Exhibit 23(d)(2)
SUB-ADVISORY AGREEMENT
Sub-Advisory Agreement executed as of January 1, 2004, between DELAWARE
MANAGEMENT COMPANY, a series of Delaware Management Business Trust, a Delaware
statutory trust (the "Adviser"), and X. XXXX PRICE ASSOCIATES, INC., a Maryland
corporation (the "Sub-Adviser").
WHEREAS, Lincoln Variable Insurance Products Trust (the "Trust"), on behalf
of the Aggressive Growth Fund (the "Fund") has entered into an Investment
Management Agreement, dated May 1, 2003, with Adviser, pursuant to which the
Adviser has agreed to provide certain investment management services to the
Fund; and
WHEREAS, the Sub-Adviser is principally engaged in the business of
rendering investment advisory services and is registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"); and
WHEREAS, the Adviser desires to appoint Sub-Adviser as investment
subadviser to provide the investment advisory services to the Fund as 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 control and direction 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. The Sub-Adviser, on behalf of the Fund, is authorized, in its
discretion and without prior consulting with the Adviser, to:
(i) buy, sell, exchange, convert, lend, and otherwise trade in any stocks,
bonds, and other securities or assets;
(ii) place orders and negotiate the commissions for the execution of
transactions in securities or other assets with or through such brokers,
dealers, underwriters or issuers as the Sub-Adviser may select;
(iii) vote proxies, exercise conversion or subscriptions rights, and
respond to tender offers and other consent solicitations with respect to the
issuers of securities in which Fund assets may be invested, provided such
materials have been forwarded to the Sub-Adviser in a timely fashion by the
Fund's custodian;
(iv) maintain all or part of the Fund's uninvested assets in short-term
income producing instruments for such periods of time as shall be deemed
reasonable and prudent by the Sub-Adviser, including, but not limited to,
investments in X. Xxxx Price Reserve Investment Fund or X. Xxxx Price Government
Reserve Investment Fund which are internal money market funds available for use
only by clients of the Sub-Adviser for short-term investments;
(v) instruct the Fund custodian to deliver for cash received, securities or
other cash and/or securities instruments sold, exchanged, redeemed or otherwise
disposed of from the Fund, and to pay cash for securities or other cash and/or
securities instruments delivered to the custodian and/or credited to the Fund
upon acquisition of the same for the Fund; and
(vi) generally, perform any other act necessary to enable the Sub-Adviser
to carry out its obligations under this Agreement.
In the performance of its duties, the Sub-Adviser will comply with the
provisions of the organizational documents of the Fund; the stated investment
objective, policies and restrictions of the Fund in the then current effective
Registration Statement of the Fund; any written instructions and directions of
the Trustees or the Adviser; and its general fiduciary responsibility to the
Fund. 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.
(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 the manner in which the Sub-Adviser believes to be in the best
interests of the Fund, 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) 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 such services are defined under Section 28(e) of the Securities
Exchange Act of 1934 and as described below. In using its best efforts to obtain
quality execution 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.
(e) 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.
(f) The Sub-Adviser shall furnish the Trustees with such information and
reports regarding the Fund's investments as the Adviser deems appropriate or as
the Trustees may reasonably request.
(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.
2. OTHER AGREEMENTS.
The investment management services provided by the Sub-Adviser under this
Agreement are not exclusive, and the Sub-Adviser and its affiliates shall be
free to render investment advisory or other services to others (including other
investment companies) so long as its ability to render the services provided for
in this Agreement shall not be impaired thereby.
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 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. Each month,
the Adviser will provide the Sub-Adviser with reasonable documentation agreed to
by the parties that sets forth the computation of such sub-advisory fee.
4. DUTIES OF THE ADVISER.
The Adviser shall furnish the Sub-Adviser with any documents, materials or
information that the Sub-Adviser may reasonably request to enable it to perform
its duties pursuant to this Agreement.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
(a) This Agreement shall become effective upon the date first written
above, and shall remain in full force and effect continuously thereafter until
terminated as set forth below.
(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 Investment Company Act of 1940 (the
"1940 Act"); provided, however, that this Agreement may be terminated:
(i) by the Fund at any time by the vote of a majority of Trustees
of the Trust or by the vote of a majority of the outstanding voting
securities of the Fund;
(ii) by the Adviser at any time on 60 days' prior written notice to
the Sub-Adviser, unless this Agreement is otherwise terminated; or
(iii) by the Sub-Adviser at any time on 60 days' prior written
notice to the Adviser, unless this Agreement is otherwise terminated.
(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 Adviser and the Fund shall have terminated.
(d) No provision of this Agreement may be changed, waived, discharged, or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
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 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 Internal Revenue 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 President 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 reasonable legal and other expenses) to
which the Adviser or the Funds may become subject as a result of 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, provided that the Sub-Adviser shall have been given prompt written
notice concerning any matter for which indemnification is otherwise afforded
hereunder.
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 Act. The Sub-Adviser
agrees that all records that it maintains on behalf of the Fund are property of
the Fund and the Sub-adviser will surrender promptly to the Fund any of 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 Securities and Exchange Commission, the Fund's auditors, the
Fund or any representative of the Fund, the Adviser, or any governmental agency
or other instrumentality having regulatory authority over the Fund.
10. REGULATORY AND MARKETING MATERIALS.
(a) Sub-Adviser acknowledges that Adviser is not responsible for the
preparation and filing, if necessary, of any of the Fund's regulatory or
marketing materials; the Fund or its designee is responsible for the preparation
and filing, if necessary, of the Fund's regulatory and marketing materials.
(b) The Fund shall not use the name "X. Xxxx Price" and any of the other
names of the Sub-Adviser or its affiliated companies and any derivative or logo
or trade or service xxxx thereof, or disclose information related to the
business of the Sub-Adviser or any of its affiliates in any prospectus, sales
literature or other material relating to the Trust in any manner not approved
prior thereto by the Sub-Adviser except for information which is otherwise
publicly available; provided, however, that the Sub-Adviser shall approve all
uses of its name and that of its affiliates which merely refer in accurate terms
to its appointment hereunder or which are required by the SEC or a state
securities commission. 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) business days to the Fund shall relieve the Fund of the
obligation to obtain the prior written permission of the Sub-Adviser.
(c) Upon termination of this Agreement for any reason, the Fund shall as
soon as practicable cease and cause the Trust to cease all use of the name and
xxxx "X. Xxxx Price."
(d) The Sub-Adviser shall not use the name of the Trust, the Adviser or any
of their affiliates and any derivative or logo or trade or service xxxx thereof,
or disclose information related to the business of the Fund or any of its
affiliates in any material relating to the Sub-Adviser in any manner not
approved prior thereto by the Fund except for information which is otherwise
publicly available; provided, however, that the Fund shall approve all uses of
its name and that of its affiliates which merely refer in accurate terms to the
appointment of the Sub-Adviser hereunder or which are required by the SEC or a
state securities commission. 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) business days to the Sub-Adviser shall relieve the Sub-Adviser of the
obligation to obtain the prior written permission of the Fund.
11. GOVERNING LAW.
This Agreement shall be governed in accordance with 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 provisions
of the 1940 Act, in such case, the latter shall control.
12. SEVERABILITY/INTERPRETATION.
Should any part of this Agreement be 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.
13. 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 Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties have caused this instrument to be signed in
duplicate on their behalf 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/ See Xxxx Xxxx
-----------------------
Name: See Xxxx Xxxx
Title: Executive Vice President
X. XXXX PRICE ASSOCIATES, INC.
/s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Accepted and agreed to
as of the day and year
first above written:
AGGRESSIVE GROWTH FUND, a series of
Lincoln Variable Insurance Products Trust
/s/ Rise X.X. Xxxxxx
Name: Rise X.X. Xxxxxx
Title: Vice President and Assistant Treasurer
SCHEDULE A
FEE SCHEDULE
The Adviser shall pay to the Sub-Adviser compensation at an annual rate as
follows:
0.50% of the first $250,000,000 of average daily net assets of the Fund,
and 0.45% of any excess of average daily net assets of the Fund over
$250,000,000
ATTACHMENT
to the
SUB-INVESTMENT MANAGEMENT AGREEMENT
between
DELAWARE MANAGEMENT COMPANY
and
JANUS CAPITAL MANAGEMENT LLC
Investment Manager shall pay to Sub-Investment Manager a monthly fee,
calculated pursuant to Section 7 of the Agreement, as follows:
0.55% of the first $100,000,000 of average daily net assets of the Fund,
0.50% of the next $400,000,000; and 0.45% of any excess over $500,000,000.
