EXHIBIT 99(d)(6)
INVESTMENT SUB-ADVISORY AGREEMENT
First American Investment Funds, Inc. - International Fund
December 9, 2004
X.X. Xxxxxx Investment Management Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sir or Madam:
First American Investment Funds, Inc. a Maryland Corporation (the
"Corporation"), and U.S. Bancorp Asset Management, a Delaware corporation (the
"Adviser"), hereby agree with X.X. Xxxxxx Investment Management Inc., a Delaware
corporation (the "Sub-Adviser") as follows:
1. Investment Description; Appointment. The Corporation
desires to employ the capital of the Corporation's International Fund
(the "Fund") by investing and reinvesting in investments of the kind
and in accordance with the limitations specified in its Articles of
Incorporation and Bylaws, each as amended to date (the "Charter
Documents"), and in the prospectus (the "Prospectus") and the statement
of additional information (the "Statement") filed with the Securities
and Exchange Commission as part of the Corporation's Registration
Statement on Form N-1A, as amended from time to time, and in such
manner and to such extent as from time to time may be approved by the
Corporation's Board. Copies of the Prospectus, the Statement and the
Charter Documents, each as currently in effect, have been delivered to
the Sub-Adviser. The Corporation agrees, on an ongoing basis, to
provide to the Sub-Adviser as promptly as practicable copies of all
amendments and supplements to the Prospectus and the Statement and
amendments to the Charter Documents. The Corporation desires to engage
and hereby appoints the Sub-Adviser to act as discretionary investment
sub-adviser to the Fund. The Sub-Adviser accepts the appointment and
agrees to furnish the services described herein for the compensation
set forth below.
2. Services as Investment Sub-Adviser, Guidelines and Advice.
Subject to the supervision of the Corporation's Board and of the
Adviser, the Sub-Adviser will (a) manage the Fund's assets in
accordance with the Fund's investment
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objective(s) and policies stated in the Prospectus, the Statement and
the Charter Documents, but subject to the Guidelines (as such term is
defined below); (b) make investment decisions for the Fund; (c) place
purchase and sale orders for portfolio transactions for the Fund; and
(d) employ professional portfolio managers and securities analysts to
provide research services to the Fund. In providing these services,
the Sub-Adviser will conduct a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of the Fund's
assets.
The Adviser agrees on an on-going basis to provide or cause to
be provided to the Sub-Adviser guidelines, to be revised as provided
below (the "Guidelines"), setting forth limitations, by dollar amount
or percentage of net assets, on the types of securities in which the
Fund is permitted to invest or investment activities in which the Fund
is permitted to engage. The Guidelines shall remain in effect until
12:00 p.m. on the third business day following actual receipt by the
Sub-Adviser of a written notice, denominated clearly as such, setting
forth revised Guidelines. The Sub-Adviser shall be permitted to rely on
the most recent Guidelines delivered to it. The Corporation and the
Adviser agree that the Sub-Adviser may rely on the Guidelines without
independent verification of their accuracy.
3. Brokerage. In selecting brokers or dealers to execute
transactions on behalf of the Fund, the Sub-Adviser will seek the best
overall terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser will consider factors it deems
relevant, including, without limitation, the breadth of the market in
the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of
the commission, if any, for the specific transaction and on a
continuing basis. In selecting brokers or dealers to execute a
particular transaction, and in evaluating the best overall terms
available, the Sub-Adviser is authorized to consider brokerage and
research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934, as amended).
4. Proxy Voting. Sub-Adviser shall vote all proxies with
respect to securities held in the Fund in accordance with Sub-Adviser's
proxy voting guidelines and procedures in effect from time to time. In
the event material changes are made to the proxy voting guidelines the
Sub-Adviser agrees to provide the Adviser with a copy of the revised
proxy voting guidelines. The Adviser agrees to instruct the Fund's
custodian to forward all proxy materials and related shareholder
communications to Sub-Adviser promptly upon receipt. The Sub-Adviser
agrees to promptly inform the Adviser and the Fund of any conflict of
interest the Sub-Adviser is aware of that it has in voting proxies with
respect to securities held by the Fund. The Sub-Adviser shall not be
liable with regard to voting of proxies or other corporate actions if
the proxy materials and related communications are not received in a
timely manner. Sub-Adviser shall not be required
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to take any action or render any advice with respect to any legal
proceedings, including bankruptcies, involving securities, or the
issuers thereof, held in the Fund on or prior to the date of this
Agreement.
5. Information Provided to the Corporation. (a) The
Sub-Adviser will keep the Corporation and the Adviser informed of
developments materially affecting the Fund, and will, on its own
initiative, furnish the Corporation and the Adviser from time to time
with whatever information the Sub-Adviser believes is appropriate for
this purpose.
(b) Sub-Adviser agrees to furnish the information requested of a
sub-adviser, as set forth in the Fund's Valuation Procedures, as
currently existing or hereafter modified, including, without
limitation, advising the Adviser as soon as practicable of any
"significant event" (as defined in the Valuation Procedures) relating
to, or affecting the value of, any security or other asset held by the
Fund. A copy of the current Valuation Procedures is attached as
Exhibit A. The Adviser agrees to notify the Sub-Adviser of any
modification to the Valuation Procedures in a timely manner.
(c) the Sub-Adviser will timely notify the Adviser of any material
violations of the Fund's compliance policies and procedures which have
been supplied to the Sub-Adviser.
(d) the Sub-Adviser will timely notify the Adviser of any material
violations of the Sub-Adviser's policies and procedures that affect the
Fund or the Adviser.
6. Standard of Care. The Sub-Adviser shall exercise its best
judgment in rendering the services described in paragraphs 2, 3 and 4
above. The Sub-Adviser 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 a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement (each such act or omission
shall be referred to as "Disqualifying Conduct").
The Sub-Adviser does not guarantee the future performance of the Fund
or any specific level of performance, the success of any investment
decision or strategy that the Sub-Adviser may use, or the success of
the Sub-Adviser's overall management of the Fund. The Corporation and
the Adviser understand that investment decisions made for the Fund by
the Sub-Adviser are subject to various market, currency, economic,
political and business risks, and that those investment decisions will
not always be profitable.
7. Compensation. In consideration of the services rendered
pursuant to this Agreement, the Adviser will pay the Sub-Adviser on the
fifth business day of each month a fee for the previous month according
to the attached Schedule A. The fee for the period from the date of
this Agreement to the end of the calendar
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month shall be prorated according to the proportion that such period
bears to the full monthly period. Upon any termination of this
Agreement before the end of a month, the fee for such part of that
month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees
payable to the Sub-Adviser, the value of the Fund's net assets shall
be computed at the times and in the manner specified in the Prospectus
and/or the Statement.
8. Expenses. The Sub-Adviser will bear all of its expenses in
connection with the performance of its services under this Agreement.
All other expenses to be incurred in the operation of the Fund will be
borne by the Corporation, except to the extent specifically assumed by
the Sub-Adviser. The expenses to be borne by the Corporation include,
without limitation, the following: organizational costs, taxes,
interest, brokerage fees and commissions, Directors' fees, Securities
and Exchange Commission fees and state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, outside auditing and legal
expenses, costs of independent pricing services, costs of maintaining
existence, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing and
printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing stockholders,
costs of stockholders' reports and meetings, and any extraordinary
expenses.
9. Services to Other Companies or Accounts. The Corporation
understands that the Sub-Adviser now acts, will continue to act and may
act in the future as investment adviser to fiduciary and other managed
accounts and as investment adviser to other investment companies, and
the Corporation has no objection to the Sub-Adviser so acting, provided
that whenever the Corporation and one or more other accounts or
investment companies advised by the Sub-Adviser have available funds
for investment, investments suitable and appropriate for each will be
allocated in accordance with a methodology believed to be equitable to
each entity. The Sub-Adviser agrees to allocate similarly opportunities
to sell securities. The Corporation recognizes that, in some cases,
this procedure may limit the size of the position that may be acquired
or sold for the Fund. In addition, the Corporation understands that the
persons employed by the Sub-Adviser to assist in the performance of the
Sub-Adviser's duties hereunder will not devote their full time to such
service and nothing contained herein shall be deemed to limit or
restrict the right of the Sub-Adviser or any affiliate of the
Sub-Adviser to engage in and devote time and attention to other
business or to render services of whatever kind or nature.
10. Books and Records. In compliance with the requirements of
Rule 31a-3 under the Investment Company Act of 1940, as amended (the
"Act"), the
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Sub-Adviser hereby agrees that all records which it maintains for the
Fund are the property of the Corporation and further agrees to
surrender promptly to the Corporation copies of any of such records
upon the Fund's or the Adviser's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the
Act the records relating to its activities hereunder required to be
maintained by Rule 31a-1 under the Act and to preserve the records
relating to its activities hereunder required by Rule 204-2 under the
Investment Advisers Act of 1940, as amended, for the period specified
in said Rule.
11. Term of Agreement. This Agreement shall become effective
as of the date of its execution and shall continue in effect for a
period of two years from the date of execution. Thereafter, this
Agreement shall continue automatically for successive annual periods,
provided such continuance is specifically approved at least annually by
(i) the Corporation's Board or (ii) a vote of a "majority" (as defined
in the Act) of the Fund's outstanding voting securities, provided that
in either event the continuance also is approved by a majority of the
Corporation's Board who are not "interested persons" (as defined in the
Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, on 90 days' written notice
(the date of termination may be less than or more than 90 days after
the written notice of termination so long as the duration of the notice
period is agreed upon by the Adviser and Sub-Adviser), by the Adviser,
by the Corporation's Board, by vote of holders of a majority of the
Fund's shares or by the Sub-Adviser, and will terminate five business
days after the Sub-Adviser receives written notice of the termination
of the advisory agreement between the Corporation and the Adviser. This
Agreement also will terminate automatically in the event of its
assignment (as defined in the Act).
12. Indemnification. (a) The Adviser agrees to indemnify and
hold harmless the Sub-Adviser from and against any and all claims,
losses, liabilities or damages (including reasonable attorneys' fees
and other related expenses), howsoever arising, from or in connection
with this Agreement or the performance by the Sub-Adviser of its duties
hereunder; provided, however, that nothing contained herein shall
require that the Sub-Adviser be indemnified for its Disqualifying
Conduct.
(b) The Sub-Adviser agrees to indemnify and hold harmless the Adviser
and the Fund from and against any and all claims, losses, liabilities
or damages (including reasonable attorney's fees and other related
expenses), arising, from the Sub-Adviser's misfeasance, bad faith or
gross negligence in the performance of its duties or from its reckless
disregard of its obligations and duties under this Agreement ; provided
however, that nothing contained herein shall require that the Adviser
or the Fund be indemnified for their Disqualifying Conduct as described
herein.
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13. Disclosure. Neither the Corporation nor the Adviser shall,
without the prior written consent of the Sub-Adviser, make
representations regarding or reference to the Sub-Adviser or any
affiliates in any disclosure document.
14. Delegation to Third Parties. Except where prohibited by
applicable law or regulation, the Sub-Adviser may delegate or may
employ a third party to perform any accounting, administrative,
reporting and ancillary services required to enable the Sub-Adviser to
perform its functions under this Agreement. Notwithstanding any other
provision of the Agreement, the Sub-Adviser may provide information
about the Adviser and the Fund to any such third party for the purposes
of this paragraph, provided that the third party is subject to a
confidentiality agreement that specifically prevents the misuse of any
such information, including portfolio holdings. The Sub-Adviser will
act in good faith and with due diligence in the selection, use and
monitoring of third parties and shall be solely responsible for any
loss, mistake, negligence or misconduct caused by such third party.
15. Trade Settlement at Termination. Termination will be
without prejudice to the completion of any transaction already
initiated. On, or after, the effective date of termination, the
Sub-Adviser shall be entitled, without prior notice to the Adviser or
the Fund, to direct the Fund's custodian to retain and/or realize any
assets of the Fund as may be required to settle transactions already
initiated, and to pay any outstanding liabilities of the Sub-Adviser.
Following the date of effective termination, any new transactions will
only be executed by mutual agreement between the Adviser and the
Sub-Adviser.
16. Disclosure. (a) Neither the Adviser, the Fund or the
Sub-Adviser shall disclose information of a confidential nature
acquired in consequence of this Agreement, except for information which
they may be entitled or bound to disclose by law, regulation or which
is disclosed to their advisers where reasonably necessary for the
performance of their professional services or, in the case of the
Sub-Adviser, as permitted in accordance with the above paragraph
(Delegation to Third Parties).
(b) Notwithstanding the provisions of Clause 16(a), to the extent that
any market counterparty with whom the Sub-Adviser deals requires
information relating to the Fund (including, but not limited to, the
identity of the Adviser or the Fund and market value of the Fund), the
Sub-Adviser shall be permitted to disclose such information to the
extent necessary to effect transactions on behalf of the Fund in
accordance with the terms of this Agreement.
(c) Notwithstanding the provisions of Clauses 16(a) and 16(b), the
Sub-Adviser shall be prohibited from consulting, or otherwise providing
information relating to the Fund's portfolio, with any third party
investment adviser engaged in providing portfolio management services to
registered investment companies.
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17. Instruction to Custodian. The Sub-Adviser shall not have
control of the investments or cash in the Fund but shall have authority
to issue to the Fund's custodian such instructions as it may consider
appropriate in connection with the settlement of any transaction
relating to the Fund which it has initiated. The Adviser shall ensure
that the Fund's custodian is obliged to comply with any instructions of
the Sub-Adviser given in accordance with this Agreement, including
directions given under Paragraph 14. The Sub-Adviser will not be
responsible for supervising the Fund's custodian.
18. Money Laundering. Each of the Adviser and the Fund
confirms that where it is acting as principal or where it is acting on
behalf of another person (notwithstanding that it enters into this
Agreement and any transactions as principal), it is in compliance with
the anti money laundering regulations that apply to it. The Adviser and
the Fund shall provide any document or information to the Sub-Adviser
that the Sub-Adviser may request for complying with its own anti money
laundering regulations.
19. Transactions in Derivatives. The Fund is permitted to
purchase, sell, hold and generally deal in and with domestic or foreign
derivatives in accordance with its policies and restrictions as set
forth in the current Registration Statement of the Corporation filed
with the SEC and any applicable law.
20. The Corporation and the Adviser represent and warrant
to Sub-Adviser that: (i) the Corporation and the Adviser have full
power and authority to appoint Sub-Adviser to manage the Fund in
accordance with the terms of this Agreement, this Agreement is valid
and has been duly authorized, does not violate any obligation by which
the Corporation or the Adviser are bound, and when so executed and
delivered, will be binding upon the Corporation and Adviser in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally
and general principles of equity (and the Corporation and Adviser agree
to provide Sub-Adviser with evidence of such authority as may be
reasonably requested by Sub-Adviser).
21. Miscellaneous. All notices provided for by this Agreement
shall be in writing and shall be deemed given when received, against
appropriate receipt, by Xxxxx Xxxxxx in the case of the Sub-Adviser,
the Adviser's General Counsel in the case of the Adviser, and the
Fund's Secretary in the case of the Fund, or such other person as a
party shall designate by notice to the other parties. 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.
This Agreement constitutes the entire agreement among the parties
hereto and supersedes any prior agreement among the parties relating to
the subject matter hereof. The paragraph headings of this Agreement are
for convenience of reference and do not constitute a part hereof. This
Agreement shall be governed in accordance with the internal
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laws of the State of New York, without giving effect to principles of
conflict of laws.
If the foregoing accurately sets forth our agreement, kindly
indicate your acceptance hereof by signing and returning the enclosed
copy hereof.
Very truly yours,
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Chief Financial Officer
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By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
------------------------------------
Title: Mutual Fund Treasurer
-----------------------------------
Accepted:
X.X. Xxxxxx Investment Management Inc.
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
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Title: Vice President
------------------------------
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SCHEDULE A
34 BASIS POINTS ON THE FIRST $100 MILLION OF FUND ASSETS
30 BASIS POINTS ON THE NEXT $250 MILLION OF FUND ASSETS
24 BASIS POINTS ON THE NEXT $1.25 BILLION OF FUND ASSETS
22 BASIS POINTS ON FUND ASSETS GREATER THAN $1.6 BILLION
The Corporation, the Adviser and the Sub-Adviser agree that the above
fee schedule is reflective of the total net asset value of the Fund as
of the date of this Agreement. The Corporation, the Adviser and the
Sub-Adviser agree to renegotiate the fee schedule in good faith if the
Fund's assets should fall below $750 million.
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