EXHIBIT 5(b)
LB SERIES FUND, INC.
INVESTMENT ADVISORY AGREEMENT
This Agreement made this 31st day of January, 1994 by and between LB
SERIES FUND, INC., a Minnesota corporation (the "Fund"), and LUTHERAN
BROTHERHOOD, a Minnesota fraternal benefit society (the "Adviser").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Adviser is willing to provide business management services
to the Fund on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
ARTICLE 1: Duties of the Adviser. The Adviser shall provide the Fund
with such investment advice and supervision as the Fund may from time to
time consider necessary for the proper supervision of its assets. The
Adviser shall act as adviser to the Fund and as such shall furnish
continuously an investment program and shall determine from time to time
what securities shall be purchased, sold or exchanged and what portion of
the assets of the Fund shall be held uninvested, subject always to the
restrictions of the Fund's Articles of Incorporation and Bylaws, as amended
from time to time, to the provisions of the 1940 Act and to the Fund's then
current Prospectus. The Adviser shall also make recommendations as to the
manner in which voting rights, rights to consent to corporate action and any
other rights pertaining to the Fund's portfolio securities shall be
exercised. Should the Directors of the Fund at any time, however, make any
definite determination as to investment policy and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that
such determination has been revoked. The Adviser shall take, on behalf of
the Fund, all actions which it deems necessary to implement the investment
policies determined as provided above, and in particular to place all orders
for the purchase, sale or exchange of portfolio securities for the Fund's
account with brokers, dealers or bankers selected by it, and to that end the
Adviser is authorized as the agent of the Fund to give instructions to the
custodian of the Fund (the "Custodian") or to any sub-custodian of the Fund
as to deliveries of securities and payments of cash for the account of the
Fund. In connection with the selection of such brokers, dealers or bankers
and the placing of such orders, the Adviser is directed at all times to
obtain for the Fund the most favorable prices at reasonably competitive
commission rates. In fulfilling this requirement the 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 or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction, if the Adviser or any
sub-adviser employed by the Adviser determined 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 or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund and to other clients of the
Adviser as to which the Adviser exercises investment discretion.
ARTICLE 2: Allocation of Charges and Expenses. The Adviser shall
furnish at its own expense investment advisory and portfolio administrative
and management services necessary for servicing the investments of the Fund,
and investment advisory facilities and executive and supervisory personnel
for managing the investments and effecting the portfolio transactions of the
Fund. The Adviser shall arrange, if desired by the Fund, for officers and
employees of the Adviser to serve as Directors, Officers or agents of the
Fund if duly elected or appointed to such positions and subject to their
individual consent and to any limitations imposed by law. It is understood
that the Fund will pay, or provide for the payment of, all of its own
expenses including, without limitation, compensation of Directors not
affiliated with the Adviser, Lutheran Brotherhood or Lutheran Brotherhood
Variable Insurance Products Company, governmental fees, interest charges,
taxes, membership dues in the Investment Company Institute allocable to the
Fund, fees and expenses of independent auditors, of legal counsel and of any
transfer agent, registrar and dividend disbursing agent of the Fund,
expenses of preparing, printing and mailing prospectuses, shareholders'
reports, notices, proxy statements and reports to governmental officers and
commissions, expenses connected with the execution, recording and settlement
of portfolio security transactions, insurance premiums, fees and expenses of
the Custodian for all services to the Fund, including safekeeping of funds
and securities and keeping of books and calculating the net asset value of
shares of the Fund, expenses of shareholders' meetings, and expenses
relating to the issuance, registration and qualification of shares of the
Fund.
The Adviser may enter into a sub-investment advisory agreement or
agreements with another party or parties providing that such party or
parties shall furnish certain advisory and other services to the Fund and
the Adviser and also providing that on the terms and conditions of such sub-
investment advisory agreement such party or parties may determine from time
to time what securities shall be purchased, sold or exchanged by the Fund
and what portion of the assets of the Fund shall be held uninvested.
ARTICLE 3: Compensation of the Adviser. For the services to be
rendered hereunder, the Fund shall pay to the Adviser an investment advisory
fee which shall be a daily charge equal to an annual rate of .40% of the
aggregate average daily net assets of the Fund. If the Adviser shall serve
for less than the whole of any period specified in this ARTICLE 3, the
compensation to the Adviser shall be prorated.
ARTICLE 4: Covenants of the Adviser. The Adviser agrees that it will
not deal with itself, or with the Directors of the Fund or the Fund's
principal underwriter, if any, as principal, broker or dealer in making
purchases or sales of securities or other property for the account of the
Fund except as permitted by the 1940 Act and the rules, regulations or
orders thereunder, will not take a long or short position in the shares of
the Fund, and will comply with all other provisions of the Fund's Articles
of Incorporation and Bylaws as then in effect and current Prospectus of the
Fund relative to the Adviser, its directors, officers, employees and
affiliates.
ARTICLE 5: Limitation of Liability of the Adviser. The Adviser shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in carrying out its
duties under this Agreement and management of the Fund, except for willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder.
As used in this ARTICLE 5, the term "Adviser" shall include directors,
officers and employees of the Adviser as well as the Adviser itself.
ARTICLE 6: Activities of the Adviser. The services of the Adviser to
the Fund are not to be deemed to be exclusive, the Adviser and its
affiliates being free to render services to others. It is understood that
Directors, Officers, employees and shareholders of the Fund may be or become
interested in the Adviser as shareholders, directors, officers, employees or
otherwise, and that directors, officers, employees and shareholders of the
Adviser may be or become similarly interested in the Fund, and that the
Adviser may be or become interested in the Fund as a shareholder or
otherwise.
ARTICLE 7: Duration, Termination and Amendments of this Agreement.
This Agreement shall become effective on the date of its execution and shall
govern the relations between the parties hereto thereafter, and shall remain
in force until December 1, 1988 on which date it will terminate unless its
continuance after such date is specifically approved at least annually (i)
by the vote of a majority of the Directors of the Fund who are not
interested persons of the Fund or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (ii) by the Directors
of the Fund, or by vote of a majority of the outstanding voting securities
of the Fund. The aforesaid requirement that continuance of this Agreement
be "specifically approved at least annually" shall be construed in a manner
consistent with the 1940 Act and the rules and regulations thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Directors of the Fund or by vote of a majority of the
outstanding voting securities of the Fund, or by the Adviser, in each case
on not more than sixty (60) days written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.
This Agreement may be amended only if such amendment is approved by
vote of a majority of the outstanding voting securities of the Fund and by
the Adviser.
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the 1940 Act and
the rules and regulations thereunder, subject, however, to such exemptions
as may be granted by the Securities and Exchange Commission under the 1940
Act.
ARTICLE 8: Miscellaneous. This Agreement shall be construed in
accordance with the laws of the State of Minnesota, contains the entire
understanding among the parties with respect to the matters covered hereby,
and may be executed in several counterparts, each of which shall be deemed
to be an original and one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the
undersigned, thereunto duly authorized, all as of the day and year first
above written.
LB SERIES FUND, INC.
By /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
Its President
LUTHERAN BROTHERHOOD
By /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Its President
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