Exhibit No. EX-99(h)(9)
EXPENSE LIMITATION AGREEMENT
GARTMORE MUTUAL FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of February 28, 2005, by and
between GARTMORE MUTUAL FUNDS (the "Trust"), GARTMORE MUTUAL FUND CAPITAL TRUST
(the "Investment Adviser") and NORTHPOINTE CAPITAL, LLC (the "Subadviser"), on
behalf of the fund listed on Exhibit A (the "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 the 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 Investment Adviser and Subadviser have entered into a
Subadvisory Agreement (the "Subadvisory Agreement"), pursuant to which the
Subadviser renders investment advisory services to certain funds of the Trust,
including the Fund and pursuant to which the Investment Adviser pays 100% of the
investment management fee it receives pursuant to the Advisory Agreement to the
Subadviser; and
WHEREAS, the Trust, Investment Adviser and Subadviser have determined that
it is appropriate to maintain the expenses of the Fund at a level below the
level to which that Fund would otherwise be subject;
NOW, THEREFORE, the Trust, the Investment Adviser and the Subadviser
hereto agree as follows:
1. Expense Limitation.
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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 (including
Subadviser) (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 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
Subadviser.
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-Non-Daily Dividend Funds. To determine the
Subadviser's liability with respect to the Excess Amount for Funds that do not
accrue daily dividends, 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 Subadviser and Investment Adviser shall (i) waive or
reduce the subadvisory and advisory fees 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 the Fund an amount that, together
with the waived or reduced advisory fee, is sufficient to satisfy such Excess
Amount.
1.4 Method of Computation - Daily Dividend Funds. To determine the
Subdviser's liability with respect to the Excess Amount for Funds that accrue
daily dividends (a "Daily Dividend Fund"), each day the Fund Operating Expenses
shall be annualized as of that day for each class of a Daily Dividend Fund. If
the annualized Fund Operating Expenses for any day exceed the Operating Expense
Limit of a Daily Dividend 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 a Fund an amount that, together with the waived or reduced advisory fee, is
sufficient to satisfy such Excess Amount.
1.5 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 subadvisory fees waived or
reduced and other payments remitted by the Subadviser to the 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
are greater than $100 million and in which the Investment Advisory Agreement and
Subadvisory Agreement are 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 Subadviser shall be entitled to
reimbursement, in whole or in part as provided below, of the subadvisory fees
waived or reduced and other payments remitted by the Subadviser pursuant to
Section 1 hereof. The total amount of reimbursement to which the Subadviser may
be entitled (the "Reimbursement Amount") shall equal, at any time, the sum of
all subadvisory fees previously waived or reduced by the Subadviser and all
other payments remitted by the Subadviser 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 Subadviser, 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 Subadviser waived subadvisory 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, e.g., interest accruable on the
Reimbursement Amount.
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2.2. Board Approval. No reimbursement shall be paid to the Subadviser
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 Agreement. The Trust's Board of Trustees shall
determine quarterly in advance whether any portion of the Reimbursement Amount
may be paid in such quarter.
2.3. Method of Computation. To determine a Fund's payments, if any, to
reimburse the Subadviser 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
Subadviser 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 Subadviser 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.
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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 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 to accrue for more than three years after the fiscal year when
the Subadviser waived subadvisory fees or reimbursed other expenses for the
corresponding Excess Amount pursuant to Section 1. In order to terminate the
Agreement, the Subadviser must give at least 30 days' prior written notice to
the Investment Adviser and to the Fund 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 Subadviser for fee waivers and expense reimbursements
previously made by the Subadviser on behalf of the Fund shall survive the
termination of the Agreement.
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4. Miscellaneous.
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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
subadvisory 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, the Subadvisory Agreement or the 1940 Act,
shall have the same meaning as and be resolved by reference to such Advisory
Agreement, the Subadvisory 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
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Secretary
GARTMORE MUTUAL FUND CAPITAL TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer, Chief Financial Officer
NORTHPOINTE CAPITAL, LLC
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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EXHIBIT Ato the Expense Limitation Agreement between
GARTMORE MUTUAL FUNDS
GARTMORE MUTUAL FUND CAPITAL TRUST
and
NORTHPOINTE CAPITAL, LLC
February 28, 2005
Name of Fund/Class Expense Limitation for Fund/Class
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NorthPointe Small Cap Growth Fund
Class A 1.10%
Class B 1.10%
Class C 1.10%
Class R 1.10%
Institutional Service Class 1.10%
Institutional Class 1.10%
Effective until at least February 28, 2006. 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.
GARTMORE MUTUAL FUNDS
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Secretary
GARTMORE MUTUAL FUND CAPITAL TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer, Chief Financial Officer
NORTHPOINTE CAPITAL, LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
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