EXPENSE LIMITATION AGREEMENT
EX-99.D8
EXPENSE LIMITATION AGREEMENT, effective as of April 30, 2010 by and between Xxxxxx Street Capital
Management (the “Adviser”) and Xxxxxx Street Funds (the “Trust”) (the “Agreement”), 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 and First Hawaiian Bank entered into an Investment Advisory Agreement dated
March 31, 1999 (the “Advisory Agreement”);
WHEREAS, the Adviser and First Hawaiian Bank entered into Assignment and Assumption Agreement dated
February 22, 2000 whereby the Adviser assumed the Management Agreement and the obligations
contained therein;
WHEREAS, the Trust and the Adviser have entered into an Investment Advisory Agreement dated March
31, 1999 (the “Advisory Agreement”), pursuant to which the Adviser provides investment advisory
services to each Fund for compensation based on the value of the average daily net assets of each
such Fund;
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 Fund at a level below the level
to which each such Fund would normally be subject in order to maintain each Fund’s expense ratios
at the Maximum Annual Operating Expense Limit (as hereinafter defined) specified for such Fund in
Schedule A hereto;
NOW THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
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, acquired fund fees and expenses,
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) and expenses for which payment has been made through the use of all or a portion of
brokerage commissions (or markups or markdowns) generated by that Fund (“Fund Operating Expenses”),
exceed the Maximum Annual 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. Maximum Annual Operating Expense Limit. The Maximum Annual Operating Expense Limit
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. That Maximum Annual Operating Expense Limit for each Fund
contemplates that certain expenses for each Fund may be paid through the use of all or a portion of
brokerage commissions (or markups or markdowns) generated by that Fund.
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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
Maximum Annual Operating Expense Limit of such Fund, the Adviser shall first waive or reduce its
investment advisory fee for such month by an amount sufficient to reduce the annualized Fund
Operating Expenses to an amount no higher than the Maximum Annual Operating Expense Limit. If the
amount of the waived or reduced investment advisory fee for any such month is insufficient to pay
the Excess Amount, the Adviser may also remit to the appropriate Fund or Funds an amount that,
together with the waived or reduced investment advisory fee, is sufficient to pay such Excess
Amount.
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.
2. Reimbursement of Fee Waivers and Expense Reimbursements.
2.1. Reimbursement. If in any year in which the Advisory Agreement is still in effect and
the estimated aggregate Fund Operating Expenses of such Fund for the fiscal year are less than the
Maximum Annual Operating Expense Limit for that year, subject to approval by the Trust’s Board of
Trustees as provided in Section 2.2 below, the Adviser shall be entitled to reimbursement by such
Fund, in whole or in part as provided below, of the investment advisory fees waived or reduced and
other payments remitted by the Adviser to such Fund pursuant to Section 1 hereof. The total amount
of reimbursement to which the Adviser may be entitled (“Reimbursement Amount”) shall equal, at any
time, the sum of all investment advisory fees previously waived or reduced by the Adviser and all
other payments remitted by the Adviser to the Fund, pursuant to Section 1 hereof, during any of the
previous three (3) fiscal years, less any reimbursement previously paid by such Fund to the
Adviser, pursuant to this Section 2, with respect to such waivers, reductions, and payments. The
Reimbursement Amount shall not include any additional charges or fees whatsoever, including, e.g.,
interest accruable on the Reimbursement Amount.
2.2. Board Approval. No reimbursement shall be paid to the Adviser with respect to any
Fund pursuant to this Section 2 unless the Trust’s Board of Trustees has determined in advance that
the payment of such reimbursement to the Adviser is in the best interests of such Fund and its
shareholders.
2.3. Method of Computation. To determine each Fund’s accrual, if any, to reimburse the
Adviser for the Reimbursement Amount, each month the Fund Operating Expenses of each Fund shall be
annualized as of the last day of the month. If the annualized Fund Operating Expenses of a Fund for
any month are less than the Maximum Annual Operating Expense Limit of such Fund, such Fund shall
accrue into its net asset value an amount payable to the Adviser sufficient to increase the
annualized Fund Operating Expenses of that Fund to an amount no greater than the Maximum Annual
Operating Expense Limit of that Fund, provided that such amount paid to
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the Adviser will in no event exceed the total Reimbursement Amount. For accounting purposes,
amounts accrued pursuant to this Section 2 shall be a liability of the Fund for purposes of
determining the Fund’s net asset value.
2.4. Payment and Year-End Adjustment. Amounts accrued pursuant to this Agreement shall be
payable to the Adviser as of the last day of each month. 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 actual Fund Operating Expenses of a Fund for the prior fiscal year (including any
reimbursement payments hereunder with respect to such fiscal year) do not exceed the Maximum Annual
Operating Expense Limit.
3. Term and Termination of Agreement.
This Agreement shall continue in effect with respect to all Funds until April 30, 2011 and shall
thereafter continue in effect from year to year for successive one-year periods, provided that this
Agreement may be terminated, without payment of any penalty, with respect to any Fund:
(i) by the Trust, for any reason and at any time; and
(ii) by the Adviser, for any reason, upon ninety (90) days’ prior written notice to the Trust at
its principal place of business, such termination to be effective as of the close of business on
the last day of the then-current one-year period; or at such earlier time provided that such
termination is approved by majority vote of the Trustees and the Independent Trustees voting
separately.
4. Miscellaneous.
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 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. The parties to this Agreement acknowledge and agree that all
litigation arising hereunder, whether direct or indirect, and of any and every nature whatsoever
shall be satisfied solely out of the assets of the affected Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. The Trust’s Declaration of Trust, as amended from time to time, is on file
in the Office of the Secretary of State of the Commonwealth of Massachusetts. Such Declaration of
Trust describes in detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of shares of beneficial interest.
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
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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 0000 Xxx.
4.4. Enforceability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
or provisions of this Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
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.
THE ADVISORS INNER CIRCLE FUND,
on behalf of each series of the Trust set forth in Schedule A
/s/ Xxxxxx Xxxxx |
||
Vice President and Secretary |
XXXXXX STREET CAPITAL MANAGEMENT
/s/ illegible signature |
||
Principal |
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SCHEDULE A
to the Expense Limitation Agreement Effective April 30, 2010
by and Between Xxxxxx Street Capital Management and Xxxxxx Street Funds
to the Expense Limitation Agreement Effective April 30, 2010
by and Between Xxxxxx Street Capital Management and Xxxxxx Street Funds
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
| Maximum Annual | ||||
| Name of Fund | Operating Expense Limit | |||
Government Money Market Fund Class I Shares |
0.50 | % | ||
Government Money Market Fund Class A Shares |
0.75 | % | ||
Hawaii Municipal Bond Fund Class I Shares |
0.55 | % | ||
Hawaii Municipal Bond Fund Class A Shares |
0.80 | % | ||
High Grade Income Fund Class I Shares |
0.76 | % | ||
Dividend Value Fund Class I Shares |
1.05 | % | ||
Strategic Growth Fund Class I Shares |
1.25 | % | ||
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