FUND ADMINISTRATION AGREEMENT
Exhibit (h)3
AGREEMENT made as the ______ day of August, 2012, between Longleaf
Partners Global Fund (the “Fund”) the fourth series of LONGLEAF PARTNERS FUNDS
TRUST, a Massachusetts business trust, (“the Master Trust”), and SOUTHEASTERN ASSET
MANAGEMENT, INC., a Tennessee corporation, (hereinafter referred to as “the
Administrator”). In consideration of the mutual agreements herein made, the Fund appoints the
Administrator and the Administrator agrees to serve as the Fund Administrator on the terms and
conditions set forth herein.
I
GENERAL AUTHORITY AND FACILITIES
1.01. STANDARD OF SERVICE OF THE ADMINISTRATOR
The Administrator will use its best efforts to provide efficient, effective, and accurate
administrative services for the Fund, as defined in Section II herein, and will seek innovative and
continuing technological improvements for the said functions for which it has assumed
responsibilities. The Administrator will not be liable or responsible for delays or errors by
reason of circumstances beyond its control, including acts of civil or military authority, national
emergencies, labor difficulties, fire, mechanical breakdown beyond its control, flood or
catastrophe, acts of God, insurrection, war, riots or failure beyond its control of transportation,
communication or power supply. The Administrator will provide services equal in quality to those
administration, accounting, and shareholder services performed for any other management investment
companies which the administrator may serve in a similar capacity.
1.02. FACILITIES AND EMPLOYEES
(a) The Administrator shall, at its own expense, furnish directly or through subsidiaries,
office facilities, including space, furniture and equipment and, to the extent that such services
are not being provided by others under contract with the Fund, personnel for managing the affairs
of the Fund, maintaining and servicing the records with respect to the investments and shareholders
of the Fund, and maintaining and servicing all other books and records of the Fund, as required by
the Investment Company Act of 1940, but not including such duties, services, or records which are
customarily performed or maintained for an open-end management investment company by its custodian,
transfer agent, independent auditors, and/or outside legal counsel.
(b) The Administrator shall provide personnel satisfactory to the Board of Trustees of the
Fund, if necessary, to serve as officers of the Fund, including President, one or more Executive
Vice Presidents or Vice Presidents, a Secretary, a Treasurer, and such additional officers,
employees, and/or agents as may reasonably be necessary for the performance of its duties under
this Agreement.
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(c) The personnel and facilities provided by the Administrator shall be subject to the control
and direction of the Board of Trustees of the Fund, notwithstanding that some or all of
their compensation and expenses of their employment may be paid by the Administrator. The
Administrator is responsible for the employment, control and conduct of its agents and employees
and for injury to such agents or employees or to others through its agents or employees. The
Administrator assumes full responsibility for its agents and employees under applicable statutes
and agrees to pay all employment taxes thereunder. The Administrator will maintain appropriate
insurance at its own expense against public liability in a reasonable amount.
1.03. DOCUMENTS TO BE FURNISHED TO ADMINISTRATOR
The Fund shall from time to time provide the Administrator with: (1) a copy of the
Declaration of Trust of the Fund and all amendments thereto; (2) a copy of the bylaws of the
Fund as amended from time to time; (3) certified copies of votes of the Board of Trustees of the
Fund relating to the issues of Shares of the Fund; (4) any amended certificate for Shares of the
Fund in the form adopted by the Board; (5) specimen signatures of the officers of the Funds; (6)
such other documents as the Administrator may reasonably request.
1.04. PROTECTION OF ADMINISTRATOR; INDEMNIFICATION
(a) The Administrator may rely on certifications of the President, any Executive Vice
President or Vice President, the Secretary or the Treasurer of the Fund, or any other person so
designated by the Board, as to proceedings facts or other matters in connection with any action
taken by the shareholders or the Board of Trustees of the Fund, and upon instructions not
inconsistent with this Agreement, from the President or any Executive Vice President or Vice
President and the Treasurer or any Assistant Treasurer. The Administrator may apply to counsel for
the Fund or to its own counsel for advice whenever it deems it expedient. With respect to any
action taken on the basis of such certifications or instructions or in accordance with the advice
of counsel for the Fund, the Fund will indemnify and hold harmless the Administrator from any and
all liability and expense.
(b) The Administrator shall be indemnified and held harmless by the Fund against any loss or
damage by reason of any act done by it in good faith and in reliance upon any instrument or
certificate for shares believed by it (a) to be genuine and (b) to be signed, countersigned or
executed by any person or persons authorized to sign, countersign, or execute such instrument or
certificate; provided, however, that the Administrator shall not be so indemnified in the event of
its failure to obtain a proper signature guarantee.
(c) If any officer of the Fund shall no longer be vested with authority to sign for the Fund,
written notice thereof shall forthwith be given to the Administrator by the Fund and until receipt
of such notice by it, the Administrator shall be fully indemnified and held harmless by the Fund in
recognizing and acting upon certificates or other instruments bearing the signatures or facsimile
signatures of such officer.
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(d) Except as may otherwise be required by the Investment Company Act of 1940 or the rules
thereunder, neither the Administrator nor its stockholders, officers, directors, employees or
agents shall be subject to any liability for, or any damages, expenses or losses incurred in
connection with, any act or omission connected with or arising out of any services rendered
under this Agreement, including any mistake of judgment, except by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement. Notwithstanding the
foregoing, the Administrator shall not be liable to the Fund for the acts and omissions of any
party engaged by it to execute purchases and sales of portfolio securities for or on behalf of the
Fund under this Agreement, except to the extent that such a party is liable to the Administrator
for such acts and omissions. Any person, even though also employed by the Administrator, who may be
or become an employee of the Fund shall be deemed, when acting within the scope of his or her
employment by the Fund, to be acting in such employment solely for the Fund and not as the employee
or agent of the Administrator.
(e) The Administrator shall for all purposes herein be deemed to be an independent contractor.
As such, the Administrator has no authority to act for or represent the Fund in any way and is not
an agent of the Fund.
II
ACCOUNTING AND ADMINISTRATION FUNCTIONS
2.01. MAINTENANCE OF RECORDS
The Administrator will maintain records on behalf of the Fund in compliance with the
Rules and Regulations of the Securities and Exchange Commission, including, but not limited to, any
such records required to be maintained pursuant to Section 31(a) of the Investment Company Act of
1940 and the Rules and Regulations thereunder. Such records will at all times be available for
inspection and use by the Fund and upon termination of this Agreement be transferred upon
instructions of the Fund to any successor administrator or to the Fund itself.
2.02. RESPONSIBILITIES AND FUNCTIONS
The Administrator shall have the responsibility of managing, performing, or supervising the
administrative and business operations of the Fund, other than those related to the management of
the Fund’s portfolio of securities and the distribution and sale of the Fund’s shares. The duties
and responsibilities to be performed by the Administrator shall include the following:
(1) Preparation or supervision of the preparation of all registration statements and
prospectuses, and the filing thereof with the appropriate regulatory authorities.
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(2) Preparation or supervision of the preparation of all public financial statements and
financial reports, the filing thereof with the appropriate regulatory authorities, and the
distribution to shareholders of the Fund.
(3) Preparation or the supervision of the preparation of all tax returns and the filing
thereof with the appropriate regulatory authorities.
(4) Preparation or the supervision of the preparation of any Proxy Statements, assistance in
the conduct of any meetings of shareholders, tabulation of proxies and ballots of shareholders, and
the maintenance of minutes of such meetings.
(5) Daily valuation of the Fund’s portfolio and the daily calculation of the Fund’s net asset
value per share.
(6) Co-ordination and liaison between the Fund and its Investment Counsel, its Custodian, its
Transfer Agent and the reconciliation of all accounts and records provided by such entities.
(7) Management and scheduling of regular quarterly meetings of the Fund’s
Board of Trustees, and in connection therewith, providing all necessary assistance in the conduct
of such meetings, and the maintenance of minutes of such meetings.
(8) Establishment of internal accounting controls and procedures and the continuing monitoring
thereof.
(9) Co-ordination with the Fund’s independent certified public accounts and outside legal
counsel.
(10) Management of audits and inspections by the Fund’s independent certified public
accountants and by all regulatory authorities.
(1l) Supplying or obtaining on behalf of the Fund such other advice or assistance as may be
necessary or desirable in the continuing administration of the Fund’s business affairs.
2.03. ADMINISTRATION FEES AND EXPENSES
(a) The Administrator shall be entitled to receive and the Fund shall be obligated to pay to
the Administrator for the services specified in this Section II an Administration Fee, which shall
be accrued daily and paid monthly in arrears of 0.10% per annum of average daily net assets. The
Fund shall also reimburse the Administrator for the Fund’s equitable and appropriate share of the
salary of the Fund’s Treasurer, as allocated among the Fund and any other Fund or series and any
other commingled investment or insurance product served by the Administrator and the Fund’s
Treasurer, subject to review of and approval by the Board of Trustees, and shall pay or provide
reimbursement for all other operational expenses, as provided in Paragraphs 2.03(b) and 2.03(c) of
this Agreement.
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2.03(b) The Fund shall pay all of its costs and expenses of operation, except those
specifically stated herein to be borne or payable by the Administrator. The expenses payable by the
Fund shall include, but shall not be limited to: (i) the fees of the Fund’s Investment Counsel, and
Administrator; (ii) the fees of any Custodian and Transfer Agent of the Fund; (iii) compensation of
the Fund’s independent certified public accountants and any legal counsel retained by the Fund,
including compensation and costs relating to litigation, and the fees, compensation and expenses of
the “non-interested” Trustees of the Fund; (iv) franchise, income, business license and original
issue taxes relating to the Fund and its securities; (v) fees and legal
expenses incurred in qualifying the shares of the Fund for sale with any state regulatory
agency in the several states, and the fees and expenses of maintaining, renewing, increasing or
amending such qualifications; (vi) insurance and bonding premiums and industry association dues;
(vii) fees and expenses involved in registering and maintaining registrations of the Fund and of
its shares with the Securities and Exchange Commission, including the preparation and printing of
prospectuses for shareholders; (viii) costs of printing and mailing to shareholders prospectuses,
proxy statements, dividend notices, routine and special reports and other communications to
shareholders, as well as all expenses of shareholders and Trustees meetings; (ix) costs of printing
of any stock certificates; (x) interest expense and brokers’ commissions and issue and transfer
taxes chargeable to the Fund in connection with securities transactions to which the Fund is a
party; (xi) the costs of obtaining prices of the Fund’s portfolio securities; and (xii) any
extraordinary expenses including extraordinary legal expenses; provided, however, that all such
expenses to be paid by the Fund shall be subject to review and approval by the Board of Trustees
of the Fund as to the reasonableness thereof.
2.03(c) The Fund shall reimburse the Administrator for the Fund’s equitable and appropriate
share of the costs and expenses of the following items, such costs and expenses to be allocated
among the Fund and any other Funds or series and any other commingled investment or insurance
products served by the Administrator, subject to review of and approval by the Board of Trustees of
the Fund as to the method of allocation and the reasonableness of the costs and expenses:
(1) Costs and expenses of leasing or acquiring specialized computer programs or computer
software and software support contracts used exclusively by the Fund and any other Funds or
commingled products.
(2) Costs and expenses of leasing or acquiring specialized computer equipment or hardware and
appropriate support contracts for computer equipment purchased exclusively for and dedicated solely
to processing of transactions for the Fund and any other Funds or commingled products.
(3) Organizational expenses amortized in a manner as permitted by generally accepted
accounting principles and the Securities & Exchange Commission, limited to the particular series or
Fund.
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(4) Costs and expenses of stationery, appropriate forms, envelopes, checks, postage,
telephone, telegraph, and overnight or other courier charges and other similar items, to the extent
such costs and expenses have not been paid directly by the Fund.
III
TERMINTATION, AMENDMENTS, AND OTHER PROVISIONS
3.0I. RENEWAL AND TERMINATION
This Agreement shall remain in effect for a period of two (2) years and from year to year
thereafter, provided such continuance is approved at least annually by the vote of holders of a
majority, as defined in the Investment Company Act (the “Act”), of the outstanding voting
securities of the Fund or by the Trustees of the Fund; provided, that in either event such
continuance is also approved annually by the vote of a majority of the Trustees of the Fund who are
not parties to this Agreement or who are not otherwise “interested persons” (as defined in the
Investment Company Act of 1940) or any such party, which vote must be cast in person at a meeting
called for the purpose of voting on such approval; provided, however, that (a) the Fund may, at any
time and without the payment of any penalty, terminate this Agreement upon sixty days written
notice to the Administrator, either by majority vote of the Trustees of the Fund or by the vote of
a majority of the outstanding voting securities of the Fund; (b) this Agreement shall
immediately terminate in the event of its assignment (within the meaning of the Investment Company
Act of 1940) unless such automatic termination shall be prevented by an exemptive order of the
Securities and Exchange Commission; and (c) the Administrator may terminate this Agreement without
penalty on sixty days written notice to the Fund. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed post-paid, to the other party at the principal office
of such party.
3.02. SUCCESSOR ADMINISTRATOR
In the event that a successor to any of the Administrator’s duties or responsibilities
hereunder is designated by the Fund by written notice to the Administrator, the Administrator will,
promptly upon such termination and at the expense of the Fund, transfer to such successor all other
relevant books, records, correspondence and other data established or maintained by the
Administrator under this Agreement in form reasonably acceptable to the Fund (if such form differs
from the form in which the Administrator has maintained the same, the Fund shall pay any expenses
associated with transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from the Administrator’s personnel
in the establishment of books, records, and other data by such successor.
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3.03. AMENDMENT
This Agreement may be amended by the parties without the vote or consent of the shareholders
of the Fund to supply any omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, or if they deem it necessary to confirm this Agreement to the
requirements of applicable federal laws or regulations.
3.04. FURTHER ASSURANCES
Each party agrees to perform such further acts and execute such further documents as are
necessary to effectuate the purposes of this Agreement.
3.05. MISCELLANEUOUS
(a) This Agreement shall be construed and enforced in accordance with and governed by the laws
of the Commonwealth of Massachusetts.
(b) The captions in this Agreement are included for convenience of reference only and in no
way define or limit any of the provisions of this Agreement or otherwise affect their construction
or effect. This Agreement may be executed simultaneously in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute one and the same
instrument.
(c) The Declaration of Trust establishing the Fund, a copy of which, together with all
amendments thereto (the “Declaration”), is on file in the office of the Secretary of Commonwealth
of Massachusetts, provides that the name of the Trust refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the said Trust shall be held to any personal
liability, nor shall resort be had to their private property for the satisfaction of any obligation
or claim or otherwise in connection with the affairs of said Trust, but the Trust assets and estate
only shall be liable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement this _____ day of August,
2012
Longleaf Partners Fund Trust (the Master Trust) and Longleaf Partners Global Fund (Fourth Series) |
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By: | ||||
Southeastern Asset Management, Inc. | ||||
(the Investment Counsel) | ||||
By: |
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