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EXHIBIT 5(l)
June 25, 1993
Xxxxxxxx Associates Capital Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR CAPITAL APPRECIATION FUND)
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 Capital
Appreciation 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. Pursuant to authority granted the Adviser by the
Trust's Trustees and pursuant to the procisions of the Investment Advisory
Agreement dated June 25, 1993, between the Advisor and the Trust, 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 and you are willing to
act as such a sub-investment adviser and to perform such services under the
terms and conditions hereinafter set forth. 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) Declaration of Trust of the Trust, filed with the Secretary
of the State of Delaware dated June 8, 1993, as amended from time to
time (the "Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(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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XXXXXXXX ASSOCIATES CAPITAL CORP.
HARBOR CAPITAL APPRECIATION FUND
JUNE 25, 1993
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 the Fund's portfolio, which
advice shall be consistent with the investment objective and policies of
the Fund. You will determine what securities shall be purchased for the
Fund's assets, what securities shall be held or sold by the Fund, 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 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. 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 for the Fund's account with brokers or dealers
selected by you. The Adviser shall provide you with written statements
of such Declaration; By-laws; investment objectives and policies; 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
shall have no obligations or duties whatsoever to ensure compliance with
any limitation relating to the amount of (i) the Fund's aggregate assets
which may be invested in any category of investment or in a particular
manner or (ii) short-term or other category of gain that may be realized
by the Fund, in the aggregate, in any given period.
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 Fund in the light of current and prospective
economic and market conditions.
3. ALLOCATION OF CHARGES AND EXPENSES. You will bear your own costs of
providing services hereunder. Except as aforesaid, 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
Appendix 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. The 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 of 1940. Your
fee will be
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XXXXXXXX ASSOCIATES CAPITAL CORP.
HARBOR CAPITAL APPRECIATION FUND
JUNE 25, 1993
based on the average of the net asset values of the Fund, computed 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.
5. AVOIDANCE OF INCONSISTENT POSITION AND BROKERAGE. 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
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 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 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.
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. From time to time as the Board of Trustees of the Trust 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.
6. LIMITATION OF LIABILITY. 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
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XXXXXXXX ASSOCIATES CAPITAL CORP.
HARBOR CAPITAL APPRECIATION FUND
JUNE 25, 1993
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 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 willful
misfeasance, bad faith, gross negligence or a reckless disregard of your
obligations, as specified above.
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 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 of the Fund, 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 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, by the Adviser, 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 Sections 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, 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 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 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 such Trustees to
evaluate this Agreement or any proposed amendments thereto for the
purposes of casting a vote pursuant to paragraphs 7 or 8 hereof.
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XXXXXXXX ASSOCIATES CAPITAL CORP.
HARBOR CAPITAL APPRECIATION FUND
JUNE 25, 1993
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 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
The name "Harbor Fund" 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.
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.
YOURS VERY TRULY,
HARBOR 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
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXXX ASSOCIATES CAPITAL CORP.
By /s/ Xxxx X. Xxxxx
-----------------------------------
Title: President
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XXXXXXXX ASSOCIATES CAPITAL CORP.
HARBOR CAPITAL APPRECIATION FUND
JUNE 25, 1993
SCHEDULE A
You will receive an advisory fee equal on an annual basis to .75% of the Fund's
average actual net assets, as defined in paragraph 4 of the Agreement, up to
$10 million; .50% on the next $30; .35% on the next $25 million of such
assets; .25% on the next $335 million of such assets; .22% on the next $600
million of such assets; and .20% on assets in excess of $1 billion. The Adviser
will pay you a fee each year which is not less than $125,000. 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 payments of the accounts of the Xxxxx-Illinois Master Retirement
Trust that you manage.
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