SUBADVISORY AGREEMENT
Exhibit No. EX-23(d)(2)(bb)
THIS AGREEMENT is made and entered into effective the 1st day of October, 2007, by and among
NATIONWIDE VARIABLE INSURANCE TRUST (the “Trust”), a Delaware statutory trust, NATIONWIDE FUND
ADVISORS (the “Adviser”) a Delaware statutory trust registered under the Investment Advisers Act of
1940, as amended (the “Advisers Act”), and ABERDEEN ASSET MANAGEMENT INC., a corporation organized
under the laws of Delaware (the “Subadviser”), 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 certain of the series of the Trust that are listed on Exhibit A to this Agreement
(each, a “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 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 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 Funds 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.
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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 Funds as set forth
in the Funds’ prospectus and statement of additional information as currently in effect and,
as soon as practical after the Trust, a 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 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 a Fund, its funds available, or to become available, for investment
and generally as to the conditions of a 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 a 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 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, copies of any financial statements or reports made by a Fund to its
shareholders, and any further materials or information which the Subadviser may reasonably
request to enable it to perform its functions under this Agreement.
The Adviser shall perform quarterly and annual tax compliance tests to ensure that a
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
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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 a 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 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 rights with respect to the securities
and other investments in the Subadviser Assets 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, 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 a 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 a 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
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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. 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 a 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 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 a Fund. The Subadviser 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 a 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, 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 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 a
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
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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 a 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 a 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 its Code of Ethics for 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 a Fund’s
Records are property of the Trust; except to the extent that the Subadviser is required to
maintain a 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 a Fund’s Records for
its internal files. A 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 for
telecopying promptly to the Adviser 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 changes in the ownership or
management of the Subadviser, or of material changes in the control of the
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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 on a less frequent basis
as agreed upon by the parties in person.
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 a 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.
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 a Fund, the
Trust or the Adviser in any way or otherwise be deemed an agent of a Fund, the Trust or the
Adviser.
4. Expenses. During the term of this Agreement, 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, a 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
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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 Funds 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 a Fund’s Prospectus. If
this Agreement shall be effective for only a portion of a month with respect to a 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 represents and
warrants to the Adviser and the Trust as follows:
(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”), 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 corporation duly organized and properly registered and
operating under the laws 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;
(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
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(e) The Form ADV of the Subadviser previously 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, 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.
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;
(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, and the information contained therein is accurate and complete in all
material respects and does not omit to state any material fact necessary in
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order to make the statements made, in light of the circumstances under which they were
made, not misleading;
(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 Funds, 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 effects.
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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 and employees (“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. 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 Funds 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.
(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
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Fund not managed by 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 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.
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 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 a Fund are present in person or by proxy or (b) more than 50% of the outstanding
shares of a 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 a 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.
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12. Duties of the Adviser. The Adviser shall continue to have responsibility for all
services to be provided to a 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 a Fund.
13. Affiliates of the Adviser. Notwithstanding anything to the contrary contained
herein, the Subadviser may receive research from its affiliates.
14. 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, 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
Subadviser, which approval shall not be unreasonably withheld or delayed. The Adviser
hereby agrees to make all reasonable efforts to cause a 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 (excluding the
Funds), 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 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.
15. 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.
16. 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 a 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;
12
(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;
(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.
17. 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:
| (a) | If to the Subadviser: | ||
| Aberdeen Asset Management Inc. 0000 Xxxxxx Xxxxxx — 37th Floor Philadelphia, PA 19103 Attention: Legal Department Facsimile: (000) 000-0000 |
|||
| (b) | If to the Adviser: |
||
| Nationwide Fund Advisors 0000 Xxxxx Xxxx — Xxxxx 0000 Xxxxxxxxxxxx, XX 00000 Attention: Legal Department Facsimile: (000) 000-0000 |
|||
| (c) | If to the Trust: | ||
| Nationwide Variable Insurance Trust 0000 Xxxxx Xxxx — Xxxxx 0000 Xxxxxxxxxxxx, XX 00000 Attention: Legal Department Facsimile: (000) 000-0000 |
18. 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
13
thereof and in accordance with the 1940 Act. In the case of any conflict, the 1940 Act shall
control.
19. 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.
20. 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.
21. Captions. The captions herein are included for convenience of reference only and
shall be ignored in the construction or interpretation hereof.
22. 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.
23. 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.
24. Nationwide Variable Insurance Trust and its Trustees. The terms “Nationwide
Variable Insurance Trust” and the “Trustees of Nationwide Variable Insurance Trust” 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. In connection with securities transactions for a 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 Exhibit) 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.]
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
written above.
| TRUST NATIONWIDE VARIABLE INSURANCE TRUST |
||||
| By: | ||||
| Name: | Xxxx X. Xxxxx | |||
| Title: | President | |||
| ADVISER NATIONWIDE FUND ADVISORS |
||||
| By: | ||||
| Name: | Xxxx X. Xxxxx | |||
| Title: | President | |||
| SUBADVISER ABERDEEN ASSET MANAGEMENT INC. |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
15
EXHIBIT A
SUBADVISORY AGREEMENT
AMONG
NATIONWIDE FUND ADVISORS,
NATIONWIDE VARIABLE INSURANCE TRUST
AND ABERDEEN ASSET MANAGEMENT INC.
SUBADVISORY AGREEMENT
AMONG
NATIONWIDE FUND ADVISORS,
NATIONWIDE VARIABLE INSURANCE TRUST
AND ABERDEEN ASSET MANAGEMENT INC.
Effective October 1, 2007
| Funds of the Trust | Advisory Fees | |
Nationwide NVIT Global Financial Services Fund
|
0.51% on Subadviser Assets up to $500 million | |
Nationwide NVIT Global Health Sciences Fund
|
0.51% on Subadviser Assets up to $500 million | |
Nationwide NVIT Global Technology and
Communications Fund
|
0.51% on Subadviser Assets up to $500 million | |
Nationwide NVIT Growth Fund
|
0.35% on Subadviser Assets up to $250 million; 0.325% on Subadviser Assets of $250 million to $1 billion; 0.30% on Subadviser Assets of $1 billion to $2 billion |
|
Nationwide NVIT U.S. Growth Leaders Fund
|
0.45% on Subadviser Assets up to $500 million | |
NVIT Nationwide Fund
|
0.30% on Subadviser Assets up to $250 million; 0.29% on Subadviser Assets of $250 million to $1 billion; 0.285% on Subadviser Assets of $1 billion to $2 billion |
|
NVIT Nationwide Leaders Fund
|
0.44% on Subadviser Assets up to $500 million | |
Nationwide Multi-Manager NVIT Small Cap Value Fund |
0.50% on Subadviser Assets up to $200 million | |
Nationwide Multi-Manager NVIT Small Company Fund |
0.54% on all Subadviser Assets |
16
