AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
GARTMORE XXXXXX ENHANCED INCOME FUND
(formerly Xxxxxx Enhanced Income Fund)
EXPENSE LIMITATION AGREEMENT, amended February 28, 2005 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), an Ohio business trust (the "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 theFund 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 renders 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; and
WHEREAS, the Trust and the Investment Adviser have determined that it
is appropriate to restate and amend this Agreement for the Fund.
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 the Fund or a class of the 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, wrapper fee,
premiums and expenses related to wrapper agreements for the Fund, short sale
dividend expenses, other expenditures which are capitalized in accordance with
generally accepted accounting principles, expenses incurred by the Fund in
connection with any merger or reorganization, 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 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
liability with respect to the Excess Amount, each day the Fund Operating
Expenses shall be annualized as of that day for each class of the Fund. If the
annualized Fund Operating Expenses for any day exceed the Operating Expense
Limit of the Fund class, the Investment Adviser shall (i) on a daily basis waive
or reduce its advisory fee for such month 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 the 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 the Fund 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 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
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
the Fund or a class of the Fund (as appropriate), 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
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
2.3. Method of Computation. To determine the 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 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, the 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 in no
event exceed the total Reimbursement Amount. If the annualized Fund Operating
Expenses for the 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 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
will not continue for more than five years after the Fund's commencement of
operations. 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 the 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.
3
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.
GARTMORE MUTUAL FUNDS
(formerly Nationwide Mutual Funds)
By:___________________________________
Name:
Title:
GARTMORE XXXXXX CAPITAL MANAGEMENT, INC.
(formerly Xxxxxx Capital Management, Inc.)
By:___________________________________
Name:
Title:
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 February 28, 2005)
Name of Fund/Class Expense Limitation for Fund/Class*
------------------ ----------------------------------
Gartmore Xxxxxx Enhanced Income Fund
(formerly Xxxxxx Enhanced Income Fund)
Institutional Service Class 0.45%
Class A 0.45%
Institutional Class 0.45%
Class R 0.45%
________________
*Effective until February 28, 2006. 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.
GARTMORE MUTUAL FUNDS
By:___________________________________
Name:
Title:
GARTMORE XXXXXX CAPITAL MANAGEMENT, INC.
By:___________________________________
Name:
Title:
