Exhibit 23(h)(10)
AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
GARTMORE XXXXXX ENHANCED INCOME FUND
(formerly Xxxxxx Enhanced Income Fund)
EXPENSE LIMITATION AGREEMENT, amended July 1, 2002 to the Agreement
originally effective as of December 29, 1999, as amended March 5, 2001 to assign
responsibilities under the Agreement, by and between GARTMORE XXXXXX CAPITAL
MANAGEMENT, INC. (formerly Xxxxxx Capital Management, Inc.) (the "Investment
Adviser") and GARTMORE MUTUAL FUNDS (formerly Nationwide Mutual Funds) (the
"Trust"), an Ohio business trust, on behalf of the Gartmore Xxxxxx Enhanced
Income Fund (formerly Xxxxxx Enhanced Income Fund) (the "Fund").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open end-diversified management company of
the series type, and each Fund is a 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 will render investment advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund; and
WHEREAS, the Trust and the Investment 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 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.
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1.1. Applicable Expense Limit. To the extent that the aggregate expenses
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of every character incurred by the Fund in any fiscal year, including but not
limited to investment advisory fees of the Investment Adviser (but excluding
interest, taxes, brokerage commissions, Rule 12b-1 fees, fees paid pursuant to
an Administrative Services Plan, wrapper fee, premiums and expenses related to
wrapper agreements for the Fund and other expenditures which are capitalized in
accordance with generally accepted accounting principles and other extraordinary
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
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shall be a percentage of the average daily net assets of each class of the Fund
as described in Exhibit A, or
such other rate as may be agreed to in writing by the parties. The parties
hereby agree that the Operating Expenses 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
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liability with respect to the Excess Amount, 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, the Investment Adviser shall first waive or reduce its
advisory fee for such month by an amount sufficient to reduce the annualized
Fund Operating Expenses to an amount no higher than the Operating Expense Limit.
If the amount of the waived or reduced advisory fee for any such month is
insufficient to pay the Excess Amount, the Investment Adviser may also remit to
a Fund 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
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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.
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2.1 Reimbursement. If in any fiscal year during which total Fund assets
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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 the 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,
pursuant to Section 1 hereof, during any of the previous five (5) fiscal years
less any reimbursement previously paid by such Fund to the Investment Adviser,
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
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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 the this Agreement. The Trust's Board of Trustees
shall determine quarterly in advance whether any reimbursement may be paid to
the Investment Adviser in such quarter.
2.3 Method of Computation. To determine a Fund's payments, if any, to
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reimburse the Investment Adviser for all or any portion of the Reimbursement
Amount, each month the
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Fund Operating Expenses for each Fund 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, 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, provided that such amount paid to the Investment Adviser will in
no event exceed the total Reimbursement Amount. If the annualized Fund Operating
Expenses for a Fund are greater that the Operating Expense Limit for one or more
months in a quarter and less 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
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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.
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This Agreement shall continue in effect for the period listed on Exhibit A
for any Fund covered by the Agreement 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"), provided however, that the reimbursements described in Section 2
will not continue for more than five years after a Fund's commencement of
operations. After the period listed on Exhibit A has passed, this Agreement may
be terminated by the Investment Adviser, without payment of any penalty, upon 90
days' prior written notice to the other party at its principal place of
business.
4. Miscellaneous.
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4.1 Captions. The captions in this Agreement are included for convenience
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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
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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
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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
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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.
GARTMORE MUTUAL FUNDS
(formerly Nationwide Mutual Funds)
By: /s/ XXXX X. TANTRA
Name: Xxxx X. Tantra
Title: Assistant Secretary
GARTMORE XXXXXX CAPITAL MANAGEMENT, INC.
(formerly Xxxxxx Capital Management, Inc.)
By: /s/ XXXXX X. XXXXXXXX
Name: Xxxxx X. Xxxxxxxx
Title: A.P. - Associate General Counsel
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EXHIBIT A
to the Amended and Restated
Expense Limitation Agreement between
GARTMORE MUTUAL FUNDS
and
GARTMORE XXXXXX CAPITAL MANAGEMENT, INC.
December 29, 1999
(as amended July 1, 2002)
Name of Fund/Class Expense Limitation for Fund/Class*
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Gartmore Xxxxxx Enhanced Income Fund
(formerly Xxxxxx Enhanced Income Fund)
Service Class 0.45%
Class A 0.45%
Institutional Class 0.45%
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*Effective until July 1, 2003. These expense limitations may be revised to
decrease the limitations 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 any time if mutually agreed upon by the parties.
