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EXHIBIT 5t
May 2, 1997
Emerging Growth Advisors, Inc.
000 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR GROWTH FUND)
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Dear Sirs:
Harbor Capital Advisors, Inc. (the "Adviser"), a Delaware corporation, with its
principal offices at One XxxXxxx, Xxxxxx, Xxxx 00000, is the investment adviser
to Harbor Fund (the "Trust") on behalf of Harbor Growth Fund (the "Fund"). 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 the Fund, as established
pursuant to a written instrument executed by the Trustees of the Trust. The
Trust is an open-end, management investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
Pursuant to authority granted the Adviser by the Trust's Trustees, the Adviser
has selected you to act as a sub-investment adviser of the Fund and to provide
certain other services, as more fully set forth below. You are willing to act
as such a sub-investment adviser and to perform such services under the terms
and conditions hereinafter set forth, and you represent and warrant that you
are an investment adviser registered under the Investment Advisers Act of 1940,
as amended. Accordingly, the Adviser and the Trust on behalf of the Fund agree
with you as follows:
1. DELIVERY OF FUND DOCUMENTS. The Adviser has furnished you with copies,
properly certified or authenticated, of each of the following:
(A) Agreement and Declaration of Trust of the Trust, as amended
and restated from time to time, and the Certificate of Trust which
was filed with the Delaware Secretary of State dated June 8, 1993
(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 the Adviser as
investment adviser and you as a sub-investment adviser and approving
the form of this Agreement.
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EMERGING GROWTH ADVISORS, INC.
HARBOR GROWTH FUND
MAY 2, 1997
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The Adviser 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. ADVISORY SERVICES. You will regularly provide the Fund with advice
concerning the investment management of that portion of the Fund's assets
that are allocated to you, which advice shall be consistent with the
investment objective and policies of the Fund as set forth in the Fund's
Prospectus and Statement of Additional Information and any investment
guidelines or other instructions received in writing from the Adviser.
The Board of Trustees or the Adviser may, from time to time, make
additions to and withdrawals from the assets of the Fund allocated to
you. You will determine what securities shall be purchased for such
portion of the Fund's assets, what securities shall be held or sold by
such portions of the Fund's assets, and what portion of such assets shall
be held uninvested, subject always to the provisions of the Trust's
Declaration of Trust and By-Laws and the Investment Company Act and to
the investment objective, policies and restrictions (including, without
limitation, the requirements of Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code") for qualification as a regulated
investment company) of the Fund, as each of the same shall be from time
to time in effect as set forth in the Fund's Prospectus and Statement of
Additional Information, or any investment guidelines or other
instructions received in writing from the Adviser, and subject, further,
to such policies and instructions as the Board of Trustees may from time
to time establish and deliver to you. In accordance with paragraph 5,
you or your agent shall arrange for the placing of all orders for the
purchase and sale of portfolio securities with brokers or dealers
selected by you for that portion of the Fund's assets for which you serve
as sub-investment adviser.
The Adviser shall provide you with written statements of the Declaration
of Trust; By-Laws; the Fund's written investment objective and policies;
Prospectus and Statement of Additional Information and instructions, as
in effect from time to time; and you shall have no responsibility for
actions taken in reliance on any such documents. You will conform your
conduct to and will ensure that your management of the portion of the
Fund's assets allocated to you complies with the Investment Company Act
and all rules and regulations thereunder, the requirements for
qualification of the Fund as a regulated investment company under
Subchapter M of the Code, all other applicable federal and state laws and
regulations, and with the provisions of the Fund's Registration Statement
as amended or supplemented under the Securities Act of 1933, as amended,
and the Investment Company Act.
In the performance of your duties hereunder, you are and shall be an
independent contractor and unless otherwise expressly provided herein or
otherwise authorized in writing, shall have no authority to act for or
represent the Trust or the Fund in any way or otherwise be deemed to be
an agent of the Trust or the Fund or of the Adviser. You will make your
officers and employees available to meet with the Trust's officers and
Trustees at least quarterly on due notice to review the investments and
investment program of the portion of the Fund's assets allocated to you
in light of current and prospective economic and market conditions.
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EMERGING GROWTH ADVISORS, INC.
HARBOR GROWTH FUND
MAY 2, 1997
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Nothing in this Agreement shall limit or restrict the right of any of
your directors, officers and employees who may also be a trustee, officer
or employee of the Trust to engage in any other business or to devote his
or her time and attention in part to the management or other
aspects of any business, whether of a similar or a dissimilar nature, nor
limit or restrict your right to engage in any other business or to render
service of any kind to any other corporation, firm, individual or
association, except as specifically prescribed in Section 4.
3. ALLOCATION OF CHARGES AND EXPENSES. You will bear your own costs of
providing services hereunder. Other than as herein specifically
indicated, you will not be required to pay any expenses of the Fund.
4. COMPENSATION OF THE SUBADVISER. For all investment management services
to be rendered hereunder, the Adviser will pay a fee, as set forth in
Schedule A attached hereto, quarterly in April, July, October and
January, based on a percentage of the average of the actual net asset
values of the portion of the Fund that you managed at the close of the
last business day of each month within the quarter. Determination of net
asset value of the Fund is computed daily by the Fund's custodian, State
Street Bank and Trust Company. Your fee will be based on the average of
the net asset values of the portion of the Fund that you manage, computed
in the manner specified in the Fund's Prospectus and Statement of
Additional Information for the computation of the net assets of the Fund
by State Street Bank and Trust Company, on the last business day of each
month within the quarter. If the determination of net asset value is
suspended for the last business day of the month, then for the purposes
of this paragraph 4, the value of the net assets of the Fund as last
determined shall be deemed to be the value of the net assets. If State
Street Bank and Trust Company determines the value of the net assets of
the Fund's 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 4.
You will offer to the Adviser any more favorable asset based fee
agreements that are provided to other investment clients, except that for
any such agreements in effect upon the signing of this Agreement. Such
offer shall be made as soon as practicable after a more favorable asset
based fee agreement is provided for any other investment clients. Should
more favorable asset based fee agreements be offered to others, the
Adviser will be notified within (30) business days after such new asset
based fee agreements are established.
Your services to the Fund pursuant to this Agreement are deemed to be
exclusive for a period of seven (7) years from the date of this Agreement
and it is understood that you may not render investment advice,
management and other services to any other registered investment company.
The provisions set forth in the preceding sentence will survive
termination of this Agreement except in the event this Agreement is
assigned by or otherwise terminated by the Adviser or the Trust on behalf
of the Fund.
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EMERGING GROWTH ADVISORS, INC.
HARBOR GROWTH FUND
MAY 2, 1997
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5. AVOIDANCE OF INCONSISTENT POSITION AND BROKERAGE. In connection with
purchases or sales of portfolio securities for the account of the portion
of the Fund allocated to you, neither you nor any of your directors,
officers or employees will act as a principal or agent or receive any
compensation in connection with the purchase or sale of investment
securities by the Fund, other than the compensation provided for in this
Agreement. You or your agent shall arrange for the placing of all orders
for the purchase and sale of portfolio securities for the portion of the
Fund's account allocated to you 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 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 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
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, except as specifically prescribed in
Section 4.
You will advise the Trust's custodian and the Adviser on a prompt basis
of each purchase and sale of a portfolio security specifying the name of
the issuer, the description and amount or number of shares of the
security purchased, the market price, commission and gross or net price,
trade date, settlement date and identity of the effecting broker or
dealer and such other information as may be reasonably required. From
time to time as the Board of Trustees or the Adviser may reasonably
request, you will furnish to the Trust's officers and to each of its
Trustees reports on portfolio transactions and reports on issues of
securities held in the portfolio, all in such detail as the Trust or the
Adviser may reasonably request.
On occasions when you deem the purchase or sale of a security to be in
the best interest of the Fund as well as other of your clients, you, to
the extent permitted by applicable laws and regulations, may, but shall
be under no obligation to, aggregate the securities to be sold or
purchased 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, shall be made by you in the manner you consider to be the
most equitable and consistent with your fiduciary obligations to the Fund
and to such other clients.
6. LIMITATION OF LIABILITY OF SUBADVISER. You shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Fund
or the Adviser in
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EMERGING GROWTH ADVISORS, INC.
HARBOR GROWTH FUND
MAY 2, 1997
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connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on
your part or from reckless disregard by you of your obligations and
duties under this Agreement.
You shall keep the Fund's books and records to be maintained by you and
shall timely furnish to the Adviser all information relating to your
services hereunder needed by the Adviser to keep the other books and
records of the Fund required by Rule 31a-1 under the Investment Company
Act. You agree that all records which you maintain for the Fund are the
property of the Fund and you shall surrender promptly and without any
charge to the Fund any of such records required to be maintained by you.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain
in force until March 17, 1999 and from year to year thereafter, but only
so long as such continuance, and the continuance of the Adviser as
investment adviser of the Fund, is specifically approved at least
annually in the manner prescribed in the Investment Company Act and the
rules and regulations thereunder, subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission by any rule,
regulation or order. 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, by the Adviser, or by you. This Agreement shall
automatically terminate in the event of its assignment or the assignment
of the investment advisory agreement between the Adviser and the Trust,
on behalf of the Fund. In interpreting the provisions of this Agreement,
the definitions contained in Sections 2(a) of the Investment Company Act
(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,
regulations or order.
8. 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 whom enforcement of the
change, waiver, discharge or termination is sought, and no material
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 the Adviser or you or of the Trust,
cast in person at a meeting called for the purpose of voting on such
approval.
It shall be your responsibility to furnish to the Board of Trustees such
information as may reasonably be necessary in order for the Trustees to
evaluate this Agreement or any proposed amendments thereto for the
purposes of casting a vote pursuant to paragraphs 7 or 8 hereof.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
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EMERGING GROWTH ADVISORS, INC.
HARBOR GROWTH FUND
MAY 2, 1997
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10. 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 name "Harbor Fund" is the designation of
the Trustees for the time being under the Declaration of Trust 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 or the Fund as neither the Trustees, officers, agents
or shareholders assume any personal liability for obligations entered into
on behalf of the Trust or the Fund. No series of the Trust shall be
liable for any claims against any other series or assets of the Trust.
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.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return one such
counterpart to the Fund and the other such counterpart to the Adviser,
whereupon this letter shall become a binding contract.
HARBOR FUND
(ON BEHALF OF HARBOR GROWTH FUND)
By /s/ Xxxxxx X. Xxxxxx
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Title: President
HARBOR CAPITAL ADVISORS, INC.
By /s/ Xxxxxxxxx X. Xxxxxxx
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Title: Senior Vice President
EMERGING GROWTH ADVISORS, INC.
By /s/ Xxxxx X. Xxxxxx
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Title: President
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EMERGING GROWTH ADVISORS, INC.
HARBOR GROWTH FUND
MAY 2, 1997
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SCHEDULE A
You will receive an advisory fee equal on an annual basis to 1.00% of the
average actual net asset values of the Fund at the close of the last business
day of each month within the quarter up to $5 million; 0.75% on the next $20
million of such average actual net asset values; and 0.50% on such average
actual net asset values thereafter. The annual advisory fee paid by the
Adviser to you shall not be less than $10,000. In the event that this
Agreement terminates during any portion of year, the fee due to you shall be
prorated based upon the number of days the Agreement was in effect. For
purposes of determining the applicable fee rate and satisfying the minimum
payment, the assets of the Fund and the payments of the Adviser to you will be
combined with the assets and payment of the accounts of the Harbor Capital
Group Trust for Defined Benefits Plans f/k/a Xxxxx Illinois Master Retirement
Trust account that you manage.
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