INVESTMENT SUB-ADVISORY AGREEMENT
Between
LUTHERAN BROTHERHOOD
and
XXXX XXXXX-XXXXXXX INTERNATIONAL, INC.
INVESTMENT SUB-ADVISORY AGREEMENT, made as of the _____ day of ____________
1995, between Lutheran Brotherhood ("Adviser"), a fraternal beneficiary
society organized and existing under the laws of the State of Minnesota, and
Xxxx Xxxxx-Xxxxxxx International, Inc. ("Sub-Adviser"), a corporation
organized and existing under the laws of the State of Maryland.
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated
as of the 31st day of January, 1994 and amended as of the ______ day of
January, 1996, ("Advisory Agreement") with LB SERIES FUND, INC. ("Company"),
which is engaged in business as an open-end investment company registered
under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Company is authorized to issue shares of the World Growth
Portfolio ("Portfolio"), a separate series of the Company;
WHEREAS, the Sub-Adviser is engaged principally in the business of rendering
investment supervisory services and is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended ("Advisers Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as sub-adviser to
furnish certain investment advisory services to the Adviser and the
Portfolio and the Sub-Adviser is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein
set forth, the parties hereto agree as follows:
1. Appointment. Adviser hereby appoints the Sub-Adviser as its investment
sub-adviser with respect to the Portfolio for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
2. Duties of the Sub-Adviser.
A. Investment Sub-Advisory Services. Subject to the supervision of the
Company's Board of Trustees ("Board") and the Adviser, the Sub-Adviser shall
act as the investment sub adviser and shall supervise and direct the
investments of the Portfolio in accordance with the Portfolio's investment
objectives, policies, and restrictions as provided in the Portfolio's
Prospectus and Statement of Additional Information, as currently in effect
and as amended or supplemented from time to time (hereinafter referred to as
the "Prospectus"), and such other limitations as the Portfolio may impose by
notice in writing to the Sub-Adviser. The Sub-Adviser shall obtain and
evaluate such information relating to the economy, industries, businesses,
securities markets, and securities as it may deem necessary or useful in the
discharge of its obligations hereunder and shall formulate and implement a
continuing program for the management of the assets and resources of the
Portfolio in a manner consistent with the Portfolio's investment
objective(s), policies, and restrictions. In furtherance of this duty, the
Sub-Adviser, on behalf of the Portfolio, is authorized, in its discretion
and without prior consultation with the Portfolio or the Adviser, to:
(1) buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds, and other securities or assets; and
(2) directly or through the trading desks of Xxxx Xxxxx-Xxxxxxx
International, Inc., Xxxxxx Xxxxxxx Holdings Limited, and their affiliates
place orders and negotiate the commissions (if any) for the execution of
transactions in securities or other assets with or through such brokers,
dealers, underwriters or issuers as the Sub-Adviser may select.
B. Further Duties of Sub-Adviser. In all matters relating to the
performance of this Agreement, the Sub-Adviser shall act in conformity with
the Company's Master Trust Agreement, By-Laws, and currently effective
Registration Statement (as defined below) and with the written instructions
and directions of the Board and the Adviser, and shall comply with the
requirements of the 1940 Act, the Advisers Act, the rules thereunder, and
all other applicable federal and state laws and regulations.
3. Compensation. For the services provided and the expenses assumed by
the Sub-Adviser pursuant to this Agreement, the Sub-Adviser shall receive a
monthly investment management fee as set forth in Schedule 1, attached
hereto and incorporated herein by reference. The management fee shall be
payable monthly to the Sub-Adviser [on or before the _________ day of the
next succeeding calendar month; or, monthly in arrears]. If this Agreement
becomes effective or terminates before the end of any month, the investment
management fee for the period from the effective date to the end of such
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proration which such period
bears to the full month in which such effectiveness or termination occurs.
4. Duties of the Adviser.
A. The Adviser shall continue to have responsibility for all services to
be provided to the Portfolio pursuant to the Advisory Agreement and shall
oversee and review the Sub-Adviser's performance of its duties under this
Agreement.
B. The Adviser has furnished the Sub-Adviser with copies of each of the
following documents and will furnish to the Sub-Adviser at its principal
office all future amendments and supplements to such documents, if any, as
soon as practicable after such documents become available:
(1) The Master Trust Agreement of the Company, as filed with the State of
Delaware, as in effect on the date hereof and as amended from time to time
("Declaration of Trust");
(2) The By-Laws of the Company as in effect on the date hereof and as
amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of the Company authorizing the
appointment of the Adviser and the Sub-Adviser and approving the form of the
Advisory Agreement and this Agreement;
(4) The Company's Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-IA, as filed with the
Securities and Exchange Commission ("SEC") relating to the Portfolio and its
shares and all amendments thereto ("Registration Statement");
(5) The Notification of Registration of the Company under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
(6) The Portfolio's Prospectus (as defined above); and
(7) A certified copy of any financial statement or report prepared for
the Portfolio by certified or independent public accountants, and copies of
any financial statements or reports made by the Portfolio to its
shareholders or to any governmental body or securities exchange.
The Adviser shall furnish the Sub-Adviser with any further documents,
materials or information that the Sub-Adviser may reasonably request to
enable it to perform its duties pursuant to this Agreement.
C. During the term of this Agreement, the Adviser shall furnish to the
Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of the Portfolio or the public, which refer to
the Sub-Adviser or its clients in any way, prior to the use thereof, and the
Adviser shall not use any such materials if the Sub-Adviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. The Adviser shall ensure that materials
prepared by employees or agents of the Adviser or its affiliates that refer
to the Sub-Adviser or its clients in any way are consistent with those
materials previously approved by the Sub-Adviser as referenced in the
preceding sentence.
5. Brokerage.
A. The Sub-Adviser agrees that, in placing orders with broker-dealers for
the purchase or sale of portfolio securities, it shall attempt to obtain
quality execution at favorable security prices; provided that, on behalf of
the Portfolio, the Sub-Adviser may, in its discretion, agree to pay a
broker-dealer that furnishes brokerage or research services as such services
are defined under Section 28(e) of the Securities Exchange Act of 1934, as
amended ("1934 Act"), a higher commission than that which might have been
charged by another broker-dealer for effecting the same transactions, if the
Sub-Adviser determines in good faith that such commission is reasonable in
relation to the brokerage and research services provided by the broker-
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to the accounts as to which
it exercises investment discretion (as such term is defined under Section
3(a)(35) of the 1934 Act). In no instance will portfolio securities be
purchased from or sold to the Sub-Adviser, or any affiliated person thereof,
except in accordance with the federal securities laws and the rules and
regulations thereunder.
B. On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio 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
the manner the Sub-Adviser considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and to its other clients.
6. Ownership of Records. The Sub-Adviser shall maintain all books and
records required to be maintained by the Sub-Adviser pursuant to the 1940
Act and the rules and regulations promulgated thereunder with respect to
transactions on behalf of the Portfolio. In compliance with the
requirements of Rule 3 1 a-3 under the 1940 Act, the Sub-Adviser hereby
agrees (i) that all records that it maintains for the Portfolio are the
property of the Company, (ii) to preserve for the periods prescribed by Rule
3 1 a-2 under the 1940 Act any records that it maintains for the Company and
that are required to be maintained by Rule 3 1 a- I under the 1940 Act, and
(iii) agrees to surrender promptly to the Company any records that it
maintains for the Company upon request by the Company; provided, however,
the Sub-Adviser may retain copies of such records.
7. Reports. The Sub-Adviser shall furnish to the Board or the Adviser, or
both, as appropriate, such information, reports, evaluations, analyses and
opinions as the Sub-Adviser and the Board or the Adviser, as appropriate,
may mutually agree upon from time to time.
8. Services to Others Clients. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of the Sub-Adviser, or any affiliated
person thereof, to render investment management and corporate administrative
services to other investment companies, to act as investment manager or
investment counselor to other persons, firms, or corporations, or to engage
in any other business activities, or (ii) the right of any director,
officer, or employee of the Sub-Adviser, who may also be a trustee, officer,
or employee of the Company, to engage in any other business or to devote his
or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
9. Sub-Adviser's Use of the Services of Others. The Sub-Adviser may (at its
cost except as contemplated by Paragraph 5 of this Agreement) employ,
retain, or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Sub-Adviser or the
Company or Portfolio, as appropriate, with such statistical and other
factual information, such advice regarding economic factors and trends, such
advice as to occasional transactions in specific securities, or such other
information, advice, or assistance as the Sub-Adviser may deem necessary,
appropriate, or convenient for the discharge of its obligations hereunder or
otherwise helpful to the Company or the Portfolio, as appropriate, or in the
discharge of Sub-Adviser's overall responsibilities with respect to the
other accounts that it serves as investment manager or counselor.
10. Limitation of Liability of the Sub-Adviser. Neither the Sub-Adviser nor
any of its officers, directors, or employees, nor any person performing
executive, administrative, trading, or other functions for the Company, the
Portfolio (at the direction or request of the Sub-Adviser) or the Sub-
Adviser in connection with the Sub-Adviser's discharge of its obligations
undertaken or reasonably assumed with respect to this Agreement, shall be
liable for (i) any error of judgment or mistake of law or for any loss
suffered by the Company or Portfolio or (ii) any error of fact or mistake of
law contained in any report or data provided by the Sub-Adviser, except for
any error, mistake or loss resulting from willful misfeasance, bad faith, or
gross negligence in the performance of its or his duties on behalf of the
Company or Portfolio or from reckless disregard by the Sub-Adviser or any
such person of the duties of the Sub-Adviser pursuant to this Agreement.
11. Representations of Sub-Adviser. The Sub-Adviser represents, warrants,
and agrees as follows:
A. The Sub-Adviser: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services contemplated by this Agreement;
(iii) has met, and will continue to meet for so long as this Agreement
remains in effect, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory
agency, necessary to be met in order to perform the services contemplated by
this Agreement; (iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will immediately notify the
Adviser of the occurrence of any event that would disqualify the Sub-Adviser
from serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
B. The Sub-Adviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and, if it has not already
done so, will provide the Adviser and the Company with a copy of such code
of ethics, together with evidence of its adoption.
C. The Sub-Adviser has provided the Adviser and the Company with a copy
of its Form ADV as most recently filed with the SEC and will, promptly after
filing any amendment to its Form ADV with the SEC, furnish a copy of such
amendment to the Adviser.
12. Term of Agreement. This Agreement shall become effective upon the date
first above written, provided that this Agreement shall not take effect
unless it has fast been approved (i) by a vote of a majority of those
trustees of the Company who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by vote of a majority of the
Portfolio's outstanding voting securities. Unless sooner terminated as
provided herein, this Agreement shall continue in effect for two years from
its effective date. Thereafter, this Agreement shall continue in effect
from year to year, with respect to the Portfolio, subject to the termination
provisions and all other terms and conditions hereof, so long as such
continuation shall be specifically approved at least annually (a) by either
the Board, or by vote of a majority of the outstanding voting securities of
the Portfolio; (b) in either event, by the vote, cast in person at a meeting
called for the purpose of voting on such approval, of a majority of the
trustees of the Company who are not parties to this Agreement or interested
persons of any such party; and (c) the Sub-Adviser shall not have notified
the Company, in writing, at least 60 days prior to such approval that it
does not desire such continuation. The Sub-Adviser shall furnish to the
Company, promptly upon its request, such information as may reasonably be
necessary to evaluate the terms of this Agreement or any extension, renewal,
or amendment hereof.
13. Termination of Agreement. Notwithstanding the foregoing, this Agreement
may be terminated at any time, without the payment of any penalty, by vote
of the Board or by a vote of a majority of the outstanding voting securities
of the Portfolio on at least 60 days' prior written notice to the Sub-
Adviser. This Agreement may also be terminated by the Adviser: (i) on at
least 120 days' prior written notice to the Sub-Adviser, without the payment
of any penalty; (ii) upon material breach by the Sub-Adviser of any of the
representations and warranties set forth in Paragraph I I of this Agreement,
if such breach shall not have been cured within a 20-day period after notice
of such breach; or (iii) if the Sub-Adviser becomes unable to discharge its
duties and obligations under this Agreement. The Sub-Adviser may terminate
this Agreement at any time, without the payment of any penalty, on at least
60 days' prior notice to the Adviser. This Agreement shall terminate
automatically in the event of its assignment or upon termination of the
Advisory Agreement.
14. Amendment of 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 material amendment of this
Agreement shall be effective until approved by vote of a majority of the
Portfolio's outstanding voting securities.
15. Miscellaneous.
A. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Maryland without giving effect to the conflicts of
laws principles thereof and the 1940 Act. To the extent that the applicable
laws of the State of Maryland conflict with the applicable provisions of the
1940 Act, the latter shall control.
B. Captions. The captions contained 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.
C. Entire Agreement. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior agreements
between the parties relating to the subject matter hereof, and all such
prior agreements shall be deemed terminated upon the effectiveness of this
Agreement.
D. Interpretation. Nothing herein contained shall be deemed to require
the Company to take any action contrary to its [Articles/Declaration of
Trust] or By-Laws, or any applicable statutory or regulatory requirement to
which it is subject or by which it is bound, or to relieve or deprive the
Board of its responsibility for and control of the conduct of the affairs of
the Portfolio.
E. Definitions. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a term
or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any
such court, by rules, regulations, or orders 'of the SEC validly issued
pursuant to the Act. As used in this Agreement, the terms "majority of the
outstanding voting securities," "affiliated person," "interested person,"
"assignment," broker," "investment adviser," "net assets," "sale," "sell,"
and "security" shall have the same meaning as such terms have in the 1940
Act, subject to such exemption as may be granted by the SEC by any rule,
regulation, or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made less
restrictive 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 instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
LUTHERAN BROTHERHOOD
Attest:
______________________________ By: _______________________________
XXXX XXXXX-XXXXXXX
INTERNATIONAL, INC.
Attest:
______________________________ By: _______________________________
