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EXHIBIT 23(d)(8)
INVESTMENT SUBADVISORY AGREEMENT
Agreement made as of this 1st day of July, 1998, among American Odyssey
Funds, Inc., a Maryland corporation (the "Series Fund"), American Odyssey Funds
Management, Inc., a New Jersey corporation (the "Manager"), and XX Xxxxx
Securities Corporation, a New York corporation (the "Subadviser").
WHEREAS, American Odyssey Funds Management, Inc. has entered into a
management agreement (the "Management Agreement") with the Series Fund, a
diversified open-end management investment company registered under the
Investment Company Act of 1940 (the "1940 Act"), pursuant to which American
Odyssey Funds Management, Inc. will act as Manager of the Series Fund.
WHEREAS, the Series Fund is currently divided into six separate series
or Funds, each of which is established pursuant to a resolution of the Board of
Directors of the Series Fund, and the Series Fund may in the future add
additional Funds; and
WHEREAS, the Manager has the responsibility of evaluating,
recommending, and supervising investment advisers to each Fund and, in
connection therewith, desires to retain the Subadviser to provide investment
advisory services to the American Odyssey Emerging Opportunities Fund (the
"Fund"), the Series Fund has the responsibility of compensating the investment
advisers to each Fund and desires to retain the Subadviser to provide investment
advisory services to the Fund, and the Subadviser is willing to render such
investment advisory services.
NOW, THEREFORE, the parties agree as follows:
1. (a) Subject to the supervision of the Manager and of the Board of
Directors of the Series Fund, the Subadviser shall manage the
investment operations of the assets of the Fund allocated by the
Manager to the Subadviser (such assets referred to as the "Allocated
Assets"), including the purchase, retention and disposition of
portfolio investments, in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Prospectus (such
Prospectus and Statement of Additional Information as currently in
effect and as amended or supplemented from time to time, being herein
called the "Prospectus") and subject to the following understandings:
(i) The Subadviser shall consult periodically with
the Manager and they shall agree upon the current investment
strategy for the Allocated Assets in the light of anticipated
cash flows.
(ii) The Subadviser shall provide supervision of the
Allocated Asset's investments and determine from time to time
what securities, options, futures contracts, and other
investments included in the Allocated Assets will be
purchased, retained, sold, or loaned by the Fund, and what
portion of the Allocated Assets will be invested or held
uninvested as cash.
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(iii) In the performance of its duties and
obligations under this Agreement, the Subadviser shall act in
conformity with the Articles of Incorporation, By-Laws, and
Prospectus of the Series Fund and with the instructions and
directions of the Manager and of the Board of Directors of the
Series Fund and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of
1986, and all other applicable federal and state laws and
regulations.
(iv) The Subadviser will place orders for the
securities, options, futures contracts, and other investments
to be purchased or sold as part of the Allocated Assets with
or through such persons, brokers, dealers, or futures
commission merchants (including but not limited to persons
affiliated with the Manager) as the Subadviser may select in
order to carry out the policy with respect to brokerage set
forth in the Series Fund's Registration Statement and
Prospectus or as the Board of Directors may direct from time
to time. In providing the Fund with investment advice and
management, the Subadviser will give primary consideration to
securing the most favorable price and efficient execution.
Within the framework of this policy, the Subadviser may
consider such factors as the price of the security, the rate
of the commission, the size and difficulty of the order, the
reliability, integrity, financial condition, general execution
and operational capabilities of competing broker-dealers and
futures commission merchants, and the brokerage and research
services they provide to the Subadviser or the Fund. The
parties agree that it is desirable for the Fund that the
Subadviser have access to supplemental investment and market
research and security and economic analysis that certain
brokers or futures commission merchants are able to provide.
The parties further agree that brokers and futures commission
merchants that provide such research and analysis may execute
brokerage transactions at a higher cost to the Fund than would
result if orders to execute such transactions had been placed
with other brokers on the sole basis of ability to obtain the
most favorable price and efficient execution. Therefore,
notwithstanding the second sentence of this paragraph
1(a)(iv), the Subadviser is authorized to place orders for the
purchase and sale of securities, options, futures contracts,
and other investments for the Fund with brokers or futures
commission merchants who provide the Subadviser with such
research and analysis, subject to review by the Manager and
the Series Fund's Board of Directors from time to time with
respect to the extent and continuation of this practice. The
Series Fund and the Manager acknowledge that the services
provided by such brokers or futures commission merchants may
be useful to the Subadviser in connection with the
Subadviser's services to other clients.
When the Subadviser deems the purchase or sale of a
security, option, futures contract, or other investment to be
in the best interest of the Fund as well as other clients of
the Subadviser, the Subadviser, to the extent permitted by
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applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities, options, futures
contracts, or other investments to be sold or purchased in
order to obtain the most favorable price or lower brokerage
commissions and efficient execution and to allocate the shares
purchased or sold among the Series Fund and the Subadviser's
other clients on a fair and nondiscriminatory basis, in a
manner consistent with the Subadviser's fiduciary obligations
to the Fund and to such other clients.
(v) The Subadviser shall maintain all books and
records with respect to the portfolio transactions of the
Allocated Assets required by subparagraphs (b)(5), (6), (7),
(9), (10) and (11) and paragraph (f) of Rule 31a-1 under the
1940 Act and by Rule 17e-1(c)(2) under the 1940 Act and shall
render to the Series Fund such periodic and special reports as
its Board of Directors or the Manager may reasonably request.
(vi) The Subadviser shall provide the Series Fund's
custodian on each business day with information relating to
all transactions concerning the Allocated Assets and shall
provide the Manager with such information upon request of the
Manager.
(vii) The investment management services provided by
the Subadviser hereunder are not exclusive, and the Subadviser
shall be free to render similar services to others.
(b) Services to be furnished by the Subadviser under this
Agreement may be furnished through the medium of any directors,
officers, or employees of the Subadviser or its affiliates.
(c) The Subadviser shall keep the books and records with
respect to the Allocated Assets required to be maintained by the
Subadviser pursuant to paragraph 1(a)(v) hereof and shall timely
furnish to the Manager or the Series Fund's custodian all information
relating to the Subadviser's services hereunder needed to keep the
other books and records of the Fund required by Rules 17e-1(c)(2) and
31a-1 under the 1940 Act. The Subadviser agrees that all records which
it maintains for the Fund are the property of the Fund and the
Subadviser will surrender promptly to the Fund any of such records upon
the Fund's request, provided however that the Subadviser may retain a
copy of such records. The Subadviser further agrees to preserve for the
periods prescribed by Rules 17e-1(c)(2) and 31a-2 under the 1940 Act
any such records as are required to be maintained by it pursuant to
paragraph 1(a)(v) hereof.
(d) The Subadviser agrees to maintain procedures adequate to
ensure its compliance with the 1940 Act, the Investment Advisers Act of
1940 (the "Advisers Act"), and other applicable state and federal laws
and regulations.
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(e) The Subadviser shall furnish to the Manager, upon the
Manager's reasonable request, copies of all records prepared in
connection with (i) the performance of this Agreement and (ii) the
maintenance of compliance procedures pursuant to paragraph 1(d) hereof.
(f) The Subadviser agrees to provide upon reasonable request
of the Manager or the Series Fund, information regarding the
Subadviser, including but not limited to background information about
the Subadviser and its personnel and performance data, for use in
connection with efforts to promote the Series Fund and the sale of its
shares.
2. The Manager shall continue to have responsibility for all services
to be provided to the Fund pursuant to the Management Agreement and shall
oversee and review the Subadviser's performance of its duties under this
Agreement.
3. The Series Fund shall pay the Subadviser, for the services provided
and the expenses assumed pursuant to this Subadvisory Agreement, a fee at an
annual rate of 0.50% of the average daily Net Allocated Assets up to and
including $50 million, plus a fee at an annual rate of 0.45% of the average
daily Net Allocated Assets over $50 million and up to and including $100
million, plus a fee at an annual rate of 0.40% of the average daily Net
Allocated Assets over $100 million. The term "Net Allocated Assets" means the
Allocated Assets less related liabilities as determined by the Manager or its
designee. This fee will be computed daily and paid monthly.
4. The Subadviser shall not be liable for any loss suffered by the
Series Fund or the Manager as a result of any negligent act or error of judgment
of the Subadviser in connection with the matters to which this Agreement
relates, except a loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3) of
the 0000 Xxx) or loss resulting from willful misfeasance, bad faith or gross
negligence on the Subadviser's part in the performance of its duties or from its
reckless disregard of its obligations and duties under this Agreement. The
Series Fund shall indemnify the Subadviser and hold it harmless from all loss,
cost, damage and expense, including reasonable expenses for legal counsel,
incurred by the Subadviser resulting from actions from which it is relieved of
responsibility by this paragraph. The Subadviser shall indemnify the Series Fund
and the Manager and hold them harmless from all loss, cost, damage and expense,
including reasonable expenses for legal counsel, incurred by the Series Fund and
the Manager resulting from actions from which the Subadviser is not relieved of
responsibility by this paragraph.
5. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as such continuance is specifically
approved at least annually in conformity with the requirements of the 1940 Act;
provided, however, that this Agreement may be terminated by the Fund at any
time, without the payment of any penalty, by the Board of Directors of the
Series Fund or by vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the Fund, or by the Manager or the Subadviser at any
time, without
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the payment of any penalty, on not more than 60 days' nor less than 30 days'
written notice to the other party. This Agreement shall terminate automatically
in the event of its assignment (as defined in the 0000 Xxx) or upon the
termination of the Management Agreement.
6. Nothing in this Agreement shall limit or restrict the right of any
of the Subadviser's directors, officers, or employees to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar or dissimilar nature, nor
limit the Subadviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual, or association,
except as described in Paragraph 1(a)(vii) above.
7. During the term of this Agreement, the Manager agrees to furnish the
Subadviser at its principal office all prospectuses, proxy statements, reports
to shareholders, sales literature or other material prepared for distribution to
shareholders of the Fund or the public, which refer to the Subadviser in any
way, prior to use thereof and not to use material if the Subadviser reasonably
objects in writing five business days (or such other time as may be mutually
agreed) after receipt thereof. Such materials may be furnished to the Subadviser
hereunder by first class mail, overnight delivery service, facsimile
transmission equipment, or hand delivery.
8. This Agreement may be amended by mutual consent, but the consent of
the Series Fund must be obtained in conformity with the requirements of the 1940
Act.
9. Except as otherwise specifically provided in this Agreement, any
notice or other communication required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by certified or registered
mail, return receipt requested and postage prepaid, (1) to the American Odyssey
Funds, Inc. at Xxx Xxxxx Xxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000, Attention:
President; (2) to American Odyssey Funds Management, Inc. at Xxx Xxxxx Xxxxxx,
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000, Attention: Secretary; or (3) to XX Xxxxx
Securities Corporation, at Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: President.
10. This Agreement shall be governed by the laws of the State of New
Jersey.
11. This Agreement may be executed in two or more counterparts, which
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
AMERICAN ODYSSEY FUNDS, INC.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Witness
AMERICAN ODYSSEY FUNDS
MANAGEMENT, INC.
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Witness
XX XXXXX SECURITIES CORPORATION
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Witness
