EXHIBIT 99.d(41)
May 1, 2007
Harbor Capital Advisors, Inc.
Xxx XxxXxxx
Xxxxxx, Xxxx 00000
INVESTMENT ADVISORY AGREEMENT
(HARBOR SMALL TO MID CAP VALUE FUND)
Dear Sirs:
Harbor Funds (the "Trust") has been organized under the laws of Delaware to
engage in the business of an investment company. The shares of beneficial
interest of the Trust ("Shares") are divided into multiple series, including
Harbor Small to Mid Cap Value Fund (the "Fund"), as established pursuant to a
written instrument executed by the Trustees of the Trust. Series may be
terminated, and additional series established, from time to time by action of
the Trustees. The Trust on behalf of the Fund has selected you to act as the
investment adviser of the Fund and to provide certain other services, as more
fully set forth below, and you are willing to act as such investment adviser and
to perform such services under the terms and conditions hereinafter set forth.
Accordingly, the Trust agrees with you as follows:
1. DELIVERY OF FUND DOCUMENTS: The Trust has furnished you with copies
properly certified or authenticated of each of the following:
(a) Agreement and Declaration of Trust of the Trust, as in effect
on the date hereof (the "Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof (the
"By-Laws").
(c) Resolutions of the Trustees selecting you as investment
adviser and approving the form of this Agreement.
The Trust will furnish you from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, including future resolutions of the Trustees approving the
continuance of the items listed in (c) above.
2. NAME OF FUND: The Trust may use the name "Harbor Funds" or any name
derived from the name "Harbor Capital Advisors" in connection with the
Fund only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect, including any similar agreement
with any organization which shall have succeeded to your business as
investment adviser. At such time as such an agreement shall no longer
be in effect, the Trust (to the extent that it lawfully can) will cause
the Fund to cease to use such a name or any other name indicating
INVESTMENT ADVISORY AGREEMENT
HARBOR SMALL TO MID CAP VALUE FUND
MAY 1, 2007
that it is advised by or otherwise connected with you or any
organization which shall have so succeeded to your business.
3. SUBADVISERS: You may engage one or more investment advisers which are
either registered as such or specifically exempt from registration
under the Investment Advisers Act of 1940, as amended, to act as
subadvisers to provide with respect to the Fund certain services set
forth in Paragraphs 4 and 7 hereof, all as shall be set forth in a
written contract to which the Trust, on behalf of the Fund, and you
shall be parties, which contract shall be subject to approval in
accordance with the requirements of the Investment Company Act of 1940,
as amended, and as such requirements may be modified by rule,
regulation or order of the Securities and Exchange Commission.
4. ADVISORY SERVICES: You will regularly provide the Fund with investment
research, advice and supervision and will furnish continuously an
investment program for the Fund consistent with the investment
objectives and policies of the Fund. You will determine what securities
shall be purchased for the Fund, what securities shall be held or sold
by the Fund, and what portion of the Fund's assets shall be held
uninvested, subject always to the provisions of the Trust's Declaration
of Trust and By-Laws and of the Investment Company Act of 1940, as
amended, and to the investment objectives, policies and restrictions of
the Fund, as each of the same shall be from time to time in effect, and
subject, further to such policies and instructions as the Board of
Trustees may from time to time establish. You shall advise and assist
the officers of the Trust in taking such steps as are necessary or
appropriate to carry out the decisions of the Board of Trustees and the
appropriate committees of the Board of Trustees regarding the conduct
of the business of the Trust insofar as it relates to the Fund.
5. ALLOCATION OF CHARGES AND EXPENSES: You will pay the compensation and
expenses of all officers and executive employees of the Trust and will
make available, without expense to the Trust, the services of such of
your partners and employees as may duly be elected officers or Trustees
of the Trust, subject to their individual consent to serve and to any
limitations imposed by law. You will pay the Trust's office rent and
will provide investment advisory, research and statistical facilities
and all clerical services relating to research, statistical and
investment work. You will not be required to pay any expenses of the
Trust other than those specifically allocated to you in this paragraph
5. In particular, but without limiting the generality of the foregoing,
you will not be required to pay: organization expenses of the Trust;
clerical salaries; fees and expenses incurred by the Trust in
connection with membership in investment company organizations;
brokers' commissions; payment for portfolio pricing services to a
pricing agent, if any; legal, auditing or accounting expenses; taxes or
governmental fees; the fees and expenses of the transfer agent of the
Trust; the cost of preparing share certificates or any other expenses,
including clerical expenses of issue, redemption or repurchase of
shares of beneficial interest of the Trust; the expenses of and fees
for registering or qualifying securities for sale and of maintaining
the registration of the Trust and registering the Trust as a broker or
a dealer; the fees and expenses of Trustees of the Trust who are not
affiliated with you; the cost of preparing and distributing reports and
notices to shareholders; the fees or disbursements of custodians of the
Trust's assets, including expenses incurred in the performance of any
obligations enumerated by the Declaration of Trust or By-Laws of the
Trust insofar as they govern agreements with any such custodian; or
litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Trust's business.
You shall not be required to pay expenses of activities which are
primarily intended to result in sales of Shares of the Trust if and to
the extent that (i) such expenses are required to be borne by a
principal underwriter which acts as the
2
INVESTMENT ADVISORY AGREEMENT
HARBOR SMALL TO MID CAP VALUE FUND
MAY 1, 2007
distributor of the Trust's Shares pursuant to an underwriting agreement
which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Trust on behalf of the Fund shall have adopted a
plan in conformity with Rule 12b-1 under the Investment Company Act of
1940, as amended, providing that the Trust (or some other party) shall
assume some or all of such expenses. You shall be required to pay the
foregoing expenses that are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted
to be paid by the Trust (or some other party) pursuant to such a plan.
6. COMPENSATION OF THE ADVISER:
(a) For all services to be rendered and payments made as provided
in paragraphs 4 and 5 hereof, the Trust on behalf of the Fund
will pay you on the last day of each month a fee equal to the
sum of 0.75% per annum of the average daily net assets of the
Fund, as defined below. The "average daily net assets" of the
Fund are defined as the average of the values placed on the
net assets as of 4:00 P.M. (New York time), on each day on
which the net asset value of the Fund's portfolio is
determined consistent with the provisions of Rule 22c-1 under
the Investment Company Act of 1940 or, if the Fund lawfully
determines the value of the net assets of its portfolio as of
some other time on each business day, as of such time. The
value of the net assets of the Fund shall be determined
pursuant to the applicable provisions of the Declaration of
Trust of the Trust. If, pursuant to such provisions, the
determination of net asset value is suspended for any
particular business day, then for the purposes of this
paragraph 6, the value of the net assets of the Fund as last
determined shall be deemed to be the value of the net assets
as of the close of the New York Stock Exchange, or as of such
other time as the value of the net assets of the Fund's
portfolio may lawfully be determined, on that day. If the
determination of the net asset value of the Shares of the Fund
has been suspended pursuant to the Declaration of Trust of the
Trust for a period including such month, your compensation
payable at the end of such month shall be computed on the
basis of the value of the net assets of the Fund as last
determined (whether during or prior to such month). If the
Fund determines the value of the net assets of its portfolio
more than once on any day, the last such determination thereof
on that day shall be deemed to be the sole determination
thereof on that day for the purposes of this paragraph 6.
(b) You agree that your compensation for any month shall include,
and thus be reduced by, the amount, if any, which you pay to
any subadviser engaged pursuant to Paragraph 3 hereof. You
agree that the Trust on behalf of the Fund shall not be
required to pay any fee to any such subadviser.
7. AVOIDANCE OF INCONSISTENT POSITION: In connection with purchases or
sales of portfolio securities for the account of the Fund, neither you
nor any of your partners, directors, officers or employees nor any
subadviser engaged by you pursuant to paragraph 3 hereof will act as a
principal or agent or receive any commission. You or your agent shall
arrange for the placing of all orders for the purchase and sale of
portfolio securities for the Fund's account with brokers or dealers
selected by you. In the selection of such brokers or dealers and the
placing of such orders, you are directed at all times to seek for the
Fund the most favorable execution and net price available. It is also
understood that it is desirable for the Fund that you have access to
supplemental investment and market research and security and economic
analyses provided by certain 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
3
INVESTMENT ADVISORY AGREEMENT
HARBOR SMALL TO MID CAP VALUE FUND
MAY 1, 2007
and efficient execution. Therefore, you are authorized to place orders
for the purchase and sale of securities for the Fund with such certain
brokers, subject to review by the Trust's 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
you in connection with your services to other clients. If any occasion
should arise in which you give any advice to clients of yours
concerning the Shares of the Fund, you will act solely as investment
counsel for such clients and not in any way on behalf of the Fund. Your
services to the Fund pursuant to this Agreement are not to be deemed to
be exclusive and it is understood that you may render investment
advice, management and other services to others.
8. LIMITATION OF LIABILITY OF ADVISER: You shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters to which this Agreement relates,
except a loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from
reckless disregard by you of your obligations and duties under this
Agreement. Any person, even though also employed by you, who may be or
become an employee of and paid by the Trust or the Fund shall be
deemed, when acting within the scope of his employment by the Trust, to
be acting in such employment solely for the Trust and not as your
employee or agent.
9. DURATION AND TERMINATION OF THIS AGREEMENT: This Agreement shall remain
in force until May 1, 2009 and from year to year thereafter, but only
so long as such continuance is specifically approved at least annually
in the manner prescribed in the Investment Company Act of 1940 and the
rules and regulations thereunder. This Agreement may, on 60 days
written notice, be terminated at any time without the payment of any
penalty, by the Board of Trustees, by vote of a majority of the
outstanding voting securities of the Fund, or by you. This Agreement
shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Agreement, the definitions
contained in Section 2(a) of the Investment Company Act of 1940
(particularly the definitions of "interested person," "assignment" and
"majority of the outstanding voting securities"), as from time to time
amended, shall be applied, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission by any rule,
regulation or order.
10. AMENDMENT OF THIS AGREEMENT: No provisions 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, and no
amendment of this Agreement shall be effective until approved by vote
of the holders of a majority of the outstanding voting securities of
the Fund and by the Board of Trustees, including a majority of the
Trustees who are not interested persons of you or of the Trust, cast in
person at a meeting called for the purpose of voting on such approval.
11. GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
12. MISCELLANEOUS: It is understood and expressly stipulated that neither
the holders of shares of the Trust or the Fund nor the Trustees shall
be personally liable hereunder. 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. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
4
INVESTMENT ADVISORY AGREEMENT
HARBOR SMALL TO MID CAP VALUE FUND
MAY 1, 2007
The name "Harbor Funds" is the designation of the Trustees for the time
being under the Declaration of Trust dated June 8, 1993, as amended
from time to time, and all persons dealing with the Trust or the Fund
must look solely to the property of the Trust or the Fund for the
enforcement of any claims against the Trust as neither the Trustees,
officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust. No series of the Trust
shall be liable for any claims against any other series of the Trust.
13. CONFIDENTIALITY. You shall maintain all non-public information
regarding the Fund's portfolio, including the list of portfolio
securities held by the Fund, which you receive or have access to in the
course of performing your duties hereunder as strictly confidential.
You shall not disclose or disseminate such non-public information to
any third party unless such disclosure is approved in writing by the
Fund. You shall not use non-public information regarding the Fund's
portfolio as a basis to place or recommend any securities transactions
for yourself or any third party.
If you are in agreement with the foregoing, please sign the form of acceptance
on the accompanying counterpart of this letter and return such counterpart to
the Trust, whereupon this letter shall become a binding contract.
HARBOR FUNDS ON BEHALF OF
HARBOR SMALL TO MID CAP VALUE FUND
By:
---------------------------------------
Xxxxx X. Xxx Xxxxxx, President
The foregoing Agreement is hereby accepted as of the date thereof.
HARBOR CAPITAL ADVISORS, INC.
By:
-------------------------------------------
Xxxxxxx X. XxXxxx, Executive Vice President
5
