Exhibit 23(d)(5)
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 UBS GLOBAL ASSET MANAGEMENT (AMERICAS)
INC., a Delaware corporation (the "Sub-Adviser").
WHEREAS, Lincoln Variable Insurance Products Trust (the "Trust"), on behalf
of the Global Asset Allocation 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 Adviser desires to appoint Sub-Adviser as investment
subadviser 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. In the performance of its duties, the Sub-Adviser will comply with
the provisions of the organizational documents of the Fund and the stated
investment objective, policies and restrictions of the Fund, and 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, as the case may be, may
determine. 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 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.
(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 to be deemed exclusive, and the Sub-Adviser shall be free to
render
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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.
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.
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 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 (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 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 not more than 60 days' written
notice to the Sub-Adviser; or
(iii) by the Sub-Adviser at any time on 60 days' written notice to
the Adviser.
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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 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 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
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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. 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) business
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) 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 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.
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,
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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
UBS GLOBAL ASSET MANAGEMENT
(AMERICAS) INC.
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Director
Accepted and agreed to
as of the day and year
first above written:
GLOBAL ASSET ALLOCATION FUND, a series of
Lincoln Variable Insurance Products Trust
/s/ Rise X.X. Xxxxxx
Name: Rise X.X. Xxxxxx
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:
0.47% of the first $200 million of average daily net assets of the Fund;
0.42% of the next $200 million of average daily net assets of the Fund; and
0.40% of any excess of average daily net assets of the Fund over $400
million
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