<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION
14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ X / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
The HighMark Group
3435 Stelzer Road
Columbus, OH 43219
------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Martin E. Lybecker, Esq.
Ropes & Gray, Suite 800 East
One Franklin Square
1301 K Street, N.W.
Washington, D.C. 20005
------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
/ / $125 per Item 22(a)(2) of Exchange Act Schedule 14A.
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:* N/A
4) Proposed maximum aggregate value of transaction: N/A
* Set forth the amount on which the filing is calculated and state how
it was determined.
/ X / 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: $125
2) Form, Schedule or Registration Statement No.: Schedule 14A
3) Filing Party: Martin E. Lybecker, Esq.
4) Date Filed: January 9, 1996
Notes:
<PAGE> 2
THE HIGHMARK GROUP
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 11, 1996
A special meeting of the shareholders of The HighMark Group (the "Group"),
will be held at 9:00 a.m. at the offices of BISYS Fund Services, Inc., 3435
Stelzer Road, Columbus, Ohio on March 11, 1996, for the following purposes:
1. Agreements With The Investment Adviser.
To consider a new Investment Advisory Agreement and to ratify the
continuation of the Sub-Administration, Sub-Transfer Agency and Custodian
Agreements. This new Investment Advisory Agreement is required because the
pending merger of The Mitsubishi Bank, Limited and The Bank of Tokyo, Ltd. and
the related combination of their respective subsidiaries BanCal Tri-State
Corporation, The Bank of California, N.A. ("BOC"), and Union Bank may cause a
legal termination of the existing Investment Advisory Agreement between the
Group and BOC. There will be no change in the Group's investment objectives or
investment policies or in the duties of BOC, which will be renamed Union Bank of
California, N.A. ("UBOC"), as a result of the approval of the new Investment
Advisory Agreement. There will be no change in the fees payable by the Group to
UBOC as a result of approval of the new Investment Advisory Agreement. No
significant changes in the personnel of the investment adviser are currently
planned. The new Investment Advisory Agreement is contingent upon and will be
effective upon the consummation of the mergers and reorganization described
above.
2. Trustees.
To approve or disapprove the election of the Board of Trustees;
3. Independent Accountant.
To ratify the selection of Deloitte & Touche LLP as independent accountants
to the Group; and
4. To transact such other business as may properly come before the meeting or
any adjournment thereof.
The Board of Trustees has fixed December 15, 1995 as the record date for
determination of shareholders entitled to vote at this meeting.
By Order of the Trustees
/s/ Stephen G. Mintos
STEPHEN G. MINTOS
President
January 29, 1996
YOU CAN HELP 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.
<PAGE> 3
THE HIGHMARK GROUP
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees (the
"Trustees") of The HighMark Group (the "Group"). The proxy is revocable at any
time before it is voted by sending written notice of the revocation to the Group
or by appearing personally at the March 11, 1996 special meeting of shareholders
of the Group (the "Special Meeting"). The cost of preparing and mailing the
notice of meeting, the proxy card, this proxy statement and any additional proxy
material has been or is to be borne by The Bank of California, N.A. ("BOC"), the
Group's investment adviser. Proxy solicitations will be made primarily by mail,
but may also be made by telephone, telegraph, fax or personal interview
conducted by certain officers or employees of the Group or of BISYS Fund
Services Ohio, Inc. (the Group's shareholder servicing agent) or BISYS Fund
Services, Inc. (the Group's administrator) or, if necessary, a commercial firm
retained for this purpose. In the event that the shareholder signs and returns
the proxy ballot, but does not indicate a choice as to any of the items on the
proxy ballot, the proxy attorneys will vote those shares in favor of such
proposal(s).
Only shareholders of record at the close of business on December 15, 1995
will be entitled to vote at the Special Meeting. On December 15, 1995, the Group
had outstanding 1,140,915,397.019 shares of beneficial interest ("Shares"), each
Share being entitled to one vote, and each fractional Share being entitled to a
proportionate fractional vote. On the same date, The HighMark Growth Fund (the
"Growth Fund") had outstanding 2,595,090.229 Shares, The HighMark Income and
Growth Fund (the "Income and Growth Fund") had outstanding 479,994.486 Shares,
The HighMark Income Equity Fund (the "Income Equity Fund") had outstanding
17,462,477.287 Shares, The HighMark Balanced Fund (the "Balanced Fund") had
outstanding 2,825,192.229 Shares, the HighMark Bond Fund (the "Bond Fund") had
outstanding 5,907,507.298 Shares, The HighMark Government Bond Fund (the
"Government Bond Fund") had outstanding 481,669.770 Shares, The HighMark
Diversified Obligations Fund (the "Diversified Obligations Fund") had
outstanding 378,403,466.350 Shares, The HighMark U.S. Government Obligations
Fund (the "U.S. Government Obligations Fund") had outstanding 207,059,191.130
Shares, The HighMark 100% U.S. Treasury Obligations Fund (the "100% U.S.
Treasury Obligations Fund") had outstanding 312,663,648.070 Shares. The HighMark
California Tax-Free Fund (the "California Tax-Free Fund") had outstanding
170,482,455.440 Shares, the HighMark Tax-Free Fund (the "Tax-Free Fund") had
outstanding 42,554,704.730 Shares, The HighMark Intermediate California
Municipal Bond Fund (the "California Municipal Fund") had outstanding 0 Shares
and The HighMark Intermediate Municipal Bond Fund (the "Municipal Fund") had
outstanding 0 Shares.
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 Investment Company Act of 1940 (the "1940 Act"), the affirmative vote
necessary to approve the matter under consideration 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 Group's executive offices are located at 3435 Stelzer Road, Columbus,
Ohio 43219. This proxy statement and the enclosed notice of meeting and proxy
card are first being mailed on or about January 22, 1996.
A copy of the Group's Annual Report dated July 31, 1995 is available upon
request and may be obtained by calling 1-800-433-6884.
1
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SUMMARY OF PROPOSALS
This Special Meeting is being called for the following purposes: (1) to
approve or disapprove a new investment advisory agreement between the Group and
BOC (the "New Investment Advisory Agreement"), and to ratify or reject
continuation of the following agreements to which BOC is also a party: the Sub-
Administration Agreement, the Sub-Transfer Agency Agreement and the Custodian
Agreement. The New Investment Advisory Agreement will be dated, and the
continuation of the other agreements will be effective upon the later of (i)
approval of the New Investment Advisory Agreement and ratification of the
continuation of the Sub-Administration Agreement, the Sub-Transfer Agency
Agreement and the Custodian Agreement by shareholders and Trustees of the Group
or (ii) the consummation of a series of merger and reorganization transactions
between BOC's ultimate parent, The Mitsubishi Bank, Limited ("MBL") and The Bank
of Tokyo, Ltd. ("BOT") and their respective California subsidiaries, BanCal
Tri-State Corporation ("Tri-State"), BOC and Union Bank ("Union"). As a result
of the Merger, BOC will be renamed Union Bank of California, N.A. ("UBOC"); (2)
to approve or disapprove the election of the Board of Trustees; (3) to ratify
the selection of Deloitte & Touche LLP as independent accountants to the Group;
and (4) to transact such other business as may properly come before the meeting
or any adjournment thereof.
Approval of Proposal (1) with respect to any of the thirteen separate
investment funds of the Group (each a "Fund," or collectively, the "Funds")
requires the affirmative vote of: (a) 67% or more of the Shares of such Fund
present at the Special Meeting, if the holders of more than 50% of the
outstanding Shares are present or represented by proxy, or (b) more than 50% of
the outstanding Shares of such Fund, whichever is less.
Approval of Proposals (2) and (3) requires the affirmative vote of a
majority of the outstanding voting Shares (as defined in the 1940 Act) of the
Group.
PROPOSAL (1)
APPROVAL OR DISAPPROVAL OF THE NEW
INVESTMENT ADVISORY AGREEMENT AND
RATIFICATION OR REJECTION OF THE
CONTINUATION OF THE SUB-ADMINISTRATION,
THE SUB-TRANSFER AGENCY
AND THE CUSTODIAN AGREEMENTS
THE NEW INVESTMENT ADVISORY AGREEMENT
Consideration of the New Investment Advisory Agreement is being requested
because of the pending merger of MBL and BOT and the related combination of
their subsidiaries, Tri-State, BOC and Union. The New Investment Advisory
Agreement between the Group and the combined California bank, which will be
renamed Union Bank of California, N.A. ("UBOC") would take effect upon the later
of (i) approval of the New Investment Advisory Agreement by shareholders of the
Group or (ii) the consummation of the Merger.
Here are some of the factors you should consider in determining whether to
approve the New Investment Advisory Agreement:
The Board of Trustees has unanimously approved the New Investment
Advisory Agreement;
There will be no change in the Group's investment objectives or
investment policies or in the duties of BOC as a result of approval of the
New Investment Advisory Agreement;
There will be no change in the fees payable by the Group to UBOC for
advisory services as a result of approval of the New Investment Advisory
Agreement; and
The Board of Trustees has been advised that UBOC management currently
intends that no significant changes in the persons currently responsible
for providing investment advice to the Group will be made by UBOC following
the consummation of the Merger.
2
<PAGE> 5
BOC, 400 California Street, Post Office Box 45000, San Francisco, CA 94104,
serves as investment adviser to each Fund pursuant to an investment advisory
agreement dated May 8, 1992 (the "Present Investment Advisory Agreement").
Investment advisory and management services are provided to each Fund of the
Group by MERUS Capital Management ("MERUS"), a division of BOC.
Union, BOC and Tri-State, BOC's Delaware holding company, have signed an
Agreement and Plan of Reorganization, dated as of September 27, 1995 (the
"Reorganization Agreement"), a related Plan of Merger, dated as of September 27,
1995 (the "Merger Agreement") and a related Purchase and Assumption Agreement
(the "Purchase Agreement"), dated as of September 27, 1995 (the Reorganization
Agreement, the Merger Agreement and the Purchase Agreement are collectively the
"Merger Agreements"). See "Proposed Merger" below. Consummation of the Merger
will not alter the relationship between BOC and the Group, and BOC will remain
the entity responsible for providing investment advisory services to the Group
following the Merger. However, the Merger will cause BOC to change its name to
UBOC. To the extent the Merger might be deemed to result in a change in
ownership of BOC, the Present Investment Advisory Agreement would automatically
terminate in accordance with its terms as required by the 1940 Act. Thus,
approval of the New Investment Advisory Agreement by shareholders of the Group
is being sought in order to avoid any interruption in the provision of advisory
services to the Group.
On November 29, 1995, the Trustees, including a majority of the Trustees
who are not interested persons of the Group or BOC, as defined in the 1940 Act,
approved the New Investment Advisory Agreement with UBOC, pursuant to which UBOC
will continue to act as the Group's investment adviser. THE TERMS OF THE NEW
INVESTMENT ADVISORY AGREEMENT ARE IDENTICAL TO THOSE OF THE PRESENT INVESTMENT
ADVISORY AGREEMENT WITH RESPECT TO DUTIES, FEES AND THE STANDARD OF CARE. The
effective date of the New Investment Advisory Agreement will be the later of (i)
approval by shareholders of the New Investment Advisory Agreement or (ii) the
date of the consummation of the Merger (the "Closing Date"). It is currently
expected that the Closing Date will occur on or about April 1, 1996. UBOC will
be headquartered at 350 California Street, San Francisco, California.
Copies of the Present Investment Advisory Agreement and the New Investment
Advisory Agreement appear as Exhibits A and B, respectively, to this proxy
statement.
The initial form of the Present Investment Advisory Agreement naming BOC as
investment adviser was approved by the Board of Trustees, including a majority
of the Trustees who are not interested persons of the Group or BOC, as defined
in the 1940 Act, on June 11, 1987 and was most recently reapproved, in its
current form dated May 8, 1992, on June 21, 1995. As required by the 1940 Act,
such shareholder approval was obtained prior to the commencement of operations
of each Fund. The Present Investment Advisory contract was last submitted to a
vote of shareholders on January 9, 1992 for the purpose of approval of changes
in the term and the payment of brokerage commissions on Fund portfolio
transactions.
The terms of the New Investment Advisory Agreement (which are materially
unchanged from the Present Investment Advisory Agreement) provide that UBOC,
subject to the direction of the Board of Trustees, will provide a continuous
investment program for each Fund, including investment research and management
with respect to all securities and investments and cash equivalents in said
Funds. UBOC will determine from time to time what securities and other
investments will be purchased, retained or sold by the Group with respect to the
Funds. For its services under the Present Investment Advisory Agreement, BOC is
entitled to receive an annual fee from each Fund of the lesser of: (a)(i) for
the U.S. Government Obligations, Diversified Obligations, 100% U.S. Treasury
Obligations, Tax-Free and California Tax-Free Funds, a fee computed daily and
paid monthly at the annual rate of forty one-hundredths of one percent (.40%) of
such Funds' first $500 million of average daily net assets, thirty-five
one-hundredths of one percent (.35%) of the next $500 million of average daily
net assets, and thirty one-hundredths of one percent (.30%) of the remaining
average daily net assets and (ii) for the Balanced, Growth, Government, Income
and Growth, Intermediate California, Intermediate Municipal, Income Equity and
Bond Funds, a fee computed daily and paid monthly at the annual rate of one
percent (1.00%) of such Funds' first $40 million of average daily net assets and
sixty one-hundredths of one percent (.60%) of the remaining average daily net
assets, or (b) such fee as may from time to time be agreed upon in writing by
the Group and BOC.
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<PAGE> 6
These fees are identical in amount to the fees to which each of the Funds
will be contractually subject under the New Investment Advisory Agreement.
The Present Investment Advisory Agreement and the New Investment Advisory
Agreement each provides that BOC or UBOC, respectively, may, from time to time
and for such periods as it deems appropriate, further reduce its compensation by
voluntarily limiting the expenses of the Funds. During the fiscal year ended
July 31, 1995, BOC earned aggregate investment advisory fees of $5,315,609 and
waived an aggregate of $1,051,529. The California Municipal Fund and the
Municipal Fund had not yet commenced operations during the fiscal year ended
July 31, 1995.
For the fiscal year ended July 31, 1995, investment advisory fees paid to,
and voluntarily reduced by BOC, on a Fund by Fund basis, were as follows:
<TABLE>
<CAPTION>
INVESTMENT FEES
ADVISORY VOLUNTARILY
FEES PAID REDUCED
---------- ----------
<S> <C> <C>
Growth Fund............................. $ 37,349 $158,716
Income and Growth Fund.................. $ 0 $ 56,251
Income Equity Fund...................... $1,419,062 $ 11,439
Balanced Fund........................... $ 83,790 $168,408
Bond Fund............................... $ 271,150 $250,310
Government Bond Fund.................... $ 0 $ 46,447
Diversified Obligations Fund............ $1,429,494 $ 0
U.S. Government Obligations Fund........ $ 729,094 $ 0
100% U.S. Treasury Obligations Fund..... $ 920,611 $ 0
California Tax-Free Fund................ $ 267,095 $326,450
Tax-Free Fund........................... $ 157,964 $ 33,508
</TABLE>
If approved by shareholders at this Special Meeting, the New Investment
Advisory Agreement will continue until July 31, 1996, unless terminated, and may
be renewed from year to year thereafter by the Board of Trustees. The
continuation of the New Investment Advisory Agreement must be approved (a) by a
majority vote of the Trustees, including a majority of the Trustees who are not
parties to the New Investment Advisory Agreement or interested persons of the
Group or BOC, as defined in the 1940 Act, cast in person at a meeting called for
that purpose and (b) by a vote of a majority of the outstanding voting
securities of a Fund. The New Investment Advisory Agreement may be terminated as
to a particular Fund at any time on sixty days' written notice, without the
payment of any penalty, by the Group (by vote of the Group's Board of Trustees
or by vote of a majority of the outstanding voting securities of such Fund) or
by UBOC. The New Investment Advisory Agreement may not be assigned and shall
terminate automatically in the event of its assignment, as defined in the 1940
Act. The New Investment Advisory Agreement provides that it may be amended only
by an instrument in writing signed by the party against which enforcement of the
change is sought.
As does the Present Investment Advisory Agreement, the New Investment
Advisory Agreement provides that UBOC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in connection
with the performance of the New Investment Advisory Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of UBOC in the performance of its duties
or from reckless disregard by UBOC of its obligations and duties under the New
Investment Advisory Agreement.
The Trustees of the Group, including the Trustees who are not interested
persons of the Group or BOC as defined in the 1940 Act, reviewed and unanimously
approved the New Investment Advisory Agreement in person at a meeting on
November 29, 1995 and have directed that it be submitted to the shareholders of
the Group for their approval.
If the New Investment Advisory Agreement is approved by shareholders and
the Merger is thereafter consummated, the New Investment Advisory Agreement will
be executed and become effective on the Closing Date. In the event the Merger is
not consummated, the Present Investment Advisory Agreement will
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continue in accordance with its terms. In the event the Merger is consummated
and the New Investment Advisory Agreement is not approved, the Board of Trustees
will consider what further actions should be taken.
PROPOSED MERGER
The terms of the proposed merger provide that (i) MBL and BOT will engage
in a merger transaction in which MBL will be the surviving entity and will
change its name to The Bank of Tokyo-Mitsubishi, Ltd. ("BTM"), and (ii) as soon
as practicable thereafter, the California bank subsidiaries of BOT and MBL,
Union and BOC, respectively, will combine to become Union Bank of California,
N.A.
The combination of the California banking subsidiaries of BOT and MBL will
be accomplished pursuant to (i) an Agreement and Plan of Reorganization (the
"Reorganization Agreement") among Union, BOC and Tri-State, (ii) an Agreement
and Plan of Merger (the "Merger Agreement"), pursuant to which Tri-State will
merge with and into Union, with Union being the surviving corporation, and (iii)
a Purchase and Assumption Agreement (the "Purchase Agreement"), between Union
and BOC pursuant to which Union will transfer substantially all of its banking
business and other assets to BOC in exchange for BOC's assumption of
substantially all of the liabilities of Union and the issuance by BOC to Union
of 26,117,714 shares of common stock, $15.00 par value. In a practical sense,
the transactions under the Reorganization Agreement, the Merger Agreement and
the Purchase Agreement will be effected as a single, integrated transaction.
Following the transactions described above, BOC will be renamed Union Bank
of California, N.A., referred to herein as UBOC. UBOC will succeed by operation
of law to all rights, obligations, properties, assets, investments, deposits,
demands, and agreements covered by the Purchase Agreement, and to all
properties, assets, investments, agreements, rights, and obligations of Union
under all fiduciary or representative capacities (e.g., trusts and
executorships). After this transfer to UBOC of substantially all its banking
business, Union will voluntarily relinquish its California banking license and
its federal deposit insurance and will be strictly a bank holding company for
UBOC and its non-bank subsidiaries and will be renamed UnionBanCal Corporation
("UBCC")
Immediately following the combination of the California subsidiaries, UBCC
will own approximately 94% of the outstanding shares of Common Stock of UBOC.
BTM will in turn own approximately 81% of the issued and outstanding UBCC Common
Stock. In addition to its indirect ownership of UBOC through its ownership of
81% of UBCC Common Stock, BTM will also own directly approximately 6% of the
common stock of UBOC. As a consequence, both UBCC and BTM will be deemed to
control UBOC for purposes of the 1940 Act.
The Group has been advised that, after careful review and consideration,
the Group's Board of Trustees believes the Merger will provide significant value
to its shareholders and enable them to participate in the expanded opportunities
for growth that the Merger will make possible.
Consummation of the Merger is subject to the satisfaction of certain
conditions, including the receipt of all necessary regulatory approvals.
Approval of the Merger by the shareholders of Union and BOC is being solicited.
Shareholders of the Group are not being asked to vote on the Merger. The Merger
Agreements may be terminated and the Merger abandoned at any time prior to the
Closing Date by the mutual consent of the parties or upon the occurrence of
other events specified in the Merger Agreements. Completion of the Merger will
occur as soon as practicable after satisfaction or waiver of the applicable
conditions, which the parties anticipate will occur by April 1, 1996.
THE SUB-ADMINISTRATION AGREEMENT
BOC acts as sub-administrator for each of the Group's Funds pursuant to the
Sub-Administration Agreement between The Winsbury Company (now known as BISYS
Fund Services ("BISYS")) and BOC dated December 23, 1991. (A copy of the
Sub-Administration Agreement is attached hereto as Exhibit C.) At a meeting held
on November 29, 1995, the Group's Board of Trustees approved the continuation of
the Sub-Administration Agreement with UBOC. The Sub-Administration Agreement was
ratified by a majority of the outstanding Shares of each Fund at a meeting of
shareholders held on January 9, 1992. All of the terms
5
<PAGE> 8
of the Sub-Administration Agreement will remain unchanged. The Board of Trustees
is seeking shareholder ratification of the Sub-Administration Agreement at this
time for advisory purposes only.
As Sub-administrator for each Fund, BOC assists BISYS in providing such
administrative services as may be reasonably requested by BISYS from time to
time. Such services may include clerical, bookkeeping, accounting, stenographic
and administrative services which will enable BISYS to more efficiently perform
its obligations under the Administration Agreement. Under the Sub-Administration
Agreement, BOC is entitled to receive a fee from BISYS with respect to each Fund
at an annual rate up to .05% of the Fund's average daily net assets, plus BOC's
related out-of-pocket expenses.
For the fiscal year ended July 31, 1995, sub-administration fees paid to
BOC were as follows:
<TABLE>
<CAPTION>
SUB- FEES
ADMINISTRATION VOLUNTARILY
FEES PAID REDUCED
------------ ------------
<S> <C> <C>
Growth Fund............................. $ 5,204.48 $ 4,364.04
Income and Growth Fund.................. $ 0.00 $ 2,525.54
Income Equity Fund...................... $ 80,398.52 $ 30,315.53
Balanced Fund........................... $ 9,450.47 $ 3,650.86
Bond Fund............................... $ 22,939.79 $ 8,582.10
Government Bond Fund.................... $ 720.96 $ 2,160.91
Diversified Obligations Fund............ $ 135,085.72 $ 51,240.93
U.S. Government Obligations Fund........ $ 68,960.52 $ 26,130.11
100% U.S. Treasury Obligations Fund..... $ 87,050.63 $ 33,564.35
California Tax-Free Fund................ $ 56,432.25 $ 21,114.70
Tax-Free Fund........................... $ 18,091.25 $ 6,699.56
</TABLE>
The Administration Agreement permits BISYS to subcontract its services
thereunder, provided that BISYS will not be relieved of its obligations under
the Administration Agreement by the appointment of a subcontractor and BISYS
shall be responsible to the Group for all acts of the subcontractor as if such
acts were its own, except for losses suffered by any Fund resulting from willful
misfeasance, bad faith, or gross negligence by the subcontractor in the
performance of its duties or for reckless disregard by it of its obligations and
duties.
The Sub-Administration Agreement provides that BOC will use its best
efforts to ensure the accuracy of all services performed under the Agreement but
that BOC will not be liable to the Group or BISYS for any action taken or
omitted by BOC in the absence of bad faith, willful misfeasance, or negligence
or for reckless disregard by it of its obligations and duties. BOC will assume
no responsibility under the Sub-Administration Agreement, and will not be
liable, for any damage, loss of data, delay or any other loss whatsoever caused
by events beyond its reasonable control. The Sub-Administration Agreement
further provides that BISYS will indemnify and hold harmless BOC, its employees,
agents, directors, officers, and nominees from and against any and all claims,
demands, actions, and suits, whether groundless or otherwise, and from and
against any and all judgments, liabilities, losses, damages, costs, charges,
counsel fees, and other expenses of every nature and character arising out of or
in any way relating to BOC's actions taken or nonactions with respect to the
performance of services under the Agreement with respect to a Fund or based, if
applicable, upon reasonable reliance on information, records, instructions, or
requests with respect to such Fund given or made to BOC by a duly authorized
representative of BISYS; provided that this indemnification shall not apply to
actions or omissions of BOC in cases of its own bad faith, willful misfeasance,
or negligence or reckless disregard by it of its obligations and duties.
The Sub-Administration Agreement will remain in effect until July 31, 1996
and will thereafter continue in effect as to a particular Fund for successive
periods of twelve months ending on July 31st of each year unless written notice
not to renew is given by the non-renewing party to the other party at least 60
days prior to the expiration of the then-current term. The Sub-Administration
Agreement may be terminated during the initial term by either party as to a
particular Fund at any time on sixty days' written notice to the other party.
6
<PAGE> 9
THE SUB-TRANSFER AGENCY AGREEMENT
BOC acts as sub-transfer agent for each of the Group's Funds pursuant to
the Sub-Transfer Agency Agreement between The Winsbury Service Corporation (now
know as BISYS Fund Services Ohio, Inc. "(BISYS Ohio")) and BOC dated as of
February 22, 1989. (A copy of the Sub-Transfer Agency Agreement is attached
hereto as Exhibit D). At a meeting held on November 29, 1995, the Group's Board
of Trustees approved the continuation of the Sub-Transfer Agency Agreement with
UBOC. All of the terms of the Sub-Transfer Agency Agreement will remain
unchanged. The Sub-Transfer Agency Agreement was initially approved by a
majority of the outstanding Shares of each Fund at a meeting of shareholders
held on February 22, 1989, and was ratified by shareholders at a meeting on
January 9, 1992. The Board of Trustees is seeking shareholder ratification of
the Sub-Transfer Agency Agreement at this time for advisory purposes only.
As sub-transfer agent, BOC performs sub-transfer agency services with
respect to investments in each of the Group's Funds through certain accounts
maintained with BOC and its affiliates. These services include the processing of
purchases and redemptions of Shares and the maintenance of shareholder transfer
and accounting records, such as the history of purchases, redemptions, dividend
distributions, and similar transactions in the shareholder's account.
For its services as sub-transfer agent, BISYS Ohio has agreed to pay BOC
with respect to the Group's Balanced Fund, Growth Fund, Income Equity Fund, Bond
Fund, Government Bond Fund, Income and Growth Fund, California Municipal Fund
and Municipal Fund an annual base fee of $12.00 per shareholder account with
respect to the first 101 through 2,999 shareholder accounts invested in a Fund
and an annual base fee of $9.00 per shareholder account with respect to 3,000 or
more shareholder accounts invested in a Fund; BISYS Ohio has agreed to pay BOC
with respect to the Group's U.S. Government Obligations Fund, Diversified
Obligations Fund, 100% U.S. Treasury Obligations Fund, Tax-Free Fund and
California Tax-Free Fund an annual base fee of $15.00 per shareholder account
with respect to 101 or more shareholder accounts invested in the Fund. (The
number of shareholder accounts for purposes of determining the base fee is
calculated on a monthly basis and the base fee does not apply when 100 or less
shareholder accounts have been invested in a Fund.) BOC is also entitled to be
reimbursed by BISYS Ohio for postage, handling fees, and reasonable costs of
supplies used by BOC in the performance of its sub-transfer agency services.
For the fiscal year ended July 31, 1995, sub-transfer agency fees paid to
BOC were as follows:
<TABLE>
<CAPTION>
SUBTRANSFER
AGENT FEES
PAID
-----------
<S> <C>
Growth Fund.................................. $ 3,695.00
Income and Growth Fund....................... $ 0
Income Equity Fund........................... $ 31,292.00
Balanced Fund................................ $ 0
Bond Fund.................................... $ 4,391.00
Government Bond Fund......................... $ 0
Diversified Obligations Fund................. $ 4,911.00
U.S. Government Obligations Fund............. $ 0
100% U.S. Treasury Obligations Fund.......... $ 526.25
California Tax-Free Fund..................... $ 0
Tax-Free Fund................................ $ 0
</TABLE>
The Sub-Transfer Agency Agreement provides that it will continue in effect
unless terminated with respect to a particular Fund upon thirty days' written
notice by one party to the other party. The Agreement also provides that BOC
will use its best efforts to ensure the accuracy of all services performed under
the Sub-Transfer Agency Agreement, and that BISYS Ohio will indemnify and hold
harmless BOC, its employees, agents, directors, and officers from and against
any and all claims, demand, actions, and suits, whether groundless or otherwise
and from and against any and all judgments, liabilities, losses, damages, costs,
charges, counsel fees, and other expenses of every nature and character arising
out of or in any way relating to BOC's actions taken or non-actions with respect
to the performance of services under the Agreement or based, if
7
<PAGE> 10
applicable, upon information, instructions, or requests made to BOC by an
officer or employee of BISYS Ohio; provided that this indemnification does not
apply to actions or omissions of BOC in cases of its own bad faith, willful
misconduct or gross negligence.
THE CUSTODIAN AGREEMENT
BOC acts as custodian for each of the Group's Funds pursuant to the
Custodian Agreement between BOC and the Group dated December 23, 1991. (A copy
of the Custodian Agreement is attached hereto as Exhibit E). At a meeting held
on November 29, 1995, the Group's Board of Trustees approved the continuation of
the Custodian Agreement with UBOC. As the Group's custodian, BOC's
responsibilities include safeguarding and controlling each Fund's cash and
securities, handling the receipt and delivery of each Fund's securities, and
collecting interest and dividends on each Fund's investments.
The Custodian Agreement was approved by a majority of the outstanding
Shares of each of the Group's Funds at a meeting of shareholders held on January
9, 1992. All of the terms of the Custodian Agreement will remain unchanged. The
Board of Trustees is seeking Shareholder ratification of the Custodian Agreement
at this time for advisory purposes only.
Under the Custodian Agreement, BOC is entitled to receive a custodian fee
from each Fund at an annual rate of .02% of the Fund's average daily net assets,
with an annual minimum fee of $2,500 per Fund. In addition, BOC is entitled to
charge each Fund transactional, holding and disbursement fees involving each
Fund's assets. BOC is entitled to be reimbursed by the Group for reasonable
out-of-pocket expenses incurred in connection with its duties under the
Custodian Agreement, and charges each Fund a flat fee for particular types of
transactions involving the receipt and delivery of the Fund's securities.
For the fiscal year ended July 31, 1995, custodian fees paid to BOC under
the Custodian Agreement were as follows:
<TABLE>
<CAPTION>
FEES
CUSTODIAN VOLUNTARILY
FEES PAID REDUCED
---------- ----------
<S> <C> <C>
Growth Fund............................. $ 0 $ 34,541
Income and Growth Fund.................. $ 0 $ 25,817
Income Equity Fund...................... $ 76,450 $ 0
Balanced Fund........................... $ 0 $ 28,297
Bond Fund............................... $ 37,760 $ 0
Government Bond Fund.................... $ 0 $ 14,584
Diversified Obligations Fund............ $111,937 $ 0
U.S. Government Obligations Fund........ $ 78,529 $ 0
100% U.S. Treasury Obligations Fund..... $ 56,901 $ 0
California Tax-Free Fund................ $ 58,008 $ 0
Tax-Free Fund........................... $ 38,800 $ 0
</TABLE>
The Custodian Agreement will remain in effect until July 31, 1996 and will
thereafter continue in effect as to a particular Fund for successive periods of
twelve-months ending on July 31st of each year, provided that such continuation
is specifically approved at least annually by the Group's Board of Trustees or
by vote of the outstanding Shares of the Fund and, in either case, by a majority
of the Trustees who are not interested persons (as defined in the 1940 Act) of
any party to the Custodian Agreement. The Custodian Agreement is terminable at
any time as to a particular Fund without penalty by the Trustees, by a majority
of the outstanding Shares of that Fund or by either party upon sixty days'
written notice to the other party. The Custodian Agreement also provides that
BOC will exercise reasonable care in carrying out the provisions of the
Custodian Agreement but that BOC will be liable only for its own negligence or
bad faith acts or failures to act. Under the Custodian Agreement, each Fund will
indemnify BOC and hold it harmless from and against all claims, liabilities, and
expenses (including attorneys' fees) with respect to such Fund which BOC may
suffer or incur on account of acting as the custodian under the Agreement except
such claims, liabilities, and expenses arising from BOC's own negligence or bad
faith.
8
<PAGE> 11
TRUSTEES' RECOMMENDATIONS AND OTHER INFORMATION
The New Investment Advisory Agreement and the continuation of the
Sub-Administration Agreement, the Sub-Transfer Agency Agreement and the
Custodian Agreement were approved by the Board of Trustees of the Group,
including a majority of the Trustees who are not interested persons of the Group
as defined in the 1940 Act, at a meeting held on November 29, 1995.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE GROUP VOTE FOR THE
PROPOSED NEW INVESTMENT ADVISORY AGREEMENT. Unlike the New Investment Advisory
Agreement, which must be approved by shareholders in order to avoid any
interruption in the provision of advisory services to the Group, as explained
above under the heading "The New Investment Advisory Agreement," the
Sub-Administration Agreement, the Sub-Transfer Agency Agreement and the
Custodian Agreement are being presented to shareholders for ratification at this
time for advisory purposes only, and the Trustees also recommend that
shareholders of the Group vote FOR ratification of these Agreements.
In making these recommendations, the Trustees have considered information
relating to UBOC status following the completion of the Merger, including
present capabilities and expertise in serving as investment adviser,
sub-administrator, sub-transfer agent and custodian to the Group. They have
reviewed the terms of each Agreement, including the fact that no effective net
change to the Group's investment advisory, sub-administration, sub-transfer
agent or custodian fees is being proposed. The Trustees have also considered the
fact that UBOC would continue to be familiar with the Group and their
shareholder base.
Pursuant to the Present Investment Advisory Agreement, MERUS determines,
subject to the general supervision of the Board of Trustees of the Group and in
accordance with each Fund's investment objective and restrictions, which
securities are to be purchased and sold by a Fund, and which brokers are to be
eligible to execute its portfolio transactions. While MERUS generally seeks
competitive spreads or commissions on behalf of each of the Funds, the Group may
not necessarily pay the lowest spread or commission available on each
transaction. Allocation of transactions to various dealers is determined by
MERUS in its best judgment and in a manner deemed fair and reasonable to
Shareholders. The primary consideration is prompt execution of orders in an
effective manner at the most favorable price. Subject to this consideration,
dealers who provide supplemental investment research to MERUS may receive orders
for transactions by the Group. Information so received is in addition to and not
in lieu of services required to be performed by MERUS and does not reduce the
advisory fees payable to BOC by the Group. Such information may be useful to
MERUS in serving both the Group and other clients and, conversely, supplemental
information obtained by the placement of business of other clients may be useful
to MERUS in carrying out its obligations to the Group.
In connection with their recommendations to shareholders to vote for the
Agreements, the Trustees were advised by BOC that no significant changes in the
persons currently responsible for providing investment advice to the Group are
currently planned to be made by UBOC following consummation of the merger. BOC
also advised the Trustees that it intends to examine all mutual fund activities
of the combined entities subsequent to consummation of the Merger, and that
management of the Group would be involved in the examination of these
activities. Accordingly, BOC has advised the Trustees that it is unable to
predict whether changes will be recommended which would materially impact the
Group's operations or when such changes, if recommended, would be proposed.
Nevertheless, the Trustees, including all members of the Board of Trustees who
are not interested persons of the Group, BOC, or UBOC concluded that UBOC will
be fully capable of performing the services contemplated by the New Investment
Advisory Agreement, the Sub-Administration Agreement, the Sub-Transfer Agency
Agreement and the Custodian Agreement and recommended that the New Investment
Advisory Agreement be approved by the shareholders of the Group, and that the
continuation of the Sub-Administration Agreement, the Sub-Transfer Agency
Agreement and the Custodian Agreement be ratified by shareholders of the Group.
In regard to the New Investment Advisory Agreement, the 1940 Act provides
that, in connection with the sale of any interest in an investment adviser which
results in the "assignment" of an investment advisory contract, an investment
adviser of a registered investment company, or an affiliated person of such
investment adviser, may receive any amount or benefit if (i) for a period of
three years after the sale, at least 75% of the
9
<PAGE> 12
members of the Board of Trustees of the investment company are not interested
persons of the investment adviser or the predecessor adviser, and (ii) there is
no "unfair burden" imposed on the investment company as a result of such sale or
any express or implied terms, conditions or understanding applicable thereto.
For this purpose, "unfair burden" is defined to include any arrangement during
the two-year period after the transaction, whereby the investment adviser or its
predecessor or successor investment advisers, or any interested persons of any
such adviser, receives or is entitled to receive any compensation directly or
indirectly (i) from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company
other than bona fide ordinary compensation as principal underwriter for such
company, or (ii) from the investment company or its security holders for other
than bona fide investment advisory or other services. This provision of the 1940
Act was enacted by Congress in 1975 to make it clear that an investment adviser
(or an affiliated person of the adviser) can realize a profit on the sale of the
adviser's business subject to the two safeguards described above. The majority
of the members of the Board of Trustees of the Group is not and will not be
comprised of interested persons of BOC or UBOC. (See Proposal (2) below,
identifying the interested Trustees of the Group.) Additionally, the Board of
Trustees of the Group has received assurance from BOC that no "unfair burden"
will be imposed on the Group as a result of the proposed transaction.
THE BOARD OF TRUSTEES OF THE GROUP RECOMMENDS THAT THE SHAREHOLDERS APPROVE
THE NEW INVESTMENT ADVISORY AGREEMENT AND THAT SHAREHOLDERS RATIFY THE
CONTINUATION OF THE SUB-ADMINISTRATION AGREEMENT, THE SUB-TRANSFER AGENCY
AGREEMENT AND THE CUSTODIAN AGREEMENT.
PROPOSAL (2)
ELECTION OF BOARD OF TRUSTEES
At the Special Meeting, shareholders of the Group will be asked to elect
five Trustees to the Board of Trustees, one of whom, Frederick J. Long, is a new
nominee who has been serving as a Trustee to date by appointment by the other
members of the Board. The current Board of Trustees of the Group, including a
majority of the Trustees who are not interested persons, as defined in the 1940
Act, has selected and proposed for election the nominees listed below. Each
trustee who is elected will hold office until the next meeting of shareholders
of the Group and until such trustee's successor shall have been elected and
shall have qualified, or until such trustee's term is terminated as provided in
the Group's Declaration of Trust and By-laws. The Group is a Massachusetts
business trust, and is therefore not required to hold annual meetings of
shareholders. Consequently, the trustees who are elected at the Special Meeting
could serve for extended periods of time without shareholder approval.
If the nominees withdraw from election or are otherwise unavailable to
serve as Trustee, the proxies will be voted for such other persons as the Board
of Trustees may choose, or the size of the Board of Trustees may be reduced as
necessary pursuant to the Group's Declaration of Trust and By-laws. The nominees
listed below have consented to being named in this Proxy Statement and to serve
if elected. The table below sets forth certain information about the nominees.
<TABLE>
<CAPTION>
TRUSTEE BUSINESS EXPERIENCE DURING PAST FIVE
NAME SINCE YEARS AGE
- ------------------------------ ------ ---------------------------------------- ------
<S> <C> <C> <C>
Thomas L. Braje 1987 Vice President and Chief Financial 52
1000 Alfred Nobel Drive Officer of Bio Rad Laboratories, Inc.
Hercules, CA 94547
David A. Goldfarb 1987 Partner, Goldfarb & Simens, Certified 53
111 Pine Street Public Accountants
18th Floor
San Francisco, CA 94111
</TABLE>
10
<PAGE> 13
<TABLE>
<CAPTION>
TRUSTEE BUSINESS EXPERIENCE DURING PAST FIVE
NAME SINCE YEARS AGE
- ------------------------------ ------ ---------------------------------------- ------
<S> <C> <C> <C>
Joseph C. Jaeger 1987 Senior Vice President and Chief 60
100 First Street Financial Officer, Delta Dental Plan of
San Francisco, CA 94105 California
Frederick J. Long 1993 President and Chief Executive Officer, 60
520 Pike Street Acordia Northwest, Inc., Acordia/Pettit-
20th Floor Morry Company (insurance brokerage)
Seattle, WA 98101
Stephen G. Mintos* 1987 Employee, and prior to October 1993, a 41
3435 Stelzer Road limited partner of BISYS Fund Services
Columbus, OH 43219
</TABLE>
- ---------------
* Indicates an "interested person" of the Group as defined in the Investment
Company Act of 1940. Mr. Mintos is an interested person of the Group because
he is an employee of BISYS Fund Services, Inc., the Group's administrator and
distributor.
(1) Mr. Mintos also serves as a Trustee of the following registered investment
companies: The Parkstone Group of Funds, The Pacific Capital Funds and The
Riverfront Funds.
The disinterested Trustees received a quarterly fee of $750 for services as
trustee and $1,500 for each meeting of the Board attended, and were also
reimbursed for expenses incurred in connection with attendance at meetings of
the Board of Trustees. The Trustees, if elected, will continue to receive the
same fees as enumerated above. For the fiscal period ended July 31, 1995, the
disinterested Trustees received fees aggregating $42,000.
During the fiscal year ended July 31, 1995, there were five meetings of the
Board of Trustees. Each Trustee attended at least 75% of the meetings. There are
no committees of the Board of Trustees. As of November 17, 1995, the trustees
and officers of the Group owned beneficially less than 1% of the outstanding
Shares of the Group and of each Fund.
For the disinterested Trustees, the following table sets forth information
concerning fees paid and retirement benefits accrued during the fiscal year
ended July 31, 1995:
<TABLE>
<CAPTION>
(3)
PENSION OR (5)
RETIREMENT (4) TOTAL
(2) BENEFITS ESTIMATED COMPENSATION
AGGREGATE ACCRUED AS ANNUAL FROM FUND
(1) COMPENSATION PART OF FUND BENEFITS UPON COMPLEX PAID
NAME OF TRUSTEE FROM GROUP EXPENSES RETIREMENT TO TRUSTEES
- ------------------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
Thomas J. Braje.......... $ 10,500 None None $ 10,500
David A. Goldfarb........ $ 10,500 None None $ 10,500
Joseph C. Jaeger......... $ 10,500 None None $ 10,500
Frederick J. Long........ $ 10,500 None None $ 10,500
</TABLE>
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE TO ELECT EACH
NOMINEE TO THE BOARD OF TRUSTEES.
INFORMATION ABOUT MBL, TRI-STATE AND BOC
MBL, with 52.71 trillion yen in assets and a 115-year history, is one of
the world's leading commercial banks. In Japan, MBL provides a broad range of
financial services to consumers and corporations. These services are made
available through a network of 346 banking offices located primarily in the
Tokyo and Osaka regions. MBL is also very active overseas. The Mitsubishi Bank
Group, an international network of 72 branches, offices, and subsidiaries in 27
countries, serves its Japanese and foreign clientele in such areas as corporate
banking, project finance, trade finance, and treasury and foreign exchange. The
Mitsubishi Bank Group is engaged in a variety of investment banking activities
in the world's principal capital markets. These
11
<PAGE> 14
activities include bond underwriting and dealing, developing financial
derivative products, and providing M&A and other financial advisory services.
MBL is one of Japan's most widely traded and broadly owned corporations, with
46,994 registered shareholders as of March 31, 1995. Its shares are listed in
Japan on the Tokyo, Osaka, Kyoto, and Sapporo stock exchanges and overseas on
the New York, London, Paris, Zurich, Geneva, and Basel stock exchanges.
Tri-State is a registered bank holding company incorporated under the laws
of Delaware, which conducts banking business primarily through its principal
subsidiary, BOC, a national banking association. MBL owns 100% of the
outstanding shares of Tri-State and 17% of the outstanding shares of BOC Common
Stock. Tri-State owns the remaining 83% of the outstanding shares of BOC Common
Stock. As BOC and its subsidiaries represented more than 99% of Tri-State's
total assets and total revenues at June 30, 1995, the following business
discussion focuses on BOC and its subsidiaries.
BOC has operated in California since 1864. With total assets of
approximately $7.9 billion as of September 30, 1995, BOC offers full banking and
fiduciary services and was ranked as the sixth largest bank in California in
terms of total assets as of that date. At September 30, 1995, BOC maintained 46
banking offices in California, Oregon and Washington and six branches and six
representative offices in foreign countries and an international banking
subsidiary in New York.
BOC offers a variety of credit products, including commercial, real estate,
installment, accounts receivable, inventory and agricultural loans, and loans to
financial institutions and public entities of all sizes. In addition, BOC
provides depository and non-credit services such as checking, cash management,
personal and business (employee benefit) trust, investment, financial advisory
and automated business services to its commercial customers. Most of BOC's
domestic business activity is with customers in California, Oregon and
Washington. Substantially all of BOC's real estate construction and mortgage
loans are secured by property located in these states.
BOC also provides consumer banking services through its branch system,
primarily consisting of checking and savings accounts, money market accounts,
personal and residential loans, MasterCard(R) and Visa(R), safe deposit
facilities and other related financial services.
BOC has been involved in international operations since its inception. BOC
extends credit to foreign central and commercial banks, foreign governments and
their agencies and domestic and foreign corporations engaged in international
business. In addition, BOC is active in the financing of foreign trade. BOC
places deposits with and receives deposits from domestic and foreign banks which
operate in the Eurocurrency market and receives deposits at its foreign branches
from foreign and domestic customers. Non-credit international services also are
provided, including correspondent banking and funds transfer services. Most of
BOC's foreign business activity is with customers in Asia.
BOC provides trust services in California, Oregon and Washington. BOC's
principal trust offices are located in San Francisco, Los Angeles, Portland,
Seattle and Tacoma. Personal trust services include trust administration,
probate administration, and investment advisory, agency and custody services.
Employee benefit trust services include trust administration and custody and
investment advisory services relating to corporate retirement plans, individual
retirement accounts, Keogh plans and other retirement or health and welfare
plans.
BOC, both directly and through its NASD registered broker-dealer
subsidiary, BankCal Investment Services, Inc., provides a broad range of
investment products. Through its staff located in San Francisco, Los Angeles,
Portland and Seattle, BOC provides fixed income securities, money market
instruments, mutual funds, annuities and equity securities to BOC's corporate,
public entity, financial institution and individual customers.
BOC also serves as investment advisor to the Equity Income Portfolio and as
investment sub-advisor to the Large Cap Value Portfolio of the SEI Institutional
Managed Trust. BOC may reduce its fee, in its descretion. As of September 30,
1995, the assets and advisory or sub-advisory fees, as applicable, of these
funds were as follows:
12
<PAGE> 15
<TABLE>
<CAPTION>
RATIO OF
ADVISORY
FEE TO NET
ASSET VALUE ASSETS
--------------- -----------
<S> <C> <C>
Equity Income Portfolio.............. $250,609,000.00 0.25%
Large Cap Value Portfolio............ $331,592,000.00 0.20%
</TABLE>
Tri-State's and BOC's principal executive offices are located at 400
California Street, San Francisco, CA 94104; telephone number (415) 765-0400.
INFORMATION ABOUT BOT AND UNION
The Bank of Tokyo Group is one of Japan's premier international financial
institution. Founded in 1946 as successor to the Yokohama Specie Bank, which was
established in 1880, BOT has been the most prominent force in Japan's foreign
exchange market. In addition to foreign exchange, BOT offers an array of
services to its internationally oriented clients in such fields as corporate
finance, global service banking, investment advisory services and project
finance. These services are carried out through a network of approximately 400
international offices, subsidiaries, sub-branches and associated institutions.
BOT has 26.78 trillion yen in assets.
Union is a California banking corporation formed in 1952. Union is the
fourth largest commercial bank in California, with $19 billion in assets at
September 30, 1995, and is estimated to be the thirty-first largest commercial
bank nationally, based on deposits at such date. BOT owned approximately 71.54
percent of the issued and outstanding Union Common Stock at September 30, 1995.
Union has 209 offices throughout California, primarily centered in the San
Diego, Los Angeles, Orange County and San Francisco metropolitan areas. It also
has licensed loan production offices for either commercial, consumer or
residential loans in five California cities and Dallas, Texas. It has four
overseas banking offices located in Guam (2), Saipan and Grand Cayman, a
representative office in Tokyo, Japan and International Banking Facilities in
San Francisco and Los Angeles.
Union provides a wide range of financial services, including trust and
investment management services, to California consumers, small businesses,
middle market companies and major corporations, and has a strong position in
providing financial services for growing Pacific Rim companies in California
through its affiliation with BOT's Pacific Rim network. Union maintains
relationships with a significant number of the Japanese-owned businesses in
California, and assists U.S. companies in establishing businesses in Japan and
other Pacific Rim countries.
Union serves consumers, smaller businesses, and government and nonprofit
institutions through its 209 offices in California. It has seven commercial
banking offices in the state through which extensive services are provided to
California's corporate middle market, such as lines of credit, accounts
receivable and inventory financing, foreign trade financing and an array of
cash-management services. Union considers its principal market for this segment
of Union to be businesses with sales between $20 million and $200 million. Union
lends statewide to the California real estate market primarily through the three
geographic regions of its real estate industries area. Union also provides
specialized lending services to corporate customers, a variety of banking
services in the institutional and deposit markets, and asset management services
for individuals and businesses. Union has twelve subsidiaries that provide
various types of services to Union and its customers.
Union's principal executive offices are located at 350 California Street,
San Francisco, California 94104; telephone number (415) 445-0442.
13
<PAGE> 16
OFFICERS AND DIRECTORS
The principal executive officers and directors of UBOC will be:
<TABLE>
<CAPTION>
NAME PROPOSED POSITION WITH UBOC PRINCIPAL OCCUPATION
- ----------------------- ------------------------------ -----------------------------------
<S> <C> <C>
Alexander D. Calhoun Director. A director of Union Of Counsel, Graham & James,
since 1968. Attorneys at Law, since 1992.
General Partner, 3638 Washington
Associates.
Richard D. Farman Director. A director of Union President, Chief Operating Officer
since 1988. and Director of Pacific Enterprises
since 1993. Former Chief Executive
Officer Southern California Gas
Company, a subsidiary of Pacific
Enterprises.
Stanley F. Farrar Director. A director of BOC Partner, Sullivan & Cromwell since
since 1984. 1984.
Herman E. Gallegos Director. A director of Union Independent management consultant
since 1988. since 1982. Former U.S. Public
Delegate to the 49th United Nations
General Assembly. Chairman of the
Board, Gallegos Institutional
Investors Corporation (retired).
Director of Pacific Telesis Group
and Pacific Bell.
Jack L. Hancock Director. A director of Union Executive Vice President of Pacific
since 1994. Bell (retired). Director of
Whittaker Corporation.
Richard C. Hartnack Vice Chairman of the Board of Former Executive Vice President of
UBOC. Vice Chairman of the The First National Bank of Chicago.
Union Board since 1991.
Roy A. Henderson Vice Chairman of the Board of Chairman of LoPresti Flight
UBOC. A director of BOC since Concepts. Former President and
1993. Chief Operating Officer of Puget
Sound Bank.
Harry W. Low Director. A director of Union Mediator/Arbitrator, Judicial
since 1993. Arbitration & Mediation Services,
Inc. since 1992. Presiding Justice,
State of California Court of
Appeals, 1st District (retired).
Mary S. Metz Director. A director of Union Dean of University Extension,
since 1988. University of California, Berkeley
since 1991. President Emerita of
Mills College. Director of Pacific
Telesis Group, Pacific Gas &
Electric Co. and Longs Drugs
Stores.
Raymond E. Miles Director. A director of BOC Professor, Haas School of Business,
since 1987. University of California, Berkeley
since 1963.
J. Fernando Niebla Director. A director of BOC Chairman and Chief Executive
since 1994. Officer of Infotec Development,
Inc. since 1979.
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
NAME PROPOSED POSITION WITH UBOC PRINCIPAL OCCUPATION
- ----------------------- ------------------------------ -----------------------------------
<S> <C> <C>
Hiroo Nozawa Deputy Chairman of the Board Chairman, President and Chief
and Chief Operating Officer of Executive Officer of BOC since
UBOC. Chairman, President and 1994. A director of MBL since 1992
Chief Executive Officer of BOC and of BOC since 1994. Former
since 1994. A director of MBL Senior Officer of Mitsubishi.
since 1992 and of BOC since
1994. Former Senior Officer of
Mitsubishi.
Sidney R. Peterson Director. A director of Union Consultant and private investor
since 1988. since 1984. Chairman and Chief
Executive Officer of Getty Oil
Company (retired). Director of
Avery Dennison Corporation, NICOR,
Inc., Global Natural Resources,
Inc. and Group Technologies
Corporation.
Carl W. Robertson Director. A director of BOC Managing Director of Warland
since 1975. Investments Company since 1985.
Charles R. Scott Director. A director of BOC Chairman and Chief Executive
since 1990. Officer of Leadership Centers USA
since 1995. Former President and
Chief Executive Officer of The
Actava Group and Intermark Inc.
Vice Chairman and Director of Pier
I Imports, Inc.
Paul W. Steere Director. A director of BOC Member, Bogle & Gates, P.L.L.C.
since 1981. since 1966. Director of Accordia
Northwest, Inc., a subsidiary of
Accordia, Inc.
Henry T. Swigert Director. A director of BOC Chairman of ESCO Corporation since
since 1989. 1979.
Robert M. Walker Vice Chairman of Board of Former Vice Chairman of the Board
UBOC. Vice Chairman of the and Chief Credit Officer of Valley
Union Board since 1992. National Bank of Arizona.
Blenda J. Wilson Director. A director of Union President of California State
since 1993. University, Northridge since 1992.
Former Chancellor of the University
of Michigan - Dearborn.
Kanetaka Yoshida President and Chief Executive President and Chief Executive
Officer and Director of UBOC. Officer of Union since 1993. A
President and Chief Executive director of both Union and BOT
Officer of Union since 1993. A since 1990. Former Vice Chairman of
director of both Union and BOT the Union Board and Chief Financial
since 1990. Former Vice Officer of Union. Former Senior
Chairman of the Union Board Officer of BOT.
and Chief Financial Officer of
Union. Former Senior Officer
of BOT.
</TABLE>
15
<PAGE> 18
PROPOSAL (3)
RATIFICATION OF SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
At the Special Meeting, the Group's shareholders will be asked to ratify
the Board of Trustees' selection of Deloitte & Touche LLP as the Group's
independent certified public accountants for the fiscal year ended July 31,
1996. On September 20, 1995, a majority of the Group's Board of Trustees who are
not interested persons (as defined in the 1940 Act) of the Group voted to select
Deloitte & Touche LLP to replace Coopers & Lybrand LLP who had served as the
Group's independent public accountants since June 11, 1987. Deloitte & Touche
LLP has informed the Group that it has no direct or material indirect financial
interest in the Group. A representative of Deloitte & Touche LLP is expected to
be available at the Meeting in person or telephonically to make a statement if
he or she desires to do so and to respond to appropriate questions.
The Board of Trustees recommends that shareholders vote to ratify the
selection of Deloitte & Touche LLP as the Group's independent accountants for
the fiscal year ending July 31, 1996.
AFFILIATED BROKER TRANSACTIONS
In the fiscal year ended July 31, 1995, no brokerage commissions were paid
to affiliated brokers of the Group or of BOC on account of trading for the
Funds.
OTHER MATTERS AND DISCRETION
OF PERSONS NAMED IN THE PROXY
While the Special Meeting is called to act upon any other business that may
properly come before it, at the date of this proxy statement the only business
which the management intends to present or knows that others will present is the
business stated in the Notice of Meeting. If any other matters lawfully come
before the Special Meeting, and in all procedural matters at said Special
meeting, it is the intention that the enclosed proxy shall be voted in
accordance with the best judgment of the persons named as proxies therein, or
their substitutes, present and acting at the Special Meeting.
If at the time any session of the Special Meeting is called to order, a
quorum is not present, in person or by proxy, the persons named as proxies may
vote those proxies that have been received to adjourn the Special Meeting to a
later date. In the event that a quorum is present but sufficient votes in favor
of one or more of the proposals have not been received, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies with respect to any such proposal. All such
adjournments will require the affirmative vote of a majority of the Shares
present in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxies will vote those proxies that they are
entitled to vote in favor of the proposal, in favor of such an adjournment, and
will vote those proxies required to be voted against the proposal, against any
such adjournment. A vote may be taken on one or more of the proposals in this
proxy statement prior to any such adjournment if sufficient votes for its or
their approval have been received and it is otherwise appropriate.
As of November 17, 1995, the Group believes that BOC was the shareholder of
record of 30.65% of the Investor Shares and 97.65% of the Fiduciary Shares of
the Growth Fund, 25.58% of the Investor Shares and 97.55% of the Fiduciary
Shares of the Income and Growth Fund, 29.04% of the Investor Shares and 95.03%
of the Fiduciary Shares of the Income Equity Fund, 8.19% of the Investor Shares
and 98.60% of the Fiduciary Shares of the Balanced Fund, 67.81% of the Investor
Shares and 94.51% of the Fiduciary Shares of the Bond Fund, 84.28% of the
Fiduciary Shares of the Government Bond Fund, 97.97% of the Fiduciary Shares of
the Tax-Free Fund, and substantially all of the Fiduciary Shares of the U.S.
Government Obligations Fund, the Diversified Obligations Fund, the 100% U.S.
Treasury Obligations Fund and the California Tax-Free Fund. There were no
shareholders of the California Municipal Fund and the Municipal Fund as of
November 17, 1995. As of November 17, 1995, the Group believes that BOC had
voting power with respect to 60.61% of the Growth Fund Fiduciary Shares, 42.96%
of the Income Equity Fund Fiduciary Shares, 41.09% of the Balanced
16
<PAGE> 19
Fund Fiduciary Shares, 46.20% of the Bond Fund Fiduciary Shares, 13.88% of the
Government Bond Fund Fiduciary Shares, 15.80% of the Diversified Obligations
Fund Fiduciary Shares, 6.87% of the U.S. Government Obligations Fund Fiduciary
Shares, 22.84% of the 100% U.S. Treasury Fund Fiduciary Shares, 17.90 % of the
California Tax-Free Fund Fiduciary Shares, 44.87% of the Tax-Free Fund Fiduciary
Shares and 7.94% of the Income and Growth Fund Fiduciary Shares. As a result,
BOC may be deemed to be a "controlling person" of each of the Funds under the
1940 Act.
The following list indicates the beneficial ownership of the shareholders
who, to the best knowledge of the Group, are the beneficial owners of more than
5% of the outstanding Shares of the Group as of November 17, 1995:
<TABLE>
<CAPTION>
PERCENTAGE
OF
BENEFICIAL
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
GROWTH FUND INVESTOR SHARES
Richard Ormsby 5.31%
13004 Abra Rd.
San Diego, CA 92128
John A. Dito 11.00%
650 South Hope St. #2800
Los Angeles, CA 92621
FIDUCIARY SHARES
The Bank of California, N.A. 32.28%
Capital Accumulation Plan
400 California St.
San Francisco, CA 94104
The Bank of California N.A. 18.14%
Personal Retirement Option Plan
400 California St.
San Francisco, CA 94104
INCOME AND GROWTH FUND
INVESTOR SHARES
Sharon K. Clark 7.94%
29036 Miller Rd.
Valley Center, CA 92082
FIDUCIARY SHARES
Control Master Products Inc. PS 9.05%
1065 Shary Circle
Concord, CA 94518
United Alloys Inc. Profit Sharing Plan 7.36%
900 East Slauson Ave.
Los Angeles, CA 90011
Dick's Towing & Road Service 6.57%
2012 South 146th Street
Seattle, WA 98168
Newport Adhesive & Composites Inc. 5.93%
Qualified Retirement Plan
1822 Reynolds Ave.
Irvine, CA 92714
</TABLE>
17
<PAGE> 20
<TABLE>
<CAPTION>
PERCENTAGE
OF
BENEFICIAL
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
Decker Communications Inc. 401(k) Plan 12.47%
44 Montgomery, 17th Floor
San Francisco, CA 94104
Economy Foods, Inc. 6.88%
Attn: John Keith Berkley
941 E. Charleston Rd.
POB 50548
Palo Alto, CA 94303
Liebman, Reiner, Nachison & Walsh 6.14%
Attn: Helen Champion
3255 Wilshire Blvd., 12th Floor
Los Angeles, CA 90010
INCOME EQUITY FUND INVESTOR SHARES
John A. Dito 6.47%
650 Itope St., #2800
Los Angeles, CA 90071
FIDUCIARY SHARES
The Bank of California N.A. 17.02%
Capital Accumulation Plan
400 California St.
San Francisco, CA 94104
The Bank of California 7.83%
Personal Retirement Option Plan
400 California St.
San Francisco, CA 94104
BALANCED FUND INVESTOR SHARES
None
FIDUCIARY SHARES
The Bank of California, N.A. 25.74%
Capital Accumulation Plan
400 California St.
San Francisco, CA 94104
The Bank of California N.A. 13.10%
Personal Retirement Options Plan
400 California St.
San Francisco, CA 94104
Milligan New Company 5.12%
Attn: Jack Gillis
150 N. Autumn St.
San Jose, CA 95110
</TABLE>
18
<PAGE> 21
<TABLE>
<CAPTION>
PERCENTAGE
OF
BENEFICIAL
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
Sound Floor Coverings, Inc. 5.24%
Attn: Peter Chick
18375 Olympic Ave. South
Tukwila, WA 98188
Virgil V. Miller 6.28%
Tumac Lumber Co., Inc.
529 SW Third Ave.
Portland, OR 97204
BOND FUND
INVESTOR SHARES
James Harris 6.28%
121 Christian Valley Rd.
Auburn, CA 95602
George L. Jacobs 39.24%
60 Ironwood
Upland, CA 94605
FIDUCIARY SHARES
The Bank of California N.A. 11.25%
Capital Accumulation Plan
400 California St.
San Francisco, CA 94104
The Bank of California N.A. 5.78%
Personal Retirement Options Plan
400 California St.
San Francisco, CA 94104
GOVERNMENT BOND FUND
INVESTOR SHARES
None
FIDUCIARY SHARES
United Alloys Inc. Profit Sharing Plan 10.71%
900 East Slauson Ave.
Los Angeles, CA 90011
Fisher Implement Co. Profit Sharing Plan 6.49%
P.O. Box 159
Albany, OR 97321
Jose G. Bautista 7.44%
20480 View Point Road
Cistro Valley, CA 94592
Douglas T. Frederighi 5.29%
4 Quail Run
Lafayette, CA 94549
</TABLE>
19
<PAGE> 22
<TABLE>
<CAPTION>
PERCENTAGE
OF
BENEFICIAL
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
Michela Rizzuto 10.48%
1975 E. Heather Circle
Brea, CA 92621
Riverview Savings Bank 5.15%
Attn: Ronald Wysake
P.O. Box 1068
Carma, WA 98607
DIVERSIFIED OBLIGATIONS FUND
INVESTOR SHARES
None.
FIDUCIARY SHARES
None.
U.S. GOVERNMENT OBLIGATION FUND
INVESTOR SHARES
None.
FIDUCIARY SHARES
Spitzel/Anderson Escrow 10.04%
3700 Wilshire Blvd. #820
Los Angeles, CA 90010
Lakeside Foundation 6.05%
50 Fremont Ste 3520
San Francisco, CA 94105
100% U.S. TREASURY FUND
INVESTOR SHARES
None.
FIDUCIARY SHARES
The Bank of California, N.A. Capital 6.16%
Accumulation Plan
400 California Street
San Francisco, CA 94104
Louise Laverne Kohlstaedt 5.63%
c/o Emilie J. Rubright
3742 Forest Gate Drive N.E.
Iowa City, IA 52240
CALIFORNIA TAX FREE FUND
INVESTOR SHARES
None.
FIDUCIARY SHARES
None.
TAX FREE FUND
INVESTOR SHARES
None.
</TABLE>
20
<PAGE> 23
<TABLE>
<CAPTION>
PERCENTAGE
OF
BENEFICIAL
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
FIDUCIARY SHARES
Michael S. Engl 16.59%
Attn: Kitty Willard
P.O. Box 2500
Sun Valley, ID 83353
Neil Anderson 5.99%
2915 E. Madison St., #200
Seattle, WA 98112
CALIFORNIA MUNICIPAL FUND
INVESTOR SHARES
None.
FIDUCIARY SHARES
None.
MUNICIPAL FUND
INVESTOR SHARES
None.
FIDUCIARY SHARES
None.
</TABLE>
The table below indicates each additional person other than The Bank of
California and the beneficial owners listed above who own of record 5% or more
of the Investor Shares of the following Funds of the Group as of November 17,
1995. As of November 17, 1995, the Lutheran Services Foundation, 2424 S. Fremont
Ave., Alhambra, CA 91803 owned 10.33% of the Fiduciary Shares of the Government
Bond Fund. No person other than the Bank of California and the beneficial owners
listed above own of record more than 5% of the Fiduciary Shares of a Fund.
<TABLE>
<CAPTION>
PERCENTAGE
OF RECORD
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
GROWTH FUND
Guy Paquet 6.63%
951 S. Beach Blvd.
La Habra, CA 90631
Bill and Yuriko Tsutagawa 6.00%
2242 Valley Rd.
Oceanside, CA 92056
Layne Hamilton 6.08%
11479 Round House Ct.
Gold River, CA 95670-7714
National Financial Services Corp. 27.24%
FBO Gary Frankosky
One World Financial Center
200 Liberty St. 4th Fl.
New York, NY 10281-0000
</TABLE>
21
<PAGE> 24
<TABLE>
<CAPTION>
PERCENTAGE
OF RECORD
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
INCOME AND GROWTH FUND
National Financial Services Corp. 9.67%
For the Exclusive Benefit of Customers
200 Liberty St.
New York, NY 10281
Bill and Yuriko Tsutagawa 44.15%
2242 Valley Rd.
Oceanside, CA 92056
INCOME EQUITY FUND
Guy Paquet 7.86%
951 S. Beach Blvd.
La Habra, CA 90631
National Financial Services Corp. 29.56%
FBO Gary Frankosky
One World Financial Center
200 Liberty St., 4th Fl.
New York, NY 10281
BALANCED FUND
John F. Roach 67.73%
587 Perugia Way
Los Angeles, CA 90077
Yoko Fujii 6.33%
and Tadashi Fujii
Trst Tadashi & Yoko Fujii 1992 Trst
DTD 11/27/92
1405 Lamont Ave.
Thousand Oaks, CA 91748
Rosalind Fahmy 8.87%
2691 Pocatello
Bolland Heights, CA 91748
BOND FUND
Wallace Allred 6.02%
and Norma Allred
JT WROS
2250 N. Broadway No. 48
Escondido, CA 92026
National Financial Services Corp. 12.81%
One World Financial Center
200 Liberty St. 4th Fl.
New York, NY
GOVERNMENT BOND FUND
Chapa-De Indian Health Program, Inc. 91.81%
11670 Atwood Rd.
Auburn, CA 95603
</TABLE>
22
<PAGE> 25
<TABLE>
<CAPTION>
PERCENTAGE
OF RECORD
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
DIVERSIFIED OBLIGATIONS FUND
National Financial Services Corp. 10.65%
For the Benefit of our Customers
One World Financial Center
200 Liberty St. 4th Fl.
New York, NY 10281
Managed Business Assets 5.45%
Ushio America Inc.
10550 Camchere Drive
Cypress, CA 90630
U.S. GOVERNMENT OBLIGATIONS FUND
Managed Business Assets 6.49%
Phyxis Corporation
9380 Carroll Park Drive
San Diego, CA 92121
National Financial Services Corp. 18.51%
For The Benefit of our Customers
One World Financial Center
200 Liberty St., 4th Fl.
New York, NY 10281
Saperstein Mayeda and Goldstein 30.84%
Dennys Class Settlement Fund
Attn: Helen Thompson
1300 Clay St., 11th Fl.
Oakland, CA 94612
Tulare County Treasurer 5.49%
c/o Gerald Fields
Civic Center Room 103E
Visalia, CA 93291
100% U.S. TREASURY FUND
National Financial Services Corp. 5.96%
For the Benefit of our Customers
One World Financial Center
200 Liberty St. 4th Fl.
New York, NY 10281
Daniel S. Coelho, Sr. 8.83%
300 S. Harbor Blvd.
1000 Anaheim, CA 92805
Liquor Barn Inc. 6.89%
7392 Trade St.
San Diego, CA 92121
</TABLE>
23
<PAGE> 26
<TABLE>
<CAPTION>
PERCENTAGE
OF RECORD
NAME AND ADDRESS OWNERSHIP
- ------------------------------------------------- ----------
<S> <C>
CALIFORNIA TAX FREE FUND
National Financial Services Corp. 41.16%
For the Benefit of Our Customers
One World Financial Center
200 Liberty St., 4th Fl.
New York, NY 10281-0000
TAX FREE FUND
Sally Skinner Behnke 5.72%
c/o REB Enterprises
1326 5th Ave., Suite 711
Seattle, WA 98101
National Financial Services Corp. 30.67%
For the Benefit of our Customers
One World Financial Center
200 Liberty St., 4th Fl.
New York, NY 10281
DYK Incorporated 20.80%
Attn: Bob Dykmin
P.O. Box 696
El Cajon, CA 92022
Valley Concereto Company 7.23%
c/o L.P. Hughes
P.O. Box 55099
Seattle, WA 98155
CALIFORNIA MUNICIPAL FUND
None.
MUNICIPAL FUND
None.
</TABLE>
As of November 17, 1995, the Officers and Trustees of the Group owned less
than 1% of the Group's outstanding Shares.
INFORMATION ABOUT BISYS FUND SERVICES
The Group's principal distributor is BISYS Fund Services, Inc., 3435
Stelzer Road, Columbus, Ohio 43219. BISYS Fund Services, Inc. is wholly owned by
The BISYS Group, Inc., 150 Clove Road, Little Falls, New Jersey 07424, a
publicly owned company engaged in information processing, loan servicing and
401(k) administration and recordkeeping services to and through banking and
other financial organizations. The following persons are officers of the Group
and may be deemed to have an interest in BISYS Fund Services, Inc. by virtue of
their status as employees and/or executive officers of that company:
24
<PAGE> 27
<TABLE>
<CAPTION>
OFFICER
OF THE
NAME POSITION WITH FUNDS AGE FUNDS SINCE
- -------------------- --------------------- --- -----------
<S> <C> <C> <C>
Stephen G. Mintos Chairman and Trustee 41 1987
J. David Huber Vice President 49 1987
William J. Tomko Vice President 37 1991
Cynthia L. Lindsey Vice President 37 1993
Nancy E. Converse Secretary 46 1994
Martin Dean Treasurer 32 1995
Alaina Metz Assistant Secretary 28 1995
</TABLE>
Bank of California, N.A., has a dealer agreement with BISYS Fund Services
pursuant to which BOC is authorized to place orders with the Group's Transfer
Agent for the purchase of Shares and tender Shares to the Transfer Agent for
redemption.
If you do not expect to attend the Special Meeting, please sign your proxy
card promptly and return it in the enclosed envelope to avoid unnecessary
expense and delay. No postage is necessary.
January 22, 1996
25
<PAGE> 28
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of May 8, 1992 between THE HIGHMARK GROUP, a
Massachusetts business trust (herein called the "Group"), and THE BANK OF
CALIFORNIA, N.A., a national banking association with its principal offices in
San Francisco, California (herein called the "Investment Adviser").
WHEREAS, the Group is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Group desires to retain the Investment Adviser to furnish
investment advisory and administrative services to certain investment portfolios
of the Group (the "Funds") and the Investment Adviser represents that it is
willing and possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Group hereby appoints the Investment Adviser to act as
investment adviser to the Funds identified on Schedule A hereto for the period
and on the terms set forth in this Agreement. The Investment Adviser accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Group has furnished the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) the Group's Declaration of Trust, as filed with the Secretary of
State of the Commonwealth of Massachusetts on March 10, 1987, and all
amendments thereto or restatements thereof (such Declaration, as presently
in effect and as it shall from time to time be amended or restated, is
herein called the "Declaration of Trust");
(b) the Group's Code of Regulations and amendments thereto;
(c) resolutions of the Group's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) the Group's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission on March 12,
1987 and all amendments thereto;
(e) the Group's Registration Statement on Form N-lA under the
Securities Act of 1933, as amended ("1933 Act"), (File No. 33-12608) and
under the 1940 Act as filed with the Securities and Exchange Commission and
all amendments thereto; and
(f) the Funds' most recent prospectuses and Statement of Additional
Information (such prospectuses and Statement of Additional Information, as
presently in effect, and all amendments and supplements thereto are herein
collectively called the "Prospectus").
The Group will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Group's Board of
Trustees, the Investment Adviser will provide a continuous investment program
for each Fund, including investment research and management with respect to all
securities and investments and cash equivalents in said Funds. The Investment
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Group with respect to the Funds. The
Investment Adviser will provide the services under this Agreement in accordance
with each Fund's investment objective, policies, and restrictions as stated in
the Prospectus and resolutions of the Group's Board of Trustees. The Investment
Adviser further agrees that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has
investment responsibilities;
<PAGE> 29
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its
activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to the investment
advisory activities of the Investment Adviser;
(c) will not make loans to any person to purchase or carry units of
beneficial interest in the Group or make loans to the Group;
(d) will place orders pursuant to its investment determinations for
the Group either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Investment Adviser will
attempt to obtain prompt execution of orders in an effective manner at the
most favorable price. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are comparable, the
Investment Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Investment
Adviser with research advice and other services. Unless and until
appropriate procedures are adopted by the Trustees of the Group under Rule
17e-1 of the 1940 Act and unless the provisions of such Rule are complied
with, portfolio securities will not be purchased from or sold to The
Winsbury Company, The Bank of California, N.A., or any affiliated person of
either the Group, The Winsbury Company, or The Bank of California, N.A.;
(e) will maintain all books and records with respect to the Group's
securities transactions and will furnish the Group's Board of Trustees such
periodic and special reports as the Board may request;
(f) will treat confidentially and as proprietary information of the
Group all records and other information relative to the Group and prior,
present or potential interestholders, and will not use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in
writing by the Group, which approval shall not be unreasonably withheld and
may not be withheld where the Investment Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by the Group; and
(g) will maintain its policy and practice of conducting its fiduciary
functions independently. In making investment recommendations for the
Group, the Investment Adviser's personnel will not inquire or take into
consideration whether the issuers of securities proposed for purchase or
sale for the Group's account are customers of the Investment Adviser or of
its parent or its subsidiaries or affiliates. In dealing with such
customers, the Investment Adviser and its parent, subsidiaries, and
affiliates will not inquire or take into consideration whether securities
of those customers are held by the Group.
4. Services Not Exclusive. The investment management services furnished by
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Investment Adviser hereby agrees that all records which
it maintains for the Group are the property of the Group and further agrees to
surrender promptly to the Group any of such records upon the Group's request.
The Investment Adviser further agrees to preserve for the periods prescribed by
Rule 3la-3 under the 1940 Act the records required to be maintained by Rule
3la-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Group.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Investment Adviser
and the Investment Adviser will accept as full compensation therefor a fee
computed daily and paid monthly at the applicable annual rate set forth on
Schedule A hereto. Each Fund's obligation to pay the above-described fee to the
Investment Adviser will begin as of the date of the initial public sale of
shares in that Fund.
-2-
<PAGE> 30
If in any fiscal year the aggregate expenses of any of the Funds (as
defined under the securities regulations of any state having jurisdiction over
the Group) exceed the expense limitations of any such state, the Investment
Adviser will reimburse the Fund for a portion of such excess expenses equal to
such excess times the ratio of the fees otherwise payable by the Fund to the
Investment Adviser hereunder to the aggregate fees otherwise payable by the Fund
to the Investment Adviser hereunder and to The Winsbury Company under the
Administration Agreement between The Winsbury Company and the Group. The
obligation of the Investment Adviser to reimburse the Funds hereunder is limited
in any fiscal year to the amount of its fee hereunder for such fiscal year,
provided, however, that notwithstanding the foregoing, the Investment Adviser
shall reimburse the Funds for such proportion of such excess expenses regardless
of the amount of fees paid to it during such fiscal year to the extent that the
securities regulations of any state having jurisdiction over the Group so
require. Such expense reimbursement, if any, will be estimated daily and
reconciled and paid on a monthly basis.
8. Limitation of Liability. The Investment Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by the Investment Adviser of its obligations
and duties under this Agreement.
9. Duration and Termination. This Agreement will become effective as to a
particular Fund as of the date first written above, provided that it shall have
been approved by vote of a majority of the outstanding voting securities of such
Fund, in accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until October 31, 1993.
Thereafter, if not terminated, this Agreement shall continue in effect as
to a particular Fund for successive periods of twelve months each ending on
October 31st of each year, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Group's
Board of Trustees who are not parties to this Agreement or interested persons of
any party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the vote of a majority of the Group's
Board of Trustees or by the vote of a majority of the outstanding voting
securities of such Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to a particular Fund at any time on sixty days' written notice,
without the payment of any penalty, by the Group (by vote of the Group's Board
of Trustees or by vote of a majority of the outstanding voting securities of
such Fund) or by the Investment Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" shall have the same meaning of such terms in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the Commonwealth of Massachusetts.
The names "The HighMark Group" and "Trustees of The HighMark Group" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of March 10, 1987 to which reference is hereby made and a copy of
which is on file at the office of the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and all amendments
thereto so filed or hereafter filed. The obligations of "The HighMark Group"
entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, interestholders or
-3-
<PAGE> 31
representatives of the Trust personally, but bind only the assets of the Trust,
and all persons dealing with any Fund of the Trust must look solely to the
assets of the Trust belonging to such Fund for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE HIGHMARK GROUP
By: /s/ KENNETH B. QUINTENZ
Title: President
THE BANK OF CALIFORNIA, N.A.
By: /s/ HAROLD C. WARNER
Title: Senior Vice President
Seal
Seal
<PAGE> 32
DATED: AS OF DECEMBER 1, 1992
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN THE HIGHMARK GROUP AND
THE BANK OF CALIFORNIA, N.A.
<TABLE>
<CAPTION>
NAME OF FUND COMPENSATION
- --------------------------------- ----------------------------------------------------
<S> <C>
The Balanced Fund................ Annual rate of one percent (1.00%) of the first $40
million of the Fund's average daily net assets and
sixty one-hundredths of one percent (.60%) of the
remaining average daily net assets.
The Growth Fund.................. Annual rate of one percent (1.00%) of the first $40
million of the Fund's average daily net assets and
sixty one-hundredths of one percent (.60%) of the
remaining average daily net assets.
The Government Bond Fund......... Annual rate of one percent (1.00%) of the first $40
million of the Fund's average daily net assets and
sixty one-hundredths of one percent (.60%) of the
remaining average daily net assets.
The Income and Growth Fund....... Annual rate of one percent (1.00%) of the first $40
million of the Fund's average daily net assets and
sixty one-hundredths of one percent (.60%) of the
remaining average daily net assets.
THE HIGHMARK GROUP
By: /s/ KENNETH B. QUINTENZ
Title: President
THE BANK OF CALIFORNIA, N.A.
By: /s/ HAROLD C. WARNER
Title:
</TABLE>
- ---------------
(1) All fees are computed daily and paid periodically.
<PAGE> 33
EXHIBIT B
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of between THE HIGHMARK GROUP, a
Massachusetts business trust (herein called the "Group"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association with its principal offices in
San Francisco, California (herein called the "Investment Adviser").
WHEREAS, the Group is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS, the Group desires to retain the Investment Adviser to furnish
investment advisory and administrative services to certain investment portfolios
of the Group (the "Funds") and the Investment Adviser represents that it is
willing and possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Group hereby appoints the Investment Adviser to act as
investment adviser to the Funds identified on Schedule A hereto for the period
and on the terms set forth in this Agreement. The Investment Adviser accepts
such appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
2. Delivery of Documents. The Group has furnished the Investment Adviser
with copies properly certified or authenticated of each of the following:
(a) the Group's Declaration of Trust, as filed with the Secretary of
State of the Commonwealth of Massachusetts on March 10, 1987, and all
amendments thereto or restatements thereof (such Declaration, as presently
in effect and as it shall from time to time be amended or restated, is
herein called the "Declaration of Trust");
(b) the Group's Code of Regulations and amendments thereto;
(c) resolutions of the Group's Board of Trustees authorizing the
appointment of the Investment Adviser and approving this Agreement;
(d) the Group's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission on March 12,
1987 and all amendments thereto;
(e) the Group's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ("1933 Act"), (File No. 33-12608) and
under the 1940 Act as filed with the Securities and Exchange Commission and
all amendments thereto; and
(f) the Fund's most recent prospectuses and Statement of Additional
Information (such prospectuses and Statement of Additional Information, as
presently in effect, and all amendments and supplements thereto are herein
collectively called the "Prospectus").
The Group will furnish the Investment Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. Management. Subject to the supervision of the Group's Board of
Trustees, the Investment Adviser will provide a continuous investment program
for each Fund, including investment research and management with respect to all
securities and investments and cash equivalents in said Funds. The Investment
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Group with respect to the Funds. The
Investment Adviser will provide the services under this Agreement in accordance
with each Fund's investment objective, policies, and restrictions as stated in
the Prospectus and resolutions of the Group's Board of Trustees. The Investment
Adviser further agrees that it:
<PAGE> 34
(a) will use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its
activities under this Agreement in accordance with any applicable
regulations of any governmental authority pertaining to the investment
advisory activities of the Investment Adviser;
(c) will not make loans to any person to purchase or carry units of
beneficial interest in the Group or make loans to the Group;
(d) will place orders pursuant to its investment determinations for
the Group either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Investment Adviser will
attempt to obtain prompt execution of orders in an effective manner at the
most favorable price. Consistent with this obligation, when the execution
and price offered by two or more brokers or dealers are comparable, the
Investment Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Investment
Adviser with research advice and other services. Unless and until
appropriate procedures are adopted by the Trustees of the Group under Rule
17e-1 of the 1940 Act and unless the provisions of such Rule are complied
with, portfolio securities will not be purchased from or sold to BISYS Fund
Services, Union Bank of California, N.A., or any affiliated person of
either the Group, BISYS Fund Services, or Union Bank of California, N.A.;
(e) will maintain all books and records with respect to the Group's
securities transactions and will furnish the Group's Board of Trustees such
periodic and special reports as the Board may request;
(f) will treat confidentially and as proprietary information of the
Group all records and other information relative to the Group and prior,
present or potential interestholders; and will not use such records and
information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in
writing by the Group, which approval shall not be unreasonably withheld and
may not be withheld where the Investment Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so
requested by the Group; and
(g) will maintain its policy and practice of conducting its fiduciary
functions independently. In making investment recommendations for the
Group, the Investment Adviser's personnel will not inquire or take into
consideration whether the issuers of securities proposed for purchase or
sale for the Group's account are customers of the Investment Adviser or of
its parent or its subsidiaries or affiliates. In dealing with such
customers, the Investment Adviser and its parent, subsidiaries, and
affiliates will not inquire or take into consideration whether securities
of those customers are held by the Group.
4. Services Not Exclusive. The investment management services furnished by
the Investment Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records which
it maintains for the Group are the property of the Group and further agrees to
surrender promptly to the Group any of such records upon the Group's request.
The Investment Adviser further agrees to preserve for the periods prescribed by
Rule 31a-3 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, the Investment Adviser
will pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Group.
7. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Funds will pay the Investment Adviser
and the Investment Adviser will accept as full compensation therefor a fee
computed daily and paid monthly at the applicable annual rate set forth on
-2-
<PAGE> 35
Schedule A hereto. Each Fund's obligation to pay the above-described fee to the
Investment Adviser will begin as of the date of the initial public sale of
shares in that Fund.
If in any fiscal year the aggregate expenses of any of the Funds (as
defined under the securities regulations of any state having jurisdiction over
the Group) exceed the expense limitations of any such state, the Investment
Adviser will reimburse the Fund for a portion of such excess expenses equal to
such excess times the ratios of the fees otherwise payable by the Fund to the
Investment Adviser hereunder to the aggregate fees otherwise payable by the Fund
to the Investment Adviser hereunder and to BISYS Fund Services under the
Administration Agreement between BISYS Fund Services and the Group. The
obligation of the Investment Adviser to reimburse the Funds hereunder is limited
in any fiscal year to the amount of its fee hereunder for such fiscal year,
provided, however, that notwithstanding the foregoing, the Investment Adviser
shall reimburse the Funds for such proportion of such excess expenses regardless
of the amount of fees paid to it during such fiscal year to the extent that the
securities regulations of any state having jurisdiction over the Group so
require. Such expense reimbursement, if any, will be estimated daily and
reconciled and paid on a monthly basis.
8. Limitation of Liability. The Investment Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Funds in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by the Investment Adviser of its obligations
and duties under this Agreement.
9. Duration and Termination. This Agreement will become effective as to a
particular Fund as of the date first written above, provided that it shall have
been approved by vote of a majority of the outstanding voting securities of such
Fund, in accordance with the requirements under the 1940 Act, and, unless sooner
terminated as provided herein, shall continue in effect until
.
Thereafter, if not terminated, this Agreement shall continue in effect as
to a particular Fund for successive periods of twelve months each ending on
October 31st of each year, provided such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Group's
Board of Trustees who are not parties to this Agreement or interested persons of
any party to this Agreement, cast in person at a meeting called for the purpose
of voting on such approval, and (b) by the vote of a majority of the Group's
Board of Trustees or by the vote of a majority of the outstanding voting
securities of such Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to a particular Fund at any time on sixty days' written notice,
without the payment of any penalty, by the Group (by vote of the Group's Board
of Trustees or by vote of a majority of the outstanding voting securities of
such Fund) or by the Investment Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" shall have the same meaning of such terms in the 1940 Act.)
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the Commonwealth of Massachusetts.
The names "The HighMark Group" and "Trustees of The HighMark Group" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of March 10, 1987 to which reference is hereby made and a copy of
which is on file at the office of the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law,
-3-
<PAGE> 36
and to any and all amendments thereto so filed or hereafter filed. The
obligations of "The HighMark Group" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, interestholders or representatives of the Trust personally, but bind
only the assets of the Trust, and all persons dealing with any Fund of the Trust
must look solely to the assets of the Trust belonging to such Fund for the
enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE HIGHMARK GROUP
By:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
Seal
Seal
<PAGE> 37
DATED AS OF , 1995
FORM OF
AMENDED AND RESTATED
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN THE HIGHMARK GROUP AND
UNION BANK OF CALIFORNIA, N.A.
<TABLE>
<CAPTION>
NAME OF FUND COMPENSATION
- ---------------------------------------- -------------------------------------------------
<S> <C>
The U.S. Government Obligations Fund.... Annual rate of forty one-hundredths of one
percent (.40%) of the U.S. Government Obligations
Fund's first $500 million of average daily net
assets, thirty-five one-hundredths of one percent
(.35%) of the next $500 million of average daily
net assets, and thirty one-hundredths of one
percent (.30%) of the remaining average daily net
assets.
The Diversified Obligations Fund........ Annual rate of forty one-hundredths of one
percent (.40%) of the Diversified Obligations
Fund's first $500 million of average daily net
assets, thirty-five one-hundredths of one percent
(.35%) of the next $500 million of average daily
net assets, and thirty one-hundredths of one
percent (.30%) of the remaining average daily net
assets.
The 100% U.S. Treasury Obligations Annual rate of forty one-hundredths of one
Fund.................................. percent (.40%) of the U.S. Treasury Obligations
Fund's first $500 million of average daily net
assets, thirty-five one- hundredths of one
percent (.35%) of the next $500 million of
average daily net assets, and thirty one-
hundredths of one percent (.30%) of the remaining
average daily net assets.
The Income Equity Fund.................. Annual rate of one percent (1.00%) of the first
$40 million of the Income Equity Fund's average
daily net assets and sixty one-hundredths of one
percent (.60%) of the remaining average daily net
assets.
The Bond Fund........................... Annual rate of one percent (1.00%) of the first
$40 million of the Bond Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
The Tax-Free Fund....................... Annual rate of forty one-hundredths of one
percent (.40%) of the Tax-Free Fund's first $500
million of average daily net assets, thirty-five
one-hundredths of one percent (.35%) of the next
$500 million of average daily net assets, and
thirty one-hundredths of one percent (.30%) of
the remaining average daily net assets.
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
NAME OF FUND COMPENSATION
- ---------------------------------------- -------------------------------------------------
<S> <C>
The California Tax-Free Fund............ Annual rate of forty one-hundredths of one
percent (.40%) of the California Tax-Free Fund's
first $500 million of average daily net assets,
thirty-five one-hundredths of one percent (.35%)
of the next $500 million of average daily net
assets, and thirty one-hundredths of one percent
(.30%) of the remaining average daily net assets.
The Balanced Fund....................... Annual rate of one percent (1.00%) of the first
$40 million of the Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
The Growth Fund......................... Annual rate of one percent (1.00%) of the first
$40 million of the Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
The Government Bond Fund................ Annual rate of one percent (1.00%) of the first
$40 million of the Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
The Income and Growth Fund.............. Annual rate of one percent (1.00%) of the first
$40 million of the Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
The Intermediate California Municipal Annual rate of one percent (1.00%) of the first
Bond Fund............................. $40 million of the Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
The Intermediate Municipal Bond Fund.... Annual rate of one percent (1.00%) of the first
$40 million of the Fund's average daily net
assets and sixty one-hundredths of one percent
(.60%) of the remaining average daily net assets.
THE HIGHMARK GROUP
By:
Title: President
UNION BANK OF CALIFORNIA, N.A.
By:
Title:
</TABLE>
A-2
<PAGE> 39
EXHIBIT C
SUB-ADMINISTRATION AGREEMENT
AGREEMENT made this 23rd day of December, 1991, between THE WINSBURY
COMPANY LIMITED PARTNERSHIP, d/b/a The Winsbury Company ("Winsbury"), a
partnership organized under the laws of the State of Ohio and having its
principal place of business at 1900 East Dublin-Granville Road, Columbus, Ohio
43229, and THE BANK OF CALIFORNIA, N.A. (the "Sub-Administrator"), a national
banking association having its main office at 400 California Street, San
Francisco, California 94101.
WHEREAS, Winsbury has entered into a Management and Administration
Agreement, dated December 23, 1991 (the "Management and Administration
Agreement"), with The HighMark Group (the "Trust"), a Massachusetts business
trust having its principal place of business at 1900 East Dublin-Granville Road,
Columbus, Ohio 43229, concerning the provision of management and administrative
services for the investment portfolios of the Trust identified on Schedule A
hereto, as such Schedule shall be amended from time to time (individually
referred to herein as the "Fund" and collectively as the "Funds"); and
WHEREAS, Winsbury desires to retain the Sub-Administrator to assist it in
performing administrative services with respect to each Fund and the
Sub-Administrator is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Sub-Administrator. The Sub-Administrator will assist
Winsbury in providing administrative services with respect to each Fund as may
be reasonably requested by Winsbury from time to time. Such services may
include, but are in no way limited to, such clerical, bookkeeping, accounting,
stenographic, and administrative services which will enable Winsbury to more
efficiently perform its obligations under the Management and Administration
Agreement. Specific assignments may include:
(i) With regard to the investment adviser to the Trust, and at the
direction of Winsbury, to:
a. advise with regard to various compliance requirements including
but not limited to the performance of credit analysis as required by
Rule 2a-7 under the Investment Company Act of 1940, as amended (the
"1940 Act");
b. assist in the preparation of Trustees' compliance reports;
c. assist in the resolution of other technical issues of a
non-compliance nature; and
d. serve as on-site liaison;
(ii) Gathering of information deemed necessary by Winsbury to support
(a) required state regulatory filings (including filings required to be
made with California tax, blue sky and bank agencies) and (b) required
federal regulatory filings;
(iii) Preparation of statistical and research data;
(iv) Assistance in the preparation of the Group's Annual and
Semi-Annual Reports to Shareholders; and
(v) Assistance in the gathering of data from the investment adviser to
the Trust for inclusion in Winsbury's periodic reports to the Trustees.
The Sub-Administrator will keep and maintain all books and records relating
to its services in accordance with Rule 31a-1 under the 1940 Act.
2. Compensation; Reimbursement of Expenses. Winsbury shall pay the
Sub-Administrator for the services to be provided by the Sub-Administrator under
this Agreement in accordance with, and in the manner
<PAGE> 40
set forth in, Schedule B hereto. In addition, Winsbury agrees to reimburse the
Sub-Administrator for the Sub-Administrator's reasonable out-of-pocket expenses
in providing services hereunder.
3. Effective Date. This Agreement shall become effective with respect to a
Fund as of the date first written above (or, if a particular Fund is not in
existence on that date, on the date specified in the amendment to Schedule A to
this Agreement relating to such Fund or, if no date is specified, the date on
which such amendment is executed) (the "Effective Date").
4. Term. This Agreement shall continue in effect with respect to a Fund,
unless earlier terminated by either party hereto as provided hereunder, until
October 31, 1993, and thereafter shall be renewed automatically for successive
one-year terms unless written notice not to renew is given by the non-renewing
party to the other party at least 60 days prior to the expiration of the
then-current term; provided, however, that after such termination for so long as
the Sub-Administrator, with the written consent of Winsbury, in fact continues
to perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Either party to this Agreement may terminate such Agreement
prior to the expiration of the initial term set forth above by providing the
other party with written notice of such termination at least 60 days prior to
the date upon which such termination shall become effective. Compensation due
the Sub-Administrator and unpaid by Winsbury upon such termination shall be
immediately due and payable upon and notwithstanding such termination. The
Sub-Administrator shall be entitled to collect from Winsbury, in addition to the
compensation described under paragraph 2 hereof, the amount of all the
Sub-Administrator's cash disbursements for services in connection with the Sub-
Administrator's activities in effecting such termination, including without
limitation, the delivery to Winsbury, the Trust, and/or their respective
designees of the Trust's property, records, instruments and documents, or any
copies thereof. Subsequent to such termination for a reasonable fee to be paid
by Winsbury, the Sub-Administrator will provide Winsbury and/or the Trust with
reasonable access to any Trust documents or records remaining in its possession.
5. Standard of Care; Reliance on Records and Instructions;
Indemnification. The Sub-Administrator shall use its best efforts to insure the
accuracy of all services performed under this Agreement, but shall not be liable
to Winsbury or the Trust for any action taken or omitted by the
Sub-Administrator in the absence of bad faith, willful misfeasance, negligence
or from reckless disregard by it of its obligations and duties. Winsbury agrees
to indemnify and hold harmless the Sub-Administrator, its employees, agents,
directors, officers and nominees from and against any and all claims, demands,
actions and suits, whether groundless or otherwise, and from and against any and
all judgments, liabilities, losses, damages, costs, charges, counsel fees and
other expenses of every nature and character arising out of or in any way
relating to the Sub-Administrator's actions taken or nonactions with respect to
the performance of services under this Agreement with respect to a Fund or
based, if applicable, upon reasonable reliance on information, records,
instructions or requests with respect to such Fund given or made to the
Sub-Administrator by a duly authorized representative of Winsbury; provided that
this indemnification shall not apply to actions or omissions of the
Sub-Administrator in cases of its own bad faith, willful misfeasance, negligence
or from reckless disregard by it of its obligations and duties, and further
provided that prior to confessing any claim against it which may be the subject
of this indemnification, the Sub-Administrator shall give Winsbury written
notice of and reasonable opportunity to defend against said claim in its own
name or in the name of the Sub-Administrator.
6. Record Retention and Confidentiality. The Sub-Administrator shall keep
and maintain on behalf of the Trust all books and records which the Trust and
the Sub-Administrator are, or may be, required to keep and maintain in
connection with the services to be provided hereunder pursuant to any applicable
statutes, rules and regulations, including without limitation Rules 31a-1 and
31a-2 under the 1940 Act. The Sub-Administrator further agrees that all such
books and records shall be the property of the Trust and to make such books and
records available for inspection by the Trust, by Winsbury, or by the Securities
and Exchange Commission at reasonable times and otherwise to keep confidential
all books and records and other information relative to the Trust and its
shareholders; except when requested to divulge such information by
duly-constituted authorities or court process.
-2-
<PAGE> 41
7. Uncontrollable Events. The Sub-Administrator assumes no responsibility
hereunder, and shall not be liable, for any damage, loss of data, delay or any
other loss whatsoever caused by events beyond its reasonable control.
8. Rights of Ownership. All computer programs and procedures developed to
perform the services to be provided by the Sub-Administrator under this
Agreement are the property of the Sub-Administrator. All records and other data
except such computer programs and procedures are the exclusive property of the
Trust and all such other records and data will be furnished to Winsbury and/or
the Trust in appropriate form as soon as practicable after termination of this
Agreement for any reason.
9. Return of Records. The Sub-Administrator may at its option at any time,
and shall promptly upon the demand of Winsbury and/or the Trust, turn over to
Winsbury and/or the Trust and cease to retain the Sub-Administrator's files,
records and documents created and maintained by the Sub-Administrator pursuant
to this Agreement which are no longer needed by the Sub-Administrator in the
performance of its services or for its legal protection. If not so turned over
to Winsbury and/or the Trust, such documents and records will be retained by the
Sub-Administrator for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to Winsbury
and/or the Trust unless the Trust authorizes in writing the destruction of such
records and documents.
10. Representations of Winsbury. Winsbury certifies to the
Sub-Administrator that this Agreement has been duly authorized by Winsbury and,
when executed and delivered by Winsbury, will constitute a legal, valid and
binding obligation of Winsbury, enforceable against Winsbury in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting the rights and remedies of creditors
and secured parties.
11. Representations of the Sub-Administrator. The Sub-Administrator
represents and warrants that: (1) the various procedures and systems which the
Sub-Administrator has implemented with regard to safeguarding from loss or
damage attributable to fire, theft, or any other cause of the records and other
data of the Trust and the Sub-Administrator's records, data, equipment
facilities and other property used in the performance of its obligations
hereunder are adequate and that it will make such changes therein from time to
time as are required for the secure performance of it obligations hereunder, and
(2) this Agreement has been duly authorized by the Sub-Administrator and, when
executed and delivered by the Sub-Administrator, will constitute a legal, valid
and binding obligation of the Sub-Administrator, enforceable against the Sub-
Administrator in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
12. Insurance. The Sub-Administrator shall notify Winsbury should any of
its insurance coverage be cancelled or reduced. Such notification shall include
the date of change and the reasons therefor. The Sub-Administrator shall notify
Winsbury of any material claims against it with respect to services performed
under this Agreement, whether or not they may be covered by insurance, and shall
notify Winsbury from time to time as may be appropriate of the total outstanding
claims made by the Sub-Administrator under its insurance coverage.
13. Notices. Any notice provided hereunder shall be sufficiently given
when sent by registered or certified mail to Winsbury at the following address:
1900 East Dublin-Granville Road, Columbus, Ohio 43229, and to the
Sub-Administrator at the following address: 400 California Street, San
Francisco, California 94104, or at such other address as either party may from
time to time specify in writing to the other party pursuant to this Section.
14. Headings. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
15. Assignment. This Agreement and the rights and duties hereunder shall
not be assignable with respect to a Fund by either of the parties hereto except
by the specific written consent of the other party and with the specific written
consent of the Trust.
-3-
<PAGE> 42
16. Governing Law. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of The Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE WINSBURY COMPANY
LIMITED PARTNERSHIP
By: THE WINSBURY CORPORATION,
General Partner
By: /s/ KENNETH B. QUINTENZ
Title: Chairman
THE BANK OF CALIFORNIA, N.A.
By: /s/ KAREN KINNEY
Title: Vice President and Manager
Seal
<PAGE> 43
DATED: AS OF DECEMBER 1, 1992
AMENDED AND RESTATED
SCHEDULE A
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
THE WINSBURY COMPANY
AND
THE BANK OF CALIFORNIA, N.A.
<TABLE>
<CAPTION>
NAME OF FUND
- ------------------------------------------------------------
<S> <C>
The HighMark U.S. Government Obligations Fund
The HighMark Diversified Obligations Fund
The HighMark 100% U.S. Treasury Obligations Fund
The HighMark Tax-Free Fund
The HighMark California Tax-Free Fund
The HighMark Balanced Fund
The HighMark Growth Fund
The HighMark Income Equity Fund
The HighMark Special Growth Equity Fund
The HighMark Bond Fund
The HighMark Government Bond Fund
The HighMark Income and Growth Fund
</TABLE>
THE WINSBURY COMPANY
LIMITED PARTNERSHIP
By: THE WINSBURY CORPORATION,
General Partner
By: /s/ RON HENDERSON
Title: President
THE BANK OF CALIFORNIA, N.A.
By: /s/ KAREN KINNEY
Title: Vice President and Manager
Seal
<PAGE> 44
DATED: AS OF DECEMBER 1, 1992
AMENDED AND RESTATED
SCHEDULE B
TO THE SUB-ADMINISTRATION AGREEMENT
BETWEEN
THE WINSBURY COMPANY
AND
THE BANK OF CALIFORNIA, N.A.
<TABLE>
<CAPTION>
NAME OF FUND COMPENSATION(1)
- ------------------------------------------------------------ -------------------------
<S> <C>
The HighMark California Tax-Free Fund Annual Rate of up to five
The HighMark Diversified Obligations Fund one-hundredths (.05%) of
The HighMark Tax-Free Fund each such Fund's average
The HighMark U.S. Government Obligations Fund daily net assets
The HighMark 100% U.S. Treasury Obligations Fund
The HighMark Balanced Fund
The HighMark Growth Fund
The HighMark Special Growth Equity Fund
The HighMark Income Equity Fund
The HighMark Bond Fund
The HighMark Government Bond Fund
The HighMark Income and Growth Fund
</TABLE>
THE WINSBURY COMPANY
LIMITED PARTNERSHIP
By: THE WINSBURY CORPORATION,
General Partner
By: /s/ RON HENDERSON
Title: President
THE BANK OF CALIFORNIA, N.A.
By: /s/ KAREN KINNEY
Title: Vice President and Manager
- ---------------
(1) All fees are computed daily and paid periodically.
B-1
<PAGE> 45
EXHIBIT D
SUB-TRANSFER AGENCY AGREEMENT
Agreement made this 22nd day of February, 1989, between The Winsbury
Service Corporation (the "Transfer Agent"), a corporation organized under the
laws of the State of Ohio and having its principal place of business at 33 North
Third Street, Columbus, Ohio 43215, and The Bank of California, N.A. (the "Sub-
Transfer Agent"), a national banking association having its main office at 400
California Street, San Francisco, California 94102.
WHEREAS, the Transfer Agent is the transfer agent and shareholder servicing
agent for various investment portfolios of The HighMark Group (the "Group")
pursuant to a Transfer Agent and Shareholder Service Agreement between the
Transfer Agent and the Group; and
WHEREAS, the parties hereto have agreed to arrange separately for the
performance of transfer agency and shareholder service functions for owners of
units of beneficial interest ("Shares") of the Group's investment portfolios
identified on Schedule A hereto ("Funds") who maintain the type of account
("Account") with the Sub-Transfer Agent or its affiliates identified on Schedule
B hereto ("Accountholders"); and
WHEREAS, the Transfer Agent desires to retain the Sub-Transfer Agent to
perform such services and the Sub-Transfer Agent is willing to perform such
services on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. The Sub-Transfer Agent shall perform, subject to instructions from the
Transfer Agent, the services set forth on Schedule C hereto.
2. The Sub-Transfer Agent represents that it has registered as a transfer
agent under the Securities Exchange Act of 1934, and that it will maintain and
preserve all records as required by any applicable statutes, rules, and
regulations to be maintained and preserved in connection with the performance of
the services provided under this Agreement (including without limitation all
records required to be maintained and preserved on behalf of the Group pursuant
to Rules 31a-1 and 31a-2 of the Investment Company Act of 1940), and that it
will otherwise comply with all laws, rules, and regulations applicable to the
services provided under this Agreement. The Sub-Transfer Agent hereby agrees to
make such records available for inspection by the Transfer Agent or the Group or
the Securities and Exchange Commission at reasonable times and otherwise to keep
confidential all records and other information relative to the Group and the
owners of its Shares ("Shareholders"); except when requested to divulge such
information by duly-constituted authorities or court process, or requested by a
Shareholder with respect to information concerning an account as to which such
Shareholder has either a legal or beneficial interest or when requested by the
Transfer Agent, the Group, or the Shareholder. The Sub-Transfer Agent further
agrees that it will permit the Transfer Agent to have reasonable access to its
personnel and records in order to facilitate the monitoring of the quality of
the services provided under this Agreement. Upon the request of the Transfer
Agent, the Sub-Transfer Agent shall provide copies of all the historical records
relating to transactions involving a Fund and an Accountholder, written
communications regarding a Fund to or from an Accountholder, and other
materials, in each case as may reasonably be requested to enable the Transfer
Agent or its representatives to monitor and review the services to be provided
hereunder, or to comply with any request of the Board of Trustees of the Group
or of a governmental body or self-regulatory organization or a Shareholder.
Among other things, the Sub-Transfer Agent agrees to provide promptly at the
request of the Transfer Agent a complete and accurate set of mailing labels with
the name and address of each Accountholder, and also upon such request both an
accounting history in machine readable form of each individual account and a
printout thereof.
3. The Sub-Transfer Agent may at its option at any time, and shall promptly
upon the Transfer Agent's demand, turn over to the Transfer Agent and cease to
retain the Sub-Transfer Agent's files, records and
<PAGE> 46
documents created and maintained by the Sub-Transfer Agent pursuant to this
Agreement which are no longer needed by the Sub-Transfer Agent in the
performance of its services or for its legal protection. If not so turned over
to the Transfer Agent, such documents and records will be retained by the
Sub-Transfer Agent for six years from the year of creation. At the end of such
six-year period, such records and documents will be turned over to the Transfer
Agent unless the Transfer Agent, upon written authorization from the Group,
authorizes in writing the destruction of such records and documents.
4. All computer programs and procedures developed to perform services
required to be provided by the Sub-Transfer Agent under this Agreement are the
property of the Sub-Transfer Agent. All records and other data except such
computer programs and procedures are the exclusive property of the Group and all
such other records and data will be furnished to the Transfer Agent on behalf of
the Group in appropriate form as soon as practicable after termination of this
Agreement for any reason. The Sub-Transfer Agent represents and warrants that
the various procedures and systems which the Sub-Transfer Agent has implemented
with regard to safeguarding from loss or damage attributable to fire, theft, or
any other cause of the blank checks, records, and other data of the Group and
the Sub-Transfer Agent's records, data, equipment facilities, and other property
used in the performance of its obligations under this Agreement are adequate,
and that it will make such changes therein from time to time as are required for
the secure performance of its obligations under this Agreement.
5. The Sub-Transfer Agent hereby agrees to promptly notify the Transfer
Agent if for any reason it is unable to perform fully and promptly any of its
obligations under this Agreement with respect to any Fund or any Accountholder.
6. The Sub-Transfer Agent hereby understands and acknowledges that the
provisions of this Agreement do not in any way limit the authority of the Group
to take such action as it may deem appropriate or advisable in connection with
all matters relating to the operations of a Fund and the sale of such Fund's
Shares.
7. The Transfer Agent shall pay the Sub-Transfer Agent for the services to
be provided under this Agreement in accordance with, and in the manner set forth
in, Schedule D hereto, and to reimburse the Sub-Transfer Agent for postage,
handling fees, and reasonable costs of supplies used by the Sub-Transfer Agent
in the performance of the services provided under this Agreement. The fees to be
paid pursuant to this Section 7 may be changed upon the written consent of the
parties hereto.
8. The Sub-Transfer Agent shall use its best efforts to insure the accuracy
of all services performed under this Agreement, and the Transfer Agent shall
indemnify and hold harmless the Sub-Transfer Agent, its employees, agents,
directors, and officers from and against any and all claims, demands, actions
and suits, whether groundless or otherwise, and from and against any and all
judgments, liabilities, losses, damages, costs, charges, counsel fees and other
expenses of every nature and character arising out of or in any way relating to
the Sub-Transfer Agent's actions taken or non-actions with respect to the
performance of services under this Agreement or based, if applicable, upon
information, instructions or requests made to the Sub-Transfer Agent by an
officer or employee of the Transfer Agent; provided that this indemnification
shall not apply to actions or omissions of the Sub-Transfer Agent in cases of
its own bad faith, willful misconduct or gross negligence, and further provided
that prior to confessing any claim against it which may be the subject of this
indemnification, the Sub-Transfer Agent shall give the Transfer Agent written
notice of and reasonable opportunity to defend against said claim in its own
name or in the name of the Sub-Transfer Agent.
9. This Agreement and the rights and duties hereunder shall not be
assignable by either party hereto except by the specific written consent of the
other party. This Agreement shall become effective as of the date first written
above, and thereafter may be terminated at any time by either party hereto upon
thirty (30) days written notice to the other party. Upon termination of this
Agreement, the Sub-Transfer Agent shall be entitled to collect from the Transfer
Agent, in addition to the fees and reimbursement of expenses provided in Section
7 hereof, its reasonable expenses in connection with the Sub-Transfer Agent's
activities in effecting such termination, including without limitation, the
delivery to the Transfer Agent of the property, records, instruments and
documents, or any copies thereof, relating to the Sub-Transfer Agent's services
under this Agreement.
-2-
<PAGE> 47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first written above.
THE WINSBURY SERVICE CORPORATION
By: /s/ KENNETH B. QUINTENZ
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
-3-
<PAGE> 48
DATED: AS OF DECEMBER 1, 1992
AMENDED AND RESTATED
SCHEDULE A
TO THE SUB-TRANSFER AGENCY
AGREEMENT BETWEEN THE WINSBURY
SERVICE CORPORATION AND THE BANK
OF CALIFORNIA, N.A.
<TABLE>
<CAPTION>
NAME OF FUND
- ------------------------------------------------------------
<S> <C>
The Balanced Fund
The Growth Fund
The Income Equity Fund
The Special Growth Equity Fund
The Bond Fund
The U.S. Government Obligations Fund
The Diversified Obligations Fund
The 100% U.S. Treasury Obligations Fund
The Tax-Free Fund
The California Tax-Free Fund
The Government Bond Fund
The Income and Growth Fund
</TABLE>
THE WINSBURY SERVICE CORPORATION
By: /s/ RON HENDERSON
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
A-1
<PAGE> 49
SCHEDULE B
TYPE OF ACCOUNT
Individual Retirement Accounts invested in the Group's Funds, including,
but not limited to, those Individual Retirement Accounts invested in the Group's
Funds as a result of the reorganization of the investment portfolios of the IRA
Collective Investment Fund (the "IRA Fund") and certain Funds of the Group
pursuant to an Agreement and Plan of Reorganization between the IRA Fund, the
Group, and The Bank of California, N.A., dated April 20, 1988, and amended June
21, 1988.
THE WINSBURY SERVICE CORPORATION
By: /s/ KENNETH B. QUINTENZ
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
B-1
<PAGE> 50
SCHEDULE C
I. RECORD MAINTENANCE
The Sub-Transfer Agent shall provide full maintenance of all Shareholder
records for each Accountholder. Such records will include:
A. Share balances;
B. Account transaction history, including dividends paid and the date
and price for all transactions;
C. Name and address of the record Shareholder, including zip codes and
certified tax identification numbers and impending back-up withholding;
D. Records of distributions and dividend payments;
E. Transfer records; and
F. Overall control records.
II. REGULAR DAILY OPERATIONS.
The Sub-Transfer Agent shall perform the following functions daily with
respect to Accountholders:
A. Process new accounts on the Shareholder file;
B. Process additional purchases to the records of accounts already on
the Shareholder file;
C. Process redemptions as instructed by the Accountholder;
D. Transfer of Shares upon instructions from the Accountholder; and
E. Process changes of Accountholder/representative on accounts.
III. PERIODIC OPERATIONS.
The Sub-Transfer Agent shall perform the following functions periodically
with respect to Accountholders:
A. Mail semi-annual and annual Group and/or Fund reports and
prospectuses;
B. Produce transcripts of account history as requested by the Transfer
Agent; and
C. Prepare and file Form 1099's with the Internal Revenue Service, and
any similar applicable forms or documents required under state law.
IV. CONTROLS.
The Sub-Transfer Agent shall maintain all balance controls daily and
produce monthly summaries expressed in:
A. Shares; and
B. dollar amounts.
V. SPECIAL SERVICES INCLUDED.
The Sub-Transfer Agent shall prepare envelopes/labels and mail proxy
statements, and shall tabulate and certify votes from returned ballots.
THE WINSBURY SERVICE CORPORATION
By: /s/ KENNETH B. QUINTENZ
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
C-1
<PAGE> 51
DATED: AS OF DECEMBER 1, 1992
AMENDED AND RESTATED
SCHEDULE D
TO THE SUB-TRANSFER AGENCY AGREEMENT
BETWEEN THE WINSBURY SERVICE
CORPORATION AND THE BANK OF CALIFORNIA, N.A.
FEES
With respect to the Balanced Fund, the Growth Fund, the Income Equity Fund,
the Special Growth Equity Fund, the Bond Fund, the Government Bond Fund and the
Income and Growth Fund annual base fee of $12.00 per Account with respect to the
first 101 through 2999 Accounts invested in a Fund and annual base fee of $9.00
per Account with respect to 3,000 or more Accounts invested in a Fund, and with
respect to the U.S. Government Obligations Fund, the Diversified Obligations
Fund, the 100% U.S. Treasury Obligations Fund, the Tax-Free Fund, and the
California Tax-Free Fund, annual base fee of $15.00 per Account with respect to
101 or more Accounts invested in a Fund. The number of Accounts for purposes of
determining the base fee is calculated on a monthly basis and the base fee shall
not apply when 100 or less Accounts are invested in a Fund.
THE WINSBURY SERVICE CORPORATION
By: /s/ RON HENDERSON
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
D-1
<PAGE> 52
EXHIBIT E
CUSTODIAN AGREEMENT
This Agreement, dated as of December 23, 1991, is entered into by and
between The HighMark Group, a Massachusetts business trust having its principal
place of business in Columbus, Ohio (hereinafter called the "Group"), and The
Bank of California, N.A., a national banking association having its main office
in San Francisco, California (hereinafter called the "Custodian").
In consideration of the mutual covenants herein contained, the Group and
the Custodian agree as follows:
1. APPOINTMENT AND ACCEPTANCE.
The Group hereby appoints the Custodian as custodian of all of the
securities and cash of each investment portfolio of the Group identified on
Schedule A hereto (a "Fund"), and the Custodian agrees to act as such upon the
terms and conditions herein set forth. The Group agrees to deliver to the
Custodian all securities and cash owned by a Fund, and all payments of income,
payments of principal, or capital distributions received by a Fund with respect
to all securities owned by such Fund from time to time, and the cash
consideration received by a Fund for such new or treasury units of beneficial
interest of such Fund ("Shares") as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Group held or
received by a Fund and not delivered to the Custodian.
2. DEFINITIONS.
The word "securities" as used herein shall have the meaning stated in
Section 2(a)(36) of the Investment Company Act of 1940, as amended (the "1940
Act").
The words "proper instructions" as used herein mean a writing signed or
initialled by such one or more person or persons ("Authorized Persons") and in
such manner as the Board of Trustees of the Group shall have from time to time
authorized and whose authority, names and signatures have been most recently
certified to the Custodian by the Secretary or an Assistant Secretary of the
Group. Each such writing shall set forth the transactions involved, including a
specific statement of the purpose for which action is requested. Payments of
monies or deliveries of securities with respect to a Fund for purposes not
specifically set forth in this Agreement shall be made by the Custodian only
upon receipt of, in addition to proper instructions, a Resolution specifying the
amount of such payment or describing the securities to be delivered, the purpose
for which the payment or delivery is being made and declaring such purpose to be
a proper purpose of such Fund and naming the person or persons to whom such
payment or delivery is to be made. Oral instructions will be considered proper
instructions if the Custodian reasonably believes them to have been given by
Authorized Persons. The Group shall cause all oral instructions to be confirmed
in writing. Upon receipt of a Resolution as to the authorization by the Trustees
of the Group accompanied by a detailed description of procedures approved by the
Trustees, proper instructions may include communications effected directly
between electromechanical or electric devices provided that the Trustees and the
Custodian are satisfied that such procedures afford adequate safeguards for a
Fund's assets.
The word "Resolution" shall mean a copy of a resolution of the Board of
Trustees (or the executive committee) of the Group duly certified by the
Secretary or an Assistant Secretary of the Group.
The word "Depository" as used herein has the meaning as set forth in
Section 11 herein.
3. NAMES, TITLES AND SIGNATURES.
The Group will furnish the Custodian with a Resolution indicating the
name(s) and signature(s) of the Authorized Persons from time to time authorized
to act hereunder. In the event that any person named in the most recent
Resolution shall cease to be an Authorized Person, the Group will furnish the
Custodian with a certificate of the Secretary or an Assistant Secretary advising
it to that effect. In the absence of such
<PAGE> 53
certificate, the Custodian shall be entitled to rely, as aforesaid, upon the
signatures of the Authorized Persons named in the most recent Resolution.
4. ACCOUNTS.
The Custodian shall maintain an account (or accounts) on behalf of each
Fund, which may be an account (or accounts) used commonly on behalf of only
those customers for whom the Custodian acts in a fiduciary, advisory, custodian,
or other similar capacity. Such account (or accounts) with respect to a Fund
shall be subject only to draft or order by the Custodian acting pursuant to the
terms of this Agreement, and the Custodian shall hold in such account (or
accounts), subject to the provisions hereof, all cash received by it from or for
the account of such Fund other than cash maintained by such Fund in a bank
account established and used in accordance with Rule 17f-3 under the 1940 Act.
Funds held by the Custodian on behalf of each Fund in such account (or accounts)
shall be at all times identifiable as such in the Custodian's records.
Funds held by the Custodian on behalf of a Fund may be deposited by it as
Custodian for such Fund in such other banks or trust companies as it may in its
discretion deem necessary or desirable in accordance with the purposes and terms
described herein, provided that every such other bank or trust company shall be
qualified to act as a custodian under the 1940 Act and further provided that
each such bank or trust company and the deposit of funds with each such bank or
trust company shall be approved by vote of a majority of the Trustees of the
Group as evidenced by a Resolution. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
At the direction of the Group or its investment adviser, the Custodian
shall convert currency in a Fund's account to other currencies through customary
channels including, without limitation, the Custodian or any of its affiliates
or subsidiaries, as shall be necessary to effect any transaction directed by the
Group or its investment adviser. The Group acknowledges that (i) the foreign
currency exchange department is a part of the Custodian or one of its affiliates
or subsidiaries, (ii) a Fund is not obligated to effect foreign currency
exchange with the Custodian, (iii) the Custodian will receive benefits for such
foreign currency transactions which are in addition to the compensation which
the Custodian receives for administering the Funds, and (iv) the Custodian will
make available the relevant data so that the Group can determine that the
foreign currency exchange transactions are as favorable to a Fund at terms
generally available in arm's length transactions between unrelated parties.
5. COLLECTION OF INCOME.
The Custodian shall collect all income and other payments with respect to
securities held hereunder when such securities are in the name of, or in the
process of transfer into the name of, the Custodian or a nominee of the
Custodian on the record date for such income or other payments in the case of
registered securities, or are held by the Custodian on the date of payment by
the issuer thereof in the case of bearer securities. The Custodian shall credit
all such income collected by it hereunder with respect to a Fund to the account
of such Fund. Without limiting the generality of the foregoing, the Custodian
shall detach and present for payment all coupons and other income items
requiring presentation as and when they become due and shall collect dividends
and interest when due on securities registered in the name of the Custodian or a
nominee of the Custodian.
With respect to securities of foreign issue, while the Custodian will use
its best efforts to collect any monies which may to its knowledge become
collectible arising from such securities, including dividends, interest and
other income, and to notify the Group of any call for redemption, offer of
exchange, right of subscription, reorganization or other proceedings affecting
such securities, it is understood that the Custodian shall be under no
responsibility for any failure or delay (other than a failure or delay arising
from the Custodian's own negligence or bad faith) in effecting such collections
or giving such notices, whether or not relevant information is published in any
financial service available to it.
The Custodian shall not be under any obligation or duty to take action to
effect collection of any amount, if the securities (domestic or foreign) upon
which such amount is payable are in default and payment is
-2-
<PAGE> 54
refused after due demand or presentation. The Custodian will, however, promptly
notify the Group in writing of such default and refusal to pay.
6. PAYMENT OF MONEY OF A FUND.
Upon receipt of proper instructions, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out monies of a
Fund in the following cases only:
a. Upon the purchase of securities for the account of such Fund but only
(1) against the delivery of such securities to the Custodian (or any bank,
banking firm or trust company doing business in the United States or abroad
which is qualified under the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this purpose in accordance with the
terms hereof) registered in the name of such Fund or in the name of a nominee of
such Fund or in the name of a nominee of the Custodian referred to in Section 8
hereof or in proper form for transfer; (2) in the case of a purchase effected
through a Depository, in accordance with the conditions set forth in Section 11
hereof; or (3) in the case of repurchase agreements entered into between such
Fund and a bank or a registered broker-dealer, (i) against delivery of the
securities either in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by such Fund of securities
owned by the bank or the registered broker-dealer along with written evidence of
the agreement by the bank or the registered broker-dealer to repurchase such
securities from such Fund;
b. In connection with the conversion, exchange or surrender of securities
owned by such Fund as set forth in Section 7(b) hereof;
c. For the redemption or repurchase of Shares of such Fund as set forth in
Section 10 hereof;
d. For the payment of any expense or liability incurred by such Fund,
including but not limited to the following payments for the account of such
Fund: interest, taxes, management, accounting, transfer agent and legal fees,
and operating expenses of such Fund whether or not such expenses are to be in
whole or in part capitalized or treated as deferred expenses;
e. For the payment of any dividends declared with respect to such Fund
pursuant to the governing documents of the Group;
f. For transfer to a demand or time deposit account of such Fund in any
bank, whether domestic or foreign, or in any savings and loan association; and
g. For any other proper purposes of such Fund, but only upon receipt of, in
addition to proper instructions, a Resolution specifying the amount of such
payment, setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose of such Fund, and naming the
person or persons to whom such payment is to be made.
7. DUTIES OF CUSTODIAN WITH RESPECT TO SECURITIES OF A FUND HELD BY CUSTODIAN.
a. Holding Securities.
The Custodian shall hold in a separate account for each Fund, and
physically segregated at all times, except for securities held in a Depository,
from those of any other persons, firms or corporations, pursuant to the
provisions hereof, all securities received by it from or for the account of such
Fund. The Custodian shall have no power or authority to assign, hypothecate,
pledge or otherwise dispose of any securities and investments, except pursuant
to proper instructions of the Group or as otherwise provided herein and only for
the account of a Fund as hereinafter provided.
b. Delivery of Securities.
The Custodian shall release and deliver securities owned by a Fund held by
the Custodian or in a Depository account of the Custodian only upon receipt of
proper instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
-3-
<PAGE> 55
(1) Upon the sale of such securities for the account of such Fund and
receipt of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by such Fund;
(3) In the case of a sale effected through a Depository, in accordance
with the provisions of Section 11 hereof;
(4) To a Depository in connection with tender or other similar offers
for portfolio securities of such Fund;
(5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name of
such Fund or into the name of any nominee or nominees of the Custodian or
into the name or nominee name of any agent appointed pursuant to Section 9;
or for exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be delivered to
the Custodian;
(7) To the broker selling the same for examination in accordance with
the "street delivery" custom;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions for
conversion contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
(9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
(10) For delivery in connection with any loans of securities made by
such Fund, but only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and such Fund, which may be in the form
of cash, obligations issued by the United States Government, its agencies
or instrumentalities, or other securities as permitted in accordance with
the terms of the current Prospectus of such Fund;
(11) For delivery as security in connection with any borrowings by
such Fund requiring a pledge of assets by such Fund, but only against
receipt of amounts borrowed by the Custodian except where additional
collateral is being pledged on an outstanding loan; or
(12) For any other proper purposes of such Fund, but only upon receipt
of, in addition to proper instructions, a Resolution specifying the
securities to be delivered, setting forth the purpose for which such
delivery is to be made, declaring such purposes to be proper purposes of
such Fund, and naming the person or persons to whom delivery of such
securities shall be made.
8. REGISTRATION OF SECURITIES.
Securities held by the Custodian (other than bearer securities) on behalf
of a Fund shall be registered in the name of such Fund or in the name of any
nominee of such Fund or of any nominee of the Custodian which nominee shall be
assigned exclusively to such Fund, unless the Group has authorized in writing
the appointment of a nominee to be used in common with other registered
investment companies having the same investment adviser as such Fund or in
common exclusively with other accounts for which the Custodian acts in a
fiduciary, advisory, custodial, or other similar capacity, or in the name or
nominee name of any agent appointed pursuant to Section 9 or in the name of any
nominee or nominees used by a Depository. All securities accepted by the
Custodian on behalf of a Fund under the terms of this Contract shall be in
"street"
-4-
<PAGE> 56
or other good delivery form. The Custodian shall use its best efforts to the end
that the specific securities held by the Custodian on behalf of each Fund shall
be at all times identifiable as such in the Custodian's records.
9. APPOINTMENT OF AGENTS.
Subject to the provisions of Section 12 hereof, the Custodian may at any
time or times in its discretion appoint (and may at any time remove) any other
bank (as defined in the 1940 Act) as its agent or subcustodian to carry out such
of the provisions of this Agreement as the Custodian may from time to time
direct; provided, however, that the appointment of any agent shall not relieve
the Custodian of any of its responsibilities or liabilities hereunder.
10. PAYMENTS FOR REDEMPTION OR REPURCHASE OF SHARES OF A FUND.
From such funds as may be available for the purpose, but subject to the
limitations of the Declaration of Trust and Code of Regulations of the Group and
any applicable votes of the Trustees of the Group pursuant thereto, the
Custodian shall, upon receipt of instructions from the Transfer Agent for a
Fund, make funds available for payment to holders of Shares ("Shareholders") of
such Fund who have delivered to the Transfer Agent a request for redemption or
repurchase of their Shares. In connection with the redemption or repurchase of
Shares of a Fund, the Custodian is authorized upon receipt of instructions from
the Transfer Agent to wire funds to a commercial bank designated by a redeeming
Shareholder.
11. DEPOSIT OF A FUND'S ASSETS IN A DEPOSITORY.
The Custodian may deposit and/or maintain securities owned by a Fund in (i)
a foreign securities depository or clearing agency in accordance with Rule 17f-5
of the 1940 Act, (ii) a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act of 1934
which acts as a securities depository, and (iii) the book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 C.F.R. 306, Subpart B of
31 C.F.R. Part 350, and the book-entry regulations of federal agencies
substantially in the form of Subpart O; provided in each case that such deposit
and/or maintenance complies with all applicable provisions of Rule 17f-4 under
the 1940 Act, as such Rule may from time to time be amended (each a
"Depository"). The Group shall furnish the Custodian with a Resolution
evidencing the approval by the Group of the use of a Depository by the
Custodian. The Board of Trustees of the Group shall review, at least annually,
the use of a Depository with respect to this Agreement.
Without limiting the generality of the foregoing regarding the use of such
Depository, it is agreed that the following provisions shall apply thereto:
a. The Custodian shall deposit and/or maintain the securities in an account
of the Custodian in the Depository that shall not include any assets of the
Custodian other than assets held by it for customers;
b. The Custodian shall send the Group a confirmation of any transfers to or
from the account of a Fund. Where securities are transferred to that account,
the Custodian shall also, by book entry or otherwise, identify as belonging to
such Fund a quantity of securities in a fungible bulk of securities (1)
registered in the name of the Custodian (or its nominee) or (2) shown on the
Custodian's account on the books of the Depository;
c. The Custodian shall pay for securities purchased for the account of a
Fund upon (1) receipt of advice from the Depository that such securities have
been transferred to the account, and (2) the making of an entry on the records
of the Custodian to reflect such payment and transfer for the account of such
Fund. The Custodian shall transfer securities sold for the account of a Fund
upon (1) receipt of advice from the Depository that payment for such securities
has been transferred to the account, and (2) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the account of
such Fund. Copies of all advices from the Depository of transfers of securities
for the account of a Fund shall identify such Fund as well as the Group, be
maintained for such Fund by the Custodian and be provided to the Group at its
request. The Custodian shall furnish the Group confirmation of each transfer to
or from the account of a Fund in the form of a written advice or notice and
shall furnish to the Group copies of daily transaction sheets reflecting each
day's transactions in the Depository for the account of a Fund on the next
business day;
-5-
<PAGE> 57
d. The Custodian shall promptly send to the Group reports it receives from
the Depository on its system of internal accounting control. The Custodian shall
send to the Group such reports on its own system of internal accounting control
as the Group may reasonably request from time to time;
e. The Custodian shall comply with all other conditions which may be
imposed from time to time by statute or by appropriate rules and regulations on
the use of a Depository with respect to the securities of a Fund; and
f. Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to a Fund for any loss or damage to such Fund
resulting from the use of a Depository by reason of any negligence or
misfeasance of the Custodian or any of its agents or its employees or from any
failure of the Custodian or any such agent to pursue diligently such rights as
it may have against such Depository; at the election of a Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claim against the Depository or any person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that such Fund has
not been made whole for any such loss or damage. Furthermore, the Custodian
shall be fully responsible for any loss suffered by a Fund as a result of any
act or failure to act on the part of a Depository, to the same extent that the
Custodian would have been liable had the Custodian taken or failed to take such
action with respect to securities of such Fund entrusted to its custody.
Without, in any way, limiting the generality of the foregoing, the Custodian
shall be responsible for the safe custody of the securities held in such
Depository, to the same extent as if the Custodian held physical possession of
such securities.
12. USE OF FOREIGN SUBCUSTODIANS AND FOREIGN DEPOSITORIES.
Subject to the provisions of this Section 12, the Custodian may, in
connection with the purchase and sale by a Fund of securities outside the United
States, appoint in writing (and may at any time remove) any foreign banking
institution, trust company, or other entity which is qualified to act as a
foreign custodian under Rule 17f-5 of the 1940 Act (a "Foreign Sub-Custodian")
or any Depository which is a foreign securities depository or clearning agency
which is qualified to act as such under Rule 17f-5 of the 1940 Act (a "Foreign
Depository"), to carry out, in accordance with the terms of this Agreement, such
of the provisions of the Agreement as the Custodian may, from time to time,
direct; provided, however, that such Foreign Subcustodian or Foreign Depository
(which itself would meet the qualifications for a successor custodian set forth
in Section 18 is understood to be the agent of the Custodian and not the agent
of such Fund, and the Custodian shall be fully responsible for the acts of such
Foreign Subcustodian or Foreign Depository and shall not be relieved of any of
its responsibilities hereunder by the appointment of such Foreign Subcustodian
or Foreign Depository.
a. The Custodian shall exercise reasonable care in the selection of any
Foreign Subcustodian or Foreign Depository. In making its selection, the
Custodian shall consider (i) the Foreign Subcustodian's or Foreign Depository's
financial strength, general reputation and standing in the country in which it
is located, its ability to provide efficiently the custodian services required
and the relative cost of such services, (ii) whether the Foreign Subcustodian or
Foreign Depository would provide a level of safeguards for safekeeping and
custody of securities not materially different from those prevailing in the
United States, (iii) whether the Foreign Subcustodian or Foreign Depository has
branch offices in the United States in order to facilitate jurisdiction over and
enforcement of judgments against it, and (iv) in the case of a Foreign
Depository, the number of its participants and its operating history.
b. The Custodian shall give notice to the Group of its intention to deposit
securities with a Foreign Subcustodian or (directly or through a Foreign
Subcustodian) with a Foreign Depository. The notice shall identify the proposed
Foreign Subcustodian or Foreign Depository and shall include reasonably
available information relied on by the Custodian in making the selection and,
where applicable, a copy of the proposed form of agreement with the Foreign
Subcustodian or Foreign Depository.
c. Within 30 days of its receipt of a notice from the Custodian pursuant to
paragraph 12(b) of this Agreement regarding the Custodian's proposed selection
of one or more Foreign Subcustodians or Foreign Depositories, the Group shall
give written notice to the Custodian of the Group's approval or disapproval of
the proposed selection.
-6-
<PAGE> 58
d. The Custodian shall evaluate and determine at least annually the
continued eligibility of each Foreign Subcustodian and Foreign Depository
approved by the Group to act as such hereunder. In discharging this
responsibility, the Custodian shall (i) monitor continuously the day-to-day
services and reports provided by each Foreign Subcustodian or Foreign
Depository, (ii) at least annually, obtain and review the annual financial
report published by such Foreign Subcustodian or Foreign Depository and any
reports on such Foreign Subcustodian or Foreign Depository prepared by a
reputable independent analyst, and (iii) at least triennially, physically
inspect the operations of such Foreign Subcustodian or Foreign Depository.
e. If the Custodian determines that any Foreign Subcustodian or Foreign
Depository no longer satisfies the applicable requirements under Rule 17f-5 of
the 1940 Act to serve as such or is otherwise no longer capable or qualified to
perform the functions contemplated herein, the Custodian shall promptly give
written notice thereof to the Group. The notice shall, in addition, either (i)
indicate the Custodian's intention to transfer securities held by the removed
Foreign Subcustodian or Foreign Depository to another Foreign Subcustodian or
Foreign Depository previously approved by the Group, or (ii) include a notice
pursuant to paragraph 12(b) of this Agreement of the Custodian's intention to
deposit securities with a new Foreign Subcustodian or Foreign Depository.
13. USE OF EURO-CLEAR SECURITIES CLEARANCE FACILITIES.
A Fund may, from time to time, with respect to securities purchased or sold
by such Fund in Europe, if any, wish to use the Euro-clear Securities Clearance
Facilities. In such cases, a Foreign Subcustodian of the Custodian employed
pursuant to Section 12 may, notwithstanding the other provisions of this
Agreement:
a. make payments of cash upon the purchase of securities for the account of
such Fund prior to delivery of such securities to the Foreign Subcustodian; and
b. deliver securities upon sales of such securities for the account of such
Fund prior to receipt by the Foreign Subcustodian of payment therefor;
provided that any such transactions shall be implemented in accordance with
procedures agreed to in advance in writing by the Group, the Custodian and such
Foreign Subcustodian.
14. VOTING AND OTHER ACTION.
The Custodian shall promptly deliver or mail to the Group all forms of
proxies and all notices of meetings and other notices or announcements affecting
or relating to the securities of a Fund, and, upon receipt of proper
instructions, shall execute and deliver or cause its nominee to execute and
deliver such proxies or other authorizations as may be required. Neither the
Custodian nor its nominee shall vote upon any of the securities or execute any
proxy to vote thereon or give any consent to take any other action with respect
thereto (except as otherwise herein provided) unless ordered to do so by proper
instructions.
15. TRANSFER TAX AND OTHER DISBURSEMENTS.
A Fund shall pay or reimburse the Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder, and for all
other necessary and proper disbursements and expenses made or incurred by the
Custodian in the performance of this Agreement; provided that, with the
exception of such transfer taxes, a Fund shall not pay or reimburse the
Custodian for any disbursements or expenses made or incurred in connection with
the use by the Custodian of a Depository.
The Custodian shall execute and deliver and shall cause any Depository to
execute and deliver such certificates in connection with securities delivered to
it or by it under this Agreement as may be required under the laws of any
jurisdiction to exempt from taxation any exemptible transfers and/or deliveries
of any such securities. The Custodian shall use reasonable efforts to obtain
refunds of taxes withheld on securities or the income thereof that are available
under applicable tax laws, treaties, and regulations.
-7-
<PAGE> 59
16. RESPONSIBILITY OF CUSTODIAN AND INDEMNIFICATION.
The Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon proper instructions, Resolutions, any notice, request, consent, certificate
or other instrument reasonably believed by it to be genuine and to be signed by
the proper party or parties and shall be entitled to receive as conclusive proof
of any fact or matter required to be ascertained by it hereunder, a certificate
signed by the President, a Vice President, the Treasurer, the Secretary or an
Assistant Secretary of the Group. The Custodian may receive and accept a
Resolution as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by the
Board of Trustees pursuant to the Declaration of Trust or the Code of
Regulations of the Group as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian of written
notice from the Secretary or an Assistant Secretary to the contrary.
The Custodian shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Group) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
The Custodian shall be held to the exercise of reasonable care in carrying
out the provisions of this Agreement but shall be liable only for its own
negligent or bad faith acts or failures to act. A Fund shall indemnify the
Custodian and hold it harmless from and against all claims, liabilities, and
expenses (including attorneys' fees) with respect to such Fund which the
Custodian may suffer or incur on account of being Custodian hereunder except
such claims, liabilities, and expenses arising from the Custodian's own
negligence or bad faith.
If a Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
such Fund being liable for the payment of money or incurring liability of some
other form, such Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
17. EFFECTIVE PERIOD, TERMINATION AND INTERPRETIVE AND ADDITIONAL PROVISIONS.
This Agreement shall become effective with respect to a Fund as of the date
first written above and, unless sooner terminated as provided herein, shall
continue in effect until October 31, 1993. Thereafter, if not terminated, this
Agreement shall continue in effect as to a particular Fund for successive
periods of twelve months each ending on October 31st of each year, provided such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Group's Board of Trustees who are not parties
to this Agreement or interested persons (as defined in the Investment Company
Act of 1940) of any party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the vote of a majority of
the Group's Board of Trustees or by the vote of a majority of the outstanding
voting securities of such Fund.
This Agreement may be terminated with respect to a Fund at any time,
without the payment of any penalty, by an instrument in writing either delivered
or mailed, postage prepaid, to the other party, such termination to take effect
not sooner than sixty (60) days after the date of such delivery or mailing;
provided, however, that the Group shall not terminate this contract in
contravention of any applicable Federal or state regulations, or any provisions
of the Declaration of Trust and the Code of Regulations of the Group as the same
may from time to time be amended, and further provided, that the Group may at
any time by action of its Board of Trustees substitute with respect to a Fund
another bank or trust company for the Custodian by giving notice as above to the
Custodian.
Upon termination hereof the Custodian shall be entitled to such
compensation as may be due it as of the date of such termination and shall
likewise be entitled to reimbursement for its costs, expenses, and disbursements
and as provided herein. In the event of termination of the Agreement and for so
long as the Custodian, with the written consent of the Group, in fact continues
to perform any one or more of the services
-8-
<PAGE> 60
contemplated by this Agreement or any Schedule hereto, the provisions of this
Agreement shall continue in full force and effect.
This Agreement may be amended with respect to a Fund at any time by mutual
agreement of the parties hereto in writing; provided, however, that this
Agreement may not be amended in contravention of any applicable Federal or state
regulations, or any provisions of the Declaration of Trust and the Code of
Regulations of the Group as the same may from time to time be amended.
The Group or its authorized representatives shall have reasonable access to
inspect books and records maintained by the Custodian or any agent, Foreign
Subcustodian or Depository holding securities hereunder to verify the accuracy
of such books and records. The Custodian shall notify the Group promptly of any
applicable law or regulation in any country where securities are held that would
restrict such access or inspection.
In connection with the operation of this Agreement, the Custodian and the
Group may, with respect to a Fund, agree from time to time on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement, any
such interpretive or additional provisions to be signed by both parties and
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable Federal or state regulations, or any provisions
of the Declaration of Trust and Code of Regulations of the Group as the same may
from time to time be amended.
No interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
18. SUCCESSOR CUSTODIAN.
If a successor custodian is appointed with respect to a Fund by the Board
of Trustees of the Group, the Custodian shall, upon termination, deliver to such
successor custodian at the office of the Custodian, duly endorsed and in form
for transfer, all securities then held hereunder and all funds or other
properties of such Fund deposited with or held by it hereunder.
If no such successor custodian is appointed, the Custodian shall, in like
manner, at its office, upon receipt of a certified copy of a vote of the
Shareholders of such Fund, deliver such securities, funds and other properties
in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Shareholders of such Fund shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian shall have the right to deliver to a bank
or trust company of its own selection qualified to act as a custodian under the
1940 Act, having an aggregate capital, surplus, and undivided profits, as shown
by its last published report, of not less than $20,000,000, all securities,
funds, and other properties held by the Custodian on behalf of such Fund and all
instruments held by it relative thereto and all other property held by it with
respect to such Fund under this Agreement. Thereafter such bank or trust company
shall be the successor of the Custodian with respect to such Fund under this
Agreement.
In the event that securities, funds, and other properties remain in the
possession of the Custodian after the date of termination hereof owing to the
failure of the Group to procure the certified copy above referred to, or of the
Trustees to appoint a successor custodian, the Custodian shall be entitled to
fair compensation for its services during such period and the provisions of this
Agreement relating to the duties and obligation of the Custodian shall remain in
full force and effect.
19. COMPENSATION OF CUSTODIAN.
The Custodian shall be entitled to compensation for its services and
expenses as Custodian for the assets of a Fund as described on Schedule B
hereto.
-9-
<PAGE> 61
20. MASSACHUSETTS LAW TO APPLY.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
21. MATTERS RELATING TO THE GROUP AS A MASSACHUSETTS BUSINESS TRUST.
The names 'The HighMark Group' and 'Trustees of The HighMark Group' refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of March 10, 1987 to which reference is hereby made and a copy of
which is on file at the office of the Secretary of The Commonwealth of
Massachusetts and elsewhere as required by law and to any and all amendments
thereto so filed or hereafter filed. The obligations of 'The HighMark Group'
entered into in the name or on behalf thereof by any of the Group's Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, Shareholders, representatives, or
agents of the Trust personally, but bind only the assets of the Trust, and all
persons dealing with any series of Shares of the Trust must look solely to the
assets of the Trust belonging to such series for the enforcement of any claims
against the Trust.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized officers and its seal to
be hereunto affixed as of the day first written above.
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
Title: Vice President
THE HIGHMARK GROUP
By: /s/ KENNETH B. QUINTENZ
Title: President
[Seal]
[Seal]
<PAGE> 62
DATED: AS OF DECEMBER 1, 1992
AMENDED AND RESTATED
SCHEDULE A
TO THE CUSTODIAN AGREEMENT
BETWEEN THE HIGHMARK GROUP AND
THE BANK OF CALIFORNIA, N.A.
Name of Fund
The U.S. Government Obligations Fund
The Diversified Obligations Fund
The 100% U.S. Treasury Obligations Fund
The Balanced Fund
The Growth Fund
The Income Equity Fund
The Special Growth Equity Fund
The Bond Fund
The Tax-Free Fund
The California Tax-Free Fund
The Government Bond Fund
The Income and Growth Fund
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
Title: Vice President
THE HIGHMARK GROUP
By: /s/ S. MINTOS
Title: President
[Seal]
[Seal]
<PAGE> 63
SCHEDULE B
TO THE CUSTODIAN AGREEMENT
BETWEEN THE HIGHMARK GROUP AND
THE BANK OF CALIFORNIA, N.A.
DECEMBER 23, 1991
Each Fund shall pay the Custodian a fee at an annual rate of .02% of the
Fund's average daily net assets, with a minimum annual fee of $2,500. The
Custodian shall also be entitled to be reimbursed by each Fund for its
reasonable out-of-pocket expenses incurred in the performance of its duties
under the Agreement. In addition, the Custodian will be entitled to receive from
each Fund the following fees as specified:
<TABLE>
<S> <C>
Transaction Charges:
Depository Eligible.............................. $17.00
Depository Ineligible............................ $40.00
Annual Holding Charges:
Depository Eligible.............................. $25.00
Depository Ineligible............................ $40.00
Disbursement Charges:............................ $10.00
</TABLE>
THE BANK OF CALIFORNIA, N.A.
By: /s/ GREG KING
Title: Vice President
THE HIGHMARK GROUP
By: /s/ KENNETH B. QUINTENZ
Title: President
[Seal]
[Seal]
<PAGE> 64
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
DIVERSIFIED OBLIGATIONS FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
DIVERSIFIED OBLIGATIONS FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
DIVERSIFIED OBLIGATIONS FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 65
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
U.S. GOVERNMENT OBLIGATIONS FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
U.S. GOVERNMENT OBLIGATIONS FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
U.S. GOVERNMENT OBLIGATIONS FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 66
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
100% U.S. TREASURY OBLIGATIONS FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
100% U.S. TREASURY OBLIGATIONS FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
100% U.S. TREASURY OBLIGATIONS FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 67
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
CALIFORNIA TAX-FREE FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
CALIFORNIA TAX-FREE FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
CALIFORNIA TAX-FREE FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 68
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
TAX-FREE FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
TAX-FREE FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
TAX-FREE FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 69
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
BOND FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
BOND FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
BOND FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 70
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
INCOME EQUITY FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
INCOME EQUITY FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
INCOME EQUITY FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 71
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
BALANCED FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
BALANCED FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
BALANCED FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 72
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
GROWTH FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
GROWTH FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
GROWTH FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 73
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
INCOME AND GROWTH FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
INCOME AND GROWTH FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
INCOME AND GROWTH FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
<PAGE> 74
[HIGHMARK MUTUAL FUND GROUP LOGO]
PROXY SERVICES
P.O. BOX 9148
FARMINGDALE, NY 11735-9855
THE HIGHMARK GROUP
GOVERNMENT BOND FUND
Proxy for Special Meeting of Shareholders - March 11, 1996
The undersigned hereby appoints Stephen G. Mintos and Cynthia L.
Lindsey proxies to vote and act at the Special Meeting of Shareholders of the
GOVERNMENT BOND FUND
(the "Fund"), a portfolio of The HighMark Group, to be held at the offices of
BISYS Fund Services, Inc., 3435 Stelzer Road, Columbus, Ohio 43219 at 9:00 a.m.
(Eastern time) on March 11, 1996 and at all adjournments thereof, in respect of
all Shares of the Fund as to which the undersigned may be entitled to vote or
act. Each proxy shall have power of substitution and a majority of said proxies
or their substitutes, or any one if only one be present and acting, shall have
all powers hereby granted.
The proxies are hereby authorized and instructed to vote upon the
matters specified in the notice of meeting as set forth below. If no choice is
indicated as to a proposal, the proxies shall vote FOR such proposal. The
proxies may vote in their discretion on any other matter which may properly
come before the meeting.
THIS PROXY APPLIES TO THE ACCOUNT LISTED ABOVE.
PLEASE DO NOT HESITATE TO CONTACT THE HIGHMARK GROUP AT 1-800-433-6884
SHOULD YOU HAVE ANY QUESTIONS.
THIS IS YOUR PROXY. DETACH AND RETURN BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
IMPORTANT PROXY
PLEASE FILL OUT AND SIGN PROXY TODAY.
PLEASE DETACH PROXY BELOW AND RETURN USING THE ENCLOSED SELF-ADDRESSED
RETURN ENVELOPE.
NOTE: Signature(s) should agree with name(s) as printed hereon. All joint
owners should sign. Fiduciaries please indicate their titles. This proxy is
solicited on behalf of the Board of Trustees of The HighMark Group. Please sign
and return promptly in the enclosed envelope.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS /X/
HIGH KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
GOVERNMENT BOND FUND
VOTE ON DIRECTORS
- -----------------
FOR WITH- FOR
ALL OR HOLD OR ALL
ALL EXCEPT 2. Election of Trustees: 01) Thomas L. Braje,
/ / / / / / 02) Joseph C. Jaeger, 03) Stephen G. Mintos,
04) David A. Goldfarb, 05) Frederick J. Long.
______________________________________________
To withhold authority to vote for any
individual nominee, mark the "For All
Except" box and write the nominee's number on
the line provided above.
FOR AGAINST ABSTAIN
/ / / / / / 1. Proposal to approve the proposed New
Investment Advisory Agreement, and to ratify
the continuation of the Sub-Administration
Agreement, the Sub-Transfer Agency Agreement
and the Custodian Agreement.
/ / / / / / 3. Proposal to ratify the selection of Deloitte &
Touche LLP as independent accountants.
/ / / / / / 4. Transaction of such other business as may
properly come before the meeting or any
adjournments thereof.
___________________________________________ ___________________________________
(Sign here exactly as name(s) appear above.
_______________________
DATE
