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EXHIBIT 99(d)(22)
June ___, 2001
Xxxxxxxx & Xxxxxxx, Inc.
000 X. Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR VALUE 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 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, 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
JUNE ___, 2001
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 from time to time, 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
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 objectives, 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; the By-laws; the Fund's 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 the portion of the
portfolio of the Fund 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 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
JUNE ___, 2001
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 assets
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 the net
asset value of the Fund is computed daily by the Fund's custodian, 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 assets 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 the
Fund's custodian, on the last business day of each month within the
quarter. If the determination of the value of net assets 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 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.
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.
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.
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.
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
JUNE ___, 2001
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.
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.
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 June ___, 2003 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,
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
JUNE ___, 2001
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 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 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, subject however, to such exemptions as may be granted by
the Securities and Exchange Commission by any rule, regulation or
order.
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
JUNE ___, 2001
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:
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Xxxxx X. Xxxxxxxx, President
HARBOR CAPITAL ADVISORS, INC.
By:
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Xxxxxxxxx X. Xxxxxxx, Senior Vice President
The foregoing Agreement is hereby accepted as of the date thereof.
XXXXXXXX & XXXXXXX, INC.
By:
----------------------------------------------
Xxxxx X. Xxxxxxx, President
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XXXXXXXX & XXXXXXX, INC.
HARBOR VALUE FUND
JUNE ___, 2001
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 of the Fund at the close of the
last business day of each month within the quarter managed by you 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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