ADVISORY CONTRACT
OLD WESTBURY FUNDS, INC. (the "Fund")
Old Westbury International Fund (the "Portfolio")
0 Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
October 12, 1993
Bessemer Trust Company, N.A.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
We herewith confirm our agreement with you as follows:
1. We propose to engage in the business of investing and
reinvesting our assets in securities of the type, and in accordance with the
limitations, specified in our Articles of Incorporation, By-Laws and
Registration Statement filed with the Securities and Exchange Commission under
the Investment Company Act of 1940 (the "1940 Act") and the Securities Act of
1933, including the Prospectus forming a part thereof (the "Registration
Statement"), all as from time to time in effect, and in such manner and to such
extent as may from time to time be authorized by our Board of Directors. We
enclose copies of the documents listed above and will furnish you such
amendments thereto as may be made from time to time.
2. (a) We hereby employ you to manage the investment and
reinvestment of our assets as above specified, and, without limiting the
generality of the foregoing, to provide the management and other services
specified below.
(b) Subject to the general control of our Board of
Directors, you will make decisions with respect to all purchases and sales of
our portfolio securities. To carry out such decisions, you are hereby
authorized, as our agent and attorney-in-fact, for our account and at our risk
and in our name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in our portfolio
securities you are authorized to exercise full discretion and act for us in the
same manner and with the same force and effect as our corporation itself 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. In furtherance of
such and subject to applicable law and procedures adopted by the Fund's Board of
Directors, you may (i) pay commissions to brokers other than yourself which are
higher than such that might be charged by another qualified broker to obtain
brokerage and/or research services considered by you to be useful or desirable
for your investment management of the Portfolio and/or other advisory accounts
of yours and any investment advisor affiliated
with you; and (ii) consider the sales of shares of the Portfolio by brokers
including your affiliates as a factor in your selection of brokers for Portfolio
transactions.
(c) You will report to our Board of Directors at each
meeting thereof all changes in our portfolio since your prior report, and will
also keep us in touch with important developments affecting our portfolio and,
on your own initiative, will furnish us from time to time with such information
as you may believe appropriate for this purpose, whether concerning the
individual entities whose securities are included in our portfolio, the
activities in which such entities engage, Federal income tax policies applicable
to our investments, or the conditions prevailing in the money market or the
economy generally. You will also furnish us with such statistical and analytical
information with respect to our portfolio securities as you may believe
appropriate or as we may reasonably request. In making such purchases and sales
of our portfolio securities, you will comply with the policies set from time to
time by our Board of Directors as well as the limitations imposed by our Amended
Articles of Incorporation, the provisions of the Internal Revenue Code relating
to regulated investment companies and the 1940 Act, and the limitations
contained in the Registration Statement.
(d) It is understood that you will from time to time
employ, subcontract with or otherwise associate yourself with, entirely at your
expense such persons as you believe to be particularly fitted to assist you in
the execution of your duties hereunder.
(e) You or your affiliates will also provide supervisory
personnel who will be responsible for supervising and monitoring the performance
of our Administrator in connection with its duties under our Administrative
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 your employees or employees of
your affiliates or of other organizations. It is understood that we have
retained, at our expense, an Administrator to perform the operational components
of the functions and services listed herein.
(f) You or your affiliates will also furnish us such
additional administrative supervision and such office facilities as you may
believe appropriate or as we may reasonably request subject to the requirements
of any regulatory authority to which you may be subject. We will reimburse you
for all of our operating costs incurred by you, including rent, depreciation of
equipment and facilities, interest and amortization of loans financing equipment
used by us and all the expenses incurred to conduct our affairs. The amounts of
such reimbursements shall from time to time be agreed upon between us.
3. We agree, subject to the limitations described below, to be
responsible for, and hereby assume the obligation for payment of, all our
expenses including: (a) brokerage and commission expenses; (b) foreign, federal,
state or local taxes, including issuance and transfer taxes incurred
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by or levied on us; (c) commitment fees, certain insurance premiums and
membership fees and dues in investment company organizations; (d) interest
charges on borrowings; (e) charges and expenses of our custodian; (f) charges
and expenses relating to the issuance, redemption, transfer and dividend
disbursing functions for us; (g) telecommunications expenses; (h) recurring and
non-recurring legal, accounting and recordkeeping expenses; (i) costs of
organizing and maintaining the Fund's existence as a corporation; (j)
compensation, including directors' fees, of any of our directors, officers or
employees who are not your officers or officers employees of the Administrator
or their affiliates, and costs of other personnel providing administrative and
clerical services to us; (k) costs of providing shareholders' services,
including charges and expenses of persons providing confirmations of
transactions in the Portfolio's shares, periodic statements to shareholders and
recordkeeping services, and costs of shareholders' reports, proxy solicitations,
and corporate meetings; (l) fees and expenses of registering our shares under
the appropriate federal securities laws and of qualifying our shares under
applicable state securities laws, including expenses attendant upon the initial
registration and qualification of these shares and attendant upon renewals of,
or amendment to, those registrations and qualifications; (m) expenses of
preparing, printing and delivering the initial registration statement and of
preparing, printing and delivering the Prospectus to existing shareholders and
of printing shareholder application forms for shareholder accounts; (n) fees and
expenses payable to the Advisor, Distributor, Administrator, custodian, transfer
agent and dividend agent; and (o) any other distribution or promotional expenses
contemplated by an effective plan adopted by us pursuant to Rule 12b-1 under the
Act. Our obligation for the foregoing expenses is limited by your agreement to
be responsible, while this Agreement is in effect, for any amount by which our
annual operating expenses, including distribution expenses, (excluding taxes,
brokerage, interest and extraordinary expenses) exceed the limits on investment
company expenses prescribed by any state in which the Portfolio's shares are
qualified for sale.
4. We will expect of you, and you will give us the benefit of,
your best judgment and efforts in rendering these services to us, and we agree
as an inducement to your undertaking these services that you will not be liable
hereunder for any mistake of judgment or for any other cause, provided that
nothing herein shall protect you against any liability to us or to our security
holders by reason of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
5. (a) In consideration of the foregoing we will pay you a fee
computed daily and payable monthly, in accordance with the following schedule:
.80% of the first $100 million of the Portfolio's average net assets; .75% of
the second $100 million of the Portfolio's average net assets; and .70% of the
Portfolio's average net assets exceeding $200 million. Your fee will be accrued
by us daily, and will be payable on the last day of each calendar month for
services performed hereunder during that month or on such other schedule as you
shall request of us in writing. You may waive your right to any fee to which you
are entitled hereunder, provided such waiver is delivered to us in writing. Any
reimbursement of our expenses, to which we may become entitled pursuant to
paragraph 3 hereof, will be paid to us at the end of the
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month for which those expenses are accrued, at the same time as we pay you
your fee.
(b) Pursuant to the Portfolio's Distribution and Service
Plan, the Advisor will also act as a shareholder servicing agent for the
Portfolio pursuant to which the Portfolio is permitted to pay the Advisor a
maximum of .25% per annum of the Portfolio's average daily net assets to
compensate it and to permit the Advisor to compensate banks, savings and loans
and other financial institutions (the Advisor with such other institutions, each
a "Shareholder Servicing Agent") whose clients are Portfolio shareholders for
providing shareholder services. In addition, the Advisor may use the advisory
fee for distribution and servicing purposes including defraying the costs of
performing shareholder servicing functions on behalf of the Portfolio,
compensating others, including banks, broker-dealers and other organizations
whose customers or clients are shareholders of the Portfolio for providing
assistance in distributing the Portfolio's shares and defraying the cost of
shareholder servicing and other promotional activities. To the extent that you
or your affiliates directly may make payments to banks, securities dealers and
other third parties who engage in the sale of our shares or who render
shareholder support services, and that such payments may be deemed indirect
financing of an activity primarily intended to result in the sale of shares of
the Portfolio within the context of Rule 12b-1 under the 1940 Act (the "Rule"),
then such payments by you shall be deemed to be authorized under the Portfolio's
Distribution and Service Plan adopted pursuant to the Rule. You, will, in your
sole discretion, determine the amount of such payments and may from time to time
in your sole discretion increase or decrease the amount of such payments;
provided, however, that no such payment will increase the amount the Portfolio
is required to pay you or any person under this Agreement or any agreement. Any
payments made by you for such purposes are subject to compliance with the terms
of written agreements in a form satisfactory to the Fund's Board of Directors to
be entered into by you and the participating organization.
6. This Agreement will become effective on October 12, 1993
and shall continue in effect until October 12, 1995 and thereafter for
successive twelve-month periods (computed from each October 1), provided that
such continuation is specifically approved at least annually by our Board of
Directors or by a majority vote of the holders of our outstanding voting
securities, as defined in the 1940 Act, and, in either case, by a majority of
those of our directors who are neither party to this Agreement nor, other than
by their service as directors of the corporation, interested persons, as defined
in the 1940 Act, of any such person who is party to this Agreement. Upon the
effectiveness of this Agreement, it shall supersede all previous Agreements
between us covering the subject matter hereof. This Agreement may be terminated
at any time, without the payment of any penalty, by vote of a majority of our
outstanding voting securities, as defined in the 1940 Act, or by a vote of a
majority of our entire Board of Directors, on sixty days' written notice to you,
or by you on sixty days' written notice to us.
7. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale,
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hypothecation or pledge by you. The terms "transfer", "assignment" and "sale" as
used in this paragraph shall have the meanings ascribed thereto by governing law
and in applicable rules or regulations of the Securities and Exchange
Commission.
8. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your officers, directors or employees who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
OLD WESTBURY FUNDS, INC.
Old Westbury International Fund
By:/s/XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Treasurer
ACCEPTED: October 12, 1993
BESSEMER TRUST COMPANY, N.A.
By: /S/XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Senior Executive Vice President
BTC016
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