SHAREHOLDER SERVICING AGREEMENT
OLD WESTBURY FUNDS, INC. (the "Fund")
Old Westbury Emerging Growth Fund (the "Portfolio")
0 Xx. Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
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 hereby employ you, pursuant to the Distribution and
Service Plan dated 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 banks,
savings and loans and other financial institutions with which you have written
agreements and whose clients are Fund shareholders (each institution a
"Shareholder Servicing Agent") to perform, all shareholder servicing functions
not performed by us, by the Distributor or Broker-Dealers, or by our Transfer
Agent.
(b) In consideration of the foregoing we will pay you a fee
at the annual rate of one quarter of one percent (0.25%) of the Portfolio's
average daily net assets attributable to your clients (and client's of your
affiliates) to compensate you for providing shareholder services to such
clients. In addition, we will pay you up to one quarter of one percent (.25%)
per annum of the Portfolio's average daily net assets attributable to the
clients of the other Shareholder Servicing Agents (together, the "Shareholder
Servicing Fees") to permit you to make payments to such Shareholder Servicing
Agents whose clients are Fund shareholders. 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 fee or payment to which
you are entitled hereunder, provided such waiver is delivered to us in writing.
(c) You make payments from time to time from your Shareholder
Servicing Fee attributable to your clients to defray the costs of, and to
compensate Shareholder Servicing Agents (not already receiving a Shareholder
Servicing Fee from you for which you are reimbursed) for performing shareholder
servicing and related administrative functions on behalf of the Portfolio.
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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 any advisory 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
Distributor, the Broker-Dealers and Shareholder Servicing Agents 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 the Shareholder
Servicing Agents will provide that such Shareholder Servicing Agents receive a
fee, which may be paid periodically, on an annual basis equal 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
Shareholder Servicing Agents 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 addresses; 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,
updated 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 meeting of shareholders of the Fund; and provide
such other related services as the Fund or a shareholder may request.
Shareholder Servicing Agents may waive all or a portion of their Shareholder
Servicing Fees.
(b) Payments to Shareholder Servicing Agents 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
Shareholder Servicing Agents.
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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, 1997 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 or 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 to 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.
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