EXHIBIT (h)(3)
FEE WAIVER AND EXPENSE LIMITATION AGREEMENT
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THIS AGREEMENT is made as of October 29, 1999, between XXXXX X. XXXXXX
AND COMPANY INCORPORATED, a Massachusetts corporation (the "Advisor") and THE
DLB FUND GROUP, a Massachusetts business trust (the "Trust").
1. Recitals. The Trust has been organized to serve as an investment
vehicle primarily for certain large institutional and private client accounts,
and both the Trust and the Advisor believe that they and the Trust's
shareholders would benefit if each series of the Trust constituting a separate
investment portfolio set forth below (each a "Fund" and, collectively, the
"Funds") were to achieve and maintain an amount of assets sufficiently large to
result in economies of scale for the Fund and sufficient future revenues for the
Advisor. Therefore, the Advisor is agreeing to take certain actions more
specifically described below to reduce or eliminate certain costs otherwise
borne by shareholders of the Funds and to enhance the returns generated for
shareholders of the Funds.
2. General Agreement. The Advisor will, until this Agreement is
terminated under Section 4, take one or more of the three actions described in
Section 3 to the extent that the Fund's total annual operating expenses (not
including brokerage commissions, hedging transaction fees and other investment
related costs, extraordinary, non-recurring and certain other unusual expenses
such as litigation expenses and other extraordinary legal expenses, securities
lending fees and expenses and transfer taxes) exceed the percentage of that
Fund's average daily net assets (the "Expense Limitation") set forth in the
table below:
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FUND EXPENSE LIMITATION
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DLB Fixed Income Fund 0.55%
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DLB Value Fund 0.80%
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DLB Growth Fund 0.80%
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DLB Disciplined Growth Fund 0.90%
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DLB Enterprise III Fund 0.90%
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DLB Micro Capitalization Fund 1.30%
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DLB Global Small Capitalization Fund 1.50%
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DLB Xxxxxxx Xxxxx International Fund 1.00%
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DLB Xxxxxxx Xxxxx Emerging Markets Fund 1.75%
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3. Advisor Actions. The Advisor will use its best efforts to cause each
Fund to maintain the expense level described in Section 2 by taking one or more
of the following actions: (i) waiving a portion of its fee under the Advisory
Agreement between the Advisor and the Trust relating to the Fund; (ii)
reimbursing the Fund for expenses exceeding the Expense Limitation; or (iii)
paying directly expenses that may exceed the Expense Limitation.
4. Term. This Agreement shall have an initial term ending on October
31, 1999 and shall automatically be continued thereafter for successive 1-year
periods unless either the Trust or the Advisor terminates this Agreement by
giving six months written notice prior to the next occuring anniversary date to
the other party.
5. Miscellaneous. The Advisor understands and acknowledges that the
Trust intends to rely on this Agreement, including in connection with the
preparation and printing of the Trust's prospectuses and its daily calculation
of each Fund's net asset value.
6. Disclaimer of Liability. A copy of the Agreement and the Declaration
of Trust of the Trust is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Board of Trustees of the Trust as Trustees and not individually
and that the obligations of this instrument are not binding upon any of the
Trustees or shareholders individually but are binding upon the assets and
property of the Trust; provided, however, that the Agreement and Declaration of
Trust of the Trust provides that the assets of a particular series of the Trust
shall under no circumstances be charged with liabilities attributable to any
other series of the Trust and that all persons extending credit to, or
contracting with or having any claim against a particular series of the Trust
shall look only to the assets of that particular series for payment of such
credit, contract or claim.
This Agreement constitutes the entire agreement between the Advisor and
the Trust concerning the subject matter hereof and supersedes all prior oral and
written agreements and understandings between the parties concerning such
subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
XXXXX X. XXXXXX AND COMPANY INCORPORATED
By: /s/ XxXxxx X. Xxxxxx
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Senior Vice President and Treasurer
DLB FUND GROUP
By: /s/ Xxxxx X. Xxxxxxxxx
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President
