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EXHIBIT (h)(4)
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EXPENSE LIMITATION AGREEMENT
NATIONWIDE SEPARATE ACCOUNT TRUST
EXPENSE LIMITATION AGREEMENT, effective as of May 31, 2000, by and between
VILLANOVA MUTUAL FUND CAPITAL TRUST (the "Investment Adviser") and NATIONWIDE
SEPARATE ACCOUNT TRUST (the "Trust"), a Massachusetts business trust, on behalf
of each of the funds, as listed on Exhibit A (each, a "Fund").
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open end-diversified management company of
the series type, and each Fund is a series of the Trust; and
WHEREAS, the Trust and the Investment Adviser have entered into an
Investment Advisory Agreement (the "Advisory Agreement"), pursuant to which the
Investment Adviser will render investment advisory services to the Fund for
compensation based on the value of the average daily net assets of the Fund; and
WHEREAS, the Trust and the Investment Adviser have determined that it is
appropriate and in the best interests of the Fund and its shareholders to
maintain the expenses of the Fund at a level below the level to which the Fund
would normally be subject during its start-up period.
NOW, THEREFORE, the parties hereto agree as follows:
1. Expense Limitation.
1.1. Applicable Expense Limit. To the extent that the aggregate expenses of
every character incurred by the Fund in any fiscal year, including but
not limited to investment advisory fees of the Investment Adviser (but
excluding interest, taxes, brokerage commissions, Rule 12b-1 fees,
fees paid pursuant to an Administrative Services Plan and other
expenditures which are capitalized in accordance with generally
accepted accounting principles and other extraordinary expenses not
incurred in the ordinary course of the Fund's business) ("Fund
Operating Expenses"), exceed the Operating Expense Limit, as defined
in Section 1.2 below, such excess amount (the "Excess Amount") shall
be the liability of the Investment Adviser.
1.2. Operating Expense Limit. The Operating Expense Limit in any year shall
be a percentage of the average daily net assets of each Fund as
described in Exhibit A, or such other rate as may be agreed to in
writing by the parties.
1.3. Method of Computation. To determine the Investment Adviser's liability
with respect to the Excess Amount, each month the Fund Operating
Expenses shall be annualized as of the last day of the month for each
class of a Fund. If the annualized Fund Operating Expenses for any
month exceed the Operating Expense Limit, the Investment Adviser shall
first waive or reduce its advisory fee for such month by an amount
sufficient to reduce the annualized Fund Operating Expenses to an
amount no higher than the Operating Expense Limit. If the amount of
the waived or reduced advisory fee for any such month is insufficient
to pay the Excess Amount, the Investment Adviser may also remit to a
Fund an amount that, together with the waived or reduced advisory fee,
is sufficient to pay such Excess Amount.
1.4. Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made
by the appropriate party in order that the amount of the advisory fees
waived or reduced and other payments remitted by the Investment
Adviser to a Fund with respect to the previous fiscal year shall equal
the Excess Amount.
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2.. Reimbursement of Fee Waivers and Expense Reimbursements.
2.1. Reimbursement. If in any fiscal year during which total Fund assets
are greater than $100 million and in which the Investment Advisory
Agreement is still in effect, the estimated aggregate Fund Operating
Expenses for the fiscal year are less than the Operating Expense Limit
for that year, subject to quarterly approval by the Trust's Board of
Trustees as provided in Section 2.2 below, the Investment Adviser
shall be entitled to reimbursement by a Fund, in whole or in part as
provided below, of the advisory fees waived or reduced and other
payments remitted by the Investment Adviser to the Fund pursuant to
Section 1 hereof. The total amount of reimbursement to which the
Investment Adviser may be entitled (the "Reimbursement Amount") shall
equal, at any time, the sum of all advisory fees previously waived or
reduced by the Investment Adviser and all other payments remitted by
the Investment Adviser to a Fund, pursuant to Section 1 hereof, during
any of the previous five (5) fiscal years less any reimbursement
previously paid by such Fund to the Investment Adviser, pursuant to
Sections 2.2 or 2.3 hereof, with respect to such waivers, reductions,
and payments. The Reimbursement Amount shall not include any
additional charges or fees whatsoever, including, e.g., interest
accruable on the Reimburse-ment Amount.
2.2. Board Approval. No reimbursement shall be paid to the Investment
Adviser pursuant to this provision in any fiscal year, unless the
Trust's Board of Trustees has determined that the payment of such
reimbursement is appropriate in light of the terms of the this
Agreement. The Trust's Board of Trustees shall determine quarterly in
advance whether any reimbursement may be paid to the Investment
Adviser in such quarter.
2.3. Method of Computation. To determine a Fund's payments, if any, to
reimburse the Investment Adviser for all or any portion of the
Reimbursement Amount, each month the Fund Operating Expenses for each
Fund shall be annualized as of the last day of the month. If the
annualized Fund Operating Expenses for any month are less than the
Operating Expense Limit, a Fund, only with the prior approval of the
Board, shall pay to the Investment Adviser an amount sufficient to
increase the annualized Fund Operating Expenses to an amount no
greater than the Operating Expense Limit, provided that such amount
paid to the Investment Adviser will in no event exceed the total
Reimbursement Amount. If the annualized Fund Operating Expenses for a
Fund are greater that the Operating Expense Limit for one or more
months in a quarter and less the remaining month(s), the calculation
described in this section will be made on a monthly basis and the net
amount of the monthly calculations will be presented to the Board for
approval.
2.4. Year-End Adjustment. If necessary, on or before the last day of the
first month of each fiscal year, an adjustment payment shall be made
by the appropriate party in order that the actual Fund Operating
Expenses for the prior fiscal year (including any reimbursement
payments hereunder with respect to such fiscal year) do not exceed the
Operating Expense Limit.
3.. Term and Termination of Agreement.
This Agreement shall continue in effect for a period of one year from the
date of its execution and from year to year thereafter provided such continuance
is specifically approved by a majority of the Trustees of the Trust who (i) are
not "interested persons" of the Trust or any other party to this Agreement, as
defined in the 1940 Act, and (ii) have no direct or indirect ▇▇▇▇▇-cial interest
in the operation of this Agreement ("Non-Interested Trustees"), provided
however, that the reimbursements described in Section 2 will not continue for
more than five years after a Fund's commencement of operations. Nevertheless,
this Agreement may be terminated by the Investment Adviser, without payment of
any penalty, upon 90 days' prior written notice to the other party at its
principal place of business.
4.. Miscellaneous.
4.1. Captions. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
4.2. Interpretation. Nothing herein contained shall be deemed to require
the Trust or a Fund to take any action contrary to the Trust's
Agreement and Declaration of Trust or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which
it is bound, or to relieve or deprive the Trust's Board of Trustees of
its responsibility for and control of the conduct of the affairs of
the Trust or the Fund.
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4.3. Definitions. Any question of interpretation of any term or provision
of this Agreement, including but not limited to the investment
advisory fee, the computations of net asset values, and the allocation
of expenses, having a counterpart in or otherwise derived from the
terms and provisions of the Advisory Agreement or the 1940 Act, shall
have the same meaning as and be resolved by reference to such Advisory
Agreement or the 1940 Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized as of the day and year first
above written.
NATIONWIDE SEPARATE ACCOUNT TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
VILLANOVA MUTUAL FUND CAPITAL TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
EXHIBIT A
TO THE EXPENSE LIMITATION AGREEMENT BETWEEN
NATIONWIDE SEPARATE ACCOUNT TRUST
AND
VILLANOVA MUTUAL FUND CAPITAL TRUST
AS OF MAY 31, 2000
NAME OF FUND EXPENSE LIMITATION
FOR FUND
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Nationwide Growth Focus Fund II . . . . . . . . . . . . 1.35%
Nationwide Quest Fund II. . . . . . . . . . . . . . . . 1.40%
Nationwide Global Technology and Communications Fund II 1.35%
Nationwide Global Life Sciences Fund II . . . . . . . . 1.00%
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