EXHIBIT (d)(2)
SUB-ADVISORY AGREEMENT
This Agreement, made as of this 11th day of April, 2000, 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 Insurance Portfolios, Inc., a Minnesota
corporation ("FAIP"), on behalf of its International Portfolio, a separately
managed series of FAIP ("International Portfolio"), has appointed the Adviser as
International Portfolio's investment adviser pursuant to an Investment Advisory
Agreement dated December 8, 1999 (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 International
Portfolio, 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, FAIP has
approved the appointment of the Sub-Adviser as the sub-adviser for International
Portfolio.
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, International
Portfolio 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 International Portfolio's assets
shall at all times be subject to the investment
objectives, policies and restrictions of
International Portfolio as set forth in FAIP's
then-effective Registration Statement under the
Securities Act of 1933, as amended, including the
Prospectus and Statement of Additional Information of
International Portfolio 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
International Portfolio made by the Board of
Directors of FAIP (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 International Portfolio 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 International Portfolio's investments
will be provided to FAIP or to such person as is
designated by
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FAIP. If a transfer of investment advisory or
sub-advisory services with respect to International
Portfolio 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 FAIP or to such person as is
designated by FAIP.
(c) Any investment decisions made by the Sub-Adviser on
behalf of International Portfolio 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, FAIP or International
Portfolio in any way or otherwise be an agent of the Adviser,
FAIP or International Portfolio.
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 International
Portfolio 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 International Portfolio shall
be paid by International Portfolio.
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, International Portfolio or FAIP,
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 FAIP and
International Portfolio); 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
International Portfolio'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 issues by FAIP);
dues and other expenses incident to FAIP'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
International Portfolio 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 FAIP's distributor or the Adviser or
an affiliate of the Adviser as a broker, including as a
principal broker, provided that the brokerage transactions
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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 FAIP 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 FAIP 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 International Portfolio 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 International Portfolio's assets in
each country in which it invests; foreseeable difficulties, if
any, in converting International Portfolio'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 by
it 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 0.75% of the first $100 million of
International Portfolio's average daily net assets; 0.50% of
International Portfolio's average daily assets in excess of
$100 million up to $300 million; 0.45% of International
Portfolio's average daily assets in excess of $300 million up
to $500 million; and 0.40% of International Portfolio'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 International Portfolio,
FAIP and the Adviser with respect to any loss, liability,
judgment, cost or penalty which International Portfolio, FAIP
or the Adviser may directly or indirectly suffer or
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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 International Portfolio 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 International
Portfolio 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
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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
International Portfolio 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 FAIP, 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 International Portfolio,
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 FAIP
who are not parties to this Agreement or "interested persons"
(as defined in the Act) of the Adviser, of the Sub-Adviser or
of FAIP and the vote of a majority of the outstanding shares
of International Portfolio.
12. Wherever referred to in this Agreement, the vote or approval
of the holders of a majority of the outstanding shares of
International Portfolio shall mean the lesser of (a) the vote
of 67% or more of the shares of International Portfolio 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 International Portfolio.
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.
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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.
FIRST AMERICAN ASSET MANAGEMENT,
A DIVISION OF U.S. BANK NATIONAL
ASSOCIATION
By
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Its
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XXXXXX & XXXXXX ASSOCIATES, INC.
By
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Its
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