SHAREHOLDER SERVICING AGREEMENT
OLD WESTBURY FUNDS, INC. (the "Fund")
Old Westbury Growth Opportunity Fund (the "Portfolio")
Federated Tower
Pittsburgh, Pennsylvania 15222-3779
Edgewood Services, Inc.
Federated Tower
Pittsburgh, Pennsylvania 15222-3779
Gentlemen:
We hereby confirm our agreement with you as follows:
1. We hereby employ you, pursuant to the Distribution and
Service Plan adopted by us in accordance with Rule 12b-1 (the "Plan") under the
Investment Company Act of 1940, as amended (the "Act"), to provide the services
listed below:
(a) You will perform, or arrange for others including
broker-dealers with which you have written agreements and whose clients are
Fund shareholders (each a "Broker-Dealer") to perform, all shareholder
servicing functions not performed by us, by the Advisor or its Shareholder
Servicing Agents, or by our Transfer Agent.
(b) In consideration of the foregoing we will pay you up to
one quarter of one percent (0.25%) per annum of the Portfolio's average daily
net assets attributable to the clients of the Broker-Dealers (the "Shareholder
Servicing Fee") to permit you to make payments to the Broker-Dealers for
providing shareholder services. Your payment 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 us
in writing. You may waive your right to any payment to which you are entitled
hereunder, provided such waiver is delivered to us in writing.
(c) You will make payments from time to time from your own
resources and past profits for the following purposes:
(i) to defray the costs of, and to compensate Broker-
Dealers for performing shareholder servicing and related
administrative functions on behalf of the Portfolio;
(ii) to compensate Broker-Dealers for providing
assistance in distributing the Portfolio's shares;
(iii) to pay the costs of printing and distributing the
Portfolio's prospectus to prospective investors; and
(iv) to defray the cost of the preparation and printing of
brochures and other promotional materials, mailings to prospective
shareholders, advertising, and other promotional activities, including
salaries and/or commissions of sales personnel in connection with the
distribution of the Portfolio's shares.
You will in your sole discretion determine the amount of any payments made by
you pursuant to this Agreement, and you 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 which we are required to pay to
you under either this Agreement or the distribution agreement between you and
us, or otherwise.
2. Except as otherwise provided herein, you will be
responsible for the payment of all expenses incurred by you in rendering the
foregoing services, except that we will pay (i) telecommunications expenses,
including the cost of dedicated lines and CRT terminals, incurred by you, the
Advisor, the Shareholder Servicing Agents and Broker-Dealers in rendering such
services, and (ii) the cost of typesetting, printing and delivering our
prospectus to existing shareholders of the Portfolio and of preparing and
printing subscription application forms for shareholder accounts. Our
obligation to be responsible for the expenses enumerated in this paragraph 2 is
limited to an amount equal to .05% per annum of the Portfolio's average daily
net assets.
3. (a) The written agreements between you and Broker-Dealers
will provide that such Broker-Dealers receive a fee, which may be paid
periodically, on an annual basis, equal to up to 0.25% of the average daily net
assets of the Portfolio represented by shares owned during the period for which
payment is being made by investors with whom such Broker-Dealer maintains a
servicing relationship, and will, as agents for their customers, perform the
following, among other things: answer customer inquiries regarding account
status and history, the manner in which purchases and redemptions of shares of
the Fund may be effected and certain other matters pertaining to the Fund;
assist shareholders in designating and changing dividend options, account
designations and addressees; provide necessary personnel and facilities to
establish and maintain shareholder accounts and records; assist in processing
purchase and redemption transactions; arrange for the wiring of funds; transmit
and receive funds in connection with customer orders to purchase or redeem
shares; verify and guarantee shareholder signatures in connection with
redemption orders and transfers and changes in shareholder designated accounts;
furnish (either separately or on an integrated basis with other reports sent to
a shareholder by the Fund) monthly and year-end statements and confirmation of
purchases and redemptions; transmit, on behalf of the Fund, proxy
statements, annual reports, updating prospectuses and other communications from
the Fund to shareholders of the Fund; receive, tabulate and transmit to the
Fund proxies executed by shareholders with respect to meetings of shareholders
of the Fund; and provide such other related services as the Fund or a
shareholder may request. Broker-Dealers may waive all or a portion of their
Shareholder Servicing Fees.
(b) Payments to Broker-Dealers to compensate them for
providing shareholder servicing and related administrative functions are
subject to compliance by them with the terms of written agreements satisfactory
to our Board of Directors to be entered into between you and the
Broker-Dealers.
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
shareholders 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. This Agreement will become effective on the date hereof
and will remain in effect until August 8, 1996 and thereafter for successive
twelve-month periods (computed from each August 1), provided that such
continuation is specifically approved at least annually by vote of our Board of
Directors and of a majority of those of our directors who are not interested
persons (as defined in the Act) and have no direct or indirect financial
interest in the operation of the Plan or in any agreements related to the Plan,
cast in person at a meeting called for the purpose of voting on this Agreement.
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of a majority of our entire Board of Directors, and by a vote
of a majority of our Directors who are not interested persons (as defined in
the Act) and who have no direct or indirect financial interest in the operation
of the Plan or in any agreement related to the Plan, or by vote of a majority
of our outstanding voting securities, as defined in the Act, on sixty days'
written notice to you, or by you on sixty days' written notice to us.
6. 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,
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 thereunder.
7. 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 another
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 Growth Opportunity Fund
By:
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Name: S. Xxxxxxx Xxxxx
Title: Secretary
ACCEPTED: October 18, 1996
EDGEWOOD SERVICES, INC.
By:
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Name:
Title:
