EXPENSE LIMITATION AGREEMENT THE WESTPORT FUNDS
THE
WESTPORT FUNDS
EXPENSE LIMITATION AGREEMENT, effective
as of March 1, 1999 by and between Westport Advisers, LLC (the “Adviser”) and
The Westport Funds (the “Trust”), on behalf of each series of the Trust set
forth in Schedule A
attached hereto (each a “Fund,” and collectively, the “Funds”).
WHEREAS, the Trust is a Delaware
business trust organized under a Declaration of Trust (“Declaration of 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 Trust; and
WHEREAS, each Fund
consists of multiple classes as set forth in Schedule A attached hereto;
and
WHEREAS,
the Trust and the Adviser have entered
into an Investment Advisory Agreement dated November 25,
1997 (the “Advisory Agreement”), pursuant to which the Adviser provides
investment advisory services to each Fund listed in Schedule A, which
may be amended from time to time, for compensation based on the value
of the average daily net assets of each class of each
Fund; and
WHEREAS, the Trust and the Adviser have
determined that it is appropriate and in the best interests of each
Fund and its shareholders to maintain
the expenses of each class of each Fund, and, therefore,
have entered into this Expense Limitation Agreement (“the Agreement”), in order
to maintain the expense ratios of each class of each Fund at the levels
specified in Schedule A
attached hereto; and
NOW THEREFORE, the parties hereto agree
that the Agreement provides 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 aggregate expenses of every character
incurred by a Fund in any fiscal year, including but not limited to investment
advisory fees of the Adviser (but excluding interest, taxes, brokerage
commissions, other expenditures which are capitalized in accordance with
generally accepted accounting principles, other extraordinary expenses not
incurred in the ordinary course of such Fund’s business, and amounts, if any,
payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940
Act, if any) (“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 Adviser.
1.2. Operating Expense
Limit. The Maximum Operating Expense Limit in any year with
respect to each class of each Fund shall be the amount specified in Schedule A based on a
percentage of the average daily net assets of each class of each
Fund.
1.3. Method of
Computation. To determine the Adviser’s liability with respect
to the Excess Amount, each month the Fund Operating Expenses for each Fund shall
be annualized as of the last day of the month. If the annualized Fund
Operating Expenses for any month of a Fund exceed the Operating Expense Limit of
such Fund, the Adviser shall waive or reduce its investment advisory fee for
such month by an amount, or remit an amount to the appropriate class or classes
of the Fund or Funds, sufficient to reduce the annualized Fund Operating
Expenses to an amount no higher than the Operating Expense Limit; provided,
however, that any waiver or reduction of the advisory fee is applied equally
across the classes of the Fund.
1.4. 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 the Fund or
Funds with respect to the previous fiscal year shall equal the Excess
Amount.
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2.
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Term and Termination
of Agreement.
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This Agreement with respect to the
Funds shall continue in effect through December 31, 1999, and from year to year
thereafter provided each such continuance is specifically approved by a majority
of the Trustees of the Trust. This Agreement shall terminate
automatically upon the termination of the Advisory Agreement.
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3.
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Miscellaneous.
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3.1. 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.
3.2. Interpretation. Nothing
herein contained shall be deemed to require the Trust or the Funds to take any
action contrary to the Trust’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 Trust’s Board of Trustees of its
responsibility for and control of the conduct of the affairs of the Trust or the
Funds.
3.3. 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.
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.
THE WESTPORT FUNDS
ON BEHALF OF EACH OF ITS
SERIES
By: /s/ Xxxxxx X.
Xxxxxx
Xxxxxx X. Xxxxxx
Executive Vice President, Secretary
and Treasurer
WESTPORT ADVISERS, LLC
By: /s/ Xxxxxx X. Xxxxxxx,
Xx.
Xxxxxx X. Xxxxxxx, Xx.
Managing Director
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SCHEDULE
A
OPERATING
EXPENSE LIMITS
This
Agreement relates to the following Funds and classes of the Trust:
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Maximum
Operating
Expense Limit
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Westport
Fund – Class R shares
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1.50%
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Westport
Fund – Class I shares
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1.50%
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Westport
Small Cap Fund – Class R shares
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1.50%
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Westport
Small Cap Fund – Class I shares
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1.50%
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