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EXHIBIT (h)(1)
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FUND ADMINISTRATION AGREEMENT
This Fund Administration Agreement is made as of this 1st day of November,
1997, between Nationwide Separate Account Trust, a Massachusetts business trust
(the "Trust"), and Nationwide Advisory Services, Inc., an Ohio corporation, (the
"Administrator").
WHEREAS, the Trust is a Massachusetts business trust, which operates as an
open-end management investment company and registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"); and
WHEREAS, the Trust desires to retain the Administrator to provide certain
administrative and fund accounting services described below with respect to
certain of the series of the Trust (the "Funds"), each of which as are now, or
may hereafter be, listed on Exhibit A to this Agreement, and the Administrator
is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties hereto agree as follows:
1. Appointment of Administrator. The Trust hereby appoints the Administrator
as administrator of the Funds on the terms and conditions set forth in this
Agreement; and the Administrator hereby accepts such appointment and agrees
to perform the services and duties set forth in Section 2 of this Agreement
in consideration of the compensation provided for in Section 4 hereof.
2. Services and Duties. As Administrator, and subject to the supervision and
control of the Trust's Board of Trustees, the Administrator will provide
facilities, equipment, and personnel to carry out the following
administrative and fund accounting services for operation of the business
and affairs of the Trust and each of the Funds covered by this Agreement:
a. prepare, file, and maintain the Trust's governing documents, including
the Declaration of Trust, the Bylaws, minutes of meetings of Trustees
and shareholders, and proxy statements for meetings of shareholders;
b. prepare and file on a timely basis with the Securities and Exchange
Commission and the appropriate state securities authorities the
registration statements for the Trust, relating to the Funds and the
Funds' shares, and all amendments thereto, the Trust's reports
pursuant to Investment Company Act Rule 24f-2, reports to shareholders
and regulatory authorities, including form N-SAR, and prospectuses,
proxy statements, and such other documents as may be necessary or
convenient to enable the Trust to make continuous offering of the
Fund's shares and to conduct its affairs;
c. prepare, negotiate, and administer contracts on behalf of the Funds
with, among others, the Trust's custodian and transfer agent;
d. supervise the Trust's custodian;
e. calculate performance data of the Funds;
f. prepare and file on a timely basis the Federal and State income and
other tax returns for the Funds;
g. examine and review the operations of the Trust's custodian, transfer
agent and investment adviser and the Funds' subadvisers, if any, to
promote compliance with applicable state and federal law;
h. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
i. perform internal audit examinations in accordance with procedures to
be adopted by the Administrator and the Trust;
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j. assist with the design, development, and operation of the Funds;
k. provide individuals reasonably acceptable to the Trust's Board of
Trustees for nomination, appointment, or election as officers of the
Trust, who will be responsible for the management of certain of the
Trust's affairs as determined by the Trust's Board of Trustees;
l. monitor the Trust's compliance with Section 817 and Sections 851
through 855 of the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, so as to enable the Trust and each
Fund to comply with the diversification requirements applicable to
investments of variable contracts and for each to maintain its status
as a "regulated investment company;"
m. advise the Trust and its Board of Trustees on matters concerning the
Funds and their affairs;
n. provide the Trust with office space and personnel; and
o. provide the Trust and each Fund with fund accounting services,
including but not limited to the following services:
1) keeping and maintaining the following books and records of the
Trust and each of the Funds pursuant to Rule 31a-1 under the
Investment Company Act, including:
a) journals containing an itemized daily record of all purchase
and sales of securities, all receipts and disbursements of
cash and all other debit and credits, as required by Rule
31a-1(b)(1);
b) general and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts,
including interest accrued and interest received, as
required by Rule 31a-1(b)(2)(i);
c) separate ledger accounts required by Rule 31a-1(b)(2)(ii)
and (iii); and
d) a monthly trial balance of all ledger accounts (except
shareholder accounts) as required by Rule 31a-1(b)(8).
2) performing the following accounting services on a regular basis
for each Fund, as may be reasonably requested by the Trust:
a) calculate the net asset value per share;
b) calculate the dividend and capital gain distribution, if
any;
c) calculate a Fund's yield;
d) reconcile cash movements with the Trust's custodian;
e) affirm to the Trust's custodian all portfolio trades and
cash movements;
f) verify and reconcile with the Trust's custodian all daily
trade activity;
g) provide such reports as may be required by the Trust;
h) preparation of the Trust's financial statements, including
oversight of expense accruals and payments;
i) calculating the deviation between marked-to-market and
amortized cost valuations for any money market fund; and
j) such other similar services with respect to a Fund as may be
reasonably requested by the Trust; and
p. assist in all aspects of the Funds' operations other than those
provided under other specific contracts.
The foregoing, along with any additional services that the
Administrator shall agree in writing to perform for the Trust
hereunder, shall hereafter be referred to as "Administrative
Services." In compliance with the requirements of Rule 31a-3 under the
Investment Company Act, the Administrator hereby agrees that all
records that it maintains for the Trust are the property of the Trust
and further agrees to surrender promptly to the Trust any of such
records upon the Trust's request. The Administrator further agrees to
preserve for the periods prescribed by Investment Company Act Rule
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31a-2 the records required to be maintained by Investment Company Act
Rule 31a-1. Administrative Services shall not include any duties,
functions, or services to be performed for the Trust by the Trust's
investment adviser, custodian, or transfer agent pursuant to their
agreements with the Trust.
The Administrator acknowledges the importance of efficient and
prompt transmission of information to the life insurance companies
affiliated with the Administrator ("Nationwide"), the purchaser of
Trust shares to fund the obligations of certain variable annuity
contracts. The Administrator agrees to use its best efforts to meet
the deadline for transmission of pricing information presently set by
Nationwide and such other time deadlines as may be established from
time to time in the future.
When performing Administrative Services to the Trust and for the
Funds, the Administrator will comply with the provisions of the
Declaration of Trust and Bylaws of the Trust, will safeguard and
promote the welfare of the Trust and the Funds, and will comply with
the policies that the Trustees may from time to time reasonably
determine, provided that such policies are not in conflict with this
Agreement, the Trust's governing documents, or any applicable statutes
or regulations.
3. Expenses. The Administrator shall be responsible for expenses incurred in
providing all the Administrative Services to the Trust, including the
compensation of the Administrator's employees who serve as officers of the
Trust, except that the Trust shall reimburse the Administrator for the cost
of the pricing services that the Administer utilizes. The Trust (or the
Trust's investment adviser) shall be responsible for all other expenses of
the Trust, including without limitation: (i) investment advisory and
subadvisory fees; (ii) interest and taxes; (iii) brokerage commissions and
other costs in connection with the purchase or sale of securities and other
investment instruments; (iv) fees and expenses of the Trust's trustees,
other than those who are "interested persons" of the Administrator or
investment adviser of the Trust; (v) legal and audit expenses; (vi)
custodian and transfer and dividend disbursing agent fees and expenses;
(vii) fees and expenses related to the registration and qualification of
the Trust and the Trust's shares for distribution under state and federal
securities laws; (viii) expenses of printing and mailing reports and
notices and proxy material to beneficial shareholders of the Trust; (ix)
all other expenses incidental to holding meetings of the Trust's
shareholders, including proxy solicitations therefor; (x) insurance
premiums for fidelity and other coverage; (xi) association membership dues;
(xii) such nonrecurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Trust is a
party and the legal obligation which the Trust may have to indemnify the
Trust's trustees and officers with respect thereto.
4. Compensation. For the Administrative Services provided, the Trust hereby
agrees to pay and the Administrator hereby agrees to accept as full
compensation for its services rendered hereunder the administrative 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 and will be paid monthly as soon as practicable after the last day
of each month.
In case of termination of this Agreement during any month, the
administrative fee for that month shall be reduced proportionately on the
basis of the number of business days during which it is in effect, and the
fee computed upon the average net assets for the business days it is so in
effect for that month.
5. Responsibility of Administrator.
a. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or negligence on its
part in the performance of its duties or from reckless disregard by it
of its obligations and duties under this Agreement. Any person, even
though also an officer, director, partner, employee or agent of the
Administrator, who may be or become an officer or trustee of the
Trust, shall be deemed, when rendering services to the Trust or acting
on any business of the Trust (other than services or business in
connection with the duties of the Administrator hereunder) in
accordance with his responsibilities to the Trust as such officer or
trustee, to be rendering such services to or acting solely for the
Trust and not as an officer, director, partner, employee or agent or
one under the control or direction of the Administrator even though
paid by the Administrator.
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b. The Administrator shall be kept indemnified by the Trust and be
without liability for any action taken or thing done by it in
performing the Administrative Services in accordance with the above
standards; provided, however, that the Trust will not indemnify the
Administrator for the portion of any loss or claim caused, directly or
indirectly, by the negligence, wilful malfeasance or bad faith of the
Administrator or by the Administrator's reckless disregard of its
duties and obligations hereunder. In order that the indemnification
provisions contained in this Section 5 shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or
save the Administrator harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question,
and it is further understood that the Administrator will use all
reasonable care to identify and notify the Trust promptly concerning
any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Trust. The
Trust shall have the option to defend the Administrator against any
claim which may be the subject of this indemnification. In the event
that the Trust so elects it will so notify the Administrator and
thereupon the Trust shall take over complete defense of the claim, and
the Administrator shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
Section. The Administrator shall in no case confess any claim or make
any compromise or settlement in any case in which the Trust will be
asked to indemnify the Administrator except with the Trust's written
consent.
6. Duration and Termination.
a. This Agreement shall become effective as of the date first written
above. The Agreement may be terminated at any time, without payment of
any penalty, by either party upon 90 days' advance written notice to
the other party. The Agreement may also be terminated immediately upon
written notice to the other party in the event of a material breach of
any provision of this Agreement by such other party.
b. Upon the termination of this Agreement, the Trust shall pay to the
Administrator such compensation as may be payable prior to the
effective date of such termination. In the event that the Trust
designates a successor to any of the Administrator's obligations
hereunder, the Administrator shall, at the direction of the Trust,
transfer to such successor all relevant books, records and other data
established or maintained by the Administrator under the foregoing
provisions.
7. Amendment. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing
signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.
8. Nationwide Separate Account 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, representatives, or agents
are not made individually, but only in their capacities with respect to
Nationwide Separate Account 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.
9. Notices. Notices of any kind to be given to the Trust hereunder by the
Administrator shall be in writing and shall be duly given if delivered to
the Trust and to its investment adviser at the following address:
Nationwide Separate Account Trust
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxx, Treasurer
Notices of any kind to be given to the Administrator hereunder by the
Trust shall be in writing and shall be duly given if delivered to the
Administrator at:
Nationwide Advisory Services, Inc.
Three Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxx, Vice President and General Manager
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10. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect. If any provision
of this Agreement shall be held or made invalid by a court or regulatory
agency decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. Subject to the provisions of
Section 5, hereof, this Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors. This
Agreement shall be governed by and construed to be in accordance with
substantive laws of the State of Ohio 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
NATIONWIDE ADVISORY SERVICES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxx
Title: Treasurer
NATIONWIDE SEPARATE ACCOUNT TRUST
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Treasurer
EXHIBIT A
NATIONWIDE SEPARATE ACCOUNT TRUST
FUND ADMINISTRATION AGREEMENT
FUNDS OF THE TRUST FUND ADMINISTRATION FEES
Total Return Fund
Capital Appreciation Fund 0.05% of each Fund's average daily
Government Bond Fund net assets up to $1 billion
Money Market Fund 0.04% on assets of $1 billion and more
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Nationwide Balanced Fund For each Fund,
Nationwide Equity Income Fund 0.07% on assets up to $250 million
Nationwide Global Equity Fund 0.05% on the next $750 million
Nationwide High Income Bond Fund 0.04% on assets of $1 billion and
more
Nationwide Multi Sector Bond Fund
Nationwide Small Cap Value Fund
Nationwide Select Advisers Mid Cap Fund
Nationwide Strategic Growth Fund
Nationwide Strategic Value Fund
Dated as of November 1, 1997.
NATIONWIDE ADVISORY SERVICES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxx
Title: Treasurer
NATIONWIDE SEPARATE ACCOUNT TRUST
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Treasurer
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