EXHIBIT 5(f)
SUB-ADVISORY AGREEMENT
This Agreement, made as of this 23rd day of July, 1998, by and
between U.S. Bank National Association, a national banking association organized
and existing under the laws of the United States of America (the "Adviser"), and
Xxxxxx & Xxxxxx Associates, Inc., a Delaware corporation (the "Sub-Adviser").
WHEREAS, First American Investment Funds, Inc., a Maryland
corporation ("FAIF"), on behalf of its Emerging Markets Fund, a separately
managed series of FAIF ("Emerging Markets Fund"), has appointed the Adviser as
Emerging Markets Fund's investment adviser pursuant to an Investment Advisory
Agreement dated April 2, 1991, as amended (the "Advisory Agreement"); and
WHEREAS, pursuant to the terms of the Advisory Agreement, the
Adviser desires to appoint the Sub-Adviser as its sub-adviser for Emerging
Markets Fund, and the Sub-Adviser is willing to act in such capacity upon the
terms set forth herein; and
WHEREAS, pursuant to the terms of the Advisory Agreement, FAIF has
approved the appointment of the Sub-Adviser as the sub-adviser for Emerging
Markets Fund.
NOW, THEREFORE, the Adviser and the Sub-Adviser agree as follows:
1. The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser
hereby agrees to act, as sub-adviser for, and to manage the investment of the
assets of, Emerging Markets Fund as set forth herein. Without limiting the
generality of the foregoing, it is specifically understood and agreed by the
Adviser and the Sub-Adviser that:
(a) The investment of Emerging Markets Fund's assets shall at all
times be subject to the investment objectives, policies and restrictions
of Emerging Markets Fund as set forth in FAIF's then-effective
Registration Statement under the Securities Act of 1933, as amended,
including the Prospectus and Statement of Additional Information of
Emerging Markets Fund contained therein. The Adviser shall communicate to
the Sub-Adviser any changes or additions to or interpretations of such
investment objectives, policies and restrictions of Emerging Markets Fund
made by the Board of Directors of FAIF (the "Board"). The Sub-Adviser
shall report to the Adviser and the Board regularly at such times and in
such detail as the Adviser or the Board may from time to time request in
order to permit the Adviser and the Board to determine the adherence of
Emerging Markets Fund to its investment objectives, policies and
restrictions.
(b) The Sub-Adviser hereby agrees that upon the request of the Board
or the Adviser, copies of all records pertaining to Emerging Markets
Fund's investments will be provided to FAIF or to such person as is
designated by FAIF. If a transfer of investment advisory or sub-advisory
services with respect to Emerging Markets Fund should occur, the
Sub-Adviser will promptly and at its own expense take all steps necessary
or appropriate to segregate such records and deliver them to FAIF or to
such person as is designated by FAIF.
(c) Any investment decisions made by the Sub-Adviser on behalf of
Emerging Markets Fund shall be subject, in the discretion of the Adviser,
to review, approval or ratification by the Adviser.
In acting hereunder the Sub-Adviser shall be an independent contractor and,
unless otherwise expressly provided or authorized hereunder or by the Board,
shall have no authority to act for or represent the Adviser, FAIF or Emerging
Markets Fund in any way or otherwise be an agent of the Adviser, FAIF or
Emerging Markets Fund.
2. The Sub-Adviser, at its own expense, shall provide all office
space, personnel and facilities necessary and incident to the performance of the
Sub-Adviser's services hereunder. The Sub-Adviser may consult with counsel to
Emerging Markets Fund and shall be protected insofar as it
acts in conformity with advice rendered to it by such counsel. The fees and
expenses of counsel to Emerging Markets Fund shall be paid by Emerging Markets
Fund.
3. The Sub-Adviser shall be responsible only for those expenses
expressly stated in paragraph 2 to be the responsibility of the Sub-Adviser and
shall not be responsible for any other expenses of the Adviser, Emerging Markets
Fund or FAIF, including, as illustrative and without limitation, fees and
charges of any custodian (including charges as custodian and for keeping books
and records and similar services to FAIF and Emerging Markets Fund); fees and
expenses of directors; fees and expenses of independent auditors, legal counsel,
transfer agents, dividend disbursing agents, and registrars; costs of and
incident to issuance, redemption and transfer of Emerging Markets Fund's shares,
and distributions to shareholders (including dividend payments and reinvestment
of dividends); brokers' commissions; interest charges; taxes and corporate fees
payable to any government or governmental body or agency (including those
incurred on account of the registration or qualification of securities issued by
FAIF); dues and other expenses incident to FAIF's membership in the Investment
Company Institute and other like associations; costs of stock certificates,
shareholder meetings, corporate reports, reports and notices to shareholders;
and costs of printing, stationery and bookkeeping forms.
4. The Sub-Adviser shall not purchase or sell securities for
Emerging Markets Fund in any transaction in which the Sub-Adviser or any
affiliate of the Sub-Adviser is acting as broker or dealer. The Sub-Adviser may,
with the prior consent of the Adviser, utilize FAIF's distributor or the Adviser
or an affiliate of the Adviser as a broker, including as a principal broker,
provided that the brokerage transactions and procedures are in accordance with
Rule 17e-1 under the Investment Company Act of 1940, as amended (the "Act"),
other applicable provisions, if any, of the Act, and the then-effective
Registration Statement of FAIF under the Securities Act of 1933, as amended. All
allocation of portfolio transactions shall be subject to such policies and
supervision as the Board or any committee thereof deem appropriate and any
brokerage policy set forth in the then-current Registration Statement of FAIF as
provided to the Sub-Adviser. The Sub-Adviser shall provide to the Adviser and
the Board such reports in respect to placement of security transactions for
Emerging Markets Fund as the Adviser or the Board may reasonably request. The
Sub-Adviser also shall provide to the Adviser and the Board such reports
assessing the likelihood, if any, of expropriation, nationalization, freezes or
confiscation of Emerging Markets Fund's assets in each country in which it
invests; foreseeable difficulties, if any, in converting Emerging Markets Fund's
cash and cash equivalents into U.S. dollars; and similar matters, as the Adviser
or the Board may reasonably request in order to assist the Board in making the
determinations required to be made pursuant to Rule 17f-5 under the Act.
5. For the services provided and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay to the Sub-Adviser
as full compensation therefor a fee based on an annual rate of 0.85% of the
first $100 million of Emerging Markets Fund's average daily net assets; 0.60% of
Emerging Markets Fund's average daily assets in excess of $100 million up to
$300 million; 0.55% of Emerging Markets Fund's average daily net assets in
excess of $300 million up to $500 million; and 0.50% of Emerging Markets Fund's
average daily assets in excess of $500 million. This fee will be computed based
on net assets at the beginning of each day and will be paid to the Sub-Adviser
monthly on or before the fifteenth day of the month next succeeding the month
for which the fee is paid. The fee shall be prorated for any fraction of a
fiscal year at the commencement and termination of this Agreement. Anything to
the contrary herein notwithstanding, the Sub-Adviser may at any time and from
time to time waive any part or all of any fee payable to it pursuant to this
Agreement.
6. Nothing in this Agreement shall prevent the Sub-Adviser or any
partner, officer, employee or other affiliate thereof from acting as investment
adviser for any other person, firm or corporation, or from engaging in any other
lawful activity, and shall not in any way limit or restrict the Sub-Adviser or
any of its partners, officers, employees or agents from buying, selling or
trading any securities for its or their own accounts or for the accounts of
others for whom it or they may be acting,
provided, however, that the Sub-Adviser will undertake and permit such persons
to undertake no activities which, in its judgment, will adversely affect the
performance of its obligations under this Agreement.
The Sub-Adviser agrees to indemnify Emerging Markets Fund, FAIF and
the Adviser with respect to any loss, liability, judgment, cost or penalty which
Emerging Markets Fund, FAIF or the Adviser may directly or indirectly suffer or
incur in any way arising out of or in connection with any material breach of
this Agreement by the Sub-Adviser. The Adviser agrees to indemnify the
Sub-Adviser with respect to any loss, liability, judgment, cost or penalty which
the Sub-Adviser may directly or indirectly suffer or incur in any way arising
out of the performance of its duties under this Agreement, except as provided in
the following paragraph.
The Sub-Adviser shall give Emerging Markets Fund the benefit of its
best judgment and effort in rendering services hereunder, but the Sub-Adviser
shall not be liable for any act or omission or for any loss sustained by
Emerging Markets Fund in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties, under this Agreement. The Sub-Adviser
shall not be entitled to indemnity for any loss, liability, judgment, cost or
penalty resulting from willful misfeasance, bad faith or negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations and duties, under this Agreement.
7. The Sub-Adviser represents, warrants and agrees that the Sub-
Adviser is registered as an "investment adviser" under the Investment Advisers
Act of 1940, as amended (the "Advisers Act") and is and shall continue at all
times to be in compliance in all material respects with the requirements imposed
upon it by the Advisers Act. The Sub-Adviser agrees to (a) supply the Adviser
with such documents as the Adviser may reasonably request to document the
Sub-Adviser's compliance with such laws and regulations, and (b) immediately
notify the Adviser of the occurrence of any event which would disqualify the
Sub-Adviser from serving as an investment adviser of an investment company
pursuant to any applicable law or regulation. The Sub-Adviser will furnish to
the Adviser a copy of any amendment to the Sub-Adviser's Form ADV promptly
following the filing of such amendment with the Securities and Exchange
Commission.
8. The Adviser and the Sub-Adviser each represents and warrants that
it has the power to execute and deliver this Agreement and any other
documentation relating hereto and to perform its respective obligations under
this Agreement and that it has taken all necessary action to authorize such
execution, delivery and performance. Such execution, delivery and performance do
not violate or conflict with any law applicable to the Adviser or the
Sub-Adviser, respectively, any order or judgment of any court or other
governmental agency, or any contractual restriction binding on or affecting the
Adviser or the Sub-Adviser, respectively. The obligations of the Adviser and the
Sub-Adviser, respectively, under this Agreement constitute their respective
legal, valid and binding obligations, enforceable against each of them in
accordance with the terms hereof.
9. The effective date of this Agreement shall be the date set forth
in the first paragraph hereof. Unless sooner terminated as hereinafter provided,
this Agreement shall continue in effect for a period of more than two years from
the date of its execution but only as long as such continuance is specifically
approved at least annually by (a) the Board or by the vote of a majority of the
outstanding shares of Emerging Markets Fund and (b) the vote of a majority of
the directors, who are not parties to this Agreement or "interested persons" (as
defined in the Act) of the Adviser, of the Sub-Adviser or of FAIF, cast in
person at a meeting called for the purpose of voting on such approval.
10. This Agreement may be terminated at any time, without the
payment of any penalty, by the Board or by the vote of a majority of the
outstanding shares of Emerging Markets Fund, or by the Adviser or the
Sub-Adviser, upon 60 days' written notice to the other parties.
This Agreement shall automatically terminate in the event of its
"assignment" (as defined in the Act), provided, however, that such automatic
termination shall be prevented in a particular case by an order of exemption
from the Securities and Exchange Commission or a no-action letter of the staff
of the Commission to the effect that such assignment does not require
termination as a statutory or regulatory matter.
11. This Agreement may be modified by mutual consent, such consent
only to be authorized by a majority of the directors of FAIF who are not parties
to this Agreement or "interested persons" (as defined in the Act) of the
Adviser, of the Sub-Adviser or of FAIF and the vote of a majority of the
outstanding shares of Emerging Markets Fund.
12. Wherever referred to in this Agreement, the vote or approval of
the holders of a majority of the outstanding shares of Emerging Markets Fund
shall mean the lesser of (a) the vote of 67% or more of the shares of Emerging
Markets Fund at a meeting where more than 50% of the outstanding shares are
present in person or by proxy, or (b) the vote of more than 50% of the
outstanding shares of Emerging Markets Fund.
13. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder shall not be
thereby affected.
14. Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.
15. The internal law, and not the law of conflicts, of the State of
Minnesota will govern all questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed
by this Agreement.
16. This Agreement constitutes the entire agreement between the
parties concerning its subject matter and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
XXXXXX & XXXXXX ASSOCIATES, INC.
By /s/ Xxxxx X. Xxxxxxx
--------------------------------
Its Senior Vice President
--------------------------------
U.S. BANK NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its Vice President
--------------------------------
