John Hancock Investment Management Services, LLC 601 Congress Street Boston, MA 02210
| Xxxx Xxxxxxx Investment Management Services, LLC 000 Xxxxxxxx Xxxxxx Xxxxxx, XX 00000 |
 |
As of September 13, 2011
To the Trustees of:
Xxxx Xxxxxxx Funds III
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxx Xxxxxxx Funds III
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
| Re: | Amended and Restated Expense Limitation Agreement and Voluntary Expense Limitation Notice |
With reference to the Advisory Agreement dated July 1, 2009, as amended, entered into by and
between Xxxx Xxxxxxx Investment Management Services, LLC (the “Adviser”) and Xxxx Xxxxxxx Funds III
(the “Trust”), on behalf of each series of the Trust (each, a “Fund” and collectively, the
“Funds”), we hereby notify you as follows:
1. The Adviser agrees to contractually waive its management fee for each Fund and, to the extent
necessary, bear other expenses, as set forth in Appendices A and B.
2. The Adviser has voluntarily agreed to waive its management fee as set forth in Appendices C and
D.
3. We understand and intend that the Trust rely on this undertaking in overseeing the preparation
and filing of Post-effective Amendments to the Registration Statement on Form N-1A for the Trust
and the Funds with the Securities and Exchange Commission, in accruing each Fund’s expenses for
purposes of calculating its net and gross asset value per share, and for other purposes permitted
under Form N-1A and/or the Investment Company Act of 1940, as amended, and we expressly permit the
Trust so to rely.
Very truly yours,
XXXX XXXXXXX INVESTMENT MANAGEMENT SERVICES, LLC
By:
|
/s/ Xxxxxxx X. Xxxx
|
|||
| Chief Financial Officer | ||||
By:
|
/s/ Xxxxxxx Xxxxx
Senior Vice President |
APPENDIX A
Total Fund Operating Expense Limitations
For purposes of this Appendix:
“Expenses” means all the expenses of a class of shares of a Fund (including those expenses of the
Fund attributable to such class) but excluding: (i) taxes; (ii) portfolio brokerage commissions;
(iii) interest; (iv) litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund’s business; (v) acquired fund fee expenses paid
indirectly; (vi) short dividend expense; and (vii) fees under any agreements or plans of the Fund
dealing with services for shareholders and others with beneficial interests in shares of the Trust.
“Expense Limit” means the percentage of average annual net assets (on an annualized basis)
attributable to a class of shares of the Funds set forth below.
The Adviser agrees to make payment to a specific class of shares of the Fund (up to the amount of
the expenses relating solely to such class of shares), in an amount equal to the amount by which
the Expenses of such class of shares exceed the Expense Limit for such class set forth in the table
below.
The Expense Limit for the classes of shares of the Funds indicated below for the purposes of this
Appendix shall be as follows:
| Fund/Class | X | X | X | X0 | X0 | X0 | X0 | X | I2 | T | ADV | 1 | NAV | R6 | ||||||||||||||||||||||||||||||||||||||||||
Core High Yield1 |
1.25 | % | None | None | N/A | N/A | N/A | N/A | 0.94 | % | X/X | X/X | X/X | X/X | X/X | X/X | ||||||||||||||||||||||||||||||||||||||||
Disciplined Value1 |
1.30 | % | 2.05 | % | 2.05 | % | 1.65 | % | 1.55 | % | 1.25 | % | 0.95 | % | 0.99 | % | 0.85 | % | N/A | 1.00 | % | N/A | None | 0.86 | %2 | |||||||||||||||||||||||||||||||
Disciplined Value Mid Cap |
1.25 | %3 | N/A | 2.10 | %4 | N/A | N/A | N/A | N/A | 1.00 | %5 | N/A | N/A | 1.25 | %5 | N/A | None | 0.99 | %2 | |||||||||||||||||||||||||||||||||||||
Global Shareholder Yield6 |
1.42 | % | 2.12 | % | 2.12 | % | X/X | X/X | X/X | X/X | 0.97 | % | N/A | N/A | N/A | N/A | None | 0.97 | %2 | |||||||||||||||||||||||||||||||||||||
International Allocation1 |
0.63 | % | 1.33 | % | 1.33 | % | X/X | X/X | X/X | X/X | 0.27 | % | X/X | X/X | X/X | X/X | X/X | X/X | ||||||||||||||||||||||||||||||||||||||
| 1 | At the June 5-7, 2011 meeting of the Board of Trustees of the Trust, the Adviser notified the Board of the extension of the expiration date of the fee waiver and expense reimbursement arrangements until June 30, 2012. | |
| 2 | At the September 11-13, 2011 meeting of the Board of Trustees of the Trust, the Adviser notified the Board of, and the Board ratified, the fee waiver and/or expense reimbursement for Class R6 shares of this fund with an expiration date of June 30, 2013, effective as of August 30, 2011 | |
| 3 | This expense reimbursement rate expires December 31, 2011. Effective January 1, 2012, the expense reimbursement rate shall be increased to 1.35%, which shall continue in effect until July 31, 2012. | |
| 4 | At the September 11-13, 2011 meeting of the Board of Trustees of the Trust, the Adviser notified the Board of, and the Board ratified, the fee waiver and/or expense reimbursement for Class C shares of this fund with an expiration date of July 31, 2012, effective as of August 12, 2011. | |
| 5 | This expense reimbursement shall continue in effect until July 9, 2012. | |
| 6 | This expense reimbursement shall continue in effect until June 30, 2012. |
A-1
| Fund/Class | X | X | X | X0 | X0 | X0 | X0 | X | I2 | T | ADV | 1 | NAV | R6 | ||||||||||||||||||||||||||||||||||||||||||
International Core1 |
1.60 | % | 2.30 | % | 2.30 | % | 1.90 | % | 1.80 | % | 1.50 | % | 1.20 | % | 1.24 | % | N/A | N/A | N/A | 1.15 | % | None | 1.12 | %2 | ||||||||||||||||||||||||||||||||
International Growth1 |
1.60 | % | 2.30 | % | 2.30 | % | X/X | X/X | X/X | X/X | 1.24 | % | N/A | N/A | N/A | 1.15 | % | None | N/A | |||||||||||||||||||||||||||||||||||||
International Value Equity |
1.60 | %7 | X/X | X/X | X/X | X/X | X/X | X/X | 1.18 | %1 | X/X | X/X | X/X | X/X | Xxxx | X/X | ||||||||||||||||||||||||||||||||||||||||
Leveraged Companies1 |
1.35 | % | 2.05 | % | 2.05 | % | X/X | X/X | X/X | X/X | 0.99 | % | X/X | X/X | X/X | X/X | X/X | X/X | ||||||||||||||||||||||||||||||||||||||
Rainier Growth1 |
1.35 | % | 2.10 | % | 2.10 | % | 1.70 | % | 1.60 | % | 1.30 | % | 1.00 | % | 1.04 | % | N/A | 1.40 | % | 1.14 | % | N/A | None | 0.86 | %2 | |||||||||||||||||||||||||||||||
Small Cap Opportunities1 |
1.60 | % | 2.30 | % | 2.30 | % | X/X | X/X | X/X | X/X | 1.24 | % | X/X | X/X | X/X | X/X | X/X | X/X | ||||||||||||||||||||||||||||||||||||||
Small Company1 |
1.50 | % | N/A | N/A | 1.80 | % | 1.70 | % | 1.40 | % | 1.10 | % | 1.04 | % | N/A | N/A | 1.34 | % | X/X | X/X | 0.00 | %0 | ||||||||||||||||||||||||||||||||||
X.X. Xxxx0 |
1.35 | % | 2.05 | % | 2.05 | % | 1.64 | % | 1.54 | % | 1.24 | % | 0.94 | % | 0.89 | % | X/X | X/X | X/X | X/X | X/X | X/X | ||||||||||||||||||||||||||||||||||
| 7 | This expense reimbursement shall continue in effect until February 11, 2013. |
A-2
APPENDIX B
Fund Level Contractual Investment Management Fee Waivers
Effective April 1, 2011, the Adviser agrees to limit Xxxx Xxxxxxx Global Shareholder Yield Fund’s
management fee to a maximum annual rate of 0.80% of the Fund’s average daily net assets. The
limitation will continue until at least June 30, 2012.
B-1
APPENDIX C
Advisor Fee Voluntary Waiver
Fund Level
The Adviser, as the investment adviser for the Xxxx Xxxxxxx International Allocation Portfolio (the
“Fund”), receives a fee of 0.05% on assets invested in funds of Xxxx Xxxxxxx Funds II and the Trust
and 0.50% on all other investments.
The Fund invests in other mutual funds, of which some or all of the investments are mutual funds
managed by the Adviser who receives an advisory fee for such services. The voluntary adviser fee
waiver shall apply as follows:
The Adviser has voluntarily agreed to waive its advisory fees for the Fund so that the amount
retained by the Adviser after payment of subadvisory fees, including Adviser fees collected on the
underlying investments after payment of subadvisory fees, does not exceed 0.50% of the Fund’s
average annual net assets.
This advisory fee waiver is voluntary and can be terminated at any time by the Adviser on notice to
the Trust.
C-1
APPENDIX D
Fund Level Other Voluntary Limit on Total Operating Expenses
For purposes of this Appendix:
“Expenses” means all the expenses of a Fund excluding: (i) taxes; (ii) portfolio brokerage
commissions; (iii) interest; (iv) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of the Fund’s business; (v) acquired fund fee expenses
paid indirectly; (vi) short dividend expense; (vii) advisory fees; (viii) Rule 12b-1 fees; (ix)
transfer agency fees; (x) printing, postage and blue sky registration fees; (xi) fees under any
agreements; or plans of the Fund dealing with services for shareholders and others with beneficial
interests in shares of the Trust.
“Expense Limit” means the percentage of a Fund’s average annual net assets (on an annualized basis)
set forth below.
The Adviser agrees to waive advisory fees and, to the extent necessary, reimburse other expenses of
the Fund, in an amount equal to the amount by which the Expenses of such Fund exceed the Expense
Limit for such Fund set forth in the table below.
The Expense Limit for each of the Funds indicated below for the purposes of this Appendix shall be
as follows:
| Fund | Expense Limit* | |||
Core High Yield |
0.19 | % | ||
International Allocation |
0.16 | % | ||
Small Cap Opportunities |
0.27 | % | ||
U.S. Core |
0.04 | % | ||
| * | Fee waivers and/or expense reimbursements are voluntary and may be amended or terminated at any time by the Adviser. |
D-1
