Exhibit No. EX-99(h)(8)
EXPENSE LIMITATION AGREEMENT
GARTMORE MUTUAL FUNDS
EXPENSE LIMITATION AGREEMENT, effective as of February 28, 2005 by and
between GARTMORE GLOBAL ASSET MANAGEMENT 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 otherwise 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 the current agreements for the Funds.
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 a 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 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.
1.3. Method of Computation. To determine the Investment Adviser's
liability with respect to the Excess Amount, 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 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) 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.
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 after a Fund commences operations 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, 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
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 of a Fund class 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 a 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
xxxxx- cial 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 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.
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.
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
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxxx
Assistant Secretary
GARTMORE GLOBAL ASSET MANAGEMENT
TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
4
EXHIBIT A
to the Expense Limitation Agreement between
GARTMORE MUTUAL FUNDS
and
GARTMORE GLOBAL ASSET MANAGEMENT TRUST
February 28, 2005
Name of Fund/Class Expense Limitation for Fund/Class
------------------ ---------------------------------
Gartmore Emerging Markets Fund
Class A 1.55%
Class B 1.55%
Class C 1.55%
Class R 1.55%
Institutional Service Class 1.55%
Institutional Class Shares 1.55%
Gartmore International Growth Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class Shares 1.40%
Gartmore Worldwide Leaders Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class Shares 1.40%
Gartmore European Leaders Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Institutional Service Class 1.40%
5
Gartmore OTC Fund
Class A 1.80%
Class B 2.40%
Class C 2.40%
Institutional Service Class 1.47%
Institutional Class 1.32%
Gartmore Asia Pacific Leaders Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Institutional Service Class 1.40%
Gartmore Global Financial Services Fund
Class A 1.40%
Class B 1.40%
Class C 1.40%
Class R 1.40%
Institutional Service Class 1.40%
Institutional Class Shares 1.40%
Gartmore Global Utilities Fund
Class A 1.20%
Class B 1.20%
Class C 1.20%
Class R 1.20%
Institutional Service Class 1.20%
Institutional Class Shares 1.20%
------------
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.
6
