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HIGHMARK INTERNATIONAL EQUITY FUND
SUB-ADVISORY AGREEMENT
AGREEMENT executed as of September 1, 1998 by and between HIGHMARK
CAPITAL MANAGEMENT, INC. (the "Adviser") and AXA ASSET MANAGEMENT PARTENAIRES, a
French corporation with registration number Paris B392 846 747, with its
registered office at Xxxxx, 00000, Xxxxxx, 46 Avenue de La Grande Armee 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, 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
Investments Distribution Co. is Distributor of the HighMark Funds; 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 thereunder, as they may be amended from time to time.
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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 AXA Asset Management Partenaires, a
company incorporated in France 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 property 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;
(c) The Trust's Registration Statement on Form N-lA 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;
(d) 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
(e) 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 Fund. In the performance of its
duties, Sub-Adviser will
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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.
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 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 Rules and Regulations of the SEC 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 Funds 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 SubAdviser'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
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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, SEI Financial Services Company or
any affiliated person of either the Trust, Adviser, 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 with
representatives of Adviser and the Board of Trustees the management of
the Fund, including, without limitation, review of the general
investment strategy of the 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 3la-1 under the '40
Act and wilt 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 not inconsistent
with the fiduciary duties 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 duty 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.
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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 in Schedule B.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 3la-3
under the '40 Act, Sub-Adviser 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. Sub-Adviser
further agrees to preserve for the periods prescribed by Rule 3la-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 3la-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 4.
6. EXPENSES. During the terms 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.
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, 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
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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 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 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 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, 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 Funds at any time, without the payment of any penalty, on sixty (60) day's
written notice by the Adviser to Sub-Adviser to the other party. 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.)
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:
13.1 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 five
business days (or such
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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 shall
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.
000 Xxxxxxx Xxxxxx
Post Office Xxx 00000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, President
To the Sub-Adviser at:
AXA Asset Management Partenaires
00, Xxxxxx xx Xx Xxxxxx Xxxxx
Xxxxx, 00000, Xxxxxx
Attention: Xxxxx X. Xxxxx
Chief Executive Officer
To the Trust or the Fund at:
HighMark Funds
c/o SEI Fund Resources
Xxx Xxxxxxx Xxxxxx Xxxxx
Xxxx, Xxxxxxxxxxxx 00000
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
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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.
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.
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HIGHMARK CAPITAL MANAGEMENT, INC. AXA ASSET MANAGEMENT PARTENAIRES
By:__________________________ By:_______________________________
Name:________________________ Name:____________________________
Title:_______________________ Title:_____________________________
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SCHEDULE A
HIGHMARK INTERNATIONAL EQUITY FUND
Advisory Fee: 95 b.p.
Sub-Advisory Fee: 50 b.p.
The Sub-Advisory fee shall be payable out of the Advisory fee.
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SCHEDULE B
SUB-ADVISER PERFORMANCE STANDARDS
Outperform the MSCI Europe, Australia, Far East Index ("MSCI EAFE
Index")* and perform in the top 40% of non-U.S. equity mutual fund universe
(MSCI EAFE benchmark) as measured by Lipper Analytical Services.
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.
* The MSCI EAFE Index is an arithmetic, market value-weighted average of the
performance of over 900 securities listed on the stock exchanges of the
following countries in Europe, Australia, and the Far East: Australia, Austria,
Belgium, Denmark, Finland, France, Hong Kong, Ireland, Italy, Japan, Malaysia,
Netherlands, New Zealand. The index is calculated on a total return basis in
U.S. dollars, which includes reinvestment of gross dividends before deduction of
withholding taxes.
