SUBADVISORY AGREEMENT
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This Subadvisory Agreement made this 1st day of October 1997, by and
between Investment Advisers, Inc., a Delaware corporation ("Advisers"), and IAI
International Limited, a United Kingdom corporation (the "Subadviser").
WITNESSETH THAT:
WHEREAS, IAI Investment Funds III, Inc., a corporation operating as an
open-end investment company duly organized under the laws of the State of
Minnesota, has appointed Advisers its investment adviser with respect to the
assets of its separate portfolio represented by its Series D shares of common
stock, which portfolio is commonly referred to as IAI Pacific Basin Fund (the
"Fund") pursuant to the terms of an Investment Advisory Agreement dated as of
the date hereof (the "Agreement"); and
WHEREAS, Advisers desires to appoint the Subadviser as its subadviser, and
the Subadviser is willing to act in such capacity upon the terms herein set
forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1. The Subadviser agrees to act as investment adviser for the Fund,
and to manage the investment of the assets of the Fund, and assume the
responsibilities and obligations Advisers assumed pursuant to the Agreement, a
copy of which is attached hereto; provided, however, that all investment
decisions made by the Subadviser will be subject to approval or ratification by
Advisers.
SECTION 2. In payment for the services to be rendered by the Subadviser
hereunder, Advisers shall pay the Subadviser an annual fee based on the average
daily net assets of the Fund, which fee shall be paid to the Subadviser within
ten (10) business days after the last day of the month in which said services
were rendered, in the amount set forth below.
Daily Net Assets Fee IAI International Receives Annually
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For the first $100 million .8125
For the next $100 - $250 million .7500
For the next $250 - $500 million .6250
Above $500 million .4375
SECTION 3. The Subadviser shall be free to render services to others
similar to those rendered under this Subadvisory Agreement or of a different
nature except as such services may conflict with the services to be rendered or
the duties to be assumed hereunder.
SECTION 4. The effective date of this Subadvisory Agreement shall be the
date upon which this Subadvisory Agreement is approved by a vote of the holders
of at least a majority of the outstanding shares of the Fund. Wherever referred
to in this Subadvisory Agreement, the vote or approval of the holders of a
majority of the outstanding voting shares of the Fund shall mean the vote of (a)
67% of the shares of the Fund at a meeting where more than 50% of the
outstanding shares are present in person or by proxy or (b) more than 50% of the
outstanding shares of the Fund, whichever is the lesser.
Unless sooner terminated as hereinafter provided, this Subadvisory
Agreement shall continue in effect for a period more than two years from the
date of its execution but only as long as such continuance is specifically
approved at least annually by the Board of Directors of the Fund, including the
specific approval of a majority of the directors who are not interested persons
of the Subadviser, Advisers, or of the Fund cast in person at a meeting called
for the purpose of voting on such approval, or by the vote of the holders of the
outstanding voting securities of the Fund.
This Subadvisory Agreement may be terminated at any time without the
payment of any penalty by the vote of the Board of Directors of the Fund or by
the vote of the holders of a majority of the outstanding voting securities of
the Fund, or by Advisers or the Subadviser upon 60 days' written notice to the
other party.
This Subadvisory Agreement shall automatically terminate in the event of
its assignment as such term is defined by the Investment Company Act of 1940.
SECTION 5. Any notice under this Subadvisory 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.
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IN WITNESS WHEREOF, Advisers and the Subadviser have caused this
Subadvisory Agreement to be executed by their duly authorized officers as of the
day and year first above written.
INVESTMENT ADVISERS, INC.
ATTEST:
/s/Xxxxxxx X. Xxxxxx By /s/Xxxx X. Xxxx
Its Chief Executive Officer
IAI INTERNATIONAL LIMITED
ATTEST:
/s/Xxxxxxx X. Xxxxxx By /s/Xxxxxx X. Xxxxxxx
Its Director
IAI INVESTMENT FUNDS III, Inc.
with respect to IAI Pacific Basin Fund
ATTEST:
/s/Xxxxxxx X. Xxxxxx By /s/Xxxx X. Xxxx
Its President
