EXPENSE LIMITATION AGREEMENT II
Exhibit
(h)(3)(r)
THIS EXPENSE LIMITATION AGREEMENT II (the “Agreement”)
is made as of July 1, 2010, by and between Pacific Life
Funds (the “Trust”), a Delaware statutory trust, and
Pacific Life Fund Advisors LLC (“Adviser” or
“PLFA”), a Delaware limited liability company.
WITNESSETH:
WHEREAS, the Trust is a Delaware statutory trust and is
registered with the Securities and Exchange Commission
(“SEC”) under the Investment Company Act of 1940, as
amended (the “1940 Act”) as an open-end management
investment company;
WHEREAS, the Trust is authorized to issue shares of beneficial
interest in separate series with each series representing
interests in a separate portfolio of securities and other assets
(each a “Fund,” and collectively, the
“Funds”), the applicable Funds are designated in
Schedule A hereto, which may be amended from time to time;
WHEREAS, the Trust and the Adviser have entered into an
Investment Advisory Agreement dated June 13, 2001, as
amended, and transferred from Pacific Life to PLFA effective
May 1, 2007, (“Advisory Agreement”), pursuant to
which the Adviser is authorized to provide investment advisory
services for the Trust and each of its Funds for compensation
based on the value of the average daily net assets of the Funds;
WHEREAS, the Trust and the Adviser have determined that it is
appropriate and in the best interests of the Funds and their
shareholders to maintain the expenses of the Funds at levels
agreeable to the Trust and the Adviser.
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
| I. | Expense Limitation. |
A. Fund Operating
Expenses. For purposes of this Agreement
“Fund Operating Expenses” shall consist of the
ordinary operating expenses incurred by a Fund in any fiscal
year, including the administration fees and organizational
expenses and excluding the following: investment advisory fees;
distribution
and/or
service fees; dividends on securities sold short; acquired fund
fees and expenses; foreign taxes on dividends, interest, or
gains; interest; taxes; brokerage commissions and other
transactional expenses; extraordinary expenses, such as
litigation; and other expenses not incurred in the ordinary
course of the Fund’s business.
B. Operating Expense
Limit. The operating expense limit with respect
to a Fund shall be the amount specified in Schedule A
attached hereto (the “Operating Expense Limit”), based
on a percentage of the average daily net assets of the Funds for
the period described in Section I.D. The Adviser may elect
to lower the expense caps
and/or
extend the time period further by amending Schedule A.
C. Applicable Expense
Limit. To the extent that the Fund Operating
Expenses incurred by a Fund exceed the Operating Expense Limit,
as defined in Section I.B. above, the Adviser shall waive
its respective fees, or a portion thereof, under the Advisory
Agreement or otherwise reimburse each Fund, as applicable, for
such excess amount (the “Excess Amount”).
D. Method of
Computation. To determine the Adviser’s
obligation with respect to the Excess Amount, each day the
Fund Operating Expenses for each Fund shall be annualized.
If the annualized Fund Operating Expenses of a Fund at the
end of any month during which this Agreement is in effect exceed
the Operating Expense Limit for that Fund, the Adviser shall
waive or reduce its fee under the Advisory Agreement or remit to
that Fund an amount that, together with the waived or reduced
investment advisory fee, is sufficient to pay the Excess Amount
computed on the last day of the month.
E. Year-End
Adjustment. If necessary, on or before the last
day of the first month of each fiscal year, an adjustment
payment shall be made by the appropriate party in order that the
amount of the investment advisory fees waived or reduced and
other payments remitted by the Adviser to a Fund with respect to
the previous fiscal year shall equal the Excess Amount.
F. Repayment. Each
Fund agrees to repay the Adviser, out of assets belonging to
that Fund, any Fund Operating Expenses in excess of the
Operating Expense Limit paid, reimbursed or otherwise absorbed
by the Adviser, during the term of this Agreement, provided that
the Adviser will not be entitled to repayment for any amount by
which such repayment would cause Fund Operating Expenses,
during the fiscal year of such repayment to exceed the then
current Operating Expense Limit. Except to the extent consistent
with generally accepted accounting principles and the position
of the staff of the SEC at the time, no amount will be repaid to
the Adviser by a Fund more than three fiscal years after the
year in which the Adviser reduced its fee, reimbursed or
otherwise absorbed the Excess Amount. Any amounts waived by the
Adviser are not subject to repayment.
| II. | Term and Termination of Agreement. |
The Agreement shall have an initial term of ten (10) years.
The Adviser may elect to extend beyond the initial term, by
amendment to Schedule A to this Agreement. In addition,
this Agreement shall terminate upon termination of the Advisory
Agreement, or it may be terminated by the Trust, without payment
of any penalty, upon ninety (90) days’ written notice
to the Adviser at its principal place of business. The repayment
obligations described in Section I.F. of the Agreement
shall survive for the period indicated in that Section.
| III. | Miscellaneous. |
A. Governing
Law. This Agreement shall be governed by the laws
of the State of Delaware, provided that nothing herein shall be
construed in a manner inconsistent with
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the 1940 Act, the Investment Advisers Act of 1940, or any rules
or order of the SEC thereunder.
B. Definitions. Any
question of interpretation of any term or provision of this
Agreement, including but not limited to the investment advisory
fee, the administration fee, the computations of net asset
values, and the allocation of expenses, having a counterpart in
or otherwise derived from the terms and provisions of the
Advisory Agreement, the Administration Agreement or the 1940
Act, shall have the same meaning as and be resolved by reference
to such Advisory Agreement, Administration Agreement or the 1940
Act.
C. Captions. The
captions in this Agreement are included for convenience of
reference only and in no other way define or delineate any of
the provisions hereof or otherwise affect their construction or
effect.
D. Limitation of
Liability. The Administrator and Adviser shall
look only to the assets of the respective Fund for performance
of this Agreement and repayment of any claim hereunder that the
Administrator
and/or
Adviser may have with respect to a Fund, and neither any of the
other Funds of the Trust, nor any of the Trust’s trustees,
officers, employees, agents or shareholders, shall be liable
therefore.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers designated below on the
day and year first above written.
|
By: /s/
Xxxxxx X. Xxxxxxxx
|
By: /s/ Xxxxxx X. Milfs | |
|
Name: Xxxxxx X. Xxxxxxxx
|
Name: Xxxxxx X. Milfs | |
|
Title: Vice President
|
Title: Vice President & Secretary |
PACIFIC
LIFE FUND ADVISORS LLC
|
By: /s/
Xxxxxx X. Xxxxxxxx
|
By: /s/ Xxxxxx X. Milfs | |
|
Name: Xxxxxx X. Xxxxxxxx
|
Name: Xxxxxx X. Milfs | |
|
Title: VP, Fund Advisor Operations
|
Title: Vice President & Secretary |
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SCHEDULE A
PACIFIC LIFE FUNDS
OPERATING EXPENSE LIMITS UNDER EXPENSE LIMITATION AGREEMENT II
Effective July 1, 2010
PACIFIC LIFE FUNDS
OPERATING EXPENSE LIMITS UNDER EXPENSE LIMITATION AGREEMENT II
Effective July 1, 2010
|
Maximum Operating Expense Limit (as a Percentage of average daily net assets) |
||||
| Years 1-3 | Years 3-10 | |||
|
PL Portfolio Optimization Conservative Fund
|
0.15% | 0.30% | ||
|
PL Portfolio Optimization Moderate-Conservative Fund
|
0.15% | 0.30% | ||
|
PL Portfolio Optimization Moderate Fund
|
0.15% | 0.30% | ||
|
PL Portfolio Optimization Moderate-Aggressive Fund
|
0.15% | 0.30% | ||
|
PL Portfolio Optimization Aggressive Fund
|
0.15% | 0.30% | ||
|
PL Floating Rate Loan Fund
|
0.15% | 0.30% | ||
|
PL Small-Cap Value Fund
|
0.15% | 0.30% | ||
|
PL Main
Street®
Core Fund
|
0.15% | 0.30% | ||
|
PL Emerging Markets Fund
|
0.15% | 0.30% | ||
|
PL Small-Cap Growth Fund
|
0.15% | 0.30% | ||
|
PL International Value Fund
|
0.15% | 0.30% | ||
|
PL Large-Cap Value Fund
|
0.15% | 0.30% | ||
|
PL Short Duration Bond Fund
|
0.15% | 0.30% | ||
|
PL Growth LT Fund
|
0.15% | 0.30% | ||
|
PL Mid-Cap Equity Fund
|
0.15% | 0.30% | ||
|
PL International Large-Cap Fund
|
0.15% | 0.30% | ||
|
PL Managed Bond Fund
|
0.15% | 0.30% | ||
|
PL Inflation Managed Fund
|
0.15% | 0.30% | ||
|
PL Large-Cap Growth
|
0.15% | 0.30% | ||
|
XX Xxxxxxxx Fund
|
0.15% | 0.30% | ||
|
PL Mid-Cap Growth Fund
|
0.15% | 0.30% | ||
|
PL Real Estate Fund
|
0.15% | 0.30% | ||
|
By: /s/ Xxxxxx X. Xxxxxxxxx
|
By: /s/ Xxxxxx X. Milfs | |
|
Name: Xxxxxx X. Xxxxxxxx
|
Name: Xxxxxx X. Milfs | |
|
Title: Vice President
|
Title: Vice President & Secretary |
PACIFIC
LIFE FUND ADVISORS LLC
|
By: /s/ Xxxxxx X. Xxxxxxxxx
|
By: /s/ Xxxxxx X. Milfs | |
|
Name: Xxxxxx X. Xxxxxxxx
|
Name: Xxxxxx X. Milfs | |
|
Title:VP, Fund Advisor Operations
|
Title: Vice President & Secretary |
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