--------------------------------------------------------------------------------
EXHIBIT (h)(5)
--------------------------------------------------------------------------------
EXPENSE LIMITATION AGREEMENT
NATIONWIDE SEPARATE ACCOUNT TRUST
EXPENSE LIMITATION AGREEMENT, amended effective as of December 27, 2000 by
and between VILLANOVA GLOBAL ASSET MANAGEMENT TRUST (the "Investment Adviser")
and NATIONWIDE SEPARATE ACCOUNT TRUST (the "Trust"), a Massachusetts business
trust, on behalf of each of the funds listed on Exhibit A (each, a "Fund").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open end-diversified management company of
the series type, and each Fund is a series of the Trust; and
WHEREAS, the Trust and the Investment Adviser have entered into an
Investment Advisory Agreement (the "Advisory Agreement"), pursuant to which the
Investment Adviser will render investment advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund; and
WHEREAS, the Trust and the Investment Adviser have determined that it is
appropriate and in the best interests of the Fund and its shareholders to
maintain the expenses of the Fund at a level below the level to which the Fund
would normally be subject during its start-up period.
NOW, THEREFORE, the parties hereto agree as follows:
5. Expense Limitation.
5.1. Applicable Expense Limit. To the extent that the aggregate expenses of
every character incurred by a Fund in any fiscal year, including but
not limited to investment advisory fees of the Investment Adviser (but
excluding interest, taxes, brokerage commissions, Rule 12b-1 fees,
fees paid pursuant to an Administrative Services Plan and other
expenditures which are capitalized in accordance with generally
accepted accounting principles and other extraordinary expenses not
incurred in the ordinary course of the Fund's business) ("Fund
Operating Expenses"), exceed the Operating Expense Limit, as defined
in Section 1.2 below, such excess amount (the "Excess Amount") shall
be the liability of the Invest-ment Adviser.
5.2. Operating Expense Limit. The Operating Expense Limit in any year shall
be a percentage of the average daily net assets of each class of the
Fund as described in Exhibit A, or such other rate as may be agreed to
in writing by the parties. The parties hereby agree that Operating
Expense Limit described in Exhibit A initially will not be increased
before the date listed on Exhibit A.
5.3. Method of Computation. To determine the Investment Adviser's liability
with respect to the Excess Amount, each month the Fund Operating
Expenses shall be annualized as of the last day of the month for each
class of a Fund. If the annualized Fund Operating Expenses for any
month exceed the Operating Expense Limit of a Fund class, the
Investment Adviser shall first waive or reduce its advisory fee for
such month by an amount sufficient to reduce the annualized Fund
Operating Expenses to an amount which does not exceed the Operating
Expense Limit. If the amount of the waived or reduced advisory fee for
any such month is insufficient to satisfy the Excess Amount, the
Investment Adviser may also remit to a Fund an amount that, together
with the waived or reduced advisory fee, is sufficient to satisfy such
Excess Amount.
5.4. Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made
by the appropriate party in order that the amount of the advisory fees
waived or reduced and other payments remitted by the Investment
Adviser to a Fund with respect to the previous fiscal year shall equal
the Excess Amount.
-- 332 --
6. Reimbursement of Fee Waivers and Expense Reimbursements.
6.1. Reimbursement. If in any fiscal year during which total Fund assets
are greater than $100 million and in which the Investment Advisory
Agreement is still in effect, the estimated aggregate Fund Operating
Expenses for the fiscal year are less than the Operating Expense Limit
for that year, subject to quarterly approval by the Trust's Board of
Trustees as provided in Section 2.2 below, the Investment Adviser
shall be entitled to reimbursement by a Fund, in whole or in part as
provided below, of the advisory fees waived or reduced and other
payments remitted by the Investment Adviser to the Fund pursuant to
Section 1 hereof. The total amount of reimbursement to which the
Investment Adviser may be entitled (the "Reimbursement Amount") shall
equal, at any time, the sum of all advisory fees previously waived or
reduced by the Investment Adviser and all other payments remitted by
the Invest-ment Adviser to a Fund, pursuant to Section 1 hereof,
during any of the previous five (5) fiscal years after a Fund
commences operations less any reimbursement previously paid by such
Fund to the Investment Adviser, pursuant to Sections 2.2 or 2.3
hereof, with respect to such waivers, reductions, and payments. The
Reimbursement Amount shall not include any additional charges or fees
whatsoever, including, e.g., interest accruable on the Reimburse-ment
Amount.
6.2. Board Approval. No portion of the Reimbursement Amount shall be paid
to the Investment Adviser pursuant to this provision in any fiscal
year, unless the Trust's Board of Trustees has determined that the
payment of such reimbursement is appropriate in light of the terms of
this Agreement. The Trust's Board of Trustees shall determine
quarterly in advance whether any portion of the Reimbursement Amount
may be paid to the Investment Adviser in such quarter.
6.3. Method of Computation. To determine a Fund's payments, if any, to
reimburse the Investment Adviser for all or any portion of the
Reimbursement Amount, each month the Fund Operating Expenses for each
Fund class shall be annualized as of the last day of the month. If the
annualized Fund Operating Expenses of a Fund class for any month are
less than the Operating Expense Limit for that class, a Fund may
submit for Board approval (See Section 2.2), a proposal to pay to the
Investment Adviser an amount which is equal to the amount by which the
Operating Expense Limit exceeds the annualized Fund Operating
Expenses.
6.4. Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made
by the appropriate party in order that the actual Fund Operating
Expenses for the prior fiscal year (including any reimbursement
payments hereunder with respect to such fiscal year) do not exceed the
Operating Expense Limit.
7. Term and Termination of Agreement.
This Agreement shall continue in effect for a period of one year from the
date of its execution for any Fund covered by the Agreement initially and for an
initial one-year period for any Fund subsequently added to the Agreement and
from year to year thereafter provided such continuance is specifically approved
by a majority of the Trustees of the Trust who (i) are not "interested persons"
of the Trust or any other party to this Agreement, as defined in the 1940 Act,
and (ii) have no direct or indirect financial interest in the operation of this
Agreement ("Non-Interested Trustees"), provided however, that the reimbursements
described in Section 2 will not continue to accrue for more than five years
after a Fund's commencement of operations. Notwithstanding the preceding
provisions, the parties hereby agree that the initial Operating Expense Limits
describe herein shall remain in place until at least the date listed on Exhibit
A.
8. Miscellaneous.
8.1. Captions. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
8.2. Interpretation. Nothing herein contained shall be deemed to require
the Trust or a Fund to take any action contrary to the Trust's
Agreement and Declaration of Trust or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which
it is bound, or to relieve or deprive the Trust's Board of Trustees of
its responsibility for and control of the conduct of the affairs of
the Trust or the Fund.
-- 333 --
8.3. Definitions. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment
advisory fee, the computations of net asset values, and the allocation
of expenses, having a counterpart in or otherwise derived from the
terms and provisions of the Advisory Agreement or the 1940 Act, shall
have the same meaning as and be resolved by reference to such Advisory
Agreement or the 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
NATIONWIDE SEPARATE ACCOUNT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
VILLANOVA GLOBAL ASSET MANAGEMENT TRUST
By: /s/ Xxxxx X. Xxxxxxxx
EXHIBIT A
TO THE EXPENSE LIMITATION AGREEMENT BETWEEN
NATIONWIDE SEPARATE ACCOUNT
TRUSTANDVILLANOVA GLOBAL ASSET MANAGEMENT TRUST
AUGUST 30, 2000
(AS AMENDED DECEMBER 27, 2000)
NAME OF FUND EXPENSE
LIMITATION
FOR FUND
----------
Gartmore NSAT Emerging Markets Fund . . . 1.75%*
Gartmore NSAT International Growth Fund . 1.60%*
Gartmore NSAT Global Leaders Fund . . . . 1.55%*
Gartmore NSAT European Growth Fund. . . . 1.60%*
Gartmore NSAT Global Small Companies Fund 1.75%*
Gartmore NSAT OTC Fund. . . . . . . . . . 1.60%*
-------------------------
* Effective until at least May 1, 2002.
SEPARATE ACCOUNT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
VILLANOVA GLOBAL ASSET MANAGEMENT TRUST
By: /s/ Xxxxx X. Xxxxxxxx
-- 334 --
