Exhibit (h)(3)
LAUDUS TRUST
AMENDED AND RESTATED 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
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 Massachusetts business 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.
A copy of the Agreement and Declaration of Trust of the Trust, as amended, is on
file with the Secretary of The Commonwealth of Massachusetts and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations of or arising
out of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Trust.
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: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------ ------------------------------
Name: Xxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer Title: President and Chief Executive
Officer
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SCHEDULE A
DATE OF MANAGEMENT
FUND CONTRACT EXPENSE LIMIT
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Laudus Xxxxxxxxx U.S. Small January 30, 2004 Institutional Shares -- 1.14%
Capitalization Fund*
Investor Shares-- 1.44%
Laudus Xxxxxxxxx International Small January 30, 2004 Institutional Shares -- 1.49%
Capitalization Fund
Investor Shares-- 1.79%
Laudus Xxxxxxxxx Value Long/Short January 30, 2004 Institutional Shares -- 1.74%
Equity Fund
Investor Shares-- 2.04%
Laudus Xxxxxxxxx U.S. Large January 30, 2004 Institutional Shares -- 0.84%
Capitalization Growth Fund
Investor Shares-- 1.14%
Laudus Xxxxxxxxx U.S. Large May 2, 2005 Institutional Shares -- 0.84%
Capitalization Value Fund
Investor Shares-- 1.14%
Laudus Xxxxxxxxx International Equity January 30, 2004 Institutional Shares -- 1.12
Fund
Investor Shares-- 1.40%
Laudus Xxxxxxxxx U.S. Discovery Fund January 30, 2004 Institutional Shares -- 1.14%
Investor Shares-- 1.44%
Laudus Xxxxxxxxx U.S. Large January 30, 2004 Institutional Shares -- 0.84%
Capitalization Fund
Investor Shares-- 1.14%
Laudus Xxxxxxxxx International May 1, 2006 Institutional Shares -- 1.35%
Discovery Fund
Investor Shares-- 1.65%
Laudus Mondrian Emerging Markets September 28, 2007 Institutional Shares -- 1.45%
Fund
Select Shares -- 1.52%
Investor Shares -- 1.80%
Laudus Mondrian International Fixed September 28, 2007 Institutional Shares -- 0.75%
Income Fund
Select Shares -- 0.82%
Investor Shares -- 1.10%
Laudus Mondrian International Equity March 31, 2008 Institutional Shares --1.05%
Fund
Select Shares -- 1.12%
Investor Shares -- 1.40%
Laudus Mondrian Global Equity Fund March 31, 2008 Institutional Shares -- 1.05%
Select Shares -- 1.12%
Investor Shares -- 1.40%
* There is no Expense Limit for Adviser Shares of the Laudus Xxxxxxxxx U.S.
Small Capitalization Fund.
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