EXHIBIT 99.d(39)
Xxxxxx 0, 0000
Xxxxx Investment Management, LLC
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
INVESTMENT ADVISORY AGREEMENT FOR SUBADVISER
(HARBOR GLOBAL VALUE 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 Global Value 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 (the "Investment Advisers Act"). 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 in effect on
the date hereof (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.
PZENA INVESTMENT MANAGEMENT LLC
HARBOR GLOBAL VALUE FUND
AUGUST 1, 2006
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 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 to the investment objectives, policies and
restrictions 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 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 Investment Advisers Act and all rules and
regulations thereunder, 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. With respect to the requirements for
qualification of the Fund as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"), the Adviser understands that you are not equipped to monitor
compliance with these requirements and that the Adviser will be
responsible for monitoring, testing and notifying you of the Fund's
compliance or non-compliance with Subchapter M.
You shall maintain written compliance policies and procedures that you
reasonably believe are adequate to ensure the Fund's compliance with the
foregoing and that are reasonably designed to prevent yourself and the
Fund from violating applicable federal securities laws. You agree to
provide the Trust and the Adviser with such reports and certifications and
with such access to your officers and employees that the Trust or Adviser
may reasonably request for the purpose of assessing the adequacy of your
compliance policies and procedures. You agree to notify the Adviser
immediately upon detection of any breach of any of the Fund's policies,
guidelines or procedures and of any violation of any applicable law or
regulation, including the Investment Company Act, relating to that portion
of the Fund's assets allocated to you. You also agree to notify us
promptly upon detection of any material violations of your compliance
policies and procedures that relate to the Fund or your activities as an
investment adviser generally, such as when the violation could be
considered material to your advisory clients.
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
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HARBOR GLOBAL VALUE FUND
AUGUST 1, 2006
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 (provided, however, that you may retain copies of such
records). Such books, records, information or reports may be made
available to properly authorized government representatives consistent
with state and federal law and/or regulations.
The Adviser shall be responsible for voting all proxies with respect to
the securities held by the Fund. To assist the Adviser in that regard, you
shall forward to the Adviser promptly any proxy materials, proof of claim
forms, settlement notices and other important information relating to the
Fund which you may receive.
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 Trustees and the Trust's
or Adviser's officers at least quarterly in your offices or at such other
mutually agreeable location 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 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. The Adviser understands and has advised the Fund's Board of
Trustees that you may act as an investment adviser or subadviser to other
investment companies and other advisory clients, some of which may have
different objectives than those of the Fund and portion of the Fund
allocated to you.
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. For the
avoidance of any doubt, the Fund shall bear all expenses incurred in the
operation of the Fund, including without limitation taxes, interest,
brokerage fees and commissions, if any, fees of trustees who are not
officers, directors, partners, employees or holders of 5 percent or more
of the outstanding voting securities of you or the Adviser or any
affiliates, Securities and Exchange Commission ("Commission") fees and
state blue sky registration and qualification fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
outside auditing and legal expenses, costs of maintaining corporate
existence, costs of preparing and printing prospectuses and statements of
additional information or any supplements or amendments thereto necessary
for the continued effective registration of the Fund's Shares under
federal or state securities laws, costs of printing and distributing any
prospectus, statement of additional information, supplement or amendment
thereto for existing shareholders of the Fund, costs of shareholders'
reports and meetings, and any extraordinary expenses. It is understood
that certain advertising, marketing, shareholder servicing, administration
and/or distribution expenses to be incurred in connection with the Shares
may be paid by the Fund as provided in any plan which may in the sole
discretion of the Fund be adopted in accordance with Rule 12b-1 under the
Investment Company Act, and that such expenses shall be paid apart from
any fees paid under this Agreement.
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HARBOR GLOBAL VALUE FUND
AUGUST 1, 2006
4. COMPENSATION OF THE SUBADVISER. For all investment management services to
be rendered hereunder, the Adviser will pay to you a fee, as set forth in
Schedule A attached hereto, quarterly in arrears, based on a percentage of
the average daily net assets (as defined below) of the portion of the Fund
that you managed during the quarter. "Average daily net assets" means the
average of the values placed on the net assets of the portion of the Fund
that you managed on each day on which the net asset value of the Fund's
portfolio is determined. The net assets of the Fund are valued in the
manner specified in the Fund's Prospectus and Statement of Additional
Information by the Fund's custodian. If determination of the value of net
assets is suspended for any particular 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 your other mutual fund advisory clients
with similar investment objectives, guidelines and strategies to those
utilized by the Fund, except for any such agreements in effect as of the
date of this Agreement. Such offer shall be made as soon as
practicable after a more favorable asset based fee agreement is provided
for any other advisory clients. Should more favorable asset based fee
agreements be offered to others, the Adviser will be notified within (30)
business days after such new asset based fee agreements are established.
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, employees or affiliates 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, except as permitted by the Investment Company Act
and approved by the Board of Trustees. You are hereby authorized to select
all brokers or dealers that will execute the purchases or sales of
portfolio securities for the account of the portion of the Fund allocated
to you and you are hereby authorized as the agent of the Fund to give
instructions to the Trust's custodian as to deliveries of securities or
other investments and payments of cash from the portion of the Fund
allocated to you to such brokers or dealers for your portion of the Fund.
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 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
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AUGUST 1, 2006
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. With respect to transactions under this paragraph,
it is understood that you will not be deemed to have acted unlawfully, or
to have breached a fiduciary duty to the Fund or the Trust, or be in
breach of any obligation owing to the Fund or the Trust under this
Agreement, or otherwise, solely by reason of your having caused your
portion of the Fund to pay a member of a securities exchange, a broker or
a dealer a commission for effecting a securities transaction in your
portion of the Fund in excess of the amount of commission another member
of an exchange, broker or dealer would have charged if you determined in
good faith that the commission paid was reasonable in relation to the
brokerage and research services provided by such member, broker, or
dealer, viewed in terms of that particular transaction or your overall
responsibilities with respect to your accounts, including the portion of
the Fund, as to which you exercise investment discretion.
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. When an order is so aggregated, the actual prices
applicable to the aggregated transaction will be averaged and each other
client participating in the aggregated transaction will be treated as
having purchased or sold its portion of the securities at such average
price, and all transaction costs incurred in effecting the aggregated
transaction will be shared on a pro-rata basis among the clients
participating in the transaction.
6. REPRESENTATIONS OF ADVISER. The Adviser: (a) is registered as an
investment adviser with the Commission under the Investment Advisers Act;
(b) is a corporation duly organized and validly existing under the laws of
the State of Delaware, with the power to own and possess its assets and
carry on its business as it is now being conducted; (c) the execution,
delivery and performance by the Adviser of this Agreement are within the
Adviser's powers and have been duly authorized by all necessary action on
the part of its Board of Trustees, and no action by or in respect of, or
filing with, any governmental body, agency or official is required on the
part of the Adviser for the execution, delivery and performance by the
Adviser of this Agreement, and the execution, delivery and performance by
the Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation; (ii) the
Adviser's governing instruments; or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(d) the Adviser acknowledges that it received a copy of the subadviser's
Form ADV prior to the execution of this Agreement; (e) the Adviser and the
Trust
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have duly entered into an Advisory Agreement pursuant to which the Trust
authorized the Adviser to enter into this Agreement; and (f) the Adviser
and the Trust have policies and procedures designed to detect and deter
disruptive trading practices, including "market timing," and the Adviser
and the Trust each agree that they will continue to enforce and abide by
such policies and procedures, as amended from time to time, and comply
with all existing and future laws relating to such matters or to the
purchase and sale of interests in the Fund generally.
7. 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.
The Adviser shall indemnify you, your affiliates and your controlling
persons for any liability and expenses, including reasonable attorneys'
fees, howsoever arising from, or in connection with, the Adviser's breach
of this Agreement or its representations and warranties herein or as a
result of the Adviser's willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties hereunder.
The Adviser shall indemnify and defend you, your affiliates and your
controlling persons for any loss or expense (including reasonable
attorneys' fees) arising out of or in connection with any claim, demand,
action, suit or proceeding relating to any actual or alleged material
misstatement or omission in the Fund's registration statement, proxy
statement, or communication to current or prospective investors in the
Fund or Trust, other than a misstatement or omission made in reliance on
written information furnished by you as set forth above.
8. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall remain in
force until August 1, 2008 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 penalties charged to the Fund, 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 will terminate immediately upon 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.
9. NOTICE. Any notice under this Agreement by a party shall be in writing,
addressed and personally delivered, mailed postage prepaid, or sent by
facsimile transmission with confirmation of receipt, to the other party at
such address as such other party may designate for the receipt of such
notice.
10. 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
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AUGUST 1, 2006
amendment of this Agreement shall be effective until approved 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.
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 8 or 10 hereof.
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 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.
13. PROHIBITION ON CONSULTING WITH OTHER SUBADVISERS. You are not permitted to
consult with any other subadviser to Harbor Fund with respect to
transactions by the Fund in securities or other assets.
14. CONFIDENTIALITY. You shall maintain all non-public information regarding
the Fund's portfolio, including the list of portfolio securities held by
the Fund, which you receive or have access to in the course of performing
your duties hereunder as strictly confidential. You shall not disclose or
disseminate such non-public information to any third party unless such
disclosure is approved in writing by the Fund or the Adviser or is
otherwise required by law. You shall not use your knowledge of non-public
information regarding the Fund's portfolio as a basis to place or
recommend any securities transactions for your own benefit to the
detriment of the Fund. You will not disclose or use any records or
confidential information obtained pursuant to this Agreement in any manner
whatsoever except as authorized in this Agreement or in writing by the
Adviser or the Fund, or if such disclosure is required by federal or state
regulatory authorities. You may disclose the investment performance of the
portion of the Fund allocated to you, provided that such disclosure does
not reveal the identity of the Adviser, or the Fund or the composition of
your portion of the Fund. You may, however, disclose that the Adviser and
the Fund and are your clients. The Adviser may identify you as a
subadviser in connection with marketing its funds management services, and
you hereby consent to being so identified. All relevant and applicable
portions of prospectuses, sales literature and similar documents which
name or describe you shall be subject to your review and consent prior to
use, which consent shall not be unreasonably withheld; provided, however,
that to the extent that you have reviewed
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HARBOR GLOBAL VALUE FUND
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and approved such documents, the Adviser shall be entitled to update such
documents with statistical data without seeking your prior or further
approval.
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 GLOBAL VALUE FUND
By: ______________________________________________
Xxxxx X. Xxx Xxxxxx, President
HARBOR CAPITAL ADVISORS, INC.
By: ______________________________________________
Xxxxx X. Xxxxxxx, Executive Vice President
The foregoing Agreement is hereby accepted as of the date thereof.
PZENA INVESTMENT MANAGEMENT LLC
By:______________________________________
Name:____________________________________
Title:___________________________________
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