INVESTMENT SUBADVISORY AGREEMENT
By and Among
Aid Association for Lutherans
and
LB Series Fund, Inc.
and
Fidelity Management & Research Company
INVESTMENT SUBADVISORY AGREEMENT, made as of the ___ day of _______, 2002, (the "Effective
Date") by and among Aid Association for Lutherans, a fraternal benefit society organized and
existing under the laws of the State of Wisconsin ("Adviser"), LB Series Fund, Inc., a
corporation organized and existing under the laws of the State of Minnesota ("Fund"), and
Fidelity Management & Research Company, a corporation organized and existing under the laws
of the State of Delaware ("Subadviser").
WHEREAS, Adviser has entered into an Investment Advisory Agreement dated as of the 1st day
of January, 2002 ("Advisory Agreement") with the Fund, 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 Fund is authorized to issue shares of the FI All Cap Portfolio ("Portfolio"), a
separate series of the Fund; and
WHEREAS, Subadviser is engaged principally in the business of rendering investment
supervisory management services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act"); and
WHEREAS, the Fund and Adviser desire to retain Subadviser as subadviser to furnish certain
investment advisory services to Adviser and the Portfolio and Subadviser 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:
I. Appointment. (A) Adviser hereby appoints Subadviser as its investment subadviser
with respect to the Portfolio for the period and on the terms set forth in this
Agreement, and (B) Subadviser hereby accepts such appointment and agrees to render
the services herein set forth, for the compensation herein provided.
II. Additional Series. In the event that the Fund establishes one or more series of
shares other than the Portfolio with respect to which Adviser desires to retain
Subadviser to render investment advisory services hereunder, Adviser shall so notify
Subadviser in writing, indicating the advisory fee to be payable with respect to the
additional series of shares. If Subadviser is willing to render such services on the
terms provided for herein, it shall so notify Adviser in writing, whereupon such
series shall become a Portfolio hereunder.
III. Duties of Subadviser.
A. Subadviser is hereby authorized and directed and hereby agrees to (i) furnish
continuously an investment program for the Portfolio, and (ii) determine from
time to time what investments shall be purchased, sold or exchanged and what
portion of the assets of the Portfolio shall be held uninvested. Subadviser
shall perform these duties subject always to (1) the overall supervision of
Adviser and the Board of Directors of the Fund (the "Board"), (2) the Fund's
Articles and By-laws (as defined below), as amended from time to time, (3) the
stated investment objectives, policies and restrictions of the Portfolio as
set forth in the Fund's then current Registration Statement (as defined
below), (4) any additional policies or guidelines established by Adviser or
Board that have been furnished in writing to Subadviser, and (5) all
applicable provisions of the 1940 Act, the Advisers Act, and the rules and
regulations thereunder. In advising the Portfolio, the Subadviser shall use
reasonable efforts to comply with Subchapters L and M of the Internal Revenue
Code of 1986, as amended (the "Code") . In accordance with Section VII,
Subadviser shall arrange for the execution of all orders for the purchase and
sale of securities and other investments for the Portfolio's account and will
exercise full discretion and act for the Fund in the same manner and with the
same force and effect as the Fund might or could do with respect to such
purchases, sales, or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct of such
purchases, sales, or other transactions.
B. Subadviser shall have no responsibility with respect to maintaining custody of
the Portfolios assets. Subadviser shall affirm security transactions with
central depositories and advise the custodian of the Portfolio ("Custodian")
or such depositories or agents as may be designated by Custodian and Adviser
promptly of each purchase and sale of a portfolio security, specifying the
name of the issuer, the description and amount or number of shares of the
security purchased, the market price, the commission and gross or net price,
the trade date and settlement date and the identity of the effecting broker or
dealer. Subadviser shall from time to time provide Custodian and Adviser with
evidence of authority of its personnel who are authorized to give instructions
to Custodian.
C. Adviser acknowledges that Subadviser is not the compliance agent for the Fund
or for Adviser, and does not have access to all of the Fund's books and
records necessary to perform certain compliance testing. To the extent that
Subadviser has agreed to perform the services specified in this Section hereof
in accordance with applicable law (including sub-chapters M and L of the Code,
the 1940 Act and the Advisers Act ("Applicable Law")) and in accordance with
the Fund's Articles of Incorporation and By-laws, policies and determinations
of the Board and Adviser and the Fund's current Registration Statement
received by Subadviser (collectively, the "Charter Requirements"), the
Subadviser shall perform such services based upon its books and records with
respect to the Portfolio, which comprise a portion of the Portfolio's books
and records, and upon written instructions received from the Fund, Adviser or
the Fund's administrator, and shall not be held responsible under this
Agreement so long as it performs such services in accordance with this
Agreement, the Charter Requirements and Applicable Law based upon such books
and records and such instructions provided by the Fund, Adviser or the Fund's
administrator.
D. Unless Adviser advises Subadviser in writing that the right to vote proxies
has been expressly reserved to Adviser or the Fund or otherwise delegated to
another party, Subadviser shall exercise voting rights incident to any
securities held in the Portfolio without consultation with Adviser or Fund,
provided that Subadviser will follow any written instructions received from
Adviser or Fund with respect to voting as to particular issues thirty days
prior to the vote. Subadviser shall further respond to all corporate action
matters incident to the securities held in the Portfolio including, without
limitation, proofs of claim in bankruptcy and class action cases and shelf
registrations.
E. Upon request of Custodian and/or Fund, Subadviser shall provide assistance in
connection with the determination of the fair value of securities in the
Portfolio for which market quotations are not readily available and the
parties to this Agreement agree that the Subadviser shall not bear
responsibility or liability for the determination or accuracy of the valuation
of any portfolio securities and other assets of the Portfolio.
F. In the performance of its duties hereunder, Subadviser is and shall be an
independent contractor and except as expressly provided for herein or
otherwise expressly provided or authorized shall have no authority to act for
or represent the Portfolio or the Fund in any way or otherwise be deemed to be
an agent of the Portfolio, the Fund or of Adviser.
IV. Compensation. For the services provided pursuant to this Agreement, Subadviser shall
receive an investment management fee as set forth in Schedule 1, attached hereto and
incorporated herein by reference. The management fee shall be accrued and computed
daily based on the average daily net assets of the Portfolio as determined at the
close of the New York Stock Exchange and payable monthly in arrears to Subadviser on
or before the 10th day of the next succeeding calendar month. 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.
V. Expenses. Except for expenses specifically assumed or agreed to be paid by Subadviser
pursuant hereto, Subadviser shall not be liable for any expenses of Adviser, the Fund
or any Portfolio, including, without limitation, (i) interest and taxes; (ii)
brokerage commissions and other costs in connection with the purchase or sale of
securities or other investment instruments with respect to the Portfolio; and (iii)
Custodian fees and expenses. Subadviser will pay its own expenses incurred in
furnishing the services to be provided by it pursuant to this Agreement.
VI. Duties of Adviser. Adviser has furnished Subadviser with copies of each of the
following documents and will furnish to Subadviser at its principal office all future
amendments and supplements to such documents, if any, as soon as practicable after
such documents become available:
A. The Articles of Incorporation of the Fund, as filed with the State of Minnesota,
as in effect on the date hereof and as amended from time to time ("Articles");
B. The by-laws of the Fund as in effect on the date hereof and as amended from time
to time ("By-Laws");
C. Certified resolutions of the Board authorizing the appointment of Adviser and
Subadviser and approving the form of the Advisory Agreement and this Agreement;
D. The Fund's Registration Statement under the 1940 Act and the Securities Act of
1933, as amended (the "1933 Act") on Form N-1A, as filed with the Securities and
Exchange Commission ("SEC") relating to the Portfolio and its shares and all
amendments thereto ("Registration Statement");
E. The Notification of Registration of the Fund under the 1940 Act on Form N-8A as
filed with the SEC and any amendments thereto;
F. The Portfolio's most recent prospectus (the "Prospectus");
G. Any proxy statements of the Fund sent to shareholders of the Portfolio for the
purpose of voting on matters affecting the Portfolio; and
H. Copies of reports made by the Fund to its shareholders.
Adviser shall furnish Subadviser with any further documents, materials or information
that Subadviser may reasonably request to enable it to perform its duties pursuant to
this Agreement.
VII. Portfolio Transactions.
A. Subadviser agrees that, in executing portfolio transactions and selecting
brokers or dealers, if any, it shall 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, Subadviser shall consider all factors it
deems relevant, including the breadth of the market in and the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, with respect to the
specific transaction and on a continuing basis. In evaluating the best
overall terms available, and in selecting the broker or dealer, if any, to
execute a particular transaction, Subadviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended ("1934 Act")) provided to
Subadviser with respect to the Portfolio and/or other accounts over which
Subadviser exercises investment discretion. Subadviser may, in its
discretion, agree to pay a broker or dealer that furnishes such brokerage or
research services a higher commission than that which might have been charged
by another broker-dealer for effecting the same transactions, if Subadviser
determines in good faith that such commission is reasonable in relation to the
brokerage and research services provided by the broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
Subadviser 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).
Subadviser shall, upon request from Adviser, provide such periodic and special
reports describing any such brokerage and research services received and the
incremental commissions, net price or other consideration to which they
relate.
B. In no instance will portfolio securities be purchased from or sold to
Subadviser, or any affiliated person thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder.
C. Subadviser may buy securities for the Portfolio at the same time it is selling
such securities for another client account and may sell securities for the
Portfolio at the time it is buying such securities for another client
account. In such cases, subject to applicable legal and regulatory
requirements, and in compliance with such procedures of the Fund as may be in
effect from time to time, Subadviser may effectuate cross transactions between
the Portfolio and such other account if it deems this to be advantageous. The
Subadviser's affiliated broker/dealers may effectuate cross transactions
between the Portfolio and its customers in accordance with such procedures of
the Fund as may be in effect from time to time.
D. On occasions when Subadviser deems the purchase or sale of a security to be in
the best interest of the Fund as well as other clients of Subadviser,
Subadviser, 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 Subadviser in the manner Subadviser considers to
be the most equitable and consistent with its fiduciary obligations to the
Fund and to its other clients.
VIII. Ownership of Records. Subadviser shall maintain all books and records required to be
maintained by a sub-investment adviser of a registered investment company 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
31a-3 under the 1940 Act, Subadviser hereby agrees (A) that all records that it
maintains for the Portfolio are the property of the Fund, (B) to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records that it maintains for
the Fund and that are required to be maintained by Rule 31a-1 under the 1940 Act, and
(C) to surrender promptly to the Fund any records that it maintains for the Fund upon
request by the Fund; provided, however, Subadviser may retain copies of such records.
IX. Reports and Meetings.
A. Subadviser shall furnish to the Board or Adviser, or both, as appropriate,
such information, reports, evaluations, analyses and opinions as are required
by law or that the Board or Adviser, as appropriate, may reasonably require on
quarterly or annual timeframes, including, without limitation: compliance
reporting and certification with respect to:
1. Affiliated Brokerage Transactions
2. Affiliated Underwritings
3. Cross Transactions
4. Prospectus Compliance
5. Code of Ethics
B. Subadviser shall make available in person to the Board on an annual basis and
to Adviser personnel on a periodic basis the portfolio manager of the
Portfolio or an appropriate investment professional of Subadviser to review
the investments and the investment program of the Portfolio and the services
provided by Subadviser hereunder.
X. Services to Other Clients. Nothing contained in this Agreement shall limit or
restrict (i) the freedom of Subadviser, 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 Subadviser, who may also be a
director, officer, or employee of the Fund, 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.
XI. Subadviser's Use of the Services of Others. Subadviser may, at its cost, employ,
retain, or otherwise avail itself of the services or facilities of other persons or
organizations for the purpose of providing Subadviser or the Fund 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 Subadviser
may deem necessary, appropriate, or convenient for the discharge of its obligations
hereunder or otherwise helpful to the Fund or the Portfolio, as appropriate, or in
the discharge of Subadviser's overall responsibilities with respect to the other
accounts that it serves as investment manager or counselor.
The Subadviser may, at its own expense, delegate any or all of its duties and
responsibilities under this Agreement to its wholly-owned subsidiary, FMR Co., Inc.,
provided that the Subadviser remains responsible to the Adviser and the Fund for the
performance of all of its responsibilities and duties hereunder. The Subadviser will
compensate FMR Co., Inc. for its services to the Fund. Subject to prior notice to
the Adviser, the Subadviser may terminate the services of FMR Co, Inc. for the
Portfolio(s) and shall, at such time, assume the responsibilities of FMR Co., Inc.
with respect to the Fund.
XII. Liability of Subadviser; Indemnification. Neither Subadviser nor any of its
officers, directors, or employees, nor any person performing executive,
administrative, trading, or other functions for the Fund, the Portfolio (at the
direction or request of Subadviser) or Subadviser in connection with Subadviser's
discharge of its obligations undertaken or reasonably assumed with respect to this
Agreement (collectively, "Related Persons"), shall be liable for (i) any error of
judgment or mistake of law or for any loss suffered by the Fund or Portfolio or (ii)
any error of fact or mistake of law contained in any report or data provided by
Subadviser, except for any error, mistake or loss resulting from willful misfeasance,
bad faith, or gross negligence in the performance by Subadviser or such Related
Person of Subadviser's duties under this Agreement on behalf of the Fund or Portfolio
or from reckless disregard by Subadviser or any such Related Person of the duties of
Subadviser pursuant to this Agreement (each of which is referred to as a "Culpable
Act").
Notwithstanding the foregoing, any stated limitations on liability shall not relieve
Subadviser from any responsibility or liability Subadviser may have under federal
statutes..
Subadviser shall indemnify Adviser and its Related Persons and hold them harmless
from and against any and all actions, suits or claims whether groundless or
meritorious and from and against any and all losses, damages, costs, charges,
reasonable counsel fees, payments, expenses and liabilities (collectively, "Damages")
arising directly or indirectly out of or in connection with the performance of
services by Subadviser or its Related Persons hereunder to the extent such Damages
result from a Culpable Act.
Adviser shall indemnify Subadviser and its Related Persons from and against any
Damages arising directly or indirectly out of or in connection with the performance of
services by Adviser or its Related Persons under this Agreement or the Advisory
Agreement, in each case, to the extent such Damages result from any willful
misfeasance, bad faith, or gross negligence in the performance by Adviser or any of
its Related Persons of Adviser's duties under the Agreement or Advisory Agreement on
behalf of the Fund or Portfolio or from reckless disregard by the Adviser or any of
its Related Persons of the duties of Adviser pursuant to this Agreement or the
Advisory Agreement.
XIII. Representations of Subadviser. Subadviser represents, warrants, and agrees as
follows:
A. Subadviser (i) is registered as an investment adviser under 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, Massachusetts or Delaware requirements, or the
applicable requirements of any federal 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 promptly notify Adviser of the
occurrence of any event that would disqualify Subadviser from serving as an
investment adviser of an investment company pursuant to Section 9(a) of the
1940 Act or otherwise.
B. Subadviser has adopted a written code of ethics (the "Subadviser Code")
complying with the requirements of Rule 17j-1 under the 1940 Act, as may be
amended from time to time, and, has provided the Adviser and the Fund with a
copy of the Subadviser Code, together with evidence of its adoption. The
Subadviser certifies that it has adopted procedures reasonably necessary to
prevent access persons as defined in Rule 17j-1 ("Access Persons") from
violating the Subadviser Code. On a quarterly basis, Subadviser will either;
(i) certify to Adviser that Subadviser and its Access Persons have complied
with Subadviser Code with respect to the Portfolio, or (ii) identify any
material violations of the Subadviser Code which have occurred with respect to
the Portfolio. In addition, Subadviser will furnish at least annually to
Adviser and the Board a written report that (a) describes any issues arising
under the Subadviser Code since the last report to the Board, including, but
not limited to, information about material violations of the Subadviser Code
with respect to the Portfolio and sanctions imposed in response to the
material violations and (b) certifies that the Subadviser has adopted
procedures reasonably necessary to prevent Access Persons from violating the
Subadviser Code.
C. Subadviser has provided Adviser and the Fund with a copy of its Form ADV as
most recently filed with the SEC and, if not so filed, the its most recent
Part 2 of Form ADV, and will, promptly after filing any amendment to its Form
ADV with the SEC, and, if not so filed, any amendment to Part 2 of its Form
ADV, furnish a copy of such amendment to Adviser.
XIV. Representations of Adviser. Adviser represents, warrants, and agrees as follows:
A. Adviser (i) is registered as an investment adviser under 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 its management agreement with the Fund; (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 promptly notify Adviser of the occurrence of any
event that would disqualify Subadviser from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
B. Adviser and the Fund have adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act, as may be amended from time to
time.
C. Adviser has provided Subadviser with a copy of its Form ADV as most recently
filed with the SEC and, if not so filed, the its most recent Part 2 of Form ADV,
and will, promptly after filing any amendment to its Form ADV with the SEC, and,
if not so filed, any amendment to Part 2 of its Form ADV, furnish a copy of
such amendment to Subadviser.
XV. Compliance with Applicable Regulations. In performing its duties hereunder,
Subadviser shall have compliance procedures reasonably calculated to ensure
compliance with all applicable provisions of the 1940 Act and the Advisers Act, and
any rules and regulations adopted thereunder; Subchapter M of the Code; the
provisions of the Registration Statement, as provided by Adviser to Subadviser; the
provisions of the Articles and the By-Laws of the Fund, as the same may be amended
from time to time, as provided by Adviser to Subadviser; and any other applicable
provisions of federal securities law.
XVI. Term of Agreement. This Agreement shall become effective with respect to the FI All
Cap Portfolio on the Effective Date and, with respect to any additional Portfolio, on
the date of receipt by the Adviser of notice from the Subadviser in accordance with
Section II hereof that the Subscriber is willing to serve as Subadviser with respect
to such Portfolio. Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the Effective Date with respect to the FI All
Cap Portfolio and, with respect to each additional Portfolio, for two years from the
date on which this Agreement becomes effective with respect to such Portfolio.
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 (a) such continuation shall be specifically approved at
least annually (i) by either the Board, or by vote of a majority of the outstanding
voting securities of the Portfolio; (ii) 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
Directors of the Fund who are not interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such approval; and
(b) Subadviser shall not have notified the Fund, in writing, at least 60 days prior
to such approval that it does not desire such continuation.
XVII. 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 Subadviser. This Agreement may also be
terminated by Adviser: (i) on at least 60 days' prior written notice to Subadviser,
without the payment of any penalty; or (ii) upon material breach by Subadviser of any
of the representations and warranties set forth in Section XIII of this Agreement, if
such breach shall not have been cured within a 20-day period after notice of such
breach. Subadviser may terminate this Agreement at any time, without the payment of
any penalty, on at least 60 days' prior notice to Adviser. This Agreement shall
terminate automatically in the event of its assignment, as such term is defined in
the 1940 Act, or upon termination of the Advisory Agreement. Any approval,
amendment, or termination of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of any Portfolio shall be
effective to continue, amend or terminate this Agreement with respect to any such
Portfolio notwithstanding (i) that such action has not been approved by the holders
of a majority of the outstanding voting securities of any other Portfolio affected
thereby, and/or (ii) that such action has not been approved by the vote of a majority
of the outstanding voting securities of the Fund, unless such action shall be
required by any applicable law or otherwise.
XVIII. Use of Subadviser's Name. The parties agree that the name of Subadviser, the names
of any affiliates of Subadviser and any derivative, logo, trademark, service xxxx or
trade name are the valuable property of the Subadviser and its affiliates. Adviser
and the Fund shall have the right to use such name(s), derivatives, logos, trademarks
or service marks or trade names only with the prior written approval of Subadviser,
which approval shall not be unreasonably withheld or delayed so long as this
Agreement is in effect.
Upon termination of the Agreement, Adviser and the Fund shall forthwith cease to use
such name(s), derivatives, logos, trademarks, service marks or trade names. Adviser
and the Fund agree they will review with Subadviser any advertisement, sales
literature, or notice prior to its use that makes reference to Subadviser or its
affiliates or any such name(s), derivatives, logos, trademarks, service marks or
trade names, it being understood that Subadviser shall have no responsibility to
ensure of the adequacy of the form or content of such materials for purposes of the
1940 Act or other applicable laws and regulations. If Adviser or the Fund makes an
unauthorized use of Subadviser's names, derivatives, logos, trademarks, service marks
or trade names, the parties acknowledge that Subadviser shall suffer irreparable hard
for which monetary damages are inadequate and thus, Subadviser will be entitled to
injunctive relief.
XIX. Review of Fund Documents. During the term of this Agreement, Adviser shall furnish
to Subadviser at its principal office all prospectuses, proxy statements, reports to
shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to Subadviser or its clients in
any way, prior to the use thereof, and Adviser shall not use any such materials if
Subadviser reasonably objects in writing in five (5) days (or such other time as may
be mutually agreed, which would include longer time periods for review of the Fund's
prospectus and other parts of the registration statement) after receipt thereof.
XX. Confidentiality. All information furnished by one party to the other party
(including their respective agents, employees and representatives) hereunder shall be
treated as confidential and shall not be disclosed to third parties, except if it is
otherwise in the public domain or, with notice to the other party, as may be
necessary to comply with applicable laws, rules, regulations, subpoenas or court
orders. Without limiting the foregoing, Adviser acknowledges that the securities
holdings of the Portfolio(s) constitute information of value to Subadviser, and
agrees (1) not to use for any purpose, other than for Adviser or the Fund, or their
agents, to supervise or monitor Subadviser, the holdings or trade-related information
of the Fund; and (2) not to disclose the Portfolio(s)' holdings, except: (a) as
required by applicable law or regulation; (b) as required by state or federal
regulatory authorities; (c) to the Board, counsel to the Board, counsel to the Fund,
the administrator or any sub-administrator, the independent accounts and any other
agent of the Fund; or (d) as otherwise agreed to by the parties in writing. Further,
Adviser agrees that information supplied by Subadviser, including approved lists,
internal procedures, compliance procedures and any board materials, is valuable to
Subadviser, and Adviser agrees not to disclose any of the information contained in
such materials, except: (i) as required by applicable law or regulation; (ii) as
required by state or federal regulatory authorities; (iii) to the Board, counsel to
the Board, counsel to the Fund, the administrator or any sub-administrator, the
independent accountants and any other agent of the Fund; or (iv) as otherwise agreed
to by the parties in writing.
XXI. Amendments, Waivers, etc. Provisions of this Agreement may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought. This
Agreement (including any exhibits hereto) may be amended at any time by written
mutual consent of the parties, subject to the requirements of the 1940 Act, the
Advisers Act, and rules and regulations promulgated and orders granted thereunder.
XXII. Notification. Subadviser will notify Adviser promptly of any change in the personnel
of Subadviser with responsibility for making investment decisions in relation to the
Portfolio or who have been authorized to give instructions to Custodian.
XXIII. Override Provisions. Notwithstanding any other provision of this Agreement:
A. Prior to this Agreement being approved by a vote of a majority of the Portfolio's
outstanding voting securities in accordance with the 1940 Act: (i) in no event
shall compensation paid to the Subadviser hereunder exceed the amount permitted
by Rule 15a-4 under the 1940 Act; (ii) the portion of the compensation payable by
the Fund to the Adviser under the terms of the Advisory Agreement with respect to
such Portfolio that is equal in amount to the compensation payable to the
Subadviser hereunder (the "Subadviser Escrow Amount") shall be held in an
interest-bearing escrow account with the Fund's custodian or a bank (the "Escrow
Account"); and (iii) 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 10 days' prior written notice
to the Subadviser. The Subadviser Escrow Amount, including interest earned
thereon, shall be paid promptly after approval of this Agreement by the vote of a
majority of the Portfolio's outstanding voting securities in accordance with the
1940 Act, provided that such approval is obtained no later than 150 days after
the date of this Agreement.
B. If this Agreement is not approved by a vote of a majority of the Portfolio's
outstanding voting securities within the time period stated above, (i) this
Agreement shall immediately terminate; and (ii) the Subadviser shall receive from
the Escrow Account the lesser of: (a) the sum of the amount of any costs incurred
by the Subadviser in performing its duties under this Agreement prior to such
termination plus any interest earned on that amount, and (b) the sum of the
Subadviser Escrow Amount plus any interest earned on that amount.
XXIV. Miscellaneous.
A. Governing Law. This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts without giving effect to the conflicts of
laws principles thereof and the 1940 Act. To the extent that the applicable
laws of the Commonwealth of Massachusetts conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. Insurance. Adviser, the Fund and Subadviser each agree to maintain errors and
omissions or professional liability insurance coverage in an amount that is
reasonable in light of the nature and scope of its respective business
activities.
C. 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.
D. 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.
E. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered and mailed, postage prepaid, to the other party, with a copy to the
Fund, at the addressed below or such other address as such other party may
designate for the receipt of such notice.
If to Adviser: Aid Association for Lutherans
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx XX 00000
Attention: Investment Division
If to Subadviser: Fidelity Management & Research Company
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
F. Interpretation. Nothing herein contained shall be deemed to require the Fund to
take any action contrary to its Articles 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.
G. Successors. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and permitted assigns.
H. If any provisions of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall be
deemed to be severable.
I. 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 1940 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.
J. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original.
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.
AID ASSOCIATION FOR LUTHERANS
Attest:_______________________ By:________________________________
Name:_________________________ Name:______________________________
Title:_____________________________
LB SERIES FUND, INC.
Attest:_______________________ By:________________________________
Name:_________________________ Name:______________________________
Title:_____________________________
FIDELITY MANAGEMENT & RESEARCH COMPANY
Attest:_______________________ By:________________________________
Name:_________________________ Name:______________________________
Title:_____________________________
Schedule I
Dated as of January 1, 2002
Subadvisory Fees
FI All Cap Portfolio
Average Net Daily Assets Annual Rate
$0 - 100 million 0.60%
$100 - 500 million 0.55%
$500 - 750 million 0.50%
$750+ million 0.45%
