Burnham Investors Trust Expense Limitation Agreement
Xxxxxxx
Investors Trust
EXPENSE
LIMITATION AGREEMENT, made as of this 1st
day of
May, 2007, by and among Xxxxxxx Asset Management Corporation (the “Adviser”),
Xxxxxxx Securities, Inc. (the “Distributor”) and Xxxxxxx Investors Trust (the
“Trust”), on behalf of each series identified and from time to time set forth on
Schedule
A
attached
hereto (each, a “Schedule A Fund”) and each series identified and from time to
time set forth on Schedule
B
attached
hereto (each, a “Schedule B Fund”) (each Schedule A Fund and Schedule B Fund, a
“Fund”).
WHEREAS,
the Trust is registered under the Investment Company Act of 1940, as amended
(the “1940 Act”), as an open-end management investment company and is organized
as a statutory trust under the laws of the State of Delaware, and each Fund
is a
series of the Trust;
WHEREAS,
the Trust, on behalf of each Fund, and the Adviser are parties to an investment
advisory agreement (the “Advisory Agreement”), pursuant to which the Adviser
provides investment advisory services to each Fund in consideration of
compensation based on the value of the average daily net assets of such Fund
(the “Advisory Fee”);
WHEREAS,
the Trust, on behalf of each Fund, and the Distributor are parties to such
Fund’s plan adopted in accordance with Rule 12b-1 under the 1940 Act (each, a
“Rule 12b-1 Plan”) relating to each class of shares of each Fund, pursuant to
which the Distributor engages in marketing and distribution activities on behalf
of such Fund in consideration for compensation based on the value of the average
daily net assets of such Fund (the “Rule 12b-1 Fee”);
WHEREAS,
the Adviser and the Distributor have voluntarily determined that it is
appropriate and in the best interests of each Fund and its shareholders to
maintain certain expenses of each class of the Funds at specified levels. The
Trust, on behalf of each Fund, the Adviser and the Distributor therefore have
entered into this Expense Limitation Agreement (this “Agreement”) in order to
maintain the expense ratio of each class of each Schedule A Fund at the level
specified in Schedule A
attached
hereto, or to limit the “other expenses” of each class of each Schedule B Fund
at the level specified in Schedule
B
attached
hereto, as the case may be, on the terms and conditions set forth
herein;
WHEREAS,
each Schedule A Fund is prepared to repay the Adviser and the Distributor,
subject to the terms and conditions set forth herein, certain waived Advisory
Fees and Rule 12b-1 Fees if such Fund subsequently achieves a sufficient level
of assets;
WHEREAS,
each Schedule A Fund and each Schedule B Fund is prepared to repay the Adviser,
subject to the terms and conditions set forth herein, certain reimbursed Excess
Amounts (as defined in Section 1.2) if such Fund subsequently achieves a
sufficient level of assets; and
WHEREAS,
this Agreement supercedes, with respect to each Fund, the Excess Expense Plan
of
the Trust adopted by the Trust’s Audit Committee on February 16, 2001 (the
“Excess Expense Plan”);
NOW
THEREFORE, in consideration of the mutual covenants set forth herein and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
1. Expense
Limitations.
1.1 Expense
Limit Applicable to Schedule A Funds.
During
the Term (as defined in Section 2.1), the Adviser and the Distributor each
agree
to waive all or a portion of their respective Advisory Fees and Rule 12b-1
Fees
to the extent necessary so that the “Total Annual Fund Operating Expenses” (as
defined in Form N-1A under the 0000 Xxx) incurred by the applicable class of
shares of a Schedule A Fund (excluding Non-Capped Expenses, as defined in
Section 1.3) (“Capped Operating Expenses”) do not exceed the Expense Limit (as
defined in Section 1.4) applicable to such class. During the Term, to the extent
that Capped Operating Expenses incurred by a class of shares of a Schedule
A
Fund in any fiscal year (after the waiver of Advisory Fees by the Adviser and
Rule 12b-1 Fees by the Distributor) exceed the Expense Limit for such class,
such excess amount (the “Schedule A Fund Excess Amount”) shall be borne by the
Adviser. The parties hereto agree that to the extent Capped Operating Expenses
applicable to a class of shares of a Schedule A Fund in any fiscal year do
not
exceed the Expense Limit for such class, the Advisory Fee and Rule 12b-1 Fee
shall be payable by such Schedule A Fund in respect of such class in the
following order:
| · |
first,
the Distributor shall be entitled to receive the Rule 12b-1 Fee up
to the
amount payable under such Schedule A Fund’s Rule 12b-1 Plan applicable to
such class of shares; and
|
| · |
thereafter,
the Adviser shall be entitled to receive the Advisory Fee up to the
amount
payable under the Advisory
Agreement.
|
1.2 Expense
Limit Applicable to Schedule B Funds.
During
the Term, the Adviser agrees to pay or reimburse the expenses of each class
of
shares of each Schedule B Fund to the extent necessary so that “Other Expenses”
(as defined in Form N-1A under the 0000 Xxx) incurred by such class (excluding
Non-Capped Expenses) (“Capped Other Expenses”) do not exceed the Expense Limit
applicable to such class. During the Term, to the extent that Capped Other
Expenses incurred by a class of shares of a Schedule B Fund in any fiscal year
exceed the Expense Limit for such class, such excess amount (the “Schedule B
Fund Excess Amount”) shall be borne by the Adviser. Each of a Schedule A Fund
Excess Amount and a Schedule B Fund Excess Amount shall be referred to herein
as
an “Excess Amount.”
1.3 Non-Capped
Expenses.
The
following costs and expenses (“Non-Capped Expenses”) are outside of the Expense
Limits: interest charges on Fund borrowings, taxes, brokerage commissions,
dealer spreads and other transaction costs, expenditures that are capitalized
in
accordance with generally accepted accounting principles, “Acquired Fund” (as
defined in Form N-1A under the 0000 Xxx) fees and expenses, short sale
dividends, extraordinary expenses not incurred in the ordinary course of a
Fund’s business (i.e.,
litigation and indemnification), and any other costs and expenses that may
be
approved by the Board of Trustees of the Trust (the “Board”). Extraordinary
expenses are expenses that are unusual or are expected to recur infrequently,
and may include, but are not limited to: (i) expenses of the reorganization,
restructuring or merger of a Fund, including the acquisition of all the assets
of a Fund or the acquisition by a Fund of another fund’s assets, (ii) expenses
of substantially rewriting and reformatting a Fund’s disclosure documents (as
distinguished from routine annual revisions and updates), (iii) expenses of
holding, and soliciting proxies, for a shareholder meeting to consider and
vote
upon changes to a Fund’s investment policies and restrictions, charter documents
or other fundamental matters (as distinguished from routine matters such as
the
election of Trustees or the approval or accountants), and (iv) expenses of
converting to a new custodian, transfer agent or other service provider.
1.4 Expense
Limit.
The
maximum “Expense Limit” in any year with respect to each class of shares of a
Fund shall be the amount specified in Schedule
A
or
Schedule
B,
as the
case may be, based on a percentage of the average daily net assets of the
applicable class.
1.5 Reimbursement.
The
Trust shall keep a record of the amounts of Advisory Fees and Rule 12b-1 Fees
waived in respect of Schedule A Funds pursuant to Section 1.1 hereof and Excess
Amounts reimbursed in respect of Schedule A Funds and Schedule B Funds pursuant
to Section 1.1 and Section 1.2 hereof (such waived fees and reimbursed Excess
Amounts, “Prior Expenses”). Subject to the last sentence of this
Section 1.5, if at any future date Capped Operating Expenses of a class of
shares of a Schedule A Fund are less than the Expense Limit for such class,
the
Adviser and the Distributor shall be entitled to payment by such class of the
amount of the Prior Expenses that the Adviser and Distributor have respectively
waived and/or reimbursed in respect of such class, without interest thereon,
except to the extent that such payment will cause the Capped Operating Expenses
of such class to exceed the Expense Limit for that class. Subject to the last
sentence of this Section 1.5, if at any future date Capped Other Expenses
of a class of shares of a Schedule B Fund are less than the Expense Limit for
such class, the Adviser shall be entitled to payment by such class of the amount
of the Prior Expenses that the Adviser has paid or reimbursed in respect of
such
class, without interest thereon, except to the extent that such payment will
cause the Capped Other Expenses of such class to exceed the Expense Limit for
that class. If the Capped Operating Expenses or Capped Other Expenses of a
class
of shares of a Fund, as applicable, subsequently exceed the Expense Limit for
that class, the payment of Prior Expenses to the Adviser and/or the Distributor,
as applicable, shall be suspended. If subsequent payment of Prior Expenses
shall
be resumed to the extent that Capped Operating Expenses or Capped Other
Expenses, as applicable, do not exceed the Expense Limit for the class, the
Expense Limit for such class shall apply (unless previously terminated in
accordance with Section 2 hereof). The Adviser and the Distributor may each
seek
reimbursement only for Prior Expenses waived, reimbursed or paid by it during
the three fiscal years immediately prior to such reimbursement; provided,
however,
that
such Prior Expenses may only be reimbursed hereunder to the extent they were
waived, reimbursed or paid after the Effective Date (as defined in Section
2.1)
applicable to the class from which reimbursement is sought (or the effective
date of the Excess Expense Plan or any prior agreement that is similar to this
Agreement). The provisions of this Agreement shall survive the termination
of
this Agreement to the extent necessary to permit any such reimbursement.
1.6 Limitation
of Liability.
The
obligations and expenses incurred, contracted for or otherwise existing with
respect to a Fund shall be enforced against the assets of such Fund or the
applicable class thereof and not against the assets of any other class or any
other Fund or series of the Trust. It is understood and expressly stipulated
that neither the holders of shares of a Fund nor the Trustees of the Trust
shall
be personally liable hereunder.
1.7 Method
of Computation.
To
determine the Adviser’s and the Distributor’s obligations hereunder, each month
the Capped Operating Expenses or Capped Other Expenses, as applicable, for
a
class of shares of a Fund shall be annualized as of the last day of the month.
If the annualized Capped Operating Expenses or Capped Other Expenses, as
applicable, of a class of shares of a Fund for any month exceed the Expense
Limit for such class, (i) if the Fund is a Schedule A Fund, the Adviser and/or
the Distributor shall waive all or a portion of their respective Advisory Fees
and/or Rule 12b-1 Fees for such month, and if necessary the Adviser promptly
shall remit an amount to the class, or bear an amount of expenses, that is
sufficient to reduce the annualized Capped Operating Expenses to an amount
that
is no higher than the Expense Limit for such class, provided that any waiver
of
Advisory Fees shall be applied to each class of the same Fund pro
rata
based on
the assets of each class, or (ii) if the Fund is a Schedule B Fund, the Adviser
promptly shall remit an amount to the class, or bear an amount of expenses,
that
is sufficient to reduce the annualized Capped Other Expenses to an amount that
is no higher than the Expense Limit for such class.
1.8 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 and Rule 12b-1 Fees waived, if any, and other
payments remitted by the Adviser to a Fund with respect to the previous fiscal
year shall equal the Excess Amount for such fiscal year.
1.9 Voluntary
Fee Waiver/Expense Reimbursement.
Nothing
herein shall preclude the Adviser and/or the Distributor from either voluntarily
waiving Advisory Fees or Rule 12b-1 Fees, as applicable, that it is entitled
to
from any class of any Fund and/or voluntarily reimbursing the expenses of any
class of any Fund in a manner that is not required by this Section 1, as the
Adviser or the Distributor, as applicable, in its sole and absolute discretion,
deems reasonable or appropriate. Any such voluntary waiver or voluntary expense
reimbursement may be modified or terminated by the Adviser or the Distributor,
as applicable, at any time, in its sole and absolute discretion, without the
approval of, but after notice to, the Board.
2. Term;
Termination.
2.1 Term.
The
term of this Agreement (the “Term”) shall begin on the date hereof (or, if
later, the date a class of shares of a Fund is added to Schedule
A
or
Schedule
B,
as the
case may be, with respect to such class) (the “Effective Date”) and end after
the close of business on April 30th
of the
immediately succeeding calendar year (or such other date as may be agreed to
in
writing by all of the parties hereto), unless this Agreement is earlier
terminated (in whole or with respect only to the applicable Fund) in accordance
with Section 2.2. The Term may be continued from year to year thereafter,
provided that each such continuance is specifically approved by all of the
parties hereto, including with respect to each Fund by a majority of the
Trustees of the Trust who are not “interested persons,” as defined in the 1940
Act. No party shall be obligated to extend the Term of this Agreement.
2.2 Termination.
This
Agreement shall terminate:
(i)with
respect to all Funds, upon the first May 1st
after
the failure of the Agreement to be continued in accordance with Section
2.1;
(ii)with
respect to a Schedule A Fund and to the Adviser or the Distributor, as
applicable, automatically upon the termination of the Advisory Agreement or
the
Rule 12b-1 Plan of such Schedule A Fund, unless otherwise agreed by the Adviser
or the Distributor;
(iii)with
respect to a Schedule B Fund and the Adviser, automatically upon the termination
of the Advisory Agreement of such Schedule B Fund, unless otherwise agreed
by
the Adviser; or
(iv)upon
a
writing duly executed by the Adviser, the Distributor and the Trust terminating
the Agreement with respect to a specified Fund or Funds.
3. Miscellaneous.
3.1 Reports
to the Board.
The
Adviser shall include in the compliance report provided at each regular
quarterly meeting of the Board information enabling the Board to determine
whether the Adviser and Distributor have fully complied with the requirements
of
this Agreement. The Adviser shall also report at each regular quarterly meeting
of the Board the amount of Prior Expenses recovered by the Adviser and the
Distributor from each Fund during the preceding calendar quarter.
3.2 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.
3.3 Interpretation.
Nothing
herein contained shall be deemed to require the Trust to take any action that
is
contrary to the Trust’s declaration of trust or bylaws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of its responsibility for and control
of the conduct of the affairs of the Trust.
3.4 Definitions.
Any
question of interpretation of any term or provision of this Agreement, including
but not limited to the Advisory Fee or Rule 12b-1 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,
a
Rule 12b-1 Plan or the 1940 Act, shall have the same meaning as and shall be
resolved by reference to such Advisory Agreement or Rule 12b-1 Plan or the
1940
Act and to interpretations thereof, if any, by the United States courts or,
in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Securities and Exchange Commission (the “SEC”) issued pursuant
to the 1940 Act. In addition, if the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is revised by rule, regulation
or
order of the SEC, that provision shall be deemed to incorporate the effect
of
that rule, regulation or order. Otherwise the provisions of this Agreement
shall
be interpreted in accordance with the substantive laws of the State of New
York.
Notwithstanding anything herein to the contrary, any waiver of fees or
reimbursement of expenses under this Agreement shall be made in accordance
with
Section 18 of the 1940 Act and subchapter M of the Internal Revenue Code
concerning preferential dividends.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective officers as of the day and year first above written.
XXXXXXX
INVESTORS TRUST on behalf of
each
FUND
set forth on Schedule
A
and
Schedule
B
attached
hereto
By:
/s/
Xxxxxxx X. Xxxxx
Xxxxxxx
X. Xxxxx
Its:
Executive Vice President, Chief Financial
Officer,
Treasurer and Secretary
XXXXXXX
ASSET MANAGEMENT CORPORATION
By:
/s/
Xxx X. Xxxxxxx
Xxx
X.
Xxxxxxx
Its:
Chairman, Chief Executive Officer and Director
XXXXXXX
SECURITIES, INC.
By:
/s/
Xxx X. Xxxxxxx
Xxx
X.
Xxxxxxx
Its:
Chairman, Chief Executive Officer and Director
[Signature
Page to Expense Limitation Agreement]
US1DOCS
6138309v10
Schedule
A
Expense
Limits
|
Fund
|
Date
Added to Schedule
|
Share
Class
|
Expense
Limit* (% of average daily net assets of the
class)
|
|
Xxxxxxx
Fund
|
May
1, 2007
|
Class
A
|
1.39%
|
|
Xxxxxxx
Fund
|
May
1, 2007
|
Class
B
|
2.14%
|
|
Xxxxxxx
Fund
|
May
1, 2007
|
Class
C
|
2.14%
|
|
Financial
Services Fund
|
May
1, 2007
|
Class
A
|
1.60%
|
|
Financial
Services Fund
|
May
1, 2007
|
Class
B
|
2.35%
|
|
Financial
Services Fund
|
May
1, 2007
|
Class
C
|
2.35%
|
*
The
Expense Limit for each class of each Schedule A Fund applies with respect to
such class’ Capped Operating Expenses.
A-1
US1DOCS
6138309v10
Schedule
B
Expense
Limits
|
Fund
|
Date
Added to Schedule
|
Share
Class
|
Expense
Limit* (% of average daily net assets of the
class)
|
|
Financial
Industries Fund
|
May
1, 2007
|
Class
A
|
0.55%
|
|
Financial
Industries Fund
|
May
1, 2007
|
Class
C
|
0.55%
|
*
The
Expense Limit for each class of each Schedule B Fund applies with respect to
such class’ Capped Other Expenses.
