EX-99.h.6.
EXPENSE LIMITATION AGREEMENT
ABERDEEN FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of [__________] by and between
ABERDEEN ASSET MANAGEMENT INC. (the "Investment Adviser") and ABERDEEN FUNDS
(the "Trust") a Delaware statutory trust, on behalf of the funds listed on
Exhibit A (each, a "Fund").
WHEREAS, the Trust 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 each Fund is a separate series of the Trust; and
WHEREAS, the Trust and the Investment Adviser have entered into an
Investment Advisory Agreement (the "Advisory Agreement"), pursuant to which the
Investment Adviser renders investment advisory services to each Fund for
compensation based on the value of the average daily net assets of that Fund;
and
WHEREAS, the Trust and the Investment Adviser have determined that it is
appropriate and in the best interests of each Fund and its shareholders to
maintain the expenses of the Fund at a level below the level to which that Fund
would otherwise be subject.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1. Applicable Expense Limit. To the extent that the aggregate expenses
incurred by a Fund or a class of a Fund in any fiscal year, including but not
limited to investment advisory fees of the Investment Adviser (but excluding
interest, taxes, brokerage commissions and other costs incurred in connection
with the purchase and sale of portfolio securities, Rule 12b-1 fees, fees paid
pursuant to an Administrative Services Plan, short sale dividend expenses, other
expenditures which are capitalized in accordance with generally accepted
accounting principles, expenses incurred by a Fund in connection with any merger
or reorganization, and other non-routine expenses not incurred in the ordinary
course of the Fund's business) ("Fund Operating Expenses"), exceed the Operating
Expense Limit, as defined in Section 1.2 below, such excess amount (the "Excess
Amount") shall be the liability of the Investment Adviser.
1.2. Operating Expense Limit. The Operating Expense Limit in any year shall
be an amount that is a percentage of the average daily net assets of each class
of the Fund at an annual rate as described in Exhibit A, or such other annual
rate as may be agreed to in writing by the parties. The parties hereby agree
that Operating Expense Limit described in Exhibit A will not be increased before
the date listed on Exhibit A.
1.3. Method of Computation. To determine the Investment Adviser's liability
with respect to the Excess Amount for the Funds, each month the Fund Operating
Expenses shall be annualized as of the last day of the month for each class of a
Fund. If the annualized Fund Operating Expenses for any month exceed the
Operating Expense Limit of a Fund class, the Investment Adviser shall (i) waive
or reduce its advisory fee by an amount sufficient to reduce the annualized Fund
Operating Expenses to an amount which does not exceed the Operating Expense
Limit, and/or (ii) remit to a Fund an amount that, together with the waived or
reduced advisory fee, is sufficient to satisfy 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 Adviser to a Fund with
respect to the previous fiscal year shall equal the Excess Amount.
2. Reimbursement of Fee Waivers and Expense Reimbursements.
2.1. Reimbursement.
A. Aberdeen Select Equity Fund, Aberdeen Select Growth Fund, Aberdeen
Global Health Sciences Fund and Aberdeen Global Technology &
Communications Fund
For the Funds identified above, if in any fiscal year during which total
Fund assets are greater than $100 million and in which the Investment Advisory
Agreement is still in effect, the estimated aggregate Fund Operating Expenses
for the fiscal year are less than the Operating 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 Adviser shall be entitled to reimbursement by
a Fund, in whole or in part as provided below, of the advisory fees waived or
reduced and other payments remitted by the Investment Adviser to the Fund
pursuant to Section 1 hereof. The total amount of reimbursement to which the
Investment Adviser may be entitled (the "Reimbursement Amount") shall equal, at
any time, the sum of all advisory fees previously waived or reduced by the
Investment Adviser and all other payments remitted by the Investment Adviser to
a Fund or a class of a Fund (as appropriate), pursuant to Section 1 hereof, less
any reimbursement previously paid by such Fund to the Investment Adviser,
pursuant to Section 2 hereof, with respect to such waivers, reductions, and
payments; provided, however, that no Reimbursement Amount shall be paid at a
date more than five (5) years after the fiscal year when the Investment Adviser
waived investment advisory fees or reimbursed other expenses to a Fund or a
class of a Fund for the corresponding Excess Amount pursuant to Section 1. The
Reimbursement Amount shall not include any additional charges or fees
whatsoever, including, but not limited to, interest accruable on the
Reimbursement Amount.
B. Aberdeen Mid Cap Growth Fund, Aberdeen Select Small Cap Fund, Aberdeen
China Opportunities Fund, Aberdeen Global Natural Resources Fund,
Aberdeen Optimal Allocations Funds, Aberdeen Developing Markets Fund,
Aberdeen International Equity Fund, Aberdeen Select Worldwide Fund,
Aberdeen Global Financial Services Fund, Aberdeen Global Utilities
Fund, Aberdeen Hedged Core Equity Fund, Aberdeen Small Cap Growth
Fund, Aberdeen Small Cap Value Fund, Aberdeen Small Cap Opportunities
Fund, Aberdeen Market Neutral Fund and Aberdeen Equity Long-Short
Fund.
For the Funds identified above, if in any fiscal year during which total
Fund assets are greater than $100 million and in which the Investment Advisory
Agreement is still in effect, the estimated aggregate Fund Operating Expenses
for the fiscal year are less than the Operating 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 Adviser shall be entitled to reimbursement by
a Fund, in whole or in part as provided below, of the advisory fees waived or
reduced and other payments remitted by the Investment Adviser to the Fund
pursuant to Section 1 hereof. The Reimbursement Amount shall equal, at any time,
the sum of all advisory fees previously waived or reduced by the Investment
Adviser and all other payments remitted by the Investment Adviser to a Fund or a
class of a Fund (as appropriate), pursuant to Section 1 hereof, less any
reimbursement previously paid by such Fund to the Investment Adviser, pursuant
to Section 2 hereof, with respect to such waivers, reductions, and payments;
provided, however, that no Reimbursement Amount shall be paid at a date more
than three (3) years after the fiscal year when the Investment Adviser waived
investment advisory fees or reimbursed other expenses to a Fund or a class of a
Fund for the corresponding Excess Amount pursuant to Section 1. The
Reimbursement Amount shall not include any additional charges or fees
whatsoever, including, but not limited to, interest accruable on the
Reimbursement Amount.
2.2. Board Approval. No reimbursement shall be paid to the Investment
Adviser pursuant to this provision in any fiscal year, unless the Trust's Board
of Trustees has determined that the payment of such reimbursement is appropriate
in light of the terms of this Agreement. The Trust's Board of Trustees shall
determine quarterly in advance whether any portion of the Reimbursement Amount
may be paid to the Investment Adviser in such quarter.
2.3. Method of Computation. To determine a Fund's payments, if any, to
reimburse the Investment Adviser for all or any portion of the Reimbursement
Amount, each month the Fund Operating Expenses for each Fund class shall be
annualized as of the last day of the month. If the annualized Fund Operating
Expenses for any month are less than the Operating Expense Limit for that class
for that year, a Fund, only with the prior approval of the Board, shall pay to
the Investment Adviser an amount sufficient to increase the annualized Fund
Operating Expenses to an amount no greater than the Operating Expense Limit for
that year, provided that such amount paid to the Investment Adviser will not
exceed the total Reimbursement Amount. If the annualized Fund Operating Expenses
for a Fund are greater than the Operating Expense Limit for one or more months
in a quarter and less than the remaining month(s), the calculation described in
this section will be made on a monthly basis and the net amount of the monthly
calculations will be presented to the Board for approval.
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 Fund Operating Expenses for the prior
fiscal year (including any reimbursement payments hereunder with respect to such
fiscal year) do not exceed the Operating Expense Limit.
3. Term and Termination of Agreement.
This Agreement shall continue in effect for the period listed on Exhibit A
for any Fund covered by the Agreement and then unless this Agreement is
terminated earlier as provided below, 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"), provided however, that the reimbursements described in Section 2.1 A
will not continue to accrue for more than five years and the reimbursements
described in Section 2.1 B will not continue to accrue for more than three years
after the fiscal year when the Investment Adviser waived investment advisory
fees or reimbursed other expenses to a Fund for the corresponding Excess Amount
pursuant to Section 1. In order to terminate the Agreement, the Investment
Adviser must give at least 30 days' prior written notice to the Trust prior to
the end of the period listed on Exhibit A or the end of the annual renewal.
Regardless of any other termination provisions, the provisions contained in
Section 2 of this Agreement relating to the reimbursement of the Investment
Adviser for fee waivers and expense reimbursements previously made by the
Investment Adviser on behalf of the Fund shall survive the termination of the
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 a Fund to take any action contrary to the Trust's Agreement and
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 1940 Act.
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.
ABERDEEN FUNDS
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
ABERDEEN ASSET MANAGEMENT INC.
By:
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Name:
Title:
EXHIBIT A
to the Expense Limitation Agreement between
ABERDEEN FUNDS and
ABERDEEN ASSET MANAGEMENT INC.
Effective [__________]*
Name of Fund/Class Expense Limitation for Fund/Class
Aberdeen Select Equity Fund
Class A 1.20%
Class B 1.20%
Class C 1.20%
Class R 1.20%
Institutional Service Class 1.20%
Institutional Class 1.20%
Aberdeen Select Mid Cap Growth Fund
Class A 1.20%
Class B 1.20%
Class C 1.20%
Class D 1.20%
Class R 1.20%
Institutional Service Class 1.20%
Institutional Class 1.20%
Aberdeen Select Small Cap Fund
Class A 1.35%
Class B 1.35%
Class C 1.35%
Class R 1.35%
Institutional Service Class 1.35%
Institutional Class 1.35%
Aberdeen Select Growth Fund
Class A 1.30%
Class B 1.30%
Class C 1.30%
Class R 1.30%
Institutional Service Class 1.30%
Institutional Class 1.30%
Aberdeen Select Worldwide Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class 1.40%
Aberdeen China Opportunities Fund
Class A 1.75%
Class B 1.75%
Class C 1.75%
Class R 1.75%
Institutional Service Class 1.75%
Institutional Class 1.75%
Aberdeen Developing Markets Fund
Class A 1.55%
Class B 1.55%
Class C 1.55%
Class R 1.55%
Institutional Service Class 1.55%
Institutional Class 1.55%
Aberdeen International Equity Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class 1.40%
Aberdeen Hedged Core Equity Fund
Class A 1.65%
Class B 1.65%
Class C 1.65%
Class R 1.65%
Institutional Service Class 1.65%
Institutional Class 1.65%
Aberdeen Market Neutral Fund
Class A 1.65%
Class B 1.65%
Class C 1.65%
Class R 1.65%
Institutional Service Class 1.65%
Institutional Class 1.65%
Aberdeen Equity Long-Short Fund
Class A 1.65%
Class B 1.65%
Class C 1.65%
Class R 1.65%
Institutional Service Class 1.65%
Institutional Class 1.65%
Aberdeen Global Financial Services Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class 1.40%
Aberdeen Health Sciences Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class 1.40%
Aberdeen Natural Resources Fund
Class A 1.20%
Class B 1.20%
Class C 1.20%
Class R 1.20%
Institutional Service Class 1.20%
Institutional Class 1.20%
Aberdeen Technology and Communications Fund
Class A 1.38%
Class B 1.38%
Class C 1.38%
Class R 1.38%
Institutional Service Class 1.38%
Institutional Class 1.38%
Aberdeen Global Utilities Fund
Class A 1.20%
Class B 1.20%
Class C 1.20%
Class R 1.20%
Institutional Service Class 1.20%
Institutional Class 1.20%
Aberdeen Optimal Allocations Fund: Growth
Class A 0.25%
Class B 0.25%
Class C 0.25%
Class R 0.25%
Institutional Service Class 0.25%
Institutional Class 0.25%
Aberdeen Optimal Allocations Fund: Moderate Growth
Class A 0.25%
Class B 0.25%
Class C 0.25%
Class R 0.25%
Institutional Service Class 0.25%
Institutional Class 0.25%
Aberdeen Optimal Allocations Fund: Moderate
Class A 0.25%
Class B 0.25%
Class C 0.25%
Class R 0.25%
Institutional Service Class 0.25%
Institutional Class 0.25%
Aberdeen Optimal Allocations Fund: Defensive
Class A 0.25%
Class B 0.25%
Class C 0.25%
Class R 0.25%
Institutional Service Class 0.25%
Institutional Class 0.25%
Aberdeen Optimal Allocations Fund: Specialty
Class A 0.25%
Class B 0.25%
Class C 0.25%
Class R 0.25%
Institutional Service Class 0.25%
Institutional Class 0.25%
Aberdeen Small Cap Opportunities Fund
Class A 1.25%
Class B 1.25%
Class C 1.25%
Class R 1.25%
Institutional Service Class 1.25%
Institutional Class 1.25%
Aberdeen Small Cap Growth Fund
Class A 1.35%
Class B 1.35%
Class C 1.35%
Class R 1.35%
Institutional Service Class 1.35%
Institutional Class 1.35%
Aberdeen Small Cap Value Fund
Class A 1.35%
Class B 1.35%
Class C 1.35%
Class R 1.35%
Institutional Service Class 1.35%
Institutional Class 1.35%
* Effective [_________] until at least February 28, 2009, as most recently
approved at the [_____________] Board Meeting. These expense limitations
may be revised, after the expiration of the agreed upon term, if mutually
agreed upon by the parties. They may also be revised to increase the
limitations at anytime if mutually agreed upon by the parties.
ABERDEEN FUNDS
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
ABERDEEN ASSET MANAGEMENT INC.
By:
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Name:
Title: