INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into as of the 28th day of August,
2007 by and between NATIONWIDE MUTUAL FUNDS (the "Trust"), a Delaware statutory
trust, and NATIONWIDE FUND ADVISORS (the "Adviser"), a Delaware statutory trust
registered under the Investment Advisers Act of 1940, as amended (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, as amended (the "1940 Act");
WHEREAS, the Trust desires to retain the Adviser to furnish certain
investment advisory services and to provide, or arrange for the provision of,
other services, as described herein, with respect to certain of the series of
the Trust, all as now are or may be hereafter listed on Exhibit A to this
Agreement (each, a "Fund"); and
WHEREAS, the Adviser represents that it is willing and possesses legal
authority to render such services subject to the terms and conditions set forth
in this Agreement,
NOW, THEREFORE, the Trust and the Adviser do mutually agree and promise
as follows:
1. APPOINTMENT AS ADVISER. The Trust hereby appoints the Adviser to
act as investment adviser to each Fund subject to the terms and conditions set
forth in this Agreement. The Adviser hereby accepts such appointment and agrees
to furnish the services hereinafter described for the compensation provided for
in this Agreement.
2. DUTIES OF ADVISER.
a. INVESTMENT MANAGEMENT SERVICES.
(i) Subject to the supervision of the Trust's Board of
Trustees (and except as otherwise permitted under the terms of any exemptive
relief obtained by the Adviser from the SEC, or by rule or regulation), the
Adviser will provide, or arrange for the provision of, a continuous investment
program and overall investment strategies for each Fund, including investment
research and management with respect to all securities and investments and cash
equivalents in each Fund. The Adviser will determine, or arrange for others to
determine, from time to time what securities and other investments will be
purchased, retained or sold by each Fund and will implement, or arrange for
others to implement, such determinations through the placement, in the name of a
Fund, of orders for the execution of portfolio transactions with or through such
brokers or dealers as may be so selected. The Adviser will provide, or arrange
for the provision of, the services under this Agreement in accordance with the
stated investment policies and restrictions of each Fund as set forth in that
Fund's current 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 Trust's Board of Trustees.
(ii) Subject to the provisions of this Agreement and the 1940
Act and any exemptions thereto, the Adviser is authorized to appoint one or more
qualified subadvisers (each a "Subadviser") to provide each Fund with certain
services required by this Agreement. Each Subadviser shall have such investment
discretion and shall make all determinations with respect to the investment of a
Fund's assets as shall be assigned to that Subadviser by the Adviser and the
purchase and sale of portfolio securities with respect to those assets and shall
take such steps as may be necessary to implement its decisions. The Adviser
shall not be responsible or liable for the investment merits of any decision by
a Subadviser to purchase, hold, or sell a security for a Fund.
(iii) Subject to the supervision and direction of the
Trustees, the Adviser shall (i) have overall supervisory responsibility for the
general management and investment of a Fund's assets; (ii) determine the
allocation of assets among the Subadvisers, if any; and (iii) have full
investment discretion to make all determinations with respect to the investment
of Fund assets not otherwise assigned to a Subadviser.
(iv) The Adviser shall research and evaluate each Subadviser,
if any, including (i) performing initial due diligence on prospective
Subadvisers and monitoring each Subadviser's ongoing performance; (ii)
communicating performance expectations and evaluations to the Subadvisers; and
(iii) recommending to the Trust's Board of Trustees whether a Subadviser's
contract should be renewed, modified or terminated. The Adviser shall also
recommend changes or additions to the Subadvisers and shall compensate the
Subadvisers.
(v) The Adviser shall provide to the Trust's Board of Trustees
such periodic reports concerning a Fund's business and investments as the Board
of Trustees shall reasonably request.
b. OTHER SERVICES. The Adviser will provide, or arrange for the
provision of, transfer agency, custody, fund administration and accounting, and
legal services (other than counsel to the Trustees who are not "interested
persons" of the Adviser), subject in each case to the approval of the Board of
Trustees. The Adviser will also provide supervisory personnel who will be
responsible for supervising and/or monitoring the performance of a Fund's
service providers in connection with their duties. Such personnel may be
employees of the Adviser or employees of affiliates of the Adviser or of other
organizations.
c. COMPLIANCE WITH APPLICABLE LAWS AND GOVERNING DOCUMENTS. In
the performance of its duties and obligations under this Agreement, the Adviser
shall act in conformity with the Trust's Agreement and Declaration of Trust, as
from time to time amended and/or restated, and By-Laws, as from time to time
amended and/or restated, and the Prospectus and with the instructions and
directions received from 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") (including the requirements for qualification as a
regulated investment company) and all other applicable federal and state laws
and regulations.
The Adviser acknowledges and agrees that subject to the supervision and
directions of the Trust's Board of Trustees, it shall be solely responsible for
compliance with all disclosure requirements under all applicable federal and
state laws and regulations relating to the Trust or a Fund, including, without
limitation, the 1940 Act, and the rules and regulations thereunder, except that
each Subadviser shall have liability in connection with information furnished by
the Subadviser to a Fund or to the Adviser.
d. CONSISTENT STANDARDS. It is recognized that the Adviser will
perform various investment management and administrative services for entities
other than the Trust and the Funds; in connection with providing such services,
the Adviser agrees to exercise the same skill and care in performing its
services under this Agreement as the Adviser exercises in performing similar
services with respect to the other fiduciary accounts for which the Adviser has
investment responsibilities.
e. BROKERAGE. The Adviser is authorized, subject to the
supervision of the Trust's Board of Trustees, (1) to establish and maintain
accounts on behalf of each Fund with, and to place orders for the purchase and
sale of assets not allocated to a Subadviser, with or through, such persons,
brokers or dealers ("brokers") as the Adviser may select; and (2) to negotiate
commissions to be paid on such transactions. In the selection of such brokers
and the placing of such orders, the Adviser shall seek to obtain for a Fund the
most favorable price and execution available, except to the extent the Adviser
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 Adviser, bearing in
mind the Fund's best interests at all times, shall consider all factors it deems
relevant, including price, the size of the transaction, the nature of the market
for the security, 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, the Adviser 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, as amended) to the Adviser an amount of commission for effecting a Fund's
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 Adviser 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 responsibilities of the Adviser 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 Adviser in connection with the Adviser's services to other
clients. On occasions when the Adviser deems the purchase or sale of a security
to be in the best interests of a Fund as well as other clients of the Adviser,
the Adviser, 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 order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of securities so
sold or purchased, as well as the expenses incurred in the transaction, will be
made by the Adviser in the manner the Adviser considers to be the most equitable
and consistent with its fiduciary obligations to each Fund and to such other
clients.
f. SECURITIES TRANSACTIONS. The Adviser will not purchase
securities or other instruments from or sell securities or other instruments to
a Fund; PROVIDED, HOWEVER, the Adviser 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, the Advisers Act and the rules and regulations
promulgated thereunder or any exemption therefrom.
The Adviser agrees to observe and comply with Rule 17j-1 under the 1940
Act and the Trust's Code of Ethics, as the same may be amended from time to
time.
g. BOOKS AND RECORDS. In accordance with the 1940 Act and the
rules and regulations promulgated thereunder, the Adviser shall maintain
separate books and detailed records of all matters pertaining to the Funds and
the Trust (the "Fund's Books and Records"), including, without limitation, a
daily ledger of such assets and liabilities relating thereto and brokerage and
other records of all securities transactions. The Adviser acknowledges that the
Fund's Books and Records are property of the Trust. In addition, the Fund's
Books and Records shall be available to the Trust at any time upon request and
shall be available for telecopying without delay to the Trust during any day
that the Funds are open for business.
3. EXPENSES.
a. During the term of this Agreement, the Adviser 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 a
Fund. The Adviser 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 Adviser shall be responsible
for the expenses and costs for the officers of the Trust and the Trustees of the
Trust who are "interested persons" (as defined in the 0000 Xxx) of the Adviser.
b. Unless otherwise mutually agreed to by the Trust and the
Adviser, the Adviser will pay the operating costs and expenses of each class of
the Funds (except those described in subsection (c) below, which shall be paid
by the Trust, or other expenses otherwise excluded under the terms of this
Agreement) including (1) all charges and expenses of any custodian or depository
appointed by the Trust for the safekeeping of its cash, securities and other
assets, (2) all charges and expenses paid to an administrator appointed by the
Trust to provide fund administration services, (3) the charges and expenses of
any transfer agents and registrars appointed by the Trust, (4) the charges and
expenses of independent certified public accountants for the Trust, (5) charges
and expenses of legal counsel for the Trust in connection with legal matters
relating to the Trust (excluding any extraordinary fees or legal fees and costs
in contemplation or arising out of litigation to which the Funds, the officers
or Trustees are a party or incurred in anticipation of becoming a party), (6)
compensation and expenses of the Trust's officers and Trustees who are
"interested persons" of the Adviser, (7) industry association membership dues,
(8) insurance and bonding premiums, (9) expenses relating to the issuance,
registration and qualification of the Trust's shares and other governmental
fees, (10) expenses related to printing and delivering prospectuses, statements
of additional information, and shareholder reports and supplements to any of the
aforementioned to existing shareholders, and (11) expenses incurred in
connection with preparing, filing, printing and mailing shareholder reports,
notices, proxy statements, and reports to government agencies.
c. The Adviser shall not be required to pay any of the following
expenses of the Trust, which instead shall be borne by the Trust: (1) the
compensation and expenses of Trustees of the Trust who are not "interested
persons" of the Adviser, (2) charges and expenses of legal counsel to the
Trustees of the Trust who are not "interested persons" of the Adviser, (3)
expenses incurred in connection with the provision of shareholder services and
distribution services under a Rule 12b-1 plan, (4) fees for administrative
servicing paid in connection with the Trust's Administrative Services Plan, (5)
the cost of securities, commodities and other financial instruments in which the
Trust invests; (6) brokerage commissions and issue and transfer taxes chargeable
to the Trust in connection with securities transactions to which the Trust is a
party, (7) all taxes payable by the Trust to Federal, State or other
governmental entities, (8) the cost of share certificates representing shares of
the Trust, (9) interest, (10) short sale dividend expenses, and (11) expenses
incurred by the Fund in connection with any merger or reorganization and other
non-routine expenses not incurred in the ordinary course of the Fund's business.
4. COMPENSATION. For the services provided and the expenses assumed
with respect to a Fund pursuant to this Agreement, the Adviser will be entitled
to the fee listed for each Fund on Exhibit A. Such fees will be computed daily
and payable monthly at an annual rate based on a Fund's 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 as described in
each Fund's 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.
Notwithstanding any other provision of this Agreement, the Adviser may
from time to time agree not to impose all or a portion of its fee otherwise
payable hereunder (in advance of the time such fee or portion thereof would
otherwise accrue). Any such fee reduction may be discontinued or modified by the
Adviser at any time.
5. REPRESENTATIONS AND WARRANTIES OF ADVISER. The Adviser represents
and warrants to the Trust as follows:
The Adviser is registered as an investment adviser under the
Advisers Act;
The Adviser is a statutory trust duly organized, validly
existing and in good standing 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;
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 and/or 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 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;
The Form ADV of the Adviser provided to the Trust is a true
and complete copy of the form, including that part or parts of the Form ADV
filed with the SEC, that part or parts maintained in the records of the Adviser,
and/or that part or parts provided or offered to clients, in each case as
required under the Advisers Act and rules thereunder, and the information
contained in such Form ADV 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.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE
INFORMATION. All representations and warranties made by the Adviser pursuant to
Section 5 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.
7. LIABILITY AND INDEMNIFICATION.
a. LIABILITY. 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 shall not be subject to any liability to a Fund or
the Trust, 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 Fund assets; PROVIDED, HOWEVER, that nothing herein shall
relieve the Adviser from any of its obligations under applicable law, including,
without limitation, the federal and state securities laws.
b. INDEMNIFICATION. The Adviser shall indemnify the Trust and its
officers and trustees, for any liability and expenses, including 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.
8. DURATION AND TERMINATION.
a. DURATION. Unless sooner terminated, this Agreement shall
continue until May 1, 2009 and thereafter shall continue automatically for
successive annual periods with respect to each of the Funds; PROVIDED that such
continuance is specifically approved at least annually by the Trust's Board of
Trustees or the vote of the lesser of (a) 67% of the shares of a Fund
represented at a meeting 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 FURTHER 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 by vote of a majority of the Trust's Board of Trustees, or, with
respect to a Fund, by "vote of a majority of the outstanding voting securities"
(as defined in the 0000 Xxx) of that Fund, or by the Adviser, in each case, upon
not less than sixty (60) days' written notice to the other party.
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.
9. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. It is understood that the action taken by the Adviser
under this Agreement may differ from the advice given or the timing or nature of
action taken with respect to other clients of the Adviser, and that a
transaction in a specific security may not be accomplished for all clients of
the Adviser at the same time or at the same price.
10. AMENDMENT. This Agreement may be amended by mutual consent of
the parties, provided that the terms of each such amendment shall be in writing
and approved by the Trust's Board of Trustees or by a vote of a majority of the
outstanding voting securities of a Fund (as required by the 1940 Act).
11. CONFIDENTIALITY. Subject to the duties of the Adviser and the
Trust 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 a Fund and the Trust and the actions
of the Adviser and the Funds in respect thereof.
12. 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 party, 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 Adviser:
Nationwide Fund Advisors
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department.
Facsimile: (000) 000-0000
b. If to the Trust:
Nationwide Mutual Funds
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department.
Facsimile: (000) 000-0000
13. JURISDICTION. This Agreement shall be governed by and construed
to be in accordance with substantive laws of the State of Delaware 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.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
together constitute one and the same instrument.
15. CERTAIN DEFINITIONS. For the purposes of this Agreement,
"interested person," "affiliated person," "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.
16. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
17. 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.
18. NATIONWIDE MUTUAL FUNDS AND ITS TRUSTEES. The terms "Nationwide
Mutual Funds" and the "Trustees of Nationwide Mutual Funds" refer respectively
to the Trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under an Agreement and Declaration of Trust
made and dated as of September 30, 2004, as has been or may be amended and/or
restated from time to time, and to which reference is hereby made.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
ADVISER:
NATIONWIDE FUND ADVISORS
By: /s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: President
TRUST:
NATIONWIDE MUTUAL FUNDS
By: /s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: President
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
BETWEEN
NATIONWIDE FUND ADVISORS AND NATIONWIDE MUTUAL FUNDS
EFFECTIVE AUGUST 28, 2007
----------------------------------------------------------- ----------------------------------------------------------
NATIONWIDE TARGET DESTINATION FUNDS OF THE TRUST ADVISORY FEES
----------------------------------------------------------- ----------------------------------------------------------
Nationwide Destination 2010 Fund 0.50% of the Fund's average daily net assets
Nationwide Destination 2015 Fund
Nationwide Destination 2020 Fund
Nationwide Destination 2025 Fund
Nationwide Destination 2030 Fund
Nationwide Destination 2035 Fund
Nationwide Destination 2040 Fund
Nationwide Destination 2045 Fund
Nationwide Destination 2050 Fund
Nationwide Retirement Income Fund
----------------------------------------------------------- ----------------------------------------------------------
TRUST:
NATIONWIDE MUTUAL FUNDS
By: /s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: President
ADVISER:
NATIONWIDE FUND ADVISORS
By: /s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: President
