstanding
shares of the Fund and by the vote, cast in person at a meeting called for
the purpose of voting on such approval, of a majority of the Trustees of the
Trust who are not interested persons of the Trust or the Adviser or of the
Sub-Adviser.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of September 1, 2006 and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
a. The Fund may at any time terminate this Agreement by not less than sixty
(60) days' written notice delivered or mailed by registered mail,
postage prepaid, to the Adviser and the Sub-Adviser; or
b. If (i) the Trustees of the Trust or the shareholders by the affirmative
vote of a majority of the outstanding shares of the Fund and (ii) a
majority of the Trustees who are not interested persons of the Trust or
of the Adviser or of the Sub-Adviser, by vote cast in person at a
meeting called for the purpose of voting on such approval, do not
specifically approve at least annually the continuance of the Agreement,
then this Agreement shall automatically terminate at the close of
business on the second anniversary of its execution, or upon the
expiration of one year from the effective date of the last such
continuance, whichever is later; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of the
Fund for their approval and such shareholders fail to approve such
continuance of this Agreement as provided herein, the Sub-Adviser may
continue to serve hereunder in a manner consistent with the Investment
Company Act of 1940 and the Rules and Regulations thereunder; or
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c. The Adviser may at any time terminate this Agreement by not less than
ninety (90) days' written notice delivered or mailed by registered mail,
postage prepaid, to the Sub-Adviser, and the Sub-Adviser may at any time
terminate this Agreement by not less than ninety (90) days' written
notice delivered or mailed by registered mail, postage prepaid, to the
Adviser.
Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by affirmative vote of a majority of the
outstanding shares of the Fund.
Termination of this Agreement pursuant to Section 5 shall be without the
payment of any penalty.
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 1940 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 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;
c. The ownership of more than 51% of the common stock of the Sub-Adviser,
or any of the Sub-Adviser's portfolio managers for the Fund shall have
changed.
d. The Chairman of the Board of Directors or the President of the
Sub-Adviser, or any of the Sub-Adviser's portfolio managers for the Fund
shall have changed.
7. CERTAIN DEFINITIONS
For the purpose of this Agreement, the "affirmative vote of a majority of
the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more that 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders
of more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
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For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940 and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940 and the Rules and
Regulations thereunder; and the term "brokerage and research services" shall
have the meaning given in the Securities Exchange Act of 1934 and the Rules and
Regulations thereunder.
8. NONLIABILITY OF SUB-ADVISER
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, the rendering of services hereunder.
Sub-Adviser, its directors, trustees, officers or employees shall not be
liable to the Lincoln Entities defined in Section 9 for any loss suffered
solely as a consequence of any action or inaction of any custodian of the Fund
in failing to observe the instructions of the Sub-Adviser.
9. EXCEPTIONS TO NON-LIABILITY
Notwithstanding Section 8 above, Sub-Adviser agrees to indemnify the Fund,
the Adviser, the Separate Account and the Depositor of the Separate Account
(the "Lincoln Entities") 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) and litigation (including legal and
other expenses) to which the Lincoln Entities, or any of them, may become
subject under any statute, at common law or otherwise, insofar as those losses,
claims damages, liabilities or expenses (or actions in respect thereof) or
settlements arise as a result of any failure by the Sub-Adviser, whether
unintentional or in good faith or otherwise:
a. To adequately diversify the investment program of the Fund, pursuant to
the requirements of the Section 817(h) of the Code, and the regulations
issued thereunder (including, but not by way of limitation, Reg. Sec.
1.817-5), relating to the diversification requirements for variable
annuity, endowment, and life insurance contracts.
b. To supply the Lincoln Entities, or any of them, with the accurate
information by which they, or any of them, may properly calculate the
accumulation and/or annuity unit values, or provide other information to
the public, to its clients or prospects, or to any regulatory body, all
as may be mandated by law or required pursuant to the relevant
Prospectuses and Registration Statements for the Fund and for the
Separate Account and any other separate accounts it may serve.
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10. USE OF SUB-ADVISER'S NAME
Adviser will not use Sub-Adviser's name (nor that of any affiliate) in its
marketing or sales literature, without prior review and approval by
Sub-Adviser, which approval will not be unreasonably withheld or delayed.
11. RIGHT OF AUDIT
The Fund shall own and control all the pertinent records pertaining to
transactions under this Agreement. The Sub-Adviser shall permit employees or
legal representatives of the Lincoln Entities (including independent auditors),
or any of them, at the Lincoln Entities' reasonable discretion, to audit the
books and records (including, but not by way of limitation, electronic data
files, and e-mail, whether on-line or in storage) of Sub-Adviser which relate
to transactions which are the subject of this Agreement. Any audit will be
conducted during normal business hours of the Sub-Adviser and on the
Sub-Adviser's premises. Sub-Adviser agrees to provide to the Lincoln Entities,
without charge, reasonable access to its facilities and personnel during the
conduct of any audit. Sub-Adviser may charge a reasonable fee for photocopying
and other out-of-pocket costs associated with an audit conducted under this
Section.
12. ALTERNATIVE RESOLUTION OF DISPUTES
Prior to commencing litigation over any dispute arising out of or relating
to this agreement the parties shall attempt in good faith to resolve the
dispute by the following means:
a. Negotiation. Any party may give the other party(ies) written notice of
any dispute not resolved in the normal course of business. Within twenty
(20) days after delivery of that notice, executives from those parties
involved in the dispute and who have authority to settle the controversy
shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the dispute. If the matter has not
been resolved within 120 days of the disputing party's notice, or if the
parties fail to meet within the twenty (20) days, any of the disputing
parties may initiate a minitrial of the controversy or claim as provided
in Paragraph (b). If a negotiator intends to be accompanied at a meeting
by an attorney, the other negotiator(s) shall be given at least three
(3) working days' notice of that intention and may also be accompanied
by an attorney.
b. Minitrial. If the dispute has not been resolved by negotiation as
provided herein, the disputing parties shall endeavor to settle the
dispute by minitrial under the then current Center For Public Resources
("CPR") Model Minitrial Procedure, assisted by a neutral third party who
will be selected by the disputing
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parties from the CPR Panels of Neutrals. If the disputing parties
encounter difficulty in agreeing on a neutral third party, they will
seek the assistance of CPR in the selection process.
c. Extension of Deadlines. Any or all of the deadlines set forth in this
Section 12 may be extended by mutual agreement of the disputing parties.
d. Confidentiality. All negotiations pursuant to this Section 12 are
confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence and
applicable State Rules of Evidence.
e. No Waiver. Nothing in this Section 12 shall be construed to constitute a
waiver of any right provided by the Investment Advisers Act of 1940 to
any party to this agreement.
13. CHOICE OF LAW
This agreement shall be interpreted and construed in accordance with the law
of the State of Indiana.
IN WITNESS WHEREOF, LINCOLN INVESTMENT ADVISORS CORPORATION and PYRAMIS
GLOBAL ADVISORS, LLC have each caused this Instrument to be signed in duplicate
on its behalf by its duly authorized representative, all as of the day and year
first above written.
LINCOLN INVESTMENT ADVISORS
CORPORATION
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Second Vice President
PYRAMIS GLOBAL ADVISORS, LLC
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Administrative Officer
Accepted and Agreed to By:
LVIP FI EQUITY-INCOME FUND,
a series of Lincoln Variable
Insurance Products
Trust
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
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