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                             NORTH AMERICAN FUNDS
                             SUBADVISORY AGREEMENT

         AGREEMENT made this March 10, 2000, between American General Asset
Management Corp., a Delaware corporation (the "Adviser"), and Founders Asset
Management LLC, a Delaware limited liability company (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 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;

         v.       provide recommendations, 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; and

         vi.      vote proxies in accordance with the Proxy Voting Policy of the
                  Subadviser.

b.       The Subadviser, at its expense, will furnish (i) all necessary
         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 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

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         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. To the extent permitted by Section
         28(e) of the Securities Exchange Act of 1934, 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 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 members, officers or
         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 in connection with the Subadviser's provision
         of services under this Agreement as are required of an investment
         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.

e.       The Subadviser will maintain all accounts, books and records with
         respect to the Portfolios as are required of an investment 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.

f.       The Subadviser agrees to observe and comply with Rule 17j-1 under the
         Investment Company Act, as the same may be amended from time to time
         ("Rule 17j-1"), and with Subadviser's Code of Ethics (which shall
         comply in all material respects with Rule 17j-1). The Subadviser also
         shall use its best efforts to cause its Access Persons (as defined in
         subsection (e) of Rule 17j-1) to observe and comply with Rule 17j-1 and
         its Code of Ethics. On a quarterly basis, the Subadviser will either
         (i) certify to the Adviser that the Subadviser and its Access Persons
         have complied with the Subadviser's Code of Ethics with respect to the
         Fund or (ii) identify any material violations which have occurred with
         respect to the Fund. In addition, the Subadviser will report at least
         annually to the Adviser concerning any other violations of the
         Subadviser's Code of Ethics concerning the Portfolios which required
         significant remedial action and which were not previously reported.

3.       COMPENSATION OF SUBADVISER

         The Adviser will pay the Subadviser with respect to each Portfolio the
compensation specified in Appendix A to this Agreement.

4.       LIABILITY OF SUBADVISER

         Neither the Subadviser nor any of its members 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 members or employees; and neither the Subadviser nor any of its
members 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 misfeasance, bad
faith, or negligence in the performance of, or from disregard of the duties of,
the Subadviser or any of its members or employees.

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5.       SUPPLEMENTAL AND OTHER 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.

         The services of the Subadviser to the Trust are not to be deemed to be
exclusive, the Subadviser and any person controlled by or under common control
with the Subadviser being free to render investment advisory and other services
to any other person or entity.

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 members 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 Formation
and Operating Agreement of the Subadviser, respectively, or by specific
provision of applicable law.

7.       REGULATION

         The Subadviser shall submit to all regulatory and administrative 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

         Unless sooner terminated, this Agreement will continue in effect with
respect to each Portfolio for a period more than two years from the date of its
initial effectiveness only so long as such continuance is specifically approved
at least annually either by the Trustees of the Trust or by a majority of the
outstanding voting securities of such Portfolio, provided that in either event
such continuance shall also be approved 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.

         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, with respect
to any or all Portfolios, by the Adviser or Subadviser on sixty days' written
notice to the Trust and the other party. This agreement will automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in the Investment Company Act) or with respect to a Portfolio in the
event the Advisory Agreement between the Adviser and the Trust terminates with
respect to such Portfolio 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 adviser 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;

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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 member or controlling member of the Subadviser or the
         portfolio manager of any Portfolio changes.

10.      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 Trustees of the Trust who
are not interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, and, if required by
applicable law, by the vote of a majority of the outstanding securities of each
Portfolio affected by the amendment.

11.      ENTIRE AGREEMENT

         This Agreement contains the entire understanding and agreement of the
parties.

12.      HEADINGS

         The headings in the sections of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.

13.      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.

14.      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 contained herein.

15.      GOVERNING LAW

         The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, 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, conflict with applicable provisions of the Investment Company Act,
the latter shall control.

16.      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 officers as of the date first
mentioned above.

                                    American General Asset Management Corp.

                                    by:
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                                    Founders Asset Management LLC

                                    by:
                                       --------------------------------

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                                  APPENDIX A
                                  ----------

         The Subadviser shall serve as investment subadviser for the following
Portfolios 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
Percentage Fee"):

         International Small Cap Fund: .500% of the first $300,000,000, .450%
         between $300,000,000 and $500,000,000 and .400% on the excess over
         $500,000,000 of the average net assets of the Fund;

         Large Cap Growth Fund: .500% of the first $50,000,000, .450% between
         $50,000,000 and $200,000,000, .425% between $200,000,000 and
         $500,000,000, .400% between $500,000,000 and $850,000,000 and .350% on
         the excess over $850,000,000 of the average net assets of the Fund;

         Global Equity Fund: .500% of the first $50,000,000, .450% between
         $50,000,000 and $200,000,000, .400% between $200,000,000 and
         $500,000,000 and .350% on the excess over $500,000,000 of the average
         net assets of the Fund;

         The Subadviser Percentage Fee for each Portfolio shall be accrued for
each calendar day this Agreement is in force and the sum of the daily fee
accruals 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
accordance 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 effective 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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