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EXHIBIT (6)(c)
Form of Investment Sub-Advisory Agreement between Union Bank of California, NA.,
and Bank of Tokyo-Mitsubishi Trust Company
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INVESTMENT SUBADVISORY AGREEMENT
AGREEMENT executed as of April , 1997 by and between UNION BANK of CALIFORNIA,
N.A. (the "Advisor"), and BANK OF TOKYO-MITSUBISHI TRUST COMPANY (the
"SubAdvisor"), a subsidiary of The Bank of Tokyo-Mitsubishi, Ltd., a New York
state chartered bank.
WHEREAS, Advisor is the investment manager for the The HighMark Group (the
"Trust"), an open-end management investment company registered under the
Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, Advisor desires to retain SubAdvisor as its agent to furnish investment
advisory services for certain of the Trust's diversified investment portfolios
which are listed on Schedule A attached hereto and made a part hereof (the
"Funds").
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. Appointment. Advisor hereby appoints SubAdvisor to provide certain
sub-investment advisory services to the Funds for the period and on the terms
set forth in this Agreement. SubAdvisor accepts such appointment and agrees to
furnish the services herein set forth for the compensation herein provided.
2. Delivery of Documents. Advisor has furnished or will furnish SubAdvisor with
copies properly certified or authenticated of each of the following:
(a) the Trust's Agreement and 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 Trust's By-Laws and amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of SubAdvisor and approving this Agreement;
(d) the Trust's Notification of Registration of Form N-8A under the
Investment Company Act of 1940 (the "1940 Act") as filed with the
Securities and Exchange Commission (the "SEC") on [ ] and all
amendments thereto;
(e) the Trust'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 SEC and all amendments
thereto insofar as
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such Registration Statement and such amendments relate to the Funds;
(f) the Trust's most recent prospectuses and Statement of Additional
Information for the Funds (such prospectuses and Statement of
Additional Information, as presently in effect, and all amendments
and supplements thereto are herein collectively called the
"Prospectus"); and
(g) such other materials and documents as SubAdvisor shall
reasonably request.
Advisor will furnish SubAdvisor from time to time with copies of all amendments
of or supplements to the foregoing.
3. Management. Subject always to the supervision of the Trust's Board of
Trustees and Advisor, SubAdvisor will furnish an investment program in respect
of, and make investment decisions for, all assets of the Funds and place all
orders for the purchase and sale of securities, all on behalf of the Funds. In
the performance of its duties, SubAdvisor will satisfy its fiduciary duties to
the Funds (as set forth in Section 8 below), and will monitor the Funds
investments, and will comply with the provisions of the Trust's Declaration of
Trust and By-Laws, as amended from time to time, and the stated investment
objectives, policies and restrictions of the Funds. SubAdvisor and Advisor will
each make its officers and employees available to the other from time to time at
reasonable times to review investment policies of the Funds and to consult with
each other regarding the investment affairs of the Funds. SubAdvisor shall also
make itself reasonably available to the Board of Trustees at such times as the
Board of Trustees shall request.
SubAdvisor represents and warrants that it is in compliance with all applicable
Rules and Regulations of the SEC pertaining to its investment advisory
activities and 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;
(b) will conform with all applicable Rules and Regulations of the
SEC pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment determinations for
the Funds either directly with the issuer or with any broker or
dealer. In providing the Funds with investment supervision, the
SubAdvisor will give primary consideration to securing the most
favorable price and efficient execution. Within the framework of
this policy, the SubAdvisor may consider the financial
responsibility research and investment information
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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 SubAdvisor's other clients may be a party. It is understood that
it is desirable for the Funds that the SubAdvisor 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 Funds than may result when
allocating brokerage to other brokers on the basis of seeking the
most favorable price and efficient execution. Therefore, the
SubAdvisor is authorized to place orders for the purchase and sale
of securities for the Funds with such brokers, subject to such
guidelines as shall be established by the Advisor 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 SubAdvisor in
connection with the SubAdvisor's services to other clients.
On occasions when the SubAdvisor deems the purchase or sale of a security to be
in the best interest of the Funds as well as other clients of the SubAdvisor,
the SubAdvisor, 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 SubAdvisor in the manner it considers to be the most equitable
and consistent with its fiduciary obligations to the Funds and to such other
clients. In no instance will portfolio securities be purchased from or sold to
Advisor, SubAdvisor, SEI Financial Services Company or any affiliated person of
either the Trust, Advisor, SEI Financial services Company or SubAdvisor that
Advisor has identified to the SubAdvisor in writing, except as may be permitted
under the 1940 Act;
(d) will report regularly to Advisor and will make appropriate
persons available for the purpose of reviewing at reasonable times
with representatives of Advisor and the Board of Trustees the
management of the Funds, including, without limitation, review of
the general investment strategy of the Funds, the performance of the
Funds in relation to standard industry indices and general
conditions affecting the marketplace and will provide various other
reports from time to time as reasonably requested by Advisor;
(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 1940
Act and will furnish Advisor and the Trust's Board of Trustees such
periodic and special reports as the Board of Trustees may request;
(f) will act upon instructions form Advisor not inconsistent with
the fiduciary duties hereunder; and
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(g) will treat confidentially and as proprietary information of the
Trust all such records and other information relative to the Trust
maintained by the SubAdvisor, 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
SubAdvisor 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.
SubAdvisor 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 Funds.
4. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, SubAdvisor hereby agrees that all records which it maintains for
the Trust are the property of the Trust and further agrees to surrender promptly
to the Trust any of such records upon the Trust's request. SubAdvisor further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 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 1940 Act. SubAdvisor may
delegate its responsibilities under this Section to affiliates that perform
custody and/or fund accounting services for the Funds, which delegation shall
not, however, relieve the SubAdvisor of its responsibilities under this
paragraph 4.
5. Expenses. During the terms of this Agreement, SubAdvisor 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.
6. Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, Advisor will pay the SubAdvisor, and the SubAdvisor agrees to
accept as full compensation therefor, a sub-advisory fee, accrued daily and
payable monthly, in accordance with Schedule B hereto. From time to time,
SubAdvisor may agree to waive or reduce some or all of the compensation to which
it is entitled under this Agreement.
7. Services to Others. Advisor understands, and has advised the Trust's Board of
Trustees, that SubAdvisor now acts, and may in the future act, as an investment
adviser to fiduciary and other managed accounts, and as investment advisor,
sub-investment adviser, and/or administrator to other investment companies.
Advisor has no objection to SubAdvisor's acts in such capacities, as long as
such services do not impair the services rendered to Advisor or the Trust.
Advisor recognizes, and has advised the Trust's Board of Trustees, that in some
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cases this procedure may adversely affect the size of the position that the
Funds may obtain in a particular security. In addition, Advisor understands, and
has advised the Trust's Board of Trustees, that the persons employed by
SubAdvisor to assist in SubAdvisor'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 SubAdvisor 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.
8. Limitation of Liability. The SubAdvisor shall not be liable for any error or
judgment or for any loss suffered by the Funds or Advisor in connection with
performance of its obligations under this Agreement, 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 damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the 1940 Act), or a loss resulting
from willful misfeasance, bad faith or gross negligence on the SubAdvisor's part
in the performance of its duties or from reckless disregard of its obligations
and duties under this Agreement, except as may otherwise be provided under
provisions or applicable state law which cannot be waived or modified hereby.
9. Indemnification. Advisor and SubAdvisor 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 on the part of the
indemnifying party which constitutes willful misfeasance, bad faith or gross
negligence.
10. Duration and Termination. This Agreement will become effective as of the
date hereof, provided that it has been approved by vote of a majority of the
outstanding voting securities of the Funds in accordance with the requirements
under the 1940 Act, and, unless sooner terminated as provided herein, will
continue in effect for one year.
Thereafter, if not terminated, this Agreement will continue in effect for the
Funds for successive periods of 12 months, each ending on the day preceding the
anniversary of the Agreement's effective date of each year, 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, SubAdvisor, or Advisor, 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 Funds. Notwithstanding the
foregoing, this Agreement may be terminated as to the Funds at any time, without
the payment of any penalty, on sixty (60) day's written notice by Advisor or by
SubAdvisor. 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
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the 1940 Act.)
11. 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.
12. SubAdvisor Information. During the terms of this Agreement, Advisor agrees
to furnish the SubAdvisor at SubAdvisor's principal office all prospectuses,
proxy statements, reports to stockholders, sales literature or other materials
prepared for distribution to stockholders of the Funds, the Trust or the public
that refer to the SubAdvisor or its clients in any way prior to use thereof and
not to use material if the SubAdvisor reasonably objects in writing within five
business days (or such other period as may be mutually agreed) after receipt
thereof. The SubAdvisor's right to object to such materials is limited to the
portions of such materials that expressly relate to the SubAdvisor, its services
and its clients. The Advisor agrees to use its reasonable best efforts to ensure
that materials prepared by its employees or agents or its affiliates that refer
to the SubAdvisor or its clients in any way are consistent with those materials
previously approved by the SubAdvisor as referenced in the first sentence of
this paragraph. Sales literature may be furnished to the SubAdvisor by
first-class or overnight mail, facsimile transmission equipment or hand
delivery.
13. 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 shall inure to the
benefit of the parties hereto and their respective successors.
14. Notices. Any notice, advice or report to be given pursuant to this Agreement
shall be delivered or mailed:
To Advisor at:
Union Bank of California, N.A.
000 "X" Xxxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx, Senior Vice President
To the SubAdvisor at:
The Bank of Tokyo-MitsubishiTrust Company
000 Xxxxxxxx
Xxx Xxxx, XX 00000
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Attention: Xxxxxx X. Xxxxxx, CIO
To the Trust or the Funds at:
The HighMark Group
0 Xxxxxxx Xxxxxx Xxxx
Xxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department
15. Change of Law. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Agreement is altered by a rule, regulation or order of
the Commission, whether of special or general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
16. 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.
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The name "The HighMark Group" and "Trustees of the The HighMark Group" 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 "The HighMark Group" 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.
UNION BANK OF CALIFORNIA, N.A.
By:_________________________________
Name:_______________________________
Title:________________________________
THE BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:_________________________________
Name:_______________________________
Title:________________________________
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SCHEDULE A
THE HIGHMARK GROUP
Blue Chip Growth Fund
Convertible Securities Fund
Emerging Growth Fund
Government Securities Fund
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SCHEDULE B
SUB ADVISOR COMPENSATION
1. Government Securities Fund
Advisory Fee: 50 b.p.
Subadvisory Fee: 20 b.p.
2. Convertible Securities Fund
Advisory Fee: 60 b.p.
Subadvisory Fee: 30 b.p.
3. Blue Chip Growth Fund
Advisory Fee: 60 b.p.
Subadvisory Fee: 30 b.p.
4. Emerging Growth Fund
Advisory Fee: 80 b.p.
Subadvisory Fee: 50 b.p.
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