Exhibit (h)(7)
LAUDUS INSTITUTIONAL TRUST
EXPENSE LIMITATION AGREEMENT
This Agreement, dated as of March 31, 2008, is made and entered into by and
between Xxxxxxx Xxxxxx Investment Management, Inc. (the "Adviser") and Laudus
Institutional Trust (the "Trust") on behalf of each series of the Trust listed
on Schedule A hereto, as may be amended from time to time (each a "Fund" and
collectively the "Funds").
WHEREAS, the Trust is a Delaware statutory trust and is registered
under the Investment Company Act of 1940 (the "1940 Act") as an open-end
management investment company of the series type, and each Fund is a series of
the Trust;
WHEREAS, the Trust on behalf of each Fund and the Adviser have entered
into Management Contracts dated, for each Fund, as set forth on Schedule A (each
a "Management Agreement"), pursuant to which the Adviser provides investment
management services to each Fund for compensation based on the value of the
average daily net assets of each Fund; and
WHEREAS, the Trust and the Adviser have determined that it is
appropriate and in the best interest of each Fund and its shareholders to
maintain the expenses of each Fund at a level below the level to which each Fund
may normally be subject.
NOW THEREFORE, the parties hereto agree as follows:
1. EXPENSE LIMITATION AND WAIVER. Until further notice from the Adviser
to the Trust and in any event through July 30, 2010 the Adviser agrees that, to
the extent that ordinary operating expenses incurred by a Fund in any fiscal
year, including but not limited to investment advisory fees of the Adviser and
including amounts payable pursuant to any plan adopted in accordance with Rule
12b-1 under the 1940 Act and sub-accounting fees (but excluding nonrecurring
account fees, fees on securities transactions such as exchange fees, dividends
and interest on securities sold short, service fees, interest, taxes, brokerage
commissions, other expenditures which are capitalized in accordance with
generally accepted accounting principles, and other extraordinary expenses not
incurred in the ordinary course of such Fund's business (the "Fund Operating
Expenses")), exceed the Expense Limit as set forth on SCHEDULE A, such excess
amount will be the liability of the Adviser.
2. REIMBURSEMENT. If in any month during which the Management Agreement
for a Fund is in effect, the estimated annualized Fund Operating Expenses of
such Fund for that month are less than the Expense Limit as set forth on
SCHEDULE A, the Adviser shall be entitled to reimbursement by the Fund of the
investment advisory fees waived or reduced and other payments remitted to the
Fund pursuant to Section 1 hereof (the "Reimbursement Amount"), to the extent
that the Fund's annualized Fund Operating Expenses plus the amount so reimbursed
equals, for such month, the Expense Limit as set forth on SCHEDULE A; PROVIDED
that such reimbursement may be paid, in each case, only during the fiscal year
in which the waiver, reduction or other payment was made or during the following
two fiscal years; and FURTHER PROVIDED that such amount paid to the Adviser,
together with all other amounts reimbursed to the Adviser pursuant to this
agreement during the fiscal year in which such amount is paid, will in no event
exceed the total Reimbursement Amount.
3. YEAR-END ADJUSTMENT. If necessary, on or before the last day of the
first month of the Trust's fiscal year, an adjustment payment shall be made by
the appropriate party in order that the actual Fund Operating Expenses of each
Fund for the prior fiscal year (including any reimbursement payments hereunder
with respect to such fiscal year) do not exceed the Expense Limit for each Fund
as set forth on SCHEDULE A.
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4. TERM AND TERMINATION. This Agreement shall continue in effect with
respect to all Funds until July 30, 2010 and shall thereafter continue in effect
with respect to each Fund for a period of two (2) years, and shall be
subsequently renewed annually on a rolling basis in two (2) year increments,
provided either party may elect not to renew the Agreement an additional two (2)
years upon such sixty (60) days' written prior notice. Nevertheless, this
Agreement may be terminated by either party hereto, without payment of any
penalty, upon sixty (60) days' prior written notice to the other party at its
principal place of business; provided that, in the case of termination by the
Adviser, such action shall be authorized by the Trust's Board of Trustees.
5. CAPTIONS. The captions in this Agreement are included for
convenience of reference and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
6. 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 Bylaws, each as in effect from time to time, or any applicable
statutory or regulatory requirement, including without limitation any
requirements under the 1940 Act, 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
or control of the conduct of the affairs of the Trust or the Funds.
7. DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from the terms
and provisions of a 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.
8. AMENDMENT. This Agreement may be amended only by a written
instrument signed by each of the parties hereto.
IN WITNESS WHEREOF, 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.
LAUDUS TRUST, XXXXXXX XXXXXX INVESTMENT
On behalf of the Funds MANAGEMENT, INC.
By: By:
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Name: Xxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer Title: President and Chief
Executive Officer
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SCHEDULE A
FUND DATE OF MANAGEMENT EXPENSE LIMIT
CONTRACT
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Laudus Mondrian Institutional Emerging Markets Fund [March 31, 2008] [Institutional Shares -- 1.27%]
Laudus Mondrian Institutional International Equity Fund [March 31, 2008] [Institutional Shares --0.90%]
