<Page>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
EQUITRUST SERIES FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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:
------------------------------------------------------------------------
<Page>
EquiTrust Series Fund, Inc. March 20, 2003
Dear Shareholders,
A meeting of the shareholders of EquiTrust Series Fund, Inc. (the "Fund")
will be held on Wednesday, May 21, 2003 at 8:00 a.m. CST at 5400 University
Avenue, West Des Moines, Iowa. This meeting has been called to consider and vote
upon the election of directors, the approval of the Amended and Restated
Investment Advisory and Management Services Agreement between the Fund and
EquiTrust Investment Management Services, Inc. and the retention of Ernst &
Young LLP as auditors. YOUR DIRECTORS HAVE UNANIMOUSLY APPROVED ALL PROPOSALS
THAT YOU ARE BEING ASKED TO VOTE UPON.
Some of you will receive multiple proxies because of your ownership of more
than one account within the Fund. Your vote is important. To ensure that your
vote is counted, it is necessary that you:
- Review the attached proposals;
- Complete and sign each proxy card that you receive; and
- Return the proxy card(s) in the enclosed postage-paid envelope as soon as
possible. Multiple proxies may be sent in one envelope.
Your prompt response will save the Fund the expense of additional
solicitations. It is our belief that the proposed changes are in the best
interest of shareholders and you are encouraged to vote favorably upon all of
them.
Sincerely,
/s/ Craig A. Lang
Craig A. Lang
PRESIDENT
<Page>
EQUITRUST SERIES FUND, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
TELEPHONE (515) 225-5586
(877) 860-2904
NOTICE OF EQUITRUST SERIES FUND, INC.
SPECIAL MEETING OF SHAREHOLDERS
MAY 21, 2003
March 20, 2003
TO THE SHAREHOLDERS OF EQUITRUST SERIES FUND, INC.:
Notice is hereby given that a Special Meeting of Shareholders of EquiTrust
Series Fund, Inc. (the "Fund"), including each of the Fund's six portfolios
(Value Growth Portfolio, High Grade Bond Portfolio, Strategic Yield Portfolio,
Managed Portfolio, Money Market Portfolio, and Blue Chip Portfolio)
(individually, a "Portfolio" and collectively, the "Portfolios"), will be held
at 5400 University Avenue, West Des Moines, Iowa on Wednesday, May 21, 2003, at
8:00 a.m., CST, for the following purposes:
1. To elect seven (7) directors to serve for a term beginning May 21, 2003
to continue until their successors shall have been duly appointed or elected.
2. To approve the Amended and Restated Investment Advisory and Management
Services Agreement between the Fund and EquiTrust Investment Management
Services, Inc.
3. To ratify the selection of Ernst & Young LLP as independent auditors for
the fiscal year ending July 31, 2003.
4. To transact such other business as may properly come before the Special
Meeting.
Shareholders of record of the Fund at the close of business on March 7, 2003
are entitled to notice of and to vote at the Special Meeting.
IN ORDER TO AVOID DELAYS AND ADDITIONAL EXPENSE FOR THE FUND, AND TO ASSURE
THAT YOUR SHARES ARE REPRESENTED, IF YOU DO NOT EXPECT TO BE PRESENT IN PERSON
AT THE SPECIAL MEETING, YOU ARE REQUESTED TO COMPLETE, SIGN AND MAIL THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
[SIGNATURE]
Craig A. Lang
PRESIDENT
<Page>
EQUITRUST SERIES FUND, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
TELEPHONE (515) 225-5586
(877) 860-2904
PROXY STATEMENT
March 20, 2003
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of the Fund of proxies to be voted at the Special Meeting of
Shareholders of the Fund to be held on May 21, 2003, and at any and all
adjournments thereof. The cost of preparing, printing and mailing the enclosed
proxy, accompanying notice and proxy statement, and all other costs in
connection with the solicitation of proxies, will be paid by the Fund.
Additional solicitation may be made by letter, telephone or facsimile by
officers or employees of EquiTrust Investment Management Services, Inc., the
Fund's Investment Adviser and Distributor, which is located at 5400 University
Avenue, West Des Moines, Iowa 50266 (the "Adviser"). EquiTrust Investment
Management Services, Inc. also serves as the Fund's Administrator; Principal
Underwriter; and Shareholder Service, Dividend Disbursing and Transfer Agent; as
well as provides accounting services to the Fund.
On the matters as to which a choice has been specified by the shareholders
on the proxy, the shares of each Portfolio will be voted accordingly. If no
choice is specified, the shares of the Portfolio will be voted FOR the election
of the seven nominees for director as listed in this Proxy Statement; FOR
approval of the Amended and Restated Investment Advisory and Management Services
Agreement; and FOR ratification of the selection of Ernst & Young LLP as the
Fund's independent auditors. Shareholders who give proxies may revoke them at
any time before they are voted by filing with the Fund a written notice of
revocation, by delivering a duly executed proxy bearing a later date, or by
attending the Special Meeting and voting in person.
A quorum of shareholders is required to take action at the Fund's Special
Meeting. A majority of the shares of the Fund (for a Fund-wide vote) or each
Portfolio (for a Portfolio-wide vote) issued and outstanding and entitled to
vote at the Special Meeting, represented in person or by proxy, will constitute
a quorum. Votes cast by proxy or in person will be tabulated by the judges, who
will determine whether a quorum is present at the Special Meeting. The judges
will treat abstentions as present for the purpose of determining a quorum.
For purposes of determining the approval of the matters submitted for a
vote, abstentions will have the same effect as shares voted against approval of
such matters. The details of the three proposals to be voted upon by the
shareholders of each Portfolio and the vote required for approval of each
proposal are set forth under the description of each proposal below.
As of March 7, 2003, there were issued and outstanding shares of the
Portfolios as follows: of Value Growth; of High
Grade Bond; of
1
<Page>
Strategic Yield; of Managed; of Money Market;
and of Blue Chip. Those persons who were
shareholders of record at the close of business on March 7, 2003 will be
entitled to one vote for each share held.
THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS JULY 31, 2002 ANNUAL
REPORT AND JANUARY 31, 2003 SEMI-ANNUAL REPORT UPON REQUEST. WRITE TO THE FUND
AT 5400 UNIVERSITY AVENUE, WEST DES MOINES, IOWA 50266, OR CALL 1-877-860-2904
(U.S. TOLL FREE).
This Proxy Statement is first being mailed to shareholders of the Fund on or
about March 20, 2003.
1. ELECTION OF DIRECTORS
At the Special Meeting, seven (7) directors are to be elected to serve for a
term to commence on the date of this meeting and continue until their successors
shall have been duly appointed or elected. The table below shows the nominees
for election to the Board, all of whom, other than Paul E. Larson, Steven W.
Plate and Erlin J. Weness, currently serve as directors of the Fund. The
nominees for election to the Board of the Fund are also nominees for election to
the Boards of EquiTrust Money Market Fund, Inc. and EquiTrust Variable Insurance
Series Fund (the three funds collectively referred to as the "EquiTrust Funds"),
and all the nominees, other than Paul E. Larson, Steven W. Plate and Erlin J.
Weness, currently serve as directors/trustees of the EquiTrust Funds. Donald G.
Bartling, a current Board member, will retire from the Board effective May 21,
2003; Curtis C. Pietz retired effective February 13, 2003.
At the February 13, 2003 Board of Directors meeting, the directors of the
Fund voted to increase the size of the Board from six members to seven. The
Nominating Committee of the Board of Directors, which consists of the Fund's
independent directors, presented nominations at the Fund's Board meeting held on
February 13, 2003. The entire Board of Directors reviewed and approved the slate
of nominees on that date. Messrs. Larson, Plate and Weness have been nominated
to fill the two vacancies created by the retirement of Messrs. Bartling and
Pietz and the new Board position. Prior to the nominations being made, the
current Board of Directors met personally with Messrs. Larson, Plate and Weness
and additionally reviewed their background and qualifications to serve on the
Board. The affirmative vote of a majority of the shares present and entitled to
vote will be required to elect the directors.
It is the intention of the persons named in the enclosed proxy to vote the
shares represented thereby for the election of the nominees listed below unless
the proxy is marked otherwise. Each nominee has agreed to serve as a director of
the Fund if elected; however, should any nominee become unwilling or unable to
accept election, the proxies for the Fund will be voted for one or more
substitute nominees designated by the Fund's present Board of Directors.
The following lists each nominee for director and his age; address;
principal occupation and other business affiliations; the year in which each
nominee was first elected a director of the Fund, if applicable; the number of
portfolios in the complex to be overseen by each nominee and other directorships
held by each nominee.
2
<Page>
NOMINEES FOR DIRECTOR
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
LENGTH FUND COMPLEX
NAME, ADDRESS POSITION(S) HELD OF TIME PRINCIPAL OCCUPATION(S) TO BE OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY NOMINEE HELD BY NOMINEE
- --------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS/
NOMINEES(2)
Craig A. Lang (51)* President and Since 2002 Dairy Farmer; Chairman 13 None
Director and Director, FBL
Financial Group, Inc.;
President and Director,
Iowa Farm Bureau
Federation and other
affiliates of the
foregoing; Director,
American Farm Bureau
Federation, Farm Bureau
Mutual Insurance Company,
Western Agricultural
Insurance Company and
Western Ag Insurance
Agency, Inc.; President
and Trustee, EquiTrust
Variable Insurance
Series Fund; Member,
Growmark, Inc.
Coordinating Committee;
past member, Cattlemen's
Beef Board
William J. Oddy (58)* Chief Executive Since 1981 Chief Executive Officer 13 Director, American Equity
Officer and and Management Director, Investment Life Insurance
Director FBL Financial Company, Berthel
Group, Inc.; Chief Fisher & Company, Inc.
Executive Officer, Farm and Berthel Fisher &
Bureau Life Insurance Company Financial
Company and other Services, Inc.
affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and Western Farm
Insurance Agency; Chief
Executive Officer and
Director, EquiTrust Life
Insurance Company and
other affiliates of the
foregoing and RIK, Inc.;
Chief Executive Officer
and Manager, EquiTrust
Marketing Services, LLC;
Chief Executive Officer,
Chief Financial Officer
and Director,
</Table>
3
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
LENGTH FUND COMPLEX
NAME, ADDRESS POSITION(S) HELD OF TIME PRINCIPAL OCCUPATION(S) TO BE OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY NOMINEE HELD BY NOMINEE
- --------------------------------------------------------------------------------------------------------------------------
EquiTrust Investment
Management Services,
Inc.; Chief Executive
Officer and Trustee,
EquiTrust Variable
Insurance Series Fund;
President and Director,
FBL Real Estate Ventures,
Ltd.; Vice President,
Western Computer
Services, Inc.
INDEPENDENT DIRECTORS/
NOMINEES
Erwin H. Johnson (60) Director Since 1989 Farmer; Owner and 13 Director, First Security
1841 March Avenue Manager, Center View Bank and Trust Co.
Charles City, Iowa Farms Co.; Farm Financial (Charles City, Iowa)
50616-9115 Planner; Iowa State
University Cooperative
Extension Service Seed
Sales; Syngenta;
Director, Iowa 4-H
Foundation and Ag
Ventures Alliance;
Council Member, West St.
Charles United Methodist
Church
Kenneth Kay (60) Director Since 1996 President, K-Ranch Inc. 13 Director, First Whitney
51606 590th Street Bank & Trust (Atlantic,
Atlantic, Iowa Iowa)
50022-8233
Steven W. Plate (47) N/A Nominee CPA/Owner, Plate, 13 None
c/o Plate, Baker & Co. Baker & Co., P.C.,
1003 Main Street Certified Public
Grinnell, Iowa 50112 Accountants
Paul E. Larson (50) N/A Nominee Part-time consultant, 13 Nominee, Board of
588 Chardonnay Point Scarborough Retirement Directors,
Waukee, Iowa 50263 Services, LLC; retired Wellmark, Inc.
President, Equitable Life
Insurance Company of Iowa
and related entities
</Table>
4
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
LENGTH FUND COMPLEX
NAME, ADDRESS POSITION(S) HELD OF TIME PRINCIPAL OCCUPATION(S) TO BE OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY NOMINEE HELD BY NOMINEE
- --------------------------------------------------------------------------------------------------------------------------
Erlin J. Weness (58) N/A Nominee Owner and Operator, 13 Director, First State
1620 Pinewood Drive Weness Consulting; Bank Southwest
Worthington, Minnesota Extension Educator - (Worthington, Minnesota),
56187 Farm Management, First State Insurance
University of Minnesota Agency (Worthington,
Minnesota) and First
Rushmore Bancorporation
(Worthington, Minnesota)
</Table>
- ------------------------
1 Each director shall serve as a director of the Fund until the next
meeting of shareholders called for the purpose of conducting the
election of such director or a successor to such director, and until his
successor is elected and qualified, or until such director dies, resigns
or is removed.
2 All interested directors maintain the same business address of 5400
University Avenue, West Des Moines, Iowa 50266.
* "Interested Person" of the Fund as defined in Section 2(a)(19) of the
Investment Company Act of 1940. Messrs. Lang and Oddy are interested
directors of the Fund by virtue of their positions with the Adviser
and/or affiliated persons of the Adviser.
The directors affiliated with the Adviser serve without any compensation from
the Fund. Each director who is not affiliated with the Adviser receives an
annual retainer of $5,000 for serving on the boards of all EquiTrust Funds and a
fee of $1,000 plus expenses for each meeting of the EquiTrust Funds attended. A
fee of $250 is paid for each telephonic board or committee meeting attended. The
table below shows the aggregate compensation paid to each director by the Fund
for its fiscal year ended July 31, 2002. The last column of the table shows the
total compensation received by the directors for the fiscal year ended July 31,
2002 for services as a director of the Fund and the other EquiTrust Funds
(EquiTrust Money Market Fund, Inc. and EquiTrust Variable Insurance
Series Fund).
<Table>
<Caption>
TOTAL COMPENSATION
AGGREGATE PENSION AND RETIREMENT FROM ALL FUNDS IN
COMPENSATION FROM BENEFITS ACCRUED AS PART THE EQUITRUST
NAME OF DIRECTOR THE FUND OF FUND EXPENSES COMPLEX
- ------------------------------------------------------------------------------------------------------------
Mr. Bartling* $3,167 $0 $9,500
- ------------------------------------------------------------------------------------------------------------
Mr. Johnson 3,167 0 9,500
- ------------------------------------------------------------------------------------------------------------
Mr. Kay 3,167 0 9,500
- ------------------------------------------------------------------------------------------------------------
Mr. Pietz* 3,167 0 9,500
- ------------------------------------------------------------------------------------------------------------
Mr. Lang** 0 0 0
- ------------------------------------------------------------------------------------------------------------
Mr. Oddy** 0 0 0
- ------------------------------------------------------------------------------------------------------------
Mr. Wiederstein** 0 0 0
- ------------------------------------------------------------------------------------------------------------
</Table>
* Mr. Bartling will resign from the Fund effective May 21, 2003; Mr. Pietz
resigned from the Fund effective February 13, 2003.
** Interested persons of the Fund. Mr. Wiederstein resigned from the Fund
and Mr. Lang was elected as a director of the Fund effective February
14, 2002.
5
<Page>
Directors and officers of the Fund do not receive any benefits from the Fund
upon retirement, nor does the Fund accrue any expenses for pension or retirement
benefits.
COMMITTEES OF BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors has established an Audit Committee. The Audit
Committee of the Fund recommends the selection of independent auditors for the
Fund, reviews with such independent public accountants the planning, scope and
results of their audit of the Fund's financial statements and the fees for
services performed, reviews the financial statements of the Fund and receives
audit reports. The Audit Committee is comprised of only independent directors.
The current members are Messrs. Bartling, Johnson, and Kay. The Audit Committee
met twice during the fiscal year ended July 31, 2002.
The Board of Directors has also established a Nominating Committee. The
Nominating Committee of the Fund selects and nominates all nominees for those
director positions to be held by individuals who are not interested persons of
the Fund. The Nominating Committee consists of only independent directors. The
current members are Messrs. Bartling, Johnson, and Kay. The Nominating Committee
did not hold a meeting during the fiscal year ended July 31, 2002. The
Nominating Committee has met twice during the current fiscal year. Because the
Fund does not hold regular shareholder meetings, the Committee has not
established procedures for shareholders to submit recommendations for names to
the Board of Directors.
The Fund's Board of Directors held four meetings during the fiscal year
ended July 31, 2002. During the last fiscal year, each director attended 75% or
more of the Fund's Board meetings, and the committee meetings if a member
thereof.
The following table sets forth the dollar range of securities and shares
owned in the Fund by each Nominee for Director and the aggregate dollar range of
securities for all Funds in the EquiTrust Funds complex owned by each Nominee
for Director as of December 31, 2002.
<Table>
<Caption>
AGGREGATE DOLLAR RANGE
OF EQUITY SECURITIES IN
DOLLAR RANGE OF NUMBER OF SHARES ALL FUNDS TO BE OVERSEEN
NAME OF NOMINEE SECURITIES IN THE FUND OWNED IN THE FUND BY NOMINEE IN FAMILY
- ------------------------------------------------------------------------------- OF INVESTMENT COMPANIES
INTERESTED NOMINEES:
Craig A. Lang High Grade Bond $1 - $10,000 34.897 $10,001 - $50,000
Strategic Yield $1 - $10,000 39.889
Managed $1 - $10,000 236.000
Blue Chip $1 - $10,000 4.382
Value Growth $1 - $10,000 27.627
William J. Oddy None None $10,001 - $50,000
INDEPENDENT NOMINEES:
Erwin H. Johnson Managed $1 - $10,000 444.173 $50,001 - $100,000
Value Growth $50,001 - $100,000 6,198.471
Kenneth Kay High Grade Bond $1 - $10,000 34.674 $1 - $10,000
Strategic Yield $1 - $10,000 54.679
Blue Chip $1 - $10,000 113.472
Paul E. Larson None None None
Steven W. Plate None None None
Erlin J. Weness None None None
- ----------------------------------------------------------------------------------------------------------
</Table>
6
<Page>
As of March 7, 2003, the officers and nominees for director as a group owned
of record or beneficially less than % of the then outstanding shares of
each Portfolio of the Fund.
THE FUND'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE ELECTION OF EACH NOMINEE FOR DIRECTOR.
2. APPROVAL OF THE AMENDED AND RESTATED INVESTMENT ADVISORY AND
MANAGEMENT SERVICES AGREEMENT
EquiTrust Investment Management Services, Inc. currently serves as the
investment adviser for the Fund pursuant to an Investment Advisory and
Management Services Agreement dated November 11, 1987. In addition, the Adviser
serves as the Fund's Distributor; Administrator; Principal Underwriter; and
Shareholder Service, Dividend Disbursing and Transfer Agent; as well as provides
accounting services to the Fund. The Adviser is a wholly owned subsidiary of FBL
Financial Services, which is a wholly owned subsidiary of FBL Financial
Group, Inc., an Iowa corporation, 62.5% of whose outstanding voting stock is
owned by Iowa Farm Bureau Federation, an Iowa not-for-profit corporation. Each
of these entities is located at 5400 University Avenue, West Des Moines, Iowa
50266. Kansas Farm Bureau, 2627 KFB Plaza, Manhattan, Kansas 66502, owns 9.0% of
the outstanding voting stock of FBL Financial Group, Inc. The Adviser also acts
as the investment adviser to individuals, institutions and the other EquiTrust
Funds: EquiTrust Money Market Fund, Inc. and EquiTrust Variable Insurance
Series Fund. Personnel of the Adviser also manage investments for the portfolios
of affiliated insurance companies, including Farm Bureau Life Insurance Company
and EquiTrust Life Insurance Company.
The officers and directors of the Fund hold similar positions with EquiTrust
Money Market Fund, Inc. and EquiTrust Variable Insurance Series Fund. Some of
the officers and interested directors of the Fund also serve as officers and
directors of the Adviser and related entities. The following table lists the
current officers and directors of the Fund and their ages; addresses; principal
occupations and other business affiliations, including their position(s), if
any, with regard to the Adviser and related entities; the year in which each
officer or director was first elected to the Fund; the number of portfolios in
the EquiTrust Funds complex to be overseen by each director and other
directorships held by each director.
OFFICERS AND DIRECTORS
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
POSITION(S) LENGTH FUND COMPLEX
NAME, ADDRESS HELD OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS
AND OFFICERS(2)
Craig A. Lang (51)* President and Since 2002 Dairy Farmer; Chairman 13 None
Director and Director, FBL
Financial Group, Inc.;
President and Director,
Iowa Farm Bureau
Federation and other
affiliates of the
foregoing; Director,
American Farm
</Table>
7
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
POSITION(S) LENGTH FUND COMPLEX
NAME, ADDRESS HELD OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
Bureau Federation, Farm
Bureau Mutual Insurance
Company, Western
Agricultural Insurance
Company and Western Ag
Insurance Agency, Inc.;
President and Trustee,
EquiTrust Variable
Insurance Series Fund;
Member, Growmark, Inc.
Coordinating Committee;
past member, Cattlemen's
Beef Board
William J. Oddy (58)* Chief Executive Since 1981 Chief Executive Officer 13 Director, American Equity
Officer and and Management Director, Investment Life Insurance
Director FBL Financial Company, Berthel
Group, Inc.; Chief Fisher & Company, Inc.
Executive Officer, Farm and Berthel Fisher &
Bureau Life Insurance Company Financial
Company and other Services, Inc.
affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and Western Farm
Insurance Agency; Chief
Executive Officer and
Director, EquiTrust Life
Insurance Company and
other affiliates of the
foregoing and RIK, Inc.;
Chief Executive Officer
and Manager, EquiTrust
Marketing Services, LLC;
Chief Executive Officer,
Chief Financial Officer
and Director, EquiTrust
Investment Management
Services, Inc.; Chief
Executive Officer and
Trustee, EquiTrust
Variable Insurance
Series Fund; President
and Director, FBL Real
Estate Ventures, Ltd.;
Vice President, Western
Computer Services, Inc.
Stephen M. Morain (57) Senior Vice Since 1982 General Counsel and N/A N/A
President and Assistant Secretary, Iowa
General Counsel Farm Bureau Federation;
General Counsel,
Secretary and Director,
</Table>
8
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
POSITION(S) LENGTH FUND COMPLEX
NAME, ADDRESS HELD OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
Farm Bureau Management
Corporation; Senior Vice
President and General
Counsel, FBL Financial
Group, Inc. and other
affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and Western Farm
Insurance Agency; Senior
Vice President, General
Counsel and Manager,
EquiTrust Marketing
Services, LLC; Senior
Vice President, General
Counsel and Director,
EquiTrust Investment
Management Services, Inc.
JoAnn Rumelhart (49) Executive Vice Since 2000 Executive Vice President N/A N/A
President and General Manager -
Life Cos., FBL Financial
Group, Inc.; Executive
Vice President and
General Manager, Farm
Bureau Life Insurance
Company and other
affiliates of the
foregoing; Executive Vice
President and Director,
EquiTrust Investment
Management
Services, Inc.; Executive
Vice President and
Manager, EquiTrust
Marketing Services, LLC;
Executive Vice President,
EquiTrust Money Market
Fund, Inc. and EquiTrust
Variable Insurance Series
Fund; Vice President, FBL
Insurance Brokerage, Farm
Bureau Mutual Insurance
Company and other
affiliates of the
foregoing
James W. Noyce (47) Chief Financial Since 1996 Chief Financial Officer N/A N/A
Officer, Chief and Chief Administrative
Administrative Officer, FBL Financial
Officer and Group, Inc. and other
Treasurer affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and
</Table>
9
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
POSITION(S) LENGTH FUND COMPLEX
NAME, ADDRESS HELD OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
other affiliates of the
foregoing; Chief
Financial Officer, Chief
Administrative Officer
and Treasurer, EquiTrust
Money Market Fund, Inc.
and EquiTrust Variable
Insurance Series Fund;
Chief Financial Officer,
Chief Administrative
Officer, Treasurer and
Manager, EquiTrust
Marketing Services, LLC;
Chief Executive Officer,
Western Computer
Services, Inc.; Vice
President, Treasurer and
Director, EquiTrust
Investment Management
Services, Inc. and FBL
Real Estate Ventures,
Ltd.; President,
Treasurer and Director,
FBL Leasing Services,
Inc.
John M. Paule (46) Chief Marketing Since 2000 Chief Marketing Officer, N/A N/A
Officer FBL Financial
Group, Inc. and other
affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and other affiliates of
the foregoing; Chief
Marketing Officer and
Director, EquiTrust
Investment Management
Services, Inc.; Chief
Marketing Officer and
Manager, EquiTrust
Marketing Services, LLC
Lou Ann Sandburg (54) Vice President- Since 1999 Vice President- N/A N/A
Investments and Investments and Assistant
Assistant Treasurer, FBL Financial
Treasurer Group, Inc. and other
affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and Western Farm
Insurance Agency; Vice
President-Investments,
Assistant Treasurer and
Director, EquiTrust
Investment Management
Services, Inc.;
</Table>
10
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
POSITION(S) LENGTH FUND COMPLEX
NAME, ADDRESS HELD OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
Vice President, Assistant
Treasurer and Manager,
EquiTrust Marketing
Services, LLC; Vice
President, FBL Financial
Services, Inc. and other
affiliates of the
foregoing; Vice President
and Director, FBL Leasing
Services, Inc.; Vice
President, Secretary and
Director, FBL Real Estate
Ventures, Ltd.; Vice
President, Western
Computer Services, Inc.
Dennis M. Marker (51) Vice President- Since 1982 Vice President-Investment N/A N/A
Investment Administration, FBL
Administration Financial Group, Inc. and
other affiliates of the
foregoing, Farm Bureau
Mutual Insurance Company
and Western Farm
Insurance Agency;
President and Director,
EquiTrust Investment
Management
Services, Inc.; Vice
President-Investment
Administration and
Manager, EquiTrust
Marketing Services, LLC;
Vice President and
Director, FBL Leasing
Services, Inc.
Sue A. Cornick (42) Sr. Market Since 1990 Sr. Market Conduct and N/A N/A
Conduct and Mutual Funds Vice
Mutual Funds President and Secretary,
Vice President EquiTrust Investment
and Secretary Management
Services, Inc. and other
affiliates of the
foregoing
Kristi Rojohn (40) Assistant Since 1990 Investment Compliance N/A N/A
Secretary Vice President and
Assistant Secretary,
EquiTrust Investment
Management
Services, Inc. and
EquiTrust Marketing
Services, LLC.; Assistant
Secretary, EquiTrust
Money Market Fund, Inc.
</Table>
11
<Page>
<Table>
<Caption>
TERM OF NUMBER OF
OFFICE & PORTFOLIOS IN
POSITION(S) LENGTH FUND COMPLEX
NAME, ADDRESS HELD OF TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
AND AGE WITH FUND SERVED(1) DURING PAST FIVE YEARS BY DIRECTOR HELD BY DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
and EquiTrust Variable
Insurance Series Fund
Susan M. Coombs (42) Mutual Fund Since 2002 Mutual Fund Accounting N/A N/A
Accounting Director, EquiTrust
Director Investment Management
Services, Inc. and other
affiliates of the
foregoing
INDEPENDENT DIRECTORS
Donald G. Bartling Director Since 1980 Farmer; Partner, Bartling 13 None
(75) Brothers Partnership
25718 CR 6 (farming business);
Herman, Nebraska 68029 Landlord
Erwin H. Johnson (60) Director Since 1989 Farmer; Owner and 13 Director, First Security
1841 March Avenue Manager, Center View Bank and Trust Co.
Charles City, Iowa Farms Co.; Farm Financial (Charles City, Iowa)
50616-9115 Planner; Iowa State
University Cooperative
Extension Service Seed
Sales; Syngenta;
Director, Iowa 4-H
Foundation and Ag
Ventures Alliance;
Council Member, West St.
Charles United Methodist
Church
Kenneth Kay (60) Director Since 1996 President, K-Ranch Inc. 13 Director, First Whitney
51606 590th Street Bank & Trust (Atlantic,
Atlantic, Iowa Iowa)
50022-8233
</Table>
- ------------------------
1 Each director shall serve as a director of the Fund until the next
meeting of shareholders called for the purpose of conducting the
election of such director or a successor to such director, and until his
successor is elected and qualified, or until such director dies, resigns
or is removed.
2 All interested directors and officers maintain the same business address
of 5400 University Avenue, West Des Moines, Iowa 50266.
* "Interested Person" of the Fund as defined in Section 2(a)(19) of the
Investment Company Act of 1940. Messrs. Lang and Oddy are interested
directors of the Fund by virtue of their positions with the Adviser
and/or affiliated persons of the Adviser.
12
<Page>
The following table lists additional executive officers and directors of the
Adviser who are not directors or officers of the Fund, including their
addresses; principal occupations and other business affiliations, including
their position(s) with regard to the Adviser and related entities.
<Table>
<Caption>
NAME AND ADDRESS(1) POSITION(S) HELD WITH ADVISER PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
Thomas E. Burlingame Vice President and Director Vice President - Associate General Counsel,
FBL Financial Group, Inc., and other
affiliates of the foregoing, Farm Bureau
Mutual Insurance Company and Western Farm
Insurance Agency; Vice President, Secretary
and Director, FBL Leasing Services, Inc.; Vice
President and Manager, EquiTrust Marketing
Services, LLC
Lynn E. Wilson Vice President and Director Vice President - Life Sales, FBL Financial
Group, Inc., and other affiliates of the
foregoing; President and Manager, EquiTrust
Marketing Services, LLC
</Table>
- ------------------------
1 All directors and officers of the Adviser maintain the same business
address of 5400 University Avenue, West Des Moines, Iowa 50266.
The current Investment Advisory and Management Services Agreement ("the
Agreement"), dated November 11, 1987, was approved by a vote of at least a
majority of the outstanding shares of the Fund on November 11, 1987, and was
later amended on December 1, 1996. Under the Agreement, the Adviser handles the
investment and reinvestment of the Fund's assets and provides for the Fund, at
the Adviser's expense, office space and facilities, certain business equipment,
advisory, research and statistical facilities, clerical services and personnel
as may be necessary to administer the business affairs of the Fund. The Adviser
also has agreed to arrange for any of its officers and directors to serve
without salary as directors, officers or agents of the Fund if duly elected to
such positions. The Adviser is not required to pay expenses of the Fund other
than as set forth above.
As compensation for the investment advisory and management services and the
aforementioned facilities and administrative services to be provided by the
Adviser, the Fund has agreed to pay the Adviser an annual management fee,
accrued daily and payable monthly, based on the average daily net assets of each
Portfolio as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS
FIRST SECOND OVER
$200 $200 $400
PORTFOLIO MILLION MILLION MILLION
- -----------------------------------------------------------------------------------------------------------------
Value Growth 0.50% 0.45% 0.40%
- -----------------------------------------------------------------------------------------------------------------
High Grade Bond 0.40% 0.35% 0.30%
- -----------------------------------------------------------------------------------------------------------------
Strategic Yield 0.55% 0.50% 0.45%
- -----------------------------------------------------------------------------------------------------------------
Managed 0.60% 0.55% 0.50%
- -----------------------------------------------------------------------------------------------------------------
Money Market 0.25% 0.25% 0.25%
- -----------------------------------------------------------------------------------------------------------------
Blue Chip 0.25% 0.25% 0.25%
- -----------------------------------------------------------------------------------------------------------------
</Table>
13
<Page>
For the fiscal year ended July 31, 2002, the Fund paid the following fees to
the Adviser:
<Table>
<Caption>
HIGH
VALUE GRADE STRATEGIC MONEY BLUE
GROWTH BOND YIELD MANAGED MARKET CHIP
FEES PAID TO THE ADVISER PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------
Investment advisory and management fees $357,320 $58,835 $67,740 $230,516 $10,939 $133,595
Transfer and dividend disbursing agent fees 154,497 29,804 33,862 101,713 5,979 147,846
Distribution fees* 330,783 63,333 51,711 174,107 16,461 240,068
Administrative service fees 165,392 31,667 25,856 87,054 8,230 120,034
Accounting fees 30,000 7,354 6,158 19,210 2,188 26,678
</Table>
- ------------------------
* During the fiscal year ended July 31, 2002, of the aggregate amount of
distribution fees paid to the Adviser, $256,976 was paid to EquiTrust
Marketing Services, LLC, an affiliate of the Adviser.
These services will continue to be provided by the Adviser after the Amended
and Restated Investment Advisory and Management Services Agreement is approved.
The Adviser voluntarily waived certain fees for the Money Market Portfolio
of the Fund. These waivers may be revoked at any time at the option of the
Adviser. The following table is a summary of the fees waived:
<Table>
<Caption>
CLASS OF SHARES BEGINNING DATE OF AMOUNT OF FEE
FEE WAIVED AFFECTED WAIVER WAIVED
- -------------------------------------------------------------------------------------------------------
Management Fees Class A and I January 1, 2002 0.25%
- -------------------------------------------------------------------------------------------------------
Administrative Service Fees Class A February 2, 2002 0.25%
- -------------------------------------------------------------------------------------------------------
Transfer Agent Fees Class A November 22, 2002 0.218%
- -------------------------------------------------------------------------------------------------------
Accounting Fees Class A and I January 24, 2003 0.05%
- -------------------------------------------------------------------------------------------------------
</Table>
The Adviser also serves as investment adviser for EquiTrust Money Market
Fund, Inc. and EquiTrust Variable Insurance Series Fund. Both EquiTrust Money
Market Fund, Inc. and the Money Market Portfolio of the EquiTrust Variable
Insurance Series Fund have an investment objective similar to that of the Money
Market Portfolio of the Fund. In addition, each of the portfolios of the
EquiTrust Variable Insurance Series Fund has an investment objective similar to
that of a corresponding portfolio of the Fund. The following table summarizes
the net assets of the other funds as of December 31, 2002 and the rate of
compensation paid to the Adviser by these funds:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS
NET ASSETS FIRST SECOND OVER
AS OF DECEMBER 31, $200 $200 $400
FUND AND PORTFOLIO 2002 MILLION MILLION MILLION
- ------------------------------------------------------------------------------------------------------------------
EquiTrust Money Market Fund, Inc. $21,023,095 0.25% 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------
EQUITRUST VARIABLE INSURANCE SERIES FUND
- ------------------------------------------------------------------------------------------------------------------
Value Growth $40,953,105 0.45% 0.45% 0.40%
- ------------------------------------------------------------------------------------------------------------------
High Grade Bond $24,875,905 0.30% 0.275% 0.25%
- ------------------------------------------------------------------------------------------------------------------
Strategic Yield $22,395,432 0.45% 0.45% 0.40%
- ------------------------------------------------------------------------------------------------------------------
Managed $54,427,804 0.45% 0.45% 0.45%
- ------------------------------------------------------------------------------------------------------------------
Money Market $ 8,149,541 0.25% 0.25% 0.25%
- ------------------------------------------------------------------------------------------------------------------
Blue Chip $63,698,617 0.20% 0.20% 0.20%
- ------------------------------------------------------------------------------------------------------------------
</Table>
14
<Page>
The Adviser voluntarily waived the 0.25% management fee for EquiTrust Money
Market Fund, Inc. effective November 15, 2002 and a portion (0.25%) of the
transfer agent fee for that fund effective January 24, 2003. These waivers may
be revoked at any time at the option of the Adviser. No fees have been waived
for any portfolio of the EquiTrust Variable Insurance Series Fund.
The Agreement continues in effect as to each Portfolio from year to year as
long as its continuation is approved annually by vote of a majority of the
Portfolio's outstanding shares or by the Fund's Board of Directors, including,
in either event, a majority of those directors who are not parties to such
agreement or "interested persons" (as such term is defined in the Investment
Company Act of 1940) of any such party except in their capacities as directors
of the Fund. It may be terminated as to any Portfolio without penalty at any
time upon 60 days' notice by the Adviser, or by the Portfolio by vote of the
Fund's Board of Directors, or by a majority vote of the Portfolio's outstanding
shares, and will terminate automatically upon assignment. The Agreement was most
recently approved for continuance on November 14, 2002, by the Board of
Directors, including a vote of a majority of the directors who are not
"interested persons" of either party to the Agreement.
Due to changes in names of both the Fund and the Adviser, the current
Agreement has become outdated. The Agreement has been revised to reflect the
current names of the Fund and the Adviser and make certain other minor changes
to the Agreement, none of which materially affect the nature or level of
services provided by the Adviser, or affect the advisory fees paid by the Fund.
At its February 13, 2003 meeting, the Board of Directors, including the
independent directors, evaluated the Amended and Restated Investment Advisory
and Management Services Agreement ("the Amended Agreement") and, believing that
the terms of the Amended Agreement are fair and in the best interests of the
Fund and its shareholders, approved the Amended Agreement, subject to approval
by the shareholders of the Fund.
In approving the Amended Agreement, the Board of Directors considered, among
other factors, the nature and quality of the services provided under the Amended
Agreement and the overall fairness of the Amended Agreement to the Fund. The
Board also considered that, other than minor changes, the Agreement between the
Fund and the Adviser has not been altered.
An affirmative vote of the holders of a majority of the outstanding shares
of each Portfolio is required for the approval of the Amended Agreement. As
defined in the Investment Company Act of 1940, a vote of the holders of a
majority of the outstanding shares of a Portfolio means the vote of (i) 67% or
more of the voting shares of the Portfolio present at the meeting, if the
holders of more than 50% of the outstanding shares of the Portfolio are present
in person or by proxy, or (ii) more than 50% of the outstanding voting shares of
the Portfolio, whichever is less. If the shareholders of a Portfolio do not
approve the Amended Agreement, the Portfolio will continue to operate under the
current Agreement. The proposed Amended Agreement will be sent back to the Fund
Board of Directors to determine what action is best for the shareholders of the
Portfolio.
The form of the Amended Agreement for the Fund is attached as Exhibit "A".
You should read the form of the Amended Agreement. The description in this Proxy
Statement is only a summary of the Amended Agreement.
15
<Page>
THE FUND'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF
EACH PORTFOLIO VOTE FOR THE APPROVAL OF THE AMENDED AND RESTATED INVESTMENT
ADVISORY AND MANAGEMENT SERVICES AGREEMENT.
3. SELECTION OF INDEPENDENT AUDITORS
The members of the Fund's Board of Directors who are not "interested
persons" of the Fund have unanimously selected Ernst & Young LLP ("E&Y"),
independent public accountants, as independent auditors to audit the books and
records of the Fund for the fiscal year ending July 31, 2003. E&Y has served the
Fund in this capacity since 1987 and has no direct or indirect financial
interest in the Fund except as independent auditors. The selection of E&Y as
independent auditors of each Portfolio is being submitted to the shareholders
for ratification, which requires the affirmative vote of a majority of the
shares of the Fund present and entitled to vote on the matter. A representative
of E&Y is expected to be present at the Special Meeting and will be available to
respond to any appropriate questions and to make a statement if he or she
wishes.
The following sets forth the fees that E&Y has billed the Fund, the other
EquiTrust Funds and to the Adviser and affiliates of the Adviser that provide
services to the Fund, for the Fund's most recent fiscal year.
AUDIT FEES: For the Fund's fiscal year ended July 31, 2002, the aggregate
fees billed by E&Y for professional services rendered for the audit of the
Fund's financial statements was $43,300.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES: E&Y did not
provide any financial information systems design and implementation services to
the Fund or the Adviser for the Fund's fiscal year ended July 31, 2002.
ALL OTHER FEES: For the Fund's fiscal year ended July 31, 2002, the
aggregate fees billed by E&Y included $3,655 for audit-related expenses of the
Fund; $52,470 for fees related to the audits of EquiTrust Money Market Fund,
Inc. and EquiTrust Variable Insurance Series Fund and $30,000 for services
performed by E&Y for companies affiliated with the Fund that provide support for
the operations of the Fund.
The Audit Committee of the Board of Directors of the Fund has reviewed the
statement of independence provided by E&Y, considered whether the provision of
additional services by the firm is compatible with such firm's independence with
respect to the Fund, and concluded that the additional services provided by E&Y
does not compromise that firm's independence with regard to the Fund.
THE FUND'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS.
ADDITIONAL INFORMATION ABOUT MEETING
SHAREHOLDER PROPOSALS
Since the Fund does not hold regular meetings of its shareholders, the date
of the next special shareholder meeting cannot be anticipated. Any shareholder
who wishes to submit a proposal for
16
<Page>
consideration at the next meeting of shareholders, when and if it is called,
should submit such proposal to the Fund.
OWNERSHIP OF FUND SHARES
As of December 31, 2002, two entities owned greater than 5% of the
outstanding shares in certain Portfolios of the Fund. Farm Bureau Life Insurance
Company owned more than 5% of the outstanding shares in the following
Portfolios: 6.1% of the High Grade Bond Portfolio, 12.3% of the Strategic Yield
Portfolio and 49.6% of the Money Market Portfolio. Wells Fargo Bank Minnesota,
N.A., Fifth and Marquette, Minneapolis, Minnesota 55402, as Trustee of the Farm
Bureau 401(k) Savings Plan, owned more than 5% of the outstanding shares in the
following Portfolios: 5.7% of the Value Growth Portfolio, 10.6% of the High
Grade Bond Portfolio, 10.0% of the Strategic Yield Portfolio, 8.1% of the
Managed Portfolio, 9.2% of the Blue Chip Portfolio and 25.2% of the Money Market
Portfolio.
To the Fund's knowledge, no other shareholder owned more than 5% in any
Portfolio of the Fund.
GENERAL
Management does not intend to present and does not have reason to believe
that any other items of business will be presented at the Fund's Special
Meeting. However, if other matters are properly presented to the Special Meeting
for a vote, the proxies will be voted upon such matters in accordance with the
judgment of the person acting under the proxies.
Failure of a quorum to be present at the Special Meeting will necessitate
adjournment and will subject the Fund to additional expense. The persons named
in the enclosed proxy may also move for an adjournment of the Special Meeting to
permit further solicitation of proxies with respect to any of the proposals if
they determine that adjournment and further solicitation is reasonable and in
the best interests of the shareholders.
IF YOU CANNOT BE PRESENT IN PERSON, YOU ARE REQUESTED TO COMPLETE, SIGN AND
RETURN THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
[SIGNATURE]
Craig A. Lang
PRESIDENT
17
<Page>
EXHIBIT A
FORM OF AMENDED AND RESTATED
INVESTMENT ADVISORY AND
MANAGEMENT SERVICES AGREEMENT
This Agreement made this 11th day of November, 1987, as amended December 1,
1996 and as further amended and restated the 21st day of May, 2003, by and
between EQUITRUST SERIES FUND, INC., a Maryland corporation (the "Fund"), and
EQUITRUST INVESTMENT MANAGEMENT SERVICES, INC., a Delaware corporation
("EquiTrust");
WHEREAS, the original Agreement between the Fund and EquiTrust made
November 11, 1987 was approved by the vote of at least a majority (as defined in
the Investment Company Act of 1940 ("ICA")) of the outstanding shares of the
Fund and was later amended on December 1, 1996;
WHEREAS, the Fund and EquiTrust wish to amend and restate the original
Agreement as amended (i) to reflect the current names of the Fund, the
portfolios of the Fund and EquiTrust, and (ii) to make other minor
modifications; and it is amended and restated hereby:
WITNESSETH:
In consideration of the mutual covenants herein contained, it is agreed as
follows:
1. ADVISORY SERVICES. EquiTrust shall furnish investment research and
advice to the Fund and shall manage the investment and reinvestment of the
assets of the portfolios currently offered and to be offered by the Fund (the
"Portfolios") and its business affairs and matters incidental thereto, all
subject to the supervision of the Board of Directors of the Fund (the "Board"),
and the provisions of the Articles of Incorporation and By-Laws of the Fund and
any resolutions, rules or regulations adopted by the Board. EquiTrust shall for
all purposes herein provided be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized herein, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent for the Fund. The Fund shall also be free to retain, at its own expense,
other persons to provide it with any services whatsoever including, but not
limited to, statistical, factual or technical information or advice. The
services of EquiTrust herein provided are not to be deemed exclusive and
EquiTrust shall be free to render similar services or other services to others
so long as its services hereunder shall not be impaired thereby.
2. LIMITATIONS ON ADVISORY SERVICES. EquiTrust shall perform the services
under this Agreement subject to the supervision and review of the Board of
Directors and in a manner consistent with the objectives, policies and
restrictions of each Portfolio of the Fund as stated in its Registration
Statement, as amended from time to time, the provisions of the ICA and the
applicable requirements of the Internal Revenue Code of 1986.
3. DUTIES OF ADVISER. In carrying out its obligations to manage the
investment and reinvestment of the assets of the Fund, EquiTrust shall, as
appropriate and consistent with the limitations set forth in Paragraph 2 hereof:
(a) perform research and obtain and evaluate pertinent economic,
statistical and financial data relevant to the investment
policies of each Portfolio of the Fund as set forth in the
prospectus for the Fund, as amended from time to time;
18
<Page>
(b) make and carry out day-to-day decisions to acquire or dispose
of permissible investments, manage the investments and any
other property of the Fund, and provide or obtain such services
as may be necessary in managing, acquiring or disposing of
investments; and
(c) determine the composition of the assets of each of the
Portfolios, including the purchase, retention or sale of the
securities and cash contained in those Portfolios.
4. REPORT TO BOARD. EquiTrust, either through persons employed by it or at
its expense, shall furnish to the Board at least once every quarter a schedule
of investments and other assets held in the Portfolios and a statement of all
purchases and sales for the Portfolios, except short-term money market
instruments, made during the period since the last report.
5. RECORDS. EquiTrust agrees to preserve for the period prescribed by the
rules and regulations of the Securities and Exchange Commission all records
EquiTrust maintains for the Fund as are required to be maintained pursuant to
said rules. EquiTrust agrees that all such records shall be the property of the
Fund and shall be made available, within five (5) business days of the request,
to the Fund's accountants or auditors during regular business hours at
EquiTrust's offices upon prior written notice. In the event of termination of
this Agreement for any reason, all such records shall be returned promptly to
the Fund, free from any claim or retention of rights by EquiTrust. In addition,
EquiTrust will provide any materials, reasonably related to the investment
advisory services provided hereunder, as may be reasonably requested in writing
by the Board or officers of the Fund or as may be required by any governmental
agency having jurisdiction.
6. EXPENSES. EquiTrust shall at its expense furnish the Fund with office
space (in the offices of EquiTrust, or other such place or places as may be
agreed upon by the parties) and such office facilities, simple business
equipment, advisory, research and statistical facilities and clerical services
and personnel as may be necessary to administer the investment business of the
Fund. EquiTrust shall arrange, if desired by the Fund, for officers or employees
of EquiTrust to serve without salary from the Fund as Directors, officers or
agents of the Fund if duly elected or appointed to such positions by the
shareholders of the Fund or by the Board thereof and subject to their individual
consent and to any limitations imposed by law. EquiTrust will not be required to
pay any other expenses of the Fund other than those expressly enumerated herein;
and in particular, but without limiting the generality of the foregoing,
EquiTrust will not be required to pay any of the following Fund expenses:
(1) expenses for services rendered by a custodian including those for the
safekeeping of the Fund's securities or other property and for keeping its books
of account, (2) charges and expenses of independent auditors, legal counsel, any
transfer or dividend disbursing agent or any registrar of the Fund, (3) costs of
acquiring and disposing of portfolio securities, (4) interest, if any, on
obligations incurred by the Fund, (5) the cost of calculating the net asset
value of each Portfolio of the Fund as provided in the Articles of Incorporation
and By-Laws of the Fund and corporate reports, (6) membership dues in the
Investment Company Institute or any similar organization, (7) the cost of
reports, notices to shareholders and other shareholder communications and other
like miscellaneous expenses, (8) expenses of any registration and qualification
of shares of the Fund for sale under federal securities laws and the securities
laws of any state or other jurisdiction, (9) telephone and personnel costs
incurred by EquiTrust and allocable to the above, (10) taxes and fees payable to
federal, state or other governmental agencies or otherwise, and (11) expenses of
underwriting and selling shares of stock issued by the Fund. The Board shall
determine how expenses are to be allocated among the existing Portfolios, and
the determination of the Board shall be final and
19
<Page>
binding. The Fund shall not pay or incur any obligation for any management or
administrative expenses for which the Fund intends to seek reimbursement from
EquiTrust as herein provided without first obtaining the written approval of
EquiTrust.
7. COMPENSATION. For the services to be rendered and the charges and
expenses assumed and to be paid by EquiTrust as provided herein, the Fund shall
pay EquiTrust compensation based on an annual percentage of the average daily
net assets of each Portfolio as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS
FIRST SECOND OVER
$200 $200 $400
PORTFOLIO MILLION MILLION MILLION
- -----------------------------------------------------------------------------------------------------------------
Managed 0.60% 0.55% 0.50%
- -----------------------------------------------------------------------------------------------------------------
Strategic Yield 0.55% 0.50% 0.45%
- -----------------------------------------------------------------------------------------------------------------
Value Growth 0.50% 0.45% 0.40%
- -----------------------------------------------------------------------------------------------------------------
High Grade Bond 0.40% 0.35% 0.30%
- -----------------------------------------------------------------------------------------------------------------
Money Market 0.25% 0.25% 0.25%
- -----------------------------------------------------------------------------------------------------------------
Blue Chip 0.25% 0.25% 0.25%
- -----------------------------------------------------------------------------------------------------------------
</Table>
Compensation under this Agreement shall be calculated and accrued for each
business day by applying the appropriate annual rates to the net assets of the
Portfolio in accordance with the formula set forth above as of the close of the
last business day preceding the day for which the fee is being calculated, and
dividing the sum so computed by the number of business days in the fiscal year.
The fees thus accrued shall be payable monthly, provided that such compensation
shall be paid proportionately for any other period ending with the termination
of this Agreement.
8. LIMITATION OF EXPENSES. In the event that expenses of any Portfolio
chargeable to its income account (including amounts payable hereunder but
exclusive of brokerage fees, distribution services fee, interest, taxes and
extraordinary expenses for any fiscal year ending on a date at which this
Agreement is in effect) shall exceed 1.50% of the average daily net assets of
the Portfolio for said fiscal year, calculated on the basis of the average of
all of the daily valuations of the net assets of the Portfolio in effect as of
the close of each business day during said fiscal year, EquiTrust shall pay to
the Portfolio the amount by which such expenses exceed the applicable
limitation, within three days after the determination of the amount thereof. In
no event shall EquiTrust be required to reimburse the Portfolio in an amount
exceeding its compensation for such period from such Portfolio under this
Agreement.
9. FUND TRANSACTIONS AND BROKERAGE. EquiTrust agrees to determine the
securities to be purchased or sold by each Portfolio of the Fund, subject to the
provisions of Paragraphs 2 and 3 above, and to place orders pursuant to its
determinations either directly with the issuer, with any broker-dealer or
underwriter that specializes in the securities for which the order is made, or
with any other broker or dealer selected by EquiTrust, subject to the following
limitations.
EquiTrust is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for each Portfolio of the Fund
and will use its best efforts to obtain the most favorable price and efficient
execution of the Fund's orders, taking into account all appropriate factors,
including: price; dealer spread or commission, if any; size and difficulty of
the transaction; the nature of the market for the security; the reliability,
financial condition and general execution and operational capabilities of the
broker-dealer; and the research, statistical, and economic data or facilities
furnished by the broker-dealer to the Fund.
20
<Page>
If, in the judgment of EquiTrust, the Fund or any Portfolio thereof would be
benefited by supplemental investment research, EquiTrust is authorized to pay
reasonable fees for such information. The expenses of EquiTrust may not
necessarily be reduced as a result of receipt of such supplemental information.
EquiTrust or any of its affiliates may also use any investment research obtained
for the benefit of the Fund or any Portfolio thereof in providing investment
advice to its other investment advisory accounts.
10. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or
sales of portfolio securities for the account of the Fund or any Portfolio
thereof, neither EquiTrust nor any officer, director or shareholder of EquiTrust
shall act as principal or receive any commission other than its compensation
provided for in this Agreement. Such limitation, however, shall not prohibit the
payment of the usual and customary brokerage commissions to any of such parties
in the proper case. It is understood and agreed that EquiTrust, by virtue of a
separate agreement or agreements with the Fund, may also act as underwriter,
distributor, transfer agent and/or shareholder service agent for the Fund,
and/or perform accounting services for the Fund, and may be compensated
therefor.
The same securities held by the Fund may also be held by separate investment
accounts or other investment companies for which EquiTrust may act as an adviser
or by EquiTrust or its affiliates. Because of different investment objectives or
other factors, a particular security may be bought by EquiTrust or its
affiliates or for one or more clients when one or more clients are selling the
same security. If purchases or sales of securities for the Fund or other
entities for which EquiTrust or its affiliates act as investment adviser or for
their advisory clients arise for consideration at or about the same time, the
Fund agrees that EquiTrust may make transactions in such securities, in such
manner as is deemed equitable to all. To the extent that transactions on behalf
of more than one client of EquiTrust during the same period may increase demand
for securities being purchased or the supply of securities being sold, the Fund
recognizes that there may be an adverse effect on price.
It is agreed that, on occasions when EquiTrust deems the purchase or sale of
a security to be in the best interests of the Fund as well as other accounts or
companies, it may, to the extent permitted by applicable laws and regulations,
but shall not be obligated to, aggregate the securities to be sold or purchased
for the Fund with those to be sold or purchased for other accounts or companies
in order to obtain favorable execution and lower brokerage commissions. In that
event, allocation of the securities purchased or sold, as well as the expenses
incurred in the transaction, will be made by EquiTrust in the manner it
considers to be most equitable and consistent with its fiduciary obligations to
the Fund and to such other accounts or companies. The Fund recognizes that in
some cases this procedure may adversely affect the size of the position
obtainable for a Portfolio of the Fund.
11. LIMITATION OF LIABILITY OF ADVISER. EquiTrust shall not be liable for
any error of judgment or mistake of law, or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except loss to the
Fund resulting from willful misfeasance, bad faith or gross negligence on the
part of EquiTrust in the performance of its obligations and duties or by reasons
of its reckless disregard of its obligations and duties under this Agreement,
except to the extent otherwise provided by law. It is understood that the
officers, Directors, agents and shareholders of the Fund are or may become
interested in EquiTrust as officers, directors, agents, shareholders or
otherwise, and that the officers, directors, shareholders and agents of
EquiTrust may become similarly interested in the Fund; and that the existence of
any such dual interest shall not affect the validity of this Agreement or any
transaction hereunder except as provided in the Articles of Incorporation or
By-Laws of the Fund or Articles of Incorporation of EquiTrust, or by the
specific provisions of applicable law. Any person, even though also employed by
EquiTrust, who may be or
21
<Page>
become an employee of and paid by the Fund shall be deemed, when acting within
the scope of his employment by the Fund, to be acting in such employment solely
for the Fund and not as an employee or agent of EquiTrust.
12. EFFECTIVE DATE AND TERM. This Agreement shall not become effective
unless and until it is approved by the Fund's Board, including a majority of
Directors who are not parties to this Agreement or "interested persons" (as
defined in the ICA) of any such party to this Agreement, as to the Value Growth
Portfolio, a vote of a "majority of the outstanding voting securities" (as
defined in the ICA) of such Portfolio. This Agreement shall come into full force
and effect on December 1, 1987, provided that it shall not become effective as
to any subsequently created Portfolio until it has been approved by the Board of
Directors specifically for such Portfolio.
As to each Portfolio of the Fund, the Agreement shall continue in effect
until November 30, 1988, and shall thereafter continue in effect from year to
year so long as its continuance is approved at least annually in the manner
required by the ICA and the rules and regulations thereunder; provided however
that if the continuation of this Agreement is not approved for a Portfolio,
EquiTrust may continue to serve in such capacity for such Portfolio in the
manner and to the extent permitted by the ICA and the rules and regulations
thereunder. In connection with such approvals, the Board shall request, and
EquiTrust shall furnish, such information as may be necessary to evaluate this
Agreement.
As to each Portfolio of the Fund, this Agreement:
A. may be terminated without the payment of any penalty upon 60 days'
written notice to EquiTrust either by the Board or by a majority vote of
those persons having voting rights in respect of the affected
Portfolio(s) of the Fund;
B. shall automatically terminate if it is assigned (within the meaning of
the ICA) by EquiTrust;
C. may be terminated by EquiTrust without payment of any penalty upon 60
days' written notice to the Secretary of the Board; and
D. may be amended, 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. Any amendment of
this Agreement shall be subject to the ICA.
13. NOTICES. Any notices under this Agreement shall be in writing
addressed and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such notice.
14. MISCELLANEOUS. The captions in this Agreement are included for
convenience or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the Fund and EquiTrust have caused this Agreement to be
executed in their names and on their behalf and under their corporate seals by
and through their duly authorized officers all on the day and year first above
written.
[SIGNATURE LINES OMITTED]
22
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[EQUITRUST MUTUAL FUNDS LOGO] 000000 0000000000 0 0000
000000000.000 ext
000000000.000 ext
000000000.000 ext
MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4 HOLDER ACCOUNT NUMBER
ADD 5
ADD 6 C 1234567890 J N T
Mark this box with an X if you have
/ / made changes to your name or
address details above.
SPECIAL MEETING PROXY CARD - EQUITRUST SERIES FUND, INC.
The Board of Directors recommends a vote FOR the following Proposals:
1. Election of Directors
FOR WITHHOLD FOR WITHHOLD
01 - Craig A. Lang / / / / 05 - Paul E. Larson / / / /
02 - William J. Oddy / / / / 06 - Steven W. Plate / / / /
03 - Erwin H. Johnson / / / / 07 - Erlin J. Weness / / / /
04 - Kenneth Kay / / / /
<Table>
FOR ALL
FOR AGAINST EXCEPT ABSTAIN FOR AGAINST ABSTAIN
2. Approval of the Amended and / / / / / / / / 3. Ratification of the selection / / / / / /
Restated Investment Advisory and of independent auditors
Management Services Agreement
</Table>
If you do not want your shares of a particular Portfolio voted for this
proposal, mark the "For All Except" box and write the Portfolio(s) for which you
want your vote cast against in the box below.
______________________________________________
You are only eligible to vote in connection with the Portfolios in which you are
invested as of the record date, March 7, 2003.
AUTHORIZED SIGNATURES - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.
Please sign your name(s) exactly as show above and date this proxy. If shares
are held jointly, both joint owners should sign. If signing as attorney,
executor, administrator, guardian or in any other capacity, please give your
full title as such.
<Table>
Signature 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)
__________________________________________________ __________________________________________________ _________________
2 U P X H H H P P P P 0016982
</Table>
009CDG
<Page>
PROXY - EQUITRUST SERIES FUND, INC.
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS MAY 21, 2003
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF EQUITRUST
SERIES FUND, INC.
The undersigned hereby appoint(s) Craig A. Lang, Stephen M. Morain and William
J. Oddy, and each of them, proxies with several powers of substitution, to vote
for the undersigned at the 2003 Special Meeting of Shareholders of EquiTrust
Series Fund, Inc., to be held on May 21, 2003, notice of which meeting and the
Proxy Statement accompanying the same have been received by the undersigned, or
at any adjournment thereof, upon the following matters as described in the
Notice of Meeting and accompanying Proxy Statement.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER(S). ALL PROPOSALS (SET FORTH ON THE REVERSE SIDE
OF THIS PROXY CARD) HAVE BEEN PROPOSED BY THE BOARD OF DIRECTORS. IF NO
DIRECTION IS GIVEN ON THESE PROPOSALS, THIS PROXY CARD WILL BE VOTED "FOR" THE
NOMINEES LISTED IN ITEM 1 AND "FOR" ITEMS 2 AND 3. THE PROXY WILL BE VOTED IN
ACCORDANCE WITH THE HOLDER'S BEST JUDGEMENT AS TO ANY OTHER MATTER.
YOUR VOTE IS IMPORTANT. IF YOU DO NOT EXPECT TO ATTEND THE MEETING OR IF YOU
PLAN TO ATTEND BUT WISH TO VOTE BY PROXY, PLEASE SIGN, DATE AND MAIL THIS
PROXY. A RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES.
009CEC