Nationwide Office of Investments Incentive Plan

1.

Definitions. The capitalized terms used herein shall have the following meanings:

(a)

“Award Year” shall mean the calendar/fiscal year for which the Incentive Award is paid;

(b)

“Participant” shall mean each member of the staff of the Office of Investments whose position is identified for participation in and who has been notified of her/his eligibility for participation in the Plan for the Award Year;

(c)

“Incentive Award” shall mean the amount payable to an individual Participant in an Award Year, based on the achievement and surpassing of the performance goals pursuant to Section 4 hereof;

(d)

“Business Unit” shall mean the Office of Investments;

(e)

“Business Unit Award Fund” shall mean the funds available to be allocated to Participants within Business Unit based on Business Unit’s performance during the Award Year;

(f)

“Business Unit Chief Officer” shall mean the most senior Nationwide officer whose sole responsibility is the operations of the Business Unit.

(g)

“Total Value Added” shall mean the total risk adjusted spread on a net present value basis for all investments, adjusted for expenses and credit experience in each period. The reported Value Added is a blend of the current year and the preceding years when computed, such that the current year has a weighting of approximately half the overall performance with the prior years comprising the other half.

(h)

“Nationwide” shall mean Farmland Mutual Insurance Company, Nationwide Financial Services, Inc., Nationwide Mutual Insurance Company, Nationwide Mutual Fire Insurance Company, Scottsdale Insurance Company, and all subsidiaries of any of such companies;

(i)

“Plan Administrator” shall mean the individual(s) formally designated by the Business Unit Chief Officer to be responsible for the administration and implementation of the Plan.

(j)

Retirement” means termination of employment with all members of the enterprise on or after the date on which he or she shall have:

•

Attained normal retirement age,

•

Attained age 55 and completed 180 months of vesting service; or

•

Attained age 62 and completed 60 months of vesting service, whichever is earliest.

2.

Effective Date. The Plan shall become effective as of January 1, 2004, and shall continue in effect until December 31, 2004, unless terminated as set forth herein. The Plan shall supersede any and all prior Business Unit incentive compensation programs except as detailed herein. The Plan must be annually reviewed and approved for continuation.

3.

Absolute Discretion. The Chairman and Chief Executive Officer of Nationwide or the Business Unit Chief Officer shall have sole and absolute discretion over all aspects of the Plan, including but not limited to the final determination of Incentive Awards and amounts. Determinations of such individuals shall be conclusive and binding on all parties.

4.

Determination of Incentive Awards. Incentive Awards for the Award Year are determined in the following manner:

(a)

The Business Unit Award Fund shall be equal to the amount determined based on the Office of Investments performance scorecard set forth in per attachments I - II.

(b)

Incentive Awards are based primarily on, but not limited to; an assessment of the Participant’s achievement of assigned performance objectives, and the Participant’s compliance with applicable laws, statutes, regulations, and Nationwide and Business Unit policies, practices, and procedures. The amount of each Incentive Award shall be approved by the Business Unit Chief Officer in his or her sole discretion. The total of all Incentive Awards shall not exceed the Business Unit Award Fund.

(c)

Not withstanding the foregoing, Participants on a written final warning stage of a performance plan at the time of the bonus payout will not receive a payout.

5.

Payment of Individual Incentive Awards. Incentive Awards, if awarded, are due and payable not later than March 15 of the calendar year following the Award Year.

6.

Forfeiture. Any Participant whose employment with Nationwide is terminated, whether voluntarily or otherwise, prior to the end of the Award Year, shall forfeit any and all rights to an Incentive Award; except:

a)

Where the Participant has terminated active employment with Nationwide during the Award Year as a result of the Participant’s death,

b)

Where the Participant has terminated active employment with Nationwide due to retirement during an Award Year, or

c)

Where the Participant has involuntarily terminated active employment with Nationwide and is entitled to benefits under the Severance Pay Plan maintained by his or her employer, or would have been entitled to such benefits in the absence of an offer of Suitable Replacement Employment as defined in such Severance Pay Plan.

7.

Review Procedures. The Plan Administrator shall prepare all calculations made under the Plan. The Finance unit providing services to the Business Unit shall review a

representative sample of the calculations made under the Plan and other information incidental thereto, and reconcile calculations and other information with Business Unit performance reports. Reviews will be conducted on an annual basis. Review findings will be discussed with the Plan Administrator and communicated by Business Unit Finance to the Business Unit Chief Officer.

8.

Amendments; Terminations. Chairman and Chief Executive Officer of Nationwide or Business Unit Chief Officer may periodically review, modify and/or terminate the Plan at any time.

9.

Employment. Nothing in the Plan shall interfere with or limit in any way the right of the Business Unit or Nationwide to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Business Unit or Nationwide.

10.

Other Plan Participation. Participants are eligible to participate in the Performance Incentive Plan (PIP). However; Participants in the Plan are ineligible to simultaneously participate in other Nationwide short-term variable reward plans. Eligibility for future short-term variable reward plans, if any, will be evaluated by the Business Unit Chief Officer.

11.

Transfer In Or New Hire. In the event an employee becomes a Participant after the beginning of the Award Year, the Participant will be eligible for a pro-rata Incentive Award based on the effective date of his or her employment and pursuant to Section 4 hereof.

12.

Transfer To A Non-Participating Position. In the event a Plan Participant transfers to a non-participating position within Nationwide, the Business Unit Chief Officer has the discretion to pay or not pay an Incentive Award. Any such award, if paid, shall be based on the portion of the Award Year during which the Participant held an eligible position.

13.

Nontransferability. No right or interest of any Participant in the Plan shall be assignable or transferable, or subject to any lien, directly, by operation of law or otherwise, including, but not limited to, execution, levy, garnishment, attachment, pledge, and bankruptcy

14.

Beneficiary Designation. In the case of a Participant’s death before he or she receives any or all of Plan benefit to be paid, any benefit under the Plan will be paid to the Participant’s estate. If there is no estate, benefits will be paid in accordance with the applicable state and local laws.

15.

Governing Law. The Plan shall be governed by and construed in accordance with the laws of the state of Ohio or other states as deemed applicable or appropriate.

16.

Withholding Taxes. The Company shall have the right to deduct from all payments under the Plan any federal, state, or local taxes required by law to be withheld with respect to such payments.

17.

Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular, and the singular shall include the plural.

18.

Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

19.

Intent. The Plan is intended solely for the purpose of enabling Business Unit to achieve its business objectives and increase productivity by rewarding exceptional performance by Participants. The Plan shall not affect or impair any of the rules, policies or procedures of the Business Unit or Nationwide otherwise applicable to Participants.

EVP, Chief Financial, Investments, and Strategy Officer

Executive Vice President and Chief Administrative Officer

Performance Measures      

Investment Scorecard

NW Corporate PIP

Performance Measures      

Investment Scorecard

NW Corporate Goal

Weight

NATIONWIDE FINANCIAL      

General Account FI

Total Value Added

Mutual Funds

NMF Bond

LB G/C

NMF Money Market

IBC Tier 1

NMF Tax Free

LB Municipal

NMF Govt

ML Govt Master

NSAT Govt

ML Govt Master

NSAT Money Market

IBC Tier 1

Separate Accounts

Sep Acct Ohio

Blended Index

Sep Acct B Retirement

LB G/C

Real Estate Equity

RE Portfolio

Custom NCREIF

NATIONWIDE INSURANCE

Managed Fixed Income

Tax Adjusted Value Added

Equities

Equity Universe Rank (Preliminary)

*  Includes separate account equity assets.

Venture Capital

Venture Economics Universe Rank (6 mo lag)

*  Commitment size and vintage year weighted ranking.

TOTAL