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EXHIBIT 5(p)
November 1, 1993
Xxxxxxxx & Xxxxxxx, Inc.
000 X. Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR VALUE 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 Value 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.
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.
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
NOVEMBER 1, 1993
2. ADVISORY SERVICES. You will regularly provide the Fund with advice
concerning the investment management of that portion of the Fund's
portfolio which the Board of Trustees determines to allocate to you from
time to time, 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 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, 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 subinvestment
adviser.
The Adviser shall provide you with written statements of the Declaration
of Trust; By-laws; 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 in
accordance with and will ensure that the portion of the portfolio of the
Fund allocated to you conforms with the Investment Company Act and all
rules and regulations thereunder, the requirements for qualification as a
regulated investment company of 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
the light of current and prospective economic and market conditions.
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.
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
NOVEMBER 1, 1993
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 Fund 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, and is consistent with the provisions of Rule 22c-1 under the
Investment Company Act. Your fee will be based on the average of the net
asset values of the Fund, 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. Such offer shall
be made as soon as it is practicable after a more favorable asset based
fee agreement is provided for any other investment clients.
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.
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
NOVEMBER 1, 1993
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 will not be liable for any
loss sustained by reason of the adoption of any investment policy or the
purchase, sale or retention of any security on your recommendation,
whether or not such recommendation shall have been based upon your own
investigation and research or upon investigation and research made by any
other individual, firm or corporation, if such recommendation shall have
been made, and such other individual, firm or corporation shall have been
selected without gross negligence and in good faith; but nothing herein
contained will be construed to protect you against any liability to the
Adviser, the Trust, the Fund or its shareholders by reason of your gross
negligence or bad faith or willful misfeasance in the performance of your
duties or by reason of your reckless disregard 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 Fund shall be deemed,
when acting within the scope of his employment by the Fund, to be acting
in such employment solely for the Fund and not as your employee or agent.
The Adviser shall indemnify you for any damages and related expenses
incurred by you as a result of the performance of your duties hereunder,
unless the same shall result from behavior found by a final judicial
determination to constitute wilful misfeasance, bad faith, gross
negligence or a reckless disregard of your obligations, as specified
above.
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, 1995 and from year to year thereafter, but only
so long as such continuance, and the
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
NOVEMBER 1, 1993
continuance of the Adviser as investment adviser of the Fund, is
specifically approved at least annually by the vote of a majority of
the Trustees who are not interested persons of you or the Adviser or the
Trust, cast in person at a meeting called for the purpose of voting on
such approval and by a vote of the Board of Trustees or of a majority of
the outstanding voting securities of the Fund. The aforesaid requirement
that continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the Investment
Company Act 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, 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.
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.
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
NOVEMBER 1, 1993
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 VALUE 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
XXXXXXXX & XXXXXXX, INC.
By /s/ Xxxxx Xxxxxxx
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Title: President
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUNDY
NOVEMBER 1, 1993
SCHEDULE A
You will receive an advisory fee equal on an annual basis to .30% of the
portion of the Fund's average actual net asset value managed by Xxxxxxxx &
Xxxxxxx up to $5 million; and .25% on the next $10 million of such assets; and
.20% on such assets in excess of $15 million, at the close of the last business
day of each month within the quarter. In the event that this Agreement
terminates during any portion of a year, the fee due to you shall be prorated
based upon the number of days the Agreement was in effect.
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