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EXHIBIT 5(c)
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
Advantage Fund, a Massachusetts business trust and an open-end management
investment company (the "Trust"), 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 Trust 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 August 18, 1993 between the Adviser and the Trust (the
"Trust/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 Trust'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 Trust'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 Trust in any
way.
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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 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 Trust or make
loans to the Trust;
(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 Trust'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
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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 discretion. In no instance will portfolio
securities be purchased from or sold to the Trust,
Security Management 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
Trust'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 Trust all records and other
information relative to the Adviser and the Trust 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 Trust and
Adviser, Sub-Adviser may divulge such information to
duly constituted authorities, or when so requested by
the Adviser and the Trust, 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 Trust, the
Sub-Adviser's personnel will not inquire or take into
consideration whether the issuers of securities
proposed for purchase or sale for the Trust'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 Trust; and
(h) render, upon request of the Adviser or the Trust'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
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or the Trust any such records upon the Adviser's or the Trust'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.
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 Trust's Registration Statement. If the Adviser is required to
reduce its fee or to reimburse the Trust 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 Trust'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 Security
Management Company (under the Trust's Administration Agreement with Security
Management Company) by the Trust 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 Trust 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 Trust'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 Trust, or the holders of
securities of the Trust 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
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fiduciary duty with respect to the receipt of compensation for services (all
within the meaning of 0000 Xxx) in respect of Adviser or the Trust in the
performance of duties hereunder.
9. LIMITATION OF TRUST'S LIABILITY. The Sub-Adviser acknowledges that
it has received notice of and accepts the limitations upon the Trust's liability
set forth in its Declaration of Trust. The Sub-Adviser agrees that any of the
Trust's obligations shall be limited to the assets of the Funds and that the
Sub-Adviser shall not seek satisfaction of any such obligation from the
shareholders of the Trust nor from any Trustee, Trust employee or agent of the
Trust.
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 Trust'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 Trust'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 Trust'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 Trust'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 Trust/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
Trust. 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 Trust'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
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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 Advantage Fund" and "Trustees of
the Parkstone Advantage Fund" 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 May 18, 1993 which is
hereby referred to and a copy of which is on file at the office of the State
Secretary of the Commonwealth of Massachusetts and the principal office of the
Trust. The obligations of "The Parkstone Advantage Fund" 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 WHEREOF, 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 Advantage Fund 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 ADVANTAGE FUND
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
Its: President
FIRST OF AMERICA INVESTMENT
CORPORATION
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 COMPENSATION DATE
------------ ------------ ----
International Discovery Fund Annual Rate of 0.50% of the first $50 March 1, 1995
million of the average daily net assets
under management pursuant to
agreements with First of America
Investment Corporation, 0.45% of the
average daily net assets between $50
million and $100 million, 0.40% of the
average daily net assets between $100
million and $400 million, and 0.30% of
the average daily net assets above $400
million, provided, the minimum annual
fee shall be $75,000.
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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