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EXHIBIT 9(e)
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, made as of the 17th day of November,
1997, by and between Pacific Global Fund, Inc., a Maryland corporation doing
business as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the
Balanced Fund (the "Fund"), and Pacific Global Investment Management Company, a
California corporation (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Corporation, on behalf of the Fund, and the Investment
Manager have entered into an Investment Management Agreement, dated October 16,
1992 (the "Management Agreement"), pursuant to which the Investment Manager will
render investment management and advisory services to the Fund for compensation
based on the value of the average daily net assets of the Fund; and
WHEREAS, the Corporation and the Investment Manager have determined
that it is appropriate and in the best interests of the Fund and its
shareholders to maintain Fund expenses at a level below the level to which the
Fund would normally be subject during its start-up period.
NOW THEREFORE, the parties hereto agree as follows:
1 Fee Waiver
During the Fund's fiscal year ending December 31, 1997, the Investment
Manager will reduce its investment advisory fee by a percentage equal to the
investment management fee rate paid to the Fund's sub-adviser, which currently
equals 0.40% of average daily net assets. In addition, for the Fund's fiscal
quarter ending March 31, 1997, the Investment Manager has waived the remainder
of its investment advisory fee. At any time upon 30 days notice to the Fund, the
Investment Manager may terminate its obligations hereunder to make fee waivers.
2 Repayment of Fee Waivers and Expense Reimbursements.
2.1 Repayment. With respect to each Class, in any fiscal year in which
the following conditions are met, the Investment Manager shall be entitled to
reimbursement by the Fund, on behalf of such Class, in whole or in part as
provided below, of the applicable Class Reimbursement Amount:
(a) the Fund's total assets at the beginning of such
fiscal year are greater than $20 million;
(b) the Management Agreement is in effect;
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(c) prior to any quarter in which repayments are to be
made, the Investment Manager has exercised its right
pursuant to Section 1 hereof to terminate all fee
waivers under this Agreement;
(d) aggregate Class Operating Expenses for the fiscal
year are less than 2.50% of average daily net assets
attributable to such Class; and
(e) the Corporation's Board of Directors has reviewed
such repayments on a quarterly basis as provided in
Section 2.2 below.
The total amount of reimbursement to which the Investment Manager may be
entitled with respect to a Class (the "Class Reimbursement Amount") shall equal,
at any time, (a) all investment management fees previously waived or reduced by
the Investment Manager with respect to such Class, plus (b) all net expense
reimbursement payments previously paid by the Investment Manager with respect to
such Class attributable to any preceding year, minus (c) all payments previously
received by the Investment Manager pursuant to Section 2.3 hereof with respect
to such Class. The Class A Reimbursement Amount shall include all net investment
management fees waived or reduced and all net expense reimbursement payments
made by the Investment Manager to or on behalf of the Fund from its inception
through the implementation date of the Corporation's Multi-Class Plan pursuant
to Rule 18f-3 under the 1940 Act, as such Plan is in effect from time to time
(the "Multi-Class Plan"). The Class Reimbursement Amounts shall not, however,
include any additional charges or fees whatsoever, including, e.g., interest
accruable on such Class Reimbursement Amount. The period during which a Class
Reimbursement Amount may be paid by the Fund to the Investment Manager shall not
exceed five years from the date on which the first payment, if any, of such
Class Reimbursement Amount is made by the Fund. As used herein, "Class Operating
Expenses" of a Class shall mean expenses of every character incurred by the
Fund, including but not limited to investment advisory fees of the Investment
Manager (but excluding interest, taxes, brokerage commissions, and other
expenditures which are capitalized in accordance with generally accepted
accounting principles, other extraordinary expenses not incurred in the ordinary
course of the Fund's business, and repayments pursuant to Section 2 hereof)
attributable to such Class in accordance with the Multi-Class Plan.
2.2 Board Review. No reimbursement shall be paid to the Investment
Manager pursuant to this provision in any fiscal quarter, unless the
Corporation's Board of Directors has first reviewed such payment for consistency
with this Agreement.
2.3 Method of Computation. To determine the Fund's payments, if any, on
behalf of a Class to reimburse the Investment Manager for the applicable Class
Reimbursement Amount, as of the first day of each fiscal quarter the annual
Class Operating Expenses for the Fund's current fiscal year shall be estimated
by adding (a) the Class Operating Expenses actually incurred as of the first day
of such quarter to (b) an estimate of the Class Operating Expenses for the
remainder of such fiscal year. If such estimate is less than 2.50% of average
daily net assets attributable to such Class, during such fiscal quarter the
Investment Manager in its discretion may receive repayment from the Fund, on
behalf of such Class, in an amount no greater than the difference between .625%
of average daily net assets attributable to such Class and the estimated Class
Operating Expenses for such quarter, payable at the time and in the
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manner provided in the Investment Management Agreement for the payment of
investment management fees.
2.4 Quarter-End Adjustment. If necessary, within thirty days after the
end of each quarter in which the Investment Manager receives repayment
hereunder, the Investment Manager will make an adjustment payment to the Fund
such that the actual Class Operating Expenses for each Class for such quarter do
not exceed .625% of average daily net assets attributable to such Class.
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 Directors of the
Corporation who (i) are not "interested persons" of the Corporation or any other
party to this Agreement, as defined in the Act, and (ii) have no direct or
indirect financial interest in the operation of this Agreement ("Non-Interested
Directors"). Nevertheless, this Agreement may be terminated 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 Fund, such action shall be authorized by resolution of a
majority of the Non-Interested Directors of the Corporation or a vote of a
majority of the outstanding voting securities of the Fund. The Investment
Manager's right to repayment of prior fee waivers and expense reimbursements
pursuant to Section 2 hereof shall survive the termination of this Agreement.
4 Miscellaneous.
4.1 Notices. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, (a) if to the Investment Manager,
to Pacific Global Investment Management Company, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, XX 00000, and (b) if to the Corporation, at the foregoing office
of the Investment Manager.
4.2 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.
4.3 Interpretation. Nothing herein contained shall be deemed to require
the Fund or the Corporation to take any action contrary to the its Articles of
Incorporation 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
Board of Directors of its responsibility for and control of the conduct of the
affairs of the Corporation or the Fund.
4.4 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
provisions of the Management Agreement, shall have the same meaning as and be
resolved by reference to such Agreement.
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4.5 Governing law. Except insofar as the 1940 Act or other federal laws
or regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PACIFIC GLOBAL FUND, INC.
d/b/a PACIFIC ADVISORS FUND INC.
ON BEHALF OF THE BALANCED FUND
/s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXX
Secretary
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
/s/ XXXXXX X. XXXXXX By: /s/ XXXXXX X. XXXXXXX
Secretary
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