EX-99(d)(1)
INTERIM INVESTMENT ADVISORY AGREEMENT
THIS INTERIM AGREEMENT is made and entered into as of the 27th day of
April, 2007, to become effective on May 1, 2007, by and between NATIONWIDE
MUTUAL FUNDS (a.k.a. "Gartmore Mutual Funds," until May 1, 2007) (the "Trust"),
a Delaware statutory trust, and NATIONWIDE FUND ADVISORS (a.k.a. "Gartmore
Mutual Fund Capital Trust," until May 1, 2007) (the "Adviser"), a Delaware
statutory trust registered under the Investment Advisers Act of 1940, as amended
(the "Advisers Act").
W I T N E S S E T H :
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust currently retains the Adviser to furnish certain
investment advisory services, as described herein, with respect to each of the
series of the Trust (each, a "Fund") pursuant to the Investment Advisory
Agreement dated February 28, 2005 ("Previous Agreement");
WHEREAS, the Previous Agreement will terminate automatically upon its
assignment (as defined in the 1940 Act), which assignment will occur upon the
closing of the sale of the Adviser by Nationwide Mutual Insurance Company ("NM")
to Nationwide Financial Services, Inc. ("NFS") (the "Transaction"), and which
Transaction is scheduled to close at the close of business on April 30, 2007;
WHEREAS, the Board of Trustees has unanimously approved a new
investment advisory agreement ("New Agreement") to become effective upon the
closing of the Transaction and has submitted the New Agreement to each Fund's
shareholders for their approval;
WHEREAS, shareholders of certain of the Funds have not yet approved the
New Agreement;
WHEREAS, the Board of Trustees of the Trust now desires to ensure that
the Adviser's provision of investment advisory services to each such Fund
continues without interruption, until such time as shareholders of each such
Fund approve the New Agreement, following the closing of the Transaction and
termination of the Previous Agreement with respect to such Funds; and
WHEREAS, Rule 15a-4 under the 1940 Act provides a temporary exemption
from the shareholder approval requirements of Section 15(a) of the 1940 Act upon
Board approval of an interim agreement containing the certain conditions
specified in Rule 15a-4 adopted under the 1940 Act ("Interim 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 interim investment adviser to each Fund listed on Exhibit A subject to the
terms and conditions set forth in this
Interim Agreement. The Adviser hereby accepts such appointment and agrees to
furnish the services hereinafter described for the compensation provided for in
this Interim 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.
(2) 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.
(3) 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.
(4) 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.
(5) 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.
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(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 Agreement and
Declaration of Trust, as from time to time amended and/or restated, and
By-Laws, as from time to time amended and/or restated, and the
Prospectus and with the instructions and directions received from the
Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, including Rule 15a-4 thereunder, 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, (1) to establish and
maintain accounts on behalf of each Fund with, and to place orders for
the purchase and sale of assets not allocated to a Subadviser, with or
through, such persons, brokers or dealers ("brokers") as the Adviser
may select; and (2) to negotiate commissions to be paid on such
transactions. In the selection of such brokers and the placing of such
orders, the Adviser shall seek to obtain for a Fund the most favorable
price and execution available, except to the extent the Adviser may be
permitted to pay higher brokerage commissions for brokerage and
research services, as provided below. In using its reasonable efforts
to obtain for a Fund the most favorable price and execution available,
the Adviser, bearing in mind the Fund's best interests at all times,
shall consider all factors it deems relevant, including price, the size
of the transaction, the nature of the market for the security, the
amount of the commission, if any, the timing of the transaction, market
prices and trends, the reputation, experience and financial stability
of the broker involved, and the quality of service rendered by the
broker in other transactions. Subject to such policies as the Trustees
may determine, the Adviser shall not be deemed to have acted unlawfully
or to have breached any duty created by this Agreement or otherwise
solely by reason of its having caused a Fund to pay a broker that
provides brokerage and research services (within the meaning of Section
28(e) of the Securities Exchange Act of 1934, as amended) to the
Adviser an amount of commission for effecting a Fund 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
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the overall responsibilities of the Adviser with respect to the
accounts as to which it exercises investment discretion.
It is recognized that the services provided by such brokers
may be useful to the Adviser in connection with the Adviser's services
to other clients. On occasions when the Adviser deems the purchase or
sale of a security to be in the best interests of a Fund as well as
other clients of the Adviser, the Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation
to, aggregate the securities to be sold or purchased in order to obtain
the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of securities so sold or
purchased, as well as the expenses incurred in the transaction, will be
made by the Adviser in the manner the Adviser considers to be the most
equitable and consistent with its fiduciary obligations to each Fund
and to such other clients.
(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, 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 the Trust who are "interested persons" (as defined in the 0000 Xxx)
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 and expenses of independent certified public accountants
and of general ledger accounting and internal reporting services for the Trust,
(5) the
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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.
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.
Notwithstanding any other provision in this Agreement, all compensation
earned by the Adviser hereunder respectively as to each Fund of the Trust listed
on Exhibit A of this Interim Agreement shall be held in an interest-bearing
escrow account with the Trust's custodian or a bank until such time as the
holders of a majority of the outstanding voting securities of such Fund approve,
within 150 days from the effective date of this Interim Agreement, the New
Agreement between the Adviser and the Trust on behalf of such Fund. Upon such
approval of the Shareholders of a Fund, the escrowed amount (including interest
earned) for such Fund will be paid to the Adviser. However, should the New
Agreement between the Adviser and the Trust not be approved by the holders of a
Fund's outstanding voting securities within 150 days from the effective date of
this Interim Agreement, the Adviser will be paid for such Fund from the escrow
account the lesser of (i) any costs incurred by the Adviser in performing
services under this Interim Agreement for such Fund; or (ii) the total amount in
the escrow account (plus interest earned) for such Fund. Adviser shall submit to
the Trust, on a monthly basis, a report itemizing its costs, as defined herein,
including any supporting documentation.
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;
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(b) The Adviser is a business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware
with the power to own and possess its assets and carry on its business
as it is now being conducted;
(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 trustees, and no action by or in respect of, or filing with, any
governmental body, agency or official is required on the part of the
Adviser for the execution, delivery and performance by the Adviser of
this Agreement, and the execution, delivery and performance by the
Adviser of this Agreement do not contravene or constitute a default
under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon the Adviser;
(d) The Form ADV of the Adviser provided to the Trust is a
true and complete copy of the form, including that part or parts of the
Form ADV filed with the SEC, that part or parts maintained in the
records of the Adviser, and/or that part or parts provided or offered
to clients, in each case as required under the Advisers Act and rules
thereunder, and the information contained in such Form ADV is accurate
and complete in all material respects and does not omit to state any
material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE
INFORMATION. All representations and warranties made by the Adviser pursuant to
Section 5 shall survive for the duration of this Agreement and the parties
hereto shall promptly notify each other in writing upon becoming aware that any
of the foregoing representations and warranties are no longer true.
7. LIABILITY AND INDEMNIFICATION.
(a) LIABILITY. In the absence of willful misfeasance, bad
faith or gross negligence on the part of the Adviser or a reckless
disregard of its duties hereunder, the Adviser shall not be subject to
any liability to a Fund or the Trust, for any act or omission in the
case of, or connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding or sale of Fund
assets; PROVIDED, HOWEVER, that nothing herein shall relieve the
Adviser from any of its obligations under applicable law, including,
without limitation, the federal and state securities laws.
(b) INDEMNIFICATION. The Adviser shall indemnify the Trust and
its officers and trustees, for any liability and expenses, including
attorneys fees, which may be sustained as a result of the Adviser's
willful misfeasance, bad faith, gross negligence, reckless disregard of
its duties hereunder or violation of applicable law, including, without
limitation, the federal and state securities laws.
8. DURATION AND TERMINATION.
(a) DURATION. This Interim Agreement shall become effective on
May 1, 2007 and shall continue in full force and effect continuously
until the date not greater than 150 days from May 1, 2007, unless
sooner terminated as provided herein.
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(b) TERMINATION. This Agreement will terminate as to any Fund
listed on Exhibit A to this Interim Agreement: (1) upon approval of the
New Agreement by a majority of such Fund's outstanding voting
securities. This Agreement may also be terminated at any time, upon the
vote of a majority of the Trustees, or (2) with respect to any Fund, by
the vote of a majority of such Fund's outstanding voting securities (as
defined in the 1940 Act), upon not more than 10 (ten) calendar days
written notice to the Adviser. This Agreement may also be terminated by
the Adviser upon not less than sixty (60) days notice to the Trust.
This Agreement shall not be assigned and shall terminate automatically
in the event of its assignment (as such term is defined in the 1940 Act).
9. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are not to be deemed exclusive, and the Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. It is understood that the action taken by the Adviser
under this Agreement may differ from the advice given or the timing or nature of
action taken with respect to other clients of the Adviser, and that a
transaction in a specific security may not be accomplished for all clients of
the Adviser at the same time or at the same price.
10. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be in writing and
approved by the Trust's Board of trustees or by a vote of a majority of the
outstanding voting securities of a Fund (as required by the 1940 Act).
11. CONFIDENTIALITY. Subject to the duties of the Adviser and the Trust
to comply with applicable law, including any demand of any regulatory or taxing
authority having jurisdiction, the parties hereto shall treat as confidential
all information pertaining to a Fund and the Trust and the actions of the
Adviser and the Funds in respect thereof.
12. NOTICE. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, delivered, or
mailed postpaid to the other party, or transmitted by facsimile with
acknowledgment of receipt, to the parties at the following addresses or
facsimile numbers, which may from time to time be changed by the parties by
notice to the other party:
(a) If to the Adviser:
Nationwide Fund Advisors ("Gartmore Mutual Fund Capital
Trust," until May 1, 2007)
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department.
Facsimile: (000) 000-0000
(b) If to the Trust:
Nationwide Mutual Funds ("Gartmore Mutual Funds," until
May 1, 2007)
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Legal Department.
Facsimile: (000) 000-0000
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13. JURISDICTION. This Agreement shall be governed by and construed to
be in accordance with substantive laws of the State of Delaware without
reference to choice of law principles thereof and in accordance with the 1940
Act. In the case of any conflict, the 1940 Act shall control.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which shall
together constitute one and the same instrument.
15. CERTAIN DEFINITIONS. For the purposes of this Agreement,
"interested person," "affiliated person," "assignment" shall have their
respective meanings as set forth in the 1940 Act, subject, however, to such
exemptions as may be granted by the SEC.
16. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
17. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision or applicable law, the remainder of the
Agreement shall not be affected adversely and shall remain in full force and
effect.
18. NATIONWIDE MUTUAL FUNDS AND ITS TRUSTEES. The terms "Nationwide
Mutual Funds" or "Gartmore Mutual Funds" and the "Trustees of Nationwide Mutual
Funds" or the "Trustees of Gartmore Mutual Funds" refer respectively to the
Trust created and the Trustees, as trustees but not individually or personally,
acting from time to time under an Agreement and Declaration of Trust made and
dated as of September 30, 2004, as has been or may be amended and/or restated
from time to time, and to which reference is hereby made.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
ADVISER:
NATIONWIDE FUND ADVISORS
(a.k.a. Gartmore Mutual Fund Capital Trust)
By: /S/XXXXXX X. XXXXXXX
--------------------------------------------
Name: XXXXXX X. XXXXXXX
------------------------------------------
Title: SVP-COO
-----------------------------------------
TRUST:
NATIONWIDE MUTUAL FUNDS
(a.k.a. Gartmore Mutual Funds)
By: /S/XXXX XXXXX
--------------------------------------------
Name: XXXX XXXXX
------------------------------------------
Title: PRESIDENT
-----------------------------------------
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EXHIBIT A
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INTERIM INVESTMENT ADVISORY AGREEMENT
BETWEEN NATIONWIDE MUTUAL FUNDS
AND NATIONWIDE FUND ADVISORS
EFFECTIVE MAY 1, 2007
PAGE 1
FUNDS OF THE TRUST ADVISORY FEES
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Nationwide U.S. Growth Leaders Fund2 0.90% on assets up to $500 million
0.80% on the next $1.5 billion in assets
0.75% on assets of $2 billion and more
Nationwide Micro Cap Equity Fund 1.25% of the Fund's average daily net assets
Nationwide Small Cap Leaders Fund 0.95% of the Fund's average daily net assets
Nationwide U.S. Growth Leaders Long-Short Fund 1.50% on assets up to $250 million
1.25% on assets of $250 million and more
Nationwide China Opportunities Fund1 1.25% on assets up to $500 million
1.20% on assets of $500 million and more
but less than $2 billion
1.15% on assets of $2 billion and more
Nationwide Optimal Allocations Fund: 0.15% of the Fund's average daily net assets
Growth
Nationwide Optimal Allocations Fund: Moderate Growth 0.15% of the Fund's average daily net assets
Nationwide Optimal Allocations Fund: Moderate 0.15% of the Fund's average daily net assets
Nationwide Optimal Allocations Fund: Specialty 0.15% of the Fund's average daily net assets
Nationwide Small Cap Fund 0.95% on assets up to $100 million
0.80% on assets of $100 million and more
Nationwide Investor Destinations Moderate Fund 0.13% of average daily net assets
Nationwide Investor Destinations Moderately 0.13% of average daily net assets
Conservative Fund
Nationwide Investor Destinations Conservative Fund 0.13% of average daily net assets
Nationwide Worldwide Leaders Fund1 0.90% on assets up to $500 million
0.85% on assets of $500 million and more
but less than $2 billion
0.80% for assets of $2 billion and more
Nationwide Short Duration Bond Fund 0.35% on assets up to $500 million
0.34% on assets of $500 million and more
but less than $1 billion
0.325% on assets of $1 billion and more
but less than $3 billion
0.30% on assets of $3 billion and more
but less than $5 billion
0.285% on assets of $5 billion and more
but less than $10 billion
0.275% for assets of $10 billion and more
EXHIBIT A
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INTERIM INVESTMENT ADVISORY AGREEMENT
BETWEEN NATIONWIDE MUTUAL FUNDS
AND NATIONWIDE FUND ADVISORS
EFFECTIVE MAY 1, 2007
PAGE 2
1Performance Fees for the Nationwide China Opportunities Fund and Nationwide
Worldwide Leaders Fund.
The base advisory fee for each of these Funds, as set forth above, is adjusted
each quarter beginning one year after implementation of the Performance Fee,
depending upon a Fund's investment performance for the 12 months preceding the
end of that month relative to the investment performance of each respective
Fund's benchmark as listed below. The base fee is either increased or decreased
proportionately by the following amounts at each breakpoint, based upon whether
a Fund has out-performed or under-performed its respective benchmark (using the
performance of each such Fund's Class A Shares to measure), by more or less than
a maximum of 500 basis points over the preceding rolling 12 month period as
follows:
+/- 100 bps under/outperformance 2bps
+/- 200 bps under/outperformance 4bps
+/- 300 bps under/outperformance 6bps
+/- 400 bps under/outperformance 8bps
+/- 500 bps or more under/outperformance 10bps
The investment performance of each Fund will be the sum of: (1) the change in
each Fund's value during such period; (2) the value of the Fund's cash
distributions (from net income and realized net gains) having an ex-dividend
date during such calculation period; and (3) the value of any capital gains
taxes paid or accrued during such calculation period for undistributed realized
long-term capital gains from the Fund. For this purpose, the value of
distributions per share of realized capital gains, of dividends per share paid
from investment income and of capital gains taxes per share reinvested in the
Fund will be the Fund's value in effect at the close of business on the record
date for the payment of such distributions and the date on which provision is
made for such taxes, after giving effect to such distribution, dividends and
taxes.
Benchmark Index Performance:
The performance of each respective benchmark Index for a calculation period,
expressed as a percentage of each Index, at the beginning of such period will be
the sum of: (1) the change in the level of the Index during such period; and (2)
the value, as calculated consistent with the Index, of cash distributions having
an ex-dividend date during such period made by those companies whose securities
comprise the Index. For this purpose, cash distributions on the securities that
comprise the Index will be treated as if they were reinvested in the Index at
least as frequently as the end of each calendar quarter following payment of the
dividend.
BENCHMARK INDICES:
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1. Nationwide China Opportunities Fund MSCI Xxxxx Xxx Index
2. Nationwide Worldwide Leaders Fund MSCI World Index
2Performance fee for the Nationwide U.S. Growth Leaders Fund
The base advisory fee listed above is adjusted each quarter, beginning
one year after commencement of operations, depending on the Fund's investment
performance for the 36 months preceding the end of that month, relative to the
investment performance of the Fund's benchmark, the S&P 500 Index. The base fee
is either increased or decreased by the following amounts at each breakpoint,
based on whether the Fund has out- or under-performed the S&P 500 Index by more
or less than 1200 basis points over the preceding rolling 36 month period:
EXHIBIT A
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INTERIM INVESTMENT ADVISORY AGREEMENT
BETWEEN NATIONWIDE MUTUAL FUNDS
AND NATIONWIDE FUND ADVISORS
EFFECTIVE MAY 1, 2007
PAGE 3
For assets up to $500 million +/- 22 basis points
Next $1.5 billion in assets +/- 18 basis points
Assets of $2 billion and more +/- 16 basis points
The investment performance of the Nationwide U.S. Growth Leaders Fund will be
the sum of: (1) the change in the Fund's value during such period; (2) the value
of the Fund's cash distributions (from net income and realized net gains) having
an ex-dividend date during such calculation period; and (3) the value of any
capital gains taxes paid or accrued during such calculation period for
undistributed realized long-term capital gains from the Fund. For this purpose,
the value of distributions per share of realized capital gains, of dividends per
share paid from investment income and of capital gains taxes per share
reinvested in the Fund at the Fund's value in effect at the close of business on
the record date for the payment of such distributions and dividends and the date
on which provision is made for such taxes, after giving effect to such
distribution, dividends and taxes.
S&P 500 Index Performance:
The performance of the S&P 500 Index for a calculation period, expressed as a
percentage of the S&P 500 Index, at the beginning of such period will be the sum
of: (1) the change in the level of the S&P 500 Index during such period; and (2)
the value, as calculated consistent with the S&P 500 Index, of cash
distributions having an ex-dividend date during such period made by those
companies whose securities comprise the S&P 500 Index. For this purpose, cash
distributions on the securities that comprise the S&P 500 Index will be treated
as if they were reinvested in the S&P 500 Index at least as frequently as the
end of each calendar quarter following payment of the dividend.
