EXHIBIT 99d(16)
FORM OF
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR INTERNATIONAL GROWTH 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 International 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, 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.
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 as they may be amended
in consultation with you, 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 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 as they may
be amended in consultation with you, 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 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 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 reasonable intervals from time to time 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 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 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 by the Fund's
custodian, on the last business day of each month within the quarter. If
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.
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 execution.
Therefore, you are authorized to place orders for the purchase and sale
of securities for the Fund with such 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 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 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 the originals of any of such records required to be
maintained by you, provided that you may retain a copy.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain
in force until March 1, 2006 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 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 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 and the responsibility of the Adviser 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. SUBADVISER AFFILIATES. You are prohibited from consulting with all
affiliated subadvisers of Harbor Fund with respect to securities and
asset transactions of Harbor International Growth Fund.
