SCHEDULE 14C INFORMATION
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Securities Exchange Act of 1934
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GuideStone Funds
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GUIDESTONE FUNDS
MyDestination 2015 Fund, MyDestination 2025 Fund, MyDestination 2035 Fund, MyDestination 2045 Fund,
MyDestination 2055 Fund, Conservative Allocation Fund, Balanced Allocation Fund,
Growth Allocation Fund, Aggressive Allocation Fund, Money Market Fund,Low-Duration Bond Fund,
Medium-Duration Bond Fund, Extended-Duration Bond Fund, Global Bond Fund,
Strategic Alternatives Fund, Defensive Market Strategies Fund, Equity Index Fund,
Global Real Estate Securities Fund, Value Equity Fund, Growth Equity Fund, Small Cap Equity Fund,
International Equity Index Fund, International Equity Fund and Emerging Markets Equity Fund
2401 Cedar Springs Road
Dallas, Texas 75201-1498
INFORMATION STATEMENT
July 27, 2018
Dear Shareholder:
The enclosed Information Statement discusses actions that have been taken with respect to certain or each of the above-listed series (each, a “Fund,” and together, the “Funds”) of GuideStone Funds (the “Trust”).
The Board of Trustees of the Trust (“Board”) has approved the appointment of two newsub-advisers, Wellington Management Company LLP (“Wellington”) and Goldman Sachs Asset Management, L.P. (“GSAM” and together with Wellington, the “NewSub-Advisers”), to manage separate portions of the Emerging Markets Equity Fund’s (the “EME Fund”) portfolio. GuideStone Capital Management, LLC, the investment adviser to the EME Fund, believes that the appointments of the NewSub-Advisers will enhance the investment services provided to the EME Fund and will improve the EME Fund’s return potential. There will be no change to the EME Fund’s investment objective, and the overall management and advisory fees paid by the EME Fund will not increase as a result of the appointments of the NewSub-Advisers. The newsub-advisory agreements with the NewSub-Advisers have been approved in conjunction with the termination ofsub-advisory agreements with Genesis Investment Management, LLP and Genesis Asset Managers, LLP (together, the “LegacySub-Advisers”), each on behalf of the EME Fund. The portions of the EME Fund managed by the NewSub-Advisers will include portions previously managed by the LegacySub-Advisers.
In addition, GuideStone Financial Resources of the Southern Baptist Convention, the majority shareholder of the Trust, has approved the election of Randall T. Hahn to the Board of Trustees of the Trust.
We are not asking you for a proxy and you are requested not to send us a proxy. If you have any questions, please call1-888-GS-FUNDS(1-888-473-8637), and we will be glad to assist you. Thank you for your continued support of GuideStone Funds.
Very truly yours, |
/s/ John R. Jones |
John R. Jones |
President |
GUIDESTONE FUNDS
MyDestination 2015 Fund, MyDestination 2025 Fund, MyDestination 2035 Fund, MyDestination 2045 Fund,
MyDestination 2055 Fund, Conservative Allocation Fund, Balanced Allocation Fund,
Growth Allocation Fund, Aggressive Allocation Fund, Money Market Fund,Low-Duration Bond Fund,
Medium-Duration Bond Fund, Extended-Duration Bond Fund, Global Bond Fund,
Strategic Alternatives Fund, Defensive Market Strategies Fund, Equity Index Fund,
Global Real Estate Securities Fund, Value Equity Fund, Growth Equity Fund, Small Cap Equity Fund,
International Equity Index Fund, International Equity Fund and Emerging Markets Equity Fund
2401 Cedar Springs Road
Dallas, Texas 75201-1498
INFORMATION STATEMENT
Important Notice Regarding the
Availability of Information Statement
The Information Statement is available at GuideStoneFunds.com/Funds/Disclosures.
July 27, 2018
This document is an Information Statement for shareholders of each of the above-listed series (each a “Fund” and together, the “Funds”) of GuideStone Funds (the “Trust”). GuideStone Capital Management, LLC (“GSCM” or the “Adviser”) serves as the investment adviser to each Fund and is located at 2401 Cedar Springs Road, Dallas, Texas 75201-1498. The Funds’ principal underwriter is Foreside Funds Distributors LLC, whose principal office is located at 400 Berwyn Park, 899 Cassatt Road, Suite 110, Berwyn, Pennsylvania 19312. BNY Mellon Investment Servicing (US) Inc. serves as the Funds’ transfer agent and is located at 760 Moore Road, King of Prussia, Pennsylvania 19406. The Northern Trust Company serves as the Funds’ administration and fund accounting agent and is located at 50 South LaSalle Street, Chicago, Illinois 60603. This Information Statement will be mailed on or about July 27, 2018, to the shareholders of record of each Fund as of July 16, 2018 (the “Record Date”).
As described in the Funds’ prospectus, the assets of certain Funds are, or may be, allocated among multiplesub-advisers. The Trust and the Adviser have received an exemptive order from the U.S. Securities and Exchange Commission to permit the Adviser, subject to approval of the Board of Trustees of the Trust (“Board”), to select and replacesub-advisers for the Funds and to amendsub-advisory agreements without obtaining shareholder approval, provided there is not an increase in the overall management and advisory fees payable by the Funds, and subject to certain conditions. These conditions require, among other things, that the shareholders be notified of the appointment of a newsub-adviser within 90 days of thesub-adviser’s appointment. This Information Statement provides such notice of the Board’s approval of the newsub-advisory agreements with Wellington Management Company LLP (“Wellington”) and Goldman Sachs Asset Management, L.P. (“GSAM”) on behalf of the Emerging Markets Equity Fund (“EME Fund”).
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In addition, the Trust has obtained the written consent of GuideStone Financial Resources of the Southern Baptist Convention (“GuideStone Financial Resources”) to elect Randall T. Hahn to the Board, effective August 23, 2018. As disclosed in the Funds’ prospectus, GuideStone Financial Resources at all times directly or indirectly controls the vote of at least 60% of the outstanding shares of the Trust. The Funds will refuse to accept any investment that would result in a change of such control. As of the date of its approval, GuideStone Financial Resources directly or indirectly controlled the vote of at least 60% of each Fund’s shares. This means that GuideStone Financial Resources, which is an affiliate of the Adviser, controls the vote on any matter that requires shareholder approval. Therefore, in accordance with the Trust’s governing documents, the election of Dr. Hahn has been approved by shareholders.
This Information Statement is provided solely for information purposes. This is not a proxy statement.We are not asking you for a proxy, and you are requested not to send us a proxy.
The Funds will bear the expenses incurred in connection with preparing this Information Statement. The information in this document should be considered to be an Information Statement for purposes of Schedule 14C under the Securities Exchange Act of 1934, as amended.
You may obtain a copy of the Trust’s annual report to shareholders and the most recent semi-annual report, free of charge, by writing to the Trust at 2401 Cedar Springs Road, Dallas, Texas 75201-1498, by calling toll free at1-888-GS-FUNDS(1-888-473-8637) or by going to the website at GuideStoneFunds.com.
Appendix A lists the shares of each Fund issued and outstanding as of the Record Date. Appendix B lists the shareholders who owned beneficially or of record more than 5% of the shares of each class of the Funds as of the Record Date. To the knowledge of the Adviser, executive officers and Trustees of the Trust, as a group, owned less than 1% of the outstanding shares of each class of each Fund as of the Record Date.
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I. | Emerging Markets Equity Fund: Appointment of Wellington Investment Company LLP and Goldman Sachs Asset Management, L.P. asSub-Advisers |
A. | Overview |
On May 22, 2018, the Board voted to approve the appointment of two newsub-advisers, Wellington and GSAM (together, the “NewSub-Advisers”), to manage separate portions of the EME Fund’s portfolio. The NewSub-Advisers replaced Genesis Investment Management, LLP and Genesis Asset Managers, LLP (together, the “LegacySub-Advisers”), which had served as two of the EME Fund’ssub-advisers. The investment objective will not change as a result of the appointments of the NewSub-Advisers; however, the overall management and advisory fees for the EME Fund will decrease by approximately 0.12% (12 basis points) as a result of the appointments of the NewSub-Advisers.
B. | Appointment |
At a regular,in-person meeting held on May21-22, 2018, the Board, including the Trustees who are not “interested persons” (as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Trust, the Adviser, Wellington, GSAM or the Trust’s principal underwriter (the “Independent Trustees”), considered and unanimously approved the Adviser’s recommendation to appoint each of the NewSub-Advisers to manage separate portions of the EME Fund’s portfolio pursuant to separatesub-advisory agreements between the Trust, the Adviser and Wellington (the “Wellington Agreement”) and between the Trust, the Adviser and GSAM (the “GSAM Agreement” and together with the Wellington Agreement, the “NewSub-Advisory Agreements”).
The Adviser’s recommendation was based on certain factors, including, but not limited to, its assessment of the performance of Wellington’s Emerging Markets Equity Strategy (the “Wellington Strategy”) and the GSAM Global Emerging Markets Equity Strategy (the “GSAM Strategy”) over historical periods, each strategy’s ability to enhance the EME Fund’s emerging markets exposure and the desire of the Adviser to optimize the investment objective of the EME Fund. Based upon a review of comparative performance information and other factors, the Adviser recommended, and the Board approved, the NewSub-Advisory Agreements on behalf of the EME Fund. The NewSub-Advisers replaced the LegacySub-Advisers and began providingsub-advisory services to the EME Fund on June 30, 2018. In addition to the NewSub-Advisers, AQR Capital Management, LLC, a currentsub-adviser to the EME Fund, will continue to providesub-advisory services to the EME Fund and its allocated portion of the EME Fund increased upon the termination of the Legacy Sub-Advisers.
The Adviser’s recommendation to hire the NewSub-Advisers was based on its analysis of the EME Fund’s investment objective and the structure of the EME Fund’s underlyingsub-adviser composite. The Adviser’s recommendation is intended to enhance the EME Fund’s all cap core and growth emerging markets exposure, to enhance the investment services provided to the EME Fund and to improve the EME Fund’s excess return potential.
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C. | Board Considerations |
In making its determination to approve the selection of the NewSub-Advisers, the Board, including the Independent Trustees advised by independent legal counsel, considered a number of factors. Such factors included the nature, extent and quality of the services to be provided by the NewSub-Advisers; composite historical performance information for the Wellington Strategy and the GSAM Strategy, respectively; the fees charged by each NewSub-Adviser for its emerging markets equity strategy; and information regarding the ownership structure, investment management experience, personnel, clients, assets under management (“AUM”) or assets under supervision (“AUS”), legal and regulatory history, compliance policies and procedures, brokerage and soft dollar practices and investment philosophies and processes of each NewSub-Adviser. The Board also reviewed presentations by the Adviser regarding the comprehensive review process it used to recommend the NewSub-Advisers. The Board received and considered information about the potential of the NewSub-Advisers to contribute economies of scale as the EME Fund grows in size. The Board considered that the Adviser had been able to negotiate fees that were favorable compared to each NewSub-Adviser’s respective stated fee schedule. In addition, the Board noted that each NewSub-Adviser’s fee schedule included breakpoints that would reduce thesub-advisory fees charged if specified asset levels are reached in the future.
Because this engagement with the NewSub-Advisers is new, there was no relevant historical profitability information for the Board to assess. The Board noted that GSAM provided an estimate of profitability for providing its services to the EME Fund, which was based on an incremental cost approach. The Board noted that Wellington did not provide an estimate of profitability because it does not maintain financial records in a manner that isolates the profitability of a particular investment service or specific client. The Trustees considered the Adviser’s assessment of each NewSub-Adviser’s financial condition. The Trustees noted that the Adviser, after reviewing certain financial information provided by the NewSub-Advisers, believed that each NewSub-Adviser was financially sound.
The Board considered the fees to be paid to each NewSub-Adviser under the NewSub-Advisory Agreements, as well as the overall fee structure under each NewSub-Advisory Agreements, in light of the nature, extent and quality of the services to be provided. The Board noted that the EME Fund’s overall management and advisory fees would decrease as a result of the appointment of the NewSub-Advisers. The Board also noted that the EME Fund, and not the Adviser, pays fees to the NewSub-Advisers directly. The Board considered that the EME Fund is subject to an expense limitation arrangement, for both its Institutional Class and Investor Class, whereby the Adviser is obligated to waive or reimburse certain expenses of each class of the EME Fund in order to limit the respective total expense ratio of the class. Accordingly, the Trustees observed that the reduction in the EME Fund’s overall management and advisory fee could result in the reduction in the expenses covered by the expense cap and that such a reduction would inure to the benefit of the Adviser. The Board noted the Adviser’s representation that the elimination of its waiver or reimbursement obligation with respect to the EME Fund is anticipated to have a positive, but not material, impact on the Adviser’s profitability.
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The Board considered potential“fall-out” or ancillary benefits anticipated to be received by each NewSub-Adviser and its respective affiliates as a result of its arrangements with the EME Fund. The Board concluded that any potential benefits to be derived by the NewSub-Advisers included potential access to additional research resources, larger AUM and reputational benefits, which were consistent with those generally derived bysub-advisers to mutual funds.
The Board further considered the qualifications, experience and capabilities of the Wellington investment professionals who will have primary portfolio management responsibilities for the EME Fund. The Board noted that Wellington is structured as a partnership with lineage dating back to 1928 and currently has, along with its investment advisory affiliates, investment management authority of approximately $1.1 trillion in client assets as of June 30, 2018. The Board considered that Wellington serves as asub-adviser for more than half of the assets in which it, including investment advisory affiliates, has investment management authority.
The Board also considered the qualifications, experience and capabilities of the GSAM investment professionals who will have primary portfolio management responsibilities for the EME Fund. The Board also noted that GSAM is a wholly owned subsidiary of The Goldman Sachs Group, Inc. (“Goldman Sachs”) and would benefit from certain resources of the Goldman Sachs organization.
The Board considered that the Adviser intends to allocate approximately 30% of the EME Fund’s assets to the Wellington Strategy and approximately 17% of the EME Fund’s assets to the GSAM Strategy. The Board noted the Adviser’s determination that the NewSub-Advisers’ strategies were expected to complement each other, and the other strategies currently utilized in the EME Fund. The Board considered the Adviser’s determination that the addition of the NewSub-Advisers improves the risk profile of the EME Fund and would further diversify its sources of returns, all in a manner consistent with the risk and return objectives of the EME Fund.
While noting that past performance does not indicate future results, the Board considered each of the Wellington Strategy’s and GSAM Strategy’s composite performance history versus the applicable benchmark index, the MSCI Emerging Markets Index. With respect to Wellington, the Board observed that the composite performance of the Wellington Strategy, gross of fees for the periods ended March 31, 2018, versus the benchmark, had been favorable over historical time periods (evaluated since March 31, 1994). The Board noted that the Wellington Strategy had outperformed the benchmark index over theone-, three-, five- and seven-year periods ended March 31, 2018. With respect to the GSAM Strategy, the Board observed that the composite performance of the GSAM Strategy, gross of fees for the periods ended March 31, 2018, versus the benchmark, had been favorable over historical time periods (evaluated since July 1, 2013). The Board noted that the GSAM Strategy had outperformed its benchmark index over theone- and three-year periods ended March 31, 2018.
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The Board noted that the Adviser plans to engage a transition manager tore-allocate separate portions of the EME Fund’s assets to the NewSub-Advisers. The Board reviewed the Adviser’s estimate of the costs of the transition of assets and the estimated time that it would take the EME Fund to recover such costs. In connection with a discussion of the costs, the Adviser noted that the transition would entail the sale and purchase of emerging markets equities, which have more limited liquidity and, therefore, may entail higher transaction costs than equity securities in other markets.
Based on all of the information provided to the Board and its consideration of relevant factors, the Board determined that the NewSub-Advisers would provide investment management services that are appropriate in scope and that the fees paid to each NewSub-Adviser by the EME Fund under its respective NewSub-Advisory Agreement are fair and reasonable in light of the nature, extent and quality of services to be provided. In their deliberations, the Trustees did not identify any particular information that wasall-important or controlling, and each Trustee may have attributed different weights to the various factors deliberated upon, among others.
No officers or Trustees of the Trust are officers, employees, directors, general partners or shareholders of each of the NewSub-Advisers. In addition, since January 1, 2017, the beginning of the Trust’s prior fiscal year, no Trustee of the Trust has had, directly or indirectly, a material interest, material transaction or material proposed transaction to which each NewSub-Adviser, any parent or subsidiary of each of the NewSub-Advisers or any subsidiary of a parent of such entities was, or is to be, a party. GSAM also serves as asub-adviser to the Medium-Duration Bond Fund and the Strategic Alternatives Fund, other series of the Trust advised by the Adviser.
Information Regarding the NewSub-Advisers.Each of the NewSub-Advisers will serve assub-adviser to a separate assigned portion of the EME Fund’s portfolio.
Wellington.Wellington is registered as an investment adviser under the Investment Advisers Act of 1940, as amended (“Advisers Act”). Vera M. Trojan, CFA, Senior Managing Director and Equity Portfolio Manager, is responsible for theday-to-day management of the portion of the EME Fund assigned to Wellington. Ms. Trojan has served as a portfolio manager for Wellington for more than five years. More information about Wellington is provided in Appendix C.
GSAM.GSAM is registered as an investment adviser under the Advisers Act and was founded in 1989. As of June 30, 2018, GSAM, along with its investment advisory affiliates had approximately $1.5 trillion in AUS, which includes AUM and other client assets for which the firm does not have full discretion. The GSAM Strategy Team is responsible for managing GSAM’s portion of the EME Fund. Ultimate accountability for the EME Fund portfolio account resides with portfolio managers, Hiren Dasani, CFA, Managing Director, and Basak Yavuz, CFA, Executive Director. Both Mr. Dasani and Ms. Yavuz have served as portfolio managers at GSAM for more than five years. More information about GSAM is provided in Appendix E.
Comparison of the Management Fees. The overall management and advisory fees paid by the EME Fund will decrease by 0.12% (12 basis points) from 1.03% to 0.91% as a result of the appointments of the NewSub-Advisers compared to the overall management and advisory fees paid by the EME Fund prior to theeffective date of the New Sub-Advisory Agreements. However, pursuant to the expense limitation arrangement
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described below, the Adviser is able to recoup previously-waived fees from the EME Fund. It is estimated that the EME Fund will repay the Adviser 0.12% for the Institutional Class and 0.02% for the Investor Class. Due to the fee repayment to the Adviser, it is estimated that the total expense ratio will increase by 0.01% (one basis point) for the Institutional Class and will decrease by 0.01% (one basis point) for the Investor Class for the current fiscal year. The EME Fund is subject to an expense limitation arrangement under which the Adviser has agreed to waive fees and/or reimburse expenses to the extent needed to limit total annual operating expenses, before expense payments by broker-dealers, to 1.32% for the Institutional Class and 1.57% for the Investor Class (excluding interest, taxes, brokerage commissions, extraordinary expenses, acquired fund fees and expenses and expenses incurred in connection with the short sales of securities). This contractual waiver and reimbursement applies to direct fund operating expenses only and, should it be needed, will remain in place until April 30, 2019. If expenses fall below the levels noted above within three years after the Adviser has made such a waiver or reimbursement, the EME Fund may repay the Adviser so long as the repayment does not cause the EME Fund to exceed its expense limitation in place during the year in which the waiver or reimbursement was originally incurred, or the EME Fund’s expense limitation at the time of the repayment, whichever is lower.
With respect to the Adviser’s profitability, the EME Fund, and not the Adviser, pays thesub-advisory fees to each NewSub-Adviser directly; therefore, the Adviser’s profitability will be impacted to the extent the Adviser benefits from a reduction in the level of expenses the Adviser was required to waive or reimburse, and any amounts that the EME Fund is able to repay the Adviser, pursuant to its expense limitation arrangement with the EME Fund. The Adviser’s profitability is expected to be positively, but not materially, impacted by the appointment of the NewSub-Advisers, because of the elimination of the Adviser’s fee waiver obligation and the ability of the EME Fund to repay the Adviser for prior waivers and reimbursements due to the decrease in the overall management and advisory fees and therefore the decrease in the EME Fund’s total expenses.
Prior to the effectiveness of the NewSub-Advisory Agreements, the Institutional Class and Investor Class of the EME Fund paid overall management and advisory fees,non-inclusive of any applicable waiver, of 1.03% of average daily net assets for the year ended December 31, 2017. For the fiscal year ended December 31, 2017, the actual overall management and advisory fees paid by the EME Fund to the Adviser,non-inclusive of any applicable waiver, and thesub-advisers to the EME Fund were $1,380,181 and $2,921,584, respectively.
Description of the NewSub-Advisory Agreements. The NewSub-Advisory Agreements became effective on June 1, 2018, and the NewSub-Advisers began providing services to the EME Fund on June 30, 2018. This description of the NewSub-Advisory Agreements is qualified in its entirety by the Forms ofSub-Advisory Agreement, which are included in Appendix D and F. The terms of the NewSub-Advisory Agreements are substantially similar to the investmentsub-advisory agreements between the Trust, the Adviser and the EME Fund’s othersub-advisers, including the LegacySub-Advisers, except as to: (1) the effective date; (2) compensation; (3) updated provisions regarding indemnification and the duties of thesub-adviser to reflect evolving industry standards and to specify in greater detail certain duties of thesub-adviser, including duties related to brokerage arrangements, the aggregation of portfolio transactions, assistance with the valuation of portfolio securities, assistance with the preparation of filings and reports and with information regarding class action claims, and obligations with respect to compliance matters; and (4) a provision permitting the New Sub-
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Advisers to use persons employed by a “participating affiliate” to provide, or assist in providing, discretionary investment advisory services under the NewSub-Advisory Agreements to the extent not prohibited by, or inconsistent with, applicable law, including the requirements of the 1940 Act, the rules thereunder, and relevant position of the U.S. Securities and Exchange Commission and its staff. The NewSub-Advisory Agreements will continue in effect for an initial term of two years. Thereafter, the NewSub-Advisory Agreements will continue in effect only if approved annually by the Board or by the vote of the shareholders of the majority of the outstanding shares of the Trust, and also, in either event, if approved by a majority of the Independent Trustees.
Under the NewSub-Advisory Agreements, the NewSub-Advisers will manage the assets of the EME Fund that are allocated to them by the Adviser. The NewSub-Advisers have discretion pursuant to the NewSub-Advisory Agreements to purchase and sell securities for their respective allocated segment of the EME Fund’s assets in accordance with the EME Fund’s objectives, policies and restrictions and the more specific strategies and guidelines provided by the Adviser. Although the NewSub-Advisers are subject to the overall supervision of the Board and officers of the Trust and by the Adviser, these parties do not evaluate the investment merits of specific securities transactions.
The NewSub-Advisory Agreements recognize that the NewSub-Advisers may, under certain circumstances, pay higher brokerage commissions by executing portfolio transactions with brokers that provide the firm with research, analysis, advice or similar services. The NewSub-Advisory Agreements also provide that the NewSub-Advisers will (1) maintain all books and records required to be maintained by them pursuant to the 1940 Act and the rules and regulations promulgated thereunder with respect to transactions the NewSub-Advisers effect on behalf of the EME Fund and will furnish the Board and the Adviser with such periodic and special reports as the Board or the Adviser may reasonably request; and (2) provide the Board or the Adviser with certain economic and investment analyses and reports, as well as monthly reports, setting forth the EME Fund’s performance with respect to the NewSub-Advisers’ investments on its behalf and make available to the Board and the Adviser any economic, statistical and investment services that the NewSub-Advisers normally make available to their institutional investors or other customers.
The NewSub-Advisory Agreements do not protect the NewSub-Advisers against liability to the EME Fund or its shareholders to which the firms might otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of or breach of their duties and obligations under the NewSub-Advisory Agreements. The NewSub-Advisory Agreements will terminate automatically with respect to the EME Fund upon assignment or upon the termination of the EME Fund’s Advisory Agreement with the Adviser. The NewSub-Advisory Agreements may also be terminated without penalty at any time by any party thereto, immediately upon written notice to the other parties.
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II. | All Funds: Election of Trustee to the Trust’s Board of Trustees |
A. | Overview |
GuideStone Financial Resources, as majority shareholder of the Trust, has elected Randall T. Hahn to the Board, effective August 23, 2018. The Trust’s Amended and Restated Trust Instrument, dated May 1, 2017, provides that Dr. Hahn will hold office until his resignation, removal or mandatory retirement or until he ceases to be a member of the board of trustees of GuideStone Financial Resources. Dr. Hahn will serve as a Trustee who is an “interested person” (as that term is defined in Section 2(a)(19) under the 1940 Act) of the Trust (“Interested Trustee”).
B. | Information Regarding the Board of Trustees |
The operations of each Fund are under the supervision of the Board. The primary responsibility of the Board is to represent the interests of the shareholders of the Trust and to provide oversight of the management of the Trust. Upon effectiveness of the election of Dr. Hahn, the Board will be comprised of nine individuals: Dr. Hahn and John R. Morris, each of whom is an Interested Trustee, and William Craig George, Barry D. Hartis, Grady R. Hazel, Christopher W. Kersey, MD, MBA, Joseph A. Mack, Franklin R. Morgan and Kyle L. Tucker, each of whom is an Independent Trustee. Mr. George serves as Chairman of the Board. During the fiscal year ended December 31, 2017, the Board held four regular meetings and four special meetings. All of the Trustees who served as such during the entirety of the previous fiscal year attended more than 75% of the Board meetings held during that period. Unlike public operating companies, mutual funds do not typically hold annual shareholder meetings. Accordingly, the Trust does not have a policy pertaining to attendance at annual shareholder meetings by members of the Board.
The Trustees (including Dr. Hahn) of the Trust, their years of birth, business addresses and principal occupations and directorships during the past five years are set forth in the following table.
Name (Date of Birth), Address and Position(s) with Trust | Term of Office and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Trusteeships/ Directorships Held by Trustee | ||||
INDEPENDENT TRUSTEES | ||||||||
William Craig George (1958) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2004 | Senior Credit Officer, First National Bank of PA, 2014 - present; Chief Credit Officer, CapStone Bank, 2011 – 2014 | 24 | None | ||||
Barry D. Hartis (1945) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2014 | Certified Public Accountant, 1987 - present. | 24 | GuideStone Financial Resources – Board of Trustees Member, 2004 – 2012; GuideStone Funds – Board of Trustees, Interested Trustee, 2005 – 2012. |
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Name (Date of Birth), Address and Position(s) with Trust | Term of Office and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Trusteeships/ Directorships Held by Trustee | ||||
Grady R. Hazel (1947) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2011 | Chief Financial Officer, The Dunham School, 2016 – present; Certified Public Accountant, 2015 – present; G400 Relations Manager, American Institute of Certified Public Accountants, 2012 – 2015; Executive Director, Society of Louisiana CPAs, 1995 – 2012. | 24 | Neighbors Federal Credit Union — Vice-Chairman of the Board; Stonetrust Commercial Insurance Company — Board of Directors Member and Chairman of Audit Committee; State Board of Certified Public Accountants of Louisiana — Board Member. | ||||
Christopher W. Kersey, MD, MBA (1969) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2017 | Founding Managing Partner, Havencrest Healthcare Capital Partners, 2016 – present; Managing Member and Partner, Camden Partners Holdings, LLC – Registered Investment Adviser, 2008 – 2016. | 24 | Essence Group Holdings Corporation — Board of Directors Member, 2011 — 2017; IPG — Board of Directors Member, 2013 — 2016; Metabolon — Board of Directors Member, 2013 — 2016; Paragon Bioservices — Board of Directors Member 2013 — 2016; PatientSafe Solutions — Board of Directors Member 2010 — 2017; Johns Hopkins Medicine International — Chairman of the Board, 2011 — present; Johns Hopkins Medicine — Board of Trustees Member, 2010 — present; The Johns Hopkins Hospital — Board of Trustees Member, 2010 — present; The Johns Hopkins Hospital Endowment Fund — Board of Directors Member, 2010 — present; The Johns Hopkins Carey Business School — Member of the Health Care Advisory Board of Directors, 2012 — present. |
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Name (Date of Birth), Address and Position(s) with Trust | Term of Office and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Trusteeships/ Directorships Held by Trustee | ||||
Joseph A. Mack (1939) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2002 | Independent Consultant, 2010 - present; Director of Public Policy, North Greenville University, 2011 - 2016; Contractor, Interim Director of Public Policy, South Carolina Baptist Convention, 2017; Contractor, South Carolina Citizens for Life, 2014 - present. | 24 | None | ||||
Franklin R. Morgan (1943) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2005 | Retired – Senior Vice President, Director of International Administration, Prudential Securities, Inc., 1960 – 2003. | 24 | None | ||||
Kyle L. Tucker (1981) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2013 | Vice President and Financial Advisor – CAPTRUST Financial Advisors, 2006 – present. | 24 | Fellowship of Christian Athletes (NC) Triangle Board, 2012 — 2015; NC Values Coalition Board, 2015 — present; Institute for Faith and Family, 2015 — present; College Golf Fellowship, 2012 — Present. | ||||
INTERESTED TRUSTEES2 | ||||||||
Randall T. Hahn, D.Min. (1965) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2018 | Senior Pastor, The Heights Baptist Church, 2002 – present. | 24 | GuideStone Financial Resources – Board of Trustees Member, June 2015 – present. | ||||
John R. Morris (1938) 2401 Cedar Springs Road Dallas, TX 75201-1498 Trustee | Since 2017 | Vice President andBroker-in-Charge, Hound Ears Club, Inc., 2010 – 2018. | 24 | GuideStone Financial Resources — Chairman, June 2018 — present; GuideStone Financial Resources — Board of Trustees Member, June 2012 — present; GuideStone Capital Management, LLC, Board of Directors Member, May 2014 — present; GuideStone Investment Services, Board of Directors Member, July 2012 — present; GuideStone Resource Management, Inc., Board of Directors Member, May 2014 — present. |
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Name (Date of Birth), Address and Position(s) with Trust | Term of Office and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Trusteeships/ Directorships Held by Trustee | ||||
OFFICERS WHO ARE NOT TRUSTEES3 | ||||||||
Ron W. Bass (1966) 2401 Cedar Springs Road Dallas, TX 75201-1498 Chief Compliance Officer and AML Officer | Since 2009 | Director of Asset Management Compliance, GuideStone Financial Resources, June 2009 - present. | N/A | N/A | ||||
Melanie Childers (1971) 2401 Cedar Springs Road Dallas, TX 75201-1498 Vice President — Fund Operations | Since 2014 | Managing Director, Fund Operations, GuideStone Financial Resources, 2014 – present; Director, Funds Administration and Operations, GuideStone Financial Resources, 2009 – 2014. | N/A | N/A | ||||
John R. Jones (1953) 2401 Cedar Springs Road Dallas, TX 75201-1498 President | Since 2000 | Executive Vice President and Chief Operating Officer, GuideStone Financial Resources, 1997 – present. | N/A | N/A | ||||
Patrick Pattison (1974) 2401 Cedar Springs Road Dallas, TX 75201-1498 Vice President and Treasurer | Since 2008 | Chief Accounting Officer, GuideStone Financial Resources, 2015 – present; Director of Financial Reporting & Process Review, GuideStone Financial Resources, 2008 – 2015. | N/A | N/A | ||||
Matt L. Peden (1967) 2401 Cedar Springs Road Dallas, TX 75201-1498 Vice President and Investment Officer | Since 2001 | Vice President and Chief Investment Officer, GuideStone Financial Resources, 2015 – present; Director of Portfolio Management, GuideStone Financial Resources, 2010 – 2015. | N/A | N/A | ||||
Matthew A. Wolfe (1982) 2401 Cedar Springs Road Dallas, TX 75201-1498 Chief Legal Officer and Secretary | Since 2017 | Associate Counsel – Investment and Corporate Services, GuideStone Financial Resources, 2015 – present; Vice President and Assistant General Counsel, Goldman Sachs & Co., 2012 – 2015. | N/A | N/A | ||||
Erin Wynne (1981) 2401 Cedar Springs Road Dallas, TX 75201-1498 Financial Officer | Since 2016 | Director, Financial Reporting & Analysis, GuideStone Financial Resources, 2015 – present; Manager, Financial Reporting & Analysis, GuideStone Financial Resources, 2010 – 2015. | N/A | N/A |
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(1) | Each Independent Trustee serves until his or her resignation, removal or mandatory retirement. Each Interested Trustee serves until his or her resignation, removal or mandatory retirement or until he or she ceases to be a member of the Board of Trustees of GuideStone Financial Resources. All Trustees must retire at the end of the calendar year in which they attain the age of 80 or after achieving 10 years of service, whichever occurs last. Officers serve at the pleasure of the Board of Trustees. |
(2) | Dr. Hahn and Mr. Morris are Interested Trustees of the Trust due to their positions on the Board of Trustees of GuideStone Financial Resources. |
(3) | The officers of the Trust may be deemed to be affiliates of the Adviser due to their positions with the Adviser and/or GuideStone Financial Resources. |
In addition to the information set forth in the trustees and officers table and other relevant qualification, experience, attributes or skills applicable to a particular Trustee, the following provides further information about the qualifications and experience of each Trustee (including Dr. Hahn):
William Craig George. Mr. George has been the Chairman of the Board of Trustees of the Trust since January 2015 and a member of the Board of Trustees since September 2004. He has been employed with First National Bank of PA since 2011 and currently serves as the Senior Credit Officer. In his role with First National Bank of PA, Mr. George underwrites and approves loans. Additionally, he oversees bank loan policy and bank lending compliance. He was previously employed with SunTrust Bank as an Executive Vice President/Regional Credit Officer. He has served on the board of the Pregnancy Life Care Center of Raleigh and on the Allocations Committee of Triangle United Way. Mr. George holds a Bachelor of Science degree in Business Administration from the University of North Carolina at Chapel Hill.
Randall T. Hahn, D.Min. Dr. Hahn is the Senior Pastor at The Heights Baptist Church in Colonial Heights, Virginia, where he has served since 2002. He holds a Bachelor of Arts degree from Texas A&M University, a Master of Theology degree from Dallas Theological Seminary and a Doctor of Ministry degree from Southeastern Baptist Theological Seminary. Dr. Hahn currently serves on the Board of Trustees of GuideStone Financial Resources.
Barry D. Hartis. Mr. Hartis is currently self-employed as a CPA. Previously, he served as a CPA with Haynes Strand and Company, PLLC. Mr. Hartis was the Vice President, Eastern Region of the North Carolina Baptist Men’s Association. He is a former member of the Board of Directors of the North Carolina Association of CPAs and a member of the American Institute of CPAs. Mr. Hartis has served as the Vice President for Business and Finance with Gardner-Webb University, the Vice President for Administrative Services with the College of the Albemarle and the Vice President for Business and Finance with Greensboro College. Mr. Hartis holds a Bachelor of Science degree in Accounting from the University of North Carolina at Charlotte and holds a Certificate of Completion from the College Business Management Institute, the University of Kentucky.
Grady R. Hazel. Mr. Hazel serves as Chief Financial Officer at The Dunham School and is self-employed as a CPA. Previously, he served as a G400 Relations Manager for the American Institute of Certified Public Accountants, where he acted as a liaison to CPA firms that have 101 to 400 CPAs. Prior to that role, he was employed by the Society of Louisiana CPAs as an Executive Director. He is currently Vice-Chairman of the Board of Directors of Neighbors Federal Credit Union. In addition, he serves on the board of Stonetrust Commercial Insurance Company, where he is also Chairman of the Audit Committee. Mr. Hazel is a CPA and a Chartered Global Management Accountant (CGMA). Mr. Hazel holds a Bachelor of Science degree and a Master of Business Administration degree both from Louisiana State University.
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Christopher W. Kersey,MD, MBA. Dr. Kersey is the Founding Managing Partner at Havencrest Healthcare Capital Partners. Previously, he was a Managing Member and Partner of Camden Partners Holdings, LLC, anSEC-registered investment adviser that provides services to private investment funds. In this capacity, he focused on private equity investments in the health care and business services industries. Dr. Kersey currently serves on multiple Johns Hopkins boards as well as serving on the boards of directors for several portfolio companies. Dr. Kersey holds a Bachelor of Arts degree in Human Biology from Stanford University, a Master of Business Administration degree in Finance from Harvard Business School and a Doctor of Medicine degree from Emory University School of Medicine.
Joseph A. Mack. Mr. Mack served as the Chairman of the Board of Trustees of the Trust from June 2005 until January 2015 and has been a member of the Board of Trustees since March 2002. He currently serves as an independent consultant and is the former Director of Office of Public Policy of the South Carolina Baptist Convention, where he served for 12 years. Prior to that role, he served the state of South Carolina as the Deputy Director of the state’s Retirement System, Deputy Director of the Division of Human Management and Deputy Executive Director of the Budget and Control Board. Mr. Mack has also served on several foundations and committees. He received a Bachelor of Science in Business Administration from Florida State University.
Franklin R. Morgan. Mr. Morgan is a former Senior Vice President/Director with Prudential Securities. He served with Prudential Securities and predecessor firms for 41 years, and his final position with the firm was as Senior Vice President, Director of International Administration. Mr. Morgan’s main responsibilities were high level administrative management of 27 branches and support functions in 20 different countries. He was also responsible for business quality-compliance for the firm. Mr. Morgan held numerous securities licenses and was an arbitrator with the NASD (FINRA) as well as a past panel member of the New York Stock Exchange Disciplinary Board.
John R. Morris. Mr. Morris was Vice President andBroker-in-Charge at Hound Ears Club, Inc., a captive real estate office. Mr. Morris holds a Bachelor of Arts degree from Wheaton College and graduate degrees from both the American Institute of Banking and Stonier Graduate School of Banking, Rutgers, The State University of New Jersey. Mr. Morris currently serves as Chairman to the Board of Trustees of GuideStone Financial Resources and serves on the Board of Directors of GuideStone Capital Management, LLC, the Board of Directors of GuideStone Investment Services and the Board of Directors of GuideStone Resource Management, Inc.
Kyle L. Tucker. Mr. Tucker currently serves as Vice President and Financial Advisor at CAPTRUST Financial Advisors. In this capacity, he provides advice to retirement plans and personal investment accounts such as designing and implementing customized financial plans, developing investment models and selecting and monitoring of mutual funds and investment managers. Mr. Tucker holds a Bachelor of Science degree in Business Management from North Carolina State University. In addition, he is a CERTIFIED FINANCIAL PLANNER (CFP®) and holds the Series 6, 7 and 66 securities registrations.
14
Board Role in Risk Oversight.The Board’s role with respect to the Trust is oversight. As is the case with virtually all investment companies (as distinguished from operating companies), service providers to the Trust, primarily the Adviser and its affiliates, have responsibility for theday-to-day management of the Funds, which includes responsibility for risk management. Examples of prominent risks include investment risk, regulatory and compliance risks, operational risks, accounting risks, valuation risks, service provider risks and legal risks. As part of its oversight role, the Board, acting at its scheduled meetings, or the Chairman, acting between Board meetings, interacts with and receives reports from senior personnel of service providers, including the Adviser’s Chief Investment Officer (or a senior representative of the Adviser) and portfolio management personnel. The Board receives periodic presentations and reports from senior personnel of the Adviser or its affiliates regarding risk management generally, as well as periodic presentations regarding specific operational, compliance or investment areas such as accounting, administration, anti-money laundering, personal trading, valuation, investment research and securities lending. The Board also receives reports from counsel to the Trust and the Board’s own independent legal counsel regarding regulatory compliance and governance matters. The Board interacts with and receives reports from the Trust’s Chief Compliance Officer, and in connection with each scheduled meeting, the Trust’s Independent Trustees meet separately from the Adviser and Trust management, with the Trust’s Chief Compliance Officer and independent legal counsel, on regulatory compliance matters. The Board’s oversight role does not make the Board a guarantor of the Trust’s investments or activities.
Board Leadership Structure.The Chairman of the Board of Trustees is an Independent Trustee and holds no management position with the Trust or its Adviser,sub-advisers or service providers. The Board has determined that its leadership structure, in which the Chairman of the Board is an Independent Trustee, along with the Board’s majority of Independent Trustees, is appropriate in light of the services provided to the Trust and provides the best protection against conflict of interests with the Trust’s Adviser and service providers.
Information About Each Trustee’s Qualifications, Experience, Attributes or Skills.GuideStone Financial Resources primarily provides financial products and services to persons and organizations associated with the Southern Baptist Convention. In accordance with the Trust’s organizational documents, all Trustees must be active members of a Baptist church in friendly cooperation with the Southern Baptist Convention as defined in the Southern Baptist Convention Constitution and interested Trustees must also be members of the Board of Trustees of GuideStone Financial Resources. All Trustees serve without compensation except for reimbursement of expenses in attending meetings. The Board believes that the significance of each Trustee’s experience, qualifications, attributes or skills is an individual matter (meaning that experience that is important for one Trustee may not have the same value for another) and that these factors are best evaluated at the Board level, with no single Trustee, or particular factor, being indicative of Board effectiveness. However, the Board believes that Trustees need to have the ability to critically review, evaluate, question and discuss information provided to them, and to interact effectively with Trust management, service providers and counsel, in order to exercise effective business judgment in the performance of their duties. Experience relevant to having this ability may be achieved through a Trustee’s educational background; business, professional training or practice (e.g., accounting, banking, brokerage, finance or ministry); public service or academic positions; experience from
15
service as a board member (including the Board of the Trust); senior level positions in Southern Baptist Convention member organizations such as churches or hospitals; or as an executive of investment funds, public companies or significant private ornot-for-profit entities or other organizations, as well as other life experiences. In identifying and evaluating nominees for the Board, the Nominating Committee also considers how each nominee would affect the composition of the Board of Trustees. In seeking out and evaluating nominees, each candidate’s background is considered in light of existing board membership. The ultimate goal is a board consisting of trustees with a diversity of relevant individualized expertise. In addition to providing for Board synergy, this diversity of expertise allows Trustees to provide insight and leadership within the Board’s committee structure.
While the Board has not adopted a specific policy on diversity, it takes overall diversity into account when considering and evaluating nominees for Trustee. The Board generally considers the manner in which each Trustee’s professional experience, background, skills and other individual attributes (such as involvement in Southern Baptist and other evangelical missions and ministries) will contribute to the effectiveness of the Board.
Committees.Currently, the Board has an Audit Committee, Compliance and Risk Committee, Investment Management Committee and a Nominating Committee. The responsibilities of each committee and its members are described below.
Audit Committee. The Board has an Audit Committee comprised only of the Independent Trustees, Messrs. George, Hartis, Hazel, Mack, Morgan and Tucker and Dr. Kersey. Pursuant to its charter, the Audit Committee has the responsibility, among other things, to (1) appoint the Trust’s independent auditors; (2) review and approve the scope of the independent auditors’ audit activity; (3) review the financial statements, which are the subject of the independent auditors’ certifications; and (4) review with such independent auditors the adequacy of the Trust’s basic accounting system and the effectiveness of the Trust’s internal accounting controls. During the fiscal year ended December 31, 2017, there were three meetings of the Audit Committee.
Compliance and Risk Committee. The Board has a Compliance and Risk Committee comprised of Messrs. Hartis and Morgan, the majority of whom are Independent Trustees. Pursuant to its charter, the Compliance and Risk Committee has the responsibility, among other things, to (1) oversee generally the management of the Trust’s operational, information security, compliance, regulatory, strategic, reputational and other risks; (2) oversee generally matters relating to the Trust’s compliance controls and related policies and procedures; and (3) act as a liaison between the chief compliance officer of the Trust and the full Board when necessary and appropriate. The Compliance and Risk Committee was established in February 2015. During the fiscal year ended December 31, 2017, there were six meetings of the Compliance and Risk Committee.
Investment Management Committee. The Board has an Investment Management Committee comprised of only Independent Trustees, Messrs. George, Hazel and Tucker and Dr. Kersey. Pursuant to its charter, the Investment Management Committee has the responsibility, among other things, to (1) review information in consideration of investment advisory andsub-advisory agreements; (2) make recommendations to the Board regarding the initial approval, reapproval or termination of investment advisory orsub-advisory agreements; (3) monitorsub-advisers to identify those that may require review by the Trust’s management or further discussion or review by the Board; and (4) serve as a liaison between the Trust’s management and the Board involving changes in Fund investment objectives and strategies, changes at the Adviser orsub-advisers and other material developments related to the investment management of the Funds that may warrant Board consideration. The Investment Management Committee was established in August 2011. During the fiscal year ended December 31, 2017, there were six meetings of the Investment Management Committee.
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Nominating Committee. The Board has a Nominating Committee, comprised only of the Independent Trustees, Messrs. George, Hartis, Hazel, Mack, Morgan and Tucker and Dr. Kersey. Pursuant to its charter, the Nominating Committee is responsible for the nomination of candidates to serve as Trustees. The Trust’s governing documents provide that only shareholders, by a vote of a majority of the outstanding shares, may fill vacancies in the Board of Trustees or otherwise elect a Trustee. The Trust documents further provide that the selection and nomination of persons to fill vacancies on the Board of Trustees to serve as Independent Trustees shall be committed to the discretion of the Independent Trustees then serving, provided that shareholders may also nominate and select persons to serve in these positions. During the fiscal year ended December 31, 2017, there was one meeting of the Nominating Committee.
In proposing a nominee, the Nominating Committee considers certain factors, including but not limited to, the general knowledge, background and experience of the nominee. Specifically, the Nominating Committee considers whether the nominee possesses a high level of integrity, appropriate experience and a commitment to fulfill the fiduciary duties inherent in Board membership. The Nominating Committee also considers the extent to which a candidate possesses sufficiently diverse skill sets and characteristics that would contribute to the Board’s overall effectiveness. In determining potential candidates’ qualifications for Board membership, the Committee may consider all factors it determines to be relevant to fulfilling the role of being a member of the Board. The Nominating Committee may consider potential candidates for nomination identified by one or more shareholders of the Trust. Shareholders owning 50% or more of the outstanding voting securities of the Trust can submit recommendations in writing to the attention of Matthew A. Wolfe, Chief Legal Officer and Secretary, GuideStone Funds, 2401 Cedar Springs Road, Dallas, Texas 75201-1498.
Securities and Other Interests.The following table sets forth the dollar range of equity securities beneficially owned by each Trustee (including Dr. Hahn) in all of the Funds of the Trust (which for each Trustee comprise all registered investment companies within the Trust’s family of investment companies overseen by him), as of June 30, 2018.
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Name of Trustee | Dollar Range of Equity Securities in each Portfolio of the Trust | Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee within the Family of Investment Companies | ||
INTERESTED TRUSTEES | ||||
Randall T. Hahn, D.Min. | $10,001 - $50,000 in the Low-Duration Bond Fund $10,001 - $50,000 in the Medium-Duration Bond Fund $10,001 - $50,000 in the Extended-Duration Bond Fund $10,001 - $50,000 in the Global Bond Fund $50,001 - $100,000 in the Defensive Market Strategies Fund $1 - $10,000 in the Global Real Estate Securities Fund $50,001 - $100,000 in the Value Equity Fund $50,001 - $100,000 in the Growth Equity Fund $10,001 - $50,000 in the Small Cap Equity Fund $50,001 - $100,000 in the International Equity Fund $10,001 - $50,000 in the Emerging Markets Equity Fund | Over $100,000 | ||
John R. Morris | NONE | NONE | ||
INDEPENDENT TRUSTEES | ||||
William Craig George | NONE | NONE | ||
Barry D. Hartis | NONE | NONE | ||
Grady R. Hazel | NONE | NONE | ||
Christopher W. Kersey, MD, MBA | NONE | NONE | ||
Joseph A. Mack | $50,001-$100,000 in the Strategic Alternatives Fund $50,001-$100,000 in the Defensive Market Strategies Fund | Over $100,000 | ||
Franklin R. Morgan | NONE | NONE | ||
Kyle L. Tucker | $1-$10,000 in the Growth Allocation Fund $1-$10,000 in the Aggressive Allocation Fund | $1-$10,000 |
As a group, the Trustees and officers of the Trust owned less than 1% of each Class of a Fund, as of June 30, 2018.
As of May 8, 2018, the Independent Trustees or their respective immediate family members (spouse or dependent children) did not own beneficially or of record any securities of the Trust’s Adviser,sub-advisers or Underwriter, or in any person directly or indirectly controlling, controlled by, or under common control with the Adviser,sub-advisers or Underwriter.
Compensation.The Trust pays no compensation to the Trustees. The Trust reimburses the Trustees for any expenses incurred in attending meetings. The Trust does not compensate the officers for the services they provide to the Funds.
Other Information.Dr. Hahn and Mr. Tucker’s spouse are beneficiaries of the Southern Baptist Churches 403(b)(9) Retirement Plan sponsored by GuideStone Financial Resources. Mr. Mack is a beneficiary of the 403(b)(9) Retirement Plan of the South Carolina Baptist Convention sponsored by GuideStone Financial Resources.
III. | Additional Information |
Portfolio Transactions. To the extent permitted by law and in accordance with procedures established by the Board, each Fund of the Trust may engage in brokerage transactions with brokers that are affiliates of the Adviser or the Fund’ssub-advisers, with brokers who are affiliates of such brokers, or with unaffiliated brokers who trade or clear through affiliates of the Adviser or the Fund’ssub-advisers. For the fiscal year ended December 31, 2017, the Fund did not pay commissions to any affiliated brokers.
18
Shareholder Communications. The Board has provided for a process by which shareholders may send communications to the Board. If a shareholder wishes to send a communication to the Board, or to a specified Trustee, the communication should be submitted in writing to Matthew A. Wolfe, Chief Legal Officer and Secretary, GuideStone Funds, 2401 Cedar Springs Road, Dallas, Texas 75201-1498, who will forward such communication to the Trustee(s).
Multiple Shareholders in a Household. If you are a member of a household in which multiple shareholders of the Fund(s) share the same address, and the Fund(s) or your broker or bank (for “street name” accounts) has received consent to household material, then the Fund(s) or your broker or bank may have sent to your household only one copy of this Information Statement (the “Materials”), unless the Fund(s) or your broker or bank previously received contrary instructions from a shareholder in your household. If you are part of a household that has received only one copy of the Materials, the Fund(s) will deliver promptly a separate copy of the Materials to you upon written or oral request. To receive a separate copy of the materials, or if you would like to receive a separate copy of future information statements, proxy statements, prospectuses or annual reports, please contact the Trust by writing to the Trust at 2401 Cedar Springs Road, Dallas, Texas 75201-1498 or by calling1-888-GS-FUNDS(1-888-473-8637). On the other hand, if you are now receiving multiple copies of these documents and would like to receive a single copy in the future, please contact the Trust at the telephone number or address stated above.
By Order of the Board of Trustees, |
| |||
/s/ Matthew A. Wolfe | ||||
Matthew A. Wolfe | ||||
Chief Legal Officer and Secretary |
July 27, 2018
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APPENDIX A
ISSUEDAND OUTSTANDING SHARESASOF JULY 16, 2018
Fund | Institutional Class | Investor Class | ||||||
MyDestination 2015 Fund | 10,562,995.836 | 51,143,857.913 | ||||||
MyDestination 2025 Fund | 22,649,884.595 | 88,870,818.463 | ||||||
MyDestination 2035 Fund | 16,093,176.975 | 53,313,338.499 | ||||||
MyDestination 2045 Fund | 16,055,529.605 | 38,490,558.251 | ||||||
MyDestination 2055 Fund | 3,295,920.317 | 6,831,922.326 | ||||||
Conservative Allocation Fund | 7,796,259.454 | 37,318,739.630 | ||||||
Balanced Allocation Fund | 26,298,242.031 | 103,520,445.685 | ||||||
Growth Allocation Fund | 21,819,842.507 | 76,649,448.275 | ||||||
Aggressive Allocation Fund | 15,547,239.097 | 69,480,795.555 | ||||||
Money Market Fund | 296,553,385.220 | 900,395,773.160 | ||||||
Low-Duration Bond Fund | 47,711,900.837 | 23,161,244.636 | ||||||
Medium-Duration Bond Fund | 88,466,104.957 | 18,032,706.538 | ||||||
Extended-Duration Bond Fund | 7,050,954.781 | 6,641,683.891 | ||||||
Global Bond Fund | 45,814,873.305 | 12,140,562.698 | ||||||
Strategic Alternatives Fund | 30,756,620.517 | 7,092,873.239 | ||||||
Defensive Market Strategies Fund | 53,323,392.828 | 27,913,003.100 | ||||||
Equity Index Fund | 16,628,650.147 | 16,965,549.489 | ||||||
Global Real Estate Securities Fund | 14,921,397.998 | 9,414,944.906 | ||||||
Value Equity Fund | 50,448,486.556 | 17,102,263.851 | ||||||
Growth Equity Fund | 41,857,751.110 | 24,565,643.921 | ||||||
Small Cap Equity Fund | 15,505,002.983 | 14,657,454.594 | ||||||
International Equity Index Fund | 17,936,206.808 | N/A | ||||||
International Equity Fund | 82,139,453.013 | 21,835,184.634 | ||||||
Emerging Markets Equity Fund | 37,870,319.354 | 7,524,662.952 |
A-1
APPENDIX B
SHAREHOLDERS OWNING BENEFICIALLYOROF RECORD MORE THAN 5%OF
GUIDESTONE FUNDS
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
MyDestination 2015 Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 29,775,661.100 | 58% | |||
MyDestination 2015 Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 8,117,605.445 | 16% | |||
MyDestination 2015 Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 8,026,615.054 | 16% | |||
MyDestination 2025 Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 54,853,404.989 | 62% | |||
MyDestination 2025 Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 15,873,726.901 | 18% | |||
MyDestination 2025 Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 11,631,513.702 | 13% | |||
MyDestination 2035 Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 32,618,627.297 | 61% | |||
MyDestination 2035 Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 10,018,301.017 | 19% | |||
MyDestination 2035 Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 7,729,855.419 | 14% | |||
MyDestination 2045 Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 23,542,896.187 | 61% | |||
MyDestination 2045 Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 7,133,557.180 | 19% | |||
MyDestination 2045 Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 5,833,946.165 | 15% |
B-1
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
MyDestination 2055 Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 3,830,450.198 | 56% | |||
MyDestination 2055 Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 1,441,263.859 | 21% | |||
MyDestination 2055 Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 1,182,701.825 | 17% | |||
Conservative Allocation Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 18,471,441.748 | 49% | |||
Conservative Allocation Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 9,470,003.090 | 25% | |||
Conservative Allocation Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 2,883,097.414 | 8% | |||
Balanced Allocation Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 64,029,579.393 | 62% | |||
Balanced Allocation Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 25,413,118.047 | 25% | |||
Growth Allocation Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 49,930,173.524 | 61% | |||
Growth Allocation Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 20,401,607.450 | 27% | |||
Growth Allocation Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 5,074,648.977 | 7% | |||
Aggressive Allocation Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 47,955,150.085 | 69% | |||
Aggressive Allocation Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 14,910,366.455 | 21% | |||
Money Market Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 212,490,351.040 | 24% |
B-2
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Money Market Fund Investor Class | GuideStone Financial Resources Money Mkt LiqMed-Duration Bond Fd PO Box 2190 Dallas, TX 75221-2190 | 89,736,109.090 | 10% | |||
Money Market Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 77,547,380.930 | 9% | |||
Money Market Fund Investor Class | GuideStone Financial Resources Money Mkt Liq International Equity Fd PO Box 2190 Dallas, TX 75221-2190 | 72,123,684.240 | 8% | |||
Money Market Fund Investor Class | GuideStone Financial Resources Money Mkt Liq Growth Equity Fund PO Box 2190 Dallas, TX 75221-2190 | 62,250,330.830 | 7% | |||
Money Market Fund Investor Class | GuideStone Financial Resources Capital Preservation Fund PO Box 2190 Dallas, TX 75221-2190 | 46,858,148.300 | 5% | |||
Low-Duration Bond Fund Investor Class | �� | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 9,305,826.083 | 40% | ||
Low-Duration Bond Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 4,983,579.249 | 22% | |||
Low-Duration Bond Fund Investor Class | GuideStone Financial Resources Restricted Insurance Reserves PO Box 2190 Dallas, TX 75221-2190 | 2,690,250.160 | 12% | |||
Low-Duration Bond Fund Investor Class | GuideStone Financial Resources Operating Services PO Box 2190 Dallas, TX 75221-2190 | 1,717,271.182 | 7% | |||
Medium-Duration Bond Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 8,637,669.793 | 48% | |||
Medium-Duration Bond Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 4,678,885.461 | 26% | |||
Extended-Duration Bond Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 3,837,055.006 | 58% | |||
Extended-Duration Bond Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 1,759,971.780 | 26% | |||
Global Bond Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 4,374,804.293 | 36% |
B-3
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Global Bond Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 2,382,627.715 | 20% | |||
Global Bond Fund Investor Class | GuideStone Financial Resources Operating Services PO Box 2190 Dallas, TX 75221-2190 | 1,285,928.843 | 11% | |||
Global Bond Fund Investor Class | National Financial Services LLC FBO Our Customer Attn Mutual Funds Dept 4th Floor 499 Washington Blvd Jersey City, NJ 07310-2010 | 859,750.037 | 7% | |||
Global Bond Fund Investor Class | GuideStone Financial Resources Restricted Insurance Reserves PO Box 2190 Dallas, TX 75221-2190 | 725,227.078 | 6% | |||
Strategic Alternatives Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 2,174,499.792 | 31% | |||
Strategic Alternatives Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 1,967,539.836 | 28% | |||
Strategic Alternatives Fund Investor Class | GuideStone Financial Resources Restricted Insurance Reserves PO Box 2190 Dallas, TX 75221-2190 | 707,538.106 | 10% | |||
Strategic Alternatives Fund Investor Class | GuideStone Financial Resources Unfunded Deferred Compensation Plan (UDC) PO Box 2190 Dallas, TX 75221-2190 | 631,487.723 | 9% | |||
Strategic Alternatives Fund Investor Class | GuideStone Financial Resources Operating Services PO Box 2190 Dallas, TX 75221-2190 | 501,830.976 | 7% | |||
Defensive Market Strategies Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 11,092,753.870 | 40% | |||
Defensive Market Strategies Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 6,302,038.372 | 23% | |||
Defensive Market Strategies Fund Investor Class | National Financial Services LLC FBO Our Customer Attn Mutual Funds Dept 4th Floor 499 Washington Blvd Jersey City, NJ 07310-2010 | 3,023,646.504 | 11% |
B-4
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Equity Index Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 8,994,438.002 | 53% | |||
Equity Index Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 4,665,669.011 | 28% | |||
Equity Index Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 1,091,703.097 | 6% | |||
Global Real Estate Securities Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 5,179,997.658 | 55% | |||
Global Real Estate Securities Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 2,524,191.301 | 27% | |||
Global Real Estate Securities Fund Investor Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 498,198.167 | 5% | |||
Value Equity Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 9,954,024.650 | 58% | |||
Value Equity Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 4,405,142.527 | 26% | |||
Growth Equity Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 15,392,520.202 | 63% | |||
Growth Equity Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 6,146,294.427 | 25% | |||
Small Cap Equity Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 9,195,263.883 | 63% | |||
Small Cap Equity Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 3,722,150.171 | 25% | |||
International Equity Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 12,498,005.807 | 57% | |||
International Equity Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 5,691,801.979 | 26% | |||
Emerging Markets Equity Fund Investor Class | GuideStone Church Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 3,606,078.370 | 48% |
B-5
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Emerging Markets Equity Fund Investor Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 1,752,181.926 | 23% | |||
Emerging Markets Equity Fund Investor Class | LPL Financial (FBO) Customer Accounts Attn Mutual Fund Operations PO Box 509046 San Diego, CA 92150-9046 | 622,376.404 | 8% | |||
MyDestination 2015 Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 8,800,569.630 | 83% | |||
MyDestination 2015 Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 906,230.399 | 9% | |||
MyDestination 2015 Fund Institutional Class | GuideStone Financial Resources ER 403(b) Retirement Plan PO Box 2190 Dallas, TX 75221-2190 | 796,050.573 | 8% | |||
MyDestination 2025 Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 19,802,109.733 | 87% | |||
MyDestination 2025 Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 1,570,909.992 | 7% | |||
MyDestination 2035 Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 14,377,642.253 | 89% | |||
MyDestination 2035 Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 1,230,938.113 | 8% | |||
MyDestination 2045 Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 14,030,145.490 | 87% | |||
MyDestination 2045 Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 1,564,747.169 | 10% | |||
MyDestination 2055 Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 2,981,087.064 | 90% | |||
MyDestination 2055 Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 257,825.508 | 8% |
B-6
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Conservative Allocation Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 6,137,147.006 | 79% | |||
Conservative Allocation Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 762,044.112 | 10% | |||
Balanced Allocation Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 19,598,119.969 | 75% | |||
Balanced Allocation Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 4,497,214.934 | 17% | |||
Growth Allocation Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 19,226,645.009 | 88% | |||
Growth Allocation Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 1,860,789.133 | 9% | |||
Aggressive Allocation Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 13,212,016.567 | 85% | |||
Aggressive Allocation Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 1,859,061.101 | 12% | |||
Money Market Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 72,496,968.690 | 24% | |||
Money Market Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 32,453,127.210 | 11% | |||
Money Market Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 29,832,544.430 | 10% | |||
Money Market Fund Institutional Class | GuideStone Financial Resources Aggressive Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 24,583,153.400 | 8% | |||
Money Market Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 21,107,067.080 | 7% |
B-7
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Money Market Fund Institutional Class | GuideStone Financial Resources Baylor University Ret Plan PO Box 2190 Dallas, TX 75221-2190 | 17,476,395.510 | 6% | |||
Money Market Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 16,301,331.440 | 5% | |||
Money Market Fund Institutional Class | The Southern Baptist Theological Seminary-Short Term 2825 Lexington Road Louisville, KY 40206 | 15,833,191.430 | 5% | |||
Low-Duration Bond Fund Institutional Class | GuideStone Financial Resources Conservative Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 18,820,502.271 | 39% | |||
Low-Duration Bond Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 7,620,270.456 | 16% | |||
Low-Duration Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 7,174,894.310 | 15% | |||
Low-Duration Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,249,823.263 | 7% | |||
Low-Duration Bond Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 2,705,922.737 | 6% | |||
Medium-Duration Bond Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 25,926,172.117 | 29% | |||
Medium-Duration Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 20,413,871.756 | 23% | |||
Medium-Duration Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 11,115,929.020 | 13% | |||
Medium-Duration Bond Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 9,033,039.326 | 10% |
B-8
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Medium-Duration Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 7,889,568.733 | 9% | |||
Medium-Duration Bond Fund Institutional Class | GuideStone Financial Resources Conservative Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 4,684,920.081 | 5% | |||
Extended-Duration Bond Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 4,055,985.542 | 58% | |||
Extended-Duration Bond Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 1,435,148.590 | 20% | |||
Extended-Duration Bond Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 1,151,679.382 | 16% | |||
Global Bond Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 14,166,467.191 | 31% | |||
Global Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 8,824,711.754 | 19% | |||
Global Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 6,687,688.362 | 15% | |||
Global Bond Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 4,945,753.930 | 11% | |||
Global Bond Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 2,958,600.348 | 6% | |||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources Fixed Benefit Plan PO Box 2190 Dallas, TX 75221-2190 | 7,116,457.558 | 23% | |||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 6,117,426.409 | 20% |
B-9
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources Operating Reserves – Tier 2 PO Box 2190 Dallas, TX 75221-2190 | 2,994,774.972 | 10% | |||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 2,978,253.506 | 10% | |||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 2,811,496.369 | 9% | |||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 2,805,059.599 | 9% | |||
Strategic Alternatives Fund Institutional Class | GuideStone Financial Resources Conservative Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 2,520,260.619 | 8% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 12,940,742.131 | 24% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 9,891,935.575 | 19% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 5,653,292.003 | 11% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 4,444,738.055 | 8% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources Operating Reserves Tier 2 PO Box 2190 Dallas, TX 75221-2190 | 3,316,520.965 | 6% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,136,873.750 | 6% | |||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources Conservative Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 3,036,547.850 | 6% |
B-10
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Defensive Market Strategies Fund Institutional Class | GuideStone Financial Resources Fixed Benefit Plan PO Box 2190 Dallas, TX 75221-2190 | 2,888,830.266 | 5% | |||
Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,195,072.441 | 19% | |||
Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 2,894,169.000 | 17% | |||
Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 2,579,310.346 | 16% | |||
Equity Index Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 2,502,151.281 | 15% | |||
Equity Index Fund Institutional Class | Wells Fargo Bank NA FBO CCCI-MMKT PO Box 1533 Minneapolis, MN 55480-1533 | 1,382,689.305 | 8% | |||
Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,225,142.694 | 7% | |||
Global Real Estate Securities Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 4,188,138.419 | 28% | |||
Global Real Estate Securities Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 3,655,033.810 | 24% | |||
Global Real Estate Securities Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,521,168.426 | 10% | |||
Global Real Estate Securities Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,173,246.689 | 8% | |||
Global Real Estate Securities Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 1,124,662.480 | 8% |
B-11
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Global Real Estate Securities Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,013,213.052 | 7% | |||
Value Equity Fund Institutional Class | GuideStone Financial Resources Aggressive Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 12,817,536.790 | 25% | |||
Value Equity Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 10,500,196.858 | 21% | |||
Value Equity Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 7,667,820.270 | 15% | |||
Value Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 4,473,209.150 | 9% | |||
Value Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,994,169.347 | 8% | |||
Value Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,531,800.308 | 7% | |||
Growth Equity Fund Institutional Class | GuideStone Financial Resources Aggressive Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 9,985,112.493 | 24% | |||
Growth Equity Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 8,193,105.341 | 20% | |||
Growth Equity Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 6,027,303.427 | 14% | |||
Growth Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,565,641.891 | 9% | |||
Growth Equity Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 3,393,453.000 | 8% |
B-12
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Growth Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,279,593.310 | 8% | |||
Growth Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 2,840,298.500 | 7% | |||
Small Cap Equity Fund Institutional Class | GuideStone Financial Resources Aggressive Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 2,969,442.361 | 19% | |||
Small Cap Equity Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 2,372,793.683 | 15% | |||
Small Cap Equity Fund Institutional Class | GuideStone 403(b)(9) Employer Plan PO Box 2190 Dallas, TX 75221-2190 | 2,098,086.146 | 14% | |||
Small Cap Equity Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 1,695,947.441 | 11% | |||
Small Cap Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,584,020.403 | 10% | |||
Small Cap Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,391,371.746 | 9% | |||
Small Cap Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,206,206.139 | 8% | |||
International Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 5,118,023.624 | 29% | |||
International Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 4,622,749.109 | 26% | |||
International Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 4,180,312.460 | 23% |
B-13
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
International Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2015 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,964,362.534 | 11% | |||
International Equity Index Fund Institutional Class | GuideStone Financial Resources MyDestination 2055 Fund PO Box 2190 Dallas, TX 75221-2190 | 1,135,007.022 | 6% | |||
International Equity Fund Institutional Class | GuideStone Financial Resources Aggressive Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 20,779,446.168 | 25% | |||
International Equity Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 16,930,850.100 | 21% | |||
International Equity Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 12,053,473.112 | 15% | |||
International Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 7,191,536.073 | 9% | |||
International Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 6,487,725.304 | 8% | |||
International Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 5,898,729.097 | 7% | |||
Emerging Markets Equity Fund Institutional Class | GuideStone Financial Resources Aggressive Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 8,871,985.257 | 23% | |||
Emerging Markets Equity Fund Institutional Class | GuideStone Financial Resources Growth Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 6,977,457.632 | 18% | |||
Emerging Markets Equity Fund Institutional Class | GuideStone Financial Resources Balanced Allocation Fund PO Box 2190 Dallas, TX 75221-2190 | 4,994,971.055 | 13% | |||
Emerging Markets Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2025 Fund PO Box 2190 Dallas, TX 75221-2190 | 4,496,186.149 | 12% |
B-14
Name of Fund | Shareholder Name and Address | Number and Percentage of July 16, 2018 (Percentage of shares owned rounded to the nearest whole percentage) | ||||
Emerging Markets Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2035 Fund PO Box 2190 Dallas, TX 75221-2190 | 4,258,467.416 | 11% | |||
Emerging Markets Equity Fund Institutional Class | GuideStone Financial Resources MyDestination 2045 Fund PO Box 2190 Dallas, TX 75221-2190 | 3,552,923.971 | 9% |
B-15
APPENDIX C
MORE INFORMATIONABOUT WELLINGTON MANAGEMENT COMPANY LLP
Wellington Management Company LLP (“Wellington”), with principal offices at 280 Congress Street, Boston, Massachusetts 02210, has been a registered investment advisor since 1928. Wellington is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowments, foundations and other institutions. Wellington and its predecessor organizations have provided investment advisory services for over 80 years. As of June 30, 2018, Wellington, along with its investment advisory affiliates, had investment management authority with respect to approximately $1.1 trillion in assets.
Listed below are the names, addresses and principal occupations during the past five years for the directors and principal executive officers of Wellington:
Name | Position(s) with Wellington/Principal Occupations | |
Cynthia M. Clarke | Senior Managing Director and General Counsel | |
John D. Norberg | Senior Managing Director and Chief Compliance Officer | |
Edward J. Steinborn | Senior Managing Director and Chief Financial Officer | |
Brendan J. Swords | Chairman, Chief Executive Officer |
The business address of each person listed above is the same as the address for Wellington.
Wellington does not serve as investment adviser orsub-adviser to any registered investment companies which employ an emerging markets equity strategy similar to that proposed to be employed for the Emerging Markets Equity Fund.
C-1
APPENDIX D
FORMOF SUB-ADVISORY AGREEMENT
THISSUB-ADVISORY AGREEMENT (“Agreement”) is made among GUIDESTONE FUNDS, a Delaware business trust (“Trust”), and GUIDESTONE CAPITAL MANAGEMENT, LLC (“Adviser”), a limited liability company organized under the laws of the State of Texas, and WELLINGTON MANAGEMENT COMPANY LLP, a registered investment adviser organized under the laws of the State of Delaware(“Sub-Adviser”).
WHEREAS, the Adviser has entered into an Investment Advisory Agreement (“Management Agreement”) with the Trust, anopen-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”); and
WHEREAS, the Emerging Markets Equity Fund (“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 certain of 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 theSub-Adviser to render investment advisory services for the portion of the Fund’s assets allocated to theSub-Adviser, as determined from time to time by the Adviser, in the manner and on the terms hereinafter set forth; and
WHEREAS, theSub-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 theSub-Adviser agree as follows:
1. Appointment. The Adviser and the Trust hereby appoint and employ theSub-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 theSub-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 theSub-Adviser. TheSub-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 Agreement or another writing by the Trust, the Adviser and theSub-Adviser.
2. Acceptance of Appointment. TheSub-Adviser accepts that appointment and agrees to render the services herein set forth, for the compensation herein provided.
3. Duties asSub-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 theSub-Adviser, theSub-Adviser will: (i) provide a continuous investment program with respect to the Fund Account; (ii) determine from time to time what investments in the Fund Account will be purchased, retained or sold by the Fund; and be responsible for placing purchase and sell orders for investments and for other related transactions with respect to the Fund Account. TheSub-Adviser will provide services under this Agreement 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 theSub-Adviser has written notice. TheSub-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 theSub-Adviser.
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(b) In accordance with the Fund’s investment policies described in the Registration Statement, theSub-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 alcohol, 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 theSub-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 theSub-Adviser with such amendments or supplements on a timely basis, and any such changes shall become effective once they have been received by theSub-Adviser. Unless instructed by the Adviser to the contrary, theSub-Adviser shall within a reasonable period of time bring the Fund Account into compliance with such amendments or supplements after they have been received by theSub-Adviser. If theSub-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 theSub-Adviser may rely in purchasing and selling securities for the Fund Account.
(c) TheSub-Adviser will select brokers and dealers to effect all portfolio transactions for the Fund Account subject to the conditions set forth herein. TheSub-Adviser will place all necessary orders with brokers, dealers or issuers, and will negotiate brokerage commissions, if applicable. TheSub-Adviser agrees that, in placing orders with brokers, it will seek to obtain “best execution”, considering all of the circumstances, and shall maintain records adequate to demonstrate compliance with this requirement. On behalf of the Fund, and in compliance with Section 28(e) of the Securities Exchange Act of 1934, theSub-Adviser may, in its discretion, use brokers (including brokers that may be affiliates of theSub-Adviser to the extent permitted by Section 3(d) hereof) who provide theSub-Adviser with research, analysis, advice and similar services to execute portfolio transactions, and theSub-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 theSub-Adviser’s determining in good faith that such commission is reasonable in terms either of the particular transaction or of the overall responsibility of theSub-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. Subject to seeking best execution, the Board or the Adviser may direct theSub-Adviser to effect transactions in portfolio securities through broker-dealers in a manner that will help generate resources to pay the costs of certain expenses that the Trust is required to pay or for which the Trust is required to arrange payment. TheSub-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 or other assets be purchased from or sold to theSub-Adviser, any other investmentsub-adviser that serves assub-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”). On occasions when theSub-Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other clients of theSub-Adviser, theSub-Adviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities to be purchased or sold to attempt to obtain a more favorable price or lower brokerage commissions and efficient execution. Whenever theSub-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 theSub-Adviser, the orders will be allocated as to price and amount among all such accounts in a manner theSub-Adviser believes to be equitable over time and consistent with its fiduciary obligations to each account. In addition, subject to applicable laws, rules and regulation, theSub-Adviser may, but shall be under no obligation to, execute purchases and sales of the same securities or other instruments on behalf of the Fund directly with other clients of theSub-Adviser as set forth in Wellington Management’s Policy and Procedures on Order Execution.
(d) Except as permitted by law or an exemptive order or rule of the SEC, and the Trust’s policies and procedures adopted thereunder, theSub-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 anysub-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 theSub-Adviser with a written list of such brokers and dealers and will, from time to time, update such list as necessary. TheSub-Adviser agrees that it will provide the Adviser with a written list of brokers and dealers that are affiliates of theSub-Adviser and will, from time to time, update such list as necessary.
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(e) In furnishing services hereunder, to the extent prohibited under, or necessary to comply with, the 1940 Act, theSub-Adviser will not consult with any othersub-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. For the avoidance of doubt, the foregoing restriction will not be deemed to prohibit theSub-Adviser from consulting with: (i) any of its affiliated persons concerning transactions in securities or other assets; (ii) any of the other coveredsub-advisers concerning compliance with paragraphs (a) and (b) of Rule12d3-1; and (iii) a successorsub-adviser of the Fund in order to effect an orderly transition ofsub-advisory duties so long as such consultations do not concern transactions prohibited by Section 17(a) of the 1940 Act.
(f) TheSub-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 theSub-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 Rule31a-3 under the 1940 Act, theSub-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 Rule31a-2 under the 1940 Act any records that it maintains for the Trust and that are required to be maintained by Rule31a-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. Notwithstanding the foregoing, theSub-Adviser shall be able to retain copies of such records to the extent necessary to comply with theSub-Adviser’s recordkeeping policies or regulatory obligations.
(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 theSub-Adviser shall not have possession or custody thereof. TheSub-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 Rule31a-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 theSub-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, theSub-Adviser shall have no responsibility or liability with respect to custodial arrangements or the acts, omissions or other conduct of the Custodian, other than acts or omissions arising in reliance on instructions of theSub-Adviser, and except that it shall be the responsibility of theSub-Adviser to notify the Adviser if the Custodian fails to confirm proper execution of the instructions.
(h) TheSub-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. TheSub-Adviser also agrees to make available to the Board and Adviser any economic, statistical and investment services that theSub-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, theSub-Adviser is not the official pricing agent with respect to the Fund Account but will assist the Administrator and/or the Fund in determining the fair valuation of all portfolio securities held in the Fund Account. Upon request of the Adviser or Administrator, theSub-Adviser will provide reasonable assistance to the Adviser with respect to the valuation of any 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. TheSub-Adviser shall promptly notify the Adviser if, for any reason, theSub-Adviser believes that the price of any security or other investment in the Fund Account may not accurately reflect the value thereof. In those circumstances, approved fair valuation methodology may be utilized by theSub-Adviser to establish a price, at which time a fair valuation recommendation would be provided to the Adviser. TheSub-Adviser will maintain records with respect to securities valuation information provided hereunder, and shall provide such information to the Adviser upon request.
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(j) TheSub-Adviser shall provide reasonable assistance as needed in the preparation of (but not pay for) all periodic reports by the Trust or the Fund to shareholders of the Fund and all reports and filings required to maintain the registration and qualification of the Fund, or to meet other regulatory or tax requirements applicable to the Fund, under federal and state securities and tax laws. Upon the request of the Trust or the Adviser, theSub-Adviser shall review draft reports to shareholders, Registration Statements or portions thereof that relate to the Fund or theSub-Adviser and other documents provided to theSub-Adviser, provide comments on such drafts on a timely basis, and provide certifications orsub-certifications on a timely basis as to the accuracy of the information contained in such reports or other documents. TheSub-Adviser will prepare and cause to be filed in a timely manner Form 13F and, if required, Schedule 13G with respect to securities held for the Fund Account.
(k) As reasonably requested by the Trust on behalf of the Trust’s officers and in accordance with the scope of theSub-Adviser’s obligations and responsibilities contained in this Agreement (i.e., with respect to the Fund Account and theSub-Adviser’s provision of portfolio management services hereunder), theSub-Adviser will provide reasonable assistance to the Trust in connection with the Trust’s compliance with the Sarbanes-Oxley Act and the rules and regulations promulgated by the SEC thereunder, and Rule38a-1 of the 1940 Act. Specifically, theSub-Adviser agrees to (a) certify periodically, upon the reasonable request of the Trust, that with respect to the Fund Account and theSub-Adviser’s provision of portfolio management services hereunder, it is in compliance with all applicable “federal securities laws”, as required by Rule38a-l under the 1940 Act, and Rule206(4)-7 under the Advisers Act; (b) upon request and reasonable prior notice, cooperate with third-party audits arranged by the Trust to evaluate the effectiveness of the Trust’s compliance controls; (c) upon request and reasonable prior notice, provide the Trust’s chief compliance officer with direct access to its chief compliance officer (or his/her designee); (d) upon request, provide the Trust’s chief compliance officer with periodic reports; and (e) promptly provide notice of any material compliance matters that relate to, or could reasonably be expected to have an impact on, the Fund Account, Fund, Trust or the performance of theSub-Adviser’s duties under this Agreement.
(l) TheSub-Adviser is permitted to use persons employed by an “affiliated person” (as defined in the 1940 Act) of theSub-Adviser, each of whom shall be treated as an “associated person” of theSub-Adviser (as defined in the Advisers Act to provide, or assist in providing, discretionary investment advisory services under the Agreement to the extent not prohibited by, or inconsistent with, applicable law, including the requirements of the 1940 Act, the rules thereunder, and relevant positions of the SEC and its staff. In addition,Sub-Adviser is permitted to use affiliates and employees of such affiliates, to providenon-discretionary investment advisory services. TheSub-Adviser will be responsible under the Agreement for any action taken by such person on behalf of the Fund to the same extent as if theSub-Adviser had taken such action directly. All fees and/or other compensation payable to a participating affiliate shall be the sole responsibility of theSub-Adviser and neither the Fund nor the Adviser shall have any obligation to pay any fee or compensation to such participating affiliate.
(m) TheSub-Adviser will not be responsible for making any class action filings, including bankruptcies, on behalf of the Fund Account. TheSub-Adviser shall make reasonable efforts to provide the Trust and the Adviser with any information it receives regarding class action claims or any other actions or proceedings in which the Fund may be entitled to participate involving any asset held in the Fund Account and shall cooperate with the Trust and the Adviser to the extent reasonably necessary for the Trust or the Adviser to pursue and/or participate in any such action.
4. Further Duties. In all matters relating to the performance of this Agreement, theSub-Adviser will act in conformity with the applicable 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 theSub-Adviser in writing, and with the written instructions and written directions of the Board and the Adviser; and will comply with the requirements of (i) the 1940 Act and Advisers Act and the rules under each; (ii) the diversification requirements of Section 851(b)(2) of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies; (iii) the Commodity Exchange Act, as amended, and the rules and regulations adopted thereunder from time to time; and (iv) all other federal and state laws and regulations applicable to the Trust and the Fund. The Adviser agrees to provide to theSub-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.
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5. Proxies. Provided the Custodian has timely forwarded the relevant proxy materials, theSub-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 theSub-Adviser (or its designated agent) all relevant proxy solicitation materials.
6. Expenses. During the term of this Agreement, theSub-Adviser will bear all expenses incurred by it in connection with its services under this Agreement 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 theSub-Adviser for its services under this Agreement shall be calculated daily and paid monthly by the Trust, and not the Adviser, in accordance with the attached Schedule B. TheSub-Adviser shall not be responsible for any expenses incurred by the Fund or the Trust. If this Agreement 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 bepro-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. TheSub-Adviser shall discharge its duties under this Agreement with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent investment professional acting in a similar capacity and familiar with such matters would use (the “Standard of Care”). TheSub-Adviser shall not be liable for any loss other than a loss which is incurred by reason of a breach of its Standard of Care under this Agreement. 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 theSub-Adviser or any of its directors, officers, employees or affiliates for all losses, damages, liabilities, costs and expenses (including reasonable legal expenses) (“Losses”) incurred by theSub-Adviser by reason of or arising out of any act or omission by the Adviser under this Agreement, if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of the Adviser, or any breach of warranty, representation or agreement hereunder, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of theSub-Adviser or theSub-Adviser’s breach of fiduciary duty to the Adviser.
(b) The Trust shall indemnify theSub-Adviser or any of its directors, officers, employees or affiliates for all losses, damages, liabilities, costs and expenses (including reasonable legal expenses) (“Losses”) incurred by theSub-Adviser by reason of or arising out of any act or omission by the Trust under this Agreement, if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of the Trust, or any breach of warranty, representation or agreement hereunder, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of theSub-Adviser or theSub-Adviser’s breach of fiduciary duty to the Trust.
(c) TheSub-Adviser shall indemnify the Adviser or any of its directors, officers, employees or affiliates for all losses, damages, liabilities, costs and expenses (including reasonable legal expenses) (“Losses”) incurred by the Adviser by reason of or arising out of any act or omission by theSub-Adviser under this Agreement if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of theSub-Adviser, or any other breach of its Standard of Care, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of the Adviser or the Adviser’s breach of fiduciary duty to theSub-Adviser.
(d) TheSub-Adviser shall indemnify the Trust or any of its trustees, officers, employees or affiliates for all losses, damages, liabilities, costs and expenses (including reasonable legal expenses) (“Losses”) incurred by the Trust by reason of or arising out of any act or omission by theSub-Adviser under this Agreement if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of theSub-Adviser, or any other breach of its Standard of Care, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of the Trust or the Trust’s breach of fiduciary duty to theSub-Adviser.
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(e) The indemnification in this Section 9 shall survive the termination of this Agreement.
10. Representations, Warranties and Agreements of the Trust. The Trust represents, warrants and agrees that:
(a) The Adviser and theSub-Adviser each has been duly appointed by the Board to provide investment services to the Fund Account as contemplated hereby.
(b) The Trust will cause the Adviser to deliver to theSub-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 theSub-Adviser, as is necessary for theSub-Adviser to carry out its obligations under this Agreement.
11. Representations of the Adviser. The Adviser represents, warrants and agrees that:
(a) The Adviser has been duly authorized by the Board to delegate to theSub-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 Agreement 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 Agreement; (iii) has met and will seek to continue to meet for so long as this Agreement 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 Agreement; (iv) has the authority to enter into and perform the services contemplated by this Agreement; and (v) will promptly notify theSub-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 theSub-Adviser. TheSub-Adviser represents, warrants and agrees that:
(a) TheSub-Adviser (i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement 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 Agreement; (iii) has met and will seek to continue to meet for so long as this Agreement 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 Agreement; (iv) has the authority to enter into and perform the services contemplated by this Agreement; and (v) will promptly notify the Trust and Adviser of the occurrence of any event that theSub-Adviser reasonably determines could have a materially adverse impact on theSub-Adviser’s ability to provide services under this Agreement or would disqualify theSub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise. TheSub-Adviser will also promptly notify the Trust and the Adviser if it is served or otherwise receives notice of any material 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) TheSub-Adviser has adopted and implemented written policies and procedures, as required by Rule206(4)-7 under the Advisers Act, which are reasonably designed to prevent violations of federal securities laws by theSub-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) TheSub-Adviser has adopted a written code of ethics complying with the requirements of Rule17j-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 theSub-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 Agreement is in effect, theSub-Adviser shall furnish to the Trust and the Adviser (i) 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 (ii) a written certification that theSub-Adviser has adopted procedures reasonably necessary to prevent violations of the code of ethics. In addition, theSub-Adviser shall (i) promptly report to the Board in writing any material amendments to its code of ethics; (ii) promptly furnish to the Board all information regarding any material 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 theSub-Adviser’s code of ethics; and (iii) provide quarterly reports to the Adviser on any material violations of theSub-Adviser’s code of ethics during the period so indicated. Upon the reasonable written request of the Adviser, theSub-Adviser shall permit the Adviser, its employees or its agents to examine the reports required to be made to theSub-Adviser by Rule17j-1(c)(1) and all other records relevant to theSub-Adviser’s code of ethics.
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(d) TheSub-Adviser has provided the Trust and the Adviser with a copy of its Form ADV, which as of the date of this Agreement 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 theSub-Adviser, as required by the Advisers Act.
(e) TheSub-Adviser will notify the Trust and the Adviser of any change of control of theSub-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 theSub-Adviser, in each case prior to such change if theSub-Adviser is aware of such change but in any event not later than promptly after such change. TheSub-Adviser agrees that it may bear all reasonable expenses of the Trust and Adviser, if any, arising out ofSub-Adviser’s failure to notify the Trust and the Adviser as set forth herein.
(f) TheSub-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) TheSub-Adviser will not, in violation of applicable law or regulation, 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 in providing investment advice or investment management services to the Fund.
(h) TheSub-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. Notwithstanding the preceding sentence, theSub-Adviser may (i) disclose its relationship with the Trust, Fund or Adviser in client lists without prior written consent of the Adviser; and (ii) use the performance of the Fund Account in its composite performance.
13. Services Not Exclusive. The services furnished by theSub-Adviser hereunder are not to be deemed to be exclusive, and theSub-Adviser shall be free to furnish similar services to others, except as prohibited by applicable law or agreed upon in writing among theSub-Adviser, the Trust and the Adviser.
14. Confidentiality. TheSub-Adviser, the Adviser and Fund acknowledge and agree that during the term of this Agreement the parties may have access to information that is proprietary or confidential to both parties or their respective affiliates (“Confidential Information”). The parties agree that their respective officers and employees shall treat all such Confidential Information as confidential and proprietary and will not use or disclose Confidential Information for any purpose other than in connection with the exercise of their responsibilities under this Agreement, except in the following circumstances: (i) where any Confidential Information is made publicly available other than in breach of this Agreement; and (ii) where disclosure is required by law or requested by any governmental or regulatory authority that may have jurisdiction over either party, in which case such party shall request confidential treatment of such information whenever possible. In addition, the Adviser and the Fund acknowledge that theSub-Adviser may disclose information relating to its investment activities in the normal course of business, including information relating to the Fund Account, provided that no information identifying the Fund or the Adviser may be shared.
The Adviser and the Fund agree not to make use of the investment decisions or recommendations of theSub-Adviser, other than with respect to the Fund Account, without the written consent of theSub-Adviser. In addition, each party shall use its best efforts to ensure that any of its agents or affiliates who may gain access to Confidential Information shall be made aware of its proprietary nature and shall likewise treat it as confidential.
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15. Authorized Representatives of the Adviser. TheSub-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 theSub-Adviser. TheSub-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 Agreement 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 those Trustees of the Trust who are not “interested persons” of the Trust, as defined within the meaning of Section 2(a)(19) of the 1940 Act, 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 the Fund, unless any requirement for a vote of the outstanding voting securities of the Fund is rendered inapplicable by an order of exemption from the SEC.
(b) Notwithstanding the foregoing, this Agreement 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 Agreement will terminate automatically in the event of its assignment (as defined under the 1940 Act) or upon termination of the Management Agreement as it relates to the Fund. TheSub-Adviser agrees to bear all reasonable expenses of the Trust, if any, arising out of an assignment of this Agreement.
17. 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 whom enforcement of the change, waiver, discharge or termination is sought. No material amendment of this Agreement shall be effective until approved (i) by the vote of a majority of those Trustees of the Trust who are not parties to this Agreement 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 orno-action letter permitting it to modify the Agreement 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 andSub-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 to theSub-Adviser pursuant to this Agreement 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 to theSub-Adviser shall be limited to the respective assets of the Fund. The Adviser andSub-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 Agreement 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. Reference to theSub-Adviser. The Adviser and the Trust are authorized to publish and distribute information, including, but not limited, to registration statements, fund fact sheets and marketing material, regarding the provision ofsub-advisory services by theSub-Adviser pursuant to this Agreement and to include in such information the name of theSub-Adviser or any trademark, service mark, symbol or logo of theSub-Adviser, without the prior written consent of theSub-Adviser. The Adviser will provide copies of such items to theSub-Adviser upon request within a reasonable time following such use, publication or distribution.
21. No Implied Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, rule or regulation, (i) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing signed by the other party; (ii) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (iii) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.
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22. Severability. If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
23. 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. As used in this Agreement, 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 Agreement 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 Agreement and the Schedule(s) attached hereto embody the entire agreement and understanding among the parties. This Agreement may be signed in counterpart.
24. Notices. Any notice herein required is to be in writing and is deemed to have been given to theSub-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 Agreement will be delivered by personal service, by postage mail – return receipt requested or sent by electronic transmission (via facsimile or email) or a similar means of same day delivery which provides evidence of receipt (or with a confirming copy by mail as set forth herein). All notices provided to Adviser will be sent to the attention of . All notices provided to theSub-Adviser will be sent to the attention of the .
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PURSUANT TO AN EXEMPTION FROM THE COMMODITY FUTURES TRADING COMMISSION IN CONNECTION WITH ACCOUNTS OF QUALIFIED ELIGIBLE PERSONS, THIS BROCHURE OR ACCOUNT DOCUMENT IS NOT REQUIRED TO BE, AND HAS NOT BEEN, FILED WITH THE COMMISSION. THE COMMODITY FUTURES TRADING COMMISSION DOES NOT PASS UPON THE MERITS OF PARTICIPATING IN A TRADING PROGRAM OR UPON THE ADEQUACY OR ACCURACY OF COMMODITY TRADING ADVISOR DISCLOSURE. CONSEQUENTLY, THE COMMODITY FUTURES TRADING COMMISSION HAS NOT REVIEWED OR APPROVED THIS TRADING PROGRAM OR THIS BROCHURE OR ACCOUNT DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized signatories as of June 6, 2018.1
GUIDESTONE FUNDS – | ||||||
EMERGING MARKETS EQUITY FUND | ||||||
2401 Cedar Springs Road | ||||||
Dallas, Texas 75201 | ||||||
Attest | ||||||
By: | By: | |||||
Name: Melanie Childers | Name: | John R. Jones | ||||
Title: Vice President – Fund Operations | Title: | President | ||||
GUIDESTONE CAPITAL MANAGEMENT, LLC | ||||||
2401 Cedar Springs Road | ||||||
Dallas, Texas 75201 | ||||||
Attest | ||||||
By: | By: | |||||
Name: Matt L. Peden | Name: | David S. Spika | ||||
Title: Vice President and Chief Investment Officer | Title: | President | ||||
WELLINGTON MANAGEMENT | ||||||
COMPANY LLP | ||||||
280 Congress Street | ||||||
Boston, Massachusetts 02210 | ||||||
Attest | ||||||
By: | By: | |||||
Name: | Name: | |||||
Title: | Title: |
1 Original Agreement dated June 6, 2018.
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SCHEDULE A
REPORTS TO BE PROVIDED BYSUB-ADVISER
EFFECTIVE DATE JUNE 6, 2018
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 theSub-Adviser has discharged its responsibilities in accordance with the Investment Manager Mandate and the GuideStone Funds Compliance Checklist, noting any instances ofnon-compliance during the quarter, and that theSub-Adviser will continue to maintain the Fund Account in compliance. Report to GuideStone Capital Management, LLC any changes or material violations of theSub-Adviser’s Code of Ethics during the quarter. Also, a statement to the effect that theSub-Adviser has discharged its responsibilities in accordance with Rule38a-1 and204-2. |
3. | Commission recapture report, including soft dollars. |
4. | All equitySub-Advisers provide a report documenting how any proxies were voted during the quarter. |
5. | Attribution analysis report. |
6. | Liquidity summary which is aone-page report showing a summary % of illiquid and deemed liquid securities by month for each of the types of securities on the 144A worksheet. |
7. | 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 incomeSub-Advisers this will include Agency transactions only. |
8. | Report on notice of regulatory examinations and copies of any exam reports. |
9. | An updated list of all affiliated persons of theSub-Adviser. |
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Annually
1. | SSAE 16 / SOC 1 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 theSub-Adviser’s policies or code of ethics. |
2. | Updated proxy voting policy. |
3. | Current code of ethics and Rule17j-1 certification paragraph. |
4. | Certificate of insurance as proof of liability and fiduciary insurance coverage. |
5. | Updated Form ADV Parts 1 and 2, or more frequently if revised during the year. |
6. | Complete requested Section 15(c) questionnaire and provide information requested by the Board in connection with its review of thesub-advisory contract. |
7. | Certification with respect to the Fund Account that theSub-Adviser’s provision of portfolio management services is in compliance with all applicable “federal securities laws,” as required by Rule38a-1 under the 1940 Act and Rule206(4)-7 under the Advisers Act. |
Periodic
1. | Promptly furnish all information regarding any material violation of the code of ethics by any person who would be considered an Access Person under GuideStone Funds and GuideStone Capital Management, LLC’s code of ethics, if such person were not subject to theSub-Adviser’s code of ethics. |
2. | Promptly notify GuideStone Capital Management, LLC of any material event related to the organization that theSub-Adviser reasonably determines is an important consideration in the ongoing relationship between theSub-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 theSub-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 theSub-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 theSub-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 a list of any participating affiliate which provides, or assists in providing, services under the Agreement, which includes the identity of the participating affiliate and such other information reasonably requested by GuideStone Capital Management, LLC. |
10. | Provide copies of any other periodic or special report required pursuant to the 1940 Act and the rules and regulations promulgated thereunder with respect to theSub-Adviser’s management of the Fund Account. |
11. | Promptly notify GuideStone Capital Management, LLC of any material amendments toSub-Adviser’s code of ethics. |
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SCHEDULE B
SUB-ADVISORY FEES
This Schedule B contains thesub-advisory fee information required by Section 7 of theSub-Advisory Agreement among GuideStone Funds (“Trust”), GuideStone Capital Management, LLC (“Adviser”) and Wellington Management Company LLP,(“Sub-Adviser”) relating to the Emerging Markets Equity Fund (“Fund”), a series of the Trust.
Fee Schedule. Fees payable to theSub-Adviser pursuant to this Agreement 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 theSub-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 theSub-Adviser.
Average Daily Net Assets | Annual Rate |
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SCHEDULE C
AUTHORIZED REPRESENTATIVES OF THE ADVISER
Name | Title | Specimen Signature | ||
David S. Spika | President | |||
Matt L. Peden | Vice President and | |||
Chief Investment Officer | ||||
Patrick Pattison | Vice President and Treasurer | |||
Melanie Childers | Vice President – Fund Operations | |||
Matthew A. Wolfe | Secretary | |||
Ronald W. Bass | Chief Compliance Officer |
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APPENDIX E
MORE INFORMATIONABOUT GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Goldman Sachs Asset Management, L.P. (“GSAM”), with principal offices at 200 West Street, New York, New York 10282, has been a registered investment adviser since 1990. GSAM provides a wide range of discretionary and investment advisory services, actively managed and quantitatively driven, for the firm’s clients. GSAM is wholly owned by GSAM Holdings LLC, a wholly owned subsidiary of The Goldman Sachs Group, Inc. and an affiliate of Goldman, Sachs & Co. GSAM Holdings LLC is also the general partner of GSAM and has been providing financial solutions for investors since 1988. As of June 30, 2018, GSAM, along with its investment advisory affiliates, had approximately $1.5 trillion in assets under supervision (“AUS”). AUS includes assets under management and other client assets for which the firm does not have full discretion.
Listed below are the names, addresses and principal occupations during the past five years for the directors and principal executive officers of GSAM:
Name | Principal Occupation | |
Jacqueline Dupree Arthur | Chief Operating Officer of GSAM | |
Eric Lane Scott | Co-Head, Investment Management Division(Co-Chief Executive Officer) of GSAM | |
Timothy Joseph O’Neill | Co-Head, Investment Management Division(Co-Chief Executive Officer) of GSAM | |
Ellen Randy Porges | General Counsel, Investment Management Division (Chief Legal Officer) of GSAM | |
Judith Leah Shandling | Chief Compliance Officer of GSAM |
The business address of each person listed above is the same as the address for GSAM.
GSAM does not serve as investment adviser orsub-adviser to any registered investment companies which employ an emerging markets equity strategy similar to that proposed to be employed for the Emerging Markets Equity Fund.
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APPENDIX F
FORMOF SUB-ADVISORY AGREEMENT
THISSUB-ADVISORY AGREEMENT (“Agreement”) is made among GUIDESTONE FUNDS, a Delaware business trust (“Trust”), and GUIDESTONE CAPITAL MANAGEMENT, LLC (“Adviser”), a limited liability company organized under the laws of the State of Texas, and GOLDMAN SACHS ASSET MANAGEMENT, L.P., a registered investment adviser organized under the laws of the State of Delaware(“Sub-Adviser”).
WHEREAS, the Adviser has entered into an Investment Advisory Agreement (“Management Agreement”) with the Trust, anopen-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”); and
WHEREAS, the Emerging Markets Equity Fund (“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 certain of 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 theSub-Adviser to render investment advisory services for the portion of the Fund’s assets allocated to theSub-Adviser, as determined from time to time by the Adviser, in the manner and on the terms hereinafter set forth; and
WHEREAS, theSub-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 theSub-Adviser agree as follows:
1. Appointment. The Adviser and the Trust hereby appoint and employ theSub-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 theSub-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 theSub-Adviser. TheSub-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 Agreement or another writing by the Trust, the Adviser and theSub-Adviser.
2. Acceptance of Appointment. TheSub-Adviser accepts that appointment and agrees to render the services herein set forth, for the compensation herein provided.
3. Duties asSub-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 theSub-Adviser, theSub-Adviser will: (i) provide a continuous investment program with respect to the Fund Account; (ii) determine from time to time what investments in the Fund Account will be purchased, retained or sold by the Fund; and be responsible for placing purchase and sell orders for investments and for other related transactions with respect to the Fund Account. TheSub-Adviser will provide services under this Agreement 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 theSub-Adviser has written notice. TheSub-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 theSub-Adviser.
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(b) In accordance with the Fund’s investment policies described in the Registration Statement, theSub-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 alcohol, 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 theSub-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 theSub-Adviser with such amendments or supplements on a timely basis, and any such changes shall become effective once they have been received by theSub-Adviser. If theSub-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 theSub-Adviser may rely in purchasing and selling securities for the Fund Account.
(c) TheSub-Adviser will select brokers and dealers to effect all portfolio transactions for the Fund Account subject to the conditions set forth herein. TheSub-Adviser will place all necessary orders with brokers, dealers or issuers, and will negotiate brokerage commissions, if applicable. TheSub-Adviser agrees that, in placing orders with brokers, it will seek to obtain best 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, theSub-Adviser may, in its discretion, use brokers (including brokers that may be affiliates of theSub-Adviser to the extent permitted by Section 3(d) hereof) who provide theSub-Adviser with research, analysis, advice and similar services to execute portfolio transactions, and theSub-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 theSub-Adviser’s determining in good faith that such commission is reasonable in terms either of the particular transaction or of the overall responsibility of theSub-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. TheSub-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 or other assets be purchased from or sold to theSub-Adviser, any other investmentsub-adviser that serves assub-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”). On occasions when theSub-Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other clients of theSub-Adviser, theSub-Adviser, to the extent permitted by applicable laws and regulations, may, but shall be under no obligation to, aggregate the securities to be purchased or sold to attempt to obtain a more favorable price or lower brokerage commissions and efficient execution. Whenever theSub-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 theSub-Adviser, the orders will be allocated as to price and amount among all such accounts in a manner theSub-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, theSub-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 anysub-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 theSub-Adviser with a written list of such brokers and dealers and will, from time to time, update such list as necessary. TheSub-Adviser agrees that it will provide the Adviser with a written list of brokers and dealers that are affiliates of theSub-Adviser and will, from time to time, update such list as necessary.
(e) In furnishing services hereunder, to the extent prohibited under, or necessary to comply with, the 1940 Act, theSub-Adviser will not consult with any othersub-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. For the avoidance of doubt, the
foregoing restriction will not be deemed to prohibit theSub-Adviser from consulting with: (i) any of its affiliated persons concerning transactions in securities or other assets; (ii) any of the other coveredsub-advisers concerning compliance with paragraphs (a) and (b) of Rule12d3-1; and (iii) a successorsub-adviser of the Fund in order to effect an orderly transition ofsub-advisory duties so long as such consultations do not concern transactions prohibited by Section 17(a) of the 1940 Act.
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(f) TheSub-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 theSub-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 Rule31a-3 under the 1940 Act, theSub-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 Rule31a-2 under the 1940 Act any records that it maintains for the Trust and that are required to be maintained by Rule31a-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 theSub-Adviser shall not have possession or custody thereof. TheSub-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 Rule31a-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 theSub-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, theSub-Adviser shall have no responsibility or liability with respect to custodial arrangements or the acts, omissions or other conduct of the Custodian, other than acts or omissions arising in reliance on instructions of theSub-Adviser, and except that it shall be the responsibility of theSub-Adviser to notify the Adviser if the Custodian fails to confirm in writing proper execution of the instructions.
(h) TheSub-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. TheSub-Adviser also agrees to make available to the Board and Adviser any economic, statistical and investment services that theSub-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, theSub-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. TheSub-Adviser shall promptly notify the Adviser if, for any reason, theSub-Adviser believes that the price assigned to any security or other investment in the Fund Account that is not readily ascertainable may not accurately reflect the value thereof. TheSub-Adviser will maintain adequate records with respect to securities valuation information provided hereunder, and shall provide such information to the Adviser upon request.
(j) TheSub-Adviser shall provide reasonable assistance as needed in the preparation of (but not pay for) all periodic reports by the Trust or the Fund to shareholders of the Fund and all reports and filings required to maintain the registration and qualification of the Fund, or to meet other regulatory or tax requirements applicable to the Fund, under federal and state securities and tax laws. Upon the request of the Trust or the Adviser, theSub-Adviser shall review draft reports to shareholders, Registration Statements or portions thereof that relate to the Fund or theSub-Adviser and other documents provided to theSub-Adviser, provide comments on such drafts on a timely basis, and provide certifications orsub-certifications on a timely basis as to the accuracy of the information contained in such reports or other documents. TheSub-Adviser will prepare and cause to be filed in a timely manner Form 13F and, if required, Schedule 13G with respect to securities held for the Fund Account, without regard for any other assets held by the Trust or the Fund.
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(k) As reasonably requested by the Trust on behalf of the Trust’s officers and in accordance with the scope of theSub-Adviser’s obligations and responsibilities contained in this Agreement (i.e., with respect to the Fund Account and theSub-Adviser’s provision of portfolio management services hereunder), theSub-Adviser will provide reasonable assistance to the Trust in connection with the Trust’s compliance with the Sarbanes-Oxley Act and the rules and regulations promulgated by the SEC thereunder, and Rule38a-1 of the 1940 Act. Specifically, theSub-Adviser agrees to (a) certify periodically, upon the reasonable request of the Trust, that with respect to the Fund Account and theSub-Adviser’s provision of portfolio management services hereunder, it is in compliance with all applicable “federal securities laws”, as required by Rule38a-l under the 1940 Act, and Rule206(4)-7 under the Advisers Act; (b) upon request and reasonable prior notice, cooperate with third-party audits arranged by the Trust to evaluate the effectiveness of the Trust’s compliance controls; (c) upon request and reasonable prior notice, provide the Trust’s chief compliance officer with direct access to its chief compliance officer (or his/her designee); (d) upon request, provide the Trust’s chief compliance officer with periodic reports; and (e) promptly provide notice of any material compliance matters that relate to, or could reasonably be expected to have an impact on, the Fund Account, Fund, Trust or the performance of theSub-Adviser’s duties under this Agreement.
(l) TheSub-Adviser is permitted to use persons employed by an “affiliated person” (as defined in the 1940 Act) of theSub-Adviser, each of whom shall be treated as an “associated person” of theSub-Adviser (as defined in the Advisers Act to provide, or assist in providing, discretionary investment advisory services under the Contract to the extent not prohibited by, or inconsistent with, applicable law, including the requirements of the 1940 Act, the rules thereunder, and relevant positions of the SEC and its staff. In addition,Sub-Adviser is permitted to use affiliates and employees of such affiliates, to providenon-discretionary investment advisory services. TheSub-Adviser will be responsible under the Agreement for any action taken by such person on behalf of the Fund to the same extent as if theSub-Adviser had taken such action directly. All fees and/or other compensation payable to a participating affiliate shall be the sole responsibility of theSub-Adviser and neither the Fund nor the Adviser shall have any obligation to pay any fee or compensation to such participating affiliate. To the extent theSub-Adviser utilizes the services of a participating affiliate under this Section 3(l), it will provide the Adviser and the Fund with 30 days’ written notice, which will include the identity of the participating affiliate and such other information reasonably requested by the Adviser or the Fund.
(m) TheSub-Adviser will not be responsible for making any class action filings, including bankruptcies, on behalf of the Fund Account. TheSub-Adviser shall promptly provide the Trust with any proof of claim it receives regarding class action claims or any other legal matters involving any asset held in the Fund Account and shall cooperate with the Trust and the Adviser to the extent necessary for the Trust or the Adviser to pursue and/or participate in any such action. If the Trust or the Adviser identifies a security held or previously held by the Fund Account to theSub-Adviser, theSub-Adviser shall, to the extent commercially reasonable and legally permissible, inform the Trust and the Adviser if theSub-Adviser has determined to participate or opt out of a class action litigation or otherwise commence an independent litigation (domestic or foreign) related to that security.
4. Further Duties. In all matters relating to the performance of this Agreement, theSub-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 theSub-Adviser in writing, and with the written instructions and written directions of the Board and the Adviser; and will comply, to the extent applicable to the Fund Account, with the requirements of (i) the 1940 Act and Advisers Act and the rules under each; (ii) the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies; (iii) the Commodity Exchange Act, as amended, and the rules and regulations adopted thereunder from time to time; and (iv) all other federal and state laws and regulations applicable to the Trust and the Fund. The Adviser agrees to provide to theSub-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, theSub-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 theSub-Adviser (or its designated agent) all relevant proxy solicitation materials.
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6. Expenses. During the term of this Agreement, theSub-Adviser will bear all expenses incurred by it in connection with its services under this Agreement 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 theSub-Adviser for its services under this Agreement shall be calculated daily and paid monthly by the Trust, and not the Adviser, in accordance with the attached Schedule B. TheSub-Adviser shall not be responsible for any expenses incurred by the Fund or the Trust. If this Agreement 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 bepro-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.
(a) TheSub-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.
(b) Notwithstanding anything herein to the contrary, in no event will theSub-Adviser have any responsibility for any other fund of the Trust, for any portion of the Fund not managed by theSub-Adviser or for the acts or omissions of any othersub-adviser to the Trust or the Fund.
9. Indemnification.
(a) The Adviser shall indemnify theSub-Adviser or any of its directors, officers, employees or affiliates for all losses, damages, liabilities, costs and expenses (including legal) (“Losses”) incurred by theSub-Adviser by reason of or arising out of any act or omission by the Adviser under this Agreement, if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of the Adviser, or any breach of warranty, representation or agreement hereunder, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of theSub-Adviser or theSub-Adviser’s breach of fiduciary duty to the Adviser.
(b) The Trust shall indemnify theSub-Adviser or any of its directors, officers, employees or affiliates for all losses, damages, liabilities, costs and expenses (including legal) (“Losses”) incurred by theSub-Adviser by reason of or arising out of any act or omission by the Trust under this Agreement, if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of the Trust, or any breach of warranty, representation or agreement hereunder, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of theSub-Adviser or theSub-Adviser’s breach of fiduciary duty to the Trust.
(c) TheSub-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 theSub-Adviser under this Agreement if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of theSub-Adviser, or any breach of warranty, representation or agreement hereunder, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of the Adviser or the Adviser’s breach of fiduciary duty to theSub-Adviser.
(d) TheSub-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 theSub-Adviser under this Agreement if such act or omission involves the gross negligence, willful misfeasance, bad faith or breach of fiduciary duty of theSub-Adviser, or any breach of warranty, representation or agreement hereunder, except to the extent that such Losses arise as a result of the gross negligence, willful misfeasance or bad faith of the Trust or the Trust’s breach of fiduciary duty to theSub-Adviser.
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(e) The indemnification in this Section 9 shall survive the termination of this Agreement.
10. Representations, Warranties and Agreements of the Trust. The Trust represents, warrants and agrees that:
(a) The Adviser and theSub-Adviser each has been duly appointed by the Board to provide investment services to the Fund Account as contemplated hereby.
(b) The Trust will cause the Adviser to deliver to theSub-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 theSub-Adviser, as is necessary for theSub-Adviser to carry out its obligations under this Agreement.
11. Representations of the Adviser. The Adviser represents, warrants and agrees that:
(a) The Adviser has been duly authorized by the Board to delegate to theSub-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 Agreement 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 Agreement; (iii) has met and will seek to continue to meet for so long as this Agreement 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 Agreement; (iv) has the authority to enter into and perform the services contemplated by this Agreement; and (v) will promptly notify theSub-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 theSub-Adviser. TheSub-Adviser represents, warrants and agrees that:
(a) TheSub-Adviser (i) is registered as an investment adviser under the Advisers Act and will continue to be so registered for so long as this Agreement 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 Agreement; (iii) has met and will seek to continue to meet for so long as this Agreement 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 Agreement; (iv) has the authority to enter into and perform the services contemplated by this Agreement; and (v) will promptly notify the Trust and Adviser of the occurrence of any event that could reasonably have a materially adverse impact on theSub-Adviser’s ability to provide services under this Agreement or would disqualify theSub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise. TheSub-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) TheSub-Adviser has adopted and implemented written policies and procedures, as required by Rule206(4)-7 under the Advisers Act, which are reasonably designed to prevent violations of federal securities laws by theSub-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) TheSub-Adviser has adopted a written code of ethics complying with the requirements of Rule17j-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 theSub-Adviser has adopted procedures reasonably designed 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 Agreement is in effect, theSub-Adviser shall furnish to the Trust and the Adviser (i) 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 (ii) a written certification that theSub-Adviser has adopted procedures reasonably designed to prevent
violations of the code of ethics. In addition, theSub-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 information regarding any material 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 theSub-Adviser’s code of ethics; and (iii) provide quarterly reports to the Adviser on any material violations of theSub-Adviser’s code of ethics during the period so indicated. Upon the reasonable written request of the Adviser, theSub-Adviser shall permit the Adviser, its employees or its agents to examine the reports relating to the Fund Account required to be made to theSub-Adviser by Rule17j-1(c)(1) and all other records relevant to theSub-Adviser’s code of ethics.
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(d) TheSub-Adviser has provided the Trust and the Adviser with a copy of its Form ADV, which as of the date of this Agreement 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 theSub-Adviser, as required by the Advisers Act.
(e) TheSub-Adviser will notify the Trust and the Adviser of any change of control of theSub-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 theSub-Adviser, in each case prior to such change if theSub-Adviser is aware of such change but in any event not later than promptly after such change. TheSub-Adviser agrees to bear all reasonable expenses of the Trust and Adviser, if any, arising out of such change.
(f) TheSub-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) TheSub-Adviser will not, in violation of applicable law or regulation, 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 in providing investment advice or investment management services to the Fund.
(h) TheSub-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. Notwithstanding the preceding sentence, theSub-Adviser may (i) disclose its relationship with the Trust, Fund or Adviser in client lists without prior written consent of the Adviser; and (ii) use the performance of the Fund Account in its composite performance.
(i) The Fund is a “Qualified Eligible Person” as defined under Commodity Futures Trading Commission (“CFTC”) Regulation 4.7, consents to its account being an “exempt account” for purposes of CFTC Regulation 4.7 and acknowledges that it has not been furnished with a disclosure document prepared in accordance with CFTC Regulation 4.31 because no such document is required pursuant to CFTC Regulation 4.7.
(j) TheSub-Adviser (i) is not required to be a member of the National Futures Association (the “NFA”) or to be registered with the CFTC in any capacity under the Commodity Exchange Act, as amended, because it does not engage in any CFTC-regulated activities, or (ii) has compiled with all conditions of any applicable exclusion or exemption from such registration, or (iii) is duly registered with the CFTC and is a member of good standing of the NFA.
13. Services Not Exclusive. The services furnished by theSub-Adviser hereunder are not to be deemed to be exclusive, and theSub-Adviser shall be free to furnish similar services to others, except as prohibited by applicable law or agreed upon in writing among theSub-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 materialnon-public information pertaining to the Fund Account and the actions of theSub-Adviser, the Adviser and the Trust in respect thereof.
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15. Authorized Representatives of the Adviser. TheSub-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 theSub-Adviser. TheSub-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 Agreement 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 those Trustees of the Trust who are not “interested persons” of the Trust, as defined within the meaning of Section 2(a)(19) of the 1940 Act, 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 the Fund, unless any requirement for a vote of the outstanding voting securities of the Fund is rendered inapplicable by an order of exemption from the SEC.
(b) Notwithstanding the foregoing, this Agreement 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 Agreement will terminate automatically in the event of its assignment or upon termination of the Management Agreement as it relates to the Fund. TheSub-Adviser agrees to bear all reasonable expenses of the Trust, if any, arising out of an assignment of this Agreement.
17. 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 whom enforcement of the change, waiver, discharge or termination is sought. No material amendment of this Agreement shall be effective until approved (i) by the vote of a majority of those Trustees of the Trust who are not parties to this Agreement 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 orno-action letter permitting it to modify the Agreement 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 andSub-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 Agreement 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 andSub-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 Agreement 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. Reference to theSub-Adviser. The Adviser and the Trust are authorized to publish and distribute information, including, but not limited, to registration statements, fund fact sheets and marketing material, regarding the provision ofsub-advisory services by theSub-Adviser pursuant to this Agreement and for no other purpose whatsoever and to include in such information the name of theSub-Adviser or any trademark, service mark, symbol or logo (collectively, the “Marks”) of theSub-Adviser, without the prior written consent of theSub-Adviser provided that the use of the Marks shall only be in the exact form, style and type prescribed by theSub-Adviser. The Adviser will provide copies of such items to theSub-Adviser upon request within a reasonable time following such use, publication or distribution.
21. No Implied Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law, rule or regulation, (i) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing signed by the other party; (ii) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (iii) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.
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22. Severability. If any provision of this Agreement is held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby.
23. 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. As used in this Agreement, 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 Agreement 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 Agreement and the Schedule(s) attached hereto embody the entire agreement and understanding among the parties. This Agreement may be signed in counterpart.
24. Notices. Any notice herein required is to be in writing and is deemed to have been given to theSub-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 Agreement will be delivered by personal service, by postage mail – return receipt requested or sent by electronic transmission (via facsimile or email) or a similar means of same day delivery which provides evidence of receipt (or with a confirming copy by mail as set forth herein). All notices provided to Adviser will be sent to the attention of . All notices provided to theSub-Adviser will be sent to the attention of .
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized signatories as of June 6, 2018.1
GUIDESTONE FUNDS – | ||||||||
EMERGING MARKETS EQUITY FUND | ||||||||
2401 Cedar Springs Road | ||||||||
Dallas, Texas 75201 | ||||||||
Attest | ||||||||
By: | By: | |||||||
Name: | Melanie Childers | Name: | John R. Jones | |||||
Title: | Vice President – Fund Operations | Title: | President | |||||
GUIDESTONE CAPITAL MANAGEMENT, LLC | ||||||||
2401 Cedar Springs Road | ||||||||
Dallas, Texas 75201 | ||||||||
Attest | ||||||||
By: | By: | |||||||
Name: | Matt L. Peden | Name: | David S. Spika | |||||
Title: | Vice President and | Title: | President | |||||
Chief Investment Officer | ||||||||
GOLDMAN SACHS ASSET | ||||||||
MANAGEMENT, L.P. | ||||||||
200 West Street | ||||||||
New York, New York 10282 | ||||||||
Attest | ||||||||
By: | By: | |||||||
Name: | Name: | |||||||
Title: | Title: |
1Original Agreement dated June 6, 2018.
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SCHEDULE A
REPORTS TO BE PROVIDED BYSUB-ADVISER
EFFECTIVE DATE JUNE 6, 2018
Monthly
4. | Transaction and valuation reports, including investment performance. |
5. | 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. |
6. | Report on transactions with affiliated broker/dealers on both an Agency and Principal basis. |
Quarterly
10. | GuideStone Funds Compliance Checklist. |
11. | Quarterly Certification Memorandum – A statement to the effect that theSub-Adviser has discharged its responsibilities in accordance with the Investment Manager Mandate and the GuideStone Funds Compliance Checklist, noting any instances ofnon-compliance during the quarter, and that theSub-Adviser will continue to maintain the Fund Account in compliance. Report to GuideStone Capital Management, LLC any changes or material violations of theSub-Adviser’s Code of Ethics during the quarter. Also, a statement to the effect that theSub-Adviser has discharged its responsibilities in accordance with Rule38a-1 and204-2. |
12. | Commission recapture report. |
13. | All fixed incomeSub-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. |
14. | All equitySub-Advisers provide a report documenting how any proxies were voted during the quarter. |
15. | Attribution analysis report. |
16. | Liquidity summary which is aone-page report showing a summary % of illiquid and deemed liquid securities by month for each of the types of securities on the 144A worksheet. |
17. | 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 incomeSub-Advisers this will include Agency transactions only. |
18. | Report on notice of regulatory examinations and copies of any exam reports. |
19. | An updated list of all affiliated persons of theSub-Adviser. |
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Annually
8. | SSAE 16 / SOC 1 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 theSub-Adviser’s policies or code of ethics. |
9. | Updated proxy voting policy. |
10. | Current code of ethics and Rule17j-1 certification paragraph. |
11. | Report showing proof of liability and fiduciary insurance coverage and ERISA bonding requirements. |
12. | Updated Form ADV Parts 1 and 2, or more frequently if revised during the year. |
13. | Complete requested Section 15(c) questionnaire and provide information requested by the Board in connection with its review of thesub-advisory contract. |
14. | Certification with respect to the Fund Account that theSub-Adviser’s provision of portfolio management services is in compliance with all applicable “federal securities laws,” as required by Rule38a-1 under the 1940 Act and Rule206(4)-7 under the Advisers Act. |
Periodic
12. | Immediately furnish all information regarding any material violation of the code of ethics by any person who would be considered an Access Person under GuideStone Funds and GuideStone Capital Management, LLC’s code of ethics, if such person were not subject to theSub-Adviser’s code of ethics. |
13. | 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 theSub-Adviser and GuideStone Funds. |
14. | Timely advise GuideStone Capital Management, LLC of any significant changes in the ownership, organizational structure, financial condition or key personnel staffing of theSub-Adviser. |
15. | Advise GuideStone Capital Management, LLC of any changes in the Fund Account manager. |
16. | Promptly inform GuideStone Capital Management, LLC of any major changes in theSub-Adviser’s investment outlook, investment strategy and/or Fund Account structure. |
17. | Meet with GuideStone Capital Management, LLC on a periodic basis for a formal Fund Account review. |
18. | Advise GuideStone Capital Management, LLC of any pertinent issues that theSub-Adviser deems to be of significant interest. |
19. | Provide GuideStone Capital Management, LLC with reports or other information regarding brokerage and benefits received there from. |
20. | Provide copies of any other periodic or special report required pursuant to the 1940 Act and the rules and regulations promulgated thereunder with respect to theSub-Adviser’s management of the Fund Account. |
21. | Promptly notify GuideStone Capital Management, LLC of any material amendments toSub-Adviser’s code of ethics. |
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SCHEDULE B
SUB-ADVISORY FEES
This Schedule B contains thesub-advisory fee information required by Section 7 of theSub-Advisory Agreement among GuideStone Funds (“Trust”), GuideStone Capital Management, LLC (“Adviser”) and Goldman Sachs Asset Management, L.P.,(“Sub-Adviser”) relating to the Emerging Markets Equity Fund (“Fund”), a series of the Trust.
Fee Schedule. Fees payable to theSub-Adviser pursuant to this Agreement 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 theSub-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 theSub-Adviser.
Average Daily Net Assets | Annual Rate |
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SCHEDULE C
AUTHORIZED REPRESENTATIVES OF THE ADVISER
Name | Title | Specimen Signature | ||
David S. Spika | President | |||
Matt L. Peden | Vice President and | |||
Chief Investment Officer | ||||
Patrick Pattison | Vice President and Treasurer | |||
Melanie Childers | Vice President – Fund Operations | |||
Matthew A. Wolfe | Secretary | |||
Ron W. Bass | Chief Compliance Officer |
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