EXPENSE LIMITATION AGREEMENT
THE APPLETON FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of December 12, 2000 by and
between Appleton Partners, Inc. (the "Adviser") and The Appleton Funds (the
"Trust"), on behalf of the Appleton Equity Growth Fund (the "Fund"), a series of
the Trust.
WHEREAS, the Trust is an Ohio business trust organized under an Agreement
and Declaration of Trust ("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 each fund is a series of the Trust;
and
WHEREAS, the Trust and the Adviser have entered into an Advisory Agreement
dated December 12, 2000 (the "Advisory Agreement"), pursuant to which the
Adviser provides investment advisory services to the Fund, which may be amended
from time to time, for compensation based on the value of the average daily net
assets of the Fund; and
WHEREAS, the Trust and the Adviser have determined that it is appropriate
and in the best interests of the Fund and its shareholders to maintain the
expenses of the Fund, and, therefore, have entered into this Expense Limitation
Agreement (the "Agreement"), in order to maintain the expense ratio of the Fund
at the level specified in Section 1.2 hereto; and
NOW THEREFORE, the parties hereto agree that the Agreement provides as
follows:
1. Expense Limitation.
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1.1 APPLICABLE EXPENSE LIMIT. To the extent that the aggregate expenses of
every character incurred by the Fund in any fiscal year, including but not
limited to advisory fees of the Adviser (but excluding interest, taxes,
brokerage commissions, 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 amounts, if any,
payable pursuant to a plan adopted in accordance with Rule 12b-1 under the 1940
Act, if any) ("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 Adviser.
1.2 OPERATING EXPENSE LIMIT. The maximum Operating Expense Limit in any
year with respect to the Fund shall be 1.50% of the average daily net assets of
the Fund.
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1.3 METHOD OF COMPUTATION. To determine the Adviser's liability with
respect to the Excess Amount, each month the Fund Operating Expenses shall be
annualized as of the last day of the month. If the annualized Fund Operating
Expenses for any month exceed the Fund's Operating Expense Limit, the Adviser
shall waive or reduce its advisory fee for such month by an amount, or remit an
amount to Fund, sufficient to reduce the annualized Fund Operating Expenses to
an amount no higher than the Operating Expense Limit.
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 Adviser to the Fund with respect to
the previous fiscal year shall equal the Excess Amount.
2. TERM AND TERMINATION OF AGREEMENT.
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This Agreement shall continue in effect through December 31, 2001 and from
year to year thereafter provided each such continuance is specifically approved
by a majority of the Trustees of the Trust. This Agreement shall terminate
automatically upon the termination of the Advisory Agreement.
3. MISCELLANEOUS.
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3.1 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.
3.2 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 Bylaws, 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.
3.3 DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly, as of the day and year first above
written.
THE APPLETON FUNDS
ON BEHALF OF THE APPLETON
EQUITY GROWTH FUND
By:
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James I. Ladge
President
APPLETON PARTNERS, INC.
By:
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Douglas C. Chamberlain
President
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