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Exhibit (5)(b)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on this ______ day of
______________, 1998, between NATIONWIDE INVESTING FOUNDATION III (the "Trust"),
an Ohio business trust, and UNION BOND & TRUST COMPANY (the "Adviser"), a trust
company organized under the laws of Oregon.
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 (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 without violation of applicable laws (including the
Xxxxx-Xxxxxxxx Act) and regulations.
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
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resolutions and directions of the Trust's Board of Trustees. To the
extent that a Fund enters into wrapper agreements as described in the
Prospectus, the Adviser will work with the wrap agreement providers to
furnish the Fund with the monthly crediting rate applicable for the
wrap agreements.
(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.
(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
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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 services to the Fund, 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.
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
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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 Investment Advisers Act of 1940 (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 Adviser's Code of Ethics (which shall comply in
all material respects with Rule 17j-1 under the 1940 Act), as the same
may be amended from time to time. On a quarterly basis, the Adviser
will either (i) certify to the Trust that the Adviser and its Access
Persons have complied with the Adviser's Code of Ethics with respect to
the Fund or (ii) identify any violations which have occurred with
respect to the Fund.
(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 Fund's pro rata share of the compensation and expenses of
the Trustees of Trust who are "interested persons" (as defined in the 0000 Xxx)
of the Trust and for the compensation and expenses of the officers of the Trust
who are employees of the Adviser.
It is understood that the Trust will pay all of its own expenses,
unless otherwise agreed to by the Trust and the Adviser, 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
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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 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) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses and reports to
shareholders, (10) 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, (11) insurance and
bonding premiums, (12) association membership dues, (13) bookkeeping and the
costs of calculating the net asset value of shares of the Trust's Funds, and
(14) 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.
Notwithstanding any other provision of this Agreement, the Adviser may
from time to time agree to waive 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 exempt from registration as an investment
adviser under the Advisers Act;
(b) The Adviser is a trust company duly organized, validly
existing and in good standing under the laws of the State of Oregon
with the power to own and possess its assets and carry on its business
as it is now being conducted;
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(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 or
violation 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.
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 wilful misfeasance, bad faith
or gross negligence on the part of the Adviser or a reckless disregard
of its duties hereunder or except a loss resulting from a breach of
fiduciary duty with respect to receipt of compensation for services
provided for under this agreement, 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
wilful 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 a loss resulting
from a breach of fiduciary duty with respect to receipt of compensation
for services provided for under this agreement.
8. Duration and Termination.
(a) Duration. Unless sooner terminated, this Agreement shall
continue with respect to a Fund until _______________, 2000, 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 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
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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, as to a Fund, 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
0000 Xxx) and shall terminate automatically in the event of its assignment.
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 (to the extent 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:
Union Bank & Trust Company
0000 XX Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxx, Xxxxxx 00000
Attention:
Facsimile:
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(b) If to the Trust:
Nationwide Investing Foundation III
Three Xxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
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. Miscellaneous. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
The Trust is a business trust organized under Chapter 1746, Ohio
Revised Code and under a Declaration of Trust dated as of October 30, 1997, to
which reference is hereby made a copy of which is on file at the office of the
Secretary of State of Ohio, and to any and all amendments thereto so filed or
hereafter filed. The obligations of the Trust entered into in the name of on
behalf thereof by any of the Nationwide Investing Foundation III Trustees,
officers, employees or agents are not made individually, but only in their
capacities with respect to the Trust. Such obligations are not binding upon any
of the Trustees, shareholders, officers, employees, or agents of the Trust
personally, but bind only the assets of the Trust, as set forth in Section
1746.13(A), Ohio Revised Code. All persons dealing with any series of the 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
ADVISER
UNION BOND & TRUST COMPANY
By:__________________________________
Name:
Title:
TRUST
NATIONWIDE INVESTING FOUNDATION III
By:__________________________________
Name:
Title:
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EXHIBIT A
NATIONWIDE INVESTING FOUNDATION III
Investment Advisory Agreement
Funds of the Trust Advisory Fees (applicable for each Fund)
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Xxxxxx Capital Accumulation Fund 0.35% of the average daily net assets of the Fund
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