SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ X ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or
Sec. 240.14a-12
DG Investor Series
(Name of Registrant as Specified In Its Charter)
Federated Investors
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1.Title of each class of securities to which transaction applies:
2.Aggregate number of securities to which transaction applies:
3.Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
4.Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1)Amount Previously Paid:
2)Form, Schedule or Registration Statement No.:
3)Filing Party:
4)Date Filed:
DG INVESTOR SERIES
DG OPPORTUNITY FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 21, 1997
A special meeting of the shareholders of DG Opportunity Fund (the
`Fund''), a portfolio of DG Investor Series (the ``Trust''), will be held
at Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3779, at 3:00 p.m. (Eastern time), on July 21, 1997, for the
following purposes:
(1) To approve or disapprove a Sub-Advisory Agreement and
exhibits thereto, between the Fund's investment adviser,
ParkSouth Corporation (`ParkSouth'') and Womack Asset
Management, Inc. (`Sub-Adviser''), on behalf of the Fund;
(2) To transact such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Trustees has fixed June 19, 1997, as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Trustees
John W. McGonigle
Secretary
June 30, 1997
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY TO AVOID
ADDITIONAL EXPENSE.
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING
FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE
ENCLOSED PROXY. IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT THE
NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL MEETING. THE
ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
DG INVESTOR SERIES
Federated Investors Tower
Pittsburgh, PA 15222-3779
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees of
DG Investor Series
(the `Trust'') with respect to DG Opportunity Fund (the ``Fund''). The
proxies will be voted at the special meeting of shareholders of the Fund to
be held on July 21, 1997, at the offices of the Trust, Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779 (such special meeting and any
adjournment or postponement thereof are referred to as the "Special
Meeting"). The proxy is revocable at any time before it is voted by
sending written notice of the revocation to the Trust or by appearing
personally at the Special Meeting.
The cost of preparing and mailing the notice of meeting, this proxy
statement, proxy card and any additional proxy material has been or is to
be borne by the Trust. Proxy solicitations will be made primarily by mail,
but may also be made by telephone, telegraph, or personal interview
conducted by certain officers or employees of the Trust, of Federated
Shareholder Services Company (the Trust's transfer agent) or of Federated
Administrative Services (the Trust's administrator). In the event that a
shareholder signs, dates, and returns the proxy ballot but does not
indicate a choice as to an item on the proxy ballot, the proxy attorneys
will vote those shares in favor of such proposal.
The purposes of the Special Meeting are set forth in the accompanying
Notice of Special Meeting of Shareholders. The Trustees know of no business
other than that mentioned in the Notice that will be presented for
consideration at the Special Meeting. Should other business properly be
brought before the Special Meeting, proxies will be voted in accordance
with the best judgment of the persons named as proxies. This Proxy
Statement and the enclosed proxy card are expected to be mailed on or about
June 30, 1997, to shareholders of record at the close of business on June
19, 1997 (the "Record Date").
Only shareholders of record on the Record Date will be entitled to
vote at the Special Meeting. On the Record Date, the Fund had outstanding
shares of beneficial interest. A majority of the
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outstanding shares of the Fund, represented in person or by proxy, shall be
required to constitute a quorum at the Special Meeting for the purpose of
voting on the proposals offered.
Each share of the Fund is entitled to one vote, and fractional shares
are entitled to proportionate shares of one vote. At the close of business
on June 19, 1997, the following persons owned, to the knowledge of
management, 5% or more of the outstanding shares of the Fund: Deposit
Guaranty National Bank (`DGNB''), acting in various capacities for
numerous accounts, was owner of record of shares
(XX%).
The favorable vote of a majority, as defined in the Investment Company
Act of 1940 (the `1940 Act''), of the outstanding voting securities of the
Fund is required for approval of the proposal to approve a new Sub-Advisory
Agreement between ParkSouth and Sub-Adviser on behalf of the Fund. The
vote of shareholders of a majority (as so defined in the 1940 Act) of
outstanding securities means (a) the vote of the holders of 67% or more of
the shares present at the meeting, if the holders of 50% or more of the
outstanding voting securities of the Fund are present or represented by
proxy, or (b) the vote of the holders of more than 50% of the outstanding
shares, whichever is less.
For purposes of determining the presence of a quorum and counting
votes on the matters presented, shares represented by abstentions and
`broker non-votes'' will be counted as present, but not as votes cast, at
the Special Meeting. Under the Trust's Declaration of Trust, the vote will
be determined on the basis of a percentage of votes cast at the Special
Meeting. Under the Investment Company Act of 1940 (the `1940 Act''), the
affirmative vote necessary to approve a new Sub-Advisory Agreement between
the Trust and the Sub-Adviser on behalf of the Fund may be determined with
reference to a percentage of votes present at the Special Meeting, which
would have the effect of treating abstentions and non-votes as if they were
votes against the proposal.
The Trust will furnish, without charge, a copy of the annual report,
which includes audited financial statements for the fiscal year ended
February 28, 1997, and/or semi-annual report for the six-month period ended
August 31, 1996, to any shareholder of record upon request. The Trust's
principal executive offices are located at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779. The Trustees propose to mail this
proxy statement and the enclosed Notice of meeting and proxy card on or
about June 30, 1997.
SUB-ADVISORY AGREEMENT
Terms of the Sub-Advisory Agreement
A copy of the Sub-Advisory Agreement is attached hereto as Exhibit 1.
Pursuant to the terms of the proposed investment sub-advisory
Agreement between the Fund's investment adviser, ParkSouth, and the Sub-
Adviser, the Sub-Adviser would act as a discretionary sub-adviser to the
Fund for all assets of the Fund other than cash and cash-equivalents.
Under the terms of the Sub-Advisory Agreement, the Sub-Adviser will make
all determinations with respect to the investment of non-cash assets of the
Fund, and shall take such steps as may be necessary to implement the same,
including the placement of purchase and sale orders on behalf of the Fund.
The Sub-Advisory Agreement provides that the Sub-Adviser shall pay all
expenses incurred by it and its staff in connection with the performance of
its services under the Sub-Advisory Agreement, including the payment of
salaries of all officers and employees who are employed by it. ParkSouth
will pay the Sub-Adviser an annual fee determined by applying the following
annual rates to the Fund's aggregate daily net assets: .32% of the Fund's
assets up to the first $50 million; .075% of the Fund's net assets in
excess of $50 million but less than $70 million; plus .25% of the Fund's
net assets in excess of $70 million. Applying the foregoing formula to the
Fund's current level of net assets, the Sub-Adviser would currently be
entitled to a sub-advisory fee equal to .25% of the Fund's average daily
net assets, payable by ParkSouth from ParkSouth's investment advisory fee
of .95% of the Fund's average daily net assets.
The Sub-Advisory Agreement provides with respect to the Fund that, if
approved by shareholders of the Fund, it will remain in effect for an
initial term of two years from the date of its execution and shall continue
in effect for successive one-year periods, provided such continuance is
specifically approved at least annually by vote of a majority of Trustees,
including a majority of the independent Trustees, cast in person at a
meeting called for the purpose of voting on such approval. The Sub-
Advisory Agreement may be terminated by the Trustees at any time without
penalty, or by a vote of a majority of the outstanding voting securities of
the Fund on 60 days' written notice. The Sub-Advisory Agreement will
immediately terminate in the event of its assignment (as such term is
defined in the 1940 Act) or in the event of the termination of the Trust's
advisory Agreement with ParkSouth.
The Trustees have reviewed and unanimously approved the terms of the
Sub-Advisory Agreement and directed that it be submitted to the Fund's
shareholders for their approval. In the event that the Sub-Advisory
Agreement is not approved by the Fund's shareholders, ParkSouth would be
solely responsible for providing investment advice to the Fund, and the
Trustees will consider what action, if any, should be taken, including, but
not limited to, requesting that the Sub-Adviser perform sub-advisory
services at cost until a new sub-advisory Agreement is approved by the
Fund's shareholders.
INFORMATION REGARDING THE SUB-ADVISER, WOMACK ASSET MANAGEMENT, INC.
The Sub-Adviser, Womack Asset Management, Inc., based in Jackson,
Mississippi, is a registered investment adviser formed in 1997 by William
A. Womack. Mr. Womack, until February 1997, had been Senior Vice President
and Trust Investment Officer of DGNB (the parent corporation of ParkSouth,
and, until March 1, 1997, the investment adviser to the Fund), and the
portfolio manager for the Fund. In February 1997, Mr. Womack left DGNB in
order to establish and operate the Sub-Adviser.
Because of the outstanding performance record achieved by the Fund
during Mr. Womack's tenure, and because of Mr. Womack's high standing with
the Fund's shareholders, ParkSouth has determined that it is in the Fund's
best interest to continue to use Mr. Womack's expertise in the management
of the Fund, and this would be accomplished through the proposed sub-
advisory relationship.
It is contemplated that Mr. Womack will, at least initially, be the
sole employee and sole shareholder of the Sub-Adviser. ParkSouth believes
that adequate portfolio management back-up is in place if Mr. Womack were
unable, temporarily or permanently, to devote his attention to the Fund's
management. Specifically, ParkSouth has a team of investment professionals,
led by Gerald White, available to assume full day-to-day responsibility for
all tasks and duties associated with serving as adviser to the Fund.
BOARD OF TRUSTEES' RECOMMENDATION
Based on their consideration, analysis and evaluation of the above
factors and other information deemed by them to be relevant to the proposed
Sub-Advisory Agreement, the Trustees (including the Trustees who are not
"interested persons" as defined in the 1940 Act) have concluded that it
would be in the best interests of the Fund and its shareholders to approve
the proposed Sub-Advisory Agreement on behalf of the Fund.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS APPROVAL BY SHAREHOLDERS
OF THE FUND OF THE SUB-ADVISORY AGREEMENT BETWEEN PARKSOUTH AND THE
SUB-ADVISER, WOMACK ASSET MANAGEMENT, INC.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold annual
meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to DG Investor Series,
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, so that
they are received within a reasonable time before any such meeting.
No business other than the matter described above is expected to come
before the Special Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or
postponement of the Special Meeting, the persons named on the enclosed
proxy card will vote on such matters according to their best judgment in
the interests of the Fund.
PROXIES, QUORUM AND VOTING AT THE SPECIAL MEETING
Any person giving a proxy has the power to revoke it any time prior to
its exercise by executing a superseding proxy or by submitting a written
notice of revocation to the Secretary of the Trust. In addition, although
mere attendance at the Special Meeting will not revoke a proxy, a
shareholder present at the Special Meeting may withdraw his or her proxy
and vote in person. All properly executed and unrevoked proxies received
in time for the Special Meeting will be voted in accordance with the
instructions contained in the proxies. If no instruction is given, the
persons named as proxies will vote the shares represented thereby in favor
of the matters set forth in the attached Notice.
In the event that, at the time any session of the Special Meeting is
called to order, a quorum is not present at the Special Meeting, or in the
event that a quorum is present at the Special Meeting but sufficient votes
to approve any of the proposals are not received, the persons named as
proxies may propose one or more adjournments of the Special Meeting (with
respect to all or some of the proposals) to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a
majority of those shares affected by the adjournment represented at the
Special Meeting in person or by proxy. If a quorum is present, the persons
named as proxies will vote those proxies which they are entitled to vote
FOR all such proposals in favor of such an adjournment, and will vote those
proxies required to be voted AGAINST any such proposal against any
adjournment. A shareholder vote may be taken on one or more of the
proposals in this Proxy Statement prior to any such adjournment if
sufficient votes have been received for approval. Under the Declaration of
Trust of the Trust, a quorum is constituted by the presence in person or by
proxy of the holders of a majority of the issued and outstanding shares of
the Fund entitled to vote at the Special Meeting.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES.
By Order of the Trustees
JOHN W. McGONIGLE
Secretary
June 30, 1997
Cusip 23321N400
GO1258-10(6/97)
EXHIBIT 1
DG INVESTOR SERIES
SUB-ADVISORY AGREEMENT
THIS INVESTMENT SUB-ADVISORY AGREEMENT (the "Agreement") is made and
entered into as of day of , 1997 by and between ParkSouth
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Corporation (the "Adviser") and Womack Asset Management (the "Sub-
Adviser").
PRELIMINARY STATEMENTS
A. DG Investor Series, a Massachusetts business trust (the "Trust"),
is an open-end management company as defined in the Investment Company Act
of 1940 and is registered as such with the Securities and Exchange
Commission.
B. The Adviser has been retained by the Trust under the Investment
Advisory Contract dated as of March 31, 1997 (the "Contract") to act as
investment adviser with respect to each of the Trust's investment
portfolios, including the DG Opportunity Fund (the "Fund").
C. The Adviser is authorized under the Contract to "contract with
such other person, persons, corporation, or corporations as its own cost
and expense as it shall determine in order to assist it in carrying out
this Contract."
D. The Adviser wishes to retain the Sub-Adviser to provide, and the
Sub-Adviser wishes to render, portfolio management services for the Fund,
all upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and the
covenants herein contained, the Adviser and the Sub-Adviser agree as
follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to act as a
discretionary sub-adviser to the Fund for all assets of the Fund other than
cash and cash equivalents. The Sub-Adviser hereby accepts the appointment
and agrees to use its best professional judgement to make and implement
investment decisions for the Fund in accordance with the provisions of this
Agreement.
2. Duties of the Sub-Adviser
(a) Subject to the direction and control of the Adviser and the Board
of Trustees of the Trust, the Sub-Adviser shall be responsible for the
management of the investment operations of the Fund and the determination
of what portion of the Fund's assets will be held in cash and cash
equivalents and what portion will be invested in equity securities and
other assets. Any cash and cash equivalents in the Fund shall be managed
by the Adviser. The Sub-Adviser is hereby authorized to select portfolio
securities for investment, to determine whether to purchase and sell
securities for the Fund, and upon making any purchase or sale decision for
the Fund, to place orders for the execution of such portfolio transactions
in accordance with Section 4 of this Agreement and any operational
procedures that may be specified by the Adviser from time to time
("Operational Procedures"). The Sub-Adviser shall consult with the Adviser
upon the Adviser's reasonable request with respect to any investment
decision made by it for the Fund and assist the Adviser and the Trust's
officers in connection with the operation of the Fund and perform any
further acts that may be necessary to effectuate the purposes of this
Agreement.
(b) In providing portfolio management services to the Fund, the Sub-
Adviser shall be subject to such investment restrictions as are set forth
in the Investment Company Act of 1940 and rules thereunder; the Internal
Revenue Code; applicable state securities laws; the supervision and control
of the Board of Trustees; such specific instructions as the Board of
Trustees may adopt and as may be communicated to the Sub-Adviser; the
investment objectives, policies and restrictions of the Fund; and
instructions from the Adviser.
3. Supervision and Compliance. Notwithstanding any provision of this
Agreement, the Adviser shall retain all rights to supervise, and, in its
discretion, conduct investment advisory activities relating to the Fund.
The activities of the Sub-Adviser shall be subject at all times to the
direction and control of the Board of Trustees of the Trust and the
Adviser, and shall comply with: (a) the Declaration and By-Laws of the
Trust; (b) the Registration Statement of the Trust, as it may be amended
from time to time, including the investment objectives and policies set
forth therein; (c) the Investment Company Act of 1940 and the Investment
Advisers Act of 1940 and the regulations thereunder; (d) the Internal
Revenue Code and the regulations thereunder applicable to regulated
investment companies; (e) any other applicable laws or regulations; and (f)
such other limitations as the Adviser or the Board of Trustees of the Trust
may adopt. The Sub-Adviser shall comply with all requests by the officers
and agents of the Trust to review, examine or audit any records concerning
the Sub-Adviser's investment advisory activities in connection with the
Fund. The Sub-Adviser shall provide all information, records or other
materials as the Adviser may reasonably request in order to oversee
compliance by the Sub-Adviser with the provisions of this Agreement and
with applicable law and shall take such actions or refrain from taking such
actions as the Adviser in its best judgment may reasonably request as
necessary to promote or ensure such compliance.
4. Purchase and Sale of Securities. The Sub-Adviser shall place orders
for the purchase or sale or of securities on behalf of the Fund with any
broker and/or dealer who deals in such securities, all in the manner as set
forth herein and in accordance with the Operational Procedures.
(a) In placing orders with brokers and/or dealers, the Sub-Adviser
shall use its best efforts to obtain the best net price and the most
favorable execution of its orders, after taking into account all factors it
deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of
the broker and/or dealer, and the reasonableness of the commission, if any,
both for the specific transaction and on a continuing basis. Consistent
with this obligation, the Sub-Adviser may, to the extent permitted by law,
purchase and sell portfolio securities using brokers who provide brokerage
and research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to or for the benefit of the Fund and/or
other accounts over which the Sub-Adviser or the Adviser exercises
investment discretion. The Sub-Adviser is authorized to pay a broker who
provides such brokerage and research services a commission for effecting a
securities transaction which is in excess of the amount of commission
another broker would have charged for effecting that transaction, if the
Sub-Adviser determines in good faith that such commission was reasonable in
relation to the value of brokerage and research services provided by such
broker. This determination may be viewed in terms of either that
particular transaction or of the overall responsibilities of the Sub-
Adviser with respect to the accounts as to which it exercises investment
discretion.
(b) Notwithstanding the foregoing, the Board of Trustees and the
Adviser periodically may review the commissions paid by the Fund and
determine whether those commissions were reasonable in relation to the
brokerage and research services received.
5. Expenses. The Sub-Adviser shall furnish, at its own expense, all
office space, office facilities, equipment and personnel necessary or
appropriate to the performance of its duties under this Agreement. The
Sub-Adviser also shall pay the salaries of all personnel performing
services related to the Sub-Adviser's duties under this Agreement.
6. Compensation of the Sub-Adviser. In consideration of the services to
be rendered by the Sub-Adviser under this Agreement, the Adviser shall pay
the Sub-Adviser a fee as set forth in Exhibit A to this Agreement.
7. Services to Others. The services of the Sub-Adviser to the Adviser
and the Trust are not to be deemed exclusive, and, except as may be
provided in any other agreement between the Sub-Adviser and the Adviser,
the Sub-Adviser may render services to others and to engage in other
activities, so long as such services and activities do not adversely affect
the Sub-Adviser's ability to perform its obligations under this Agreement;
provided, however, that during the term of this Agreement, the Sub-Adviser
shall not render any portfolio management services to any other open-end
management company except with the prior written consent of the Adviser.
8. Representations, Warranties, and Agreements of the Sub-Adviser
(a) As of the Effective Date of this Agreement (as defined below in
Section 10(a) of this Agreement), the Sub-Adviser will be registered as an
"investment adviser" under the Investment Advisers Act of 1940.
(b) The Sub-Adviser will comply with the provisions of the Adviser's
written code of ethics and any policies and procedures thereunder
(including any sanctions imposed by the Adviser), and with the Adviser's
policies and procedures designed to detect and prevent the misuse of
material, nonpublic information that are applicable to its sub-advisory
services rendered under this Agreement. In addition, the Sub-Adviser will
adopt or has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the Investment Company Act of 1940, will
provide the Adviser with a copy of that code of ethics and evidence of its
adoption, and will make such reports to the Trust as required by Rule 17j-
1. The Sub-Adviser will also adopt or has adopted policies and procedures
sufficient to enable the Sub-Adviser to detect and prevent the misuse of
material, nonpublic information by the Sub-Adviser or any person associated
with the Sub-Adviser, in compliance with the federal and state securities
laws.
(c) The Sub-Adviser will prepare, maintain, keep current and preserve
on behalf of the Trust and the Adviser all records concerning the Sub-
Adviser's activities in connection with the Fund that the Fund is required
by law to maintain, including, but not limited to, records required under
paragraphs (b)(5), (b)(6), (b)(9), (b)(10), and (f) of rule 31a-1 under the
Investment Company Act (a summary of these provisions as currently in
effect is attached hereto as Exhibit B). Any records required to be
maintained and preserved pursuant to the provisions of Rule 31a-l and Rule
31a-2 under the Investment Company Act of 1940 that are prepared by the
Sub-Adviser on behalf of the Fund are the property of the Fund and will be
surrendered promptly on request to the Fund or any person acting on behalf
of the Trust during the term of this Agreement and at any time after the
termination of this Agreement. The Sub-Adviser will comply with all
reasonable requests for information by the Adviser or the Trust's officers
or Board of Trustees, including information required for the Fund's filings
with the Securities and Exchange Commission and state securities
commissions.
(d) The Sub-Adviser will promptly after filing with the Securities
and Exchange Commission any amendment to its Form ADV furnish a copy of
such amendment to the Trust and the Adviser.
(e) The Sub-Adviser will immediately notify the Adviser of the
occurrence of any event which would disqualify the Sub-Adviser from serving
as an investment adviser of an investment company under Section 9(a) of the
Investment Company Act or otherwise.
9. Limitations on Liability; Indemnification
(a) The Sub-Adviser hereby is notified expressly of the limitation of
liability as set forth as set forth in Article XI of the Declaration of
Trust and agrees that the obligations under this Agreement of the Fund and
of the Trust with respect to the Fund are limited solely to the assets of
the Fund, and the Sub-Adviser shall not seek satisfaction of any such
obligation from any other investment portfolio of the Trust; any
shareholders of any investment portfolio; any Trustee; or officers,
employees or agents of the Trust.
(b) The Sub-Adviser shall give the Adviser and the Trust the benefit
of its best judgment and efforts in rendering services under this
Agreement. The Sub-Adviser agrees to indemnify and hold harmless the
Adviser, its shareholders, officers, directors, employees, agents and
affiliates (referred to collectively herein as the Adviser) from and
against any and all claims, demands, judgments, losses, costs, expenses
(including, without limitation, court costs and attorneys' fees),
liabilities, or damages, which at any time or from time to time may be
paid, incurred or suffered by or asserted against the Adviser, arising out
of, based upon or resulting from any act or omission of the Sub-Adviser in
performing its obligations under this Agreement; provided, however, that
the Sub-Adviser shall not be obligated to indemnify the Adviser to the
extent that such matters arise from or are caused by the Adviser's willful
malfeasance or bad faith.
10. Effective Date; Termination; and Assignment.
(a) This Agreement shall become effective as of the Effective Date as
defined below and shall continue in effect for two years from the Effective
Date and thereafter for successive periods of one year, subject to the
provisions for termination and all of the other terms and conditions in
this Agreement if: (i) such continuation is specifically approved at least
annually by the vote of a majority of the Trustees of the Trust, including
a majority of the Trustees who are not parties to this Agreement or
interested persons of any such party (other than as Trustees of the Trust),
cast in person at a meeting called for that purpose, and, where required
under the Investment Company Act of 1940, by vote of a majority of the
outstanding voting securities of the Fund; and (ii) neither party has
notified the other in writing at least sixty (60) days prior to the
anniversary date of the Effective Date in any year thereafter that it does
not desire such continuation. The Effective Date is the date on which this
Agreement is approved by the vote of a majority of the outstanding voting
securities of the Fund.
(b) This Agreement may be terminated at any time without the payment
of any penalty (i) by action of the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund upon sixty (60)
days' written notice to the Sub-Adviser and (ii) in the event of
termination of the Contract for any reason whatsoever. This Agreement also
may be terminated at any time by the Adviser (i) on account of the Sub-
Adviser's repeated failure to comply with the Adviser's requests or
instructions issued hereunder, or (ii) in the event of a breach of
fiduciary duty by the Sub-Adviser.
(c) Termination of this Agreement will not affect (i) the validity of
any action previously taken by the Adviser or the Sub-Adviser under this
Agreement or (ii) liabilities or obligations of the parties from
transactions initiated before termination of this Agreement. Anything
herein to the contrary notwithstanding, termination of this Agreement shall
not affect the indemnification provisions set forth above in Section 9 of
this Agreement, which shall remain operative and in full force and effect
notwithstanding such termination.
(d) This agreement shall terminate automatically in the event of its
assignment (as defined in the Investment Company Act of 1940 and any rules
thereunder, as they may be interpreted by the staff of the Securities and
Exchange Commission).
(e) So long as both the Adviser and the Sub-Adviser shall be legally
qualified to act as an investment adviser to the Fund, neither the Adviser
nor the Sub-Adviser shall act as an investment adviser (as such term is
defined in the Investment Company Act of 1940) to the Fund except as
provided herein and in the Contract or in such other manner as may be
expressly agreed between the Adviser and the Sub-Adviser; provided,
however, that if the Adviser or the Sub-Adviser shall resign or for any
reason be unable or unwilling to serve prior to the end of the term of this
Agreement, the remaining party, the Sub-Adviser or the Adviser as the case
may be, shall not be prohibited from serving as an investment adviser to
the Fund by reason of the provisions of this Subsection 10(e).
11. Governing Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Pennsylvania without giving effect to
the choice of law provisions thereof, to the extent that such laws are
consistent with provisions of the Investment Company Act of 1940 and the
regulations thereunder.
12. Amendment. This Agreement may be amended from time to time by
agreement of the parties; provided, however, such amendment shall be
approved by the vote of a majority of the Trustees of the Trust, including
a majority of the Trustees who are not parties to this Agreement or
interested persons of any such party (other than as Trustees of the Trust),
cast in person at a meeting called for that purpose, and, where required
under the Investment Company Act of 1940, by vote of a majority of the
outstanding voting securities of the Fund;
13. Waiver. The failure of either party to insist, in one or more
instances, upon strict performance of the obligations of this Agreement, or
to exercise any rights contained herein, shall not be construed as a
waiver, or relinquishment for the future of such obligation or right, which
shall remain and continue in full force and affect.
14. Miscellaneous. The captions in this Agreement are included for
the convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or effect.
Should any part of this Agreement be held or made invalid by a court
decision, statute, regulation, or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have caused this
Agreement to be executed and delivered in their names and on their behalf
by the undersigned, duly authorized officers, all as of the day and year
first above written.
PARKSOUTH CORPORATION
By:
------------------------------
name:
-------------------------
title:
--------------------------
WOMACK ASSET MANAGEMENT
By:
------------------------------
name:
-------------------------
title:
--------------------------
EXHIBIT A
DG INVESTOR SERIES
DG OPPORTUNITY FUND
Sub-Advisory Agreement
Sub-Advisory Fees
For all services rendered by the Sub-Adviser hereunder, the Adviser
shall pay, on a monthly basis, a Sub-Advisory Fee, based on the average
daily net assets of the Fund under management by the Sub-Adviser during the
preceding month, as described below. The Sub-Advisory fee shall be the sum
of: .32% of average daily net assets up to $50 million; .075% of average
daily net assets in excess of $50 million and up to $70 million; and .25%
of average daily net assets in excess of $70 million. The Sub-Advisory
Fee will be accrued daily, and for any period in which the Sub-Adviser
provides portfolio management services under this Agreement for less than
one full month, the Sub-Advisory Fee will be prorated by the number of the
days of the month during which such services were rendered.
Notwithstanding anything herein to the contrary, if the Sub-Advisory
Fee received by the Sub-Adviser during the first year of this Agreement,
when added to any other compensation paid by the Adviser to the Sub-Adviser
for any purposes during the same one-year period, does not equal or exceed
$190,000 (One Hundred Ninety Thousand Dollars) (the "Threshold Amount"),
the Adviser shall pay, at its own expense and cost, any resulting shortfall
at the end of that one-year period. If this Agreement is terminated before
the end of that one-year period, there shall be subtracted from the
Threshold Amount a percentage of the Threshold Amount equal to (x) a
fraction equal to the number of the days of the one-year period remaining
at the date of termination, divided by 365, multiplied by (y) a fraction
equal to the total net assets of clients of the Adviser managed by the Sub-
Adviser at the time of such termination ("Aggregate Net Assets"), divided
by the Aggregate Net Assets minus the amount, if any, of net assets of
other clients remaining under management by the Sub-Adviser following such
termination.
EXHIBIT B
DG INVESTOR SERIES
DG OPPORTUNITY FUND
Sub-Advisory Agreement
Records To be Maintained by the Sub-Adviser
1. (Rule 31a -1(b)(5) and (6) of the Investment Company Act of
1940). A record of each brokerage order, and all other portfolio purchases
and sales orders by the Sub-Adviser or on behalf of the Fund for, or in
connection with, the purchase or sale of securities, whether executed or
unexecuted. Such records shall include:
A. The name of the broker,
B. The terms and conditions of the order, and of any modification or
cancellation thereof,
C. The time of entry or cancellation,
D. The price at which executed,
E. The time of receipt of report of execution, and
F. The name of the person who placed the order on behalf of the Fund
2. (Rule 31a-1(b)(9) of the Investment Company of 1940). A record for
each fiscal quarter, completed within ten (10) days after the end of the
quarter, showing specifically the basis or bases upon which the allocation
of orders for the purchase and sale of portfolio securities to brokers or
dealers was made, and the division of brokerage commissions or other
compensation on such purchase and sale orders. The record:
A. Shall include the consideration given to:
(i) the sale of shares of a feeder fund of the Portfolio
(ii) the supplying of services or benefits by brokers or
dealers to:
(a) The Fund,
(b) The Adviser,
(c) yourself (the Sub-Adviser), and
(d) Any person other than the foregoing.
(iii) Any other considerations other than the technical
qualifications of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
C. Shall describe in detail the application of any general or
specific formula or other determinant used in arriving at such
allocation of purchase and sale orders and such division of
brokerage commissions or other compensation.
D. Shall include the name of the person responsible for making the
determination of such allocation and such division of brokerage
commissions or other compensation.
3. (Rule 31a-1(b)(10) of the Investment Company Act of 1940). A record
in the form of an appropriate memorandum identifying the person or persons,
committees, or groups authorizing the purchase or sale of portfolio
securities. Where an authorization is made by a committee or group, a
record shall be kept of the names of its members who participate in the
authorization. There shall be retained as part of this record any
memorandum, recommendation, or instruction supporting or authorizing the
purchase or sale of portfolio securities and such other information as is
appropriate to support the authorization.*
4. (Rule 31a-1(f) of the Investment Company Act of 1940). Such
accounts, books and other documents as are required to be maintained by
registered investment advisers by rule adopted under Section 204 of the
Investment Advisers Act of 1940, to the extent such records are necessary
or appropriate to record the Sub-Adviser's transactions made with respect
to the Fund Account.
* Such information might include: the current Form 10-K, annual and
quarterly reports, press releases, reports by analysts and from brokerage
firms (including their recommendations, i.e., buy, sell, hold), and any
internal reports or portfolio manager reviews.
PLEASE MARK VOTES AS IN
THIS EXAMPLE
x
FOR
AGAINST
ABSTAIN
1.) To approve or disapprove a Sub-Advisory Agreement and exhibits thereto,
between ParkSouth Corporation and Womack Asset Management, Inc. on behalf
of DG Opportunity Fund.
2.) To transact such other business as may properly come before the meeting
or any adjournment thereof.
RECORD DATE SHARES:
Date
Please be sure to sign and date this Proxy.
Mark box at right if comments or address change have been noted on the
reverse side of this card.
Shareholder sign here
Co-owner sign here
DETACH CARD
DG INVESTOR SERIES
Please take note of the important information enclosed with the Proxy
Ballot. There are a number of issues related to the management and
operation of your Fund that require your immediate attention and approval.
These are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall
be voted. Then sign the card, detach it and return your proxy card in the
enclosed postage paid envelope.
Your vote must be received prior to the Special Meeting of Shareholders,
July 21, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
DG Investor Series
DG INVESTOR SERIES
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of DG
Opportunity Fund hereby appoint C. Grant Anderson, Patricia F. Conner,
Marie M. Hamm, Carol B. Kayworth, and Daniel J. Damico, or any one of them,
true and lawful attorneys, with the power of substitution of each, to vote
all Shares of DG Opportunity Fund which the undersigned is entitled to vote
at the Special Meeting of Shareholders to be held on July 21, 1997, at
Federated Investors Tower, Pittsburgh, Pennsylvania, at 3:00 p.m., and at
any adjournment thereof.
The attorneys named will vote the Shares represented by this proxy in
accordance with the choices made on this ballot. If no choice is indicated
as to any item, this proxy will be voted affirmatively on that matter. The
approval of each proposal is not contingent on the approval of any other
matter.
PLEASE RETURN THIS PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE BOTTOM PORTION.
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Please sign this proxy exactly as your name appears on the books of the
Fund. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or
her title.
DO YOU HAVE ANY COMMENTS?
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