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SCHEDULE 14C
(RULE 14c-101)
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Check the appropriate box:
Preliminary Information Statement
Confidential, for use of the Commission only (as permitted by Rule
14(c)-5(d)(2))
X Definitive Information Statement
NATIONWIDE SEPARATE ACCOUNT TRUST
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NATIONWIDE SEPARATE ACCOUNT TRUST
Three Nationwide Plaza
Columbus, Ohio 43215
(800) 848-6331
September 29, 1999
Dear Nationwide Small Company Fund Shareholder:
The enclosed information statement details a recent subadviser change
for the Nationwide Small Company Fund (the "Fund"), a series of Nationwide
Separate Account Trust (the "Trust"). On July 6, 1999, Warburg Pincus Asset
Management, Inc. ("Warburg"), one of the Fund's investment subadvisers, was
acquired by Credit Suisse Group ("Credit Suisse"). Credit Suisse has combined
Warburg with its existing U.S. asset management business, and such combined
businesses will be conducted by Credit Suisse Asset Management, LLC, an indirect
wholly-owned U.S. subsidiary of Credit Suisse (the "New Subadviser"). The
acquisition will not affect the current level of advisory services provided to
the Fund and the contractual subadvisory fee paid to the New Subadviser will
remain the same.
As a matter of regulatory compliance, we are sending you this
information statement which describes the management structure of the Fund, the
ownership of the New Subadviser, and the terms of the subadvisory agreement with
the New Subadviser which the Board of Trustees of the Trust has approved.
We look forward to continuing to serve you and the Fund in the future.
Sincerely,
James F. Laird, Jr.
Treasurer
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NATIONWIDE SEPARATE ACCOUNT TRUST
NATIONWIDE SMALL COMPANY FUND
THREE NATIONWIDE PLAZA
COLUMBUS, OHIO 43215
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INFORMATION STATEMENT
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This information statement (the "Information Statement") is being
provided to owners of variable annuity contracts or variable life insurance
policies issued by Nationwide Life Insurance Company or Nationwide Life and
Annuity Insurance Company (collectively, "Nationwide") who are entitled to give
voting instructions to the shareholders of the Nationwide Small Company Fund
(the "Fund"), a series of Nationwide Separate Account Trust ("the "Trust")
(collectively, the owners are referred to as "Contract Owners"). The Information
Statement is being provided in lieu of a proxy statement, pursuant to the terms
of an exemptive order the Trust received from the Securities and Exchange
Commission which permits the Fund's manager to hire new subadvisers and to make
changes to existing subadvisory contracts with the approval of the Board of
Trustees of the Trust (the "Board" or the "Trustees"), but without obtaining
shareholder approval. This information statement is being furnished by the
Board.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
This information statement will be mailed on
or about September 30, 1999.
THE TRUST
The Fund is an investment portfolio or series of the Trust, a
Massachusetts business trust. The Trust initially entered into an Investment
Advisory Agreement with Nationwide Advisory Services, Inc., an Ohio corporation
("NAS") on October 20, 1995; on September 1, 1999, the investment advisory
services being performed by NAS were transferred to Villanova Mutual Fund
Capital Trust (the "Adviser"), an entity under common control with NAS.
Effective with the transfer of advisory services to the Adviser on September 1,
1999, the Fund was added to the Investment Advisory Agreement dated November 1,
1997 as subsequently amended (the "Advisory Agreement") which previously covered
the Trust's other series and which was materially similar to the Fund's original
Investment Advisory Agreement. Shareholder approval was not required in order to
transfer the investment advisory services from NAS to the Adviser and to add the
Fund to the Advisory Agreement. Pursuant to the Advisory Agreement, the Adviser
selects the subadvisers for and/or manages the investments of each series of the
Trust and supervises each series' daily business affairs, subject to supervision
and direction of the Board. The Adviser selects subadvisers it believes will
provide the Fund with high quality
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investment services consistent with the Fund's investment objectives. The
Adviser is responsible for the overall monitoring of the Fund's subadvisers.
Five subadvisers have been chosen for the Fund: Credit Suisse Asset
Management, LLC, The Dreyfus Corporation, Lazard Asset Management, Neuberger
Berman LLC and Strong Capital Management, Inc. The Fund's subadvisers act
pursuant to agreements with the Adviser and the Trust that were also transferred
from NAS to the Adviser on September 1, 1999. The subadvisers' duties include
furnishing continuing advice and recommendations to the relevant portion of the
respective Fund regarding securities to be purchased and sold. Each of the
subadvisers is independent of the Adviser and discharges its responsibilities
subject to the oversight and supervision of the Adviser, which pays the
subadvisers' fees. The Fund does not pay fees directly to the subadvisers.
However, in accordance with procedures adopted by the Board, a subadviser of the
Fund may effect portfolio transactions through an affiliated broker-dealer,
acting as agent and not as principal, and receive brokerage commissions in
connection therewith as permitted by Section 17(e) of the Investment Company Act
of 1940, as amended (the "1940 Act"), the rules thereunder and other applicable
securities laws.
THE MERGER
On February 15, 1999, the parent companies of Warburg Pincus Asset
Management, Inc. ("Warburg"), then one of the Fund's subadvisers, entered into a
Merger Agreement and Plan of Reorganization (the "Merger Agreement") with Credit
Suisse Group ("Credit Suisse"). Pursuant to the terms of the Merger Agreement,
Credit Suisse acquired the direct parent company of Warburg on July 6, 1999 (the
"Acquisition"). Credit Suisse then combined Warburg with Credit Suisse's
existing U.S. asset management business (the "Reorganization"), and such
combined businesses are now conducted by an indirect wholly-owned U.S.
subsidiary of Credit Suisse, Credit Suisse Asset Management, LLC, a newly formed
Delaware limited liability company (the "New Subadviser"). The Acquisition and
the Reorganization are together referred to herein as the "Merger". The New
Subadviser acts as an investment subadviser to the Fund, and its headquarters is
in New York.
INFORMATION ABOUT THE NEW SUBADVISER
Credit Suisse is a global financial services company, providing a
comprehensive range of banking and insurance products. Active on every continent
and in all major financial centers, Credit Suisse comprises five business units
- -- Credit Suisse Asset Management ("CSAM") (asset management); Credit Suisse
First Boston (investment banking); Credit Suisse Private Banking (private
banking); Credit Suisse (retail banking); and Winterthur (insurance). Credit
Suisse has approximately $680 billion of global assets under management and
employs approximately 62,000 people worldwide. The principal business address of
Credit Suisse is Paradeplatz 8, CH 8070, Zurich, Switzerland.
CSAM is the global institutional asset management and mutual fund arm of
Credit Suisse. CSAM employs approximately 1,600 people worldwide and has global
assets under management of approximately $210 billion in multiple product
services, including equities, fixed
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income, derivatives and balanced portfolios. The principal worldwide business
address of CSAM is Uetlibergstrasse 231, CH 8045, Zurich, Switzerland.
CSAM's U.S. asset management business, a New York general partnership,
formerly known as BEA Associates, changed its name to CSAM in January 1999 to
more accurately reflect its integration into CSAM and, together with its
predecessor firms, has been engaged in the investment advisory business for over
60 years. In July 1999, in connection with the Merger, the General Partnership
was reorganized as Credit Suisse Asset Management, LLC and became the New
Subadviser. In the U.S., the New Subadviser is an investment manager for
corporate and state pension funds, endowments and other institutions and has
U.S. assets under management of approximately $57 billion. The principal U.S.
business address of the New Subadviser is 153 East 53rd Street, New York, NY
10022.
William W. Priest is the Chief Executive Officer of the New Subadviser.
Since 1990, Mr. Priest has been the Chairman of the Management Committee, Chief
Executive Officer and Executive Director of the New Subadviser. Mr. Priest is a
director of TIG Holdings, Inc. and of other investment companies advised by the
New Subadviser.
The directors of the New Subadviser are Philip Ryan, Agnes Reicke, Hal
Liebes and Michael Guarasci, each of whom is currently an executive officer of
Credit Suisse and/or its affiliates. The business address for Mr. Ryan is
Beaufort House, 15 St. Botolph Street, London EC3A 7JJ England. The business
address for Ms. Reicke is Uetlibergstrasse 231, CH 8045, Zurich, Switzerland.
The business address for Messrs. Liebes and Guarasci is 153 East 53rd Street,
New York, NY 10022. The New Subadviser also has an operating committee
consisting of senior investment professionals drawn from the combined resources
of Warburg and CSAM.
None of the officers or Trustees of the Trust are officers or directors
of the New Subadviser.
THE SUBADVISORY AGREEMENT
As described below, the Board approved the subadvisory agreement for
the Fund with the New Subadviser (the "Subadvisory Agreement") on May 10, 1999.
The Subadvisory Agreement is dated as of July 6, 1999, and was amended as of
September 1, 1999 to transfer the Subadvisory Agreement from NAS to the Adviser.
The Subadvisory Agreement will be in effect until July 1, 2000, and may continue
thereafter from year to year only if specifically approved at least annually by
the Board or by 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 the disinterested Trustees, by vote cast in
person at a meeting called for the purpose of voting on such approval.
Other than identification of the New Subadviser and the execution and
termination dates, the Subadvisory Agreement is substantially identical to the
previous subadvisory agreement dated October 20, 1995 among NAS, Warburg and the
Trust (acting on behalf of the Fund), which automatically terminated by its
terms on July 6, 1999 as a result of the Acquisition. In
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particular, the contractual advisory fee rate paid to the New Subadviser has not
been changed. The previous subadvisory agreement with Warburg was approved by
the Fund's initial shareholder on October 20, 1995. The following is a
description of the terms of the Subadvisory Agreement.
Under the Subadvisory Agreement, subject to the oversight and review of
the Adviser and the Board, the New Subadviser manages the investment and
reinvestment of a portion of the assets of the Fund. Specifically, the New
Subadviser, subject to the oversight and review of the Adviser and the Board,
manages its portion of the Fund, makes investment decisions, places purchase and
sale orders, manages otherwise uninvested cash assets included in its portion of
the Fund, maintains records concerning its activities which it is required to
maintain and renders reports to the Adviser or the Fund as either may reasonably
request.
The New Subadviser is responsible for all expenses incurred by it in
the performance of its duties under the Subadvisory Agreement other than the
cost of securities, commodities and other investments purchased for the Fund.
The Subadvisory Agreement further provides that in the absence of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
obligations or duties thereunder on the part of the New Subadviser, the New
Subadviser shall not be liable to the Adviser, the Trust or the Fund or any of
the Fund's shareholders for any act or omission in the course of, or connected
in any way with, rendering services or for any losses sustained in the purchase,
holding or sale of any securities.
In the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties thereunder on the part of the
Adviser, the Adviser shall not be liable to the New Subadviser for any act or
omission in the course of, or connected in any way with, rendering services or
for any losses sustained in the purchase, holding or sale of any securities.
The New Subadviser shall indemnify the Adviser and the Trust for any
liability and expenses, including attorneys' fees, which may be sustained as a
result of the Subadviser's willful misfeasance, bad faith, gross negligence,
reckless disregard of its duties under the Subadvisory Agreement.
The Adviser shall indemnify the New Subadviser for any liability and
expenses, including attorneys' fees, which may be sustained (i) as a result of
the Adviser's willful misfeasance, bad faith, gross negligence, reckless
disregard of its duties under the Subadvisory Agreement or (ii) arising out of
the Adviser's responsibilities to the Trust and the Fund. The Trust also shall
indemnify the Subadviser for any act or omission by the Trust or any untrue
statement of material fact contained in sales materials or the prospectus
relating to the Fund.
The Subadvisory Agreement may be terminated at any time, without
payment of a penalty by the Fund or the Trust, by vote of a majority of the
Board, or by vote of a majority of the outstanding voting securities of the
Fund, or by the Adviser in each case, upon 60 days' written notice to the New
Subadviser. The Subadvisory Agreement may be terminated by the New Subadviser
any time, without the payment of any penalty, upon 60 days' written notice to
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the Adviser and the Trust. In the event of a material breach of the Subadvisory
Agreement, any party immediately upon written notice to the other parties may
terminate the Subadvisory Agreement. The Subadvisory Agreement automatically
terminates in the event of its assignment.
Under the Advisory Agreement, the Fund pays the Adviser an advisory fee
at the annual rate of 1.00% of the average daily net assets of the Fund (the
"Assets"). In return for the services provided by the New Subadviser and each of
the other four subadvisers of the Fund, the Adviser pays each of the New
Subadviser and the four other subadvisers an annual subadvisory fee of .60% of
the portion of the Fund's Assets managed by each individual subadviser.
The foregoing description of the Subadvisory Agreement is only a
summary and is qualified in its entirety by reference to the text of the full
agreement. A copy of the Subadvisory Agreement is on file with the Securities
and Exchange Commission.
For fiscal year 1998, each of the subadvisers of the Fund was paid an
advisory fee rate of 0.60%, and aggregate subadvisory fees paid by the Adviser
with respect to the Fund were $2,119,688. NAS voluntarily agreed to waive all or
part of its fees in order to limit the Fund's total operating expenses.
The following table sets forth the contractual advisory fee rate and
net assets as of March 9, 1999 of other U.S. registered investment companies
advised by Warburg with similar investment policies and objectives as the Fund.
<TABLE>
<CAPTION>
NET ASSETS AS
OF MARCH 9, CONTRACTUAL ADVISORY
NAME OF FUND 1999 FEE RATE (+)
- ------------ ------------- --------------------
<S> <C> <C>
Warburg Pincus Institutional Fund, Inc. - Small $ 194,163,769 0.90%(0.72%)
Company Growth Portfolio
Warburg Pincus Small Company Growth Fund $ 4,543,683 1.00%(0.00%)
Warburg Pincus Trust - Small Company Growth $ 734,902,165 0.90%
Portfolio
</TABLE>
- ----------
+ Advisory fee rate after waivers and/or expense limitations, if applicable,
appears in parentheses next to the contractual advisory fee rate.
BOARD OF DIRECTORS' EVALUATION
On May 10, 1999, the Board considered materials concerning the Merger
provided to it by Warburg and Credit Suisse. At that time, the Board discussed
the general terms of the Merger and the anticipated benefits for the Warburg
organization and for the Fund. The Board was also presented with additional
information regarding Credit Suisse and its affiliates, including its existing
U.S. asset management business. The Board was informed that Warburg's senior
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professionals were joining the new organization and that the then current
portfolio managers of the Fund would continue to manage the portion of the
Fund's assets managed before the Merger. The Board discussed this information
among themselves and with representatives of the Adviser.
During the course of their deliberations, the Board considered a
variety of factors including the nature, quality and extent of the services that
Warburg has provided and the New Subadviser will provide to the Fund; the
continuity from and quality of personnel from Warburg to the New Subadviser; the
maintenance of the identical contractual advisory fee rates; and the
substantially identical nature of the previous subadvisory agreement to the
Subadvisory Agreement (other than the change to the New Subadviser as the
investment adviser).
At the meeting held on May 10, 1999, the Trustees, including a majority
of the Trustees who are not interested persons of the Fund, approved the
Subadvisory Agreement.
ADDITIONAL INFORMATION
The Adviser serves as investment adviser, selects the subadvisers for
and/or manages the investments of each series of the Trust and supervises the
Trust's daily business affairs, subject to general review by the Board.
Nationwide Investors Services, Inc. ("NIS") serves as the transfer agent and
dividend disbursing agent for the Trust. NIS is a wholly-owned subsidiary of
Villanova SA Capital Trust, an entity that serves as the Trust's administrator
and which is under common control with the Adviser. Both the Adviser and NIS are
located at Three Nationwide Plaza, Columbus, Ohio 43215. Because the Fund is
sold primarily as an underlying mutual fund option in variable insurance
products, the Fund has no principal underwriter. However, the Adviser provides
marketing and wholesaling at no additional cost to the Fund.
As of September 21, 1999, to the Trust's knowledge, the following are
the only persons who had or shared voting or investment power over more than 5%
of the outstanding shares of the Fund:
<TABLE>
AMOUNT AND NATURE OF
VOTING AND INVESTMENT PERCENT OF THE FUND'S
NAME AND ADDRESS POWER OUTSTANDING SHARES
- ---------------- --------------------- ---------------------
<S> <C> <C>
Separate Accounts Shared voting and
of Nationwide, investment power over 99.00%
One Nationwide Plaza, 21,636,741 shares of
Columbus, OH 43215 the Fund
</TABLE>
As of September 21, 1999, the officers and Trustees of the Trust as a
group owned less than 1% of the outstanding shares of beneficial interest of the
Fund.
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Although Contract Owners are not being asked to vote on change to the
New Subadviser, the Trust is required by the rules of the Commission to
summarize the voting rights of Contract Owners. Whenever a matter affecting the
Fund requires shareholder approval, a shareholder meeting generally will be held
and a proxy statement and proxy/voting instruction form will be sent to the
Fund's shareholders and to Contract Owners who have selected the Fund as an
underlying mutual fund option. Contract Owners do not vote on such matters
directly because they are not shareholders of the Fund, but they will be asked
in the proxy statement to give voting instructions to those separate accounts of
Nationwide that are shareholders of the Fund. These separate accounts will then
vote the shares of the Fund attributable to the Contract Owners in accordance
with the voting instructions received from the Contract Owners. If voting
instructions are not received, the separate accounts will vote the shares of the
Fund for which voting instructions have not been received in proportion (for,
against or abstain) to those for which timely voting instructions have been
received. Each share of the Fund is entitled to one vote, and each fraction of a
share is entitled to a proportionate fractional vote. Contract Owners will also
be permitted to revoke previously submitted voting instructions in accordance
with instructions contained in the proxy statement sent to the Fund's
shareholders and to Contract Owners.
The foregoing description of Contract Owner voting rights is only a
brief summary of these rights; whenever shareholder approval of a matter
affecting the Fund is required, the proxy statement sent to the Fund's
shareholders and to Contract Owners will fully describe the voting rights of
Contract Owners and the voting procedures that will be followed at the
shareholder meeting.
In addition to serving as subadvisers to the Fund, Neuberger Berman,
LLC and Lazard Freres & Co. LLC are also registered broker-dealers. As a result,
both of them are deemed to be affiliated brokers of the Fund under the
Investment Company Act of 1940, as amended. During the fiscal year ended
December 31, 1998, the Fund paid brokerage commissions totaling $31, 801 to
Neuberger Berman, LLC and $542 to Lazard Freres & Co. LLC
The costs relating to the preparation and mailing of this Information
Statement are being borne by Warburg and Credit Suisse.
Copies of the most recent annual and semi-annual reports are available
without charge. Copies of such reports may be obtained by writing to the Trust,
at Three Nationwide Plaza, Columbus, Ohio 43215, or by calling (800) 848-6331.
By Order of the Directors,
Elizabeth A. Davin
Secretary
Dated: September 29, 1999
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