<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ONE GROUP-REGISTERED TRADEMARK- MUTUAL FUNDS
3435 STELZER ROAD
COLUMBUS, OHIO 43219
- --------------------------------------------------------------------------------
(Name of Registrant as specified in its Charter)
JESSICA K. DITULLIO, ESQ.
BANK ONE CORPORATION
100 E. BROAD STREET
COLUMBUS, OHIO 43215
- --------------------------------------------------------------------------------
(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:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
-----------------------------------------------------------------------
(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):
N/A
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
-----------------------------------------------------------------------
(5) Total Fee paid:
N/A
-----------------------------------------------------------------------
/ / 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:
N/A
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(2) Form, schedule or Registration statement No.:
N/A
-----------------------------------------------------------------------
(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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<PAGE>
ONE GROUP-REGISTERED TRADEMARK- INCOME BOND FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 19, 1999
Notice is hereby given that a Special Meeting of the Shareholders ("Special
Meeting") of One Group Income Bond Fund (the "Fund"), a separate series of One
Group-Registered Trademark- Mutual Funds (the "Trust"), will be held at 10:00
a.m. (Eastern Time) on November 19, 1999 at the Trust's offices, 3435 Stelzer
Road, Columbus, Ohio, 43219, for the following purposes:
1. To approve a Sub-Investment Advisory Agreement between Banc One
Investment Advisors Corporation and Banc One High Yield Partners, LLC
with respect to the Fund;
2. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
The proposal referred to above is discussed in the Proxy Statement attached
to this Notice. Each Shareholder is invited to attend the Special Meeting in
person.
Shareholders of record at the close of business on September 23, 1999 (the
"Shareholders") are entitled to notice of, and to vote at, this Special Meeting
or any adjournment thereof.
<TABLE>
<S> <C> <C>
By Order of the Trustees
Charles L. Booth
Secretary
</TABLE>
October 19, 1999
YOUR VOTE IS IMPORTANT. YOU CAN HELP THE FUND AVOID THE NECESSITY AND EXPENSE OF
SENDING FOLLOW-UP LETTERS TO ENSURE A QUORUM BY PROMPTLY:
1. VOTING ON-LINE VIA THE INTERNET.
2. VOTING BY CALLING TOLL-FREE, OR
3. MARKING, SIGNING, DATING AND RETURNING THE ENCLOSED PROXY. (THE ENCLOSED
ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES).
IF YOU ARE UNABLE TO ATTEND THE SPECIAL MEETING, PLEASE VOTE BY ONE OF THESE
THREE METHODS SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING.
<PAGE>
ONE GROUP-REGISTERED TRADEMARK- INCOME BOND FUND
3435 STELZER ROAD
COLUMBUS, OHIO 43219
------------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 19, 1999
---------------------
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees (the
"Trustees") of One Group-Registered Trademark-Mutual Funds (the "Trust") on
behalf of One Group Income Bond Fund (the "Fund"). The proxy is revocable at any
time before it is voted by sending written notice of the revocation or a
subsequently executed proxy to the Trust at the above address or by appearing
personally and electing to vote on November 19, 1999 at the Special Meeting of
Shareholders of the Fund at 10:00 a.m. (Eastern Time) at 3435 Stelzer Road,
Columbus, Ohio 43219 (such meeting and any adjournment thereof is referred to
herein as the "Special Meeting"). The cost of preparing and mailing the Notice
of Special Meeting, the proxy card, this proxy statement and any additional
proxy material has been or is to be borne jointly by Banc One Investment
Advisors Corporation (the "Investment Advisor") and Banc One High Yield
Partners, LLC ("Banc One High Yield Partners"). Proxy solicitations will be made
primarily by mail, but may also be made by telephone, telegraph, or personal
interview conducted by certain officers or employees of the Trust or The One
Group Services Company (the Trust's administrator pursuant to a management and
administration agreement between The One Group Services Company and the Trust).
In the event that the Shareholder signs and returns the proxy ballot, but does
not indicate a choice as to any of the items on the proxy ballot, the proxy
attorneys will vote those Shares in favor of such proposal(s).
Only Shareholders of record at the close of business on September 23, 1999
will be entitled to vote at the Special Meeting. On September 23, 1999, the Fund
had a total of 184,391,268.387 Shares outstanding. Each Share of the Fund is
entitled to one vote, with each fractional share being entitled to a
proportionate fractional vote on each matter to be acted upon at the Special
Meeting. This proxy statement and the enclosed proxy card will be sent to
Shareholders of record on or about October 19, 1999.
One Group Mutual Funds' Declaration of Trust and Code of Regulations do not
provide for annual shareholder meetings, and no such meetings are planned for
2000. Proposals that shareholders would like to have included in a proxy
statement for any future meeting must be received by One Group Mutual Funds
within a reasonable period of time prior to printing and mailing proxy material
for such meeting.
For purposes of determining the presence of a quorum and counting votes on
the matters presented, Shares represented by abstentions and "broker non-votes"
will be counted as present, but not as votes cast, at the Special Meeting. Under
the Investment Company Act of 1940, as amended (the "1940 Act"), the affirmative
vote necessary to approve the matter under consideration may be determined with
reference to a percentage of votes present at the Special Meeting, which would
have the effect of treating abstentions and non-votes as if they were votes
against the proposal.
The Trust's executive offices are located at 3435 Stelzer Road, Columbus,
Ohio 43219.
A COPY OF THE FUND'S ANNUAL REPORT FOR THE YEAR ENDED JUNE 30, 1999 IS
AVAILABLE UPON REQUEST FROM THE ONE GROUP SERVICES COMPANY AND MAY BE OBTAINED
WITHOUT CHARGE BY CALLING 1-800-480-4111.
1
<PAGE>
INTRODUCTION
This Special Meeting is being called for the following purposes: (1) to
approve a Sub-Investment Advisory Agreement between Banc One Investment Advisors
Corporation (the "Investment Advisor") and Banc One High Yield Partners, LLC
("Banc One High Yield Partners") with respect to the Fund; and (2) to transact
such other business as may properly come before the Special Meeting or any
adjournment thereof.
Approval of Proposal (1) requires the affirmative vote of the lesser of: (a)
67% or more of the outstanding Shares of the Fund present at the Special
Meeting, if the holders of more than 50% of the outstanding Shares are present
or represented by proxy, or (b) more than 50% of the outstanding Shares of the
Fund.
PROPOSAL (1)--APPROVAL OF SUB-INVESTMENT ADVISORY AGREEMENT
BETWEEN THE INVESTMENT ADVISOR AND BANC ONE HIGH YIELD PARTNERS
On August 19, 1999, the Trustees of the Trust, including a majority of the
Trustees who are not interested persons of the Trust or Banc One High Yield
Partners, as defined in the 1940 Act, unanimously approved on behalf of the Fund
the form of the proposed Sub-Investment Advisory Agreement between the
Investment Advisor and Banc One High Yield Partners. (A copy of the form of the
proposed Sub-Investment Advisory Agreement between the Investment Advisor and
Banc One High Yield Partners is included as Exhibit A to this proxy statement).
Under the proposed Sub-Investment Advisory Agreement, Banc One High Yield
Partners would act as Sub-Advisor to the Fund with regard to that portion of the
Fund's assets designated by the Investment Advisor for investment in corporate
fixed-income securities and instruments rated below investment grade or unrated
corporate fixed-income securities and instruments of similar quality
(collectively, "High Yield Assets").
CURRENT INVESTMENT ADVISORY CONTRACT
At the present time, the Investment Advisor, an indirect subsidiary of Bank
One Corporation, serves as investment advisor to the Fund pursuant to an
investment advisory agreement dated January 11, 1993 (the "Investment Advisory
Agreement"). The Investment Advisory Agreement was last submitted to a vote of
shareholders of the Fund on March 10, 1988. The Investment Advisory Agreement
will continue in effect as to the Fund from year to year, if such continuance is
approved at least annually by the Trust's Board of Trustees or by vote of a
majority of the outstanding shares of the Fund and, in either case, by a
majority of the Trustees who are not interested persons as defined in the 1940
Act, by vote cast in person at a meeting called for such purpose. The Trust's
Board of Trustees renewed the Investment Advisory Agreement at their quarterly
meeting on August 19, 1999. The Investment Advisory Agreement may be terminated
as to the Fund at any time on 60 days' written notice without penalty by the
Trustees, by vote of a majority of the outstanding shares of that Fund, or by
the Investment Advisor. The Investment Advisory Agreement also terminates
automatically in the event of any assignment, as defined in the 1940 Act.
Under the Investment Advisory Agreement, the Investment Advisor makes the
day-to-day investment decisions for the Fund and continuously reviews,
supervises and administers the Fund's investment programs. As consideration for
its services, the Investment Advisor is entitled to a fee of sixty one-
hundredths of one percent (.60%) of the Fund's daily net assets. The Investment
Advisor and the Fund's administrator and distributor, The One Group Services
Company, have agreed to waive fees and/or reimburse expenses to limit total
annual fund operating expenses to .92% for Class A shares, 1.57% for Class B
shares, 1.57% for Class C shares, and .67% for Class I shares for the period
beginning November 1, 1999 and ending on October 31, 2000. For the fiscal year
ended June 30, 1999, the Fund paid
2
<PAGE>
investment advisory fees to the Investment Advisor equal to $2,094,101.29 after
taking into account fee waivers/reimbursements.(1)
PROPOSED SUB-INVESTMENT ADVISORY AGREEMENT
Under the proposed Sub-Investment Advisory Agreement, if approved, the
Investment Advisor will continue to have full responsibility for providing
investment advisory services to the Fund. The Investment Advisor will discharge
this responsibility in part through retention of Banc One High Yield Partners,
at the Investment Advisor's sole expense, to manage those assets of the Fund
that are designated from time to time by the Investment Advisor for investment
in High Yield Assets. (Currently, up to 30% of the Fund's total assets may be
invested in High Yield Assets). The Investment Advisor will oversee the
activities of Banc One High Yield Partners and will be responsible for: (i)
designating the assets of the Fund to be managed by Banc One High Yield
Partners; and (ii) setting any policies it deems appropriate for Banc One High
Yield Partners's activities, subject to the direction of the Fund's Trustees.
Shareholders of the Fund will continue to receive the benefits of the Investment
Advisor's supervision of the Fund and, under the proposed arrangement, receive
the additional benefit of Banc One High Yield Partners' investment advisory
services.
Pursuant to the Sub-Investment Advisory Agreement, Banc One High Yield
Partners, in accordance with the Fund's objective, policies and restrictions,
and subject to the general supervision of the Trustees and the Investment
Advisor, will manage the day-to-day investment activities for those assets
designated as eligible for investment in High Yield Assets by the Investment
Advisor (the "High Yield Portfolio"). Banc One High Yield Partners will make
investment decisions concerning, and place all orders for, purchases and sales
of the High Yield Portfolio's securities and maintain the High Yield Portfolio's
records relating to such purchases and sales. Banc One High Yield Partners will
bear those expenses expressly stated to be payable by it under the
Sub-Investment Advisory Agreement.
In consideration for the services provided and expenses assumed under the
Sub-Investment Advisory Agreement, the Investment Advisor will pay Banc One High
Yield Partners a fee, computed daily and paid monthly, at an annual rate of
sixty one-hundredths of one percent (.60%) of the High Yield Portfolio's daily
net assets. Banc One High Yield Partners has agreed to waive a portion of the
sub-advisory fee in an amount equal to the percentage of the investment advisory
fee that is waived by the Investment Advisor with respect to the Fund. The
Investment Advisor will bear the sole responsibility for the payment of the
sub-advisory fee to Banc One High Yield Partners.
The proposed Sub-Investment Advisory Agreement will become effective on the
date approved by the Shareholders and, unless sooner terminated, will continue
for an initial term ending August 31, 2000. Thereafter, the Sub-Investment
Advisory Agreement will continue for successive one-year terms, provided that
such continuation is specifically approved at least annually by a vote of a
majority of the Trustees, or by the vote of a majority of the outstanding Shares
of the Fund, and, in either case, by a majority of the Trustees who are not
interested persons as defined in the 1940 Act, by vote cast in person at a
meeting called for such purpose. The proposed Sub-Investment Advisory Agreement
will terminate automatically in the event of its assignment, as defined in the
1940 Act or termination of the Investment Advisory Agreement.
The Trustees recommend that the Shareholders of the Fund vote to approve the
proposed Sub-Investment Advisory Agreement, thereby appointing Banc One High
Yield Partners as the Sub-Investment
- ------------------------
(1) On March 22, 1999, the Pegasus Multi-Sector Bond Fund (the "Predecessor
Fund") consolidated with the Fund. The Predecessor Fund is considered the
surviving fund for accounting purposes. The Predecessor Fund had a fiscal year
ending December 31st which was changed to June 30th upon consolidation with the
Fund. The investment advisory fee is for the period beginning January 1, 1999
through June 30, 1999 and includes fees paid to First Chicago NBD Investment
Management Company, an affiliate of the Investment Advisor, as advisor to the
Pegasus Funds.
3
<PAGE>
Advisor to the Fund. Approval by Shareholders of the Sub-Investment Advisory
Agreement will not result in an increase in the contractual rate of any advisory
or sub-investment advisory fees payable by the Fund, but will result in the
payment of the sub-investment advisory fees by the Investment Advisor to Banc
One High Yield Partners. Such sub-investment advisory fees are borne solely by
the Investment Advisor and not by the Fund.
In unanimously approving the proposed Sub-Investment Advisory Agreement and
recommending its approval by Shareholders, the Trustees of the Funds, including
the independent Trustees, considered the best interests of Shareholders of the
Fund and took into account all factors they deemed relevant. The factors
considered by the independent Trustees included the nature, quality and extent
of the service to be provided by Banc One High Yield Partners; the complexity of
the high yield market; and data on investment performance, management fees and
expense ratios of competitive funds. After considering these factors, the
Trustees concluded that the proposed Sub-Investment Advisory Agreement would be
beneficial to the Fund and to Shareholders.
In the event that holders of a majority of the outstanding Shares of the
Fund vote in the negative with respect to the proposed Sub-Investment Advisory
Agreement, the Trustees will consider such further action as they may determine
to be in the best interests of the Fund's Shareholders.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUND
VOTE TO APPROVE THE PROPOSED SUB-INVESTMENT ADVISORY AGREEMENT.
INFORMATION ABOUT BANC ONE HIGH YIELD PARTNERS, LLC
Banc One High Yield Partners, (1111 Polaris Parkway, P.O. Box 710211,
Columbus, Ohio 43271-0211) is a registered investment advisor formed in June,
1998 to provide investment advisory services related to high yield, high risk
investments to the One Group High Yield Bond Fund (the "High Yield Bond Fund")
and other advisory clients. Banc One High Yield Partners is controlled by the
Investment Advisor and Pacholder Associates, Inc., (8044 Montgomery Road, Suite
382, Cincinnati, Ohio 45236). The Investment Advisor and Pacholder Associates,
Inc. own 51% and 49% respectively of the membership units of Banc One High Yield
Partners. As of June 30, 1999, Banc One High Yield Partners had approximately
$150 million in assets under management. Banc One High Yield Partners has
provided sub-advisory services to the High Yield Bond Fund since the High Yield
Bond Fund's inception in 1998.
The name, address, and principal occupation of each of the principal
executive officer and each member of the board of managers of Banc One High
Yield Partners are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD WITH
BANC ONE
NAME AND ADDRESS HIGH YIELD PARTNERS PRINCIPAL OCCUPATION
- ---------------------------------------- ---------------------- -----------------------------------
<S> <C> <C>
Mark A. Beeson ......................... Manager, Chairman and Senior Managing Director, Banc One
Banc One Investment Advisors Chief Executive Investment Advisors Corporation
Corporation Officer
1111 Polaris Parkway
Columbus, Ohio 43271
William J. Morgan ...................... Manager President, Pacholder Associates,
Pacholder Associates, Inc. Inc., a registered investment
8044 Montgomery Road, Suite #382 advisor
Cincinnati, Ohio 45236
James P. Shanahan, Jr. ................. Manager Managing Director & General
Pacholder Associates, Inc. Counsel, Pacholder Associates,
8044 Montgomery Road, Suite #382 Inc., a registered investment
Cincinnati, Ohio 45236 advisor
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD WITH
BANC ONE
NAME AND ADDRESS HIGH YIELD PARTNERS PRINCIPAL OCCUPATION
- ---------------------------------------- ---------------------- -----------------------------------
<S> <C> <C>
Peter W. Atwater ....................... Manager Chief Operating Officer,
Banc One Investment Advisors Banc One Investment Advisors
Corporation Corporation
1111 Polaris Parkway
Columbus, Ohio 43271
Gary J. Madich, CFA .................... Manager Senior Managing Director, Banc One
Banc One Investment Advisors Investment Advisors Corporation
Corporation
1111 Polaris Parkway
Columbus, Ohio 43271
</TABLE>
INFORMATION ABOUT THE INVESTMENT ADVISOR
The Investment Advisor is an indirect, wholly-owned subsidiary of Bank One
Corporation, a bank holding company incorporated in the state of Delaware. Bank
One Corporation, One Bank One Plaza, Chicago Illinois 60670 has affiliate
banking organizations in Arizona, Colorado, Delaware, Florida, Illinois,
Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Texas, Utah, West
Virginia and Wisconsin. In addition, Bank One Corporation has several affiliates
that engage in data processing, venture capital, investment and merchant
banking, and other diversified services including trust management, investment
management, brokerage, equipment leasing, mortgage banking, consumer finance,
and insurance. On a consolidated basis, Bank One Corporation had assets of over
$256 billion as of June 30, 1999.
The Investment Advisor represents a consolidation of the investment advisory
staffs of a number of bank affiliates of Bank One Corporation, which have
considerable experience in the management of open-end management investment
company portfolios, including the Trust since 1985. As of June 30, 1999, the
Investment Advisor acted as investment adviser for approximately $126 billion in
assets, of which over $59 billion is in the Trust.
The name, address, and principal occupation of each of the principal
executive officer and directors of the Investment Advisor are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD WITH
THE
NAME AND ADDRESS INVESTMENT ADVISOR PRINCIPAL OCCUPATION
- ---------------------------------------- ---------------------- -----------------------------------
<S> <C> <C>
David J. Kundert ....................... Chairman, President, Chairman, President and CEO, Banc
Banc One Investment Advisors and CEO One Investment Advisors
Corporation Corporation; Chairman, Bank One
1111 Polaris Parkway Trust Company, N.A.
Columbus, Ohio 43271
Kenneth T. Stevens ..................... Director Chairman, Bank One Retail Group
1111 Polaris Parkway
Columbus, Ohio 43240
Peter W. Atwater ....................... Director and Chief Chief Operating Officer, Banc One
Banc One Investment Advisors Operating Officer Investment Advisors Corporation
Corporation
1111 Polaris Parkway
Columbus, Ohio 43271
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
POSITION(S) HELD WITH
THE
NAME AND ADDRESS INVESTMENT ADVISOR PRINCIPAL OCCUPATION
- ---------------------------------------- ---------------------- -----------------------------------
<S> <C> <C>
David R. Meuse ......................... Director Principal, Stonehenge Holdings,
Stonehenge Holdings, Inc. Inc.
150 East Gay Street
Columbus, Ohio 43215
William G. Jurgenson ................... Director Executive Vice President, First
Bank One, N.A. (Illinois) National Bank of Chicago
One Bank One Plaza
Chicago, Illinois 60670
William P. Boardman .................... Director Bank One Corporation, Senior
Bank One Corporation Executive Vice President and Head
One Bank One Plaza of Acquisitions
Chicago, Illinois 60670
Richard W. Vague ....................... Director Chairman and CEO, First USA
First USA
201 North Market Street
Wilmington, Delaware 19801
</TABLE>
INFORMATION ABOUT THE ONE GROUP SERVICES COMPANY
The One Group Services Company, a wholly-owned subsidiary of the BISYS
Group, Inc., is the Trust's principal underwriter pursuant to a Distribution
Agreement under which shares of the Trust are sold on a continuous basis. The
One Group Services Company also serves as the Trust's Administrator pursuant to
a Management and Administration Agreement. The address of The One Group Services
Company is 3435 Stelzer Road, Columbus, Ohio 43219.
BANKING LAWS
Banc One High Yield Partners believes that it may perform the services for
the Fund contemplated by the Sub-Investment Advisory Agreement with the
Investment Advisor without a violation of applicable banking laws and
regulations. The Investment Advisor also believes that it may perform investment
advisory services for the Fund pursuant to the Investment Advisory Agreement
with the Trust without a violation of applicable banking laws and regulations.
Future changes in federal or state statutes and regulations relating to
permissible activities of banks or bank holding companies and their subsidiaries
and affiliates, as well as further judicial or administrative decisions or
interpretations of present and future statutes and regulations, could change the
manner in which Banc One High Yield Partners or the Investment Advisor could
continue to perform services for the Fund.
ADDITIONAL INFORMATION
TRUSTEES AND OFFICERS OF THE FUND
None of the trustees or officers of the Fund hold positions with the
Investment Advisor or Banc One High Yield Partners, or have an interest in the
Investment Advisor or Banc One High Yield Partners, or in a person controlling,
controlled by or under common control with the Investment Advisor or Banc One
High Yield Partners except John F. Finn (one of the trustees of the Fund) who
owns or controls 10,125 shares of Bank One Corporation common stock, the
indirect parent of the Investment Advisor.
6
<PAGE>
OWNERS
The following list indicates the ownership of the Shareholders who, to the
best knowledge of the Fund, are the owners of more than 5% of the outstanding
Shares of the Fund:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS TITLE OF CLASS OWNERSHIP TYPE OF OWNERSHIP
- --------------------------------------- ----------------- ---------------------- -----------------
<S> <C> <C> <C>
Donaldson Lufkin Jenrette
Securities Corporation Inc. ......... Class A Shares 6.66% Record
P.O. Box 2052
Jersey City, NJ 07303-2052
Strafe & Co. .......................... Class A Shares 5.06% Record
BOIA--One Group Operations
1111 Polaris Parkway
PO Box 710211
Columbus, Ohio 43271-0211
Strafe & Co. .......................... Class I Shares 88.69% Record
BOIA--One Group Operations
1111 Polaris Parkway
PO Box 710211
Columbus, Ohio 43271-0211
</TABLE>
As a group, the Officers and Trustees of the Fund own less than 1% of the
outstanding Shares of the Fund.
ALLOCATION OF BROKERAGE
For the fiscal year ended June 30, 1999, the Fund did not pay brokerage
commissions to affiliated brokers.
Allocation of transactions, including their frequency, to various dealers is
determined by the Investment Advisor with respect to the Fund based on its best
judgment and in a manner deemed fair and reasonable to Shareholders. The primary
consideration is prompt execution of orders in an effective manner at the most
favorable price. Subject to this consideration, dealers who provide supplemental
investment research to the Investment Advisor may receive orders for
transactions by the Fund. Information so received is in addition to and not in
lieu of services required to be performed by the Investment Advisor and does not
reduce the advisory fees payable to the Investment Advisor. Such information may
be useful to the Investment Advisor in serving both the Fund and other clients
and, conversely, supplemental information obtained by the placement of business
of other clients may be useful to the Investment Advisor in carrying out its
obligations to the Fund.
Dated: October 19, 1999
IF YOU DO NOT EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE VOTE BY USING ONE
OF THE FOLLOWING THREE METHODS:
1. VOTE ON-LINE BY USING THE ENCLOSED INSTRUCTIONS;
2. VOTE BY CALLING TOLL FREE USING THE ENCLOSED INSTRUCTIONS; OR
3. SIGN YOUR PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE TO
AVOID UNNECESSARY EXPENSE AND DELAY. FOR YOUR CONVENIENCE, NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES.
7
<PAGE>
EXHIBIT A
SUB-INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of , 1999 by and between BANC ONE INVESTMENT
ADVISORS CORPORATION, an Ohio corporation with its principal office in Columbus,
Ohio (hereinafter called the "Investment Adviser") and BANC ONE HIGH YIELD
PARTNERS, LLC, an investment adviser with its principal office in Columbus, Ohio
(hereinafter called the "Sub-Adviser").
WHEREAS, the Investment Adviser serves as the Investment Adviser to One
Group-Registered Trademark- Income Bond Fund (the "Fund") of One
Group-Registered Trademark- Mutual Funds (the "Trust"), a Massachusetts business
trust and an open-end diversified management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Investment Adviser desires to retain the Sub-Adviser to provide
investment sub-advisory services to the Fund with regard to corporate
fixed-income securities and instruments which are rated below investment grade
or unrated corporate fixed-income securities of similar quality (collectively,
"High Yield Assets") and the Sub-Adviser is willing and believes it possesses
legal authority to make available such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto agree as follows:
1. RETENTION. The Investment Adviser hereby retains the Sub-Adviser to
provide certain sub-investment advisory services set forth herein to it with
regard to investments by the Fund in High Yield Assets for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts such retention and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. DELIVERY OF DOCUMENTS. The Investment Adviser has furnished the
Sub-Adviser with copies properly certified or authenticated of each of the
following documents:
(a) the Trust's Amended and Restated Declaration of Trust, as filed with
the Secretary of State of the Commonwealth of Massachusetts on February 19,
1993, and all amendments thereto or restatements thereof (such Declaration,
as presently in effect and as it shall from time to time be amended or
restated, is herein called the "Declaration of Trust");
(b) the Trust's Code of Regulations and amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing the
appointment of the Sub-Adviser and approving this Agreement;
(d) the Trust's original Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission on
February 20, 1985 and all amendments thereto;
(e) the Trust's current Registration Statement on Form N-lA under the
Securities Act of 1933, as amended ("1933 Act"), and under the 1940 Act as
filed with the Securities and Exchange Commission and all amendments
thereto; and
(f) the Trust's most recent prospectus and Statement of Additional
Information relating to the Fund (such prospectus and Statement of
Additional Information, as presently in effect, and all amendments and
supplements thereto are herein collectively called the "Prospectus").
The Investment Adviser will promptly furnish the Sub-Adviser with copies of
all amendments of or supplements to the foregoing documents.
3. MANAGEMENT. Subject always to the instructions and supervision of the
Investment Adviser and the Trust's Board of Trustees, the Sub-Adviser will
provide a continuous investment program for High Yield Assets with respect to
those assets of the Fund that are designated by the Investment Adviser for
8
<PAGE>
investment in High Yield Assets from time to time (the "Portfolio"), including
investment research and management with respect to all securities and
investments constituting High Yield Assets and cash equivalents related thereto.
Subject to any restrictions, instructions, or guidelines provided by either the
Fund or the Investment Adviser, the Sub-Adviser will determine from time to time
what High Yield Assets will be purchased, retained or sold by the Trust with
respect to the Portfolio and will place all purchase and sale orders on behalf
of the Fund with respect to the Portfolio. The Sub-Adviser will provide the
services under this Agreement in accordance with the Fund's investment
objective, policies and restrictions as stated in the Prospectus and resolutions
of the Trust's Board of Trustees. The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(b) will comply in all material respects with all applicable Rules and
Regulations of the Securities and Exchange Commission and in addition will
conduct its activities under this Agreement in accordance with any
applicable regulations pertaining to the investment advisory activities of
the Sub-Adviser;
(c) will not make loans to any person to purchase or carry units of
beneficial interest ("Shares") in the Fund or make loans to the Trust;
(d) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In
placing orders with brokers and dealers, the Sub-Adviser will attempt to
obtain prompt execution of orders in an effective manner at the most
favorable price. Consistent with this obligation, when the execution and
price offered by two or more brokers or dealers are comparable, the
Sub-Adviser may, in its discretion, purchase and sell portfolio securities
to and from brokers and dealers who provide the Sub-Adviser with research
advice and other services. In no instance will portfolio securities be
purchased from or sold to The One Group Services Company, the Investment
Adviser, the Sub-Adviser or any affiliated person of either the Trust, The
One Group Services Company, the Investment Adviser, or the Sub-Adviser,
except to the extent permitted by the 1940 Act;
(e) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Fund and prior,
present or potential shareholders, and will not use such records and
information for any purpose other than in the performance of its
responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Trust, which approval shall not be
unreasonably withheld. The foregoing shall not apply to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required or
requested to be disclosed by the Securities and Exchange Commission or any
other regulatory examiner of the Sub-Adviser, any auditor of the parties
hereto, by judicial or administrative process or otherwise by applicable law
or regulation. Nothing herein shall restrict the Sub-Adviser's ability to
publish information regarding the performance of accounts under its
management; and
(f) will maintain its policy and practice of conducting its fiduciary
functions independently. In making investment recommendations for the Fund,
the Sub-Adviser's personnel will not inquire or take into consideration
whether the issuers of securities proposed for purchase or sale for the
Fund's account are customers of the Investment Adviser, the Sub-Adviser or
the parents or subsidiaries or affiliates of the Investment Adviser or
Sub-Adviser. In dealing with such customers, the Sub-Adviser and its parent,
subsidiaries, and affiliates will not inquire or take into consideration
whether securities of those customers are held by the Trust.
4. SERVICES NOT EXCLUSIVE. The investment advisory services furnished by
the Sub-Adviser hereunder are not to be deemed exclusive. Except to the extent
necessary to perform the Sub-Adviser's obligations
9
<PAGE>
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of the Sub-Adviser, or any subsidiary or affiliate of the Sub-Adviser, or
any employee of the Sub-Adviser, to engage in any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
person.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 3la-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request;
provided, however, that the Sub-Adviser may retain copies of any or all such
records. The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 3la-2 under the 1940 Act all records which it maintains for the Fund
that are required to be maintained by Rule 3la-1 under the 1940 Act.
6. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Trust. The Trust and the Investment Adviser will be
responsible for all of their respective expenses and liabilities.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Investment Adviser will pay the Sub-Adviser and
the Sub-Adviser will accept as full compensation therefor a fee computed daily
and paid monthly in arrears on the first business day of each month at an annual
rate of sixty one-hundredths of one percent (.60%) of the Portfolio's average
daily net assets. The Sub-Advisor agrees to waive a portion of the sub-advisory
fee equal to the percentage of the investment advisory fee waived by the
Investment Adviser with respect to the Fund.
If the fee payable to the Sub-Adviser pursuant to this Section 7 begins to
accrue before the end of any month or if this Agreement terminates before the
end of any month, the fee for the period from such date to the end of such month
or from the beginning of such month to the date of termination, as the case may
be, shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs. For purposes of
calculating fees, the value of the Portfolio's assets shall be computed in the
manner specified in the Prospectus and the Trust's Declaration of Trust for the
computation of the value of the Trust's net assets in connection with the
determination of the net asset value of the Trust's shares. Payment of said
compensation shall be the sole responsibility of the Investment Adviser and
shall in no way be an obligation of the Fund or of the Trust.
8. LIMITATION OF LIABILITY. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or fact or for any loss suffered by the
Trust or the Investment Adviser in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective as of
the date first written above, provided that it shall have been approved by vote
of a majority of the outstanding voting securities of the Fund, in accordance
with the requirements under the 1940 Act, and, unless sooner terminated as
provided herein, shall continue in effect until August 31, 2000. Thereafter, if
not terminated, this Agreement shall continue in effect for successive periods
of twelve months each ending on August 31st of each year, provided such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of the Trust's Board of Trustees who are not parties
to this Agreement or interested persons of the Trust, the Sub-Adviser, or the
Investment Adviser, cast in person at a meeting called for the purpose of voting
on such approval, and (b) by the vote of a majority of the Trust's Board of
Trustees or by the vote of a majority of the outstanding voting securities of
the Fund. Notwithstanding the foregoing, this Agreement may be terminated at any
time on sixty days' written notice, without the payment of any penalty, by the
Trust (by vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Fund), by the Investment Adviser or by the
Sub-Adviser. This Agreement will immediately terminate in the event of its
assignment and upon termination of the Investment Advisory
10
<PAGE>
Agreement between the Trust and the Investment Adviser. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meaning of such terms
in the 1940 Act.)
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and shall be governed by the laws
of the Commonwealth of Massachusetts.
The names 'One Group-Registered Trademark- Mutual Funds' and 'Trustees of
One Group-Registered Trademark- Mutual Funds' refer respectively to the Trust
created and the Trustees, as trustees but not individually or personally, acting
from time to time under a Declaration of Trust dated May 23, 1985 to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of the Commonwealth of Massachusetts and elsewhere as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of 'One Group-Registered Trademark- Mutual Funds' entered into in
the name or on behalf thereof by any of the Trustees, representatives or agents
are made not individually, but in such capacities, and are not binding upon any
of the Trustees, Shareholders or representatives of the Trust personally, but
bind only the assets of the Trust, and all persons dealing with any series of
Shares of the Trust must look solely to the assets of the Trust belonging to
such series for the enforcement of any claims against the Trust.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
<TABLE>
<S> <C>
BANC ONE INVESTMENT ADVISORS CORPORATION
By: ------------------------------------------
Title: Senior Managing Director
----------------------------------------------
BANC ONE HIGH YIELD PARTNERS, LLC
By: ------------------------------------------
Title: Vice President--Portfolio Manager
----------------------------------------------
One Group Mutual Funds hereby acknowledges and
agrees to the provisions of paragraph 3(e) of
this Agreement.
ONE GROUP MUTUAL FUNDS
By: ------------------------------------------
Title: President
- ----------------------------------------------
</TABLE>
12
<PAGE>
Exhibit B
ONE GROUP-Registered Trademark- INCOME BOND FUND
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS ON NOVEMBER 19, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF ONE GROUP MUTUAL FUNDS.
The undersigned hereby appoints Mark S. Redman and Charles L. Booth, each of
them with full power of substitution as proxies of the undersigned, to vote, as
designated below, at the Special Meeting of Shareholders of One Group Income
Bond Fund (the "Fund") on November 19, 1999 at 10:00 a.m., Eastern time, and at
any adjournments thereof, all of the units of beneficial interest in the Fund
which the undersigned would be entitled to vote upon the following matter if
personally present.
1. To approve a Sub-Investment Advisory Agreement between Banc One Investment
Advisors Corporation and Banc One High Yield Partners, LLC with respect to
the Fund;
FOR AGAINST ABSTAIN
( ) ( ) ( )
2. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
FOR AGAINST ABSTAIN
( ) ( ) ( )
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL (1). IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THE TRUSTEES
RECOMMEND A VOTE FOR THE PROPOSALS ON THE REVERSE SIDE.
NOTE: Please sign exactly as the name appears on this card. EACH Joint owner
must sign the proxy. When signing as executor, administrator, attorney, trustee
or guardian, or as custodian for a minor, please give the FULL title of such.
If a corporation, please give the FULL corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
__________________________________________
Signature of Shareholder(s)
__________________________________________
Signature of Shareholder(s)
Dated: ________________________________ , 1999.
PLEASE MARK, SIGN, DATE, AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE. IF YOU HAVE VOTED YOUR
PROXY ONLINE OR BY TELEPHONE, PLEASE DO NOT RETURN THIS PROXY CARD.
<PAGE>
Exhibit C
ONE GROUP-REGISTERED TRADEMARK-MUTUAL FUNDS
Two Quick and Easy Ways
To Vote Your Proxy INSTANTLY
- --------------------------
As a valued One Group Income Bond Fund shareholder, your proxy vote is important
to us. That's why we've made it faster and easier to vote your proxy at YOUR
convenience, 24 hours a day. After reviewing the enclosed PROXY STATEMENT, which
outlines important issues affecting the Fund, select one of the following quick
and easy methods to register your vote -- ACCURATELY and IMMEDIATELY.
<TABLE>
<CAPTION>
VOTE ON-LINE VOTE BY TOLL-FREE PHONE CALL
<S> <C>
1. Read the enclosed PROXY STATEMENT and have your PROXY 1. Read the enclosed PROXY STATEMENT and have your PROXY CARD* at
CARD* at hand. hand.
2. Go to Web site WWW.PROXYVOTE.COM. 2. Call the toll-free Number found on your
3. Enter the 12-digit Control Number found on your PROXY CARD.
PROXY CARD. 3. Enter the 12-digit Control Number found on your
4. Cast your vote using the easy-to-follow instructions. PROXY CARD.
4. Cast your vote using the easy-to-follow instructions.
</TABLE>
*DO NOT MAIL THE PROXY CARD IF VOTING BY INTERNET OR TELEPHONE.
