1
EXHIBIT 5(b)
June 25, 1993
Harbor Capital Advisors, Inc.
Xxx XxxXxxx
Xxxxxx, Xxxx 00000
INVESTMENT ADVISORY AGREEMENT
(HARBOR GROWTH FUND)
------------------------------------
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 Growth Fund (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) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting you as investment adviser
and approving the form of this Agreement.
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 (c) above.
2
INVESTMENT ADVISORY AGREEMENT
HARBOR GROWTH FUND
JUNE 25, 1993
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
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
2
3
INVESTMENT ADVISORY AGREEMENT
HARBOR GROWTH FUND
JUNE 25, 1993
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 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
3
4
INVESTMENT ADVISORY AGREEMENT
HARBOR GROWTH FUND
JUNE 25, 1993
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.
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
4
5
INVESTMENT ADVISORY AGREEMENT
HARBOR GROWTH FUND
JUNE 25, 1993
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, 1995 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 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.
5
6
INVESTMENT ADVISORY AGREEMENT
HARBOR GROWTH FUND
JUNE 25, 1993
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
