Exhibit No. EX-99(h)(6)
EXPENSE LIMITATION AGREEMENT
GARTMORE MUTUAL FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of February 28, 2005, by and
between Gartmore Mutual Fund Capital Trust (the Investment Adviser") and
GARTMORE MUTUAL FUNDS, a Delaware statutory trust (the "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-diversified management company
of the series type, and each 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 Trust and the Investment Adviser have determined that it
is appropriate and in the best interests of each Fund and its shareholders to
maintain the expenses of the Fund at a level below the level to which that Fund
would normally be subject during its start-up period.
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 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, 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 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 initially will not be increased before the date listed on Exhibit A.
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1.3. METHOD OF COMPUTATION - NON-DAILY DIVIDEND FUNDS. To determine the
Investment Adviser'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 Investment Adviser shall (i) waive or reduce its
advisory fee by an amount sufficient to reduce the annualized Fund Operating
Expenses to an amount that does not exceed the Operating Expense Limit, and/or
(ii) remit to a 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
Investment Adviser'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 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.
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 Investment Adviser to
a Fund or a class of a 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 portion of the Reimbursement Amount shall be
paid to the Investment Adviser pursuant to this provision in any fiscal year,
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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
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 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
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 a Fund are greater than 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 a 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.
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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 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
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
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EXHIBIT A
to the Expense Limitation Agreement between
GARTMORE MUTUAL FUNDS and
GARTMORE MUTUAL FUND CAPITAL TRUST
February 28, 2005
NAME OF FUND/CLASS EXPENSE LIMITATION FOR FUND/CLASS
------------------ ---------------------------------
Gartmore Large Cap Value Fund
(formerly Prestige Large Cap Value Fund
and Nationwide Large Cap Value Fund)
Class A 1.15%
Class B 1.15%
Class C 1.15%
Class R 1.15%
Institutional Service Class 1.15%
Institutional Class 1.15%
Gartmore Small Cap Fund
(formerly Nationwide Small Cap Fund
and Prestige Small Cap Fund)
Class A 1.35%
Class B 1.35%
Class C 1.35%
Class R 1.35%
Institutional Service Class 1.35%
Institutional Class 1.35%
Gartmore Global Technology and Communications Fund
Class A 1.38%
Class B 1.38%
Class C 1.38%
Class R 1.38%
Institutional Service Class 1.38%
Institutional Class 1.38%
Gartmore Global Health Sciences Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class 1.40%
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NAME OF FUND/CLASS EXPENSE LIMITATION FOR FUND/CLASS
------------------ ---------------------------------
NorthPointe Small Cap Value Fund
Institutional Class 1.00%
Gartmore Value Opportunities Fund (formerly Nationwide Value Opportunities 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%
Gartmore High Yield Bond Fund (formerly Nationwide High Yield Bond Fund)
Class A 0.85%
Class B 0.85%
Class C 0.85%
Class R 0.85%
Institutional Service Class 0.85%
Institutional Class 0.85%
Gartmore U.S. Growth Leaders Fund (formerly Gartmore Growth 20 Fund)
Class A 1.30%
Class B 1.30%
Class C 1.30%
Class R 1.30%
Institutional Service Class 1.30%
Institutional Class 1.30%
Gartmore Nationwide Leaders Fund
Class A 1.20%
Class B 1.20%
Class C 1.20%
Class R 1.20%
Institutional Service Class 1.20%
Institutional Class 1.20%
Gartmore Micro Cap Equity Fund
Class A 1.65%
Class B 1.65%
Class C 1.65%
Class R 1.65%
Institutional Service Class 1.65%
Institutional Class 1.65%
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Each of the Asset Allocation Funds (Gartmore Investor Destinations Aggressive
Fund, Gartmore Investor Destinations Moderately Aggressive Fund, Gartmore
Investor Destinations Moderate Fund, Gartmore Investor Destinations Moderately
Conservative Fund, Gartmore Investor Destinations Conservative Fund)
NAME OF FUND/CLASS EXPENSE LIMITATION FOR FUND/CLASS
------------------ ---------------------------------
Class A 4.00%**
Class B 4.00%**
Class C 4.00%**
Service Class 4.00%**
Class A 0.25%
Class B 0.25%
Class C 0.25%
Class R 0.25%
Service Class 0.25%
Institutional Class Shares 0.25%
Gartmore S&P 500 Index Fund(1)
(Formerly Nationwide S&P 500 Index Fund)
Class A 0.23%
Class B 0.23%
Class C 0.23%
Class R 0.23%
Local Fund Shares 0.23%
Service Class 0.23%
Institutional Service Class 0.23%
Institutional Class 0.23%
Gartmore Small Cap Index Fund(1)
Class A 0.30%
Class B 0.30%
Class C 0.30%
Class R 0.30%
Institutional Class 0.30%
Class A 4.00%**
Class B 4.00%**
Class C 4.00%**
Institutional Class 4.00%**
Gartmore Mid Cap Market Index Fund(1)
(formerly Nationwide Mid Cap Index Fund)
Class A 0.32%
Class B 0.32%
Class C 0.32%
Class R 0.32%
Institutional Class 0.32%
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NAME OF FUND/CLASS EXPENSE LIMITATION FOR FUND/CLASS
------------------ ---------------------------------
Gartmore International Index Fund(1)
(formerly Nationwide International Index Fund)
Class A 0.37%
Class B 0.37%
Class C 0.37%
Class R 0.37%
Institutional Class 0.37%
Class A 4.00%**
Class B 4.00%**
Class C 4.00%**
Institutional Class 4.00%**
Gartmore Bond Index Fund(1)
(Formerly Nationwide Index Fund)
Class A 0.32%
Class B 0.32%
Class C 0.32%
Class R 0.32%
Institutional Class 0.32%
Class A 4.00%**
Class B 4.00%**
Class C 4.00%**
Institutional Class 4.00%**
Effective until at least 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.
** Effective until at least March 1, 2011.
(1) With respect to the Gartmore S&P 500 Index, Gartmore Small Cap Index,
Gartmore Mid Cap Market Index, Gartmore International Index, and Gartmore
Bond Index Funds, effective through at least May 1, 2006.
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