1
EXIBIT 5(h)
June 25, 1993
Harbor Capital Advisors, Inc.
Xxx XxxXxxx
Xxxxxx, Xxxx 00000
INVESTMENT ADVISORY AGREEMENT
(HARBOR SHORT DURATION 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 Short Duration 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 SHORT DURATION 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
2
3
INVESTMENT ADVISORY AGREEMENT
HARBOR SHORT DURATION FUND
JUNE 25, 1993
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
.40% 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
3
4
INVESTMENT ADVISORY AGREEMENT
HARBOR SHORT DURATION FUND
JUNE 25, 1993
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.
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
4
5
INVESTMENT ADIVSORY AGREEMENT
HARBOR SHORT DURATION FUND
JUNE 25, 1993
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, 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 ADIVSORY AGREEMENT
HARBOR SHORT DURATION
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
