EXHIBIT 28(D)(10)
SUB-ADVISORY AGREEMENT
LVIP MFS INTERNATIONAL GROWTH FUND
This Sub-Advisory Agreement ("Agreement") executed as of October 1, 2010, is
between LINCOLN INVESTMENT ADVISORS CORPORATION, a Tennessee corporation (the
"Adviser"), and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware
corporation (the "Sub-Adviser").
WHEREAS, Lincoln Variable Insurance Products Trust (the "Trust"), on behalf
of the LVIP MFS International Growth Fund (the "Fund"), has entered into an
Investment Management Agreement, dated April 30, 2007, 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 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. In the performance of its
duties and obligations under this Agreement, the Sub-Adviser will comply with
the diversification requirements of Subchapters L and M under 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. 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-Adviser or any
change in the portfolio manager or managers assigned by the Sub-Adviser to
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manage the Fund, and further provided that the Adviser provides the Sub-Adviser
with an estimate of expenses in advance of distribution of the supplement.
(c) The Sub-Adviser shall vote proxies relating to the Fund's investment
securities in accordance with its own proxy voting policies and procedures, 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-Adviser shall not be responsible for filing proofs of claim or
otherwise participating in class action lawsuits or bankruptcy proceedings 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 and received by the
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 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 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.
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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
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 which shall be provided to the Sub-Adviser.
(i) 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 the
Sub-Adviser receives them from the Adviser or the Trust: (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) provisions of the Investment
Company Act of 1940 (the "1940 Act") and the Investment Advisers Act of 1940
(the "Advisers Act") applicable to the services provided by the Sub-Adviser
hereunder; (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
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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-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, related to the services
rendered hereunder. 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 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 Adviser agrees to provide or cause to be provided to the Sub-Adviser
on an ongoing basis a list of all publicly traded affiliates of the Adviser
which may not be purchased by the Fund and a list of all brokers and
underwriters affiliated with the Adviser for reporting transactions under
applicable provisions of the Investment Company Act.
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.
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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 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
failed to satisfy the diversification requirements under Subchapter L of the
Code or ceased to 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,
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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) 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 8, 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 untrue statement of a material fact contained in disclosure provided by the
Sub-Adviser 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.
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 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
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representative of the Fund, the Adviser, or any governmental agency or other
instrumentality having regulatory authority over the Fund.
(c) The Adviser acknowledges that the Sub-Adviser does not have access to
all of the Fund's books and records to perform certain compliance testing.
However, to the extent that the Sub-Adviser has agreed to perform the services
specified in this Agreement, the Sub-Adviser shall perform compliance testing
with respect to the Fund based upon information in its possession and upon
information and written instructions received from the Adviser.
10.CONFIDENTIAL INFORMATION
(a) Each party will use non-public 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 or have not otherwise been disclosed in the
public domain.
(c) It is understood that any non-public information or recommendation
supplied by, or produced by, the Sub-Adviser in connection with the performance
of its obligations hereunder or any investment transaction undertaken by the
Sub-Adviser for the Fund is to be regarded by the Fund and the Adviser as
confidential and for use only by the Adviser and the Fund.
▇▇.▇▇▇▇▇▇▇▇▇ 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
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(10) calendar days to the Sub-Adviser shall relieve the Sub-Adviser of the
obligation to obtain the prior written permission of the Fund.
12.USE OF NAME
It is understood that the name "Massachusetts Financial Services Company"
and "MFS" or any derivative thereof or logo associated with that name is the
valuable property of the Sub-Adviser and its affiliates and that the Trust, the
Adviser and/or the Fund have the right to use such name (or derivative or logo)
in offering materials of the Fund with the approval of the Sub-Adviser and for
so long as the Sub-Adviser is an investment sub-adviser to the Trust and/or the
Fund. Upon termination of this Agreement, the Trust and the Fund shall as soon
as is reasonably possible cease to use such name (or derivative or logo),
except as required by law or regulation.
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.
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:
Massachusetts Financial Services Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
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Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
(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.
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: President
MASSACHUSETTS FINANCIAL SERVICES
COMPANY
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President and
General Counsel
Accepted and agreed to
as of the day and year
first above written:
LINCOLN VARIABLE INSURANCE PRODUCTS TRUST,
on behalf of the LVIP MFS International Growth Fund
/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and President
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SCHEDULE A
Fee Schedule
The Adviser shall pay to the Sub-Adviser compensation at an annual rate as
follows:
ANNUAL FEE AS A PERCENTAGE OF
NAME OF FUND AVERAGE DAILY NET ASSETS
----------------------------------- -----------------------------
LVIP MFS International Growth Fund 0.45% of first $400 million
0.40% of next $600 million
0.35% over $1 billion
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