<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
OHIO NATIONAL LIFE INSURANCE
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO NATIONAL LIFE INSURANCE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
February 29, 1996
Dear ONE Fund Shareholder:
As the management and sale of variable products grow more complex,
your ONE Fund Board of Directors believes a simpler, more direct organizational
structure would better serve you. As you read in the Questions & Answers on the
next page, your Fund Board recommends that Ohio National Investments, Inc. be
approved as ONE Fund's investment adviser.
Ohio National Investments, Inc. consists of the same officers,
directors and investment advisory personnel as the current adviser, O.N.
Investment Management Company (ONIMCO). If approved, the same people and
support staff will continue to manage your assets. The difference is
that Ohio National Investments, Inc. is a subsidiary of Ohio National Life,
whereas ONIMCO is a subsidiary of The O.N. Equity Sales Company. (More
information can be found inside this statement.)
Your approval is necessary to enact this change. The proposed new
agreements are substantially the same as the present ones involving ONIMCO.
THEY WILL NOT CHANGE ANY OF ONE FUND'S FEES, EXPENSES, OPERATIONS, PORTFOLIO
MANAGERS OR SUB-ADVISERS. You should continue to receive the same high quality
investment management that you have come to expect over the years.
Your Board of Directors believes the new agreements serve your best
interest. They have approved them unanimously. They recommend you vote FOR the
proposals. They also recommend you elect the nominees for director and ratify
the selection of independent public accountants. I encourage you to vote in
favor of the proposals. PLEASE VOTE NOW TO HELP SAVE THE COST OF ADDITIONAL
SOLICITATIONS.
PLEASE COMPLETE, SIGN AND RETURN THE PROXY PROMPTLY IN THE ENVELOPE
PROVIDED. No postage is required if mailed within the United States.
YOUR VOTE IS IMPORTANT!
As always, we thank you for your confidence and support.
Sincerely,
Donald J. Zimmerman
President
<PAGE> 3
IMPORTANT NEWS FOR ONE FUND SHAREHOLDERS
February, 1996
While we encourage you to read the full text of the enclosed proxy statement,
here's a brief overview of the major matters to be voted upon.
Questions & Answers
Q. What is happening?
A. ONE Fund intends to name Ohio National Investments, Inc. as its new
investment adviser. Ohio National Investments consists of the same officers,
directors and investment advisory personnel as the current adviser, O.N.
Investment Management Company. In order for Ohio National Investments to serve
as investment adviser, it is necessary for ONE Fund to approve a new investment
advisory agreement.
The following pages elaborate on the proposed new investment advisory
agreement, service agreement and sub-advisory agreement. A vote is also being
sought on the election of directors to the Board of Directors and the selection
of independent public accountants.
Q. Why am I being asked to vote on the proposed new agreements?
A. The Investment Company Act of 1940 requires a vote whenever there is a
change in investment adviser. Your vote is important.
Q. How will this change affect me as a ONE Fund shareholder?
A. ONE Fund and your fund investment will not change. You will still be
invested in the same portfolios. The same people and support staff will
continue to manage your assets.
The proposed new agreements are substantially the same as the current
ones. They will not change any of ONE Fund's fees, expenses, operations,
portfolio managers or sub-advisers.
Q. Will the investment advisory fees be the same?
A. Yes, the investment advisory fees paid by ONE Fund will remain the
same.
<PAGE> 4
Q. What's the reason for this change?
A. To better protect your interests. O.N. Investment Management Company
is a subsidiary of The O.N. Equity Sales Company. The O.N. Equity Sales Company
offers a wide range of securities products and its operations are growing
rapidly. Its activities and those of its registered representatives can subject
it to potential legal liabilities that, in turn, could impair O.N. Investment
Management Company's operations. Ohio National Investments, in contrast, is a
new wholly owned subsidiary of Ohio National Life. As such, it is much less
vulnerable to claims against an affiliated broker-dealer.
Q. How do the board members of my fund suggest that I vote?
A. After careful consideration, the board members of ONE Fund, including
the independent members, recommend that you vote "For" all the items on the
enclosed instruction sheet.
Q. Whom do I call for more information?
A. Please call your registered representative of The O.N. Equity Sales
Company or call ONE Fund at 1-800-578-8078.
HOW TO USE THE PROXY
Each portfolio must vote separately. If you approve of the recommendations of
your Fund Board and wish to vote in favor of all the proposals for ALL the
portfolios in which you hold an interest, you may simply check the "For" box in
the uppermost section of the proxy.
If you wish to vote on each proposal separately, please do so in
sections 1 through 5. If you check the "For All Except" box in section 1, you
should check the lettered box(es) corresponding to the individual(s) for whom
you wish to withhold authority. Note that on sections 2 through 4, you are
permitted to vote only for those portfolios in which you hold an interest.
Thank you for mailing your proxy promptly!
<PAGE> 5
ONE FUND, INC.
237 WILLIAM HOWARD TAFT ROAD
CINCINNATI, OHIO 45219
NOTICE OF MEETING OF SHAREHOLDERS
MARCH 28, 1996
A meeting of the shareholders of ONE Fund, Inc. (the "Fund") will be
held at the Fund's offices at 237 William Howard Taft Road, Cincinnati, Ohio on
March 28, 1996, at 10:00 a.m. for the following purposes:
1. To elect five Directors to serve terms of three years and until
their respective successors shall have been elected and
qualified in accordance with the by-laws of the Fund;
2. To approve a new Investment Advisory Agreement with Ohio
National Investments, Inc. ("ONII") in order to substitute
that new corporation for O.N. Investment Management Company
("ONIMCO");
3. To approve a new Service Agreement among the Fund, ONII and The
Ohio National Life Insurance Company;
4. To approve a new Sub-Advisory Agreement, between ONII and
Societe Generale Asset Management Corp., for the International
and Global Contrarian Portfolios;
5. To ratify or reject the selection of KPMG Peat Marwick LLP as
independent public accountants for the Fund for the fiscal
year ending June 30, 1996; and
6. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on January 31, 1996, are
entitled to notice of and to vote at the meeting.
For reasons given in the attached Proxy Statement, your Board of Directors
RECOMMENDS A VOTE FOR THE PROPOSALS.
Ronald L. Benedict
Secretary
Cincinnati, Ohio
February 29, 1996
<PAGE> 6
ONE FUND, INC.
237 WILLIAM HOWARD TAFT ROAD
CINCINNATI, OHIO 45219
PROXY STATEMENT
MEETING OF SHAREHOLDERS
MARCH 28, 1996
This Statement is furnished in connection with the solicitation of proxies
by the Board of Directors (the "Board") of ONE Fund, Inc. (the "Fund"), for use
at the meeting of shareholders of the Fund to be held on March 28, 1996, and at
any and all adjournments thereof. This statement is being mailed to
shareholders of the Fund on or about February 29, 1996.
Proxies will be solicited primarily by delivering this statement and its
enclosures to the shareholders of record. Printing, mailing and legal costs of
this solicitation will be borne by the Fund; all other costs will be borne by
the investment adviser, O.N. Investment Management Company ("ONIMCO"). No extra
compensation will be paid to employees of the Fund for soliciting proxies.
Each proxy may be revoked at any time prior to being voted by giving
written notice to the Secretary of the Fund, or by the shareholder's appearing
in person at the meeting and notifying the Secretary of his or her intent to
revoke the proxy. Any later dated proxy will revoke an earlier one. All proxies
which are properly executed and received in time and not so revoked will be
voted at the meeting in accordance with the instructions thereon, if any. If a
proxy is returned and no specification is made, the proxy will be voted in
favor of the proposals and for the election of the Directors.
Each shareholder of record at the close of business on January 31,
1996 is entitled to one vote for each share held. As of December 31, 1995, the
number of shares issued and outstanding as to each portfolio of the Fund were
as shown below. Because of its ownership of a substantial number of shares, The
Ohio National Life Insurance Company ("ONLI") is a controlling person of the
Fund and of each portfolio thereof other than the International Portfolio. The
number of shares owned by ONLI, and their percentages of all outstanding
shares, are shown below.
<TABLE>
<CAPTION>
Total Shares Shares Owned Percent
Portfolio Outstanding by ONLI of Total
- --------- ----------- ------------ --------
<S> <C> <C> <C>
Money Market 17,546,128 13,824,481 78.8%
Tax-Free Income 563,279 530,831 94.2
Income 746,222 483,832 64.8
Income & Growth 707,779 395,974 55.9
Growth 642,309 283,877 44.2
Small Cap 311,155 205,851 66.1
International 939,002 116 0.0
Global Contrarian 407,991 258,034 63.2
---------- ---------- ------
Total for Fund 21,863,865 15,982,996 73.1%
</TABLE>
SUMMARY OF PROPOSALS
Briefly summarized, the purpose of the meeting is for shareholders to
vote on the following proposals:
1
<PAGE> 7
1. To elect five Directors. The nominees are listed below under
"Director Nominees." Each nominee will be voted on separately. The combined
votes of the shareholders of all eight portfolios will apply to the election of
each nominee.
2. To approve a new Investment Advisory Agreement substituting Ohio
National Investments, Inc. ("ONII") for ONIMCO as the Fund's investment
adviser. See "New Investment Adviser," below. Shareholders of each portfolio
will vote separately on the approval of the new Investment Advisory Agreement
as it relates to their portfolio.
3. To approve a new Service Agreement as described below under "New
Investment Adviser." Shareholders of each portfolio will vote separately on the
approval of the new Service Agreement as it relates to their portfolio.
4. To approve a new Sub-Advisory Agreement with Societe Generale Asset
Management Corp., as described below under "New Investment Adviser."
Shareholders having assets in the International and Global Contrarian
Portfolios will vote separately on the approval of the new Sub-Advisory
Agreement as it relates to each of those two portfolios.
5. To ratify the selection of KPMG Peat Marwick LLP as independent
public accountants for the Fund for the fiscal year ending June 30, 1996. The
combined votes of the shareholders of all eight portfolios will apply to this
proposal.
Since the shareholders of each portfolio will vote separately on the
approval of the new Investment Advisory Agreement, the new Service Agreement
and, for owners of shares of the International and Global Contrarian
Portfolios, the new Sub-Advisory Agreement, these agreements may be approved
and take effect as to some portfolios and not as to others. If an agreement is
not approved by the shareholders of a portfolio, the corresponding existing
agreement will continue as to that portfolio.
Approval with respect to each issue requires approval by a majority vote
of the eligible shareholders for that issue. Under the Investment Company Act
of 1940 (the "1940 Act"), a majority vote means the concurrence of the lesser
of (a) 67% of the shares represented in person or by proxy at a meeting where
more than 50% of the outstanding shares are so represented or (b) 50% of all
the outstanding shares.
THE FUND BOARD HAS UNANIMOUSLY APPROVED THE NEW CORPORATE STRUCTURE AND
AGREEMENTS, AND RECOMMENDS THEIR APPROVAL BY THE SHAREHOLDERS.
ELECTION OF DIRECTORS
At the meeting, five Directors are to be elected to hold office until the
1999 meeting of shareholders and until their respective successors have been
elected and qualified. The nominees for election as Directors are listed under
"Director Nominees." The Fund has no nominating committee. Nominations are made
by the Board. Each of the candidates for Director will be voted on,
individually, by all the shareholders voting as a whole and not by portfolios.
It is the intention of the persons named in the enclosed form of proxy to
vote for the election of the nominees. The nominees have consented to being
named in this proxy statement and to serving as Directors if elected. Should
any of them become unable or unwilling to accept election, the persons named in
the proxy will exercise their voting power in favor of such other persons as
the Board of Directors may recommend. It is not contemplated that any of the
nominees will be unable to serve if elected.
As of December 31, 1995, Mr. Zimmerman owned 3,220 shares and Mr. Benedict
owned 1,299 shares of the Fund.
COMPENSATION OF DIRECTORS
Directors who are not affiliated with ONLI or the investment adviser
(presently ONIMCO) received aggregate remuneration of $13,800 during 1995. The
Board of Directors met four times during 1995. It is estimated that this
remuneration will aggregate $13,800
2
<PAGE> 8
during 1996. Directors and officers of the Fund who are affiliated with ONLI or
the investment adviser receive no compensation from the Fund. For the fiscal
year ending June 30, 1995, the Directors were compensated as follows:
<TABLE>
<CAPTION>
Aggregate
Compensation Total Compensation
Name and Position From the Fund from Fund Complex*
- ----------------- ------------- ------------------
<S> <C> <C>
James E. Baker $4,250 $13,450
Director
Ronald L. Benedict None None
Director and Secretary
George E. Castrucci $4,250 $13,450
Director
Maurice H. Kirby, Jr. $4,250 $13,450
Directo
Donald J. Zimmerman None None
Director and President
<FN>
*The "Fund Complex" consists of the Fund and Ohio National Fund, Inc.
</TABLE>
DIRECTOR NOMINEES
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION AND DIRECTOR
NAME AGE OTHER POSITIONS SINCE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Ronald L. Benedict* 54 Secretary of the Fund; Second Vice 1992
President & Counsel of ONLI:
Director and Secretary of
ONESCO; Secretary of ONIMCO
and ONII; Assistant
Secretary of ONLAC; Director
and Secretary of Ohio
National Fund.
George E. Castrucci 58 Business consultant and private investor. 1993
Formerly President and Chief Operating
Officer of Great American Communications
Co. and Chairman and Chief Executive
Officer of Great American Broadcasting Co.;
Director of Benchmark Savings Bank;
General Partner of GTOO, LLP; Director of
Ohio National Fund.
Maurice H. Kirby, Jr. 69 Retired. Formerly Senior Vice President of 1992
First National Bank of Cincinnati; Director
of Ohio National Fund.
</TABLE>
3
<PAGE> 9
<TABLE>
<S> <C> <C> <C>
George M. Vredeveld 53 Professor of Economics, University of N/A
Cincinnati; Director of the Center for
Economic Education; Private consultant;
Director of Benchmark Savings Bank;
General Partner of GTOO, LLP.
Donald J. Zimmerman* 58 President of the Fund; Senior Vice 1992
President Insurance Operations of ONLI
and ONLAC; Director and Secretary of
ONLI and ONLAC; Director and
President of Ohio National Fund; Director
and President of ONESCO.
<FN>
*Messrs. Benedict and Zimmerman are "interested persons" within the meaning of
the 1940 Act. They are "affiliated persons" of the Fund because they are Fund
officers and Mr. Benedict is Secretary of both the present investment adviser,
ONIMCO, and of the proposed new investment adviser, ONII.
</TABLE>
OTHER OFFICERS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
PRINCIPAL OCCUPATION AND OFFICER
NAME AGE OTHER POSITIONS SINCE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Joseph P. Brom 60 Vice President of the Fund; Senior Vice 1992
President and Chief Investment Officer of
ONLI and ONLAC; Director and President
of ONIMCO and ONII; Vice President of
Ohio National Fund.
Michael A. Boedeker 53 Vice President of the Fund; Vice President, 1992
Fixed Income Securities of
ONLI and ONLAC; Director and
Vice President of ONIMCO and
ONII; Vice President of Ohio
National Fund.
David G. McClure 42 Vice President of the Fund; Vice President, 1992
Variable Product Sales of ONLI; Director,
Vice President and Chief Operating Officer
of ONESCO; Director and Vice President
of ONIMCO and ONII.
Dennis R. Taney 48 Treasurer of the Fund; Financial Officer 1993
of ONLI; Treasurer of ONIMCO and ONII;
Treasurer of Ohio National Fund.
Stephen T. Williams 42 Vice President of the Fund; Senior 1992
Investment Officer & Portfolio Manager
of ONLI; Director and Vice
President of ONIMCO and
ONII; Vice President of Ohio
National Fund.
</TABLE>
4
<PAGE> 10
INVESTMENT ADVISORY SERVICES
The Fund's investment adviser from the Fund's inception has been ONIMCO, a
wholly-owned subsidiary of The O.N. Equity Sales Company ("ONESCO"), which in
turn is a wholly-owned subsidiary of ONLI. Under the Investment Advisory
Agreement between ONIMCO and the Fund, ONIMCO regularly furnishes to the Board
recommendations with respect to an investment program consistent with the
Fund's investment policies. Upon approval of an investment program by the
Board, ONIMCO implements the program by placing orders for the purchase and
sale of securities. ONIMCO also provides the Fund with office space, necessary
clerical personnel (other than those provided by agreements between the Fund
and The Provident Bank (Cincinnati, Ohio), which serves as custodian, transfer
agent and servicing agent for the Fund), and services of executive and
administrative personnel.
Under a Service Agreement among the Fund, ONIMCO and ONLI, ONLI has agreed
to furnish ONIMCO, at cost, such research facilities, services and personnel as
may be needed by ONIMCO in connection with its performance under the Investment
Advisory Agreement. ONIMCO has agreed to reimburse ONLI for its expenses in
this regard. The Fund has not paid ONIMCO any compensation for services other
than under the Investment Advisory Agreement during the last fiscal year. The
only such compensation paid to an affiliate of ONIMCO during the fiscal year
ending June 30, 1995, was $115,771 paid to ONESCO under the Fund's 12b-1 Plan.
The address of ONIMCO, ONLI, ONLAC and the Fund is 237 William Howard Taft
Road, Cincinnati, Ohio 45219.
The president of ONIMCO is Joseph P. Brom. ONIMCO's directors are Mr.
Brom, Michael A. Boedeker, David G. McClure and Stephen T. Williams. Messrs.
Brom, Boedeker and Williams are principally employed as investment officers
of ONLI. Each of them is also a vice president of the Fund. Mr. McClure's
principal employment is the management of variable product sales for
ONLI. ONIMCO's secretary, Ronald L. Benedict, is also the secretary and a
director of the Fund. The business address of each of these individuals is
237 William Howard Taft Road, Cincinnati, Ohio 45219.
The Investment Advisory Agreement and Service Agreement were both entered
into on May 12, 1992. They were submitted to and approved by the shareholders
of each portfolio of the Fund on the following dates:
Money Market May 12, 1992
Tax-Free Income October 28, 1994
Income May 12, 1992
Income & Growth May 12, 1992
Growth May 12, 1992
Small Cap October 28, 1994
International April 28, 1993
Global Contrarian October 28, 1994
As compensation for its services, ONIMCO receives from the Fund annual
fees on the basis of each portfolio's average daily net assets during the
quarterly period for which the fees are paid based on the following schedule:
(a) for those assets held in the Income, Income & Growth and Growth Portfolios,
the fee is at an annual rate of 0.50% of the first $100 million of those assets
in each portfolio, 0.40% of the next $150 million and 0.30% of assets over $250
million; (b) as to assets held in the Money Market Portfolio, the fee is at an
annual rate of 0.30% of the first $100 million of such assets, 0.25% of the
next $150 million, and 0.20% of assets over $250 million; (c) for assets held
in the Tax-Free Income Portfolio, the fee is at an annual rate of 0.60% of the
first $100 million of those assets, 0.50% of the next $150 million, and 0.40%
of assets over $250 million; (d) for assets held in the Small Cap Portfolio,
the fee is at an annual rate of 0.65% of the first $100 million, 0.55% of the
next $150 million, and 0.45% of assets over $250 million; and (e) for assets
held in the International and Global Contrarian Portfolios, the fee is at an
annual rate of 0.90% of assets in each portfolio. However, ONIMCO is presently
voluntarily waiving all of its fees in connection with the
5
<PAGE> 11
Money Market Portfolio and one-half of its fees in connection with the Tax-Free
Income, Income, Income & Growth, Growth, and Small Cap Portfolios.
Under Supplemental Investment Advisory Agreements, the Fund authorizes
ONIMCO to retain sub-advisers for the International and Global Contrarian
Portfolios, subject to the approval of the Fund's Board of Directors. ONIMCO
has entered into Sub-advisory Agreements with Societe Generale Asset Management
Corp. to manage the investment and reinvestment of those Portfolios' assets,
subject to the supervision of ONIMCO. As compensation for their sub-advisory
services, Societe Generale Asset Management Corp. receives from ONIMCO fees at
the annual rate of 0.75% of the International and Global Contrarian Portfolios'
average daily net assets during the quarter for which the fee is paid.
The Supplemental Investment Advisory Agreements and Sub-Advisory
Agreements were approved by the shareholders of the International and Global
Contrarian Portfolios on the same dates as listed above for approval of the
Investment Advisory Agreement.
All of these agreements are reviewed and approved for continuance by the
Board of Directors each year. The agreements were most recently reviewed by the
Board and approved for continuance on August 17, 1995, by a unanimous vote of
all the Directors cast in person at a Board meeting called for the purpose of
voting on that continuance. Each of these agreements provides for automatic
termination in the event of its assignment.
In addition to the Fund, ONIMCO is also the investment adviser to Ohio
National Fund, Inc., which presently consists of the following portfolios:
<TABLE>
<CAPTION>
Ohio National Fund
Portfolio Assets (12/31/95)
------------------ -----------------
<S> <C>
Equity $175,691,958
Money Market 15,715,788
Bond 18,064,393
Omni 109,577,216
International 90,593,727
Capital Appreciation 19,320,283
Small Cap 16,038,031
Global 4,420,595
Aggressive Growth 4,005,461
</TABLE>
As compensation for its services to Ohio National Fund, ONIMCO receives
from Ohio National Fund annual fees on the basis of each portfolio's average
daily net assets during the quarterly period for which the fees are paid based
on the following schedule: (a) for each of the Equity, Bond and Omni
Portfolios, 0.60% of the first $100 million of each of those Portfolios' net
assets, 0.50% of the next $150 million of net assets, 0.45% of the next $250
million of net assets, 0.40% of the next $500 million of net assets, 0.30% of
the next $1 billion of net assets, and 0.25% of net assets over $2 billion; (b)
for the Money Market Portfolio, 0.30% of the first $100 million of net assets,
0.25% of the next $150 million of net assets, 0.23% of the next $250 million of
net assets, 0.20% of the next $500 million of net assets, and 0.15% of net
assets over $1 billion; (c) for the International and Global Contrarian
Portfolios, 0.90% of each Portfolio's net assets; and (d) for the Capital
Appreciation, Small Cap and Aggressive Growth Portfolios, 0.80% of each
Portfolio's net assets. However, as to the Money Market Portfolio of Ohio
National Fund, ONIMCO is presently waiving any of its fee in excess of 0.25%.
NEW INVESTMENT ADVISER
Fund management and the Board of Directors have determined that the Fund
and its shareholders would be better served by a modified corporate structure
featuring a new investment adviser corporation. Accordingly, ONLI has formed a
new corporation, ONII,
6
<PAGE> 12
which is proposed to replace ONIMCO as the Fund's investment adviser. ONII is an
Ohio corporation and is in the process of being registered under the federal
Investment Advisers Act of 1940. That registration process is expected to be
completed on or about ________________, 1996. Such registration does not involve
any approval or disapproval of the ability of ONII or its personnel to manage
investment portfolios. ONII, like ONIMCO, uses ONLI's investment personnel and
administrative systems. ALL THE DIRECTORS, OFFICERS AND INVESTMENT ADVISORY
PERSONNEL FOR ONII ARE IDENTICAL TO THOSE FOR ONIMCO.
The primary reason for replacing ONIMCO as the investment adviser relates
to ONIMCO's status as a subsidiary of ONESCO, a securities broker-dealer.
ONESCO has grown rapidly in recent years and has greatly expanded its retail
sales activities in the securities marketplace. In addition to marketing the
Fund and ONLI's variable contracts, ONESCO offers a broad spectrum of
non-affiliated securities. ONESCO's operations and the retail sales activities
of its registered representatives can subject it to potentially substantial
legal liabilities. Since ONIMCO is a subsidiary of ONESCO, ONIMCO's operations
and its ability to manage the Fund's investments are potentially vulnerable to
factors beyond ONIMCO's control. ONII is not subject to most of the potential
legal liabilities that could threaten ONIMCO because ONII is a direct
subsidiary of ONLI, not of ONESCO.
If the proposed new Investment Advisory Agreement, Service Agreement and
Sub-Advisory Agreement are approved by the shareholders, ONII will replace
ONIMCO as the Fund's investment adviser and those new agreements will take
effect as of May 1, 1996, or as soon thereafter as ONII is registered under the
Investment Advisers Act. Copies of the proposed new agreements are included as
exhibits to this proxy statement. All of the new agreements are substantially
identical to the current agreements that they will replace. ONII intends to
continue ONIMCO's practice of waiving all of its investment advisory fees for
the Money Market Portfolio and one-half of its investment advisory fees for the
Tax-Free Income, Income, Income & Growth, Growth and Small Cap Portfolios. THE
NEW AGREEMENTS WILL NOT RESULT IN ANY CHANGE IN ANY OF THE FUND'S FEES,
OPERATIONS, PORTFOLIO MANAGERS OR SUB-ADVISERS.
The new agreements have been approved by the Fund's Board of Directors by
unanimous vote on January 24, 1996. The proposed new agreements are as follows:
INVESTMENT ADVISORY AGREEMENT - -This agreement (see Exhibit A) between
ONII and the Fund is substantially identical to the current agreement with
ONIMCO. There will be no change in any of the investment advisory fees. The new
agreement also incorporates the terms of existing supplemental agreements that
permit ONIMCO to appoint sub-advisers to manage the assets of the International
and Global Contrarian Portfolios. While the new agreement will not limit the
use of sub-advisers to just those two portfolios, it is not contemplated that
sub-advisers would ever be used by any of the Money Market, Tax-Free Income,
Income, Income & Growth, Growth or Small Cap Portfolios and, in any event,
sub-advisory arrangements for any of those six portfolios would require prior
Board and shareholder approval.
SERVICE AGREEMENT - - This agreement (see Exhibit B) among ONII, the Fund
and ONLI is identical to the current agreement except for the substitution of
ONII for ONIMCO. The purpose of the agreement is for ONLI to provide ONII with
the necessary investment advisory personnel, office space and administrative
services (all at cost) to enable ONII to perform its functions as investment
adviser to the Fund.
The new Investment Advisory and Service Agreements are intended to apply
to all portfolios of the Fund, but they must be approved by the shareholders of
each portfolio in order to apply to that portfolio.
SUB-ADVISORY AGREEMENT FOR THE INTERNATIONAL AND GLOBAL CONTRARIAN
PORTFOLIOS - - This agreement (see Exhibit C) between ONII and Societe Generale
Asset Management Corp. is identical to ONIMCO's existing agreements except that
presently there are two agreements (one for each portfolio) which are proposed
to be combined into a single contract. Societe Generale Asset Management Corp.
will continue to manage the assets of the International and Global Contrarian
Portfolios as sub-adviser under the supervision of ONII. Only International and
Global Contrarian Portfolio shareholders are eligible to vote on
7
<PAGE> 13
approval of this agreement. It must be approved separately by the shareholders
of each of those portfolios in order to apply to that portfolio.
THE FUND BOARD HAS UNANIMOUSLY APPROVED THE PROPOSED NEW AGREEMENTS AND
RECOMMENDS THEIR APPROVAL BY THE SHAREHOLDERS.
RATIFICATION OF SELECTION OF AUDITOR
The Board of Directors, including all Directors who are not "interested
persons" of the Fund, have selected KPMG Peat Marwick LLP as independent
auditors for the Fund with respect to its operations for the fiscal year ending
June 30, 1996. Their selection is submitted for ratification or rejection by
the shareholders. KPMG Peat Marwick LLP have been the independent auditors for
the Fund since its organization and do not have any direct or indirect
financial interest in the Fund. Representatives of KPMG Peat Marwick LLP are
expected to attend the shareholders' meeting. They will have the opportunity to
make a statement if they desire to do so, and they are expected to be available
to respond to appropriate questions. The Directors who are not affiliated with
ONLI or the investment adviser constitute the Fund's Audit Committee. The Audit
Committee met twice with the independent auditors during 1995. The functions of
the Audit Committee are to recommend the engagement and discharge of the
independent auditors and to review with the independent auditors the plan and
results of the auditing engagement. The ratification of the selection of the
independent auditors will be voted on by all the shareholders voting as a whole
and not by portfolios.
OTHER MATTERS WHICH MAY COME BEFORE MEETING
Management is not aware of any other matters which may come before the
meeting. If, however, any other matter properly comes before the meeting, it is
the intention of the persons named in the accompanying form of proxy to vote
the proxy in accordance with their judgment on such matters.
FINANCIAL STATEMENTS
The Fund's annual and semi-annual reports are sent to all shareholders.
The Fund's most recent annual and semi-annual reports are also available free
upon request by contacting ONE Fund, Inc., P.O. Box 237, Cincinnati, Ohio 45201
(telephone 1-800-578-8078).
SHAREHOLDER PROPOSALS
As a registered investment company incorporated under Maryland law, the
Fund is not required to hold annual meetings of shareholders. The Fund
generally intends to hold a meeting of shareholders every three years for the
purpose of electing Directors and it will hold special meetings as required or
deemed desirable. The date of the next meeting for the purpose of electing
Directors cannot be stated with certainty, but it is anticipated to be during
the first quarter of 1999. A shareholder may have included in the proxy
statement for the next meeting of shareholders certain proposals for
shareholder action with he or she intends to introduce at such meeting. Notice
of any shareholder proposal must be received by the Fund no later than 120 days
prior to a meeting of shareholder in order for the proposal to be included in
the proxy solicitation materials for that meeting.
8
<PAGE> 14
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this first day of May, 1996, by and between ONE FUND,
INC., a Maryland corporation (hereinafter called the "Fund") and OHIO NATIONAL
INVESTMENTS, INC., an Ohio corporation (hereinafter called the "Adviser").
WHEREAS, the Fund and the Adviser wish to enter into an Agreement setting forth
the terms upon which the Adviser will perform certain services for the Fund;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISER
The Fund hereby appoints the Adviser to manage the investment and reinvestment
of the assets of the Fund and to perform the other services herein set forth,
subject to the supervision of the Board of Directors of the Fund, for the
period and on the terms herein set forth. The Adviser hereby accepts such
appointment and agrees during such period, to render the services and to assume
the obligations herein set forth for the compensation herein provided. Any
investment program undertaken by the Adviser pursuant to this Agreement and any
other activities undertaken by the Adviser on behalf of the Fund shall at all
times be subject to any directives of the Fund's Board of Directors, any duly
constituted committee thereof or any officer of the Fund acting pursuant to
like authority.
2. DUTIES OF ADVISER
In carrying out its obligations to manage the investment and reinvestment of
the assets of the Fund, the Adviser shall:
(a) obtain and evaluate pertinent economic, statistical and financial data and
other information relevant to the investment policies of the Fund, affecting
the economy generally and individual companies or industries the securities of
which are included in the Fund's portfolios or are under consideration for
inclusion therein;
(b) regularly furnish to the Board of Directors of the Fund for approval,
modification or rejection, recommendations with respect to investment programs
consistent with the fundamental policies and related investment policies for
each portfolio as set forth in the Fund's currently effective prospectus and
statement of additional information;
(c) take such steps as are necessary to implement the investment programs
approved by the Fund's Board of Directors by purchase and sale of securities,
including the placing of orders for such purchase and sale; and
<PAGE> 15
(d) regularly report to the Fund's Board of Directors with respect to
implementation of the approved investment programs and the Adviser's activities
in connection with the administration of the Fund.
3. USE OF SUB-ADVISERS
In providing the services and assuming the obligations set forth herein, in
connection with any investment portfolio of the Fund, the Adviser may at its
expense employ one or more Sub-Advisers, or may enter into such service
agreements as the Adviser deems appropriate in connection with the performance
of its duties and obligations hereunder. Reference herein to the duties and
responsibilities of the Adviser shall include any Sub-Adviser employed by the
Adviser to the extent the Adviser shall delegate such duties and
responsibilities to any such Sub-Adviser. Any agreement between the Adviser and
a Sub-Adviser shall be subject to the approval of the Fund, its Board of
Directors, and shareholders of any portfolio affected thereby, as required by
the Investment Company Act of 1940, as amended (the "1940 Act"), and any such
Sub-Adviser shall at all times be subject to the direction of the Board of
Directors of the Fund or any officer of the Fund acting pursuant to the Board's
authority. Furthermore, the Adviser shall perform ongoing due diligence
oversight of any such Sub-Adviser in order to assure continuing quality of
performance by said Sub-Adviser.
4. TO BE FURNISHED BY THE ADVISER
In addition to performing the obligations set forth in paragraph 2 hereof,
the Adviser shall furnish at its own expense or pay the expenses of the Fund
for the following:
(a) office space in the offices of the Adviser or in such other place as
may be agreed upon from time to time, and all necessary office facilities and
equipment;
(b) necessary executive and other personnel for managing the affairs of the
Fund, including personnel to perform clerical, accounting and other office
functions (exclusive of those related to and to be performed under contract for
custodial, bookkeeping, transfer and dividend disbursing agency services by any
bank or other agents selected to perform such services); and
(c) all information and services, other than services of counsel,
required in connection with the preparation of registration statements,
prospectuses and statements of additional information, including amendments and
revisions thereto; all annual, semi-annual and periodic reports; and notices
and proxy solicitation material furnished to shareholders of the Fund or
regulatory authorities.
5. ITEMS NOT REQUIRED TO BE FURNISHED BY THE ADVISER
Nothing in paragraph 4 hereof shall require the Adviser to bear, or to
reimburse the Fund for:
2
<PAGE> 16
(a) any of the costs of printing and mailing the items referred to in
subparagraph (c) of paragraph 4;
(b) the costs of preparation, printing and mailing disclosure documents
required by regulatory authorities;
(c) compensation of directors of the Fund who are not directors, officers
or employees of the Adviser;
(d) registration, filing and other fees in connection with requirements of
regulatory authorities;
(e) the charges and expenses of any custodian appointed by the Fund for
custodial services;
(f) charges and expenses of independent accountants retained by the Fund;
(g) charges and expenses of any transfer, bookkeeping and dividend
disbursing agent appointed by the Fund;
(h) brokers' commissions and issue and transfer taxes chargeable to the
Fund in connection with securities transactions to which the Fund is a party;
(i) taxes and corporate fees payable by the Fund to federal, state or
other governmental agencies;
(j) the cost of stock certificates, if any, representing shares of the
Fund;
(k) legal fees and expenses in connection with the affairs of the Fund,
including registering and qualifying its shares with regulatory
authorities; and
(l) expenses of shareholders and directors meetings.
6. RELATED SERVICES
(a) The services of the Adviser to the Fund hereunder are not to be deemed
exclusive and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired or interfered with thereby.
(b) To better enable it to fulfill its obligations hereunder, the Adviser
has entered into a service agreement with The Ohio National Life Insurance
Company, to which the Fund is also a party, under which The Ohio National Life
Insurance Company has agreed to furnish certain personnel and facilities to the
Adviser on a cost reimbursement basis.
(c) The Adviser and any persons performing executive, administrative or
trading functions for the Fund, whose services were made available to the Fund
by the Adviser, are specifically authorized to allocate brokerage business to
firms
3
<PAGE> 17
that provide brokerage and research services or facilities and to cause the
Fund to pay a member of a securities exchange, or any other securities broker,
an amount of commission for effecting a securities transaction in excess of the
amount another member of an exchange or broker would have charged for effecting
that transaction, if the Adviser or such person determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services, as such services are defined in Section 28(e)
of the Securities Exchange Act of 1934 (the "1934 Act"), provided by such member
or broker, viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to any accounts as to which the
Adviser exercises investment discretion, as that term is defined in Section
3(a)(35) of the 1934 Act.
7. COMPENSATION OF ADVISER
(a) Each investment portfolio of the Fund shall pay the Adviser, as full
compensation for all services rendered and all facilities furnished hereunder,
a fee computed separately for each portfolio of the Fund at the annual rates
shown on Schedule A hereof or, as to any portfolios added to the Fund after the
date first above written, on any additional Schedules hereto, which rates shall
be based on the current value of the respective portfolio's average total net
assets.
(b) Fees shall be payable at such intervals, not more frequently than
monthly and not less frequently than quarterly, as the Board of Directors of
the Fund may from time to time determine and specify in writing to the Adviser.
The fees shall be calculated on the basis of the average of all valuations of
the net assets of each respective portfolio, made as of the time each business
day that the Board of Directors has set for valuing the current net assets of
the Fund, during the period for which the fees are paid.
8. REIMBURSEMENT OF EXCESS EXPENSES
If in any calendar quarter the total of all ordinary business expenses
applicable to any investment portfolio (excluding the fee payable under
paragraph 7 above to the Adviser, taxes, portfolio brokerage commissions and
interest) should exceed one percent of the average net assets of such
investment portfolio as computed above in paragraph 7, the Adviser shall pay
such excess. For the purposes of this paragraph the term "calendar quarter"
shall include the portion of any calendar quarter which shall have lapsed at
the date of termination of this agreement and the expense limitation shall be
that part of 1% proportional to the portion of a full calendar quarter lapsed.
9. INTERESTED PERSONS OF THE FUND AND THE ADVISER
It is understood that directors, officers, agents and shareholders of the Fund
are or may be interested in the Adviser as directors, officers, shareholders,
or otherwise, that directors, officers, agents and shareholders of the Adviser
are or may be interested in the Fund as directors, officers, shareholders or
otherwise, that the Adviser may be interested in the Fund and that the
existence of any such dual
4
<PAGE> 18
interest shall not affect the validity hereof or of any transactions hereunder
except as otherwise provided in the Articles of Incorporation of the Fund and
the Adviser, respectively, or by specific provision of applicable law.
10. LIABILITIES OF ADVISER
Neither the Adviser nor any of its directors, officers or employees, nor any
person performing executive, administrative or trading functions shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
for loss resulting from willful misfeasance, bad faith or gross negligence in
the performance of its, his or her duties on behalf of the Fund or from
reckless disregard by the Adviser or any such person of the Adviser's duties
under this Agreement. Without limiting the generality of the foregoing, neither
the Adviser nor any such person shall be deemed to have acted unlawfully or to
have breached any duty to the Fund under state or federal law in effect at the
date of the enactment of Section 28(e) of the 1934 Act solely by reason of
having caused the Fund to pay a member of any securities exchange, or any other
securities broker or dealer, an amount of commission for effecting a securities
transaction in excess of the commission another member of a securities
exchange, or another securities broker or dealer, would have charged for
effecting that transaction if the Adviser or such other person determined in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to any accounts to which the
Adviser exercises investment discretion.
11. DURATION, TERMINATION AND AMENDMENT
(a) This Agreement shall become effective as to any portfolio upon its
approval for such portfolio by the Board of Directors of the Fund and the
shareholders of the class of capital stock designated for that portfolio. This
Agreement will continue in effect for a period more than two years from the
date of its effectiveness as to any portfolio only so long as such continuance
is specifically approved at least annually either by the Board of Directors of
the Fund or by the vote of a majority of the outstanding voting securities of
the portfolio, provided that in either event such continuance shall also be
approved by the vote of a majority of the directors of the Fund who are not
interested persons (as defined in the 1940 Act) of any party to this Agreement
cast in person at a meeting called for the purpose of voting on such approval.
The required shareholder approval of this Agreement or of any continuance of
this Agreement shall be effective with respect to a portfolio if a majority of
the outstanding voting securities of the class (as defined in Rule 18f-2(h)
under the 1940 Act) of capital stock of the portfolio votes to approve the
Agreement or its continuance, notwithstanding that this Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of the entire Fund.
5
<PAGE> 19
(b) If the shareholders of capital stock of any portfolio fail to approve
any continuance of this Agreement, the Adviser will continue to act as
investment adviser with respect to that portfolio pending the required approval
of this Agreement or its continuance, or of a new contract with the Adviser or
a different investment adviser or other definitive action; provided, that the
compensation received by the Adviser in respect of that portfolio during such
period will be no more than the Adviser's actual costs incurred in furnishing
investment advisory and management services to such portfolio or the amount it
would have received under this Agreement, whichever is less.
(c) This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors of the Fund or, with respect to any
portfolio, by the vote of a majority of the outstanding voting securities of
that portfolio on 60 days' written notice to the Adviser, or by the Adviser, on
90 days' written notice to the Fund. This Agreement will automatically
terminate in the event of its assignment (as defined in the 1940 Act).
(d) This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each affected portfolio and by the vote of a majority of the
directors of the Fund who are not interested persons of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
12. NOTICES AND GOVERNING LAW
(a) Any notice under the Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other party at such address as the
other party may designate for the receipt of notices. Until further notice to
the other party it is agreed that the address of the Fund and that of the
Adviser for this purpose shall be 237 William Howard Taft Road, Cincinnati,
Ohio 45219.
(b) This Agreement shall be governed by the law of Ohio.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed by their duly authorized officers, in Cincinnati, Ohio, as of the date
first above written.
ONE FUND, INC. OHIO NATIONAL INVESTMENTS, INC.
By ________________________________ By________________________________
Donald J. Zimmerman, President Joseph P. Brom, President
6
<PAGE> 20
SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
Each portfolio of ONE Fund, Inc. shall pay fees to Ohio
National Investments, Inc. computed at the following rates as provided in
paragraph 7 of the Agreement:
<TABLE>
<CAPTION>
Income; International;
Net Assets Money Tax-Free Income & Growth; Small Global
in Portfolio Market Income Growth Cap Contrarian
- ------------ ------ -------- ---------------- ----- --------------
<S> <C> <C> <C> <C> <C>
First $100,000,000 0.30% 0.60% 0.50% 0.65% 0.90%
Next $150,000,000 0.25% 0.50% 0.40% 0.55% 0.90%
All Portfolio Assets 0.20% 0.40% 0.30% 0.45% 0.90%
Over $250,000,000
</TABLE>
Agreed to and accepted as of May 1, 1996.
ONE FUND, INC. OHIO NATIONAL INVESTMENTS, INC.
By: ______________________________ By: _____________________________
Donald J. Zimmerman, President Joseph P. Brom, President
<PAGE> 21
EXHIBIT B
SERVICE AGREEMENT
THIS AGREEMENT, made this first day of May, 1996, by and among ONE
FUND, INC., (the "Fund"), a Maryland corporation, OHIO NATIONAL INVESTMENTS,
INC. ("Adviser"), an Ohio corporation and THE OHIO NATIONAL LIFE INSURANCE
COMPANY ("Ohio National Life"), a mutual life insurance company organized under
the laws of the State of Ohio;
WHEREAS, Ohio National Life has caused the Adviser to be organized to
serve as investment adviser to investment companies and to others; and
WHEREAS, the Adviser and the Fund have entered into an Investment
Advisory Agreement dated May 1, 1996 whereby the Adviser undertakes to furnish
the Fund with investment advisory services and to furnish or pay the expenses
of the Fund for certain other services; and
WHEREAS, Ohio National Life is willing to make available to the
Adviser on a part-time basis certain employees of Ohio National Life for the
purpose of better enabling the Adviser to fulfill its obligations under the
Investment Advisory Agreement, provided that the Adviser bears all costs
allocable to the time spent by them on the affairs of the Adviser, and the
Adviser and the Fund believe that such an arrangement will be for their mutual
benefit;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. The Adviser shall have the right to use, on a part-time basis, and
Ohio National Life shall make available on such basis, such employees of Ohio
National Life for such periods as may be agreed upon by the Adviser and Ohio
National Life, as may be reasonably needed by the Adviser in the performance of
its investment advisory functions. It is anticipated that most of such
employees will be persons employed in the investment operations of Ohio
National Life in addition to such clerical, stenographic and administrative
services as the Adviser may reasonably request.
2. The employees of Ohio National Life in performing services for the
Adviser hereunder may, to the full extent that they deem appropriate, have
access to and utilize statistical and economic data, investment research
reports and other materials prepared for or contained in the files of Ohio
National Life which is relevant to making investment decisions within the
investment objectives of the Fund, and may make such materials available to the
Adviser; provided, that any such materials prepared or obtained in connection
with a private placement or other nonpublic transaction need not be made
available to the Adviser if Ohio National Life deems such materials
confidential.
3. Employees of Ohio National Life performing services for the Adviser
pursuant hereto shall report and be responsible solely to the officers and
directors of the Adviser or persons designated by them. Ohio National Life
shall have no responsibility for investment recommendations and decisions of
the Adviser based upon information or advice given or obtained by or through
such Ohio National Life employees.
4. Ohio National Life will, to the extent requested by the Adviser,
supply to employees of the Adviser, including part-time employees of Ohio
National Life serving the Adviser, such clerical, stenographic and
administrative services and such office supplies and equipment as may be
reasonably required in order that they may properly perform their respective
functions on behalf of the Adviser in connection with its performance of the
Investment Advisory Agreement.
<PAGE> 22
5. The obligation of performance under the Investment Advisory
Agreement is solely that of the Adviser, and Ohio National Life undertakes no
obligation in respect thereto, except as otherwise expressly provided herein.
6. In consideration of the services to be rendered by Ohio National
Life and its employees pursuant to this Agreement, the Adviser agrees to
reimburse Ohio National Life for such costs, direct and indirect, as may be
fairly attributable to the services performed for the Adviser. Such costs shall
include, but not be limited to, an appropriate portion of salaries, employee
benefits, general overhead expense, supplies and equipment, and a charge in the
nature of rent for the cost of space in Ohio National Life offices fairly
allocable to activities of the Adviser under the Investment Advisory Agreement.
In the event of disagreement between the Adviser and Ohio National Life as to a
fair basis for allocating or apportioning costs, such basis shall be fixed by
the independent public accountants for the Fund.
7. (a) This Agreement shall continue in effect as to any portfolio of
the Fund for a period more than two years from the date of its execution only
so long as such continuation is specifically approved at least annually by
either the Board of Directors of the Fund or by vote of a majority of that
portfolio's outstanding voting securities, provided that in either event such
continuation shall also be approved by the vote of a majority of the directors
who are not interested persons of the Fund, cast by them in person at a meeting
called for purpose of voting on such approval; provided, however, that:
(b) This Agreement may at any time be terminated as to any
portfolio of the Fund without the payment of any penalty on 60 days' notice to
the Adviser and to Ohio National Life either by vote of the Board of Directors
of the Fund or by vote of a majority of the outstanding voting securities of
that portfolio.
(c) This Agreement shall immediately terminate in event of
its assignment (as that term is defined in the Investment Company Act of 1940).
(d) This Agreement may be terminated by the Adviser or by
Ohio National Life on 90 days' written notice to the other and to the Fund.
8. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other party at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party it is agreed that the address of the Fund, that of the
Adviser and that of Ohio National Life for this purpose shall be 237 William
Howard Taft Road, Cincinnati, Ohio 45219.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers the day and year first above
written.
ONE FUND, INC.
By ___________________________________
Donald J. Zimmerman, President
2
<PAGE> 23
OHIO NATIONAL INVESTMENTS, INC.
By ___________________________________
Joseph P. Brom, President
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By ___________________________________
David B. O'Maley, Chairman,
President & Chief Executive Officer
3
<PAGE> 24
EXHIBIT C
SUB-ADVISORY AGREEMENT
This Agreement is made as of the first day of May, 1996 by and between OHIO
NATIONAL INVESTMENTS, INC. , an Ohio corporation (the "Adviser"), and SOCIETE
GENERALE ASSET MANAGEMENT CORP., a Delaware corporation (the "Sub-Adviser").
WHEREAS, ONE FUND, INC. (the "Fund"), is a Maryland corporation that is
registered under the Investment Company Act of 1940, as amended, (together with
the regulations promulgated pursuant thereto, the "1940 Act"); and
WHEREAS, the Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended, (together with the regulations promulgated
pursuant thereto, the "Advisers Act"); and
WHEREAS, the Adviser has been appointed as investment adviser to the Fund in
accordance with the 1940 Act and the Advisers Act; and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Advisers Act and engages in the business of providing investment advisory
services; and
WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser,
subject to the requirements of the 1940 Act and the Advisers Act, as a
sub-adviser with respect to those portions of the assets of the Fund designated
as the INTERNATIONAL PORTFOLIO and the GLOBAL CONTRARIAN PORTFOLIO of the Fund
on the terms and conditions set forth below;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
SECTION 1. Investment Advisory Services
----------------------------
(a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby
accepts engagement by the Adviser, to supervise and manage on a
fully-discretionary basis the cash, securities and other assets of the
International Portfolio and the Global Contrarian Portfolio that the Adviser
shall from time to time place under the supervision of the Sub-Adviser (such
cash, securities and other assets initially and as same shall thereafter be
increased or decreased by the investment performance thereof and by additions
thereto and withdrawals therefrom by the Adviser shall hereinafter be referred
to as the "Portfolios").
(b) All activities by the Sub-Adviser on behalf of the Adviser and the
Portfolios shall be in accordance with the investment objectives, policies and
restrictions set forth in the 1940 Act and in the Fund's prospectus and
statement of additional information, as amended from time to time (together,
the "Prospectus") and as interpreted from time to time by the Board of
Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on
behalf of the Adviser and the Portfolios shall also be subject to the due
diligence oversight and direction of the Adviser.
(c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the
sole and exclusive responsibility to select members of securities exchanges,
brokers, dealers and futures commission merchants for the execution of
transactions of the Portfolios and, when applicable, shall negotiate
commissions in connection therewith. All such selections shall be made in
accordance with the Fund's policies and restrictions regarding brokerage
allocation set forth in the Prospectus.
<PAGE> 25
(d) In carrying out its obligations to manage the investments and reinvestments
of the assets of the Portfolios, the Sub-Adviser shall: (1) obtain and evaluate
pertinent economic, statistical, financial and other information affecting the
economy generally and individual companies or industries the securities of
which are included in each of the Portfolios or are under consideration for
inclusion therein; (2) formulate and implement continuous investment programs
for the Portfolios consistent with the investment objectives and related
investment policies and restrictions for the Portfolios as set forth in the
Prospectus; and (3) take any steps necessary to implement the aforementioned
investment programs by placing orders for the purchase and sale of securities.
(e) In connection with the purchase and sale of securities of the Portfolios,
the Sub-Adviser shall arrange for the transmission to the Adviser and the
Portfolios' custodian on a daily basis such confirmation, trade tickets and
other documents as may be necessary to enable them to perform their
administrative responsibilities with respect to the Portfolios. With respect to
securities of the Portfolios to be purchased or sold through the Depository
Trust Company, the Sub-Adviser shall arrange for the automatic transmission of
the I.D. confirmation of the trade to the Portfolios' custodian.
(f) In connection with the placement of orders for the execution of the
Portfolios' securities transactions, the Sub-Adviser shall create and maintain
all necessary records of the Portfolios as are required of an investment
adviser of a registered investment company including, but not limited to,
records required by the 1940 Act and the Advisers Act. All such records
pertaining to the Portfolios shall be the property of the Fund and shall be
available for inspection and use by the Securities and Exchange Commission, any
other regulatory authority having jurisdiction, the Fund, the Adviser or any
person retained by the Fund or the Adviser. Where applicable, such records
shall be maintained by the Sub-Adviser for the period and in the place required
by Rule 31a-2 under the 1940 Act.
(g) The Sub-Adviser shall render such reports to the Adviser and/or to the
Board of Directors of the Fund concerning the investment activity and
composition of the Portfolios in such form and at such intervals as the Adviser
or the Board may from time to time reasonably require.
(h) In acting under this Agreement, the Sub-Adviser shall be an
independent contractor and not an agent of the Adviser or the Fund.
SECTION 2. Expenses
--------
(a) The Sub-Adviser shall assume and pay all of its own costs and expenses,
including those for furnishing such office space, office equipment, office
personnel and office services as the Sub-Adviser may require in the performance
of its duties under this Agreement.
(b) The Fund shall bear all expenses of organizing and registering the
Portfolios, and the Fund and Adviser shall bear all of their respective
expenses of their operations and businesses not expressly assumed or agreed to
be paid by the Sub-Adviser under this Agreement. In particular, but without
limiting the generality of the foregoing, the Fund shall pay any fees due to
the Adviser, all interest, taxes, governmental charges or duties, fees,
brokerage and commissions of every kind arising hereunder or in connection
herewith, expenses of transactions with shareholders of the Portfolios,
expenses of offering interests in the Portfolios for sale, insurance,
association membership dues, all charges of custodians (including fees as
custodian and for keeping books, performing portfolio valuations and rendering
other services to the Fund), independent auditors and legal counsel, expenses
of preparing, printing and distributing all prospectuses, proxy material,
reports and notices to shareholders of the Fund, and all other costs incident
to the existence of the Portfolios.
2
<PAGE> 26
SECTION 3. Use of Services of Others
-------------------------
The Sub-Adviser may (at its expense except as set forth in Section 2 hereof)
employ, retain or otherwise avail itself of the services or facilities of other
persons or organizations for the purpose of providing the Sub-Adviser with such
statistical or factual information, such advice regarding economic factors and
trends or such other information, advice or assistance as the Sub-Adviser may
deem necessary, appropriate or convenient for the discharge of the
Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the
Portfolios.
SECTION 4. Sub-Advisory Fees
-----------------
In consideration of the Sub-Adviser's services to the Fund hereunder, the
Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, equal
to 0.1875% of the average daily net assets of each of the Portfolios during the
quarter preceding each payment (equivalent to an annual fee of three-quarters
of one percent (0.75%) of the average daily net assets of each of the
Portfolios during the year) (the "Sub-Advisory Fee"). The Sub-Advisory Fee
shall be accrued for each calendar day and the sum of the daily Sub-Advisory
Fee accruals shall be paid quarterly to the Sub-Adviser on or before the fifth
business day of the next succeeding quarter. The daily fee accruals will be
computed by multiplying the fraction of one over the number of calendar days in
the quarter by 0.1875% and multiplying this product by the net assets of each
Portfolio as determined in accordance with the Prospectus as of the close of
business on the previous business day. The Sub-Advisory Fee shall be payable
solely by the Adviser, and the Fund shall not be liable to the Sub-Adviser for
any unpaid Sub-Advisory Fee.
SECTION 5. Limitation of Liability of Sub-Adviser
--------------------------------------
(a) The Sub-Adviser shall be liable for losses resulting from its own acts or
omissions caused by the Sub-Adviser's willful misfeasance, bad faith or gross
negligence in the performance of its duties hereunder or its reckless disregard
of its duties under this Agreement, and nothing herein shall protect the
Sub-Adviser against any such liability to the shareholders of the Fund or to
the Adviser. The Sub-Adviser shall not be liable to the Fund or to any
shareholder of the Fund or to the Adviser for any claim or loss arising out of
any investment or other act or omission in the performance of the Sub-Adviser's
duties under this Agreement, or for any loss or damage resulting from the
imposition by any government of exchange control restrictions which might
affect the liquidity of the Fund's assets maintained with custodians or
securities depositories in foreign countries, or from any political acts of any
foreign governments to which such assets might be exposed, or for any tax of
any kind, including without limitation any statutory, governmental, state,
provincial, regional, local or municipal imposition, duty, contribution or levy
imposed by any government or governmental agency upon or with respect to such
assets or income earned with respect thereto (collectively "Taxation").
(b) In the event the Sub-Adviser is assessed any Taxation in respect of the
assets, income or activities of either Portfolio, the Adviser and the Fund
jointly will indemnify the Sub-Adviser for all such amounts wherever imposed,
together with all penalties, charges, costs and interest relating thereto and
all expenditures, including reasonable attorney's fees, incurred by the
Sub-Adviser in connection with the defense or settlement of any such
assessment. The Sub-Adviser shall undertake and control the defense or
settlement of any such assessment, including the selection of counsel or other
professional advisers, provided that the selection of such counsel and advisers
and the settlement of any assessment shall be subject to the approval of the
Adviser and the Fund, which approvals shall not be unreasonably withheld. The
Adviser and the Fund shall have the right to retain separate counsel and assume
the defense or settlement on behalf of the Adviser and the Fund, as the case
may be, of any such assessment if representation of the Adviser and the Fund by
counsel selected by the Sub-Adviser would be inappropriate due to actual or
potential conflicts of interest.
3
<PAGE> 27
SECTION 6. Services to Other Clients and the Fund
--------------------------------------
(a) Subject to compliance with the 1940 Act, nothing contained in this
Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated
persons from acting, and being separately compensated for acting, in one or
more capacities on behalf of the Fund. The Adviser and the Fund understand that
the Sub-Adviser may act as investment manager or in other capacities on behalf
of other customers including entities registered under the 1940 Act. While
information, recommendations and actions which the Sub-Adviser supplies to and
does on behalf of the Portfolios shall in the Sub-Adviser's judgment be
appropriate under the circumstances in light of the investment objectives and
policies of the Fund, as set forth in the Prospectus delivered to the
Sub-Adviser from time to time, it is understood and agreed that they may be
different from the information, recommendations and actions the Sub-Adviser or
its affiliated persons supply to or do on behalf of other clients. The
Sub-Adviser and its affiliated persons shall supply information,
recommendations and any other services to the Portfolios and to any other
client in an impartial and fair manner in order to seek good results for all
clients involved. As used herein, the term "affiliated person" shall have the
meaning assigned to it in the 1940 Act.
(b) On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of a Portfolio as well as other customers, the
Sub-Adviser may, with the consent of the Adviser and to the extent permitted by
applicable law, aggregate the securities to be so sold or purchased in order to
obtain the best execution or lower brokerage commissions, if any. The
Sub-Adviser may also on occasion purchase or sell a particular security for one
or more customers in different amounts. On either occasion, and to the extent
permitted by applicable law and regulations, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
customers.
(c) The Sub-Adviser agrees to use the same skill and care in providing services
to the Fund as it uses in providing services to fiduciary accounts for which it
has investment responsibility. The Sub-Adviser will conform with all applicable
rules and regulations of the Securities and Exchange Commission.
SECTION 7. Reports to the Sub-Adviser
--------------------------
The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements,
reports and other information relating to the business and affairs of the Fund
as the Sub-Adviser may, at any time or from time to time, reasonably require in
order to discharge the Sub-Adviser's duties under this Agreement.
SECTION 8. Term of Agreement
-----------------
Provided that this Agreement shall have first been approved by the Board of
Directors of the Fund, including a majority of the members thereof who are not
interested persons (as defined in the 1940 Act) of either party, by a vote cast
in person at a meeting called for the purpose of voting such approval, then
this Agreement shall be effective on the date hereof. Unless earlier terminated
as hereinafter provided, this Agreement shall continue in effect until approved
by a majority vote of the voting securities of each of the Portfolios, at a
meeting to take place not more than one year after the effective date of the
Fund's registration statement relating to that Portfolio. Thereafter, this
Agreement shall continue in effect from year to year, subject to approval
annually by the Board of Directors of the Fund or by vote of a majority of the
voting securities of each of the Portfolios and also, in either event, by the
vote, cast in person at a meeting called for the purpose of voting on such
approval, of a majority of the Directors of the Fund who are not parties to
this Agreement or interested persons (as defined in the 1940 Act) of any such
person.
4
<PAGE> 28
SECTION 9. Termination of Agreement; Assignment
------------------------------------
(a) This Agreement may be terminated by either party hereto without the payment
of any penalty, upon 90 days' prior notice in writing to the other party and to
the Fund, or upon 60 days' written notice by the Fund to the two parties;
provided, that in the case of termination by the Fund such action shall have
been authorized by resolution of a majority of the Board of Directors of the
Fund or by vote of a majority of the voting securities of either or both of the
Portfolios. In addition, this Agreement shall terminate upon the later of (1)
the termination of the Adviser's agreement to provide investment advisory
services to the Fund or (2) notice to the Sub-Adviser that the Adviser's
agreement to provide investment advisory services to the Fund has terminated.
(b) This Agreement shall automatically terminate in the event of its assignment
(as defined in the 1940 Act).
(c) Termination of this Agreement for any reason shall not affect rights of the
parties that have accrued prior thereto.
SECTION 10. Notices
-------
(a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of
any of the following events: (1) any change in any of the Sub-Adviser's
officers or portfolio managers; (2) the Sub-Adviser fails to be registered as
an investment adviser under the Advisers Act or under the laws of any
jurisdiction in which the Sub-Adviser is required to be registered as an
investment adviser in order to perform its obligations under this Agreement;
(3) the Sub-Adviser is the subject of any action, suit, proceeding, inquiry or
investigation at law or in equity, before or by any court, public board or
body, involving the affairs of either Portfolio; or (4) any change in ownership
or control of the Sub-Adviser.
(b) Any notice given hereunder shall be in writing and may be served by being
sent by telex, facsimile or other electronic transmission or sent by registered
mail or by courier to the address set forth below for the party for which it is
intended. A notice served by mail shall be deemed to have been served seven
days after mailing and in the case of telex, facsimile or other electronic
transmission twelve hours after dispatch thereof. Addresses for notice may be
changed by written notice to the other party.
If to the Adviser:
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
Fax No. (513) 559-6589
With a copy to:
Joseph P. Brom, President
Ohio National Investments, Inc.
P.O. Box 237
Cincinnati, Ohio 45201
5
<PAGE> 29
If to the Sub-Adviser:
Societe Generale Asset Management Corp.
1221 Avenue of the Americas, Eighth Floor
New York, New York 10020
Fax No. (212) 278-5911
With a copy to:
Jean-Marie Eveillard, President
Societe Generale Asset Management Corp.
1221 Avenue of the Americas, Eighth Floor
New York, New York 10020
SECTION 11. Governing Law
-------------
This Agreement shall be governed by and subject to the requirements of the
laws of the State of New York without reference to the choice of law
provisions thereof.
SECTION 12. Applicable Provisions of Law
----------------------------
The Agreement shall be subject to all applicable provisions of law, including,
without limitation, the applicable provisions of the 1940 Act, and to the
extent that any provisions herein contained conflict with any such applicable
provisions of law, the latter shall control.
SECTION 13. Counterparts
------------
This Agreement may be entered into in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the day and year first above written.
OHIO NATIONAL INVESTMENTS, INC.
By:_________________________________________
Joseph P. Brom, President
SOCIETE GENERALE ASSET MANAGEMENT CORP.
By:_________________________________________
Jean-Marie Eveillard, President
Accepted and Agreed:
ONE FUND, INC.
By:___________________________________
Donald J. Zimmerman, President
6
<PAGE> 30
PROXY
ONE FUND, INC.
I (we) acknowledge receipt of a copy of the Notice of Shareholders' Meeting,
Proxy Statement and semi-annual report, and appoint each of Ronald L. Benedict
and Donald J. Zimmerman to be my (our) proxies and attorneys with full power of
substitution and revocation to vote my (our) ONE Fund, Inc., shares at the
meeting of shareholders to be held on March 28, 1996, and at any adjournments
thereof, as specified below, and in accordance with their best judgment on any
other business that may properly come before the meeting. This proxy relates to
a solicitation by the Board of Directors.
<TABLE>
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
You may check ONE of these boxes instead of voting on each of the numbered items below:
For or Against or Abstain on ALL the Board of Directors recommendations.
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------
1. To elect the following as Directors: (A) Ronald L. Benedict (B) George E. Castrucci
(C) Maurice H. Kirby, Jr. (D) George M. Vredeveld (E) Donald J. Zimmerman
For All or Against All or For All Except: (A) (B) (C) (D) (E)
[ ] [ ] [ ] [ ] [ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------
2. To approve the new Investment Advisory Agreement as to all portfolios:
For or Against or Abstain as to all portfolios
[ ] [ ] [ ]
or For as to the following portfolio(s): _______________________________________________________
[ ]
or Against as to the following portfolio(s): ___________________________________________________
[ ]
or Abstain as to the following portfolio(s): ___________________________________________________
[ ]
- ---------------------------------------------------------------------------------------------------
3. To approve the new Service Agreement as to all portfolios:
For or Against or Abstain as to all portfolios
[ ] [ ] [ ]
or For as to the following portfolio(s): _______________________________________________________
[ ]
or Against as to the following portfolio(s): ___________________________________________________
[ ]
or Abstain as to the following portfolio(s): ___________________________________________________
[ ]
- ---------------------------------------------------------------------------------------------------
4. To approve the new Sub-Advisory Agreement with Societe Generale Asset Management Corp.:
For or Against or Abstain as to the International Portfolio
[ ] [ ] [ ]
For or Against or Abstain as to the Global Contrarian Portfolio
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------
5. To ratify the selection of KPMG Peat Marwick LLP as independent public accountants:
For or Against or Abstain
[ ] [ ] [ ]
- ---------------------------------------------------------------------------------------------------
Dated ___________________, 1996 _____________________________________________
Signature of Shareholder(s)
</TABLE>
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.
