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Exhibit 5(d)
SUB-INVESTMENT ADVISORY AGREEMENT
SUB-INVESTMENT ADVISORY AGREEMENT made as of the 1st day of March, 1995, by
and between First of America Investment Corporation, a Michigan corporation
(the "Adviser"), and Gulfstream Global Investors, Ltd., a Texas limited
partnership (the "Sub-Adviser").
WHEREAS, the Adviser serves as investment adviser of The Parkstone Group of
Funds, a Massachusetts business trust and an open-end management investment
company (the "Group"), which has filed a registration statement (the
"Registration Statement") under the Investment Company Act of 1940, as amended
(the "1940 Act") and the Securities Act of 1933.
WHEREAS, the Group is comprised of several separate investment portfolios; and
WHEREAS, the Adviser desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser experienced in the
management of a portfolio of international securities to assist the Adviser in
performing services for the portfolios indicated on Schedule A to this
Agreement (the "Funds"); and
WHEREAS, the Sub-Adviser is registered under the Investment Advisers Act of
1940, as amended, and is engaged in the business of rendering investment
advisory and sub-advisory services to investment companies and desires to
provide such services to the Adviser; and
WHEREAS, the Sub-Adviser is familiar with the investment objective, policies
and restrictions of the Funds and has reviewed the Investment Advisory
Agreement dated as of December 22, 1992 between the Adviser and the Group (the
"Group/Adviser Agreement").
NOW, THEREFORE, in consideration of the terms and conditions hereinafter set
forth, it is agreed as follows:
1. Appointment of the Sub-Adviser. The Adviser hereby appoints the
Sub-Adviser to provide a continuous investment program for the Funds, subject
to such instructions and supervision as the Adviser may from time to time
furnish and further subject to the control and direction of the Group's Board
of Trustees, for the period and on the terms hereinafter set forth. The
Sub-Adviser hereby accepts such appointment and agrees during such period to
render the services and to assume the obligations herein set forth for the
compensation herein provided. The Sub-Adviser will provide the services under
this Agreement in accordance with the Funds' investment objective, policies and
restrictions as stated in each Fund's most recent Prospectus and Statement of
Additional Information and as the same may, from time to time, be supplemented
or amended and in resolutions of the Group's Board of Trustees. Adviser agrees
to furnish the Sub-Adviser from time to time copies of all amendments of or
supplements to such Prospectus and Statement of Additional Information. The
Sub-Adviser shall for all purpose herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized (whether
herein or otherwise), have no authority to act for or represent the Adviser,
the Funds or the Group in any way.
2. Sub-Advisory Services. Subject to such instructions and supervision as the
Adviser may from time to time furnish, the continuous investment program of the
Funds provided by the Sub-Adviser shall include, among other things, investment
research and management with respect
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to all securities, investments and cash equivalents in the Funds. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund, the appropriate
portion of the Fund's assets to be invested in particular countries or
geographic regions, the use of foreign exchange contracts and other foreign
currency matters, and the manner in which voting rights, rights to consent to
corporate action and other rights pertaining to the Funds' investments should
be exercised. The Sub-Adviser will implement such determinations through the
placement, in the name of a Fund, of orders for the execution of portfolio
transactions with or through such brokers or dealers as it may select.
In fulfilling its responsibilities hereunder, the Sub-Adviser agrees that it
will:
(a) use the same skill and care in providing such services as it uses in
providing services to other fiduciary accounts for which it has
investment responsibilities;
(b) conform with all applicable Rules and Regulations of the United States
Securities and Exchange Commission ("SEC") and in addition will conduct
its activities under this Agreement in accordance with any applicable
regulations of any government authority pertaining to the investment
advisory activities of the Sub-Adviser and shall furnish such written
reports or other documents substantiating such compliance as the Adviser
reasonably may from time to time request;
(c) not make loans to any person to purchase or carry units of beneficial
interest in the Group or make loans to the Group;
(d) place orders pursuant to investment determinations for the Funds either
directly with the issuer or with an underwriter, market maker or broker
or dealer. In placing orders with brokers and dealers, the Sub-Adviser
will use its reasonable best efforts to obtain prompt execution of orders
in an effective manner at the most favorable price. Consistent with this
obligation, the Sub-Adviser may, to the extent permitted by law, purchase
and sell portfolio securities to, from and through brokers and dealers
who provide brokerage and research services (within the meaning of
Section 28(e) of the Securities Exchange Act of 1934) to or for the
benefit of the Funds and/or other accounts over which the Sub-Adviser
exercises investment discretion. Subject to the review of the Group's
Board of Trustees from time to time with respect to the extent and
continuation of the policy, the Sub-Adviser is authorized to pay a broker
or dealer who provides such brokerage and research services a commission
for effecting a securities transaction for a Fund which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Sub-Adviser determines in good faith
that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed
in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to the accounts as to
which it exercises investment
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discretion. In no instance will portfolio securities be purchased from or sold
to the Group, The Winsbury Company, Adviser or Sub-Adviser or any affiliate of
the foregoing except as may be permitted by the 1940 Act;
(e) maintain all necessary or appropriate books and records with respect to
each Fund's securities transactions in accordance with all applicable
laws, rules and regulations, including but not limited to Section 31(a)
of the 1940 Act and will furnish the Group's Board of Trustees such
periodic and special reports as the Board reasonably may request;
(f) treat confidentially and as proprietary information of the Adviser and
the Group all records and other information relative to the Adviser and
the Group and prior, present, or potential interest-holders, and will not
use such records and information for any purpose other than performance
of its responsibilities and duties hereunder, except that subject to
prompt notification to the Group and Adviser, Sub-Adviser may divulge
such information to duly constituted authorities, or when so requested by
the Adviser and the Group, provided, however, that nothing contained
herein shall prohibit the Sub-Adviser from advertising or soliciting the
public generally with respect to other products or services, regardless
of whether such advertisement or solicitation may be directed to persons
including prior, present or potential shareholders of the Funds;
(g) maintain its policy and practice of conducting its fiduciary functions
independently. In making investment recommendations for the Group, the
Sub-Adviser's personnel will not inquire or take into consideration
whether the issuers of securities proposed for purchase or sale for the
Group's account are customers of the Adviser, Sub-Adviser or of their
respective parents, subsidiaries or affiliates. In dealing with such
customers, the Sub-Adviser and its affiliates will not inquire or take
into consideration whether securities of those customers are held by the
Group; and
(h) render, upon request of the Adviser or the Group's Board of Trustees,
written reports concerning the investment activities of the Funds.
3. Expenses. During the term of this Agreement, the Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Funds.
4. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records, if any, which it
maintains for the Funds are the property of such Funds and further agrees to
surrender promptly, to the Adviser or the Group any such records upon the
Adviser's or the Group's request and that such records shall be available for
inspection by the SEC. The Sub-Adviser further agrees to preserve for the
periods and at the places prescribed by Rule 31a-2 under the 1940 Act, the
records required to be maintained by Rule 31a-1 under the 1940 Act.
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5. Compensation of the Sub-Adviser. In consideration of services rendered
pursuant to this Agreement, the Adviser will pay the Sub-Adviser a fee at the
annual rate of the value of each Fund's average daily net assets set forth in
Schedule A hereto. Such fee shall be accrued daily and paid monthly as soon as
practicable after the end of each month. If the Sub-Adviser shall serve for
less than the whole of any month, the foregoing compensation shall be prorated.
For the purpose of determining fees payable to the Sub-Adviser, the value of
each Fund's net assets shall be computed at the times and in the manner
specified in the Group's Registration Statement. If the Adviser is required to
reduce its fee or to reimburse the Group because the expenses of a Fund exceed
applicable limits under state securities regulations or are in excess of any
voluntary expense limitations set forth in the Group's current Registration
Statement, the Sub-Adviser's fee hereunder shall be reduced by an amount equal
to such excess expense multiplied by the ratio that the Sub-Adviser's fee
hereunder bears to the sum of the fees paid to the Adviser and to The Winsbury
Company (under the Management and Administration Agreement with The Winsbury
Company) by the Group with respect to the Fund. Notwithstanding anything
contained herein to the contrary, the Sub-Adviser shall not be compensated on
the basis of a share of capital gains or upon capital appreciation of a Funds
or any portion thereof except as may be authorized by applicable law.
6. Services Not Exclusive. The services of the Sub-Adviser hereunder are not
to be deemed exclusive, and the Sub-Adviser shall be free to render similar
services to others and to engage in other activities, so long as the services
rendered hereunder are not impaired. It is understood that the action taken by
the Sub-Adviser under this Agreement may differ from the advice given or the
timing or nature of action taken with respect to other clients of the
Sub-Adviser, and that a transaction in a specific security may not be
accomplished for all clients of the Sub-Adviser at the same time or at the same
price.
7. Use of Names. The Sub-Adviser shall not use the name of the Group or the
Adviser in any material relating to the Sub-Adviser in any manner not approved
prior thereto by the Adviser; provided, however, that the Adviser shall approve
all uses of its or the Group's name which merely refer in accurate terms to the
appointment of the Sub-Adviser hereunder or which are required by the SEC or a
state securities commission; and, provided further, that in no event shall such
approval be unreasonably withheld.
8. Liability. Sub-Adviser, in rendering its services hereunder, agrees to
use its best judgment and efforts, and Adviser agrees that Sub-Adviser shall
not be liable hereunder for any mistake in judgment or any event whatsoever
except for lack of good faith on the part of Sub-Adviser. Notwithstanding the
foregoing, nothing herein shall be deemed to protect or purport to protect
Sub-Adviser against any liability to Adviser, the Group, or the holders of
securities of the Group to which Sub-Adviser would otherwise be subject by
reason of an act or practice constituting willful misfeasance, bad faith, gross
negligence, reckless disregard of duty or a breach of fiduciary duty involving
personal misconduct, or loss resulting from breach of fiduciary duty with
respect to the receipt of compensation for services (all within the meaning of
0000 Xxx) in respect of Adviser or the Group in the performance of duties
hereunder.
9. Limitation of Group's Liability. The Sub-Adviser acknowledges that it has
received notice of and accepts the limitations upon the Group's liability set
forth in its Declaration of Group. The Sub-Adviser agrees that any of the
Group's obligations shall be limited to the assets
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of the Funds and that the Sub-Adviser shall not seek satisfaction of any such
obligation from the shareholders of the Group nor from any Trustee, Group
employee or agent of the Group.
10. Duration, Renewal, Termination and Amendment. This Agreement shall become
effective as of the date first written above and, unless sooner terminated as
provided herein, shall continue until December 31, 1996.
After December 31, 1996, if not terminated, this Agreement shall continue in
effect with respect to Funds for successive periods of approximately twelve
months each ending on December 31 of each year, provided such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Group's Board of Trustees who are not parties to this Agreement
or interested persons of any party to this Agreement, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the vote
of a majority of the Group's Board of Trustees or by the vote of a majority of
all votes attributable to the outstanding Shares of a Fund. This Agreement may
be terminated as to a Fund at any time, without payment of any penalty, by the
Group's Board of Trustees, by the Adviser, or by a vote of the majority of the
outstanding voting securities of the Fund, upon 60 days' prior written notice
to the Sub-Adviser, or by the Sub-Adviser upon 150 days' prior written notice
to the Adviser and the Group's Board of Trustees, or upon such shorter notice
as may be mutually agreed upon. This Agreement shall terminate automatically
and immediately upon termination of the Group/Adviser Agreement.
This Agreement shall terminate automatically and immediately in the event of
its assignment. No assignment of this Agreement shall be made by the
Sub-Adviser without the consent of the Adviser and the Board of Trustees of the
Group. The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meaning set forth for such terms in the 1940 Act.
This Agreement may be amended at any time by the Adviser and the Sub-Adviser,
subject to approval by the Group's Board of Trustees and, if required by
applicable SEC rules and regulations, a vote of a majority of the Fund's
outstanding voting securities.
11. Confidential Relationship. Any information and advice furnished by either
party to this Agreement to the other shall be treated as confidential and shall
not be disclosed to third parties except as required by law.
12. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Michigan and the applicable provisions
of the 1940 Act. To the extent applicable law of the State of Michigan, or any
of the provisions herein, conflict with applicable provisions of the 1940 Act,
the latter shall control.
14. Names. The names "The Parkstone Group of Funds" and "Trustees of the
Parkstone Group of Funds" refer respectively to the Trust created and the
Trustees, as trustees but no individually or personally, acting from time to
time under an Agreement and Declaration of Trust dated March 25, 1987 which is
hereby referred to and a copy of which is on file at the office of
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the State Secretary of the Commonwealth of Massachusetts and the principal
office of the Trust. The obligations of "The Parkstone Group of Funds" entered
into in the name or on behalf thereof by any of the Trustees, representatives
or agents are made not individually, but in such capacities, and are not
binding upon any of the Trustees, shareholders, or representatives of the Trust
personally, but bind only the property of the Trust, and all persons dealing
with any class of shares of the Trust must look solely to the property of the
Trust belonging to such class for the enforcement of any claims against the
Trust.
15. Miscellaneous. This Agreement constitutes the full and complete agreement
of the parties hereto with respect to the subject matter hereof. Each party
agrees to perform such further actions and execute such further documents as
are necessary to effectuate the purposes hereof. The captions in this
Agreement are included for convenience only and in no way define or delimit any
of the provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in several counterparts, all of which together shall
for all purposes constitute one Agreement, binding on all parties.
IN WITNESS HEREOF, the parties have duly executed this Agreement as of the
date first written above.
FIRST OF AMERICA INVESTMENT CORPORATION
By: /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
Its: President
GULFSTREAM GLOBAL INVESTORS, LTD.
By: Tull, Doud, Xxxxx & Triltsch, Inc., General Partner
By: /s/ C. XXXXXX XXXX
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C. Xxxxxx Xxxx
Its: President
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The Parkstone Group of Funds and First of America Investment Corporation each
acknowledge receipt of Gulfstream Global Investors, Ltd. Disclosure Statement
as required by Rule 204-3 under the Investment Advisers Act of 1940 not less
than 48 hours prior to the execution date of this Agreement.
THE PARKSTONE GROUP OF FUNDS
By: /s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx
Its: President
FIRST OF AMERICA INVESTMENT
CORPORATION
By: /s/ XXXXXXX X. XXXX
-------------------------
Xxxxxxx X. Xxxx
Its: President
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Dated: March 1, 1995
SCHEDULE A
To the Sub-Investment Advisory Agreement
between First of America Investment Corporation and
Gulfstream Global Investors, Ltd.
NAME OF FUND DATE COMPENSATION
------------ ---- ------------
Parkstone International March 1, 1995 Annual Rate of .50% of the first $50 Million
Discovery Fund of the average daily net assets under
management pursuant to agreements with First
of America Investment Corporation, .45% of
the average daily net assets between $50
Parkstone Balanced Fund March 1, 1995 Million and $100 Million, .40% of the
average daily net assets between $100
Million and $400 Million, and .30% of the
average daily net assets above $400 Million,
provided, the minimum annual fee shall be
$75,000.
Parkstone Emerging Markets March 1, 1995 Annual Rate of .50% of the average daily net
Fund assets under management pursuant to
agreements with First of America Investment
Corporation
FIRST OF AMERICA INVESTMENT CORPORATION
By: /s/ XXXXXXX X. XXXX
--------------------------------
Xxxxxxx X. Xxxx
Its: President
GULFSTREAM GLOBAL INVESTORS, LTD.
By: Tull, Doud, Xxxxx & Triltsch, Inc.
General Partner
By: /s/ C. XXXXXX XXXX
--------------------------------
C. Xxxxxx Xxxx
Its: President
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