OLD MUTUAL INSURANCE SERIES FUND EXPENSE LIMITATION AGREEMENT
Exhibit (h)(2)
This EXPENSE LIMITATION AGREEMENT, effective as of January 1, 2006, by and between Old Mutual
Insurance Series Fund (the “Trust”), on behalf of each portfolio of the Trust set forth in Schedule
A (each a “Portfolio”, and collectively, the “Portfolios”), and Old Mutual Capital, Inc. (the
“Investment Manager”).
WHEREAS, the Trust is a Delaware statutory trust organized under an Agreement and Declaration
of Trust dated November 14, 2000, as amended (the “Declaration of Trust”), and is registered under
the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management
investment company of the series type and each Portfolio is one of the series of the Trust; and
WHEREAS, the Trust and the Investment Manager have entered into an Investment Management
Agreement (the “Investment Management Agreement”), pursuant to which the Investment Manager will
render investment services to each Portfolio for compensation (the “Management Fee”) based on the
value of the average daily net assets of each such Portfolio; and
WHEREAS, the Trust and the Investment Manager have determined that it is appropriate and in
the best interests of each Portfolio and its shareholders to limit certain expenses of each Class
of each Portfolio.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as follows:
1. EXPENSE LIMITATION.
1.1 APPLICABLE EXPENSE LIMIT. To the extent that the aggregate expenses incurred by each
Class of a Portfolio in a fiscal year, including but not limited to Management Fees of the
Investment Manager and fees and expenses incurred under the Trust’s Distribution Plan (Class A
Shares), Distribution Plan (Class C shares), Service Plan (Class A and Class C shares) and Service
Plan (Advisor Class shares) (but excluding: (i) interest, taxes, brokerage costs and commissions,
and other expenditures which are capitalized in accordance with generally accepted accounting
principles; and (ii) other extraordinary expenses not incurred in the ordinary course of such
Portfolio’s business) (“Class Expenses”), exceed the Expense Limit, as defined in Section 1.2
below, such excess amount (the “Excess Amount”) shall be the liability of the Investment Manager.
1.2 EXPENSE LIMIT. The Expense Limit for the Class A, Class C, Advisor Class, and Class Z
shares of a Portfolio shall be as set forth in Schedule A, Schedule B and Schedule C and Schedule
D, respectively, or such other rate as may be agreed to in writing by the parties from time to
time.
1.3 METHOD OF COMPUTATION. To determine the Investment Manager’s liability with respect to
the Excess Amount, each month the Class Expenses for each Class of each Portfolio shall be
annualized as of the last day of the month. If the annualized Class Expenses for any month of a
Class of a Portfolio exceed the Expense Limit of such Class, the Investment Manager shall first
waive or reduce its investment management fee for such month for the affected Portfolio or
Portfolios by an amount sufficient to reduce the annualized Class Expenses to an amount no higher
than the Expense Limit. If the amount of the waived or reduced Management Fee for any such month
is insufficient to pay the Excess Amount, the Investment Manager may also remit to the appropriate
Portfolio or Portfolios an amount that, together with the waived or reduced 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, an adjustment payment shall be made by the appropriate party in order that the amount
of the advisory fees waived or reduced and other payments remitted by the Investment Manager to the
Portfolio or Portfolios with respect to the previous fiscal year shall equal the Excess Amount.
2. REIMBURSEMENT OF FEE WAIVERS AND EXPENSE REIMBURSEMENTS.
2.1 REIMBURSEMENT. If in any year during which the total assets of a Portfolio are greater
than $75 million and in which the Investment Management Agreement is still in effect, the estimated
Class Expenses of any Class of such Portfolio for the fiscal year are less than the corresponding
Expense Limit for that year, subject to quarterly approval by the Trust’s Board of Trustees as
provided in Section 2.2 below, the Investment Manager shall be entitled to reimbursement by such
Portfolio, in whole or in part as provided below, of the advisory fees waived or reduced and other
payments remitted by the Investment Manager to such Portfolio pursuant to Section 1 hereof. The
total amount of reimbursement to which the Investment Manager may be entitled (the “Reimbursement
Amount”) shall equal, at any time, the sum of all Management Fees previously waived or reduced by
the Investment Manager and all other payments remitted by the Investment Manager to the Portfolio,
pursuant to Section 1 hereof, during any of the previous three (3) fiscal years, less any
reimbursement previously paid by such Portfolio to the Investment Manager, pursuant to Sections 2.2
or 2.3 hereof, with respect to such waivers, reductions, and payments. The Reimbursement Amount
shall not include any additional charges or fees whatsoever, including, e.g., interest accruable on
the Reimbursement Amount.
2.2 BOARD APPROVAL. No reimbursement shall be paid to the Investment Manager pursuant to this
provision in any fiscal quarter, unless the Trust’s Board of Trustees has determined that the
payment of such reimbursement is in the best interests of the Portfolio or Portfolios and their
respective shareholders. The Trust’s Board of Trustees shall determine quarterly in advance
whether any reimbursement may be paid to the Investment Manager in such quarter.
2
2.3 METHOD OF COMPUTATION. To determine each Portfolio’s payments, if any, to reimburse the
Investment Manager for the Reimbursement Amount, each month the Class Expenses of each Class of
each Portfolio shall be annualized as of the last day of
the month. If the annualized Class Expenses of a Class of a Portfolio for any month are less
than the Expense Limit of such Class, such Portfolio, only with the prior approval of the Board,
shall pay to the Investment Manager an amount sufficient to increase the annualized Class Expenses
of that Class of a Portfolio to an amount no greater than the Expense Limit of that Class of a
Portfolio, provided that such amount paid to the Investment Manager will in no event exceed the
total Reimbursement Amount.
2.4 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 actual
Class Expenses of a Portfolio for the prior fiscal year (including any reimbursement payments
hereunder with respect to such fiscal year) do not exceed the Expense Limit.
3. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall continue in effect until December 31, 2008 (the “Initial Term”), and from
year to year thereafter provided such continuance is specifically approved by a majority of the
Trustees of the Trust who (i) are not “interested persons” of the Trust or any other party to this
Agreement, as defined in the 1940 Act, and (ii) have no direct or indirect financial interest in
the operation of this Agreement (“Non-Interested Trustees”). After the Initial Term, this
Agreement may be terminated as to any Class of any one or all Portfolios 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 Trust, such action
shall be authorized by resolution of a majority of the Non-Interested Trustees of the Trust or by a
vote of a majority of the outstanding voting securities of the Trust.
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. This Agreement shall be construed in accordance with the laws of the
State of Delaware without reference to conflicts of law rules. Nothing herein contained shall be
deemed to require the Trust or any Portfolio 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, the Portfolios or the
Classes.
4.3 DEFINITIONS. Any questions of interpretation of any term or provision of this Agreement,
including but not limited to the Management 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 Investment Management Agreement or the 1940 Act, shall have the same meaning as and be
resolved by reference to such Investment Management Agreement or the 1940 Act.
3
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.
| OLD MUTUAL INSURANCE SERIES FUND on behalf of each of the Portfolios listed on Schedule A |
||||||
| By: | /s/ Xxxx Xxxxxxx | |||||
| Name: Xxxx Xxxxxxx Title: Chief Executive Officer |
||||||
| OLD MUTUAL CAPITAL, INC. | ||||||
| By: | /s/ Xxxx Xxxxx | |||||
| Name: Xxxx Xxxxx | ||||||
| Title: Chief Financial Officer | ||||||
4
SCHEDULE A
DATED __________, 2005
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL INSURANCE SERIES FUND
AND
OLD MUTUAL CAPITAL, INC.
DATED _______, 2005
DATED __________, 2005
TO
EXPENSE LIMITATION AGREEMENT
BETWEEN
OLD MUTUAL INSURANCE SERIES FUND
AND
OLD MUTUAL CAPITAL, INC.
DATED _______, 2005
This Agreement relates to the following Portfolios of the Trust:
| Expense | ||||
| Limit | ||||
Old Mutual Growth II Portfolio
|
1.04 | % | ||
Old Mutual Large Cap Growth Portfolio
|
0.96 | % | ||
Old Mutual Mid-Cap Portfolio
|
0.99 | % | ||
Old Mutual Large Cap Growth Concentrated Portfolio
|
0.89 | % | ||
Old Mutual Select Value Portfolio
|
0.94 | % | ||
Old Mutual Small Cap Growth Portfolio
|
1.07 | % | ||
Old Mutual Small Cap Portfolio
|
1.02 | % | ||
Old Mutual Columbus Circle Technology & Communications Portfolio
|
0.85 | % | ||
