EXPENSE LIMITATION AGREEMENT
EXHIBIT
99-23.h.4
EXPENSE
LIMITATION AGREEMENT (the “Agreement”), effective as of May 1, 2009 by and
between Wilshire Associates Incorporated, a California corporation (the
“Advisor”) and Wilshire Mutual Funds, Inc. (the “Company”), on behalf of the
Wilshire Large Cap Core 130/30 Fund (the “Fund”).
WHEREAS,
the Company is a Maryland Corporation, 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 the Fund is a series of the
Company;
WHEREAS,
the Company and the Advisor have entered into an Investment Advisory Agreement
dated April 1, 2002 (“Advisory Agreement”), pursuant to which the Advisor
provides investment management services to the Fund for compensation based on
the value of the average daily net assets of the Fund; and
WHEREAS,
the Company and the Advisor have determined that it is appropriate and in the
best interests of the Fund and its shareholders to maintain the expenses of the
Fund at a level below the level to which the Fund may otherwise be
subject;
NOW
THEREFORE, the parties hereto agree as follows:
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1.
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EXPENSE
LIMITATION.
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1.1 Applicable Expense
Limit. To the extent that the ordinary operating expenses
incurred by the Fund in any fiscal year, including but not limited to investment
advisory fees of the Advisor, but excluding taxes, brokerage expenses, dividend
expenses on short securities and extraordinary expenses (“Fund Operating
Expenses”), exceed the Operating Expense Limit, as defined in Section 1.2
below, such excess amount (the “Excess Amount”) shall be the liability of the
Advisor to the extent set forth in this Agreement.
1.2 Operating Expense
Limit. The Operating Expense Limit with respect to the Fund
shall be 1.40% and 1.25% (annualized) of the average daily net assets of the
Fund for its Investment Class and Institutional Class shares,
respectively.
1.3 Duration of Operating
Expense Limit. The Operating Expense Limit with respect to the
Fund shall remain in effect during the term of this Agreement.
1.4 Method of
Computation. To determine the Advisor’s obligation with
respect to the Excess Amount, each day the Fund Operating Expenses for the Fund
shall be annualized. If the annualized Fund Operating Expenses for
any day of the Fund exceed the Operating Expense Limit of the Fund, the Advisor
shall waive or reduce its investment advisory fee or absorb the other Fund
expenses in an amount sufficient to pay that day’s Excess Amount. The
Company may offset amounts owed to the Fund pursuant to this Agreement against
the advisory fee payable to the Advisor.
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2.
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REIMBURSEMENT OF FEE
WAIVERS AND EXPENSE
REIMBURSEMENTS.
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If on any
day during which the Advisory Agreement is in effect, the estimated annualized
Fund Operating Expenses of the Fund for that day are less than the Operating
Expense Limit, the Advisor shall be entitled to reimbursement by the Fund of the
investment advisory fees waived or reduced, and any other expense reimbursements
or similar payments remitted by the Adviser to the Fund pursuant to
Section 1 hereof (the “Reimbursement Amount”) within three years after the
year in which the Advisor waived or reduced investment advisory fees or
reimbursed expenses, to the extent that the Fund’s annualized Operating Expenses
plus the amount so reimbursed equals, for such day, the Operating Expense Limit,
provided that such amount paid to the Advisor will in no event exceed the total
Reimbursement Amount and will not include any amounts previously
reimbursed.
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3.
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TERM AND TERMINATION
OF AGREEMENT.
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This
Agreement shall terminate upon the earlier of termination of the Advisory
Agreement or on April 30, 2010. The obligation of the Advisor under
Section 1 of this Agreement and of the Company under Section 2 of this
Agreement shall survive the termination of the Agreement solely as to expenses
and obligations incurred prior to the date of such termination.
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4.
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MISCELLANEOUS.
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4.1 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.
4.2 Interpretation. Nothing
herein contained shall be deemed to require the Company or the Fund to take any
action contrary to the Company’s Articles of Incorporation 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 Directors of
its responsibility for and control of the conduct of the affairs of the Company
or the Fund.
4.3 Definitions. Any
question of interpretation of any term or provision of this Agreement, including
but not limited to the investment advisory 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 or the 1940 Act,
shall have the same meaning as and be resolved by reference to such Advisory
Agreement or the 1940 Act.
4.4 Amendments. This
Agreement may be amended only by a written agreement signed by each of the
parties hereto.
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective officers thereunto duly authorized and their respective corporate
seals to be hereunto affixed, as of the day and year first above
written.
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WILSHIRE
ASSOCIATES INCORPORATED
By:
/s/ Xxxxxxxx X.
Xxxxxxx
Name: Xxxxxxxx
X. Xxxxxxx
Title:
President
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WILSHIRE
MUTUAL FUNDS, INC.
By:
/s/ Xxxxxxxx X.
Xxxxxxx
Name: Xxxxxxxx
X. Davanazo
Title:
President
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3
RATIFICATION OF EXPENSE
LIMITATION AGREEMENT FOR WILSHIRE LARGE CAP CORE 130/30 FUND
Suggested
resolution:
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RESOLVED:
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that
the Board of Directors of the Company does hereby ratify the Expense
Limitation Agreement between the Company and the Advisor, whereby the
Advisor limits the fees and expenses of the Wilshire Large Cap Core 130/30
Fund as set forth in the Expense Limitation Agreement as presented to this
meeting.
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