<PAGE> 1
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No. ___)
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, for Use of the Commission Only (as Permitted by
Rule 14c-5(d)(2))
/X/ Definitive Information Statement
AON ASSET MANAGEMENT FUND, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Information Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii) or 14c-5(g).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/X/ Fee previously paid 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
AON ASSET MANAGEMENT FUND, INC.
6610 WEST BROAD STREET
RICHMOND, VIRGINIA 23230
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF AON ASSET MANAGEMENT FUND, INC.
TO BE HELD ON APRIL 24, 1996
Notice is hereby given that a special meeting of the shareholders of
the Aon Asset Management Fund, Inc. (the "Fund") will be held at 1:30 p.m.,
local time, on Wednesday, April 24, 1996 in the Board Room, 8th floor, Life of
Virginia Building, 6610 West Broad Street, Richmond, Virginia 23230 for the
following purposes:
(1) To approve or disapprove a proposed Administration Agreement,
among the Fund, Forth Financial Securities Corporation and Aon Advisors,
Inc., in the form appended hereto as Exhibit A;
(2) To elect five directors of the Fund; and
(3) To consider ratification of the selection of Ernst & Young LLP as
independent public accountants for the Fund for the 1996 fiscal year.
As a shareholder of record at the close of business on March 20, 1996,
you have the right to vote your Fund shares in person or by proxy at the
meeting.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
April 3, 1996 John J. Palmer
President
<PAGE> 3
AON ASSET MANAGEMENT FUND, INC.
6610 WEST BROAD STREET
RICHMOND, VIRGINIA 23230
INFORMATION STATEMENT
This Information Statement is being furnished on behalf of Aon Asset
Management Fund, Inc. (the "Fund") and relates to a Special Meeting of
Shareholders of the Fund (the "Special Meeting"), to be held Wednesday, April
24, 1996 at 1:30 p.m., local time, in the Board Room, 8th floor, Life of
Virginia Building, 6610 West Broad Street, Richmond, Virginia 23230 and at any
adjournment thereof, for the purposes set forth in the accompanying Notice of
Special Meeting of Shareholders. The approximate mailing date of this
Information Statement is April 3, 1996. At this meeting, shareholders of the
Fund will be asked:
(1) To approve or disapprove a proposed Administration Agreement,
among the Fund, Forth Financial Securities Corporation and Aon Advisors,
Inc., in the form appended hereto as Exhibit A;
(2) To elect five directors of the Fund; and
(3) To consider ratification of the selection of Ernst & Young LLP as
independent public accountants for the Fund for the 1996 fiscal year.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
INTRODUCTION
The Fund's investment advisor is Aon Advisors, Inc. ("AAI"), with
offices at 6604 West Broad Street, Richmond, Virginia 23230, and 123 North
Wacker Drive, Chicago, Illinois 60606. AAI, which is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended, is a
wholly-owned subsidiary of Aon Corporation, 123 North Wacker Drive, Chicago,
Illinois 60606, a holding company whose common stock is listed on the New York
Stock Exchange. AAI serves as investment advisor of the two portfolios of the
Fund, the Money Market Portfolio and the Flexible Asset Allocation Portfolio,
under the oversight and supervision of the board of directors of the Fund and
pursuant to respective Investment Advisory Agreements dated January 27, 1994
and April 26, 1995.
The Fund's shares are distributed by Forth Financial Securities
Corporation ("FFSC"), 6610 West Broad Street, Richmond, Virginia 23230, a
wholly-owned subsidiary of Forth Financial Resources, Ltd. ("FFRL"). As noted
below, until April 1, 1996, FFRL was a wholly-owned subsidiary of Aon
Corporation and is now a wholly-owned subsidiary of General Electric Capital
Corporation ("GECC"). FFSC also provides administrative services to the Fund
pursuant to an Administration Agreement among the Fund, AAI and FFSC.
On April 1, 1996, Aon Corporation sold its The Life Insurance Company
of Virginia ("Life of Virginia") subsidiary to GECC. In connection with its
sale of Life of
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<PAGE> 4
Virginia, Aon Corporation has also sold all of the stock of FFRL to
GECC. As a result of such transactions, Aon Corporation has notified the Fund
of its desire that the board of directors of the Fund be reconstituted to
comprise primarily directors who are neither affiliated persons of Life of
Virginia or FFSC nor currently serving as directors of Life of Virginia Series
Fund, Inc. ("LOVSF"), another registered investment company of which Life of
Virginia is the sponsor. To this end, Aon Corporation and certain of its
subsidiaries, which as of March 20, 1996 collectively beneficially owned 98.58%
of the outstanding Money Market Portfolio shares and 98.85% of the outstanding
Flexible Asset Allocation Portfolio shares constituting 98.59% of the total
outstanding shares of capital stock of the Fund, have requested pursuant to the
Fund's By-Laws that the Fund call a special meeting of shareholders of the Fund
to consider the election of five nominees proposed by Aon Corporation and such
subsidiaries as new directors of the Fund (the "New Board"). If the New Board
is elected, each current member of the board of directors of the Fund is
expected to resign and the term of office of each such person as a director of
the Fund would thereupon terminate.
Aon Corporation and its subsidiaries which are shareholders of the
Fund have notified the Fund that, if the New Board is elected, it is expected
that the New Board will thereafter consider proposals to approve, and to the
extent necessary to seek shareholder approval of, certain changes relating to
the operation of the Fund, which may include but are not necessarily limited to
proposals (i) to reorganize the Fund as a Delaware business trust, an action
that, among other things, is expected to allow the Fund to offer unlimited
series and classes of capital stock and may result in a change in the Fund's
name, (ii) to replace FFSC with Aon Securities Corp., an indirect wholly-owned
subsidiary of Aon Corporation, as the Fund's distributor, (iii) assuming the
approval of Proposal No. 1, to replace FFSC with another firm as the Fund's
administrator, (iv) to replace those executive officers of the Fund who are
affiliated with Life of Virginia or FFSC with persons who are not so
affiliated, (v) to consider whether to retain Firstar Trust Company ("Firstar")
as the Fund's custodian, transfer agent and accounting agent or replace Firstar
with one or more other firms and (vi) to approve a distribution plan as
contemplated by Rule 12b-1 under the Investment Company Act of 1940, as amended
(the "1940 Act") for certain classes of shares of the respective series of the
Fund.
RECORD DATE AND OUTSTANDING SHARES
Every holder of record of shares of capital stock of the Fund at the
close of business on March 20, 1996 will be entitled to vote at the special
meeting in person or by proxy. As of such date, each Portfolio of the Fund had
outstanding the number of shares of capital stock set forth opposite such
Portfolio below:
Money Market Portfolio (Class A) 381,235,109.37
Flexible Asset Allocation Portfolio (Class B) 7,167,724.00
As provided in the Fund's Amended and Restated Articles of
Incorporation ("Articles"), each holder of capital stock of the Fund shall be
entitled to one vote for each full share, and a fractional vote for each
fractional share, of capital stock then standing in his or her name on the
books of the Fund. Proposal 1 requires approval by each Portfolio of the Fund.
Therefore, shareholders of each class will vote separately on this proposal.
Proposals 2 and 3 require approval by both Portfolios of the Fund in the
aggregate and not by class. Therefore, shareholders of both classes will vote
together on these proposals. No shares of capital stock of the Fund have
cumulative voting rights.
The table below lists the shareholders owning, as of March 20, 1996,
5% or greater of any class of the outstanding shares of capital stock of the
Fund:
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<PAGE> 5
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Amount and Percent
Name and Address Nature of of
Title of Class of Beneficial Owner Beneficial Ownership Class
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A Aon Risk Services PFTA 152,035,000.00 39.88
(Money Market Controller, 7th Floor directly owned shares
Portfolio) 123 N. Wacker Dr.
Chicago, IL 60606
Class A Rollins Hudig Hall Co. 91,925,000.00 24.11
(Money Market Controller, 22nd Floor directly owned shares
Portfolio) 123 N. Wacker Dr.
Chicago, IL 60606
Class A Combined Insurance Company 51,127,077.78 13.41
(Money Market of America directly owned shares
Portfolio) Investment Accounting,
27th Floor
123 N. Wacker Dr.
Chicago, IL 60606
Class A Rollins Hudig Hall-NY 19,100,000.00 5.11
(Money Market Suite 22 directly owned shares
Portfolio) 123 N. Wacker Dr.
Chicago, IL 60606
Class B Combined Insurance Company 5,404,961.523 75.41
of America directly owned shares
Investment Accounting Mgr.
27th Floor
123 N. Wacker Dr.
Chicago, IL 60606
Class B Virginia Surety Company Inc. 1,680,140.199 23.44
Investment Account Mgr. directly owned shares
123 N. Wacker Dr.
Chicago, IL 60606
</TABLE>
Each of the shareholders listed in the table above is a direct or
indirect wholly-owned subsidiary of Aon Corporation. Therefore, Aon
Corporation may be deemed to be the beneficial owner of all of the shares
listed above.
THE FUND WILL DELIVER TO ITS SHAREHOLDERS A COPY OF ITS MOST RECENT
ANNUAL REPORT UPON REQUEST. A SHAREHOLDER WHO WISHES TO RECEIVE A COPY OF THE
FUND'S ANNUAL REPORT MAY WRITE THE FUND AT 6610 WEST BROAD STREET, RICHMOND,
VIRGINIA, OR CALL (800) 866-3555.
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<PAGE> 6
---------------------
PROPOSAL NO. 1
APPROVAL OR DISAPPROVAL OF ADMINISTRATION AGREEMENT
---------------------
FFSC has provided administrative services to the Fund pursuant
to an Administration Agreement (the "Agreement") among the Fund, AAI and FFSC.
The Agreement provides that it shall automatically terminate in the event of
its assignment (as "assignment" is defined in the 1940 Act). FFSC is a
wholly-owned subsidiary of FFRL, which was formerly a wholly-owned subsidiary
of Aon Corporation. In connection with its sale of Life of Virginia, Aon
Corporation has sold all of the stock of FFRL to GECC and accordingly
FFRL is currently a wholly-owned subsidiary of GECC. The sale of all of
FFRL's stock to GECC resulted in a change of control of FFSC. Such change in
control constituted an assignment, thereby terminating the Agreement.
In order to maintain the administrative services provided for the Fund
by FFSC, the board of directors of the Fund, including a majority of the
directors who are not "interested persons" of the Fund, has determined to
approve a new Administration Agreement (the "New Agreement") among the Fund,
AAI and FFSC.
A copy of the New Agreement is attached to this Information Statement
as Exhibit A. The terms of the New Agreement shall be identical to the terms
of the Agreement. Specifically, FFSC shall provide certain administrative and
supervisory services to the Money Market Portfolio and the Flexible Asset
Allocation Portfolio (each a "Portfolio") of the Fund, at AAI's expense. For
providing such services, AAI will pay FFSC an annual fee of $25,000 plus a
monthly fee of 0.05% of the average daily net assets of each of the
above-referenced Portfolios.
If approved by the affirmative vote of a majority of the outstanding
voting shares of each Portfolio, the New Agreement will continue in effect from
year to year so long as such continuance is specifically approved at least
annually either (i) by the board of directors of the Fund, or (ii) by a vote of
a majority of the outstanding voting shares of each Portfolio, provided that in
either event such continuance shall also be approved by a majority of the
directors who are not parties to the New Agreement, or interested persons of
the Fund or FFSC, cast in person at a meeting called for the purpose of voting
on such approval.
RECOMMENDATION AND VOTE REQUIRED
At the Special Meeting, shareholders of the Fund will be asked to
approve or disapprove the New Agreement. The board of directors of the Fund
believes that approval of the New Agreement is in the best interests of the
Fund. In the event the New Agreement is not approved by the Fund's
shareholders, the board of directors will take such action as it deems to be in
the best interests of the Fund, which may include calling a meeting of the
shareholders to vote on another Administration Agreement.
The approval or disapproval of the New Agreement requires the vote of
a majority of the outstanding voting shares of each Portfolio of the Fund, at a
meeting of shareholders at which a quorum is
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<PAGE> 7
present, in person or by proxy. Abstention votes will not be counted as either
a "FOR" or "AGAINST" vote, but will be included in the number of shares
represented at the Special Meeting for quorum purposes.
THE BOARD OF DIRECTORS OF THE FUND, INCLUDING A MAJORITY OF THE
NON-INTERESTED DIRECTORS, RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION
OF THE PROPOSED NEW AGREEMENT AMONG THE FUND, FFSC, AND AAI.
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<PAGE> 8
---------------------
PROPOSAL NO. 2
ELECTION OF DIRECTORS
---------------------
ELECTION OF DIRECTORS
Pursuant to the Articles and By-Laws of the Fund, the number of
directors of the Fund shall be eight. However, it is expected that, if the New
Board is elected, all current directors of the Fund will resign
contemporaneously with such election and the By-Laws of the Fund will thereupon
be amended to reduce the number of directors of the Fund to five. The
following persons have been nominated for election to the board as the entire
board of directors, to hold office until until their successors are elected and
qualified. The nominees are: Michael A. Cavataio, Michael A. Conway, Carleton
D. Pearl, Richard J. Peters and Donald W. Phillips. These nominees are not
currently members of the board of directors of the Fund. All nominees for
election as director have consented to being named in this Information
Statement and have agreed to serve if elected. Should any of the nominees be
unable to accept the nomination or election, which the Fund has no reason to
anticipate, another person or persons may be nominted for election as director.
As a result of Aon Corporation's desire to reconstitute the board of
directors of the Fund upon the sale of Life of Virginia as described above, the
tenure of the current board of directors of the Fund is expected to terminate
upon the election of the New Board.
INFORMATION CONCERNING NOMINEES
The following table shows the nominees who are standing for election
as director and their principal occupations which, unless specific dates are
shown, are of more than five years' duration, although the titles held may not
have been the same throughout.
<TABLE>
<CAPTION>
Share
Name Postition Age Business Experience Ownership (1)
---- --------- --- ------------------- -------------
<S> <C> <C> <C> <C>
Michael A. Cavataio Director Nominee 52 Director and Vice-Chairman and 81,093.90 (2)
3125 Ramsgate Road Advisor, Pioneer Financial Services. Flexible Asset Allocation
Rockford, IL 61114 President, Rockford Lillian's Inc., Portfolio
1984 to 1995. Real estate
developer. Director, Today's
Bancorp. Director, Today's Bank
East.
Michael A. Conway* Director Nominee 49 President, Aon Advisors, Inc.
123 North Wacker Drive Senior Vice President and 14,370 (3)
29th Floor Senior Investment Officer, Money Market Portfolio
Chicago, IL 60606 Aon Corporation
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
Share
Name Postition Age Business Experience Ownership (1)
---- --------- --- ------------------- -------------
<S> <C> <C> <C> <C>
Donald W. Phillips Director Nominee 47 Chairman, Equity Institutional 0
2 North Riverside Plaza Investors, Inc. and Executive Vice
Chicago, IL 60606 President, Equity Group Investments,
Inc. Director, Capsure, Inc.
Director, Sit Mutual Funds Group.
Carleton D. Pearl Director Nominee 52 Senior Vice President & Treasurer, 0
McDonald's Corporation McDonald's Corporation.
McDonald's Plaza
Oak Brook, Ill 60521
Richard J. Peters Director Nominee 48 Vice President, Treasurer and 0
13400 W. Outer Drive Director, Penske Corporation.
Detroit, MI 48239 President and Director, Penske
Motorsports, Inc.
</TABLE>
* These nominees are "interested persons" of the Fund, as defined in the 1940
Act.
(1) Full shares of the Fund owned beneficially as of March 20, 1996,
based on information furnished by each nominee. On that date, the directors
and officers of the Fund, as a group, beneficially owned less than 1%,
of the Class A and Class B shares of the Fund.
(2) Beneficial ownership shared by Pioneer Financial Services,
of which Mr. Cavataio is chairman of the investment committee and a director.
(3) Excludes up to 375,820,000 Money Market Portfolio shares and 7,085,103
Flexible Asset Allocation Portfolio shares, constituting 98.6% and 98.8% of the
outstanding shares of each portfolio respectively, owned of record by various
subsidiaries of Aon Corporation, for which Mr. Conway serves as chief investment
officer and may be deemed to be the beneficial owner by virtue of his sole
and/or shared voting and dispositive power over these shares. Mr. Conway
disclaims beneficial ownership of such shares.
Since the beginning of the Fund's fiscal year ended October 31, 1995,
no transactions involving purchases or sales of securities of AAI or Aon
Corporation or any of their affiliates by any member of, or nominee for, the
board of directors of the Fund were made in an amount exceeding 1% of the
outstanding securities of any class of AAI, Aon Corporation or any of their
affiliates.
CURRENT DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND
The following schedule sets forth certain information furnished by
each of the current directors and principal executive officers of the Fund.
<TABLE>
<CAPTION>
Name Position Age Business Experience
- ---- -------- --- -------------------
<S> <C> <C> <C>
John J. Palmer* President and Director 56 Director, AAI, since 1987. Director, Life
of Virginia, since 1986. President,
</TABLE>
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<PAGE> 10
<TABLE>
<S> <C> <C> <C>
LOVSF, since 1986. President, FFSC, since 1992.
Wallace L. Chandler Director 69 Director, Universal Corporation, since
P.O. Box 25099 1986. Vice
Richmond, VA 23260 Chairman, Universal Corporation, until December 31, 1988.
Director, Lawyer's Title Corporation, since 1991. Director,
Regency Financial Shares, Inc., since 1989 and Chairman since
1992. Director and Vice Chairman, Regency Bank, from 1987 to
1992.
John E. Leard Director 79 Retired Vice President, Richmond
6207 Monument Ave. Newspapers, Richmond, VA 23226
Inc. Retired Executive Editor, the Richmond Times-Dispatch and
The Richmond News Leader.
Robert P. Martin Director 63 Self-employed investment consultant
P.O. Box 12085 since 1985. Managing Director,
Richmond, VA 23241 Continental Investment Advisors, Ltd., 1984 to 1985.
J. Clifford Miller, III Director 54 Account Executive, Davenport & Co. of
7103 Glen Parkway Virginia, Inc., since 1992. Owner, Miller
Richmond, VA 23229 Farms. Consultant since 1988. Head-Upper School, Collegiate
Schools, until 1988. Director, Miller Manufacturing Co., Inc.
General Partner, Miller Land Fund, since 1987.
Lawrence R. Miller* Vice President and Director 53 Vice-President -Investments, Combined
123 North Wacker Drive Insurance Company of America, since
Chicago, IL 60606 1986. Senior Executive Director, AAI, since 1991. Executive
Director, AAI, 1987-1990. Executive Director, Continental
Investment Advisors, Ltd., from 1986 to 1987.
J. Garnett Nelson* Director 57 Director, Life of Virginia, from 1989 to 1995. Senior Vice
President, Life of Virginia, 1988-1995. Executive Director,
AAI, from 1986 to 1995. Director, RAC Income Fund, Inc.
Director, Lawyer's Title Company, since 1992.
</TABLE>
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<PAGE> 11
<TABLE>
<S> <C> <C> <C>
Lee A. Putney Director 63 Director, Regency Financial Services,
4208 Sulgrave Road Inc., since 1989. Director, Regency
Richmond, VA 23221 Bank, since 1987. Managing Partner, KPMG Peat Marwick, from
1964 to 1985.
Jerry G. Overman Vice President 47 Treasurer and Director of Investment Services, AAI, since 1985.
Treasurer, Life of Virginia, since 1988. Second Vice President
and Treasurer of Continental Investment Advisors, Ltd., from
1984 to 1986.
Linda L. Lanam Secretary 47 Corporate Secretary, Life of Virginia and a number of Life of
Virginia affiliates, since 1992. Vice President and Senior
Counsel, Life of Virginia, since 1989. Vice President and
Senior Counsel, Union Fidelity Life Insurance Company, from 1986
to 1989.
Scott R. Reeks Treasurer 38 Director of Marketing Administration and Equity Operations, Life
of Virginia, since 1991. Manager-Equity Operations, Life of
Virginia, from 1986 to 1991. Treasurer, Vice President and
Manager of Operations, FFSC, since 1985. Treasurer, LOVSF since
1985.
</TABLE>
* These directors are "interested persons" of the Fund, as defined in the
1940 Act.
Each of the current directors of the Fund , except Lawrence R. Miller,
also serves as a director of LOVSF.
The tenure of each current director is expected to terminate upon the
election of the New Board at the Special Meeting. Each current officer will
hold his respective position until his successor is duly elected or appointed
or until he is removed by the board of directors of the Fund, whichever shall
occur first. Unless otherwise noted, the address of each individual listed
above is 6610 West Broad Street, Richmond, Virginia 23230.
MEETINGS AND COMMITTEES
The Fund does not have an active nominating, standing or compensation
committee. The Fund has an active audit committee currently consisting of
Messrs. Chandler, Leard, Martin, J.C. Miller, and Putney. The audit committee
meets periodically with the Fund's independent accountants and the executive
officers of the Fund. This committee reviews the accounting principles being
applied by the Fund in financial reporting, the scope and adequacy of internal
controls, the scope of the audit and non-audit assignments of the independent
-9-
<PAGE> 12
accountants, and the related fees. During the year ended October 31, 1995,
the board of directors of the Fund met 5 times and the audit committee met
1 time. Each director attended seventy-five percent or more of the total
meetings of the directors and the committees of the directors on which he
served which were held during the year.
COMPENSATION OF OFFICERS AND DIRECTORS
Directors or officers who are interested persons of AAI or any of its
affiliates do not receive any consideration from the Fund for their services to
the Fund. The directors who are not interested persons of the Fund are
compensated by the Fund at a rate of $4,000 annually, plus $250 per board or
committee meeting attended. In addition, directors who are compensated by the
Fund are also reimbursed for any out-of-pocket expenses incurred in connection
with affairs of the Fund.
Set forth below is a compensation table listing, for each current
director entitled to receive compensation, the aggregate compensation received
from the Fund for its last fiscal year, and the total compensation received
from the Fund and LOVSF.
TABLE OF DIRECTORS' COMPENSATION
<TABLE>
<CAPTION>
Aggregate Compensation Total Compensation from
Director from Fund Fund and LOVSF
-------- ---------------------- -----------------------
<S> <C> <C>
Mr. Chandler $4,700 $7,500
Mr. Leard $5,000 $8,000
Mr. Martin $5,000 $8,000
Mr. C. Miller $5,000 $8,000
Mr. Putney $5,000 $8,000
</TABLE>
Directors and officers of the Fund do not receive any benefits from
the Fund upon retirement nor does the Fund accrue any expenses for pension or
retirement benefits.
RECOMMENDATION AND VOTE REQUIRED
The election of any director requires the vote of a plurality of the
shares voted, regardless of class, at a meeting of shareholders at which a
quorum is present, in person or by proxy. This means that the five nominees
receiving the largest number of votes will be elected. Accordingly, a
plurality of all votes cast by shareholders of the Money Market Portfolio and
the Flexible Asset Allocation Portfolio, regardless of class, shall be required
to elect each director. Abstention votes will not be counted as either a "FOR"
or "AGAINST" vote, but will be included in the number of shares represented at
the Special Meeting in person or by proxy for quorum purposes.
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<PAGE> 13
THE BOARD OF DIRECTORS OF THE FUND MAKES NO RECOMMENDATION WITH
RESPECT TO THE ELECTION OF MESSRS. CAVATAIO, CONWAY, PEARL, PETERS AND PHILLIPS
AS MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND.
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<PAGE> 14
-----------------------
PROPOSAL NO. 3
RATIFICATION OF
INDEPENDENT ACCOUNTANTS
-----------------------
The board of directors of the Fund, including a majority of the
directors who are not "interested persons" of the Fund, has selected Ernst &
Young LLP, an independent accounting firm, to serve as independent certified
public accountants to the Fund for the fiscal year ending October 31, 1996.
Ernst & Young LLP was selected as independent accountants to Aon Corporation
and its subsidiaries in 1986, has served as independent accountants to the Fund
since September 26, 1991 and reports directly to the Fund's audit committee.
Audit services performed by Ernst & Young LLP during the most recent fiscal
year included examinations of the financial statements of the Fund, services
related to filings with the Securities and Exchange Commission and
consultations on matters relating to accounting and financial reporting.
RECOMMENDATION AND VOTE REQUIRED
At the Special Meeting, shareholders of the Fund will be asked to
consider ratification of the selection of Ernst & Young LLP as independent
accountants for the Fund. It is the belief of the board of directors that the
employment of Ernst & Young LLP for the 1996 fiscal year would be in the best
interests of the Fund. Representatives of Ernst & Young LLP are not expected
to be present at the Special Meeting.
The ratification of the selection of the independent accountants
requires the vote of a majority of the shares voted, regardless of class, at a
meeting of shareholders at which a quorum is present, in person or by proxy.
Abstention votes will not be counted as either a "FOR" or "AGAINST" vote, but
will be included in the number of shares represented at the Special Meeting in
person or by proxy for quorum purposes.
THE BOARD OF DIRECTORS OF THE FUND, INCLUDING A MAJORITY OF
NON-INTERESTED DIRECTORS, RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION
OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS FOR THE FUND.
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<PAGE> 15
---------------------
SHAREHOLDER PROPOSALS
---------------------
The Fund is not required to hold annual meetings of shareholders and
the Fund currently does not intend to hold such meetings unless shareholder
action is required in accordance with the 1940 Act or the Fund's By-laws. A
shareholder proposal intended to be presented at any meeting of shareholders of
the Fund hereafter called must be received by the Fund a reasonable time before
the board of directors' solicitation relating thereto is made in order to be
included in the Fund's proxy statement and form of proxy relating to that
meeting and presented at the meeting. The mere submission of a proposal by a
shareholder does not guarantee that such proposal will be included in the proxy
statement because certain rules under the Federal securities laws must be
complied with before inclusion of the proposal is required. A shareholder
desiring to submit a proposal for presentation at a meeting of shareholders
should send the proposal to the offices of the Fund at 6610 West Broad Street,
Richmond, Virginia 23230.
---------------------
ADDITIONAL INFORMATION
---------------------
The Fund knows of no other matters that may come before the meeting.
The Fund's policy, as permitted by Virginia law and expressed in its
By-Laws, is to forgo the holding of future shareholder meetings unless mandated
by provisions of the 1940 Act or applicable state law. By observing this
policy, the Fund seeks to avoid the expenses customarily incurred in the
preparation of proxy material and the holding of shareholder meetings, as well
as the related expenditure of corporate staff time.
John J. Palmer
President
April 3, 1996
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<PAGE> 16
APPENDIX A
ADMINISTRATION AGREEMENT
This Agreement (hereinafter "Agreement") made this 29th day of
December, 1993 by and between Aon Asset Management Fund, Inc., a Virginia
corporation (hereinafter the "Fund"), Aon Advisors, Inc., a Virginia corporation
(hereinafter "Aon Advisors"), and Forth Financial Securities Corporation, a
Virginia corporation (hereinafter "Administrator"), respectively.
1. Furnishing Documents.
1.1 The Fund has furnished the Administrator with copies of each
of the following:
(a) Articles of Incorporation of the Fund;
(b) By-Laws of the Fund as in effect on the date hereof;
(c) The Fund's effective registration statement on Form
N-lA, as filed with the Securities and Exchange Commission ("SEC");
and
(d) The most recent prospectus of the Fund.
1.2 The Fund will furnish the Administrator from time to time with
copies of all amendments of or supplements to the foregoing, if any. The
Administrator will be entitled to rely on all such furnishings.
2. Administrative Services.
2.1 The Administrator hereby agrees to supervise all aspects of
the Fund's operations (except those performed by the Fund's investment adviser,
Aon Advisors, Inc.), in accordance with the documents referred to in Section
1.1, and assume the obligations set forth for the compensation provided.
2.2 The Administrator shall:
(a) monitor all services and personnel it supplies in
order to ensure the effective day-to-day corporate and legal
administration of the Fund;
(b) supply, or provide persons to perform, internal
auditing and internal legal services;
(c) supply stationery and office supplies;
(d) prepare reports to shareholders and the Board of
Directors of the Fund;
(e) prepare, or provide persons to prepare, tax returns;
(f) prepare reports to and filings with the SEC and State
Blue Sky authorities;
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<PAGE> 17
(g) at the Fund's request, furnish office space, in such
place as may be agreed upon from time to time, and all necessary
office facilities (exclusive of such office space and facilities
provided under Section 2(i) below);
(h) supply, or provide persons to perform, clerical,
accounting, bookkeeping, administrative and other similar services
(exclusive of those services relating to and to be performed under any
contract for custodial, transfer, dividend and accounting services
entered into by the Fund with a third party); and
(i) furnish persons satisfactory to the Fund to respond
during normal business hours to in person, written and telephone
requests for assistance and information from shareholders of the Fund,
and provide such facilities and equipment as may be necessary for such
persons to carry out their duties under this section 2(i), including,
without limitation, office space and facilities, telephones and CRT
terminals and equipment (including telephone lines) necessary for
access to the Fund's shareholder records.
2.3 Nothing contained herein shall be construed to restrict the
Fund's right to hire its own employees or to contract for services to be
performed by third parties.
2.4 The Administrator agrees that all records which it maintains
for the Fund are the Fund's property and that the Administrator will surrender
them to the Fund, its independent auditors, the Board of Directors of the Fund,
or as may be required by any governmental agency having jurisdiction over the
Fund, promptly upon written request. The provisions of this paragraph shall
survive any termination of this Agreement.
3. Administration Fee.
3.1 Aon Advisors (and not the Fund) shall pay to the
Administrator, after the end of each calendar month, as compensation for its
services rendered pursuant to Section 2(a) through (i) of this Agreement, an
administration fee accrued daily. This fee is based upon the values placed on
the net assets of the Fund's Money Market Portfolio and Flexible Asset
Allocation Portfolio, and of any other Portfolios the Fund may determine to
create from time to time, each day the net asset value is determined throughout
the month at an annual rate of 0.05% (5/100ths of 1%).
3.2 Aon Advisors will also pay a further administrative fee in the
amount of $25,000 payable annually to the Administrator.
3.3 If there is no determination of the net asset value of any
Portfolio of the Fund as a result of a suspension of the right of redemption of
Fund shares, then for the purposes of this Section 3, the value of the net
assets of that Portfolio as last determined will be deemed to be the value of
the net assets of that Portfolio for each day that such suspension continues.
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<PAGE> 18
4. Expenses.
4.1 The Administrator will bear all expenses in connection with
the performance of its services under this Agreement.
4.2 The Fund will assume and pay all other expenses incurred in
the operation of the Fund, including:
(a) taxes and fees payable by the Fund to Federal, State
or other governmental agencies;
(b) brokerage fees and commissions, and issue and
transfer taxes;
(c) interest;
(d) Board of Directors meeting attendance fees and
expenses of directors of the Fund who are not directors, officers or
employees of Aon Advisors, the Administrator, or of any affiliated
person (other than a registered investment company) of Aon Advisors or
the Administrator;
(e) registration, qualification, filing and other fees in
connection with securities registration requirements of Federal and
State regulatory authorities;
(f) the charges and expenses for custodial, paying agent,
transfer agent, dividend agent and accounting agent services;
(g) outside legal fees and expenses in connection with
the affairs of the Fund, including, but not limited to, registering
and qualifying its shares with Federal and State regulatory
authorities;
(h) charges and expenses of outside auditors;
(i) costs of meetings of shareholders and directors of
the Fund;
(j) costs of maintenance of corporate existence;
(k) insurance premiums;
(l) investment advisory fees;
(m) costs and fees associated with printing and
delivering registration statements, stockholders' reports and proxy
statements;
(n) costs and fees associated with delivering reports to
and filings with the SEC and State Blue Sky authorities;
(o) costs relating to administration of the Fund's
general operations;
(p) costs relating to the Fund's own employees, if any;
and
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<PAGE> 19
(q) costs of preparing, printing and delivering the
Fund's prospectuses to existing shareholders.
5. Similar Activities For Others.
5.1 The services of the Administrator under this Agreement are not
to be deemed exclusive and the Administrator will be free to render similar
services to others so long as its services under this Agreement are not
impaired.
6. Dual Interests.
6.1 It is understood by the parties to this Agreement that any of
the shareholders, directors, officers, employees and agents of the Fund may be
a director, officer, employee or agent of, or be otherwise interested in the
Administrator, any affiliated person of the Administrator, any organization in
which the Administrator may have an interest, or any organization which may
have an interest in the Administrator and any such affiliated person or
organization may have an interest in the Fund.
6.2 It is also understood by the parties to this Agreement that
the existence of any such dual interest shall not affect the validity of any
transactions, except as otherwise provided in the Articles of Incorporation of
the Fund and of the Administrator or by specific provisions of applicable law,
including the Investment Company Act of 1940 (the "1940 Act").
7. Liability of the Administrator.
7.1 In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties on the part of the
Administrator (or its officers, directors, agents, employees, controlling
persons, shareholders, and any other person or entity affiliated with the
Administrator or retained by it to perform or assist in the performance of its
obligations under this Agreement), neither the Administrator nor any of its
officers, directors, employees or agents shall be subject to liability to the
Fund or to any shareholder or to any other person with a beneficial interest in
the Fund for any act or omission in the course of, or connection with,
rendering services hereunder, including without limitation any error or
judgment or mistake of law or for any loss suffered by the Fund or any
shareholder or other person in connection with the matters to which this
Agreement relates, except to the extent specified in Section 36(b) of the 1940
Act, to the extent applicable, concerning loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services.
8. Duration, Termination and Amendment of this Agreement.
8.1 This Agreement shall not become effective (and the
Administrator shall not serve or act as the Fund's administrator) as to any
Portfolio unless and until this Agreement is approved by the Fund's Board of
Directors, including a majority of directors who are not parties to this
Agreement or interested persons of any
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<PAGE> 20
such party to this Agreement and by shareholders of such Portfolio.
8.2 If approved by the vote of a majority of the outstanding
voting securities of each Portfolio, this Agreement shall continue in effect
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually either (i) by the Board of Directors of
the Fund or (ii) by a vote of a majority of the outstanding voting securities
of the Portfolio, provided that in either event such continuance shall also be
approved by the vote of a majority of the directors who are not parties to this
Agreement, interested persons of the Fund or of the Administrator, case in
person at a meeting called for the purpose of voting on such approval.
8.3 This Agreement may, on sixty days' written notice, be
terminated as to any Portfolio, at any time, without the payment of any
penalty, by the Board of Directors of the Fund, by a vote of a majority of the
Portfolio's outstanding voting securities or by Aon Advisors.
8.4 This Agreement shall automatically terminate as to any
Portfolio in the event of its assignment or if it shall not be approved by a
majority of the outstanding voting securities of that Portfolio.
8.5 In interpreting the provisions of this Section 8, the
definitions contained in Section 2(a) of the 1940 Act (particularly the
definitions of "interested person" and "assignment", and the majority of
outstanding "voting securities") shall be applied.
8.6 This Agreement shall not be amended as to any Portfolio
without specific approval of such amendment by (i) the vote of a majority of
the outstanding voting securities of the Portfolio, and (ii) the vote of a
majority of the Fund's directors, including a majority of directors who are not
parties to this Agreement and who are not interested persons of the Fund or of
the Administrator, cast in person at a meeting called for the purpose of voting
on such approval.
9. Miscellaneous.
9.1 The Administrator may from time to time employ or associate
with any person or persons it may believe to be particularly fitted to assist
it in the performance of this Agreement. The compensation of any such persons
will be paid by the Administrator, and no obligation with respect to providing
compensation, or otherwise, will be incurred by, or on behalf of, the Fund or
any Portfolio with respect to such persons. In addition, the Fund understands
that the persons employed by the Administrator to assist in the performance of
its duties hereunder will not devote their full time to those duties, and that
noting contained herein will be deemed to limit or restrict the Administrator's
right or the right of any of the Administrator's affiliates to engage in and
devote time and attention to other businesses or to render other services of
whatever kind or nature.
9.2 The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any
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<PAGE> 21
of the provisions hereof or otherwise affect their construction or effect.
9.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
9.4 It is intended by the parties that this Agreement be governed
by the law of the Commonwealth of Virginia; however, this Agreement is also
governed by, and subject to, the 1940 Act, and rules thereunder, including such
exemptions therefrom as the SEC may grant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers, thereunto duly authorized.
ATTEST: AON ASSET MANAGEMENT FUND, INC.
/s/ M. O'DOHERTY /s/ JOHN J. PALMER
- -------------------------------- -----------------------------------
ASSISTANT SECRETARY PRESIDENT
ATTEST: AON ADVISORS, INC.
/s/ M. O'DOHERTY /s/ J. GARNET NELSON
- -------------------------------- -----------------------------------
ASSISTANT SECRETARY SR. EXECUTIVE DIRECTOR
ATTEST: FORTH FINANCIAL SECURITIES
CORPORATION
/s/ M. O'DOHERTY /s/ SCOTT R. REEKS
- -------------------------------- -----------------------------------
ASSISTANT SECRETARY VICE PRESIDENT
6
