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EXHIBIT EX-99.12(A)
[DATE]
Board of Trustees
Nationwide Mutual Funds
1200 River Road
Conshohocken, PA 19428
Re: PLAN OF REORGANIZATION, DATED AS OF THE ___ DAY OF ________,
2001 (THE "PLAN"), MADE by NATIONWIDE MUTUAL FUNDS (THE
"TRUST") ON BEHALF OF NATIONWIDE LONG-TERM U.S. GOVERNMENT
BOND FUND (THE "ACQUIRED FUND") AND NATIONWIDE INTERMEDIATE
U.S. GOVERNMENT BOND FUND (THE "ACQUIRING FUND")
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Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax
consequences of the reorganization of the Acquired Fund, which consists of: (i)
the acquisition by the Acquiring Fund of substantially all of the property,
assets and goodwill, subject to the liabilities, of the Acquired Fund, in
exchange solely for shares of beneficial interest, without par value, of the
Acquiring Fund - Class A (the "Acquiring Fund Class A Shares"); shares of
beneficial interest, without par value, of the Acquiring Fund - Class B (the
"Acquiring Fund Class B Shares"); and shares of beneficial interest, without par
value, of the Acquiring Fund - Class D (the "Acquiring Fund Class D Shares")
(the Acquiring Fund Class A Shares, the Acquiring Fund Class B Shares and the
Acquiring Fund Class D Shares are collectively referred to as the "Acquiring
Fund Shares"); (ii) the distribution of (a) the Acquiring Fund Class A Shares to
the holders of the Acquired Fund - Class A shares (the "Acquired Fund Class A
Shares"), (b) the Acquiring Fund - Class B Shares to the holders of the Acquired
Fund - Class B shares (the "Acquired Fund Class B Shares"), and (c) the
Acquiring Fund Class D Shares to the holders of the Acquired Fund - Class D
shares (the "Acquired Fund Class D Shares") (the Acquired Fund Class A Shares,
the Acquired Fund Class B Shares and the Acquired Fund Class D Shares are
collectively referred to as the "Acquired Fund Shares"), according to their
respective interests in complete liquidation of the Acquired Fund; and (iii) the
dissolution of the Acquired Fund as soon as practicable after the closing (the
"Reorganization"), all upon and subject to the terms and conditions of the Plan.
In rendering our opinion, we have reviewed and relied upon: (a) the
Plan, dated ________ ___, 2001, made by the Trust on behalf of the Acquiring
Fund and the Acquired Fund; (b) the proxy materials provided to shareholders of
the Acquired Fund in connection with the Special Meeting of Shareholders of the
Acquired Fund held on [DATE]; (c) certain representations concerning the
Reorganization made to us, as of [DATE], by the Acquiring Fund and the Acquired
Fund in a letter dated [DATE] (the "Representation Letter"); (d) all other
documents, financial and other reports and corporate minutes which we deemed
relevant or appropriate; and (e) such statutes, regulations, rulings and
decisions as we deemed material in rendering this opinion. All terms used
herein, unless otherwise defined, are used as defined in the Plan.
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For purposes of this opinion, we have assumed that the Acquired Fund,
on the closing date of the Reorganization, satisfies, and following the closing
date Reorganization, the Acquiring Fund will continue to satisfy, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"), for qualification as a regulated investment company.
Based on the foregoing, and provided that the Reorganization is carried
out in accordance with the applicable laws of the State of Delaware, the terms
of the Plan, and statements in the Representation Letter, it is our opinion
that:
1. The acquisition by the Acquiring Fund of substantially all of the
assets of the Acquired Fund as provided for in the Plan in exchange for the
Acquiring Fund Shares, followed by the distribution by the Acquired Fund to its
shareholders of the Acquiring Fund Shares in complete liquidation of the
Acquired Fund, will qualify as a reorganization within the meaning of Section
368(a)(1) of the Code, and the Acquired Fund and the Acquiring Fund will each be
a "party to the reorganization" within the meaning of Section 368(b) of the
Code.
2. No gain or loss will be recognized by the Acquired Fund upon the
transfer of substantially all of its assets to the Acquiring Fund in exchange
solely for the Acquiring Fund Shares pursuant to Section 361(a) and Section
357(a) of the Code.
3. No gain or loss will be recognized by the Acquired Fund upon the
distribution of the Acquiring Fund Shares to its shareholders pursuant to the
plan of liquidation of the Acquired Fund (in pursuance of the Plan) under
Section 361(c)(1) of the Code.
4. No gain or loss will be recognized by the Acquiring Fund upon the
receipt by it of substantially all of the assets of the Acquired Fund in
exchange solely for the Acquiring Fund Shares pursuant to Section 1032(a) of the
Code.
5. The basis of the assets of the Acquired Fund received by the
Acquiring Fund will be the same as the basis of such assets to the Acquired Fund
immediately prior to the exchange pursuant to Section 362(b) of the Code.
6. The holding period of the assets of the Acquired Fund received by
the Acquiring Fund will include the period during which such assets were held by
the Acquired Fund pursuant to Section 1223(2) of the Code.
7. No gain or loss will be recognized by the shareholders of the
Acquired Fund upon the exchange of their shares in the Acquired Fund solely for
the Acquiring Fund Shares (including fractional shares to which they may be
entitled) pursuant to Section 354(a) of the Code.
8. The basis of the Acquiring Fund Shares received by the shareholders
of the Acquired Fund will be the same as the basis of the Acquired Fund Shares
exchanged therefor pursuant to Section 358(a)(1) of the Code.
9. The holding period of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) will include the holding period of the Acquired Fund Shares
surrendered in exchange therefor, provided that the Acquired Fund Shares were
held as a capital asset on the date of the Reorganization, pursuant to Section
1223(1) of the Code.
10. The Acquiring Fund will succeed to and take into account as of the
date of the transfer (as defined in Section 1.381(b)-1(b) of the regulations
issued by the United States Treasury ("Treasury Regulations")) the items of the
Acquired Fund described in Section 381(c) of the Code, subject to the conditions
and limitations specified in Sections 381, 382, 383 and 384 of the Code and the
Treasury Regulations thereunder.
Our opinion is based upon the Code, the applicable Treasury Regulations
promulgated thereunder, the present positions of the Internal Revenue Service
(the "Service") as set forth in published
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revenue rulings and revenue procedures, present administrative positions of the
Service, and existing judicial decisions, all of which are subject to change
either prospectively or retroactively. We do not undertake to make any
continuing analysis of the facts or relevant law following the date of the
Reorganization.
Our opinion is conditioned upon the performance by the Acquiring Fund
and the Acquired Fund of their undertakings in the Plan and the Representation
Letter.
Our opinion is limited to the transactions incident to the
Reorganization described herein, and no opinion is rendered with respect to any
other transaction. In addition, no opinion is rendered regarding (i) whether
either the Acquired Fund or the Acquiring Fund qualifies as a regulated
investment company for federal income tax purposes, (ii) whether either the
Acquired Fund or the Acquiring Fund satisfies (or is required to satisfy) the
diversification requirements of Section 817(h) of the Code, and (v) whether
variable annuity contract owners and variable life insurance policy holders who
have allocated their assets to the Acquired Fund possess sufficient indicia of
control over the investment to be regarded as the owner of such a contract for
federal income tax purposes under the principles of Rev. Rul. 81-225, 1981-2
C.B. 12.
This opinion is being rendered to the Acquiring Fund and the Acquired
Fund, and may be relied upon only by such funds and the shareholders of each.
Very truly yours,
STRADLEY, RONON, STEVENS & YOUNG, LLP
