EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, effective as of December 23, 2015 by and between
PineBridge Investments LLC (the "Adviser") and The Advisors' Inner Circle Fund
III (the "Trust") (the "Agreement"), on behalf of the series of the Trust set
forth in Schedule A attached hereto (the "Funds").
WHEREAS, the Trust is a Delaware statutory Trust organized under an Agreement
and Declaration of Trust, dated December 4, 2013 (the "Declaration of Trust"),
and is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end management company of the series type, and the Funds
are each a series of the Trust;
WHEREAS, the Trust and the Adviser have entered into an Investment Advisory
Agreement dated October 30, 2015 (the "Advisory Agreement"), pursuant to which
the Adviser provides investment advisory services to the Funds for compensation
based on the value of the average daily net assets of the Funds;
WHEREAS, the Trust and the Adviser have determined that it is appropriate and in
the best interests of the Funds and their shareholders to maintain the expenses
of the Funds at a level at or below the level to which each Fund would normally
be subject in order to maintain each Fund's expense ratio 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 any class-specific
expenses (including shareholder servicing fees), interest, taxes, brokerage
commissions and other costs and expenses relating to the securities that are
purchased and sold by the Fund (including dividend and interest expenses on
securities sold short), acquired fund fees and expenses, other expenditures
which are capitalized in accordance with generally accepted accounting
principles, and other non-routine 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 the Fund shall be the amount specified in Schedule
A based on a percentage of the average daily net assets of the Fund. The Maximum
Annual Operating Expense Limit for the Fund contemplates that certain expenses
for the Fund may be paid through the use of all or a portion of brokerage
commissions (or markups or markdowns) generated by the Fund.
1.3. METHOD OF COMPUTATION. To determine the Adviser's liability with respect to
the Excess Amount, each month the Fund Operating Expenses for the Fund shall be
annualized as of the last day of the month. If the annualized Fund Operating
Expenses for any month of the 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 Fund 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 (or the termination of this Agreement if sooner), 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 with respect to the previous fiscal year
shall equal the Excess Amount for such fiscal year.
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, 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, for example, interest
accruable on the Reimbursement Amount.
2.2. BOARD NOTIFICATION. The Fund shall provide to the Board a quarterly report
of any reimbursements paid to the Adviser pursuant to this agreement.
2.3. METHOD OF COMPUTATION. To determine the Fund's accrual, if any, to
reimburse the Adviser for the Reimbursement Amount, each month the Fund
Operating Expenses of the Fund shall be annualized as of the last day of the
month. If the annualized Fund Operating Expenses of the 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 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.
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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 the 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 for such fiscal year.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect with respect to the Fund until February
28, 2017 at the rate of 0.50%, and shall thereafter continue in effect from year
to year for successive one-year periods, the first of which to end on February
28, 2018, at the rate of 0.75%, as indicated on Schedule A, provided that this
Agreement may be terminated, without payment of any penalty, with respect to the
Fund:
(i) by the Trust, for any reason and at any time;
(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 Initial Term End Date or 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; and
(iii) automatically upon the termination of the Advisory Agreement.
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 Fund 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 Fund.
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 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.
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4.5. GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of Delaware
without giving effect to the conflicts of law principles thereof, and the
parties consent to the jurisdiction of courts, both state or federal, in
Delaware, with respect to any dispute under this Agreement.
4.6. AMENDMENT. This Agreement may not be amended except pursuant to a writing
signed by the parties hereto and in accordance with the 1940 Act, when
applicable.
4.7. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute or rule, or shall be otherwise rendered
invalid, the remainder of this Agreement shall not be affected thereby.
4.8. ENTIRE AGREEMENT.This Agreement, including any schedules hereto (each of
which is incorporated herein and made a part hereof by these references),
represents the entire agreement and understanding of the parties hereto, and
shall supersede any prior agreements.
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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 III, on behalf of the series of the Trust set
forth in Schedule A
/s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: VP & Secretary
PINEBRIDGE INVESTMENTS LLC
/s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Managing Director
SCHEDULE A
MAXIMUM ANNUAL OPERATING EXPENSE LIMITS
This Agreement relates to the following Funds of the Trust:
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MAXIMUM ANNUAL
OPERATING EXPENSE
NAME OF FUND SHARE CLASS LIMIT TERM END DATE
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PineBridge Dynamic Asset Allocation Fund Investor Servicing Shares 0.50% February 28, 2017
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Institutional Shares
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PineBridge Dynamic Asset Allocation Fund Investor Servicing Shares 0.75% February 28, 2018
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Institutional Shares
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