<PAGE>
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:
[ X ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[ ] Definitive Proxy Statement Commission Only (as permitted by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Under Rule 14a-12
HighMark Funds
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
(Name of Registrant as Specified in its Charter)
Martin E. Lybecker, Esq.
Ropes & Gray
One Franklin Square
1301 K Street, N.W., Ste. 800 East
Washington, D.C. 20005
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(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 (Set forth the amount on which the
filing is calculated and state how it was determined).: N/A
(4) Proposed maximum aggregate value of transaction: N/A
<PAGE>
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
1) Amount previously paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
Notes:
<PAGE>
IMPORTANT SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------
HighMark Funds
HighMark International Equity Fund
The document you hold in your hands contains your proxy statement and proxy
card. A proxy card is, in essence, a ballot. When you vote your proxy, you tell
us how to vote on your behalf on important issues relating to the HighMark
International Equity Fund. The proxy card may be completed by checking the
appropriate box voting for or against the specific proposal relating to your
Fund. If you simply sign the proxy without specifying a vote, your shares will
be voted in accordance with the recommendations of the Board of Trustees.
We urge you to take the time to read the proxy statement, fill out the proxy
card, and return it to us (or vote by telephone or the Internet). Voting your
proxy, and doing so promptly, enables the Fund to avoid conducting additional
mailings. When shareholders do not return their proxies in sufficient numbers,
we will incur the expense of follow-up solicitations.
Please take a few moments to exercise your right to vote. Thank you.
--------------------------------------------------------------------------------
<PAGE>
(Front Cover of Proxy Package)
HIGHMARK FUNDS
Notice of Special Meeting of Shareholders
to be held February 28, 2001
A special meeting of the shareholders of the HighMark International
Equity Fund (the "Fund"), a series of the HighMark Funds, will be held at 3:00
p.m. at the offices of SEI Investments Fund Resources, 1 Freedom Valley Drive,
Oaks, Pennsylvania, on February 28, 2001, for the following purposes:
1. To approve a new Investment Sub-Advisory Agreement between
HighMark Capital Management, Inc. ("HCM") and Deutsche Asset Management
Investment Services Ltd. ("Deutsche") with respect to the Fund.
2. To transact such other business as may properly come
before the meeting or any adjournment thereof.
The Board of Trustees has fixed December 27, 2000 as the record date
for determination of shareholders entitled to vote at this meeting.
By Order of the Trustees
William E. Zitelli, Jr.
SECRETARY
January 29, 2001
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>
To HighMark International Equity Fund Shareholders:
The purpose of this proxy is to announce that a Special Meeting of Shareholders
(the "Meeting") of HighMark International Equity Fund (the "Fund"), a separate
series of HighMark Funds (the "Trust"), has been scheduled for February 28,
2001. The purpose of this Meeting is to submit to the Shareholders a vote to
approve a new Investment Sub-Advisory agreement between HighMark Capital
Management, Inc. ("HCM" or the "Adviser") and Deutsche Asset Management
Investment Services Ltd. (the "Sub-Adviser").
While you are, of course, welcome to join us at the Meeting, most Shareholders
cast their votes by filling out and signing the enclosed proxy card (or by
telephone or the Internet). In order to conduct the Meeting, a majority of
shares must be represented either in person or by proxy. Whether or not you plan
to attend the Meeting, we need your vote. Please vote by telephone or the
Internet, or mark, sign and date the enclosed proxy card and return it promptly
in the enclosed, postage-paid envelope so that the maximum number of shares may
be voted.
We encourage you to read the enclosed proxy statement thoroughly. In addition,
we have included on the next page a list of some commonly asked questions and
answers. If you have any additional questions, please call your account
administrator, investment representative, or HighMark Funds directly at
1-800-433-6884.
Your vote is very important to us. As always, we thank you for your confidence
and support.
Sincerely,
James R. Foggo
President
HighMark Funds
PLEASE SIGN AND RETURN THE ENCLOSED PROXY BALLOT CARD
(OR VOTE BY TELEPHONE OR THE INTERNET)
YOUR VOTE IS VERY IMPORTANT
<PAGE>
HIGHMARK FUNDS
Q. WHY IS THE BOARD OF TRUSTEES PROPOSING TO ADOPT A NEW INVESTMENT
SUB-ADVISORY AGREEMENT?
A. In unanimously approving the proposed Investment Sub-Advisory Agreement
and recommending its approval by Shareholders, the Trustees of the
Fund, including the independent Trustees, considered the best interests
of Shareholders of the Fund and took into account all factors they
deemed relevant. The factors considered by the Trustees included the
nature, quality and extent of the service to be provided by Deutsche
and data on investment performance, management fees and expense ratios
of competitive funds. After considering these factors, the Trustees
concluded that the proposed Investment Sub-Advisory Agreement would be
beneficial to the Fund and to Shareholders.
Q. WILL THE NEW INVESTMENT SUB-ADVISORY AGREEMENT REPLACE THE FUND'S CURRENT
SUB-ADVISORY AGREEMENT WITH AXA INVESTMENT MANAGERS GS LTD. ("AXA")?
A. No. The proposed Investment Sub-Advisory Agreement would be in addition
to, not in place of, the Fund's current Sub-Advisory Agreement. If the new
Investment Sub-Advisory Agreement is approved both Deutsche and AXA will
be Sub-Advisers to the Fund. Each Sub-Adviser will manage those assets of
the Fund allocated to it by the Investment Adviser, at the Investment
Adviser's discretion.
Q. WILL APPROVAL OF THE INVESTMENT SUB-ADVISORY AGREEMENT RESULT IN ANY
ADDITIONAL SHAREHOLDER EXPENSE?
A. No. Under the proposed agreement, the Investment Adviser will continue to
have full responsibility for providing investment advisory services to
the Fund and will compensate the additional Sub-Adviser at its sole
expense.
Q. WHAT IF I DO NOT RETURN MY PROXY VOTING BALLOT?
A. In order to conduct the Shareholder Meeting, a quorum must be present, in
person or by proxy. A quorum is defined as representation of over 50%
of the shares outstanding for the Fund as of December 27, 2000. In the
event that not enough shareholders return the enclosed proxy ballot
card to achieve quorum, we will be forced to incur additional expenses
associated with additional solicitations. In order to avoid additional
costs, please return the completed proxy ballot as soon as possible.
2
<PAGE>
Q. HOW DOES THE BOARD SUGGEST THAT I VOTE?
A. After careful consideration, the Board of Trustees of HighMark Funds,
including the independent members, recommends that you vote "FOR"
adopting the proposed Investment Sub-Advisory Agreement. The Board also
wishes to urge you to vote and return all the proxy ballot cards you
receive.
Q. WHO SHOULD I CALL WITH QUESTIONS ABOUT THIS PROXY?
A. If you have any questions regarding this proxy, please contact your
account administrator, investment representative, or HighMark Funds
directly at 1-800-433-6884.
THE INFORMATION PROVIDED IN THIS "Q&A" IS SUPPORTED
BY DISCLOSURES CONTAINED IN THE ACCOMPANYING
PROXY STATEMENT
3
<PAGE>
HIGHMARK FUNDS
HighMark International Equity Fund
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees (the
"Trustees") of the HighMark International Equity Fund (the "Fund"), a series of
HighMark Funds (the "Trust"). The proxy is revocable at any time before it is
voted by sending written notice of the revocation to the Trust or by appearing
personally at the February 28, 2001 special meeting of shareholders of the Fund
(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 Fund. 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 Fund, the Fund's
investment adviser, or the Fund'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 27,
2000 will be entitled to vote at the Special Meeting. On December 27, 2000, the
Fund had outstanding 3,662,068 shares of beneficial interest ("Shares"), each
Share being entitled to one vote, and each fractional Share being entitled to a
proportionate fractional vote. This proxy statement and the enclosed proxy card
will be sent to Shareholders of record on or about January 29, 2001.
For purposes of determining the presence of a quorum and counting votes
on the matters presented, Shares represented by abstentions and "broker
non-votes" may be counted as present, but not as votes cast, at the Special
Meeting. Under the Investment Company Act of 1940, as amended (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 Trust's executive offices are located in Oaks, Pennsylvania 19456.
This proxy statement and the enclosed notice of meeting and proxy card are first
being mailed on or about January 29, 2001.
A copy of the Trust's Annual Report dated July 31, 2000 is available
upon request and may be obtained without charge by calling 1-800-433-6884.
4
<PAGE>
INTRODUCTION
This Special Meeting is being called (1) to approve the addition of a
new Sub-Advisory Agreement (the "New Sub-Advisory Agreement"), found at
Exhibit A, between HighMark Capital Management, Inc. ("HCM" or the "Investment
Adviser") and Deutsche Asset Management Investment Services Ltd. ("Deutsche"
or the "Sub-Adviser") with respect to the Fund and (2) to transact such other
business as may properly come before the Special Meeting or any adjournment
thereof.
Approval of Proposals (1) and (2) requires the affirmative vote of:
(a) 67% or more of the Shares of the 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 the
Fund, whichever is less.
PROPOSAL (1)
APPROVAL OF THE
NEW SUB-ADVISORY AGREEMENT BETWEEN THE INVESTMENT
ADVISER AND DEUTSCHE
On December 6, 2000, the Trustees of the Trust, including a majority of
the Trustees who are not interested persons of the Fund, HCM, or Deutsche, as
defined in the 1940 Act, unanimously approved, on behalf of the Fund, the
proposed New Sub-Advisory Agreement between HCM and Deutsche, pursuant to which
Deutsche will act as an additional investment sub-adviser to the Fund.
Consideration of the New Sub-Advisory Agreement is being requested
because the Board of Trustees believes that it would be in the shareholders best
interests to have experienced and talented investment personnel, who specialize
in the international management of fund assets, managing the Fund's assets.
Specifically, the Trustees believe that it would be beneficial to the Fund and
its shareholders to add a sub-adviser with a more growth-oriented investment
style, such as Deutsche, to complement the core approach of the Fund's current
sub-adviser, AXA.
Here are some of the factors you should consider in determining whether
to approve the New Sub-Advisory Agreement:
The Board of Trustees has unanimously approved the New Sub-Advisory
Agreement;
There will be no change in the Fund's investment objective or
policies or in the duties of HCM as a result of approval of the New
Sub-Advisory Agreement; and
5
<PAGE>
There will be no change in the fees payable by the Fund to HCM for
advisory services as a result of approval of the New Sub-Advisory
Agreement, although the fees payable by HCM to AXA or Deutsche may
change.
HCM, 475 Sansome Street, Post Office Box 45000, San Francisco, CA
94104, serves as investment adviser to the Fund. Investment sub-advisory duties
are handled by AXA Investment Managers GS Ltd. (`AXA") pursuant to an
Sub-Advisory Agreement, between HCM and AXA (the "AXA Sub-Advisory Agreement").
Pursuant to the AXA Sub-Advisory Agreement, AXA is responsible for making the
day-to-day investment decisions for the assets of the Fund allocated to AXA by
HCM, subject to the supervision of, and policies established by, HCM and the
Trustees. On December 6, 2000, the Trustees unanimously determined that based on
all pertinent factors it was in the shareholder's best interests to add an
additional sub-adviser. If shareholders approve the New Sub-Advisory Agreement,
then the Trustees have approved Deutsche to operate as an additional Sub-Adviser
to the Fund. If shareholders do not approve the New Sub-Advisory Agreement then
AXA will continue as the sole Sub-Adviser, making the day-to-day investment
decisions for the assets of the Fund.
CURRENT INVESTMENT ADVISORY CONTRACT
At the present time, HCM serves as investment adviser to the Trust
pursuant to an investment advisory agreement dated September 1, 1998 (the
"Investment Advisory Agreement"). The Investment Advisory Agreement was last
submitted to a vote of shareholders of the Fund on March 11, 1998. The
Investment Advisory Agreement will continue in effect as to the Fund from year
to year, if such continuance is approved at least annually by the Trust's Board
of Trustees or by vote of a majority 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, by vote cast in person at a meeting called for such
purpose. The Trust's Board of Trustees renewed the Investment Advisory Agreement
at their quarterly meeting on June 21, 2000. The Investment Advisory Agreement
may be terminated as to the Fund at any time on 60 days' written notice without
penalty by the Trustees, by vote of a majority of the outstanding shares of the
Fund, or by the Investment Adviser. The Investment Advisory Agreement also
terminates automatically in the event of any assignment, as defined in the 1940
Act.
Under the Investment Advisory Agreement, HCM may make the day-to-day
investment decisions for the Fund or employ a sub-adviser at its expense to
provide day-to-day management. Regardless of whether it employs a sub-adviser,
HCM continuously reviews, supervises and administers the Fund's investment
programs. As consideration for its services, the Investment Adviser receives an
annual fee of ninety-five one-hundredths of one percent (0.95%) of the Fund's
average daily net assets. For the fiscal year ended July 31, 2000, the Fund paid
investment advisory fees to the Investment Adviser equal to $1,126,671.
6
<PAGE>
CURRENT INVESTMENT SUB-ADVISORY AGREEMENT
Under the current Investment Sub-Advisory Agreement, AXA Investment
Manager GS Ltd. ("AXA") serves as the Sub-Adviser to the Fund pursuant to a
Sub-Advisory Agreement with HCM. Under the Sub-Advisory Agreement, AXA
manages that portion of the Fund's assets allocated to it, selects its
investments and places all orders for purchases and sales of securities,
subject to the general supervision of the HighMark Funds' Board of Trustees
and HCM and in accordance with the Fund's investment objectives, policies and
restrictions. More specifically, AXA performs the following services for that
portion of the Fund's portfolio allocated to it: (i) provides investment
research and credit analysis concerning the Fund's investments; (ii) conducts
a continual program of investment of the Fund's assets; (iii) places orders
for all purchases and sales of the investments made for the Fund; (iv)
maintains the books and records required in connection with its duties
hereunder; and (v) keeps the Investment Adviser informed of developments
materially affecting the Fund. Pursuant to the Sub-Advisory Agreement, the
Adviser pays AXA an annual fee of fifty one-hundredths of one percent (0.50%)
of the Fund's average daily net assets allocated to AXA. For the fiscal year
ended July 31, 2000, HCM paid AXA $595,383 for sub-advisory services to the
Fund. Under the Sub-Advisory Agreement, AXA may, from time to time, agree to
waive or reduce some or all of its fees to which it is entitled under this
Agreement. For the period January 1, 2001 through December 31, 2001, AXA has
agreed to reduce its fee to twenty one-hundredths of one percent (0.20%) of
the average daily net assets of the Fund allocated to AXA.
AXA is a subsidiary of AXA Investment Managers. AXA has a highly
experienced and knowledgeable investment management staff. AXA employs
approximately 90 investment professionals directly involved in asset management
and portfolio management supported by approximately 40 highly specialized
research and analysis staff. AXA has been registered with the Securities and
Exchange Commission as an investment adviser since 1995.
Under the current Investment Sub-Advisory Agreement, AXA is not liable
for any error of judgement or mistake of law or for any loss suffered by the
Investment Adviser, the Trust or the Fund in connection with the matters to
which the current Investment Sub-Advisory Agreement relates, except that AXA is
liable to the Investment Adviser for a loss resulting from a breach of fiduciary
duty by AXA under the 1940 Act 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 AXA in the performance of its duties or from reckless
disregard by it of its obligations or duties under the current Investment
Sub-Advisory Agreement. In no case is AXA liable for actions taken or
non-actions with respect to the performance of services under the Agreement
based upon specific information, instructions or requests given or made to AXA
by the Investment Adviser.
PROPOSED INVESTMENT SUB-ADVISORY AGREEMENT
UNDER THE PROPOSED INVESTMENT SUB-ADVISORY AGREEMENT, IF APPROVED, THE
INVESTMENT ADVISER WILL CONTINUE TO HAVE FULL RESPONSIBILITY FOR PROVIDING
INVESTMENT
7
<PAGE>
ADVISORY SERVICES TO THE FUND. THE INVESTMENT ADVISER WILL DISCHARGE
THIS RESPONSIBILITY IN PART THROUGH RETENTION OF DEUTSCHE, AT THE INVESTMENT
ADVISER'S SOLE EXPENSE, TO MANAGE THE DAY-TO-DAY INVESTMENT PROGRAM OF THOSE
ASSETS OF THE FUND ALLOCATED TO DEUTSCHE. THE INVESTMENT ADVISER WILL OVERSEE
THE ACTIVITIES OF DEUTSCHE AND WILL BE RESPONSIBLE FOR SETTING ANY POLICIES
IT DEEMS APPROPRIATE FOR DEUTSCHES ACTIVITIES, SUBJECT TO THE DIRECTION OF
THE FUNDS TRUSTEES. SHAREHOLDERS OF THE FUND WILL CONTINUE TO RECEIVE THE
BENEFITS OF THE INVESTMENT ADVISER'S SUPERVISION OF THE MANAGEMENT OF THE
FUND AND, UNDER THE PROPOSED ARRANGEMENT, WILL RECEIVE THE ADDITIONAL BENEFIT
OF DEUTSCHE'S INVESTMENT ADVISORY SERVICES. THE COMBINED CONTRIBUTIONS OF THE
INVESTMENT ADVISER, AXA, AND DEUTSCHE TO THE FUND'S MANAGEMENT SHOULD ENHANCE
THE LEVEL OF SERVICE TO THE SHAREHOLDERS.
Under the proposed Investment Sub-Advisory Agreement, Deutsche Asset
Management Investment Services, Ltd. ("Deutsche") would serve as a Sub-Adviser
to the Fund pursuant to a Sub-Advisory Agreement with HCM. Under the
Sub-Advisory Agreement, for that portion of Fund assets allocated to Deutsche by
HCM, Deutche would manage the Fund, select its investments and place all
orders for purchases and sales of securities, subject to the general supervision
of the HighMark Funds' Board of Trustees and HCM and in accordance with the
Fund's investment objectives, policies and restrictions. More specifically,
Deutsche would perform the following services for that portion of the Fund's
portfolio allocated to it: (i) provide investment research and credit analysis
concerning the Fund's investments; (ii) conduct a continual program of
investment of the Fund's assets; (iii) place orders for all purchases and sales
of the investments made for the Fund; (iv) maintain the books and records
required in connection with its duties hereunder; and (v) keep the Investment
Adviser informed of developments materially affecting the Fund. As consideration
for its services, Deutsche will be entitled to receive an annual fee based on
the average daily net assets of the Fund allocated to Deutsche as follows:
<TABLE>
<CAPTION>
Fund Assets Rate as a Percentage of Average Net Assets
----------- ------------------------------------------
<S> <C>
Up to $250 million 0.60%
Over $250 million 0.50%
</TABLE>
The Investment Adviser will bear the sole responsibility for the
payment of the sub-advisory fee to Deutsche.
The proposed Investment Sub-Advisory Agreement will become effective on
the date approved by the Shareholders and, unless sooner terminated, will
continue for an initial term ending in two years. Thereafter, the Investment
Sub-Advisory Agreement will continue for successive one-year terms, provided
that such continuation is specifically approved at least annually by a vote of a
majority of the Trustees, or by the vote of a majority of the outstanding
8
<PAGE>
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, by vote cast in person
at a meeting called for such purpose. The proposed Investment Sub-Advisory
Agreement will terminate automatically in the event of its assignment, as
defined in the 1940 Act or termination of the Investment Advisory Agreement.
The Trustees recommend that the Shareholders of the Fund vote to
approve the proposed Investment Sub-Advisory Agreement, thereby appointing
Deutsche as a second Investment Sub-Adviser to the Fund. Approval by
Shareholders of the Investment Sub-Advisory Agreement will not result in an
increase in the contractual rate of the total advisory fees payable by the Fund,
but will result in the payment of the sub-advisory fees by the Investment
Adviser to Deutsche. Such sub-advisory fees are borne solely by the Investment
Adviser and not by the Fund.
The Investment Sub-Advisory Agreement provides that Deutsche will not
be liable to the Investment Adviser, the Trust or any Shareholder of the Fund
for any act or omission in the course of, or connected with its services under
the Investment Sub-Advisory Agreement or for any losses that may be sustained in
the purchase, holding or sale of any security, except a loss resulting from
willful misfeasance, bad faith, or gross negligence, or reckless disregard by
Deutsche of its obligations or duties under the Agreement.
There are no material differences between the current and proposed
Investment Sub-Advisory Agreements except for the differences in fees, as
described above, which are borne by the Adviser.
In unanimously approving the proposed Investment Sub-Advisory Agreement
and recommending its approval by Shareholders, the Trustees of the Fund,
including the independent Trustees, considered the best interests of
Shareholders of the Fund and took into account all factors they deemed relevant.
The factors considered by the independent Trustees included the nature, quality
and extent of the service to be provided by Deutsche and data on investment
performance, management fees and expense ratios of competitive funds. After
considering these factors, the Trustees concluded that the proposed Investment
Sub-Advisory Agreement would be beneficial to the Fund and to its Shareholders.
In the event that holders of a majority of the outstanding Shares of
the Fund vote in the negative with respect to the proposed Investment
Sub-Advisory Agreement, the Trustees will consider such further action as they
may determine to be in the best interests of the Fund's Shareholders.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUND VOTE TO
APPROVE THE PROPOSED INVESTMENT SUB-ADVISORY AGREEMENT.
9
<PAGE>
ADDITIONAL INFORMATION
INFORMATION ABOUT THE INVESTMENT ADVISER
HighMark Capital Management, Inc., ("HCM") serves as investment adviser of the
HighMark Funds and manages their investment portfolios on a day-to-day basis
under the supervision of HighMark Funds' Board of Trustees.
HCM is a subsidiary of UnionBanCal Corporation, the holding company of Union
Bank of California, N.A. UnionBanCal Corporation is a publicly held corporation,
which is principally held by The Bank of Tokyo-Mitsubishi, Ltd. As of September
30, 2000, UnionBanCal Corporation and its subsidiaries had approximately $33.7
billion in consolidated assets. As of the same date, HighMark Capital
Management, had over $19 billion in assets under management. HighMark Capital
Management (and its predecessors), with a team of approximately 50 stock and
bond research analysts, portfolio managers and traders, has been providing
investment management services to individuals, institutions and large
corporations since 1917.
The name, address, and principal occupation of the principal executive officers
and each director of the Investment Adviser are as follows:
<TABLE>
<CAPTION>
Position with Type of
the Adviser Name Principal Occupation Business
----------- ---- -------------------- --------
<S> <C> <C> <C>
Director, Chairman of the Board Piet Westerbeek III Executive Vice President Institutional
Union Bank of California Services and
445 S. Figueroa Street Asset Management
Los Angeles, CA 90071
Director, President and Chief Clark R. Gates President and CEO Investment
Executive Officer HighMark Capital Management
Management
475 Sansome Street
San Francisco, CA 94104
Director Hirotsugu Hayashi Senior Vice President Banking
Office of the President
Union Bank of California
400 California Street
San Francisco, CA 94104
Director Richard C. Hartnack Vice Chairman Banking
Union Bank of California
445 S. Figueroa Street
Los Angeles, CA 90071
Director Akifumi Tamagawa Executive Vice President Banking
and Manager
Office of the President
Union Bank of California
400 California Street
San Francisco, CA 94104
</TABLE>
10
<PAGE>
<TABLE>
<S> <C> <C> <C>
Director Honoria F. Vivell Executive Vice President Banking
Community Banking Group
Union Bank of California
445 S. Figueroa Street
Los Angeles, CA 90071
Senior Vice President of Sales Jeffrey L. Boyle Senior Vice President Institutional
Union Bank of California Services and
475 Sansome Street Asset Management
San Francisco, CA 94111
Secretary John J. King Senior Vice President and Banking
Associate General Counsel
Union Bank of California
400 California Street
San Francisco, CA 94104
Assistant Treasurer Kristen Friedman Vice President Banking
Administration and
Support Group
Union Bank of California
400 California Street
San Francisco, CA 94104
Compliance Officer and Assistant Teresita Ching HighMark Capital Investment
Secretary Management Management
475 Sansome Street
San Francisco, CA 94111
Managing Director, Chief Investment Luke C. Mazur HighMark Capital Investment
Officer Management Management
475 Sansome Street
San Francisco, CA 94104
Managing Director, Mutual Funds R. Gregory Knopf HighMark Capital Investment
Management Management
445 S. Figueroa Street
Los Angeles, CA 90071
Managing Director, Chief Financial Kevin A. Rogers HighMark Capital Investment
Officer Management Management
18300 Von Karman Avenue
Irvine, CA 92715
</TABLE>
INFORMATION ABOUT DEUTSCHE ASSET MANAGEMENT INVESTMENT SERVICES, LTD.
Deutsche Asset Management Investment Services, Ltd. ("Deutsche") was
originally founded in 1972 as Morgan Grenfell Investment Services Limited
and managed approximately $12 billion in assets as of March 31, 2000.
Deutsche Asset Management is located at One Appold Street,
11
<PAGE>
London, England. Deutsche provides investment advice primarily to U.S. and
Canadian institutional investors.
Deutsche is wholly owned by Deutsche Asset Management Group Limited
which in turn is wholly owned by Deutsche Morgan Grenfell Group PLC ("DMG"), an
investment holding company. DMG is a wholly-owned subsidiary of Deutsche Bank
AG, an international commercial and investment banking group. Deutsche Bank AG
is a major global banking institution that is engaged in a wide range of
financial services, including investment management, mutual fund, retail and
commercial banking, investment banking and insurance.
The following table shows other investment companies advised by
Deutsche with investment objectives similar to the Fund. However, Deutsche does
not sub-advise these investment companies or any other investment companies with
investment objectives similar to the Fund.
<TABLE>
<CAPTION>
Most Recent Assets as of Advisory Advisory Fee
Fund Name Fiscal Year End Fiscal Year End Fee Rate Paid as of Fiscal
Year End
<S> <C> <C> <C> <C>
Deutsche Asset Management 10/31/2000 $278,160,711 0.70% $1,629,360
International Select Equity
Hillview International Alpha Account was $25,147,846 0.80% on the $0
Fund not funded (as of 12/31/00) first $25
until million and
12/31/2000 0.60% on all
assets in
excess of $25
million
</TABLE>
OFFICERS AND DIRECTORS
The principal executive officers and directors of Deutsche Asset
Management Investment Services Ltd. are:
12
<PAGE>
<TABLE>
<CAPTION>
Name and Address Position With Deutsche Principal Occupation
---------------- ---------------------- --------------------
<S> <C> <C>
Annette Jane Fraser Chief Executive Officer of Same
One Appold Street Deutsche and Fund Manager
London, EC2A 2UU
Richard Charles Wilson Director of Deutsche Asset Same
One Appold Street Management and Fund Manager
London, EC2A 2UU
Alexander Tedder Director of Deutsche Asset Same
One Appold Street Management and Fund Manager
London, EC2A 2UU
</TABLE>
INFORMATION ABUT THE ADMINISTRATOR AND DISTRIBUTOR
SEI Investments Mutual Funds Services (the "Administrator"), a Delaware business
trust, has its principal business offices at Oaks, Pennsylvania 19456, serves as
the Trust's administrator. SEI Investments Management Corporation ("SIMC"), a
wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the
owner of all beneficial interest in the Administrator. SEI Investments and its
subsidiaries and affiliates, including the Administrator, are leading providers
of funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors, and
money managers.
SEI Investments Distribution Co. (the "Distributor"), a wholly-owned subsidiary
of SEI Investments Company, serves as distributor to the Funds. The Distributor
may provide financial assistance in connection with pre-approved seminars,
conferences and advertising to the extent permitted by applicable state or
self-regulatory agencies, such as the National Association of Securities
Dealers.
AFFILIATED BROKER TRANSACTIONS
In the fiscal year ended July 31, 2000, no brokerage commissions were
paid to affiliated brokers of the Fund, of Deutsche, or of AXA on account of
trading for the Fund.
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
13
<PAGE>
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 December 27, 2000, the Fund believes that Union Bank of
California was the shareholder of record of 59.3% of the Fund. As of the same
date, the Fund believes that Union Bank of California had voting power with
respect to 78.2% of the Fund's Shares. As a result, Union Bank of California may
be deemed to be a "controlling person" of the Fund under the 1940 Act.
To the best knowledge of the Fund, only the following persons are the
record or beneficial owners of more than 5% of the Fund's outstanding Shares as
of December 27, 2000:
HIGHMARK INTERNATIONAL EQUITY FUND- FIDUCIARY SHARES
<TABLE>
<CAPTION>
Percentage of Record
Name and Address Ownership
---------------- --------------------
<S> <C>
AXA Banque 6.31%
372 Rue Saint Honore
75040 Paris Cedex 01 France
Lane & Company
c/o Union Bank of California
Attn: Kathleen Heilman 75.15%
P.O. Box 85484
San Diego, CA 92186-5484
</TABLE>
14
<PAGE>
HIGHMARK INTERNATIONAL EQUITY FUND - CLASS A SHARES
<TABLE>
<CAPTION>
Percentage of Record
Name and Address Ownership
---------------- --------------------
<S> <C>
NFSC FEBO #PC1-083593 6.12%
Said Cohen TTBB
Said and Joan Cohen Family Trust
U/A 9/28/77
1862 Park Skyline Road
Santa Ana, CA 92705-3120
Painewebber for the Benefit of Springate
Investments Limited
PW 8 8.59%
333 Waterfront Drive
Road Town Tortola, British Virgin Islands
Painewebber for the Benefit of 1285PSPB 2
1013 Centre Road 7.56%
Wilmington, DE 19805-1265
Painewebber for the Benefit of Headstart
Leverage LTD
Class C PW 7 6.72%
SVCS LTC
22/23 Eden Quay
Dublin 1 Ireland
Painewebber for the Benefit of Springate
Investments Limited PW 4
333 Waterfront Drive 8.22%
Road Town Tortola, British Virgin Islands
Painewebber for the Benefit of Painewebber
CDN FBO
John P Metcalf 19.73%
P.O. Box 3321
Weehawken, NJ 0708708154
Painewebber for the Benefit of Rhino Fund
Three LP
Attn: Brad Sellers
3800 Fanwood Place 28.89%
Richmond, VA 23233-1855
</TABLE>
15
<PAGE>
HIGHMARK INTERNATIONAL EQUITY FUND- CLASS B SHARES
<TABLE>
<CAPTION>
Percentage of Record
Name and Address Ownership
---------------- --------------------
<S> <C>
NFSC FEBO # OBP-476943
SO Cal Inderground
P.O. Box 1747 10.88%
Brea, CA 92822-1747
NFSC FEBO # ol5-993042
Union Bank of California Cust
IRA of David C. Gallardo
Rollover
10290 Ave 191/2 9.25%
Chowchilla. CA 93630-9070
</TABLE>
HIGHMARK INTERNATIONAL EQUITY FUND- CLASS C SHARES
<TABLE>
<CAPTION>
Percentage of Record
Name and Address Ownership
---------------- --------------------
<S> <C>
State Street Bank & Trst Co.
Cust for the IRA of FBO Rodney A. Harrison 8.27%
2410 N. Post St.
Spokane, WA 99205-3251
Rosemary Mercurio
8440 W. Kimberly Way 36.45%
Peoria, AZ 85382-8721
State Street Bank & Trust Co.
Cust for the IRA of FBO Ronald D. Noon 22.56%
PO Box 893
Orinda, CA 94563-0888
State Street Bank & Trust Co.
Cust for the IRA of FBO Hiroshi Nakai
138 15th Ave. 20.10%
San Francisco, CA 92118-1011
</TABLE>
16
<PAGE>
As of December 27, 2000 the Officers and Trustees of the Fund owned
less than 1% of the Fund's outstanding Shares.
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 29, 2001
17
<PAGE>
EXHIBIT A
FORM OF
HIGHMARK INTERNATIONAL EQUITY FUND
SUB-ADVISORY AGREEMENT
This AGREEMENT is executed as of _________________, 200_ and made effective as
of __________________, 200_, by and between HIGHMARK CAPITAL MANAGEMENT, INC.
(the "Adviser") and DEUTSCHE ASSET MANAGEMENT INVESTMENT SERVICES, LTD., a
______________________, which is an investment adviser registered under the laws
of the United States as an investment adviser under the Investment Advisers Act
of 1940 ("Sub-Adviser").
WHEREAS, the Adviser is the investment adviser for the HighMark Funds (the
"Trust"), an open-end diversified management investment company registered under
the Investment Company Act of 1940, as amended ("`40 Act");
WHEREAS, Adviser's affiliate, Union Bank of California N.A., serves as
Custodian for the HighMark Funds and provides certain other services for the
Funds;
WHEREAS, SEI Investments Fund Resources is Administrator and SEI
Investment Distribution Co. is Distributor of the HighMark Funds
(collectively, the "SEI Companies"); and
WHEREAS, Adviser desires to retain Sub-Adviser as its agent to furnish
investment sub-advisory services for certain assets of the Trust's
International Equity Fund (the "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
meanings set forth:
1.1 "33 Act" shall mean the Securities Act of 1933, the rules and
regulations issued thereunder, as they may be amended from time to time.
1.2 "40 Act" shall mean the Investment Company Act of 1940, the rules
and regulations issued thereunder, as they may be amended from time to time.
1.3 "Administrator" and "Distributor" shall mean SEI Investments Fund
Resources and SEI Investments Distribution Co, respectively.
1.4 "Adviser" shall mean HighMark Capital Management, Inc.
1.5 "Adviser's Act" shall mean the Investment Adviser's Act of
1940 and the rules and regulations promulgated thereunder, as
they may be amended from time to time
<PAGE>
1.6 "Bank" shall mean Union Bank of California, N.A., a national
banking association organized under the laws of the United States.
1.7 "Sub-Adviser" shall mean Deutsche Asset Management Investment
Services, Ltd., a company incorporated in ________ and registered
as an investment adviser under the Investment Advisers Act of 1940.
2. APPOINTMENT. Adviser hereby appoints Sub-Adviser to provide
certain sub- advisory services to the Fund for the period and
on the terms set forth in this Agreement. Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
3. DELIVERY OF DOCUMENTS. Adviser has furnished or will furnish
Sub-Adviser with copies properly certified or authenticated of
each of the following:
(a) Copies of the Declarations of Trust establishing the
HighMark Funds and the By-Laws of the Trust;
(b) Resolutions of the Trust's Board of Trustees authorizing
the appointment of Sub-Adviser and approving this Agreement;
(b) The Trust's Registration Statement on Form N-1A under the
`33 Act (File No. 33-37687) and the `40 Act as filed with the SEC and all
amendments thereto insofar as such Registration Statement and such amendments
relate to the Funds;
(c) The Trust's most recent prospectus and Statement of
Additional Information for the International Equity Fund (such prospectus and
Statement of Additional Information, as presently in effect, and all
amendments and supplements thereto are herein collectively called the
"Prospectus"); and
(d) Such other materials and documents as Sub-Adviser shall
reasonably request.
Adviser will furnish Sub-Adviser with copies of all amendments of or
supplements to the foregoing promptly following adoption of such amendments
or supplements.
4. MANAGEMENT:
4.1 Subject always to the supervision of the Trust's Board of Trustees
and of Adviser, Sub-Adviser will furnish an investment program in respect
of, and make investment decisions for, the assets of the Fund entrusted to
it hereunder. Sub-Adviser may place all orders for the purchase and sale of
securities, on behalf of the Fund. Sub-Adviser is also authorized, subject
to periodic approvals of authorized persons by the Board of Trustees, to
instruct Custodian to settle trades executed on behalf of the Fund. In the
performance of its duties, Sub-Adviser will satisfy its fiduciary duties to
the Fund, will monitor the Fund investments, and will comply with the
provisions of the Trust's Declaration of Trust and By-Laws, as amended from
time to time, and with the investment objectives, policies and restrictions
of the Fund stated in the Fund Prospectus and compliance policies and
procedures furnished to the Sub-Adviser by Adviser from time to time.
2
<PAGE>
4.2 Sub-Adviser and Adviser will each make its officers and employees
available to the other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other regarding the
investment affairs of the Fund. Sub-Adviser shall also make itself
reasonably available to the Trust's Board of Trustees at such times as the
Board of Trustees shall request.
4.3 Sub-Adviser represents and warrants that it is and shall remain in
compliance with all applicable United States Securities and Exchange
Commission ("SEC") Rules and Regulations pertaining to its investment
advisory activities and agrees that it:
(a) will use at least the same skill and care in providing such
services as it uses in providing services to fiduciary accounts in the
United States for which it has investment responsibilities;
(b) will maintain registration with the SEC as an investment
adviser under the Advisers Act and will conform with all applicable laws,
rules and regulations pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or dealer.
In providing the Fund with investment supervision, the Sub-Adviser will
give primary consideration to securing the most favorable price and
efficient execution. Within the framework of this policy, the Sub-Adviser
may consider the financial responsibility, research and investment
information and other services provided by brokers or dealers who may effect
or be a party to any such transaction or other transactions to which the
Sub-Adviser's other clients may be a party. It is understood that it is
desirable for the Fund that the Sub-Adviser have access to supplemental
investment and market research and security and economic analysis provided
by brokers who may execute brokerage transactions at a higher cost to the
Fund than may result when allocating brokerage to other brokers on the basis
of seeking the most favorable price and efficient execution. Therefore, the
Sub-Adviser is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to such guidelines as
shall be established by the Adviser and reviewed by the Trust's Board of
Trustees from time to time with respect to the extent and continuation of
this practice. It is understood that the services provided by such brokers
may be useful to the Sub-Adviser in connection with the Sub-Adviser's
services to other clients.
On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients of
the Sub-Adviser, the Sub-Adviser, to the extent permitted by applicable laws
and regulations, may, but shall be under no obligation to, aggregate the
securities to be so purchased or sold in order to obtain the most favorable
price or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients. In no instance will
portfolio securities be purchased from or sold to Adviser, Sub-Adviser, the
SEI Companies, or any affiliated person of any of the Trust, Adviser, the
Sub-Adviser, or the SEI Financial Services Company or Sub-Adviser that
Adviser has identified to the Sub-Adviser in writing, except as may be
permitted under the `40 Act.
(d) will report regularly to Adviser and will make appropriate
persons available for the purpose of reviewing at reasonable times the
management of the Fund with representatives of Adviser and the Board of
Trustees, including, without limitation, review of the general investment
strategy of the
3
<PAGE>
Fund, the performance of the Fund in relation to standard industry indices
which have been agreed upon between Adviser and Sub-Adviser and general
conditions affecting the marketplace, and will provide various other reports
from time to time as reasonably requested by Adviser;
(e) will maintain books and records with respect to the Trust's
securities transactions required by subparagraphs (b)(5), (6), (7), (9),
(10) and (11) and paragraph (f) of Rule 31a-1 under the `40 Act and will
furnish Adviser and the Trust's Board of Trustees such periodic and special
reports as the Adviser or Board of Trustees may request;
(f) will act upon instructions from Adviser that are not
inconsistent with the fiduciary duties undertaken hereunder; and
(g) will treat confidentially and as proprietary information of
the Trust all such records and other information relative to the Trust
maintained by the Sub-Adviser, 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
Trust, which approval shall not be unreasonably withheld and may not be
withheld where Sub-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
Trust.
Sub-Adviser shall have the right to execute and deliver, or cause
its nominee to execute and deliver, all proxies and notices of meetings and
other notices affecting or relating to the securities of the Fund.
4.4 Sub-Advisor will diligently perform services as defined under this
Agreement. However, Sub-Advisor makes no representations or guarantees
whatsoever that the objective(s) of the Fund will be achieved or that the
Fund will outperform its benchmark as set forth in Schedule B.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the `40 Act, Sub-Adviser hereby agrees that certain records which it
maintains for the Trust are the property of the Trust also and further
agrees to surrender promptly to the Trust a duplicate of any of such
records, upon the Trust's request. Sub-Adviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the `40 Act the records
required to be maintained by subparagraphs (b)(5), (6), (7), (9), (10) and
(11) and paragraph (f) of Rule 31a-1 under the `40 Act for the Fund.
Sub-Adviser may delegate its responsibilities under this Section to
affiliates that perform custody and/or fund accounting services for the
Fund, which delegation shall not, however, relieve the Sub-Adviser of its
responsibilities under this paragraph 5.
6. EXPENSES. During the term of this Agreement, Sub-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 Trust, unless otherwise stated in
this Agreement.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, Adviser will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory
fee, accrued daily and payable monthly, in accordance with Schedule A
hereto. From time to time, Sub-Adviser may, in its sole discretion, agree to
waive or reduce some or all of the compensation to which it is entitled
under this Agreement.
4
<PAGE>
8. SERVICES TO OTHERS. Adviser understands, and has advised the
Trust's Board of Trustees, that Sub-Adviser now acts and may in the future
act, as an investment adviser to fiduciary and other managed accounts, and
as investment adviser, sub-investment adviser, and/or administrator to other
investment companies. Adviser has no objection to Sub-Adviser's acting in
such capacities, as long as such services do not impair the services
rendered to Adviser or the Trust. Adviser recognizes, and has advised the
Trust's Board of Trustees that, in some cases, this procedure may
adversely affect the size of the position that the Fund may obtain in a
particular security. In addition, Adviser understands, and has advised the
Trust's Board of Trustees, that the persons employed by Sub-Adviser to assist
in Sub-Adviser's duties under this Agreement will not devote their full time
to such service and nothing contained in this Agreement will be deemed to
limit or restrict the right of Sub-Adviser or any of its affiliates to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
9. LIMITATION OF LIABILITY. The Sub-Adviser shall not be liable for any
error or judgment or for any loss suffered by the Fund or Adviser in
connection with performance of its obligations under this Agreement or for
having executed Advisor's instructions , except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of admages shall be limited to the period
and the amount set forth in Section 36(b)(3) of the `40 Act), or a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Sub-Adviser's part in the performance of its obligations or in failing to
perform its obligations under this Agreement, except as may otherwise be
provided under provisions of applicable state or federal law which cannot be
waived or modified hereby.
10. INDEMNIFICATION. Adviser and Sub-Adviser each agree to indemnify the
other against any claim against, loss or liability to, such other party
(including reasonable attorneys' fees) arising out of any action taken
or not taken in the performance of its obligations under this Agreement
on the part of the indemnifying party which constitutes willful
misfeasance, bad faith or gross negligence.
11. DURATION AND TERMINATION. This Agreement will become effective as of
the date hereof, provided that it has been approved by a vote of a majority
of the outstanding voting securities of the Fund in accordance with the
requirements under the `40 Act, and, unless sooner terminated as provided
therein, will continue in effect for two (2) years.
Thereafter, if not terminated, this Agreement will continue in effect for the
Fund for successive periods of 12 months, each ending on the day preceding
the annual anniversary of the Agreement's effective date, provided that such
continuation is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not
interested persons of the Trust, Sub-Adviser, or Adviser, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the
vote of a majority of the Trust's Board of Trustees or by the vote of
majority of all votes attributable to the outstanding Shares of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the
Fund at any time, without the payment of any penalty, on sixty (60) day's
written notice by the Adviser to Sub-Adviser. This Agreement may be
terminated at any time, without the payment of any penalty, on 120 day's
written notice by the Sub-Adviser to 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" have the same meaning of such terms in the `40 Act.)
5
<PAGE>
12. 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.
13. SUB-ADVISER INFORMATION. During the terms of this Agreement, Adviser
agrees to furnish the Sub-Adviser at Sub-Adviser's principal office all
prospectuses, proxy statements, reports to stockholders, sales literature or
other materials prepared for distribution to stockholders of the Fund, the
Trust or the public that refer to the Sub-Adviser or its clients in any way
prior to use thereof, and not to use material if the Sub-Adviser reasonably
objects in writing within ten (10) business days (or such other period as may
be mutually agreed) after receipt thereof. The Sub-Adviser's right to object
to such materials is limited to the portions of such materials that expressly
relate to the Sub-Adviser, its services and its clients. The Adviser agrees
to use its reasonable best efforts to ensure that materials prepared by its
employees or agents or its affiliates that refer to the Sub-Adviser or its
clients in any way are consistent with those materials previously approved by
the Sub-Adviser as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Sub-Adviser by first-class or overnight
mail, facsimile transmission equipment or hand delivery.
14. SEVERABILITY. Should any part of this Agreement be held 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 inure
to the benefit of the parties hereto and their respective successors.
15. NOTICES. Any notice, advice or report to be given pursuant to this
Agreement shall be delivered or mailed as set forth below:
TO ADVISER AT:
HighMark Capital Management, Inc.
475 Sansome Street
Post Office Box 45000
San Francisco, CA 94104
Attention: Clark Gates, President
TO THE SUB-ADVISER AT:
Deutsche Asset Management Investment Services, Ltd.
130 Liberty Street - 36th Floor
New York, N.Y. 10006
Attention: C. Jason Psome
Director
TO THE TRUST OR THE FUND AT:
HighMark Funds
6
<PAGE>
c/o SEI Investments Fund Resources
and SEI Investments Distribution Co.
One Freedom Valley Rd.
Oaks, Pennsylvania 19456
Attention: Legal Department
Parties agree that they shall not be bound by the terms of any changes in
policies, procedures, or contracts until notice has been received as set forth
in this Agreement.
16. CHANGE OF LAW. Where the effect of a requirement of the `40 Act
reflected in any provision of this Agreement is altered by a rule, regulation
or order of the SEC, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule, regulation
or order.
17. 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 is held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement will not be affected thereby. This Agreement will be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and will be governed by the laws of the Commonwealth of Massachusetts.
The name "HighMark Funds" and "Trustees of the HighMark Funds" refer,
respectively, to the Trust created by, and the Trustees as trustees (but not
individually or personally), acting from time to time under, the Declaration of
the Trust, to which reference is hereby made and copy of which is on file at the
office of the Secretary of State 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 "HighMark Funds" entered in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually but only in such capacities and are not binding upon any of the
Trustees, Shareholders or representatives of the Trust personally, but bind only
the assets of the Trust, and persons dealing with the Funds must look solely to
the assets of the Trust belonging to such Funds for the enforcement of any
claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officer designated below as of the day and year first above
written.
HIGHMARK CAPITAL MANAGEMENT, INC. DEUTSCHE ASSET MANAGEMENT INVESTMENT
SERVICES, LTD.
By:______________________________ By:________________________________
Name: Clark Gates Name:______________________________
Title: President Title:_____________________________
7
<PAGE>
SCHEDULE A
HIGHMARK INTERNATIONAL FUND
Advisory Fee: 95 b.p.
Sub-Advisory Fee: 60 b.p. on the first $250 million, and
50 b.p. on all assets over $250 million
The Sub-Advisory fee shall be payable out of the Advisory fee
<PAGE>
SCHEDULE B
SUB-ADVISER PERFORMANCE STANDARDS
Outperform the MSCI Europe, Australia, Far East Index ("MSCI EAFE Index")* and
perform in the top 30% of the Morningstar Foreign Equity Funds universe.
Sub-Advisor will diligently perform services as defined under this Agreement.
However, Sub-Advisor makes no representations or guarantees whatsoever that the
objective of the Fund will be achieved or that the Fund will outperform its
benchmark as set forth above.
<PAGE>
HIGHMARK INTERNATIONAL EQUITY FUND
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS ON FEBRUARY 28, 2001
This proxy is solicited by the Board of Trustees of HighMark Funds for use at a
Special Meeting of Shareholders of the International Equity Fund ("Special
Meeting") to be held on February 28, 2001 at 3:00 p.m. Eastern Time at 1 Freedom
Valley Drive, Oaks, Pennsylvania.
The undersigned hereby appoints James R. Foggo and William E. Zitelli,
each of them with full power of substitution as proxies of the undersigned, to
vote, as designated below, at the above-stated Special Meeting and at any and
all adjournments thereof, all units of beneficial interest in the International
Equity Fund which the undersigned would be entitled to vote upon if personally
present:
PROPOSAL (1) Approval of the new Investment Sub-Advisory Agreement between
HighMark Capital Management and Deutsche Asset Management Investment Services
Ltd.
______ FOR ______ AGAINST ______ ABSTAIN
PROPOSAL (2) Transaction of such other business as may properly come before
the Special Meeting.
______ FOR ______ AGAINST ______ ABSTAIN
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSAL (1) AND TO AUTHORIZE THE PROXIES, IN THEIR DISCRETION, TO
VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE
TRUSTEES RECOMMEND A VOTE FOR ITEMS (1) AND (2).
NOTE: Please sign legibly and exactly as the name appears on this card.
Joint owners must EACH sign the proxy. When signing as executor, administrator,
attorney, trustee or guardian, or as custodian for a minor, please give the FULL
title of such. If a corporation, please give the FULL corporate name and
indicate the signer's office. If a partner, please sign in the partnership name.
---------------------------------------------------
Signature(s) of Shareholder(s)
---------------------------------------------------
Signature(s) of Shareholder(s)
Date: , 2001
------------------
IF VOTING BY MAIL, PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
