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EXHIBIT (h)(4)(d)
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EXPENSE LIMITATION AGREEMENT
GARTMORE VARIABLE INSURANCE TRUST
EXPENSE LIMITATION AGREEMENT, effective as of October 15, 2002, by and
between GARTMORE MUTUAL FUND CAPITAL TRUST (the "Investment Adviser") and
GARTMORE VARIABLE INSURANCE TRUST (the "Trust"), a Massachusetts business trust,
on behalf of each 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 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 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 of
every character 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 (including interest, taxes, brokerage commissions
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 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 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, each day the Fund Operating
Expenses shall be annualized as of that day for each class of a Fund.
If the annualized Fund Operating Expenses for any day exceed the
Operating Expense Limit of a Fund class, the Investment Adviser shall
(i) on a daily basis 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)
on a monthly basis 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.
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2. Reimbursement of Fee Waivers and Expense Reimbursements.
2.1. Reimbursement. 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 Invest-ment Adviser to a Fund, pursuant to Section 1 hereof, 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; 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 for the
corresponding Excess Amount pursuant to Section 1. 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
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, 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 the Operating Expense Limit, 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 initially 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 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.
..The parties hereby agree that the initial Operating Expense Limits describe
herein shall remain in place until at least the date listed on Exhibit A.
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.
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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.
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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.
GARTMORE VARIABLE INSURANCE TRUST
By: /s/ Xxxxxxxxx X. Xxxxx
Name: Xxxxxxxxx X. Xxxxx
Title: Xxxxxxxxx X. Xxxxx
GARTMORE MUTUAL FUND CAPITAL TRUST
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
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AMENDED EXHIBIT A
to the Expense Limitation Agreement between
GARTMORE VARIABLE INSURANCE TRUST
and
GARTMORE MUTUAL FUND CAPITAL TRUST
As of October 15, 2002
NAME OF FUND/CLASS EXPENSE LIMITATION FOR FUND/CLASS
Gartmore GVIT Money Market Fund Class V 0.55%*
* Effective until at least October 15, 2003.
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