EXHIBIT 28(d)(19)
SUB-ADVISORY AGREEMENT
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This Sub-Advisory Agreement ("Agreement") executed as of April 30,
2008, is between LINCOLN INVESTMENT ADVISORS CORPORATION, a Tennessee
corporation (the "Adviser"), and SSgA Funds Management, Inc., a Massachusetts
corporation (the "Sub-Adviser"). As a matter of administrative convenience, this
Agreement is entered into by and between the Sub-Adviser and the Adviser with
respect to multiple Funds of the Lincoln Variable Insurance Products Trust (the
"Trust"), each of which is a registered investment company registered under the
Investment Company Act of 1940, as amended and is listed in Schedule B hereto.
Nevertheless, this Agreement shall be construed to constitute a separate
Agreement on behalf of each such Fund, and the term Fund is used in the singular
herein.
WHEREAS, the Trust, on behalf of 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, 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) The Trust and the Advisor appoint the Sub-Advisor to act as
investment sub-advisor to the Fund on the terms set forth in this Agreement.
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.
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 another writing by the Trust, Adviser and the Sub-Adviser.
(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). 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-
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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, 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.
(d) The Sub-Advisor shall not be responsible for filing proofs of claim
or otherwise participating in class action lawsuits with respect to securities
held by the Fund.
(e) 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 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, and as communicated in writing to the
Sub-Adviser, 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. The Sub-Adviser shall maintain
records 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
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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.
(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 from time to
time, including attendance at Board of Trustees Meetings, at such reasonable
times as the parties may agree to review investment policies of the Fund and to
consult with the Adviser or the Board of Trustees 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
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 Act of 1940
(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.
(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 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.
(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 reasonably deem
appropriate or may request from the Sub-
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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 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) The Sub-Adviser shall, as part of its compliance process, perform
diversification testing under Section 817(h) of the Code based upon its own
records with respect to the Fund assets managed by the Sub-Adviser and report
promptly any failure indicated by such testing to the Adviser, and take any
necessary actions to remedy such failure. Notwithstanding the foregoing
sentence, the Adviser agrees that the official testing for the Fund's compliance
with diversification testing under Section 817(h) of the Code shall be performed
by Adviser, the Fund's custodian or services provider other than the
Sub-Adviser.
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.
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 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. REPRESENATIONS.
(a) Representations of the Adviser. The Adviser represents, warrants
and agrees as follows: (1) The Adviser has been duly authorized by the Board of
Trustees of the Trust to
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delegate to the Sub-Adviser the provision of investment services to the Funds as
contemplated hereby; and (2) The Adviser (i) is registered as an investment
adviser under the Advisers Act and will continue to be so registered for so long
as this Agreement remains in effect; (ii) is not prohibited by the 1940 Act, the
Advisers Act or other law, regulation or order from performing the services
contemplated by this Agreement; (iii) has met and will seek to continue to meet
for so long as this Agreement remains in effect, any other applicable federal or
state requirements, or other applicable requirements of any regulatory or
industry self-regulatory agency necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to enter into
and perform the services contemplated by this Agreement ; and (v) will promptly
notify the Sub-Adviser of the occurrence of any event that would disqualify the
Adviser from serving as an investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise.
(b) Representations of the Sub-Adviser. The Sub-Adviser represents,
warrants and agrees as follows: The Sub-Adviser (i) is registered as an
investment adviser under the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect; (ii) is not prohibited by the
1940 Act, the Advisers Act or other law, regulation or order from performing the
services contemplated by this Agreement; (iii) has met and will seek to continue
to meet for so long as this Agreement remains in effect, any other applicable
federal or state requirements, or other applicable requirements of any
regulatory or industry self-regulatory agency necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the authority to
enter into and perform the services contemplated by this Agreement ; and (v)
will promptly notify the Trust and Adviser of the occurrence of any event that
would disqualify the Sub-Adviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise
5. 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.
6. 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:
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(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 Investment Company Act of
1940 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.
7. 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.
8. NONLIABILITY OF SUB-ADVISER.
(a) Except as may otherwise be provided by the Investment Company Act
of 1940 or the Investment Advisers Act of 1940, 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 Adviser, 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.
9. INDEMNIFICATION.
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(a) Notwithstanding Section 8, the Sub-Adviser agrees to indemnify the
Adviser and the Fund 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 Fund may become subject as a
result of any untrue statement of a material fact contained in disclosure
provided by the Sub-Adviser expressly 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 misleading, provided that the Sub-Adviser shall have
been given written notice concerning any matter for which indemnification is
claimed under this Section.
(b) The Adviser agrees to indemnify the Sub-Adviser for, and hold it
harmless against, any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Adviser) or
litigation (including reasonable legal and other expenses) to which the
Sub-Adviser may become subject as a result of any untrue statement of a material
fact (or any omission of a material fact required to be stated necessary to make
such disclosure not misleading) contained in the Fund's Regulatory Filings,
which statement was not provided by Sub-Adviser expressly for inclusion in the
Fund's Regulatory Filings, provided that the Adviser shall have been given
written notice concerning any matter for which indemnification is claimed under
this Section.
(c) Neither party shall be responsible for any consequential or
indirect damages or losses sustained by the other party.
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. 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.
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11. 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.
12. 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.
13. 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 Investment Company Act of 1940 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 Investment Company Act of 1940 or
other federal laws and regulations which may be applicable, the latter shall
control.
14. SEVERABILITY/INTERPRETATION.
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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.
15. 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:
SSgA Funds Management, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Compliance Officer
(b) If to the Adviser:
Lincoln Investment Advisors Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
16. 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.
17. ADV PART II RECEIPT
Concurrent with the execution of this Agreement, the Sub-Adviser is
delivering to the Adviser and to the Trust a copy of Part II of its Form ADV, as
revised, on file with the SEC. The Adviser and the Trust hereby acknowledge
receipt of such copy.
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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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman
SSGA FUNDS MANAGEMENT, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
Accepted and agreed to
as of the day and year
first above written:
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST,
on behalf of the [See attached Schedule B] Fund
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
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