Exhibit 99.d(20)
March 1, 2006
Northern Cross Investments Limited
00 Xxx-Xx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX00 Xxxxxxx
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR INTERNATIONAL 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 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) Declaration of Trust of the Trust, filed with the Delaware Secretary
of State, dated June 8, 1993, as amended and restated from time to
time (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 sub-investment adviser and approving the form of
this Agreement.
NORTHERN CROSS INVESTMENTS LIMITED
HARBOR INTERNATIONAL FUND
MARCH 1, 2006
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 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 portion 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, 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 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 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
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
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HARBOR INTERNATIONAL FUND
MARCH 1, 2006
in any other business or to render service of any kind to any other
corporation, firm, individual or association.
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, monthly in arrears, based on a percentage of the average
daily net asset value of the portion of the Fund that you managed. The net
assets of the Fund are 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. If determination of the
value of net assets is suspended for the business day, 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 Fund,
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 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 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 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
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HARBOR INTERNATIONAL FUND
MARCH 1, 2006
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 March 1, 2007 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
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HARBOR INTERNATIONAL FUND
MARCH 1, 2006
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 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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NORTHERN CROSS INVESTMENTS LIMITED
HARBOR INTERNATIONAL FUND
MARCH 1, 2006
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 INTERNATIONAL FUND
By:
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Xxxxx X. Xxx Xxxxxx, President
HARBOR CAPITAL ADVISORS, INC.
By:
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Xxxxxxx X. XxXxxx,
Executive Vice President
The foregoing Agreement is hereby accepted as of the date thereof.
NORTHERN CROSS INVESTMENTS LIMITED
By:
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Xxxxx Xxxxxxxxx, President
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