Exhibit No. EX-23(d)(3)(i)
SUBADVISORY AGREEMENT
THIS AGREEMENT is made and entered into effective the 19th day of
December, 2007, by and among NATIONWIDE MUTUAL FUNDS (formerly Gartmore Mutual
Funds) (the "Trust"), a Delaware statutory trust, NATIONWIDE FUND ADVISORS
(formerly Gartmore Mutual Fund Capital Trust) (the "Adviser") a Delaware
business trust registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act"), and DIMENSIONAL FUND ADVISORS LP (the "Subadviser"), a
limited partnership organized under the laws of the State of Delaware, and also
registered under the Advisers Act.
WITNESSETH:
WHEREAS, the Trust is registered with the U.S. 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 Adviser has, pursuant to an Investment Advisory Agreement
with the Trust dated of the 1st day of May, 2007 (the "Advisory Agreement"),
been retained to act as investment adviser for a certain series of the Trust
that is listed on Exhibit A to this Agreement (the "Fund");
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;
WHEREAS, the Trust and the Adviser each represent that 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 the Subadviser to assist it in
the provision of a continuous investment program for that portion of the Fund's
assets that the Adviser will assign to the Subadviser, 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
with respect to each Fund:
1. Appointment as Subadviser. The Adviser hereby appoints the
Subadviser to act as investment adviser for and to manage that portion or all of
the assets of the Fund that the Adviser from time to time upon reasonable prior
notice allocates to, and puts under the control of, the Subadviser (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 appointment. 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 cannot object to such activities.
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 the Fund as set forth in the Fund's current prospectus and
statement of additional information as currently in effect and, as soon as
practical after the Trust, the Fund or the Adviser notifies the Subadviser
thereof, 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 monitor on a continuous basis the
performance of the Subadviser Assets and to conduct a continuous program of
investment, evaluation and, if appropriate, sale and reinvestment of the
Subadviser Assets. The Subadviser is authorized, in its sole discretion and
without prior consultation with the Adviser, to buy, sell, lend and otherwise
trade in any stocks, bonds and other securities and investment instruments on
behalf of the Subadviser Assets, in accordance with the Fund's investment
objective and policies. 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,
providing information concerning the Fund, its funds available, or to become
available, for investment and generally as to the conditions of the Fund's or
the Trust's affairs.
b. Compliance with Applicable Laws and Governing Documents.
In the performance of its services under this Agreement, the Subadviser shall
act in conformity with the Prospectus and the Trust's Agreement and Declaration
of Trust and By-Laws as currently in effect and, as soon as practical after the
Trust, the Fund or the Adviser notifies the Subadviser thereof, as supplemented,
amended and/or restated from time to time (referred to hereinafter as the
"Declaration of Trust" and "By-Laws," respectively) 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. Without limiting the preceding sentence,
the Adviser promptly shall notify the Subadviser as to any act or omission of
the Subadviser hereunder that the Adviser reasonably deems to constitute or to
be the basis of any noncompliance or nonconformance with any of the Trust's
Declaration of Trust and By-Laws and the Prospectus, the instructions and
directions received in writing from the Adviser or the Trustees of the Trust or
the 1940 Act, the Code, and all other applicable federal and state laws and
regulations. Notwithstanding the foregoing, the Adviser shall remain responsible
for ensuring the Fund's and the Trust's overall compliance with the 1940 Act,
the Code and all other applicable federal and state laws and regulations and the
Subadviser is only obligated to comply with this subsection (b) with respect to
the Subadviser Assets. The Adviser timely will provide the Subadviser with (i) a
copy of the minutes of the meetings of the Board of Trustees of the Trust to the
extent they may affect a Fund or the services of the Subadviser, (ii) copies of
any financial statements or reports made by a Fund to its shareholders, (iii)
resolutions, policies and procedures adopted by the Trust in respect of the
management or operation of the Fund, (iv) a list of affiliated brokers and
underwriters and other affiliates for compliance with application provisions of
the Investment Company Act, and (v) any further materials or information which
the Subadviser may reasonably request to enable it to perform its functions
under this Agreement. Until updates or amendments to such documents are
provided, the Subadviser may continue to rely on those documents previously
provided.
The Adviser shall perform quarterly and annual tax compliance
tests to ensure that the Fund is in compliance with Subchapter M and Section
817(h) of the Code. In connection with such compliance tests, the Adviser shall
inform the Subadviser at least ten (10) business days prior to a calendar
quarter end if the Subadviser Assets are out of compliance with the
diversification requirements under either Subchapter M or Section 817(h). If the
Adviser notifies the Subadviser that the Subadviser Assets are not in compliance
with such requirements noted above, the Subadviser will take prompt action to
bring the Subadviser Assets back into compliance within the time permitted under
the Code thereunder.
The Adviser will 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 that 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 will ensure 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 Fund, 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 in writing 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 upon
reasonable request 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 Adviser hereby delegates to the
Subadviser the Adviser's discretionary authority to exercise voting, conversion
and subscription rights and the right to respond to tender offers and other
consent solicitations, with respect to the securities and other investments in
the Subadviser Assets, provided that such materials have been forwarded to the
Subadviser in a timely manner by the Fund's custodian, and authorizes the
Subadviser to delegate further such discretionary authority to a designee
identified in a notice given to the Trust and the Adviser. The Subadviser,
including without limitation its designee, 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 pursuant to its then current proxy voting policies
and procedures, and shall not be required to seek or take instructions from, the
Adviser, the Fund or the Trust or take any action with respect thereto. If both
the Subadviser and another entity managing assets of the Fund have invested the
Fund's assets in the same security, the Subadviser and such other entity will
each have the power to vote its pro rata share of the Fund's security.
The Subadviser will establish a written procedure for proxy
voting in compliance with current applicable rules and regulations, including
but not limited to Rule 30b1-4 under the 1940 Act. The Subadviser will provide
the Adviser or its designee, a copy of such procedure and establish a process
for the timely distribution of the Subadviser's voting record with respect to
the Fund's securities and other information necessary for the Fund to complete
information required by Form N-1A under the 1940 Act and the Securities Act of
1933, as amended (the "Securities Act"), Form N-PX under the 1940 Act, and Form
N-CSR under the Xxxxxxxx-Xxxxx Act of 2002, as amended, respectively.
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. Upon request, 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 plenary authority of the Trust's Board of
Trustees, to establish and maintain accounts on behalf of the Fund with, and
place orders for the investment and reinvestment, including without limitation
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 (collectively "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 best execution for the Fund. The Subadvisor is permitted to pay
higher brokerage commissions for brokerage and research services, as provided
below. In using its reasonable efforts to obtain best execution for the Fund,
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. Notwithstanding the foregoing, neither the
Trust, the Fund nor the Adviser shall instruct the Subadviser to place orders
with any particular Broker(s) with respect to the Subadviser Assets. Subject to
such policies as the Trustees may determine, or as may be mutually agreed to by
the Adviser and the Subadviser, the Subadviser is authorized but not obligated
to cause, and 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, the 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 Subadviser Assets'
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 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 the Fund with respect to the Subadviser
Assets 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 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 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 the Fund or the size of the position obtainable for, or
disposed of by, the Fund with respect to the Subadviser Assets.
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 the Fund; provided,
however, the Subadviser or any affiliated person of the Subadviser may purchase
securities or other instruments from or sell securities or other instruments to
the 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, on its own behalf and with respect to 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 its 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 at least an annual basis, the Subadviser will comply with
the reporting requirements of Rule 17j-1, which may include either (i)
certifying 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) identifying any violations which have occurred with respect to
the Subadviser Assets. The Subadviser will have also submitted the Subadviser's
Code of Ethics to the Adviser in order for the Adviser to obtain its initial
approval by the Board of Trustees no later than the date of execution of this
agreement and subsequently within six months of any material change thereto.
g. Books and Records. The Subadviser shall maintain separate
detailed records as are required by applicable laws and regulations of all
matters hereunder pertaining to the Subadviser Assets (the "Fund's Records"),
including, without limitation, brokerage and other records of all securities
transactions. The Subadviser acknowledges that the Fund's Records are property
of the Trust; except to the extent that the Subadviser is required to maintain
the Fund's Records under the Advisers Act or other applicable law and except
that the Subadviser, at its own expense, is entitled to make and keep a copy of
the Fund's Records for its internal files. The Fund's Records shall be available
to the Adviser or the Trust at any time upon reasonable request during normal
business hours and shall be available to the Adviser for telecopying promptly to
the Adviser upon notice during any day that the Fund is open for business as set
forth in the Prospectus.
h. Information Concerning Subadviser Assets and Subadviser.
From time to time as the Adviser or the Trust reasonably may request in good
faith, the Subadviser will furnish the requesting party reports on portfolio
transactions and reports on the Subadviser Assets, all in such reasonable detail
as the parties may reasonably agree in good faith. 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 the Trust's or the Adviser's 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 via telephone on a quarterly basis and
in person on a less frequent basis as agreed upon by the parties.
Subject to the other provisions of this Agreement, the
Subadviser will also provide such information or perform such additional acts
with respect to the Subadviser Assets as are reasonably 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, and any rule or regulation thereunder.
i. Custody Arrangements. The Trust or the Adviser shall
notify the Subadviser of the identities of its custodian banks and the custody
arrangements therewith with respect to the Subadviser Assets and shall give the
Subadviser written notice of any changes in such custodian banks or 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 in good faith relating to all transactions concerning the
Subadviser Assets. The Trust shall instruct its custodian banks to (A) carry out
all investment instructions as may be directed by the Subadviser with respect to
the Subadviser Assets (which instructions may be orally given if confirmed in
writing); and (B) provide the Subadviser with all operational information
necessary for the Subadviser to trade the Subadviser Assets on behalf of the
Fund. The Subadviser shall have no liability for the acts or omissions of the
authorized custodian(s), unless such act or omission is required by and taken in
reliance upon instructions given to the authorized custodian(s) by a
representative of the Subadviser properly authorized (pursuant to written
instruction by the Adviser) to give such instructions.
j. Legal Proceedings. The Subadviser shall not advise or act
for the the Fund, the Adviser or the Trust in any legal proceedings, including
bankruptcies or class actions, involving securities held or previously held by
the Fund or the issuers of such securities.
3. Independent Contractor. In the performance of its services
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 Fund, the Trust or the Adviser in
any way or otherwise be deemed an agent of the Fund, the Trust or the Adviser,
except as provided in Section 2(d) of this Agreement.
4. Expenses. During the term of this Agreement, the Subadviser will
pay all expenses incurred by it in connection with its activities under this
Agreement. 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, the Fund's or Adviser's expenses, which shall
include, but not be limited to: the cost of securities, commodities and other
investments (including brokerage commissions and other transaction charges, if
any) purchased for a Fund and any losses incurred in connection therewith,
expenses of holding or carrying Subadviser Assets, including, without
limitation, expenses of dividends on stock borrowed to cover a short sale and
interest, fees or other charges incurred in connection with leverage and related
borrowings with respect to the Subadviser Assets, organizational and offering
expenses (which include, but are not limited to, 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 Fund's
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 SEC; expenses of registering
or qualifying securities of the Fund for sale in the various states; freight and
other charges in connection with the shipment of the Fund's 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 Fund 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 pursuant to this
Agreement, the Subadviser is entitled to the fee listed for the Fund on Exhibit
A hereto. Such fees will be computed daily and paid no later than the seventh
(7th) business day following the end of each month, from the Adviser, calculated
at an annual rate based on the Subadviser Assets' average daily net assets.
The method of determining the net asset value of the Subadviser Assets
for purposes hereof shall be the same as the method of determining net asset
value for purposes of establishing the offering and redemption price of the
shares of the Trust as described in the Fund's Prospectus. If this Agreement
shall be effective for only a portion of a month with respect to the Fund, the
aforesaid fee shall be prorated for the portion of such month during which this
Agreement is in effect for the Fund.
6. Representations and Warranties of Subadviser. The Subadviser
a. The Subadviser is registered as an investment adviser
under the Advisers Act;
b. The Subadviser is registered as a Commodity Trading
Advisor under the Commodity Exchange Act, as amended (the "CEA"), with the
Commodity Futures Trading Commission (the "CFTC"), or has filed a notice of
exemption with the CFTC under the CEA, or is not required to file such
registration or exemption;
c. The Subadviser is a limited partnership duly formed and
properly registered and operating 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 and as proposed to be conducted hereunder;
2
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 actions of its directors or shareholders, 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 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 violation of, or a material 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; and
e. The Form ADV of the Subadviser provided to the Adviser
and 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.
The Subadviser represents that its Form ADV provided to the Adviser complies in
all material respects with the requirements of the Advisers Act.
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
Rule 4.14 under the CEA with the CFTC and the National Futures Association or is
not required to file such exemption;
c. The Adviser is a business trust 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
and as proposed to be conducted hereunder and the Adviser has provided the
Subadviser with a true and complete copy of the Declaration of Trust and
By-Laws;
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 directors, shareholders or managing
unitholder, 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 violation of, or a material 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 and 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.
The Adviser represents that its Form ADV provided to the Subadviser and the
Trust complies in all material respects with the requirements of the Advisers
Act.
3
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
delegate certain of its duties under the Advisory Agreement to other investment
advisers, including without limitation, the appointment of a subadviser with
respect to assets of each of the Trust's mutual fund series, including without
limitation the Adviser's entering into and performing 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 statutory trust duly formed 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 and as
proposed to be conducted hereunder;
b. The Trust is registered as an investment company under
the 1940 Act and has elected to qualify and has qualified, together with the
Fund, as a regulated investment company under the Code, and the Fund's shares
are registered under the Securities Act;
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 Trust 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; and
d. The Trust acknowledges that it received a copy of the
Subadviser's Form ADV prior to the execution of this Agreement.
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 the recitals above and 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 or accurate
in all material respects.
4
10. Liability and Indemnification.
a. Liability. The Subadviser shall exercise its best
judgment in rendering its services in accordance with the terms of this
Agreement, but otherwise, 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, employees, agents and affiliates ("Affiliates")
and each person, if any, who within the meaning of the Securities Act controls
the Subadviser ("Controlling Persons"), if any, shall not be subject to any
expenses or liability to the Adviser, any other subadviser to a Fund, the Trust
or a Fund or any of a Fund's shareholders, in connection with the matters to
which this Agreement relates, including without limitation for any losses that
may be sustained in the purchase, holding or sale of Subadviser Assets. The
Adviser shall exercise its best judgment in rendering its obligations in
accordance with the terms of this Agreement, but otherwise (except as set forth
in Section 10(c) below), 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. In no case will the Subadviser be liable
for actions taken or omissions of actions with respect to the performance of
services under this Agreement based upon specific information, instructions or
requests given or made to the Subadviser by the Adviser. Notwithstanding the
foregoing, 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 without limitation reasonable
attorneys' fees and expenses, which the Adviser, the Trust and/or the Fund and
their respective Affiliates and Controlling Persons may sustain 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 without limitation reasonable
attorneys' fees and expenses, 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.
The Trust shall indemnify the Subadviser, its Affiliates and
its Controlling Persons, for any liability and expenses, including without
limitation reasonable attorneys' fees and expenses, which may be sustained as a
result of the Trust'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.
5
c. The Subadviser shall not be liable to the Adviser for (i)
any acts of the Adviser or any other subadviser to a Fund with respect to the
portion of the assets of that Fund not managed by the 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 the Adviser or any other subadviser to
a Fund, which records are not also maintained by or otherwise available to the
Subadviser upon reasonable request. The Adviser agrees that the 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 and from any other
acts of the Adviser, including any failure of the Adviser to provide accurate
and current information with respect to any records maintained by the Adviser or
any other subadviser to the Fund.
11. Duration and Termination.
a. Duration. Unless sooner terminated, this Agreement shall
continue until May 1, 2009 with respect to any Fund covered by this Agreement
initially and for any Fund subsequently added to this Agreement, an initial
period of no more than two years that terminates on the second May 1st that
occurs following the effective date of this Agreement with respect to such Fund,
and thereafter shall continue automatically for successive annual periods with
respect to each such Fund, provided 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 the 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 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 with
respect to the 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
Fund (as defined in the 1940 Act), or by the Adviser, in each case, upon not
more than 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 not more than 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. To the extent
required by the Investment Advisers Act of 1940 and interpretations thereunder,
the Subadviser will notify the Adviser in the event of any change in the
membership of the Subadviser's partnership within a reasonable time after such
change.
6
c. Effect of Termination. Termination of this Agreement
shall not affect (i) the validity of any action previously taken by the
Subadviser under this Agreement, (ii) liabilities or obligations of the parties
arising from transactions initiated before termination of this Agreement, or
(iii) the Adviser's obligations to compensate the Subadviser for work performed
under this Agreement prior to termination. On the termination of this Agreement,
the Subadviser shall have no obligation to recommend or take any action with
regard to the securities, cash or other investments comprising the Subadviser
Assets, other than ordinary settlement obligations.
12. Duties of the Adviser. The Adviser shall continue to have
responsibility for all services to be provided to the Fund 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 Fund.
13. Reference to Adviser and Subadviser.
a. Neither the Adviser nor any Affiliate or agent of the
Adviser shall make reference to or use the name of Subadviser or any of its
Affiliates, or any of their clients (excluding the Fund), except references
concerning the identity of and services provided by the Subadviser to a 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 the Subadviser, which approval shall not be
unreasonably withheld or delayed. The Adviser hereby agrees to make all
reasonable efforts to cause the 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 the Adviser or any of its Affiliates,
or any of their clients, except references concerning the identity of and
services provided by the Adviser to a Fund or to the Subadviser, 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 the Adviser, which approval shall not be unreasonably withheld
or delayed. The Subadviser hereby agrees to make all reasonable efforts to cause
any Affiliate of the Subadviser 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 1940 Act), 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 any and all information pertaining to the
Fund and the actions of the Subadviser, the Adviser and the Fund in respect
thereof; except to the extent:
a. Authorized. The Adviser or the Trust has authorized such
disclosure;
b. Court or Regulatory Authority. Disclosure of such
information is expressly required or requested by a court or other tribunal of
competent jurisdiction or applicable federal or state regulatory authorities (a
"Required Disclosure");
c. Publicly Known Without Breach. Such information becomes
known to the general public without a breach of this Agreement or a similar
confidential disclosure agreement regarding such information;
d. Already Known. Such information already was known by the
party prior to the date hereof without confidentiality restrictions;
e. Received From Third Party. Such information was or is
hereafter rightfully received by the party from a third party (expressly
excluding the Fund's custodian, prime broker and administrator) without
restriction on its disclosure and without breach of this Agreement or of a
similar confidential disclosure agreement regarding them; or
f. Independently Developed. The party independently
developed such information.
In the event of a Required Disclosure, to the extent permitted
by applicable law, the party making such Required Disclosure shall use
commercially reasonable efforts to notify the other party of such Required
Disclosure prior to making such Required Disclosure. If it is not possible to
notify the other party prior to making a Required Disclosure, to the extent
permitted by applicable law, such notice shall be provided as soon as
practicable after making such Required Disclosure.
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 parties:
If to the Subadviser:
Dimensional Fund Advisors LP.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
If to the Adviser:
Nationwide Fund Advisors
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
If to the Trust:
Nationwide Mutual Funds
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Legal Department
Facsimile: (000) 000-0000
17. Jurisdiction. This Agreement shall be governed by and construed
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.
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. Entire Agreement. This Agreement, together with all exhibits,
attachments and appendices, contains the entire understanding and agreement of
the parties with respect to the subject matter hereof.
23. 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 the 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.
24. Multi-Manager Funds. In connection with securities
transactions for the Fund, the Subadviser that is (or whose affiliated person
is) entering into the transaction, and any other investment manager that is
advising an affiliate of the Fund (or portion of the Fund) (collectively, the
"Managers" for the purposes of this section) entering into the transaction are
prohibited from consulting with each other concerning transactions for the Fund
in securities or other assets and, if both Managers are responsible for
providing investment advice to the Fund, the Manager's responsibility in
providing advice is expressly limited to a discrete portion of the Fund's
portfolio that it manages. This prohibition does not apply to communications by
the Adviser in connection with the Adviser's (i) overall supervisory
responsibility for the general management and investment of the Fund's assets;
(ii) determination of the allocation of assets among the Manager(s), if any; and
(iii) investment discretion with respect to the investment of Fund assets not
otherwise assigned to a Manager.
[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.
TRUST:
NATIONWIDE MUTUAL FUNDS
By:/s/Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
Title: President & CEO
ADVISER:
NATIONWIDE FUND ADVISORS
By: /s/Xxxx X. Xxxxx
-----------------------
Name: Xxxx X. Xxxxx
Title: President
SUBADVISER:
DIMENSIONAL FUND ADVISORS LP
By:/s/Xxxxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President and
Secretary
By: Dimensional Holdings
Inc., its Sole General
Partner
EXHIBIT A
SUBADVISORY AGREEMENT
AMONG
NATIONWIDE FUND ADVISORS,
NATIONWIDE MUTUAL FUNDS
AND DIMENSIONAL FUND ADVISORS LP
Effective December 19, 2007*
Fund of the Trust Subadvisory Fees
Nationwide U.S. Small Cap Value Fund 0.45% on all assets
-------------------------------------------------------------------------------
* As approved at the October 25, 2007 Board Meeting
