FORM OF AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
Exhibit (13)(c)
FORM OF
AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of March 1, 2005, and amended and restated as of
October [ ], 2009, by and between Transamerica Asset Management, Inc. (formerly, Transamerica Fund
Advisors, Inc.)(the “Investment Manager”), and Transamerica Funds (formerly, Transamerica IDEX
Mutual Funds)(the “Company”), on behalf of each series of the Company set forth in Schedule A (each
a “Fund,” and collectively, the “Funds”).
WHEREAS, the Company is a Delaware statutory trust, and is registered under the Investment
Company Act of 1940, as amended (the “1940 Act”), as an open-end management company of the series
type, and each Fund is a series of the Company; and
WHEREAS, the Company and the Investment Manager have entered into investment advisory
agreements on behalf of the Funds (“Management Agreements”), pursuant to which the Investment
Manager provides investment management services to each Fund for compensation based on the value of
the average daily net assets of each such Fund; and
WHEREAS, the Company and the Investment Manager have determined that it is appropriate and in
the best interests of each Fund and its shareholders to maintain the expenses of each Fund at a
level below the level to which each such Fund may normally be subject; and
WHEREAS, the Company and the Investment Manager wish to structure this Expense Limitation
Agreement in a manner consistent with the requirements of Revenue Procedure 96-47, 1996-2 CB 338,
and Revenue Procedure 99-40, I.R.B. 1999-46, 565 so as to avoid any possibility that any Fund is
deemed to have paid a preferential dividend, and in a manner consistent with the SEC’s
interpretation of analogous requirements in Rule 18f-3(a) under the 1940 Act;
NOW, THEREFORE, the parties hereto agree as follows:
4. Expense Limitation.
1.1. Applicable Expense Limit. The Investment Manager agrees to reduce the investment
management fees payable to it pursuant to the Management Agreements and make payments to the Funds
to the extent necessary to limit the ordinary operating expenses incurred by each Fund in any
fiscal year, excluding interest, taxes, 12b-1 fees, brokerage commissions, extraordinary expenses
such as litigation and other expenses not incurred in the ordinary course of such Fund’s business
(“Fund Operating Expenses”) to the Operating Expense Limit, as defined in Section 1.2 below. With
respect to Class P shares of a Fund, if any, “Fund Operating Expenses” shall mean the ordinary
operating expenses incurred by the Fund in any fiscal year, including but not limited to investment
management fees of the Investment Manager, but excluding interest, taxes, brokerage commissions,
extraordinary expenses such as litigation and other expenses not incurred in the ordinary course of
such Fund’s business. For each Fund, any amount of Fund Operating Expenses above the Operating
Expense Limit (such excess amount, the “Excess Amount”) shall be the liability of the Investment
Manager.
1.2. Operating Expense Limit. The “Operating Expense Limit” in any fiscal year with
respect to each Fund shall be the amount specified in Schedule A based on a percentage of the
average daily net assets of each Fund.
1.3. Duration of Operating Expense Limit. The Operating Expense Limit with respect to
each Fund shall remain in effect until the date specified for that Fund on Schedule A. The
Investment Manager may extend, but may not during the term of this Agreement shorten, the duration
of the Operating Expense Limit for any Fund by delivering a revised Schedule A to the Company
reflecting such extension. Such an extension must continue at the same (or lower) Operating Expense
Limit amount specified on Schedule A.
1.4. Method of Computation. This Expense Limitation Agreement shall in all cases be
interpreted in a manner consistent with the requirements of Revenue Procedure 96-47, 1996-2 CB 338,
and Revenue Procedure 99-40, I.R.B. 1999-46, 565 so as to avoid any possibility that any Fund is
deemed to have paid a preferential dividend. In the event of any conflict between any term of this
Expense Limitation Agreement and the previous sentence, the previous sentence shall control.
Advisory fees and other expenses related to the management of the Company’s assets.
Each Class of each Fund shall be allocated and shall pay an investment management fee and other
fees and expenses related to the management of the Fund’s assets (including custodial fees and tax
return preparation fees) on the basis of the net asset value of that Class in relation to the net
asset value of the Fund. The benefit of a waiver or reimbursement of
any advisory fee and any other fees and expenses related to the management of the Fund’s
assets (including custodial fees and tax return preparation fees) shall be allocated to all shares
by net asset value, regardless of Class.
Other fees and expenses. Each Class of each Fund may be allocated and may pay a
different share of other fees and expenses, not including advisory or custodial fees or other fees
and expenses related to the management of the Fund’s assets, if these expenses are actually
incurred in a different amount by that Class, or if the Class receives services of a different kind
or to a different degree than other Classes.
Subject to the foregoing, to determine the Investment Manager’s liability with respect to the
Excess Amount, each day the Fund Operating Expenses for each Fund generally will be annualized as
of that day. If the annualized Fund Operating Expenses of a Fund as of that day exceed the
Operating Expense Limit of such Fund, the management fees payable to the Investment Manager that
are accrued that day generally will be waived in an amount sufficient to reduce the Excess Amount
so that the annualized Fund Operating Expenses as of that day equal the Operating Expense Limit.
If such waiver of management fees is not sufficient to equal the Operating Expense Limit, the Fund
will accrue a receivable from the Investment Manager in an amount sufficient so that the annualized
Fund Operating Expenses equal to the Operating Expense Limit.
In case a Fund needs to accrue such receivables from the Investment Manager during any month,
the Fund will inform the Investment Manager about the Excess Amount owed to the Fund for that month
and the Investment Manager will remit to the Fund promptly after the end of the month an amount
that, together with already waived management fees, is sufficient to pay that month’s Excess
Amount.
1.5. Periodic Adjustments. As necessary, daily, monthly and annual adjustments,
accruals or payments will be made by the appropriate party to ensure that the amount of the
management fees waived and payments remitted to a Fund by the Investment Manager equal the Excess
Amount for any Fund fiscal year during the duration of this Agreement.
2. Reimbursement of Fee Waivers and Expense Reimbursements.
If on any day or month, the estimated annualized Fund Operating Expenses of the Funds listed
in Schedule B as of that day or month are less than the Operating Expense Limit as of that day or
month, the Investment Manager shall be entitled to reimbursement by such Fund of the investment
management fees waived or reduced and other payments remitted by the Investment Manager to such
Fund pursuant to Section I hereof during any of the previous thirty-six (36) months beginning with
the effective date of this Agreement (the “Reimbursement Amount”), to the extent that the
annualized Fund Operating Expenses plus the amount so reimbursed equals, as of such day or month,
the Operating Expense Limit provided in Schedule A, provided that such amount paid to the
Investment Manager will in no event exceed the total Reimbursement Amount and will not include any
amounts previously reimbursed. The Reimbursement Amount may not include any additional charge or
fees, such as interest accruable on the Reimbursement Amount. Amounts so reimbursed shall be
allocated to the oldest Reimbursement Amount during the previous thirty-six (36) months until fully
reimbursed, and thereafter, to the next oldest Reimbursement Amount, and so forth. Periodic
adjustments to the Reimbursement Amount and related reimbursement may be made by the Fund, as
necessary to ensure that the amount of Fund Operating Expenses during any Fund fiscal year never
exceed the Operating Expense Limit during that fiscal year.
3. Term and Termination of Agreement.
Unless the Investment Manager has extended the duration of the Operating Expense Limit with
respect to a Fund pursuant to Section 1.3 of this Agreement, this Agreement shall automatically
renew effective March 1 of every year for one-year terms until such time as the Investment Manager
provides written notice of non-renewal past the then-current term. In addition, this Agreement
shall terminate with respect to a Fund upon termination of the Investment Management Agreement of
that Fund.
4. Miscellaneous.
4.1. Multiple Class Plan. In case a Fund has multiple classes of shares, any amount
of fees or expenses waived, paid or reimbursed pursuant to the terms of this Agreement shall be
allocated among the classes of shares of the Fund in accordance with the terms of the Fund’s
multiple class plan pursuant to Rule 18f-3 under the 1940 Act.
4.2. 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.
4.3. Interpretation. Nothing herein contained shall be deemed to require the Company
or the Funds to take any action contrary to the Company’s Declaration of Trust or By-Laws, or any
applicable statutory or regulatory requirement to which it is subject or by which it is bound, or
to relieve or deprive the Company’s Board of Trustees of its responsibility for and control of the
conduct of the affairs of the Company or the Funds.
4.4. Definitions. Any question of interpretation of any term or provision of this
Agreement, including but not limited to the investment management 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 Management Agreement or the 1940 Act, shall have the same meaning as
and be resolved by reference to such Management Agreement or the 1940 Act.
5. Voluntary Expense Limitation and Reimbursement.
5.1. Notwithstanding any other provision of this Agreement, the Investment Manager (or its
affiliates) may voluntarily waive fees and/or reimburse expenses of one or more classes of
Transamerica Money Market (the “Money Market Fund”) to such level(s) as the Company’s officers may
reasonably determine. Any such waiver or expense reimbursement may be discontinued by the
Investment Manager at any time. The Investment Manager shall be entitled to recapture any amounts
so waived or reimbursed upon the Money Market Fund attaining such yield as the Company’s officers
reasonably determine.
5.2. Once the Money Market Fund has maintained a daily positive yield for a reasonable amount
of time, as determined by the Investment Manager, the Investment Manager shall be entitled to
reimbursement by the Money Market Fund of the fees waived and/or expenses reimbursed by the
Investment Manager or any of its affiliates to the Money Market Fund pursuant to Section 5.1 of
this Agreement during any of the previous thirty-six (36) months beginning July 1, 2009. Any such
reimbursement shall not result in the Money Market Fund’s effective daily yield to be negative.
This Agreement supersedes all prior written agreements between the parties relating to the
subject matter hereof, and all such prior agreements are deemed terminated upon the effectiveness
of this Agreement.
The parties have caused this Agreement to be signed by their respective officers thereunto
duly authorized as of the day and year first above written.
| TRANSAMERICA ASSET MANAGEMENT, INC. |
||||
| By: | ||||
| Xxxxxx X. Xxxxxxxxx | ||||
| Senior Vice President, General Counsel and Secretary | ||||
| TRANSAMERICA FUNDS |
||||
| By: | ||||
| Xxxxxxxxxxx X. Xxxxxxx | ||||
| Vice President and Chief Investment Officer | ||||
SCHEDULE A
OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Company:
| MAXIMUM | ||||||||
| OPERATING | ||||||||
| EXPENSE LIMIT | ||||||||
| EFFECTIVE | ||||||||
| FUND NAME | THROUGH | EXPENSE LIMIT | ||||||
Transamerica AllianceBernstein International Value |
March 1, 2010 | 1.13% | ||||||
Transamerica American Century Large Company Value |
March 1, 2010 | None | ||||||
Transamerica Asset Allocation — Conservative Portfolio |
March 1, 2010 | 0.45% | ||||||
Transamerica Asset Allocation — Growth Portfolio |
March 1, 2010 | 0.45% | ||||||
Transamerica Asset Allocation — Moderate Growth Portfolio |
March 1, 2010 | 0.45% | ||||||
Transamerica Asset Allocation — Moderate Portfolio |
March 1, 2010 | 0.45% | ||||||
Transamerica Balanced |
March 1, 2011 | 1.45%* | ||||||
Transamerica BlackRock Global Allocation |
March 1, 2010 | 1.00% | ||||||
Transamerica BlackRock Large Cap Value |
March 1, 2010 | 1.00% | ||||||
Transamerica BlackRock Natural Resources |
March 1, 2010 | 1.00% | ||||||
Transamerica BNY Mellon Market Neutral Strategy |
March 1, 2010 | 1.65%** | ||||||
Transamerica Clarion Global Real Estate Securities |
March 1, 2010 | None | ||||||
Transamerica Convertible Securities |
March 1, 2010 | 1.35% | ||||||
Transamerica Diversified Equity |
March 1, 2011 | 1.17%* | ||||||
Transamerica Equity |
March 1, 2011 | 1.17%* | ||||||
Transamerica Evergreen Health Care |
March 1, 2010 | None | ||||||
Transamerica Evergreen International Small Cap |
March 1, 2010 | 1.32% | ||||||
Transamerica Federated Market Opportunity |
March 1, 2010 | 1.05% | ||||||
Transamerica Flexible Income |
March 1, 2011 | 1.50% | ||||||
Transamerica Growth Opportunities |
March 1, 2011 | 1.40%* | ||||||
Transamerica High Yield Bond |
March 1, 2011 | 1.24%* | ||||||
Transamerica Xxxxxxxx Xxxxxx |
Xxxxx 0, 0000 | Xxxx | ||||||
Xxxxxxxxxxxx XXXxxxxx Core Bond |
June 30, 2010 | 0.70% | ||||||
Transamerica JPMorgan International Bond |
March 1, 2010 | 0.75% | ||||||
Transamerica JPMorgan Mid Cap Value |
March 1, 2010 | 1.05% | ||||||
[Transamerica Xxxx Xxxxx Partners All Cap] |
March 1, 2011 | 1.20%* | ||||||
Transamerica Xxxxxx Xxxxxx Bond |
March 1, 2010 | 0.88% | ||||||
Transamerica Xxxxxxx Xxxxxx |
Xxxxx 0, 0000 | Xxxx | ||||||
Xxxxxxxxxxxx Xxxxxxx International Growth |
March 1, 2010 | 1.31 % | ||||||
Transamerica MFS International Equity |
March 1, 2010 | None | ||||||
Transamerica Money Market |
March 1, 2011 | 0.48% | ||||||
Transamerica Multi-Manager Alternative Strategies Portfolio |
March 1, 2010 | 0.55% | ||||||
Transamerica Multi-Manager International Portfolio |
March 1, 2010 | 0.45% | ||||||
Transamerica Xxxxxxxxx Xxxxxx International |
March 1, 2010 | 1.25% | ||||||
Transamerica Xxxxxxxxxxx Developing Markets |
March 1, 2010 | 1.45% | ||||||
| MAXIMUM | ||||||||
| OPERATING | ||||||||
| EXPENSE LIMIT | ||||||||
| EFFECTIVE | ||||||||
| FUND NAME | THROUGH | EXPENSE LIMIT | ||||||
Transamerica Xxxxxxxxxxx Small- & Mid-Cap Value |
March 1, 2010 | 1.15% | ||||||
Transamerica PIMCO Real Return TIPS |
March 1, 2010 | None | ||||||
Transamerica PIMCO Total Return |
March 1, 2010 | None | ||||||
Transamerica Schroders International Small Cap |
March 1, 2010 | 1.27% | ||||||
Transamerica Science & Technology |
March 1, 2010 | 1.18% | ||||||
Transamerica Short-Term Bond |
March 1, 2010 | 0.85%† | ||||||
Transamerica Small/Mid Cap Value |
March 1, 2010 | 1.40% | ||||||
Transamerica Xxxxxxxxx Global |
March 1, 2010 | 1.20% | ||||||
Transamerica Third Avenue Value |
March 1, 2010 | 1.00% | ||||||
Transamerica Xxxxxxxxx International Value |
March 1, 2010 | 1.35% | ||||||
Transamerica UBS Dynamic Alpha |
March 1, 2010 | 1.65%** | ||||||
Transamerica UBS Large Cap Value |
March 1, 2010 | 1.02% | ||||||
Transamerica Value Balanced |
March 1, 2010 | 1.20% | ||||||
Transamerica Xxx Xxxxxx Emerging Markets Debt |
March 1, 2010 | 1.15% | ||||||
Transamerica Xxx Xxxxxx Mid-Cap Growth |
March 1, 2010 | 1.00% | ||||||
Transamerica Xxx Xxxxxx Small Company Growth |
March 1, 2010 | 1.15% | ||||||
Transamerica WMC Emerging Markets |
March 1, 2010 | 1.40% | ||||||
| * | The Operating Expense Limit for Class P shares of: Transamerica Balanced shall be 1.10%, Transamerica Diversified Equity shall be 1.15%, Transamerica Equity shall be 1.15%, Transamerica Growth Opportunities shall be 1.40%, Transamerica High Yield Bond shall be 0.90% and Transamerica Xxxx Xxxxx Partners All Cap shall be 1.40%. | |
| ** | Exclusive of dividend expense on short sales. | |
| † | Effective May 1, 2009, the Investment Manager agrees to further reduce the Fund Operating Expenses of Transamerica Short-Term Bond by waiving 0.10% of its investment management fees payable to it by Transamerica Short-Term Bond for one year through May 1, 2010. In addition, the Investment Manager agrees that 0.10% of the 0.35% 12b-1 fee applicable to Class A shares of Transamerica Short-Term Bond will be waived for one year through May 1, 2010. |
SCHEDULE B
FUNDS SUBJECT TO EXPENSE REIMBURSEMENT
FUND NAME
Transamerica AllianceBernstein International Value*
Transamerica Asset Allocation — Conservative Portfolio
Transamerica Asset Allocation — Growth Portfolio
Transamerica Asset Allocation — Moderate Growth Portfolio
Transamerica Asset Allocation — Moderate Portfolio
Transamerica Balanced
Transamerica BlackRock Global Allocation*
Transamerica BlackRock Large Cap Value
Transamerica BlackRock Natural Resources
Transamerica BNY Mellon Market Neutral Strategy
Transamerica Convertible Securities
Transamerica Diversified Equity
Transamerica Equity*
Transamerica Evergreen International Small Cap
Transamerica Federated Market Opportunity*
Transamerica Flexible Income
Transamerica Growth Opportunities*
Transamerica High Yield Bond*
Transamerica JPMorgan Core Bond
Transamerica JPMorgan International Bond*
Transamerica JPMorgan Mid Cap Value
[Transamerica Xxxx Xxxxx Partners All Cap*]
Transamerica Xxxxxx Xxxxxx Bond
Transamerica Xxxxxxx International Growth
Transamerica Money Market
Transamerica Multi-Manager Alternative Strategies Portfolio
Transamerica Multi-Manager International Portfolio*
Transamerica Xxxxxxxxx Xxxxxx International*
Transamerica Xxxxxxxxxxx Developing Markets*
Transamerica Xxxxxxxxxxx Small-& Mid-Cap Value
Transamerica Schroders International Small Cap
Transamerica Science & Technology
Transamerica Short-Term Bond
Transamerica Small/Mid Cap Value
Transamerica Xxxxxxxxx Global
Transamerica Third Avenue Value
Transamerica Xxxxxxxxx International Value
Transamerica UBS Dynamic Alpha
Transamerica UBS Large Cap Value
Transamerica Value Balanced*
Transamerica Xxx Xxxxxx Emerging Markets Debt
Transamerica Xxx Xxxxxx Mid Cap Growth*
Transamerica Xxx Xxxxxx Small Company Growth
Transamerica WMC Emerging Markets
| * | The Fund may not recapture any fees waived and/or reimbursed prior to March 1, 2008. |
