EXHIBIT 8(h)
FORM OF
EXPENSE LIMITATION AGREEMENT
EXPENSE LIMITATION AGREEMENT, made as of the ___ day of ___________, 199_,
by and between Pacific Global Fund, Inc., a Maryland corporation doing business
as Pacific Advisors Fund Inc. (the "Corporation"), on behalf of the Growth Fund
(the "Fund"), Pacific Global Investment Management Company, a California
corporation (the "Investment Manager"), and Pacific Global Investors Services,
Inc., a California corporation (the "Transfer Agent").
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 ___________________,
199_ (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, on behalf of the Fund, and the Transfer Agent
have entered into a Transfer Agency, Dividend Disbursing Agency, and
Administrative Services Agreement, dated as of December 22, 1992 (the "Transfer
Agency Agreement"), pursuant to which the Transfer Agent will provide among
other things transfer agency services to the Fund and receive transfer agency
fees ("Transfer Agency Fees") in accordance with the Transfer Agency Fee
Schedule in Schedule A to the Transfer Agency Agreement; and
WHEREAS, the Corporation, the Investment Manager, and the Transfer Agent
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 EXPENSE LIMITATION
1.1 APPLICABLE EXPENSE LIMIT. For each Class of the Fund, to the extent
that the Class Operating Expenses in any fiscal year exceed the applicable Class
Operating Expense Limit, such excess amount (the "Class Excess Amount") shall be
the liability of the Investment Manager, except as to certain Transfer Agency
Fees with respect to Class C, which shall be the liability of the Transfer Agent
as provided in Section 1.3.1 below. As used herein, "Class Operating Expenses"
of a Class shall mean that the aggregate expenses of every character incurred by
the Fund in any fiscal year, including but not limited to the Fund's
organizational expenses and investment advisory fees
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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 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").
1.2 CLASS OPERATING EXPENSE LIMIT. The Class Operating Expense Limit for
the Fund's Class A Shares shall equal 2.50% of the average daily net assets of
the Fund attributable to Class A Shares. The Class Operating Expense Limit for
the Fund's Class C Shares shall equal 3.25% of the average daily net assets of
the Fund attributable to Class C Shares.
1.3 METHOD OF COMPUTATION.
1.3.1 FEE WAIVER. Fee Waivers will be determined separately for
each Class as follows. For each Class, 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 exceeds the applicable Class Operating Expense Limit, the
Investment Manager shall waive or reduce its investment management fee for
each month of such quarter with respect to such Class by an amount
sufficient to reduce the estimated Class Operating Expenses for such
quarter to an amount no higher than the applicable Class Operating Expense
Limit. If a waiver of all of the investment management fees with respect
to Class A for such quarter will not reduce the estimated Class A Operating
Expenses below the Class A Operating Expense Limit, the Investment Manager
will reimburse the Fund, for the benefit of Class A, for the difference in
accordance with Section 1.3.2 herein. If a waiver of all of the investment
management fees with respect to Class C for such quarter will not reduce
the estimated Class C Operating Expenses below the Class C Operating
Expense Limit, then (a) the Transfer Agent shall waive or reduce its
Transfer Agency Fees for each month of such quarter with respect to Class C
by an amount sufficient to reduce the estimated Class C Operating Expenses
for such quarter to an amount no higher than the Class C Operating Expense
Limit, and if the waiver of all of the Transfer Agency Fees with respect to
Class C for such quarter will not reduce the estimated Class C Operating
Expenses below the Class C Operating Expense Limit, the Investment Manager
will reimburse the Fund, for the benefit of Class C, for the difference in
accordance with Section 1.3.2 herein.
1.3.2 EXPENSE REIMBURSEMENT. Expense reimbursement payments will
be determined separately for each Class as follows. For each Class, as of
the last day of each fiscal quarter, the Investment Manager shall determine
the actual year-to-date Class Operating Expenses and the actual
year-to-date average daily net assets of the Fund attributable to such
Class. If at that time the actual year-to-date Class Operating Expenses
(net of any fee waiver or reduction) exceed the year-to-date portion of the
applicable Class
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Operating Expense Limit, the Investment Manager shall pay to the Fund, for
the account of such Class, an amount sufficient to reduce the year-to-date
Class Operating Expenses (net of any fee waiver or reduction) to the
year-to-date portion of the applicable Class Operating Expense Limit. If
at that time the actual year-to-date Class Operating Expenses (net of any
fee waiver or reduction) are less than the year-to-date portion of the
applicable Class Operating Expense Limit, the Fund, on behalf of such
Class, shall repay to the Investment Manager and/or to the Transfer Agent
previously paid expense reimbursement amounts and/or fee waivers in an
amount such that the year-to-date Class Operating Expenses (net of any
remaining amount attributable to fee waiver or reduction) shall be no
greater than the year-to-date portion of the applicable Class Operating
Expense Limit, provided that the total of such repayments by the Fund shall
not exceed the total fee waivers and expense reimbursement previously made
by the Investment Manager and the Transfer Agent respectively with respect
to such Class for such fiscal year. Any such repayment amount with respect
to Class C shall be allocated first to the Investment Manager up to the
amount of its expense reimbursement payments (if any) in excess of its
investment management fee, second to the Transfer Agent up to the amount of
its waiver (if any) of Transfer Agency Fees, and third to the Investment
Manager up to the amount of its waiver of investment management fees (if
any). Each payment hereunder shall be due no later than 30 days after the
end of the relevant fiscal quarter.
1.4 YEAR-END ADJUSTMENT. Each year, if necessary, within 30 days after
the completion of the audit of the Company's financial statements for such
fiscal year, an adjustment payment shall be made by the appropriate party in
order that the amount of the investment management fees and Transfer Agency Fees
waived or reduced and other payments remitted by the Investment Manager to the
Fund with respect to each Class for such fiscal year shall equal the applicable
Class Excess Amount.
1.5 TERMINATION OF FEE WAIVER AND EXPENSE REIMBURSEMENTS. At any time
upon 30 days notice to the Fund, the Investment Manager and/or the Transfer
Agent may terminate their respective obligations to make fee waivers and/or pay
expense reimbursement payments pursuant to Section 1 hereof.
2 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.
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3 MISCELLANEOUS.
3.1 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, (b) if to the Transfer Agent, to Pacific Global
Investors Services, Inc., 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX
00000, and (c) if to the Corporation, at the foregoing office of the Investment
Manager.
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 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.
3.4 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.
3.5 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.
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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 GROWTH FUND
By:
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Secretary
ATTEST: PACIFIC GLOBAL INVESTMENT
MANAGEMENT COMPANY
By:
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Secretary
ATTEST: PACIFIC GLOBAL INVESTORS
SERVICES, INC.
By:
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Secretary
40597
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