EXHIBIT (h)(i)
ADMINISTRATION AGREEMENT
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THIS AGREEMENT is made as of this 19th day of September, 2000, by and
between Old Westbury Funds, Inc., a Maryland corporation (the "Company"), having
its principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and
BISYS FUND SERVICES OHIO, INC. (the "Administrator"), an Ohio corporation
organized under the laws of the State of Ohio and having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of common stock ("Shares"); and
WHEREAS, the Company desires the Administrator to provide, and the
Administrator is willing to provide, administrative services to each series of
the Company, all as now or hereafter may be established from time to time
("Portfolios"), on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE 1. Retention of the Administrator. The Company hereby retains
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the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Company in any way and shall
not be deemed an agent of the Company.
ARTICLE 2. Administrative Services. The Administrator shall perform or
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supervise the performance by others of administrative services in connection
with the operations of the Portfolios, and, on behalf of the Company, will
investigate, assist in the selection of and conduct relations with custodians,
depositories, accountants, legal counsel, underwriters, brokers and dealers,
corporate fiduciaries, insurers, banks and persons in any other capacity deemed
to be necessary or desirable for the Portfolios' operations. The Administrator
shall provide the Board of Directors of the Company (hereafter referred to as
the "Directors") with such reports regarding investment performance and
compliance with investment policies and applicable laws, rules and regulations
as they may reasonably request but shall have no responsibility for supervising
the performance by any investment adviser or sub-adviser of its
responsibilities.
The Administrator shall provide the Company with regulatory reporting,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for shareholders' and Directors' meetings) for handling
the affairs of the Portfolios and such other services as the Administrator
shall, from time to time, determine to be necessary to perform its obligations
under this Agreement. In addition, at the request of the Directors, the
Administrator shall make reports to the Company's Directors concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Company expenses and control all
disbursements for the Company, and as appropriate compute the
Company's yields, total return, expense ratios, portfolio
turnover rate and, if required, portfolio average
dollar-weighted maturity;
(b) (i) coordinate, prepare and file with the SEC the annual
update and all other amendments to the Company's registration
statement on Form N-1A, (ii) coordinate, prepare and file with
the SEC supplements to the Company's registration statement
or, as agreed upon by the parties hereto, review such
supplements that are prepared by counsel to the Company, (iii)
review Notices of Annual or Special Meetings of shareholders
and proxy materials relating thereto that are prepared by
counsel to the Company, (iv) coordinate the solicitation and
tabulation of proxies in connection with meetings of
shareholders, (v) coordinate the printing and distribution of
prospectuses, supplements and proxy materials, (vi) maintain
corporate records on behalf of the Company, including, but not
limited to, minute books, Articles of Incorporation and
By-Laws, (vii) provide appropriate personnel to attend board
meetings and record the minutes of such meetings, and (viii)
produce and distribute materials for board meetings, including
agendas, proposed resolutions, and relevant sections of the
board materials pertaining to the responsibilities of the
Company's administrator;
(c) prepare such reports, applications and documents
(including reports regarding the sale and redemption of Shares
as may be required in order to comply with Federal and state
securities law) as may be necessary or desirable to register
the Company's Shares with state securities authorities,
monitor the sale of Company Shares for compliance with state
securities laws, and file with the appropriate state
securities authorities the registration statements and reports
for the Company and the Company's Shares and all amendments
thereto, as may be necessary or convenient to register and
keep effective the Company and the Company's Shares with state
securities authorities to enable the Company to make a
continuous offering of its Shares;
(d) develop and prepare, with the assistance of the Company's
investment adviser, communications to shareholders, including
the annual and semi-annual
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reports to shareholders, coordinate the printing and mailing
of such reports to Company shareholders;
(e) administer contracts on behalf of the Company with,
among others, the Company's investment adviser, distributor,
custodian, transfer agent and fund accountant;
(f) supervise the Company's transfer agent with respect
to the payment of dividends and other distributions to
shareholders;
(g) calculate performance data of the Portfolios for
dissemination to information services covering the investment
company industry;
(h) coordinate and supervise the preparation and filing
of the Company's tax returns;
(i) examine and review the operations and performance of
the various organizations providing services to the Company or
any Portfolio of the Company, including, without limitation,
the Company's investment adviser, distributor, custodian, fund
accountant, transfer agent, outside legal counsel and
independent public accountants, and at the request of the
Directors, report to the Board on the performance of
organizations;
(j) assist with the design, development, and operation of
the Portfolios, including new classes, investment objectives,
policies and structure;
(k) provide individuals acceptable to the Company's
Directors to serve as officers of the Company, who will be
responsible for the management of certain of the Company's
affairs as determined by the Company's Directors;
(l) advise the Company and its Directors on matters
concerning the Company and its affairs;
(m) obtain and keep in effect fidelity bonds and
directors and officers/errors and omissions insurance policies
for the Company in accordance with the requirements of Rules
17g-1 and 17d-1(7) under the 1940 Act as such bonds and
policies are approved by the Company's Directors and make
necessary filings with the Securities and Exchange Commission
in accordance with Rule 17g-1(g) under the 1940 Act;
(n) monitor and advise the Company and its Portfolios on
their registered investment company status under the Internal
Revenue Code of 1986, as amended;
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(o) perform all administrative services and functions of
the Company and each Portfolio to the extent administrative
services and functions are not provided to the Company or such
Portfolio pursuant to the Company's or such Portfolio's
investment advisory agreement, distribution agreement,
custodian agreement, transfer agent agreement and fund
accounting agreement;
(p) furnish advice and recommendations with respect to
other aspects of the business and affairs of the Portfolios as
the Company and the Administrator shall determine desirable;
and
(q) prepare and file with the SEC the semi-annual report
for the Company on Form N-SAR and all required notices
pursuant to Rule 24f-2.
The Administrator shall perform such other services for the Company
that are mutually agreed upon by the parties from time to time. Such services
may include performing internal audit examinations; mailing the annual reports
of the Portfolios; preparing an annual list of shareholders; and mailing notices
of shareholders' meetings, proxies and proxy statements, for all of which the
Company will pay the Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
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(A) The Administrator. The Administrator shall furnish at its own
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expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Company as well as all Directors of the
Company who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Company retained by the Directors of the
Company to perform services on behalf of the Company.
(B) The Company. The Company assumes and shall pay or cause to be paid
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all other expenses of the Company not otherwise allocated herein, including,
without limitation, organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Directors
who are not affiliated persons of the Administrator or the investment adviser to
the Company or any affiliated corporation of the Administrator or the investment
adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Company.
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ARTICLE 4. Compensation of the Administrator.
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(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Company shall pay to the Administrator compensation at an annual
rate specified in Schedule A attached hereto. Such compensation shall be
calculated and accrued daily, and paid to the Administrator monthly. The Company
shall also reimburse the Administrator for its reasonable out-of-pocket
expenses, including the travel and lodging expenses incurred by officers and
employees of the Administrator in connection with attendance at Board meetings.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) Survival of Compensation Rights. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Limitation of Liability; Indemnification.
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The duties of the Administrator shall be confined to those expressly
set forth herein, and no implied duties are assumed by or may be asserted
against the Administrator hereunder. The Administrator shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any act
or omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law which
cannot be waived or modified hereby. (As used in this Article 5, the term
"Administrator" shall include partners, officers, employees and other agents of
the Administrator as well as the Administrator itself.)
So long as the Administrator acts in good faith and without negligence
or willful misfeasance, and without reckless disregard of its obligations and
duties, with respect to its performance of services under this Agreement, the
Company assumes full responsibility and shall indemnify the Administrator and
hold it harmless from and against any and all actions, suits and claims, whether
groundless or otherwise, and from and against any and all losses, damages,
costs, charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the Administrator's actions taken or non-actions with
respect to the performance of services hereunder. The Administrator agrees to
indemnify and hold harmless the Company, its employees, agents, Directors,
officers and nominees from and against any and all claims, demands, actions and
suits, whether groundless or otherwise, and from and against any and all
judgments, liabilities, losses, damages, costs, charges, counsel fees and other
expenses of every nature and character arising out of or in any way relating to
the Administrator's bad faith, willful
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misconduct, negligence or from reckless disregard of its obligations and duties,
with respect to the performance of services under this Agreement. The indemnity
and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the indemnifying party may be asked to indemnify
or hold the other party harmless, the indemnifying party shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the indemnified party will use all reasonable
care to identify and notify the indemnifying party promptly concerning any
situation which presents or appears likely to present the probability of such a
claim for indemnification against the indemnifying party, but failure to do so
in good faith shall not affect the rights hereunder.
The indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the indemnifying party and satisfactory to the
other party, whose approval shall not be unreasonably withheld. In the event
that the indemnifying party elects to assume the defense of any suit and retain
counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. If the indemnifying party does not elect to
assume the defense of a suit, it will reimburse the indemnified party for the
reasonable fees and expenses of any counsel retained by the other party.
The Administrator may apply to the Company at any time for instructions
and may consult counsel for the Company or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Company until receipt of written notice thereof from the Company.
ARTICLE 6. Activities of the Administrator. The services of the
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Administrator rendered to the Company are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Directors, officers, employees
and shareholders of the Company are or may be or become interested in the
Administrator, as officers, employees or otherwise and that partners, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Company, and that the Administrator may be or become
interested in the Company as a shareholder or otherwise.
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ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
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be as specified in Schedule A hereto.
ARTICLE 8. Assignment. This Agreement shall not be assignable by either
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party without the written consent of the other party; provided, however, that
the Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that the Administrator shall be responsible, to the extent provided in Article 5
hereof, for all acts of such subcontractor as if such acts were its own. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
ARTICLE 9. Amendments. This Agreement, or any term thereof, may be
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modified only by a written amendment, signed by the party against whom
enforcement of such modification is sought.
ARTICLE 10. Certain Records. The Administrator shall maintain customary
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records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Company shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Administrator may exhibit such records to any person in any case where
it is advised by its counsel that it may be held liable for failure to do so,
unless (in cases involving potential exposure only to civil liability) the
Company has agreed to indemnify the Administrator against such liability.
ARTICLE 11. Compliance with Law. The Administrator undertakes to comply
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with all applicable requirements of the Securities Act of 1933, the Securities
Exchange Act of 1934, the 1940 Act and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by the Administrator hereunder.
ARTICLE 12. Definitions of Certain Terms. The terms "interested person"
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and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 13. Notice. Any notice required or permitted to be given by
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either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the following address: 0000 Xxxxxxx
0
Xxxx, Xxxxxxxx, Xxxx 00000, or at such other address as such party may from time
to time specify in writing to the other party pursuant to this Section.
ARTICLE 14. Governing Law. This Agreement shall be construed in
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accordance with the laws of the State of Ohio and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the State of Ohio, or
any of the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
ARTICLE 15. Multiple Originals. This Agreement may be executed in two
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or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
OLD WESTBURY FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Title: President
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BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: President
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF SEPTEMBER 1, 0000
XXXXXXX XXX XXXXXXXX FUNDS, INC.
AND
BISYS FUND SERVICES OHIO, INC.
Portfolios: This Agreement shall apply to all Portfolios of Old Westbury
Funds, Inc., either now or hereafter created (individually,
the "Portfolio", and collectively, the "Portfolios"). The
current Portfolios of the Company are set forth below:
Old Westbury Core Equities Fund
Old Westbury Growth Opportunity Fund
Old Westbury International Fund
Old Westbury Fixed Income Fund
Old Westbury Municipal Bond Fund
Fees: Pursuant to Article 4, in consideration of services rendered
and expenses assumed pursuant to this Agreement, the Company
will pay the Administrator on the first business day of each
month, or at such time(s) as the Administrator shall request
and the parties hereto shall agree, a fee computed daily at
the annual rate of:
Twelve one-hundredths of one percent (.12%) of the
Company's average daily net assets up to $450
million.
Ten one-hundredths of one percent (.10%) of the
Company's average daily net assets in excess of $450
million up to $750 million.
Seven and one-half one-hundredths of one percent
(.075%) of the Company's average daily net assets in
excess of $750 million up to $1,500,000,000.
Five one-hundredths of one percent (.05%) of the
Company's average daily net assets in excess of
$1,500,000,000.
The fee for the period from the day of the month this
Agreement is entered into until the end of that month shall be
prorated according to the proportion which such period bears
to the full monthly period. Upon any termination of this
Agreement before the end of any month, the fee for such part
of a month shall be prorated according to the proportion which
such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
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For purposes of determining the fees payable to the
Administrator, the value of the net assets of a particular
Portfolio shall be computed in the manner described in the
Company's Articles of Incorporation or in the Prospectus or
Statement of Additional Information respecting that Portfolio
as from time to time is in effect for the computation of the
value of such net assets in connection with the determination
of the liquidating value of the shares of such Portfolio.
The parties hereby confirm that the fees payable hereunder
shall be applied to each Portfolio as a whole, and not to
separate classes of shares within the Portfolios.
The fee payable by the Company hereunder shall be allocated to
each Portfolio based upon its pro rata share of the total fee
payable hereunder. Such fee as is attributable to each
Portfolio shall be a separate (and not joint or joint and
several) obligation of each such Portfolio. The Administrator
may agree, from time to time, to waive any fees payable under
this Agreement. Such waiver shall be at the Administrator's
sole discretion.
Term: Pursuant to Article 7, the term of this Agreement shall
commence on September 1, 2000 and shall remain in effect
through February 28, 2003 ("Initial Term"). During the Initial
Term, this Agreement may be terminated without penalty (i) by
mutual agreement of the parties, (ii) for "cause," as defined
below, upon the provision of 60 days advance written notice by
the party alleging cause or (iii) as to any Portfolio or the
Company, except for a Combination, as defined below, upon the
liquidation, dissolution or elimination (hereinafter referred
to as "liquidation") of such Portfolio or the Company, as the
case may be.
After the Initial Term, this Agreement may be renewed by the
parties hereto for additional one year periods and may be
terminated without penalty by a vote of a majority of the
entire Board of Directors of the Company, upon 90 days'
written notice to the Administrator, or by the Administrator
upon 90 days' written notice to the Company.
For purposes of this Agreement, "cause" shall mean (a) a
material breach of this Agreement that has not been remedied
for thirty (30) days following written notice of such breach
from the non-breaching party; (b) an act or series of acts or
omissions which, in the aggregate, constitutes, in the
reasonable judgment of the Company's Directors, a serious
failure to perform satisfactorily BISYS' obligations
hereunder; (c) a final, unappealable judicial, regulatory or
administrative ruling or order in which the party to be
terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; or (d) financial
difficulties on the part of the party to be terminated which
are evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent or
acquiescence in, a voluntary or involuntary case under Title
11 of the United States Code, as from time to time is in
effect, or any applicable law,
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other than said Title 11, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors.
Notwithstanding the foregoing, after such termination for so
long as the Administrator, with the written consent of the
Company, in fact continues to perform any one or more of the
services contemplated by this Agreement or any schedule or
exhibit hereto, the provisions of this Agreement, including
without limitation the provisions dealing with
indemnification, shall continue in full force and effect.
Compensation due the Administrator through the effective date
of termination and unpaid by the Company upon such termination
shall be immediately due and payable upon and notwithstanding
such termination. The Administrator shall be entitled to
collect from the Company, in addition to the compensation
described in this Schedule A, the amount of all of the
Administrator's cash disbursements for services in connection
with the Administrator's activities in effecting such
termination, including without limitation, the delivery to the
Company and/or its designees of the Company's property,
records, instruments and documents.
If, during the Initial Term of this Agreement, for any reason
other than nonrenewal, mutual agreement of the parties,
"cause", as defined above, or "liquidation", as defined above,
the Administrator is replaced as administrator, or if a third
party is added to perform all or a part of the services
provided by the Administrator under this Agreement (excluding
any sub-administrator appointed by the Administrator as
provided in Article 7 hereof), then the Company shall make a
one-time cash payment, in consideration of the fee structure
and services to be provided under this Agreement, and not as a
penalty, to the Administrator equal to (i) the balance due the
Administrator for the remainder of the Initial Term, in the
event such termination occurs during the first twelve (12)
months of the Initial Term, (ii) seventy-five percent (75%) of
the balance due the Administrator for the remainder of the
Initial Term, in the event such termination occurs during the
second twelve (12) months of the Initial Term, or (iii) fifty
percent (50%) of the balance due the Administrator for the
remainder of the Initial Term, in the event such termination
occurs during the last six (6) months of the Initial Term,
assuming for purposes of calculation of the payment that such
balance shall be based upon the average amount of the
Company's assets for the twelve months prior to the date the
Administrator is replaced or a third party is added.
In the event that the Company is merged into, or its assets
are combined with, another legal entity in part or in whole
pursuant to any form of business reorganization (a
"Combination") prior to the expiration of the Initial Term and
the Administrator is not retained to provide administration
services consistent with this Agreement, the parties
acknowledge and agree that the one-time cash payment referred
to in the preceding paragraph shall be due and payable. No
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other fees or amounts shall be due the Administrator in the
event of a Combination.
The parties further acknowledge and agree that, in the event
the Administrator is replaced, or a third party is added, as
set forth above, (i) a determination of actual damages
incurred by the Administrator would be extremely difficult,
and (ii) the liquidated damages provision contained herein is
intended to adequately compensate the Administrator for
damages incurred and is not intended to constitute any form of
penalty.
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