<PAGE> 1
As filed with the Securities
and Exchange Commission on January 18, 1996
1933 Act Registration No. 2-25538
1940 Act File No. 811-1428
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 40 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / X /
Amendment No. 21 / X /
THE CARDINAL FUND INC.
-----------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
155 East Broad Street, Columbus, Ohio 43215
-----------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code 614/464-5511
------------
Frank W. Siegel, 155 East Broad Street, Columbus, Ohio 43215
------------------------------------------------------------
(Name and Address of Agent for Service)
Copy to:
Charles H. Hire, Esq.
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215
Approximate Date of Proposed Public Offering:
Immediately, upon effectiveness
It is proposed that this filing will become effective (check appropriate box)
_____ immediately upon filing pursuant to paragraph (b)
__X__ on January 19, 1996, pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on (date) pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
_____ this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
<PAGE> 2
<TABLE>
CALCULATION OF FEE*
- -------------------------------------------------------------------------------------
<CAPTION> Proposed Proposed
Maximum Maximum
Title of Offering Aggregate Amount of
Securities Amount Being Price Per Offering Registration
Being Registered Registered Unit** Price*** Fee
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares,
without par value,
of The Cardinal Fund
Inc. 4,141,576 $13.11 $290,000 $100
</TABLE>
* The Registrant has also registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Rule 24f-
2(a)(1) under the Investment Company Act of 1940. On November 21,
1995, the Registrant filed its Rule 24f-2 Notice with respect to the
fiscal year ended September 30, 1995.
** Based on the offering price per share on January 15, 1996.
*** Calculated pursuant to Rule 24e-2 under the Investment Company Act of
1940. During the fiscal year ended September 30, 1995, the total
amount of securities redeemed was $59,809,536; of the redeemed amount,
$5,803,464 were used for reductions pursuant to Rule 24f-2(c) under
said Act in the current fiscal year and $54,006,072 are being used for
reduction in this Amendment under Rule 24e-2.
<PAGE> 3
THE CARDINAL FUND INC.
Cross Reference Sheet Required By
Rule 481(a) under the Securities Act of 1933
<TABLE>
<CAPTION>
Part A of Form N-1A Item No. Caption(s) in Prospectus
---------------------------- ------------------------
<S> <C>
1.(a)(i) ............................. Cover Page
(ii) ............................. Cover Page
(iii) ............................. Cover Page
(iv) ............................. Cover Page
(v) ............................. Cover Page
(vi) ............................. *
(vii)............................. *
(b) ................................ *
2.(a)(i) ............................. "Fee Table"
(ii) ............................. *
(b) ................................ "Prospectus Highlights"
(c) ................................ "Prospectus Highlights"
3.(a) ................................ "Financial Highlights"
(b) ................................ "Financial Highlights"
(c) ................................ "Financial Highlights"
(d) ................................ "Financial Highlights"
4.(a)(i)(A) .......................... "What Is The Fund?"
(i)(B) .......................... "What Is The Fund?"
(ii) ............................. "What Are The Investment Objective And Policies Of The Fund?"
(ii)(A) .......................... *
(ii)(B)(1) ....................... "What Are The Investment Objective And Policies Of The Fund?"
(ii)(B)(2) ....................... *
(ii)(C) .......................... *
(ii)(D) .......................... *
(b)(i) ............................. *
(ii) ............................. *
(c) ................................ "What Are The Investment Objective and Policies Of The Fund?"
5.(a) ................................ "Who Manages My Investment In The Fund?"
(b)(i) ............................. "Who Manages My Investment In The Fund?"
(b)(ii) ............................ "Who Manages My Investment In The Fund?"
</TABLE>
______________
*Indicates items which are omitted or inapplicable or answer to which is
in the negative and omitted from Prospectus.
- i -
<PAGE> 4
<TABLE>
<CAPTION>
Part A of Form N-1A Item No. Caption(s) in Prospectus
---------------------------- ------------------------
<S> <C>
(b)(iii) ........................... "Who Manages My Investment In The Fund?"
(c) ................................ "Who Manages My Investment In The Fund?"
(d) ................................ "Who Manages My Investment In The Fund?"
(e) ................................ "Who Manages My Investment In The Fund?"
(f) ................................ "Financial Highlights"
(g)(i)(A) .......................... *
(g)(i)(B) .......................... *
(g)(i)(C) .......................... *
(g)(ii) ............................ *
5A.(a) ................................ *
5A.(b) ................................ *
5A.(c) ................................ *
6. (a) ................................ "What Are My Rights As A Shareholder?"
(b) ................................ *
(c) ................................ *
(d) ................................ *
(e) ................................ "Who Provides Shareholder Reports?"
(f) ................................ "What Distributions Will I Receive?"
(g) ................................ "Does The Fund Pay Federal Income Tax?"; "What About My Taxes?"
7. (a) ................................ "How Do I Purchase Shares Of The Fund? -- General"
(b) ................................ "How Do I Purchase Shares Of The Fund? -- Public Offering Price";
"How Is Net Asset Value Calculated?"
(c) ................................ "May My Tax Sheltered Retirement Plan Invest In The Fund?"; "How May
I Qualify For Quantity Discounts?"; "What Other Shareholder Programs
Are Provided?"; "How May I Redeem My Shares?"; "Are There Any Special
Purchase Programs For Certain Retirement Plans?"
(d) ................................. "How Do I Purchase Shares Of The Fund? -- General"
(e) ................................. *
(f) ................................. *
8. (a) ................................. "How May I Redeem My Shares?"
(b) ................................. "How May I Redeem My Shares?"
(c) ................................. *
(d) ................................. "How May I Redeem My Shares?"
9. .................................... *
</TABLE>
______________
*Indicates items which are omitted or inapplicable or answer to which is
in the negative and omitted from Prospectus.
- ii -
<PAGE> 5
PROSPECTUS ___________________________________________________________________
[ LOGO ]
THE CARDINAL FUND INC.
The Cardinal Fund Inc. (the "Fund") is a diversified, open-end, management
investment company. The primary investment objective of the Fund is to achieve
long-term growth of capital and income through selective participation in the
long-term progress of American businesses and industries. The policy of the Fund
is generally to invest in equity securities. Current income, while a factor in
portfolio selection, is secondary to the Fund's primary objective. There can be
no assurance that the Fund's objective will be achieved.
The Fund has entered into an Agreement and Plan of Reorganization and
Liquidation, dated as of December 1, 1995 (the "Plan"), with The Cardinal Group,
an Ohio business trust (the "Group"). Pursuant to the Plan, The Cardinal Fund, a
series of the Group (the "Acquiring Fund"), would acquire all of the assets of
the Fund in exchange for the assumption of all of the Fund's liabilities and a
number of full and fractional shares of the Acquiring Fund having an aggregate
net asset value equal to the Fund's net assets (the "Reorganization"). The Fund
would then be liquidated, and the shares of the Acquiring Fund would be
distributed to Fund shareholders.
The Reorganization is subject to certain regulatory approvals and to approval by
the shareholders of the Fund at a Special Shareholders Meeting currently
expected to be held in March, 1996. If the shareholders approve the
Reorganization, it is expected that the Reorganization would be effected on or
about March 31, 1996; however, the Reorganization may be effected on such
earlier or later date as the Group and the Fund may determine. There can be no
assurance that the Reorganization will take place when or as currently proposed.
THE SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, NOR ARE SUCH SHARES FEDERALLY INSURED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN THE FUND INVOLVES CERTAIN
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
For further information regarding the Fund or for assistance
in opening an account or redeeming shares, please call (800) 282-9446 toll free.
Inquiries may also be made by mail addressed
to the Fund at its principal office:
155 East Broad Street
Columbus, Ohio 43215
- --------------------------------------------------------------------------------
This Prospectus sets forth concisely the information about the Fund that a
prospective investor ought to know before investing in the Fund. This Prospectus
should be retained for future reference. A Statement Of Additional Information
respecting the Fund dated January 19, 1996, has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. Such Statement
is available upon request without charge from the Fund at the above address or
by calling the phone number provided above.
Investors should read and retain this Prospectus for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE OHIO COMPANY
The date of this Prospectus is January 19, 1996
- --------------------------------------------------------------------------------
<PAGE> 6
- --------------------------------------------------------------------------------
KEY FEATURES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
PROFESSIONAL MANAGERS.......... The Fund's portfolio is fully managed by professional
portfolio managers. (See page 13.)
DIVERSIFICATION................ The Fund's portfolio of securities represents an interest
in many companies and industries and therefore provides a
diversification of risk.
REDUCED SALES CHARGE........... An investor will pay a reduced sales charge for large
investments. (See page 8.)
LOW INITIAL INVESTMENT......... An investor can acquire shares of a portfolio of common
stocks with a smaller investment than would be needed to
purchase a similar portfolio directly.
FLEXIBILITY.................... You may switch once each calendar quarter from one mutual
fund to another within the Cardinal Group of Funds as
your personal circumstances or market conditions dictate.
(See pages 14 and 15.)
RETIREMENT PROGRAMS............ The Fund is a permissible investment for qualified
retirement plans.
DIVIDEND REINVESTMENT.......... You may reinvest dividends, capital gains or both in
additional shares of the Fund at no charge. (See pages 4
and 10.)
ACH PROCESSING................. Investors may use Automated Clearing House ("ACH")
processing for subsequent purchases of shares,
redemptions, and/or distributions paid. (See page 14.)
</TABLE>
2
<PAGE> 7
- --------------------------------------------------------------------------------
PROSPECTUS HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHARES OFFERED................. The Fund has authorized 30,000,000 shares of common
stock, without par value (the "Shares"), all of a single
class. (See page 15.)
OFFERING PRICE & SALES
CHARGE....................... The public offering price is equal to net asset value per
share plus a sales charge equal to 4.50% of the public
offering price (4.71% of net amount invested) reduced on
investments of $100,000 or more (see page 8) and waived
if purchasers are Qualifying Plans for whom The Ohio
Company serves as a trustee or investment adviser. (See
page 10.)
MINIMUM PURCHASE............... $1,000 minimum initial investment and $50 minimum subse-
quent investments. (See pages 7 and 8.)
TYPE OF COMPANY................ Diversified, open-end, management investment company,
commonly known as a mutual fund. Organized as an Ohio
corporation on September 16, 1966. (See page 6.)
INVESTMENT OBJECTIVE........... Long-term growth of capital and income through selective
participation in the long-term progress of American
business and industry. (See page 6.)
INVESTMENT POLICIES............ The Fund generally invests in equity securities. Current
income, while a factor in portfolio selection, is
secondary to the primary objective. (See pages 6 and 7.)
RISK FACTORS AND SPECIAL
CONSIDERATIONS............... An investment in a mutual fund such as the Fund involves
a certain amount of risk, including market risk, and may
not be suitable for all investors. Some investment
policies of the Fund may entail certain risks, including
the use of repurchase agreements. (See "WHAT ARE THE
INVESTMENT OBJECTIVE AND POLICIES OF THE FUND?" on pages
6 and 7.)
INVESTMENT ADVISER............. The Fund has entered into an Investment Advisory Agree-
ment with The Ohio Company. Cardinal Management Corp., a
wholly-owned subsidiary of The Ohio Company, acts as the
Fund's transfer agent, and acts as investment adviser to
and transfer agent for Cardinal Government Securities
Trust, Cardinal Tax Exempt Money Trust, Cardinal
Government Obligations Fund, Cardinal Balanced Fund and
Cardinal Aggressive Growth Fund. (See page 13.)
MANAGEMENT FEE................. The annual rate is .5% of the average daily net assets of
the Fund. (See page 14.)
DISTRIBUTIONS.................. Dividends and distributions are made with such frequency
as the Fund shall determine. (See page 10.)
REDEMPTION..................... At net asset value per share without charge, except that
broker-dealers may charge a service fee for assisting in
a redemption. (See page 11.)
TRANSFER AGENT................. Cardinal Management Corp. (See page 14.)
</TABLE>
3
<PAGE> 8
- --------------------------------------------------------------------------------
FEE TABLE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................... 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).......................... 0%
Deferred Sales Load
(as a percentage of original purchase price or redemption
proceeds, as applicable)...................................... 0%
Redemption Fees
(as a percentage of amount redeemed, if applicable).......... 0%
Exchange Fee................................................... $ 0
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fees................................................ .50%
12b-1 Fees..................................................... .00
Other Expenses................................................. .20
-------
Total Fund Operating Expenses.................................. .70%
=======
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period:................ $ 52 $ 66 $ 82 $128
</TABLE>
The purpose of the above table is to assist a potential purchaser of the Fund's
Shares in understanding the various costs and expenses that an investor in the
Fund will bear directly or indirectly. See "WHO MANAGES MY INVESTMENT IN THE
FUND?" for a more complete discussion of the shareholder transaction expenses
and annual operating expenses of the Fund. The example and expenses above
reflect current fees. THE FOREGOING EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN.
4
<PAGE> 9
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following Financial Highlights with respect to each of the ten fiscal years
ended September 30, 1995, have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report thereon, together with certain financial
statements, are contained in the Fund's Statement Of Additional Information and
which may be obtained by shareholders and prospective investors.
FINANCIAL HIGHLIGHTS FOR EACH SHARE OF CAPITAL STOCK
OUTSTANDING THROUGHOUT EACH PERIOD*:
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-----------------------------------------------------------------
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, Beginning of period................... $ 12.73 $ 12.91 $ 12.95 $ 11.88 $ 9.28
Income from investment operations:
Net investment income................................ .36 .31 .32 .35 .35
Net gains or losses on securities (both realized and
unrealized)........................................ 1.32 .12 .55 1.37 2.70
--------- --------- --------- --------- ---------
Total from investment operations..................... 1.68 .43 .87 1.72 3.05
--------- --------- --------- --------- ---------
Less Distributions:
Dividends (from net investment income)............... (.35) (.33) (.29) (.36) (.38)
Distributions (from capital gains)................... (.83) (.28) (.62) (.29) (.07)
Returns of capital................................... -- -- -- -- --
--------- --------- --------- --------- ---------
Total Distributions.................................. (1.18) (.61) (.91) (.65) (.45)
Net asset value, End of period......................... $ 13.23 $ 12.73 $ 12.91 $ 12.95 $ 11.88
========= ========= ========= ========= =========
Total Return**......................................... 14.84% 3.38% 6.98% 15.05% 33.54%
Ratios/Supplemental Data:
Net assets, End of period (000) omitted................ $ 226,181 $ 246,581 $ 282,125 $ 261,392 $ 221,428
Ratio of expenses to average net assets................ 0.70% 0.72% 0.68% 0.67% 0.67%
Ratio of net investment income to average net assets... 2.89% 2.40% 2.46% 2.83% 3.15%
Portfolio Turnover Rate................................ 19.78% 23.20% 11.11% 6.22% 33.27%
</TABLE>
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-----------------------------------------------------------------
1990 1989 1988 1987 1986
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, Beginning of period................ $ 11.75 $ 10.38 $ 11.73 $ 10.35 $ 8.55
Income from investment operations:
Net investment income............................. .42 .41 .37 .33 .22
Net gains or losses on securities (both realized
and unrealized)................................. (1.87) 1.73 (.82) 2.05 2.37
--------- --------- --------- --------- ---------
Total from investment operations.................. (1.45) 2.14 (.45) 2.38 2.59
--------- --------- --------- --------- ---------
Less Distributions:
Dividends (from net investment income)............ (.53) (.39) (.47) (.28) (.23)
Distributions (from capital gains)................ (.49) (.38) (.43) (.72) (.56)
Returns of capital................................ -- -- -- -- --
--------- --------- --------- --------- ---------
Total Distributions............................... (1.02) (.77) (.90) (1.00) (.79)
Net asset value, End of period...................... $ 9.28 $ 11.75 $ 10.38 $ 11.73 $ 10.35
========= ========= ========= ========= =========
Total Return**...................................... (13.42)% 22.04% (3.46)% 25.00% 32.56%
Ratios/Supplemental Data:
Net assets, End of period (000) omitted............. $ 168,184 $ 174,156 $ 130,978 $ 136,619 $ 84,972
Ratio of expenses to average net assets............. 0.74% 0.70% 0.73% 0.75% 0.89%
Ratio of net investment income to average net
assets............................................ 3.98% 3.93% 3.77% 3.32% 3.12%
Portfolio Turnover Rate............................. 27.10% 23.20% 12.3% 13.2% 10.3%
</TABLE>
* The Information included in the Financial Highlights has been restated to
reflect a three-for-two stock split made on January 11, 1990.
**The total return figure does not reflect the imposition of the maximum
front-end sales load.
See notes to financial statements appearing in the Fund's Statement Of
Additional Information.
5
<PAGE> 10
Pursuant to a Revolving Credit Agreement between the Fund and The Fifth Third
Bank dated April 10, 1992 (the "Loan Agreement"), the Fund may borrow money from
The Fifth Third Bank for temporary purposes, such as to accommodate abnormally
heavy redemption requests, and only in an amount not exceeding the lesser of 10%
of the Fund's gross assets taken at cost or 5% of the Fund's gross assets taken
at value. The table below sets forth certain information concerning the Loan
Agreement.
<TABLE>
<CAPTION>
AVERAGE AVERAGE NUMBER AVERAGE
AMOUNT OF DEBT AMOUNT OF DEBT OF FUND'S SHARES AMOUNT OF
YEAR ENDED OUTSTANDING AT OUTSTANDING OUTSTANDING DEBT PER SHARE
SEPTEMBER 30, END OF PERIOD DURING THE PERIOD DURING THE PERIOD DURING THE PERIOD
- ---------------- ------------------ ----------------- ------------------ -----------------
<S> <C> <C> <C> <C>
1995 $0 $ 0 19,004,227 $ 0
1994 $0 $ 4,565 20,614,531 $ 0.0002214
1993 $0 $ 1,018 21,018,555 $ 0.0000484
</TABLE>
From time to time the Fund advertises "average annual total return" and
"cumulative return." SUCH TOTAL RETURN FIGURES AND CUMULATIVE RETURN FIGURES ARE
BASED UPON HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. The average annual total return advertised by the Fund refers to
the return generated by an investment in the Fund over one-, five-and ten-year
periods and from September 30, 1975 (which periods will be stated in the
advertisement). The average annual total return over a period equates the amount
of an initial investment in the Fund to the amount redeemable at the end of that
period assuming that any dividends and distributions earned by an investment in
the Fund are immediately reinvested and the maximum applicable sales charge is
deducted from the initial investment at the time of investment. The cumulative
return advertised refers to the total return on a hypothetical investment over
the relevant period and equates the amount of an initial investment in the Fund
to the amount redeemable at the end of that period assuming that any dividends
and distributions are immediately reinvested and the maximum sales charge is
deducted from the initial investment at the time of investment. If the sales
charge were not deducted, the average annual total return and cumulative return
advertised would be higher.
Investors may also judge the performance of the Fund by comparing its
performance to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc., and Standard
& Poor's Corporation, and to data prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc. and CDA Investment Technologies, Inc. Comparisons may also be
made to the Consumer Price Index and to other indices or data published in Money
Magazine, Forbes, Barron's, The Wall Street Journal, The New York Times, The
Columbus Dispatch, Business Week, U.S.A. Today and Consumer Reports. In addition
to performance information, general information about the Fund that appears in a
publication such as those mentioned above and comparisons to such indices or
data may be included in advertisements and in reports to shareholders.
Further information about the performance of the Fund is contained in the Fund's
Annual Report to Shareholders which may be obtained without charge by contacting
the Fund at the telephone numbers set forth on the cover page of this
Prospectus.
- --------------------------------------------------------------------------------
WHAT IS THE FUND?
- --------------------------------------------------------------------------------
The Fund was organized on September 16, 1966, as an Ohio corporation and is
registered and operates as a diversified, open-end management investment company
as defined in the Investment Company Act of 1940 and commonly known as a mutual
fund.
- --------------------------------------------------------------------------------
WHAT ARE THE INVESTMENT OBJECTIVE AND POLICIES OF THE FUND?
- --------------------------------------------------------------------------------
The investment objective of the Fund is to achieve long-term growth of capital
and income through selective participation in the long-term progress of American
business and industries. The investment
6
<PAGE> 11
objective with respect to the Fund is a fundamental policy and as such may not
be changed without a vote of the holders of a majority of the outstanding Shares
of the Fund. The policy of the Fund is generally to invest in equity securities
of companies which, in the opinion of The Ohio Company, are growth oriented. The
securities purchased by the Fund are traded in either established
over-the-counter markets or on national exchanges and are issued by companies
having a market capitalization of at least $10 million. Current income, while a
factor in portfolio selection, is secondary to the primary objective. This
policy of normally investing in equity securities believed to have a potential
for long-term capital appreciation means that the assets of the Fund will
generally be subject to greater risk than may be involved in securities which do
not have such growth characteristics. It is recognized, however, that there may
be times when, as a temporary, defensive measure, the Fund's equity position
should be reduced. At such times, and otherwise for cash management purposes,
the Fund may hold its assets in cash or invest its assets in investment grade
debt securities, U.S. Government securities, repurchase agreements and preferred
stock.
A repurchase agreement is an agreement under which an investor (such as the
Fund) purchases a security from a financial institution such as a
well-established securities dealer or a bank which is a member of the Federal
Reserve System which the Fund's investment adviser deems creditworthy under
guidelines approved by the Fund's Board of Directors. At the time of purchase,
the bank or securities dealer agrees to repurchase the underlying security at a
specified time and price. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the underlying security. Securities subject to repurchase agreements
will be U.S. Government securities. Under the Investment Company Act of 1940, as
amended (the "1940 Act"), repurchase agreements are considered to be loans by
the Fund. The Fund will only enter into a repurchase agreement where (i) the
underlying securities are of the type which the Fund's investment guidelines
would allow it to purchase directly, (ii) the market value of the underlying
security, including interest accrued, will be at all times equal to or exceed
the value of the repurchase agreement, and (iii) payment for the underlying
securities is made only upon physical delivery or evidence of book-entry
transfer to the account of the custodian or a bank acting as agent. The Ohio
Company will be responsible for continuously monitoring such requirements. In
the event of a bankruptcy or other default of a seller of a repurchase
agreement, the Fund could experience both delays in liquidating the underlying
securities and losses, including: (a) possible decline in the value of the
underlying security during the period while the Fund seeks to enforce its rights
thereto; (b) possible subnormal levels of income and lack of access to income
during this period; and (c) expenses of enforcing its rights.
The Fund may also invest up to 10% of the value of its total assets in the
securities of other investment companies subject to the limitations set forth in
the 1940 Act. The Fund intends to invest in the securities of other investment
companies which, in the opinion of The Ohio Company, will assist the Fund in
achieving its objectives and in money market mutual funds for purposes of
short-term cash management. The Fund's investment in such other investment
companies may result in the duplication of fees and expenses, particularly
investment advisory fees. For a further discussion of the limitations on the
Fund's investments in other investment companies, see "INVESTMENT OBJECTIVES AND
POLICIES -- Additional Information on Portfolio Instruments -- Securities of
Other Investment Companies" in the Statement of Additional Information.
The Fund is not intended to provide a complete and balanced investment program
for an investor. There is no guarantee that the investment objective of the Fund
will be realized.
- --------------------------------------------------------------------------------
HOW DO I PURCHASE SHARES OF THE FUND?
- --------------------------------------------------------------------------------
GENERAL
The Fund's Shares may be purchased at the public offering price through The Ohio
Company, principal underwriter of the Fund's Shares, at its address and
telephone number set forth on the cover page of this Prospectus, and through
other broker-dealers who are members of the National Association of Securities
Dealers, Inc. and have sales agreements with The Ohio Company.
7
<PAGE> 12
Subsequent purchases of Shares of the Fund may be made by ACH processing as
described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE PROVIDED? -- ACH
Processing" below.
The minimum initial investment for individuals is $1,000, except the initial
investment for an applicant investing by means of the Automatic Investment Plan
(see "WHAT OTHER SHAREHOLDER PROGRAMS ARE PROVIDED?") must be at least $50.
Subsequent investments must be in amounts of at least $50.
Due to the high cost of maintaining accounts, the Fund reserves the right to
redeem involuntarily Shares in any account at the then current net asset value
if at any time redemptions have reduced a shareholder's total investment to a
net asset value below $500. A shareholder will be notified in writing that the
value of the account is less than $500 and allowed 30 days to increase the
account to $500 before the redemption is processed. Proceeds of redemptions so
processed, including dividends declared to the date of redemption, will be
promptly paid to the shareholder. Shares of the Fund may be redeemed through a
securities dealer, investment adviser, agent or other fiduciary which may charge
a fee for its services in connection with the redemption. No redemption charge
is imposed by the Fund or by The Ohio Company, the Fund's principal distributor.
PUBLIC OFFERING PRICE
The public offering price of Shares of the Fund is the net asset value per share
next determined after receipt by The Ohio Company of an order and payment, plus
a sales charge as follows:
<TABLE>
<CAPTION>
SALES CHARGE AS A PERCENTAGE
AS A OF OFFERING PRICE
PERCENTAGE ------------------------
AMOUNT OF OF THE NET SALES DEALER'S
SINGLE TRANSACTION AMOUNT INVESTED CHARGE CONCESSION
--------------------------------------------------- --------------- ---------- ----------
<S> <C> <C> <C>
Less than $100,000................................. 4.71% 4.50% 4.00%
$100,000 but less than $250,000.................... 3.63 3.50 3.00
$250,000 but less than $500,000.................... 2.56 2.50 2.00
$500,000 but less than $1,000,000.................. 1.52 1.50 1.00
$1,000,000 or more................................. 0.50 0.50 0.40
</TABLE>
(See "HOW IS NET ASSET VALUE CALCULATED?" for a description of the computation
of net asset value per share.)
The above charges on investments of $100,000 or more are applicable to purchases
made at one time by an individual, or an individual, his or her spouse and their
children not of legal age, or a trustee, guardian or other like fiduciary of
certain single trust estates or certain single fiduciary accounts.
No sales charge is imposed on purchases of Shares by officers, directors, and
employees of the Fund, or by full-time employees of The Ohio Company, who have
been such for at least 90 days or by qualified retirement plans for such
persons.
From time to time, The Ohio Company, from its own resources, may also provide
additional compensation to securities dealers in connection with sales of Shares
of the Fund. Such compensation will include financial assistance to securities
dealers in connection with conferences, sales or training programs for their
employees, seminars for the public, advertising, sales campaigns and/or
shareholder services and programs regarding the Fund and other dealer-sponsored
programs or events. In some instances, this compensation may be made available
only to certain securities dealers whose representatives have sold or are
expected to sell significant amounts of Shares of the Fund. Compensation will
include payment for travel expenses, including lodging, incurred in connection
with trips taken by invited registered representatives and members of their
families to locations within or outside of the United States for meetings or
seminars of a business nature. Securities dealers may not use sales of the
Fund's Shares to qualify for this compensation to the extent such may be
prohibited by the laws of any state or any self-regulatory agency, such as the
8
<PAGE> 13
National Association of Securities Dealers, Inc. In addition, The Ohio Company
may make ongoing payments to brokerage firms, financial institutions (including
banks) and others to facilitate the administration and servicing of shareholder
accounts. None of the aforementioned additional compensation is paid for by the
Fund or its shareholders.
AUTOMATIC INVESTMENT PLAN
The Fund has made arrangements to enable you to make automatic monthly or
quarterly investments, in the minimum amount of $50 per transaction, from your
checking account. Assuming the cooperation of your financial institution, your
checking account therein will be debited to purchase Shares of the Fund on the
periodic basis you select. Confirmation of your purchase of Fund Shares will be
provided by the Fund. The debit of your checking account will be reflected in
the checking account statement you receive from your financial institution.
Please contact The Ohio Company for the appropriate form.
- --------------------------------------------------------------------------------
MAY MY TAX SHELTERED RETIREMENT PLAN INVEST IN THE FUND?
- --------------------------------------------------------------------------------
Shares of the Fund qualify for purchase in connection with the following tax
sheltered retirement plans:
-- Individual retirement account ("IRAs") plans
-- Simplified Employee Pension Plans
-- 403(b)(7) Custodial Plans sponsored by certain tax-exempt employers
-- Pension, profit-sharing and 401(k) plans qualifying under Section 401(a)
of the Internal Revenue Code
- --------------------------------------------------------------------------------
HOW MAY I QUALIFY FOR QUANTITY DISCOUNTS?
- --------------------------------------------------------------------------------
LETTER OF INTENTION
If you (including your spouse and children not of legal age) intend to purchase
$100,000 or more of Shares of the Fund and of any other fund of the Cardinal
family of funds which is sold with a sales charge (collectively, the "Cardinal
Load Funds") during any 13-month period, you may sign a letter of intention to
that effect obtained from The Ohio Company and pay the reduced sales charge
applicable to the total amount of shares to be so purchased. The 13-month period
during which the Letter of Intention is in effect will begin on the date of the
earliest purchase to be included. In addition, trustees, guardians or other like
fiduciaries of single trust estates or certain single fiduciary accounts may
take advantage of the quantity discounts pursuant to a letter of intention.
A letter of intention is not a binding obligation upon you to purchase the full
amount indicated. Shares purchased with the first 5% of such amount will be held
in escrow (while remaining registered in your name) to secure payment of the
highest sales charge applicable to the shares actually purchased. If the full
amount indicated is not purchased, such escrowed shares will be involuntarily
redeemed to pay the additional sales charge, if necessary. Dividends on escrowed
shares, whether paid in cash or reinvested in additional shares of the
applicable Cardinal Load Fund, are not subject to escrow. The escrowed shares
will not be available for disposal by you until all purchases pursuant to the
letter of intention have been made or the higher sales charge has been paid.
When the full amount indicated has been purchased, the escrow will be released.
To the extent that you purchase more than the dollar amount indicated on the
Letter of Intention and qualify for a further reduced sales charge, the sales
charge will be adjusted for the entire amount purchased at the end of the
13-month period. The difference in sales charge will be, as you instruct, either
delivered to you in cash or used to purchase additional shares of the Cardinal
Load Fund designated by you subject to the rate of sales charge applicable to
the actual amount of the aggregate
9
<PAGE> 14
purchases. This program, however, may be modified or eliminated at any time or
from time to time by the Fund without notice.
CONCURRENT PURCHASES
For purposes of qualifying for a lower sales charge, you have the privilege of
combining "concurrent purchases" of Shares of the Fund and of one or more of the
other Cardinal Load Funds. For example, if you concurrently purchase Shares of
the Fund at the total public offering price of $50,000 and shares of another
Cardinal Load Fund at the total public offering price of $50,000, the sales
charge would be that applicable to a $100,000 purchase as shown in the table
above. "Concurrent purchases," as described above, shall include the combined
purchases of you, your spouse and your children not of legal age. To receive the
applicable public offering price pursuant to this privilege, you must, at the
time of purchase, give The Ohio Company sufficient information to permit
confirmation of qualification. This privilege, however, may be modified or
eliminated at any time or from time to time by the Fund without notice thereof.
RIGHTS OF ACCUMULATION
After your initial purchase of Shares you may also be eligible to pay a reduced
sales charge for your subsequent purchases of Shares where the total public
offering price of Shares then being purchased plus the then aggregate current
net asset value of Shares of the Fund and of shares of any Cardinal Load Fund
held in your account equals $100,000 or more. You would be able to purchase
Shares at the public offering price applicable to the total of (a) the total
public offering price of the Shares of the Fund then being purchased plus (b)
the then current net asset value of Shares of the Fund and of shares of any
other Cardinal Load Fund held in your account. For purposes of determining the
aggregate current net asset value of shares held in your account, you may
include shares then owned by your spouse and children not of legal age.
You may obtain additional information about the foregoing special purchase
method from The Ohio Company. You are responsible for notifying The Ohio Company
at the time of purchase when purchases may be accumulated to take advantage of
the reduced sales charge. This program, however, may be modified or eliminated
at any time or from time to time by the Fund without notice thereof.
- --------------------------------------------------------------------------------
ARE THERE ANY SPECIAL PURCHASE PROGRAMS FOR CERTAIN RETIREMENT PLANS?
- --------------------------------------------------------------------------------
No sales charge is imposed on purchases of Shares of the Fund by trusts
qualifying under Section 401(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), and by deferred compensation plans of state and local governments
and tax exempt organizations qualifying under section 457 or 403(b) of the Code
(collectively "Qualifying Plans"), so long as The Ohio Company serves as either
a trustee or an investment adviser for the applicable Qualifying Plans.
- --------------------------------------------------------------------------------
WHAT DISTRIBUTIONS WILL I RECEIVE?
- --------------------------------------------------------------------------------
Dividends and distributions shall be made with such frequency (long term capital
gains normally will be distributed only once annually) and in such amounts as
the Fund from time to time shall determine and from net income and net realized
capital gains of the Fund. It is the policy of the Fund to distribute, at least
annually, substantially all of its net investment income and to distribute
annually any net realized capital gains. Unless a shareholder specifically
requests otherwise, dividends and distributions will be made only in additional
Shares of the Fund and not in cash.
Shareholders may elect to receive cash distributions by using ACH processing as
described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE PROVIDED? - ACH Processing"
below.
10
<PAGE> 15
- --------------------------------------------------------------------------------
HOW MAY I REDEEM MY SHARES?
- --------------------------------------------------------------------------------
Investors may redeem Shares of the Fund at the net asset value per share next
determined following the receipt by the Fund's transfer agent, Cardinal
Management Corp., 215 East Capital Street, Columbus, Ohio 43215, of the
following: (a) written or telephonic notice to redeem, as described more fully
below, and (b) for Shares represented by certificates, either the share
certificates, properly endorsed, or properly executed stock powers. See "HOW IS
NET ASSET VALUE CALCULATED?", below, for a description of when net asset value
is determined.
As requested, The Ohio Company, on behalf of a shareholder, will forward the
foregoing notice to redeem and any share certificates or stock powers to
Cardinal Management Corp. without charge. Other broker-dealers may assist a
shareholder in redeeming his shares and may charge a fee for such services.
REDEMPTION BY MAIL
Shareholders may elect to redeem Shares of the Fund by submitting a written
request therefor to Cardinal Management Corp., the Fund's Transfer Agent at 215
East Capital Street, Columbus, Ohio 43215. Cardinal Management Corp. will
request a signature guarantee by an eligible guarantor institution as described
below. However, a signature guarantee will not be required if (1) the redemption
check is payable to the Shareholder(s) of record, and (2) the redemption check
is mailed to the Shareholder(s) at the address of record, provided, however,
that the address of record has not been changed within the preceding 15 days.
For purposes of this policy, an "eligible guarantor institution" shall include
banks, brokers, dealers, credit unions, securities exchanges and associations,
clearing agencies and savings associations as those terms are defined in the
Securities Exchange Act of 1934. Cardinal Management Corp. reserves the right to
reject any signature guarantee if (1) it has reason to believe that the
signature is not genuine or (2) it has reason to believe that the transaction
would otherwise be improper.
REDEMPTION BY TELEPHONE
Shareholders may elect to redeem Shares of the Fund by calling the Fund at the
telephone number set forth on the front of this Prospectus. The Shareholder may
direct that the redemption proceeds be mailed to the address of record or
another address.
Neither the Fund nor its service providers will be liable for any loss, damages,
expense or cost arising out of any telephone redemption effected in accordance
with the Fund's telephone redemption procedures, acting upon instructions
reasonably believed to be genuine. The Fund will employ procedures designed to
provide reasonable assurances that instructions by telephone are genuine; if
these procedures are not followed, the Fund or its service providers may be
liable for any losses due to unauthorized or fraudulent instructions. These
procedures may include recording all phone conversations, sending confirmations
to Shareholders within 72 hours of the telephone transaction, and verification
of account name and account number or tax identification number. If, due to
temporary adverse conditions, investors are unable to effect telephone
transactions, Shareholders may also redeem their Shares by mail as described
above.
AUTOMATIC WITHDRAWAL
Shareholders may elect to have the proceeds from redemptions of Shares
transmitted to an authorized bank account at a Federal Reserve member bank
through ACH processing as described under "WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED? - ACH Processing" below.
The Fund will make payment for redeemed Shares as promptly as practicable but in
no event more than seven days after receipt by Cardinal Management Corp. of the
foregoing notice and any share certificates and powers. The Fund reserves the
right to delay payment for the redemption of Shares where such Shares were
purchased with other than immediately available funds, but only until the
purchase payment has cleared (which may take fifteen or more days from the date
the purchase payment is received by the Fund). The purchase of Fund Shares by
wire transfer of federal funds would avoid any such delay.
11
<PAGE> 16
The Fund may suspend the right of redemption or may delay payment during any
period the determination of net asset value is suspended. See "HOW IS NET ASSET
VALUE CALCULATED?".
SYSTEMATIC WITHDRAWAL PLAN
If you are the owner of Shares of the Fund having a total value of $10,000 or
more at the current offering price, you may elect to redeem your Shares monthly
or quarterly in amounts of $50 or more, pursuant to the Fund's Systematic
Withdrawal Plan. Please contact The Ohio Company for the necessary form.
- --------------------------------------------------------------------------------
HOW IS NET ASSET VALUE CALCULATED?
- --------------------------------------------------------------------------------
The net asset value of the Fund is determined once daily as of 4:00 P.M.,
Columbus, Ohio time, on each business day the New York Stock Exchange is open
for business and on any other day (other than a day on which no Shares of the
Fund are tendered for redemption and no order to purchase any Shares of the Fund
is received) where there is sufficient trading in the Fund's portfolio
securities that the net asset value might be materially affected by changes in
the value of the portfolio securities. The net asset value per share of the Fund
is computed by dividing the sum of the value of the Fund's portfolio securities
plus any cash and other assets (including interest and dividends accrued but not
received) minus all liabilities (including estimated accrued expenses) by the
total number of Shares then outstanding.
Portfolio securities which are traded on United States stock exchanges are
valued at the last sale price on such an exchange as of the time of valuation on
the day the securities are being valued. Securities traded in the
over-the-counter market are valued at either the mean between the bid and ask
prices or the last sale price as one or the other may be quoted by the National
Association of Securities Dealers Automated Quotations System ("NASDAQ") as of
the time of valuation on the day the securities are being valued. The Fund uses
one or more pricing services to provide such market prices. Securities and other
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Board of
Directors of the Fund.
Determination of the net asset value may be suspended at times when (a) trading
on the New York Stock Exchange is restricted or such Exchange is closed for
other than customary weekend and holiday closings, (b) an emergency as
determined by the Securities and Exchange Commission exists making disposal of
portfolio securities or valuation of net assets of the Fund not reasonably
practicable, or (c) the Securities and Exchange Commission has by order
permitted such suspension.
- --------------------------------------------------------------------------------
DOES THE FUND PAY FEDERAL INCOME TAX?
- --------------------------------------------------------------------------------
The Fund intends to qualify as a "regulated investment company" under the Code
for so long as such qualification is in the best interest of the Fund's
shareholders. Qualification as a regulated investment company under the Code
requires, among other things, that the regulated investment company distribute
to its shareholders at least 90% of its investment company taxable income. The
Fund contemplates declaring as dividends 100% of the Fund's investment company
taxable income (before deduction of dividends paid).
A non-deductible 4% excise tax is imposed on regulated investment companies that
do not distribute in each calendar year (regardless of whether they otherwise
have a non-calendar taxable year) an amount equal to 98% of their ordinary
income for the calendar year plus 98% of their capital gain net income for the
one-year period ending on October 31 of such calendar year. The balance of such
income must be distributed during the next calendar year. If distributions
during a calendar year were less than the required amount, the Fund would be
subject to a nondeductible excise tax equal to 4% of the deficiency.
12
<PAGE> 17
- --------------------------------------------------------------------------------
WHAT ABOUT MY TAXES?
- --------------------------------------------------------------------------------
It is expected that the Fund will distribute annually to shareholders all or
substantially all of the Fund's net ordinary income and net realized capital
gains and that such distributed net ordinary income and distributed net realized
capital gains will be taxable income to shareholders for federal income tax
purposes, even if paid in additional Shares of the Fund and not in cash. The
dividends-received deduction for corporations will apply to the aggregate of
such ordinary income distributions in the same proportion as the aggregate
dividends eligible for the dividends received deduction, if any, received by the
Fund bear to its gross income.
Distribution by the Fund of the excess of net long-term capital gain over net
short-term capital loss is taxable to shareholders as long-term capital gain in
the year in which it is received, regardless of how long the shareholder has
held the Shares. Such distributions are not eligible for the dividends-received
deduction.
If the net asset value of a Share is reduced below the shareholder's cost of
that Share by the distribution of income or gain realized on the sale of
securities, the distribution is a return of invested principal, although taxable
as described above.
Prior to purchasing Shares, the impact of dividends or capital gains
distributions which are expected to be declared or have been declared, but have
not been paid, should be carefully considered. Any such dividends or capital
gains distributions paid shortly after a purchase of Shares prior to the record
date will have the effect of reducing the per share net asset value of the
Shares by the amount of the dividends or distributions. All or a portion of such
dividends or distributions, although in effect a return of capital, is subject
to tax.
The foregoing is intended only as a brief summary of some of the important tax
considerations generally affecting the Fund and its shareholders. Potential
investors in the Fund are urged to consult their tax advisers concerning the
application of federal, state and local taxes as such laws and regulations
affect their own tax situation.
Cardinal Management Corp. will inform shareholders at least annually of the
amount and nature of such income and capital gains.
- --------------------------------------------------------------------------------
WHO MANAGES MY INVESTMENT IN THE FUND?
- --------------------------------------------------------------------------------
Except where shareholder action is required by law, all of the authority of the
Fund is exercised under the direction of the Fund's Board of Directors, which is
empowered to elect officers and contract with and provide for the compensation
of agents, consultants and other professionals to assist and advise in the
operation of the Fund.
INVESTMENT ADVISER
The Fund has entered into an Investment Advisory Agreement with The Ohio
Company, 155 East Broad Street, Columbus, Ohio 43215, an investment banking firm
organized in 1925. The Ohio Company is a member of the New York and Chicago
Stock Exchanges, other regional stock exchanges and the National Association of
Securities Dealers, Inc. Through its wholly-owned subsidiary, Cardinal
Management Corp., The Ohio Company also acts as investment adviser to Cardinal
Government Securities Trust, Cardinal Tax Exempt Money Trust, Cardinal
Government Obligations Fund, Cardinal Balanced Fund and Cardinal Aggressive
Growth Fund. Descendants of H.P. and R.F. Wolfe, deceased, and members of their
families, through their possession of a majority of a voting stock, may be
considered controlling persons of The Ohio Company.
In its capacity as investment adviser, and subject to the ultimate authority of
the Fund's Board of Directors, The Ohio Company is responsible for the overall
management of the Fund's business affairs. Since
13
<PAGE> 18
December 22, 1995, John Bevilacqua has been primarily responsible for the
day-to-day management of the Fund's portfolio. Mr. Bevilacqua has been a Vice
President and Portfolio Manager for The Ohio Company since October, 1994. Prior
thereto, and since February, 1984, Mr. Bevilacqua served as Second Vice-
President -- Investments for Midland Mutual Life Insurance Company, Columbus,
Ohio.
For the Fund's fiscal year ended September 30, 1995, The Ohio Company received
compensation for its services provided under the Investment Advisory Agreement
of .5% of average net daily assets of the Fund during such year. The Ohio
Company may, however, periodically waive all or a portion of its advisory fee
with respect to the Fund to increase the net income available for distribution
as dividends. The waiver of such fee will cause the yield of the Fund to be
higher than it would otherwise be in the absence of such a waiver.
TRANSFER AGENT
The Fund has entered into an Administration Agreement with Cardinal Management
Corp., 215 East Capital Street, Columbus, Ohio 43215, pursuant to which Cardinal
Management Corp. has agreed to act as the Fund's transfer agent and dividend
disbursing agent. In consideration of such services, the Fund has agreed to pay
Cardinal Management Corp. an annual fee, paid monthly, equal to $18 per
shareholder account plus out-of-pocket expenses.
DISTRIBUTOR
The Fund has entered into a Distributor's Contract with The Ohio Company, 155
East Broad Street, Columbus, Ohio 43215, pursuant to which Shares of the Fund
continuously will be offered on a best efforts basis by The Ohio Company and
dealers selected by The Ohio Company. H. Keith Allen is an officer and director
of both the Fund and The Ohio Company. Frank W. Siegel is an officer and
director of the Fund and an officer of The Ohio Company. James M. Schrack II is
an officer of both the Fund and The Ohio Company.
CUSTODIAN
The Fund has appointed The Fifth Third Bank ("Fifth Third") 38 Fountain Square
Plaza, Cincinnati, Ohio 45263, as the Fund's custodian. In such capacity, Fifth
Third will hold or arrange for the holding of all portfolio securities and other
assets acquired and owned by the Fund.
- --------------------------------------------------------------------------------
WHAT OTHER SHAREHOLDER PROGRAMS ARE PROVIDED?
- --------------------------------------------------------------------------------
ACH PROCESSING
The Fund now offers ACH privileges. Investors may use ACH processing to make
subsequent purchases, redeem Shares and/or electronically transfer distributions
paid on Fund Shares, in addition to the other methods described in this
Prospectus. ACH provides a method by which funds may be automatically
transferred to or from an authorized bank account at a Federal Reserve member
bank that is an ACH member. Please contact your representative if you are
interested in ACH processing.
EXCHANGE PRIVILEGE
Shareholders of the Fund may, provided the amount to be exchanged meets the
applicable minimum investment requirements and the exchange is made in states
where it is legally authorized, exchange Shares of the Fund for shares of:
Cardinal Aggressive Growth Fund,
an equity fund seeking appreciation
14
<PAGE> 19
of capital (upon the payment of the
applicable sales charge);
Cardinal Balanced Fund,
a fund seeking current income
and long-term growth of both capital and
income (upon the payment of the
applicable sales charge);
Cardinal Government Obligations Fund,
a fund investing in securities issued
or guaranteed by the U.S. Government
or its agencies or instrumentalities
(upon the payment of the appropriate sales charge);
Cardinal Government Securities Trust,
a U.S. Government securities money market fund
(without payment of any sales charge); or
Cardinal Tax Exempt Money Trust,
a tax-free money market fund
(without payment of any sales charge).
Notwithstanding the foregoing and subject to the limitations contained in the
following paragraph, (i) exchanges by Qualifying Plans, for whom The Ohio
Company serves as either a trustee or an investment adviser, of Fund Shares for
shares of a Cardinal Load Fund may be completed without the payment of a sales
charge, and (ii) exchanges of Fund Shares by all other shareholders for shares
of a Cardinal Load Fund may be completed upon the payment of a sales charge
equal to the difference, if any, between the sales charge payable upon purchase
of shares of such Cardinal Load Fund and the sales charge previously paid on the
Fund Shares to be exchanged.
The foregoing exchange privilege may be exercised only once in each calendar
quarter and must be made by written or telephonic authorization. A shareholder
should notify The Ohio Company of his desire to make an exchange, and The Ohio
Company will furnish, as necessary, a prospectus and an application form to open
the account. Cardinal Management Corp., as transfer agent, will require that any
written authorization of an exchange include a signature guarantee as described
above under "HOW MAY I REDEEM MY SHARES? -- Redemption by mail." However, a
signature guarantee will not be required if the exchange is requested to be made
within the same account or into an existing account of the shareholder held in
the same name or names and in the same capacity as the account from which the
exchange is to be made. Shareholders may also authorize an exchange of shares of
the Fund by telephone. Neither the Fund nor any of its service providers will be
liable for any loss, damages, expense or cost arising out of any telephone
exchange authorization to the extent and subject to the requirements set forth
under "HOW MAY I REDEEM MY SHARES? -- Redemption by telephone" above.
For tax purposes, an exchange is treated as a redemption and a new purchase.
However, a shareholder may not include any sales charge on Shares of the Fund
for purposes of calculating the gain or loss realized upon an exchange of those
securities within 90 days of their purchase.
The Fund may at any time modify or terminate the foregoing exchange privilege.
The Fund, however, will give shareholders of the Fund 60 days' advance written
notice of any such modification or termination.
- --------------------------------------------------------------------------------
WHAT ARE MY RIGHTS AS A SHAREHOLDER?
- --------------------------------------------------------------------------------
The Fund has authorized 30,000,000 shares of Common Stock, without par value,
and all of a single class. Holders of Shares are entitled to one vote or
fraction thereof for each Share or fraction held. As provided by Ohio law, a
shareholder is entitled at any election of directors to cumulate his votes,
which means that a
15
<PAGE> 20
shareholder may give one director a total number of votes equal to the number of
Shares owned times the number of directors to be elected, or distribute his
votes on the same principle among two or more directors. All Shares, when
issued, are fully paid and nonassessable and have no preemptive rights. Each
outstanding Share or fraction thereof is entitled to participate on a pro rata
basis in dividends, distributions and net assets upon liquidation. The Fund's
Shares carry redemption rights as described under the caption "HOW MAY I REDEEM
MY SHARES?".
Unless a shareholder expressly requests otherwise, dividends and capital gain
distributions will be reinvested in Shares of the Fund and not paid in cash.
- --------------------------------------------------------------------------------
WHO PROVIDES SHAREHOLDER REPORTS?
- --------------------------------------------------------------------------------
The Fund will provide shareholders monthly a summary statement describing any
purchases and sales of Shares of the Fund and dividend and capital gain
distributions.
Holders of Shares should direct all inquiries concerning such matters to
Cardinal Management Corp., 155 East Broad Street, Columbus, Ohio 43215.
16
<PAGE> 21
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 22
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 23
Investment Adviser and Distributor
The Ohio Company
155 East Broad Street
Columbus, Ohio 43215
Transfer Agent and Dividend Paying Agent
Cardinal Management Corp.
215 East Capital Street
Columbus, Ohio 43215
Custodian
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Legal Counsel
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215
Independent Auditors
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
<PAGE> 24
====================================================
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
KEY FEATURES................................ 2
PROSPECTUS HIGHLIGHTS....................... 3
FEE TABLE................................... 4
FINANCIAL HIGHLIGHTS........................ 5
WHAT IS THE FUND?........................... 6
WHAT ARE THE INVESTMENT OBJECTIVE
AND POLICIES OF THE FUND?................. 6
HOW DO I PURCHASE SHARES OF THE FUND?....... 7
MAY MY TAX SHELTERED RETIREMENT PLAN INVEST
IN THE FUND?.............................. 9
HOW MAY I QUALIFY FOR QUANTITY DISCOUNTS?... 9
ARE THERE ANY SPECIAL PURCHASE PROGRAMS FOR
CERTAIN RETIREMENT PLANS?................. 10
WHAT DISTRIBUTIONS WILL I RECEIVE?.......... 10
HOW MAY I REDEEM MY SHARES?................. 11
HOW IS NET ASSET VALUE CALCULATED?.......... 12
DOES THE FUND PAY FEDERAL INCOME TAX?....... 12
WHAT ABOUT MY TAXES?........................ 13
WHO MANAGES MY INVESTMENT IN THE FUND?...... 13
WHAT OTHER SHAREHOLDER PROGRAMS ARE
PROVIDED?................................. 14
WHAT ARE MY RIGHTS AS A
SHAREHOLDER?.............................. 15
WHO PROVIDES SHAREHOLDER REPORTS?........... 16
</TABLE>
________________________
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE FUND, THE ADVISER, OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER BY THE
FUND OR BY THE DISTRIBUTOR TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUND TO
MAKE SUCH AN OFFER IN SUCH JURISDICTION.
====================================================
====================================================
----------------------
PROSPECTUS
----------------------
January 19, 1996
THE OHIO COMPANY
THE
CARDINAL
FUND INC.
[ LOGO ]
C A R D I N A L F U N D S
====================================================
<PAGE> 25
STATEMENT OF ADDITIONAL INFORMATION
THE CARDINAL FUND INC.
The Cardinal Fund Inc. (the "Fund") is a diversified, open-end
management investment company. The primary investment objective of the Fund is
to achieve long-term growth of capital and income through selective
participation in the long-term progress of American businesses and industries.
The policy of the Fund is generally to invest in equity securities. Current
income, while a factor in portfolio selection, is secondary to the Fund's
primary objective.
_______________________________________________________
For further information regarding the Fund or for assistance
in opening an account or redeeming shares, please call
(800) 282-9446 toll free.
Inquiries may also be made by mail addressed
to the Fund at its principal office:
155 East Broad Street
Columbus, Ohio 43215
_____________________________________________________
This Statement Of Additional Information is not a prospectus and
should be read in conjunction with the Prospectus of the Fund, dated January
19, 1996, which has been filed with the Securities and Exchange Commission.
This Statement of Additional Information is incorporated by reference in its
entirety into the Prospectus. The Prospectus is available upon request without
charge from the Fund at the above address or by calling the phone number
provided above.
JANUARY 19, 1996
<PAGE> 26
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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----
<S> <C>
THE CARDINAL FUND INC. . . . . . . . . . . . . . . . . . . . . . . . . B-1
INVESTMENT OBJECTIVE AND POLICIES . . . . . . . . . . . . . . . . . . . B-1
Additional Information on Portfolio Instruments . . . . . . . B-1
Investment Restrictions . . . . . . . . . . . . . . . . . . . B-2
Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . B-5
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . B-5
Compensation Table . . . . . . . . . . . . . . . . . . . . . . B-8
PRINCIPAL SHAREHOLDERS OF THE FUND . . . . . . . . . . . . . . . . . . B-9
THE ADVISER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . B-10
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT . . . . . . . . . . . . . B-11
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION . . . . . . . . . . . . B-12
TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-13
PERFORMANCE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . B-15
DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
CUSTODIAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
LEGAL COUNSEL AND INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . B-17
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . B-17
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . B-18
</TABLE>
-i-
<PAGE> 27
STATEMENT OF ADDITIONAL INFORMATION
THE CARDINAL FUND INC.
The Cardinal Fund Inc. (the "Fund") is an open-end management
investment company. Much of the information contained in this Statement of
Additional Information expands upon subjects discussed in the Prospectus of the
Fund. Capitalized terms not defined herein are defined in the Prospectus. No
investment in Shares of the Fund should be made without first reading the
Prospectus of the Fund.
INVESTMENT OBJECTIVE AND POLICIES
Additional Information on Portfolio Instruments
- -----------------------------------------------
SECURITIES OF OTHER INVESTMENT COMPANIES. The Fund may invest in
securities issued by other investment companies. The Fund currently intends to
limit its investments so that, as determined immediately after a securities
purchase is made: (a) not more than 5% of the value of its total assets will
be invested in the securities of any one investment company; (b) not more than
10% of the value of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (c) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Fund. As a shareholder of another investment company, the Fund would bear,
along with other shareholders, its pro rata portion of that company's expenses,
including advisory fees. These expenses would be in addition to the advisory
and other expenses that the Fund bears directly in connection with its own
operations. Investment companies in which the Fund may invest may also impose
a sales or distribution charge in connection with the purchase or redemption of
their shares and other types of commissions or charges. Such charges will be
payable by the Fund and, therefore, will be borne directly by shareholders.
REPURCHASE AGREEMENTS. Securities held by the Fund may be subject to
repurchase agreements. Under the terms of a repurchase agreement, the Fund
would acquire securities from member banks of the Federal Reserve System and
registered broker-dealers which the Adviser deems creditworthy under guidelines
approved by the Fund's Board of Trustees, subject to the seller's agreement to
repurchase such securities at a mutually agreed-upon date and price. The
repurchase price would generally equal the price paid by the Fund plus interest
negotiated on the basis of current short-term rates, which may be more or less
than the rate on the underlying portfolio securities. The seller under a
repurchase agreement will be required to maintain at all times the value of
collateral held pursuant to the agreement at not less than the repurchase price
B-1
<PAGE> 28
(including accrued interest). If the seller were to default on its repurchase
obligation or become insolvent, the Fund would suffer a loss to the extent that
the proceeds from a sale of the underlying portfolio securities were less than
the repurchase price under the agreement, or to the extent that the disposition
of such securities by the Fund were delayed pending court action.
Additionally, there is no controlling legal precedent confirming that the Fund
would be entitled, as against a claim by such seller or its receiver or trustee
in bankruptcy, to retain the underlying securities, although the Board of
Trustees of the Fund believes that, under the regular procedures normally in
effect for custody of the Fund's securities subject to repurchase agreements
and under federal laws, a court of competent jurisdiction would rule in favor
of the Fund if presented with the question. Securities subject to repurchase
agreements will be held by the Fund's custodian or another qualified custodian
or in the Federal Reserve/Treasury book-entry system. Repurchase agreements
are considered to be loans by the Fund under the 1940 Act.
Investment Restrictions
- -----------------------
The Fund deems the following to be matters of fundamental policy and
as such to be matters which the Fund will not change unless the changed policy
is otherwise lawful and is approved by holders of the majority of the
outstanding Shares of the Fund (defined as the vote, at an annual or special
meeting of shareholders of the Fund, of the lesser of (a) 67% or more of the
voting securities present at such meeting, if the holders of more than 50% of
the outstanding voting securities are present or represented by proxy, or (b)
more than 50% of the outstanding voting securities of the Fund):
The Fund will not:
(1) borrow money or issue senior securities, except that the Fund may
borrow from banks or enter into reverse repurchase agreements or
dollar roll agreements for temporary purposes in amounts up to 10% of
the value of its total assets at the time of such borrowing and except
as permitted pursuant to an exemption from the 1940 Act. The Fund
will not purchase securities while its borrowings (including reverse
repurchase agreements and dollar roll agreements) exceed 5% of its
total assets;
(2) make short sales of securities, except to the extent that the same
shall be owned by the Fund (i.e., short sales "against the box") or
purchase securities on margin;
(3) write, purchase or sell puts, calls, or combinations thereof;
(4) underwrite the securities of other issuers, except insofar as the Fund
may technically be deemed an underwriter under the
B-2
<PAGE> 29
Securities Act of 1933 in connection with the disposition of portfolio
securities;
(5) purchase securities subject to restrictions on disposition under the
Securities Act of 1933 if at the time of acquisition more than 5% of
the total assets of the Fund would be invested in such securities;
(6) concentrate more than 25% of the value of the total assets of the Fund
(determined at the date of acquisition) in any particular industry;
(7) purchase or sell real estate, except it is permissible to purchase
securities secured by real estate or real estate interests or issued
by companies that invest in real estate or real estate interests;
(8) purchase or sell commodities, commodity contracts or futures
contracts;
(9) make loans, except that the Fund may purchase or hold debt instruments
and lend portfolio securities in accordance with its investment
objective and policies, make time deposits with financial institutions
and enter into repurchase agreements;
(10) purchase the securities of any issuer if such purchase would cause
more than 5% of the Fund's total assets upon such purchase to be
invested in the securities of any one issuer (not including the
government of the United States or corporations which are the
instrumentalities of the United States);
(11) mortgage, pledge or hypothecate any assets to a greater extent than
15% of its gross assets taken at cost;
(12) purchase the securities of any issuer if such purchase would cause the
Fund to hold (i) more than 10% of the voting securities of such
issuer, (ii) more than 10% of all debt securities of such issuer taken
as a class, or (iii) more than 10% of all equity securities of such
issuer preferred in any way over the common stock of such issuer taken
as a class;
(13) purchase securities of enterprises which have a record of less than
three years' continuous operation, if such purchase would cause more
than 5% of the total assets of the Fund to be invested in the
securities of such enterprises;
(14) purchase or retain any securities of an issuer if, to the knowledge of
the Fund, the officers and directors of the Fund or the officers and
directors of its investment adviser individually owning more than 1/2
of 1% of the securities of
B-3
<PAGE> 30
such issuer together own beneficially more than 5% of the securities
of such issuer;
(15) purchase any securities from or sell any securities to (other than
stock issued by the Fund) officers or directors of the Fund, any
person or organization furnishing managerial or advisory services to
the Fund, or related classes of persons as principals;
(16) invest in companies for the purpose of exercising control or
management thereof; or
(17) change its classification as a "management company" under Section 4 of
the Investment Company Act of 1940 or change its subclassifications as
an "open-end company" or as a "diversified company" under Section 5 of
the Investment Company Act of 1940.
The following additional investment restriction may be changed without
the majority vote of the outstanding Shares of the Fund.
The Fund may not:
(1) purchase securities of other investment companies, except (a) in
connection with a merger, consolidation, acquisition or
reorganization, and (b) to the extent permitted by the 1940 Act or
pursuant to any exemptions therefrom.
If a percentage restriction or requirement set forth above is met at
the time of investment, a later failure to comply with the restriction or
requirement resulting from a change in the value of securities held by the Fund
will not be considered a violation of the policy.
The Fund has represented to the California Department of Corporations
that, in order to comply with applicable regulations, it will acquire or retain
securities of other open-end management investment companies if such
investments are made in open-end management investment companies sold with no
sales commission and the Fund's investment adviser waives its management fee
with respect to such investments. The Fund intends to comply with this
undertaking for so long as the Fund has its shares registered for sale in the
State of California or such representation is required by the California
Department of Corporations.
In addition, the Fund has represented to the Texas State Securities
Board that the Fund will (1) limit its investment in warrants, valued at the
lower of cost or market, to 5% or less of the value of the Fund's net assets,
provided that included within that amount, but not to exceed 2% of the Fund's
net assets, may be warrants which are not listed on the New York or American
Stock Exchanges and that warrants acquired by the Fund in units or
B-4
<PAGE> 31
attached to securities may be deemed to be without value, and (2) not invest in
oil, gas or other mineral leases.
The Fund has also represented to the Ohio Division of Securities that
it will not invest its assets in the securities of other investment companies,
except by purchase in the open market where no commission or profit to a
sponsor or dealer results from the purchase other than the customary broker's
commission, or except when the purchase is part of a plan of merger,
consolidation, reorganization, or acquisition. The Fund intends to comply with
this representation for so long as its Shares are registered for sale in the
State of Ohio.
Portfolio Turnover
- ------------------
The portfolio turnover rate for the Fund is calculated by dividing the
lesser of the Fund's purchases or sales of portfolio securities for the year by
the monthly average value of the portfolio securities. The calculation
excludes all securities whose remaining maturities at the time of the
acquisition were one year or less.
The portfolio turnover rate for the Fund for the two fiscal years
ended September 30, 1995 and 1994, were 19.78% and 23.20%, respectively. The
portfolio turnover rate for the Fund may vary greatly from year to year as well
as within a particular year, and may also be affected by cash requirements for
redemptions of Shares. Portfolio turnover will not be a limiting factor in
making investment decisions.
MANAGEMENT OF THE FUND
The directors and officers of the Fund, together with their addresses
and principal business occupations and other affiliations during the last five
years, are shown below. Each person named as a director also serves as a
trustee of Cardinal Government Securities Trust, Cardinal Tax Exempt Money
Trust, Cardinal Government Obligations Fund, and The Cardinal Group. Each
director who is an "interested person" of the Fund, as that term is defined in
the Investment Company Act of 1940, is indicated by an asterisk.
<TABLE>
<CAPTION>
Name, Age and Position(s) Held Principal Occupation(s)
Business Address with Fund During Past 5 Years
---------------- ---------------- -----------------------
<S> <C> <C>
*H. Keith Allen Chairman and Director, Chief Operating Officer, Secretary,
155 East Broad Street Member of Executive and Treasurer and a Director of The
Columbus, Ohio 43215 Nominating Committees Ohio Company (investment banking);
Age: 54 prior thereto, Senior Executive
Vice President of The Ohio Company.
</TABLE>
B-5
<PAGE> 32
<TABLE>
<S> <C> <C>
Gordon B. Carson Director, Member of Principal, Whitfield Robert
5413 Gardenbrook Drive Executive Committee Associates (construction consulting
Midland, Michigan 48642 firm).
Age: 84
John B. Gerlach, Jr. Director, Member of Audit Since 1994, President and a
37 West Broad Street Committee Director of Lancaster Colony
Columbus, Ohio 43215 Corporation (diversified consumer
Age: 41 products); prior thereto, Executive
Vice President, Secretary and a
Director of Lancaster Colony
Corporation.
Michael J. Knilans Director, Member of From November, 1989 to August,
1119 Kingsdale Terrace Executive Committee 1995, Member of the Ohio Bureau of
Columbus, Ohio 43220 Workers' Compensation and Chairman
Age: 68 from 1992 through August, 1995.
James I. Luck Director President, The Columbus Foundation
1234 East Broad Street (philanthropic public foundation).
Columbus, Ohio 43205
Age: 50
David L. Nelson Director, Member of Audit Chairman of the Board of Directors
18 James Lane and Nominating Committees of Herman Miller, Inc. (furniture
Stamford, CT 06903 manufacturer); former Vice
Age: 65 President, Customer Support,
Americas Region, and Vice
President, Customer Satisfaction,
Industry Segment, of Asea Brown
Boveri, Inc. (designer and
manufacturer of process automation
systems for basic industries).
*C. A. Peterson Director Chartered Financial Analyst; former
150 E. Wilson Bridge Rd. Senior Executive Vice President and
Worthington, Ohio 43085 Director of The Ohio Company
Age: 69 (investment banking).
Lawrence H. Rogers II Director Self-employed author; former Vice
4600 Drake Road Chairman, Motor Sports Enterprises,
Cincinnati, Ohio 45243 Inc.
Age: 74
*Frank W. Siegel President and Director, Chartered Financial Analyst and
155 East Broad Street Member of Executive and Senior Vice President, The Ohio
Columbus, Ohio 43215 Nominating Committees Company (investment banking);
Age: 43 former Vice President, Keystone
Group (mutual fund management/
administration); former
</TABLE>
B-6
<PAGE> 33
<TABLE>
<S> <C> <C>
Senior Vice President, Trust
Advisory Group (mutual fund
consulting).
Joseph H. Stegmayer Director, Member of Audit President and a Director of Clayton
724 Hampton Roads Dr. and Nominating Committees Homes, Inc. (manufactured homes);
Knoxville, TN 37922-4071 former Vice President, Treasurer,
Age: 44 Chief Financial Officer and a
Director of Worthington Industries,
Inc. (specialty steel and plastics
manufacturer).
Karen J. Hipsher Secretary Executive Secretary of The Ohio
155 East Broad Street Company (investment banking).
Columbus, Ohio 43215
James M. Schrack II Treasurer Vice President and Trust Officer of
155 East Broad Street The Ohio Company (investment
Columbus, Ohio 43215 banking).
Bruce E. McKibben Assistant Treasurer Since April, 1991, Employee of The
155 East Broad Street Ohio Company (investment banking;
Columbus, Ohio 43215 prior thereto, student at The Ohio
State University.
</TABLE>
As of January 11, 1996, all directors and officers of the Fund as a
group owned fewer than one percent of the Shares of the Fund then outstanding.
Pursuant to the ultimate authority of the Board of Directors of the
Fund, the Executive Committee is responsible for the general management of the
affairs of the Fund. These transactions are reported to and reviewed by the
Board of Directors.
Messrs. Allen and Siegel are Chairman, President and a director, and
Vice President and a director, respectively, of Cardinal Management Corp., the
transfer agent for the Fund. The compensation of directors and officers of the
Fund who are employed by The Ohio Company is paid by The Ohio Company.
Directors' fees (currently $500 per meeting attended, $500 annual retainer and
$500 per audit committee meeting attended) plus expenses are paid by the Fund,
except that Messrs. Allen and Siegel receive no fees from the Fund.
The following table sets forth information regarding all compensation
paid by the Fund to its Directors for their services as directors during the
fiscal year ended September 30, 1995. The Fund has no pension or retirement
plans.
B-7
<PAGE> 34
COMPENSATION TABLE
<TABLE>
<CAPTION>
Name and Position Aggregate Compensation Total Compensation From the Fund
With the Fund* From the Fund and the Fund Complex**
-------------- ------------------ --------------------------------
<S> <C> <C>
H. Keith Allen $0 $0
Chairman, Director and Member of
Executive and
Nominating Committees
Gordon B. Carson $2,400 $12,000
Director and Member of Executive
Committee
John B. Gerlach $2,600 $13,000
Director and Member of Audit Committee
Michael J. Knilans $2,400 $12,000
Director and Member of Executive
Committee
James I. Luck $2,400 $12,000
Director
David L. Nelson $2,600 $13,000
Director and Member of Audit and
Nominating Committees
C.A. Peterson $2,400 $12,000
Director
Lawrence H. Rogers, II $2,400 $12,000
Director
Frank W. Siegel $0 $0
Director, President and Member of
Nominating and Executive Committees
Joseph H. Stegmayer $2,000 $10,000
Director and Member of Audit and
Nominating Committees
</TABLE>
__________________________________
*For the fiscal year ended September 30, 1995, John L. Schlater, a
former officer of The Ohio Company and Cardinal Management Corp., had served as
a director of the Fund but no longer does so as the date hereof. Mr. Schlater
received no compensation from the Fund or the Fund Complex.
**For purposes of this Table, Fund Complex means one or more mutual
funds, including the Fund, which have a common investment
B-8
<PAGE> 35
adviser or affiliated investment advisers or which hold themselves out to the
public as being related.
PRINCIPAL SHAREHOLDERS OF THE FUND
As of January 11, 1996, the only person known to the Fund to be the
beneficial owner of more than 5% of the Fund's outstanding Shares was The Ohio
Company, which, for its own account and as trustee for various pension plans
and trusts, owned beneficially 6.04% of the Fund's outstanding Shares.
THE ADVISER
The Fund has entered into an Investment Advisory Agreement with The
Ohio Company, an investment banking firm organized in 1925, pursuant to which
The Ohio Company furnishes the Fund with continuous investment advice,
research, statistical services and certain administrative support such as
providing and paying for all officers and employees of the Fund, office space
and supplies. As compensation for such services, facilities and expenses The
Ohio Company receives a quarterly fee, accrued daily, based on an annual rate
of .5% of the daily net asset value of the Fund. For the Fund's three fiscal
years ended September 30, 1995, 1994 and 1993, fees earned by The Ohio Company
under the Investment Advisory Agreement were $1,158,534, $1,325,607 and
$1,370,536, respectively.
Under the Investment Advisory Agreement, if expenses (including the
adviser's fee but excluding interest and taxes) exceed 1-1/2% per annum of the
average daily net asset value for any fiscal year of the Fund, The Ohio Company
shall bear the excess.
The Investment Advisory Agreement also provides that the advisory fee
payable pursuant to such Agreement shall be reduced by the amount of brokerage
commissions derived by The Ohio Company, as adviser, on orders executed by it
for the Fund on a stock exchange of which such Adviser is a member.
Descendants of H. P. and R. F. Wolfe, deceased, and members of their
families, through their possession of a majority of the voting stock, may be
considered controlling persons of The Ohio Company. H. Keith Allen is an
officer and director of both the Fund and The Ohio Company. Frank W. Siegel is
an officer and director of the Fund and an officer of The Ohio Company. James
M. Schrack II is an officer of both the Fund and The Ohio Company.
B-9
<PAGE> 36
PORTFOLIO TRANSACTIONS
Subject to the policies established by the Board of Directors of the
Fund, The Ohio Company, as Investment Adviser, is responsible for the Fund's
portfolio decisions and the placing of the Fund's portfolio transactions. In
executing such transactions, The Ohio Company seeks to obtain the best net
results for the Fund taking into account such factors as price (including the
applicable brokerage commission or dealer spread), size of order, difficulties
of execution and operational facilities of the firm involved and the firm's
risk in positioning a block of securities. While The Ohio Company generally
seeks reasonably competitive commission rates, for the reasons stated in the
prior sentence, the Fund will not necessarily be paying the lowest commission
or spread available. For the Fund's three fiscal years ended September 30,
1995, 1994 and 1993, total brokerage fees paid by the Fund were $215,180,
$188,616 and $101,220, respectively, none of which was paid to The Ohio
Company.
The Ohio Company may consider provision of research, statistical and
other information to the Fund or the Adviser in the selection of qualified
broker-dealers who effect portfolio transactions for the Fund so long as The
Ohio Company's ability to obtain the best net results for portfolio
transactions of the Fund is not diminished. Such research services include
supplemental research, securities and economic analyses, and statistical
services and information with respect to the availability of securities or
purchasers or sellers of securities. Such research services may also be useful
to The Ohio Company in connection with its services to other clients.
Similarly, research services provided by brokers serving such other clients may
be useful to The Ohio Company in connection with its services to the Fund.
Although this information is useful to the Fund and The Ohio Company, except as
described below, it is not possible to place a dollar value on it. It is the
opinion of the Board of Directors and The Ohio Company that the review and
study of this information will not reduce the overall cost to The Ohio Company
of performing its duties to the Fund under the Investment Advisory Agreement.
The Fund has authorized The Ohio Company to place brokerage transactions
through Pershing and Company, a division of Donaldson, Lufkin & Jenrette, in
return for Lipper Data information prepared for the Fund's Directors relating
to information on fees and expenses of other mutual funds. In addition, during
the fiscal year ended September 30, 1994, The Ohio Company, on behalf of the
Fund, directed some brokerage transactions to Columbine Capital in return for
the provision of research services. The amount of such transactions and
related commissions were $10,758,000 and $23,588, respectively. The Ohio
Company has since not so directed any brokerage transactions to Columbine
Capital. Such brokerage transactions with both Pershing and Company and
Columbine Capital are subject to the requirements as to price and execution as
described above. The Fund is not authorized to pay brokerage
B-10
<PAGE> 37
commissions which are in excess of those which another qualified broker would
charge solely by reason of brokerage and research services provided.
Investment decisions for the Fund are made independently from those
for any other investment company or account managed by The Ohio Company. Any
such other investment company or account may also invest in the same securities
as the Fund. When a purchase or sale of the same security is made at
substantially the same time on behalf of the Fund and another investment
company or account, the transaction will be averaged as to price and available
investments will be allocated as to amount in a manner which The Ohio Company
believes to be equitable to the Fund and such other investment company or
account. In some instances, this investment procedure may adversely affect the
price paid or received by the Fund or the size of the position obtained by the
Fund. To the extent permitted by law, The Ohio Company may aggregate the
securities to be sold or purchased for the Fund with those to be sold or
purchased for other investment companies or accounts in order to obtain best
execution. As provided by the Investment Advisory Agreement, in making
investment recommendations for the Fund, The Ohio Company will not inquire or
take into consideration whether an issuer of securities proposed for purchase
or sale by the Fund is a customer of The Ohio Company or its subsidiaries or
affiliates and, in dealing with its customers, The Ohio Company or its
subsidiaries and affiliates will not inquire or take into consideration whether
securities of such customers are held by the Fund.
The Fund did not during the fiscal year ended September 30, 1995, hold
any securities of its regular brokers or dealers, as defined in Rule 10b-1
under the 1940 Act, or their parent companies.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
The Fund has entered into an Administration Agreement with Cardinal
Management Corp., a wholly-owned subsidiary of The Ohio Company, pursuant to
which Cardinal Management Corp. has agreed to act as the Fund's transfer agent,
dividend disbursing agent and administrator of plans for the Fund. In
consideration of such services the Fund has agreed to pay Cardinal Management
Corp. monthly an annual fee equal to $18 per shareholder account plus
out-of-pocket expenses. For the last three fiscal years ended September 30,
1995, Cardinal Management Corp. received $255,882, $327,423 and $297,199,
respectively, for services to the Fund pursuant to such Agreement.
B-11
<PAGE> 38
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Fund's Shares may be purchased at the public offering price
through The Ohio Company, principal underwriter of the Fund's Shares, at its
address and number set forth on the cover page of this Statement of Additional
Information, and through other broker-dealers who are members of the National
Association of Securities Dealers, Inc. and have sales agreements with The Ohio
Company.
Based upon the value of the Fund's portfolio securities and other
assets and the number of outstanding Shares as of the fiscal year ended
September 30, 1995, the net asset value and redemption price per share was
$13.23. The total offering price per share was $13.85 per share (net asset
value divided by .9550, assuming the then current maximum sales charge of 4.5%
of the offering price). The total offering price is reduced on sales of
$100,000 or more.
The net asset value of the Fund is determined once daily as of 4:00
P.M., Columbus, Ohio time, (a) on each business day the New York Stock Exchange
is open for business and a purchase order has been received by the Fund, (b) on
each such business day when a redemption request is received, and (c) at such
other times as there is a sufficient degree of trading in the Fund's portfolio
securities that the net asset value might be materially affected by changes in
the value of the portfolio securities. The net asset value per share of the
Fund is computed by dividing the sum of the value of the Fund's portfolio
securities plus any cash and other assets (including interest and dividends
accrued but not received) minus all liabilities (including estimated accrued
expenses) by the total number of shares then outstanding.
Portfolio securities which are traded on United States stock exchanges
are valued at the last sale price on such an exchange as of the time of
valuation on the day the securities are being valued. Securities traded in the
over-the-counter market are valued at either the mean between the bid and ask
prices or the last sale price as one or the other may be quoted by the National
Association of Securities Dealers Automated Quotations System ("NASDAQ") as of
the time of valuation on the day the securities are being valued. The Fund
uses one or more pricing services to provide such market prices. Securities
and other assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the direction of
the Board of Directors of the Fund.
The Fund may suspend the determination of the net asset value, the
right of redemption or postpone the date of payment for Shares during any
period when (a) trading on the New York Stock Exchange (the "Exchange") is
restricted by applicable rules and regulations of the Securities and Exchange
Commission, (b) the Exchange is closed for other than customary weekend and
holiday closings, (c) an emergency exists as a result of which (i) disposal by
the Fund
B-12
<PAGE> 39
of portfolio securities owned by it is not reasonably practicable or (ii) it is
not reasonably practicable for the Fund to determine the fair value of its net
assets, or (d) the Securities and Exchange Commission has by order permitted
such suspension.
TAXES
The Fund intends to qualify as a "regulated investment company" under
the Code for so long as such qualification is in the best interest of the
Fund's shareholders. In order to qualify as a regulated investment company,
the Fund must, among other things: derive at least 90% of its gross income
from dividends, interest, payments with respect to securities loans, and gains
from the sale or other disposition of securities or foreign currencies, or
other income derived with respect to its business of investing in such stock,
securities, or currencies; derive less than 30% of its gross income from the
sale or other disposition of stock, securities, options, future contracts or
foreign currencies held less than three months; and diversify its investments
within certain prescribed limits. In addition, to utilize the tax provisions
specially applicable to regulated investment companies, the Fund must
distribute to its shareholders at least 90% of its investment company taxable
income for the year. In general, the Fund's investment company taxable income
will be its taxable income subject to certain adjustments and excluding the
excess of any net long-term capital gain for the taxable year over the net
short-term capital loss, if any, for such year.
A non-deductible 4% excise tax is imposed on regulated investment
companies that do not distribute in each calendar year (regardless of whether
they otherwise have a non-calendar taxable year) an amount equal to 98% of
their ordinary income for the calendar year plus 98% of their capital gain net
income for the one-year period ending on October 31 of such calendar year. The
balance of such income must be distributed during the next calendar year. If
distributions during a calendar year were less than the required amount, the
Fund would be subject to a non-deductible excise tax equal to 4% of the
deficiency.
Although the Fund expects to qualify as a "regulated investment
company" and to be relieved of all or substantially all federal income taxes,
depending upon the extent of its activities in states and localities in which
its offices are maintained, in which its agents or independent contractors are
located, or in which it is otherwise deemed to be conducting business, the Fund
may be subject to the tax laws of such states or localities. In addition, if
for any taxable year the Fund does not qualify for the special tax treatment
afforded regulated investment companies, all of its taxable income will be
subject to federal tax at regular corporate rates (without any deduction for
distributions to its shareholders). In such event, dividend distributions
would be
B-13
<PAGE> 40
taxable to shareholders to the extent of earnings and profits, and would be
eligible for the dividends received deduction for corporations.
It is expected that the Fund will distribute annually to shareholders
all or substantially all of the Fund's net ordinary income and net realized
capital gains and that such distributed net ordinary income and distributed net
realized capital gains will be taxable income to shareholders for federal
income tax purposes, even if paid in additional Shares of the Fund and not in
cash.
Distribution by the Fund of the excess of net long-term capital gain
over net short-term capital loss is taxable to shareholders as long-term
capital gain in the year in which it is received, regardless of how long the
shareholder has held the Shares. Such distributions are not eligible for the
dividends-received deduction.
Federal taxable income of individuals is subject to graduated tax
rates of 15%, 28%, 31%, 36% and 39.6%. Further, the marginal tax rate may be
in excess of 39.6%, because adjustments reduce or eliminate the benefit of the
personal exemption and itemized deductions for individuals with gross income in
excess of certain threshold amounts.
Capital gains of individuals are subject to tax at the same rates
applicable to ordinary income; however, the tax rate on capital gains of
individuals cannot exceed 28%. Capital losses may be used to offset capital
gains. In addition, individuals may deduct up to $3,000 of net capital loss
each year to offset ordinary income. Excess net capital loss may be carried
forward to future years.
Federal taxable income of corporations in excess of $75,000 up to $10
million is subject to a 34% tax rate; however, because the benefit of lower tax
rates on a corporation's taxable income of less than $75,000 is phased out for
corporations with income in excess of $100,000 but lower than $335,000, a
maximum marginal tax rate of 39% may result. Federal taxable income of
corporations in excess of $10 million is subject to a tax rate of 35%.
Further, a corporation's federal taxable income in excess of $15 million is
subject to an additional tax equal to 3% of taxable income over $15 million,
but not more than $100,000.
Capital gains of corporations are subject to tax at the same rates
applicable to ordinary income. Capital losses may be used only to offset
capital gains and excess net capital loss may be carried back three years and
forward five years.
Certain corporations are entitled to a 70% dividends received
deduction for distributions from certain domestic corporations. The Fund will
designate the portion of any distributions which
B-14
<PAGE> 41
qualify for the 70% dividends received deduction. The amount so designated may
not exceed the amount received by the Fund for its taxable year that qualifies
for the dividends received deduction.
The Fund will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable dividends paid to any shareholder who
has provided either an incorrect tax identification number or no number at all,
or who is subject to withholding by the Internal Revenue Service for failure
properly to include on his return payments of interest or dividends.
Information set forth in the Prospectus and this Statement of
Additional Information which relates to federal taxation is only a summary of
some of the important federal tax considerations generally affecting purchasers
of Shares of the Fund. No attempt has been made to present a detailed
explanation of the federal income tax treatment of the Fund or its shareholders
and this discussion is not intended as a substitute for careful tax planning.
Accordingly, potential purchasers of Shares of the Fund are urged to consult
their tax advisers with specific reference to their own tax situation. In
addition, the tax discussion in the Prospectus and this Statement of Additional
Information is based on tax laws and regulations which are in effect on the
date of the Prospectus and this Statement of Additional Information; such laws
and regulations may be changed by legislative or administrative action.
PERFORMANCE INFORMATION
For the one-, five- and ten-year periods ended September 30, 1995, and
the period from September 30, 1975 to September 30, 1995, the average annual
total returns for the Fund were 9.63%, 13.25%, 12.15%, and 14.91%,
respectively. For the one-, five- and ten-year periods ended September 30,
1995, and the period from September 30, 1975 to September 30, 1995, the
cumulative return figures for the Fund were 9.63%, 86.28%, 215.05% and
1,511.18%, respectively. Each quotation of average annual total return was
computed by finding the average annual compounded rate of return over that
period which would equate the value of an initial amount of $1,000 invested in
the Fund equal to the ending redeemable value, according to the following
formula:
n
P(T + 1) = ERV
Where: P = a hypothetical initial payment of $1,000, T = average
annual total return, n = number of years, and ERV = ending redeemable value of
a hypothetical $1,000 payment at the beginning of the period at the end of the
period for which average annual total return is being calculated assuming a
complete redemption. The calculation of average annual total return assumes
the deduction of the current maximum applicable sales charge (4.5%)
B-15
<PAGE> 42
from the initial investment of $1,000, assumes the reinvestment of all
dividends and distributions at the price stated in the then effective
Prospectus on the reinvestment dates during the period and includes all
recurring fees that are charged to all Shareholder accounts assuming the Fund's
average account size. Cumulative return is computed by using average annual
return, as calculated above, for each year of the relevant period to determine
the total return on a hypothetical initial investment of $1,000 over such
period.
Investors may also judge the performance of the Fund by comparing its
performance to the performance of other mutual funds or mutual fund portfolios
with comparable investment objectives and policies through various mutual fund
or market indices such as those prepared by Dow Jones & Co., Inc. and, Standard
& Poor's Corporation and to data prepared by Lipper Analytical Services, Inc.,
Morningstar, Inc. and CDA Investment Technologies, Inc. Comparisons may also
be made to indices or data published in Money Magazine, Forbes, Barron's, The
Wall Street Journal, The New York Times, The Columbus Dispatch, Business Week,
U.S.A. Today and Consumer Reports. In addition to performance information,
general information about the Fund that appears in a publication such as those
mentioned above may be included in advertisements and in reports to
shareholders.
DISTRIBUTOR
The Ohio Company serves as the principal underwriter of Shares of the
Fund. In such capacity, and pursuant to a Distributor's Contract with the
Fund, Shares of the Fund continuously are offered on a best efforts basis by
The Ohio Company and dealers selected by The Ohio Company. Pursuant to the
Distributor's Contract, expenses of printing prospectuses and other selling
literature are borne by The Ohio Company. All other expenses of the Fund,
including taxes, fees and commissions, expenses of registering and qualifying
Shares for sale, charges of custodians, transfer agents and registrars and
auditing and legal fees and expenses are borne by the Fund.
For the Fund's three fiscal years ended September 30, 1995, 1994 and
1993, commissions paid The Ohio Company under the Distributor's Contract with
respect to the sale of Fund shares, after discounts to dealers, were $170,827,
$427,597 and $1,218,578, respectively.
CUSTODIAN
The Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati, Ohio 45263
has been selected to serve as the Fund's custodian. In such capacity the
custodian will hold or arrange for the holding of all portfolio securities and
other assets of the Fund.
B-16
<PAGE> 43
LEGAL COUNSEL AND INDEPENDENT AUDITORS
Certain legal matters as to the issuance of the Shares offered hereby
have been passed upon by Baker & Hostetler, 65 East State Street, Columbus,
Ohio 43215. The Fund has selected KPMG Peat Marwick LLP, Two Nationwide Plaza,
Columbus, Ohio 43215, as independent auditors for the Fund. The financial
statements of the Fund included in this Statement of Additional Information
have been included herein in reliance upon the report of KPMG Peat Marwick LLP,
independent auditors, given upon the authority of said firm as experts in
accounting and auditing.
ADDITIONAL INFORMATION
The Fund is registered with the Securities and Exchange Commission as
a management investment company. Such registration does not involve
supervision by the Securities and Exchange Commission of the management or
policies of the Fund.
The Prospectus and this Statement of Additional Information omit
certain of the information contained in the Registration Statement filed with
the Securities and Exchange Commission. Copies of such information may be
obtained from the Securities and Exchange Commission upon payment of the
prescribed fee.
The Prospectus and this Statement of Additional Information are not an
offering of the securities herein described in any state in which such offering
may not lawfully be made. No salesman, dealer, or other person is authorized
to give any information or make any representation other than those contained
in the Prospectus and this Statement of Additional Information.
B-17
<PAGE> 44
FINANCIAL STATEMENTS
THE CARDINAL FUND INC.
SEPTEMBER 30, 1995
B-18
<PAGE> 45
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (MARKET VALUE IN THOUSANDS)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
------- --------
<S> <C> <C>
COMMON STOCK 91.28%
AEROSPACE/DEFENSE 3.33%
Harris Corporation........................................................ 75,200 $ 4,127
Raytheon Company.......................................................... 40,000 3,400
--------
7,527
--------
APPAREL/RETAILERS 2.69%
Jacobson Stores, Incorporated............................................. 79,000 770
May Department Stores Company............................................. 110,000 4,813
Shopko Stores, Incorporated............................................... 40,000 495
--------
6,078
--------
AUTOMOTIVE MANUFACTURING 1.79%
Ford Motor Company........................................................ 130,000 4,046
--------
AUTOMOTIVE PARTS 2.01%
Amcast Industrial Corporation............................................. 109,800 2,114
Cooper Tire & Rubber Company.............................................. 100,200 2,430
--------
4,544
--------
BEVERAGES 0.69%
Anheuser-Busch Companies Incorporated..................................... 25,000 1,559
--------
CENTRAL STATES BANKS 7.46%
Banc One Corporation...................................................... 130,500 4,763
Huntington Bancshares Incorporated........................................ 203,747 4,585
KeyCorp................................................................... 220,000 7,535
--------
16,883
--------
COMMODITY CHEMICALS 4.38%
Akzo Nobel N.V............................................................ 70,214 4,221
ARCO Chemical Company..................................................... 25,000 1,219
Dow Chemical Company...................................................... 60,000 4,470
--------
9,910
--------
</TABLE>
(continued)
B-19
<PAGE> 46
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
------- --------
<S> <C> <C>
COMMON STOCK (CONTINUED)
COMPUTERS 2.84%
Compaq Computer Corporation*.............................................. 70,000 $ 3,386
Tektronix Incorporated.................................................... 51,600 3,044
--------
6,430
--------
CONGLOMERATES 8.14%
Johnson Controls, Incorporated............................................ 100,000 6,325
Tenneco, Incorporated..................................................... 150,500 6,961
Textron, Incorporated..................................................... 75,000 5,118
--------
18,404
--------
CONSUMER SERVICES 0.59%
Scotts Company, Class A*.................................................. 60,000 1,328
--------
CONTAINERS/PACKAGING 0.40%
Liqui-Box Corporation..................................................... 30,390 900
--------
DIVERSIFIED FINANCIAL SERVICES 2.43%
Beneficial Corp........................................................... 105,000 5,486
--------
DIVERSIFIED INDUSTRIALS 3.45%
Minnesota Mining & Manufacturing Company.................................. 70,000 3,955
Myers Industries, Incorporated............................................ 181,802 2,772
Raven Industries, Incorporated............................................ 60,050 1,081
--------
7,808
--------
ELECTRIC 1.90%
Northern States Power Company............................................. 95,000 4,311
--------
ELECTRICAL COMPONENTS 6.59%
Asea Brown-Boveri, Incorporated........................................... 50,300 5,024
General Electric Company.................................................. 120,400 7,675
Houston Industries, Incorporated.......................................... 50,000 2,206
--------
14,905
--------
</TABLE>
*Non-income producing (continued)
B-20
<PAGE> 47
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
------- --------
<S> <C> <C>
COMMON STOCK (CONTINUED)
FOOD 2.40%
GoodMark Foods, Incorporated.............................................. 184,000 $ 3,404
Super Food Services, Incorporated......................................... 160,800 2,030
--------
5,434
--------
GAS 1.03%
Williams Companies Incorporated........................................... 60,000 2,340
--------
HEALTHCARE PROVIDERS 0.78%
U.S. HealthCare, Incorporated............................................. 50,000 1,769
--------
INDUSTRIAL SERVICES 1.57%
Graphic Industries, Incorporated.......................................... 123,500 1,266
New England Business Services, Incorporated............................... 110,500 2,279
--------
3,545
--------
INSURANCE 2.38%
Equitable of Iowa Companies............................................... 50,300 1,861
Marsh & McLennan Companies Incorporated................................... 40,000 3,515
--------
5,376
--------
INTEGRATED OILS 9.42%
Mobil Corporation......................................................... 75,000 7,471
Royal Dutch Petroleum Company............................................. 60,000 7,365
Texaco Incorporated....................................................... 100,000 6,463
--------
21,299
--------
MEDICAL SUPPLIES 0.43%
Fisher Scientific International, Incorporated............................. 30,000 971
--------
OTHER NONFERROUS METALS 2.24%
Worthington Industries, Incorporated...................................... 275,776 5,067
--------
PAPER 2.54%
Federal Paper Board Company............................................... 89,800 3,446
Union Camp Corporation.................................................... 40,000 2,305
--------
5,751
--------
</TABLE>
(continued)
B-21
<PAGE> 48
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
------- --------
<S> <C> <C>
COMMON STOCK (CONTINUED)
PHARMACEUTICALS 2.32%
American Home Products Corporation........................................ 50,000 $ 4,244
Mylan Laboratories, Incorporated.......................................... 50,000 1,000
--------
5,244
--------
PIPELINES 0.52%
Coastal Corporation....................................................... 35,000 1,177
--------
PROPERTY/CASUALTY INSURERS 3.91%
Cincinnati Financial Corporation.......................................... 162,750 8,850
--------
PUBLISHING 0.77%
Dun and Bradstreet Corporation............................................ 30,000 1,736
--------
SPECIALTY/RETAILERS 2.71%
Limited, Incorporated..................................................... 200,000 3,800
Stanley Works............................................................. 35,000 1,518
Sun Television and Appliances............................................. 70,000 429
Wolohan Lumber Company.................................................... 34,000 387
--------
6,134
--------
TELEPHONE 5.15%
GTE Corporation........................................................... 189,716 7,446
Sprint Corporation........................................................ 120,000 4,200
--------
11,646
--------
TOBACCO 2.77%
Philip Morris Companies, Incorporated..................................... 75,000 6,263
--------
TRANSPORTATION 1.65%
GATX Corporation.......................................................... 72,300 3,742
--------
TOTAL COMMON STOCK (COST $147,559,806)............................... 206,463
--------
REPURCHASE AGREEMENTS, FULLY COLLATERALIZED BY U.S.
GOVERNMENT OBLIGATIONS 7.30%
Fifth Third Bank, 6.25%, dated 9/29/95, due 10/02/95...................... 16,500
--------
TOTAL REPURCHASE AGREEMENTS (COST $16,500,000)....................... 16,500
--------
TOTAL INVESTMENTS (COST $164,059,806) 98.58%......................... $222,963
=========
</TABLE>
See accompanying notes to financial statements.
B-22
<PAGE> 49
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
ASSETS
<TABLE>
<S> <C>
Investments in securities, at value (cost $164,060)................................... $222,963
Cash.................................................................................. 206
Receivable for investment securities sold............................................. 2,999
Dividends and interest receivable..................................................... 825
Receivable for Fund shares sold....................................................... 102
Other assets.......................................................................... 111
--------
Total assets................................................................ 227,206
--------
LIABILITIES
Payable for Fund shares redeemed...................................................... 660
Accrued investment management and transfer agent fees (note 3)........................ 314
Other accrued expenses................................................................ 51
--------
Total liabilities........................................................... 1,025
--------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
NET ASSETS -- applicable to 17,099,016 outstanding no par value shares of beneficial
interest (authorized 30,000,000).................................................... $226,181
=========
NET ASSET VALUE PER SHARE............................................................. $ 13.23
=========
</TABLE>
See accompanying notes to financial statements.
B-23
<PAGE> 50
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends.............................................................................. $ 7,504
Interest............................................................................... 847
-------
Total income................................................................. 8,351
-------
EXPENSES:
Investment management fees (note 3).................................................... 1,159
Transfer agent fees and expenses (note 3).............................................. 256
-------
Total affiliated expenses.................................................... 1,415
-------
Custodian fees......................................................................... 25
Professional fees...................................................................... 60
Reports to shareholders................................................................ 37
Directors' fees........................................................................ 21
Registration fees...................................................................... 6
Other expenses......................................................................... 64
-------
Total non-affiliated expenses................................................ 213
-------
Total expenses............................................................... 1,628
-------
Net investment income........................................................ 6,723
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Net realized gain from security transactions........................................... 17,719
Increase in unrealized gain on investments............................................. 8,122
-------
Net realized gain and increase in unrealized gain on investments............. 25,841
-------
Net increase in net assets from operations................................... $32,564
========
</TABLE>
See accompanying notes to financial statements.
B-24
<PAGE> 51
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income........................................... $ 6,723 $ 6,351
Net realized gain from security transactions.................... 17,719 17,362
Increase (decrease) in unrealized gain on investments........... 8,122 (14,821)
------------- -------------
Net increase in net assets from operations.................... 32,564 8,892
------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Distributions of net investment income ($.35 and $.33 per share,
respectively)................................................. (6,566) (6,601)
Distribution of net realized gains from security transactions
($.83 and $.28 per share, respectively)....................... (15,750) (6,006)
------------- -------------
Total distributions to shareholders........................... (22,316) (12,607)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5):
Proceeds from sale of Fund shares............................... 8,266 14,876
Net asset value of Fund shares issued in connection with
reinvestment of distributions to shareholders................. 20,894 11,831
------------- -------------
29,160 26,707
Cost of Fund shares redeemed.................................... (59,809) (58,535)
------------- -------------
Decrease in net assets derived from capital share
transactions............................................... (30,649) (31,828)
------------- -------------
Net decrease in net assets.................................... (20,401) (35,543)
NET ASSETS -- beginning of period............................... 246,582 282,125
------------- -------------
NET ASSETS -- end of period (undistributed net investment income
of $176 and $20, respectively)................................ $ 226,181 $ 246,582
============== ==============
</TABLE>
See accompanying notes to financial statements.
B-25
<PAGE> 52
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
(1) -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Cardinal Fund Inc. (the "Fund") is registered under the Investment Company
Act of 1940, as a diversified, open-end management investment company. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements. The policies are in conformity
with generally accepted accounting principles for investment companies.
Security Valuation--Investments listed or traded on a national securities
exchange are valued at the last sale price or, if there has been no recent sale,
at the last bid price. Investments traded in the over-the-counter market are
valued at the last sale price. If no quotations are available, portfolio
securities are valued in good faith by the Board of Directors to reflect their
fair value.
Security Transactions and Investment Income--Security transactions are accounted
for on the trade date and dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. In determining the net
realized gain or loss on securities sold, the cost of the securities has been
determined on the first-in, first-out (FIFO) cost basis. It is the Fund's policy
for its Custodian, or a third-party bank, to take possession of all securities
pledged as collateral for repurchase agreements and monitor the market value of
the collateral to ensure that it remains sufficient to cover the repurchase
agreements.
Distributions to Shareholders--Distributions and dividends are recorded by the
Fund on the record date. Income dividends are declared quarterly and any capital
gain distribution is declared annually.
Federal Income Taxes--No provision has been made for Federal taxes on the Fund's
income, since it is the policy of the Fund to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to make
sufficient distributions of taxable income and capital gains within the required
time to relieve it from all, or substantially all, Federal income taxes.
(2) -- PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of investment securities
(excluding short-term obligations) during the year ended September 30, 1995
aggregated $43,227,000 and $91,217,776, respectively.
During the year ended September 30, 1995 the Fund realized on a FIFO cost basis
a net capital gain of $17,719,277 and $17,777,501 for book and tax purposes,
respectively.
At September 30, 1995, the book cost of investment securities was $164,059,806
and the tax cost was $164,085,672. The difference between book and tax cost is
attributable to securities acquired in the 1975 acquisition of the Ohio Capital
Fund, Inc. and remaining in the Fund's portfolio with a book cost of $68,235 and
a tax cost of $38,594.
As of September 30, 1995, for tax purposes, gross unrealized gains and gross
unrealized losses on investment securities were $60,316,804 and $1,439,149
respectively; resulting in a net unrealized gain of $58,877,655.
(3) -- TRANSACTIONS WITH AFFILIATES
As investment manager for the Fund, The Ohio Company (the Adviser), with whom
certain officers and directors of the Fund are affiliated is allowed an annual
fee of 0.5% of the average daily net assets of the Fund. For the year ended the
Fund paid or accrued $1,158,534 for investment management services. The Adviser
has agreed that if the aggregate expenses of the Fund, as defined, for any
fiscal year exceed the
(continued)
B-26
<PAGE> 53
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
expense limitation of any state having jurisdiction over the Fund, the Adviser
will refund to the Fund, or otherwise bear, such excess. This limitation did not
affect the calculation of the management fee during the year ended September 30,
1995. In addition to providing management and advisory services, The Ohio
Company pays the compensation of all officers and employees of the Fund and
provides office space and certain related facilities required by the Fund.
The Ohio Company, acting as the General Distributor and Dealer, reported to the
Fund that it received commissions after discounts to dealers from the sale of
shares of the Fund of $170,827 for the year ended September 30, 1995. Cardinal
Management Corp., a wholly-owned subsidiary of The Ohio Company, provides
transfer agent services to the Fund. Transfer agent service fees are based on a
monthly charge per shareholder account plus out-of-pocket expenses. For the year
ended September 30, 1995 the Fund paid or accrued $255,882 for transfer agent
services provided by Cardinal Management Corp.
(4) -- COMMITMENTS AND CONTINGENCIES
The Fund has an available $5,000,000 line of credit with its custodian, Fifth
Third Bank, which was unused at September 30, 1995. When used, borrowings under
this arrangement are secured by portfolio securities and can be used only for
short term needs of the Fund. No compensating balances are required and the
arrangement bears an interest rate of 106% of the custodian's prime lending
rate.
Fidelity Bond and Errors and Omissions insurance coverage for the Fund and its
officers and directors has been obtained through ICI Mutual Insurance Company
(ICI Mutual), an industry-sponsored mutual insurance company. Included in other
assets of the Fund is a deposit of $28,588, for the initial capital of ICI
Mutual. The Fund is also committed to provide $85,764 should ICI Mutual
experience the need for additional capital contributions.
Included in other assets is a $56,000 certificate of deposit which
collateralizes a standby letter of credit in connection with the Fund's
participation in ICI Mutual. This amount is not available for investment.
(5) -- CAPITAL STOCK
At September 30, 1995, there were 30,000,000 shares of no par value capital
stock authorized and the capital amounts were as follows:
<TABLE>
<S> <C>
Paid in capital.................................................................... $147,820,440
Accumulated net realized gains on investments...................................... 19,280,863
Unrealized gain on investments..................................................... 58,903,521
Undistributed net investment income................................................ 176,409
------------
Net assets......................................................................... $226,181,233
=============
</TABLE>
(continued)
B-27
<PAGE> 54
THE CARDINAL FUND INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
-------------------------
1995 1994
---------- ----------
<S> <C> <C>
Shares sold........................................................ 677,512 1,161,378
Shares issued in connection with reinvestment of distributions
to shareholders.................................................. 1,830,954 936,172
Shares repurchased................................................. (4,782,671) (4,580,169)
---------- ----------
Net decrease....................................................... (2,274,205) (2,482,619)
Shares outstanding:
Beginning of period................................................ 19,373,221 21,855,840
---------- ----------
End of period...................................................... 17,099,016 19,373,221
========== ==========
</TABLE>
(6) -- SUBSEQUENT EVENT
On November 13, 1995 the Board of Directors approved an Agreement and Plan of
Reorganization and Liquidation between the Fund and The Cardinal Group ("TCG").
The plan calls for the transfer of all assets and liabilities of the Fund to a
series of TCG with the same basic investment objectives and restrictions. The
Trustees have determined that this action is in the best interests of the
shareholders of the Fund and TCG. Shareholder approval will be sought and is
needed to ratify the transaction.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of capital stock outstanding throughout each
period:
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
------------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning............. $ 12.73 $ 12.91 $ 12.95 $ 11.88 $ 9.28
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income................ 0.36 0.31 0.32 0.35 0.35
Net realized and unrealized gains
(losses) on investments............ 1.32 0.12 0.55 1.37 2.70
-------- -------- -------- -------- --------
Total from investment operations....... 1.68 0.43 0.87 1.72 3.05
-------- -------- -------- -------- --------
Less distributions:
Dividends............................ (0.35) (0.33) (0.29) (0.36) (0.38)
Capital gain distribution............ (0.83) (0.28) (0.62) (0.29) (0.07)
-------- -------- -------- -------- --------
Total distributions.................... (1.18) (0.61) (0.91) (0.65) (0.45)
-------- -------- -------- -------- --------
Net Asset Value, ending................ $ 13.23 $ 12.73 $ 12.91 $ 12.95 $ 11.88
======== ======== ======== ======== ========
Ratios/Supplemental Data:
Total return........................... 14.84% 3.38% 6.98% 15.05% 33.54%
======== ======== ======== ======== ========
Net assets, ending (000)............... $226,181 $246,581 $282,125 $261,392 $221,428
======== ======== ======== ======== ========
Ratio of expenses to average net
assets............................... 0.70% 0.72% 0.68% 0.67% 0.67%
======== ======== ======== ======== ========
Ratio of net investment income to
average net assets................... 2.89% 2.40% 2.46% 2.83% 3.15%
======== ======== ======== ======== ========
Portfolio turnover rate................ 19.78% 23.20% 11.11% 6.22% 33.27%
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements.
B-28
<PAGE> 55
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors
The Cardinal Fund Inc.:
We have audited the accompanying statement of assets and liabilities of The
Cardinal Fund Inc. (the Fund), including the statement of investments, as of
September 30, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended and the financial highlights for each of the years in
the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
September 30, 1995, by confirmation with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Cardinal Fund Inc. as of September 30, 1995, the results of its operations for
the year then ended, the changes in its net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
November 17, 1995
B-29
<PAGE> 56
Registration Statement
of
THE CARDINAL FUND INC.
on
Form N-1A
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements
Included in Part A:
--Financial Highlights
Included in Part B:
--Statement of Investments
September 30, 1995
--Statement of Assets and Liabilities
September 30, 1995
--Statement of Operations
for the year ended September 30, 1995
--Statements of Changes in Net Assets
for the years ended September 30, 1995
and 1994
--Notes to Financial Statements
September 30, 1995
--Independent Auditors' Report
dated November 17, 1995
All required financial statements are included in
Part B hereof. All other financial statements and
schedules are inapplicable.
(b) Exhibits
(10) Opinion of Counsel with respect to
the Shares of Registrant being
registered pursuant to Section
24(e)(1) of the Investment Company Act
of 1940.
(11) Consent of KPMG Peat Marwick LLP
(17) Financial Data Schedule
(19)(a) Powers of Attorney of Frank W.
Siegel, H. Keith Allen, Gordon B.
Carson, John B. Gerlach, Jr.,
Michael J. Knilans, James I. Luck,
David L. Nelson, C.A. Peterson,
Frank W. Siegel, Joseph H.
Stegmayer, Lawrence H. Rogers II and
James M. Schrack II.
(b) Consent of Baker & Hostetler
<PAGE> 57
Item 25. Persons Controlled or Under Common Control With Registrant
----------------------------------------------------------
None
Item 26. Number of Holders of Securities
-------------------------------
The following table sets forth as of January 11, 1996, the number of
record holders of Shares of Registrant.
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
- --------------------------------------- --------------
<S> <C>
Shares of Common Stock, without par
value, of the Registrant............... 11,753
</TABLE>
Item 28. Business and Other Connections of Investment Adviser:
----------------------------------------------------
Information with respect to The Ohio Company and its officers and
directors as set forth under the captions "WHO MANAGES MY INVESTMENT IN THE
FUND?" contained in Prospectus and "MANAGEMENT OF THE FUND" and "THE ADVISER"
contained in the Statement of Additional Information which are a part of this
Registration Statement is hereby incorporated herein by reference.
To the knowledge of Registrant, none of the directors or officers of
The Ohio Company, except those set forth below, is or has been at any time
during the past two fiscal years engaged in any other business, profession,
vocation or employment of a substantial nature. Set forth below are the names,
principal businesses and addresses of those businesses of the directors and
officers of The Ohio Company, who are or have been engaged in any other
business, profession, vocation or employment of a substantial nature during the
past two fiscal years.
<TABLE>
<CAPTION>
Officer or Director Name and Address Nature of
of The Ohio Company of Business Connection
- ------------------- ---------------- ----------
<S> <C> <C>
H. Keith Allen Ad Management Corp. Secretary/Treasurer
155 East Broad Street and Director
Columbus, Ohio 43215
Cardinal Financial Secretary/Treasurer
Management Corp. and Director
155 East Broad Street
Columbus, Ohio 43215
Cardinal Management Corp. Chairman, Secretary/
155 East Broad Street Treasurer and
Columbus, Ohio 43215 Director
</TABLE>
2C
<PAGE> 58
<TABLE>
<S> <C> <C>
H. Keith Allen Midwest Parking, Inc. Secretary/Treasurer
(continued) 155 East Broad Street and Director
Columbus, Ohio 43215
InsuranceOhio Company Agency Secretary/Treasurer
155 East Broad Street and Director
Columbus, Ohio 43215
Ohio Equities Inc. Secretary/Treasurer
395 East Broad Street and Director
Columbus, Ohio 43215
The Cardinal Fund Inc. Chairman and Director
155 East Broad Street
Columbus, Ohio 43215
Cardinal Government Chairman and Trustee
Securities Trust
155 East Broad Street
Columbus, Ohio 43215
Cardinal Tax Exempt Chairman and Trustee
Money Trust
155 East Broad Street
Columbus, Ohio 43215
Cardinal Government Chairman and Trustee
Obligations Fund
155 East Broad Street
Columbus, Ohio 43215
The Cardinal Group Chairman and Trustee
155 East Broad Street
Columbus, Ohio 43215
J. Patrick Campbell InsuranceOhio Company Agency Director
155 East Broad Street
Columbus, Ohio 43215
Ohio Equities Inc. Director
395 East Broad Street
Columbus, Ohio 43215
Daniel A. Fronk Bob Evans Farms, Inc. Director
3776 South High Street
Columbus, Ohio 43207
Cardinal Financial President
Management Corp. and Director
155 East Broad Street
Columbus, Ohio 43215
Eagle Equipment Company Treasurer and
666 Brooksedge Boulevard Director
Westerville, Ohio 43801
InsuranceOhio Company Agency Director
40 South Third Street
Columbus, Ohio 43215
</TABLE>
3C
<PAGE> 59
<TABLE>
<CAPTION>
Officer or Director Name and Address Nature of
of The Ohio Company of Business Connection
- ------------------- ---------------- ----------
<S> <C> <C>
Daniel A. Fronk Ohio Equities Inc.
(continued) 395 East Broad Street
Columbus, Ohio 43215 Director
Taylor-Woodcraft, Inc. Director
South River Road
Malta, Ohio 43758
Curtis E. Stumpf InsuranceOhio Company Agency Director
155 East Broad Street
Columbus, Ohio 43215
Ohio Equities Inc. Director
395 East Broad Street
Columbus, Ohio 43215
Martin H. InsuranceOhio Company Agency Director
Vogtsberger 155 East Broad Street
Columbus, Ohio 43215
Midwest Parking, Inc. Vice President
155 East Broad Street and Director
Columbus, Ohio 43215
Ohio Equities Inc. Director
395 East Broad Street
Columbus, Ohio 43215
John F. Wolfe Agricultural Lands, Inc. Chairman of the
P.O. Box 190 Board, President, Trustee
London, Ohio 43140 and Director
Dispatch Printing Co. Chairman of the Board, Chief
34 South Third Street Executive Officer, President,
Columbus, Ohio 43215 Publisher, Trustee and
Director
InsuranceOhio Company Agency Director
155 East Broad Street
Columbus, Ohio 43215
The Ohio Company Vice Chairman
155 East Broad Street and Director
Columbus, Ohio 43215
Ohio Equities Inc. Director
395 East Broad Street
Columbus, Ohio 43215
</TABLE>
4C
<PAGE> 60
<TABLE>
<CAPTION>
Officer or Director Name and Address Nature of
of The Ohio Company of Business Connection
- ------------------- ---------------- ----------
<S> <C> <C>
John F. Wolfe Ohio Magazine President
(continued) 34 South Third Street and Director
Columbus, Ohio 43215
RadiOhio, Inc. Chairman of the Board and
770 Twin Rivers Drive Director
Columbus, Ohio 43215
Taylor-Woodcraft Director
South River Road
Malta, Ohio 43758
VideoIndiana, Inc. Chairman of the Board and
1401 N. Meridian Street Director
Indianapolis, Indiana
WBNS TV, Inc. Chairman of the Board and
770 Twin Rivers Drive Director
Columbus, Ohio 43215
Wolfe Associates, Inc. Chairman of the Board and
34 South Third Street Director
Columbus, Ohio 43215
Wolfe Enterprises, Inc. President
34 South Third Street and Director
Columbus, Ohio 43215
William C. Wolfe, Jr. Dispatch Printing Co. Vice President/
34 South Third Street Community Relations Director
Columbus, Ohio 43215
InsuranceOhio Company Agency Director
155 East Broad Street
Columbus, Ohio 43215
The Ohio Company Director
155 East Broad Street
Columbus, Ohio 43215
Ohio Equities Inc. Director
395 East Broad Street
Columbus, Ohio 43215
RadiOhio, Inc. Director
770 Twin Rivers Drive
Columbus, Ohio 43215
WBNS TV, Inc. Director
770 Twin Rivers Drive
Columbus, Ohio 43215
Wolfe Associates, Inc. Director
34 South Third Street
Columbus, Ohio 43215
</TABLE>
5C
<PAGE> 61
<TABLE>
<CAPTION>
Officer or Director Name and Address Nature of
of The Ohio Company of Business Connection
- ------------------- ---------------- ----------
<S> <C> <C>
Wolfe Enterprises, Inc. Director
34 South Third Street
Columbus, Ohio 43215
Video Indiana, Inc. Director
1401 N. Meridian Street
Indianapolis, Indiana
</TABLE>
Item 29. Principal Underwriters
----------------------
(a) The Ohio Company acts as principal underwriter for Registrant.
The Ohio Company also is the principal underwriter of Cardinal Government
Securities Trust, Cardinal Tax Exempt Money Trust, Cardinal Government
Obligations Fund, Cardinal Balanced Fund and Cardinal Aggressive Growth Fund,
and Cardinal Management Corp., a wholly-owned subsidiary of The Ohio Company,
is the investment adviser of Cardinal Government Securities Trust, Cardinal Tax
Exempt Money Trust, Cardinal Government Obligations Fund, Cardinal Balanced
Fund and Cardinal Aggressive Growth Fund. The Ohio Company also acts as
Sponsor of Cardinal Tax-Exempt Bond Trust, First through Thirty-Fifth Series
(there is no Thirteenth Series of this Trust) and as Sponsor of Cardinal GNMA
Trust, First, Second and Third Series. The Ohio Company participates as a
member of various underwriting and selling groups and as agent of other
investment companies. It executes orders for the purchase and sale of
securities of investment companies and, from time to time, sells securities to
such companies in its capacity as a broker-dealer in securities.
(b) The Officers and Directors of The Ohio Company and their
positions with Registrant are as follows:
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
John F. Wolfe Chairman of the Board,
34 South Third Street President and Chief
Columbus, Ohio 43215 Executive Officer and
Director
William C. Wolfe Director
155 East Broad Street
Columbus, Ohio 43215
H. Keith Allen Chief Operating Officer, Chairman and Director,
155 East Broad Street Secretary, Treasurer and Member of Executive,
Columbus, Ohio 43215 Director Nominating and Investment
Committees
</TABLE>
6C
<PAGE> 62
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
John P. Campbell Senior Executive Vice President and
155 East Broad Street Director
Columbus, Ohio 43215
Daniel A. Fronk Senior Executive Vice President and
155 East Broad Street Director
Columbus, Ohio 43215
Curtis E. Stumpf Senior Executive Vice President,
155 East Broad Street Director and General Sales Manager
Columbus, Ohio 43215
Martin H. Vogtsberger Senior Executive Vice President and
155 East Broad Street Director
Columbus, Ohio 43215
Thomas A. Brownfield Senior Vice President
155 East Broad Street
Columbus, Ohio 43215
James A. Francis Senior Vice President/ Compliance
155 East Broad Street
Columbus, Ohio 43215
Jerry L. Greene Senior Vice
155 East Broad Street President/Accounting
Columbus, Ohio 43215
Kenneth S. Koralewski Senior Vice President & Manager,
155 East Broad Street Municipal Syndicate & Trading
Columbus, Ohio 43215
Curtis D. Milner Senior Vice President
155 East Broad Street
Columbus, Ohio 43215
Frank W. Siegel Senior Vice President President and Director
155 East Broad Street
Columbus, Ohio 43215
Thomas G. Terry Senior Vice President/OTC Trading
155 East Broad Street
Columbus, Ohio 43215
George E. Tootle, Jr. Senior Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
G. Douglas Voelz Senior Vice President
155 East Broad Street
Columbus, Ohio 43215
</TABLE>
7C
<PAGE> 63
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
John C. Adams Vice President/Public Finance-
155 East Broad Street Negotiated
Columbus, Ohio 43215
William N. Anderson Vice President/NYSE Floor Broker
155 East Broad Street
Columbus, Ohio 43215
Gary E. Baird Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215
John Bevilacqua Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215
John R. Carle Vice President/Cardinal Government
155 East Broad Street Obligations Fund
Columbus, Ohio 43215
Mark R. Chambers Vice President/Public Finance-
155 East Broad Street Negotiated
Columbus, Ohio 43215
G. John Cooper Vice President/Public Finance-
155 East Broad Street Negotiated
Columbus, Ohio 43215
Robert A. Corea Vice President/Corporate Finance
155 East Broad Street
Columbus, Ohio 43215
Albert W. Erickson, III Vice President/Public Finance -
155 East Broad Street Negotiated
Columbus, Ohio 43215
Michael Goodman Vice President/Municipal Trading
155 East Broad Street
Columbus, Ohio 43215
Douglas W. Hindenlang Vice President/OTC Trading
155 East Broad Street
Columbus, Ohio 43215
Mark E. Koprucki Vice President/Research
155 East Broad Street
Columbus, Ohio 43215
Elwood W. Lewis Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215
Barry G. McMahon Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215
</TABLE>
8C
<PAGE> 64
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
John R. Merrell Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215
Thomas E. Murphy Vice President/Corporate Finance
155 East Broad Street
Columbus, Ohio 43215
C. Thomas Pfister Vice President/Public Finance-
155 East Broad Street Negotiated
Columbus, Ohio 43215
Larry J. Rapp Vice President/Manager, Technical
155 East Broad Street Services
Columbus, Ohio 43215
Kara L. Rider Vice President/Municipal Trading
155 East Broad Street
Columbus, Ohio 43215
James M. Schrack II Vice President Treasurer
155 East Broad Street
Columbus, Ohio 43215
Richard H. Stillman Vice President/Public Finance-
155 East Broad Street Negotiated
Columbus, Ohio 43215
Michael E. Tedesco Vice President/Municipal Trading
155 East Broad Street
Columbus, Ohio 43215
James W. Trapp Vice President/Sales
155 East Broad Street
Columbus, Ohio 43215
William T. Weldon Vice President/Operations
155 East Broad Street
Columbus, Ohio 43215
David C. Will Vice President/Asset Management
155 East Broad Street
Columbus, Ohio 43215
Rodney A. Yeager Vice President/Tele-communications
155 East Broad Street
Columbus, Ohio 43215
Mark E. Backes Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
</TABLE>
9C
<PAGE> 65
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
Roger W. Butler Assistant Vice President/ Compliance
155 East Broad Street
Columbus, Ohio 43215
James W. Carey Assistant Vice President/ Corporate
155 East Broad Street Finance
Columbus, Ohio 43215
Scott E. Decker Assistant Vice President/
155 East Broad Street Trust-Internal Auditor
Columbus, Ohio 43215
William J. Denehy Assistant Vice President/ Corporate
155 East Broad Street Bond Trading
Columbus, Ohio 43215
Dave G. Duncan Assistant Vice President/ Syndicate
155 East Broad Street
Columbus, Ohio 43215
Carolyn A. Garner Assistant Vice President
155 East Broad Street
Columbus, Ohio 43215
Charles H. Graves, Sr. Assistant Vice President/ Sales
155 East Broad Street
Columbus, Ohio 43215
Ronald G. Hall Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
Helen J. Huntington Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
Jon P. Jones Assistant Vice President/ Municipal
155 East Broad Street Trading
Columbus, Ohio 43215
Donna M. Knapp Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
Lawrence W. Landenberger Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
Matthew E. Lee Assistant Vice President/ Trading
155 East Broad Street
Columbus, Ohio 43215
Virginia L. McCargish Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
</TABLE>
10C
<PAGE> 66
<TABLE>
<CAPTION>
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ -------------------- ---------------------
<S> <C> <C>
Kevin P. Morrow Assistant Vice President/ Research
155 East Broad Street
Columbus, Ohio 43215
Richard D. Oltean Assistant Vice President/ Trust-
155 East Broad Street Qualified Plans
Columbus, Ohio 43215
Mark Ostroske Assistant Vice President/ Asset
155 East Broad Street Management
Columbus, Ohio 43215
E. Eugene Robinson Assistant Vice President/ Research
155 East Broad Street
Columbus, Ohio 43215
Michael C. Roney Assistant Vice President/ Asset
155 East Broad Street Management
Columbus, Ohio 43215
David A. Seely, Jr. Assistant Vice President/ Operations
155 East Broad Street
Columbus, Ohio 43215
Susan H. Shaw Assistant Vice President/ National
155 East Broad Street Syndicate
Columbus, Ohio 43215
Ronald J. Trubinsky Assistant Vice President/ Corporate
155 East Broad Street Bond Trading
Columbus, Ohio 43215
Douglas J. Walouke Assistant Vice President/ Corporate
155 East Broad Street Bond Trading
Columbus, Ohio 43215
Richard J. Wayman Assistant Vice President/ Research
155 East Broad Street
Columbus, Ohio 43215
Lori A. Wells Assistant Vice President/ Technical
155 East Broad Street Services
Columbus, Ohio 43215
</TABLE>
11C
<PAGE> 67
Item 30. Location of Accounts and Records
--------------------------------
(1) Cardinal Management Corp., 155 East Broad Street,
Columbus, Ohio 43215 (Declaration of Trust, By-Laws
and Minute Books).
(2) The Ohio Company, 155 East Broad Street, Columbus,
Ohio 43215 (records relating to its function as
investment adviser, manager and distributor).
(3) Cardinal Management Corp., 215 East Capital Street,
Columbus, Ohio 43215 (records relating to its
functions as dividend and transfer agent).
(4) The Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263 (records relating to its
functions as custodian).
Item 31. Management Services
--------------------
None.
Item 32. Undertakings
------------
None.
12C
<PAGE> 68
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to Registration Statement to be signed on its behalf
by the undersigned thereunto duly authorized, in the City of Columbus and State
of Ohio on the 17th day of January, 1996. Registrant hereby certifies that
this Post-Effective Amendment to Registration Statement meets all of the
requirements for effectiveness pursuant to paragraph (b) of Rule 485 under the
Securities Act of 1933.
THE CARDINAL FUND INC.
By /s/ Frank W. Siegel
--------------------------------
Frank W. Siegel, President
13C
<PAGE> 69
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Frank W. Siegel President (Principal January 17, 1996
- -------------------------- Executive Officer and Director)
Frank W. Siegel
/s/ *H. Keith Allen Chairman and Director January 17, 1996
- --------------------------
H. Keith Allen
/s/ *Gordon B. Carson Director January 17, 1996
- --------------------------
Gordon B. Carson
/s/ *John B. Gerlach, Jr. Director January 17, 1996
- --------------------------
John B. Gerlach, Jr.
/s/ *Michael J. Knilans Director January 17, 1996
- --------------------------
Michael J. Knilans
/s/ *James I. Luck Director January 17, 1996
- --------------------------
James I. Luck
/s/ *David L. Nelson Director January 17, 1996
- --------------------------
David L. Nelson
/s/ *C. A. Peterson Director January 17, 1996
- --------------------------
C. A. Peterson
/s/ *Lawrence H. Rogers II Director January 17, 1996
- --------------------------
Lawrence H. Rogers II
/s/ *Joseph H. Stegmayer Director January 17, 1996
- --------------------------
Joseph H. Stegmayer
/s/ James M. Schrack II Treasurer (Principal January 17, 1996
- -------------------------- Financial and Accounting
James M. Schrack II Officer)
*By/s/ James M. Schrack II January 17, 1996
-----------------------
James M. Schrack II
Attorney-in-Fact
</TABLE>
14C
<PAGE> 70
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ------------------------------ ----
<S> <C> <C>
(10) Opinion of Counsel with respect to the Shares of Registrant being registered
pursuant to Section 24(e)(1) of the Investment Company Act of 1940
(11) Consent of KPMG Peat Marwick LLP
(17) Financial Data Schedule
(19) (a) Powers of Attorney of Frank W. Siegel, H. Keith Allen, Gordon B. Carson, John B.
Gerlach, Jr., Michael J. Knilans, James I. Luck, David L. Nelson, C.A. Peterson,
Frank W. Siegel, Joseph H. Stegmayer, Lawrence H. Rogers II and James M. Schrack II.
(b) Consent of Baker & Hostetler
</TABLE>
15C
<PAGE> 71
As filed with the Securities and Exchange Commission January 18, 1996
1933 Act Registration No. 2-25538
1940 Act File No. 811-1428
EXHIBITS TO
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / x /
Post-Effective Amendment No. 40 / x /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 / x /
Amendment No. 21 / x /
The Cardinal Fund Inc.
(Exact Name of Registrant as Specified in Charter)
155 East Broad Street
Columbus, Ohio 43215
(Address of Principal Executive Offices)
Registrant's Telephone Number:
(614) 464-5511
<PAGE> 1
Exhibit (10)
<PAGE> 2
--------------------
BAKER
&
HOSTETLER
--------------------
COUNSELLORS AT LAW
- -----------------------------------------------------------------------------
Capitol Square, Suite 2100 - 65 East State Street - Columbus, Ohio 43215-4260 -
(614) 228-1541
January 17, 1996
The Cardinal Fund Inc.
155 East Broad Street
Columbus, Ohio 43215
Subject: THE CARDINAL FUND INC. (THE "FUND") -- POST-EFFECTIVE
AMENDMENT NO. 40 TO REGISTRATION STATEMENT ON FORM
N-1A, FILE NO. 2-25538, FILED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND AMENDMENT NO. 21 TO
REGISTRATION STATEMENT ON FORM N-1A, FILE NO.
811-1428, FILED UNDER THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED (THE "AMENDMENT")
Ladies and Gentlemen:
In connection with the filing of the Amendment, it is our opinion
that, upon the effectiveness of the Amendment, the 4,141,576 shares of common
stock, without par value, of The Cardinal Fund Inc., when issued as described
in the Amendment and for the consideration described in the Amendment, will be
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment.
Very truly yours,
BAKER & HOSTETLER
<PAGE> 1
Exhibit (11)
<PAGE> 2
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
The Cardinal Fund Inc.:
We consent to the use of our report dated November 17, 1995, included
herein and to the references to our firm under the heading "Financial
Highlights" in the Prospectus and under the heading "Legal Counsel and
Independent Auditors" in the Statement of Additional Information.
KPMG PEAT MARWICK LLP
Columbus, Ohio
January 17, 1996
<PAGE> 1
Exhibit (17)
<PAGE> 2
[ARTICLE] 6
[RESTATED]
[CIK] 0000017493
[NAME] THE CARDINAL FUND INC.
[SERIES]
[NUMBER] 0
[NAME] 0
[MULTIPLIER] 1,000
[CURRENCY] U.S. DOLLARS
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-START] OCT-01-1994
[PERIOD-END] SEP-30-1995
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 222,963
[INVESTMENTS-AT-VALUE] 0
[RECEIVABLES] 3,926
[ASSETS-OTHER] 111
[OTHER-ITEMS-ASSETS] 206
[TOTAL-ASSETS] 227,206
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 1,025
[TOTAL-LIABILITIES] 1,025
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 147,820
[SHARES-COMMON-STOCK] 17,099
[SHARES-COMMON-PRIOR] 19,373
[ACCUMULATED-NII-CURRENT] 176
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 19,281
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 58,904
[NET-ASSETS] 226,181
[DIVIDEND-INCOME] 7,504
[INTEREST-INCOME] 847
[OTHER-INCOME] 0
[EXPENSES-NET] 1,628
[NET-INVESTMENT-INCOME] 6,723
[REALIZED-GAINS-CURRENT] 17,719
[APPREC-INCREASE-CURRENT] 8,122
[NET-CHANGE-FROM-OPS] 32,564
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 6,566
[DISTRIBUTIONS-OF-GAINS] 15,750
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 8,266
[NUMBER-OF-SHARES-REDEEMED] 59,809
[SHARES-REINVESTED] 20,894
[NET-CHANGE-IN-ASSETS] (20,401)
[ACCUMULATED-NII-PRIOR] 20
[ACCUMULATED-GAINS-PRIOR] 17,311
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,159
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 1,628
[AVERAGE-NET-ASSETS] 232,976
[PER-SHARE-NAV-BEGIN] 12.73
[PER-SHARE-NII] 0.36
[PER-SHARE-GAIN-APPREC] 1.32
[PER-SHARE-DIVIDEND] 0.35
[PER-SHARE-DISTRIBUTIONS] 0.83
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 13.23
[EXPENSE-RATIO] 0.70%
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
<PAGE> 1
Exhibit (19)(a)
<PAGE> 2
POWER OF ATTORNEY
-----------------
Frank W. Siegel, whose signature appears below, does hereby constitute
and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ Frank W. Siegel
-----------------------------
FRANK W. SIEGEL
<PAGE> 3
POWER OF ATTORNEY
-----------------
H. Keith Allen, whose signature appears below, does hereby constitute
and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ H. Keith Allen
------------------------------
H. KEITH ALLEN
<PAGE> 4
POWER OF ATTORNEY
-----------------
Gordon B. Carson, whose signature appears below, does hereby
constitute and appoint H. Keith Allen, James M. Schrack II and Frank W.
Seigel, each individually, his true and lawful attorneys and agents, with power
of substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ Gordon B. Carson
-------------------------------
GORDON B. CARSON
DPF3553\67721\95013\power1.att 25C
10/19/95 tlv
<PAGE> 5
POWER OF ATTORNEY
-----------------
John B. Gerlach, Jr., whose signature appears below, does hereby
constitute and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel,
each individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ John B. Gerlach
-------------------------------
JOHN B. GERLACH, JR
<PAGE> 6
POWER OF ATTORNEY
-----------------
Michael J. Knilans, whose signature appears below, does hereby
constitute and appoint H. Keith Allen, James M. Schrack II and Frank W.
Seigel, each individually, his true and lawful attorneys and agents, with power
of substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ Michael J. Knilans
---------------------------------
MICHAEL J. KNILANS
<PAGE> 7
POWER OF ATTORNEY
-----------------
James I. Luck, whose signature appears below, does hereby constitute
and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ James I. Luck
---------------------------------
JAMES I. LUCK
<PAGE> 8
POWER OF ATTORNEY
-----------------
David L. Nelson, whose signature appears below, does hereby constitute
and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ David L. Nelson
----------------------------------
DAVID L. NELSON
<PAGE> 9
POWER OF ATTORNEY
-----------------
C. A. Peterson, whose signature appears below, does hereby constitute
and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ C.A. Peterson
------------------------------------
C. A. PETERSON
<PAGE> 10
POWER OF ATTORNEY
-----------------
Lawrence H. Rogers II, whose signature appears below, does hereby
constitute and appoint H. Keith Allen, James M. Schrack II and Frank W. Seigel,
each individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ Lawrence H. Rogers
------------------------------------
LAWRENCE H. ROGERS II
<PAGE> 11
POWER OF ATTORNEY
-----------------
Joseph H. Stegmayer, whose signature appears below, does hereby
constitute and appoint H. Keith Allen, James M. Schrack II and Frank W.
Seigel, each individually, his true and lawful attorneys and agents, with power
of substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ Joseph H. Stegmayer
------------------------------------
JOSEPH H. STEGMAYER
<PAGE> 12
POWER OF ATTORNEY
-----------------
James M. Schrack II, whose signature appears below, does hereby
constitute and appoint H. Keith Allen, James M. Schrack II and Frank W.
Seigel, each individually, his true and lawful attorneys and agents, with power
of substitution or resubstitution, to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, each
individually, may deem necessary or advisable or which may be required to
enable The Cardinal Fund, Inc. (the "Fund") to comply with the Investment
Company Act of 1940, as amended, and the Securities Act of 1933, as amended
("Acts"), and any rules, regulations or requirements of the Securities and
Exchange Commission in respect thereof, in connection with the filing and
effectiveness of the Fund's Registration Statements on Form N-1A and Form N-14
pursuant to said Acts and any and all amendments thereto (including pre- and
post-effective amendments), including specifically, but without limiting the
generality of the foregoing, the power and authority to sign in the name and on
behalf of the undersigned as director and/or officer of the Fund such
Registration Statement(s) and any and all such amendments filed with the
Securities and Exchange Commission under any Acts and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, or any of them, shall do or cause to be
done by virtue thereof.
Dated: October 20, 1995 /s/ James M. Schrack
-------------------------------------
JAMES M. SCHRACK II
<PAGE> 1
Exhibit (19)(b)
<PAGE> 2
CONSENT OF BAKER & HOSTETLER
We hereby consent to the use of our name and to the references to our
firm under the caption "Legal Counsel and Independent Auditors" in or made a
part of the Registration Statement on Form N-1A, Registration No. 2-25538,
filed under the Securities Act of 1933, as amended, of The Cardinal Fund Inc.
Columbus, Ohio
January 17, 1996 BAKER & HOSTETLER
