OLD WESTBURY FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
THIS INVESTMENT ADVISORY AGREEMENT is made as of September 1,
2010, 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
services specified in Section 3 hereof.
Section 3. Duties of the Adviser.
(a) The Adviser shall provide investment advisory services,
including but not limited to, making 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 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 the services
hereunder, 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 transactions of the Portfolios. In
all purchases, sales and other transactions 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 performance of its duties and obligations under this
Agreement including, but not limited to, executing on behalf of
the Portfolios and the Fund such agreements and other
documentation in connection with such purchases, sales or other
transactions. The Fund acknowledges that the Fund and the
Portfolios will be bound by such trading accounts established,
and agreements and other documents executed.
(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.
(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 pay its own expenses in connection with
the services to be provided by it pursuant to this Agreement.
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. 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 6. Broker-Dealer Relationships. In connection with
the performance of its services hereunder, the Adviser is
responsible for opening accounts with brokers, dealers and
futures commission merchants ("broker-dealers"), selecting
brokers, dealers and futures commission merchants to effect all
transactions for the Portfolios, placing all necessary orders
with broker-dealers or issuers (including affiliated broker-
dealers), and negotiating commissions, if applicable. To the
extent consistent with applicable law and the investment
objectives of the Portfolios, the Adviser may purchase or sell
orders for the Portfolios with contemporaneous purchase or sell
orders of other clients of the Adviser and its affiliates. In
such event, allocation of securities so sold or purchased, as
well as the expenses incurred in the transaction, will be made
by the Adviser in the manner the Adviser considers to be the
most equitable and consistent with its fiduciary obligations to
the Portfolios and to other clients. The Adviser will seek to
obtain best execution of transactions for the Portfolios at
prices which are advantageous to the Portfolios and at
commission rates that are reasonable in relation to the benefits
received. To the extent consistent with Section 28(e) of the
Securities Exchange Act of 1934, the Adviser may pay a broker-
dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another
broker-dealer would have charged for effecting such transaction
if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the
brokerage and research products and/or services provided by such
broker-dealer. This determination, with respect to brokerage
and research products and/or services, may be viewed in terms of
either that particular transaction or the overall
responsibilities which the Adviser has with respect to the
Portfolio, as well as to other accounts over which the Adviser
exercises investment discretion. Not all such services or
products need be used by the Adviser in managing the Portfolios.
Section 7. 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 8. 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 9. 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 10. 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 11. 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 12. Term of the Agreement. This Agreement shall
become effective with respect to each of the respective
Portfolios on such date as it is approved in accordance with the
requirements of the 1940 Act, and shall initially continue for
one year, 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.
This Agreement, at such time as it is approved in accordance
with the requirements of the 1940 Act, shall supersede any and
all investment advisory agreements between the Fund and the
Adviser.
Section 13. 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 14. 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 15. 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 16. 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 17. 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 18. 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 19. 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 20. 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 Xxxxxxxx
Xxxxx X. Xxxxxxxx
Vice President & Treasurer
BESSEMER INVESTMENT
MANAGEMENT LLC
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
President
[PAGE BREAK]
SCHEDULE A
PORTFOLIO ADVISORY FEE RATE
AVERAGE NET ASSETS
U.S. Large Cap Fund First $500 million - 0.70%
Second $500 million to $1
billion - 0.65%
Over $1 billion - 0.60%
Non-U.S. Large Cap 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 & Mid 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%
