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THE PARKSTONE GROUP OF FUNDS
Supplement Dated March 17, 2000 to
the Statement of Additional Information Dated September 17, 1999
(Replaces the Supplement dated December 28, 1999)
THIS SUPPLEMENT PROVIDES NEW AND ADDITIONAL INFORMATION BEYOND THAT CONTAINED IN
THE STATEMENT OF ADDITIONAL INFORMATION AND SHOULD BE RETAINED AND READ IN
CONJUNCTION WITH THE STATEMENT OF ADDITIONAL INFORMATION.
SEI INVESTMENTS MUTUAL FUNDS SERVICES WILL ASSUME THE ROLE AS THE GROUP'S
ADMINISTRATOR, EFFECTIVE JANUARY 1, 2000, AND THE ROLE AS THE GROUP'S FUND
ACCOUNTANT, EFFECTIVE APRIL 3, 2000.
THE SECTION ENTITLED, "ADDITIONAL INFORMATION ON PORTFOLIO INSTRUMENTS," PAGE
6, IS AMENDED BY DELETION OF THE FIRST PARAGRAPH TO ADD THE FOLLOWING
INFORMATION:
"Like any investment program, an investment in a Fund entails certain risks.
The Funds will not acquire portfolio securities issued by, make savings
deposits in, or enter into repurchase, reverse repurchase or dollar roll
agreements with the Investment Adviser, SEI Investments Mutual Funds Services,
SEI or their affiliates, and will not give preference to the correspondents of
their bank affiliates with respect to such transactions, securities, savings
deposits, repurchase agreements, reverse repurchase agreements and dollar roll
agreements."
THE SECTION ENTITLED, "MANAGEMENT OF THE GROUP," PAGE 34, IS AMENDED AS
FOLLOWS:
- The first and second sentences in the sixth paragraph are deleted and the
following information is added:
"Each Trustee who is not an affiliated person of SEI Investments Mutual
Funds Services or National City Corporation, the ultimate parent of
National City Bank, receives an annual fee of $15,000 plus $3,000 for
each Board meeting attended and reimbursement of expenses incurred in
attending meetings for services as a Trustee. The Chairman of the Board
receives an additional $5,000 per annum for services in such capacity.
The Trustee and Chairman expenses are allocated on a pro rata basis
across the Armada Funds, Parkstone Group of Funds and Parkstone Advantage
Fund. Such fees are paid for services rendered to all of the Funds and
are allocated accordingly."
- The seventh and eighth paragraphs are deleted and the following
information is added:
"The officers of the Group, their addresses, and principal occupations
during the past five years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME WITH THE GROUP DURING PAST 5 YEARS
---- ------------------- -----------------------------------
<S> <C> <C>
Herbert R. Martens, Jr. President Executive Vice President, National
c/o NatCity Investments City Corporation (bank holding
1965 East Sixth Street company), since July 1997;
Cleveland, OH 44114 Chairman, President and Chief
Executive Officer, NatCity
Investments, Inc. (investment
banking), since July 1995;
President and Chief Executive
Officer, Raffensperger, Hughes &
Co., (broker-dealer), from 1993
until 1995; President, Reserve
Capital Group, from 1990 until
1993; President, since July 1997
and Trustee, since November 1997 of
Armada Funds.
W. Bruce McConnel, III Secretary Partner, Drinker Biddle & Reath
One Logan Square LLP, Philadelphia (law firm).
18th and Cherry Streets
Philadelphia, PA 19103-6996
</TABLE>
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<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME WITH THE GROUP DURING PAST 5 YEARS
---- ------------------- -----------------------------------
<S> <C> <C>
John Leven Treasurer Director of Funds Accounting of SEI
One Freedom Valley Drive Investments Mutual Funds Services
Oaks, PA 19456 since March 1999; Division
Controller, First Data Corp. from
February 1998 to March 1999;
Corporate Controller, FPS Services,
a mutual funds servicing company,
from February 1993 to February
1998; Treasurer, FPS Broker
Services, Inc. from March 1993 to
December 1998.
</TABLE>
The officers of the Group receive no compensation directly from the Group for
performing the duties of their offices. As Administrator, SEI Investments Mutual
Funds Services receives fees from the Group. As Distributor, SEI may retain all
or a portion of any sales charge on the shares sold and may receive fees under
the Distribution and Shareholder Service Plans described below. Mr. Leven,
Treasurer of the Group, is an employee of SEI Investments Mutual Funds
Services."
THE SECTION ENTITLED, "ADMINISTRATOR AND SUB-ADMINISTRATOR," PAGE 42, IS
AMENDED AS FOLLOWS:
- The first, second, third and fourth paragraphs are deleted and the following
information is added:
"SEI Investments Mutual Funds Services (the "Administrator") serves as the
administrator pursuant to the Administration Agreement dated January 1,
2000, as amended on April 3, 2000 (the "Administration Agreement"). The
Administrator, a Delaware business trust, has its principal business offices
at One Freedom Valley Drive, Oaks, Pennsylvania, 19456. SEI Investments
Management Corporation ("SIMC"), a wholly-owned subsidiary of SEI
Investments Company ("SEI Investments"), is the owner of all beneficial
interests in the Administrator. SEI Investments and its affiliates,
including the Administrator, are leading providers of funds evaluation
services, trust accounting systems, and brokerage and information services
to financial institutions, institutional investors, and money managers. The
Administrator and its affiliates also serve as administrator or
sub-administrator to the following other mutual funds: The Achievement Funds
Trust, The Advisors' Inner Circle Fund, Alpha Select Funds, The Arbor Fund,
ARK Funds, Armada Funds, Parkstone Advantage Fund, Bishop Street Funds,
Boston 1784 Funds(R), CNI Charter Funds, CrestFunds, Inc., CUFUND, The
Expedition Funds, First American Funds, Inc., First American Investment
Funds, Inc., First American Strategy Funds, Inc., HighMark Funds, Huntington
Funds, The Nevis Fund, Oak Associates Funds, The PBHG Funds, Inc., PBHG
Insurance Series Fund, Inc., SEI Asset Allocation Trust, SEI Daily Income
Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Institutional International Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic
Variable Trust, TIP Funds and UAM Funds, Inc. II.
The Administrator assists in supervising all operations of each Fund (other
than those performed by the Investment Adviser under the Investment Advisory
Agreement, by National City Bank and Union Bank of California (the
"Custodians") under the Custody Agreements. The Administrator is a
broker-dealer registered with the SEC, and is a member of the National
Association of Securities Dealers, Inc.
Under the Administration Agreement, the Administrator has agreed to maintain
office facilities for the Group; furnish statistical and research data,
clerical and certain bookkeeping services and stationery and office
supplies; prepare periodic reports to the SEC on Form N-SAR or any
replacement forms therefor; compile data for, prepare for execution by the
Funds and file certain federal and state tax returns and required tax
filings; prepare compliance filings pursuant to state securities laws with
the advice or the Group's counsel; keep and maintain the financial accounts
and records of the Funds, including calculation of daily expense accruals;
in the case of the Money Market Funds, determine the actual variance from
$1.00 of the Fund's net asset value per share; and generally assist in all
aspects of the Group's operations other than those performed by the
Investment Adviser under the Investment Advisory Agreements and by State
Street
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Bank and Trust Company under the Custody Agreement. Under the Administration
Agreement, the Administrator may delegate all or any part of its
responsibilities thereunder.
Pursuant to its authority to delegate its responsibilities under the
Administration Agreement, the Administrator has engaged IMC to provide certain
services as Sub-Administrator to the Funds of the Group. National City Bank
serves as Sub-Administrator to the Group pursuant to a Sub-Administration
Agreement dated January 1, 2000, and receives a fee from the Administrator
for its services. Under the Sub-Administration Agreement, National City
Bank will assist the Administrator by providing, upon the request of the
Administrator, services which are incidental to, but not included among,
IMC's duties as Investment Adviser to the Group. These services include
preparation of reports and documents necessary to calculate daily expense
accruals, to update the financial accounts and records of the Funds and to
prepare certain federal and state tax returns.
The Administrator receives a fee from each Fund for its services as
Administrator and fund accountant and expenses assumed pursuant to the
Administration Agreement, calculated and paid periodically, equal to the
lesser of (a) the fee calculated at the annual rate of 0.115% of that
Fund's average daily net assets, or (b) such other fee as may from time to
time be agreed upon in writing by the Group and the Administrator. As
Sub-Administrator, National City Bank is entitled to receive a fee from the
Administrator of not more than 0.02% of each Fund's average daily net
assets. The Administrator may voluntarily reduce all or a portion of its
fee with respect to any Fund in order to increase the net income of one or
more of the Funds available for distribution as dividends."
- The first sentence in the sixth paragraph is deleted and the following is
added:
"The Administration and Sub-Administration Agreements are expected to be
terminated upon the reorganization of the Group's Funds into the Armada
Funds."
THE SECTION ENTITLED, "CUSTODIAN, TRANSFER AGENT AND FUND ACCOUNTING
SERVICES," PAGE 46, IS AMENDED AS FOLLOWS:
- The third and fourth paragraphs are deleted and the following information
is added:
"In addition, SEI Investments Mutual Funds Services provides certain fund
accounting services to the Group pursuant to the Administration
Agreement. Under such Agreement, SEI Investments Mutual Funds Services
maintains the accounting books and records for the Funds, including
journals containing an itemized daily record of all purchases and sales
of portfolio securities, all receipts and disbursements of cash and all
other debits and credits, general and auxiliary ledgers reflecting all
asset, liability, reserve, capital income and expense accounts, including
interest accrued and interest received, and other require separate ledger
accounts; maintains a monthly trial, balance of all ledger accounts;
performs certain accounting services for the Funds, including calculation
of the daily net asset value per share, calculation of the dividend and
capital gain distributions, if any, and of yield, reconciliation of cash
movements with the Funds' Custodian, affirmation to the Funds' Custodian
of all portfolio trades and cash settlements, verification and
reconciliation with the Funds' Custodian of all daily trade activity;
provides certain reports; obtains dealer quotations, prices from a
pricing service or matrix prices on all portfolio securities in order to
mark the portfolio to the market; and prepares an interim balance sheet,
statement of income and expense, and statement of changes in net assets
for the Funds. The Funds reimburse National City Bank for its direct and
indirect costs and expenses incurred in rendering custodial services,
except that the costs and expenses borne by each Fund in any year may not
exceed .020% of each portfolios first $100 million of average daily net
assets, .010% of each portfolios next $650 million of average daily net
assets and .008% of the average daily net assets of each portfolio which
exceed $750 million.
For such services, for fiscal year ended May 31, 1999, the fiscal period
ended May 31, 1998 and the fiscal year ended June 30, 1997, BISYS Ohio,
the former fund accountant, received $1,596,000, $1,746,000 and
$1,722,000, respectively, from the Group."
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE.
PAR-C-010-01000
