INVESTMENT SUB-ADVISORY AGREEMENT First American Investment Funds, Inc. International Select Fund
First American Investment Funds, Inc.
International Select Fund
International Select Fund
THIS AGREEMENT is made as of the 1st day of January, 2011, between Nuveen Fund Advisors, Inc.,
a Delaware corporation (the “Advisor”) and Lazard Asset Management LLC, a Delaware limited
liability company (the “Sub-Advisor”).
WHEREAS, the Advisor acts as the investment advisor for International Select Fund (the
“Fund”), a series of First American Investment Funds, Inc. (the “Company”), pursuant to an
investment advisory agreement between the Advisor and the Company (the “Advisory Agreement”).
WHEREAS, the Advisor is responsible for the day-to-day management of the Fund and for the
coordination of the investment of the Fund’s assets in portfolio securities.
WHEREAS, specific portfolio purchases and sales for all or a portion of the Fund’s assets may
be made by one or more sub-advisors selected and appointed by the Advisor, subject to the
pre-approval of the Board of Directors of the Company (the “Board”).
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained
herein, the parties agree as follows:
1. Appointment of Sub-Advisor. The Advisor desires to engage and hereby appoints the
Sub-Advisor to act as investment sub-advisor for the emerging markets equity portion of the assets
of the Fund that the Advisor determines to allocate to the Sub-Advisor from time to time (referred
to herein as the “Sub-Advisory Portfolio”). The Sub-Advisor accepts the appointment and agrees to
furnish the services described herein for the compensation set forth below.
2. Duties of Sub-Advisor.
The Sub-Advisor is hereby employed and authorized to conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of the assets in the Sub-Advisory
Portfolio. In connection therewith, the Sub-Advisor will (a) make investment decisions for the
Sub-Advisory Portfolio; (b) place purchase and sale orders for portfolio transactions in the
Sub-Advisory Portfolio; and (c) employ professional portfolio managers and securities analysts to
provide research services relating to the Sub-Advisory Portfolio. Subject to the supervision of
the Board and the Advisor, the Sub-Advisor will manage the assets in the Sub-Advisory Portfolio in
accordance with (a) the Fund’s investment objective(s), policies and restrictions stated in the
Prospectus, the SAI and the Charter Documents (as such terms are defined below), (b) the Guidelines
(as
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such term is defined below), and (c) applicable laws and regulations. In managing the
Sub-Advisory Portfolio, the Sub-Advisor will not consider any other securities, cash or other
investment the Fund owns. The duties of the Sub-Advisor with respect to the Sub-Advisory Portfolio
shall be confined to those set forth herein.
The Advisor has furnished to the Sub-Advisor the Fund’s compliance procedures pursuant to
Rules 10f-3, 17a-7, and 17e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”)
(collectively, the “Compliance Procedures”), the Articles of Incorporation and Bylaws of the
Company, each as amended to date (the “Charter Documents”), the currently effective prospectus (the
“Prospectus”) and statement of additional information (the “SAI”) of the Fund, the resolution of
the Board approving the form of this Agreement, the resolution of the Board selecting the Advisor
as investment advisor to the Fund and approving the form of the Advisory Agreement, and the proxy
statement presented to shareholders of the Fund seeking their approval of this Agreement and the
Advisory Agreement. The Advisor agrees, on an ongoing basis, to provide to the Sub-Advisor, as
promptly as practicable, copies of all amendments and supplements to the Compliance Procedures, the
Prospectus and the SAI and amendments to the Charter Documents. The Advisor has furnished to the
Sub-Advisor all written guidelines (the “Guidelines”) setting forth additional operating policies
and procedures, including any limitations on the types of securities and other investment products
in which the Fund is permitted to invest or on investment activities in which the Fund is permitted
to engage. The Advisor retains the right, on prior written notice to the Sub-Advisor, to modify
the Guidelines at any time and in any manner. The Sub-Advisor shall either comply with the amended
Guidelines in accordance with a reasonable timeline agreed upon by the Advisor and Sub-Advisor or
terminate this Agreement in accordance with Section 11 below.
3. Brokerage. In selecting brokers or dealers to execute transactions on behalf of
the Fund, the Sub-Advisor will seek the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Advisor 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-Advisor is authorized to consider brokerage and research services
(within the meaning of Section 28(e) of the Securities Exchange Act of 1934, as amended). The
Sub-Advisor will not execute any portfolio transactions with a broker or dealer which is an
“affiliated person” (as defined in the 0000 Xxx) of the Sub-Advisor or the Advisor, except pursuant
to the Board’s approved 17e-1 Policies and Procedures for affiliated brokerage transactions. The
Advisor will provide the Sub-Advisor with a list of brokers and dealers that are “affiliated
persons” of the Advisor.
In connection with its management of the Sub-Advisory Portfolio and consistent with its
fiduciary obligation to the Fund and other clients, the Sub-Advisor, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
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aggregate the securities to be sold or purchased in order to obtain the most favorable price or
lower brokerage commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transaction, will be made by the
Sub-Advisor in the manner the Sub-Advisor considers to be, over time, the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.
4. Proxy Voting. The Sub-Advisor shall vote all proxies with respect to securities
held in the Sub-Advisory Portfolio in accordance with the Sub-Advisor’s proxy voting guidelines and
procedures in effect from time to time. In the event material changes are made to such proxy
voting guidelines, the Sub-Advisor agrees to provide the Advisor with a copy of the revised proxy
voting guidelines. The Advisor agrees to instruct the Fund’s custodian to forward all proxy
materials and related shareholder communications to the Sub-Advisor promptly upon receipt. The
Sub-Advisor agrees to promptly inform the Advisor and the Fund of any conflict of interest of which
the Sub-Advisor is aware that the Sub-Advisor has in voting proxies with respect to securities held
in the Sub-Advisory Portfolio. The Sub-Advisor 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.
5. Information Provided to the Advisor.
(a) The Sub-Advisor will keep the Advisor informed of developments materially affecting the
Fund and will, on its own initiative, furnish the Advisor from time to time with whatever
information the Sub-Advisor believes is appropriate for this purpose.
(b) The Sub-Advisor will confer with the Advisor as the Advisor may reasonably request
regarding the investment and management of the Sub-Advisory Portfolio. The Sub-Advisor will not
advise the Advisor or act for the Advisor or the Fund in any legal proceedings, including
bankruptcies or class actions, involving securities in the Sub-Advisory Portfolio or the issuers of
the securities.
(c) The Sub-Advisor agrees to comply with all reporting requirements that the Board or the
Advisor reasonably adopt and communicate to the Sub-Advisor in writing, including reporting
requirements related to performance of the Sub-Advisory Portfolio, brokerage practices, and proxy
voting.
(d) The Sub-Advisor agrees to furnish the information requested by the Advisor,
consistent with the Advisor’s duties and obligations under the Funds’ Pricing Procedures as
currently existing or hereafter modified, including, without limitation, advising the Advisor as
soon as practicable of any “significant event” (as defined in the Pricing Procedures) of which the
Sub-Advisor becomes aware relating to, or affecting the value of, any security or other asset held
in a Sub-Advisory Portfolio. A copy of the current Pricing Procedures has been provided to the
Sub-advisor. The Advisor agrees to notify the Sub-Advisor of any modification to the Pricing
Procedures applicable to the Sub-Advisor in a timely manner.
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(e) The Sub-Advisor has provided the Advisor with a true and complete copy of its compliance
policies and procedures that are reasonably designed to prevent violations of the “federal
securities laws” (as such term is defined in Rule 38a-1 under the 0000 Xxx) and Rule 206(4)-7 under
the Investment Advisers Act of 1940, as amended (the “Advisers Act”) (the “Sub-Advisor Compliance
Policies”). The Sub-Advisor’s chief compliance officer (the “Sub-Advisor CCO”) shall provide to the
Company’s chief compliance officer (the “the Company CCO”) or his or her delegate, promptly (and in
no event more than 10 business days) after the occurrence of the triggering event, the following:
(i) a report of any material changes to the Sub-Advisor Compliance Policies;
(ii) a report of any “material compliance matters,” as defined by Rule 38a-1 under the 1940
Act, that have occurred in connection with the Sub-Advisor Compliance Policies;
(iii) a copy of a summary of the Sub-Advisor CCO’s report with respect to the annual review
of the Sub-Advisor Compliance Policies pursuant to Rule 206(4)-7 under the Advisers Act;
and
(iv) an annual (or more frequently as the Company CCO may request) certification regarding
the Sub-Advisor’s compliance with Rule 206(4)-7 under the Advisers Act and Section 38a-1
under the 1940 Act as well as the foregoing sub-paragraphs (i) - (iii).
(f) The Sub-Advisor will timely notify the Advisor of any material violations by the
Sub-Advisor of the Fund’s investment policies or restrictions, the Guidelines, or any applicable
law or regulation.
6. Standard of Care. The Sub-Advisor shall exercise its best judgment in rendering
the services described in paragraphs 2, 3 and 4 above. The Sub-Advisor shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund or the Advisor in
connection with the matters to which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Sub-Advisor’s part in the performance of its
duties or from reckless disregard by the Sub-Advisor of its obligations and duties under this
Agreement (each such act or omission shall be referred to as “Disqualifying Conduct”). Neither the
Sub-Advisor nor its members, partners, officers, employees and agents shall be liable to the
Advisor, the Fund, its shareholders or any other person (a) for the acts, omissions, errors of
judgment or mistakes of law of any other fiduciary or other person with respect to the Fund or (b)
for any failure or delay in performance of the Sub-Advisor’s obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdowns, flood or catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
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The Sub-Advisor does not guarantee the future performance of the Sub-Advisory Portfolio or any
specific level of performance, the success of any investment decision or strategy that the
Sub-Advisor may use, or the success of the Sub-Advisor’s overall management of the Sub-Advisory
Portfolio. The Advisor understands that investment decisions made for the Fund by the Sub-Advisor
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 Advisor will pay the Sub-Advisor 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 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-Advisor, the value of the net assets of the Sub-Advisory Portfolio shall be computed at the
times and in the manner specified in the Prospectus and/or the SAI.
8. Expenses. The Sub-Advisor 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 Fund, except to the extent specifically assumed by the
Sub-Advisor. The expenses to be borne by the Fund 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 SAIs 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 Advisor understands that the
Sub-Advisor now acts, will continue to act and may act in the future as investment advisor to
fiduciary and other managed accounts and as investment advisor to other investment companies, and
the Advisor has no objection to the Sub-Advisor so acting, provided that whenever the Sub-Advisory
Portfolio and one or more other accounts or investment companies advised by the Sub-Advisor 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-Advisor agrees to
similarly allocate opportunities to sell securities. The Advisor recognizes that, in some cases,
this procedure may limit the size of the position that may be acquired or sold for the Sub-Advisory
Portfolio. In addition, the Advisor understands that the persons employed by
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the Sub-Advisor to assist in the performance of the Sub-Advisor’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-Advisor or any affiliate of the Sub-Advisor 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
1940 Act, the Sub-Advisor hereby agrees that all records which it specifically maintains for the
Sub-Advisory Portfolio are the property of the Fund and further agrees to surrender promptly to the
Fund copies of any of such records upon the Fund’s or the Advisor’s request. The Sub-Advisor
further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
relating to its activities hereunder required to be maintained by Rule 31a-1 under the 1940 Act and
to preserve the records relating to its activities hereunder required by Rule 204-2 under the
Advisers Act 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 the Board in the manner required by
the 1940 Act. This Agreement is terminable, without penalty, on 60 days’ written notice (the date
of termination may be less than 60 days after the written notice of termination so long as the
duration of the notice period is agreed upon by the Advisor and Sub-Advisor) by the Advisor, by the
Board, by vote of a majority of the Fund’s outstanding voting securities, or by the Sub-Advisor,
and will immediately terminate upon termination of the Advisory Agreement. This Agreement also will
terminate automatically in the event of its assignment (as defined in the 1940 Act).
12. 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-Advisor shall be entitled, without prior notice to the Advisor 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. Following the date of effective termination, any new transactions
will only be executed by mutual agreement between the Advisor and the Sub-Advisor.
13. Indemnification. (a) The Advisor agrees to indemnify and hold harmless the
Sub-Advisor and its members, partners, officers, employees, agents, successors and assigns (each a
“Sub-Advisor Indemnified Person”) from and against any and all claims, losses, liabilities or
damages (including reasonable attorneys’ fees and other related expenses) to which any Sub-Advisor
Indemnified Person may become subject as a result of the Advisor’s material breach of this
Agreement or as a result of the Advisor’s willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties hereunder or violation of applicable law;
provided, however, that no Sub-Advisor
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Indemnified Person shall be indemnified for any claim, loss, liability or damage that may be
sustained as a result of the Sub-Advisor’s Disqualifying Conduct.
(b) The Sub-Advisor agrees to indemnify and hold harmless the Advisor and the Fund and their
respective shareholders, members, partners, directors, officers, employees, agents, successors and
assigns (each an “Advisor Indemnified Person”) from and against any and all claims, losses,
liabilities or damages (including reasonable attorney’s fees and other related expenses) to which
any Advisor Indemnified Person may become subject as a result of the Sub-Advisor’s material breach
of this Agreement or as a result of the Sub-Advisor’s willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties hereunder or violation of applicable
law; provided, however, that no Advisor Indemnified Person shall be indemnified for
any claim, loss, liability or damage that may be sustained as a result of the Advisor’s
Disqualifying Conduct.
14. Delegation to Third Parties. Except where prohibited by applicable law or
regulation, the Sub-Advisor may delegate or may employ a third party to perform any accounting,
administrative, reporting and ancillary services required to enable the Sub-Advisor to perform its
functions under this Agreement. Notwithstanding any other provision of the Agreement, the
Sub-Advisor may provide information about the Advisor 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-Advisor 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, gross negligence or misconduct
caused by such third party.
15. Disclosure. (a) Neither the Advisor, on its own behalf or on behalf of the Fund,
or the Sub-Advisor shall disclose information of a confidential nature acquired in consequence of
this Agreement, except for information that they may be entitled or bound to disclose by law,
regulation or that is disclosed to their advisors where reasonably necessary for the performance of
their professional services or, in the case of the Sub-Advisor, as permitted in accordance with
Section 14 of this Agreement.
(b) Notwithstanding the provisions of Subsection 15(a), to the extent that any market
counterparty with whom the Sub-Advisor deals requires information relating to the Fund (including,
but not limited to, the identity of the Advisor or the Fund and market value of the Fund), the
Sub-Advisor 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 Subsections 15(a) and 15(b), the Sub-Advisor
acknowledges that the Advisor and the Fund intend to rely on Rule 17a-7, Rule 17a-10, Rule 10f-3,
Rule 12d3-1 and Rule 17e-1 under the 1940 Act, and the Sub-Advisor hereby agrees that it (i) shall
not consult with any other Sub-Advisor to the Fund with respect to transactions in securities for
the Sub-Advisory Portfolio or any other
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transactions of Fund assets and (ii) will provide advice and otherwise perform services
hereunder exclusively with respect to the Sub-Advisory Portfolio of the Fund.
16. Instruction to Custodian. The Sub-Advisor shall not have control of the
investments or cash, including the investment of such 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 Sub-Advisory Portfolio that it has initiated. In
addition, the Fund’s custodian shall be responsible for executing all foreign exchange transactions
made or required to be made in conjunction with settling the purchase and sale of securities in the
Sub-Advisory Portfolio. The Advisor shall ensure that the Fund’s custodian is obliged to comply
with any instructions of the Sub-Advisor given in accordance with this Agreement. The Sub-Advisor
will not be responsible for supervising the Fund’s custodian.
17. Money Laundering. The Advisor, on its own behalf and on behalf of 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 Advisor shall provide
any document or information to the Sub-Advisor that the Sub-Advisor may request for complying with
its own anti-money laundering regulations.
18. Representations and Warranties. (a) The Advisor represents and warrants to the
Sub-Advisor that the Advisor:
(i) has full power and authority to appoint the Sub-Advisor to manage the Sub-Advisory
Portfolio in accordance with the terms of this Agreement; and
(ii) this Agreement is valid and has been duly authorized by appropriate action of the
Advisor, the Board and the Fund’s shareholders, does not violate any obligation by which the
Advisor is bound, and when so executed and delivered, will be binding upon the Advisor in
accordance with its terms subject to applicable bankruptcy, insolvency, reorganization or similar
laws affecting creditors’ rights generally and general principles of equity.
(b) The Sub-Advisor represents and warrants to the Advisor that the Sub-Advisor:
(i) is registered as an “investment adviser” under the Advisers Act;
(ii) is not currently the subject of, and has not been the subject of during the last three
(3) years, any enforcement action by a regulator; and
(iii) maintains insurance coverage in an appropriate amount and shall upon request provide to
the Advisor any information it may reasonably require concerning the amount of or scope of such
insurance.
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19. Miscellaneous.
(a) Notices. All notices provided for by this Agreement shall be in writing and shall
be deemed given when received, against appropriate receipt, by the Sub-Advisor’s General Counsel in
the case of the Sub-Advisor and by the Advisor’s General Counsel in the case of the Advisor, or
such other person as a party shall designate by notice to the other parties.
(b) Amendment. This Agreement may be amended at any time, but only by written
agreement between the Advisor and the Sub-Advisor, which amendment must be approved by the Board in
the manner required by the 1940 Act.
(c) Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto and supersedes any prior agreement among the parties relating to the subject matter
hereof.
(d) Severability. If any provision of this Agreement will be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby.
(e) Headings. The paragraph headings of this Agreement are for convenience of
reference and do not constitute a part hereof.
(f) Governing Law. This Agreement shall be governed in accordance with the internal
laws of the State of Delaware, without giving effect to principles of conflict of laws.
(g) Use of Sub-Advisor’s Name. The Fund and the Advisor agree to submit any proposed
sales literature that mentions the Sub-Advisor (other than identifying the Sub-Advisor as
Sub-Advisor to the Fund) to the Sub-Advisor for review prior to use and the Sub-Advisor agrees to
promptly review such materials by a reasonable and appropriate deadline. The Advisor agrees to
cause the Advisor and the Fund’s distributor to promptly review all such sales literature for
compliance with relevant requirements, to promptly advise the Sub-Advisor of any deficiencies
contained in such sales literature, and to promptly file complying sales literature with the
relevant regulatory authorities. Neither the Advisor, nor the Fund nor any affiliate of the
foregoing will use the registered trademarks, service marks, logos, names or any other proprietary
designations of Sub-Advisor, its subsidiaries and/or affiliates (collectively, “Sub-Advisor Marks”)
in any advertising or promotional materials without Sub-Advisor’s prior written approval, which
will not be unreasonably withheld. Advisor and Sub-Advisor will work together to develop mutually
agreeable standards and procedures for the review of materials bearing Sub-Advisor Marks to
facilitate the efficient creation and use of such advertising or promotional materials.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
respective duly authorized representatives as of the date first written above.
| Nuveen Fund Advisors, Inc. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| Lazard Asset Management LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
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Schedule A
Pursuant to Section 7, the Advisor shall pay the Sub-Advisor compensation for services
rendered to the Fund, calculated daily and paid monthly, at the annual rates set forth in the
following table. Such rates are based on the average daily net assets of the Sub-Advisory
Portfolio.
| Sub-Advisory Portfolio Assets | Fee Per Annum | |||
First $112.5 million |
0.75 | % | ||
Next $37.5 million |
0.70 | % | ||
Next $37.5 million |
0.65 | % | ||
Over $187.5 million |
0.60 | % | ||
Exhibit A - Page 1
