<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
OHIO NATIONAL LIFE INSURANCE
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO NATIONAL LIFE INSURANCE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
February 29, 1996
Dear Ohio National Variable Contract Owner:
As the management and sale of variable products grow more complex,
your Ohio National Fund Board of Directors believes a simpler, more direct
organizational structure would better serve you. As you read in the Questions &
Answers on the next page, your Fund Board recommends that Ohio National
Investments, Inc. be approved as the Fund's investment adviser.
Ohio National Investments, Inc. consists of the same officers,
directors and investment advisory personnel as the current adviser, O.N.
Investment Management Company (ONIMCO). If approved, the same people and
support staff will continue to manage your assets. The difference is that Ohio
National Investments, Inc. is a subsidiary of Ohio National Life, whereas
ONIMCO is a subsidiary of The O.N. Equity Sales Company. (More information can
be found inside this statement.)
Your approval is necessary to enact this change. The proposed new
agreements are substantially the same as the present ones involving ONIMCO.
THEY WILL NOT CHANGE ANY OF THE FUND'S FEES, EXPENSES, OPERATIONS, PORTFOLIO
MANAGERS OR SUB-ADVISERS. You should continue to receive the same high quality
investment management that you have come to expect over the years.
Your Board of Directors believes the new agreements serve your best
interest. They have approved them unanimously. They recommend you vote FOR the
proposals. They also recommend you elect the nominees for director and ratify
the selection of independent public accountants. I encourage you to vote in
favor of the proposals.
It is your right to instruct Ohio National Life as to how the Fund
shares attributable to your variable contract should be voted. To assist you,
"Voting Instructions" are enclosed. PLEASE COMPLETE, SIGN AND RETURN THE
INSTRUCTIONS PROMPTLY IN THE ENVELOPE PROVIDED. No postage is required if
mailed within the United States. YOUR INSTRUCTIONS ARE IMPORTANT!
As always, we thank you for your confidence and support.
Sincerely,
Donald J. Zimmerman
President
<PAGE> 3
IMPORTANT NEWS FOR OHIO NATIONAL VARIABLE CONTRACT OWNERS
February, 1996
While we encourage you to read the full text of the enclosed proxy statement,
here's a brief overview of the major matters to be voted upon.
Questions & Answers
Q. What is happening?
A. Ohio National Fund intends to name Ohio National Investments, Inc. as
its new investment adviser. Ohio National Investments consists of the same
officers, directors and investment advisory personnel as the current adviser,
O.N. Investment Management Company. In order for Ohio National Investments to
serve as investment adviser, it is necessary for Ohio National Fund to approve
a new investment advisory agreement.
The following pages elaborate on the proposed new investment advisory
agreement, service agreement and sub-advisory agreements. A vote is also being
sought on the election of directors to the Board of Directors and the selection
of independent public accountants.
Q. Why am I being asked to vote on the proposed new agreements?
A. The Investment Company Act of 1940 requires a vote whenever there is a
change in investment adviser. Your vote is important.
Q. How will this change affect me as a variable contract owner?
A. Ohio National Fund and your variable contract will not change. You
will still be invested in the same portfolios. The same people and support
staff will continue to manage your assets.
The proposed new agreements are substantially the same as the current
ones. They will not change any of the Fund's fees, expenses, operations,
portfolio managers or sub-advisers.
Q. Will the investment advisory fees be the same?
A. Yes, the investment advisory fees paid by Ohio National Fund will
remain the same.
<PAGE> 4
Q. What's the reason for this change?
A. To better protect your interests. O.N. Investment Management Company
is a subsidiary of The O.N. Equity Sales Company. The O.N. Equity Sales Company
offers a wide range of securities products and its operations are growing
rapidly. Its activities and those of its registered representatives can subject
it to potential legal liabilities that, in turn, could impair O.N. Investment
Management Company's operations. Ohio National Investments, in contrast, is a
new wholly owned subsidiary of Ohio National Life. As such, it is much less
vulnerable to claims against an affiliated broker-dealer.
Q. How do the board members of my fund suggest that I vote?
A. After careful consideration, the board members of Ohio National Fund,
including the independent members, recommend that you instruct Ohio National
Life to vote "For" all the items on the enclosed instruction sheet.
Q. Whom do I call for more information?
A. Please call your registered representative of The O.N. Equity Sales
Company or call Ohio National Fund at 1-800-578-8078.
HOW TO USE THE VOTING INSTRUCTIONS
Each portfolio must vote separately. If you approve of the recommendations of
your Fund Board and wish to vote in favor of ALL the proposals for all the
portfolios in which you hold an interest, you may simply check the "For" box in
the uppermost section of the instructions sheet.
If you wish to vote on each proposal separately, please do so in sections 1
through 5. If you check the "For All Except" box in section 1, you should check
the lettered box(es) corresponding to the individual(s) for whom you wish to
withhold authority. Note that on sections 2 through 4, you are permitted to
vote only for those portfolios in which you hold an interest.
Thank you for mailing your instructions promptly!
<PAGE> 5
OHIO NATIONAL FUND, INC.
237 WILLIAM HOWARD TAFT ROAD
CINCINNATI, OHIO 45219
NOTICE OF MEETING OF SHAREHOLDERS
MARCH 28, 1996
A meeting of the shareholders of Ohio National Fund, Inc. (the "Fund")
will be held at the Fund's offices at 237 William Howard Taft Road, Cincinnati,
Ohio on March 28, 1996, at 10:00 a.m. for the following purposes:
1. To elect five Directors to serve terms of three years and until
their respective successors shall have been elected and
qualified in accordance with the by-laws of the Fund;
2. To approve a new Investment Advisory Agreement with Ohio
National Investments, Inc. ("ONII") in order to substitute that
new corporation for O.N. Investment Management Company
("ONIMCO");
3. To approve a new Service Agreement among the Fund, ONII and
The Ohio National Life Insurance Company;
4. To approve new Sub-Advisory Agreements, where applicable,
between ONII and the following investment advisers:
a. For the International and Global Contrarian
Portfolios with Societe Generale Asset Management Corp.
b. For the Capital Appreciation Portfolio with T. Rowe Price
Associates, Inc.
c. For the Small Cap Portfolio with Founders Asset
Management, Inc.
d. For the Aggressive Growth Portfolio with Strong Capital
Management, Inc.
5. To ratify or reject the selection of KPMG Peat Marwick LLP as
independent public accountants for the Fund for the year ending
December 31, 1996; and
6. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on January 31, 1996, are
entitled to notice of and to vote at the meeting.
For reasons given in the attached Proxy Statement, your Board of Directors
RECOMMENDS A VOTE FOR THE PROPOSALS.
Ronald L. Benedict
Secretary
Cincinnati, Ohio
February 29, 1996
<PAGE> 6
OHIO NATIONAL FUND, INC.
237 WILLIAM HOWARD TAFT ROAD
CINCINNATI, OHIO 45219
PROXY STATEMENT
MEETING OF SHAREHOLDERS
MARCH 28, 1996
This Statement is furnished in connection with the solicitation of proxies
by the Board of Directors (the "Board") of Ohio National Fund, Inc. (the
"Fund"), for use at the meeting of shareholders of the Fund to be held on March
28, 1996, and at any and all adjournments thereof. This statement is being
mailed to shareholders of, and contractowners with values allocated to, the
Fund on or about February 29, 1996.
Proxies will be solicited primarily by delivering this statement and its
enclosures to the shareholders of record and to contractowners with values
allocated to the Fund. Printing, mailing and legal costs of this solicitation
will be borne by the Fund; all other costs will be borne by the investment
adviser, O.N. Investment Management Company ("ONIMCO"). No extra compensation
will be paid to employees of the Fund for soliciting proxies.
Each proxy may be revoked at any time prior to being voted by giving
written notice to the Secretary of the Fund, or by the shareholder's appearing
in person at the meeting and notifying the Secretary of his or her intent to
revoke the proxy. Any later dated proxy will revoke an earlier one. All
proxies which are properly executed and received in time and not so revoked
will be voted at the meeting in accordance with the instructions thereon, if
any. If a proxy is returned and no specification is made, the proxy will be
voted in favor of the proposals and for the election of the Directors.
Interests of variable contractowners for which no voting instructions are
received will be voted in proportion with the instructions that are timely
received.
Each shareholder of record at the close of business on January 31, 1996 is
entitled to one vote for each share held. As of December 31, 1995, 100% of the
issued and outstanding shares of the Fund were owned of record by The Ohio
National Life Insurance Company ("ONLI") and Ohio National Life Assurance
Corporation ("ONLAC") (collectively, "Ohio National Life") and allocated to the
separate accounts of ONLI and ONLAC as shown below.
<TABLE>
<CAPTION>
EQUITY PORTFOLIO SHARES
---------------- ------
<S> <C>
ONLI Variable Account A 2,429,236
ONLI Variable Account B 1,108,755
ONLI Variable Account C 2,042,005
ONLI Variable Account D 5,670
ONLAC Variable Account R 561,063
-----------
Total Equity Portfolio Shares 6,146,729
MONEY MARKET PORTFOLIO
----------------------
ONLI Variable Account A 490,768
ONLI Variable Account B 203,814
ONLI Variable Account C 808,069
ONLI Variable Account D 1,792
ONLAC Variable Account R 67,136
-----------
Total Money Market Portfolio Shares 1,571,579
</TABLE>
1
<PAGE> 7
BOND PORTFOLIO
--------------
ONLI Variable Account A 435,271
ONLI Variable Account B 307,714
ONLI Variable Account C 860,561
ONLI Variable Account D 1,168
ONLAC Variable Account R 48,164
-----------
Total Bond Portfolio Shares 1,652,878
OMNI PORTFOLIO
--------------
ONLI Variable Account A 2,520,501
ONLI Variable Account B 1,313,691
ONLI Variable Account C 2,089,673
ONLI Variable Account D 9,039
ONLAC Variable Account R 293,171
----------
Total Omni Portfolio Shares 6,226,075
INTERNATIONAL PORTFOLIO
-----------------------
ONLI Variable Account A 2,303,282
ONLI Variable Account B 1,242,876
ONLI Variable Account C 2,171,249
ONLI Variable Account D 15,959
ONLAC Variable Account R 564,928
----------
Total International Portfolio Shares 6,298,294
CAPITAL APPRECIATION PORTFOLIO
------------------------------
ONLI Variable Account A 350,981
ONLI Variable Account B 268,545
ONLI Variable Account C 850,058
ONLI Variable Account D 38,705
ONLAC Variable Account R 103,353
----------
Total Capital Appreciation Portfolio Shares 1,611,642
SMALL CAP PORTFOLIO
-------------------
ONLI Variable Account A 329,515
ONLI Variable Account B 135,857
ONLI Variable Account C 420,789
ONLI Variable Account D 19,979
ONLI Variable Account R 105,602
----------
Total Small Cap Portfolio Shares 1,011,742
2
<PAGE> 8
GLOBAL CONTRARIAN PORTFOLIO
---------------------------
ONLI Variable Account A 50,818
ONLI Variable Account B 31,818
ONLI Variable Account C 296,600
ONLI Variable Account D 8,505
ONLI Variable Account R 21,477
-----------
Total Global Contrarian Portfolio Shares 409,218
AGGRESSIVE GROWTH PORTFOLIO
---------------------------
ONLI Variable Account A 52,791
ONLI Variable Account B 50,020
ONLI Variable Account C 194,825
ONLI Variable Account D 3,244
ONLI Variable Account R 37,325
-----------
Total Aggressive Growth Portfolio Shares 338,205
----------
Total Shares of the Fund 25,266,362
==========
SUMMARY OF PROPOSALS
Briefly summarized, the purpose of the meeting is for shareholders to
vote on the following proposals:
1. To elect five Directors. The nominees are listed below under
"Director Nominees." Each nominee will be voted on separately. The combined
votes of the shareholders of all nine portfolios will apply to the election of
each nominee.
2. To approve a new Investment Advisory Agreement substituting Ohio
National Investments, Inc. ("ONII") for ONIMCO as the Fund's investment
adviser. See "New Investment Adviser," below. Shareholders of each portfolio
will vote separately on the approval of the new Investment Advisory Agreement
as it relates to their portfolio.
3. To approve a new Service Agreement as described below under "New
Investment Adviser." Shareholders of each portfolio will vote separately on
the approval of the new Service Agreement as it relates to their portfolio.
4. To approve new Sub-Advisory Agreements as described below under
"New Investment Adviser." Only shareholders having assets in portfolios
managed by a sub-adviser may vote on these proposals as follows:
a. Shareholders of the International and Global Contrarian
Portfolios will vote separately on the approval of the new
Sub-Advisory Agreement with Societe Generale Asset Management
Corp. as it relates to each of those two portfolios.
b. Shareholders of the Capital Appreciation Portfolio will
vote on the approval of the new Sub-Advisory Agreement with T.
Rowe Price Associates, Inc.
c. Shareholders of the Small Cap Portfolio will vote on the
approval of the new Sub-Advisory Agreement with Founders Asset
Management, Inc.
d. Shareholders of the Aggressive Growth Portfolio will vote
on the approval of the new Sub-Advisory Agreement with Strong
Capital Management, Inc.
5. To ratify the selection of KPMG Peat Marwick LLP as independent
public accountants for the Fund for the year ending December 31, 1995. The
combined votes of the shareholders of all nine portfolios will apply to this
proposal. Since the shareholders of each portfolio will vote separately on the
approval of the new Investment Advisory Agreement, the new Service Agreement
and, if applicable, the new Sub-
3
<PAGE> 9
Advisory Agreement pertaining to their portfolio, these agreements may be
approved and take effect as to some portfolios and not as to others. If an
agreement is not approved by the shareholders of a portfolio, the corresponding
existing agreement will continue as to that portfolio.
Approval with respect to each issue requires approval by a majority vote of
the eligible shareholders for that issue. Under the Investment Company Act of
1940 (the "1940 Act"), a majority vote means the concurrence of the lesser of
(a) 67% of the shares represented in person or by proxy at a meeting where more
than 50% of the outstanding shares are so represented or (b) 50% of all the
outstanding shares.
THE FUND BOARD HAS UNANIMOUSLY APPROVED THE NEW CORPORATE STRUCTURE AND
AGREEMENTS, AND RECOMMENDS THEIR APPROVAL BY THE SHAREHOLDERS.
ELECTION OF DIRECTORS
At the meeting, five Directors are to be elected to hold office until the
1999 meeting of shareholders and until their respective successors have been
elected and qualified. The nominees for election as Directors are listed under
"Director Nominees." The Fund has no nominating committee. Nominations are
made by the Board. Each of the candidates for Director will be voted on,
individually, by all the shareholders voting as a whole and not by portfolios.
It is the intention of the persons named in the enclosed form of proxy to
vote for the election of the nominees. The nominees have consented to being
named in this proxy statement and to serving as Directors if elected. Should
any of them become unable or unwilling to accept election, the persons named in
the proxy will exercise their voting power in favor of such other persons as
the Board of Directors may recommend. It is not contemplated that any of the
nominees will be unable to serve if elected.
None of the Directors owns any shares of the Fund. However, as of December
31, 1995, Mr. Zimmerman had a beneficial interest in 1,343 shares, and Mr.
Benedict had a beneficial interest in 3,803 shares, because of their ownership
of variable contracts, the underlying assets of which are Fund shares.
COMPENSATION OF DIRECTORS
Directors who are not affiliated with ONLI, ONLAC or the investment adviser
(presently ONIMCO) received aggregate remuneration of $31,200 during 1995. The
Board of Directors met four times during 1995. It is estimated that this
remuneration will aggregate $31,200 during 1996. Directors and officers of the
Fund who are affiliated with ONLI, ONLAC or the investment adviser receive no
compensation from the Fund. For the fiscal year ended December 31, 1995, the
Directors were compensated as follows:
<TABLE>
<CAPTION>
Aggregate
Compensation Total Compensation
Name and Position From the Fund from Fund Complex*
- ----------------- ------------- ------------------
<S> <C> <C>
James E. Baker $10,400 $15,000
Director
Ronald L. Benedict None None
Director and Secretary
</TABLE>
4
<PAGE> 10
<TABLE>
<S> <C> <C>
George E. Castrucci $10,400 $15,000
Director
Maurice H. Kirby, Jr. $10,400 $15,000
Director
Donald J. Zimmerman None None
Director and President
</TABLE>
*The "Fund Complex" consists of the Fund and ONE Fund, Inc.
DIRECTOR NOMINEES
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AGE OTHER POSITIONS SINCE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ronald L. Benedict* 54 Secretary of the Fund since 1975; Second 1987
Vice President & Counsel of ONLI: Director
and Secretary of ONESCO; Secretary of
ONIMCO and ONII; Assistant Secretary of
ONLAC; Director and Secretary of ONE Fund
George E. Castrucci 58 Business consultant and private investor. 1993
Formerly President and Chief Operating
Officer of Great American Communications
Co. and Chairman and Chief Executive
Officer of Great American Broadcasting Co.;
Director of Benchmark Savings Bank; General
Partner of GTOO, LLP; Director of ONE Fund.
Maurice H. Kirby, Jr. 69 Retired. Formerly Senior Vice President of 1984
First National Bank of Cincinnati; Director
of ONE Fund.
George M. Vredeveld 53 Professor of Economics, University of N/A
Cincinnati; Director of the Center for
Economic Education; Private Consultant;
Director of Benchmark Savings Bank;
General Partner of GTOO, LLP.
Donald J. Zimmerman* 58 President of the Fund; Senior Vice 1987
President Insurance Operations of ONLI
and ONLAC; Director and Secretary of
ONLI and ONLAC; Director and
President of ONE Fund; Director and
President of ONESCO.
</TABLE>
*Messrs. Benedict and Zimmerman are "interested persons" within the meaning of
the 1940 Act. They are "affiliated persons" of the Fund because they are Fund
officers and Mr. Benedict is Secretary of both the present investment adviser,
ONIMCO, and of the proposed new investment adviser, ONII.
5
<PAGE> 11
OTHER OFFICERS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION AND OFFICER
NAME AGE OTHER POSITIONS SINCE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Joseph P. Brom 60 Vice President of the Fund; Senior Vice 1987
President and Chief Investment Officer of
ONLI and ONLAC; Director and President
of ONIMCO and ONII; Vice President of
ONE Fund.
Michael A. Boedeker 53 Vice President of the Fund; Vice President, 1992
Fixed Income Securities of ONLI and
ONLAC; Director and Vice President of
ONIMCO and ONII; Vice President of
ONE Fund.
Dennis R. Taney 48 Treasurer of the Fund; Financial Officer 1993
of ONLI; Treasurer of ONIMCO and ONII;
Treasurer of ONE Fund.
Stephen T. Williams 42 Vice President of the Fund; Senior 1984
Investment Officer & Portfolio Manager
of ONLI; Director and Vice President of
ONIMCO and ONII; Vice President of
ONE Fund.
</TABLE>
INVESTMENT ADVISORY SERVICES
The Fund's investment adviser from the Fund's inception has been ONIMCO, a
wholly-owned subsidiary of The O.N. Equity Sales Company ("ONESCO"), which in
turn is a wholly-owned subsidiary of ONLI. Under the Investment Advisory
Agreement between ONIMCO and the Fund, ONIMCO regularly furnishes to the Board
recommendations with respect to an investment program consistent with the
Fund's investment policies. Upon approval of an investment program by the
Board, ONIMCO implements the program by placing orders for the purchase and
sale of securities. ONIMCO also provides the Fund with office space, necessary
clerical personnel (other than those provided by agreements between the Fund
and The Provident Bank (Cincinnati, Ohio), which serves as custodian, transfer
agent and servicing agent for the Fund), and services of executive and
administrative personnel.
Under a Service Agreement among the Fund, ONIMCO and ONLI, ONLI has agreed
to furnish ONIMCO, at cost, such research facilities, services and personnel as
may be needed by ONIMCO in connection with its performance under the Investment
Advisory Agreement. ONIMCO has agreed to reimburse ONLI for its expenses in
this regard. The Fund has not paid to ONIMCO, or to any of its affiliates, any
compensation for services other than under the Investment Advisory Agreement
during the last fiscal year. The address of ONIMCO, ONLI, ONLAC and the Fund
is 237 William Howard Taft Road, Cincinnati, Ohio 45219.
The president of ONIMCO is Joseph P. Brom. ONIMCO's directors are Mr.
Brom, Michael A. Boedeker, David G. McClure and Stephen T. Williams. Messrs.
Brom, Boedeker and Williams are principally employed as investment officers of
ONLI. Each of them is also a vice president of the Fund. Mr. McClure's
principal employment is the management of variable product sales for ONLI.
ONIMCO's secretary, Ronald L. Benedict, is also the secretary and a director of
the Fund. The business address of each of these individuals is 237 William
Howard Taft Road, Cincinnati, Ohio 45219.
6
<PAGE> 12
The Investment Advisory Agreement and Service Agreement were both entered
into on November 2, 1982. They were submitted to and approved by the
shareholders of each portfolio of the Fund on the following dates:
Equity October 15, 1982
Money Market October 15, 1982
Bond October 15, 1982
Omni March 21, 1985
International April 28, 1993
Capital Appreciation April 29, 1994
Small Cap April 29, 1994
Global Contrarian March 30, 1995
Aggressive Growth March 30, 1995
On March 1, 1995, the shareholders of the Equity, Money Market, Bond and
Omni Portfolios approved amendments to the Investment Advisory Agreement as
related to their respective portfolios.
As compensation for its services, ONIMCO receives from the Fund annual fees
on the basis of each portfolio's average daily net assets during the quarterly
period for which the fees are paid based on the following schedule: (a) for
each of the Equity, Bond and Omni Portfolios, 0.60% of the first $100 million
of each Portfolio's net assets, 0.50% of the next $150 million of net assets,
0.45% of the next $250 million of net assets, 0.40% of the next $500 million of
net assets, 0.30% of the next $1 billion of net assets, and 0.25% of net assets
over $2 billion; (b) for the Money Market Portfolio, 0.30% of the first $100
million of net assets, 0.25% of the next $150 million of net assets, 0.23% of
the next $250 million of net assets, 0.20% of the next $500 million of net
assets, and 0.15% of net assets over $1 billion; (c) for the International and
Global Contrarian Portfolios, 0.90% of each Portfolio's net assets; and (d) for
the Capital Appreciation, Small Cap and Aggressive Growth Portfolios, 0.80% of
each Portfolio's net assets. However, as to the Money Market Portfolio, ONIMCO
is presently waiving any of its fee in excess of 0.25%.
Under Supplemental Investment Advisory Agreements, the Fund authorizes
ONIMCO to retain sub-advisers for the International, Capital Appreciation,
Small Cap, Global Contrarian and Aggressive Growth Portfolios, subject to the
approval of the Fund's Board of Directors. ONIMCO has entered into
Sub-advisory Agreements with sub-advisers, to manage the investment and
reinvestment of those Portfolios' assets, subject to the supervision of ONIMCO.
As compensation for their sub-advisory services, (a) Societe Generale Asset
Management Corp. receives from ONIMCO fees at the annual rate of 0.75% of the
International and Global Contrarian Portfolios' average daily net assets during
the quarter for which the fee is paid; (b) T. Rowe Price Associates, Inc.
receives from ONIMCO a fee at an annual rate of 0.70% of the first $5 million,
and 0.50% of average daily net asset value in excess of $5 million, of the
Capital Appreciation Portfolio; (c) Founders Asset Management, Inc. receives
from ONIMCO a fee at an annual rate of 0.65% of the first $75 million, 0.60% of
the next $75 million, and 0.55% of the average daily net asset value in excess
of $150 million, of the Small Cap Portfolio; and (d) Strong Capital Management,
Inc. receives from ONIMCO a fee at an annual rate of 0.70% of the first $50
million, and 0.50% of average daily net asset value in excess of $50 million,
of the Aggressive Growth Portfolio.
The Supplemental Investment Advisory Agreements and Sub-Advisory Agreements
were approved by the shareholders of the applicable portfolios on the same
dates as listed above for approval of the Investment Advisory Agreement.
All of these agreements are reviewed and approved for continuance by the
Board of Directors each year. The agreements were most recently reviewed by
the Board and approved for continuance on August 17, 1995, by a unanimous vote
of all the Directors cast in person at a Board meeting called for the purpose
of voting on that continuance. Each of these agreements provides for automatic
termination in the event of its assignment.
7
<PAGE> 13
In addition to the Fund, ONIMCO is also the investment adviser to ONE Fund,
Inc., which presently consists of the following portfolios:
ONE Fund Portfolio Assets (12/31/95)
------------------ -----------------
Money Market $17,545,997
Tax-Free Income 6,279,486
Income 7,424,240
Income & Growth 8,717,131
Growth 9,226,084
Small Cap 3,694,410
International 12,882,866
Global Contrarian 4,382,545
As compensation for its services to ONE Fund, ONIMCO receives from ONE Fund
annual fees on the basis of each portfolio's average daily net assets during
the quarterly period for which the fees are paid based on the following
schedule: (a) for those assets held in the Income, Income & Growth and Growth
Portfolios, the fee is at an annual rate of 0.50% of the first $100 million of
those assets in each portfolio, 0.40% of the next $150 million and 0.30% of
assets over $250 million; (b) as to assets held in the Money Market Portfolio,
the fee is at an annual rate of 0.30% of the first $100 million of such assets,
0.25% of the next $150 million, and 0.20% of assets over $250 million; (c) for
assets held in the Tax-Free Income Portfolio, the fee is at an annual rate of
0.60% of the first $100 million of those assets, 0.50% of the next $150
million, and 0.40% of assets over $250 million; (d) for assets held in the
Small Cap Portfolio, the fee is at an annual rate of 0.65% of the first $100
million, 0.55% of the next $150 million, and 0.45% of assets over $250 million;
and (e) for assets held in the International and Global Contrarian Portfolios,
the fee is at an annual rate of 0.90% of assets in each portfolio. However,
ONIMCO is presently voluntarily waiving all of its fees in connection with the
Money Market Portfolio and one-half of its fees in connection with the Tax-Free
Income, Income, Income & Growth, Growth, and Small Cap Portfolios of ONE Fund.
NEW INVESTMENT ADVISER
Fund management and the Board of Directors have determined that the Fund
and its shareholders (and the owners of related variable annuity and variable
life insurance contracts) would be better served by a modified corporate
structure featuring a new investment adviser corporation. Accordingly, ONLI
has formed a new corporation, ONII, which is proposed to replace ONIMCO as the
Fund's investment adviser. ONII is an Ohio corporation and is in the process
of being registered under the federal Investment Advisers Act of 1940. That
registration process is expected to be completed on or about ________________,
1996. Such registration does not involve any approval or disapproval of the
ability of ONII or its personnel to manage investment portfolios. ONII, like
ONIMCO, uses ONLI's investment personnel and administrative systems. ALL THE
DIRECTORS, OFFICERS AND INVESTMENT ADVISORY PERSONNEL FOR ONII ARE IDENTICAL TO
THOSE FOR ONIMCO.
The primary reason for replacing ONIMCO as the investment adviser relates
to ONIMCO's status as a subsidiary of ONESCO, a securities broker-dealer.
ONESCO has grown rapidly in recent years and has greatly expanded its retail
sales activities in the securities marketplace. In addition to marketing Ohio
National Life's variable contracts and its affiliated mutual fund, ONE Fund,
ONESCO offers a broad spectrum of non-affiliated securities. ONESCO's
operations and the retail sales activities of its registered representatives
can subject it to potentially substantial legal liabilities. Since ONIMCO is a
subsidiary of ONESCO, ONIMCO's operations and its ability to manage the Fund's
investments are potentially vulnerable to factors beyond ONIMCO's control.
ONII is not
8
<PAGE> 14
subject to most of the potential legal liabilities that could threaten ONIMCO
because ONII is a direct subsidiary of ONLI, not of ONESCO.
If the proposed new Investment Advisory Agreement, Service Agreement
and Sub-Advisory Agreements are approved by the shareholders, ONII will replace
ONIMCO as the Fund's investment adviser and those new agreements will take
effect as of May 1, 1996, or as soon thereafter as ONII is registered under the
Investment Advisers Act. Copies of all the proposed new agreements are
included as exhibits to this proxy statement. All of the new agreements are
substantially identical to the current agreements that they will replace. ONII
intends to continue ONIMCO's practice of waiving any of its investment advisory
fees for the Money Market Portfolio in excess of 0.25%. THE NEW AGREEMENTS
WILL NOT RESULT IN ANY CHANGE IN ANY OF THE FUND'S FEES, OPERATIONS, PORTFOLIO
MANAGERS OR SUB-ADVISERS.
The new agreements have been approved by the Fund's Board of Directors
by unanimous vote on January 24, 1996. The proposed new agreements are as
follows:
INVESTMENT ADVISORY AGREEMENT - -This agreement (see Exhibit A) between
ONII and the Fund is substantially identical to the current agreement with
ONIMCO. There will be no change in any of the investment advisory fees. The
new agreement also incorporates the terms of existing supplemental agreements
that permit ONIMCO to appoint sub-advisers to manage the assets of the
International, Capital Appreciation, Small Cap, Global Contrarian and
Aggressive Growth Portfolios. While the new agreement will not limit the use
of sub-advisers to just those five portfolios, it is not contemplated that
sub-advisers would ever be used by any of the Equity, Money Market, Bond or
Omni Portfolios and, in any event, sub-advisory arrangements for any of those
four portfolios would require prior Board and shareholder approval.
SERVICE AGREEMENT - - This agreement (see Exhibit B) among ONII, the
Fund and ONLI is identical to the current agreement except for the substitution
of ONII for ONIMCO. The purpose of the agreement is for ONLI to provide ONII
with the necessary investment advisory personnel, office space and
administrative services (all at cost) to enable ONII to perform its functions
as investment adviser to the Fund. The new Investment Advisory and Service
Agreements are intended to apply to all portfolios of the Fund, but they must
be approved by the shareholders of each portfolio in order to apply to that
portfolio.
SUB-ADVISORY AGREEMENT FOR THE INTERNATIONAL AND GLOBAL CONTRARIAN
PORTFOLIOS - - This agreement (see Exhibit C) between ONII and Societe Generale
Asset Management Corp. is identical to ONIMCO's existing agreements except that
presently there are two agreements (one for each portfolio) which are proposed
to be combined into a single contract. Societe Generale Asset Management Corp.
will continue to manage the assets of the International and Global Contrarian
Portfolios as sub-adviser under the supervision of ONII. Only International
and Global Contrarian Portfolio shareholders are eligible to vote on approval
of this agreement. It must be approved separately by the shareholders of each
of those portfolios in order to apply to that portfolio.
SUB-ADVISORY AGREEMENT FOR THE CAPITAL APPRECIATION PORTFOLIO - - This
agreement (see Exhibit D) between ONII and T. Rowe Price Associates, Inc. is
identical to ONIMCO's existing agreement. Only shareholders of the Capital
Appreciation Portfolio are eligible to vote on approval of this agreement. If
so approved, T. Rowe Price Associates, Inc. will continue to manage the
portfolio's assets as sub-adviser under the supervision of ONII.
SUB-ADVISORY AGREEMENT FOR THE SMALL CAP PORTFOLIO - - This Agreement
(see Exhibit E) between ONII and Founders Asset Management, Inc. is identical
to ONIMCO's existing agreement. Only shareholders of the Small Cap Portfolio
are eligible to vote on approval of this agreement. If so approved, Founders
Asset Management, Inc. will continue to manage the portfolio's assets as
sub-adviser under the supervision of ONII.
SUB-ADVISORY AGREEMENT FOR THE AGGRESSIVE GROWTH PORTFOLIO - - This
agreement (see Exhibit F) between ONII and Strong Capital Management, Inc. is
identical to ONIMCO's existing agreement. Only shareholders of the Aggressive
Growth Portfolio are eligible to vote
9
<PAGE> 15
on approval of this agreement. If so approved, Strong Capital Management, Inc.
will continue to manage the portfolio's assets as sub-adviser under the
supervision of ONII.
THE FUND BOARD HAS UNANIMOUSLY APPROVED ALL THE PROPOSED NEW AGREEMENTS AND
RECOMMENDS THEIR APPROVAL BY THE SHAREHOLDERS.
RATIFICATION OF SELECTION OF AUDITOR
The Board of Directors, including all Directors who are not "interested
persons" of the Fund, have selected KPMG Peat Marwick LLP as independent
auditors for the Fund with respect to its operations for the year ending
December 31, 1996. Their selection is submitted for ratification or rejection
by the shareholders. KPMG Peat Marwick LLP have been the independent auditors
for the Fund since its organization and do not have any direct or indirect
financial interest in the Fund. Representatives of KPMG Peat Marwick LLP are
expected to attend the shareholders' meeting. They will have the opportunity
to make a statement if they desire to do so, and they are expected to be
available to respond to appropriate questions. The Directors who are not
affiliated with ONLI, ONLAC or the investment adviser constitute the Fund's
Audit Committee. The Audit Committee met twice with the independent auditors
during 1995. The functions of the Audit Committee are to recommend the
engagement and discharge of the independent auditors and to review with the
independent auditors the plan and results of the auditing engagement. The
ratification of the selection of the independent auditors will be voted on by
all the shareholders voting as a whole and not by portfolios.
OTHER MATTERS WHICH MAY COME BEFORE MEETING
Management is not aware of any other matters which may come before the
meeting. If, however, any other matter properly comes before the meeting, it
is the intention of the persons named in the accompanying form of proxy to vote
the proxy in accordance with their judgment on such matters.
FINANCIAL STATEMENTS
The Fund's annual and semi-annual reports are sent to the shareholders and
all variable contract owners. The Fund's most recent annual and semi-annual
reports are also available free upon request by contacting Ohio National Fund,
Inc., P.O. Box 237, Cincinnati, Ohio 45201 (telephone 1-800-578-8078).
SHAREHOLDER PROPOSALS
As a registered investment company incorporated under Maryland law, the
Fund is not required to hold annual meetings of shareholders. The Fund
generally intends to hold a meeting of shareholders every three years for the
purpose of electing Directors and it will hold special meetings as required or
deemed desirable. The date of the next meeting for the purpose of electing
Directors cannot be stated with certainty, but it is anticipated to be during
the first quarter of 1999. A shareholder may have included in the proxy
statement for the next meeting of shareholders certain proposals for
shareholder action with he or she intends to introduce at such meeting. Notice
of any shareholder proposal must be received by the Fund no later than 120 days
prior to a meeting of shareholder in order for the proposal to be included in
the proxy solicitation materials for that meeting.
10
<PAGE> 16
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this first day of May, 1996, by and between OHIO NATIONAL
FUND, INC., a Maryland corporation (hereinafter called the "Fund") and OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (hereinafter called the
"Adviser").
WHEREAS, the Fund and the Adviser wish to enter into an Agreement setting forth
the terms upon which the Adviser will perform certain services for the Fund;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISER
The Fund hereby appoints the Adviser to manage the investment and reinvestment
of the assets of the Fund and to perform the other services herein set forth,
subject to the supervision of the Board of Directors of the Fund, for the
period and on the terms herein set forth. The Adviser hereby accepts such
appointment and agrees during such period, to render the services and to assume
the obligations herein set forth for the compensation herein provided. Any
investment program undertaken by the Adviser pursuant to this Agreement and any
other activities undertaken by the Adviser on behalf of the Fund shall at all
times be subject to any directives of the Fund's Board of Directors, any duly
constituted committee thereof or any officer of the Fund acting pursuant to
like authority.
2. DUTIES OF ADVISER
In carrying out its obligations to manage the investment and reinvestment of
the assets of the Fund, the Adviser shall:
(a) obtain and evaluate pertinent economic, statistical and financial data
and other information relevant to the investment policies of the Fund,
affecting the economy generally and individual companies or industries the
securities of which are included in the Fund's investment portfolios or are
under consideration for inclusion therein;
(b) regularly furnish to the Board of Directors of the Fund for approval,
modification or rejection, recommendations with respect to investment programs
consistent with the fundamental policies and related investment policies
for each investment portfolio as set forth in the Fund's currently effective
prospectus and Statement of Additional Information;
(c) take such steps as are necessary to implement the investment programs
approved by the Fund's Board of Directors by purchase and sale of securities,
including the placing of orders for such purchase and sale; and
<PAGE> 17
(d) regularly report to the Fund's Board of Directors with respect to
implementation of the approved investment programs and the Adviser's activities
in connection with the administration of the Fund.
3. USE OF SUB-ADVISERS
In providing the services and assuming the obligations set forth herein, in
connection with any investment portfolio of the Fund, the Adviser may at its
expense employ one or more Sub-Advisers, or may enter into such service
agreements as the Adviser deems appropriate in connection with the performance
of its duties and obligations hereunder. Reference herein to the duties and
responsibilities of the Adviser shall include any Sub-Adviser employed by the
Adviser to the extent the Adviser shall delegate such duties and
responsibilities to any such Sub-Adviser. Any agreement between the Adviser
and a Sub-Adviser shall be subject to the approval of the Fund, its Board of
Directors, and shareholders of any portfolio affected thereby, as required by
the Investment Company Act of 1940, as amended (the "1940 Act"), and any such
Sub-Adviser shall at all times be subject to the direction of the Board of
Directors of the Fund or any officer of the Fund acting pursuant to the Board's
authority. Furthermore, the Adviser shall perform ongoing due diligence
oversight of any such Sub-Adviser in order to assure continuing quality of
performance by said Sub-Adviser.
4. TO BE FURNISHED BY THE ADVISER
In addition to performing the obligations set forth in paragraph 2 hereof, the
Adviser shall furnish at its own expense or pay the expenses of the Fund for
the following:
(a) office space in the offices of the Adviser or in such other place as
may be agreed upon from time to time, and all necessary office facilities
and equipment;
(b) necessary executive and other personnel for managing the affairs of the
Fund, including personnel to perform clerical, accounting and other office
functions (exclusive of those related to and to be performed under contract for
custodial, bookkeeping, transfer and dividend disbursing agency services by any
bank or other agents selected to perform such services); and
(c) all information and services, other than services of counsel, required
in connection with the preparation of registration statements, prospectuses and
statements of additional information, including amendments and revisions
thereto; all annual, semi-annual and periodic reports; and notices and proxy
solicitation material furnished to shareholders of the Fund or regulatory
authorities.
5. ITEMS NOT REQUIRED TO BE FURNISHED BY THE ADVISER
Nothing in paragraph 4 hereof shall require the Adviser to bear, or to
reimburse the Fund for:
2
<PAGE> 18
(a) any of the costs of printing and mailing the items referred to in
subparagraph (c) of paragraph 4;
(b) the costs of preparation, printing and mailing disclosure documents
required by regulatory authorities;
(c) compensation of directors of the Fund who are not directors, officers
or employees of the Adviser;
(d) registration, filing and other fees in connection with requirements
of regulatory authorities;
(e) the charges and expenses of any custodian appointed by the Fund for
custodial services;
(f) charges and expenses of independent accountants retained by the
Fund;
(g) charges and expenses of any transfer, bookkeeping and dividend
disbursing agent appointed by the Fund;
(h) brokers' commissions and issue and transfer taxes chargeable to the
Fund in connection with securities transactions to which the Fund is a party;
(i) taxes and corporate fees payable by the Fund to federal, state or
other governmental agencies;
(j) the cost of stock certificates, if any, representing shares of
the Fund;
(k) legal fees and expenses in connection with the affairs of the Fund,
including registering and qualifying its shares with regulatory
authorities; and
(l) expenses of shareholders and directors meetings.
6. RELATED SERVICES
(a) The services of the Adviser to the Fund hereunder are not to be deemed
exclusive and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired or interfered with thereby.
(b) To better enable it to fulfill its obligations hereunder, the Adviser
has entered into a service agreement with The Ohio National Life Insurance
Company, to which the Fund is also a party, under which The Ohio National
Life Insurance Company has agreed to furnish certain personnel and facilities
to the Adviser on a cost reimbursement basis.
(c) The Adviser and any persons performing executive, administrative or
trading functions for the Fund, whose services were made available to the Fund
by the Adviser, are specifically authorized to allocate brokerage business to
firms that
3
<PAGE> 19
provide such services or facilities and to cause the Fund to pay a member of a
securities exchange, or any other securities broker, an amount of commission
for effecting a securities transaction in excess of the amount another member
of an exchange or broker would have charged for effecting that transaction, if
the Adviser or such person determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services, as such services are defined in Section 28(e) of the Securities
Exchange Act of 1934 (the "1934 Act"), provided by such member or broker,
viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to any accounts as to which the
Adviser exercises investment discretion, as that term is defined in Section
3(a)(35) of the 1934 Act.
7. COMPENSATION OF ADVISER
(a) Each investment portfolio of the Fund shall pay the Adviser, as
full compensation for all services rendered and all facilities furnished
hereunder, a fee computed separately for each portfolio of the Fund at the
annual rates shown on Schedule A hereof or, as to any portfolios added to the
Fund after the date first above written, on any additional Schedules hereto,
which rates shall be based on the current value of the respective portfolio's
average total net assets.
(b) Fees shall be payable at such intervals, not more frequently
than monthly and not less frequently than quarterly, as the Board of Directors
of the Fund may from time to time determine and specify in writing to the
Adviser. The fees shall be calculated on the basis of the average of all
valuations of the net assets of each respective portfolio, made as of the time
each business day that the Board of Directors has set for valuing the current
net assets of the Fund, during the period for which the fees are paid.
8. REIMBURSEMENT OF EXCESS EXPENSES
If in any calendar quarter the total of all ordinary business expenses
applicable to any investment portfolio (excluding the fee payable under
paragraph 7 above to the Adviser, taxes, portfolio brokerage commissions and
interest) should exceed one percent of the average net assets of such
investment portfolio as computed above in paragraph 7, the Adviser shall pay
such excess. For the purposes of this paragraph the term "calendar quarter"
shall include the portion of any calendar quarter which shall have lapsed at
the date of termination of this agreement and the expense limitation shall be
that part of 1% proportional to the portion of a full calendar quarter lapsed.
9. INTERESTED PERSONS OF THE FUND AND THE ADVISER
It is understood that directors, officers, agents and shareholders of the Fund
are or may be interested in the Adviser as directors, officers, shareholders,
or otherwise, that directors, officers, agents and shareholders of the Adviser
are or may be interested in the Fund as directors, officers, shareholders or
otherwise, that the Adviser may be interested in the Fund and that the
existence of any such dual
4
<PAGE> 20
interest shall not affect the validity hereof or of any transactions hereunder
except as otherwise provided in the Articles of Incorporation of the Fund and
the Adviser, respectively, or by specific provision of applicable law.
10. LIABILITIES OF ADVISER
Neither the Adviser nor any of its directors, officers or employees, nor any
person performing executive, administrative or trading functions shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
for loss resulting from willful misfeasance, bad faith or gross negligence in
the performance of its, his or her duties on behalf of the Fund or from
reckless disregard by the Adviser or any such person of the Adviser's duties
under this Agreement. Without limiting the generality of the foregoing,
neither the Adviser nor any such person shall be deemed to have acted
unlawfully or to have breached any duty to the Fund under state or federal law
in effect at the date of the enactment of Section 28(e) of the 1934 Act solely
by reason of having caused the Fund to pay a member of any securities exchange,
or any other securities broker or dealer, an amount of commission for effecting
a securities transaction in excess of the commission another member of a
securities exchange, or another securities broker or dealer, would have charged
for effecting that transaction if the Adviser or such other person determined
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to any accounts to which the
Adviser exercises investment discretion.
11. DURATION, TERMINATION AND AMENDMENT
(a) This Agreement shall become effective as to any portfolio upon
its approval for such portfolio by the Board of Directors of the Fund and the
shareholders of the class of capital stock designated for that portfolio. This
Agreement will continue in effect for a period more than two years from the
date of its effectiveness as to any portfolio only so long as such continuance
is specifically approved at least annually either by the Board of Directors of
the Fund or by the vote of a majority of the outstanding voting securities of
the portfolio, provided that in either event such continuance shall also be
approved by the vote of a majority of the directors of the Fund who are not
interested persons (as defined in the 1940 Act) of any party to this Agreement
cast in person at a meeting called for the purpose of voting on such approval.
The required shareholder approval of this Agreement or of any continuance of
this Agreement shall be effective with respect to a portfolio if a majority of
the outstanding voting securities of the class (as defined in Rule 18f-2(h)
under the 1940 Act) of capital stock of the portfolio votes to approve the
Agreement or its continuance, notwithstanding that this Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of the entire Fund.
5
<PAGE> 21
(b) If the shareholders of capital stock of any portfolio fail to
approve any continuance of this Agreement, the Adviser will continue to act as
investment adviser with respect to that portfolio pending the required approval
of this Agreement or its continuance, or of a new contract with the Adviser or
a different investment adviser or other definitive action; provided, that the
compensation received by the Adviser in respect of that portfolio during such
period will be no more than the Adviser's actual costs incurred in furnishing
investment advisory and management services to such portfolio or the amount it
would have received under this Agreement, whichever is less.
(c) This Agreement may be terminated at any time, without the
payment of any penalty, by the Board of Directors of the Fund or, with respect
to any portfolio, by the vote of a majority of the outstanding voting
securities of that portfolio on 60 days' written notice to the Adviser, or by
the Adviser, on 90 days' written notice to the Fund. This Agreement will
automatically terminate in the event of its assignment (as defined in the 1940
Act).
(d) This Agreement may be amended by the parties only if such
amendment is specifically approved by the vote of a majority of the outstanding
voting securities of each affected portfolio and by the vote of a majority of
the directors of the Fund who are not interested persons of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
12. NOTICES AND GOVERNING LAW
(a) Any notice under the Agreement shall be in writing, addressed
and delivered or mailed postage prepaid to the other party at such address as
the other party may designate for the receipt of notices. Until further notice
to the other party it is agreed that the address of the Fund and that of the
Adviser for this purpose shall be 237 William Howard Taft Road, Cincinnati,
Ohio 45219.
(b) This Agreement shall be governed by the law of Ohio.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed by their duly authorized officers, in Cincinnati, Ohio, as of the date
first above written.
OHIO NATIONAL FUND, INC. OHIO NATIONAL INVESTMENTS, INC.
By ______________________________ By________________________________
Donald J. Zimmerman, President Joseph P. Brom, President
6
<PAGE> 22
SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
Each portfolio of Ohio National Fund, Inc. shall pay fees to Ohio National
Investments, Inc. computed at the following rates as provided in paragraph 7 of
the Agreement:
Net Assets Money
in Portfolio Equity Bond Omni Market
------------ ------ ---- ---- ------
First $100,000,000 0.60% 0.60% 0.60% 0.30%
Next $150,000,000 0.50% 0.50% 0.50% 0.25%
Next $250,000,000 0.45% 0.45% 0.45% 0.23%
Next $500,000,000 0.40% 0.40% 0.40% 0.20%
Next $1,000,000,000 0.30% 0.30% 0.30% 0.15%
All Portfolio Assets
over $2,000,000,000 0.25% 0.25% 0.25% 0.15%
<TABLE>
<CAPTION>
Capital Small Aggressive Global
International Appreciation Cap Growth Contrarian
------------- ------------ ----- ----------- ----------
<S> <C> <C> <C> <C> <C>
All Portfolio Assets 0.90% 0.80% 0.80% 0.80% 0.90%
</TABLE>
Agreed to and accepted as of May 1, 1996.
OHIO NATIONAL FUND, INC. OHIO NATIONAL INVESTMENTS, INC.
By: ____________________________ By: _____________________________
Donald J. Zimmerman, President Joseph P. Brom, President
<PAGE> 23
EXHIBIT B
SERVICE AGREEMENT
THIS AGREEMENT, made this first day of May, 1996, by and among OHIO
NATIONAL FUND, INC., (the "Fund"), a Maryland corporation, OHIO NATIONAL
INVESTMENTS, INC. ("Adviser"), an Ohio corporation and THE OHIO NATIONAL LIFE
INSURANCE COMPANY ("Ohio National Life"), a mutual life insurance company
organized under the laws of the State of Ohio;
WHEREAS, Ohio National Life has caused the Adviser to be organized to
serve as investment adviser to investment companies and to others; and
WHEREAS, the Adviser and the Fund have entered into an Investment
Advisory Agreement dated May 1, 1996 whereby the Adviser undertakes to furnish
the Fund with investment advisory services and to furnish or pay the expenses
of the Fund for certain other services; and
WHEREAS, Ohio National Life is willing to make available to the
Adviser on a part-time basis certain employees of Ohio National Life for the
purpose of better enabling the Adviser to fulfill its obligations under the
Investment Advisory Agreement, provided that the Adviser bears all costs
allocable to the time spent by them on the affairs of the Adviser, and the
Adviser and the Fund believe that such an arrangement will be for their mutual
benefit;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. The Adviser shall have the right to use, on a part-time basis,
and Ohio National Life shall make available on such basis, such employees of
Ohio National Life for such periods as may be agreed upon by the Adviser and
Ohio National Life, as may be reasonably needed by the Adviser in the
performance of its investment advisory functions. It is anticipated that most
of such employees will be persons employed in the investment operations of Ohio
National Life in addition to such clerical, stenographic and administrative
services as the Adviser may reasonably request.
2. The employees of Ohio National Life in performing services for
the Adviser hereunder may, to the full extent that they deem appropriate, have
access to and utilize statistical and economic data, investment research
reports and other materials prepared for or contained in the files of Ohio
National Life which is relevant to making investment decisions within the
investment objectives of the Fund, and may make such materials available to the
Adviser; provided, that any such materials prepared or obtained in connection
with a private placement or other nonpublic transaction need not be made
available to the Adviser if Ohio National Life deems such materials
confidential.
3. Employees of Ohio National Life performing services for the
Adviser pursuant hereto shall report and be responsible solely to the officers
and directors of the Adviser or persons designated by them. Ohio National Life
shall have no responsibility for investment recommendations and decisions of
the Adviser based upon information or advice given or obtained by or through
such Ohio National Life employees.
4. Ohio National Life will, to the extent requested by the
Adviser, supply to employees of the Adviser, including part-time employees of
Ohio National Life serving the Adviser, such clerical, stenographic and
administrative services and such office supplies and equipment as may be
reasonably required in order that they may properly perform their respective
functions on behalf of the Adviser in connection with its performance of the
Investment Advisory Agreement.
<PAGE> 24
5. The obligation of performance under the Investment Advisory
Agreement is solely that of the Adviser, and Ohio National Life undertakes no
obligation in respect thereto, except as otherwise expressly provided herein.
6. In consideration of the services to be rendered by Ohio
National Life and its employees pursuant to this Agreement, the Adviser agrees
to reimburse Ohio National Life for such costs, direct and indirect, as may be
fairly attributable to the services performed for the Adviser. Such costs
shall include, but not be limited to, an appropriate portion of salaries,
employee benefits, general overhead expense, supplies and equipment, and a
charge in the nature of rent for the cost of space in Ohio National Life
offices fairly allocable to activities of the Adviser under the Investment
Advisory Agreement. In the event of disagreement between the Adviser and Ohio
National Life as to a fair basis for allocating or apportioning costs, such
basis shall be fixed by the independent public accountants for the Fund.
7. (a) This Agreement shall continue in effect as to any
portfolio of the Fund for a period more than two years from the date of its
execution only so long as such continuation is specifically approved at least
annually by either the Board of Directors of the Fund or by vote of a majority
of that portfolio's outstanding voting securities, provided that in either
event such continuation shall also be approved by the vote of a majority of the
directors who are not interested persons of the Fund, cast by them in person at
a meeting called for purpose of voting on such approval; provided, however,
that:
(b) This Agreement may at any time be terminated as to any
portfolio of the Fund without the payment of any penalty on 60 days' notice to
the Adviser and to Ohio National Life either by vote of the Board of Directors
of the Fund or by vote of a majority of the outstanding voting securities of
that portfolio.
(c) This Agreement shall immediately terminate in event of
its assignment (as that term is defined in the Investment Company Act of 1940).
(d) This Agreement may be terminated by the Adviser or by
Ohio National Life on 90 days' written notice to the other and to the Fund.
8. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed postage prepaid to the other party at such address as
such other party may designate for the receipt of such notices. Until further
notice to the other party it is agreed that the address of the Fund, that of
the Adviser and that of Ohio National Life for this purpose shall be 237
William Howard Taft Road, Cincinnati, Ohio 45219.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers the day and year first above
written.
OHIO NATIONAL FUND, INC.
By
______________________________
Donald J. Zimmerman,
President
2
<PAGE> 25
OHIO NATIONAL INVESTMENTS, INC.
By______________________________
Joseph P. Brom, President
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By______________________________
David B. O'Maley, Chairman,
President & Chief Executive Officer
3
<PAGE> 26
EXHIBIT C
SUB-ADVISORY AGREEMENT
This Agreement is made as of the first day of May, 1996 by and between OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and SOCIETE
GENERALE ASSET MANAGEMENT CORP., a Delaware corporation (the "Sub-Adviser").
WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that
is registered under the Investment Company Act of 1940, as amended, (together
with the regulations promulgated pursuant thereto, the "1940 Act"); and
WHEREAS, the Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended, (together with the regulations promulgated
pursuant thereto, the "Advisers Act"); and
WHEREAS, the Adviser has been appointed as investment adviser to the Fund in
accordance with the 1940 Act and the Advisers Act; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act and engages in the business of providing investment advisory
services; and
WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser,
subject to the requirements of the 1940 Act and the Advisers Act, as a
sub-adviser with respect to those portions of the assets of the Fund designated
as the INTERNATIONAL PORTFOLIO and the GLOBAL CONTRARIAN PORTFOLIO of the Fund
on the terms and conditions set forth below;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
SECTION 1. Investment Advisory Services
----------------------------
(a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby
accepts engagement by the Adviser, to supervise and manage on a
fully-discretionary basis the cash, securities and other assets of the
International Portfolio and the Global Contrarian Portfolio that the Adviser
shall from time to time place under the supervision of the Sub-Adviser (such
cash, securities and other assets initially and as same shall thereafter be
increased or decreased by the investment performance thereof and by additions
thereto and withdrawals therefrom by the Adviser shall hereinafter be referred
to as the "Portfolios").
(b) All activities by the Sub-Adviser on behalf of the Adviser and the
Portfolios shall be in accordance with the investment objectives, policies and
restrictions set forth in the 1940 Act and in the Fund's prospectus and
statement of additional information, as amended from time to time (together,
the "Prospectus") and as interpreted from time to time by the Board of
Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on
behalf of the Adviser and the Portfolios shall also be subject to the due
diligence oversight and direction of the Adviser.
(c) Subject to the supervision of the Adviser, the Sub-Adviser shall have
the sole and exclusive responsibility to select members of securities
exchanges, brokers, dealers and futures commission merchants for the execution
of transactions of the Portfolios and, when applicable, shall negotiate
commissions in connection therewith. All such selections shall be made in
accordance with the Fund's policies and restrictions regarding brokerage
allocation set forth in the Prospectus.
<PAGE> 27
(d) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Portfolios, the Sub-Adviser shall: (1)
obtain and evaluate pertinent economic, statistical, financial and other
information affecting the economy generally and individual companies or
industries the securities of which are included in each of the Portfolios or
are under consideration for inclusion therein; (2) formulate and implement
continuous investment programs for the Portfolios consistent with the
investment objectives and related investment policies and restrictions for the
Portfolios as set forth in the Prospectus; and (3) take any steps necessary to
implement the aforementioned investment programs by placing orders for the
purchase and sale of securities.
(e) In connection with the purchase and sale of securities of the
Portfolios, the Sub-Adviser shall arrange for the transmission to the Adviser
and the Portfolios' custodian on a daily basis such confirmation, trade tickets
and other documents as may be necessary to enable them to perform their
administrative responsibilities with respect to the Portfolios. With respect
to securities of the Portfolios to be purchased or sold through the Depository
Trust Company, the Sub-Adviser shall arrange for the automatic transmission of
the I.D. confirmation of the trade to the Portfolios' custodian.
(f) In connection with the placement of orders for the execution of the
Portfolios' securities transactions, the Sub-Adviser shall create and maintain
all necessary records of the Portfolios as are required of an investment
adviser of a registered investment company including, but not limited to,
records required by the 1940 Act and the Advisers Act. All such records
pertaining to the Portfolios shall be the property of the Fund and shall be
available for inspection and use by the Securities and Exchange Commission, any
other regulatory authority having jurisdiction, the Fund, the Adviser or any
person retained by the Fund or the Adviser. Where applicable, such records
shall be maintained by the Sub-Adviser for the period and in the place required
by Rule 31a-2 under the 1940 Act.
(g) The Sub-Adviser shall render such reports to the Adviser and/or to the
Board of Directors of the Fund concerning the investment activity and
composition of the Portfolios in such form and at such intervals as the Adviser
or the Board may from time to time reasonably require.
(h) In acting under this Agreement, the Sub-Adviser shall be an
independent contractor and not an agent of the Adviser or the Fund.
SECTION 2. Expenses
--------
(a) The Sub-Adviser shall assume and pay all of its own costs and
expenses, including those for furnishing such office space, office equipment,
office personnel and office services as the Sub-Adviser may require in the
performance of its duties under this Agreement.
(b) The Fund shall bear all expenses of organizing and registering the
Portfolios, and the Fund and Adviser shall bear all of their respective
expenses of their operations and businesses not expressly assumed or agreed to
be paid by the Sub-Adviser under this Agreement. In particular, but without
limiting the generality of the foregoing, the Fund shall pay any fees due to
the Adviser, all interest, taxes, governmental charges or duties, fees,
brokerage and commissions of every kind arising hereunder or in connection
herewith, expenses of transactions with shareholders of the Portfolios,
expenses of offering interests in the Portfolios for sale, insurance,
association membership dues, all charges of custodians (including fees as
custodian and for keeping books, performing portfolio valuations and rendering
other services to the Fund), independent auditors and legal counsel, expenses
of preparing, printing and distributing all prospectuses, proxy material,
reports and notices to shareholders of the Fund, and all other costs incident
to the existence of the Portfolios.
2
<PAGE> 28
SECTION 3. Use of Services of Others
-------------------------
The Sub-Adviser may (at its expense except as set forth in Section 2 hereof)
employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Sub-Adviser with such
statistical or factual information, such advice regarding economic factors and
trends or such other information, advice or assistance as the Sub-Adviser may
deem necessary, appropriate or convenient for the discharge of the
Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the
Portfolios.
SECTION 4. Sub-Advisory Fees
-----------------
In consideration of the Sub-Adviser's services to the Fund hereunder, the
Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, equal
to 0.1875% of the average daily net assets of each of the Portfolios during the
quarter preceding each payment (equivalent to an annual fee of three-quarters
of one percent (0.75%) of the average daily net assets of each of the
Portfolios during the year) (the "Sub- Advisory Fee"). The Sub-Advisory Fee
shall be accrued for each calendar day and the sum of the daily Sub-Advisory
Fee accruals shall be paid quarterly to the Sub-Adviser on or before the fifth
business day of the next succeeding quarter. The daily fee accruals will be
computed by multiplying the fraction of one over the number of calendar days in
the quarter by 0.1875% and multiplying this product by the net assets of each
Portfolio as determined in accordance with the Prospectus as of the close of
business on the previous business day. The Sub-Advisory Fee shall be payable
solely by the Adviser, and the Fund shall not be liable to the Sub-Adviser for
any unpaid Sub-Advisory Fee.
SECTION 5. Limitation of Liability of Sub-Adviser
--------------------------------------
(a) The Sub-Adviser shall be liable for losses resulting from its own acts
or omissions caused by the Sub-Adviser's willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or its reckless
disregard of its duties under this Agreement, and nothing herein shall protect
the Sub-Adviser against any such liability to the shareholders of the Fund or
to the Adviser. The Sub-Adviser shall not be liable to the Fund or to any
shareholder of the Fund or to the Adviser for any claim or loss arising out of
any investment or other act or omission in the performance of the Sub-Adviser's
duties under this Agreement, or for any loss or damage resulting from the
imposition by any government of exchange control restrictions which might
affect the liquidity of the Fund's assets maintained with custodians or
securities depositories in foreign countries, or from any political acts of any
foreign governments to which such assets might be exposed, or for any tax of
any kind, including without limitation any statutory, governmental, state,
provincial, regional, local or municipal imposition, duty, contribution or levy
imposed by any government or governmental agency upon or with respect to such
assets or income earned with respect thereto (collectively "Taxation").
(b) In the event the Sub-Adviser is assessed any Taxation in respect of
the assets, income or activities of either Portfolio, the Adviser and the Fund
jointly will indemnify the Sub-Adviser for all such amounts wherever imposed,
together with all penalties, charges, costs and interest relating thereto and
all expenditures, including reasonable attorney's fees, incurred by the
Sub-Adviser in connection with the defense or settlement of any such
assessment. The Sub-Adviser shall undertake and control the defense or
settlement of any such assessment, including the selection of counsel or other
professional advisers, provided that the selection of such counsel and advisers
and the settlement of any assessment shall be subject to the approval of the
Adviser and the Fund, which approvals shall not be unreasonably withheld. The
Adviser and the Fund shall have the right to retain separate counsel and assume
the defense or settlement on behalf of the Adviser and the Fund, as the case
may be, of any such assessment if representation of the Adviser and the Fund by
counsel selected by the Sub-Adviser would be inappropriate due to actual or
potential conflicts of interest.
3
<PAGE> 29
SECTION 6. Services to Other Clients and the Fund
--------------------------------------
(a) Subject to compliance with the 1940 Act, nothing contained in this
Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated
persons from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Fund. The Adviser and the Fund understand
that the Sub-Adviser may act as investment manager or in other capacities on
behalf of other customers including entities registered under the 1940 Act.
While information, recommendations and actions which the Sub-Adviser supplies
to and does on behalf of the Portfolios shall in the Sub-Adviser's judgment be
appropriate under the circumstances in light of the investment objectives and
policies of the Fund, as set forth in the Prospectus delivered to the
Sub-Adviser from time to time, it is understood and agreed that they may be
different from the information, recommendations and actions the Sub-Adviser or
its affiliated persons supply to or do on behalf of other clients. The
Sub-Adviser and its affiliated persons shall supply information,
recommendations and any other services to the Portfolios and to any other
client in an impartial and fair manner in order to seek good results for all
clients involved. As used herein, the term "affiliated person" shall have the
meaning assigned to it in the 1940 Act.
(b) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as other customers,
the Sub-Adviser may, with the consent of the Adviser and to the extent
permitted by applicable law, aggregate the securities to be so sold or
purchased in order to obtain the best execution or lower brokerage commissions,
if any. The Sub-Adviser may also on occasion purchase or sell a particular
security for one or more customers in different amounts. On either occasion,
and to the extent permitted by applicable law and regulations, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its fiduciary obligations to the Fund
and to su ch other customers.
(c) The Sub-Adviser agrees to use the same skill and care in providing
services to the Fund as it uses in providing services to fiduciary accounts for
which it has investment responsibility. The Sub-Adviser will conform with all
applicable rules and regulations of the Securities and Exchange Commission.
SECTION 7. Reports to the Sub-Adviser
--------------------------
The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements,
reports and other information relating to the business and affairs of the Fund
as the Sub-Adviser may, at any time or from time to time, reasonably require in
order to discharge the Sub-Adviser's duties under this Agreement.
SECTION 8. Term of Agreement
-----------------
Provided that this Agreement shall have first been approved by the Board of
Directors of the Fund, including a majority of the members thereof who are not
interested persons (as defined in the 1940 Act) of either party, by a vote cast
in person at a meeting called for the purpose of voting such approval, then
this Agreement shall be effective on the date hereof. Unless earlier
terminated as hereinafter provided, this Agreement shall continue in effect
until approved by a majority vote of the voting securities of each of the
Portfolios, at a meeting to take place not more than one year after the
effective date of the Fund's registration statement relating to that Portfolio.
Thereafter, this Agreement shall continue in effect from year to year, subject
to approval annually by the Board of Directors of the Fund or by vote of a
majority of the voting securities of each of the Portfolios and also, in either
event, by the vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the Directors of the Fund who are not
parties to this Agreement or interested persons (as defined in the 1940 Act) of
any such person.
4
<PAGE> 30
SECTION 9. Termination of Agreement; Assignment
------------------------------------
(a) This Agreement may be terminated by either party hereto without the
payment of any penalty, upon 90 days' prior notice in writing to the other
party and to the Fund, or upon 60 days' written notice by the Fund to the two
parties; provided, that in the case of termination by the Fund such action
shall have been authorized by resolution of a majority of the Board of
Directors of the Fund or by vote of a majority of the voting securities of
either or both of the Portfolios. In addition, this Agreement shall terminate
upon the later of (1) the termination of the Adviser's agreement to provide
investment advisory services to the Fund or (2) notice to the Sub-Adviser that
the Adviser's agreement to provide investment advisory services to the Fund
has terminated.
(b) This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
(c) Termination of this Agreement for any reason shall not affect rights
of the parties that have accrued prior thereto.
SECTION 10. Notices
-------
(a) The Sub-Adviser agrees to promptly notify the Adviser of the
occurrence of any of the following events: (1) any change in any of the
Sub-Adviser's officers or portfolio managers; (2) the Sub-Adviser fails to be
registered as an investment adviser under the Advisers Act or under the laws of
any jurisdiction in which the Sub-Adviser is required to be registered as an
investment adviser in order to perform its obligations under this Agreement;
(3) the Sub-Adviser is the subject of any action, suit, proceeding, inquiry or
investigation at law or in equity, before or by any court, public board or
body, involving the affairs of either Portfolio; or (4) any change in ownership
or control of the Sub-Adviser.
(b) Any notice given hereunder shall be in writing and may be served by
being sent by telex, facsimile or other electronic transmission or sent by
registered mail or by courier to the address set forth below for the party for
which it is intended. A notice served by mail shall be deemed to have been
served seven days after mailing and in the case of telex, facsimile or other
electronic transmission twelve hours after dispatch thereof. Addresses for
notice may be changed by written notice to the other party.
If to the Adviser:
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
Fax No. (513) 559-6589
With a copy to:
Joseph P. Brom, President
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
5
<PAGE> 31
If to the Sub-Adviser:
Societe Generale Asset Management Corp.
1221 Avenue of the Americas, Eighth Floor
New York, New York 10020
Fax No. (212) 278-5911
With a copy to:
Jean-Marie Eveillard, President
Societe Generale Asset Management Corp.
1221 Avenue of the Americas, Eighth Floor
New York, New York 10020
SECTION 11. Governing Law
-------------
This Agreement shall be governed by and subject to the requirements of the laws
of the State of New York without reference to the choice of law provisions
thereof.
SECTION 12. Applicable Provisions of Law
----------------------------
The Agreement shall be subject to all applicable provisions of law, including,
without limitation, the applicable provisions of the 1940 Act, and to the
extent that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.
SECTION 13. Counterparts
------------
This Agreement may be entered into in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
OHIO NATIONAL INVESTMENTS, INC.
By:_________________________________________
Joseph P. Brom, President
SOCIETE GENERALE ASSET MANAGEMENT CORP.
By:_____________________________________
Jean-Marie Eveillard, President
Accepted and Agreed:
OHIO NATIONAL FUND, INC.
By:___________________________________
Donald J. Zimmerman, President
6
<PAGE> 32
EXHIBIT D
SUB-ADVISORY AGREEMENT
This Agreement is made as of the first day of May, 1996 by and between OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and T. ROWE
PRICE ASSOCIATES, INC., a Maryland corporation (the "Sub-Adviser").
WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that
is registered under the Investment Company Act of 1940, as amended, (together
with the regulations promulgated pursuant thereto, the "1940 Act"); and
WHEREAS, the Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended, (together with the regulations promulgated
pursuant thereto, the "Advisers Act"); and
WHEREAS, the Adviser has been appointed as investment adviser to the Fund in
accordance with the 1940 Act and the Advisers Act; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act and engages in the business of providing investment advisory
services; and
WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser,
subject to the requirements of the 1940 Act and the Advisers Act, as a
sub-adviser with respect to that portion of the assets of the Fund designated
as the CAPITAL APPRECIATION PORTFOLIO of the Fund on the terms and conditions
set forth below;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
SECTION 1. Investment Advisory Services
----------------------------
(a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby
accepts engagement by the Adviser, to supervise and manage on a
fully-discretionary basis the cash, securities and other assets of the Capital
Appreciation Portfolio that the Adviser shall from time to time place under the
supervision of the Sub-Adviser (such cash, securities and other assets
initially and as same shall thereafter be increased or decreased by the
investment performance thereof and by additions thereto and withdrawals
therefrom by the Adviser shall hereinafter be referred to as the "Portfolio").
(b) All activities by the Sub-Adviser on behalf of the Adviser and the
Portfolio shall be in accordance with the investment objectives, policies and
restrictions set forth in the 1940 Act and in the Fund's prospectus and
statement of additional information, as amended from time to time (together,
the "Prospectus") and as interpreted from time to time by the Board of
Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on
behalf of the Adviser and the Portfolio shall also be subject to the due
diligence oversight and direction of the Adviser.
(c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the
sole and exclusive responsibility to select members of securities exchanges,
brokers, dealers and futures commission merchants for the execution of
transactions of the Portfolio and, when applicable, shall negotiate commissions
in connection therewith. All such selections shall be made in accordance with
the Fund's policies and restrictions regarding brokerage allocation set forth
in the Prospectus.
<PAGE> 33
(d) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Portfolio, the Sub-Adviser shall:
(1) obtain and evaluate pertinent economic, statistical, financial and other
information affecting the economy generally and individual companies or
industries the securities of which are included in the Portfolio or are under
consideration for inclusion therein; (2) formulate and implement a continuous
investment program for the Portfolio consistent with the investment objectives
and related investment policies and restrictions for such Portfolio as set
forth in the Prospectus; and (3) take such steps as are necessary to implement
the aforementioned investment program by placing orders for the purchase and
sale of securities.
(e) In connection with the purchase and sale of securities of the Portfolio,
the Sub-Adviser shall arrange for the transmission to the Adviser and the
Portfolio's custodian on a daily basis such confirmation, trade tickets and
other documents as may be necessary to enable them to perform their
administrative responsibilities with respect to the Portfolio. With respect to
Portfolio securities to be purchased or sold through the Depository Trust
Company, the Sub-Adviser shall arrange for the automatic transmission of the
I.D. confirmation of the trade to the Portfolio's custodian.
(f) In connection with the placement of orders for the execution of the
Portfolio's securities transactions, the Sub-Adviser shall create and maintain
all necessary records of the Portfolio as are required of an investment adviser
of a registered investment company including, but not limited to, records
required by the 1940 Act and the Advisers Act. All such records pertaining to
the Portfolio shall be the property of the Fund and shall be available for
inspection and use by the Securities and Exchange Commission, any other
regulatory authority having jurisdiction, the Fund, the Adviser or any person
retained by the Fund or the Adviser. Where applicable, such records shall be
maintained by the Sub-Adviser for the period and in the place required by Rule
31a-2 under the 1940 Act.
(g) The Sub-Adviser shall render such reports to the Adviser and/or to the
Board of Directors of the Fund concerning the investment activity and
composition of the Portfolio in such form and at such intervals as the Adviser
or the Board may from time to time reasonably require.
(h) In acting under this Agreement, the Sub-Adviser shall be an independent
contractor and not an agent of the Adviser or the Fund.
SECTION 2. Expenses
--------
(a) The Sub-Adviser shall assume and pay all of its own costs and expenses,
including those for furnishing such office space, office equipment, office
personnel and office services as the Sub-Adviser may require in the performance
of its duties under this Agreement.
(b) The Fund shall bear all expenses of the Portfolio's organization and
registration, and the Fund and Adviser shall bear all of their respective
expenses of their operations and businesses not expressly assumed or agreed to
be paid by the Sub-Adviser under this Agreement. In particular, but without
limiting the generality of the foregoing, the Fund shall pay any fees due to
the Adviser, all interest, taxes, governmental charges or duties, fees,
brokerage and commissions of every kind arising hereunder or in connection
herewith, expenses of transactions with shareholders of the Portfolio, expenses
of offering interests in the Portfolio for sale, insurance, association
membership dues, all charges of custodians (including fees as custodian and for
keeping books, performing portfolio valuations and rendering other services to
the Fund), independent auditors and legal counsel, expenses of preparing,
printing and distributing all prospectuses, proxy material, reports and notices
to shareholders of the Fund, and all other costs incident to the Portfolio's
existence.
2
<PAGE> 34
SECTION 3. Use of Services of Others
-------------------------
The Sub-Adviser may (at its expense except as set forth in Section 2 hereof)
employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Sub-Adviser with such
statistical or factual information, such advice regarding economic factors and
trends or such other information, advice or assistance as the Sub-Adviser may
deem necessary, appropriate or convenient for the discharge of the
Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the
Portfolio.
SECTION 4. Sub-Advisory Fees
-----------------
In consideration of the Sub-Adviser's services to the Fund hereunder, the
Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, at the
annual rate of 0.7% of the first five million dollars ($5,000,000) of the
average daily net assets of the Portfolio during the quarter preceding each
payment and 0.5% of the average daily net assets of the Portfolio in excess of
five million dollars ($5,000,000) (the "Sub-Advisory Fee"). The Sub-Advisory
Fee shall be accrued for each calendar day and the sum of the daily
Sub-Advisory Fee accruals shall be paid quarterly to the Sub-Adviser on or
before the fifth business day of the next succeeding quarter. The daily fee
accruals will be computed on the basis of the valuations of the total net
assets of the Portfolio as of the close of business each day. The Sub-Advisory
Fee shall be payable solely by the Adviser, and the Fund shall not be liable to
the Sub-Adviser for any unpaid Sub-Advisory Fee.
SECTION 5. Limitation of Liability of Sub-Adviser
--------------------------------------
(a) The Sub-Adviser shall be liable for losses resulting from its own acts or
omissions caused by the Sub-Adviser's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or its reckless disregard
of its duties under this Agreement, and nothing herein shall protect the
Sub-Adviser against any such liability to the shareholders of the Fund or to
the Adviser. The Sub-Adviser shall not be liable to the Fund or to any
shareholder of the Fund or to the Adviser for any claim or loss arising out of
any investment or other act or omission in the performance of the Sub-Adviser's
duties under this Agreement, or for any loss or damage resulting from the
imposition by any government of exchange control restrictions which might
affect the liquidity of the Fund's assets maintained with custodians or
securities depositories in foreign countries, or from any political acts of any
foreign governments to which such assets might be exposed, or for any tax of
any kind, including without limitation any statutory, governmental, state,
provincial, regional, local or municipal imposition, duty, contribution or levy
imposed by any government or governmental agency upon or with respect to such
assets or income earned with respect thereto (collectively "Taxation").
(b) In the event the Sub-Adviser is assessed any taxation in respect of the
assets, income or activities of the Portfolio, the Adviser and the Fund jointly
will indemnify the Sub-Adviser for all such amounts wherever imposed, together
with all penalties, charges, costs and interest relating thereto and all
expenditures, including reasonable attorney's fees, incurred by the Sub-Adviser
in connection with the defense or settlement of any such assessment. The
Sub-Adviser shall undertake and control the defense or settlement of any such
assessment, including the selection of counsel or other professional advisers,
provided that the selection of such counsel and advisers and the settlement of
any assessment shall be subject to the approval of the Adviser and the Fund,
which approvals shall not be unreasonably withheld. The Adviser and the Fund
shall have the right to retain separate counsel and assume the defense or
settlement on behalf of the Adviser and the Fund, as the case may be, of any
such assessment if representation of the Adviser and the Fund by counsel
selected by the Sub-Adviser would be inappropriate due to actual or potential
conflicts of interest.
3
<PAGE> 35
SECTION 6. Services to Other Clients and the Fund
--------------------------------------
(a) Subject to compliance with the 1940 Act, nothing contained in this
Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated
persons from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Fund. The Adviser and the Fund understand
that the Sub-Adviser may act as investment manager or in other capacities on
behalf of other customers including entities registered under the 1940 Act.
While information, recommendations and actions which the Sub-Adviser supplies
to and does on behalf of the Portfolio shall in the Sub-Adviser's judgment be
appropriate under the circumstances in light of the investment objectives and
policies of the Fund, as set forth in the Prospectus delivered to the
Sub-Adviser from time to time, it is understood and agreed that they may be
different from the information, recommendations and actions the Sub-Adviser or
its affiliated persons supply to or do on behalf of other clients. The
Sub-Adviser and its affiliated persons shall supply information,
recommendations and any other services to the Portfolio and to any other client
in an impartial and fair manner in order to seek good results for all clients
involved. As used herein, the term "affiliated person" shall have the meaning
assigned to it in the 1940 Act.
(b) On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Sub-Adviser may, to the extent permitted by applicable law, aggregate the
securities to be so sold or purchased in order to obtain the best execution or
lower brokerage commissions, if any. The Sub-Adviser may also on occasion
purchase or sell a particular security for one or more customers in different
amounts. On either occasion, and to the extent permitted by applicable law and
regulations, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers.
(c) The Sub-Adviser agrees to use the same skill and care in providing
services to the Fund as it uses in providing services to other similar accounts
for which it has investment responsibility. The Sub-Adviser will conform with
all applicable rules and regulations of the Securities and Exchange Commission.
SECTION 7. Reports to the Sub-Adviser
--------------------------
The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements,
reports and other information relating to the business and affairs of the Fund
as the Sub-Adviser may, at any time or from time to time, reasonably require in
order to discharge the Sub-Adviser's duties under this Agreement.
SECTION 8. Term of Agreement
-----------------
Provided that this Agreement shall have first been approved by the Board of
Directors of the Fund, including a majority of the members thereof who are not
interested persons (as defined in the 1940 Act) of either party, by a vote cast
in person at a meeting called for the purpose of voting such approval, then
this Agreement shall be effective on the date hereof. Unless earlier
terminated as hereinafter provided, this Agreement shall continue in effect
until approved by a majority vote of the voting securities of the Portfolio, at
a meeting to take place not more than one year after the effective date of the
Fund's registration statement relating to the Portfolio. Thereafter, this
Agreement shall continue in effect from year to year, subject to approval
annually by the Board of Directors of the Fund or by vote of a majority of the
voting securities of the Portfolio and also, in either event, by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Directors of the Fund who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such person.
4
<PAGE> 36
SECTION 9. Termination of Agreement; Assignment
------------------------------------
(a) This Agreement may be terminated by either party hereto without the
payment of any penalty, upon 90 days' prior notice in writing to the other
party and to the Fund, or upon 60 days' written notice by the Fund to the two
parties; provided, that in the case of termination by the Fund such action
shall have been authorized by resolution of a majority of the Board of
Directors of the Fund or by vote of a majority of the voting securities of the
Portfolio. In addition, this Agreement shall terminate upon the later of (1)
the termination of the Adviser's agreement to provide investment advisory
services to the Fund or (2) notice to the Sub-Adviser that the Adviser's
agreement to provide investment advisory services to the Fund has terminated.
(b) This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
(c) Termination of this Agreement for any reason shall not affect rights of
the parties that have accrued prior thereto.
SECTION 10. Notices
-------
(a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of
any of the following events: (1) any change in the Portfolio's portfolio
manager; (2) the Sub-Adviser fails to be registered as an investment adviser
under the Advisers Act or under the laws of any jurisdiction in which the
Sub-Adviser is required to be registered as an investment adviser in order to
perform its obligations under this Agreement; (3) the Sub-Adviser is the
subject of any action, suit, proceeding, inquiry or investigation at law or in
equity, before or by any court, public board or body, involving the affairs of
the Portfolio; or (4) any change in control of the Sub-Adviser.
(b) Any notice given hereunder shall be in writing and may be served by being
sent by telex, facsimile or other electronic transmission or sent by registered
mail or by courier to the address set forth below for the party for which it is
intended. A notice served by mail shall be deemed to have been served seven
days after mailing and in the case of telex, facsimile or other electronic
transmission twelve hours after dispatch thereof. Addresses for notice may be
changed by written notice to the other party.
If to the Adviser:
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
Fax No. (513) 559-6589
With a copy to:
Joseph P. Brom, President
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
5
<PAGE> 37
If to the Sub-Adviser:
Hannes van Wagenberg
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
Fax No. (410) 547-0180
With a copy to:
Henry H. Hopkins, Esq.
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, Maryland 21202
SECTION 11. Governing Law
-------------
This Agreement shall be governed by and subject to the requirements of the laws
of the State of Ohio without reference to the choice of law provisions thereof.
SECTION 12. Applicable Provisions of Law
----------------------------
The Agreement shall be subject to all applicable provisions of law, including,
without limitation, the applicable provisions of the 1940 Act, and to the
extent that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.
SECTION 13. Counterparts
------------
This Agreement may be entered into in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
OHIO NATIONAL INVESTMENTS, INC.
By:_____________________________________
Joseph P. Brom
President
T. ROWE PRICE ASSOCIATES, INC.
By:__________________________
George J. Collins
President, Chief Executive Officer and
Managing Director
Accepted and Agreed:
OHIO NATIONAL FUND, INC.
By: _______________________________________________
Donald J. Zimmerman, President
6
<PAGE> 38
EXHIBIT E
SUB-ADVISORY AGREEMENT
This Agreement is made as of the first day of May, 1996 by and between OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and FOUNDERS
ASSET MANAGEMENT, INC., a Delaware corporation (the "Sub-Adviser").
WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that
is registered under the Investment Company Act of 1940, as amended, (together
with the regulations promulgated pursuant thereto, the "1940 Act"); and
WHEREAS, the Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended, (together with the regulations promulgated
pursuant thereto, the "Advisers Act"); and
WHEREAS, the Adviser has been appointed as investment adviser to the Fund in
accordance with the 1940 Act and the Advisers Act; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act and engages in the business of providing investment advisory
services; and
WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser,
subject to the requirements of the 1940 Act and the Advisers Act, as a
sub-adviser with respect to that portion of the assets of the Fund designated
as the SMALL CAP PORTFOLIO of the Fund on the terms and conditions set forth
below;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
SECTION 1. Investment Advisory Services
----------------------------
(a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby
accepts engagement by the Adviser, to supervise and manage on a
fully-discretionary basis the cash, securities and other assets of the Small
Cap Portfolio that the Adviser shall from time to time place under the
supervision of the Sub-Adviser (such cash, securities and other assets
initially and as same shall thereafter be increased or decreased by the
investment performance thereof and by additions thereto and withdrawals
therefrom by the Adviser shall hereinafter be referred to as the "Portfolio").
(b) All activities by the Sub-Adviser on behalf of the Adviser and the
Portfolio shall be in accordance with the investment objectives, policies and
restrictions set forth in the 1940 Act and in the Fund's prospectus and
statement of additional information, as amended from time to time (together,
the "Prospectus") and as interpreted from time to time by the Board of
Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on
behalf of the Adviser and the Portfolio shall also be subject to the due
diligence oversight and direction of the Adviser.
(c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the
sole and exclusive responsibility to select members of securities exchanges,
brokers, dealers and futures commission merchants for the execution of
transactions of the Portfolio and, when applicable, shall negotiate commissions
in connection therewith. All such selections shall be made in accordance with
the Fund's policies and restrictions regarding brokerage allocation set forth
in the Prospectus.
<PAGE> 39
(d) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Portfolio, the Sub-Adviser shall: (1) obtain
and evaluate pertinent economic, statistical, financial and other information
affecting the economy generally and individual companies or industries the
securities of which are included in the Portfolio or are under consideration
for inclusion therein; (2) formulate and implement a continuous investment
program for the Portfolio consistent with the investment objectives and related
investment policies and restrictions for such Portfolio as set forth in the
Prospectus; and (3) take such steps as are necessary to implement the
aforementioned investment program by placing orders for the purchase and sale
of securities.
(e) In connection with the purchase and sale of securities of the Portfolio,
the Sub-Adviser shall arrange for the transmission to the Adviser and the
Portfolio's custodian on a daily basis such confirmation, trade tickets and
other documents as may be necessary to enable them to perform their
administrative responsibilities with respect to the Portfolio. With respect to
Portfolio securities to be purchased or sold through the Depository Trust
Company, the Sub-Adviser shall arrange for the automatic transmission of the
I.D. confirmation of the trade to the Portfolio's custodian.
(f) In connection with the placement of orders for the execution of the
Portfolio's securities transactions, the Sub-Adviser shall create and maintain
all necessary records of the Portfolio as are required of an investment adviser
of a registered investment company including, but not limited to, records
required by the 1940 Act and the Advisers Act. All such records pertaining to
the Portfolio shall be the property of the Fund and shall be available for
inspection and use by the Securities and Exchange Commission, any other
regulatory authority having jurisdiction, the Fund, the Adviser or any person
retained by the Fund or the Adviser. Where applicable, such records shall be
maintained by the Sub-Adviser for the period and in the place required by Rule
31a-2 under the 1940 Act.
(g) The Sub-Adviser shall render such reports to the Adviser and/or to the
Board of Directors of the Fund concerning the investment activity and
composition of the Portfolio in such form and at such intervals as the Adviser
or the Board may from time to time reasonably require.
(h) In acting under this Agreement, the Sub-Adviser shall be an independent
contractor and not an agent of the Adviser or the Fund.
SECTION 2. Expenses
--------
(a) The Sub-Adviser shall assume and pay all of its own costs and expenses,
including those for furnishing such office space, office equipment, office
personnel and office services as the Sub-Adviser may require in the performance
of its duties under this Agreement.
(b) The Fund shall bear all expenses of the Portfolio's organization and
registration, and the Fund and Adviser shall bear all of their respective
expenses of their operations and businesses not expressly assumed or agreed to
be paid by the Sub-Adviser under this Agreement. In particular, but without
limiting the generality of the foregoing, the Fund shall pay any fees due to
the Adviser, all interest, taxes, governmental charges or duties, fees,
brokerage and commissions of every kind arising hereunder or in connection
herewith, expenses of transactions with shareholders of the Portfolio, expenses
of offering interests in the Portfolio for sale, insurance, association
membership dues, all charges of custodians (including fees as custodian and for
keeping books, performing portfolio valuations and rendering other services to
the Fund), independent auditors and legal counsel, expenses of preparing,
printing and distributing all prospectuses, proxy material, reports and notices
to shareholders of the Fund, and all other costs incident to the Portfolio's
existence.
2
<PAGE> 40
SECTION 3. Use of Services of Others
-------------------------
The Sub-Adviser may (at its expense except as set forth in Section 2 hereof)
employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Sub-Adviser with such
statistical or factual information, such advice regarding economic factors and
trends or such other information, advice or assistance as the Sub-Adviser may
deem necessary, appropriate or convenient for the discharge of the
Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the
Portfolio.
SECTION 4. Sub-Advisory Fees
-----------------
In consideration of the Sub-Adviser's services to the Fund hereunder, the
Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, at the
annual rate of 0.65% of the first seventy-five million dollars ($75,000,000)
of the average daily net assets of the Portfolio during the quarter preceding
each payment, 0.6% of the next seventy-five million dollars ($75,000,000), and
0.55% of the average daily net assets of the Portfolio in excess of one hundred
and fifty million dollars ($150,000,000) (the "Sub-Advisory Fee"). The
Sub-Advisory Fee shall be accrued for each calendar day and the sum of the
daily Sub-Advisory Fee accruals shall be paid quarterly to the Sub-Adviser on
or before the fifth business day of the next succeeding quarter. The daily fee
accruals will be computed on the basis of the valuations of the total net
assets of the Portfolio as of the close of business each day. The Sub-Advisory
Fee shall be payable solely by the Adviser, and the Fund shall not be liable to
the Sub-Adviser for any unpaid Sub-Advisory Fee.
SECTION 5. Limitation of Liability of Sub-Adviser
--------------------------------------
(a) The Sub-Adviser shall be liable for losses resulting from its own acts or
omissions caused by the Sub-Adviser's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or its reckless disregard
of its duties under this Agreement, and nothing herein shall protect the
Sub-Adviser against any such liability to the shareholders of the Fund or to
the Adviser. The Sub-Adviser shall not be liable to the Fund or to any
shareholder of the Fund or to the Adviser for any claim or loss arising out of
any investment or other act or omission in the performance of the Sub-Adviser's
duties under this Agreement, or for any loss or damage resulting from the
imposition by any government of exchange control restrictions which might
affect the liquidity of the Fund's assets maintained with custodians or
securities depositories in foreign countries, or from any political acts of any
foreign governments to which such assets might be exposed, or for any tax of
any kind, including without limitation any statutory, governmental, state,
provincial, regional, local or municipal imposition, duty, contribution or levy
imposed by any government or governmental agency upon or with respect to such
assets or income earned with respect thereto (collectively "Taxation").
(b) In the event the Sub-Adviser is assessed any taxation in respect of the
assets, income or activities of the Portfolio, the Adviser and the Fund jointly
will indemnify the Sub-Adviser for all such amounts wherever imposed, together
with all penalties, charges, costs and interest relating thereto and all
expenditures, including reasonable attorney's fees, incurred by the Sub-Adviser
in connection with the defense or settlement of any such assessment. The
Sub-Adviser shall undertake and control the defense or settlement of any such
assessment, including the selection of counsel or other professional advisers,
provided that the selection of such counsel and advisers and the settlement of
any assessment shall be subject to the approval of the Adviser and the Fund,
which approvals shall not be unreasonably withheld. The Adviser and the Fund
shall have the right to retain separate counsel and assume the defense or
settlement on behalf of the Adviser and the Fund, as the case may be, of any
such assessment if representation of the Adviser and the Fund by counsel
selected by the Sub-Adviser would be inappropriate due to actual or potential
conflicts of interest.
3
<PAGE> 41
SECTION 6. Services to Other Clients and the Fund
--------------------------------------
(a) Subject to compliance with the 1940 Act, nothing contained in this
Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated
persons from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Fund. The Adviser and the Fund understand
that the Sub-Adviser may act as investment manager or in other capacities on
behalf of other customers including entities registered under the 1940 Act.
While information, recommendations and actions which the Sub-Adviser supplies
to and does on behalf of the Portfolio shall in the Sub-Adviser's judgment be
appropriate under the circumstances in light of the investment objectives and
policies of the Fund, as set forth in the Prospectus delivered to the
Sub-Adviser from time to time, it is understood and agreed that they may be
different from the information, recommendations and actions the Sub-Adviser or
its affiliated persons supply to or do on behalf of other clients. The
Sub-Adviser and its affiliated persons shall supply information,
recommendations and any other services to the Portfolio and to any other client
in an impartial and fair manner in order to seek good results for all clients
involved. As used herein, the term "affiliated person" shall have the meaning
assigned to it in the 1940 Act.
(b) On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Sub-Adviser may, to the extent permitted by applicable law, aggregate the
securities to be so sold or purchased in order to obtain the best execution or
lower brokerage commissions, if any. The Sub-Adviser may also on occasion
purchase or sell a particular security for one or more customers in different
amounts. On either occasion, and to the extent permitted by applicable law and
regulations, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser in the
manner it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers.
(c) The Sub-Adviser agrees to use the same skill and care in providing
services to the Fund as it uses in providing services to other similar accounts
for which it has investment responsibility. The Sub-Adviser will conform with
all applicable rules and regulations of the Securities and Exchange Commission.
SECTION 7. Reports to the Sub-Adviser
--------------------------
The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements,
reports and other information relating to the business and affairs of the Fund
as the Sub-Adviser may, at any time or from time to time, reasonably require in
order to discharge the Sub-Adviser's duties under this Agreement.
SECTION 8. Term of Agreement
-----------------
Provided that this Agreement shall have first been approved by the Board of
Directors of the Fund, including a majority of the members thereof who are not
interested persons (as defined in the 1940 Act) of either party, by a vote cast
in person at a meeting called for the purpose of voting such approval, then
this Agreement shall be effective on the date hereof. Unless earlier
terminated as hereinafter provided, this Agreement shall continue in effect
until approved by a majority vote of the voting securities of the Portfolio, at
a meeting to take place not more than one year after the effective date of the
Fund's registration statement relating to the Portfolio. Thereafter, this
Agreement shall continue in effect from year to year, subject to approval
annually by the Board of Directors of the Fund or by vote of a majority of the
voting securities of the Portfolio and also, in either event, by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Directors of the Fund who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such person.
4
<PAGE> 42
SECTION 9. Termination of Agreement; Assignment
------------------------------------
(a) This Agreement may be terminated by either party hereto without the
payment of any penalty, upon 90 days' prior notice in writing to the other
party and to the Fund, or upon 60 days' written notice by the Fund to the two
parties; provided, that in the case of termination by the Fund such action
shall have been authorized by resolution of a majority of the Board of
Directors of the Fund or by vote of a majority of the voting securities of the
Portfolio. In addition, this Agreement shall terminate upon the later of (1)
the termination of the Adviser's agreement to provide investment advisory
services to the Fund or (2) notice to the Sub-Adviser that the Adviser's
agreement to provide investment advisory services to the Fund has terminated.
(b) This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
(c) Termination of this Agreement for any reason shall not affect rights of
the parties that have accrued prior thereto.
SECTION 10. Notices
-------
(a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of
any of the following events: (1) any change in any of the Sub- Adviser's
officers or any portfolio manager who is providing advisory services pursuant
to this agreement; (2) the Sub-Adviser fails to be registered as an investment
adviser under the Advisers Act or under the laws of any jurisdiction in which
the Sub-Adviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement; (3) the Sub-Adviser is the
subject of any action, suit, proceeding, inquiry or investigation at law or in
equity, before or by any court, public board or body, involving the affairs of
the Portfolio; or (4) any change in control of the Sub-Adviser.
(b) Any notice given hereunder shall be in writing and may be served by being
sent by telex, facsimile or other electronic transmission or sent by registered
mail or by courier to the address set forth below for the party for which it is
intended. A notice served by mail shall be deemed to have been served seven
days after mailing and in the case of telex, facsimile or other electronic
transmission twelve hours after dispatch thereof. Addresses for notice may be
changed by written notice to the other party.
If to the Adviser:
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
Fax No. (513) 559-6589
With a copy to:
Joseph P. Brom, President
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
5
<PAGE> 43
If to the Sub-Adviser:
Gregory P. Contillo, Vice President
Founders Asset Management, Inc.
2930 East Third Avenue
Denver, Colorado 80206
Fax No. (303) 329-3848
With a copy to:
David L. Ray, Chief Financial Officer
Founders Asset Management, Inc.
2930 East Third Avenue
Denver, Colorado 80206
SECTION 11. Governing Law
-------------
This Agreement shall be governed by and subject to the requirements of the laws
of the State of Ohio without reference to the choice of law provisions thereof.
SECTION 12. Applicable Provisions of Law
----------------------------
The Agreement shall be subject to all applicable provisions of law, including,
without limitation, the applicable provisions of the 1940 Act, and to the
extent that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.
SECTION 13. Counterparts
------------
This Agreement may be entered into in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
OHIO NATIONAL INVESTMENTS, INC.
By:___________________________________
Joseph P. Brom President
FOUNDERS ASSET MANAGEMENT, INC.
By:___________________________________
David L. Ray
Chief Financial Officer
Accepted and Agreed:
OHIO NATIONAL FUND, INC.
By: _______________________________________________
Donald J. Zimmerman, President
6
<PAGE> 44
EXHIBIT F
SUB-ADVISORY AGREEMENT
This Agreement is made as of the first day of May, 1996 by and between OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and STRONG
CAPITAL MANAGEMENT, INC., a Wisconsin corporation (the "Sub-Adviser").
WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that
is registered under the Investment Company Act of 1940, as amended, (together
with the regulations promulgated pursuant thereto, the "1940 Act"); and
WHEREAS, the Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended, (together with the regulations promulgated
pursuant thereto, the "Advisers Act"); and
WHEREAS, the Adviser has been appointed as investment adviser to the Fund in
accordance with the 1940 Act and the Advisers Act; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act and engages in the business of providing investment advisory
services; and
WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser,
subject to the requirements of the 1940 Act and the Advisers Act, as a
sub-adviser with respect to that portion of the assets of the Fund designated
as the AGGRESSIVE GROWTH PORTFOLIO of the Fund on the terms and conditions set
forth below;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
SECTION 1. Investment Advisory Services
----------------------------
(a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby
accepts engagement by the Adviser, to supervise and manage on a
fully-discretionary basis the cash, securities and other assets of the
Aggressive Growth Portfolio that the Adviser shall from time to time place
under the supervision of the Sub-Adviser (such cash, securities and other
assets initially and as same shall thereafter be increased or decreased by the
investment performance thereof and by additions thereto and withdrawals
therefrom by the Adviser shall hereinafter be referred to as the "Portfolio").
(b) All activities by the Sub-Adviser on behalf of the Adviser and the
Portfolio shall be in accordance with the investment objectives, policies and
restrictions set forth in the 1940 Act and in the Fund's prospectus and
statement of additional information, as amended from time to time (together,
the "Prospectus") and as interpreted from time to time by the Board of
Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on
behalf of the Adviser and the Portfolio shall also be subject to the due
diligence oversight and direction of the Adviser.
(c) Subject to the supervision of the Adviser, the Sub-Adviser shall have
the sole and exclusive responsibility to select members of securities
exchanges, brokers, dealers and futures commission merchants for the execution
of transactions of the Portfolio and, when applicable, shall negotiate
commissions in connection therewith. The Sub-Adviser is authorized, subject to
the supervision of the Adviser and the Board of Directors of the Fund, to place
orders for the purchase and sale of the Portfolio's investments with or through
such persons, brokers or dealers, including the Sub-Adviser or affiliates
thereof, and to negotiate commissions to be paid on such transactions in
accordance with
<PAGE> 45
the Fund's policy with respect to brokerage as set forth in the Statement of
Additional Information. The Sub-Adviser may, on behalf of the Portfolio, pay
brokerage commissions to a broker which provides brokerage and research
services to the Sub-Adviser in excess of the amount another broker would have
charged for effecting the transaction, provided (i) the Sub-Adviser determines
in good faith that the amount is reasonable in relation to the value of the
brokerage and research services provided by the executing broker in terms of
the particular transaction or in terms of the Sub-Adviser's overall
responsibilities with respect to the Portfolio and the accounts as to which the
Sub- Adviser exercises investment discretion, (ii) such payment is made in
compliance with Section 28(e) of the Securities Exchange Act of 1934, as
amended, and any other applicable laws and regulations, and (iii) in the
opinion of the Sub-Adviser, the total commissions paid by the Portfoli o will
be reasonable in relation to the benefits to the Portfolio over the long term.
It is recognized that the services provided by such brokers may be useful to
the Sub-Adviser in connection with the Sub-Adviser's services to other clients.
(d) In carrying out its obligations to manage the investments and
reinvestments of the assets of the Portfolio, the Sub-Adviser shall: (1)
obtain and evaluate pertinent economic, statistical, financial and other
information affecting the economy generally and individual companies or
industries the securities of which are included in the Portfolio or are under
consideration for inclusion therein; (2) formulate and implement a continuous
investment program for the Portfolio consistent with the investment objectives
and related investment policies and restrictions for such Portfolio as set
forth in the Prospectus; and (3) take such steps as are necessary to implement
the aforementioned investment program by placing orders for the purchase and
sale of securities.
(e) In connection with the purchase and sale of securities of the
Portfolio, the Sub-Adviser shall arrange for the transmission to the Adviser
and the Portfolio's custodian on a daily basis such confirmation, trade tickets
and other documents as may be necessary to enable them to perform their
administrative responsibilities with respect to the Portfolio. With respect to
Portfolio securities to be purchased or sold through the Depository Trust
Company, the Sub-Adviser shall arrange for the automatic transmission of the
I.D. confirmation of the trade to the Portfolio's custodian.
(f) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the Investment Company Act and the rules and regulations
promulgated thereunder with respect to transactions made by it on behalf of the
Portfolio including, without limitation, the books and records required by
Subsections (b)(1), (5), (6), (7), (9), (10) and (11) and Subsection (f) of
Rule 31a-1 under the 1940 Act and shall timely furnish to the Adviser all
information relating to the Sub-Adviser's services hereunder needed by the
Adviser to keep such other books and records of the Portfolio required by Rule
31a-1 under the 1940 Act. The Sub-Adviser will also preserve all such books
and records for the periods prescribed in Rule 31a-2 under the 1940 Act, and
agrees that such books and records shall remain the sole property of the Fund
and shall be immediately surrendered to the Fund upon request. The Sub-Adviser
further agrees that all books and records maintained hereunder shall be made
available to the Fund or the Adviser at any time upon request, including
telecopy without unreasonable delay, during any business day.
(g) The Sub-Adviser shall render such reports to the Adviser and/or to the
Board of Directors of the Fund concerning the investment activity and
composition of the Portfolio in such form and at such intervals as the Adviser
or the Board may from time to time reasonably require.
(h) In acting under this Agreement, the Sub-Adviser shall be an
independent contractor and not an agent of the Adviser or the Fund and shall
have no authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed an agent of the Fund or the Adviser.
2
<PAGE> 46
SECTION 2. Expenses
--------
(a) The Sub-Adviser shall assume and pay all of its own costs and
expenses, including those for furnishing such office space, office equipment,
office personnel and office services as the Sub-Adviser may require in the
performance of its duties under this Agreement.
(b) The Fund shall bear all expenses of the Portfolio's organization and
registration, and the Fund and Adviser shall bear all of their respective
expenses of their operations and businesses not expressly assumed or agreed to
be paid by the Sub-Adviser under this Agreement. In particular, but without
limiting the generality of the foregoing, the Fund shall pay any fees due to
the Adviser, all interest, taxes, governmental charges or duties, fees,
brokerage and commissions of every kind arising hereunder or in connection
herewith, expenses of transactions with shareholders of the Portfolio, expenses
of offering interests in the Portfolio for sale, insurance, association
membership dues, all charges of custodians (including fees as custodian and for
keeping books, performing portfolio valuations and rendering other services to
the Fund), independent auditors and legal counsel, expenses of preparing,
printing and distributing all prospectuses, proxy material, reports and notices
to shareholders of the Fund, and all other costs incident to the Portfolio's
existence.
SECTION 3. Use of Services of Others
-------------------------
The Sub-Adviser may (at its expense except as set forth in Sections 1(c) and 2
hereof) employ, retain or otherwise avail itself of the services or facilities
of other persons or organizations for the purpose of providing the Sub-Adviser
with such statistical or factual information, such advice regarding economic
factors and trends or such other information, advice or assistance as the
Sub-Adviser may deem necessary, appropriate or convenient for the discharge of
the Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and
the Portfolio.
SECTION 4. Sub-Advisory Fees
-----------------
In consideration of the Sub-Adviser's services to the Fund hereunder, the
Sub-Adviser shall be entitled to a sub-advisory fee, payable monthly, at the
annual rate of 0.7% of the first fifty million dollars ($50,000,000) of the
average daily net assets of the Portfolio during the month preceding each
payment, and 0.5% of the average daily net assets of the Portfolio in excess of
fifty million dollars ($50,000,000) (the "Sub- Advisory Fee") during such
period. The Sub-Advisory Fee shall be accrued for each calendar day and the
sum of the daily Sub-Advisory Fee accruals shall be paid monthly to the
Sub-Adviser on or before the fifth business day of the next succeeding month.
The daily fee accruals will be computed on the basis of the valuations of the
total net assets of the Portfolio as of the close of business each day. The
Sub- Advisory Fee shall be payable solely by the Adviser, and the Fund shall
not be liable to the Sub-Adviser for any unpaid Sub-Advisory Fee.
SECTION 5. Limitation of Liability of Sub-Adviser
--------------------------------------
(a) In the absence of willful misfeasance, bad faith or gross negligence
in the performance of its duties hereunder or its reckless disregard of its
duties under this Agreement, the Sub-Adviser shall not be subject to any
liability to the Fund, the shareholders of the Fund or to the Adviser. The
Sub-Adviser shall not be liable to the Fund or to any shareholder of the Fund
or to the Adviser for any claim or loss arising out of any investment or other
act or omission in the performance of the Sub-Adviser's duties under this
Agreement, or for any loss or damage resulting from the imposition by any
government of exchange control restrictions which might affect the liquidity of
the Fund's assets maintained with custodians or securities depositories in
foreign countries, or from any political acts of any foreign governments to
which such assets might be exposed, or for any tax of any kind, including
without limitation any statutory, governmental, state, provincial, regional,
local or municipal imposition, duty, contribution or levy imposed by any
government or governmental agency upon or with respect to such assets or income
earned with respect thereto (collectively "Taxation").
3
<PAGE> 47
(b) In the event the Sub-Adviser is assessed any taxation in respect of
the assets, income or activities of the Portfolio, the Adviser and the Fund
jointly will indemnify the Sub-Adviser for all such amounts wherever imposed,
together with all penalties, charges, costs and interest relating thereto and
all expenditures, including reasonable attorney's fees, incurred by the
Sub-Adviser in connection with the defense or settlement of any such
assessment. The Sub-Adviser shall undertake and control the defense or
settlement of any such assessment, including the selection of counsel or other
professional advisers, provided that the selection of such counsel and advisers
and the settlement of any assessment shall be subject to the approval of the
Adviser and the Fund, which approvals shall not be unreasonably withheld. The
Adviser and the Fund shall have the right to retain separate counsel and assume
the defense or settlement on behalf of the Adviser and the Fund, as the case
may be, of any such assessment if representation of the Adviser and the Fund by
counsel selected by the Sub-Adviser would be inappropriate due to actual or
potential conflicts of interest.
SECTION 6. Services to Other Clients and the Fund
--------------------------------------
(a) Subject to compliance with the 1940 Act, nothing contained in this
Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated
persons from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Fund. The Adviser and the Fund understand
that the Sub-Adviser may act as investment manager or in other capacities on
behalf of other customers including entities registered under the 1940 Act.
While information, recommendations and actions which the Sub-Adviser supplies
to and does on behalf of the Portfolio shall in the Sub-Adviser's judgment be
appropriate under the circumstances in light of the investment objectives and
policies of the Fund, as set forth in the Prospectus delivered to the
Sub-Adviser from time to time, it is understood and agreed that they may be
different from the information, recommendations and actions the Sub-Adviser or
its affiliated persons supply to or do on behalf of other clients. The
Sub-Adviser and its affiliated persons shall supply information,
recommendations and any other services to the Portfolio and to any other client
in an impartial and fair manner in order to seek good results for all clients
involved. As used herein, the term "affiliated person" shall have the meaning
assigned to it in the 1940 Act.
(b) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other clients
of the Sub-Adviser, the Sub-Adviser may, but shall be under no obligation, to
the extent permitted by applicable law, aggregate the securities to be so sold
or purchased in order to obtain the best execution or lower brokerage
commissions, if any. The Sub-Adviser may also on occasion purchase or sell a
particular security for one or more customers in different amounts. On either
occasion, and to the extent permitted by applicable law and regulations,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Sub-Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other clients.
(c) The Sub-Adviser agrees to use the same skill and care in providing
services to the Fund as it uses in providing services to fiduciary accounts for
which it has investment responsibility. The Sub-Adviser will comply with all
applicable rules and regulations of the Securities and Exchange Commission.
SECTION 7. Reports to the Sub-Adviser
--------------------------
(a) The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy
statements, reports and other information relating to the business and affairs
of the Fund as the Sub-Adviser may, at any time or from time to time,
reasonably require in order to discharge the Sub-Adviser's duties under this
Agreement.
4
<PAGE> 48
(b) The Adviser hereby agrees to provide to the Sub-Adviser any
amendments, supplements or other changes to the Fund's Articles of
Incorporation, By-Laws, currently effective registration statement under the
1940 Act, including any amendments or supplements thereto, and Notice of
Eligibility under Rule 4.5 of the Commodity Exchange Act (collectively,
"Governing Instruments and Regulatory Filings") as soon as practicable after
such materials become available and, upon receipt by the Sub-Adviser, the
Sub-Adviser will act in accordance with such amended, supplemented or otherwise
changed Governing Instruments and Regulatory Filings.
(c) Except for the restrictions necessary to comply with Section 817(h) of
the Internal Revenue Code of 1986, as amended and Treasury Regulations Section
1.817-5 (the "Tax Restrictions"), Adviser represents and warrants that the
investment objective of the Portfolio is identical to, and that investment
policies, restrictions and limitations of the Portfolio are no more restrictive
or limiting than, those contained in the current prospectus and statement of
additional information of the Strong Discovery Fund, Inc. Except to the extent
of the Tax Restrictions, and to the extent that the parties hereto may
otherwise agree in writing, and subject to the approval of the Fund's Board of
Directors and, in the case of fundamental policies, approval of the Portfolio's
shareholders, Adviser shall cause the Fund to file such amendments, supplements
and stickers to its Prospectus and Statement of Additional Information as are
necessary to ensure that the investment policies, restrictions and limitations
applicable to the Portfolio are at all times no more restrictive than those
contained in the prospectus and statement of additional information, as the
same may be amended or supplemented from time to time, of the Strong Discovery
Fund, Inc., provided that the Sub-Adviser shall have afforded the Adviser
sufficient notice of such changes to Strong Discovery Fund, Inc. so as to
enable corresponding changes to be timely made with regard to the Portfolio's
investment objectives, policies, restrictions and limitations. Adviser shall
not permit the investment objective of the Portfolio to change without the
prior written consent of the Sub-Adviser unless such change is in response to a
change made to the Strong Discovery Fund, Inc. and then, only to the extent
necessary to make the investment objective of the Portfolio substantially
identical to that of the Strong Discovery Fund, Inc.
SECTION 8. Term of Agreement
-----------------
This Agreement shall be effective on the date hereof. Unless earlier
terminated as hereinafter provided, this Agreement shall continue in effect
until approved by a majority vote of the voting securities of the Portfolio, at
a meeting to take place not more than one year after the effective date of the
Fund's registration statement relating to the Portfolio. Thereafter, this
Agreement shall continue in effect from year to year, subject to approval
annually by the Board of Directors of the Fund or by vote of a majority of the
voting securities of the Portfolio and also, in either event, by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Directors of the Fund who are not parties to this Agreement or
interested persons (as defined in the 1940 Act) of any such person.
SECTION 9. Termination of Agreement; Assignment
------------------------------------
(a) This Agreement may be terminated by either party hereto without the
payment of any penalty, upon 90 days' prior notice in writing to the other
party and to the Fund, or upon 60 days' written notice by the Fund to the two
parties; provided, that in the case of termination by the Fund such action
shall have been authorized by resolution of a majority of the Board of
Directors of the Fund or by vote of a majority of the voting securities of the
Portfolio. In addition, this Agreement shall terminate upon the later of (1)
the termination of the Adviser's agreement to provide investment advisory
services to the Fund or (2) notice to the Sub-Adviser that the Adviser's
agreement to provide investment advisory services to the Fund has terminated.
(b) This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
5
<PAGE> 49
(c) Termination of this Agreement for any reason shall not affect rights
of the parties that have accrued prior thereto.
SECTION 10. Notices
-------
(a) The Sub-Adviser agrees to promptly notify the Adviser of the
occurrence of any of the following events: (1) any change in the portfolio
manager of the Strong Discovery Fund, Inc. or the Portfolio; (2) the
Sub-Adviser fails to be registered as an investment adviser under the Advisers
Act or under the laws of any jurisdiction in which the Sub-Adviser is required
to be registered as an investment adviser in order to perform its obligations
under this Agreement; or (3) the Sub-Adviser is the subject of any action,
suit, proceeding, inquiry or investigation at law or in equity, before or by
any court, public board or body, involving the affairs of the Portfolio.
(b) Any notice given hereunder shall be in writing and may be served by
being sent by telex, facsimile or other electronic transmission or sent by
registered mail or by courier to the address set forth below for the party for
which it is intended. A notice served by mail shall be deemed to have been
served seven days after mailing and in the case of telex, facsimile or other
electronic transmission twelve hours after dispatch thereof. Addresses for
notice may be changed by written notice to the other party.
If to the Adviser:
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
Fax No. (513) 559-6589
With a copy to:
Joseph P. Brom, President
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
If to the Sub-Adviser:
Strong Capital Management, Inc.
100 Heritage Reserve
Milwaukee, Wisconsin 53051
Attention: Rochelle Lamm Wallach
Fax No. (414) 359-3888
With a copy to:
Thomas P. Lemke, General Counsel
Strong Capital Management, Inc.
100 Heritage Reserve
Milwaukee, Wisconsin 53051
Fax No. (414) 359-3948
6
<PAGE> 50
SECTION 11. Governing Law
-------------
This Agreement shall be governed by and subject to the requirements of the laws
of the State of Ohio without reference to the choice of law provisions thereof.
SECTION 12. Applicable Provisions of Law
----------------------------
The Agreement shall be subject to all applicable provisions of law, including,
without limitation, the applicable provisions of the 1940 Act, and to the
extent that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.
SECTION 13. Counterparts
------------
This Agreement may be entered into in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
SECTION 14. Representations and Warranties of Sub-Adviser
---------------------------------------------
The Sub-Adviser represents and warrants to the Adviser and the Fund as follows:
(a) The Sub-Adviser is registered as an investment adviser under the
Advisers Act;
(b) The Sub-Adviser has filed a notice of exemption pursuant to Rule 4.14
under the CEA with the Commodity Futures Trading Commission (the "CFTC") and
the National Futures Association;
(c) The Sub-Adviser is a corporation duly organized and validly existing
under the laws of the State of Wisconsin with the power to own and possess its
assets and carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Sub-Adviser of this
Agreement are within the Sub-Adviser's powers and have been duly authorized,
and no action by or in respect of, or filing with, any governmental body,
agency or official is required on the part of the Sub-Adviser for the
execution, delivery and performance by the Sub-Adviser of this Agreement, and
the execution, delivery and performance by the Sub-Adviser of this Agreement do
not contravene or constitute a default under (i) any provision of applicable
law, rule or regulation, (ii) the Sub-Adviser's governing instruments, or (iii)
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Sub-Adviser;
(e) This Agreement is a valid and binding agreement of the Sub-Adviser;
(f) A true and complete copy of the Form ADV of the Sub-Adviser, as
amended to the date hereof and filed with the Commission has been furnished to
the Adviser, and the information contained therein is accurate and complete in
all material respects and does not omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading.
(g) The Sub-Adviser agrees to observe and comply with Rule 17j-1 under the
1940 Act and the Sub-Adviser's Code of Ethics, as may be amended from time to
time.
SECTION 15. Representations and Warranties of Adviser.
------------------------------------------
The Adviser represents and warrants to the Sub-Adviser as follows:
7
<PAGE> 51
(a) The Adviser is registered as an investment adviser under the Advisers
Act;
(b) The Fund has filed a Notice of Eligibility under Rule 4.5 of the CEA,
with the Commodity Futures Trading Commission (the "CFTC") and the National
Futures Association;
(c) The Adviser is a corporation duly organized and validly existing under
the laws of the State of Ohio with the power to own and possess its assets and
carry on its business as it is now being conducted;
(d) The execution, delivery and performance by the Adviser of this
Agreement are within the Adviser's powers and have been duly authorized, and no
action by or in respect of, or filing with, any governmental body, agency or
official is required on the part of the Adviser for the execution, delivery and
performance by the Adviser of this Agreement, and the execution, delivery and
performance by the Adviser of this Agreement do not contravene or constitute a
default under (i) any provision of applicable law, rule or regulation, (ii) the
Adviser's governing instruments, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon the Adviser;
(e) This Agreement is a valid and binding agreement of the Adviser;
(f) A true and complete copy of the Form ADV of the Adviser, as amended to
the date hereof and filed with the Commission has been furnished to the
Sub-Adviser, and the information contained therein is accurate and complete in
all material respects and does not omit to state any material fact necessary in
order to make the statements made, in light of the circumstances under which
they were made, not misleading;
(g) The Adviser acknowledges that it received a copy of the Sub-Adviser's
Form ADV at least 48 hours prior to the execution of this Agreement.
(h) The Adviser agrees to observe and comply with Rule 17j-1 under the
1940 Act and the Adviser's Code of Ethics as may be amended from time to time.
SECTION 16. Survival of Representations and Warranties: Duty to
----------------------------------------------------
Update Information.
-------------------
All representations and warranties made by the Sub-Adviser and the Adviser
pursuant to Sections 14 and 15 hereof shall survive for the duration of this
Agreement and the Parties hereto shall immediately notify, but in no event
later than five (5) business days, each other in writing upon becoming aware
that any of the foregoing representations and warranties are no longer true.
In addition, the Sub-Adviser will deliver to the Adviser and the Fund copies of
any amendments, supplements or updates to any of the information provided to
the Adviser and attached as exhibits hereto within fifteen (15) days after
becoming available.
SECTION 17. Voting of Proxies
-----------------
The Sub-Adviser shall direct the Fund's custodian as to how to vote such
proxies as may be necessary or advisable in connection with the any matters
submitted to a vote of shareholders of securities held by the Portfolio.
SECTION 18. Confidentiality
---------------
Subject to the duties of the Adviser, the Fund and the Sub-Adviser to comply
with applicable law, including any demand of any regulatory or taxing authority
having jurisdiction, the parties hereto shall treat as confidential all
information pertaining to the Fund and the actions of the Sub-Adviser, the
Adviser and the Fund in respect thereof.
8
<PAGE> 52
SECTION 19. Non-Exclusivity
---------------
Adviser acknowledges and agrees that this Agreement and the arrangements
described herein are intended to be non-exclusive and that Sub-Adviser is free
to enter into similar agreements and arrangements with other entities.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto as of the day and year first above written.
OHIO NATIONAL INVESTMENTS, INC.
By:_________________________________________
Joseph P. Brom
President
STRONG CAPITAL MANAGEMENT, INC.
By:_________________________________________
Rochelle Lamm Wallach
President of Strong Advisory Services, a
division of Strong Capital Management, Inc.
Accepted and Agreed:
OHIO NATIONAL FUND, INC.
By:_____________________________
Donald J. Zimmerman
President
9
<PAGE> 53
PROXY
OHIO NATIONAL FUND, INC.
We acknowledge receipt of a copy of the Notice of Shareholders' Meeting, Proxy
Statement and semi-annual report, and appoint each of Ronald L. Benedict and
Donald J. Zimmerman to be our proxies and attorneys with full power of
substitution and revocation to vote our Ohio National Fund, Inc. shares at the
meeting of shareholders to be held on March 28, 1996, and at any adjournments
thereof, as specified below, and in accordance with their best judgment on any
other business that may properly come before the meeting. This proxy relates
to a solicitation by the Board of Directors.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1. _____________ shares For; ______________ shares Against; _____________ shares Abstain
on the election of Ronald L. Benedict as Director.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on the election of George E. Castrucci as Director.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on the election of Maurice H. Kirby, Jr. as Director.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on the election of George M. Vredeveld as Director.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on the election of Donald J. Zimmerman as Director.
2. _____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Equity Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Money Market Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Bond Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Omni Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the International Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Capital Appreciation
Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Small Cap Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Global Contrarian
Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Investment Advisory Agreement for the Aggressive Growth
Portfolio.
</TABLE>
<PAGE> 54
<TABLE>
<CAPTION>
<S> <C> <C> <C>
3. _____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Equity Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Money Market Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Bond Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Omni Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the International Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Capital Appreciation Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Small Cap Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Global Contrarian Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Service Agreement for the Aggressive Growth Portfolio.
4. _____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Sub-Advisory Agreement with Societe Generale Asset
Management, Inc. for the International Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Sub-Advisory Agreement with Societe Generale Asset
Management, Inc. for the Global Contrarian Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Sub-Advisory Agreement with T. Rowe Price Associates, Inc. for
the Capital Appreciation Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Sub-Advisory Agreement with Founders Asset Management, Inc.
for the Small Cap Portfolio.
_____________ shares For; ______________ shares Against; _____________ shares Abstain
on approval of the new Sub-Advisory Agreement with Strong Capital Management, Inc.
for the Aggressive Growth Portfolio.
5. _____________ shares For; ______________ shares Against; _____________ shares Abstain
to ratify the selection of KPMG Peat Marwick LLP as independent public accountants.
</TABLE>
Dated: March 28, 1996 THE OHIO NATIONAL LIFE INSURANCE COMPANY
By ____________________________________
2
<PAGE> 55
VOTING INSTRUCTIONS
OHIO NATIONAL FUND, INC.
I (we) acknowledge receipt of a copy of the Notice of Shareholders' Meeting,
Proxy Statement and annual report, and instruct Ohio National Life to vote the
Ohio National Fund, Inc., shares attributable to my (our) variable contract at
the meeting of shareholders to be held on March 28, 1996, and at any
adjournments thereof, as specified below, and in accordance with their best
judgment on any other business that may properly come before the meeting.
These instructions relate to a solicitation by the Board of Directors.
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
You may check one of these boxes instead of voting on each of the numbered items below:
For or Against or Abstain on ALL the Board of Directors recommendations.
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
1. To elect the following as Directors: (A) Ronald L. Benedict (B) George E. Castrucci
(C) Maurice H. Kirby, Jr. (D) George M. Vredeveld (E) Donald J. Zimmerman
For All or Against All or For All Except: (A) (B) (C) (D) (E)
------
[ ] [ ] [ ] [ ] [ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
2. To approve the new Investment Advisory Agreement as to all portfolios:
For or Against or Abstain as to all portfolios
[ ] [ ] [ ]
or For as to the following portfolio(s):
-----------------------------------------------------------------
[ ]
or Against as to the following portfolio(s):
-------------------------------------------------------------
[ ]
or Abstain as to the following portfolio(s):
-------------------------------------------------------------
[ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
3. To approve the new Service Agreement as to all portfolios:
For or Against or Abstain as to all portfolios
[ ] [ ] [ ]
or For as to the following portfolio(s):
-----------------------------------------------------------------
[ ]
or Against as to the following portfolio(s):
-------------------------------------------------------------
[ ]
or Abstain as to the following portfolio(s):
-------------------------------------------------------------
[ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
4.a. To approve the new Sub-Advisory Agreement with Societe Generale Asset Management Corp.:
For or Against or Abstain as to the International Portfolio
[ ] [ ] [ ]
For or Against or Abstain as to the Global Contrarian Portfolio
[ ] [ ] [ ]
b. To approve the new Sub-Advisory Agreement with T. Rowe Price Associates, Inc. for the Capital
Appreciation Portfolio:
For or Against or Abstain
[ ] [ ] [ ]
c. To approve the new Sub-Advisory Agreement with Founders Asset Management, Inc. for the Small Cap
Portfolio:
For or Against or Abstain
[ ] [ ] [ ]
d. To approve the new Sub-Advisory with Strong Capital Management, Inc. for the Aggressive Growth
Portfolio:
For or Against or Abstain
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
5. To ratify the selection of KPMG Peat Marwick LLP as independent public accountants:
For or Against or Abstain
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Dated ___________________, 1996
_______________________________
Signature of Contractowner(s)
Please sign your name as it appears on the back of this form. If signing for
an estate, trust or corporation, state your title or capacity. If joint
owners, each should sign. PLEASE RETURN THESE VOTING INSTRUCTIONS IN THE
ENVELOPE PROVIDED.
<PAGE> 56
THE OHIO NATIONAL LIFE INSURANCE COMPANY
P.O. BOX 237 - CINCINNATI, OHIO 45201 - (513) 861-3600
DEDICATED TO QUALITY SINCE 1909
FEBRUARY 29, 1996
To Owners Of Group Variable Annuity Contracts
A meeting of shareholders of Ohio National Fund, Inc. will be held at the
offices of The Ohio National Life Insurance Company, 237 William Howard Taft
Road, Cincinnati, Ohio 45219 at 10:00 a.m., Thursday, March 28, 1996.
You have the right to instruct Ohio National Life as to the manner in which the
number of Fund shares attributable to your contract should be voted. If your
plan maintains individual accounts for participants, we request that you
solicit voting instructions from the participants in the plan so that their
wishes may be reflected in the voting instructions you give to Ohio National.
To assist you, if you choose to obtain instructions from plan participants, we
are enclosing proxy statements and "Participant's Instructions" forms. if more
are needed, please let us know.
Also enclosed is one Voting Instructions, which is for you, as trustee or
owner, to give instructions to Ohio National Life. You may split your
instructions between voting "for" or "against" each proposal or you may abstain
from voting on an item as you see fit after you have received or not received
instructions from the various participants. In other words, you may indicate a
percentage vote for or against, or to abstain, on each proposal. The
"Participant's Instructions" are for your convenience only and should not be
returned to Ohio National.
YOUR INSTRUCTIONS ARE IMPORTANT! Please complete your Voting Instructions
(yours only, not the "Participant's Instructions") and return it as promptly as
possible in the envelope provided. Thank You.
SINCERELY,
Donald J. Zimmerman
Senior Vice President
Insurance Operations
DJZ/NH
Enclosures
7240L
Quality Products And Services Also Provided Through Our Wholly Owned
Subsidiary,
OHIO NATIONAL LIFE ASSURANCE CORPORATION
<PAGE> 57
PARTICIPANT'S INSTRUCTIONS
OHIO NATIONAL FUND, INC.
I request that you vote the Ohio National Fund, Inc. shares attributable to my
interest in the variable contract at the meeting of Fund shareholders to be
held on March 28, 1996, as specified below. These instructions relate to a
solicitation by the Board of Directors.
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
You may check one of these boxes instead of voting on each of the numbered items below:
For or Against or Abstain on ALL the Board of Directors recommendations.
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
1. To elect the following as Directors: (A) Ronald L. Benedict (B) George E. Castrucci
(C) Maurice H. Kirby, Jr. (D) George M. Vredeveld (E) Donald J. Zimmerman
For All or Against All or For All Except: (A) (B) (C) (D) (E)
------
[ ] [ ] [ ] [ ] [ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
2. To approve the new Investment Advisory Agreement as to all portfolios:
For or Against or Abstain as to all portfolios
[ ] [ ] [ ]
or For as to the following portfolio(s):
-----------------------------------------------------------------
[ ]
or Against as to the following portfolio(s):
-------------------------------------------------------------
[ ]
or Abstain as to the following portfolio(s):
-------------------------------------------------------------
[ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
3. To approve the new Service Agreement as to all portfolios:
For or Against or Abstain as to all portfolios
[ ] [ ] [ ]
or For as to the following portfolio(s):
-----------------------------------------------------------------
[ ]
or Against as to the following portfolio(s):
-------------------------------------------------------------
[ ]
or Abstain as to the following portfolio(s):
-------------------------------------------------------------
[ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
4.a. To approve the new Sub-Advisory Agreement with Societe Generale Asset Management Corp.:
For or Against or Abstain as to the International Portfolio
[ ] [ ] [ ]
For or Against or Abstain as to the Global Contrarian Portfolio
[ ] [ ] [ ]
b. To approve the new Sub-Advisory Agreement with T. Rowe Price Associates, Inc. for the Capital
Appreciation Portfolio:
For or Against or Abstain
[ ] [ ] [ ]
c. To approve the new Sub-Advisory Agreement with Founders Asset Management, Inc. for the Small Cap
Portfolio:
For or Against or Abstain
[ ] [ ] [ ]
d. To approve the new Sub-Advisory with Strong Capital Management, Inc. for the Aggressive Growth
Portfolio:
For or Against or Abstain
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
5. To ratify the selection of KPMG Peat Marwick LLP as independent public accountants:
For or Against or Abstain
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Dated ___________________, 1996 ______________________________
Signature of Participant
