<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [ ] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
LB Series Fund, Inc.
(Name of Registrant as Specified In Its Charter)
LB Series Fund, Inc.
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
LB Series Fund, Inc.
625 Fourth Avenue South
Minneapolis, Minnesota 55415
March 27, 1998
Dear Contract Owner:
Please find enclosed a notice of a special meeting of shareholders of the
Opportunity Growth Portfolio (the "Portfolio") scheduled for April 29, 1998,
together with a proxy statement discussing the matters to be voted on at the
meeting and a voting instructions form. Please take the time to read the proxy
statement and cast your vote.
In an effort to improve the Portfolio's performance, we are asking contract
owners to approve an agreement providing for the retention of T. Rowe Price
Associates, Inc. on a temporary basis to serve as sub-adviser to the Portfolio.
The retention of T. Rowe Price will provide Lutheran Brotherhood with adequate
time to search for, identify and hire a new portfolio manager for the Portfolio.
Lutheran Brotherhood will continue to serve as the adviser for your Portfolio
and will oversee and review T. Rowe Price's performance of its duties.
The Board of Directors has unanimously recommended that contract owners of
the Portfolio vote for the proposed sub-advisory agreement with T. Rowe Price.
Should you have any questions, please feel free to call us at (800) 423-7056. We
will be happy to answer any questions you may have.
I URGE EACH SHAREHOLDER TO PROMPTLY MARK, SIGN AND RETURN THE ENCLOSED
VOTING INSTRUCTIONS FORM.
Sincerely,
ROLF F. BJELLAND
Chairman and President
<PAGE> 3
LB SERIES FUND, INC.
OPPORTUNITY GROWTH PORTFOLIO
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1998
To the Shareholders:
A Special Meeting of Shareholders (the "Special Meeting") of the
Opportunity Growth Portfolio (the "Portfolio"), a portfolio of the LB Series
Fund, Inc., will be held at the Lutheran Brotherhood Building, 625 Fourth Avenue
South, Minneapolis, Minnesota on April 29, 1998 at 8:30 a.m., local time, for
the following purposes:
1. To approve a new investment sub-advisory agreement between LB
Series Fund, Inc. (the "Fund"), Lutheran Brotherhood and T. Rowe Price
Associates, Inc. with respect to the Portfolio; and
2. To transact such other business as may properly come before the
Special Meeting and any adjournments thereof.
The Board of Directors of the Fund has fixed the close of business on March
6, 1998, as the record date for the determination of shareholders entitled to
notice of, and to vote at the Special Meeting and any adjournments thereof.
By Order of the Board of Directors
Otis F. Hilbert, Secretary
Minneapolis, Minnesota
March 27, 1998
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YOUR VOTE IS IMPORTANT
YOU CAN HELP THE PORTFOLIO AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY.
IF YOU ARE UNABLE TO BE PRESENT IN PERSON, PLEASE MARK, DATE, SIGN AND RETURN
THE ENCLOSED PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE
SPECIAL MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
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<PAGE> 4
LB SERIES FUND, INC.
OPPORTUNITY GROWTH PORTFOLIO
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 29, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of the LB Series Fund, Inc. (the "Fund") for
use at a Special Meeting of Shareholders of the Opportunity Growth Portfolio
(the "Portfolio") of the Fund (the "Special Meeting") to be held at the Lutheran
Brotherhood Building, 625 Fourth Avenue South, Minneapolis, Minnesota on April
29, 1998 at 8:30 a.m. and at any adjournments thereof.
As more fully described in this Proxy Statement, the Special Meeting has
been called to consider and vote upon the following proposals:
1. To approve a new investment sub-advisory agreement between the LB
Series Fund, Inc. (the "Fund"), Lutheran Brotherhood ("Lutheran
Brotherhood") and T. Rowe Price Associates, Inc. ("T. Rowe Price") with
respect to the Portfolio ("Proposal 1"); and
2. To transact such other business as may properly come before the
Special Meeting and any adjournments thereof.
Shares of the Portfolio are currently sold only to separate accounts (the
"Accounts") of Lutheran Brotherhood and Lutheran Brotherhood Variable Insurance
Products Company ("LBVIP") to fund benefits under variable life insurance and
variable annuity contracts issued by Lutheran Brotherhood and LBVIP (the
"Contracts"). Lutheran Brotherhood and LBVIP, as the owners of the assets in the
Accounts, will vote all of the shares of the Portfolio in accordance with the
voting instructions of Contract owners. Any such shares of a Portfolio
attributable to a Contract for which no timely voting instructions are received,
and any shares of that Portfolio held by Lutheran Brotherhood, LBVIP or any of
their affiliates for their own account, will be voted by Lutheran Brotherhood or
LBVIP in proportion to the voting instructions that are received with respect to
all Contracts participating in the Portfolio. If the voting instructions form is
returned but no instructions are given, the shares of the Portfolio to which the
form relates will be voted in favor of Proposal 1. This Proxy Statement and the
accompanying Notice of Special Meeting of Shareholders and voting instruction
form are first being mailed on or about March 27, 1998 to Contract owners as of
the record date.
The Contract owners permitted to give voting instructions to Lutheran
Brotherhood and LBVIP and the number of shares for which instructions may be
given will be determined as of March 6, 1998, the record date for the Special
Meeting. As of that date, an aggregate of 34,182,849.279 shares of capital
stock, $.0l par value, of the Portfolio were issued and outstanding. Each
shareholder is entitled to the same number of votes as the number of full and
fractional shares held by such shareholder. Each share of the Portfolio is
entitled to one vote.
As of the close of business on the record date, the following persons were
known by the Fund to own of record or beneficially 5% or more of the shares of
the Portfolio:
<TABLE>
<CAPTION>
NUMBER OF % OF
SHAREHOLDER SHARES OUTSTANDING
----------- -------------- -----------
<S> <C> <C>
Lutheran Brotherhood Variable Insurance
Product Company -- LBVIP Variable Annuity Account I......... 15,487,249.940 45.31%
625 Fourth Avenue South
Minneapolis, MN 55415
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
NUMBER OF % OF
SHAREHOLDER SHARES OUTSTANDING
----------- -------------- -----------
<S> <C> <C>
Lutheran Brotherhood Variable Insurance
Product Company -- LBVIP Variable Insurance
Account..................................................... 1,013,797.722 2.97%
625 Fourth Avenue
South Minneapolis, MN 55415
Lutheran Brotherhood -- LB Variable
Annuity Account I........................................... 16,504,596.840 48.28%
625 Fourth Avenue South
Minneapolis, MN 55415
Lutheran Brotherhood -- LB Variable
Insurance Account I......................................... 1,177,204.777 3.44%
625 Fourth Avenue South
Minneapolis, MN 55415
-------------- ------
Total.................................................. 34,182,849.279 100.00%
</TABLE>
Any Contract owner giving voting instructions may revoke them at any time
prior to their use. A Contract owner may revoke any voting instructions by (1)
giving written notice of revocation to an officer of the Portfolio, (2)
returning to an officer of the Portfolio properly executed later dated voting
instructions, or (3) attending the Special Meeting, requesting return of any
previously delivered voting instructions and voting in person. Attendance and
voting at the Special Meeting will not in and of itself constitute a revocation
of voting instructions. Signed voting instructions received by the Board of
Directors in time for voting and not so revoked will be voted in accordance with
the instructions noted thereon.
A majority of the shares of the Portfolio entitled to vote at the Special
Meeting in person or represented by proxy constitutes a quorum of the Portfolio.
Approval of Proposal 1 requires the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Portfolio entitled to
vote on Proposal 1, as such term is defined in the Investment Company Act of
1940, as amended ("1940 Act"). For that purpose, a vote of the holders of a
"majority of the outstanding voting securities" of the Portfolio means the
lesser of either (1) the vote of 67% or more of the shares of the Portfolio
present at the Special Meeting if the holders of more than 50% of the
outstanding Portfolio shares are present or represented by proxy, or (2) the
vote of the holders of more than 50% of the outstanding shares of the Portfolio.
In the event a quorum is not present at the Special Meeting or in the event
a quorum is present at the Special Meeting but sufficient votes to approve
Proposal 1 are not received, the persons named as proxies may propose one or
more adjournments of the Special Meeting to permit further solicitation of
proxies, provided that such persons determine, after consideration of all
relevant factors, including the nature of the proposal, the percentage of votes
then cast, the percentage of negative votes then cast, the nature of the
proposed solicitation activities and the nature of the reasons for such further
solicitation, that an adjournment and additional solicitation is reasonable and
in the interests of shareholders.
The Board of Directors expects to make this solicitation primarily by mail.
However, in addition to the solicitation of proxies by mail, the officers and
members of the Board of Directors and persons affiliated with Lutheran
Brotherhood, the Portfolio's investment adviser, may, without remuneration,
solicit proxies personally or by telephone, telegram or other electronic means.
The Portfolio may also retain a proxy solicitation firm to assist in any
special, personal solicitation of proxies. The costs of solicitation and
expenses incurred in connection with preparing this Proxy Statement, including
any cost of retaining a proxy solicitation firm, will be borne by Lutheran
Brotherhood.
2
<PAGE> 6
THE FINANCIAL STATEMENTS OF THE PORTFOLIO FOR THE YEAR ENDED DECEMBER 31,
1997 ARE INCLUDED IN THE PORTFOLIO'S ANNUAL REPORT FOR THE YEAR ENDED DECEMBER
31, 1997 WHICH, HAS BEEN PREVIOUSLY SENT TO CONTRACT OWNERS. THE FUND WILL
FURNISH UPON REQUEST AND WITHOUT CHANGE TO ANY CONTRACT OWNER A COPY OF THE
PORTFOLIO'S ANNUAL REPORT. A CONTRACT OWNER MAY OBTAIN A COPY OF THE ANNUAL
REPORT BY WRITING TO LB SERIES FUND, INC., 625 FOURTH AVENUE SOUTH, MINNEAPOLIS,
MINNESOTA 55415 OR BY CALLING TOLL FREE (800) 423-7056.
PROPOSAL 1
APPROVAL OF A SUB-ADVISORY AGREEMENT BETWEEN THE
FUND, LUTHERAN BROTHERHOOD AND T. ROWE PRICE ASSOCIATES, INC.
DESCRIPTION OF THE PROPOSED SUB-ADVISORY AGREEMENT
At a meeting of the Board of Directors of the Fund held on March 5-6, 1998,
a majority of the Directors, including the Directors (the "Independent
Directors") who are not interested persons of the Fund, Lutheran Brotherhood or
T. Rowe Price, within the meaning of the 1940 Act, approved the proposed
sub-advisory agreement ( the "Proposed Sub-Advisory Agreement") for the
Portfolio and recommended that the Proposed Sub-Advisory Agreement be submitted
to shareholders of the Portfolio for approval.
Proposal 1 asks shareholders of the Portfolio to approve the Proposed
Sub-Advisory Agreement. The Proposed Sub-Advisory Agreement, the form of which
is attached as Exhibit A, provides that T. Rowe Price will act as the investment
sub-adviser and will supervise and direct the investments of the Portfolio in
accordance with the Portfolio's investment objectives, policies and
restrictions, subject to the supervision of the Board of Directors and Lutheran
Brotherhood, the Portfolio's investment adviser. Lutheran Brotherhood will
continue to have responsibility for all services to be provided to the Portfolio
pursuant to the Investment Advisory Agreement dated January 31, 1994, (the
"Investment Advisory Agreement") except for services provided by T. Rowe Price
under the Proposed Sub-Advisory Agreement, and will oversee and review T. Rowe
Price's performance of its duties.
Under the Proposed Sub-Advisory Agreement, Lutheran Brotherhood will pay T.
Rowe Price a sub-advisory fee for the performance of its services at an annual
rate equal to 0.30% of the Portfolio's average daily net assets. The fee will be
payable monthly to T. Rowe Price on or before the 10th day of the month.
The Proposed Sub-Advisory Agreement will be executed and become effective
on the date of approval by the shareholders and will continue in effect from
year to year so long as such continuation shall be specifically approved at
least annually (1) by either the Board, or by a vote of a majority of the
outstanding voting securities of the Portfolio, and (2) 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 Independent Directors. The Proposed Sub-Advisory
Agreement may be terminated without penalty by vote of the Board of Directors or
by a vote of a majority of the outstanding voting securities of the Portfolio on
at least 60 days' prior written notice to T. Rowe Price or by Lutheran
Brotherhood on at least 60 days' prior written notice. T. Rowe Price may
terminate the Proposed Sub-Advisory Agreement without penalty on at least 60
days' prior notice to the Adviser. The Proposed Sub-Advisory Agreement will
terminate automatically in the event of its assignment.
The Proposed Sub-Advisory Agreement provides that T. Rowe Price will not be
subject to liability in connection with the performance of its services
thereunder in the absence of willful misfeasance, bad faith, or gross negligence
or from reckless disregard of its duties.
The discussion of the Proposed Sub-Advisory Agreement in this Proxy
Statement is qualified in its entirety by reference to the text of the Proposed
Sub-Advisory Agreement as set forth in such Exhibit A.
3
<PAGE> 7
INVESTMENT ADVISORY AGREEMENT WITH LUTHERAN BROTHERHOOD
Lutheran Brotherhood currently serves as investment adviser to the
Portfolio. Lutheran Brotherhood serves as investment adviser to the Portfolio
pursuant to the Investment Advisory Agreement. The Investment Advisory Agreement
provides for an advisory fee equal to an annual rate of .40% of the aggregate
average daily net assets of the Portfolio. For the fiscal year ended December
31, 1997, the Portfolio paid an aggregate of $1,301,986 in advisory fees to
Lutheran Brotherhood.
REASONS FOR THE PROPOSAL
In January 1998, Lutheran Brotherhood concluded that the performance of the
Portfolio had not been satisfactory in the recent past and that a change in the
personnel responsible for management of the Portfolio was required. In order to
provide adequate time to search for, identify and hire a new portfolio manager,
Lutheran Brotherhood determined that it was appropriate to retain a third party
investment advisory organization on a temporary basis to serve as sub-adviser to
the Portfolio. Lutheran Brotherhood's decision to pursue discussions with T.
Rowe Price regarding a proposed engagement as sub-advisor for the Portfolio was
based in part on its general familiarity with the capabilities and experience of
the T. Rowe Price organization as a result of an existing sub-advisory
relationship with Rowe Price-Fleming International, Inc. ("Price-Fleming"), a T.
Rowe Price affiliate. Price-Fleming serves as sub-advisor to the World Growth
Portfolio of the Fund. In February 1998, officers of Lutheran Brotherhood
conducted due diligence visits to T. Rowe Price to review various matters
relating to the proposed engagement, including T. Rowe Price's investment
approach, its experience in managing mutual funds with similar investment
objectives and policies to the Portfolio, and the background of the personnel
that would be responsible for portfolio management of the Portfolio. At a
meeting of the Board of Directors held on March 5-6, 1998, Lutheran Brotherhood
reviewed with the Directors the results of its due diligence as well as the
terms of the proposed sub-advisory engagement of T. Rowe Price. In determining
to approve the retention of T. Rowe Price as sub-adviser to the Portfolio, the
Directors took into account T. Rowe Price's substantial experience and
reputation as a manager of equity investments, and in particular investments in
small and mid-cap growth companies, and the prominence of the T. Rowe Price name
in the marketplace. The Board of Directors also considered the terms of the
Proposed Sub-Advisory Agreement, including the compensation to be paid to T.
Rowe Price for its services. The Board of Directors, after careful deliberation
and based on all the facts available to it, concluded at a Board of Directors
meeting held on March 5-6, 1998 that it would be appropriate to accept the
recommendation of Lutheran Brotherhood to retain T. Rowe Price as sub-adviser to
the Portfolio.
It is currently anticipated that the Fund will retain T. Rowe Price as
sub-adviser to the Portfolio for a term of approximately one year but the actual
term could be shorter or longer as circumstances warrant, including the time
required to identify and hire a new portfolio manager. The Fund will notify
Contract owners in the event of any material change in the anticipated length of
the T. Rowe Price engagement.
CHANGES IN INVESTMENT STYLE
In managing the Portfolio, Lutheran Brotherhood uses fundamental investment
research techniques to seek out those companies that have a competitively
superior product or service in an unsaturated market with large potential for
growth. Lutheran Brotherhood focuses primarily on companies that possess
superior earnings prospects over a three to five year time horizon.
If the Proposed Sub-Advisory Agreement is approved, T. Rowe Price plans to
manage the Portfolio using a number of proprietary quantitative models to seek
out companies that have a competitively superior product or service in an
unsaturated market with large potential for growth and measure the major
characteristics of stocks in the small capitalization growth sector. Based on
these models, stocks are selected in a "top down" manner so that the portfolio
as a whole reflects the specific characteristics that T. Rowe Price considers
4
<PAGE> 8
important, such as valuation and projected earnings growth. T. Rowe Price will
focus primarily on companies that possess superior earnings prospects.
RECOMMENDED SHAREHOLDER ACTION
THE BOARD OF DIRECTORS OF THE FUND, INCLUDING THE INDEPENDENT DIRECTORS,
UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE PORTFOLIO VOTE FOR THE APPROVAL
OF THE PROPOSED SUB-ADVISORY AGREEMENT.
OWNERSHIP AND MANAGEMENT OF T. ROWE PRICE AND RELATED MATTERS
The principal offices of T. Rowe Price are located at 100 East Pratt
Street, Baltimore, Maryland 21202. T. Rowe Price is a Maryland corporation.
Founded in 1937 by the late Thomas Rowe Price, Jr., T. Rowe Price and its
affiliates managed over $124 billion for more than 6 million individual and
institutional investor accounts as of December 31, 1997. T. Rowe Price has an
investment advisory committee composed of the following members: Richard T.
Whitney, Chairman, Marc L. Baylin, Kristen F. Culp, John H. Laporte and Donald
J. Peters. Mr. Whitney, a Managing Director of T. Rowe Price, will have day to
day responsibility for managing the Portfolio's investment and will work with
the investment advisory committee in developing and executing the Portfolio's
investment program. Mr. Whitney jointed T. Rowe Price in 1985 and has been
managing investments since 1986.
The President and Chairman of the Board of T. Rowe Price is George A.
Roche, who together with George J. Collins, James E. Halbkat, Jr., Henry H.
Hopkins, James A.C. Kennedy III, John H. Laporte, Richard L. Menschel, William
T. Reynolds, James S. Riepe, Brian C. Rogers, John W. Rosenblum, Robert L.
Strickland, M. David Testa, Philip C. Walsh, and Anne Marie Whittemore,
constitute its Board of Directors. The address of each of these persons, with
the exception of Messrs. Halbkat, Menschel, Rosenblum, Strickland, Walsh, and
Mrs. Whittemore, is 100 East Pratt Street, Baltimore, Maryland 21202, and, with
the exception of Messrs. Halbkat, Menschel, Rosenblum, Strickland, Walsh, and
Mrs. Whittemore, all are employed by T. Rowe Price. Mr. Halbkat is President of
U.S. Monitor Corporation, a provider of public response systems. Mr. Halbkat's
address is: P.O. Box 23109, Hilton Head Island, South Carolina 29925. Mr.
Menschel is a limited partner of The Goldman Sachs Group, L.P. Mr. Menschel's
address is 85 Broad Street, 2nd Floor, New York, New York 10004. Mr. Rosenblum
is the Dean of the Jepson School of Leadership Studies at the University of
Richmond, and a director of: Chesapeake Corporation, a manufacturer of paper
products; Cadmus Communications Corp., a provider of printing and communication
services; Comdial Corporation, a manufacturer of telephone systems for
businesses; Cone Mills Corporation, a textiles producer, and Providence Journal
Company, a publisher of newspapers and owner of broadcast television stations.
Mr. Rosenblum's address is: University of Richmond, Virginia 23173. Mr.
Strickland is Chairman of Lowe's Companies, Inc., a retailer of specialty home
supplies and a Director of Hannaford Bros., Co., a food retailer. Mr.
Strickland's address is 604 Two Piedmont Plaza Building, Winston-Salem, North
Carolina 27104. Mr. Walsh is a Consultant to Cyprus Amax Minerals Company,
Englewood, Colorado. Mr. Walsh's address is Pleasant Valley, Peapack, New Jersey
07977. Mrs. Whittemore is a partner of the law firm of McGuire, Woods, Battle &
Boothe and is a director of Owens & Minor, Inc.; USF&G Corporation; the James
River Corporation of Virginia; and Albermarle Corporation. Mrs. Whittemore's
address is One James Center, Richmond, Virginia 23219.
OTHER FUNDS ADVISED BY T. ROWE PRICE
T. Rowe Price acts as investment adviser to the T. Rowe Price Diversified
Small-Cap Growth Fund (the "Diversified Small-Cap Growth Fund"), a registered
investment company portfolio that has a similar investment objective and
policies to those of the Portfolio. For its services to the Diversified
Small-Cap Growth Fund, T. Rowe Price is paid a management fee consisting of two
elements: a "group" fee and an
5
<PAGE> 9
"individual" fund fee. The "group" fee varies based on the combined net assets
of certain funds distributed by T. Rowe Price Investment Services, Inc.
(excluding T. Rowe Price Index Trust, T. Rowe Price Spectrum Funds and any
institutional and private label mutual funds) (the "Combined Price Funds"). The
Diversified Small-Cap Growth Fund pays, as a portion of the "group" fee, an
amount equal to the ratio of its daily net assets to the daily net assets of all
the Combined Price Funds. The current "group" fee rate at various asset levels
of the Combined Price Funds is as follows: 0.480% for the first $1 billion;
0.450% for the next $1 billion; 0.420% for the next $1 billion; 0.390% for the
next $1 billion; 0.370% for the next $1 billion; 0.360% for the next $2 billion;
0.350% for the next $2 billion; 0.340% for the next $5 billion; 0.330% for the
next $10 billion; 0.320% for the next $10 billion; 0.310% for the next $16
billion; 0.305% for the next $30 billion; and 0.300% thereafter. The Diversified
Small-Cap Growth Fund's group fee was 0.33% based on the assets of the Combined
Price Funds of approximately $63 billion at March 31, 1997. The Diversified
Small-Cap Growth Fund pays a flat "individual" fund fee based on its net assets
equal to 0.35%. T. Rowe Price has agreed to waive fees and bear any expenses
through December 31, 1998, which would cause the Diversified Small-Cap Growth
Fund's ratio of expenses to average net assets to exceed 1.25%.
T. Rowe Price also acts as investment sub-advisor to the T. Rowe Price
Small Cap Growth Portfolio of the Metropolitan Series Fund, Inc. (the
"Sub-Advised Mutual Fund"), a portfolio of a registered investment company that
also has a similar investment objective and policies to that of the Opportunity
Growth Portfolio.
The table below sets forth the name of each investment company portfolio
having similar investment objective and policies of the Opportunity Growth
Portfolio, the annual rate of compensation (i.e., for the Diversified Small Cap
Growth Fund, the fee charged by T. Rowe Price as a percentage of average daily
net assets and, for the Sub-Advised Mutual Fund, the fee T. Rowe Price is paid
for its services as sub-advisor to the respective portfolio), and net assets as
of 12/31/97.
<TABLE>
<CAPTION>
TOTAL NET ASSETS
INVESTMENT COMPANY NAME AS OF 12/31/97 ANNUAL RATE OF COMPENSATION
- --------------------------------- ---------------- ----------------------------------------
<S> <C> <C>
T. Rowe Price $72,071,093 .35% plus allocable portion of group fee
Diversified Small-Cap
Growth Fund
Metropolitan Series Fund, Inc. $95,363,475 .35% up to $100 million
T. Rowe Price Small Cap .30% on next $300 million
Growth Portfolio .25% in excess of $400 million
</TABLE>
A special meeting of shareholders of the Lutheran Brotherhood Opportunity
Growth Fund of The Lutheran Brotherhood Family of Funds has also been scheduled
to consider a proposed sub-advisory agreement with T. Rowe Price that contains
substantially the same terms as the Proposed Sub-Advisory Agreement except that
it provides for payment by Lutheran Brotherhood Research Corp. of a sub-advisory
fee at an annual rate equal to 0.30% of such Fund's average daily net assets up
to $500 million, .25% of average daily net assets over $500 million but not over
$1 billion and .20% of average daily assets over $1 billion.
BROKERAGE TRANSACTIONS WITH RELATED BROKERS AND DEALERS
T. Rowe Price will be responsible not only for making decisions with
respect to the purchase and sale of the Portfolio's securities, but also for
implementing these decisions, including the negotiation of commissions and the
allocation of brokerage and principal business. It is expected that T. Rowe
Price may place orders for the Portfolio's transactions with broker-dealers
through the same trading desk T. Rowe Price uses for transactions in domestic
securities. The trading desk accesses brokers and dealers in various markets in
which the Portfolio's foreign securities are located. These brokers and dealers
may include certain affiliates of Robert Fleming Holdings Limited ("Robert
Fleming") and Jardine Fleming Group Limited ("JFG"), persons indirectly related
to T. Rowe Price. Robert Fleming Holdings, through Copthall Overseas Limited, a
wholly-
6
<PAGE> 10
owned subsidiary, owns 25% of the common stock of Price-Fleming, an investment
adviser registered under the Investment Advisers Act of 1940. Fifty percent of
the common stock of Price-Fleming is owned by TRP Finance, Inc., a wholly-owned
subsidiary of T. Rowe Price, and the remaining 25% is owned by Jardine Fleming
Holdings Limited, a subsidiary of JFG. JFG is 50% owned by Robert Fleming
Holdings and 50% owned by Jardine Matheson Holdings Limited. Orders for the
Portfolio's transactions placed with affiliates of Robert Fleming and JFG will
result in commissions being received by such affiliates.
The Board of Directors on behalf of the Portfolio has authorized T. Rowe
Price to utilize certain affiliates of Robert Fleming and JFG in the capacity of
broker in connection with the execution of the Portfolio's transactions. Other
affiliates of Robert Fleming and JFG also may be used. T. Rowe Price has agreed
to comply with the procedures under Rule 17e-1 under the 1940 Act when using
such brokers.
CONTRACT OWNER PROPOSALS
The Portfolio does not hold annual shareholder meetings. Contract owners
wishing to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of the
Fund, 625 Fourth Avenue South, Minneapolis, Minnesota 55415.
OTHER BUSINESS
The Board of Directors does not know of any other matters to be considered
at the Special Meeting other than those referred to above. If any other matters
are properly presented to the Special Meeting, it is the intention of proxy
holders to vote such proxies on such matters in accordance with their judgment.
By Order of the Board of Directors
Otis F. Hilbert
Secretary
March 27, 1998
Minneapolis, Minnesota
7
<PAGE> 11
INVESTMENT SUB-ADVISORY AGREEMENT
BY AND AMONG
LUTHERAN BROTHERHOOD
AND
LB SERIES FUND, INC.
AND
T. ROWE PRICE ASSOCIATES, INC.
INVESTMENT SUB-ADVISORY AGREEMENT, made as of the day of April , 1998,
between Lutheran Brotherhood ("Adviser"), a fraternal benefit society organized
and existing under the laws of the State of Minnesota, the LB Series Fund, Inc.,
a corporation organized and existing under the laws of the State of Minnesota
("Fund"), and T. Rowe Price Associates, Inc. ("Sub-Adviser"), a corporation
organized and existing under the laws of the State of Maryland.
WHEREAS, the Adviser has entered into an Advisory Agreement dated as of
January 31, 1994, ("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 Opportunity Growth
Portfolio ("Portfolio"), a separate portfolio of the Fund;
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 Fund and Adviser desire 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
Fund's Board of Directors ("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
<PAGE> 12
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 affiliates of Robert
Fleming Holdings Limited ("Robert Fleming") and Jardine Fleming Group
Limited ("JFG") 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
Fund's Articles of Incorporation, 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. Without limiting the foregoing, the Sub-Adviser
shall have primary responsibility for compliance with the procedures under Rule
17e-1 under the 1940 Act in each case in which affiliates of Robert Fleming or
JFG are used for the execution of portfolio securities transactions.
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 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.
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 except those
services to be performed by the sub-adviser hereunder 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 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 of Incorporation");
(2) The By-Laws of the Fund as in effect on the date hereof and as
amended from time to time ("By-Laws");
(3) Certified resolutions of the Board of the Fund authorizing the
appointment of the Adviser and the Sub-Adviser and approving the form of
the Advisory Agreement and this Agreement;
(4) The Fund'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 Fund under the 1940 Act on
Form N-8A as filed with the SEC and any amendments thereto;
2
<PAGE> 13
(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 fifteen
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
obligation's to the Fund 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 31a-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 Fund, (ii)
to preserve tor 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 (iii) agrees to surrender promptly to the
Fund any records that it maintains for the Fund upon request by the Fund;
provided, however, the Sub-Adviser may retain copies of such records.
3
<PAGE> 14
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 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.
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 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 the Sub-Adviser 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 Sub-Advisees 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 Fund, 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 Fund 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 Fund 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 Fund with a copy of such
code of ethics, together with evidence of its adoption.
4
<PAGE> 15
C. The Sub-Adviser has provided the Adviser and the Fund 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 first been approved (i) by a vote of a majority of those directors
of the Fund 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. This Agreement shall continue in effect unless terminated pursuant
to Section 13 hereof subject to all 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 directors of
the Fund who are not parties to this Agreement or interested persons of any such
party; and (c) the Sub-Adviser shall not have notified the Fund, in writing, at
least 60 days prior to such approval that it does not desire such continuation.
The Sub-Adviser shall furnish to the Fund, 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 60 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 11 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 Fund to take any action contrary to its Articles of Incorporation 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.
5
<PAGE> 16
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.
<TABLE>
<S> <C>
LUTHERAN BROTHERHOOD
Attest:
- -----------------------------------------------------
By:
-------------------------------------------------
LB SERIES FUND, INC.
Attest:
- -----------------------------------------------------
By:
-------------------------------------------------
T. ROWE PRICE ASSOCIATES, INC.
Attest:
- -----------------------------------------------------
By:
-------------------------------------------------
</TABLE>
6
<PAGE> 17
SCHEDULE 1
<TABLE>
<CAPTION>
RATE OF ANNUAL
SUB-ADVISORY FEE AS
A PERCENTAGE OF
AVERAGE DAILY NET ASSETS
------------------------
<S> <C>
.30%
</TABLE>
7
<PAGE> 18
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C>
FOR AGAINST ABSTAIN
============================= 1. To approve a new investment [ ] [ ] [ ]
LB SERIES FUND, INC. sub-advisory contract between
============================= Lutheran Brotherhood, T. Rowe
[Lutheran Brotherhood Variable Price and Associates, Inc. and
Insurance Products Company] the Fund with respect to the
Portfolio.
CONTRACT NUMBER: THE SHARES REPRESENTED BY THIS VOTING INSTRUCTION
RECORD DATE SHARES: FORM WILL BE VOTED IN ACCORDANCE WITH THE CHOICES
MADE ON THIS FORM. IF THE FORM IS SIGNED AND RETURNED
BUT NO INSTRUCTIONS ARE GIVEN, THE SHARES REPRESENTED
BY THIS VOTING INSTRUCTION WILL BE VOTED IN FAVOR OF
THE PROPOSAL. IF THE FORM IS NOT SIGNED AND RECEIVED
BY LB SERIES FUND, INC. BY APRIL 27, 1998 THE SHARES
REPRESENTED BY THIS VOTING INSTRUCTION WILL BE CAST
IN THE SAME PROPORTION AS INSTRUCTIONS WHICH ARE
RECEIVED FROM CONTRACT OWNERS.
Please be sure to sign and date
this Voting Instruction Form.
Date _________
Please sign exactly as your name appears herein.
_______________________________ If shares are held jointly, either holder may sign.
Contract Owner sign here Corporate proxies should be signed by an authorized
officer.
_______________________________
Co-owner sign here
DETACH CARD DETACH CARD
</TABLE>
LB SERIES FUND, INC.
625 FOURTH AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55415-1625
VOTING INSTRUCTION FORM FOR MEETING OF SHAREHOLDERS
APRIL 29, 1998
The undersigned, having received notice of a Special Meeting of the Shareholders
of the Opportunity Growth Portfolio (the "Portfolio") of LB Series Fund, Inc.
(the "Fund") to be held at the Lutheran Brotherhood Building, 625 Fourth Avenue
South, Minneapolis, Minnesota 55415, at 8:30 a.m. on April 29, 1998, hereby
instructs that all of the full and fractional shares of the Portfolio for which
I am permitted to give voting directions, be voted by Lutheran Brotherhood
Variable Insurance Products Company as indicated below and the proxy solicited
by the Board of Directors of the Fund for the Special Meeting and any
adjournment thereof be returned to the Fund.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting.
PLEASE RETURN TOP PORTION WITH YOUR INSTRUCTION IN THE ENCLOSED ENVELOPE AND
RETURN THE BOTTOM PORTION.
