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Exhibit 5(c)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 22nd day of December, 1992 between THE PARKSTONE
GROUP OF FUNDS, a Massachusetts business trust (the "Trust"), and FIRST OF
AMERICA INVESTMENT CORPORATION, a wholly-owned Michigan-chartered subsidiary of
First of America Bank Michigan, N.A. (the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust desires to retain the Investment Adviser to provide, or
arrange for the provision of, investment advisory services to one or more
investment portfolios of the Trust (the "Funds") and the Investment Adviser
represents that it is willing and possesses legal authority to so furnish such
services; and
WHEREAS, the Investment Adviser is registered under the Investment Advisers
Act of 1940, as amended, and is engaged in the business of rendering investment
advisory services to the Trust and to others and desires to provide the
services described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Investment Adviser to act as
investment adviser to the Funds identified on Schedule A hereto for the period
and on the terms set forth in this Agreement. The Investment Adviser accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided. Additional investment portfolios may from time
to time be added to those covered by this Agreement by the parties executing a
new Schedule A which shall become effective upon its execution and shall
supersede any Schedule A having an earlier date.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) the Trust's Declaration of Trust, as executed on March 25, 1987 and as
filed with the Secretary of State of the Commonwealth of Massachusetts on March
27, 1987, and all amendments thereto or restatements thereof (such Declaration,
as presently in effect and as it shall from time to time be amended or
restated, is herein called the "Declaration of Trust");
(b) the Trust's Code of Regulations and amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission on April 8, 1987 and
all amendments thereto;
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(e) Post-Effective Amendment No. 17 to the Trust's Registration Statement
on Form N-1A under the Securities Act of 1933, as amended ("1933 Act") (File
No. 33-13283), and under the 1940 Act, as filed with the Securities and
Exchange Commission; and
(f) each Fund's most recent Prospectus and Statement of Additional
Information (such Prospectus and Statement of Additional Information, as
presently in effect, and all amendments and supplements thereto are herein
collectively called the "Prospectus").
The Trust will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject to the supervision of the Trust's Board of Trustees,
the Investment Adviser will provide, or arrange for the provision of, a
continuous investment program for each of the Funds, including investment
research and management with respect to all securities and investments and cash
equivalents in said Funds. The Investment Adviser will determine, or arrange
for others to determine, from time to time what securities and other
investments will be purchased, retained or sold by the Trust with respect to
the Funds and will implement, or arrange for others to implement, such
determinations through the placement, in the name of the Funds, of orders for
the execution of portfolio transactions with or through such brokers or dealers
as it may select. The Investment Adviser will provide, or arrange for the
provision of, the services under this Agreement in accordance with each of the
Funds' investment objectives, policies and restrictions as stated in the
Prospectus and resolutions of the Trust's Board of Trustees.
Subject to the provisions of this Agreement, the Declaration of Trust and the
1940 Act, the Investment Adviser directly and indirectly may select and enter
into contracts with one or more qualified investment advisers ("Sub-Advisers")
to provide to the Trust some or all of the services required by this Agreement.
With respect to any such appointment by the Investment Adviser of any of the
Sub-Advisers, the Investment Adviser will, as appropriate:
(a) advise the Sub-Advisers with respect to United States ("U.S.")
economic conditions and trends;
(b) assist Sub-Advisers with the placement of orders for the purchase and
sale of securities of U.S. issuers;
(c) assist and consult with the Sub-Advisers regarding the management of
the Funds' short-term cash balance positions denominated in U.S. dollars to
preserve liquidity in the Funds' assets, including the placement of orders for
U.S. money market instruments;
(d) assist and consult with the Sub-Advisers in connection with the Funds'
continuous investment programs; and
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(e) periodically review, evaluate and report to the Trust's Board of
Trustees with respect to the performance of the Sub-Advisers.
In fulfilling its responsibilities hereunder, the Investment Adviser agrees
that it will, or, with respect to services provided to the Trust by any of the
Sub-Advisers appointed by the Investment Adviser, that it will require that
each of the Sub-Advisers:
a. use the same skill and care in providing such services as it uses in
providing services to fiduciary accounts for which it has investment
responsibilities;
b. conform with all applicable Rules and Regulations of the Securities and
Exchange Commission and in addition will conduct its activities under this
Agreement (or any applicable sub-investment advisory agreement) in accordance
with any applicable regulations of any governmental authority pertaining to the
investment advisory activities of the Investment Adviser or Sub-Advisers;
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 Trust either
directly with the issuer or with an underwriter, market maker or broker or
dealer. In placing orders with brokers and dealers, the Investment Adviser
will use its reasonable best efforts to obtain, or require that each of the
Sub-Advisers obtain, prompt execution of orders in an effective manner at the
most favorable price. Consistent with this obligation, the Investment Adviser
and any of the Sub-Advisers may, to the extent permitted by law, purchase and
sell portfolio securities to and from 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 Investment Adviser or any of the Sub-Advisers or any of their
respective affiliates 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 Investment Adviser and any of the
Sub-Advisers are authorized to pay a broker or dealer who provides such
brokerage and research services a commission for effecting a securities
transaction for any of the Funds which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
the Investment Adviser or Sub-Advisers determine 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 Investment
Adviser or Sub-Advisers 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 Winsbury Company, Investment Adviser or any Sub-Adviser, or
any affiliated person of the Trust, except as may be permitted by the 1940 Act;
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e. maintain all books and records with respect to the Trust's securities
transactions 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 Trust all
records and other information relative to 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 of the Trust, the
Investment Adviser and any of the Sub-Advisers may divulge such information to
duly constituted authorities, or when so requested by the Trust, provided,
however, that nothing contained herein shall prohibit the Investment Adviser or
any of the Sub-Advisers from advertising or soliciting the public generally
with respect to other products or services regardless of whether such
advertisement or solicitation may include prior, present or potential
shareholders of the Funds; and
g. maintain its policy and practice of conducting its fiduciary functions
independently. In making investment recommendations for the Trust, the
Investment Adviser's or 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 Investment Adviser or Sub-Adviser
or of their respective parents, subsidiaries or affiliates. In dealing with
such customers, the Investment Adviser or Sub-Adviser and their respective
parents, subsidiaries, and affiliates will not inquire or take into
consideration whether securities of those customers are held by the Trust.
4. SERVICES NOT EXCLUSIVE. The services furnished by the Investment Adviser
and any Sub-Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser and any Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Agreement or any
sub-advisory agreement are not impaired thereby. It is understood that the
action taken by the Investment 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 Investment Adviser, and that a transaction in a specific
security may not be accomplished for all clients of the Investment Adviser at
the same time or at the same price.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records, if
any, which it maintains for the Trust are the property of the Trust and further
agrees to surrender promptly, and to require each of the Sub-Advisers to
surrender promptly, to the Trust any of such records upon the Trust's request.
The Investment Adviser further agrees to preserve, and to require each of the
Sub-Advisers to preserve, for the periods prescribed by Rule 31a-2 under the
1940 Act, the records required to be maintained by Rule 31a-1 under the 1940
Act.
6. EXPENSES. During the term of this Agreement, the Investment Adviser will
pay all expenses, including, as applicable, the compensation of any
Sub-Advisers directly appointed
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by it, 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 Trust.
7. COMPENSATION. For the services provided and the expenses assumed pursuant
to this Agreement, each of the Funds will pay the Investment Adviser and the
Investment Adviser will accept as full compensation therefor a fee set forth on
Schedule A hereto. Each of the Funds' obligations to pay the above-described
fee to the Investment Adviser will begin as of the date of the initial public
sale of shares in that Fund. Except as permitted by applicable law, the
Investment Adviser shall not be compensated on the basis of a share of capital
gains upon or capital appreciation of any of the Funds or any portion thereof.
If in any fiscal year the aggregate expenses of any of the Funds (as defined
under the securities regulations of any state having jurisdiction over the
Trust) exceed the expense limitations of any such state, the Investment Adviser
will reimburse the Fund for a portion of such excess expenses equal to such
excess times the ratio of the fees otherwise payable by the Fund to the
Investment Adviser hereunder to the aggregate fees otherwise payable by the
Fund to the Investment Adviser hereunder and to The Winsbury Company under the
Management and Administration Agreement between The Winsbury Company and the
Trust. The obligation of the Investment Adviser to reimburse the Funds
hereunder is limited in any fiscal year to the amount of its fee hereunder for
such fiscal year, provided, however, that notwithstanding the foregoing, the
Investment Adviser shall reimburse the Funds for such proportion of such excess
expenses regardless of the amount of fees paid to it during such fiscal year to
the extent that the securities regulations of any state having jurisdiction
over the Trust so require. Such expense reimbursement, if any, will be
estimated daily and reconciled and paid on a monthly basis.
8. LIMITATION OF LIABILITY. The Investment Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Funds
in connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under
this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective as to a
particular Fund as of the date first written above (or, if a particular Fund is
not in existence on that date, on the date a registration statement relative to
that Fund becomes effective with the Securities and Exchange Commission),
provided that it shall have been approved by a vote of a majority of the
outstanding voting securities of such Fund, in accordance with the requirements
under the 1940 Act, and, unless sooner terminated as provided herein, shall
continue in effect until December 22, 1994.
Thereafter, if not terminated, this Agreement shall continue in effect as to
a particular Fund 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
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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 such Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to a
particular Fund at any time on sixty days' written notice, without the payment
of any penalty, by the Trust (by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of such Fund) or by the
Investment Adviser. This Agreement will immediately terminate in the event of
its assignment. No assignment of this Agreement shall be made by the
Investment Adviser without the consent of the Board of Trustees of the Trust.
(As used in this Agreement, the terms "majority of the outstanding voting
securities, "interested persons" and "assignment" shall have the same meaning
of such terms in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. MISCELLANEOUS. The captions in this Agreement 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 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the State of Ohio.
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 not individually or personally, acting from time to time under the
Declaration of Trust and to which reference is hereby made and a copy of which
is on file at the office of the Secretary of the Commonwealth of Massachusetts
and elsewhere as required by law, and to any and all amendments thereto as
filed or hereafter filed. 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, interest-holders or
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any Fund of the Trust must look solely to the
assets of the Trust belonging to such Fund for the enforcement of any claims
against the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE PARKSTONE GROUP OF FUNDS
(Seal) By: /s/ G. XXXXXX XXXXXXXXX
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Title: President
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FIRST OF AMERICA INVESTMENT
CORPORATION
By: /s/ XXXXXXX X. XXXX
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Title: President
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Dated: December 22, 1992
SCHEDULE A
TO THE INVESTMENT ADVISORY AGREEMENT
BETWEEN THE PARKSTONE GROUP OF FUNDS AND
FIRST OF AMERICA INVESTMENT CORPORATION
Name of Fund Compensation Date
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Parkstone International Discovery Annual Rate of 1.25% of the first $50 Million of the 12/22/92
Fund average daily net assets of such Fund, 1.20% of the
average daily net assets between $50 Million and $100
Million, 1.15% of the average daily net assets between
$100 Million and $400 Million, and 1.05% of the
average daily net assets over $400 Million.
THE PARKSTONE GROUP OF FUNDS
(Seal) By: /s/ G. XXXXXX XXXXXXXXX
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Title: President
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FIRST OF AMERICA INVESTMENT
CORPORATION
By: /s/ XXXXXXX X. XXXX
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Title: President
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All fees are computed daily and paid monthly.
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