DRAFT
ADMINISTRATION CONTRACT
THE AAL MUTUAL FUNDS
This Agreement is made as of this 1st day of January, 2004, between Thrivent Investment Management Inc., a Delaware
corporation ("Thrivent Investment Management"), as provider of administrative management and services, and The AAL Mutual Funds, a
Massachusetts Business Trust (the "Trust").
WHEREAS, the Trust engages in business as an open-end management investment company and is so registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest in separate series with each such series
representing interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust presently offers shares in nineteen (19) series, The AAL Technology Stock Fund, The AAL Aggressive
Growth Fund, The AAL Small Cap Stock Fund, The AAL Small Cap Index Fund II, The AAL Small Cap Value Fund, The AAL Mid Cap Stock
Fund, The AAL Mid Cap Index Fund, The AAL Mid Cap Index Fund II, The AAL International Fund, The AAL Capital Growth Fund, The AAL
Large Company Index Fund, The AAL Large Company Index Fund II, The AAL Equity Income Fund, The AAL Balanced Fund, The AAL High
Yield Bond Fund, The AAL Municipal Bond Fund, The AAL Bond Fund, The AAL Bond Index Fund, and The AAL Money Market Fund, such
nineteen series (the "Initial Funds"), together with all other series subsequently established by the Trust with respect to which
Thrivent Investment Management services pursuant to the terms of this Agreement, being herein collectively referred to as the
"Funds" and individually as a "Fund"; and
WHEREAS, Thrivent Investment Management is, and has been since 1987, an investment adviser of mutual funds, and has the
experience and competence to provide administrative management and service to each of the Funds; and
WHEREAS, the Trust desires to retain Thrivent Investment Management to furnish administrative management and services to
each of the Funds and Thrivent Investment Management is willing to furnish such administrative management and services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties
hereto as follows:
1. Appointment and Acceptance. The Trust appoints Thrivent Investment Management as administrative manager of each of
the Initial Funds, and Thrivent Investment Management accepts such appointment and agrees to render the services hereby set forth
for the compensation herein provided.
In the event that the Trust establishes one or more series of shares other than the Initial Funds with respect to which
it desires to retain Thrivent Investment Management to render administrative services hereunder, it shall notify Thrivent
Investment Management in writing (the "Notice"). If Thrivent Investment Management is willing to render such services on the
terms provided for herein, it shall execute and deliver the Notice to the Trust whereupon such series of shares shall become a
Fund hereunder and said Notice shall be attached to this Agreement and when attached shall be a part hereof.
2. Duties of Administrative Manager. Thrivent Investment Management will provide or procure administrative services
from Thrivent Financial for Lutherans (or one or more of its subsidiaries) or other vendors as appropriate for the Trust and each
of the Funds and, in so doing, will act in conformity with the Master Trust Agreement and Bylaws of the Trust, the current
registration statement of the Trust, the requirements of the 1940 Act and all other applicable federal and state laws and
regulations.
3. Administrative Services. The term "administrative services" means all services necessary to conduct the business
operations of the Trust and each of the Funds, except those certain services that are provided to the Trust and each of the Funds
pursuant to the following contracts:
Investment Advisory Contract
Transfer Agent Contract
Distribution Contract
Custodian Contract
Administrative Agreement
12b-1 Distribution Plan
Administrative Services include, but are not necessarily limited to, the following:
(a) Maintenance and retention of all Trust charter documents and the filing of all documents required to maintain the
Trust's status as a Massachusetts Business Trust;
(b) Arrangement of, and preparation and dissemination of all materials for, meetings of the Trust's Board of Trustees
and committees thereof and preparation and retention of all minutes and other records thereof;
(c) Internal auditing services;
(d) In-house legal and regulatory compliance services;
(e) Coordination and handling of accounting, legal and regulatory audits and examinations and preparation or management
of the preparation of responses to all inquires by regulatory agencies, the press and the general public
concerning the business and affairs of the Trust and its Funds, including handling and resolution of any
investigations, actions or proceedings initiated against the Trust by any regulatory authority and responses
to subpoenas and tax levies;
(f) Calculation of dividends and capital gains distributions for each Fund;
(g) Preparation of each Fund's performance calculations and responding to surveys conducted by third parties (e.g., Lipper,
Morningstar, etc.) and reporting of each Fund's performance and other portfolio information in response
thereto;
(h) Administration of the Trust's Code of Ethics;
(i) Administration of operating policies of the Trust and recommendations to the Trust's officers and Board of Trustees of
modifications to such policies to facilitate the protection of shareholders or the market competitiveness of
the Trust and each Fund and, to the extent necessary, to comply with new legal or regulatory requirements;
(j) Monitoring or arranging for the monitoring of legal, tax, regulatory and industry developments related to the business
affairs of the Trust and communicating such developments to the Trust's officers and Board of Trustees as they
may reasonably request or as Thrivent Investment Management believes appropriate; and
(k) Filing of claims, monitoring of class actions involving portfolio securities, and handling administrative matters in
connection with the litigation or settlement of such claims with respect to any Fund.
4. Price. For receiving Administrative Services under this Agreement, whether such services are provided by Thrivent
Investment Management, Thrivent Financial for Lutherans, or other vendors, the Trust will pay Thrivent Investment Management a fee
equal to 0.02 percent (0.02%) of each Fund's average annual daily net assets. The fee of each Fund shall be accrued at the rate
of 1/365th of the annual rate applied to the daily net assets of such Fund computed as described in the Prospectus for each Fund,
and in the case of days when the net asset value of a Fund is not computed, as of the last preceding day on which the net asset
value for that Fund was computed.
The fee so accrued during each calendar month shall be paid to Thrivent Investment Management monthly in arrears. In no
event will the charges for administrative services for any Fund during a fiscal year exceed 0.02 percent (0.02%) of the Fund's
total net assets at the end of the fiscal year. The cost of any administrative expenses in excess of 0.02 percent (0.02%) of any
of the Fund's net assets at the end of any fiscal year will be borne by Thrivent Investment Management.
5. Books and Records. Thrivent Investment Management agrees to provide reports and records reasonably necessary for
the Board of Trustees of the Trust to determine the accuracy of any item of expense charged to the Trust by Thrivent Investment
Management pursuant to this agreement. Thrivent Investment Management agrees (a) that all records which it maintains for the
Trust are the property of the Trust and shall surrender promptly to the Trust any such records upon written request, and (b) to
properly retain all records required to be maintained.
6. Services Not Exclusive. The services furnished by Thrivent Investment Management hereunder are not to be deemed
exclusive to the Trust and Thrivent Investment Management shall be free to furnish similar and other services to others.
7. Audit, Inspection and Visitation. Thrivent Investment Management shall make available during regular business
hours all records and other data created and maintained pursuant to the provisions of this Agreement for the reasonable audit and
inspection by the Trust, any person retained by the Trust, or any regulatory agency having authority over the Trust.
8. Limitation of Liability of Thrivent Investment Management and Verification of Information. Thrivent Investment
Management shall not be liable for any error of judgment or mistake of law for any loss suffered by the Trust or any Fund in
connection with the matters to which this Agreement relates except a loss resulting from negligence on its part or the part of
Thrivent Financial for Lutherans or any subsidiary in the performance of service under this Agreement.
9. Duration and Termination.
(a) This Agreement shall become effective on the date hereof, provided that it has been approved on behalf of the
Funds by a majority of the Trustees of the Trust including a majority of the Trust's disinterested Trustees.
(b) This Agreement shall continue in effect for one year from the above effective date unless sooner terminated as
provided herein. Thereafter, this Agreement shall continue for successive periods of twelve months each,
provided that such continuance is approved at least annually by a majority of the Trustees of the Trust
including a majority of the Trust's disinterested Trustees.
(c) This Agreement may be terminated on behalf of the Trust or any Fund at any time, without the payment of any
penalty, by vote of a majority of the Trust's Trustees or by vote of a majority of the outstanding voting
securities of the terminating Fund on sixty days' written notice to Thrivent Investment Management. Thrivent
Investment Management may terminate this Agreement without the payment of any penalty, on sixty days' written
notice to the Trust or any particular Fund. Termination of this Agreement with respect to a particular Fund
shall not affect this Agreement's continuation with respect to any non-terminating Fund or the Trust.
10. Amendment of This Agreement. No provision of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective until approved by a majority of the Trustees of the
Trust including a majority of the Trust's disinterested Trustees, or by a vote of a majority of the outstanding voting securities
of the Trust.
11. Use of the Names. The Trust shall not use the names of Thrivent Investment Management or Thrivent Financial for
Lutherans in any material without prior approval by Thrivent Investment Management. Thrivent Investment Management hereby
consents to the use of its name which merely refers in accurate terms to its appointment hereunder or which is required by the
Securities and Exchange Commission or other regulatory authorities.
12. Relations With Trust. Subject to and in accordance with the Master Trust Agreement and By-Laws of the Trust it is
understood that Trustees, officers, agents and shareholders of the Trust are or may be interested in Thrivent Investment
Management (or any successor thereof) as directors, officers, or otherwise, that directors, officers, agents and shareholders of
Thrivent Investment Management (or any successors) are or may be interested in the Trust as Trustees, officers, shareholders or
otherwise, that Thrivent Investment Management (or any successor thereof) is or may be interested in the Trust as a shareholder or
otherwise and that the effect of any such adverse interests shall be governed by said Agreement and Declaration of Trust.
13. Limitation of Liability. The term "The AAL Mutual Funds" means and refers to the Trustees from time to time
serving under the Master Trust Agreement of the Trust dated March 10, 1987, as the same may subsequently thereto have been, or
subsequently hereto may be, amended. It is expressly agreed that the obligations of the Trust hereunder shall not be binding upon
any of the Trustees, shareholders, nominees, officers, agents or employees of the Trust personally, but shall bind only the trust
property of the Trust, as provided in the Master Trust Agreement. The execution and delivery of this Agreement have been
authorized by the Trustees and signed by an authorized officer of the Trust, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall be deemed to have been made by any of them personally, but
shall bind only the trust property of the Trust as provided in its Master Trust Agreement. The obligations of any Fund hereunder
shall be the exclusive obligation of that Fund and Thrivent Investment Management can only look to the assets of that Fund to
satisfy any debt or obligation incurred by that Fund hereunder.
14. Miscellaneous. The captions in this Agreement are included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect their construction or effect. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
15. Choice of Law. This agreement shall be construed in accordance with the laws of the State of Minnesota and any
applicable federal law.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed by their officers designated below as
of the day and year first above written.
THE AAL MUTUAL FUNDS THRIVENT INVESTMENT
MANAGEMENT INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------- ---------------------------------
Xxxxxx X. Xxxxx, President Xxxxx X. Xxxxxxxxx, President
THE AAL MUTUAL FUNDS
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
January 30, 2004
Xxxxx X. Xxxxxxxxx, President
Thrivent Investment Management Inc.
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Dear Xx. Xxxxxxxxx:
This letter is to confirm to you that The AAL Mutual Funds (the "Trust") has created four
new series of shares to be known as Thrivent Mid Cap Growth Fund, Thrivent High Yield Fund,
Thrivent Income Fund, and Thrivent Limited Maturity Bond Fund, and that pursuant to Section
1 of the Administration Contract dated January 1, 2004, between the Trust and Thrivent
Investment Management Inc. (the "Agreement"), the Trust desires to retain you to provide
administrative management and services under the Agreement to each of the above-referenced
Funds as a "Fund" covered by the Agreement for an annual fee equal to 0.02 percent (0.02%)
of each Fund's average daily net assets and under such other terms as provided for in the
Agreement.
Please indicate your acceptance of this responsibility in accordance with the terms of the
Agreement by signing this letter as indicated below.
THE AAL MUTUAL FUNDS
By:______________________________
Xxxxxx X. Xxxxx, President
ACCEPTED AND AGREED TO:
THRIVENT INVESTMENT MANAGEMENT INC.
By:______________________________
Xxxxx X. Xxxxxxxxx, President
