EIGHTH AMENDED AND RESTATED ADMINISTRATIVE AND TRANSFER AGENCY SERVICES AGREEMENT
Exhibit (h)(i)
EIGHTH AMENDED AND RESTATED
ADMINISTRATIVE AND TRANSFER AGENCY SERVICES AGREEMENT
ADMINISTRATIVE AND TRANSFER AGENCY SERVICES AGREEMENT
EIGHTH AMENDED AND RESTATED ADMINISTRATIVE AND TRANSFER AGENCY SERVICES AGREEMENT dated
as of May 31, 2002, as amended August 8, 2002, January 31, 2005, April 30, 2005, April 30, 2006,
April 30, 2007, April 30, 2008, April 30, 2009 and April 30, 2010 between Diamond Hill Funds (the
“Trust”), an Ohio business trust, and Diamond Hill Capital Management, Inc. (“DHCM”), an Ohio
corporation.
WHEREAS, the Trust has been organized to operate as an open-end
management investment company registered under the Investment Company Act of 1940 (the
“Act”); and
WHEREAS, the Trust has engaged DHCM to act as investment adviser to one
or more of the Trust’s several series, as they are duly authorized and offered, a complete
list of which is set forth on Schedule A attached hereto, as it may be amended from time
to time (individually a “Fund” and collectively the “Funds”); and
WHEREAS, the Trust wishes to retain DHCM to perform certain
administrative and transfer agency services as hereinafter described on behalf of the
Funds; provided, however, that DHCM is authorized at its own expense to contract with
other service providers to perform any or all of the administrative and transfer agency
services hereinafter described; and
WHEREAS, DHCM wishes to provide, or arrange for the provision of, such
services to the Trust under the conditions set forth below;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, the Trust and DHCM agree as follows:
1. Employment. The Trust, being duly authorized, hereby employs DHCM to
perform the services described in this Agreement. DHCM shall perform such services upon
the terms and conditions hereinafter set forth. Any services undertaken by DHCM pursuant
to this Agreement, as well as any other activities undertaken by DHCM on behalf of the
Trust pursuant hereto, shall at all times be subject to any directives of the Board of
Trustees of the Trust.
2. Trust Administration. DHCM shall give the Trust the benefit of its best judgment,
efforts and facilities in rendering its administrative services. DHCM shall at all times
conform to: (i) all applicable provisions of the Act and any rules and regulations adopted
thereunder, (ii) the provisions of the Registration Statement of the Trust under the
Securities Act of 1933 and the Act as amended from time to time, (iii) the
provisions of the Amended and Restated Agreement and Declaration of Trust and the By-Laws
of the Trust, as each shall be amended from time to time and (iv) any other applicable
provisions of state and federal law.
Subject to the direction and control of the Trust, DHCM shall supervise the Fund’s
business affairs not otherwise supervised by other agents of the Trust. To the extent not
otherwise the primary responsibility of, or provided by, other parties under agreement
with the
Trust, DHCM shall supply (i) non-investment related statistical and research data,
(ii) internal regulatory compliance services, and (iii) executive and administrative services. DHCM
shall supervise the preparation of (i) tax returns, (ii) reports to shareholders of the Fund, (iii)
reports to and filings with the Securities and Exchange Commission, state securities commissions
and Blue Sky authorities including preliminary and definitive proxy materials and post-effective
amendments to the Fund’s registration statement, and (iv) necessary materials for meetings of the
Trust’s Board of Trustees. DHCM shall provide personnel to serve as officers of the Trust if so
elected by the Board of Trustees. Executive and administrative services include, but are not
limited to, the coordination of all third parties furnishing services to the Fund, review of the
books and records of the Trust maintained by such third parties, and the review and submission to
the officers of the Trust for their approval, of invoices or other requests for payment of Trust
expenses; and such other action with respect to the Trust as may be necessary in the opinion of
DHCM to perform its duties hereunder.
3. Transfer Agency. DHCM shall record the issuance of shares of the Trust and maintain
pursuant to applicable rules of the SEC a record of the total number of shares of the Trust
which are authorized, issued and outstanding, based upon data provided to it by the Trust.
DHCM shall also provide the Trust on a regular basis or upon reasonable request the total
number of shares which are authorized, issued and outstanding, but shall have no obligation
when recording the issuance of the Trust’s shares, except as otherwise set forth herein, to
monitor the issuance of such shares or to take cognizance of any laws relating to the issue
or sale of such shares, which functions shall be the sole responsibility of the Trust. DHCM
shall not handle physical shares. Upon receipt of a proper request for transfer and upon
surrender to DHCM of certificates, if any, in proper form for transfer, DHCM shall approve
such transfer and shall take all necessary steps to effectuate the transfer as indicated in
the transfer request. Upon approval of the transfer, DHCM shall notify the Trust in writing
of each such transaction and shall make appropriate entries on the shareholder records
maintained by DHCM.
DHCM shall also perform all such transfer agency services and duties as are customary
and necessary in the industry, including but not limited to: accounting for and processing
checks received for purchase of shares of the various series; processing purchase orders for
shares of the various series; processing returned checks; processing dividends and
distributions as and when made by the Trust; accounting for unclaimed dividends and
unclaimed redemption proceeds; processing redemptions and exchanges; processing automatic
withdrawal orders pursuant to the provisions of withdrawal plans duly executed by
shareholders; processing wire-order purchases; withholding such sums as are required to be
withheld under applicable federal and state income tax laws, rules and regulations; create
and maintain all records required by applicable laws, rules and regulations, including but
not limited to records required by Section 31 (a) of the Act and the rules thereunder;
maintain records for each shareholder account and receive and
answer all shareholder and dealer inquiries relating to account status, share
purchases, redemptions and exchanges and other investment plans available to Trust
shareholders.
5. Allocation of Charges and Expenses. DHCM will pay all operating expenses of the
Fund not specifically assumed by the Fund, including without limitation the compensation
and expenses of any employees of the Fund and of any other persons rendering any services
to the Fund; clerical and shareholder service staff salaries; office space and other office
expenses;
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fees and expenses incurred by the Fund in connection with membership in investment company
organizations; legal, auditing and accounting expenses; expenses of registering shares under
federal and state securities laws, including expenses incurred by the Fund in connection with the
organization and initial registration of shares of the Fund; insurance expenses; fees and expenses
of the transfer agent, dividend disbursing agent, shareholder service agent, plan agent,
administrator (excluding fees and expenses payable to DHCM under this Agreement), accounting and
pricing services agent and principal underwriter of the Fund; expenses, including clerical
expenses, of issue, sale, redemption or repurchase of shares of the Fund; the cost of preparing and
distributing reports and notices to shareholders, the cost of printing or preparing prospectuses
and statements of additional information for delivery to the Fund’s current shareholders; the cost
of printing or preparing stock certificates or any other documents, statements or reports to
shareholders; expenses of shareholders’ meetings and proxy solicitations; and all other operating
expenses not specifically assumed by the Fund. The Fund will be directly responsible for payment of
the fees and expenses of the custodian.
The Fund will pay all brokerage fees and commissions, taxes, borrowing costs (such as
(a) interest and (b) dividend expenses on securities sold short), fees and expenses of
trustees of the Trust who are not interested persons of the Trust, as defined in the Act,
and such extraordinary or non-recurring expenses as may arise, including litigation to which
the Fund may be a party and indemnification of the Trust’s trustees and officers with
respect thereto. The Fund will also pay the fees paid pursuant to its Management Agreement
between DHCM and the Trust, and all expenses which it is authorized to pay pursuant to Rule
12b-l under the 1940 Act. DHCM may obtain reimbursement from the Fund, at such time or times
as DHCM may determine in its sole discretion, for any of the expenses advanced by DHCM,
which the Fund is obligated to pay, and such reimbursement shall not be considered to be
part of DHCM’s compensation pursuant to this Agreement.
6. Record Keeping and Other Information. DHCM shall create and maintain all necessary
records in accordance with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the Act and the rules thereunder, as the
same may be amended from time to time, pertaining to the various functions performed by it
and not otherwise created and maintained by another party pursuant to contract with the
Trust. Where applicable, such records shall be maintained by DHCM for the periods and in the
places required
by Rule 31a-2 under the Act.
7. Audit, Inspection and Visitation. DHCM shall make available to the Trust
during regular business hours all records and other data created and maintained
pursuant to the foregoing provisions of this Agreement for reasonable audit and inspection
by the Trust or any regulatory agency having authority over the Trust.
8. Compensation. For the performance of DHCM’s obligations under this Agreement, each
Fund listed on Schedule A shall pay DHCM a monthly fee as set forth on Schedule A, on the
first business day following the end of each month.
The average value of the daily net assets of the different classes of shares of each
Fund shall be determined pursuant to the applicable provisions of the Amended and Restated
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Agreement and Declaration of Trust of the Trust or a resolution of the Board, if
required. If, pursuant to such provisions, the determination of net asset value of a Fund is
suspended for any particular business day, then for the purposes of this paragraph, the value
of the net assets of a Fund as last determined shall be deemed to be the value of the net
assets as of the close of the business day, or as of such other time as the value of a Fund’s
net assets may lawfully be determined, on that day. If the determination of the net asset
value of a Fund has been suspended for a period including such month, DHCM’s compensation
payable at the end of such month shall be computed on the basis of the value of the net assets
of that Fund as last determined (whether during or prior to such month).
9. Limitation of Liability. DHCM may rely on information reasonably believed by it
to be accurate and reliable. Except as may otherwise be required by the Act or the
rules thereunder, neither DHCM nor its shareholders, officers, directors, employees,
agents, control persons or affiliates of any thereof (collectively, the “DHCM
Employees”) shall be subject to any liability for, or any damages, expenses or losses
incurred by the Trust in connection with, any error of judgment, mistake of law, any
act or omission in connection with or arising out of any services rendered under or
payments made pursuant to this Agreement or any other matter to which this Agreement
relates, except by reason of willful misfeasance, bad faith or gross negligence on the
part of any such persons in the performance of the duties of DHCM under this Agreement
or by reason of reckless disregard by any of such persons of the obligations and duties
of DHCM under this Agreement. Any person, even though also a director, officer,
employee, shareholder or agent of DHCM, who may be or become an officer, trustee,
employee or agent of the Trust, shall be deemed, when rendering services to the Trust
or acting on any business of the Trust (other than services or business in connection
with DHCM’s duties hereunder), to be rendering such services to or acting solely for
the Trust and not as a director, officer, employee, shareholder or agent, or one under
the control or direction of DHCM, even though paid by it.
10. Indemnification of DHCM. Subject to and except as otherwise provided in the
Securities Act of 1933, as amended, and the Act, the Trust shall indemnify DHCM and
each DHCM Employee (hereinafter collectively referred to as a “Covered Person”) against
all liabilities, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses, including reasonable
accountants’ and counsel fees, incurred by any Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which such Covered
Person may be or may have been involved as a party or otherwise or with which such
person may be or may have been threatened, while serving as the administrator for the
Trust or as a DHCM Employee, or, thereafter, by reason of being or having been the
administrator for the Trust or a DHCM Employee, including but not limited to
liabilities arising due to any misrepresentation or misstatement in the Trust’s
prospectus, other regulatory filings, and amendments thereto, or in other documents
originating from the Trust. In no case shall a Covered Person be indemnified against
any liability to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties of such Covered Person.
11. Services for Others. Nothing in this Agreement shall prevent DHCM or any
affiliated person of DHCM from providing services for any other person, firm or
corporation,
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including other investment companies; provided, however, that DHCM expressly represents that
it will undertake no activities which, in its judgment, will adversely affect the performance of
its obligations to the Trust under this Agreement.
12. Compliance with the Act. The parties hereto acknowledge and agree that nothing
contained herein shall be construed to require DHCM to perform any services for any series
of the Trust which services could cause DHCM to be deemed an “investment adviser” of the
Fund within the meaning of Section 2(a)(20) of the Act or to supersede or contravene the
Prospectus or Statement of Additional Information of any series of the Trust or any
provisions of the Act and the rules thereunder.
13. Renewal and Termination. This Agreement shall become effective on the date first
above written and shall remain in force until May 31, 2003, and from year to year
thereafter, but only so long as such continuance is specifically approved at least annually
by the vote of a majority of the Trustees who are not interested persons of the Trust or
DHCM, cast in person at a meeting called for the purpose of voting on such approval and by
a vote of the Board of Trustees or of a majority of the Fund’s outstanding voting
securities. This Agreement may be terminated without the payment of any penalty by either
party upon sixty (60) days’ written notice to the other party. Upon the termination of this
Agreement, the Trust shall pay DHCM such compensation as may be payable for the period
prior to the effective date of such termination.
14. The Trust. The term “Diamond Hill Funds” means and refers to the Trustees from
time to time serving under the Trust’s Agreement and Declaration of Trust as the same may
subsequently thereto have been, or subsequently hereto may be, amended. It is
expressly agreed that the obligations of the Trust hereunder shall not be binding upon any
of the Trustees, shareholders, nominees, officers, agent or employees of the Trust,
personally, but bind only the trust property of the Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the Trust and signed by an officer
of the Trust, acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall bind only the
trust property of the Trust.
15. Miscellaneous. Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the proposes hereof. This Agreement
shall be construed and enforced in accordance with and governed by the laws of the State
of Ohio. The captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and
year first above written.
Diamond Hill Funds |
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By: | /s/ Xxxxx X. Xxxxx | |||
Xxxxx X. Xxxxx | ||||
Its: President | ||||
Diamond Hill Capital Management, Inc. |
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By: | /s/ X.X. Xxxxxx | |||
X.X. Xxxxxx | ||||
Its: President |
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Schedule A
April 30, 2010
April 30, 2010
Diamond Hill Small Cap Fund
Diamond Hill Small-Mid Cap Fund
Diamond Hill Large Cap Fund
Diamond Hill Select Fund
Diamond Hill Long-Short Fund
Diamond Hill Financial Long Short Fund
Diamond Hill Strategic Income Fund
Diamond Hill Small-Mid Cap Fund
Diamond Hill Large Cap Fund
Diamond Hill Select Fund
Diamond Hill Long-Short Fund
Diamond Hill Financial Long Short Fund
Diamond Hill Strategic Income Fund
Each Fund shall pay DHCM a fee at an annual rate of 0.30% of the average daily net assets of the
Class A and C shares of each Fund, and at an annual rate of 0.19% of the average daily net assets
of the Class I shares of each Fund.
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