<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 FUND, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO NATIONAL FUND, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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 ....................................
(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
[Ohio National Fund Services Letterhead]
August 28, 1997
Dear Ohio National Variable Contract Owner:
Enclosed are information and voting instructions from your Ohio National Fund
Board of Directors regarding the proposed approval of a new sub-advisory
agreement for the Growth & Income Portfolio. The new agreement with Robertson
Stephens Investment Management, L.P. is identical to the present agreement. It
does not contemplate any change in your portfolio management team or investment
advisory fees.
This new agreement is necessary because Robertson Stephens & Company (which
includes Robertson Stephens Investment Management) has agreed to be acquired by
BankAmerica Corporation. Robertson Stephens expects that this strategic
partnership should effectively expand its global capabilities and resources,
enhance its worldwide research efforts and increase its ability to attract
additional top-caliber professionals while maintaining its unique investment
culture. Its key investment professionals all have signed three-year employment
contracts designed to ensure consistency and continuity in Robertson Stephens'
investment style and process.
The new agreement will be voted upon at a meeting of shareholders to be held on
September 26, 1997. Your Board of Directors believes approval of the new
sub-advisory agreement will serve your best interests. They recommend you vote
FOR the proposal.
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,
/s/John J. Palmer
- -----------------
John J. Palmer
President
<PAGE> 3
OHIO NATIONAL FUND, INC.
One Financial Way
Montgomery, Ohio 45242
--------------------------------------------------------------
GROWTH & INCOME PORTFOLIO
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
--------------------------------------------------------------
SEPTEMBER 26, 1997
A special meeting of the shareholders of the Growth & Income Portfolio (the
"Portfolio") of Ohio National Fund, Inc. (the "Fund") will be held at the Fund's
offices at One Financial Way, Montgomery, Ohio on September 26, 1997, at 10:00
a.m. for the purpose of approving a new Sub-Advisory Agreement between Ohio
National Investments, Inc. and Robertson Stephens Investment Management, L.P.
and to transact such other business as may properly come before the meeting.
Shareholders of the Portfolio of record at the close of business on August 1,
1997 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 PROPOSAL.
Ronald L. Benedict
Secretary
Montgomery, Ohio
August 28, 1997
<PAGE> 4
OHIO NATIONAL FUND, INC.
ONE FINANCIAL WAY
CINCINNATI, OHIO 45242
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS OF THE
GROWTH & INCOME PORTFOLIO
SEPTEMBER 26, 1997
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 special meeting of shareholders of the Growth & Income
Portfolio (the "Portfolio") of the Fund to be held on September 26, 1997, and at
any and all adjournments thereof. This statement is being mailed to shareholders
of, and contractowners with values allocated to, the Portfolio on or about
August 28, 1997.
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 Portfolio. Printing, mailing and legal costs of this
solicitation will be borne by the Portfolio's sub-adviser, Robertson Stephens
Investment Management, L.P. ("RSIM"); all other costs will be borne by the
Fund's investment adviser, Ohio National Investments, Inc. ("the Adviser"). 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 proposal. 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 August 1, 1997 is
entitled to one vote for each share held. As of August 1, 1997, 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>
<S> <C> <C>
ONLI Variable Account A 152,050
ONLI Variable Account B 139,636
ONLI Variable Account C 243,254
ONLI Variable Account D 4,593
ONLAC Variable Account R 62,213
Total Portfolio Shares 601,746
</TABLE>
SUMMARY OF PROPOSAL
The purpose of the meeting is for shareholders to vote on the proposal to
approve a new Sub-Advisory Agreement between the Adviser and RSIM.
Approval with respect to this issue requires approval by a majority vote of
the eligible shareholders. 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
1
<PAGE> 5
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 RECOMMENDS APPROVAL BY THE SHAREHOLDERS.
INVESTMENT ADVISORY SERVICES
The Adviser is a wholly-owned subsidiary of ONLI. Under the Investment
Advisory Agreement between the Adviser and the Fund, the Adviser 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, the Adviser implements the program by placing orders for
the purchase and sale of securities. The Adviser also provides the Fund with
office space, necessary clerical personnel (other than those provided by
agreements between the Fund and Star Bank (Cincinnati, Ohio), which serves as
custodian, and American Data Services, Inc. (Huntington, NY) which serves as
transfer agent and servicing agent for the Fund), and services of executive and
administrative personnel.
The Adviser is the investment adviser to the following portfolios of the
Fund (assets shown as of August 1, 1997):
<TABLE>
<CAPTION>
<S> <C>
Equity $170,704,270
Money Market 24,141,158
Bond 19,888,645
Omni 128,624,009
International 168,839,904
Capital Appreciation 45,360,847
Small Cap 39,780,205
Global Contrarian 15,169,480
Aggressive Growth 15,071,027
Core Growth 6,818,239
Growth & Income 6,271,631
S&P 500 Index 11,792,097
Social Awareness 2,496,597
Strategic Income 2,306,567
Stellar 2,306,726
Relative Value 3,129,873
</TABLE>
Under a Service Agreement among the Fund, the Adviser and ONLI, ONLI has
agreed to furnish the Adviser, at cost, such research facilities, services and
personnel as may be needed by the Adviser in connection with its performance
under the Investment Advisory Agreement. The Adviser has agreed to reimburse
ONLI for its expenses in this regard. The Fund has not paid to the Adviser, 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 the
Adviser, ONLI, ONLAC and the Fund is One Financial Way, Cincinnati, Ohio 45242.
The president of the Adviser is Joseph P. Brom. The Adviser's directors are
Mr. Brom, Michael A. Boedeker, Michael D. Stohler and Stephen T. Williams.
Messrs. Brom, Boedeker, Stohler and Williams are principally employed as
investment officers of ONLI. Messrs. Brom, Boedeker and Williams are also vice
presidents of the Fund. The Adviser's secretary, Ronald L. Benedict, is also the
secretary and a director of the Fund. The business address of each of these
individuals is One Financial Way, Cincinnati, Ohio 45242.
The Investment Advisory Agreement and Service Agreement were both entered
into as of May 1, 1996. They were submitted to and approved by the shareholders
of the Equity, Money Market, Bond, Omni, International, Capital Appreciation,
Small Cap, Global Contrarian and Aggressive Growth Portfolios on March 28, 1996
and by the shareholders of
2
<PAGE> 6
the Core Growth, Growth & Income, S&P 500 Index, Social Awareness, Strategic
Income, Stellar and Relative Value Portfolios on January 2, 1997.
As compensation for its services, the Adviser 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, Omni and Social Awareness 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, Global Contrarian and Relative Value Portfolios, 0.90% of each
Portfolio's net assets; (d) for the Capital Appreciation, Small Cap, Aggressive
Growth and Strategic Income Portfolios, 0.80% of each Portfolio's net assets;
(e) for the Core Growth Portfolio, 0.95% of the first $150 million of net
assets, and 0.80% of net assets over $150 million; (f) for the Growth & Income
Portfolio, 0.85% of the first $200 million of net assets, and 0.80% of net
assets over $200 million; (g) for the S&P 500 Index Portfolio, 0.40% of the
first $100 million of net assets, 0.35% of the next $150 million of net assets,
and 0.33% of net assets over $250 million; and (h) for the Stellar Portfolio,
1.00% of that Portfolio's net assets. However, as to the Money Market Portfolio,
the Adviser is presently waiving any of its fee in excess of 0.25%. During 1996,
the Adviser received $5,567,076 in fees from the Fund.
Under the Investment Advisory Agreement, the Fund authorizes the Adviser to
retain sub-advisers for the International, Capital Appreciation, Small Cap,
Global Contrarian, Aggressive Growth, Core Growth, Growth & Income, Strategic
Income, Stellar and Relative Value Portfolios, subject to the approval of the
Fund's Board of Directors. The Adviser has entered into Sub-advisory Agreements
with sub-advisers, to manage the investment and reinvestment of those
Portfolios' assets, subject to the supervision of the Adviser. As compensation
for their sub-advisory services, (a) Societe Generale Asset Management Corp.
receives from the Adviser 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 the
Adviser 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 the
Adviser 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; (d) Strong Capital Management, Inc.
receives from the Adviser 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; (e) Pilgrim Baxter & Associates, Ltd. receives
from the Adviser a fee at an annual rate of 0.75% of the first $50 million,
0.70% of the next $100 million, and 0.50% of the average daily net assets in
excess of $150 million of the Core Growth Portfolio; (f) RSIM receives from the
Adviser a fee at an annual rate of 0.60% of the first $100 million, 0.55% of the
next $100 million, and 0.50% of average daily net assets in excess of $200
million of the Growth & Income Portfolio; and (g) Star Bank, N.A. receives from
the Adviser fees at an annual rate of (i) 0.55% of the first $50 million and
0.50% of the average daily net assets in excess of $50 million of the Strategic
Income Portfolio, (ii) 0.75% of the first $50 million and 0.70% of average daily
net assets in excess of $50 million of the Stellar Portfolio, and (iii) 0.65% of
the first $50 million and 0.60% of average daily net assets in excess of $50
million of the Relative Value Portfolio.
The 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 27, 1997, by unanimous votes of all
the Directors cast in
3
<PAGE> 7
person at a Board meeting called for the purpose of voting on that continuance
and approval. Each of these agreements provides for automatic termination in the
event of its assignment.
In addition to the Fund, the Adviser is also the investment adviser to ONE
Fund, which presently consists of the following portfolios:
<TABLE>
<CAPTION>
ONE FUND PORTFOLIO ASSETS (8/1/97)
------------------ ---------------
<S> <C>
Money Market $14,173,082
Tax-Free Income 6,280,279
Income 6,645,501
Income & Growth 9,815,396
Growth 9,498,704
Small Cap 4,425,496
International 19,296,705
Global Contrarian 6,387,890
Core Growth 5,145,337
</TABLE>
As compensation for its services to ONE Fund, the Adviser 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; (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; and (f) for assets held in
the Core Growth Portfolio, the fee is at an annual rate of 0.95% of the first
$150 million of assets and 0.80% of assets over $150 million. However, the
Adviser is presently voluntarily waiving 0.15% of its fees in connection with
the Money Market, Tax-Free Income, Income, Income & Growth, Growth, and Small
Cap Portfolios of ONE Fund.
NEW SUB-ADVISORY AGREEMENT
Shareholders of the Portfolio are being asked to approve a new Sub-Advisory
Agreement between the Adviser and RSIM. This "New Agreement" (See Exhibit A) is
identical in every respect to the present Sub-Advisory Agreement except that the
New Agreement will take effect at the time of the acquisition of the Robertson
Stephens group of companies (including RSIM) by BankAmerica Corporation
("BankAmerica"). That contemplated merger is expected to take place during the
fourth quarter of 1997. The merger will result in a change of control of RSIM
which, by the terms of the Sub-Advisory Agreement, results in the termination of
the Sub-Advisory Agreement.
THE MERGER. On June 8, 1997, BankAmerica entered into an Agreement and Plan
of Merger with Robertson, Stephens & Company Group, L.L.C. ("RS Group") and
Robertson Stephens & Company, Inc. ("RS Inc."), pursuant to which each of those
entities would be merged into a subsidiary of BankAmerica. Upon consummation of
those mergers, BankAmerica will become the owner of the entire beneficial
interest in RSIM. The surviving entity in the merger is referred to as "New
RS&Co".
BankAmerica will make total payments of up to $540 million. Of that amount,
$245 million will be paid to the members of RS Group and the stockholders of RS
Inc. upon
4
<PAGE> 8
consummation of the merger; $225 million will be paid to them in additional
installments during each of the next three years if they remain employed by New
RS&Co, and the remaining $70 million will be paid into a "retention pool" for
the benefit of certain key Robertson Stephens employees, who will receive
payments out of the pool in installments during the four-year period following
the merger if they remain employed by New RS&Co.
The consideration for the merger was structured in this way principally in
order to provide an incentive to Robertson Stephens employees, including key
investment professionals at RSIM, to continue their association with New RS&Co.
Any person whose employment with New RS&Co is terminated before he or she
receives all of the consideration under the Merger Agreement or payments from
the retention pool to which he or she is entitled (unless that person's
employment is terminated by New RS&Co without cause or unless that person leaves
for "good reason", as defined in his or her employment contract) will forfeit
any such amount not yet paid at the time of the termination.
The Merger Agreement does not prescribe any changes in the management or
operations of RSIM, including any changes in the personnel managing the Fund or
other services or business activities relating to the Portfolio. RSIM has
advised the Fund's Board that it does not anticipate that the merger will cause
any reduction in the quality of services now provided to the Portfolio, or have
any adverse effect on RSIM's ability to fulfill its obligations to the
Portfolio.
BANKAMERICA. BankAmerica is a bank holding company that was incorporated on
October 7, 1968 under the laws of the state of Delaware, and is registered under
the Bank Holding Company Act of 1956, as amended. Through its network of
subsidiaries, BankAmerica provides banking and other financial services
throughout the United States and in selected international markets to consumers
and business customers, including corporations, governments, and other
institutions. As a global financial intermediary, BankAmerica provides
capital-raising services, trade finance, cash management, investment banking,
capital markets and credit products, and financial advisory services to large
public- and private-sector institutions that are part of the global economy. At
December 31, 1996, BankAmerica, together with its subsidiaries, was one of the
three largest bank holding companies in the United States, with total assets of
$250.8 billion.
Bank of America National Trust and Savings Association (the "Bank") is the
largest subsidiary of BankAmerica. The Bank, which was organized in 1904,
provides commercial and retail banking and trust services through an extensive
system of branches across the western United States. BankAmerica's principal
banking subsidiaries operate branches in eleven U.S. states as well as corporate
banking offices in major U.S. cities and branches, corporate offices and
representative offices in 37 other countries and territories. The Bank and its
affiliates act as investment advisers for assets of over $50 billion, including
over $14 billion in mutual funds.
THE NEW AGREEMENT. The existing Sub-Advisory Agreement between the Adviser
and RSIM will terminate upon the consummation of the merger, because the merger
will constitute a change of control of RSIM for purposes of the Investment
Company Act of 1940, as amended. Your Fund management is proposing that you
approve the New Agreement between the same parties, to become effective
immediately upon consummation of the merger. The New Agreement is identical to
the existing Sub-Advisory Agreement, other than its effective and termination
dates.
The Board of Directors, at a meeting called for that purpose, unanimously
approved the New Agreement on August 27, 1997, and recommends that you vote to
approve the New Agreement.
5
<PAGE> 9
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 which 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
shareholders in order for the proposal to be included in the proxy solicitation
materials for that meeting.
6
<PAGE> 10
EXHIBIT A
SUB-ADVISORY AGREEMENT
This Agreement is made as of the day of October, 1997 by and between OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and ROBERTSON
STEPHENS INVESTMENT MANAGEMENT, L.P., a California limited partnership (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 GROWTH &
INCOME 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 Growth &
Income 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"). The Fund is the
owner of all cash, securities and other assets in the Portfolio, and there are
no restrictions on the pledge, hypothecation, transfer or sale of such cash,
securities or assets. To enable the Sub-Adviser to exercise fully its discretion
hereunder, the Adviser hereby appoints the Sub-Adviser as agent and
attorney-in-fact for the Portfolio with full authority to buy, sell and
otherwise deal in securities and other intangible investments and contracts
relating to the same for 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 and discretion to select members of securities
exchanges, brokers, dealers and futures commission merchants for the execution
of transactions of the Portfolio and, when applicable, shall
7
<PAGE> 11
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.
(d) In carrying out its obligations to manage the investments and reinvestments
of the assets of the Portfolio, the Sub-Adviser shall: (1) in its discretion,
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 it deems necessary, in its sole
discretion, 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,
settlement charges 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.
8
<PAGE> 12
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 0.60% of the first one hundred million dollars ($100,000,000) of
the average daily net assets of the Portfolio during the quarter preceding each
payment, 0.55% of the next one hundred million dollars ($100,000,000) of the
average daily net assets of the Portfolio, and 0.50% of the average daily net
assets of the Portfolio in excess of two hundred million dollars ($200,000,000)
(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 net market value of securities held short by the Portfolio shall
be treated as a liability of the account and, together with the amount of any
margin or other loans owed by the account, shall be subtracted in determining
net market value. If this Agreement begins on a date other than the first day of
a quarter or terminates on a date other than the last day of a quarter, the
Sub-Advisory Fee payable with respect to either such quarter shall be prorated.
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, including, but not limited to, any error in
judgment with respect to buying or selling securities for the Portfolio, 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 (other than taxes on the Sub-Adviser's
income), 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").
Notwithstanding the foregoing sentence, the Sub-Adviser shall be liable for
taxes or tax penalties incurred by the Fund for any failure of the Portfolio to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986 as amended as a result of the Sub-Adviser's management of
the Portfolio.
(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 as such
expenditures are incurred. The Sub-Adviser
9
<PAGE> 13
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.
(c) The Sub-Adviser shall have no responsibility for and shall incur no
liability to the Fund, any shareholder of the Fund or the Adviser relating to
(1) the selection or establishment by the Fund of its investment objectives,
fundamental policies and restrictions, (2) the Fund's registration or duty to
register with any government or agency, (3) the administration of any plans,
trusts or accounts investing through the Fund, or (4) the Fund's compliance with
the requirements of the 1940 Act or Subchapter M of the Internal Revenue Code
except as otherwise specified in subsection (a) of this Section 5. The Adviser
shall indemnify and defend the Sub-Adviser and its partners and employees and
hold them harmless from and against any and all claims, losses, damages,
liabilities and expenses, as they are incurred, by reason of any act or omission
of the Adviser or any custodian, broker, agent or other party selected by the
Adviser, except such as arise from the Sub-Adviser's breach of this contract or
of the Sub-Adviser's fiduciary duty to the Adviser or the Fund.
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 other entities registered under the 1940 Act. This may
create conflicts of interest with the Portfolio over the Sub-Adviser's time
devoted to managing the Portfolio and the allocation of investment opportunities
among accounts (including the Portfolio) managed by the Sub-Adviser. The
Sub-Adviser shall use its best efforts to resolve all such conflicts in a manner
that is generally fair to all of its clients without prejudice to the Portfolio.
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 shall, to the extent practicable, allocate investment opportunities
to the Portfolio over a period of time on a fair and equitable basis relative to
its other clients. Nothing in this Agreement shall be deemed to obligate the
Sub-Adviser to acquire for the Portfolio any security that the Sub-Adviser or
its partners, employees or affiliated persons may acquire for its or their own
accounts or for the account of any other client if, in the absolute discretion
of the Sub-Adviser, it is not practical or desirable to acquire a position in
that security for the Portfolio. 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 of the
Sub-Adviser, 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, beneficial timing of transactions 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. The purchase or sale of securities for the Portfolio may, in many
instances, be effected substantially simultaneously with the purchase or sale of
like securities for the accounts of other clients of the Sub-Adviser and its
10
<PAGE> 14
affiliated persons. Such transactions may be made at slightly different prices
due to the volume of securities purchased or sold. In that event, the average
price of all securities purchased or sold in such transactions may be determined
and the Portfolio may be charged or credited, as the case may be, the average
transaction price.
(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.
SECTION 9. CONFIDENTIALITY
---------------
Except as required by law, the Adviser agrees to maintain in strict confidence
all investment advice and information furnished to the Adviser or the Fund by
the Sub-Adviser.
SECTION 10. 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.
11
<PAGE> 15
SECTION 11. 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) 794-4506
With a copy to:
Joseph P. Brom, President
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
If to the Sub-Adviser:
David M. Elliott, Vice President
Robertson Stephens & Company
555 California Street
San Francisco, California 94104
Fax No. (415) 676-2574
With a copy to:
Dana K. Welch, Esq.
Robertson Stephens & Company
555 California Street
San Francisco, California 94104
SECTION 12. ARBITRATION
-----------
The parties waive their right to seek remedies in court, including any right to
a jury trial. The parties agree that any dispute between the parties arising out
of, relating to, or in connection with, this Agreement, shall be resolved
exclusively by arbitration to be conducted only in the county and state of the
principal office of the Adviser at the time of such dispute in accordance with
the rules of the American Arbitration Association ("AAA") applying the laws of
Ohio. The parties agree that such
12
<PAGE> 16
arbitration shall be conducted by a retired judge who is experienced in dispute
resolution regarding the securities industry, that discovery shall not be
permitted except as required by the rules of AAA, that the arbitration award
shall not include factual findings or conclusions of law, and that no punitive
damages shall be awarded. The parties understand that any party's right to
appeal or to seek modification of any ruling or award of the arbitrator is
severely limited. Any award rendered by the arbitrator shall be final and
binding, and judgment may be entered upon it in any court of competent
jurisdiction in the county and state of the principal office of the Adviser at
the time the award is rendered or as otherwise provided by law.
SECTION 13. DELIVERY OF INFORMATION
-----------------------
The Adviser acknowledges that it has received the Sub-Adviser's brochure
required to be delivered under the Advisers Act (including the information in
Part II of the Sub-Adviser's Form ADV). If the Adviser received such information
less than forty-eight hours prior to signing this Agreement, this Agreement may
be terminated by the Adviser without penalty within five business days from the
effective date. The Sub-Adviser agrees to deliver annually without charge the
Sub-Adviser's brochure required by the Advisers Act and any and all amendments
to its Form ADV whenever filed.
SECTION 14. USE OF NAME
-----------
The Sub-Adviser hereby agrees that the Adviser may use the Sub-Adviser's name
and logo in its marketing or advertising materials, provided that the
Sub-Adviser has reviewed and approved any such materials prior to their use.
SECTION 15. ENTIRE AGREEMENT; SEVERABILITY
------------------------------
This Agreement is the entire agreement of the parties and supersedes all prior
or contemporaneous written or oral negotiations, correspondence, agreements and
understandings regarding the subject matter hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any and all other provisions hereof.
SECTION 16. NO THIRD-PARTY BENEFICIARIES
----------------------------
Neither party intends for this Agreement to benefit any third-party not
expressly named in this Agreement.
SECTION 17. 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 18. 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.
13
<PAGE> 17
SECTION 19. 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
ROBERTSON STEPHENS INVESTMENT MANAGEMENT, L.P.
By:_______________________________
Sanford R. Robertson, Chairman
Accepted and Agreed:
OHIO NATIONAL FUND, INC.
By:_________________________
John J. Palmer, President
14
<PAGE> 18
VOTING INSTRUCTIONS
OHIO NATIONAL FUND, INC.
GROWTH & INCOME PORTFOLIO
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 special meeting of shareholders to be held on September 26, 1997, and at any
adjournments thereof, as specified below, and in accordance with its 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>
<CAPTION>
- ---------------------------------------------------------------------------------------
To approve a new Sub-Advisory Agreement between Ohio National Investments, Inc.
and Robertson Stephens Investment Management, L.P.:
<S> <C> <C> <C> <C> <C> <C>
--- --- ---
For ___ Against ___ Abstain ___
- ---------------------------------------------------------------------------------------
</TABLE>
Dated ____________________, 1997 ______________________________________
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 THIS PROXY IN THE ENVELOPE PROVIDED.
