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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Harris Associates Investment Trust
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
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(4) Proposed maximum aggregate value of transaction:
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*Set forth the amount on which the filing fee is calculated and state how
it was determined.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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December , 1995
Dear Shareholder:
SHAREHOLDER MEETING--JANUARY 30, 1996
We need your vote in order to complete the matters described below and in
the accompanying proxy statement.
A meeting of the shareholders of The Oakmark Balanced Fund, The Oakmark
Fund, The Oakmark International Emerging Value Fund, The Oakmark International
Fund and The Oakmark Small Cap Fund (collectively the "Funds"), each a series
of Harris Associates Investment Trust (the "Trust"), has been called for
January 30, 1996.
The meeting is necessary because of a proposed merger between New England
Mutual Life Insurance Company ("New England") into Metropolitan Life Insurance
Company ("Met Life") which is the second largest life insurance company in the
United States in terms of total assets. New England Mutual controls New
England Investment Companies, L.P., which owns the Funds' investment adviser,
Harris Associates L.P. That merger will require that the Trust enter into a
new investment advisory agreement for each Fund. The new investment advisory
agreements provide for the same services to be furnished to the Funds and
there will be no change in the personnel involved in managing the Funds or the
fees payable to the adviser for those services.
The shareholders of The Oakmark Fund will additionally be asked to vote to
permit the Fund: (a) to invest in repurchase agreements and (b) to lend its
portfolio securities.
THE BOARD OF TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
THE PROPOSALS SET FORTH IN THE NOTICE OF MEETING.
Please sign and return your proxy card in the enclosed postage-paid
envelope.
Sincerely,
LOGO
Victor A. Morgenstern
President
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HARRIS ASSOCIATES INVESTMENT TRUST
THE OAKMARK BALANCED FUND
THE OAKMARK FUND
THE OAKMARK INTERNATIONAL EMERGING VALUE FUND
THE OAKMARK INTERNATIONAL FUND
THE OAKMARK SMALL CAP FUND
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Two North LaSalle Street
Chicago, Illinois 60602-3790
1-800-GROWOAK (1-800-476-9625)
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NOTICE OF MEETING OF SHAREHOLDERS
JANUARY 30, 1996
To the shareholders:
A meeting of the shareholders of The Oakmark Balanced Fund, The Oakmark
Fund, The Oakmark International Emerging Value Fund, The Oakmark International
Fund and The Oakmark Small Cap Fund (the "Funds"), each a series of Harris
Associates Investment Trust (the "Trust"), will be held at
. Chicago, Illinois, on Tuesday, January 30,
1996 at a.m., Chicago time.
The Funds' investment adviser, Harris Associates L.P., is owned by New
England Investment Companies, L.P., which is controlled by New England Mutual
Life Insurance Company ("New England"). New England has agreed to be acquired
by Metropolitan Life Insurance Company in a merger that will result in a
change in control of Harris Associates L.P. that will cause a termination of
each Fund's investment advising agreement.
The shareholder meeting has been called to:
1. Approve or disprove a new investment advisory agreement for each Fund
with Harris Associates L.P. on the same terms as the Fund's current
investment advisory agreement (with shareholders of each Fund voting
separately); and
2. For shareholders of Oakmark Funds only: To amend the Fund's
fundamental investment restrictions to permit the Fund:
(a) to invest in repurchase agreements; and
(b) to lend its portfolio securities; and
to transact such other business as may properly come before the meeting.
Shareholders of record at the close of business on November 30, 1995 are
entitled to vote at the meeting.
For the board of trustees,
LOGO
Victor A. Morgenstern
President
Chicago, Illinois
December , 1995
<PAGE>
QUESTIONS AND ANSWERS (Q&A)
Q.WHAT IS HAPPENING?
A. The Funds' investment adviser, Harris Associates L.P. (the "Adviser"), is
owned by New England Investment Companies, L.P., which is controlled by
New England Mutual Life Insurance Company ("New England"). New England has
agreed to merge into Metropolitan Life Insurance Company ("Met Life") as
described in the accompanying proxy statement. The merger is scheduled to
be accomplished subject to various regulatory and other approvals in the
first quarter of 1996 ("the Merger"). Harris Associates L.P. will continue
to operate its present business with its present personnel.
Q.WHY AM I BEING ASKED TO VOTE ON THESE PROPOSALS?
A. The Investment Company Act of 1940, as amended (the "1940 Act"), requires
approval by the board of trustees and shareholders of a mutual fund of a
written contract relating to services as a fund's investment adviser. In
order to continue the services currently provided by the Adviser to the
Funds after the Merger, the Trust must enter into a new investment
advisory agreement with the Adviser for each of the Funds and such
agreements must be approved by the board of trustees and by the
shareholders of the respective Funds.
Q.HOW WILL THIS AFFECT ME?
A. The Merger has been proposed for reasons generally unrelated to the
Adviser or the Funds. The Merger will not cause any change in the
management or operations of the Funds or the Adviser. No changes in the
advisory fees, investment objectives or policies are proposed in the new
investment advisory agreements. The Adviser will continue to operate its
business in the capacity of investment adviser with the same personnel,
and the individuals currently involved in the management of the Funds will
continue in their present roles with the Funds after completion of the
Merger. Thus, you will continue to receive the same high quality
investment management and shareholder services.
Q.HOW DO THE TRUSTEES SUGGEST THAT I VOTE?
A. Vote "FOR" the proposals. After careful consideration, the trustees,
including all of the trustees who are not affiliated with the Adviser,
unanimously recommend that you vote "FOR" the new investment advisory
agreements and, in the case of shareholders of The Oakmark Fund, that you
vote "FOR" proposals 2(a) and 2(b).
Q.WHO IS PAYING THE COST OF THE PROXY SOLICITATION AND SHAREHOLDER MEETING?
A. The Adviser or Met Life will pay all costs of the shareholder meeting and
the proxy solicitation.
Q.WHAT IF I HAVE OTHER QUESTIONS?
A. We will be happy to answer your questions about the Proposals and this
proxy solicitation. Please call us at 1-800-476-9625.
* * * YOUR VOTE IS IMPORTANT * * *
PLEASE SIGN AND MAIL THE ENCLOSED PROXY
PROMPTLY IN ORDER TO BE REPRESENTED AT THE MEETING
<PAGE>
HARRIS ASSOCIATES INVESTMENT TRUST
THE OAKMARK BALANCED FUND
THE OAKMARK FUND
THE OAKMARK INTERNATIONAL EMERGING VALUE FUND
THE OAKMARK INTERNATIONAL FUND
THE OAKMARK SMALL CAP FUND
PROXY STATEMENT
GENERAL INFORMATION
WHO IS ASKING FOR MY VOTE?
The board of trustees of Harris Associates Investment Trust (the "Trust") is
soliciting proxies from the shareholders for use at a meeting of shareholders
of the Trust (the "Meeting") to be held on Tuesday, January 30, 1996 and at
any adjournment of that meeting, for the purposes set forth in the
accompanying Notice of Meeting of Shareholders. This proxy statement is first
being mailed to shareholders on or about December , 1995.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on November 30, 1995 are
entitled to participate in the meeting and to cast one vote for each share
held. The Trust currently issues shares in five series: The Oakmark Balanced
Fund ("Balanced Fund"), The Oakmark Fund ("Oakmark Fund"), The Oakmark
International Emerging Value Fund ("International Emerging Fund"), The Oakmark
International Fund ("International Fund") and The Oakmark Small Cap Fund
("Small Cap Fund") (together, the "Funds"). As of November 30, 1995 the Funds
had the following numbers of shares outstanding:
Balanced Fund, ;
Oakmark Fund, ;
International Emerging Fund, ;
International Fund, and
Small Cap Fund, .
If the accompanying proxy card is executed properly and returned, your
shares of each Fund will be voted at the meeting in accordance with the
instructions on the proxy card. However, if no instructions are specified, the
shares will be voted for the approval of the new investment advisory agreement
for each respective Fund in which you are a shareholder and, in the case of
shares of Oakmark Fund will be voted for the approval of proposed changes in
that Fund's investment restrictions. Shareholders may revoke a proxy at any
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time prior to the time it is voted by writing to the Secretary of the Trust, by
delivery of a later-dated proxy or by attending and voting at the meeting.
THE MOST RECENT ANNUAL OR QUARTERLY REPORT OF OAKMARK FUND OR INTERNATIONAL
FUND HAS PREVIOUSLY BEEN SENT TO SHAREHOLDERS OF THAT FUND AND IS AVAILABLE,
WITHOUT CHARGE, BY WRITING TO THE TRUST AT TWO NORTH LASALLE STREET, SUITE 500,
CHICAGO, ILLINOIS 60602, OR BY CALLING 1-800-476-9625.
1. NEW INVESTMENT ADVISORY AGREEMENTS
WHY ARE SHAREHOLDERS BEING ASKED TO VOTE ON THIS PROPOSAL?
Harris Associates L.P. (the "Adviser") is the investment adviser and manager
for the Funds pursuant to investment advisory agreements with the Trust dated
September 30, 1995 (for Oakmark Fund and International Fund) and November 1,
1995 (for each other Fund) (the "Present Advisory Agreements").
The Adviser is owed by New England Investment Companies L.P. ("NEIC"), which
is controlled by New England Mutual Insurance Company ("New England"). New
England has agreed to be acquired by Metropolitan Life Insurance Company ("Met
Life") in a merger of New England into Met Life (the "Merger").
The Investment Company Act of 1940, as amended (the "1940 Act"), prohibits
any person from serving as an investment adviser to a mutual fund except
pursuant to a written contract that has been approved by the fund's
shareholders. Under the 1940 Act, an investment advisory agreement cannot be
assigned and any change in the control of an investment adviser is deemed to
constitute an "assignment" that would cause a termination of investment
advisory agreements to which the adviser is a party. The Merger will result in
a change in control of the Adviser and a termination of the Present Advisory
Agreements. Therefore, in anticipation of the Merger and in order to assure
that the Adviser can continue to serve as investment manager of the Funds, it
is proposed that the shareholders approve the new investment advisory
agreements between the Trust and the Adviser relating to the respective Funds
(the "New Advisory Agreements"). A copy of the form of the New Advisory
Agreement for each Fund is attached hereto as Exhibit A.
HOW DOES THE BOARD OF TRUSTEES RECOMMEND THAT I VOTE?
VOTE "FOR" THE NEW ADVISORY AGREEMENTS. The board of trustees, including all
of the trustees who are not parties to the Merger or interested persons of any
such party, have approved the New Advisory Agreements and
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recommended them to the shareholders of the respective Funds for their
approval. For information about the board's deliberations and reasons for its
recommendations, please see "Board of Trustees Evaluation" near the end of this
proposal 1.
WHAT ARE THE TERMS OF THE NEW ADVISORY AGREEMENTS?
THE NEW ADVISORY AGREEMENT FOR EACH FUND IS IDENTICAL TO THE FUND'S CURRENT
ADVISORY AGREEMENT, EXCEPT FOR THE INITIAL TERM. The Adviser furnishes
continuing investment supervision to the Fund and will be responsible for
overall management of the Fund's business affairs; the Adviser will also
furnish office space, equipment and personnel to the Funds, and assume the
expenses of printing and distributing the Fund's prospectus and reports to
prospective investors.
Each Fund is responsible for the cost of its custodial, stock transfer,
dividend disbursing, bookkeeping, audit and legal services. Each Fund also pays
other expenses such as the cost of proxy solicitations for most meetings of
shareholders (but not this meeting), printing and distributing notices and
copies of the prospectus and shareholder reports furnished to existing
shareholders, taxes, insurance premiums, the expenses of maintaining the
registration of that Fund's shares under federal and state securities laws and
the fees of trustees not affiliated with the Adviser.
For its services as investment adviser the Adviser receives from each Fund a
monthly fee based on the Fund's net assets at the end of the preceding month.
The annual rate of fee for the Balanced Fund is .75% of net assets. The annual
rate of fee for Oakmark Fund is 1% on the first $2.5 billion of net assets;
.95% on the next $1.25 billion; .90% on the next $1.25 billion; and .85% on net
assets in excess of $5 billion. The annual rate of fee for Oakmark
International is 1% on the first $2.5 billion of net assets; .95% on the next
$2.5 billion; .90% on net assets in excess of $5 billion. The annual rate of
fee for both the International Emerging Fund and the Small Cap Fund is 1.25% of
net assets. These rates of fees are higher than the rates of fees paid by most
mutual funds. Oakmark paid advisory fees of $ , $13,431,816 and
$6,164,542 for the fiscal years ended October 31, 1995, 1994 and 1993,
respectively. Oakmark International paid advisory fees of $ ,
$13,080,028 and $2,151,162 for the fiscal years ended October 31, 1995, 1994
and 1993, respectively. Each of the other Funds commenced operations on
November 1, 1995.
The total annual expenses of the Fund, exclusive of taxes, interest and
extraordinary litigation expenses, but including fees paid to the Adviser,
shall not exceed the limits imposed by the securities regulations of any state
in which the Fund's shares are qualified for sale, and the Adviser has agreed
to reimburse
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the Fund for any such expenses in excess of such limits. The Funds believe that
currently the most restrictive limits are 2.5% of the first $30 million of a
Fund's average net assets, 2% of the next $70 million, and 1.5% thereafter.
Brokers' commissions and other charges relating to the purchase and sale of
securities are not regarded as expenses for this purpose. Moreover, for
purposes of calculating the expenses subject to this limitation, the excess
custodian costs attributable to investments in foreign securities compared to
the custodian costs which would have been incurred had the investments been in
domestic securities are excluded. For the purpose of determining whether a Fund
is entitled to any reduction in advisory fee or expense reimbursement, that
Fund's expenses are calculated daily and any reduction in fee or reimbursement
is made monthly.
The New Advisory Agreement for each Fund is for an initial term expiring
September 30, 1997. Each New Advisory Agreement will continue from year to year
thereafter only so long as such continuation is approved at least annually by
(1) the board of trustees or the vote of a majority of the outstanding voting
securities of the Fund, and (2) a majority of the trustees who are not
interested persons of any party to the agreement, cast in person at a meeting
called for the purpose of voting on such approval. The board of trustees
approved the New Advisory Agreement for each Fund on December 5, 1995. Each New
Advisory Agreement may be terminated at any time, without penalty, by either
the Trust or the Adviser upon sixty days' written notice, and is automatically
terminated in the event of its assignment as defined in the 1940 Act.
The Adviser shall not be liable for any loss suffered by the Trust or its
shareholders as a consequence of any act or omission in connection with
investment advisory or portfolio services under agreement, except by reason of
willful misfeasance, bad faith or gross negligence on the part of the Adviser
in the performance of its duties or by reason of reckless disregard by the
Adviser of its obligations and duties under the agreement.
The Present Advisory Agreements for Oakmark Fund and International Fund were
last approved by shareholders of those Funds on August 22, 1995, and the
Present Advisory Agreement for each other Fund was last approved by
shareholders of that Fund on November 1, 1995. On June 13, 1995 the board of
trustees of the Trust approved each of the Present Advisory Agreements.
WHAT SHOULD I KNOW ABOUT THE ADVISER AND NEIC?
The following information concerning NEIC has been provided to the Trust by
the Adviser and NEIC.
The Adviser is a registered investment adviser serving individuals,
institutions, pension funds, and private investment partnerships, with assets
under management of approximately $7 billion. The Adviser, a limited
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partnership, is managed by its general partner, Harris Associates, Inc.
("HAI"), a wholly-owned subsidiary of NEIC. All of the limited partnership
interests in the Adviser are owned by NEIC. The directors of HAI are David G.
Herro, Roxanne M. Martino, Robert M. Levy, Victor A. Morgenstern, William C.
Nygren, John R. Raitt, G. Neal Ryland, Robert J. Sanborn and Peter S. Voss.
Mr. Morgenstern is the principal executive officer of HAI. Messrs. Ryland and
Voss are executive officers of NEIC. The other directors are executives of the
Adviser. The Adviser's principal address is Two North LaSalle Street, Chicago,
Illinois 60602-3790.
NEIC is a publicly traded limited partnership whose general partner, New
England Investment Companies, Inc., is a subsidiary of New England Mutual Life
Insurance Company. NEIC is a holding company for several investment management
firms including Loomis, Sayles & Company, Reich & Tang L.P., Copley Real
Estate Advisors and Back Bay Advisors. Those firms currently manage
approximately $78 billion in investments, including approximately $19 billion
of mutual fund assets.
On September 29, 1995, the predecessor of the Adviser (the "Former Adviser")
sold all of its business and substantially all of its assets to NEIC. In that
transaction, in addition to the assumption of certain obligations and
liabilities of the Adviser, NEIC issued to the Adviser 9,859,155 limited
partnership units of NEIC that are subject to restrictions on resale. In April
1997 the Former Adviser will be entitled to receive additional units having a
value approximately equal to the amount by which the product of 3.6 times
certain revenues of the Adviser during 1996 exceed $175 million, but not less
than the amount by which the product of 3.5 times certain revenues of the
Adviser during 1995 exceed $175 million. The limited partners of the Former
Adviser include, among others, Victor A. Morgenstern, a trustee of the Trust,
and Robert M. Levy, Roxanne M. Martino, Robert J. Sanborn and Sherwin A.
Zuckerman, who were trustees of the Trust until September 29, 1995. In
addition, the principals of the Former Adviser, including those limited
partners, have entered into five-year employment agreements with the Adviser.
NEIC has granted to certain employees of the Adviser options that will vest
over five years to purchase an aggregate of 200,000 limited partnership units
of NEIC exercisable at the market price of the units at the time of the grant.
WHAT I SHOULD KNOW ABOUT NEW ENGLAND, MET LIFE AND THE MERGER
On August 16, 1995, the Boards of directors of New England and of Met Life
approved the Merger. Both entities are mutual life insurance companies. The
Merger is subject to various regulatory and other approvals including approval
by the requisite vote of policyholders of both New England and Met Life.
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The Merger, which will result in the transfer of New England's ownership
interest in NEIC to Met Life, constitutes a "change of control" of the Adviser
that will terminate the Present Advisory Agreements. Therefore, in order to
continue the advisory services of the Adviser, it will be necessary for the
Trust to enter into a New Advisory Agreement for each Fund.
The Board of Trustees has approved, and recommended that the shareholders of
each Fund approve, a New Advisory Agreement for the Fund to be effective upon
consummation of the Merger. A copy of the form of the New Advisory Agreement
for each Fund is attached hereto as Exhibit A.
After the Merger, the Adviser will continue to operate with the same
personnel and the individuals involved in the portfolio management of the Funds
will continue in their present roles with the Funds. The Adviser will continue
to conduct its business at Two North LaSalle Street, Chicago, Illinois, 60602.
WHAT FACTORS DID THE BOARD OF TRUSTEES CONSIDER IN APPROVING THE NEW ADVISORY
AGREEMENTS?
On September 19 and December 5, 1995 the members of the board of trustees who
were not affiliated with the Adviser met with representatives of the Adviser
and with their legal counsel to review the terms of the Merger and to consider
the possible effects of the Merger on the Funds. They also met with Peter S.
Voss, Chairman and Chief Executive Officer of NEIC and with of
Met Life. On December 5, 1995, the board of trustees determined to approve the
New Advisory Agreements and recommend the Agreements to shareholders of the
Funds for their approval.
In evaluating the New Advisory Agreements, the board of trustees reviewed
materials furnished by the Adviser, NEIC, New England and Met Life. Those
materials included information regarding the Adviser, NEIC, New England and Met
Life, their respective affiliates and their personnel, operations and financial
condition and the terms of the Merger and the possible effect on the Funds and
the shareholders of the Funds as a result of the Merger. Representatives of the
Adviser discussed the anticipated effects on the Funds and, together with
representatives of NEIC and Met Life indicated their belief that as a
consequence of the Merger, the operations of the Trust and the capability of
the Adviser to provide services to the Funds would not be adversely affected
and could be enhanced from the resources of Met Life, although there could be
no assurance as to any particular benefits that would be obtained.
The board of trustees also considered the representations of Met Life, New
England, NEIC and the Adviser that the Merger is being proposed for reasons
generally unrelated to the Adviser or the Funds. The board of trustees also
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considered the fact that the Merger does not affect the direct ownership of the
Adviser because, while the Merger will result in NEIC's becoming a subsidiary
of Met Life, the Adviser will remain a subsidiary of NEIC.
In their deliberations, the board of trustees considered the terms of the
Merger and also took into account, among other things, the nature and quality
of the services to be provided by the Adviser, the similarity of terms of the
New Advisory Agreements to the terms of the Present Advisory Agreements,
including fees payable under each such agreement, advisory and management fees
paid by comparable funds, the expense ratios of the Funds and of comparable
funds, "fall-out" benefits to the Adviser from its relationship with the Funds
including receipt of research from brokers furnished in connection with their
execution of portfolio transactions for the Funds, and the representations of
the Adviser, NEIC, New England, and Met Life that the quality of the services
being provided to the Funds will not be diminished as a result of the Merger.
Accordingly, after consideration of the above, and such other factors and
information as they deemed relevant, the board of trustees, including all
trustees who are not "interested persons" of the Trust or the Adviser (as such
term is defined by the 1940 Act), unanimously approved the New Advisory
Agreement for each Fund and voted to recommend its approval to the Fund's
shareholders.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR APPROVAL OF THE NEW ADVISORY
AGREEMENT FOR EACH FUND.
2. CHANGES IN POLICY ON MAKING LOANS
(FOR SHAREHOLDERS OF OAKMARK FUND ONLY)
Each Fund has a policy that generally prohibits the Fund from making loans
except to the extent that investment in debt securities may be considered to
involve the making of loans. Its loan policy provides that the Fund may not
"make loans, but this restriction shall not prevent the Fund from investing in
debt securities." The loan policy of each Fund other than the Oakmark Fund
provides that the Fund may not "make loans, but this restriction shall not
prevent the Fund from (a) investing in debt obligations, (b) investing in
repurchase agreement, or (c) lending its portfolio securities." [emphasis
added] The Adviser has recommended that the loan policy of Oakmark Fund be
amended to conform to that of the other Funds so that it also would be
permitted to invest in repurchase agreements and make loans of portfolio
securities.
Because the loan policy is a "fundamental" policy, it may be amended only by
vote of the shareholders of Oakmark Fund. Accordingly, the board of
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trustees has approved and recommended that the shareholders approve those
amendments, which are described more fully below.
(A) INVESTMENT IN REPURCHASE AGREEMENTS
The board of trustees has determined that it would be desirable for Oakmark
Fund to be permitted to invest in repurchase agreements, which are a convenient
vehicle for the investment of a Fund's cash reserves on a short-term basis.
Therefore, the board has recommended that the Fund's policy on loans be amended
to permit such investments.
A repurchase agreement involves a sale of securities to a Fund with the
concurrent agreement of the seller (bank or securities dealers) to repurchase
the securities at the same price plus an amount equal to an agreed-upon
interest rate within a specified time. In the event of a bankruptcy or other
default of a seller of a repurchase agreement, the Fund could experience both
delays in liquidating the underlying securities and losses. The Fund's policy
on illiquid securities prohibits the Fund from investing more than 15% of its
assets in repurchase agreements maturing in more than seven days and other
illiquid securities.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR APPROVAL OF PROPOSAL 2(A) BY
SHAREHOLDERS OF OAKMARK FUND.
(B) LOANS OF SECURITIES
The board of directors has determined that it would be desirable for Oakmark
Fund to be permitted to make loans of portfolio securities in order to earn
additional income for the Fund. Accordingly, as noted above, the board has
recommended that the Fund's policy on loans be amended to permit such loans,
which are frequently made in order to facilitate the settlement of securities
transactions of the borrowers, including in connection with short sales.
It is expected that the Fund would lend certain of its portfolio securities
to banks or broker-dealers under terms that would require that any such loan be
continuously secured by collateral in cash or cash equivalents maintained on a
current basis in an amount at least equal to the market value of the securities
loaned by the Fund. The Fund would continue to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned, and would
also receive an additional return that may be in the form of a fixed fee or a
percentage of the collateral. The Fund would have the right to call the loan
and obtain the securities loaned at any time on notice of not more than five
business days. The Fund would not have the right to vote the securities during
the existence of the loan but would call the loan to permit voting of the
securities if, in the Adviser's judgment, a material event requiring a
shareholder vote would otherwise occur before the loan was repaid. In the event
of bankruptcy or
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other default of the borrower, the Fund could experience both delays in
liquidating the loan collateral or recovering the loaned securities and
losses, including (a) possible decline in the value of the collateral or in
the value of the securities loaned during the period while the Fund seeks to
enforce its rights thereto, (b) possible subnormal levels of income and lack
of access to income during this period, and (c) expenses of enforcing its
rights.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR APPROVAL FOR PROPOSAL 2(B) BY
SHAREHOLDERS OF OAKMARK FUND.
OTHER MATTERS
The management of the Trust is not aware of any other matters to be
presented before the meeting. If any other matters should be properly
presented, your proxy, if signed and returned, will give discretionary
authority to the persons designated in it to vote according to their best
judgment.
OTHER INFORMATION
TRUSTEES OF THE TRUST
The names of the trustees of the trust, their principal occupations during
the past five years, other business affiliations, ages at October 31, 1995 and
addresses are set forth below:
<TABLE>
<CAPTION>
NAME, AGE AT OCTOBER 31, 1995
AND POSITION(S) WITH THE
TRUST PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
----------------------------- --------------------------------------------
<C> <S>
CHRISTINE M. BUCHER, 34 Vice President--Tax, Hyatt Corporation (hotel
c/o Hyatt Corporation management) since 1995; Tax Manager, Coopers &
200 West Madison Street Lybrand (independent accountants), prior
Chicago, Illinois 60602 thereto
JAMES W. FORD, 72 Retired Executive Vice President, and President
662 Greenhills Drive of Financial Services Group, Ford Motor
Ann Arbor, Michigan 48105 Company; formerly Chairman, Ford Motor Credit
Company
MICHAEL J. FRIDUSS, 53 Principal, MJ Friduss & Associates
c/o MJ Friduss & Associates (telecommunications consultants), since 1993;
1555 Museum Drive Vice President--Customer Service and
Highland Park, Illinois 60035 Information Technology, Ameritech Corporation
(telecommunications), 1992-1993; Vice
President--Customer Sales and Service,
Michigan Bell Telephone Company, prior thereto
</TABLE>
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<TABLE>
<CAPTION>
NAME, AGE AT OCTOBER 31, 1995
AND POSITION(S) WITH THE TRUST PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------ --------------------------------------------
<C> <S>
THOMAS H. HAYDEN, 44 Executive Vice President and director, Bozell
c/o Bozell Worldwide, Inc. Worldwide, Inc. (advertising and public
625 North Michigan Avenue relations), since 1992, and Senior Vice
Chicago, Illinois 60611 President, prior thereto
VICTOR A. MORGENSTERN*, 52 President of the Trust since 1991; President,
c/o Harris Associates L.P. Harris Associates, Inc. ("HAI"), the general
Two North LaSalle Street, #500 partner of the Adviser, since 1992;
Chicago, Illinois 60602 principal, Harris Associates L.P. until
September 1995
ALLAN J. REICH, 47 Senior Partner and Chair of
c/o D'Ancona & Pflaum Corporate/Securities Practice Group,
30 North LaSalle Street, #2900 D'Ancona & Pflaum (attorneys), since 1993;
Chicago, Illinois 60602 Senior Partner, McDermott, Will & Emery
(attorneys), prior thereto
BURTON W. RUDER, 51 President, The Academy Group (investments and
c/o The Academy Group consulting)
707 Skokie Boulevard, Suite 410
Northbrook, Illinois 60062
PETER S. VOSS*, 49 Chairman, President and Chief Executive
c/o New England Investment Officer, New England Investment Companies,
Companies, L.P. L.P., since 1992; Group Executive Vice
399 Boylston Street President, Bank of America, N.A., 1992;
Boston, Massachusetts 02166 Executive Vice President, Security Pacific
Bank, prior thereto; director, New England
Mutual Life Insurance Company; trustee, New
England Cash Management Trust, New England
Tax Exempt Money Market Trust, New England
Funds Trust I and New England Funds Trust II
GARY N. WILNER, M.D., 55 Senior Attending Physician, Evanston Hospital,
c/o Evanston Hospital and Medical Director--Cardiac Graphics
2650 Ridge Avenue Laboratory, Evanston Hospital Corporation
Evanston, Illinois 60201
</TABLE>
- -----------
*Mr. Morgenstern is an "interested person" (as defined in the 1940 Act) of the
Trust as an officer of the Trust and by virtue of his relationship with
the Adviser. Mr. Voss is an "interested person" of the Trust by virtue of
his relationship with NEIC and the Adviser.
Messrs. Morgenstern and Ford have been trustees since the Trust began
operation in August 1991. Mr. Reich and Dr. Wilner became trustees in August
10
<PAGE>
1993. Ms. Bucher and Messrs. Friduss, Hayden, Ruder and Voss become trustees in
September 1995.
Each trustee shall hold office until the next meeting of shareholders called
for the purpose of electing trustees and until his or her successor is elected
and qualified or until death, retirement, resignation or removal. In case any
nominee should become unavailable for election for any unforeseen reason, the
persons designated in the proxy will have the right to vote for a substitute.
Section 15(f) of the 1940 Act, which provides, in pertinent part, that an
investment adviser may receive any amount or benefit in connection with a sale
of such investment adviser that results in an assignment of an investment
advisory contract with an investment company if the following two conditions
are met: (i) there will be no "unfair burden" imposed on the investment company
as a result of such assignment; and (ii) for a period of three years after the
sale, at least 75% of the members of the board of the investment company are
not "interested persons" (as defined in the 1940 Act) of the new or predecessor
investment adviser.
With regard to the first of these conditions, the term "unfair burden," as
defined in the 1940 Act, includes any arrangement during the two-year period
after the sale whereby the investment adviser (or successor adviser) or any
interested person of any such adviser, receives or is entitled to receive any
compensation, directly or indirectly, from the investment company or its
shareholders (other than for bona fide investment advisory or other services)
or from any person in connection with the purchase or sale of securities or
other property to, from or on behalf of the investment company (other than bona
fide ordinary compensation as principal underwriter for the investment
company). The trustees are not aware of any circumstances arising from the sale
by the Former Adviser of its business and assets to NEIC described above that
would result in the imposition of an "unfair burden" on any Fund.
The Adviser and NEIC have agreed:
(i) to use all reasonable efforts to assure that, for a period of three
years following the acquisition by NEIC of the business and assets of the
Former Adviser, no more than 25% of the trustees of the Trust are
"interested persons," as defined in the 1940 Act, of the Adviser or the
Former Adviser; and
(ii) for a period of two years after that acquisition, not to take or
recommend any action that would constitute an "unfair burden" on any Fund.
New England and Met Life have also agreed to use their best efforts to
satisfy the conditions of Section 15(f) of the 1940 Act with respect to the
Merger.
11
<PAGE>
COMPENSATION OF THE TRUSTEES
The following table provides information concerning the aggregate
compensation paid by the Trust to each of the trustees (other than Messrs.
Morgenstern and Voss, who are compensated by their respective employers) for
services rendered to the Trust during the year ended October 31, 1995.
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
FROM THE
TRUSTEE TRUST*
------- ------------
<S> <C>
Christine M. Bucher............................................. $ 0
James W. Ford................................................... 18,500
Michael J. Friduss.............................................. 0
Thomas H. Hayden................................................ 0
Allan J. Reich.................................................. 17,500
Burton W. Ruder................................................. 0
Gary N. Wilner, M.D............................................. 17,500
</TABLE>
- -----------
*The Trust is not part of a fund complex.
The officers of the Trust are compensated by the Adviser and not by the
Trust. The Trust does not provide any pension or retirement benefits to its
trustees.
EXECUTIVE OFFICERS OF THE TRUST
The officers of the Trust are:
<TABLE>
<CAPTION>
NAME, AGE AT OCTOBER 31, 1995
AND POSITION(S) WITH THE TRUST PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------ --------------------------------------------
<C> <S>
VICTOR A. MORGENSTERN*, 52 President of the Trust since 1991; President,
c/o Harris Associates L.P. Harris Associates, Inc. ("HAI"), the general
Two North LaSalle Street, #500 partner of the Adviser, since 1992;
Chicago, Illinois 60602 principal of the Former Adviser until
September 1995
ROBERT J. SANBORN, 37 Portfolio Manager and Analyst for the Adviser
Executive Vice President and
Portfolio Manager (Oakmark
Fund) since 1991
DAVID G. HERRO, 34 Portfolio Manager and Analyst for the Adviser,
Vice President and Portfolio 1992-1994; Portfolio Manager--International
Manager (International Fund Equities, State of Wisconsin Investment
and International Emerging Board, prior thereto
Fund) since 1992
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AT OCTOBER 31, 1995
AND POSITION(S) WITH THE TRUST PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
------------------------------ --------------------------------------------
<C> <S>
CLYDE S. MCGREGOR, 43 Portfolio Manager and Analyst for the Adviser
Vice President and Portfolio
Manager (Balanced Fund) since
1995
STEVEN J. REID, 39 Portfolio Manager and Analyst for the Adviser
Vice President and Portfolio
Manager (Small Cap Fund)
since 1995
ADAM SCHOR, 31 Portfolio Manager and Analyst for the Adviser,
Assistant Vice President and since 1993; Analyst, American Family
Co-portfolio Manager Insurance Group, 1992-1993; Analyst, State
(International Emerging of Wisconsin Investment Board, prior thereto
Fund) since 1995
MICHAEL J. WELSH, 32 Portfolio Manager and Analyst for the Adviser,
Assistant Vice President and since 1992; Senior Associate, Valuation
Co-portfolio Manager Services, Coopers & Lybrand, prior thereto.
(International Fund) since 1995
LAUREN B. PITALIS, 35 Director of Mutual Fund Operations of the
Vice President--Shareholder Adviser since 1992; Manager of Distribution
Operations since 1994 and Services, Mesirow Financial, Inc., prior
Assistant Secretary since 1993 thereto
ANITA M. NAGLER, 39 Vice President, HAI, since 1994; General
Secretary since 1995 Counsel of the Adviser since 1993; Associate
Regional Administrator--Enforcement,
Securities and Exchange Commission, prior
thereto
DONALD TERAO, 45 Secretary and Treasurer, HAI, since 1995;
Treasurer since 1995 Controller of the Former Adviser prior
thereto
KRISTI L. ROWSELL, 29 Tax and Accounting Manager of the Adviser
Assistant Treasurer since 1995 since 1995; Vice President, Secretary and
Treasurer, Calamos Asset Management, Inc.,
and Secretary and Treasurer, CFS Investment
Trust, 1992-1995; Senior Tax Specialist,
KPMG Peat Marwick, prior thereto
</TABLE>
13
<PAGE>
SHARE OWNERSHIP
The following table shows shares of each Fund as to which each trustee, and
all trustees, and officers of the Trust as a group, had or shared power over
voting or disposition at November 15, 1995.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(1)
---------------------------------------------
BALANCED OAKMARK INT'L EMERG. INT'L SMALL CAP
NAME FUND FUND FUND FUND FUND
- ---- -------- ------- ------------ ----- ---------
<S> <C> <C> <C> <C> <C>
Christine M. Bucher...............
James W. Ford.....................
Michael J. Friduss................
Thomas H. Hayden..................
Victor A. Morgenstern.............
Allan J. Reich....................
Burton W. Ruder...................
Peter S. Voss.....................
Gary Wilner, M.D..................
All trustees and officers
as a group(2)...................
</TABLE>
- -----------
(1) Shares are held with sole power over voting and disposition except as
noted. No trustee held as much as 1% of the outstanding shares of any Fund
[except ]. The shares held by all trustees and officers as a
group represented less than 1% of the outstanding shares of each Fund
[except ].
(2) Includes shares of Balanced Fund, shares of Oakmark Fund,
shares of International Emerging Fund, shares of Oakmark
International and shares of Small Cap Fund that are held for the
benefit of persons who are not trustees, trustee-nominees or officers of
the Trust by Donald Terao, as trustee of an employee benefit plan, and as
to which Mr. Terao disclaims beneficial ownership.
The only person known by the Trust to own of record or "beneficially"
(within the meaning of that term as defined in rule 13d-3 under the Securities
Exchange Act of 1934) 5% or more of the outstanding shares of any Fund as of
November 15, 1995 was Charles Schwab & Co., Inc., 101 Montgomery Street, San
Francisco, California 94104, who owned of record but not beneficially
approximately % of the shares of Oakmark % of the shares of Oakmark
International [other Funds?]
PORTFOLIO TRANSACTIONS
Portfolio transactions of each Fund are placed with those securities brokers
and dealers that the Adviser believes will provide the best value in
transaction and research services for that Fund, either in a particular
transaction or over a period of time. Subject to that standard, portfolio
transactions for each Fund may
14
<PAGE>
be executed through Harris Associates Securities L.P. ("HASLP"), a registered
broker-dealer and an affiliate of the Adviser.
In valuing brokerage services, the Adviser makes a judgment as to which
brokers are capable of providing the most favorable net price (not necessarily
the lowest commission) and the best execution in a particular transaction. Best
execution connotes not only general competence and reliability of a broker, but
specific expertise and effort of a broker in overcoming the anticipated
difficulties in fulfilling the requirements of particular transactions, because
the problems of execution and the required skills and effort vary greatly among
transactions.
Although some transactions involve only brokerage services, many involve
research services as well. In valuing research services, the Adviser makes a
judgment of the usefulness of research and other information provided by a
broker to the Adviser in managing a Fund's investment portfolio. In some cases,
the information, e.g., data or recommendations concerning particular
securities, relates to the specific transaction placed with the broker, but for
the greater part the research consists of a wide variety of information
concerning companies, industries, investment strategy and economic, financial
and political conditions and prospects, useful to the Adviser in advising the
Funds.
The Adviser is the principal source of information and advice to the Funds,
and is responsible for making and initiating the execution of the investment
decisions by each Fund. However, the board of trustees recognizes that it is
important for the Adviser, in performing its responsibilities to the Funds, to
continue to receive and evaluate the broad spectrum of economic and financial
information that many securities brokers have customarily furnished in
connection with brokerage transactions, and that in compensating brokers for
their services, it is in the interest of the Funds to take into account the
value of the information received for use in advising the Funds. Consequently,
the commission paid to brokers (other than HASLP or any other affiliate of the
Adviser) providing research services may be greater than the amount of
commission another broker would charge for the same transaction. The extent, if
any, to which the obtaining of such information may reduce the expenses of the
Adviser in providing management services to the Funds is not determinable. In
addition, it is understood by the board of trustees that other clients of the
Adviser might also benefit from the information obtained for the Funds, in the
same manner that the Funds might also benefit from information obtained by the
Adviser in performing services to others.
HASLP may act as broker for a Fund in connection with the purchase or sale of
securities by or to the Fund if and to the extent permitted by procedures
adopted from time to time by the board of trustees of the Fund. The trustees
have determined that portfolio transactions for a Fund may be executed through
15
<PAGE>
HASLP if, in the judgment of the Adviser, the use of HASLP is likely to result
in prices and execution at least as favorable to the Fund as those available
from other qualified brokers and if, in such transactions, HASLP charges the
Fund commission rates consistent with those charged by HASLP to comparable
unaffiliated customers in similar transactions. The board of trustees,
including a majority of the trustees who are not "interested" trustees, has
adopted procedures that are reasonably designed to provide that any
commissions, fees or other remuneration paid to HASLP are consistent with the
foregoing standard. The Funds will not effect principal transactions with
HASLP. In executing transactions through HASLP, the Funds will be subject to,
and intend to comply with, section 17(e) of the 1940 Act and rules thereunder.
The reasonableness of brokerage commissions paid by the Funds in relation to
transaction and research services received are evaluated by the staff of the
Adviser on an ongoing basis. The general level of brokerage charges and other
aspects of the Funds' portfolio transactions are reviewed periodically by the
board of trustees.
The following table shows for their last fiscal year the aggregate brokerage
commissions paid by each of Oakmark Fund and International Fund to HASLP and
the percentage of each Fund's total commissions represented by the commissions
paid to HASLP (the other Funds did not commence operations until November 1,
1995):
<TABLE>
<CAPTION>
COMMISSIONS
PAID TO HASLP
--------------------
AGGREGATE AS %
COMMISSIONS OF TOTAL
----------- --------
<S> <C> <C>
Oakmark Fund............................................ $421,714 18.71%
Oakmark International Fund.............................. 71,600 2.22%
</TABLE>
OTHER INFORMATION ABOUT THE ADVISER
The Adviser is also the sub-adviser and portfolio manager for the Stalwart
Core Equity Fund ("Stalwart Fund"), a series of Briar Funds Trust ("BFT").
Pursuant to the sub-advisory agreement among the Adviser, Briar Capital
Management L.L.C. ("BCM"), Stalwart Fund's principal adviser, and BFT (the
"Sub-Advisory Agreement"), BCM pays the Adviser .50% of the average daily net
assets of Stalwart Fund, plus an adjustment determined by using a formula
based on Stalwart Fund's investment performance relative to the performance of
the S&P 500. The adjustment is 0.02% for each full 1.00% by which the total
rate of return of Stalwart Fund differs from the total rate of return on the
S&P 500 during each Stalwart Fund year. The maximum annualized performance
adjustment is plus or minus 0.10% (i.e., 10 basis points). The Adviser will
receive the maximum performance adjustment in the event that the total rate of
return of Stalwart Fund exceeds the total rate of return of the S&P 500 by
5.00%
16
<PAGE>
(i.e., 500 basis points). At November 30, 1995 Stalwart Fund had net assets of
$ million.
SOLICITATION OF PROXIES
Proxies will be solicited by the board of trustees, and the cost of
solicitation will be paid by the Adviser or Met Life. Additional solicitation
may be made by mail, personal interview, telephone and telegraph by officers of
the Trust or by principals or employees of the Adviser, none of whom will
receive any additional compensation for that service. The Trust may also
arrange to have votes recorded by telephone. The telephone voting procedure is
designed to authenticate shareholders' identities, to allow shareholders to
authorize the voting of their shares in accordance with their instructions and
to confirm that their instructions have been properly recorded. The Trust may
also engage D.F. King & Co., Inc. to render proxy solicitation services at a
fee estimated at $ . The cost of any additional solicitation, telephone
voting and for any proxy solicitation services will also be borne by the
Adviser or Met Life. The Trust will inquire of any record holder known to be a
broker, bank or other nominee as to whether other persons were the beneficial
owners of shares held of record by such persons. If so, the Trust will supply
additional copies of solicitation materials for forwarding to beneficial
owners, and the Adviser, New England and NEIC will reimburse the nominee for
reasonable out-of-pocket costs.
QUORUM; VOTING AT THE MEETING AND ADJOURNMENT
A quorum of shareholders is required to take action at the meeting. Thirty
percent of the shares entitled to vote at the meeting, represented in person or
by proxy, will constitute a quorum. The inspectors of election will determine
whether or not a quorum is present at the meeting.
Approval of each New Advisory Agreement with respect to a Fund and approval
of the changes in the fundamental policies of the Oakmark Fund, requires the
affirmative vote of "a majority of the outstanding voting securities" of the
applicable Fund. The term "a majority of the outstanding voting securities" as
defined in the 1940 Act means: the affirmative vote of the lesser of (i) 67% of
the voting securities of the Fund present at the meeting if more than 50% of
the outstanding shares of the Fund are present in person or represented by
proxy or (ii) more than 50% of the outstanding shares of the Fund.
In the event that sufficient votes to approve any proposal are not received,
the persons named as proxy agents may propose one or more adjournments of the
meeting to permit further solicitation of proxies. Any decision to adjourn the
17
<PAGE>
meeting will be made by vote of the shares present at the meeting, in person or
by proxy, whether or not a quorum is present. Proxies will be voted in favor of
adjournment as to any item of business for which there are not enough shares
present at the meeting to take action. If sufficient shares are present to
constitute a quorum for purposes of an item of business, but insufficient votes
have been cast in favor of the item to approve it, proxies will be voted in
favor of adjournment only if the board of trustees determines that adjournment
and additional solicitation is reasonable and in the best interest of the
shareholders of the Funds, taking into account the nature of the proposal, the
percentage of votes actually cast, the percentage of negative votes, the nature
of any further solicitation that might be made and the information provided to
shareholders about the reasons for additional solicitation. A vote may be taken
on any of the proposals in this proxy statement for either Fund prior to any
adjournment if sufficient votes have been received for approval with respect to
that Fund.
SHAREHOLDER MEETINGS AND PROPOSALS
Pursuant to Massachusetts law, the Declaration of Trust and By-laws of the
Trust, the Trust is not required to hold an annual meeting of shareholders.
Future meetings of shareholders will be held when and as determined necessary
by the board of trustees and in accordance with the 1940 Act. A shareholder
desiring to submit a proposal for presentation at a meeting of shareholders
should send the proposal to the offices of the Trust, Two North LaSalle Street,
Chicago, Illinois, 60602-3790.
IF YOU CANNOT BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE
ENCLOSED PROXY PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By order of the board of trustees:
LOGO
Victor A. Morgenstern
President
18
<PAGE>
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
FOR
THE OAKMARK FUND
HARRIS ASSOCIATES INVESTMENT TRUST, a Massachusetts business trust
registered under the Investment Company Act of 1940 (the "1940 Act") as an
open-end diversified management investment company (the "Trust"), and HARRIS
ASSOCIATES L.P., a Delaware limited partnership registered under the
Investment Advisers Act of 1940 as an investment adviser (the "Adviser"),
agree as follows:
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as manager
and investment adviser to The Oakmark Fund (the "Fund"), a series
of the Trust, for the period and on the terms herein set forth. The Adviser
accepts such appointment and agrees to render the services herein set forth,
for the compensation herein provided.
2. SERVICES OF ADVISER. (a) The Adviser shall manage the investment and
reinvestment of the assets of the Fund, subject to the supervision of the
board of trustees of the Trust, for the period and on the terms set forth in
this agreement. The Adviser shall give due consideration to the investment
policies and restrictions and the other statements concerning the Fund in the
Trust's Agreement and Declaration of Trust, bylaws and registration statements
under the 1940 Act and the Securities Act of 1933 (the "1933 Act"), and to the
provisions of the Internal Revenue Code applicable to the Trust as a regulated
investment company. The Adviser shall be deemed for all purposes to be an
independent contractor and not an agent of the Trust or the Fund, and unless
otherwise expressly provided or authorized, shall have no authority to act or
represent the Trust or the Fund in any way.
(b) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Adviser, although the Fund will pay the actual brokerage
commissions on portfolio transactions in accordance with Paragraph 4. In
executing portfolio transactions and selecting brokers or dealers, the Adviser
will use its best efforts to seek on behalf of the Fund the best overall terms
available for any transaction. The Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of
the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis).
A-1
<PAGE>
(c) To the extent contemplated by the Trust's registration statement under
the 1933 Act, in evaluating the best overall terms available, and in selecting
the broker or dealer to execute a particular transaction, the Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund
and/or other accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. Consistent with the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. and subject to seeking the
most favorable combination of net price and execution available, the Adviser
may consider sales of shares of the Fund as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund. The Adviser is
authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Fund which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer,
viewed in terms of that particular transaction or in terms of all of the
accounts over which investment discretion is so exercised.
3. SERVICES OTHER THAN AS ADVISER. The Adviser (or an affiliate of the
Adviser) may act as broker for the Trust in connection with the purchase or
sale of securities by or to the Trust if and to the extent permitted by
procedures adopted from time to time by the board of trustees of the Trust.
Such brokerage services are not within the scope of the duties of the Adviser
under this agreement, and, within the limits permitted by law and the trustees,
the Adviser (or an affiliate of the Adviser) may receive brokerage commissions,
fees or other remuneration from the Trust for such services in addition to its
fee for services as Adviser. Within the limits permitted by law, the Adviser
may receive compensation from the Trust for other services performed by or for
the Trust which are not within the scope of the duties of the Adviser under
this agreement.
4. EXPENSES TO BE PAID BY ADVISER. The Adviser shall furnish to the Trust, at
its own expense, such office space and all office facilities, equipment and
personnel necessary to render the services set forth in paragraph 2 above. The
Adviser shall also assume and pay all expenses incurred by it related to the
placement of securities orders, and all expenses of marketing shares of the
Trust.
5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall pay all expenses not
expressly assumed by the Adviser, including but not limited to: all charges of
depositories, custodians and other agencies for the safekeeping and servicing
of its cash, securities and other property and of its transfer agents, fund
accounting agents, registrars and its dividend disbursing and redemption
agents, if any; all charges of legal counsel and of independent auditors; all
compensation of
A-2
<PAGE>
trustees other than those affiliated with the Adviser and all expenses
incurred in connection with their services to the Trust; all costs of
borrowing money; all expenses of publication of notices and reports to its
shareholders and to governmental bodies or regulatory agencies; all expenses
of proxy solicitations of the Trust or its board of trustees with respect to
the Fund; all expenses of shareholder meetings; all expenses of typesetting of
the Fund's prospectus and of printing and mailing copies of the prospectus
furnished to each then-existing shareholder or beneficial owner; all taxes and
fees payable to federal, state or other governmental agencies, domestic or
foreign; all stamp or other transfer taxes; all expenses of printing and
mailing certificates for shares of the Trust; all expenses of bond and
insurance coverage required by law or deemed advisable by the Trust's board of
trustees; all expenses of maintaining the registration of shares of the Trust
under the 1933 Act and of qualifying and maintaining qualification of shares
of the Trust under the securities laws of such United States jurisdictions as
the Trust may from time to time reasonably designate and all expenses of
maintaining the registration of the Trust under the 1940 Act; and all fees,
dues and other expenses related to membership of the Trust in any trade
association or other investment company organization. In addition to the
payment of expenses, the Trust shall also pay all brokers' commissions and
other charges relating to the purchase and sale of portfolio securities.
6. COMPENSATION OF ADVISER. For the services to be rendered and the charges
and expenses to be assumed and to be paid by the Adviser hereunder, the Trust
shall pay out of Fund assets to the Adviser a monthly fee, based on the Fund's
net assets as of the last business day of the preceding month, at the annual
rate of *. The fee for a month shall be paid as soon as
practicable after the last day of that month. The fee payable hereunder shall
be reduced proportionately during any month in which this agreement is not in
effect for the entire month.
7. LIMITATION OF EXPENSES OF THE FUND. The total expenses of the Fund,
exclusive of taxes, interest and extraordinary litigation expenses, but
including fees paid to the Adviser, shall not in any fiscal year of the Trust
exceed the most
- -----------
*The Oakmark Balanced Fund] .75% of net assets.
[The Oakmark Fund] 1.00% on the first $2.5 billion of net assets, .95% on
the next $1.25 billion, .90% on the next $1.25 billion of net assets and
.85% on net assets in excess of $5 billion.
[The Oakmark International Fund] 1.00% on the first $2.5 billion of net
assets, .95% on the next $2.5 billion of net assets, and .90% on net
assets in excess of $5 billion.
[The Oakmark International Emerging Value Fund] 1.25% of net assets.
[The Oakmark Small Cap Fund] 1.25% of net assets.
A-3
<PAGE>
restrictive limits prescribed by any state in which Fund shares are then being
offered for sale, and the Adviser agrees to reimburse the Fund for any sums
expended for such expenses in excess of that amount. Brokers' commissions and
other charges relating to the purchase and sale of portfolio securities shall
not be regarded as expenses.
8. SERVICES OF ADVISER NOT EXCLUSIVE. The services of the Adviser to the
Trust hereunder are not exclusive, and the Adviser shall be free to render
similar services to others so long as its services under this agreement are not
impaired by such other activities.
9. LIABILITY OF ADVISER. The Adviser shall not be liable to the Trust or its
shareholders for any loss suffered by the Trust or its shareholders from or as
a consequence of any act or omission of the Adviser, or of any of the partners,
employees or agents of the Adviser, in connection with or pursuant to this
agreement, except by reason of willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or by
reason of reckless disregard by the Adviser of its obligations and duties under
this agreement.
10. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not be
binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the assets and property
of the Trust as provided in the Agreement and Declaration of Trust of the
Trust.
11. USE OF ADVISER'S NAME. The Trust may use the name "Harris Associates
Investment Trust," or any other name derived from the name "Harris Associates,"
and the name "Oakmark" 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 the business of the Adviser
as investment adviser. At such time as this agreement or any extension, renewal
or amendment hereof, or such other similar agreement shall no longer be in
effect, the Trust will (by amendment of its Agreement and Declaration of Trust,
if necessary) cease to use any name derived from the name "Harris Associates,"
any name similar thereto or any other name indicating that it is advised by or
otherwise connected with the Adviser, or with any organization which shall have
succeeded to the Adviser's business as investment adviser, and shall cease to
use the name "Oakmark" or any name derived from the name "Oakmark." The consent
of the Adviser to the use of such names by the Trust shall not prevent the
Adviser's permitting any other enterprise, including another investment
company, to use such name or names.
12. DURATION AND RENEWAL. (a) Unless terminated as provided in section 13,
this agreement shall continue in effect until September 30, 1997, and
thereafter from year to year only so long as such continuance is specifically
A-4
<PAGE>
THE OAKMARK INTERNATIONAL EMERGING VALUE FUND P R O X Y
A SERIES OF HARRIS ASSOCIATES INVESTMENT TRUST
MEETING OF SHAREHOLDERS - JANUARY __, 1996
SOLICITED BY THE BOARD OF TRUSTEES
Victor A. Morgenstern, Robert J. Sanborn and Anita M. Nagler, or any of them,
each with power of substitution, are authorized to vote all shares of The
Oakmark International Emerging Value Fund, a series of Harris Associates
Investment Trust (the "Trust"), owned by the undersigned at the meeting of
shareholders of the Trust to be held January __, 1996 and at any adjournment of
the meeting in accordance with the instructions set forth below.
PROPOSAL: Approve a new investment advisory agreement for the Fund.
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED FOR THE
MATTERS INDICATED BELOW.
The Board of Trustees recommends voting "FOR" the proposal
- --------------------------------------------------------------------------------
PLEASE RETURN THE BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
PLACE THE BALLOT SO THAT THE RETURN ADDRESS, LOCATED ON THE REVERSE SIDE OF THE
MAIL-IN STUB, APPEARS THROUGH THE WINDOW IN THE ENVELOPE.
- --------------------------------------------------------------------------------
THE OAKMARK INTERNATIONAL EMERGING APPROVAL OF THE INVESTMENT ADVISORY
VALUE FUND AGREEMENT
PLEASE SIGN, DATE AND RETURN PROMPTLY [_] FOR [_] AGAINST [_] ABSTAIN
Signature(s) should be exactly as
name or names appear on this proxy.
If stock is held jointly, each
holder should sign. If signing is
by attorney, executor, administrator,
trustee or guardian, please give full
title.
Dated ________________________, 1996.
(Please be sure to insert date.)
_________________________________
_________________________________
Signature(s) of Shareholder(s)
<PAGE>
THE OAKMARK BALANCED FUND P R O X Y
A SERIES OF HARRIS ASSOCIATES INVESTMENT TRUST
MEETING OF SHAREHOLDERS - JANUARY __, 1996
SOLICITED BY THE BOARD OF TRUSTEES
Victor A. Morgenstern, Robert J. Sanborn and Anita M. Nagler, or any of them,
each with power of substitution, are authorized to vote all shares of The
Oakmark Balanced Fund, a series of Harris Associates Investment Trust (the
"Trust"), owned by the undersigned at the meeting of shareholders of the Trust
to be held January __, 1996 and at any adjournment of the meeting in accordance
with the instructions set forth below.
PROPOSAL: Approve a new investment advisory agreement for the Fund.
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED FOR THE
MATTERS INDICATED BELOW.
The Board of Trustees recommends voting "FOR" the proposal
- --------------------------------------------------------------------------------
PLEASE RETURN THE BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
PLACE THE BALLOT SO THAT THE RETURN ADDRESS, LOCATED ON THE REVERSE SIDE OF THE
MAIL-IN STUB, APPEARS THROUGH THE WINDOW IN THE ENVELOPE.
- --------------------------------------------------------------------------------
THE OAKMARK BALANCED FUND APPROVAL OF THE INVESTMENT ADVISORY
AGREEMENT
PLEASE SIGN, DATE AND RETURN PROMPTLY [_] FOR [_] AGAINST [_] ABSTAIN
Signature(s) should be exactly as
name or names appear on this proxy.
If stock is held jointly, each
holder should sign. If signing is
by attorney, executor, administrator,
trustee or guardian, please give full
title.
Dated ________________________, 1996.
(Please be sure to insert date.)
_________________________________
_________________________________
Signature(s) of Shareholder(s)
<PAGE>
THE OAKMARK INTERNATIONAL FUND P R O X Y
A SERIES OF HARRIS ASSOCIATES INVESTMENT TRUST
MEETING OF SHAREHOLDERS - JANUARY __, 1996
SOLICITED BY THE BOARD OF TRUSTEES
Victor A. Morgenstern, Robert J. Sanborn and Anita M. Nagler, or any of them,
each with power of substitution, are authorized to vote all shares of The
Oakmark International Fund, a series of Harris Associates Investment Trust (the
"Trust"), owned by the undersigned at the meeting of shareholders of the Trust
to be held January __, 1996 and at any adjournment of the meeting in accordance
with the instructions set forth below.
PROPOSAL: Approve a new investment advisory agreement for the Fund.
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED FOR THE
MATTERS INDICATED BELOW.
The Board of Trustees recommends voting "FOR" the proposal
- --------------------------------------------------------------------------------
PLEASE RETURN THE BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
PLACE THE BALLOT SO THAT THE RETURN ADDRESS, LOCATED ON THE REVERSE SIDE OF THE
MAIL-IN STUB, APPEARS THROUGH THE WINDOW IN THE ENVELOPE.
- --------------------------------------------------------------------------------
THE OAKMARK INTERNATIONAL FUND APPROVAL OF THE INVESTMENT ADVISORY
AGREEMENT
PLEASE SIGN, DATE AND RETURN PROMPTLY [_] FOR [_] AGAINST [_] ABSTAIN
Signature(s) should be exactly as
name or names appear on this proxy.
If stock is held jointly, each
holder should sign. If signing is
by attorney, executor, administrator,
trustee or guardian, please give full
title.
Dated ________________________, 1996.
(Please be sure to insert date.)
_________________________________
_________________________________
Signature(s) of Shareholder(s)
<PAGE>
THE OAKMARK FUND P R O X Y
A SERIES OF HARRIS ASSOCIATES INVESTMENT TRUST
MEETING OF SHAREHOLDERS - JANUARY __, 1996
SOLICITED BY THE BOARD OF TRUSTEES
Victor A. Morgenstern, Robert J. Sanborn and Anita M. Nagler, or any of them,
each with power of substitution, are authorized to vote all shares of The
Oakmark Fund, a series of Harris Associates Investment Trust (the "Trust"),
owned by the undersigned at the meeting of shareholders of the Trust to be held
January __, 1996 and at any adjournment of the meeting in accordance with the
instructions set forth below.
PROPOSALS:
1. Approve a new investment advisory agreement for the Fund.
2. Approve amendments to the Fund's investment restrictions to permit the
Fund:
(a) To invest in repurchase agreements;
(b) To lend its portfolio securities
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED FOR THE
MATTERS INDICATED BELOW.
The Board of Trustees recommends voting "FOR" the proposals.
- --------------------------------------------------------------------------------
PLEASE RETURN THE BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
PLACE THE BALLOT SO THAT THE RETURN ADDRESS, LOCATED ON THE REVERSE SIDE OF THE
MAIL-IN STUB, APPEARS THROUGH THE WINDOW IN THE ENVELOPE.
- --------------------------------------------------------------------------------
THE OAKMARK FUND PROPOSAL 1. Investment advisory agreement
PLEASE SIGN, DATE AND [_] FOR [_] AGAINST [_] ABSTAIN
RETURN PROMPTLY
PROPOSAL 2(a). Investment in repurchase agreements
Signature(s) should be
exactly as name or names [_] FOR [_] AGAINST [_] ABSTAIN
appear on this proxy. If
stock is held jointly, PROPOSAL 2(b). Loans of portfolio securities
each holder should sign.
If signing is by attorney, [_] FOR [_] AGAINST [_] ABSTAIN
executor, administrator,
trustee or guardian, please
give full title.
Dated ________________________, 1996.
(Please be sure to insert date.)
_________________________________
_________________________________
Signature(s) of Shareholder(s)
<PAGE>
THE OAKMARK SMALL CAP FUND P R O X Y
A SERIES OF HARRIS ASSOCIATES INVESTMENT TRUST
MEETING OF SHAREHOLDERS - JANUARY __, 1996
SOLICITED BY THE BOARD OF TRUSTEES
Victor A. Morgenstern, Robert J. Sanborn and Anita M. Nagler, or any of them,
each with power of substitution, are authorized to vote all shares of The
Oakmark Small Cap Fund, a series of Harris Associates Investment Trust (the
"Trust"), owned by the undersigned at the meeting of shareholders of the Trust
to be held January __, 1996 and at any adjournment of the meeting in accordance
with the instructions set forth below.
PROPOSAL: Approve a new investment advisory agreement for the Fund.
IF NO SPECIFIC INSTRUCTIONS ARE PROVIDED, THIS PROXY WILL BE VOTED FOR THE
MATTERS INDICATED BELOW.
The Board of Trustees recommends voting "FOR" the proposal
- --------------------------------------------------------------------------------
PLEASE RETURN THE BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION.
PLACE THE BALLOT SO THAT THE RETURN ADDRESS, LOCATED ON THE REVERSE SIDE OF THE
MAIL-IN STUB, APPEARS THROUGH THE WINDOW IN THE ENVELOPE.
- --------------------------------------------------------------------------------
THE OAKMARK SMALL CAP FUND APPROVAL OF THE INVESTMENT ADVISORY
AGREEMENT
PLEASE SIGN, DATE AND RETURN PROMPTLY [_] FOR [_] AGAINST [_] ABSTAIN
Signature(s) should be exactly as
name or names appear on this proxy.
If stock is held jointly, each
holder should sign. If signing is
by attorney, executor, administrator,
trustee or guardian, please give full
title.
Dated ________________________, 1996.
(Please be sure to insert date.)
_________________________________
_________________________________
Signature(s) of Shareholder(s)
<PAGE>
January __, 1996
YOUR VOTE COUNTS; PLEASE RETURN YOUR PROXY TODAY
Dear Shareholder:
A few weeks ago, we sent you a proxy statement describing two matters that
are being submitted to shareholders for your vote. The shareholder meeting is
scheduled to be held on January __, 1996.
If you have not yet done so, please sign and return your proxy as soon as
possible. In case you misplaced the first one we sent you, another proxy is
enclosed. The Board of Trustees recommends that you vote FOR the proposal(s).
REMEMBER, YOUR VOTE COUNTS, NO MATTER HOW MANY SHARES YOU OWN.
Again, we encourage you to vote your proxy promptly. If you have
questions, please call us at 1-800-476-9625.
Sincerely,
Victor A. Morgenstern
President
