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EXHIBIT (5)(g)
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NORTH AMERICAN FUNDS
SUBADVISORY AGREEMENT
AGREEMENT made this_______day of_____________, 199__, between NASL
Financial Services, Inc., a Massachusetts corporation ("NASL Financial" or the
"Adviser"), and Xxxx Xxxxx Management Inc., a ________ Corporation (the
"Subadviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. APPOINTMENT OF SUBADVISER
The Subadviser undertakes to act as investment subadviser to, and,
subject to the supervision of the Trustees of North American Funds (the
"Trust") and the terms of this Agreement, to manage the investment and
reinvestment of the assets of the Portfolios specified in Appendix A to this
Agreement as it shall be amended by the Adviser and the Subadviser from
time to time (the "Portfolios"). The Subadviser will be an independent
contractor and will have no authority to act for or represent the Trust or
Adviser in any way except as expressly authorized in this Agreement or
another writing by the Trust and Adviser.
2. SERVICES TO BE RENDERED BY THE SUBADVISER TO THE TRUST
a. Subject always to the direction and control of the Trustees of
the Trust, the Subadviser will manage the investments and
determine the composition of the assets of the Portfolios in
accordance with the Portfolios' registration statement, as amended.
In fulfilling its obligations to manage the investments and
reinvestments of the assets of the Portfolios, the Subadviser
will:
i. obtain and evaluate pertinent economic,
statistical, financial and other information affecting the
economy generally and individual companies or industries
the securities of which are included in the Portfolios or are
under consideration for inclusion in the Portfolios;
ii. formulate and implement a continuous investment program
for each Portfolio consistent with the investment
objectives and related investment policies for each such
Portfolio as described in the Trust's registration statement,
as amended;
iii. take whatever steps are necessary to implement these
investment programs by the purchase and sale of securities
including the placing of orders for such purchases and sales;
iv. regularly report to the Trustees of the Trust with respect
to the implementation of these investment programs; and
v. provide determinations, in accordance with procedures
and methods established by the Trustees of the Trust, of the
fair value of securities held by the Portfolios for which market
quotations are not readily available for purposes of
enabling the Trust's Custodian to calculate net asset value.
b. The Subadviser, at its expense, will furnish (i) all
neces sary investment and management facilities, including
salaries of personnel required for it to execute its duties
faithfully, and (ii) administrative facilities, including
bookkeeping, clerical personnel and equipment necessary for the
efficient conduct of the investment affairs of the Portfolios
(excluding determination of net asset value and shareholder
accounting services).
c. The Subadviser will select brokers and dealers
including Xxxx Xxxxx & Company, Incorporated, an affiliate of the
Subadviser, to effect all transactions subject to the following
conditions: The Subadviser will place all orders with brokers,
dealers, or issuers, and will negotiate brokerage commissions if
applicable. The Subadviser is directed at all times to seek
to execute brokerage transactions for the Portfolios in
accordance with such policies or practices as may be established by
the Trustees and described in the Trust's registration statement
as amended. The Subadviser may pay a broker-dealer which
provides research and brokerage services a higher spread or
commission for a particular transaction than otherwise might have
been charged by another broker-dealer, if the
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Subadviser determines that the higher spread or commission
is reasonable in relation to the value of the brokerage and research
services that such broker-dealer provides, viewed in terms of
either the particular transaction or the Subadviser's overall
responsibilities with respect to accounts managed by the
Subadviser. The Subadviser may use for the benefit of the
Subadviser's other clients, or make available to companies affiliated
with the Subadviser or to its directors for the benefit of its
clients, any such brokerage and research services that the
Subadviser obtains from brokers or dealers.
d. The Subadviser will maintain all accounts, books and
records with respect to the Portfolios as are required of an invest
ment adviser of a registered investment company pursuant to the
Investment Company Act of 1940 (the "Investment Company Act") and
Investment Advisers Act of 1940 (the "Investment Advisers Act") and
the rules thereunder.
3. COMPENSATION OF SUBADVISER
The Adviser will pay the Subadviser with respect to each Portfolio
the compensation specified in Appendix A to this Agree ment.
4. LIABILITY OF SUBADVISER
Neither the Subadviser nor any of its partners or employees shall be
liable to the Adviser or Trust for any loss suffered by the Adviser or Trust
resulting from any error of judgment made in the good faith exercise of the
Subadviser's investment discretion in connection with selecting Portfolio
investments except for losses resulting from willful misfeasance, bad faith
or gross negligence of, or from reckless disregard of, the duties of the
Subadviser or any of its partners or employees; and neither the Subadviser
nor any of its partners or employees shall be liable to the Adviser or Trust
for any loss suffered by the Adviser or Trust resulting from any other
matters to which this Agreement relates (i.e., those other matters specified
in Sections 2 and 8 of this Agreement), except for losses resulting from
willful mis feasance, bad faith, or negligence in the performance of, or from
disregard of, the duties of the Subadviser or any of its partners or employees.
5. SUPPLEMENTAL ARRANGEMENTS
The Subadviser may enter into arrangements with other persons
affiliated with the Subadviser to better enable it to fulfill its obligations
under this Agreement for the provision of certain personnel and facilities
to the Subadviser.
6. CONFLICTS OF INTEREST
It is understood that trustees, officers, agents and
shareholders of the Trust are or may be interested in the Subadviser
as trustees, officers, partners or otherwise; that directors, officers,
agents and partners of the Subadviser are or may be interested in the
Trust as trustees, officers, shareholders or otherwise; that the Subadviser
may be interested in the Trust; and that the existence of any such dual
interest shall not affect the validity hereof or of any transactions
hereunder except as otherwise provided in the Agreement and Declaration
of Trust of the Trust and the Certificate of Incorporation of the
Subadviser, respectively, or by specific provision of applicable law.
7. REGULATION
The Subadviser shall submit to all regulatory and ad
ministrative bodies having jurisdiction over the services provided
pursuant to this Agreement any information, reports or other material which
any such body by reason of this Agreement may request or require pursuant to
applicable laws and regulations.
8. DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective with respect to each Portfolio
on the later of its execution, the effective date of the registration
statement of the Portfolio and the date of the meeting of the shareholders
of the Portfolio, at which meeting this Agreement is approved by the vote of
a majority of the out standing voting securities (as defined in the
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Investment Company Act) of the Portfolio. The Agreement will continue
in effect for a period more than two years from the date of its execution only
so long as such continuance is specifically approved at least an nually
either by the Trustees of the Trust or by a majority of the outstanding
voting securities of each of the Portfolios, provided that in either event
such continuance shall also be ap proved by the vote of a majority of the
Trustees of the Trust who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. The required
shareholder approval of the Agreement or of any continuance of the Agreement
shall be effective with respect to any Portfolio if a majority of the
outstanding voting securities of the series (as defined in Rule 18f-2(h)
under the Investment Company Act) of shares of that Portfolio votes to
approve the Agreement or its continuance, notwithstanding that the
Agreement or its con tinuance may not have been approved by a majority of
the out standing voting securities of (a) any other Portfolio affected by the
Agreement or (b) all the portfolios of the Trust.
If the shareholders of any Portfolio fail to approve the Agreement
or any continuance of the Agreement, the Subadviser will continue to act
as investment subadviser with respect to such Portfolio pending the required
approval of the Agreement or its continuance or of any contract with the
Subadviser or a dif ferent adviser or subadviser or other definitive
action; provided, that the compensation received by the Subadviser in
respect of such Portfolio during such period is in compliance with Rule
15a-4 under the Investment Company Act.
This Agreement may be terminated at any time, without the payment of
any penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Portfolio by
the vote of a majority of the outstanding voting securities of such Portfolio,
on sixty days' written notice to the Adviser and the Subadviser, or by the
Ad viser or Subadviser on sixty days' written notice to the Trust and the
other party. This agreement will automatically ter minate, without the
payment of any penalty, in the event of its assignment (as defined in the
Investment Company Act) or in the event the Advisory Agreement between the
Adviser and the Trust terminates for any reason.
9. PROVISION OF CERTAIN INFORMATION BY SUBADVISER
The Subadviser will promptly notify the Adviser in writing of the
occurrence of any of the following events:
a. the Subadviser fails to be registered as an investment
ad viser under the Investment Advisers Act or under the laws of any
jurisdiction in which the Subadviser is required to be registered as
an investment adviser in order to perform its obligations under this
Agreement;
b. the Subadviser is served or otherwise receives notice of
any action, suit, proceeding, inquiry or investigation, at law or
in equity, before or by any court, public board or body, involving the
affairs of the Trust; and
c. the managing general partner or controlling partner
of the Subadviser or the portfolio manager of any Portfolio
changes.
10. SERVICES TO OTHERS
The Adviser understands, and has advised the Trust's Board of Trustees,
that the Subadviser now acts, or may in the future act, as an investment
adviser to fiduciary and other managed accounts, and as investment adviser
or subadviser to other investment companies. The Adviser has no objection
to the Subadviser acting in such capacities, provdied that whenever the
Portfolios and one or more other investment advisory clients of the Subadviser
have available funds for investment, investments suitable and
appropriate for each will be allocated in a manner believed by the
Subadviser to be equitable to each. The Adviser recognizes, and has advised
the Trust's Board of Trustees, that in some cases this procedure may adversely
affect the size of the position that the participating Portfolio(s) may
obtain in a particular security. In addition, the Adviser understands, and
has advised the Trust's Board of Trustees, that the persons employed by the
Subadviser to assist in the Subadviser's duties under this Agreement
will not devote their full time to such service and nothing contained in
this Agreement will be deemed to limit or restrict the right of the
Subadviser or any of its affiliates to engage in and devote time and attention
to other businesses or to render services of whatever kind or nature.
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11. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment
is specifically approved by the vote of a majority of the outstanding voting
securities of each of the Portfolios af fected by the amendment and by the
vote of a majority of the Trustees of the Trust who are not interested
persons of any party to this Agreement cast in person at a meeting called for
the pur pose of voting on such approval. The required shareholder ap
proval shall be effective with respect to any Portfolio if a majority of
the outstanding voting securities of that Portfolio vote to approve the
amendment, notwithstanding that the amendment may not have been approved by
a majority of the outstanding voting securities of (a) any other Portfolio
affected by the amendment or (b) all the portfolios of the Trust.
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agree ment of
the parties.
13. HEADINGS
The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
14. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or
applicable party in person or by registered mail or a private mail or
delivery service providing the sender with notice of receipt. Notice shall
be deemed given on the date delivered or mailed in accordance with this
paragraph.
15. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void
in law or in equity, the Agreement shall be construed, insofar as is
possible, as if such portion had never been con tained herein.
16. GOVERNING LAW
The provisions of this Agreement shall be construed and in terpreted
in accordance with the laws of The Commonwealth of Mas sachusetts, or any of
the applicable provisions of the Investment Company Act. To the extent that
the laws of The Commonwealth of Massachusetts, or any of the provisions in
this Agreement, con flict with applicable provisions of the Investment
Company Act, the latter shall control.
17. LIMITATION OF LIABILITY
The Amended and Restated Agreement and Declaration of Trust dated
February 18, 1994, a copy of which, together with all amendments thereto
(the "Declaration"), is on file in the office of the Secretary of The
Commonwealth of Massachusetts, provides that the name "North American Funds"
refers to the Trustees under the Declaration collectively as Trustees, but not
as individuals or personally; and no Trustee, shareholder, officer, employee
or agent of the Trust shall be held to any personal liability, nor shall
resort be had to their private property, for the satisfaction of any
obligation or claim, in connection with the affairs of the Trust or any
portfolio thereof, but only the assets belonging to the Trust, or to the
particular portfolio with which the obligee or claimant dealt, shall be
liable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed under seal by their duly authorized of ficers as of the date
first mentioned above.
[SEAL] NASL Financial Services, Inc.
by: _____________________________
Xxxxxxx X. Xxxxxxxx
President
[SEAL] Xxxx Xxxxx Management, Inc.
by: _____________________________
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APPENDIX A
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The Subadviser shall serve as investment subadviser for the following
portfolio of the Trust. The Adviser will pay the Subadviser, as full
compensation for all services provided under this Agreement, the fee
computed separately for each such Portfolio at an annual rate as follows
(the "Subadviser Percent age Fee"):
Small/Mid Cap Fund: .___% of the first $50,000,000, ..__%
between $50,000,000 and $200,000,000, .___% between
$200,000,000 and $500,000,000 and .___% on the excess over
$500,000,000 of the current value of the net assets of the
Portfolio;
The Subadviser Percentage Fee for each Portfolio shall be accrued
for each calendar day and the sum of the daily fee ac cruals shall be paid
monthly to the Subadviser. The daily fee accruals will be computed by
multiplying the fraction of one over the number of calendar days in the year
by the applicable annual rate described in the preceding paragraph, and
multiplying this product by the net assets of the Portfolio as determined in
ac cordance with the Trust's prospectus and statement of additional
information as of the close of business on the previous business day on which
the Trust was open for business.
If this Agreement becomes effective or terminates before the end of
any month, the fee (if any) for the period from the effec tive date to the end
of such month or from the beginning of such month to the date of termination,
as the case may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or termination
occurs.
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