Contract

Exhibit 99.B(d)(2)

M FUND, INC.

For The

XXXXXXX INTERNATIONAL EQUITY FUND

THIS AGREEMENT made and entered into this 1^st day of May, 2000, by and between M Financial Investment Advisers, Inc., a corporation organized and existing under the laws of the State of Colorado (the “Adviser”), and Xxxxxxx Investment Partners, L.P., a corporation organized and existing under the laws of Scotland (the “Sub-Adviser”).

WHEREAS, M Fund, Inc., a Maryland corporation (the “Fund”), is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”), and is a series fund with a number of portfolios; and

WHEREAS, the Adviser has entered into an Investment Advisory Agreement (the “Advisory Agreement”) with the Fund, pursuant to which the Adviser will act as investment adviser to the Xxxxxxx International Equity Fund portfolio of the Fund (the “Portfolio”), which is a series of the Fund; and

WHEREAS, the Adviser, with the approval of the Fund’s directors, desires to retain the Sub-Adviser to provide investment advisory services to the Adviser in connection with the management of the Portfolio, and the Sub-Adviser is willing to render such investment advisory services.

WHEREAS, the Sub-Adviser is registered as an investment adviser pursuant to the Investment Adviser Act of 1940.

NOW, THEREFORE, in consideration of mutual covenants herein contained, the parties hereto agree as follows:

1. Duties of the Sub-Adviser. Subject to supervision by the Adviser and the Fund’s Board of Directors, the Sub-Adviser shall, on a discretionary basis without prior consultation with the Adviser of the Fund’s board of directors, manage the investment operations of the Portfolio and the composition of the Portfolio, including the purchase, retention and disposition of securities and other assets, in accordance with the Portfolio’s investment objectives, policies and restrictions as stated in the Portfolio’s prospectus and statement of additional information, as currently in effect and as amended or supplemented from time to time (referred to collectively as the “Prospectus”), and subject to the following:

(a) The Sub-Adviser shall in its discretion , select the Portfolio’s investments and determine from time to time what investments and securities will be purchased, retained or sold by the Portfolio, and what portion of the assets will be invested or held uninvested in cash.

(b) In the performance of its duties and obligations under this Agreement, the Sub-Adviser shall act in conformity with the Fund’s Articles of Incorporation and Bylaws (as such terms are defined herein) and the Prospectus and with the instructions and directions of the Adviser and of the Board of Directors of the Fund and will conform to and comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986, and all other applicable federal and state laws and regulations, as each is amended from time to time.

(c) The Sub-Adviser shall determine the securities to be purchased or sold by the Portfolio and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in the Portfolio’s Registration Statement (as defined herein) and Prospectus or as the Board of Directors or the Adviser may direct from time to time, in conformity with federal securities laws. In executing Portfolio transactions and selecting brokers or dealers, the Sub-Adviser will use its best efforts to seek on behalf of the Portfolio the best overall terms available. In assessing the best overall terms available for any transaction, the Sub-Adviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Sub-Adviser may also consider the brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the Portfolio and/or other accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may exercise investment discretion. The Sub-Adviser is authorized, subject to compliance with said Section 28(e), to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Portfolio which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Sub-Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer — viewed in terms of that particular transaction or in terms of the overall responsibilities of the Sub-Adviser to the Portfolio. In addition, the Sub-Adviser is authorized to allocate purchase and sale orders for the Portfolio’s portfolio securities to brokers or dealers (including brokers and dealers that are affiliated with the Sub-Adviser) to take into account the sale of variable contracts investing through separate accounts in the Fund if the Sub-Adviser believes that the quality of the transactions and the commission are comparable to what they would be with other qualified firms. In no instance, however, will any Portfolio’s securities be purchased from or sold to the Sub-Adviser, the Adviser, or any affiliated person of either the Fund, the Sub-Adviser or the Adviser, acting

as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act.

(d) The Sub-Adviser shall maintain all books and records with respect to the Portfolio’s portfolio transactions required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act and shall render to the Adviser or Board of Directors of the Fund such periodic and special reports as the Adviser or Board of Directors may reasonably request.

The Sub-Adviser shall keep the Portfolio’s books and records required to be maintained by the Sub-Adviser under this Agreement and shall timely furnish to the Adviser upon request all information relating to the Sub-Adviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser shall also furnish to the Adviser any other information that is required to be filed by the Adviser or the Fund with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Fund obtains from the SEC. The Sub-Adviser agrees that all records that it maintains on behalf of the Portfolio are records of the Fund and the Sub-Adviser will provide access to or copies of any such records upon the Fund’s request; however, that the Sub-Adviser may retain control 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 said records to the Adviser upon the termination of this Agreement.

The Adviser agrees to provide access to or copies of Fund records maintained by it (e.g., minutes of board of director meetings) to the Sub-Adviser at the Sub-Adviser’s request when Sub-Adviser has a reasonable business need for such records.

(e) The Sub-Adviser shall provide the Portfolio’s custodian on each business day with information relating to all transactions concerning the Portfolio’s assets and shall provide the Adviser with such information upon request of the Adviser.

(f) The Sub-Adviser shall cooperate with the Adviser, its representatives, and any third party retained thereby upon the Adviser’s exercise of its right, granted hereby, to compel an audit of the Portfolio’s financial records, examine records of the Portfolio’s portfolio transactions, and/or make a copy of such records.

(g) 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 investment management services to others in any manner that it, in its sole

discretion, considers appropriate, as long as such services do not impair the services rendered to the Adviser or the Fund.

(h) The Sub-Adviser shall promptly notify the Adviser of any financial condition that is likely to impair the Sub-Adviser’s ability to fulfill its commitments under this Agreement.

Services to be furnished by the Sub-Adviser under this Agreement may be furnished through the medium of any of the Sub-Adviser’s partners, officers or employees.

The Adviser acknowledges that the Sub-Adviser has no authority or responsibility for management of the Fund or the Portfolio other than as specifically identified in (a) through (g) above. In particular, the Sub-Adviser is not responsible for the general management of the Fund, the promotion, marketing or sale of Fund shares, the Fund’s relations or dealings with its shareholders or investors, the disclosure provided to investors or prospective investors, the performance by the Adviser of the Adviser’s duties to the Fund, and the supervision of the activities of other service providers to the Fund such as the custodian, administrator or other sub-advisers.

2. Representations and Warranties. The Adviser represents and warrants to the Sub Adviser that:

(a) The Adviser of the Fund prepared the Fund’s registration statement, including the Prospectus, and that the registration statement, including the Prospectus, complies in all material respects with the applicable laws, rules and relations in every jurisdiction in which such documents will be used;

(b) The Fund’s registration statement, including the Prospectus, does not contain any untrue statement of material fact or omit to state any material fact required by applicable law to be stated therein or necessary to be stated therein to make the statements therein not misleading under applicable law; and

(c) The Adviser and its officers, directors, partners, employees and agents will act in material compliance with all applicable laws, rules and regulations related to its management of the Fund, the operations of the Fund, the offering and distribution of the Fund’s shares and its dealings with the Sub-Adviser.

The Sub-Adviser represents and warrants to the Adviser that:

(a) The Sub-Adviser prepared all information supplied by it to the Adviser for inclusion in the Fund’s registration statement, including the Prospectus, and such information: (i) is accurate and complete in all material respects, (ii) does not contain an untrue statement of material fact or omit to state any material

fact required by applicable law to be states therein or necessary to be stated therein to make the statements therein not misleading under applicable law; and

(b) The Sub-Adviser and its officers, directors, partners, employees and agents will act in material compliance with all applicable laws, rules, and regulations in managing the assets of the Portfolio and otherwise carrying out its obligations under this Agreement.

3. Delivery of Documents. The Adviser has furnished the Sub-Adviser with copies properly certified or authenticated of each of the following documents:

(a) The Fund’s Articles of Incorporation, as filed with the Secretary of State of the State of Maryland (such Articles of Incorporation, as in effect on the date of this Agreement and as amended from time to time, are herein called the “Articles of Incorporation”);

(b) Bylaws of the Fund (such Bylaws, as in effect on the date of this Agreement and as amended from time to time, are herein called the “Bylaws”); and

4. Compensation of the Sub-Adviser. For the services to be provided by the Sub-Adviser pursuant to this Agreement, the Adviser shall pay to the Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee at the rates specified in Schedule A, which is attached hereto and made part of this Agreement. The fee shall be calculated by applying a daily rate, based on the annual percentage rates as specified in Schedule A, to the average daily net assets of the Portfolio and shall be paid to the Sub-Adviser monthly. The Sub-Adviser may, in its discretion and from time to time, waive all or a portion of its fee.

5. Limitation of Liability and Indemnification.

(a) The Sub-Adviser shall not be liable for any error of judgment or for any loss suffered by the Portfolio or the Adviser in connection with performance of the Sub-Adviser’s obligations under this Agreement, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services, or a loss resulting from willful misfeasance, bad faith or gross negligence on the Sub-Adviser’s part in the performance of its duties or from reckless disregard of its obligations and duties under this Agreement.

The Sub-Adviser shall indemnify and hold harmless the Adviser, and any person or entity that controls the Adviser, from and against any and all claims, losses,

liabilities, or damages (including attorney’s fees and related expenses) incurred by the Adviser or the Fund, and amounts paid in satisfaction of judgments or in a compromise or settlement, arising from or in connection with the performance or non-performance by the Sub-Adviser of its duties under this Agreement which gives rise to liability as provided in the preceding sentence. Not withstanding the foregoing, the Sub-Adviser shall indemnify and hold harmless the Adviser, and any person or entity that controls the Adviser, from and against any and all claims, losses, liabilities or damages (including attorney’s fees and related expenses) incurred by the Adviser or the Fund, and amounts paid in satisfaction of judgments or in a compromise settlement , arising from or in connection with the Sub-Adviser’s breach of its warranties in section 2 of this Agreement. The Adviser shall be entitled to advances from the Sub-Adviser for payment of the reasonable expenses incurred by it in connection with investigation and defending any matter as to which it seeks indemnification. This provision shall survive the termination of the Agreement.

(b) The Adviser should indemnify and hold harmless the Sub-Adviser, and any person or entity that controls the Sub-Adviser from and against any and all claims, losses, liabilities or damages (including attorney’s fees and related expenses) incurred by the Sub-Adviser, and amounts paid in satisfaction of judgments or in a compromise or settlement, arising from or in connection with the (i) the Adviser’s breach, or alleged breach, of its warranties in section 2 of this Agreement, (ii) the issue, sale or distribution of the Fund’s shares, (iii) any action taken or omitted to be taken by the Sub-Adviser with consent of, pursuant to the instructions given by, or in reliance on information provided by the Adviser, (iv) any action taken or omitted to be taken by the Adviser or the Fund or any other service provider to the Fund or the Portfolio, (v) any action taken or omitted to be taken by the Fund’s custodian or administration (A) without or contrary to instructions of given by the Sub-Adviser, (B) with the consent of or pursuant to instructions given by the Adviser or the Fund, or (C) pursuant to instructions given to the Sub-Adviser that would not give rise to liability for the Sub-Adviser under paragraph (a) of this section 5. The Sub-Adviser shall be entitles to advances from the Adviser for payment of the reasonable expenses incurred by it in connection with investigating and defending any matter as to which it seeks indemnification. This provision shall survive the termination of this agreement.

6. Reports. During the term of this Agreement, the Adviser agrees to furnish the Sub-Adviser at its principal office all prospectuses, proxy statements, reports to shareholders, sales literature or other materials prepared for distribution to shareholders of the Portfolio, the Fund or the public that refer to the Sub-Adviser in any way prior to the use thereof and not to use such material if the Sub-Adviser reasonably objects to the use thereof in a writing received by the Adviser within five business days (or such other period as may be mutually agreed) after the Sub-Adviser’s receipt thereof. The Sub-

Adviser’s right to object to such materials is limited to the portions of such materials that expressly relate to the Sub-Adviser, its services and its clients. The Adviser agrees to use its reasonable best efforts to ensure that materials prepared by its employees or agents or its affiliates that refer to the Sub-Adviser in any way are consistent with those materials previously approved by the Sub-Adviser as referenced in the first sentence of this paragraph. Sales literature may be furnished to the Sub-Adviser by first class or overnight mail, facsimile transmission equipment or hand delivery.

The Sub-Adviser agrees not to publish or otherwise distribute written information, sales literature or other documents describing or discussing the Adviser or the Fund without the Advisers prior written approval.

7. Duration and Termination. This Agreement shall become effective upon its approval by the Fund’s Board of Directors and its execution by the Adviser and the Sub-Adviser. The Adviser represents and warrants that it and the Fund have obtained Exemptive relief from the SEC permitting them to engage a Sub-Adviser without first obtaining approval of the Agreement from a majority of the outstanding voting securities of the portfolio(s) involved.

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 in conformance with the 1940 Act; provided, however, that this Agreement may be terminated (a) by the Portfolio at any time, without the payment of any penalty, by the vote of a majority of Directors of the Fund or by the vote of a majority of the outstanding voting securities of the Portfolio, (b) by the Adviser at any time, without the payment of any penalty, on not more than 60 days’ nor less than 30 days’ written notice to the other party, or (c) the Sub-Adviser at any time, without the payment of any penalty, on 60 days’ written notice to the other party. This Agreement shall terminate automatically and immediately in the event of its assignment, or in the event of a termination of the Adviser’s agreement with the Fund. As used in this Section 7, the terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act.

8. Governing Law. This Agreement shall be governed by the internal laws of the State of Maryland, without regard to conflicts of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act.

9. Severability. Should any part of this Agreement be 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 permitted successors.

10. Notice. Any notice, advice or report to be given pursuant to this Agreement shall be deemed sufficient if delivered by hand, transmitted by electronic facsimile, or mailed by registered, certified or overnight United States mail, postage prepaid, or sent by overnight delivery with a nationally recognized courier, addressed by the party giving notice to the other party at the last address furnished by the other party:

To the Adviser at:	M Financial Investment Advisers, Inc.
		River Park Center
		000 X.X. Xxxxxxx Xxxxxx
		Xxxxxxxx, XX 00000
		Attn: President

To the Sub-Adviser at:	Xxxxxxx Investment Partners, L.P.
		00000 Xxxx Xxxxx Xx.
		Xxx Xxxxx, XX 00000
		Attn: General Counsel
		Facsimile: (000) 000-0000

Each such notice, advice or report shall be effective upon receipt or three days after mailing.

11. Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings relating to this Agreement’s subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

12. 1940 Act. 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.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first written above.

M FINANCIAL INVESTMENT			XXXXXXX INVESTMENT
ADVISERS, INC.			PARTNERS, L.P.


By:	/s/ Xxxxxx X. Xxxxx		By:	/s/ Xxxxxxx X. Xxxxx

Title:		President	Title:		Managing Partner

Schedule A

to the

Investment Sub-Advisory Agreement

between

M Financial Investment Advisers, Inc.

and

Xxxxxxx Investment Partners, L.P.

Pursuant to Section 4, the Adviser shall pay the Sub-Adviser compensation at an effective annual rate as follows:

Name of Portfolio		Annual Rate of Compensation

Xxxxxxx International Equity Fund		0.95% on first $ 10 million
		0.80% on next $10 million
		0.60% on next $30 million
		0.50% on amounts over $50 million

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