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INVESTMENT SUBADVISORY AGREEMENT
Agreement made as of this 3rd day of April, 2000, among American Odyssey
Funds, Inc., a Maryland corporation (the "Series Fund"), American Odyssey Funds
Management LLC, a New Jersey limited liability company (the "Manager"), and
Equinox Capital Management, LLC, a limited liability company organized under the
laws of New York (the "Subadviser").
WHEREAS, American Odyssey Funds Management LLC 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 LLC 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 Core Equity 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 of the Fund (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 Assets' investments and determine from time to time what
securities, options, futures contracts, and other investments
included in the Allocated Assets will be
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purchased, retained, sold, or loaned by the Fund, and what portion
of the Allocated Assets will be invested or held uninvested as
cash.
(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
or Subadviser) 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.
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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 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: provided, however,
that the Subadviser agrees that it shall not serve or accept
retention as investment adviser, investment manager, or similar
service provider during the term of this Agreement and, if this
Agreement is terminated by the Subadviser, for the period of one
year after the termination of this Agreement, with or for the
benefit of any investment company registered under the 1940 Act
that seeks as a primary purchaser of its shares, directly or
indirectly through sales of variable contracts, persons who are
eligible to participate in an investment advisory asset allocation
program similar in nature to that offered by the Manager's
affiliated company, Xxxxxxxx Financial Services, Inc., it being
understood and agreed that the foregoing restriction shall not
apply to any services provided to the Financial Services
Department, or any other unit of The Travelers Insurance Company,
it being further understood and agreed that an investment company
with asset allocation as its own investment objective (commonly
called a balanced fund) shall not be subject to the foregoing
restriction.
(viii) Absent specific instructions to the contrary
provided to it by the
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Manager, and subject to the Subadviser's receipt of all necessary
voting materials, the Subadviser shall vote all proxies with
respect to investments of the allocated assets in accordance with
the Subadviser's proxy voting policy as most recently provided to
the Manager.
(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.
(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 0.35% of the average daily Net Allocated Assets up to and
including $100 million, plus a fee at an annual
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rate of 0.30% 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 act or omission 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 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
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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 LLC at Xxx Xxxxx Xxxxxx,
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000, Attention: Secretary; or (3) to Equinox
Capital Management, LLC at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 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.
By:
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Witness: Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
Secretary President
AMERICAN ODYSSEY FUNDS
MANAGEMENT LLC
By:
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Witness: Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
Assistant Secretary Senior Vice President
EQUINOX CAPITAL
MANAGEMENT, LLC
By:
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Witness: Name:
Title:
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