OLD WESTBURY FUNDS, INC.
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT is
made as of November 12, 2007, by and between Old Westbury Funds,
Inc. (the "Fund"), a Maryland corporation with its principal
place of business at 000 Xxxxx Xxxx, Xxxx xx Xxxxxxx,
Xxxxxxxxxxxx 00000, and Bessemer Investment Management LLC (the
"Adviser"), a Delaware limited liability company with its
principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
WHEREAS, the Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company, and is authorized to issue shares
in one or more series;
WHEREAS, the Adviser is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended (the
"Advisers Act); and
WHEREAS, the Fund desires that the Adviser perform investment
advisory services for each series of the Fund listed on Schedule
A hereto, as such Schedule A may be amended or supplemented from
time to time by mutual agreement (each, a "Portfolio", and
collectively, the "Portfolios"), and the Adviser is willing to
perform those services on the terms and conditions set forth in
this Agreement and desires to enter into an agreement to provide
for investment advisory services to the Fund upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the Fund and Adviser agree as follows:
Section 1. The Fund. The Fund is engaged in the business of
investing and reinvesting its assets in securities of the type
and in accordance with the limitations specified in its Articles
of Incorporation, By-Laws and Registration Statement filed with
the Securities and Exchange Commission (the "Commission") under
the 1940 Act and the Securities Act of 1933, including the
Prospectuses forming a part thereof and Statements of Additional
Information relating to the Portfolios contained therein, and as
may be supplemented from time to time, all in such manner and to
such extent as may from time to time be authorized by the Fund's
Board of Directors (the "Board"). The Board is authorized to
issue any unissued shares in any number of additional classes or
series. The Fund has delivered copies of the documents listed in
this Section to the Adviser and will from time to time furnish
the Adviser with any amendments thereof.
Section 2. Appointment. The Fund hereby appoints the
Adviser, subject to the direction and control of the Board, to
manage the investment and reinvestment of the assets in the
Portfolios and, without limiting the generality of the
foregoing, to provide the other services specified in Section 3
hereof.
Section 3. Duties of the Adviser.
(a) The Adviser shall make decisions with respect to all
purchases and sales of securities and other investment assets
for the Portfolios. Among other things, the Adviser shall make
all decisions with respect to the allocation of the Portfolios'
investments in various securities or other assets, in investment
styles and, if applicable, in other investment companies or
pooled vehicles in which the Portfolios may invest. To carry out
such decisions, the Adviser is hereby authorized, as agent and
attorney-in-fact for the Fund, for the account of, at the risk
of and in the name of the Portfolios, to place orders and issue
instructions with respect to those transactions of the
Portfolios. In all purchases, sales and other transactions in
securities for the Portfolios, the Adviser is authorized to
exercise full discretion and act for the Fund in the same manner
and with the same force and effect as the Fund might or could do
with respect to such purchases, sales or other transactions, as
well as with respect to all other things necessary or incidental
to the furtherance or conduct of such purchases, sales or other
transactions.
(b) The Adviser will report to the Board at each regular
meeting thereof all material changes in the Portfolios since the
prior report, and will also keep the Board informed of important
developments affecting the Fund, the Portfolios and the Adviser,
and on its own initiative will furnish the Board from time to
time with such information as the Adviser may believe
appropriate, whether concerning the individual companies whose
securities are held by the Portfolios, the industries in which
they engage, or the economic, social or political conditions
prevailing in each country in which the Portfolios maintain
investments. The Adviser will also furnish the Board with such
statistical and analytical information with respect to
securities in the Portfolios as the Adviser may believe
appropriate or as the Board reasonably may request. In making
purchases and sales of securities for the Portfolios, the
Adviser will comply with the policies set from time to time by
the Board as well as the limitations imposed by the Fund's
Articles of Incorporation, By-Laws and Registration Statement
under the 1940 Act and the Securities Act, the limitations in
the 1940 Act and in the Internal Revenue Code of 1986, as
amended, applicable to the Fund and the investment objectives,
policies and restrictions of the Portfolios.
(c) The Adviser will from time to time employ or associate
with such persons as the Adviser believes to be appropriate or
necessary to assist in the execution of the Adviser's duties
hereunder; provided, however, that, except as otherwise provided
herein, the employment of or sub-contracting with any such
person shall not relieve the Adviser of its responsibilities or
liabilities hereunder; and provided further that the Adviser
shall not have the authority to subcontract advisory
responsibilities without the consent of the Fund. The cost of
performance of such duties shall be borne and paid by the
Adviser. No obligation may be imposed on the Fund in any such
respect.
(d) The Adviser shall maintain records relating to portfolio
transactions and the placing and allocation of brokerage orders
as are required to be maintained by the Fund under the 1940 Act.
The Adviser shall prepare and maintain, or cause to be prepared
and maintained, in such form, for such periods and in such
locations as may be required by applicable law, all documents
and records relating to the services provided by the Adviser
pursuant to this Agreement required to be prepared and
maintained by the Fund pursuant to the rules and regulations of
any national, state, or local government entity with
jurisdiction over the Fund, including the Commission and the
Internal Revenue Service. The books and records pertaining to
the Fund that are in the possession of the Adviser shall be the
property of the Fund. The Fund, or the Fund's authorized
representatives, shall have access to such books and records at
all times during the Adviser's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and
records shall be provided promptly by the Adviser to the Fund or
the Fund's authorized representatives.
(e) The Adviser will also provide supervisory personnel who
will be responsible for supervising and monitoring the
performance of the Administrator in connection with its duties
under the Master Services Agreement and for supervising the
performance of other administrative services, accounting and
related services, net asset value and yield calculations,
reports to and filings with regulatory authorities, and services
relating to such functions. Such personnel may be employees of
the Adviser or employees of affiliates of the Adviser or of
other organizations. The Fund has retained, at the Fund's
expense, an Administrator to perform the operational components
of the functions and services listed herein.
(f) The Adviser shall pay its own expenses in connection with
the services to be provided by it pursuant to this Agreement. In
addition, the Adviser shall be responsible for compensation of
officers or employees of the Fund who are also officers or
employees of the Adviser.
Section 4. Delegation of Responsibilities. The Adviser may
carry out any of its obligations under this Agreement by
employing, subject to supervision by the Adviser, one or more
sub-advisers who are registered as investment advisers pursuant
to the Advisers Act (each, a "Sub-Adviser"). Each Sub-Adviser's
employment will be evidenced by a separate written agreement
approved by the Board and, if required under the 1940 Act, by
the shareholders of the Portfolios (unless the Commission or its
staff has given authorization or issued an interpretation or no-
action letter dispensing with the requirement of shareholder
approval). The Adviser shall not be liable hereunder for any act
or omission of any Sub-Adviser, except for failure to exercise
good faith in the employment of the Sub-Adviser and for failure
to exercise appropriate supervision of such Sub-Adviser, and as
may otherwise be agreed in writing. The Adviser shall be solely
responsible for compensating any Sub-Adviser for services
rendered under any sub-advisory agreement. The Adviser may, from
time to time and at any time, terminate any Sub-Adviser and
recommend to the Board the appointment of another Sub-Adviser or
reassume the responsibilities assigned to any Sub-Adviser with
respect to the Portfolios without obtaining the approval of the
shareholders of the Portfolios unless expressly required by the
federal securities laws.
Section 5. Control by Board. Any investment activities
undertaken by the Adviser pursuant to this Agreement, as well as
any other activities undertaken by the Adviser on behalf of the
Portfolios, shall at all times be subject to the direction and
control of the Board.
Section 6. Compliance with Applicable Requirements. In
carrying out its obligations under this Agreement, the Adviser
shall at all times comply with:
(a) all applicable provisions of the 1940 Act, and any rules
and regulations adopted thereunder;
(b) the provisions of the Registration Statement of the Fund,
as it may be amended from time to time, under the 1940 Act;
(c) the provisions of the Articles of Incorporation of the
Fund, as they may be amended from time to time;
(d) the provisions of the By-Laws of the Fund, as they may be
amended from time to time, or resolutions of the Board that may
be adopted from time to time;
(e) the provisions of the Internal Revenue Code of 1986, as
amended, applicable to the Fund or the Portfolios; and
(f) any other applicable provisions of state or federal law.
Section 7. Broker-Dealer Relationships. In connection with
the purchase and sale of securities for the Portfolios, the
Adviser is responsible for broker-dealer selection and
negotiation of brokerage commission rates. The Adviser's primary
consideration in effecting a security transaction will be to
obtain the best price and execution. In selecting a broker-
dealer to execute each particular transaction for the
Portfolios, the Adviser will take the following into
consideration: the best net price available; the reliability,
integrity and financial condition of the broker-dealer; the size
of and difficulty in executing the order; and the value of the
expected contribution of the broker-dealer to the Portfolios on
a continuing basis. Accordingly, the price to the Portfolios in
any transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified
by other aspects of the portfolio execution services offered.
Subject to such policies as the Board may from time to time
determine, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of having caused the
Portfolios to pay a broker or dealer that provides brokerage and
research services to the Adviser an amount of commission for
effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged
for effecting that transaction, if the Adviser determines in
good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities of
the Adviser with respect to the Portfolios and to other clients
of the Adviser. The Adviser is further authorized to allocate
the orders placed by it on behalf of the Portfolios to brokers
and dealers who also provide research or statistical material or
other services to the Portfolios or to the Adviser. Such
allocation shall be in such amounts and proportions as the
Adviser shall determine and the Adviser will report on such
allocations regularly to the Board, indicating the brokers to
whom such allocations have been made and the basis therefor.
Section 8. Expenses of the Portfolios. All of the ordinary
business expenses incurred in the operations of the Portfolios
and the offering of their shares shall be borne by the
Portfolios unless specifically provided otherwise in this
Agreement or another written agreement between the Adviser and
the Fund. These expenses borne by the Portfolios include, but
are not limited to, brokerage commissions, taxes, legal,
auditing and governmental fees, expenses relating to trustees
and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses
incurred by the Portfolios and the cost of printing copies of
the Prospectuses and Statements of Additional Information
distributed to the Portfolios' shareholders.
Section 9. Compensation. As compensation for the advisory
services provided under this Agreement, the Fund shall pay the
Adviser fees at the annual rates indicated on Schedule A hereto,
as such Schedule A may be amended or supplemented from time to
time. The Adviser's fee shall be accrued for each calendar day
and the sum of the daily fee accruals shall be paid monthly in
arrears to the Adviser.
Section 10. Standard of Care. The Fund shall expect of the
Adviser, and the Adviser will give the Fund the benefit of, the
Adviser's best judgment and efforts in rendering its services to
the Fund. As an inducement to the Adviser's undertaking these
services at the compensation level specified, the Adviser shall
not be liable hereunder for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the
performance of this Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the
Adviser, or any of its officers, directors, employees or agents,
in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
Section 11. Non-Exclusivity. The services of the Adviser to
the Portfolios are not to be deemed to be exclusive, and the
Adviser shall be free to render investment advisory or other
services to others (including other investment companies) and to
engage in other activities. It is understood and agreed that
officers or directors of the Adviser may serve as officers or
directors of the Fund, and that officers or directors of the
Fund may serve as officers or directors of the Adviser, to the
extent that such services may be permitted by law, and that the
officers and directors of the Adviser are not prohibited from
engaging in any other business activity or from rendering
services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust,
including other investment advisory companies.
Section 12. Books and Records. The Adviser shall, with
respect to orders the Adviser places for the purchase and sale
of portfolio securities of the Portfolios, maintain or arrange
for the maintenance of the documents and records required
pursuant to Rule 31a-1 under the 1940 Act as well as such
records as the Fund's Administrator reasonably requests to be
maintained, including, but not limited to, trade tickets and
confirmations for portfolio trades. All such records shall be
maintained in a form acceptable to the Fund and in compliance
with the provisions of Rule 31a-1 or any successor rule. All
such records will be the property of the Fund and will be
available for inspection and use by the Fund. The Adviser will
promptly notify the Fund's Administrator if it experiences any
difficulty in maintaining the records in an accurate and
complete manner.
Section 13. Term of the Agreement. This Agreement shall
become effective with respect to each of the respective
Portfolios when approved in accordance with the requirements of
the 1940 Act, and shall initially continue for two years, and
thereafter continue from year to year, provided that the
continuation of the Agreement is specifically approved at least
annually:
(a) (i) by the Fund's Board of Directors or (ii) by the vote
of "a majority of the outstanding voting securities" of the
Portfolios (as defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Fund's
Directors who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of a party to this
Agreement (other than as Directors of the Fund), by votes cast
in person at a meeting specifically called for such purpose.
Section 14. Termination. As required under the 1940 Act, this
Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty, by the Fund (by vote of the
Fund's Board of Directors or by vote of a majority of the
outstanding voting securities of the particular Portfolio), or
by the Adviser on sixty (60) days' written notice. The notice
provided for herein may be waived by the party entitled to
receipt thereof. This Agreement will immediately terminate in
the event of its assignment. This Agreement may also be
terminated immediately by the Fund or the Adviser in the event
that the other party (i) breaches a material term of this
Agreement or (ii) commits a material violation of any governing
law. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and
"assignment" shall have the same meanings as such terms have in
the 1940 Act, as modified or interpreted by the Commission or
its staff in rules, regulations, interpretations or no-action
letters.
Section 15. Indemnification by the Adviser. The Fund shall
not be responsible for, and the Adviser shall indemnify and hold
the Fund and the Portfolios harmless from and against, any and
all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to the
willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties on the part of the Adviser or
any of its officers, directors, employees or agents.
Section 16. Indemnification by the Fund. In the absence of
willful misfeasance, bad faith, gross negligence or reckless
disregard of duties hereunder on the part of the Adviser or any
of its officers, directors, employees or agents, the Fund hereby
agrees to indemnify and hold harmless the Adviser and its
officers, directors, employees and agents against all claims,
actions, suits or proceedings at law or in equity whether
brought by a private party or a governmental department,
commission, board, bureau, agency or instrumentality of any
kind, arising from the advertising, solicitation, sale, purchase
or pledge of securities, whether of the Fund or other
securities, undertaken by the Portfolios or their officers,
directors, employees or affiliates, resulting from any
violations of the securities laws, rules, regulations, statutes
and codes, whether federal or of any state, by the Portfolios or
their officers, directors, employees or affiliates. Federal and
state securities laws impose liabilities under certain
circumstances on persons who act in good faith, and nothing
herein shall constitute a waiver or limitation of any rights
which a Portfolio may have and which may not be waived under any
applicable federal or state securities laws.
Section 17. Notices. Any notices under this Agreement shall
be in writing, addressed and delivered or mailed postage paid to
the other party at such address as such other party may
designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Fund
shall be Old Westbury Funds, Inc., 000 Xxxxx Xxxx, Xxxx xx
Xxxxxxx, Xxxxxxxxxxxx 00000, Attn: President, and that of the
Adviser shall be Bessemer Investment Management LLC, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: General Counsel.
Section 18. Questions of Interpretation. Any question of
interpretation of any term or provision of this Agreement having
a counterpart in or otherwise derived from a term or provision
of the 1940 Act shall be resolved by reference to such terms or
provision of the 1940 Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any
controlling decision of any such court, by rules, regulations or
orders of the Commission, interpretations of the Commission or
its staff, or Commission staff no-action letters issued pursuant
to the 1940 Act. In addition, where the effect of a requirement
of the 1940 Act reflected in any provision of this Agreement is
revised by rule, regulation or order of the Commission, such
provision shall be deemed to incorporate the effect of such
rule, regulation or order. The duties and obligations of the
parties under this Agreement shall otherwise be governed by and
construed in accordance with the laws of the State of New York.
Section 19. Amendment. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought. If shareholder approval of an amendment is required
under the 1940 Act, no such amendment shall become effective
until approved by a vote of the majority of the outstanding
shares of the affected Portfolio(s). Otherwise, a written
amendment of this Agreement is effective upon the approval of
the Board of Directors of the Fund and the Adviser.
Section 20. Old Westbury Name. The Adviser and the Fund each
agree that the name "Old Westbury" or any variants thereof,
which comprises a component of the Fund's name, is a property
right of the parent of the Adviser. The Fund agrees and consents
that: (i) it will use the words "Old Westbury" or any variants
thereof as a component of its corporate name, the name of any
series or class, or all of the above, and for no other purpose;
(ii) it will not grant to any third party the right to use the
name "Old Westbury" of any variant thereof for any purpose;
(iii) the Adviser or any corporate affiliate of the Adviser may
use or grant to others the right to use the words "Old
Westbury," or any variant or abbreviation thereof, as all or a
portion of a corporate or business name or for any commercial
purpose, other than a grant of such right to another registered
investment company not advised by the Adviser or one of its
affiliates; and (iv) in the event that the Adviser or an
affiliate thereof is no longer acting as investment adviser to
any Portfolio or class of a Portfolio, the Fund shall, upon
request by the Adviser, promptly take such action as may be
necessary to change its corporate name to one not containing the
words "Old Westbury" or any variant thereof and following such
change, shall not use the words "Old Westbury," or any variant
thereof, as a part of its corporate name or for any other
commercial purpose, and shall use its best efforts to cause its
trustees, officers and shareholders to take any and all actions
that the Adviser may request to effect the foregoing and to
reconvey to the Adviser any and all rights to such words.
Section 21. Miscellaneous. The captions in this Agreement
are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as
of the day and year first above written.
OLD WESTBURY FUNDS, INC.
By
:
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Vice President
BESSEMER INVESTMENT
MANAGEMENT LLC
By
:
/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
President
[PAGE BREAK]
SCHEDULE A
The information will be in the following Order
Portfolio
Advisory Fee Rate Average Net Assets
Large Cap Equity Fund
First $500 million - 0.70%
Second $500 million to $1 billion - 0.65%
Over $1 billion - 0.60%
Mid Cap Equity Fund
First $500 million - 0.70%
Second $500 million to $1 billion - 0.65%
Over $1 billion - 0.60%
International Fund
First $500 million - 0.80%
Second $500 million to $1 billion - 0.75%
Over $1 billion - 0.70%
Fixed Income Fund
First $500 million - 0.45%
Second $500 million to $1 billion - 0.40%
Over $1 billion - 0.35%
Municipal Bond Fund
First $500 million - 0.45%
Second $500 million to $1 billion - 0.40%
Over $1 billion - 0.35%
Global Small Cap Fund
0.85%
Real Return Fund
0.85%
Global Opportunities Fund
First $1.25 billion - 1.10%
Second $1.25 billion to $2.5 billion - 1.05%
Over $2.5 billion - 1.00%
