EXHIBIT 99.d(34)
December 1, 2005
Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
FORM OF INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR REAL RETURN (INFLATION PROTECTED) 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 the Harbor Real Return (Inflation
Protected) 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 (the "Investment Advisers Act").
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 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 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.
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
HARBOR REAL RETURN (INFLATION PROTECTED) FUND
DECEMBER 1, 2005
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 objectives 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 financial instruments shall be purchased for such portion
of the Fund's assets, what financial instruments 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 to the investment objectives,
policies and restrictions 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 financial instruments 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; the By-Laws; the Fund's written investment objectives and
policies; the 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 Investment Advisers Act and all rules and
regulations thereunder, the requirements for qualification of the Fund as
a regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended (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.
You shall maintain written compliance policies and procedures that you
reasonably believe are reasonably designed to prevent yourself and, as a
result, the Fund from violating applicable federal securities laws
relating to that portion of the Fund's assets allocated to you. You agree
to provide the Trust and the Adviser with such reports and certifications
and with such access to your officers and employees that the Trust or
Adviser may reasonably request for the purpose of assessing the adequacy
of your compliance policies and procedures. You agree to notify the
Adviser promptly upon detection of any breach of any of the Fund's
policies, guidelines or procedures and of any violation of any applicable
law or regulation, including the Investment Company Act and Subchapter M
of the Code, relating to that portion of the Fund's assets allocated to
you. You also agree to notify us promptly upon detection of any material
violations of your compliance policies and procedures that relate to the
Fund or your activities as an investment adviser generally, such as when
the violation could be considered material to your advisory clients.
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
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HARBOR REAL RETURN (INFLATION PROTECTED) FUND
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maintained by you, provided that you may retain a copy as required for
regulatory recordkeeping purposes.
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 Trustees and the Trust's
or Adviser's officers 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.
Nothing in this Agreement shall limit or restrict the right of any of your
directors, officers and employees 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.
You shall not be responsible for taking any action to vote proxies for
publicly traded equity securities. Notwithstanding the foregoing, you may
receive information concerning assets held in the Account, including
without limitation, conversion rights, subscription rights, warrants,
options, pendency of calls, maturities of securities, expiration of
rights, tender or exchange offers, or any other right or power requiring a
discretionary decision by you. With respect to assets other than publicly
traded equity securities, you shall, when in the best interests of the
Fund exercise such rights and/ or powers. Additionally, you may receive
and take action with respect to debt restructurings, reorganizations,
refinancings or similar events with respect to securities or loans held in
the Fund's portfolio, and may receive and take action with respect to
proxies for private equity securities.
Your investment authority shall include the authority to purchase, sell,
cover open positions, and generally to deal in financial futures contracts
and options thereon, in accordance with the SAI and Prospectus for the
Trust. The Adviser will: (i) open and maintain brokerage accounts for
financial futures and options (such accounts hereinafter referred to as
"brokerage accounts") on behalf of and in the name of the Fund and (ii)
execute for and on behalf of the Fund, standard customer agreements with a
broker or brokers. You may, using such of the securities and other
property in the Fund's portfolio as you deem necessary or desirable,
direct the custodian to deposit on behalf of the Fund's portfolio,
original and maintenance brokerage deposits and otherwise direct payments
of cash, cash equivalents and securities and other property into such
brokerage accounts and to such brokers as you deem desirable or
appropriate. You have delivered to us a copy of your Disclosure Document,
as amended, dated June 1, 2005, on file with the Commodity Futures Trading
Commission. We hereby acknowledge receipt of such copy.
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 to you a fee, as set forth in
Schedule A attached hereto, quarterly in arrears beginning in [DATE],
based on a percentage of the average daily net asset value of the
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HARBOR REAL RETURN (INFLATION PROTECTED) FUND
DECEMBER 1, 2005
portion of the Fund that you managed. Consistent with the provisions of
Rule 22c-1 under the Investment Company Act, the net asset value of the
Fund is computed in the manner specified in the Fund's Prospectus and
Statement of Additional Information for the computation of the net assets
by the Fund's custodian. If determination of the value of the net assets
is suspended for any particular business day, 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 the
Fund's custodian 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.
In the event the Subadviser adopts a new, lower fee schedule for any other
client where: (1) the assets under management for such client are in a
portfolio that is substantially similar in investment style and investment
services as those of the Fund; and (2) total assets under management for
such client are less than or equal to the market value of the assets under
management of the Fund, such new fee schedule shall become applicable to
the Fund for the remaining term of the Agreement as of the effective date
of such new fee schedule upon thirty (30) days written notice thereof by
the Subadviser to the Fund.
Your services to the Fund pursuant to the 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.
5. AVOIDANCE OF INCONSISTENT POSITION AND BROKERAGE. In connection with
purchases or sales of portfolio financial instruments for the account of
the portion of the Fund allocated to you, neither you nor any of your
directors, officers, employees or affiliates will act as a principal or
agent or receive any compensation in connection with the purchase or sale
of investment financial instruments by the Fund, other than the
compensation provided for in this Agreement, except as permitted by the
Investment Company Act and approved by the Board of Trustees. You or your
agent shall arrange for the placing of all orders for the purchase and
sale of portfolio financial instruments 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
financial instruments 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.
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
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PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
HARBOR REAL RETURN (INFLATION PROTECTED) FUND
DECEMBER 1, 2005
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.
Provided the investment objectives of the Fund are adhered to, and such
aggregation is in the best interests of the Fund, you may aggregate sales
and purchase orders of securities held for the Fund with similar orders
being made simultaneously for other accounts managed by you or with
accounts of your affiliates, if in your reasonable judgment, such
aggregation is equitable and consistent with your fiduciary obligation to
the Fund and shall result in an overall economic benefit to the Fund,
taking into consideration the advantageous selling or purchase price,
brokerage commission and other expenses. In accounting for such aggregated
order price, commission and other expenses shall be averaged on a per bond
or share basis daily. The Fund acknowledges that the determination of such
economic benefit to the Fund by you is subjective and represents your
evaluation that the Fund is benefited by relatively better purchase or
sales prices, lower commission expenses and beneficial timing of
transactions or a combination of these and other factors. 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 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.
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 or gross
negligence or from reckless disregard by you of your obligations and
duties under this Agreement.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain in
force until December 1, 2007 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 30 days' written notice, be terminated at
any time without penalties charged to the Fund, 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 will terminate immediately upon 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 Section 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
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PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
HARBOR REAL RETURN (INFLATION PROTECTED) FUND
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whom enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of this Agreement shall be effective
until approved 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.
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.
11. PROHIBITION ON CONSULTING WITH OTHER SUBADVISERS. You are prohibited from
consulting with any other subadviser to Harbor Fund,. if any, or the
subadviser to any other investment company (or separate series of an
investment company) managed by the Adviser concerning Harbor Fund's
transactions in securities or other assets, except for the purpose of
complying with the conditions of Rule 12d3-1 (a) and (b) under the
Investment Company Act.
12. 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 or the Adviser or is
otherwise required by law or regulatory authority. You shall not use your
knowledge of non-public information regarding the Fund's portfolio as a
basis to place or recommend any securities transactions for your own
benefit to the detriment of the Fund.
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PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
HARBOR REAL RETURN (INFLATION PROTECTED) FUND
DECEMBER 1, 2005
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 REAL RETURN (INFLATION
PROTECTED) FUND
By: ______________________________
Xxxxx X. Xxx Xxxxxx, President
HARBOR CAPITAL ADVISORS, INC.
By: _______________________________
Xxxxxxx X. XxXxxx, Executive Vice
President
The foregoing Agreement is hereby accepted as of the date thereof.
PACIFIC INVESTMENT MANAGEMENT
COMPANY LLC
By: ________________________________
Name: ______________________________
Title: _____________________________
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