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Exhibit 5i
SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this _____ day of
_____________, among Nationwide Separate Account Trust, a Massachusetts business
trust (the "Trust"), Nationwide Advisory Services, Inc. (the "Adviser"), an Ohio
corporation registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and Xxxxxxxxx Xxxxxx, LLC, a Delaware Limited Liability
Company (the "Subadviser"), also registered under the Advisers Act.
W I T N E S S E T H :
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Adviser has, pursuant to an Advisory Agreement with the
Trust dated as of November 1, 19997 ("Advisory Agreement"), been retained to act
as investment adviser for certain of the series of the Trust which are listed on
Exhibit A to this Agreement (each a "Fund");
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain
of its duties under the Advisory Agreement to other investment advisers, subject
to the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain Subadviser to assist it in the
provision of a continuous investment program for that portion of the Trust's
assets which the Adviser will assign to the Subadviser (the "Subadviser
Assets"), and the Subadviser is willing to render such services subject to the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties do mutually agree and promise as follows:
1. Appointment as Subadviser. The Adviser hereby retains the Subadviser
to act as investment adviser for and to manage the Subadviser Assets subject to
the supervision of the Adviser and the Board of Trustees of the Trust and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the
investment management of the Subadviser Assets. It is recognized that the
Subadviser and certain of its affiliates now act, and that from time to time
hereafter may act, as investment adviser to one or more other investment
companies and to fiduciary or other managed accounts and that the Adviser and
the Trust have no objection to such activities.
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2. Duties of Subadviser.
(a) Investments. The Subadviser is hereby authorized and
directed and hereby agrees, subject to the stated investment policies
and restrictions of a Fund as set forth in the Funds' prospectus and
statement of additional information as currently in effect and as
supplemented or amended from time to time (collectively referred to
hereinafter as the "Prospectus") and subject to the directions of the
Adviser and the Trust's Board of Trustees, to purchase, hold and sell
investments for the Subadviser Assets and to monitor on a continuous
basis the performance of the Subadviser Assets. In providing these
services, the Subadviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of
the Subadviser Assets. The Adviser agrees to provide the Subadviser
with such assistance as may be reasonably requested by the Subadviser
in connection with the Subadviser's activities under this Agreement,
including, without limitation, information concerning the Funds, their
funds available, or to become available, for investment and generally
as to the conditions of the Subadviser Assets.
(b) Compliance with Applicable Laws and Governing Documents.
In the performance of its duties and obligations under this Agreement,
the Subadviser shall act in conformity with the Trust's Declaration of
Trust and By-Laws and the Prospectus, but only to the extent the
Subadviser receives copies of such documents, and with the instructions
and directions received in writing from the Adviser or the Trustees of
the Trust and will conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986, as amended (the "Code"),
and all other applicable federal and state laws and regulations.
Notwithstanding the foregoing, the Adviser shall remain responsible for
ensuring each Fund's overall compliance with the 1940 Act and the Code
and the Subadviser is only obligated to comply with this subsection (b)
with respect to the Subadviser Assets. The Adviser will provide the
Subadviser with a copy of the minutes of the meetings of the Board of
Trustees of the Trust to the extent they may affect the Funds or the
duties of the Subadviser, and with copies of any financial statements
or reports made by the Funds to their shareholders, and any further
materials or information which the Subadviser may reasonably request to
enable it to perform its functions under this Agreement.
The Adviser will also provide the Subadviser with reasonable
advance notice of any change in a Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser shall, in the performance of its duties and obligations
under this Agreement, manage the Subadviser Assets consistent with such
changes, provided the Subadviser has received prompt notice of the
effectiveness of such changes from the Trust or the Adviser. In
addition to such notice, the Adviser shall provide to the Subadviser a
copy of a modified Prospectus reflecting such changes. The Adviser
represents, acknowledges and agrees that the Prospectus will at all
times be in compliance with all disclosure requirements under all
applicable federal and state laws and regulations relating to the Trust
or the Funds, including, without limitation, the 1940 Act, and the
rules and regulations
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thereunder, and that the Subadviser shall have no liability in
connection therewith, except as to the accuracy of material information
furnished by the Subadviser to the Trust or to the Adviser specifically
for inclusion in the Prospectus. The Subadviser hereby agrees to
provide to the Adviser in a timely manner such information relating to
the Subadviser and its relationship to, and actions for, the Trust as
may be required to be contained in the Prospectus or in the Trust's
registration statement on Form N-1A.
(c) Voting of Proxies. The Subadviser shall have the power to
vote, either in person or by proxy, all securities in which the
Subadviser Assets may be invested from time to time, and shall not be
required to seek or take instructions from the Adviser, a Fund or the
Trust or take any action with respect thereto. If both the Subadviser
and another entity managing assets of a Fund have invested in the same
security, the Subadviser and such other entity will each have the power
to vote in its sole discretion its pro rata share of the security.
(d) Agent. Subject to any other written instructions of the
Adviser or the Trust, the Subadviser is hereby appointed the Adviser's
and the Trust's agent and attorney-in-fact for the limited purposes of
opening accounts and executing account documentation, agreements,
contracts and other documents as the Subadviser shall be requested by
brokers, dealers, counterparties and other persons in connection with
its management of the Subadviser Assets. The Subadviser agrees to
provide the Adviser and the Trust with copies of any such agreements
executed on behalf of the Adviser or the Trust.
(e) Brokerage. The Subadviser is authorized, subject to the
supervision of the Adviser and the Trust's Board of Trustees, to
establish and maintain accounts on behalf of a Fund with, and place
orders for the purchase and sale of the Subadviser Assets with or
through, such persons, brokers (including, to the extent permitted by
applicable law, any broker affiliated with the Subadviser) or dealers
("brokers") as the Subadviser may elect and negotiate commissions to be
paid on such transactions. The Subadviser, however, is not required to
obtain the consent of the Adviser or the Trust's Board of Trustees
prior to establishing any such brokerage account. The Subadviser shall
place all orders for the purchase and sale of portfolio investments for
a Fund's account with brokers selected by the Subadviser. In the
selection of such brokers and the placing of such orders, the
Subadviser shall seek to obtain for each Fund the most favorable price
and execution available, except to the extent it may be permitted to
pay higher brokerage commissions for brokerage and research services,
as provided below. In using its reasonable efforts to obtain for a Fund
the most favorable price and execution available, the Subadviser,
bearing in mind the best interests of each Fund at all times, shall
consider all factors it deems relevant, including price, the size of
the transaction, the breadth and nature of the market for the security,
the difficulty of the execution, the amount of the commission, if any,
the timing of the transaction, market prices and trends, the
reputation, experience and financial stability of the broker involved,
and the quality of service rendered by the broker in other
transactions. Subject to such policies as the Trustees may determine,
or as may be mutually agreed to by
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the Adviser and the Subadviser, the Subadviser shall not be deemed to
have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused a Fund to
pay a broker that provides brokerage and research services (within the
meaning of Section 28(e) of the Securities Exchange Act of 1934) to the
Subadviser an amount of commission for effecting a Fund investment
transaction that is in excess of the amount of commission that another
broker would have charged for effecting that transaction if, but only
if, the Subadviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of either
that particular transaction or the overall responsibility of the
Subadviser with respect to the accounts as to which it exercises
investment discretion.
It is recognized that the services provided by such brokers
may be useful to the Subadviser in connection with the Subadviser's
services to other clients. On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interests of a Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased. In
such event, allocation of securities so sold or purchased, as well as
the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to each Fund
and to such other clients. It is recognized that in some cases, this
procedure may adversely affect the price paid or received by a Fund or
the size of the position obtainable for, or disposed of by, a Fund.
(f) Securities Transactions. The Subadviser and any affiliated
person of the Subadviser will not purchase securities or other
instruments from or sell securities or other instruments to a Fund;
provided, however, the Subadviser and any affiliated person of the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to a Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder.
The Subadviser, including its Access Persons (as defined in
subsection (e) of Rule 17j-1 under the 1940 Act), agrees to observe and
comply with Rule 17j-1 and the Subadviser's Code of Ethics (which shall
comply in all material respects with Rule 17j-1), as the same may be
amended from time to time. On a quarterly basis, the Subadviser will
either (i) certify to the Adviser that the Subadviser and its Access
Persons have complied in all material respects with the Subadviser's
Code of Ethics with respect to the Subadviser Assets or (ii) identify
any material violations which have occurred with respect to the
Subadviser Assets.
(g) Books and Records. The Subadviser shall maintain separate
detailed records of all matters pertaining to the Subadviser Assets as
required under applicable law (the
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"Subadviser Records"), including, without limitation, brokerage and
other records of all securities transactions. The Subadviser
acknowledges that the Subadviser Records are property of the Trust. The
Subadviser Records (relating to the Subadviser Assets) shall be
available to the Adviser at any time upon reasonable request during
normal business hours and shall be available for prompt telecopying to
the Adviser during any day that a Fund is open for business. The
Subadviser shall have no responsibility for maintaining Fund or Trust
records except insofar as is directly related to the services provided
by the Subadviser to the Fund pursuant to the Agreement.
(h) Information Concerning Subadviser Assets and Subadviser.
From time to time as the Adviser or the Trust may request, the
Subadviser will furnish the requesting party reports on portfolio
transactions and reports on Subadviser Assets held in the portfolio,
all in such detail as the Adviser or the Trust may reasonably request.
The Subadviser will also inform the Adviser in a timely manner of
material changes in portfolio managers responsible for Subadviser
Assets, any material changes in the ownership or management of the
Subadviser, or of material changes in the control of the Subadviser.
Upon reasonable request, the Subadviser will make available its
officers and employees to meet with the Trust's Board of Trustees to
review the Subadviser Assets.
The Subadviser will also provide such information or perform
such additional acts as are customarily performed by a subadviser and
may be required for the Trust or the Adviser to comply with their
respective obligations under applicable laws, including, without
limitation, the Code, the 1940 Act, the Advisers Act, and the
Securities Act of 1933, as amended (the "Securities Act"), and any rule
or regulation thereunder.
(i) Custody Arrangements. The Subadviser shall on each
business day provide the Adviser and the Trust's custodian such
information as the Adviser and the Trust's custodian may reasonably
request relating to all transactions concerning the Subadviser Assets.
3. Independent Contractor. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust or the Adviser in any way or
otherwise be deemed an agent of the Trust or the Adviser.
4. Expenses. During the term of this Agreement, Subadviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for each
Fund. The Subadviser shall, at its sole expense, employ or associate itself with
such persons as it believes to be particularly fitted to assist it in the
execution of its duties under this Agreement. The Subadviser shall not be
responsible for the Trust's, a Fund's or Adviser's expenses, which shall
include, but not be limited to, organizational and offering expenses (which
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include out-of-pocket expenses, but not overhead or employee costs of the
Subadviser); expenses for legal, accounting and auditing services; taxes and
governmental fees; dues and expenses incurred in connection with membership in
investment company organizations; costs of printing and distributing shareholder
reports, proxy materials, prospectuses, stock certificates and distribution of
dividends; charges of the Funds' custodians and sub-custodians, administrators
and sub-administrators, registrars, transfer agents, dividend disbursing agents
and dividend reinvestment plan agents; payment for portfolio pricing services to
a pricing agent, if any; registration and filing fees of the Securities and
Exchange Commission (the "SEC"); expenses of registering or qualifying
securities of the Funds for sale in the various states; freight and other
charges in connection with the shipment of the Funds' portfolio securities; fees
and expenses of non-interested Trustees; salaries of shareholder relations
personnel; costs of shareholders meetings; insurance; interest; brokerage costs;
and litigation and other extraordinary or non-recurring expenses. The Trust or
the Adviser, as the case may be, shall reimburse the Subadviser for any expenses
of the Funds or the Adviser as may be reasonably incurred by such Subadviser on
behalf of the Funds or the Adviser. The Subadviser shall keep and supply to the
Trust and the Adviser reasonable records of all such expenses.
5. Compensation. For the services provided and the expenses assumed
with respect to the Funds and the Subadviser Assets pursuant to this Agreement,
the Subadviser will be entitled to the fee listed for each Fund on Exhibit A.
Such fees will be computed daily and payable no later than the seventh (7th)
business day following the end of each month, from the Adviser or the Trust,
calculated at an annual rate based on the Subadviser Assets' average daily net
assets.
The method of determining net assets of a Fund for purposes hereof
shall be the same as the method of determining net assets for purposes of
establishing the offering and redemption price of the shares of that Fund as
described in the Funds' Prospectus. If this Agreement shall be effective for
only a portion of a month, the aforesaid fee shall be prorated for the portion
of such month during which this Agreement is in effect.
6. Representations and Warranties of Subadviser. The Subadviser
represents and warrants to the Adviser and the Trust as follows:
(a) The Subadviser is registered as an investment adviser
under the Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to
Rule 4.14 under the Commodity Exchange Act (the "CEA") with the
Commodity Futures Trading Commission (the "CFTC") and the National
Futures Association ("NFA"), or is not required to file such exemption;
(c) The Subadviser is a limited liability company duly
organized and validly existing under the laws of the State of Delaware
with the power to own and possess its assets and carry on its business
as it is now being conducted;
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(d) The execution, delivery and performance by the Subadviser
of this Agreement are within the Subadviser's powers and have been duly
authorized by all necessary action and no action by or in respect of,
or filing with, any governmental body, agency or official is required
on the part of the Subadviser for the execution, delivery and
performance by the Subadviser of this Agreement, and the execution,
delivery and performance by the Subadviser of this Agreement do not
contravene or constitute a default under (i) any provision of
applicable law, rule or regulation, (ii) the Subadviser's governing
instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Subadviser;
(e) The Form ADV of the Subadviser previously provided to the
Adviser is a true and complete copy of the form as currently filed with
the SEC and the information contained therein is accurate and complete
in all material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
7. Representations and Warranties of Adviser. The Adviser represents
and warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under
the Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to
Section 4.14 under the CEA with the CFTC and the National Futures
Association;
(c) The Adviser is a corporation duly organized and validly
existing under the laws of the State of Ohio with the power to own and
possess its assets and carry on its business as it is now being
conducted;
(d) The execution, delivery and performance by the Adviser of
this Agreement are within the Adviser's powers and have been duly
authorized by all necessary action on the part of its shareholders or
directors, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(e) The Form ADV of the Adviser previously provided to the
Subadviser is a true and complete copy of the form filed with the SEC
and the information contained therein is accurate and complete in all
material respects and does not omit to state any material fact
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necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
(f) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(g) The Adviser and the Trust have duly entered into the
Advisory Agreement pursuant to which the Trust authorized the Adviser
to enter into this Agreement.
8. Representations and Warranties of the Trust. The Trust represents
and warrants to the Adviser and the Subadviser as follows:
(a) The Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with the
power to own and possess its assets and carry on its business as it is
now being conducted;
(b) The Trust is registered as an investment company under the
1940 Act and the each Fund's shares are registered under the Securities
Act; and
(c) The execution, delivery and performance by the Trust of
this Agreement are within the Trust's powers and have been duly
authorized by all necessary action on the part of the Trust and its
Board of Trustees, and no action by or in respect of, or filing with,
any governmental body, agency or official is required on the part of
the Trust for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Trust of this Agreement do not contravene or constitute a default under
(i) any provision of applicable law, rule or regulation, (ii) the
Trust's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Trust.
9. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Subadviser, the
Adviser and the Trust pursuant to Sections 6, 7 and 8, respectively, shall
survive for the duration of this Agreement and the parties hereto shall promptly
notify each other in writing upon becoming aware that any of the foregoing
representations and warranties are no longer true.
10. Liability and Indemnification.
(a) Liability. The Subadviser shall exercise its best judgment
in rendering the services in accordance with the terms of this
Agreement. In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser or a reckless disregard of its
duties hereunder, the Subadviser, each of its affiliates and all
respective partners, officers, directors and employees ("Affiliates")
and each person, if any, who within
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the meaning of the Securities Act controls the Subadviser ("Controlling
Persons") shall not be liable for any error of judgment or mistake of
law and shall not be subject to any expenses or liability to the
Adviser, the Trust or the Funds or any of the Funds' shareholders, in
connection with the matters to which this Agreement relates. In the
absence of willful misfeasance, bad faith or gross negligence on the
part of the Adviser or a reckless disregard of its duties hereunder,
the Adviser, any of its Affiliates and each of the Adviser's
Controlling Persons, if any, shall not be subject to any liability to
the Subadviser, for any act or omission in the case of, or connected
with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of Subadviser Assets;
provided, however, that nothing herein shall relieve the Adviser and
the Subadviser from any of their obligations under applicable law,
including, without limitation, the federal and state securities laws
and the CEA.
(b) Indemnification. The Subadviser shall indemnify the
Adviser, the Trust, and the Fund, and their respective Affiliates and
Controlling Persons for any liability and expenses, including
reasonable attorneys' fees, which the Adviser, the Trust, and the Fund,
and their respective Affiliates and Controlling Persons may sustain
which are sustained as a result of the Subadviser's willful
misfeasance, bad faith, gross negligence, reckless disregard of its
duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws or the CEA.
The Adviser shall indemnify the Subadviser, its Affiliates and
its Controlling Persons, for any liability and expenses, including
reasonable attorneys' fees, which may be sustained as a result of the
Adviser's willful misfeasance, bad faith, gross negligence, reckless
disregard of its duties hereunder or violation of applicable law,
including, without limitation, the federal and state securities laws or
the CEA.
11. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall
continue until May ___, 2001, and thereafter shall continue
automatically as to each Fund for successive annual periods, provided
such continuance is specifically approved at least annually by the
Trust's Board of Trustees or, if required by the 1940 Act, vote of the
lesser of (a) 67% of the shares of the respective Funds represented at
a meeting if holders of more than 50% of the outstanding shares of that
Funds are present in person or by proxy or (b) more than 50% of the
outstanding shares of the respective Funds; provided that in either
event its continuance also is approved by a majority of the Trust's
Trustees who are not "interested persons" (as defined in the 0000 Xxx)
of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval.
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(b) Termination. Notwithstanding whatever may be provided
herein to the contrary, this Agreement may be terminated at any time as
to each Fund, without payment of any penalty:
(i) By vote of a majority of the Trust's Board of
Trustees, or by vote of a majority of the outstanding voting
securities of the respective Fund, or by the Adviser, in each
case, upon at least 60 days' written notice to the Subadviser;
(ii) By any party hereto immediately upon written
notice to the other parties in the event of a material breach
of any provision of this Agreement by either of the other
parties; or
(iii) By the Subadviser upon at least 60 days'
written notice to the Adviser and the Trust.
This Agreement shall not be assigned (as such term is defined in the
0000 Xxx) and shall terminate automatically in the event of its
assignment or upon the termination of the Advisory Agreement.
12. Duties of the Adviser. The Adviser shall continue to have
responsibility for all services to be provided to the Trust pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Trust.
13. Reference to Adviser and Subadviser.
(a) Neither the Adviser nor any Affiliate or agent of it shall
make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients, except references concerning the
identity of and services provided by the Subadviser to the Fund, which
references shall not differ in substance from those included in the
Prospectus and this Agreement, in any advertising or promotional
materials without the prior approval of Subadviser, which approval
shall not be unreasonably withheld or delayed. The Adviser hereby
agrees to make all reasonable efforts to cause any Affiliate thereof to
satisfy the foregoing obligation.
(b) Neither the Subadviser nor any Affiliate or agent of it
shall make reference to or use the name of Adviser of any of its
Affiliates, or any of their clients, except references concerning the
identity of, relationship with, and services provided by the Adviser to
the Fund or to the Subadviser, which shall not differ in substance from
those included in the Prospectus and this Agreement, in any advertising
or promotional materials without the prior approval of Subadviser,
which approval shall not be unreasonably withheld or delayed. The
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Subadviser hereby agrees to make all reasonable efforts to cause any
Affiliate thereof to satisfy the foregoing obligation.
14. Amendment. This Agreement may be amended as to each Fund by mutual
consent of the parties, provided that the terms of any material amendment shall
be approved by: a) the Trust's Board of Trustees or by a vote of a majority of
the outstanding voting securities of each respective Fund (as required by the
0000 Xxx) and b) the vote of a majority of those Trustees of the Trust who are
not "interested persons" of any party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval, if such approval is
required by applicable law.
15. Confidentiality. Subject to the duties of the Adviser, the Trust
and the Subadviser to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential all information pertaining to the Fund and the actions of
the Subadviser, the Adviser and the Fund in respect thereof.
16. Notice. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Xxxxxxxxx Xxxxxx, LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Deputy General Counsel
Facsimile: (000) 000-0000
(b) If to the Trust:
Nationwide Separate Account Trust
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
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(c) If to the Adviser:
Nationwide Advisory Services, Inc.
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
17. Jurisdiction. This Agreement shall be governed by and construed to
be consistent with the Advisory Agreement and in accordance with substantive
laws of the Commonwealth of Massachusetts without reference to choice of law
principles thereof and in accordance with the 1940 Act. In the case of any
conflict, the 1940 Act shall control.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
19. Certain Definitions. For the purposes of this Agreement and except
as otherwise provided herein, "interested person," "affiliated person," and
"assignment" shall have their respective meanings as set forth in the 1940 Act,
subject, however, to such exemptions and interpretations as may be granted by
the SEC and its staff.
20. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
21. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
22. Trust and its Trustees. The terms "Nationwide Separate Account
Trust" and the "Trustees of Nationwide Separate Account Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of June 30, 1981, as has been or may be amended from time to
time, and to which reference is hereby made and a copy of which is on file at
the office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the Trust entered into in the name or on
behalf thereof by any of Nationwide Separate Account Trust's Trustees,
employees, representatives or agents are not made individually, but only in
their capacities with respect to the Trust. Such obligations are not binding
upon any of the Trustees, shareholders, or representatives of the Trust
personally, but bind only the assets of the Trust. All persons dealing with any
series of Shares of
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the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
TRUST
Nationwide Separate Account Trust
By:___________________________________
Name: Xxxxx X. Xxxxx, Xx.
Title: Treasurer
ADVISER
Nationwide Advisory Services, Inc.
By:___________________________________
Name: Xxxxxxxxxxx X. Xxxx
Title: Treasurer
SUBADVISER
Xxxxxxxxx Xxxxxx, LLC
By:___________________________________
Name:_________________________________
Title:________________________________
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EXHIBIT A
SUBADVISORY AGREEMENT
BETWEEN
NATIONWIDE ADVISORY SERVICES, INC.,
NATIONWIDE SEPARATE ACCOUNT TRUST
AND XXXXXXXXX XXXXXX, LLC
EFFECTIVE _______________
Fund of the Trust Advisory Fees
----------------- -------------
Nationwide Small Cap Growth Fund 0.60% of the average daily net assets of the
Subadviser Assets
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SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this day of ,
among Nationwide Separate Account Trust, a Massachusetts business trust (the
"Trust"), Nationwide Advisory Services, Inc. (the "Adviser"), an Ohio
corporation registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and Franklin Advisers, Inc., a California corporation (the
"Subadviser"), also registered under the Advisers Act.
W I T N E S S E T H :
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Adviser has, pursuant to an Advisory Agreement with the
Trust dated as of November 1, 1999 ("Advisory Agreement"), been retained to act
as investment adviser for certain of the series of the Trust which are listed on
Exhibit A to this Agreement (each a "Fund");
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain
of its duties under the Advisory Agreement to other investment advisers, subject
to the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain Subadviser to assist it in the
provision of a continuous investment program for that portion of the Trust's
assets which the Adviser will assign to the Subadviser (the "Subadviser
Assets"), and Subadviser is willing to render such services subject to the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, the parties do mutually agree and promise as follows:
1. Appointment as Subadviser. The Adviser hereby retains the Subadviser
to act as investment adviser for and to manage the Subadviser Assets subject to
the supervision of the Adviser and the Board of Trustees of the Trust and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the
investment management of the Subadviser Assets. It is recognized that the
Subadviser and certain of its affiliates now act, and that from time to time
hereafter may act, as investment adviser to one or more other investment
companies and to fiduciary or other managed accounts and that the Adviser and
the Trust have no objection to such activities. Nothing in this Agreement shall
impose upon the Subadviser any obligation to purchase or sell or to recommend
for purchase or sale, with respect to the Trust, any security which the
Subadviser, or its shareholders, directors, officers,
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employees or affiliates may purchase or sell for its or their own account(s) or
for the account of any other client.
2. Duties of Subadviser.
(a) Investments. The Subadviser is hereby authorized and
directed and hereby agrees, subject to the stated investment policies
and restrictions of a Fund as set forth in the Funds' prospectus and
statement of additional information as currently in effect and as
supplemented or amended from time to time (collectively referred to
hereinafter as the "Prospectus") and subject to the directions of the
Adviser and the Trust's Board of Trustees, to purchase, hold and sell
investments for the Subadviser Assets and to monitor on a continuous
basis the performance of the Subadviser Assets. In providing these
services, the Subadviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of
the Subadviser Assets. The Adviser agrees to provide the Subadviser
with such assistance as may be reasonably requested by the Subadviser
in connection with the Subadviser's activities under this Agreement,
including, without limitation, information concerning the Funds, their
funds available, or to become available, for investment and generally
as to the conditions of a Funds' or Trust's affairs.
(b) Compliance with Applicable Laws and Governing Documents.
In the performance of its duties and obligations under this Agreement,
the Subadviser shall act in conformity with the Trust's Declaration of
Trust and By-Laws and the Prospectus and with the instructions and
directions received in writing from the Adviser or the Trustees of the
Trust and will conform to and comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986, as amended (the "Code"), and
all other applicable federal and state laws and regulations.
Notwithstanding the foregoing, the Adviser shall remain responsible for
ensuring each Fund's overall compliance with the 1940 Act and the Code
and the Subadviser is only obligated to comply with this subsection (b)
with respect to the Subadviser Assets. The Adviser will provide the
Subadviser with a copy of the minutes of the meetings of the Board of
Trustees of the Trust to the extent they may affect the Funds or the
duties of the Subadviser, and with copies of any financial statements
or reports made by the Funds to their shareholders, and any further
materials or information which the Subadviser may reasonably request to
enable it to perform its functions under this Agreement.
Prior to the effectiveness of this Agreement, Adviser shall
provide Subadviser with a copy of the Funds' current Prospectus and the
Trust's Declaration of Trust and By-Laws; thereafter, Adviser shall
promptly deliver to Subadviser any amendments or supplements to such
documents. The Adviser will also provide the Subadviser with reasonable
advance notice of any change in a Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser shall, in the performance of its duties and obligations
under this Agreement, manage the Subadviser Assets consistent with such
changes, provided
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the Subadviser has received prompt notice of the effectiveness of such
changes from the Trust or the Adviser. The Adviser acknowledges and
agrees that the Prospectus will at all times be in compliance with all
disclosure requirements under all applicable federal and state laws and
regulations relating to the Trust or the Funds, including, without
limitation, the 1940 Act, and the rules and regulations thereunder, and
that the Subadviser shall have no liability in connection therewith,
except as to the accuracy of material information furnished by the
Subadviser to the Trust or to the Adviser specifically for inclusion in
the Prospectus. The Subadviser hereby agrees to provide to the Adviser
in a timely manner such information relating to the Subadviser and its
relationship to, and actions for, the Trust as may be required to be
contained in the Prospectus or in the Trust's registration on Form
N-1A.
(c) Transactions Related to Underlying Securities. The
Subadviser shall have the power to vote, either in person or by proxy,
all securities in which the Subadviser Assets may be invested from time
to time, and shall not be required to seek or take instructions from
the Adviser, a Fund or the Trust or take any action with respect
thereto. If both the Subadviser and another entity managing assets of a
Fund have invested in the same security, the Subadviser and such other
entity will each have the power to vote its pro rata share of the
security.
The subadviser shall not be expected or required to take any
action other than the rendering of investment-related advice with
respect to lawsuits involving securities presently or formerly held in
the Account, or the issuers thereof, including actions involving
bankruptcy. Should the Subadviser undertake litigation against an
issuer on behalf of accounts which it manages that are shareholders of
such issuer, the Trust agrees to pay its portion of any applicable
legal fees associated with the action or to forfeit any claim to any
assets the Subadviser may recover and, in such case, agrees to hold
Subadviser harmless for excluding the Trust from such action.
Subadviser shall receive reimbursement from the Trust for the Trust's
portion of the cost of any proxy voting service that Subadviser may
subscribe to and use in the performance of its duties hereunder.
(d) Agent. Subject to any other written instructions of the
Adviser or the Trust, the Subadviser is hereby appointed the Adviser's
and the Trust's agent and attorney-in-fact for the limited purposes of
executing account documentation, agreements, contracts and other
documents as the Subadviser shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of
the Subadviser Assets. The Subadviser agrees to provide the Adviser and
the Trust with copies of any such agreements executed on behalf of the
Adviser or the Trust upon request.
(e) Brokerage. The Subadviser is authorized, subject to the
supervision of the Adviser and the Trust's Board of Trustees, to
establish and maintain accounts on behalf of a Fund with, and place
orders for the purchase and sale of the Subadviser Assets with or
through, such persons, brokers (including, to the extent permitted by
applicable law, any
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broker affiliated with the Subadviser) or dealers ("brokers") as the
Subadviser may elect and negotiate commissions to be paid on such
transactions. The Subadviser, however, is not required to obtain the
consent of the Adviser or the Trust's Board of Trustees prior to
establishing any such brokerage account. The Subadviser shall place all
orders for the purchase and sale of portfolio investments for a Fund's
account with brokers selected by the Subadviser. In the selection of
such brokers and the placing of such orders, the Subadviser shall seek
to obtain for each Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services, as provided
below. In using its reasonable efforts to obtain for a Fund the most
favorable price and execution available, the Subadviser, bearing in
mind the best interests of each Fund at all times, shall consider all
factors it deems relevant, including price, the size of the
transaction, the breadth and nature of the market for the security, the
difficulty of the execution, the amount of the commission, if any, the
timing of the transaction, market prices and trends, the reputation,
experience and financial stability of the broker involved, and the
quality of service rendered by the broker in other transactions.
Subject to such policies as the Trustees may determine, or as may be
mutually agreed to by the Adviser and the Subadviser, the Subadviser
shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its
having caused a Fund to pay a broker that provides brokerage and
research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) to the Subadviser an amount of
commission for effecting a Fund investment transaction that is in
excess of the amount of commission that another broker would have
charged for effecting that transaction if, but only if, the Subadviser
determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided
by such broker or dealer viewed in terms of either that particular
transaction or the overall responsibility of the Subadviser with
respect to the accounts as to which it exercises investment discretion.
It is recognized that the services provided by such brokers
may be useful to the Subadviser in connection with the Subadviser's
services to other clients. On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interests of a Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased. In
such event, allocation of securities so sold or purchased, as well as
the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to each Fund
and to such other clients. It is recognized that in some cases, this
procedure may adversely affect the price paid or received by a Fund or
the size of the position obtainable for, or disposed of by, a Fund.
With respect to the allocation of trades, the Subadviser shall not
favor any account over any other. However, the Subadviser or its
affiliates may, based upon their trading strategies or clients' cash
positions, investment objectives or investment restrictions, restrict
to certain accounts purchases and
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19
sales of securities acquired in initial public offerings, including
those that trade or are expected to trade at a premium in the secondary
market.
(f) Securities Transactions. The Subadviser and any affiliated
person of the Subadviser will not purchase securities or other
instruments from or sell securities or other instruments to a Fund;
provided, however, the Subadviser and any affiliated person of the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to a Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder.
The Subadviser, including its Access Persons (as defined in
subsection (e) of Rule 17j-1 under the 1940 Act), agrees to observe and
comply with Rule 17j-1 and the Subadviser's Code of Ethics (which shall
comply in all material respects with Rule 17j-1), as the same may be
amended from time to time.
(g) Books and Records. The Subadviser shall maintain separate
detailed records of all matters pertaining to the Subadviser Assets
(the "Fund Records"), including, without limitation, brokerage and
other records of all securities transactions. The Fund Records
(relating to the Subadviser Assets) shall be available to the Trust and
the Adviser at any time upon reasonable request during normal business
hours and shall be available for telecopying without delay to the
Adviser during any day that a Fund is open for business and shall
remain available upon reasonable request after the termination of this
Agreement if so required for regulatory purposes.
(h) Information Concerning Subadviser Assets and Subadviser.
From time to time as the Adviser or the Trust may reasonably request,
the Subadviser will furnish the requesting party reports on portfolio
transactions and reports on Subadviser Assets held in the portfolio,
all in such detail as the Adviser or the Trust may reasonably request.
The Subadviser will also inform the Adviser in a timely manner of
material changes in portfolio managers responsible for Subadviser
Assets or of material changes in the control, ownership or management
of the Subadviser. Upon reasonable request, the Subadviser will make
available its officers and employees to meet with the Trust's Board of
Trustees to review the Subadviser Assets.
Upon mutual consent by the parties, the may perform such
additional acts as are customarily performed by a subadviser. The
Subadviser will also provide such information which may be required for
the Trust or the Adviser to comply with their respective obligations
under applicable laws, including, without limitation, the Code, the
1940 Act, the Advisers Act, and the Securities Act of 1933, as amended
(the "Securities Act"), and any rule or regulation thereunder.
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(i) Custody Arrangements. The Subadviser shall on each
business day provide the Adviser and the Trust's custodian such
information as the Adviser and the Trust's custodian may reasonably
request relating to all transactions concerning the Subadviser Assets.
3. Independent Contractor. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust or the Adviser in any way or
otherwise be deemed an agent of the Trust or the Adviser.
4. Expenses. During the term of this Agreement, Subadviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased for each
Fund. The Subadviser shall, at its sole expense, employ or associate itself with
such persons as it believes to be particularly fitted to assist it in the
execution of its duties under this Agreement. The Subadviser shall not be
responsible for the Trust's, a Fund's or Adviser's expenses, which shall
include, but not be limited to, organizational and offering expenses (which
include out-of-pocket expenses, but not overhead or employee costs of the
Subadviser); expenses for legal, accounting and auditing services; taxes and
governmental fees; dues and expenses incurred in connection with membership in
investment company organizations; costs of printing and distributing shareholder
reports, proxy materials, prospectuses, stock certificates and distribution of
dividends; charges of the Funds' custodians and sub-custodians, administrators
and sub-administrators, registrars, transfer agents, dividend disbursing agents
and dividend reinvestment plan agents; payment for portfolio pricing services to
a pricing agent, if any; payment for proxy voting services, registration and
filing fees of the Securities and Exchange Commission (the "SEC"); expenses of
registering or qualifying securities of the Funds for sale in the various
states; freight and other charges in connection with the shipment of the Funds'
portfolio securities; fees and expenses of non-interested Trustees; salaries of
shareholder relations personnel; costs of shareholders meetings; insurance;
interest; brokerage costs; and litigation and other extraordinary or
non-recurring expenses. The Trust or the Adviser, as the case may be, shall
reimburse the Subadviser for any expenses of the Funds or the Adviser as may be
reasonably incurred by such Subadviser on behalf of the Funds or the Adviser.
The Subadviser shall keep and supply to the Trust and the Adviser reasonable
records of all such expenses.
5. Compensation. For the services provided and the expenses assumed
with respect to the Funds and the Subadviser Assets pursuant to this Agreement,
the Subadviser will be entitled to the fee listed for each Fund on Exhibit A.
Such fees will be computed daily and payable no later than the seventh (7th)
business day following the end of each month, from the Adviser or the Trust,
calculated at an annual rate based on the Subadviser Assets' average daily net
assets.
The method of determining net assets of a Fund for purposes hereof
shall be the same as the method of determining net assets for purposes of
establishing the offering and redemption price of
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the shares of that Fund as described in the Funds' Prospectus. If this Agreement
shall be effective for only a portion of a month, the aforesaid fee shall be
prorated for the portion of such month during which this Agreement is in effect.
6. Representations and Warranties of Subadviser. The Subadviser
represents and warrants to the Adviser and the Trust as follows:
(a) The Subadviser is registered as an investment adviser
under the Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to
Rule 4.14 under the Commodity Exchange Act (the "CEA") with the
Commodity Futures Trading Commission (the "CFTC") and the National
Futures Association ("NFA"), or is not required to file such exemption;
(c) The Subadviser is a corporation duly organized and validly
existing under the laws of the State of California with the power to
own and possess its assets and carry on its business as it is now being
conducted;
(d) The execution, delivery and performance by the Subadviser
of this Agreement are within the Subadviser's powers and have been duly
authorized by all necessary action and no action by or in respect of,
or filing with, any governmental body, agency or official is required
on the part of the Subadviser for the execution, delivery and
performance by the Subadviser of this Agreement, and the execution,
delivery and performance by the Subadviser of this Agreement do not
contravene or constitute a default under (i) any provision of
applicable law, rule or regulation, (ii) the Subadviser's governing
instruments, or (iii) any agreement, judgment, injunction, order,
decree or other instrument binding upon the Subadviser;
(e) The Form ADV of the Subadviser previously provided to the
Adviser is a true and complete copy of the form as currently filed with
the SEC and the information contained therein is accurate and complete
in all material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
7. Representations and Warranties of Adviser. The Adviser represents
and warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under
the Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to
Section 4.14 under the CEA with the CFTC and the National Futures
Association;
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(c) The Adviser is a corporation duly organized and validly
existing under the laws of the State of Ohio with the power to own and
possess its assets and carry on its business as it is now being
conducted;
(d) The execution, delivery and performance by the Adviser of
this Agreement are within the Adviser's powers and have been duly
authorized by all necessary action on the part of its shareholders or
directors, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(e) The Form ADV of the Adviser previously provided to the
Subadviser is a true and complete copy of the form filed with the SEC
and the information contained therein is accurate and complete in all
material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
(f) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(g) The Adviser and the Trust have duly entered into the
Advisory Agreement pursuant to which the Trust authorized the Adviser
to enter into this Agreement.
8. Representations and Warranties of the Trust. The Trust represents
and warrants to the Adviser and the Subadviser as follows:
(a) The Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with the
power to own and possess its assets and carry on its business as it is
now being conducted;
(b) The Trust is registered as an investment company under the
1940 Act and the Fund's shares are registered under the Securities Act;
and
(c) The execution, delivery and performance by the Trust of
this Agreement are within the Trust's powers and have been duly
authorized by all necessary action on the part of the Trust and its
Board of Trustees, and no action by or in respect of, or filing with,
any governmental body, agency or official is required on the part of
the Trust for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Trust of this Agreement do not contravene or constitute a default under
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(i) any provision of applicable law, rule or regulation, (ii) the
Trust's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Trust.
9. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Subadviser, the
Adviser and the Trust pursuant to Sections 6, 7 and 8, respectively, shall
survive for the duration of this Agreement and the parties hereto shall promptly
notify each other in writing upon becoming aware that any of the foregoing
representations and warranties are no longer true.
10. Liability and Indemnification.
(a) Liability. The Subadviser shall exercise its best judgment
in rendering the services in accordance with the terms of this
Agreement. In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Subadviser or a reckless disregard of its
duties hereunder, the Subadviser, each of its affiliates and all
respective partners, officers, directors and employees ("Affiliates")
and each person, if any, who within the meaning of the Securities Act
controls the Subadviser ("Controlling Persons") shall not be liable for
any error of judgment or mistake of law and shall not be subject to any
expenses or liability to the Adviser, the Trust or the Funds or any of
the Funds' shareholders, in connection with the matters to which this
Agreement relates. In the absence of willful misfeasance, bad faith or
gross negligence on the part of the Adviser or a reckless disregard of
its duties hereunder, the Adviser, any of its Affiliates and each of
the Adviser's Controlling Persons, if any, shall not be subject to any
liability to the Subadviser, for any act or omission in the case of, or
connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of Subadviser Assets;
provided, however, that nothing herein shall relieve the Adviser and
the Subadviser from any of their obligations under applicable law,
including, without limitation, the federal and state securities laws
and the CEA.
(b) Indemnification. The Subadviser shall indemnify the
Adviser, the Trust, and the Fund, and their respective Affiliates and
Controlling Persons for any liability and expenses, including
reasonable attorneys' fees, which the Adviser, the Trust, and the Fund,
and their respective Affiliates and Controlling Persons may sustain
which are the direct result of the Subadviser's willful misfeasance,
bad faith, gross negligence, reckless disregard of its duties hereunder
or violation of applicable law, including, without limitation, the
federal and state securities laws or the CEA.
The Adviser shall indemnify the Subadviser, its Affiliates and
its Controlling Persons, for any liability and expenses, including
reasonable attorneys' fees, which may be sustained as a result of the
Adviser's willful misfeasance, bad faith, gross negligence,
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reckless disregard of its duties hereunder or violation of applicable
law, including, without limitation, the federal and state securities
laws or the CEA.
11. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall
continue until May ___, 2001, and thereafter shall continue
automatically for successive annual periods, provided such continuance
is specifically approved at least annually by the Trust's Board of
Trustees or vote of the security holders of the Funds as required under
the 1940 Act, provided that its continuance also is approved by a
majority of the Trust's Trustees who are not "interested persons" (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast
in person at a meeting called for the purpose of voting on such
approval.
(b) Termination. Notwithstanding whatever may be provided
herein to the contrary, this Agreement may be terminated at any time,
without payment of any penalty:
(i) By vote of a majority of the Trust's Board of
Trustees, or by vote of a majority of the outstanding voting
securities of a Fund, or by the Adviser, in each case, upon at
least 60 days' written notice to the Subadviser;
(ii) By any party hereto immediately upon written
notice to the other parties in the event of a breach of any
provision of this Agreement by either of the other parties; or
(iii) By the Subadviser upon at least 60 days'
written notice to the Adviser and the Trust.
This Agreement shall not be assigned (as such term is defined in the
0000 Xxx) and shall terminate automatically in the event of its
assignment or upon the termination of the Advisory Agreement.
12. Duties of the Adviser. The Adviser shall continue to have
responsibility for all services to be provided to the Trust pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Trust.
13. Reference to Adviser and Subadviser.
(a) Neither the Adviser nor any Affiliate or agent of it shall
make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients, except references concerning the
identity of and services provided by the Subadviser to the Fund, which
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25
references shall not differ in substance from those included in the
Prospectus and this Agreement, in any advertising or promotional
materials without the prior approval of Subadviser, which approval
shall not be unreasonably withheld or delayed. The Adviser hereby
agrees to make all reasonable efforts to cause a Fund and any Affiliate
thereof to satisfy the foregoing obligation.
(b) Neither the Subadviser nor any Affiliate or agent of it
shall make reference to or use the name of Adviser of any of its
Affiliates, or any of their clients, except references concerning the
identity of, relationship with, and services provided by the Adviser to
the Fund or to the Subadviser, which shall not differ in substance from
those included in the Prospectus and this Agreement, in any advertising
or promotional materials without the prior approval of Subadviser,
which approval shall not be unreasonably withheld or delayed.
14. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of any material amendment shall be approved by:
a) the Trust's Board of Trustees or by a vote of a majority of the outstanding
voting securities of the Funds (as required by the 0000 Xxx) and b) the vote of
a majority of those Trustees of the Trust who are not "interested persons" of
any party to this Agreement cast in person at a meeting called for the purpose
of voting on such approval, if such approval is required by applicable law.
15. Confidentiality. Subject to the duties of the Adviser, the Trust
and the Subadviser to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential and shall not disclose to third parties any and all
information and recommendations pertaining to the Fund and the actions of the
Subadviser, the Adviser and the Fund in respect thereof.
16. Notice. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Franklin Advisers, Inc.
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: 000-000-0000
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(b) If to the Trust:
Nationwide Separate Account Trust
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
(c) If to the Adviser:
Nationwide Advisory Services, Inc.
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
17. Jurisdiction. This Agreement shall be governed by and construed to
be consistent with the Advisory Agreement and in accordance with substantive
laws of the Commonwealth of Massachusetts without reference to choice of law
principles thereof and in accordance with the 1940 Act. In the case of any
conflict, the 1940 Act shall control.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
19. Certain Definitions. For the purposes of this Agreement and except
as otherwise provided herein, "interested person," "affiliated person," and
"assignment" shall have their respective meanings as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the SEC.
20. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
21. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
22. Trust and its Trustees. The terms "Nationwide Separate Account
Trust" and the "Trustees of Nationwide Separate Account Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of June 30, 1981, as has been or may be amended from time to
time, and to which
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reference is hereby made and a copy of which is on file at the office of the
Secretary of State of the Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of the Trust entered into in the name or on behalf
thereof by any of Nationwide Separate Account Trust's Trustees, employees,
representatives or agents are not made individually, but only in their
capacities with respect to the Trust. Such obligations are not binding upon any
of the Trustees, shareholders, or representatives of the Trust personally, but
bind only the assets of the Trust. All persons dealing with any series of Shares
of the Trust must look solely to the assets of the Trust belonging to such
series for the enforcement of any claims against the Trust.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
TRUST
Nationwide Separate Account Trust
By:_______________________________
Name: Xxxxx X. Xxxxx, Xx.
Title: Treasurer
ADVISER
Nationwide Advisory Services, Inc.
By:_______________________________
Name: Xxxxxxxxxxx X. Xxxx
Title: Treasurer
SUBADVISER
Franklin Advisers, Inc.
By:_______________________________
Name:_____________________________
Title:____________________________
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EXHIBIT A
SUBADVISORY AGREEMENT
BETWEEN
NATIONWIDE ADVISORY SERVICES, INC.,
NATIONWIDE SEPARATE ACCOUNT TRUST
AND FRANKLIN ADVISERS, INC.
EFFECTIVE __________________________
Fund of the Trust Advisory Fees
----------------- -------------
Nationwide Small Cap Growth Fund 0.60% of the average daily net assets of the
Subadviser Assets
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SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this ___ day of
________________, among Nationwide Separate Account Trust, a Massachusetts
business trust (the "Trust"), Nationwide Advisory Services, Inc. (the
"Adviser"), an Ohio corporation registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), and Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP, a
Pennsylvania Limited Liability Partnership (the "Subadviser"), also registered
under the Advisers Act.
W I T N E S S E T H :
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Adviser has, pursuant to an Advisory Agreement with the
Trust dated as of November 1, 1997 ("Advisory Agreement"), been retained to act
as investment adviser for certain of the series of the Trust which are listed on
Exhibit A to this Agreement (each a "Fund");
WHEREAS, the Advisory Agreement permits the Adviser to delegate certain
of its duties under the Advisory Agreement to other investment advisers, subject
to the requirements of the 1940 Act; and
WHEREAS, the Adviser desires to retain Subadviser to assist it in the
provision of a continuous investment program for that portion of the Trust's
assets which the Adviser will assign to the Subadviser (the "Subadviser
Assets"), and Subadviser is willing to render such services subject to the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, the parties do mutually agree and promise as follows:
1. Appointment as Subadviser. The Adviser hereby retains the Subadviser
to act as investment adviser for and to manage the Subadviser Assets subject to
the supervision of the Adviser and the Board of Trustees of the Trust and
subject to the terms of this Agreement; and the Subadviser hereby accepts such
employment. In such capacity, the Subadviser shall be responsible for the
investment management of the Subadviser Assets. It is recognized that the
Subadviser and certain of its affiliates now act, and that from time to time
hereafter may act, as investment adviser to one or more other investment
companies and to fiduciary or other managed accounts and that the Adviser and
the Trust have no objection to such activities.
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2. Duties of Subadviser.
(a) Investments. The Subadviser is hereby authorized and
directed and hereby agrees, subject to the stated investment policies
and restrictions of a Fund as set forth in the Funds' prospectus and
statement of additional information as currently in effect and as
supplemented or amended from time to time (collectively referred to
hereinafter as the "Prospectus") and subject to the directions of the
Adviser and the Trust's Board of Trustees, to purchase, hold and sell
investments for the Subadviser Assets and to monitor on a continuous
basis the performance of the Subadviser Assets. In providing these
services, the Subadviser will conduct a continual program of
investment, evaluation and, if appropriate, sale and reinvestment of
the Subadviser Assets. The Adviser agrees to provide the Subadviser
with such assistance as may be reasonably requested by the Subadviser
in connection with the Subadviser's activities under this Agreement,
including, without limitation, information concerning the Funds, their
funds available, or to become available, for investment and generally
as to the conditions of a Funds' or Trust's affairs.
(b) Compliance with Applicable Laws and Governing Documents.
In the performance of its duties and obligations under this Agreement,
the Subadviser shall act in conformity with the Trust's Declaration of
Trust and By-Laws and the Prospectus and with the instructions and
directions received in writing from the Adviser or the Trustees of the
Trust and will conform to and comply with the requirements of the 1940
Act, the Internal Revenue Code of 1986, as amended (the "Code"), and
all other applicable federal and state laws and regulations.
Notwithstanding the foregoing, the Adviser shall remain responsible for
ensuring each Fund's overall compliance with the 1940 Act and the Code
and the Subadviser is only obligated to comply with this subsection (b)
with respect to the Subadviser Assets. The Adviser will provide the
Subadviser with a copy of the minutes of the meetings of the Board of
Trustees of the Trust to the extent they may affect the Funds or the
duties of the Subadviser, and with copies of any financial statements
or reports made by the Funds to their shareholders, and any further
materials or information which the Subadviser may reasonably request to
enable it to perform its functions under this Agreement.
The Adviser will also provide the Subadviser with reasonable
advance notice of any change in a Fund's investment objectives,
policies and restrictions as stated in the Prospectus, and the
Subadviser shall, in the performance of its duties and obligations
under this Agreement, manage the Subadviser Assets consistent with such
changes, provided the Subadviser has received prompt notice of the
effectiveness of such changes from the Trust or the Adviser. In
addition to such notice, the Adviser shall provide to the Subadviser a
copy of a modified Prospectus reflecting such changes. The Adviser
acknowledges and agrees that the Prospectus will at all times be in
compliance with all disclosure requirements under all applicable
federal and state laws and regulations relating to the Trust or the
Funds, including, without limitation, the 1940 Act, and the rules and
regulations thereunder, and that
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the Subadviser shall have no liability in connection therewith, except
as to the accuracy of material information furnished by the Subadviser
to the Trust or to the Adviser specifically for inclusion in the
Prospectus. The Subadviser hereby agrees to provide to the Adviser in a
timely manner such information relating to the Subadviser and its
relationship to, and actions for, the Trust as may be required to be
contained in the Prospectus or in the Trust's registration on Form
N-1A.
(c) Voting of Proxies. The Subadviser shall have the power to
vote, either in person or by proxy, all securities in which the
Subadviser Assets may be invested from time to time, and shall not be
required to seek or take instructions from the Adviser, a Fund or the
Trust or take any action with respect thereto. If both the Subadviser
and another entity managing assets of a Fund have invested in the same
security, the Subadviser and such other entity will each have the power
to vote its pro rata share of the security.
(d) Agent. Subject to any other written instructions of the
Adviser or the Trust, the Subadviser is hereby appointed the Adviser's
and the Trust's agent and attorney-in-fact for the limited purposes of
executing account documentation, agreements, contracts and other
documents as the Subadviser shall be requested by brokers, dealers,
counterparties and other persons in connection with its management of
the Subadviser Assets. The Subadviser agrees to provide the Adviser and
the Trust with copies of any such agreements executed on behalf of the
Adviser or the Trust.
(e) Brokerage. The Subadviser is authorized, subject to the
supervision of the Adviser and the Trust's Board of Trustees, to
establish and maintain accounts on behalf of a Fund with, and place
orders for the purchase and sale of the Subadviser Assets with or
through, such persons, brokers (including, to the extent permitted by
applicable law, any broker affiliated with the Subadviser) or dealers
("brokers") as the Subadviser may elect and negotiate commissions to be
paid on such transactions. The Subadviser, however, is not required to
obtain the consent of the Adviser or the Trust's Board of Trustees
prior to establishing any such brokerage account. The Subadviser shall
place all orders for the purchase and sale of portfolio investments for
a Fund's account with brokers selected by the Subadviser. In the
selection of such brokers and the placing of such orders, the
Subadviser shall seek to obtain for each Fund the most favorable price
and execution available, except to the extent it may be permitted to
pay higher brokerage commissions for brokerage and research services,
as provided below. In using its reasonable efforts to obtain for a Fund
the most favorable price and execution available, the Subadviser,
bearing in mind the best interests of each Fund at all times, shall
consider all factors it deems relevant, including price, the size of
the transaction, the breadth and nature of the market for the security,
the difficulty of the execution, the amount of the commission, if any,
the timing of the transaction, market prices and trends, the
reputation, experience and financial stability of the broker involved,
and the quality of service rendered by the broker in other
transactions. Subject to such policies as the Trustees may determine,
or as may be mutually agreed to by
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the Adviser and the Subadviser, the Subadviser shall not be deemed to
have acted unlawfully or to have breached any duty created by this
Agreement or otherwise solely by reason of its having caused a Fund to
pay a broker that provides brokerage and research services (within the
meaning of Section 28(e) of the Securities Exchange Act of 1934) to the
Subadviser an amount of commission for effecting a Fund investment
transaction that is in excess of the amount of commission that another
broker would have charged for effecting that transaction if, but only
if, the Subadviser determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of either
that particular transaction or the overall responsibility of the
Subadviser with respect to the accounts as to which it exercises
investment discretion.
It is recognized that the services provided by such brokers
may be useful to the Subadviser in connection with the Subadviser's
services to other clients. On occasions when the Subadviser deems the
purchase or sale of a security to be in the best interests of a Fund as
well as other clients of the Subadviser, the Subadviser, to the extent
permitted by applicable laws and regulations, may, but shall be under
no obligation to, aggregate the securities to be sold or purchased. In
such event, allocation of securities so sold or purchased, as well as
the expenses incurred in the transaction, will be made by the
Subadviser in the manner the Subadviser considers to be the most
equitable and consistent with its fiduciary obligations to each Fund
and to such other clients. It is recognized that in some cases, this
procedure may adversely affect the price paid or received by a Fund or
the size of the position obtainable for, or disposed of by, a Fund.
(f) Securities Transactions. The Subadviser and any affiliated
person of the Subadviser will not purchase securities or other
instruments from or sell securities or other instruments to a Fund;
provided, however, the Subadviser and any affiliated person of the
Subadviser may purchase securities or other instruments from or sell
securities or other instruments to a Fund if such transaction is
permissible under applicable laws and regulations, including, without
limitation, the 1940 Act and the Advisers Act and the rules and
regulations promulgated thereunder.
The Subadviser, including its Access Persons (as defined in
subsection (e) of Rule 17j-1 under the 1940 Act), agrees to observe and
comply with Rule 17j-1 and the Subadviser's Code of Ethics (which shall
comply in all material respects with Rule 17j-1), as the same may be
amended from time to time. On a quarterly basis, the Subadviser will
either (i) certify to the Adviser that the Subadviser and its Access
Persons have complied with the Subadviser's Code of Ethics with respect
to the Subadviser Assets or (ii) identify any violations which have
occurred with respect to the Subadviser Assets.
(g) Books and Records. The Subadviser shall maintain separate
detailed records of all matters pertaining to the Subadviser Assets
(the "Fund Records"), including, without limitation, brokerage and
other records of all securities transactions. The Subadviser
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acknowledges that the Fund Records are property of the Trust. The Fund
Records (relating to the Subadviser Assets) shall be available to the
Adviser at any time upon reasonable request during normal business
hours and shall be available for telecopying without delay to the
Adviser during any day that a Fund is open for business.
(h) Information Concerning Subadviser Assets and Subadviser.
From time to time as the Adviser or the Trust may reasonably request,
the Subadviser will furnish the requesting party reports on portfolio
transactions and reports on Subadviser Assets held in the portfolio,
all in such detail as the Adviser or the Trust may reasonably request.
The Subadviser will also inform the Adviser in a timely manner of
material changes in portfolio managers responsible for Subadviser
Assets, any changes in the ownership or management of the Subadviser,
or of material changes in the control of the Subadviser. Upon
reasonable request, the Subadviser will make available its officers and
employees to meet with the Trust's Board of Trustees to review the
Subadviser Assets.
The Subadviser will also provide such information or perform
such additional acts as are customarily performed by a subadviser and
may be required for the Trust or the Adviser to comply with their
respective obligations under applicable laws, including, without
limitation, the Code, the 1940 Act, the Advisers Act, and the
Securities Act of 1933, as amended (the "Securities Act"), and any rule
or regulation thereunder.
(i) Custody Arrangements. The Subadviser shall on each
business day provide the Adviser and the Trust's custodian such
information as the Adviser and the Trust's custodian may reasonably
request relating to all transactions concerning the Subadviser Assets.
3. Independent Contractor. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Trust or the Adviser in any way or
otherwise be deemed an agent of the Trust or the Adviser.
4. Expenses. During the term of this Agreement, Subadviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions, investment related expenses and other transaction
charges, if any) purchased for each Fund. The Subadviser shall, at its sole
expense, employ or associate itself with such persons as it believes to be
particularly fitted to assist it in the execution of its duties under this
Agreement. The Subadviser shall not be responsible for the Trust's, a Fund's or
Adviser's expenses, which shall include, but not be limited to, organizational
and offering expenses (which include out-of-pocket expenses, but not overhead or
employee costs of the Subadviser); expenses for legal, accounting and auditing
services; taxes and governmental fees; dues and expenses incurred in connection
with membership in investment company organizations; costs of printing and
distributing shareholder reports, proxy materials, prospectuses,
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35
stock certificates and distribution of dividends; charges of the Funds'
custodians and sub-custodians, administrators and sub-administrators,
registrars, transfer agents, dividend disbursing agents and dividend
reinvestment plan agents; payment for portfolio pricing services to a pricing
agent, if any; registration and filing fees of the Securities and Exchange
Commission (the "SEC"); expenses of registering or qualifying securities of the
Funds for sale in the various states; freight and other charges in connection
with the shipment of the Funds' portfolio securities; fees and expenses of
non-interested Trustees; salaries of shareholder relations personnel; costs of
shareholders meetings; insurance; interest; brokerage costs; and litigation and
other extraordinary or non-recurring expenses. The Trust or the Adviser, as the
case may be, shall reimburse the Subadviser for any expenses of the Funds or the
Adviser as may be reasonably incurred by such Subadviser on behalf of the Funds
or the Adviser. The Subadviser shall keep and supply to the Trust and the
Adviser reasonable records of all such expenses.
5. Compensation. For the services provided and the expenses assumed
with respect to the Funds and the Subadviser Assets pursuant to this Agreement,
the Subadviser will be entitled to the fee listed for each Fund on Exhibit A.
Such fees will be computed daily and payable no later than the seventh (7th)
business day following the end of each month, from the Adviser or the Trust,
calculated at an annual rate based on the Subadviser Assets' average daily net
assets.
The method of determining net assets of a Fund for purposes hereof
shall be the same as the method of determining net assets for purposes of
establishing the offering and redemption price of the shares of that Fund as
described in the Funds' Prospectus. If this Agreement shall be effective for
only a portion of a month, the aforesaid fee shall be prorated for the portion
of such month during which this Agreement is in effect.
6. Representations and Warranties of Subadviser. The Subadviser
represents and warrants to the Adviser and the Trust as follows:
(a) The Subadviser is registered as an investment adviser
under the Advisers Act;
(b) The Subadviser has filed a notice of exemption pursuant to
Rule 4.14 under the Commodity Exchange Act (the "CEA") with the
Commodity Futures Trading Commission (the "CFTC") and the National
Futures Association ("NFA"), or is not required to file such exemption;
(c) The Subadviser is a Limited Liability Partnership duly
organized and properly registered and operating under the laws of the
Commonwealth of Pennsylvania with the power to own and possess its
assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Subadviser
of this Agreement are within the Subadviser's powers and have been duly
authorized by all necessary action and
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no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Subadviser for the
execution, delivery and performance by the Subadviser of this
Agreement, and the execution, delivery and performance by the
Subadviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Subadviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the
Subadviser;
(e) The Form ADV of the Subadviser previously provided to the
Adviser is a true and complete copy of the form as currently filed with
the SEC and the information contained therein is accurate and complete
in all material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
7. Representations and Warranties of Adviser. The Adviser represents
and warrants to the Subadviser as follows:
(a) The Adviser is registered as an investment adviser under
the Advisers Act;
(b) The Adviser has filed a notice of exemption pursuant to
Section 4.14 under the CEA with the CFTC and the National Futures
Association;
(c) The Adviser is a corporation duly organized and validly
existing under the laws of the State of Ohio with the power to own and
possess its assets and carry on its business as it is now being
conducted;
(d) The execution, delivery and performance by the Adviser of
this Agreement are within the Adviser's powers and have been duly
authorized by all necessary action on the part of its shareholders or
directors, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(e) The Form ADV of the Adviser previously provided to the
Subadviser is a true and complete copy of the form filed with the SEC
and the information contained therein is accurate and complete in all
material respects and does not omit to state any material fact
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading;
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37
(f) The Adviser acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement; and
(g) The Adviser and the Trust have duly entered into the
Advisory Agreement pursuant to which the Trust authorized the Adviser
to enter into this Agreement.
8. Representations and Warranties of the Trust. The Trust represents
and warrants to the Adviser and the Subadviser as follows:
(a) The Trust is a business trust duly organized and validly
existing under the laws of the Commonwealth of Massachusetts with the
power to own and possess its assets and carry on its business as it is
now being conducted;
(b) The Trust is registered as an investment company under the
1940 Act and the Fund's shares are registered under the Securities Act;
and
(c) The execution, delivery and performance by the Trust of
this Agreement are within the Trust's powers and have been duly
authorized by all necessary action on the part of the Trust and its
Board of Trustees, and no action by or in respect of, or filing with,
any governmental body, agency or official is required on the part of
the Trust for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Trust of this Agreement do not contravene or constitute a default under
(i) any provision of applicable law, rule or regulation, (ii) the
Trust's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Trust.
9. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Subadviser, the
Adviser and the Trust pursuant to Sections 6, 7 and 8, respectively, shall
survive for the duration of this Agreement and the parties hereto shall promptly
notify each other in writing upon becoming aware that any of the foregoing
representations and warranties are no longer true.
10. Liability and Indemnification.
(a) The Subadviser shall exercise its best judgment in
rendering the services in accordance with the terms of this Agreement.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Subadviser or a reckless disregard of its duties
hereunder, the Subadviser, each of its affiliates and all respective
partners, officers, directors and employees ("Affiliates") and each
person, if any, who within the meaning of the Securities Act controls
the Subadviser ("Controlling Persons") shall not be liable for any
error of judgment or mistake of law and shall not be subject to any
expenses or liability to the Adviser, any other subadviser to the Fund,
the Trust or the Funds or any of the Funds'
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38
shareholders, in connection with the matters to which this Agreement
relates. Except as set forth in (c) below, the absence of willful
misfeasance, bad faith or gross negligence on the part of the Adviser
or a reckless disregard of its duties hereunder, the Adviser, any of
its Affiliates and each of the Adviser's Controlling Persons, if any,
shall not be subject to any liability to the Subadviser, for any act or
omission in the case of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase,
holding or sale of Subadviser Assets; provided, however, that nothing
herein shall relieve the Adviser and the Subadviser from any of their
obligations under applicable law, including, without limitation, the
federal and state securities laws and the CEA.
(b) The Subadviser shall indemnify the Adviser, the Trust, and
the Fund, and their respective Affiliates and Controlling Persons for
any liability and expenses, including reasonable attorneys' fees, which
the Adviser, the Trust, and the Fund, and their respective Affiliates
and Controlling Persons may sustain which are proximately caused by the
Subadviser's willful misfeasance, bad faith, gross negligence, reckless
disregard of its duties hereunder or violation of applicable law,
including, without limitation, the federal and state securities laws or
the CEA.
The Adviser shall indemnify the Subadviser, its Affiliates and
its Controlling Persons, for any liability and expenses, including
reasonable attorneys' fees, which may be sustained as a result of the
Adviser's willful misfeasance, bad faith, gross negligence, reckless
disregard of its duties hereunder or violation of applicable law,
including, without limitation, the federal and state securities laws or
the CEA.
(c) The Subadviser shall not be liable to the Adviser for (i)
any acts of the Adviser or any other subadviser to the Fund with
respect to the portion of the assets of the Fund not managed by
Subadviser or (ii) acts of the Subadviser which result from acts of the
Adviser, including, but not limited to, a failure of the Adviser to
provide accurate and current information with respect to any records
maintained by Adviser or any other subadviser to the Fund, which
records are not also maintained by or otherwise available to the
Subadviser upon reasonable request. The Adviser agrees that Subadviser
shall manage the Subadviser Assets as if they were a separate operating
Fund as set forth in Section 2(b) of this Agreement. The Adviser shall
indemnify the Subadviser, its Affiliates and Controlling persons from
any liability arising from the conduct of the Adviser and any other
subadviser with respect to the portion of the Fund's assets not
allocated to the Subadviser.
11. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall
continue until May ___, 2001, and thereafter shall continue
automatically for successive annual periods, provided such continuance
is specifically approved at least annually by the Trust's Board of
Trustees or vote of the lesser of (a) 67% of the shares of the Fund
represented at a meeting
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39
if holders of more than 50% of the outstanding shares of the Fund are
present in person or by proxy or (b) more than 50% of the outstanding
shares of the Fund; provided that in either event its continuance also
is approved by a majority of the Trust's Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of any party to this
Agreement, by vote cast in person at a meeting called for the purpose
of voting on such approval.
(b) Termination. Notwithstanding whatever may be provided
herein to the contrary, this Agreement may be terminated at any time,
without payment of any penalty:
(i) By vote of a majority of the Trust's Board of
Trustees, or by vote of a majority of the outstanding voting
securities of a Fund, or by the Adviser, in each case, upon at
least 60 days' written notice to the Subadviser;
(ii) By any party hereto immediately upon written
notice to the other parties in the event of a breach of any
provision of this Agreement by either of the other parties; or
(iii) By the Subadviser upon at least 60 days'
written notice to the Adviser and the Trust.
This Agreement shall not be assigned (as such term is defined in the
0000 Xxx) and shall terminate automatically in the event of its
assignment or upon the termination of the Advisory Agreement.
12. Duties of the Adviser. The Adviser shall continue to have
responsibility for all services to be provided to the Trust pursuant to the
Advisory Agreement and shall oversee and review the Subadviser's performance of
its duties under this Agreement. Nothing contained in this Agreement shall
obligate the Adviser to provide any funding or other support for the purpose of
directly or indirectly promoting investments in the Trust.
13. Reference to Adviser and Subadviser.
(a) Neither the Adviser nor any Affiliate or agent of it shall
make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients, except references concerning the
identity of and services provided by the Subadviser to the Fund, which
references shall not differ in substance from those included in the
Prospectus and this Agreement, in any advertising or promotional
materials without the prior approval of Subadviser, which approval
shall not be unreasonably withheld or delayed. The Adviser hereby
agrees to make all reasonable efforts to cause a Fund and any Affiliate
thereof to satisfy the foregoing obligation.
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(b) Neither the Subadviser nor any Affiliate or agent of it
shall make reference to or use the name of Adviser of any of its
Affiliates, or any of their clients, except references concerning the
identity of, relationship with, and services provided by the Adviser to
the Fund or to the Subadviser, which shall not differ in substance from
those included in the Prospectus and this Agreement, in any advertising
or promotional materials without the prior approval of Subadviser,
which approval shall not be unreasonably withheld or delayed. The
Subadviser hereby agrees to make all reasonable efforts to cause a Fund
and any Affiliate thereof to satisfy the foregoing obligation.
14. Amendment. This Agreement may be amended by mutual consent of the
parties, provided that the terms of any material amendment shall be approved by:
a) the Trust's Board of Trustees or by a vote of a majority of the outstanding
voting securities of the Funds (as required by the 0000 Xxx) and b) the vote of
a majority of those Trustees of the Trust who are not "interested persons" of
any party to this Agreement cast in person at a meeting called for the purpose
of voting on such approval, if such approval is required by applicable law.
15. Confidentiality. Subject to the duties of the Adviser, the Trust
and the Subadviser to comply with applicable law, including any demand of any
regulatory or taxing authority having jurisdiction, the parties hereto shall
treat as confidential all information pertaining to the Fund and the actions of
the Subadviser, the Adviser and the Fund in respect thereof.
16. Notice. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other parties, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Subadviser:
Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
Xxx Xxxxxxxxxxx
Xxxx Xxxxxxxxxxxx, XX 00000
Attention: ___________
Facsimile: ___________
(b) If to the Trust:
Nationwide Separate Account Trust
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
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(c) If to the Adviser:
Nationwide Advisory Services, Inc.
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
17. Jurisdiction. This Agreement shall be governed by and construed to
be consistent with the Advisory Agreement and in accordance with substantive
laws of the Commonwealth of Massachusetts without reference to choice of law
principles thereof and in accordance with the 1940 Act. In the case of any
conflict, the 1940 Act shall control.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, all of which shall
together constitute one and the same instrument.
19. Certain Definitions. For the purposes of this Agreement and except
as otherwise provided herein, "interested person," "affiliated person," and
"assignment" shall have their respective meanings as set forth in the 1940 Act,
subject, however, to such exemptions as may be granted by the SEC.
20. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
21. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
22. Trust and its Trustees. The terms "Nationwide Separate Account
Trust" and the "Trustees of Nationwide Separate Account Trust" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated as of June 30, 1981, as has been or may be amended from time to
time, and to which reference is hereby made and a copy of which is on file at
the office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the Trust entered into in the name or on
behalf thereof by any of Nationwide Separate Account Trust's Trustees,
employees, representatives or agents are not made individually, but only in
their capacities with respect to the Trust. Such obligations are not binding
upon any of the Trustees, shareholders, or representatives of the Trust
personally, but bind only the assets of the Trust. All persons dealing with any
series of Shares of
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the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
TRUST
Nationwide Separate Account Trust
By:_________________________________
Name: Xxxxx X. Xxxxx, Xx.
Title: Treasurer
ADVISER
Nationwide Advisory Services, Inc.
By:_________________________________
Name: Xxxxxxxxxxx X. Xxxx
Title: Treasurer
SUBADVISER
Xxxxxx Xxxxxxxx & Xxxxxxxx, LLP
By:_________________________________
Name:_______________________________
Title:______________________________
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EXHIBIT A
SUBADVISORY AGREEMENT
BETWEEN
NATIONWIDE ADVISORY SERVICES, INC.,
NATIONWIDE SEPARATE ACCOUNT TRUST
AND XXXXXX XXXXXXXX & XXXXXXXX, LLP
EFFECTIVE
Fund of the Trust Advisory Fees
----------------- -------------
Nationwide Small Cap Growth Fund 0.60% of the average daily net assets of the
Subadviser Assets
