<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
[X] Definitive Proxy Statement COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Additional Materials RULE 14A-6(E)(2))
[_] Soliciting Material under Rule 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] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
-------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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:
-------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
3) Filing Party:
-------------------------------------------------------------------------
4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
HARRIS ASSOCIATES INVESTMENT TRUST
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602-3790
August 28, 2000
To Shareholders of The Oakmark Family of Funds:
As we announced to you in July, our investment adviser's parent company
(called "Nvest") has entered into an agreement to be acquired by CDC Asset
Management (called "CDC AM"), a leading French financial institution, as more
fully described in the enclosed proxy statement. As a result, we are
soliciting your vote for approval of certain items as described in the
enclosed proxy statement. Reading this letter completely may make your review
of the proxy statement easier. We ask that you review the proxy statement and
vote your shares promptly. You can vote by returning the enclosed proxy
card(s) or by following the instructions to vote via the Internet or via a
touch-tone phone.
Q. WHAT ARE YOU ASKING ME TO VOTE ON?
The sole proposal relates to the investment advisory agreement for each
Fund. The laws governing mutual funds generally require that when a fund's
investment adviser undergoes a change in ownership, the advisory agreement
with the fund will terminate. In order for The Oakmark Family of Funds to
continue with Harris Associates L.P. as its investment adviser, shareholders
of each Fund must approve a new investment advisory agreement.
In July, the board of trustees of Harris Associates Investment Trust voted
to amend the current investment advisory agreements to decrease the rates of
advisory fees at various asset levels for each of The Oakmark Fund, The
Oakmark Small Cap Fund, The Oakmark International Fund and The Oakmark
International Small Cap Fund. No changes were made to the fee schedules of The
Oakmark Select Fund, The Oakmark Equity and Income Fund or The Oakmark Global
Fund.
The proposed new investment advisory agreement for each Fund is identical to
the investment advisory agreement for the Fund as it will be in effect on
October 1, 2000 except for the date of the agreement and the initial term.
FEES WILL NOT INCREASE AND NO CHANGES IN PORTFOLIO MANAGERS OF YOUR FUND ARE
CONTEMPLATED.
Q. HOW WILL THE CDC AM ACQUISITION OF NVEST AFFECT THE OAKMARK FAMILY OF
FUNDS?
The transaction is not expected to affect the daily operations of the Funds
or the investment management activities of Harris Associates L.P. Harris
Associates
<PAGE>
L.P. and the Funds will continue to operate autonomously, but will be part of
a larger organization with the resources of CDC AM. We will continue to work
to meet your expectations for consistent, competitive performance and high
quality customer service. The Funds' investment objectives, strategies and
portfolio managers are not expected to change as a result of the transaction.
Q: HOW DO I VOTE?
You can vote by mail, or you can use the Internet or your telephone, if you
want to vote electronically. Please see your proxy card(s) for more
information and the instructions. If you do vote electronically, you do not
need to mail your proxy card(s). However, if you want to change your vote you
may do so using a proxy card, telephone or Internet.
If you own shares in more than one account, we have enclosed a separate card
for each account in each Fund. These are not duplicate cards; it is important
to vote each account represented by a proxy card.
REMEMBER--YOUR VOTE COUNTS!
Your vote is extremely important, even if you only own a few Fund shares.
Voting promptly is also important. If we do not receive enough votes, we will
have to resolicit shareholders, which can be time consuming and may delay the
meeting. You may receive a reminder call to return your proxy from D.F. King &
Company, a proxy solicitation firm.
Thank you for your cooperation in voting on this important proposal. If you
have questions, please call our service center representatives toll-free at 1-
800-OAKMARK (1-800-625-6275).
Sincerely,
/s/ Victor A. Morgenstern
Victor A. Morgenstern
Chairman of the Board of Trustees
2
<PAGE>
HARRIS ASSOCIATES INVESTMENT TRUST
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602-3790
August 28, 2000
To Shareholders of The Oakmark Family of Funds:
As we announced to you in July, our investment adviser's parent company
(called "Nvest") has entered into an agreement to be acquired by CDC Asset
Management (called "CDC AM"), a leading French financial institution, as more
fully described in the enclosed proxy statement. As a result, we are
soliciting your vote for approval of certain items as described in the
enclosed proxy statement. Reading this letter completely may make your review
of the proxy statement easier. We ask that you review the proxy statement and
vote your shares promptly. You can vote by returning the enclosed proxy
card(s) or by following the instructions to vote via the Internet or via a
touch-tone phone.
Q. WHAT ARE YOU ASKING ME TO VOTE ON?
The sole proposal relates to the investment advisory agreement for each
Fund. The laws governing mutual funds generally require that when a fund's
investment adviser undergoes a change in ownership, the advisory agreement
with the fund will terminate. In order for The Oakmark Family of Funds to
continue with Harris Associates L.P. as its investment adviser, shareholders
of each Fund must approve a new investment advisory agreement.
In July, the board of trustees of Harris Associates Investment Trust voted
to amend the current investment advisory agreements to decrease the rates of
advisory fees at various asset levels for each of The Oakmark Fund, The
Oakmark Small Cap Fund, The Oakmark International Fund and The Oakmark
International Small Cap Fund. No changes were made to the fee schedules of The
Oakmark Select Fund, The Oakmark Equity and Income Fund or The Oakmark Global
Fund.
The proposed new investment advisory agreement for each Fund is identical to
the investment advisory agreement for the Fund as it will be in effect on
October 1, 2000 except for the date of the agreement and the initial term.
FEES WILL NOT INCREASE AND NO CHANGES IN PORTFOLIO MANAGERS OF YOUR FUND ARE
CONTEMPLATED.
Q. HOW WILL THE CDC AM ACQUISITION OF NVEST AFFECT THE OAKMARK FAMILY OF
FUNDS?
The transaction is not expected to affect the daily operations of the Funds
or the investment management activities of Harris Associates L.P. Harris
Associates L.P.
<PAGE>
and the Funds will continue to operate autonomously, but will be part of a
larger organization with the resources of CDC AM. We will continue to work to
meet your expectations for consistent, competitive performance and high
quality customer service. The Funds' investment objectives, strategies and
portfolio managers are not expected to change as a result of the transaction.
Q: HOW DO I VOTE?
You can vote by mail, or you can use the Internet or your telephone, if you
want to vote electronically. Please see your proxy card(s) for more
information and the instructions. If you do vote electronically, you do not
need to mail your proxy card(s). However, if you want to change your vote you
may do so using a proxy card, telephone or Internet.
If you own shares in more than one account, we have enclosed a separate card
for each account in each Fund. These are not duplicate cards; it is important
to vote each account represented by a proxy card.
REMEMBER--YOUR VOTE COUNTS!
Your vote is extremely important, even if you only own a few Fund shares.
Voting promptly is also important. If we do not receive enough votes, we will
have to resolicit shareholders, which can be time consuming and may delay the
meeting. You may receive a reminder call to return your proxy from D.F. King &
Company, a proxy solicitation firm.
Thank you for your cooperation in voting on this important proposal.
Sincerely,
/s/ Victor A. Morgenstern
Victor A. Morgenstern
Chairman of the Board of Trustees
2
<PAGE>
HARRIS ASSOCIATES INVESTMENT TRUST
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602-3790
THE OAKMARK FUND
THE OAKMARK SELECT FUND
THE OAKMARK SMALL CAP FUND
THE OAKMARK EQUITY AND INCOME FUND
THE OAKMARK GLOBAL FUND
THE OAKMARK INTERNATIONAL FUND
THE OAKMARK INTERNATIONAL SMALL CAP FUND
(the "Funds")
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
October 11, 2000
A Special Meeting of the shareholders of each Fund will be held on
October 11, 2000 at 10:00 a.m. at the Conference Center, Two North LaSalle
Street, Suite 620, Chicago, Illinois 60602:
To approve a new Investment Advisory Agreement with Harris Associates
L.P. for each Fund
and to consider and act upon any other matters that properly come before the
meeting and any adjourned session of the meeting.
Shareholders of record at the close of business on August 28, 2000 are
entitled to notice of and to vote at the meeting and any adjourned session.
By order of the Board of
Trustees,
/s/ Anita M. Nagler
Anita M. Nagler
Secretary
August 28, 2000
PLEASE RESPOND. YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD(S), WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING.
<PAGE>
PROXY STATEMENT
HARRIS ASSOCIATES INVESTMENT TRUST
TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60602-3790
THE OAKMARK FUND
THE OAKMARK SELECT FUND
THE OAKMARK SMALL CAP FUND
THE OAKMARK EQUITY AND INCOME FUND
THE OAKMARK GLOBAL FUND
THE OAKMARK INTERNATIONAL FUND
THE OAKMARK INTERNATIONAL SMALL CAP FUND
(the "Funds")
The Trustees of Harris Associates Investment Trust (the "Trustees") are
soliciting proxies from the shareholders of each of the Funds in connection
with a Special Meeting of Shareholders of each Fund (the "Meeting") called to
be held on October 11, 2000 at the Conference Center, Two North LaSalle
Street, Chicago, Illinois 60602-3790. The meeting notice, this Proxy Statement
and proxy cards are being sent to shareholders of record on August 28, 2000
(the "Record Date") beginning on or about August 28, 2000.
The only item of business that the Trustees expect will come before the
Meeting is approval of a new Investment Advisory Agreement for each Fund (each
Fund's "New Advisory Agreement") with Harris Associates L.P. (the "Adviser").
The reason the Trustees are proposing the New Advisory Agreement for each Fund
is that the investment advisory agreement for each Fund will terminate when
the Adviser's parent company, Nvest Companies, L.P. ("Nvest"), is acquired by
CDC Asset Management ("CDC AM"). (A federal law, the Investment Company Act of
1940 (the "Investment Company Act"), provides generally that the advisory
agreement of a mutual fund automatically terminates when the investment
adviser or its parent company undergoes a significant change of ownership.)
The Trustees have carefully considered the matter, and have concluded that it
is appropriate to enter into the New Advisory Agreement for each Fund, so that
the Adviser can continue to manage each Fund, following the acquisition of
Nvest by CDC AM.
The acquisition of Nvest by CDC AM will occur only if various conditions are
satisfied (or waived by the parties, if permitted by law). These conditions
include, among others, certain government approvals of the acquisition and
approval of the acquisition by vote of the unitholders of Nvest and Nvest,
L.P. ("Nvest, L.P."), Nvest's advising general partner. Nvest currently
expects that the
1
<PAGE>
acquisition will occur during the fourth calendar quarter of 2000, but the
acquisition could be delayed. If the acquisition does not occur, the New
Advisory Agreements would not be needed because the automatic termination of
the investment advisory agreements would not occur.
Under the Investment Company Act, a Fund cannot enter into a New Advisory
Agreement unless the shareholders of that Fund vote to approve the New
Advisory Agreement. The Meeting is being held to seek shareholder approval of
the New Advisory Agreements.
Shareholders of each Fund will vote only with regard to the New Advisory
Agreement for that Fund. Each share is entitled to cast one vote, and
fractional shares are entitled to a proportionate fractional vote.
The Trustees recommend that the shareholders of each Fund vote to approve
the New Advisory Agreement for their Fund.
Description of the New Advisory Agreements
The New Advisory Agreement for each Fund is identical to the investment
advisory agreement for that Fund that will be in effect as of October 1, 2000
(the "Pre-acquisition Advisory Agreement"), except that the date of each New
Advisory Agreement will be the date that CDC AM acquires Nvest and the initial
term of each will be for the period ending October 31, 2001. Effective as of
October 1, 2000, the investment advisory agreement for each of The Oakmark
Fund, The Oakmark Small Cap Fund, The Oakmark International Fund and The
Oakmark International Small Cap Fund is being amended to reduce the rates of
advisory fees paid by the Fund at various asset levels. The following chart
shows, as a percentage of annual average net assets, the fee schedule for each
Fund in effect through September 2000 and the fee schedule for each Fund that
will be in effect as of October 1, 2000 and that would be applicable to the
New Advisory Agreements:
2
<PAGE>
<TABLE>
<CAPTION>
FUND OLD ADVISORY FEES NEW ADVISORY FEES
---- ----------------------------------- ---------------------------------
<S> <C> <C>
Oakmark Fund 1.00% up to $2.5 billion; 1.00% up to $2 billion;
0.95% on the next $1.25 billion; 0.90% on the next $1 billion;
0.90% on the next $1.25 billion; 0.80% on the next $2 billion; and
0.85% over $5 billion; and 0.75% over $5 billion
0.80% over $10 billion
Select Fund 1.00% up to $1 billion; No change
0.95% on the next $500 million;
0.90% o the next $500 million;
0.85% on the next $500 million;
0.80% over $2.5 billion; and
0.75% over $5 billion
Small Cap Fund 1.25% up to $1 billion; 1.00%
1.15% on the next $500 million;
1.10% on the next $500 million;
1.05% on the next $500 million; and
1.00% over $2.5 billion
Equity and Income Fund 0.75% No change
Global Fund 1.00% No change
International Fund 1.00% up to $2.5 billion; 1.00% up to $2 billion;
0.95% on the next $2.5 billion; and 0.95% on the next $1 billion; and
0.90% over $5 billion 0.85% over $3 billion
International 1.25% 1.25% up to $500 million; and
Small Cap Fund 1.10% over $500 million
</TABLE>
Appendix A to this Proxy Statement sets forth other information about the
current investment advisory agreements and the Pre-acquisition Advisory
Agreements, including the dates of each. Appendix B to this Proxy Statement
contains the form of the New Advisory Agreements. Each Pre-acquisition
Advisory Agreement and each New Advisory Agreement matches the form in
Appendix B, except for the name of the Fund, the date of the Agreement and the
fees. The Pre-acquisition Advisory Agreements and the New Advisory Agreements
are referred to as the "Agreements." The next several paragraphs briefly
summarize some important provisions of the Agreements, but for a complete
understanding of the Agreements you should read Appendixes A and B.
Each Agreement essentially provides that the Adviser, under the Trustees'
supervision, will (1) decide what securities to buy and sell for the Fund's
portfolio, (2) select brokers and dealers to carry out portfolio transactions
for the Fund, and (3) provide officers, office space and certain
administrative services to the Fund.
Each Agreement provides that it will continue in effect for an initial
period until October 31, 2001. After that, it will continue in effect from
year to year as long as the continuation is approved at least annually (i) by
the Trustees or by vote of a majority of the outstanding voting securities of
the Fund, and (ii) by vote of a
3
<PAGE>
majority of the Trustees who are not "interested persons," as that term is
defined in the Investment Company Act, of the Trust or the Adviser (those
Trustees who are not "interested persons" are referred to below as the
"Independent Trustees").
Each Agreement may be terminated without penalty by vote of the Trustees or
by vote of a majority of the outstanding voting securities of the Fund, on
sixty days' written notice to the Adviser, or by the Adviser upon sixty days'
written notice to the Trust, and each terminates automatically in the event of
its "assignment" as defined in the Investment Company Act. The Investment
Company Act defines "assignment" to include, in general, transactions in which
a significant change in the ownership of an investment adviser or its parent
company occurs (such as the acquisition of Nvest by CDC AM).
Each Agreement provides that the Adviser will not be liable to the Fund or
its shareholders, except for liability arising from the Adviser's willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
Basis for the Trustees' Recommendation
The Trustees determined at a meeting held on July 25, 2000 to recommend that
each Fund's shareholders vote to approve the New Advisory Agreement for that
Fund.
In coming to this recommendation, the Trustees considered a wide range of
information of the type they regularly consider when determining whether to
continue a Fund's advisory agreement as in effect from year to year. The
Trustees considered information about, among other things:
. the Adviser and its personnel (including particularly those personnel
with responsibilities for providing services to the Funds), resources
and investment process;
. the terms of the relevant advisory agreements (in this case, the New
Advisory Agreements);
. the scope and quality of the services that the Adviser has been
providing to the Funds;
. the investment performance of each Fund and of similar funds managed
by other advisers;
. the advisory fee rates payable to the Adviser by each Fund and the
advisory fee rates payable by similar funds managed by other advisers
(Appendix C to this Proxy Statement contains information about the
advisory fee schedules of those funds managed by the Adviser whose
investment objectives are similar to the Funds);
. the total expense ratio of each Fund and of similar funds managed by
other advisers;
4
<PAGE>
. the Adviser's practices regarding the selection and compensation of
brokers and dealers that execute portfolio transactions for the Funds,
and the brokers' and dealers' provision of brokerage and research
services to the Adviser (see "Certain Brokerage Matters" below for
more information about these matters); and
. compensation payable by each Fund to affiliates of the Adviser for
other services (see Appendix D to this Proxy Statement for more
information about that compensation).
In addition to reviewing that kind of information, which the Trustees
regularly consider on an annual or more frequent basis, the Trustees gave
particular consideration to matters relating to the possible effects on the
Adviser and the Funds of the acquisition of Nvest by CDC AM. Among other
things, the Trustees considered:
. the stated intention of Nvest and CDC AM that the Adviser will
continue to have a high degree of managerial autonomy from its parent
organizations and from other subsidiaries of Nvest;
. the stated intention of Nvest, CDC AM and the Adviser that the
acquisition will not change the investment approach or process used by
the Adviser in managing the Funds;
. representations of senior executives of the Adviser and the portfolio
managers of the Funds that they have no intention of terminating their
employment with the Adviser as a result of CDC AM's acquisition of
Nvest, and representations of the Adviser, Nvest and CDC AM that they
have no intention of terminating the employment of those executives or
portfolio managers as a result of the acquisition;
. certain actions taken by CDC AM, Nvest and the Adviser to help retain
and provide incentives for key personnel of Nvest and the Adviser;
. assurances from the Adviser that it has no plans, as a result of or in
connection with CDC AM's acquisition of Nvest, to change or
discontinue existing arrangements under which it agrees to reimburse
each class of the Funds if the class' annual ordinary operating
expenses exceed a certain percentage of its average net assets;
. the general reputation and the financial resources of CDC AM and its
parent organizations; and
. the fact that affiliates of the Adviser who currently provide transfer
agency and brokerage services to the Funds are willing to continue to
do so following the acquisition, and that the compensation rates
payable by the Funds for those services are not expected to change as
a result of the acquisition.
5
<PAGE>
In addition, the Trustees considered that the agreement relating to the
acquisition of Nvest by CDC AM provides that CDC AM and its immediate parent
company will (subject to certain qualifications) use their reasonable best
efforts to assure compliance with Section 15(f) of the Investment Company Act.
Section 15(f) provides that a mutual fund investment adviser or its affiliates
(such as Nvest's parent organizations) may receive benefit or compensation in
connection with a change of control of the investment adviser (such as CDC
AM's acquisition of the Adviser's parent, Nvest) if two conditions are
satisfied. First, for three years after the change of control, at least 75% of
the members of the board of any registered investment company advised by the
adviser must consist of persons who are not "interested persons," as defined
in the Investment Company Act, of the adviser (called the "Independent
Trustees"). (No change in the current composition of the Trustees is required
to satisfy that condition.) Second, no "unfair burden" may be imposed on any
such registered investment company as a result of the change of control
transaction or any express or implied terms, conditions or understandings
applicable to the transaction. "Unfair burden" means any arrangement, during
the two years after the transaction, by which the investment adviser or any
"interested person" of the adviser receives or is entitled to receive any
compensation, directly or indirectly, from such investment company or its
security holders (other than fees for bona fide investment advisory or other
services) or from any other person in connection with the purchase or sale of
securities or other property to, from or on behalf of such investment company.
After carefully considering the information referred to above, the Trustees,
including the Independent Trustees, unanimously voted to approve the New
Advisory Agreement for each Fund and to recommend that each Fund's
shareholders vote to approve the New Advisory Agreement for their Fund.
Information About the Ownership of the Adviser and the CDC AM/Nvest
Transaction
The Adviser is a limited partnership that has one general partner, Harris
Associates, Inc. (the "Adviser General Partner"), whose directors are David G.
Herro, Robert M. Levy, Roxanne M. Martino, Victor A. Morgenstern, Anita M.
Nagler, William C. Nygren, G. Neal Ryland, and Peter S. Voss. Mr. Levy is the
President (the principal executive officer) of the Trust. Mr. Levy's principal
occupation is his positions as the President of the Adviser and President and
Chief Executive Officer of the Adviser General Partner. The address of the
Adviser, the Adviser General Partner and Mr. Levy is Two North LaSalle Street,
Chicago, Illinois 60602-3790. The Adviser General Partner is a direct wholly-
owned subsidiary of Nvest Holdings, Inc. ("Nvest Holdings"), which in turn is
a direct wholly-owned subsidiary of Nvest. Nvest's managing general partner,
Nvest Corporation, is a direct wholly-owned subsidiary of MetLife New England
Holdings, Inc. MetLife New England Holdings, Inc. is a direct wholly-
6
<PAGE>
owned subsidiary of Metropolitan Life Insurance Company ("MetLife"). Nvest
Corporation is also the sole general partner of Nvest, L.P. Nvest, L.P.,
Nvest's advising general partner, is a publicly traded company listed on the
New York Stock Exchange. In addition to owning Nvest Corporation, MetLife
owns, directly or indirectly, approximately a 48% limited partnership interest
in Nvest. Nvest, L.P. owns approximately 15% of Nvest. (These percentages,
which are as of June 30, 2000, do not reflect the vesting and exercise,
described below, of various options held by personnel of Nvest and of its
affiliates, including the Adviser, to acquire limited partnership units of
Nvest, L.P.) If the proposed acquisition is completed, Nvest Corporation will
cease to be the managing general partner of Nvest, and the general partner of
Nvest, L.P., and MetLife will cease to own any partnership interest in Nvest.
MetLife is a wholly-owned subsidiary of MetLife, Inc., a publicly traded
company listed on the New York Stock Exchange. The address of Nvest, Nvest
Corporation, Nvest Holdings and Nvest, L.P. is 399 Boylston Street, Boston,
Massachusetts 02116. The address of MetLife New England Holdings, Inc.,
MetLife and MetLife, Inc. is One Madison Avenue, New York, New York 10010.
On June 16, 2000, Nvest and CDC AM announced that they and certain of their
respective affiliated companies had entered into an Agreement and Plan of
Merger (the "Merger Agreement"). Under the Merger Agreement, CDC AM would
acquire all of the outstanding units of partnership interest in both Nvest and
Nvest, L.P., at a price of $40 per unit. This price is subject to reduction
(but not below $34 per unit) based in part on a formula that takes into
account the investment advisory fees payable to the Adviser and other Nvest
affiliates by their mutual fund and other investment advisory clients that
have consented to the transaction. Under this formula, the price per unit that
CDC AM will pay to acquire Nvest, including the price it will pay to those
Trust Trustees and officers who hold or have been granted options to acquire
units (see below), could be reduced if a Fund's shareholders do not approve
the New Advisory Agreement for that Fund. Assuming a transaction price of $40
per unit, and the number of units and options outstanding as of June 30, 2000,
the aggregate price payable by CDC AM to acquire all of the units of Nvest
will be approximately $1.5 billion, and the aggregate price payable by CDC AM
to acquire all of the units of Nvest, L.P. (including payments with respect to
units subject to options) will be approximately $375 million.
The transaction will not occur unless various conditions are satisfied (or
waived by the parties, if permitted by law). One of these conditions is
obtaining approval or consent from investment advisory clients of the Adviser
and other Nvest affiliates (including mutual fund clients) whose advisory fees
represent a specified percentage of the total advisory fee revenues of the
Nvest organization. Because of this condition, approval or disapproval by a
Fund's shareholders of a New Advisory Agreement for that Fund, taken together
with other clients' consents or approvals, could affect whether or not the
transaction occurs. As described
7
<PAGE>
below, certain trustees and officers of the Trust will receive certain
material payments or benefits if the transaction occurs. The transaction will
result in the automatic termination of the Pre-acquisition Advisory
Agreements. If for some reason the transaction does not occur, the automatic
termination of the Pre-acquisition Advisory Agreements will not occur, and the
New Advisory Agreements will not be entered into, even if they have been
approved by the Funds' shareholders.
As a result of the acquisition, Nvest and Nvest, L.P. would become indirect
wholly-owned subsidiaries of CDC AM, which in turn is 60% owned by CDC
Finance, a wholly-owned subsidiary of Caisse des depots et Consignations
("CDC"). Founded in 1816, CDC is a major diversified financial institution
with a strong global presence in the banking, insurance, investment banking,
asset management and global custody industries. In addition to its 60%
ownership of CDC AM through CDC Finance, CDC owns 40% of CNP Assurances, the
leading French insurance company, which itself owns 20% of CDC AM. CDC also
owns 35% of Caisse National des Caisses d'Epargne, which also owns 20% of CDC
AM. CDC is 100% owned by the French state. The main place of business of CDC
AM is 7, place des Cinq Martyrs du Lycee Buffon, 75015 Paris, France. The
registered address of CDC Finance is 56, rue de Lille, 75007 Paris, France.
The registered address of CDC is 56, rue de Lille, 75007 Paris, France. The
registered address of CNP Assurances is 4, place Raoul Dautry, 75015 Paris,
France. The registered address of Caisse National des Caisses d'Epargne is 5,
rue Masseran, 75007 Paris, France. Following the acquisition, it is expected
that Nvest will be renamed CDC Asset Management-North America.
Various personnel of Nvest and of its affiliates, including the Adviser,
have previously been granted options to purchase limited partnership units of
Nvest, L.P. ("Nvest L.P. Units"). The Merger Agreement provides that those
options will vest and become fully exercisable immediately before CDC AM's
acquisition of Nvest and Nvest, L.P., even though some of those options would
not otherwise have vested or been exercisable at that time. Each option will
be converted into the right to receive cash from Nvest in an amount equal to
the difference between the option's exercise price and the transaction price
of $40 per unit (subject to reduction, but not below $34 per unit, as
explained above). As of June 30, 2000, there were 44,593,399 limited
partnership units of Nvest and options to purchase 7,432,430 Nvest L.P. Units
outstanding.
Certain Relationships and Interests of Trustees and Officers
Peter S. Voss, a Trustee of the Trust, and Victor A. Morgenstern, an officer
and Trustee of the Trust, and the following persons who are officers of the
Trust, are also officers or employees of the Adviser, directors of the Adviser
General Partner or directors of Nvest Corporation: James P. Benson, Henry R.
Berghoef,
8
<PAGE>
Kevin G. Grant, David G. Herro, Gregory L. Jackson, John J. Kane, Robert M.
Levy, Clyde S. McGregor, Anita M. Nagler, William C. Nygren, Ann W. Regan,
Kristi L. Rowsell, Edward A. Studzinski, and Michael J. Welsh (collectively,
the "Adviser Affiliates"). Some of the Adviser Affiliates, including Messrs.
Voss and Morgenstern, own partnership units in Nvest or Nvest, L.P. or have
the right to acquire partnership units under options and, upon completion of
CDC AM's acquisition of Nvest, will receive the consideration provided in the
Merger Agreement for the partnership units they own or have the right to
acquire under options. Depending on the number of units an Adviser Affiliate
owns or has the right to acquire, the amount of consideration he or she
receives could be substantial. As of June 30, 2000, Mr. Morgenstern owned
approximately 1.8% of the aggregate outstanding limited partnership units of
Nvest and Mr. Voss owned approximately 0.8% of the aggregate outstanding
limited partnership units of Nvest and 18.2% of the outstanding options to
purchase Nvest L.P. Units (which options are exercisable at different prices
based on the market prices of the underlying units when the options were
originally granted). In addition, the Merger Agreement provides that, in
connection with CDC AM's acquisition of Nvest, certain Adviser Affiliates,
including Mr. Voss, would enter into ongoing employment agreements or
participate in a retention program described below. Among other matters, such
an employment agreement would generally restrict an employee from competing
with the Adviser and soliciting clients of the Adviser and would provide for
substantial payments to be made if the employee remains employed for specified
periods of up to five years, in addition to regular salary and bonus payments.
Under the retention program, certain Adviser Affiliates would receive cash
retention awards payable over one to three years. To receive these awards,
which are in addition to regular salary and bonus payments and in some cases
may be substantial in amount, an eligible Adviser Affiliate must remain
employed by the Adviser and must agree to refrain from competing with the
Adviser and soliciting clients of the Adviser.
Certain Brokerage Matters
In their consideration of the New Advisory Agreements, the Trustees took
account of the Adviser's practices regarding the selection and compensation of
brokers and dealers that execute portfolio transactions for the Funds, and the
brokers' and dealers' provision of brokerage and research services to the
Adviser. The Adviser has informed the Trustees that it does not expect to
change those practices as a result of CDC AM's acquisition of Nvest. The
following is a summary of those practices:
Portfolio transactions for 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 be executed through Harris Associates
Securities L.P. ("HASLP"), a registered broker-dealer
9
<PAGE>
and an affiliate of the Adviser. HASLP is a limited partnership that has one
general partner, Harris Associates, Inc., which also is the general partner of
the Adviser, and one limited partner, 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 initiating and implementing the execution of the
investment decisions for each Fund. However, the Adviser, in performing its
responsibilities to the Funds, receives and evaluates a broad spectrum of
economic and financial information that many securities brokers have
customarily furnished in connection with brokerage transactions. The Adviser
believes 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) 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, 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.
The Trustees, including a majority of the Independent Trustees, have
determined that portfolio transactions for a Fund may be executed through
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
10
<PAGE>
qualified brokers and if, in such transactions, HASLP charges the Fund
commission rates at least as favorable to the Fund as those charged by HASLP
to comparable unaffiliated customers in similar transactions. The Trustees
have 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, the Funds intend to comply with section
17(e) of the Investment Company Act and rules thereunder.
The reasonableness of brokerage commissions paid by the Funds in relation to
transaction and research services received is 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
Trustees. Appendix D contains information about the brokerage commissions paid
to HASLP during the last fiscal year.
Other Information
FUND ANNUAL AND SEMI-ANNUAL REPORTS. THE FUNDS HAVE PREVIOUSLY SENT AN
ANNUAL REPORT DATED SEPTEMBER 30, 1999 AND A SEMI-ANNUAL REPORT DATED MARCH
31, 2000 TO THEIR SHAREHOLDERS. YOU CAN OBTAIN A COPY OF THESE REPORTS WITHOUT
CHARGE BY WRITING TO THE TRUST AT P.O. BOX 8510, BOSTON, MASSACHUSETTS 02266-
8510 OR BY CALLING 1-800-OAKMARK (1-800-625-6275).
Outstanding Shares and Significant Shareholders. Appendix E to this Proxy
Statement lists for each Fund the total number of shares outstanding as of
July 1, 2000 for each class of the Fund's shares entitled to vote at the
Meeting. It also identifies holders of more than 5% of any class of shares of
each Fund, and contains information about the shareholdings in the Funds of
the Trustees and the executive officers of the Funds.
Information About Proxies and the Conduct of the Meeting
Solicitation of Proxies. Proxies will be solicited primarily by mailing this
Proxy Statement and its enclosures, but proxies may also be solicited through
further mailings, telephone calls, personal interviews or e-mail by officers
of the Funds or by employees or agents of the Adviser or of Nvest and its
affiliated companies. In addition, D. F. King & Co., Inc. has been engaged to
assist in the solicitation of proxies by the Trust, at an estimated cost of
$40,000.
How to Vote. You may vote your shares by mail (by signing and returning the
enclosed proxy card(s)), by telephone, or over the Internet. To vote by
telephone or over the Internet, follow the instructions on your proxy card(s).
11
<PAGE>
Costs of Solicitation. All of the costs of the Meeting, including the costs
of soliciting proxies, will be paid by the Adviser, Nvest or CDC AM. None of
these costs will be borne by the Funds.
Voting and Tabulation of Proxies. Shares represented by duly executed
proxies will be voted as instructed on the proxy. If no instructions are
given, the proxy will be voted in favor of the relevant New Advisory
Agreement(s). You can revoke your proxy by sending a signed, written letter of
revocation to the Secretary of the Trust, by properly executing and submitting
a later-dated proxy or by attending the Meeting and voting in person.
Votes cast in person or by proxy at the Meeting will be counted by persons
appointed by the Trust as tellers for the Meeting (the "Tellers"). Thirty
percent of the shares of any Fund outstanding on the record date, present in
person or represented by proxy, constitutes a quorum for the transaction of
business by the shareholders of that Fund at the Meeting. In determining
whether a quorum is present, the Tellers will count shares represented by
proxies that reflect abstentions, and "broker non-votes," as shares that are
present and entitled to vote. Since these shares will be counted as present,
but not as voting in favor of any proposal, these shares will have the same
effect as if they cast votes against the proposal. "Broker non-votes" are
shares held by a broker or nominee as to which (i) the broker or nominee does
not have discretionary voting power and (ii) the broker or nominee has not
received instructions from the beneficial owner or other person who is
entitled to instruct how the shares are to be voted.
Required Vote. For each Fund, the vote required to approve the Fund's New
Advisory Agreement is the lesser of (1) 67% of the shares of that Fund that
are present at the Meeting, if the holders of more than 50% of the shares of
the Fund outstanding as of the record date are present or represented by proxy
at the Meeting, or (2) more than 50% of the shares of the Fund outstanding on
the record date. If the required vote is not obtained for any Fund, the
Trustees will consider what other actions to take in the best interests of the
Funds.
Adjournments; Other Business. If any Fund has not received enough votes by
the time of the Meeting to approve that Fund's New Advisory Agreement, the
persons named as proxies may propose that the Meeting be adjourned one or more
times as to that Fund to permit further solicitation of proxies. Any
adjournment requires the affirmative vote of more than 50% of the total number
of shares of that Fund that are present in person or by proxy when the
adjournment is being voted on. The persons named as proxies will vote in favor
of any such adjournment all proxies that they are entitled to vote in favor of
the Fund's New Advisory Agreement. They will vote against any such adjournment
any proxy that directs them to vote against the New Advisory Agreement. They
will not vote any proxy that directs them to abstain from voting on the New
Advisory Agreement.
12
<PAGE>
The Meeting has been called to transact any business that properly comes
before it. The only business that management of the Funds intends to present
or knows that others will present is the approval of the New Advisory
Agreements. If any other matters properly come before the Meeting, and on all
matters incidental to the conduct of the Meeting, the persons named as proxies
intend to vote the proxies in accordance with their judgment, unless the
Secretary of the Funds has previously received written contrary instructions
from the shareholder entitled to vote the shares.
Shareholder Proposals at Future Meetings. The Trust does not hold annual or
other regular meetings of shareholders. Shareholder proposals to be presented
at any future meeting of shareholders of the Funds must be received by the
Funds in writing a reasonable amount of time before the Trust solicits proxies
for that meeting, in order to be considered for inclusion in the proxy
materials for that meeting.
13
<PAGE>
Appendix A
<TABLE>
<CAPTION>
Date of Last
Submission of
Current Advisory
Description of Trustee Agreement for
New Advisory Date of Action on Current Shareholder
Old Advisory Fees (after Current Advisory Agreement Approval and
Fees (prior to September 30, Advisory Since Beginning of Reason for
Fund October 1, 2000) 2000) Agreement Fund's Last Fiscal Year Submission
---- --------------- -------------- -------------- ---------------------- ----------------
<S> <C> <C> <C> <C> <C>
Oakmark Fund 1.00% up to 1.00% up to $2 August 30, On September 9, 1999, January 30,
$2.5 billion; billion; 0.90% 1996, as the trustees approved 1996, due to
0.95% on the on the next $1 amended the continuation of termination of
next $1.25 billion; 0.80% September 17, the Fund's current advisory
billion; 0.90% on the next $2 1998 and as investment advisory agreement upon
on the next billion; and amended agreement until the change of
$1.25 billion; 0.75% over $5 effective September 30, 2000 and control of
0.85% over $5 billion October 1, on July 25, 2000, the parent company
billion; and 2000 trustees approved the of Adviser.
0.80% over $10 continuation of that
billion agreement, as amended,
until October 31,
2000.
Select Fund 1.00% up to $1 No change October 22, On September 9, 1999, The Current
billion; 0.95% 1996, as the trustees approved Advisory
on the next amended the continuation of Agreement has
$500 million; September 9, the Fund's current not been
0.90% on the 1997 and investment advisory approved by
next $500 September 17, agreement until shareholders
million; 0.85% 1998 September 30, 2000 and since the public
on the next on July 25, 2000, the offering of the
$500 million; trustees approved the Fund's shares.
0.80% over $2.5 continuation of the
billion; and Fund's current
0.75% over $5 investment advisory
billion agreement until
October 31, 2000.
Small Cap Fund 1.25% up to $1 1.00% August 30, On September 9, 1999, January 30,
billion; 1.15% 1996, as the trustees approved 1996, due to
on the next amended the continuation of termination of
$500 million; September 9, the Fund's current advisory
1.10% on the 1997 and as investment advisory agreement upon
next $500 amended agreement until the change of
million; 1.05% effective September 30, 2000 and control of
on the next October 1, on July 25, 2000, the parent company
$500 million; 2000 trustees approved the of Adviser.
1.00% over $2.5 continuation of that
billion agreement, as amended,
until October 31,
2000.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
Date of Last
Submission of
Current Advisory
Description of Trustee Agreement for
New Advisory Date of Action on Current Shareholder
Old Advisory Fees (after Current Advisory Agreement Approval and
Fees (prior to September 30, Advisory Since Beginning of Reason for
Fund October 1, 2000) 2000) Agreement Fund's Last Fiscal Year Submission
---- --------------- -------------- -------------- ---------------------- ----------------
<S> <C> <C> <C> <C> <C>
Equity and 0.75% No change August 30, On September 9, 1999, January 30,
Income Fund 1996 the trustees approved 1996, due to
the continuation of termination of
the Fund's current advisory
investment advisory agreement upon
agreement until the change of
September 30, 2000 and control of
on July 25, 2000, the parent company
trustees approved the of Adviser.
continuation of the
Fund's current
investment advisory
agreement until
October 31, 2000.
Global Fund 1.00% No change August 1, 1999 On September 9, 1999, The Current
the trustees approved Advisory
the continuation of Agreement has
the Fund's current not been
investment advisory approved by
agreement until shareholders
September 30, 2000 and since the public
on July 25, 2000, the offering of the
trustees approved the Fund's shares.
continuation of the
Fund's current
investment advisory
agreement until
October 31, 2000.
International 1.00% up to 1.00% up to $2 August 30, On September 9 1999, January 30,
Fund $2.5 billion; billion; 0.95% 1996 and as the trustees approved 1996, due to
0.95% on the on the next $1 amended the continuation of termination of
next $2.5 billion; and effective the Fund's current advisory
billion; and 0.85% over $3 October 1, investment advisory agreement upon
0.90% over $5 billion 2000 agreement until the change of
billion September 30, 2000 and control of
on July 25, 2000, the parent company
trustees approved the of Adviser.
continuation of that
agreement, as amended,
until October 31,
2000.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
Date of Last
Submission of
Current Advisory
Description of Trustee Agreement for
New Advisory Date of Action on Current A Shareholder
Old Advisory Fees (after Current dvisory Agreement Since Approval and
Fees (prior to September 30, Advisory Beginning of Fund's Reason for
Fund October 1, 2000) 2000) Agreement Last Fiscal Year Submission
---- --------------- -------------- -------------- ---------------------- ----------------
<S> <C> <C> <C> <C> <C>
International 1.25% 1.25% up to August 30, On September 9, 1999, January 30,
Small Cap $500 million; 1996 and as the trustees approved 1996, due to
Fund and 1.10% over amended the continuation of termination of
$500 million effective the Fund's current advisory
October 1, investment advisory agreement upon
2000 agreement until the change of
September 30, 2000 and control of
on July 25, 2000, the parent company
trustees approved the of Adviser.
continuation of that
agreement, as amended,
until October 31,
2000.
</TABLE>
A-3
<PAGE>
Appendix B
FORM OF INVESTMENT ADVISORY AGREEMENTS
INVESTMENT ADVISORY AGREEMENT
FOR
[NAME OF FUND APPEARS HERE]
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 [Name of Fund Appears Here] (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,
B-1
<PAGE>
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).
(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.
B-2
<PAGE>
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 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 [insert annual rate of fee here] of net assets. 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 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.
B-3
<PAGE>
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 October 31, 2001, and thereafter from year to
year only so long as such continuance is specifically approved at least
annually (a) by a majority of those trustees who are not interested
persons of the Trust or of the Adviser, voting in person at a meeting
called for the purpose of voting on such approval, and (b) by either the
board of trustees of the Trust or a vote of the
B-4
<PAGE>
holders of a majority of the outstanding shares of the Fund (which term as
used throughout this agreement shall be construed in accordance with the
definition of "vote of a majority of the outstanding voting securities of
a company" in section 2(a)(42) of the 1940 Act).
(b) Any approval of this agreement by the holders of a majority of the
outstanding shares of the Fund shall be effective to continue this
agreement notwithstanding that it has not been approved by the vote of a
majority of the outstanding shares of the Trust, unless such approval
shall be required by any other applicable law or otherwise.
13. TERMINATION. This agreement may be terminated at any time, without
payment of any penalty, by the board of trustees of the Trust, or by a vote of
the holders of a majority of the outstanding shares of the Fund, upon 60 days'
written notice to the Adviser. This agreement may be terminated by the Adviser
at any time upon 60 days' written notice to the Trust. This agreement shall
terminate automatically in the event of its assignment (as defined in section
2(a)(4) of the 1940 Act).
14. AMENDMENT. This agreement may not be amended without the affirmative
vote (a) of a majority of those trustees who are not "interested persons" (as
defined in Section 2(a)(19) of the 1940 Act) of the Trust and (b) of the
holders of a majority of the outstanding shares of the Fund.
Dated:
Harris Associates Investment Trust
By: ___________________________________
Harris Associates L.P.
by Harris Associates, Inc.
its General Partner
By: ___________________________________
B-5
<PAGE>
Appendix C
CERTAIN OTHER MUTUAL FUNDS ADVISED BY THE ADVISER
The Adviser acts as sub-adviser to the following other mutual funds that
have investment objectives similar to four of the Funds' objectives, for
compensation at the annual percentage rates of the corresponding average net
asset levels of those funds set forth below.
The Oakmark Fund:
<TABLE>
<CAPTION>
Net Assets of Annual Rate of Compensation Adviser's
Other Funds with Other Funds at (As a Percentage of Relationship to
Similar Objectives June 30, 2000 Average Daily Net Assets) Other Fund
------------------ -------------- --------------------------- ---------------
<S> <C> <C> <C>
Harris Oakmark Large Cap $ 41,259,166 0.450% of first $100 Sub-Adviser
Value Fund, a series of million; 0.400% of next
Metropolitan Series $400 million; and 0.350%
Fund, Inc. over $500 million
Harris Associates Value $ 6,593,430 0.750% of first $25 Sub-Adviser
Portfolio, a series of million; 0.600% of next
LPT Variable Insurance $75 million; and 0.500%
Series Trust over $100 million
Nvest Star Advisers $204,546,176 0.650% of first $50 Sub-Adviser
Fund, a series of Nvest million; 0.600% of next
Funds Trust I $50 million; and 0.550%
over $100 million
Nvest Star Worldwide $ 49,608,787 0.650% of first $50 Sub-Adviser
Fund, a series of Nvest million; 0.600% of the
Funds Trust I (Domestic next $50 million; and
Portfolio) 0.550% over $100 million
</TABLE>
C-1
<PAGE>
The Oakmark Select Fund:
<TABLE>
<CAPTION>
Net Assets of Annual Rate of Compensation Adviser's
Other Funds with Other Funds at (As a Percentage of Relationship to
Similar Objectives June 30, 2000 Average Net Assets) Other Fund
------------------ -------------- --------------------------- ---------------
<S> <C> <C> <C>
Harris Oakmark Mid Cap $103,276,079 0.450% on first $100 Sub-Adviser
Fund, a series of New million; 0.400% on next
England Zenith Fund $400 million; and 0.350%
over $500 million
Massachusetts Mutual $ 25,797,438 0.500% on first $100 Sub-Adviser
Focused Value Fund, a million; 0.450% on next
series of MassMutual $400 million; and 0.400%
Institutional Funds over $500 million
Masters' Select Value $ 4,495,724 0.650% on first $50 Sub-Adviser
Fund, a series of million;
Masters' Select Funds 0.600% on next $50
Trust million; and 0.550% over
$100 million
Nvest Star Value Fund, a $ 52,698,095 0.500% of first $100 Sub-Adviser
series of Nvest Funds million and 0.450% over
Trust I $100 million
The Oakmark Small Cap Fund:
<CAPTION>
Net Assets of Annual Rate of Compensation Adviser's
Other Funds with Other Funds at (As a Percentage of Relationship to
Similar Objectives June 30, 2000 Average Daily Net Assets) Other Fund
------------------ -------------- --------------------------- ---------------
<S> <C> <C> <C>
Nvest Star Small Cap $ 36,335,600 0.700% Sub-Adviser
Fund, a series of Nvest
Funds Trust I
</TABLE>
C-2
<PAGE>
The Oakmark International Fund:
<TABLE>
<CAPTION>
Net Assets of Annual Rate of Compensation Adviser's
Other Funds with Other Funds at (As a Percentage of Relationship to
Similar Objectives June 30, 2000 Average Net Assets) Other Fund
------------------ -------------- --------------------------- ---------------
<S> <C> <C> <C>
Masters' Select $63,914,281 0.650% Sub-Adviser
International, a series
of Masters' Select Funds
Trust
Nvest Star Worldwide $64,949,006 0.650% of first $50 Sub-Adviser
(International million; 0.600% of the
Portfolio) next $50 million; and
0.550% over $100 million
</TABLE>
C-3
<PAGE>
Appendix D
<TABLE>
<CAPTION>
Transfer Agency and Percentage of Fund's
Shareholder Servicing Brokerage Total Brokerage
Advisory Fee Fees Paid to Advisers' Commissions Paid to Commissions Paid to
Paid to Adviser Affiliates Advisers' Affiliates Advisers' Affiliates
(for fiscal year (for fiscal year (for fiscal year (for fiscal year
Name of Fund ended 9/30/99) ended 9/30/99) ended 9/30/99) ended 9/30/99)
------------ ----------------- ---------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
Oakmark Fund $ 59,957,947 $165,683 $1,944,758 44.1%
Select Fund $ 15,358,029 $ 53,793 $ 725,722 31.0
Small Cap Fund $ 7,251,751 $ 21,363 $ 213,191 19.1
Equity and Income Fund $ 464,454 $ 3,335 $ 56,545 69.6
Global Fund $ 3,046* $ 1,762 $ 29,127 43.2
International Fund $ 8,068,806 $ 34,772 -- --
International Small Cap
Fund $ 1,330,000 $ 5,928 -- --
</TABLE>
----
* The advisory fee of Global Fund was $18,520 before reimbursement by the
Adviser of $15,474 of Fund expenses in excess of the expense limitation.
D-1
<PAGE>
Appendix E
Shares Outstanding
For each class of the Fund's shares entitled to vote at the Meeting, the
number of shares outstanding as of July 1, 2000 was as follows:
<TABLE>
<CAPTION>
Number of Shares
-------------------
Name of Fund Class I Class II
------------ ---------- --------
<S> <C> <C>
The Oakmark Fund............................................ 82,138,247 0
The Oakmark Select Fund..................................... 80,419,547 261,575
The Oakmark Small Cap Fund.................................. 16,459,156 0
The Oakmark Equity and Income Fund.......................... 3,360,580 0
The Oakmark Global Fund..................................... 2,605,032 0
The Oakmark International Fund.............................. 52,127,532 4,252
The Oakmark International Small Cap Fund.................... 8,469,151 0
</TABLE>
E-1
<PAGE>
Ownership of Shares
As of July 1, 2000, the Trust believes that the Trustees and executive
officers of the Trust, as a group, owned less than one percent of class II
shares of each Fund and of the Trust as a whole. The following Trustees and
executive officers of the Trust owned the following number and percentages of
the outstanding shares of Class I shares of each Fund:
<TABLE>
<CAPTION>
Equity & Intl. Small
Oakmark Select Small Cap Income Global International Cap
------------- -------------- -------------- ------------- --------------- ---------------- ---------------
Total % Total % Total % Total % Total % Total % Total %
------ --- ------- --- ------- --- ------ --- ------- ---- -------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Michael J.
Friduss......... 1,148(1) * 24,491(1) * 1,847 * 0 * 2,533 * 2,890 * 1,469 *
Thomas H.
Hayden.......... 0 * 2,878 * 1,181 * 0 * 659 * 1,170 * 0 *
Robert Levy..... 0 * 197,951 * 30,560 * 0 * 82,323 3.16% 0 * 39,963 *
Christine M.
Maki............ 807 * 2,394 * 1,603 * 640 * 609 * 1,092 * 898 *
Victor A.
Morgenstern..... 30,373(2) * 106,796(2) * 69,291(2) * 11,430(2) * 125,353(2) 4.81% 84,670(2) * 129,902(2) 1.53%
Allan J. Reich.. 2,655 * 6,596 * 372 * 1,798 * 1,032 * 1,820 * 331 *
Marv R. Rotter.. 194 * 340 * 411 * 440 * 5,507 * 0 * 1,394 *
Burton W.
Ruder........... 0 * 422 * 3,822(3) * 186 * 4,318 * 13,869(3) * 32,591(3) *
Peter S. Voss... 2,914 * 4,465 * 4,533 * 0 * 0 * 9,815 * 5,485 *
Gary N. Wilner,
M.D. ........... 5,040 * 2,333 * 4,638 * 179 * 2,503 * 4,780 * 1,878 *
Trustees and
executive
officers as a
group (10
persons)........ 43,131 * 348,666 * 118,258 * 14,673 * 224,837 8.63% 120,106 * 213,911 2.53%
</TABLE>
----
Unless otherwise indicated, the persons named in the table above have sole
voting and investment power over all shares beneficially owned by them,
subject to applicable community property laws.
* Less than 1%.
(1) Mr. Friduss shares voting and/or investment power over 161 shares of
Oakmark Fund and 12,048 shares of Select Fund.
(2) Mr. Morgenstern shares voting and/or investment power over 3,481 shares of
Oakkmark Fund, 3,197 shares of Select Fund, 5,961 shares of Small Cap
Fund, 11,430 shares of Equity and Income Fund, 25,046 shares of Global
Fund, 1,881 shares of International Fund and 24,152 shares of
International Small Cap Fund.
(3) Mr. Ruder shares voting and/or investment power over 2,765 shares of Small
Cap Fund, 4,799 shares of International Fund and 8,198 shares of
International Small Cap Fund.
E-2
<PAGE>
As of July 1, 2000, the following persons owned of record or beneficially 5%
or more of the noted class of shares of the following Fund:
<TABLE>
<CAPTION>
Amount and
Percentage of
Outstanding
Name and Address Fund and Class Shares Held
---------------- -------------- ------------------
<S> <C> <C>
Banc of America Securities International Small Cap, Class I 464,282, 5.47%
LLC CNSV(1)
600 Montgomery Street Global, Class I 382,979, 14.76%
San Francisco, CA 94111-
2702
Charles Schwab & Co. Oakmark, Class I 21,787,334, 26.54%
Inc.(1)
101 Montgomery Street Select, Class I 27,267,710, 33.94%
San Francisco, CA 94104- Small Cap, Class I 4,179,932, 25.44%
4122
Equity and Income, Class I 522,730, 15.56%
International, Class I 16,791,839, 32.23%
International Small Cap, Class I 2,437,320, 28.71%
Global, Class I 185,590, 7.15%
Clyde S. and Joan K. Equity and Income, Class I 290,397, 8.64%
McGregor(2)
Two North LaSalle Street,
#500
Chicago, IL 60602
National Financial Oakmark, Class I 5,435,001, 6.62%
Services Corp.(1)
P.O. Box 3908 Select, Class I 15,892,868, 19.78%
Church Street Station Small Cap, Class I 1,476,739, 8.99%
New York, NY 10008-3908 International, Class I 3,032,537, 5.82%
International Small Cap, Class I 626,474, 7.38%
Merrill Lynch Pierce Select, Class II 219,047, 83.82%
Fenner & Smith Inc.(1)
4800 Deer Lake Dr. E. 3rd
Fl.
Jacksonville, FL 32246-
6484
Reliance Trust(1) Select, Class II 17,075, 6.53%
FBO MetLife Defined
Contribution Group
3384 Peachtree Rd. NE 9th
Fl.
Atlanta, GA 30326-1181
John Hancock(1) Select, Class II 25,191, 9.64%
FBO Cross & Peters
101 Huntington Ave. Fl. 5
Boston, MA 02199-7603
John Hancock(1) International, Class II 2,213, 52.04%
FBO Wakefield Management
101 Huntington Ave. Fl. 8
Boston, MA 02199-7603
John Hancock(1) International, Class II 2,039, 47.96%
FBO FGM
101 Huntington Ave. Fl. 5
Boston, MA 02199-7603
</TABLE>
-----------
(1) Shares are held for accounts of customers.
(2) 7.06% of the outstanding shares are held beneficially by Clyde S. and Joan
K. McGregor and 1.58% of the outstanding shares are held beneficially by
Clyde S. McGregor.
E-3
<PAGE>
HAR001
<PAGE>
HAR001adp
<PAGE>
VOTE TODAY BY MAIL,
[OAKMARK LOGO APPEARS HERE] TOUCH-TONE PHONE OR THE INTERNET
CALL TOLL-FREE 1-888-221-0697
OR LOG ON TO WWW.OAKMARK.COM
*** CONTROL NUMBER: 999 999 999 999 99 *** If voting by mail, please fold
and detach card at perforation
before mailing
FUND NAME PRINTS HERE HARRIS ASSOCIATES INVESTMENT TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS ON OCTOBER 11, 2000
The undersigned hereby appoints Victor A. Morgenstern, Anita M. Nagler and Ann
W. Regan and each of them separately, proxies with full power of substitution to
each, and hereby authorizes them to represent and to vote, as designated on the
reverse side, at the Special Meeting of Shareholders of Harris Associates
Investment Trust (the "Trust"), on Wednesday, October 11, 2000 at 10:00 a.m.
Central time, and any adjournments thereof, all of the shares of each Fund of
the Trust that the undersigned would be entitled to vote if personally present.
NOTE: Please sign exactly as your name
appears on this proxy card. All joint
owners should sign. When signing as
executor, administrator, attorney,
trustee or guardian or as custodian for
a minor, please give full title as such.
If a corporation, please sign in full
corporate name and indicate the signer's
office. If a partner, sign in the
partnership name.
---------------------------------------
---------------------------------------
Signature(s) (if held jointly)
Date
-----------------------------------
<PAGE>
If voting by mail, please fold and detach card at perforation before mailing.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting. The Trustees recommend a
vote FOR the Proposal.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX BELOW.
1. Approval of a new Investment Advisory FOR AGAINST ABSTAIN
Agreement between the Trust and Harris [_] [_] [_]
Associates L.P. (each Fund voting
separately)
<PAGE>
[LOGO OF OAKMARK FAMILY OF FUNDS]
Internet Proxy Voting Service
Proxy Voting Form
Harris Associates Investment Trust
[Fund name appears here]
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS ON OCTOBER 11, 2000
I hereby appoint Victor A. Morgenstern, Anita M. Nagler and Ann W. Regan and
each of them separately, proxies with full power of substitution to each, and
hereby authorize them to represent and to vote, as designated below, at the
Special Meeting of Shareholders of Harris Associates Investment Trust (the
"Trust"), on Wednesday, October 11, 2000 at 10:00a.m. Central time, and any
adjournments thereof, all of the shares of the Fund of the Trust I would be
entitled to vote if personally present.
This proxy when submitted will be voted in the manner directed by the
shareholder. If no direction is made, this proxy will be voted FOR each
proposal.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the meeting.
THE TRUSTEES RECOMMEND A VOTE "FOR" THE PROPOSAL.
Proposal 1. Approval of a new Investment Advisory Agreement
between the Trust and Harris Associates L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
--------------------------------------------------------------------------------
Please refer to the proxy statement for discussion of this matter.
Please review your vote carefully before submitting it.
If you vote more than once on the same matter, only your last (most recent) vote
will be considered valid.
------------------
To receive email confirmation, enter your email address here:
------------------
--------
Press this button to Submit your Proxy Vote.
--------
