1
EXHIBIT 5(d)
June 1,1996
Harbor Capital Advisors, Inc.
One XxxXxxx
Xxxxxx, Xxxx 00000
INVESTMENT ADVISORY AGREEMENT
(HARBOR INTERNATIONAL FUND II)
____________________________________________
Dear Sirs:
Harbor 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 Harbor International
Fund II (the "Fund"), as established pursuant to a written
instrument executed by the Trustees of the Trust. Series may
be terminated, and additional series established, from time to
time by action of the Trustees. The Trust on behalf of the
Fund has selected you to act as the 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 investment
adviser and to perform such services under the terms and
conditions hereinafter set forth. Accordingly, the Trust agrees
with you as follows:
1. DELIVERY OF FUND DOCUMENTS: The Trust has furnished you
with copies properly certified or authenticated of each of
the following:
(a) Declaration of Trust of the Trust, filed with
the Delaware Secretary of the State, dated June 8,
1993, as amended from time to time (the "Declaration
of Trust").
(b) Establishment and Designation of Series of
Shares of Beneficial Interest, $.01 Par Value Per
Share, establishing the Fund.
(c) By-Laws of the Trust as in effect on the date
hereof.
(d) Resolutions of the Trustees selecting you as
investment adviser and approving the form of this
Agreement.
2
INVESTMENT ADVISORY AGREEMENT
HARBOR INTERNATIONAL FUND II
JUNE 1,1996
The Trust 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 (d) above.
2. NAME OF FUND: The Trust may use the name "Harbor Fund" or any name
derived from the name "Harbor Capital Advisors" in connection with the
Fund only for so long as this Agreement or any extension, renewal or
amendment hereof remains in effect, including any similar agreement with
any organization which shall have succeeded to your business as investment
adviser. At such time as such an agreement shall no longer be in effect,
the Trust (to the extent that it lawfully can) will cause the Fund to
cease to use such a name or any other name indicating that it is advised
by or otherwise connected with you or any organization which shall have so
succeeded to your business.
3. SUBADVISERS: You may engage one or more investment advisers which
are either registered as such or specifically exempt from registration
under the Investment Company Act of 1940, as amended, to act as
subadvisers to provide with respect to the Fund certain services set forth
in Paragraphs 4 and 7 hereof, all as shall be set forth in a written
contract to which the Trust, on behalf of the Fund, and you shall be
parties, which contract shall be subject to approval by the vote of a
majority of the Trustees who are not interested persons of you, the
subadviser, or of the Trust, cast in person at a meeting called for the
purpose of voting on such approval and by the vote of a majority of the
outstanding voting securities of the Fund and otherwise consistent with
the terms of the Investment Company Act of 1940, as amended.
4. ADVISORY SERVICES: You will regularly provide the Fund with investment
research, advice and supervision and will furnish continuously an
investment program for the Fund consistent with the investment
objectives and policies of the Fund. You will determine what securities
shall be purchased for the Fund, what securities shall be held or sold by
the Fund, and what portion of the Fund's assets shall be held uninvested,
subject always to the provisions of the Trust's Declaration of Trust and
By-Laws and of 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. You shall advise and assist the officers of the Trust in
taking such steps as are necessary or appropriate to carry out the
decisions of the Board of Trustees and the appropriate committees of the
Board of Trustees regarding the conduct of the business of the Trust
insofar as it relates to the Fund.
5. Allocation of Charges and Expenses: You will pay the compensation and
expenses of all officers and executive employees of the Trust and will
make available, without expense to the Trust, the services of such of your
partners and employees as may duly be elected officers or Trustees of the
Trust, subject to their individual consent to serve and to any limitations
imposed by law. You will pay the Trust's office rent and will provide
2
3
INVESTMENT ADVISORY AGREEMENT
HARBOR INTERNATIONAL FUND II
JUNE 1,1996
investment advisory, research and statistical facilities and all clerical
services relating to research, statistical and investment work. You will
not be required to pay any expenses of the Trust other than those
specifically allocated to you in this paragraph 5. In particular, but
without limiting the generality of the foregoing, you will not be required
to pay: organization expenses of the Trust; clerical salaries; fees and
expenses incurred by the Trust in connection with membership in investment
company organizations; brokers' commissions; payment for portfolio pricing
services to a pricing agent, if any; legal, auditing or accounting
expenses; taxes or governmental fees; the fees and expenses of the
transfer agent of the Trust; the cost of preparing share certificates or
any other expenses, including clerical expenses of issue, redemption or
repurchase of shares of beneficial interest of the Trust; the expenses of
and fees for registering or qualifying securities for sale and of
maintaining the registration of the Trust and registering the Trust as a
broker or a dealer; the fees and expenses of Trustees of the Trust who are
not affiliated with you; the cost of preparing and distributing reports
and notices to shareholders; the fees or disbursements of custodians of
the Trust's assets, including expenses incurred in the performance of any
obligations enumerated by the Declaration of Trust or By-Laws of the Trust
insofar as they govern agreements with any such custodian; or litigation
and indemnification expenses and other extraordinary expenses not incurred
in the ordinary course of the Trust's business. You shall not be required
to pay expenses of activities which are primarily intended to result in
sales of Shares of the Trust if and to the extent that (i) such expenses
are required to be borne by a principal underwriter which acts as the
distributor of the Trust's Shares pursuant to an underwriting agreement
which provides that the underwriter shall assume some or all of such
expenses, or (ii) the Trust on behalf of the Fund shall have adopted a
plan in conformity with Rule 12b-1 under the Investment Company Act of
1940, as amended, providing that the Trust (or some other party) shall
assume some or all of such expenses. You shall be required to pay such of
the foregoing expenses as are not required to be paid by the principal
underwriter pursuant to the underwriting agreement or are not permitted to
be paid by the Trust (or some other party) pursuant to such a plan.
6. COMPENSATION OF THE ADVISER:
(a) For all services to be rendered and payments made as provided in
paragraphs 4 and 5 hereof, the Trust on behalf of the Fund will pay
you on the last day of each month a fee equal to the sum of .75% per
annum of the average daily net assets, as defined below, of the
Fund. The "average daily net assets" of the Fund are defined as the
average of the values placed on the net assets as of 4:00 P.M. (New
York time), on each day on which the net asset value of the Fund's
portfolio is determined consistent with the provisions of Rule 22c-1
under the Investment Company Act of 1940 or, if the Fund lawfully
determines the value of the net assets of its portfolio as of some
other time on each business day, as of such time. The value net
assets of the Fund shall be determined pursuant to the applicable
provisions of the Declaration of Trust of the Trust. If, pursuant to
such
3
4
INVESTMENT ADVISORY AGREEMENT
HARBOR INTERNATIONAL FUND II
JUNE 1,1996
provisions, the determination of net asset value is suspended for any
particular business day, then for the purposes of this paragraph 6,
the value of the net assets of the Fund as last determined shall be
deemed to be the value of the net assets as of the close of the New
York Stock Exchange, or as of such other time as the value of the net
assets of the Fund's portfolio may lawfully be determined, on that
day. If the determination of the net asset value of the Shares of
the Fund has been suspended pursuant to the Declaration of Trust of
the Trust for a period including such month, your compensation
payable at the end of such month shall be computed on the basis of
the value of the net assets of the Fund as last determined (whether
during or prior to such month). If the Fund determines the value of
the net assets of its 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
6.
(b) You agree that your compensation for any month shall include, and
thus be reduced by, the amount, if any, which you pay to any
subadviser engaged pursuant to Paragraph 3 hereof. You agree that
the Trust on behalf of the Fund shall not be required to pay any fee
to any such subadviser.
7. AVOIDANCE OF INCONSISTENT POSITION: 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 nor any subadviser
engaged by you pursuant to paragraph 3 hereof 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 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.
4
5
INVESTMENT ADVISORY AGREEMENT
HARBOR INTERNATIONAL FUND II
JUNE 1,1996
8. LIMITATION OF LIABILITY OF ADVISER: 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 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 Trust or the Fund shall be deemed, when acting within the
scope of his employment solely for the Trust and not as your employee or
agent.
9. DURATION AND TERMINATION OF THIS AGREEMENT: This Agreement shall remain
in force until March 17, 1998 and from year to year thereafter, but only
so long as such continuance is specifically approved at least annually by
the vote of a majority of the Trustees who are not interested persons of
you or of 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 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, 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 Section 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, regulation
or order.
10. AMENDMENT OF THIS AGREEMENT: No provisions 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 you or of the Trust, cast in person at a meeting
called for the purpose of voting on such approval.
11. GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
12. 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
5
6
INVESTMENT ADVISORY AGREEMENT
HARBOR INTERNATIONAL FUND II
JUNE 1,1996
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 such
counterpart to the Trust, whereupon this letter shall become a binding
contract.
Yours very truly,
HARBOR FUND
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: President
The foregoing Agreement is hereby accepted as of the date thereof.
HARBOR CAPITAL ADVISORS, INC.
By /s/ Xxxxxxxxx X. Xxxxxxx
----------------------------
Title: Senior Vice President
6
