EXHIBIT (h)(iv)
FUND ACCOUNTING AGREEMENT
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AGREEMENT made this 1/st/ day of November, 2000, between BESSEMER TRUST
COMPANY ("Bessemer"), a _________ organized under the laws of the State of
____________ and having its principal place of business at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 and BISYS FUND SERVICES OHIO, INC. ("Fund Accountant"), a
corporation organized under the laws of the State of Ohio and having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, Bessemer is responsible for performing fund accounting services
for the Old Westbury Funds, Inc. (the "Fund Company") under a certain Custodian
Agreement dated October 12, 1993 between the Fund Company and Bessemer;
WHEREAS, Bessemer desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Fund Company, all as
now or hereafter may be established from time to time (individually referred to
herein as the "Fund" and collectively as the "Funds"); and
WHEREAS, Fund Accountant is willing to perform such services on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Fund Accountant.
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(a) Maintenance of Books and Records. Fund Accountant will keep and
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maintain the following books and records of each Fund pursuant to
Rule 31a-1 under the Investment Company Act of 1940 (the "Rule"):
(i) Journals containing an itemized daily record in detail of
all purchases and sales of securities, all receipts and
deliveries of securities, all receipts and disbursements
of cash and all other debits and credits, as required by
subsection (b)(1) of the Rule;
(ii) General and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts,
including interest accrued and interest received, as
required by subsection (b)(2)(i) of the Rule;
(iii) Separate ledger accounts required by subsection
(b)(2)(ii) and (iii) of the Rule;
(iv) A monthly trial balance of all ledger accounts (except
shareholder accounts) as required by subsection (b)(8) of
the Rule; and
(v) Such other books and records enumerated in the Rule that
are requested by Bessemer.
(b) Performance of Daily Accounting Services. In addition to the
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maintenance of the books and records specified above, Fund
Accountant shall perform the following accounting services daily
for each Fund:
(i) Calculate the net asset value per share utilizing prices
obtained from the sources described in subsection
1(b)(ii) below;
(ii) Obtain security prices from independent pricing services,
or if such quotes are unavailable, then obtain such
prices from Bessemer or its designee, as approved by the
Fund Company's Board of Directors (hereafter referred to
as the "Directors");
(iii) Verify and reconcile with the Funds' custodian all daily
trade activity;
(iv) Compute, as appropriate, each Fund's net income and
capital gains, dividend payables, dividend factors, 7-day
yields, 7-day effective yields, 30-day yields, and
weighted average portfolio maturity;
(v) Review daily the net asset value calculation and dividend
factor (if any) for each Fund prior to release to
shareholders, check and confirm the net asset values and
dividend factors for reasonableness and deviations, and
distribute net asset values and yields to NASDAQ;
(vi) Report to Bessemer the daily market pricing of securities
in any money market Funds, with the comparison to the
amortized cost basis;
(vii) Determine unrealized appreciation and depreciation on
securities held in variable net asset value Funds;
(viii) Amortize premiums and accrete discounts on securities
purchased at a price other than face value, if requested
by Bessemer;
(ix) Update fund accounting system to reflect rate changes, as
received from Bessemer, on variable interest rate
instruments;
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(x) Post Fund transactions to appropriate categories;
(xi) Accrue expenses of each Fund according to instructions
received from the Fund Company's administrator;
(xii) Determine the outstanding receivables and payables for
all (1) security trades, (2) Fund share transactions and
(3) income and expense accounts;
(xiii) Provide accounting reports in connection with the Fund
Company's regular annual audit and other audits and
examinations by regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall agree
upon, as set forth in a separate schedule.
(c) Special Reports and Services.
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(i) Fund Accountant may provide additional special reports
upon the request of Bessemer, which may result in an
additional charge, the amount of which shall be agreed
upon between the parties.
(ii) Fund Accountant may provide such other similar services
with respect to a Fund as may be reasonably requested by
Bessemer, which may result in an additional charge, the
amount of which shall be agreed upon between the parties.
(d) Additional Accounting Services. Fund Accountant shall also
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perform the following additional accounting services for each
Fund:
(i) Provide monthly a download (and hard copy thereof) of the
financial statements described below, upon request of
Bessemer. The download will include the following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information and/or prepare reports for
the following:
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(A) federal and state income tax returns and federal
excise tax returns;
(B) the Fund Company's semi-annual reports with the
Securities and Exchange Commission ("SEC") on Form
N-SAR;
(C) the Fund Company's annual, semi-annual and quarterly
(if any) shareholder reports;
(D) registration statements on Form N-1A and other
filings relating to the registration of shares;
(E) the Administrator's monitoring of each Fund's status
as a regulated investment company under Subchapter M
of the Internal Revenue Code, as amended;
(F) annual audit by the Fund Company's auditors;
examinations performed by the SEC; and
(H) Board of Directors meeting materials.
2. Subcontracting.
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Fund Accountant may, at its expense, subject to the prior approval of
Bessemer and the Fund Company, which shall not be unreasonably withheld,
subcontract with any entity or person concerning the provision of the services
contemplated hereunder; provided, however, that Fund Accountant shall not be
relieved of any of its obligations under this Agreement by the appointment of
such subcontractor and provided further, that Fund Accountant shall be
responsible, to the extent provided in Section 7 hereof, for all acts of such
subcontractor as if such acts were its own.
3. Compensation.
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Bessemer shall pay Fund Accountant for the services to be provided by
Fund Accountant under this Agreement in accordance with, and in the manner set
forth in, Schedule A hereto, as such Schedule may be amended from time to time.
4. Reimbursement of Expenses.
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In addition to paying Fund Accountant the fees described in Section
3 hereof, Bessemer agrees to reimburse Fund Accountant for its out-of-pocket
expenses in providing services hereunder, including but not limited to the
following:
(a) All freight and other delivery and bonding charges incurred by Fund
Accountant in delivering materials to and from the Fund Company;
(b) All direct telephone, telephone transmission and telecopy or other
electronic transmission expenses incurred by Fund Accountant in
communication with
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Bessemer, the Fund Company, the Fund Company's custodian, dealers or
others as required for Fund Accountant to perform the services to be
provided hereunder;
(c) The cost of obtaining security market quotes pursuant to Section
1(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other materials;
(e) All systems-related expenses associated with the provision of special
reports and services pursuant to Section 1 (c) herein; and
(f) Any expenses Fund Accountant shall incur at the written direction of
the President of the Fund Company.
5. Effective Date.
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This Agreement shall become effective as of November 1, 2000 (the
"Effective Date").
6. Term.
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The term of this Agreement shall commence on the Effective Date and
shall remain in effect through February 28, 2003 (the "Initial Term"). During
the Initial Term, this Agreement may be terminated without penalty (i) by mutual
agreement of the parties, (ii) for "cause," as defined below, upon the provision
of 60 days advance written notice by the party alleging cause or (iii) as to any
Fund or the Fund Company, except for a Combination, as defined below, upon the
liquidation, dissolution or elimination (hereinafter referred to as
"liquidation") of such Fund or the Fund Company, as the case may be.
After the Initial Term, this Agreement may be renewed by the parties
hereto for additional one year periods and may be terminated without penalty by
Bessemer, upon 90 days' written notice to Fund Accountant, or by Fund Accountant
upon 90 days' written notice to Bessemer.
For purposes of this Agreement, "cause" shall mean (a) a material
breach of this Agreement that has not been remedied for thirty (30) days
following written notice of such breach from the non-breaching party; (b) an act
or series of acts or omissions which, in the aggregate, constitutes, in the
reasonable judgment of Bessemer, a serious failure to perform satisfactorily
Fund Accountant's obligations hereunder; (c) a final, unappealable judicial,
regulatory or administrative ruling or order in which the party to be terminated
has been found guilty of criminal or unethical behavior in the conduct of its
business; or (d) financial difficulties on the part of the party to be
terminated which are evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent or acquiescence in, a voluntary
or involuntary case under Title 11 of
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the United States Code, as from time to time is in effect, or any applicable
law, other than said Title 11, of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or alteration of the rights
of creditors.
Notwithstanding the foregoing, after such termination for so long as
Fund Accountant, with the written consent of Bessemer, in fact continues to
perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due Fund Accountant through the effective date
of termination and unpaid by Bessemer upon such termination shall be immediately
due and payable upon and notwithstanding such termination. Fund Accountant
shall be entitled to collect from Bessemer, in addition to the compensation
described in this Schedule A, the amount of all of Fund Accountant's cash
disbursements for services in connection with Fund Accountant's activities in
effecting such termination, including without limitation, the delivery to
Bessemer and/or its designees of the Fund Company's property, records,
instruments and documents.
If, during the Initial Term of this Agreement, for any reason other
than nonrenewal, mutual agreement of the parties, "cause", as defined above, or
"liquidation", as defined above, Fund Accountant is replaced as fund accountant,
or if a third party is added to perform all or a part of the services provided
by Fund Accountant under this Agreement (excluding any sub-contractor appointed
by Fund Accountant as provided in Article 2 hereof), then Bessemer shall make a
one-time cash payment, in consideration of the fee structure and services to be
provided under this Agreement, and not as a penalty, to Fund Accountant equal to
(i) the balance due Fund Accountant for the remainder of the Initial Term, in
the event such termination occurs during the first twelve (12) months of the
Initial Term, (ii) seventy-five percent (75%) of the balance due Fund Accountant
for the remainder of the Initial Term, in the event such termination occurs
during the second twelve (12) months of the Initial Term, or (iii) fifty percent
(50%) of the balance due Fund Accountant for the remainder of the Initial Term,
in the event such termination occurs during the last four (4) months of the
Initial Term, assuming for purposes of calculation of the payment that such
balance shall be based upon the average amount of the Fund Company's assets for
the twelve months prior to the date Fund Accountant is replaced or a third party
is added.
In the event that the Fund Company is merged into, or its assets are
combined with, another legal entity in part or in whole pursuant to any form of
business reorganization (a "Combination") prior to the expiration of the Initial
Term and Fund Accountant is not retained to provide accounting services
consistent with this Agreement, the parties acknowledge and agree that the one-
time cash payment referred to in the preceding paragraph shall be due and
payable. No other fees or amounts shall be due Fund Accountant in the event of
a Combination.
The parties further acknowledge and agree that, in the event Fund
Accountant is replaced, or a third party is added, as set forth above, (i) a
determination of actual damages incurred by Fund Accountant would be extremely
difficult, and (ii) the liquidated damages provision
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contained herein is intended to adequately compensate Fund Accountant for
damages incurred and is not intended to constitute any form of penalty.
7. Standard of Care; Reliance on Records and Instructions;
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Indemnification.
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Fund Accountant shall use its best efforts to insure the accuracy of
all services performed under this Agreement, but shall not be liable to Bessemer
or the Fund Company for any action taken or omitted by Fund Accountant in the
absence of bad faith, willful misfeasance, negligence or from reckless disregard
by it of its obligations and duties. Bessemer agrees to indemnify and hold
harmless Fund Accountant, its employees, agents, directors, officers and
nominees from and against any and all claims, demands, actions and suits,
whether groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way relating to Fund
Accountant's actions taken or nonactions with respect to the performance of
services under this Agreement with respect to any Fund or based, if applicable,
upon reasonable reliance on information, records, instructions or requests with
respect to such Fund given or made to Fund Accountant by a duly authorized
representative of Bessemer or the Fund Company; provided that this
indemnification shall not apply to actions or omissions of Fund Accountant in
cases of its own bad faith, willful misfeasance, negligence or from reckless
disregard by it of its obligations and duties, and further provided that prior
to confessing any claim against it which may be the subject of this
indemnification, Fund Accountant shall give Bessemer written notice of and
reasonable opportunity to defend against said claim in its own name or in the
name of Fund Accountant.
Fund Accountant agrees to indemnify and hold harmless Bessemer, the
Fund Company and their employees, agents, directors, officers and nominees from
and against any and all claims, demands, actions and suits, whether groundless
or otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Fund Accountant's bad faith,
willful misconduct, negligence or from reckless disregard of its obligations and
duties, with respect to the performance of services under this Agreement.
Bessemer and/or the Fund Company shall give Fund Accountant written notice of
and reasonable opportunity to defend against said claim in its own name or in
the name of Bessemer and/or the Fund Company.
8. Record Retention and Confidentiality.
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Fund Accountant shall keep and maintain on behalf of the Fund Company
all books and records which the Fund Company is, or may be, required to keep and
maintain pursuant to any applicable statutes, rules and regulations, including
without limitation Rules 31a-1 and 31a-2 under the Investment Company Act of
1940, as amended (the "1940 Act"), relating to the maintenance of books and
records in connection with the services to be provided hereunder. Fund
Accountant further agrees that all such books and records shall be the property
of the Fund Company and to make such books and records available for inspection
by Bessemer, the Fund Company or by the
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SEC at reasonable times and otherwise to keep confidential all books and records
and other information relative to the Fund Company and its shareholders; except
when requested to divulge such information by duly-constituted authorities or
court process.
9. Uncontrollable Events.
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Fund Accountant assumes no responsibility hereunder, and shall not be
liable, except in the case of Fund Accountant's bad faith, willful misfeasance,
negligence or reckless disregard of its duties and obligations, for any damage,
loss of data, delay or any other loss whatsoever caused by events beyond its
reasonable control.
10. Reports.
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Fund Accountant will furnish to Bessemer and to the Fund Company's
properly authorized auditors, examiners, distributors, dealers, underwriters,
salesmen, insurance companies and others designated by Bessemer in writing, such
reports and at such times as are prescribed pursuant to the terms and the
conditions of this Agreement to be provided or completed by Fund Accountant, or
as subsequently agreed upon by the parties pursuant to an amendment hereto.
Bessemer agrees to examine each such report or copy promptly and will report or
cause to be reported any errors or discrepancies therein.
11. Rights of Ownership.
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All computer programs and procedures developed to perform services
required to be provided by Fund Accountant under this Agreement are the property
of Fund Accountant. All records and other data except such computer programs
and procedures are the exclusive property of the Fund Company and all such other
records and data will be furnished to Bessemer or its designees in appropriate
form as soon as practicable after termination of this Agreement for any reason.
12. Return of Records.
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Fund Accountant shall maintain customary records in connection with
its duties as specified in this Agreement. Fund Accountant acknowledges and
agrees that any records required to be maintained and preserved pursuant to
applicable laws and regulations which are prepared or maintained by Fund
Accountant on behalf of the Fund Company shall be prepared and maintained at
the expense of Fund Accountant, but shall be the property of the Fund Company
and will be made available to or surrendered promptly to the Fund Company on
request; provided that, in connection with the termination of this Agreement,
such records shall be surrendered to Bessemer or its designee promptly following
the date of such termination or at such other time that is reasonably requested
by Bessemer.
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13. Representations of Bessemer.
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Bessemer certifies to Fund Accountant that: (1) as of the close of
business on the Effective Date, each Fund that is in existence as of the
Effective Date has authorized four million shares of common stock, and (2) this
Agreement has been duly authorized by Bessemer and, when executed and delivered
by Bessemer, will constitute a legal, valid and binding obligation of Bessemer,
enforceable against Bessemer in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties.
14. Representations of Fund Accountant.
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Fund Accountant represents and warrants that: (1) the various
procedures and systems which Fund Accountant has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other cause
the records, and other data of the Fund Company and Fund Accountant's records,
data, equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its obligations
hereunder, and (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
15. Insurance.
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Fund Accountant shall notify Bessemer immediately should any of its
insurance coverage be canceled or reduced. Such notification shall include the
date of change and the reasons therefor. Fund Accountant shall notify Bessemer
of any material claims against it with respect to services performed under this
Agreement, whether or not they may be covered by insurance, and shall notify
Bessemer as they may be made of the total outstanding claims made by Fund
Accountant under its insurance coverage.
16. Information to be Furnished by Bessemer.
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Bessemer has furnished to Fund Accountant the following:
(a) Copies of the Articles of Incorporation of the Fund Company and
of any amendments thereto, certified by the proper official of
the state in which such document has been filed.
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(b) Copies of the following documents:
(i) The Fund Company's By-laws and any amendments thereto; and
(ii) Authorization of a specified officer of Bessemer to execute
and deliver this Agreement and authorization for specified
officers of Bessemer to instruct Fund Accountant
thereunder.
(c) A list of all the officers of Bessemer and the Fund Company,
together with specimen signatures of those officers who are
authorized to instruct Fund Accountant in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
17. Information Furnished by Fund Accountant.
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(a) Fund Accountant has furnished to Bessemer the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments thereto.
(b) Fund Accountant shall, upon request, furnish certified copies of
corporate actions covering the following matters:
(i) Approval of this Agreement, and authorization of a specified
officer of Fund Accountant to execute and deliver this
Agreement; and
(ii) Authorization of Fund Accountant to act as fund accountant
for the Fund Company and to provide accounting services for
the Fund Company.
18. Amendments to Documents.
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Bessemer shall furnish Fund Accountant written copies of any
amendments to, or changes in, any of the items referred to in Section 16 hereof
forthwith upon such amendments or changes becoming effective.
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19. Compliance with Law.
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Except for the obligations of Fund Accountant set forth in Section 8
hereof, Bessemer assumes full responsibility for the preparation, contents and
distribution of each prospectus of the Fund Company as to compliance with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the 1940 Act and any other laws, rules and regulations of
governmental authorities having jurisdiction. Fund Accountant shall have no
obligation to take cognizance of any laws relating to the sale of the Fund
Company's shares. Bessemer represents and warrants that no shares of a Fund
established after the Effective Date of this Agreement will be offered to the
public until the Fund Company's registration statement under the Securities Act
and the 1940 Act with respect to such Fund has been declared or becomes
effective.
20. Notices.
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Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such
notice, at the following addresses: if to Bessemer, at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000; and, if to Fund Accountant, at 0000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000; or at such other address as such party may from time to
time specify in writing to the other party pursuant to this Section. Notices
will be effective upon receipt.
21. Headings.
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Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
22. Assignment.
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This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
23. Governing Law.
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This Agreement shall be governed by and provisions shall be construed
in accordance with the laws of the State of Ohio.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed all as of the day and year first above written.
BESSEMER TRUST COMPANY
By: __________________________________
Title: _______________________________
BISYS FUND SERVICES OHIO, INC.
By: __________________________________
Title: _______________________________
ACKNOWLEDGED:
OLD WESTBURY FUNDS, INC.
By: _______________________________
Title: ____________________________
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN
BESSEMER TRUST COMPANY
AND
BISYS FUND SERVICES OHIO, INC.
FEES
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Fund Accountant shall be entitled to receive a fee from Bessemer on the first
business day of each month, or at such time as Fund Accountant shall request and
the parties hereto shall agree, computed daily at the annual rate set forth
below:
Three one-hundredths of one percent (.03%) of the Fund Company's average
daily net assets up to $450 million.
Two and one-half one-hundredths of one percent (.025%) of the Fund
Company's average daily net assets in excess of $450 million up to $750
million.
Two one-hundredths of one percent (.02%) of the Fund Company's average
daily net assets in excess of $750 million up to $1.5 billion.
One one-hundredths of one percent (.01%) of the Fund Company's average
daily net assets in excess of $1.5 billion.
Out-of-Pocket Expenses
----------------------
In addition to the fees described herein, Fund Accountant shall be reimbursed
for out-of-pocket expenses in accordance with Section 4 of this Agreement.
BESSEMER TRUST COMPANY
By: _________________________________
Title: ______________________________
BISYS FUND SERVICES OHIO, INC.
By: _________________________________
Title: ______________________________
A-1
