Exhibit 23(d)(22)
FORM OF
SUB-ADVISORY AGREEMENT
LVIP GLOBAL INCOME FUND
This Sub-Advisory Agreement ("Agreement") executed as of May 1, 2009, is
between LINCOLN INVESTMENT ADVISORS CORPORATION, a Tennessee corporation (the
"Adviser"), and FRANKLIN ADVISERS, INC., a California corporation (the
"Sub-Adviser").
WHEREAS, Lincoln Variable Insurance Products Trust (the "Trust"), on behalf
of the LVIP Global Income Fund (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 specified herein to
that portion of the Fund as the Adviser shall from time to time allocate to the
Sub-Adviser (the "Managed Portion"), 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 Managed Portion of 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 Managed Portion 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-Adviser or any
change in the portfolio manager or managers assigned by the Sub-Adviser to
manage the Fund.
1
(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. Sub-Adviser's obligation to vote proxies
shall be contingent upon receipt or proxies from the Fund custodian in a timely
manner. 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-Adviser will select brokers and dealers to effect all portfolio
transactions with respect to the Managed Portion 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
and received by Sub-Adviser.) 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 Managed Portion of 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 Managed
Portion of 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 to the
extent such policies are received by 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 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
2
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 advice and assistance to the Investment
Adviser as to the determination of the fair value of certain investments held
in the Managed Portion of the Fund 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 investments in the Managed Portion of
the Fund as the Adviser reasonably 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 Managed Portion of the Fund and to consult with the
Adviser or the Board of Trustees regarding the investment affairs of the
Managed Portion 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, which shall be provided to Sub-Adviser.
(h) In the performance of its duties, the Sub-Adviser shall be subject to,
and shall perform in accordance with, the following to the extent that
Sub-Adviser receives them from Adviser or Trust: (i) provisions of the
organizational documents of the Trust that are applicable to the Managed
Portion of 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.
(i) 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.
(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
3
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 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.
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 Managed Portion 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 Managed Portion of 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
4
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 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.
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
Section 817(h) 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.
5
7. NONLIABILITY OF SUB-ADVISER.
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 Fund or to any shareholder of the Fund, for any act or omission in the
course of, or connected with, rendering services hereunder.
8. INDEMNIFICATION.
Notwithstanding Section 7, the Advisor and the Sub-Adviser each agree to
indemnify the other party (and each such party's affiliates, employees,
directors and officers) against any claim, damages, loss or liability
(including reasonable attorneys' fees) arising out of any third party claims
brought against an indemnified party that are found to constitute willful
misfeasance, bas faith or gross negligence on the part of the indemnifying
party.
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
investments held in the Managed Portion of the Fund 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. 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. This Section shall not apply to
separate records maintained by Sub-Adviser in compliance with Section 204 of
the Investment Advisers Act of 1940, which records shall be the property of
Sub-Adviser.
(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.
6
(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.
11. MARKETING MATERIALS.
(a) The Adviser agrees that the names of the Sub-Adviser and its affiliates
and any of their logos, trademarks, service marks, trade names or any
derivatives thereof (collectively, "Sub-Adviser Names") are the valuable
property of the Sub-Adviser and its affiliates. The Adviser and the Trust may
use the name of the Sub-Adviser to identify it as the sub-adviser of the Fund
as required by law or regulation. Any other use of a Sub-Adviser Name must be
pre-approved in writing by the Sub-Adviser prior to the first such use. Once
approved in writing by the Sub-Adviser, any material change in the use of the
Sub-Adviser Name requires prior approval in writing by the Sub-Adviser. The
Sub-Adviser agrees to respond to any request for approval under this section 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. Upon termination of
this Agreement, the Adviser and the Trust shall cease to use all Sub-Adviser
Names except as may be required by law or regulation. The Adviser acknowledges
that the Sub-Adviser and its affiliates could suffer irreparable harm from
unauthorized use of its trademarks, service marks, logos or trade names for
which monetary damages could be inadequate and therefore would be entitled to
seek injunctive relief.
(b) The Sub-Adviser agrees that the names of the Fund, Adviser and their
affiliates and any of their logos, trademarks, service marks, trade names or
any derivatives thereof (collectively, "Adviser Names") are the valuable
property of the Adviser and its affiliates. The Sub-Adviser may use the Adviser
Names to identify it as a sub-adviser or service provider to the Fund. Any
other use of Adviser Names must be pre-approved in writing by the Adviser prior
to use. Once approved in writing by the Adviser, any material change in the use
of the Adviser Names requires prior approval in writing by the Adviser. The
Adviser agrees to respond to any request for approval under this section on a
prompt and timely basis. Upon termination of this Agreement, the Sub-Adviser
shall cease to use all Adviser Names except as may be required by law or
regulation. The Sub-Adviser acknowledges that the Adviser, the Trust and their
affiliates could suffer irreparable harm from unauthorized use of their
trademarks, service marks, logos or trade names for which monetary damages
could be inadequate and therefore would be entitled to seek injunctive relief.
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
7
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.
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:
Franklin Advisers, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
Franklin ▇▇▇▇▇▇▇▇▇ Investments
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
(b) If to the Adviser:
Lincoln Investment Advisors Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
8
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
---------------------------------------
Name:
Title:
FRANKLIN ADVISERS, INC.
---------------------------------------
Name:
Title:
Accepted and agreed to
as of the day and year
first above written:
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST,
on behalf of the LVIP Global Income Fund
------------------------------------------
Name:
Title:
9