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EXHIBIT 5(k)
June 25, 1993
Xxxxxxxx-Xxxxxxxxx Capital Management
000 Xxxx Xxxxxxxx
Xxx Xxxxx, XX 00000
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR GROWTH FUND)
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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 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 subinvestment 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, and the Certificate of Trust which was
filed with the Delaware Secretary of State 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.
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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 that portion of the Fund's, which
advice shall be consistent with the investment objective 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. 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 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 and to the investment objective, 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 for the Fund's
account with brokers or dealers selected by you.
The Adviser shall provide you with written statements of the Declaration of
Trust; By- Laws; investment objective and policies; 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 in
accordance with and will ensure that the portion of the portfolio of the
Fund allocated to you conforms with the Investment Company Act and all
rules and regulations thereunder, the requirements for qualification as a
regulated investment company of 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 Fund in light of current and prospective economic
and market conditions.
Nothing in this Agreement shall limit or restrict the right of any of your
partners, 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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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 asset values of the Fund at
the close of the last business day of each month within the quarter.
Determination of 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. Your
fee will be based on the average of the net asset values of the fund,
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
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.
You will offer to the Adviser any more favorable asset based fee (not
incentive) agreements that are provided to other investment clients using
your Mid-Cap Growth Equity style of management, except that for any such
agreements in effect upon the signing of this Agreement. Such offer shall
be made as soon as practicable after a more favorable asset based fee (not
incentive) agreement is provided for any other investment clients. Should
more favorable asset based fee (not incentive) agreements be offered to
others using the Mid-Cap Growth Equity style of management, either alone or
in conjunction with other styles of management, for whatever reasons, the
Advisor will be notified within (30) business days after such new asset
based fee (not incentive) agreements are established.
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 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 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 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
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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 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. 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.
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
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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 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 or 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 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 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 Sections
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.
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.
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You agree to notify the Adviser of any change in the membership of the
partnership of which you are a member within a reasonable time after such
change.
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.
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
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
XXXXXXXX-XXXXXXXXX CAPITAL
MANAGEMENT A LIMITED PARTNERSHIP
By /s/ X. Xxxxxxxx
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Xxxxxxxx-Xxxxxxxxx Capital Management, Inc.
Its General Partner
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HARBOR GROWTH FUND
JUNE 25, 1993
SCHEDULE A
You will receive an advisory fee equal on an annual basis to 0.75% of the
average actual net asset values of the Fund at the close of the last business
day of each month within the quarter up to $25 million; 0.625% on the next $75
million of such average actual net asset values; and 0.50% on such average
actual net asset values thereafter. The annual advisory fee paid by the Adviser
to you shall not be less than $75,000. In the event that this Agreement
terminates during any portion of year, the fee due to you shall be prorated
based upon the number of days the Agreement was in effect. 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 payment of the accounts of the Xxxxx-Illinois Master
Retirement Trust account that you manage.
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