AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT
GARTMORE XXXXXX CAPITAL ACCUMULATION FUND
(formerly Xxxxxx Capital Accumulation Fund)
AMENDED AND RESTATED EXPENSE LIMITATION AGREEMENT, amended as of
December 5, 2003 to the Agreement originally effective February 1, 1999, as
amended March 5, 2001 to assign the responsibilities under such Agreement and as
subsequently amended, 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 CAPITAL ACCUMULATION FUND (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 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 Adviserrenders 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 otherwise be subject; 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 fees,
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 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 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 to a class of the Fund (as appropriate), 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 the Fund or a class of the 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 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 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, 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 not
exceed the total Reimbursement Amount. If the annualized Fund Operating Expenses
for the 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.
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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 the Fund covered by the Agreement and 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 Investment Adviser waived investment advisory fees or reimbursed other
expenses to the Fund for the corresponding Excess Amount pursuant to Section 1.
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.
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.
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GARTMORE MUTUAL FUNDS
By:____________________________________
Name:
Title:
GARTMORE XXXXXX CAPITAL MANAGEMENT, INC.
By:___________________________________
Name:
Title:
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EXHIBIT A
to the Expense Limitation Agreement between
GARTMORE MUTUAL FUNDS
and
GARTMORE XXXXXX CAPITAL MANAGEMENT, INC.
February 1, 1999
(As amended and restated December 5, 2003)
Name of Fund/Class Expense Limitation for Fund/Class*
------------------ ----------------------------------
Gartmore Xxxxxx Capital Accumulation Fund
Class A 0.55%
Service Class 0.55%
XXX Class 0.55%
Institutional Class 0.55%
________________
*Effective until at least February 29, 2005. 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.
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