OLD MUTUAL ADVISOR FUNDS EXPENSE LIMITATION AGREEMENT
Exhibit 99.h.5
This EXPENSE LIMITATION AGREEMENT, effective as of September 7, 2004, by and between Old
Mutual Advisor Funds (the “Trust”), on behalf of each portfolio of the Trust set forth in Schedule
A, Schedule C and Schedule I (each a “Portfolio”, and collectively, the “Portfolios”), and Old
Mutual Capital, Inc. (the “Adviser”).
WHEREAS, the Trust is a Delaware statutory trust organized under an Agreement and Declaration
of Trust dated May 27, 2004 (the “Declaration of Trust”), and is registered under the Investment
Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company of
the series type and each Portfolio is one of the series of the Trust; and
WHEREAS, the Trust currently maintains three (3) classes of shares for each Portfolio, Class
A, Class C and Institutional Class (each a “Class” and, collectively, the “Classes”); and
WHEREAS, the Trust and the Adviser have entered into an Investment Advisory Agreement (the
“Advisory Agreement”), pursuant to which the Adviser will render investment advisory services to
each Portfolio for compensation based on the value of the average daily net assets of each such
Portfolio; and
WHEREAS, the Trust and the Adviser have determined that it is appropriate and in the best
interests of each Portfolio and its shareholders to maintain certain expenses of each Class of each
Portfolio at a level below the level to which each such Class would normally be subject.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1 APPLICABLE EXPENSE LIMIT. To the extent that the aggregate expenses incurred by each
Class of a Portfolio in a fiscal year, including but not limited to investment advisory fees of the
Adviser and fees and expenses incurred under the Trust’s Distribution Plan (Class A Shares),
Distribution Plan (Class C shares), and Service Plan (Class A and Class C shares) (but excluding:
(i) interest, taxes, brokerage commissions, and other expenditures which are capitalized in
accordance with generally accepted accounting principles; and (ii) other extraordinary expenses not
incurred in the ordinary course of such Portfolio’s business) (“Class Expenses”), exceed the
Expense Limit, as defined in Section 1.2 below, such excess amount (the “Excess Amount”) shall be
the liability of the Adviser.
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1.2 EXPENSE LIMIT. The Expense Limit for the Class A, Class C and Institutional Class shares
of a Portfolio shall be as set forth in Schedule A, Schedule B and Schedule I, respectively, or
such other rate as may be agreed to in writing by the parties from time to time.
1.3 METHOD OF COMPUTATION. To determine the Adviser’s liability with respect to the Excess
Amount, each month the Class Expenses for each Class of each Portfolio shall be annualized as of
the last day of the month. If the annualized Class Expenses for any month of a Class of a
Portfolio exceed the Expense Limit of such Class, the Adviser shall first waive or reduce its
investment management fee for such month for the affected Portfolio or Portfolios by an amount
sufficient to reduce the annualized Class Expenses to an amount no higher than the 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 Portfolio or Portfolios an
amount that, together with the waived or reduced 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 advisory fees waived or reduced and other payments remitted by the Adviser to the Portfolio
or Portfolios 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 during which the total assets of a Portfolio are greater
than $75 million and in which the Advisory Agreement is still in effect, the estimated Class
Expenses of any Class of such Portfolio for the fiscal year are less than the corresponding Expense
Limit for that year, subject to quarterly approval by the Trust’s Board of Trustees as provided in
Section 2.2 below, the Adviser shall be entitled to reimbursement by such Portfolio, in whole or in
part as provided below, of the advisory fees waived or reduced and other payments remitted by the
Adviser to such Portfolio pursuant to Section 1 hereof. The total amount of reimbursement to which
the Adviser may be entitled (the “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 Portfolio, pursuant to Section 1 hereof, during any of the previous
two (2) fiscal years, less any reimbursement previously paid by such Portfolio to the Adviser,
pursuant to Sections 2.2 or 2.3 hereof, 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 pursuant to this provision
in any fiscal quarter, unless the Trust’s Board of Trustees has determined that the payment of such
reimbursement is in the best interests of the Portfolio or Portfolios and their respective
shareholders. The Trust’s Board of Trustees shall determine quarterly in advance whether any
reimbursement may be paid to the Adviser in such quarter.
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2.3 METHOD OF COMPUTATION. To determine each Portfolio’s payments, if any, to reimburse the
Adviser for the Reimbursement Amount, each month the Class Expenses of each Class
of each Portfolio shall be annualized as of the last day of the month. If the annualized
Class Expenses of a Class of a Portfolio for any month are less than the Expense Limit of such
Class, such Portfolio, only with the prior approval of the Board, shall pay to the Adviser an
amount sufficient to increase the annualized Class Expenses of that Class of a Portfolio to an
amount no greater than the Expense Limit of that Class of a Portfolio, provided that such amount
paid to the Adviser will in no event exceed the total Reimbursement Amount.
2.4 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 actual
Class Expenses of a Portfolio for the prior fiscal year (including any reimbursement payments
hereunder with respect to such fiscal year) do not exceed the Expense Limit.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect for a period of one year from the date of its
execution and from year to year thereafter provided such continuance is specifically approved by a
majority of the Trustees of the Trust who (i) are not “interested persons” of the Trust or any
other party to this Agreement, as defined in the 1940 Act, and (ii) have no direct or indirect
financial interest in the operation of this Agreement (“Non-Interested Trustees”). Nevertheless,
this Agreement may be terminated as to any Class of any one or all Portfolios by either party
hereto, without payment of any penalty, upon 90 days’ prior written notice to the other party at
its principal place of business; provided that, in the case of termination by the Trust, such
action shall be authorized by resolution of a majority of the Non-Interested Trustees of the Trust
or by a vote of a majority of the outstanding voting securities of the Trust.
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. This Agreement shall be construed in accordance with the laws of the
State of Delaware without reference to conflicts of law rules. Nothing herein contained shall be
deemed to require the Trust or any Portfolio 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, the Portfolios or the
Classes.
4.3 DEFINITIONS. Any questions of interpretation of any term or provision of this Agreement,
including but not limited to the investment advisory fee, the computations of net
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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, as of the day and year first above written.
| OLD MUTUAL ADVISOR FUNDS | |||
| on behalf of each of the Portfolios listed on Schedule A, Schedule C and Schedule I | |||
| By: | /s/ X. Xxxxxxx | ||
| OLD MUTUAL CAPITAL, INC. | |||
| By: | /s/ Xxxx Xxxxx | ||
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SCHEDULE A
DATED SEPTEMBER 7, 2004
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
DATED SEPTEMBER 7, 2004
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
(Class A Shares)
| Expense | ||||
| Limit | ||||
This Agreement relates to the following |
||||
Portfolios of the Trust: |
||||
OM Asset Allocation Conservative Portfolio |
1.50 | % | ||
OM Asset Allocation Balanced Portfolio |
1.55 | % | ||
OM Asset Allocation Moderate Growth Portfolio |
1.55 | % | ||
OM Asset Allocation Growth Portfolio |
1.60 | % | ||
SCHEDULE C
DATED SEPTEMBER 7, 2004
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
DATED SEPTEMBER 7, 2004
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
(Class C Shares)
| Expense | ||||
| Limit | ||||
This Agreement relates to the following |
||||
Portfolios of the Trust: |
||||
OM Asset Allocation Conservative Portfolio |
2.25 | % | ||
OM Asset Allocation Balanced Portfolio |
2.30 | % | ||
OM Asset Allocation Moderate Growth Portfolio |
2.30 | % | ||
OM Asset Allocation Growth Portfolio |
2.35 | % | ||
SCHEDULE I
DATED SEPTEMBER 7, 2004
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
DATED SEPTEMBER 7, 2004
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL ADVISOR FUNDS
AND
OLD MUTUAL CAPITAL, INC.
DATED SEPTEMBER 7, 2004
(Institutional Class Shares)
| Expense | ||||
| Limit | ||||
This Agreement relates to the following |
||||
Portfolios of the Trust: |
||||
OM Asset Allocation Conservative Portfolio |
1.25 | % | ||
OM Asset Allocation Balanced Portfolio |
1.30 | % | ||
OM Asset Allocation Moderate Growth Portfolio |
1.30 | % | ||
OM Asset Allocation Growth Portfolio |
1.35 | % | ||
