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EXHIBIT 23(h)(1)
FUND ADMINISTRATION AGREEMENT
AGREEMENT made as of the 1st day of August, 1994, between LONGLEAF
PARTNERS FUNDS TRUST, formerly SOUTHEASTERN ASSET MANAGEMENT FUNDS TRUST, a
Massachusetts business trust, ("the Master Trust") and each of its separate
series or separate portfolios, as presently existing or hereafter created in the
manner authorized by the provisions of the Master Trust, (each such separate
series or separate portfolio being hereafter referred to in the singular as "the
Fund") to the extent the Agreement may be adopted by the Board of Trustees
and/or shareholders of each such portfolio, 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.
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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 to serve as officers of the Fund, including a President,
one or more Executive Vice Presidents or Vice Presidents, a Secretary, a
Treasurer, and such additional officers and employees as may reasonably be
necessary for the performance of its duties under this Agreement.
(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.
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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 Fund;
(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 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.
(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 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.
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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.
(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
accountants and outside legal counsel.
(10) Management of audits and inspections by the Fund's independent
certified public accountants and by all regulatory authorities.
(11) 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.
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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 total cash compensation 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.
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 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.
(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.
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III
TERMINATION, AMENDMENTS, AND OTHER PROVISIONS
3.01. 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) of 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.
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. MISCELLANEOUS
(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 the 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
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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 on the
1st day of August, 1994.
LONGLEAF PARTNERS FUNDS TRUST, FORMERLY
SOUTHEASTERN ASSET MANAGEMENT FUNDS TRUST
(THE MASTER TRUST)
LONGLEAF PARTNERS FUND, FORMERLY SOUTHEASTERN
ASSET MANAGEMENT VALUE TRUST (FIRST SERIES)
LONGLEAF PARTNERS SMALL-CAP FUND, FORMERLY
SOUTHEASTERN ASSET MANAGEMENT SMALL-CAP FUND
By /s/ Xxxxxxx X. Xxxxxx
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Executive Vice President
SOUTHEASTERN ASSET MANAGEMENT, INC. (THE FUND
ADMINISTRATOR)
By /s/ W. Xxxx Xxxxxxx
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Executive Vice President
