ITEM 77Q(1)(e) - Form of Sub-Advisory Agreement
(Legal & General Investment Management America, Inc.
on behalf of the Equity Index Fund, Value Equity Fund,
International Equity Index Fund and Global Natural Resources
Equity Fund)
SUB-ADVISORY AGREEMENT
THIS SUB-ADVISORY AGREEMENT ("Contract") is made among GUIDESTONE
FUNDS, a Delaware business trust ("Trust"), and GUIDESTONE CAPITAL
MANAGEMENT, LLC ("Adviser"), a non-profit limited liability company
organized under the laws of the State of Texas, and
___________________________, a registered investment adviser
organized under the laws of the State of ______________ ("Sub-
Adviser"
WHEREAS, the Adviser has entered into an Investment Advisory
Agreement ("Management Agreement") with the Trust, an open-end
management investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the _________________ ("Fund") is a series of the Trust;
and
WHEREAS, under the Management Agreement, the Adviser has agreed to
provide certain investment advisory services to the Fund; and
WHEREAS, the Adviser is authorized under the Management Agreement
to delegate its investment advisory responsibilities to one or more
persons or companies; and
WHEREAS, the Board of Trustees of the Trust ("Board") and the
Adviser desire that the Adviser retain the Sub-Adviser to render
investment advisory services for the portion of the Fund's assets
allocated to the Sub-Adviser, as determined from time to time by the
Adviser, in the manner and on the terms hereinafter set forth; and
WHEREAS, the Sub-Adviser is willing to furnish such services to
the Adviser and the Fund;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the Trust, the Adviser and the Sub-
Adviser agree as follows:
1. Appointment. The Adviser and the Trust hereby appoint and
employ the Sub-Adviser as a discretionary portfolio manager, on the
terms and conditions set forth herein, of those assets of the Fund
which the Adviser determines to assign to the Sub-Adviser (those
assets being referred to as the "Fund Account"). The Adviser may
from time to time make additions to and withdrawals, including but
not limited to cash and cash equivalents, from the Fund Account,
subject to verbal notification and subsequent written notification
to the Sub-Adviser. The Sub-Adviser will be an independent
contractor and will have no authority to act for or represent the
Trust or the Adviser in any way or otherwise be deemed an agent of
the Trust or the Adviser except as expressly authorized in this
Contract or another writing by the Trust, the Adviser and the Sub-
Adviser.
2. Acceptance of Appointment. The Sub-Adviser accepts that
appointment and agrees to render the services herein set forth, for
the compensation herein provided.
3. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Board and of
the Adviser, including all written guidelines, policies and
procedures adopted by the Trust or the Adviser that are provided to
the Sub-Adviser, the Sub-Adviser will provide a continuous
investment program with respect to the Fund Account. The Sub-
Adviser will determine from time to time what investments in the
Fund Account will be purchased, retained or sold by the Fund. The
Sub-Adviser will be responsible for placing purchase and sell orders
for investments and for other related transactions with respect to
the Fund Account. The Sub-Adviser will provide services under this
Contract in accordance with the Fund's investment objective,
policies and restrictions and the description of its investment
strategy and style, all as stated in the Trust's registration
statement under the 1940 Act, and any amendments or supplements
thereto ("Registration Statement") of which the Sub-Adviser has
written notice. The Sub-Adviser is authorized on behalf of the Fund
Account to enter into and execute any documents required to effect
transactions with respect to the Fund Account, provided that such
transactions are in accord with the Registration Statement and with
all written guidelines, policies and procedures adopted by the Trust
or the Adviser that are provided to the Sub-Adviser.
(b) In accordance with the Fund's investment policies described
in the Registration Statement, the Sub-Adviser is responsible for
avoiding investment of Fund Account assets in the securities issued
by any company that is publicly recognized, as determined by
GuideStone Financial Resources of the Southern Baptist Convention
("GuideStone Financial Resources"), as being in the liquor, tobacco,
gambling, pornography or abortion industries, or any company whose
products, services or activities are publicly recognized, as
determined by GuideStone Financial Resources, as being incompatible
with the moral and ethical posture of GuideStone Financial
Resources. The Adviser shall provide in writing to the Sub-Adviser
a list of such prohibited companies, which the Adviser in its sole
discretion will amend or supplement from time to time. The Adviser
will provide the Sub-Adviser with such amendments or supplements on
a timely basis, and any such changes shall become effective once
they have been received by the Sub-Adviser. If the Sub-Adviser has
a question about whether any proposed transaction with respect to
the Fund Account would be in compliance with such investment
policies, it may consult with the Adviser during normal business
hours, and the Adviser will provide instructions upon which the Sub-
Adviser may rely in purchasing and selling securities for the Fund
Account.
(c) The Sub-Adviser agrees that, in placing orders with brokers,
it will seek to obtain the best net result in terms of price and
execution, considering all of the circumstances, and shall maintain
records adequate to demonstrate compliance with this requirement;
provided that, on behalf of the Fund, and in compliance with Section
28(e) of the Securities Exchange Act of 1934, the Sub-Adviser may,
in its discretion, use brokers (including brokers that may be
affiliates of the Sub-Adviser to the extent permitted by Section
3(d) hereof) who provide the Sub-Adviser with research, analysis,
advice and similar services to execute portfolio transactions, and
the Sub-Adviser may pay to those brokers in return for brokerage and
research services a higher commission than may be charged by other
brokers, subject to the Sub-Adviser's determining in good faith that
such commission is reasonable in terms either of the particular
transaction or of the overall responsibility of the Sub-Adviser to
the Fund and its other clients and that the total commissions paid
by the Fund will be reasonable in relation to the benefits to the
Fund over the long term. The Sub-Adviser agrees to provide the
Adviser with reports or other information regarding brokerage and
benefits received therefrom, upon the Adviser's reasonable request.
In no instance will portfolio securities be purchased from or sold
to the Sub-Adviser, any other investment sub-adviser that serves as
sub-adviser to one or more series of the Trust, or any affiliated
person thereof, except in accordance with the 1940 Act, the
Investment Advisers Act of 1940, as amended ("Advisers Act"), and
the rules under each, and all other federal and state laws or
regulations applicable to the Trust and the Fund, or in accordance
with an order of exemption received from the United States
Securities and Exchange Commission ("SEC"). Whenever the Sub-
Adviser simultaneously places orders to purchase or sell the same
security on behalf of the Fund Account and one or more other
accounts advised by the Sub-Adviser, the orders will be allocated as
to price and amount among all such accounts in a manner the Sub-
Adviser believes to be equitable over time and consistent with its
fiduciary obligations to each account.
(d) Except as permitted by law or an exemptive order or rule of
the SEC, and the Trust's policies and procedures adopted
thereunder, the Sub-Adviser agrees that it will not execute without
the prior written approval of the Adviser any portfolio
transactions for the Fund Account with a broker or dealer which is
(i) an affiliated person of the Trust, the Adviser or any sub-
adviser for any series of the Trust; (ii) a principal underwriter
of the Trust's shares; or (iii) an affiliated person of such an
affiliated person or principal underwriter. The Adviser agrees
that it will provide the Sub-Adviser with a written list of such
brokers and dealers and will, from time to time, update such list
as necessary. The Sub-Adviser agrees that it will provide the
Adviser with a written list of brokers and dealers that are
affiliates of the Sub-Adviser and will, from time to time, update
such list as necessary.
(e) In furnishing services hereunder, the Sub-Adviser will not
consult with any other sub-adviser to the Fund, any other series of
the Trust, or any other investment company under common control
with the Trust concerning transactions of the Fund in securities or
other assets. This will not be deemed to prohibit: (i) the Sub-
Adviser from consulting with any of its affiliated persons
concerning transactions in securities or other assets; (ii) the
Sub-Adviser from consulting with any of the other covered sub-
advisers concerning compliance with paragraphs (a) and (b) of Rule
12d3-1; and (iii) the Sub-Adviser from consulting with a successor
sub-adviser of the Fund in order to effect an orderly transition of
sub-advisory duties so long as such consultations do not concern
transactions prohibited by Section 17(a) of the 1940 Act.
(f) The Sub-Adviser will maintain all books and records required
to be maintained pursuant to the 1940 Act and the rules and
regulations promulgated thereunder with respect to actions by the
Sub-Adviser on behalf of the Fund, and will furnish the Board, the
Adviser or the Fund's administrator ("Administrator") with such
periodic and special reports as any of them reasonably may request.
In compliance with the requirements of Rule 31a-3 under the 1940
Act, the Sub-Adviser hereby agrees that all records that it
maintains for the Fund are the property of the Trust, agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any records that it maintains for the Trust and that are required to
be maintained by Rule 31a-1 under the 1940 Act, and further agrees
to surrender promptly to the Trust a complete set of any records
that it maintains for the Fund upon request by the Trust.
(g) All transactions will be consummated by payment to or
delivery by the custodian designated by the Trust (the
"Custodian"), or such depositories or agents as may be designated
by the Custodian in writing, of all cash and/or securities due to
or from the Fund Account, and the Sub-Adviser shall not have
possession or custody thereof. The Sub-Adviser shall advise the
Custodian and confirm in writing to the Trust, to the Adviser and
any other designated agent of the Fund, including the
Administrator, all investment orders for the Fund Account placed by
it with brokers and dealers at the time and in the manner set forth
in Rule 31a-1 under the 1940 Act. For purposes of the foregoing
sentence, communication via electronic means will be acceptable as
agreed to in writing from time to time by the Adviser. The Trust
shall issue to the Custodian such instructions as may be
appropriate in connection with the settlement of any transaction
initiated by the Sub-Adviser. The Trust shall be responsible for
all custodial arrangements and the payment of all custodial charges
and fees, and, upon giving proper instructions to the Custodian,
the Sub-Adviser shall have no responsibility or liability with
respect to custodial arrangements or the acts, omissions or other
conduct of the Custodian, except that it shall be the
responsibility of the Sub-Adviser to notify the Adviser if the
Custodian fails to confirm in writing proper execution of the
instructions.
(h) The Sub-Adviser agrees to provide, at such times as shall be
reasonably requested by the Board or the Adviser, the analysis and
reports specified on Schedule A attached hereto, including without
limitation monthly reports setting forth the investment performance
of the Fund Account. The Sub-Adviser also agrees to make available
to the Board and Adviser any economic, statistical and investment
services that the Sub-Adviser normally makes available to its
institutional or other customers.
(i) In accordance with procedures adopted by the Board, as
amended from time to time, the Sub-Adviser will assist the
Administrator and/or the Fund in determining the fair valuation of
all portfolio securities held in the Fund Account and will use its
reasonable efforts to arrange for the provision of valuation
information or a price(s) for each portfolio security held in the
Fund Account for which the Administrator does not obtain prices in
the ordinary course of business from an automated pricing service.
4. Further Duties. In all matters relating to the performance of
this Contract, the Sub-Adviser will act in conformity with the
provisions of the Trust's Trust Instrument, By-Laws and Registration
Statement of which it has received written notice, with all written
guidelines, policies and procedures adopted by the Trust as
applicable to the Fund Account that are provided to the Sub-Adviser
in writing, and with the written instructions and written directions
of the Board and the Adviser; and will comply with the requirements
of the 1940 Act and Advisers Act and the rules under each, and all
other federal and state laws and regulations applicable to the Trust
and the Fund. The Adviser agrees to provide to the Sub-Adviser
copies of the Trust's Trust Instrument, By-Laws, Registration
Statement, written guidelines, policies and procedures adopted by
the Trust as applicable to the Fund Account, written instructions
and directions of the Board and the Adviser, and any amendments or
supplements to any of these materials as soon as practicable after
such materials become available.
5. Proxies. Unless the Adviser gives written instructions to the
contrary, provided the Custodian has timely forwarded the relevant
proxy materials, the Sub-Adviser will vote all proxies solicited by
or with respect to the issuers of securities in which assets of the
Fund Account may be invested from time to time. The Adviser shall
instruct the Custodian to forward or cause to be forwarded to the
Sub-Adviser (or its designated agent) all relevant proxy
solicitation materials.
6. Expenses. During the term of this Contract, the Sub-Adviser
will bear all expenses incurred by it in connection with its
services under this Contract other than the cost of securities
(including brokerage commissions, transactional fees and taxes, if
any) purchased for the Fund. The Fund shall be responsible for its
expenses.
7. Compensation. The compensation of the Sub-Adviser for its
services under this Contract shall be calculated daily and paid
monthly by the Trust, and not the Adviser, in accordance with the
attached Schedule B. The Sub-Adviser shall not be responsible for
any expenses incurred by the Fund or the Trust. If this Contract
becomes effective or terminates before the end of any month, the fee
for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the
case may be, shall be pro-rated according to the proportion that
such period bears to the full month in which such effectiveness or
termination occurs. The Adviser shall be responsible for computing
the fee based upon a percentage of the average daily net asset value
of the assets of the Fund Account.
8. Limitation of Liability. The Sub-Adviser shall not be liable
for any loss due solely to a mistake of investment judgment, but
shall be liable for any loss which is incurred by reason of an act
or omission of its employee, partner, director or affiliate, if such
act or omission involves willful misfeasance, bad faith or gross
negligence, or breach of its duties or obligations hereunder,
whether express or implied. Nothing in this paragraph shall be
deemed a limitation or waiver of any obligation or duty that may not
by law be limited or waived.
9. Indemnification.
(a) The Adviser shall indemnify the Sub-Adviser or any of its
directors, officers, employees or affiliates for all losses,
damages, liabilities, costs and expenses (including legal)
("Losses") incurred by the Sub-Adviser by reason of or arising out
of any act or omission by the Adviser under this Contract, or any
breach of warranty, representation or agreement hereunder, except to
the extent that such Losses arise as a result of the negligence,
gross negligence, willful misfeasance or bad faith of the Sub-
Adviser or the Sub-Adviser's breach of fiduciary duty to the
Adviser.
(b) The Trust shall indemnify the Sub-Adviser or any of its
directors, officers, employees or affiliates for all losses,
damages, liabilities, costs and expenses (including legal)
("Losses") incurred by the Sub-Adviser by reason of or arising out
of any act or omission by the Trust under this Contract, or any
breach of warranty, representation or agreement hereunder, except to
the extent that such Losses arise as a result of the negligence,
gross negligence, willful misfeasance or bad faith of the Sub-
Adviser or the Sub-Adviser's breach of fiduciary duty to the Trust.
(c) The Sub-Adviser shall indemnify the Adviser or any of its
directors, officers, employees or affiliates for all losses,
damages, liabilities, costs and expenses (including legal)
("Losses") incurred by the Adviser by reason of or arising out of
any act or omission by the Sub-Adviser under this Contract if such
act or omission involves the negligence, gross negligence, willful
misfeasance, bad faith or breach of fiduciary duty of the Sub-
Adviser, or any breach of warranty, representation or agreement
hereunder, except to the extent that such Losses arise as a result
of the negligence, gross negligence, willful misfeasance or bad
faith of the Adviser or the Adviser's breach of fiduciary duty to
the Sub-Adviser.
(d) The Sub-Adviser shall indemnify the Trust or any of its
trustees, officers, employees or affiliates for all losses, damages,
liabilities, costs and expenses (including legal) ("Losses")
incurred by the Trust by reason of or arising out of any act or
omission by the Sub-Adviser under this Contract if such act or
omission involves the negligence, gross negligence, willful
misfeasance, bad faith or breach of fiduciary duty of the Sub-
Adviser, or any breach of warranty, representation or agreement
hereunder, except to the extent that such Losses arise as a result
of the negligence, gross negligence, willful misfeasance or bad
faith of the Trust or the Trust's breach of fiduciary duty to the
Sub-Adviser.
10. Representations, Warranties and Agreements of the Trust. The
Trust represents, warrants and agrees that:
(a) The Adviser and the Sub-Adviser each has been duly appointed
by the Board of Trustees of the Trust to provide investment services
to the Fund Account as contemplated hereby.
(b) The Trust will cause the Adviser to deliver to the Sub-
Adviser a true and complete copy of the Fund's Registration
Statement as effective from time to time, and such other documents
or instruments governing the investment of the Fund Account and such
other information as reasonably requested by the Sub-Adviser, as is
necessary for the Sub-Adviser to carry out its obligations under
this Contract.
11. Representations of Adviser. The Adviser represents, warrants
and agrees that:
(a) The Adviser has been duly authorized by the Board of Trustees
of the Trust to delegate to the Sub-Adviser the provision of
investment services to the Fund Account as contemplated hereby.
(b) The Adviser (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long
as this Contract remains in effect; (ii) is not prohibited by the
1940 Act, the Advisers Act or other law, regulation or order from
performing the services contemplated by this Contract; (iii) has met
and will seek to continue to meet for so long as this Contract
remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency necessary to be met in order to
perform the services contemplated by this Contract; (iv) has the
authority to enter into and perform the services contemplated by
this Contract; and (v) will promptly notify the Sub-Adviser of the
occurrence of any event that would disqualify the Adviser from
serving as an investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise.
12. Representations of Sub-Adviser. The Sub-Adviser represents,
warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so
long as this Contract remains in effect; (ii) is not prohibited by
the 1940 Act, the Advisers Act or other law, regulation or order
from performing the services contemplated by this Contract;
(iii) has met and will seek to continue to meet for so long as this
Contract remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency necessary to be met in order to
perform the services contemplated by this Contract; (iv) has the
authority to enter into and perform the services contemplated by
this Contract; and (v) will promptly notify the Trust and Adviser of
the occurrence of any event that would disqualify the Sub-Adviser
from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise. The Sub-
Adviser will also immediately notify the Trust and the Adviser if it
is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, or any
threat thereof, before or by any court, public board or body,
directly involving the affairs of the Fund.
(b) The Sub-Adviser has adopted and implemented written policies
and procedures, as required by Rule 206(4)-7 under the Advisers Act,
which are reasonably designed to prevent violations of federal
securities laws by the Sub-Adviser, its employees, officers, and
agents ("Compliance Procedures") and, the Adviser and the Trust have
been provided a copy of a summary of the Compliance Procedures and
any amendments thereto.
(c) The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide the Adviser and the Trust with a copy of such code of
ethics, together with evidence of its adoption and a certification
that the Sub-Adviser has adopted procedures reasonably necessary to
prevent violations of such code of ethics. Within thirty (30) days
following the end of the last calendar quarter of each year that
this Contract is in effect, the Sub-Adviser shall furnish to the
Trust and12 the Adviser (a) a written report that describes any
issues arising under the code of ethics or procedures during the
relevant period, including, but not limited to, information about
material violations of the code or procedures and sanctions imposed
in response to material violations; and (b) a written certification
that the Sub-Adviser has adopted procedures reasonably necessary to
prevent violations of the code of ethics. In addition, the Sub-
Adviser shall (i) promptly report to the Board in writing any
material amendments to its code of ethics; (ii) immediately furnish
to the Board all material information regarding any violation of the
code of ethics by any person who would be considered an Access
Person under the Trust's and Adviser's code of ethics, if such
person were not subject to the Sub-Adviser's code of ethics; and
(iii) provide quarterly reports to the Adviser on any material
violations of the Sub-Adviser's code of ethics during the period so
indicated. Upon the reasonable written request of the Adviser, the
Sub-Adviser shall permit the Adviser, its employees or its agents to
examine the reports required to be made to the Sub-Adviser by Rule
17j-1(c)(1) and all other records relevant to the Sub-Adviser's code
of ethics.
(d) The Sub-Adviser has provided the Trust and the Adviser with a
copy of its Form ADV, which as of the date of this Contract is its
Form ADV as most recently filed with the SEC and promptly will
furnish a copy of any material amendments to the Trust and the
Adviser at least annually. Such amendments shall reflect
significant developments affecting the Sub-Adviser, as required by
the Advisers Act.
(e) The Sub-Adviser will notify the Trust and the Adviser of any
change of control of the Sub-Adviser, including any change of its
general partners, controlling persons or 25% shareholders, as
applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Fund Account or senior management of the
Sub-Adviser, in each case prior to such change if the Sub-Adviser is
aware of such change but in any event not later than promptly after
such change. The Sub-Adviser agrees to bear all reasonable expenses
of the Trust and Adviser, if any, arising out of such change.
(f) The Sub-Adviser agrees to maintain an appropriate level of
errors and omissions or professional liability insurance coverage
equal to not less than $5,000,000.
(g) The Sub-Adviser will not use any material, non-public
information concerning portfolio companies that may be in or come
into its possession or the possession of any of its affiliates or
employees, nor will the Sub-Adviser seek to obtain any such
information, in providing investment advice or investment management
services to the Fund.
(h) The Sub-Adviser agrees that neither it, nor any of its
affiliates, will in any way refer directly or indirectly to its
relationship with the Trust, the Fund, the Adviser or any of their
respective affiliates in offering, marketing or other promotional
materials without the express written consent of the Adviser.
However, the Sub-Adviser may use the performance of the Fund Account
in its composite performance.
13. Services Not Exclusive. The services furnished by the Sub-
Adviser hereunder are not to be deemed to be exclusive, and the Sub-
Adviser shall be free to furnish similar services to others, except
as prohibited by applicable law or agreed upon in writing among the
Sub-Adviser, the Trust and the Adviser.
14. Confidentiality. Subject to the duty of the parties to
comply with applicable law, including any demand of any regulatory
or taxing authority having jurisdiction, the parties hereto shall
treat as confidential all material non-public information pertaining
to the Fund Account and the actions of the Sub-Adviser, the Adviser
and the Trust in respect thereof.
15. Authorized Representatives of the Adviser. The Sub-
Adviser is expressly authorized to rely upon any and all
instructions, approvals and notices given on behalf of the Adviser
by any one or more of those persons designated as representatives of
the Adviser whose names, titles and specimen signatures appear in
Schedule C attached hereto. The Adviser may amend such Schedule C
from time to time by written notice to the Sub-Adviser. The Sub-
Adviser shall continue to rely upon these instructions until
notified by the Adviser to the contrary.
16. Duration and Termination.
(a) Unless sooner terminated as provided herein, this Contract
shall continue in effect for a period of two years subsequent to its
initial approval, and thereafter, if not terminated, shall continue
automatically from year to year, provided that such continuance is
specifically approved annually in accordance with the 1940 Act: (i)
by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting
securities of each Fund, unless any requirement for a vote of the
outstanding voting securities of a Fund is rendered inapplicable by
an order of exemption from the SEC.
(b) Notwithstanding the foregoing, this Contract may be
terminated by any party hereto at any time, without the payment of
any penalty, immediately upon written notice to the other party, but
any such termination shall not affect the status, obligations, or
liabilities of any party hereto to the other arising prior to
termination. This Contract will terminate automatically in the
event of its assignment or upon termination of the Management
Agreement as it relates to the Fund.
17. Amendment of this Contract. No provision of this Contract
may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is
sought. No material amendment of this Contract shall be effective
until approved (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Contract or interested persons
of any such party, and (ii) by the vote of a majority of the
outstanding voting securities of the Fund (unless the Trust receives
an SEC order or no-action letter permitting it to modify the
Contract without such vote or a regulation exists under the 1940 Act
that permits such action without such vote).
18. Limitation of Trustee and Shareholder Liability. The Adviser
and Sub-Adviser are hereby expressly put on notice of the limitation
of shareholder liability as set forth in the Trust Instrument of the
Trust and agree that obligations assumed by the Trust pursuant to
this Contract shall be limited in all cases to the Trust and its
assets, and if the liability relates to one or more series of the
Trust, the obligations hereunder of the Trust shall be limited to
the respective assets of the Fund. The Adviser and Sub-Adviser
further agree that they shall not seek satisfaction of any such
obligation from the shareholders or any individual shareholder of
the Trust or the Fund, nor any officer, director or trustee of the
Trust, neither as a group nor individually.
19. Governing Law. This Contract shall be construed in
accordance with the 1940 Act and the laws of the State of Delaware,
without giving effect to the conflicts of laws principles thereof.
To the extent that the applicable laws of the State of Delaware
conflict with the applicable provisions of the 1940 Act, the latter
shall control.
20. Miscellaneous. The captions in this Contract are included
for convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction
or effect. If any provision of this Contract shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Contract shall not be affected thereby. This
Contract shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Contract, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell" and "security"
shall have the same meaning as such terms have in the 1940 Act,
subject to such exemption as may be granted by the SEC by any rule,
regulation or order. Where the effect of a requirement of the
federal securities laws reflected in any provision of this Contract
is made less restrictive by a rule, regulation or order of the SEC,
whether of special or general application, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
This Contract and the Schedule(s) attached hereto embody the entire
agreement and understanding among the parties. This Contract may be
signed in counterpart.
21. Notices. Any notice herein required is to be in writing
and is deemed to have been given to the Sub-Adviser, Adviser or the
Trust upon receipt of the same at their respective addresses set
forth below. All written notices required or permitted to be given
under this Contract will be delivered by personal service, by
postage mail - return receipt requested or by facsimile machine or a
similar means of same day delivery which provides evidence of
receipt (with a confirming copy by mail as set forth herein). All
notices provided to Adviser will be sent to the attention of Xxxxxxx
Xxxxxxxx. All notices provided to the Sub-Adviser will be sent to
the attention of ____________________________.
[rest of page left intentionally blank]
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their duly authorized signatories as of
________________.
GUIDESTONE FUNDS -
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attest
By:___________________________ By:________________________
Name: Xxxxxxx Xxxxxxxx Name: Xxxx X. Xxxxx
Title: Vice President
- Fund Operations Title: President
GUIDESTONE CAPITAL MANAGEMENT, LLC
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attest
By:___________________________ By:__________________
Name: Xxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President and Title: President
Chief Investment Officer
SUB-ADVISER
Attest
By: _____________________________ By: ___
Name: ________________________ Name: _______
Title: ________________________ Title: _____
SCHEDULE A
REPORTS TO BE PROVIDED BY SUB-ADVISER
EFFECTIVE DATE _______
Monthly
1. Transaction and valuation reports, including investment
performance.
2. Report showing the derivative holdings. Such report showing
derivative holdings should include a detailed calculation
indicating the account is in compliance with the CFTC exemption
provisions as outlined in the Investment Manager Mandate, and,
if not specifically addressed within the Investment Manager
Mandate, one of the following exemptions allowed under CFTC Rule
4.5 for registered mutual funds: (1) the percentage of the
aggregate net notional value of all derivative positions in
CFTC-regulated derivatives to the total liquidation value of the
accounts' portfolio; or (2) the percentage of the aggregate
initial margin and premiums for all positions in CFTC-regulated
derivatives to the total liquidation value of the accounts'
portfolio.
3. Report on transactions with affiliated broker/dealers on both an
Agency and Principal basis.
Quarterly
1. GuideStone Funds Compliance Checklist.
2. Quarterly Certification Memorandum - A statement to the effect
that the Sub-Adviser has discharged its responsibilities in
accordance with the Investment Manager Mandate and the
GuideStone Funds Compliance Checklist, noting any instances of
non-compliance during the quarter, and that the Sub-Adviser will
continue to maintain the Fund Account in compliance. Report to
GuideStone Capital Management, LLC any changes or material
violations of the Sub-Adviser's Code of Ethics during the
quarter. Also, a statement to the effect that the Sub-Adviser
has discharged its responsibilities in accordance with Rule 31a-
1 and 204-2.
3. Commission recapture report.
4. All fixed income Sub-Advisers utilizing derivatives, provide a
report that demonstrates stress testing of the Fund Account. At
a minimum, such testing should demonstrate the effect on the
Fund Account of a 100 basis point move in interest rates along
with quantification of the duration contribution of the
derivatives in the Fund Account.
5. All equity Sub-Advisers provide a report documenting how any
proxies were voted during the quarter.
6. Attribution analysis report.
7. Liquidity summary which is a one page report showing a summary %
of illiquid and deemed liquid securities by month for each of
the types of securities on the 144A worksheet.
8. Brokerage report in an Excel file showing the name of the
broker/dealer, the shares, the commission in U.S. dollars and
the date of the transaction. For fixed income Sub-Advisers this
will include Agency transactions only.
9. Report on notice of regulatory examinations and copies of any
exam reports.
Annually
1. SAS 70 report or other internal control reports. If a standard
internal control report is not available please provide a
description of what controls are in place to prevent things such
as rogue trading, trades outside our guidelines or the Fund
Account investment objectives, and general violation of the Sub-
Adviser's policies or code of ethics.
2. Updated proxy voting policy.
3. Current code of ethics and Rule 17j-1 certification paragraph.
4. Report showing proof of liability and fiduciary insurance
coverage and ERISA bonding requirements.
5. Updated form ADV parts I and II, or more frequently if revised
during the year.
Periodic
1. Immediately furnish all material information regarding any
violation of the code of ethics by any person who would be
considered an Access Person under GuideStone Funds and
GuideStone Capital Management's code of ethics, if such person
were not subject to the Sub-Adviser's code of ethics.
2. Promptly notify GuideStone Capital Management, LLC of any
material event related to the organization that would be deemed
an important consideration in the ongoing relationship between
the Sub-Adviser and GuideStone Funds.
3. Timely advise GuideStone Capital Management, LLC of any
significant changes in the ownership, organizational structure,
financial condition or key personnel staffing of the Sub-
Adviser.
4. Advise GuideStone Capital Management, LLC of any changes in the
Fund Account manager.
5. Promptly inform GuideStone Capital Management, LLC of any major
changes in the Sub-Adviser's investment outlook, investment
strategy and/or Fund Account structure.
6. Meet with GuideStone Capital Management, LLC on a periodic basis
for a formal Fund Account review.
7. Advise GuideStone Capital Management, LLC of any pertinent
issues that the Sub-Adviser deems to be of significant interest.
8. Provide GuideStone Capital Management, LLC with reports or other
information regarding brokerage and benefits received there
from.
9. Provide copies of any other periodic or special report required
pursuant to the 1940 Act and the rules and regulations
promulgated there under with respect to actions by the Sub-
Adviser.
10. Promptly notify GuideStone Capital Management, LLC of any
material amendments to Sub-Adviser's code of ethics.
SCHEDULE B
SUB-ADVISORY FEES
This Schedule B contains the sub-advisory fee information
required by Section 7 of the Sub-Advisory Agreement among
GuideStone Funds ("Trust"), GuideStone Capital Management, LLC
("Adviser") and _______________________, ("Sub-Adviser") relating
to the _________________ ("Fund"), a series of the Trust.
Fee Schedule. Fees payable to the Sub-Adviser pursuant to
this Contract shall be calculated daily and paid monthly by the
Trust. The fees are calculated as of the close of trading on the
last business day of the month by applying the applicable fee rate
to the average daily assets of the Fund allocated to the Sub-
Adviser for that period. For purposes of calculating the fee, the
value of the Fund's assets shall be determined in the same manner
as that which the Fund uses to determine the net asset value of its
shares. The applicable annualized fee rate shall be as indicated
in the schedule below of the Fund's assets allocated to the Sub-
Adviser.
Average Daily Net Assets Annual Rate
SCHEDULE C
AUTHORIZED REPRESENTATIVES OF THE ADVISER
Name Title Specimen Signature
Xxxxx X. Xxxxx President
Xxxx X. Xxxxx Vice President and
Chief Investment Officer
Xxxxxxx Xxxxxxxx Vice President and Treasurer
Xxxxxxx Xxxxxxxx Vice President
- Fund Operations
Xxxxxxx X. Xxxxx Secretary
Xxxxxx X. Xxxx Chief Compliance Officer
