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EXHIBIT (d)(1)
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INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this 1st day of November, 1997
between NATIONWIDE SEPARATE ACCOUNT TRUST (the "Trust"), a Massachusetts
business trust, and NATIONWIDE ADVISORY SERVICES, INC. (the "Adviser"), an Ohio
corporation registered under the Investment Advisers Act of 1940 (the "Advisers
Act").
WITNESSETH:
WHEREAS, the Trust is registered with the Securities and Exchange Commission
(the "SEC") as an open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act");
WHEREAS, the Trust desires to retain the Adviser to furnish certain investment
advisory 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. (1) 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
Securities and Exchange Commission, 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.
(1) 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.
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(2) 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.
(3) 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.
(4) 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) 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 Declaration of Trust and By-Laws 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.
(c) 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.
(d) Brokerage. The Adviser is authorized, subject to the supervision of the
Trust's Board of Trustees, to establish and maintain accounts on behalf of
each Fund with, and place orders for the purchase and sale of assets not
allocated to a Subadviser, with or through, such persons, brokers or
dealers ("brokers") as Adviser may select and 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 it may be
permitted to pay higher brokerage commissions for brokerage and research
services, as provided below. In using its reasonable efforts to obtain for
a Fund the most favorable price and execution available, the 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) to the
Adviser an amount of commission for effecting a Fund investment transaction
that is in excess of the amount of commission that another broker would
have charged for effecting that transaction if, but only if, the 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.
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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
host 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.
(e) 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 and 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.
(f) 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. 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 Trust who are "interested
persons" (as defined in the 1940 Act) of the Adviser.
It is understood that the Trust will pay all of its own expenses including,
without limitation, (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 administrative or compliance services, (3) the charges and
expenses of any transfer agents and registrars appointed by the Trust, (4) the
charges acid expenses of independent certified public accountants and of general
ledger accounting and internal reporting services for the Trust, (5) the charges
and expenses of dividend and capital gain distributions, (6) the compensation
and expenses of Trustees of the Trust who are not "interested persons" of the
Adviser, (7) brokerage commissions and issue and transfer taxes chargeable to
the Trust in connection with securities transactions to which the Trust is a
party, (8) all taxes and fees payable by the Trust to Federal, State, or other
governmental agencies, (9) the cost of stock certificates representing shares of
the Trust, (10) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses and reports to shareholders,
(11) charges and expenses of legal counsel for the Trust in connection with
legal matters relating to the Trust, including without limitation, legal
services rendered in connection with the Trust's existence, financial structure
and relations with its shareholders, (12) insurance and bonding premiums, (13)
association membership dues, (14) bookkeeping and the costs of calculating the
net asset value of shares of the Trust's Funds, and (15) expenses relating to
the issuance, registration and qualification of the Trust's shares.
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.
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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:
(a) The Adviser is registered as an investment adviser under the Advisers
Act;
(b) The Adviser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio with the power to
own and possess its assets and carry on its business as it is now
being conducted;
(c) 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 directors, and no action by or in respect of, or filing with,
any governmental body, agency or official is -required on the part of
the Adviser for the execution, delivery and performance by the Adviser
of this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii)
the Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the
Adviser;
(d) The Form ADV of the Adviser previously provided to the Trust is a true
and complete copy of the form filed with the SEC and the information
contained therein is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to
make the statements made, in light of the circumstances under which
they were made, not misleading.
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 November 1, 1999, and thereafter shall continue automatically
for successive annual periods, provided such continuance is
specifically approved at least annually by the Trust's Board of
Trustees or 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 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
1940 Act) 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 by vote of a majority of the outstanding voting
securities of a Fund, or by the Adviser, in each case, 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 1940 Act) and
shall terminate automatically in the event of its assignment.
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(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 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 parries 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 Advisory Services, Inc.
Three Nationwide Plaza, 26th Floor
Columbus, OH 43215
Attention: Xxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000
(b) If to the Trust:
Nationwide Separate Account Trust
Three Nationwide Plaza, 26th Floor
Columbus, OH 43215
Attention: Xxxxx X. Xxxxx, Xx.
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 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.
14. 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.
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 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 asset 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
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ADVISER
NATIONWIDE ADVISORY SERVICES, INC.
By: /s/ Xxxxxxxxxxx X. Xxxx
Name: Xxxxxxxxxxx X. Xxxx
Title: Treasurer
TRUST
NATIONWIDE SEPARATE ACCOUNT TRUST
By: /s/ Xxxxx X. Xxxxx, Xx.
Name: Xxxxx X. Xxxxx, Xx.
Title: Treasurer
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