<PAGE>
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE LEGENDS FUND, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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.)
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4) Proposed maximum aggregate value of transaction:
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5) Total Fee Paid:
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[ ] 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.
<PAGE>
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
THE LEGENDS FUND, INC.
ZURICH KEMPER VALUE PORTFOLIO
(Formerly, Dreman Value Portfolio)
515 West Market Street
Louisville, Kentucky 40202
------------------------------------
Notice of Special Meeting of Shareholders
------------------------------------
To the Shareholders of Zurich Kemper Value Portfolio:
A special meeting of shareholders of Zurich Kemper Value Portfolio (the
"Portfolio"), a series of The Legends Fund, Inc. (the "Fund"), will be held at
515 West Market Street, Louisville, Kentucky 40202, on December 30, 1997, at
3:30 p.m., Eastern Time. The purpose of the Meeting is:
(1)to approve or disapprove the proposed sub-advisory agreements between
ARM Capital Advisors, Inc. and each of Zurich Kemper Value Advisors, Inc.
(formerly, Dreman Value Advisors, Inc.)("ZKVA") and Scudder Kemper
Investments, Inc. relating to the Portfolio; and
(2)to transact such other matters as may properly come before the meeting
or any adjournment thereof.
The terms of the proposed sub-advisory agreements described above are the
same in all material respects as the current sub-advisory agreement,
differing only in the name of the sub-adviser and the effective and
termination dates. This Proxy Statement is being furnished to shareholders
because of the anticipated change of control of ZKVA. Please read the Proxy
Statement carefully for a description of the anticipated change of control of
ZKVA.
The Board of Directors of the Fund has fixed the close of business on
December 1, 1997 as the record date for determining the number of shares
outstanding and the contract holders entitled to give voting instructions with
respect to the Portfolio.
By Order of the Board of Directors,
Kevin L. Howard
Secretary
December 10, 1997
EACH CONTRACT HOLDER IS URGED TO EXERCISE THE RIGHT TO GIVE VOTING INSTRUCTIONS
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF THE PORTFOLIO BY FILLING IN, DATING
AND SIGNING THE ENCLOSED VOTING INSTRUCTIONS CARD AND RETURNING IT IN THE RETURN
ENVELOPE PROVIDED.
<PAGE>
THE LEGENDS FUND, INC.
ZURICH KEMPER VALUE PORTFOLIO
(Formerly, Dreman Value Portfolio)
515 West Market Street
Louisville, Kentucky 40202
------------------------------------
PROXY STATEMENT
Special Meeting of Shareholders
December 30, 1997 at 3:30 p.m.
------------------------------------
THE BOARD OF DIRECTORS OF THE LEGENDS FUND, INC. (THE "FUND") SOLICITS YOUR
PROXY FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS OF ZURICH KEMPER VALUE
PORTFOLIO (THE "PORTFOLIO") (THE "MEETING"). The Meeting is scheduled to be
held at 515 West Market Street, Louisville, Kentucky 40202, on December 30,
1997 at 3:30 p.m. As described in more detail below, the Meeting is being
called for the following purposes:
1. to approve or disapprove the proposed sub-advisory agreements between ARM
Capital Advisors, Inc. (the "Manager") and each of Zurich Kemper Value Advisors,
Inc. (formerly, Dreman Value Advisors, Inc.) ("ZKVA") and Scudder Kemper
Investments, Inc. ("SKI") relating to the Portfolio; and
2. to transact such other matters as may properly come before the meeting or any
adjournment thereof.
The Fund was incorporated in Maryland on July 22, 1992, under the name
"Integrity Series Fund, Inc." and is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). It is a series-type investment company currently consisting of four
investment portfolios. Shares of the portfolios are offered to separate
accounts ("Separate Accounts") of Integrity Life Insurance Company ("Integrity")
and National Integrity Life Insurance Company ("National Integrity"), a
wholly-owned subsidiary of Integrity, for the investment of contributions under
certain variable annuity contracts ("contracts") issued by Integrity and
National Integrity.
This Proxy Statement is being furnished on or about December 10, 1997 on
behalf of the Board of Directors of the Fund to the shareholders of the
Portfolio for their use in obtaining voting instructions from the contract
holders on the proposals to be considered at the Meeting. The Board of
Directors has fixed the close of business on December 1, 1997 as the record date
(the "Record Date") for determining the number of shares outstanding and the
contract holders entitled to give voting instructions to Integrity and National
Integrity.
<PAGE>
At the Record Date, the total number of shares of the Portfolio outstanding
were as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Approximate Approximate
Percentage Shares Held Percentage Held
Total Shares Held Held by by Separate by Separate
Number of by Separate Separate Account II of Account II of
Shares Account II of Account II of National National
Outstanding Integrity Integrity Integrity Integrity
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1,887,937.153 1,540,532.776 81.6% 347,404.377 18.4%
--------------------------------------------------------------------------------------------
</TABLE>
As of the Record Date, no person or "group" (as such term is defined in the
Securities Exchange Act of 1934, as amended, and the rules thereunder) was known
to the Fund to have allocated contributions under variable annuity contracts
such that, upon the pass-through of voting rights by Integrity and National
Integrity, such person or group would have the right to give voting instructions
with respect to more than 5% of the outstanding shares of the Portfolio. The
Directors and officers of the Fund, both individually and as a group, own less
than 1% of the Portfolio's outstanding shares.
The Fund expects that the solicitation of voting instructions from contract
holders will be made by mail, and solicitation also may be made by telephone
communications from employees of the Manager, the Fund's investment manager, or
its affiliates, who will not receive compensation for such services. All costs
of the meeting and soliciting proxies will be borne by ZKVA.
Integrity and National Integrity, the holders of record of shares of the
Portfolio, are required to "pass through" to their contract holders the right to
vote shares of the Portfolio. The Fund expects that Integrity and National
Integrity will solicit voting instructions from their contract holders and that
Integrity and National Integrity will vote 100% of the shares of the Portfolio
held by their respective Separate Accounts. Integrity and National Integrity
will vote shares of the Portfolio for which no instructions have been received
in the same proportion as they vote shares for which they have received
instructions. Abstentions will have the effect of a negative vote on the
proposal. Unmarked voting instructions from contract holders will be voted in
favor of the proposal. Integrity and National Integrity, as record shareholders
of the Portfolio, may adjourn the meeting of shareholders for a period or
periods of not more than 60 days in the aggregate if necessary to obtain
additional voting instructions from contract holders. The cost of preparing and
distributing to contract holders additional proxy materials if required in
connection with any adjournment will be borne by ZKVA.
Proxies executed by shareholders may be revoked by a written instrument
received by the Secretary of the Fund at any time before they are exercised, by
the delivery of a later-dated proxy or by attendance at the meeting and voting
in person. Pursuant to the Fund's Articles of Incorporation, the presence in
person or by proxy of the holders of record of one-third of the shares
2
<PAGE>
issued and outstanding and entitled to vote at a meeting shall constitute a
quorum for the transaction of business at such meeting.
All information in the Proxy Statement about ZKVA has been provided by
ZKVA; all information in the Proxy Statement about SKI has been provided by
Zurich Kemper Investments, Inc. ("ZKI") and Scudder, Stevens & Clark, Inc.
("Scudder"); and all information in the Proxy Statement about the Manager and
ARM Financial Group, Inc. ("ARM") has been provided by the Manager and ARM.
EACH CONTRACT HOLDER IS URGED TO EXERCISE THE RIGHT TO GIVE VOTING INSTRUCTIONS
FOR THE SPECIAL MEETING OF SHAREHOLDERS OF THE PORTFOLIO BY FILLING IN, DATING
AND SIGNING THE VOTING INSTRUCTIONS CARD FOR THE PORTFOLIO AND RETURNING THE
CARD IN THE RETURN ENVELOPE PROVIDED.
PROPOSAL NO. 1
APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT(S)
ZURICH KEMPER VALUE PORTFOLIO
On June 26, 1997, Zurich Insurance Company ("Zurich"), ZKI Holding Corp.
("ZKIH"), ZKI, Scudder and the representatives of the beneficial owners of
the capital stock of Scudder entered into a transaction agreement pursuant to
which Zurich will become the majority stockholder in Scudder with an
approximately 70% interest and ZKI will be combined with Scudder (the
"Scudder Transaction"). Zurich is the ultimate parent company of ZKVA. Upon
completion of the Scudder Transaction, Scudder will change its name to
Scudder Kemper Investments, Inc. ("SKI") and ZKI and ZKVA (the present
sub-adviser to the Portfolio) will be integrated into SKI. Scudder, a New
York-based investment adviser and the adviser for the Scudder and AARP Funds,
has approximately $125 billion under management. It is anticipated that the
Scudder Transaction will be consummated in December, 1997.
Consummation of the Scudder Transaction will constitute an "assignment," as
that term is defined in the 1940 Act, of the existing sub-advisory agreement
between the Manager and ZKVA (the "Current ZKVA Sub-Advisory Agreement") because
of the change of "control" (within the meaning of the 1940 Act) of ZKVA. As
required by the 1940 Act, the Current ZKVA Sub-Advisory Agreement provides for
its automatic termination in the event of its assignment. In anticipation of
the Scudder Transaction, therefore, it is proposed that a new sub-advisory
agreement between the Manager and SKI (the "New SKI Sub-Advisory Agreement"),
which will take effect following consummation of the Scudder Transaction, be
approved by shareholders of the Portfolio. Depending on the timing of the
combination of the Scudder, ZKI and ZKVA organizations into SKI, however,
ZKVA may continue to serve as sub-adviser to the Portfolio following
consummation of the Scudder Transaction for an interim period. Accordingly,
shareholder approval is also being sought for a new sub-advisory agreement
with ZKVA following the termination of the Current ZKVA Sub-Advisory
3
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Agreement (the "New ZKVA Sub-Advisory Agreement," and together with the New
SKI Sub-Advisory Agreement, the "New Sub-Advisory Agreement"). A copy of the
form of the New ZVKA and SKI Sub-Advisory Agreements is attached hereto.
ZVKA, following consummation of the Scudder Transaction, and SKI are
hereinafter sometimes collectively referred to as the "New Sub-Adviser". If
the New Sub-Advisory Agreement is approved by shareholders of the Portfolio,
it is anticipated that the Board of Directors of the Fund will change the
name of the Portfolio to "Scudder Kemper Value Portfolio."
The Current ZKVA Sub-Advisory Agreement is dated November 7, 1995, and was
last approved by shareholders on October 30, 1997, in connection with a
reduction of the sub-advisory fee payable thereunder by the Manager to ZKVA.
Pursuant to the investment management agreement between the Fund and the
Manager, the Portfolio compensates the Manager at the rate of .65% of the
average daily net assets of the Portfolio. The rate of compensation payable
by the Manager to ZKVA pursuant to the Current ZKVA Sub-Advisory Agreement
(expressed as an annual percentage of the average daily net assets of the
Portfolio) is .40%. The rate of compensation payable by the Manager to the
New Sub-Adviser under the New Sub-Advisory Agreement will be at the same rate
of compensation as under the Current ZKVA Sub-Advisory Agreement. The terms
of the Current ZKVA and New Sub-Advisory Agreements, which are substantially
identical, are summarized below.
Prior to October 30, 1997, the rate of compensation payable by the Manager
to ZKVA and its predecessor was .50% of the Portfolio's average daily net
assets. For the fiscal year ended June 30, 1997, the sub-advisory fee paid (at
the rate of .50% of the Portfolio's average daily net assets) by the Manager to
ZKVA was $126,377. If the current fee structure under the Current ZKVA
Sub-Advisory Agreement and the New Sub-Advisory Agreement (at the rate of
.40% of the Portfolio's average daily net assets) had been in effect, the
sub-advisory fee paid by the Manager to ZKVA would have been approximately
$101,102.
OTHER MATERIAL TERMS OF THE CURRENT ZKVA SUB-ADVISORY AGREEMENT AND NEW
SUB-ADVISORY AGREEMENT
The terms of the New Sub-Advisory Agreement are the same in all material
respects as the terms of the Current ZKVA Sub-Advisory Agreement, differing
only in the sub-adviser named therein and the effective and termination
dates. The following is a summary of the material terms of the New
Sub-Advisory Agreement and Current ZKVA Sub-Advisory Agreement:
ADVISORY SERVICES. The sub-adviser will provide a continuous investment
program for the Portfolio, including investment research with respect to all
securities and investments and cash equivalents in the Portfolio.
PAYMENT OF SUB-ADVISORY EXPENSES. The sub-adviser agrees to assume and pay
all of the costs and expenses of performing its obligations thereunder.
4
<PAGE>
LIMITATION OF LIABILITY. The sub-adviser and any of its affiliated persons
will not be liable for, or subject to any damages, expenses, or losses in
connection with, any act or omission connected with or arising out of any
services rendered thereunder, except by reason of willful misfeasance, bad
faith, or gross negligence in the performance of the sub-adviser's duties, or by
reason of reckless disregard of the sub-adviser's obligations and duties
thereunder.
TERM. The agreement will continue from year to year, provided that its
continuation is annually approved (an "annual approval") by a majority of the
Directors of the Fund, including a majority of the Directors who are not parties
to, or interested persons of any parties to, the agreement, cast in person at a
meeting called for the purpose of voting on such approval.
TERMINATION; ASSIGNMENT. The agreement may be terminated at any time
without penalty upon 60 days' written notice by the sub-adviser, the Manager,
the Directors of the Fund, or by the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Portfolio (as defined in
the 1940 Act). The agreement also provides that it will automatically terminate
in the event of its assignment (as defined in the 1940 Act) or termination of
the management agreement between the Fund and the Manager.
CONSIDERATIONS OF THE BOARD OF DIRECTORS
The Board of Directors, including the Directors who are not "interested
persons" of the Fund (as defined in the 1940 Act) (the "Independent
Directors"), determined that the terms of the New Sub-Advisory Agreement are
fair and reasonable and that the approval of the New Sub-Advisory Agreement
on behalf of the Portfolio is in the best interests of the Portfolio and its
shareholders.
In determining to approve the New Sub-Advisory Agreement, the Directors
evaluated all factors they deemed relevant with respect to the Portfolio. These
factors included the nature and extent of the services to be rendered by the New
Sub-Adviser, the fact that the sub-advisory fee rate payable by the Manager to
the New Sub-Adviser would not differ from the fee rate currently payable to
ZKVA, and that the New Sub-Adviser would continue to provide the same services
to the Portfolio under the New Sub-Advisory Agreement as ZKVA currently
provides under the Current ZKVA Sub-Advisory Agreement.
At a meeting of the Board on August 15, 1997, ZKVA provided information
to the Board to the effect that ZKVA would remain an independent and
autonomous entity within the SKI organization following the Scudder
Transaction. ZKVA also noted that it would retain its investment philosophy
and process, and provided assurances as to continuity of key personnel.
5
<PAGE>
The Board also received information relating to the financial condition and
resources of ZKVA following the Scudder Transaction. ZKVA stated that it
would continue to provide the same nature and quality of services as
currently provided, and assured the Board that there would be no diminution
in the nature or quality of services to be rendered by ZKVA following
consummation of the Scudder Transaction. In addition, the Board considered
comparative information respecting fees and expenses incurred by other mutual
funds with investment objectives similar to those of the Portfolio.
At a subsequent meeting of the Board on November 14, 1997, ZKVA reaffirmed
the information previously provided to the Board, with one modification. It was
represented to the Board that ZKVA would be integrated into SKI following the
Scudder Transaction, rather than continue as a separate legal entity. ZKVA
stated that it would operate autonomously as a separate division of SKI.
ZKVA noted that it was anticipated that key management personnel responsible
for the management of the Portfolio would remain with the New Sub-Adviser and
would continue to be responsible for the management of the Portfolio.
AT ITS MEETING ON NOVEMBER 14, 1997, THE BOARD OF DIRECTORS, INCLUDING
THE DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUND (THE "INDEPENDENT
DIRECTORS"), AFTER TAKING INTO ACCOUNT THE CONSIDERATIONS DESCRIBED ABOVE,
UNANIMOUSLY APPROVED THE NEW SUB-ADVISORY AGREEMENT AND RECOMMENDED THAT
SHAREHOLDERS VOTE FOR APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT.
INFORMATION ABOUT SKI
SCUDDER KEMPER INVESTMENTS, INC. will be located at 345 Park Avenue, New
York, New York. Following the Scudder Transaction, Zurich, located at
Mythenquai 2, 8002 Zurich, Switzerland, will become the majority stockholder in
SKI with an approximately 70% interest.
It is anticipated that SKI will also serve as investment adviser to other
investment companies having similar investment objectives to the Portfolio as
follows:
NET ASSETS OF OTHER
FUND(1)
OTHER FUND (IN MILLIONS) ANNUAL FEE RATE
- --------------------------------------------------------------------------------
.75% to $250M
Kemper Contrarian Fund (2) $78 .72% next $750M
- -----------------------------------------------------------.70% next $1.5B
Kemper-Dreman High Return .68% next $2.5B
Equity Fund (2) $738 .65% next $2.5B
- -----------------------------------------------------------.64% next $2.5B
.63% next $2.5B
Kemper Small Cap Value Fund (2) $273 .62% thereafter
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
Scudder Large Company Value Fund $1651 .75% to $500M
(formerly Scudder Capital Growth .65% next $500M
Fund) .60% next $500M
.55% thereafter
- --------------------------------------------------------------------------------
Scudder Value Fund $89 .70% of net assets
- --------------------------------------------------------------------------------
Scudder Small Company Value Fund $41 .75% of net assets(3)
- --------------------------------------------------------------------------------
(1) Net assets as of the most recent fiscal year end.
(2) A portfolio of Kemper Value Fund, Inc.
(3) Subject to waivers and/or expense limitations.
After consummation of the Scudder Transaction, it is anticipated that the
principal executive officer and directors of SKI will be as follows:
<TABLE>
<CAPTION>
Name Address Principal Occupation
- ---- ------- --------------------
<S> <C> <C>
Lynn Birdsong, Director 345 Park Avenue Senior Executive Officer --
New York, New York 10154 International Operations, SKI
Lawrence Cheng, Director Mythenquai 2 Member of Corporate
8002 Zurich, Switzerland Executive Board and Chief
Investment Officer for
Investments and International
Asset Management, Zurich
Steven Gluckstern, Director Mythenquai 2 Member of Corporate
8002 Zurich, Switzerland Executive Board and
responsible for Reinsurance,
Structured Finance, Capital
Market Products and Strategic
Investments, Zurich
Rolf Hueppi, Director Mythenquai 2 Chairman and Chief
8002 Zurich, Switzerland Executive Officer, Zurich;
Chairman of Board of
Directors, SKI
Markus Rohrbasser, Director Mythenquai 2 Chief Financial Officer and
8002 Zurich, Switzerland Member of Corporate Executive
Board, Zurich
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Cornelia Small, Director 345 Park Avenue Senior Executive Officer --
New York, New York 10154 Investment Management, SKI
Edmond Villani, Chief Executive 345 Park Avenue Chief Executive Officer,
Officer and Director New York, New York 10154 SKI
</TABLE>
INFORMATION ABOUT ZKVA
ZURICH KEMPER VALUE ADVISORS, INC. is located at 280 Park Avenue, 40th
Floor, New York, New York 10017. As of June 30, 1997, ZKVA managed over $6
billion. Clients include public funds, corporate benefit funds, college
endowments and foundations, Taft-Hartley funds, and other institutional
accounts.
ZKVA, a Delaware corporation, an indirect wholly owned subsidiary of
Zurich, was formed in August, 1995 in order to purchase substantially all of the
assets of Dreman Value Management, L.P., ZKVA's predecessor organization.
Founded in 1872, Zurich is a multinational, public corporation organized under
the laws of Switzerland. Zurich's primary business is as an insurer. Together
with its predecessor organizations, ZKVA has been in the investment management
business since 1977.
Prior to September 1997, ZKVA was known as Dreman Value Advisors, Inc. In
connection with the name change of the Sub-Adviser to Zurich Kemper Value
Advisers, Inc., the Board of Directors of the Fund changed the name of Dreman
Value Portfolio to Zurich Kemper Value Portfolio, effective September 2, 1997.
The principal executive officer and directors of ZKVA are as follows:
<TABLE>
<CAPTION>
Name Address Principal Occupation
- ---- ------- --------------------
<S> <C> <C>
John E. Neal 222 S. Riverside Plaza President, Kemper Funds Group,
Chicago, IL a unit of Zurich Kemper
Investments, Inc.; Director,
ZKI, ZKVA and Zurich Kemper
Distributors, Inc.
George Keith 280 Park Avenue, 40th Floor President, Chief Executive
New York, NY Officer and Director, ZKVA.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Stephen B. Timbers 222 S. Riverside Plaza, President, Chief Executive Officer,
Chicago, IL Chief Investment Officer and
Director, ZKI; Director, ZKDI,
ZKVA and LTV Corporation.
</TABLE>
ZKVA also serves as investment adviser to other investment companies having
similar investment objectives to the Portfolio as follows:
Net Assets of Other
Other Fund Fund(1)
(in millions) Annual Fee Rate
- --------------------------------------------------------------------------------
.75% to $250M
Kemper Contrarian Fund (2) $78 .72% next $750M
- -----------------------------------------------------------------.70% next $1.5B
Kemper-Dreman High Return Equity .68% next $2.5B
Fund (2) $738 .65% next $2.5B
- -----------------------------------------------------------------.64% next $2.5B
.63% next $2.5B
Kemper Small Cap Value Fund (2) $273 .62% thereafter
- --------------------------------------------------------------------------------
1 Net assets as of the most recent fiscal year end.
2 A portfolio of Kemper Value Fund, Inc.
AFFILIATED BROKERS
The Manager and ZKVA are each affiliated with registered broker-dealers,
including Morgan Stanley & Co. Incorporated ("Morgan Stanley")(in the case of
the Manager). SKI will also be affiliated with one or more registered
broker-dealers. From time to time, a portion of the Portfolio's brokerage
transactions may be conducted with such broker-dealers, subject to policies
established by the Fund's Board to ensure that all brokerage commissions paid to
such broker-dealers by the Portfolio with which they are affiliated are fair and
reasonable. For the fiscal year ended June 30, 1997, the Fund paid $2,060 in
brokerage commissions with respect to the Portfolio to Morgan Stanley, an
affiliated person of the Portfolio. For the fiscal year ended June 30, 1997,
the brokerage commissions paid to Morgan Stanley as a percentage of the
aggregate brokerage commissions paid by the Portfolio was 3%, and the percentage
of the aggregate dollar amount of portfolio transactions involving the payment
of such commissions engaged in by the Portfolio was 4%.
9
<PAGE>
VOTE REQUIRED FOR PROPOSAL NO. 1
Approval of Proposal No. 1 requires the affirmative vote of a majority of
the outstanding voting securities of the Portfolio. "Majority" for this purpose
under the 1940 Act means the lesser of (1) more than 50% of the outstanding
shares of the Portfolio or (2) 67% or more of the shares of the Portfolio
represented at the meeting if more than 50% of such shares are represented.
IF PROPOSAL NO. 1 IS NOT APPROVED, THE CURRENT ZKVA SUB-ADVISORY AGREEMENT
WILL TERMINATE AUTOMATICALLY UPON CONSUMMATION OF THE SCUDDER TRANSACTION. IN
SUCH AN EVENT THE MANAGER AND THE BOARD OF DIRECTORS WOULD CONSIDER AVAILABLE
ALTERNATIVES.
BOARD RECOMMENDATION
At its meeting on November 14, 1997, the Board of Directors, including the
Independent Directors, unanimously recommended that shareholders vote FOR
Proposal No. 1.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL NO. 1.
GENERAL INFORMATION
MANAGER
ARM Capital Advisors, Inc., 515 West Market Street, 8th Floor, Louisville,
Kentucky 40202, acts as the Fund's investment manager.
DISTRIBUTOR
Pursuant to a distribution agreement dated August 30, 1995, ARM Securities
Corporation ("ARM Securities") acts without remuneration as the Fund's agent for
distribution of the Portfolio's shares. ARM Securities is a wholly-owned
subsidiary of ARM. Shares of the Fund and the Portfolios are sold only to
separate accounts of Integrity and National Integrity. ARM Securities' address
is 100 North Minnesota Street, P.O. Box 69, New Ulm, Minnesota 56073-0069.
TRANSFER AGENT, DIVIDEND AGENT AND RECORDKEEPING AGENT
Investors Fiduciary Trust Company, 801 Pennsylvania Street, Kansas City,
Missouri 64105, acts as the Fund's transfer agent, dividend disbursing agent and
recordkeeping agent.
OTHER MATTERS
10
<PAGE>
The Board of Directors of the Fund does not know of any other business to
be brought before the meeting. If any other matters properly come before the
meeting, proxies will vote on such matters in their discretion.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Fund will furnish, without charge, a copy of the most recent Annual
Report to contract owners. Copies of the Annual Report may be obtained from the
Fund, without charge, by contacting the Fund in writing at the address on the
cover of this Proxy Statement, or by calling 1-800-325-8583.
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual meetings of shareholders and
currently does not intend to hold such meetings unless shareholder action is
required in accordance with the 1940 Act or the Fund's Articles of
Incorporation. A shareholder proposal to be considered for inclusion in the
proxy statement at any meeting of shareholders hereafter called must be
submitted a reasonable time before the proxy statement relating thereto is
mailed. Whether a proposal submitted will be included in the proxy statement
will be determined in accordance with applicable federal and state laws.
Respectfully Submitted,
Kevin L. Howard
Secretary
Dated: December 10, 1997
CONTRACT HOLDERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE VOTING
INSTRUCTIONS CARD AND RETURN IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
11
<PAGE>
FORM OF
SUB-ADVISORY AGREEMENT
AGREEMENT, made this __th day of _____________, 1997, between ARM Capital
Advisors, Inc., a Delaware corporation, and __________________ (SUB-ADVISER), a
_________ corporation.
WHEREAS, Manager, an indirect wholly-owned subsidiary of ARM Financial
Group, Inc., is an investment adviser registered under the Investment Advisers
Act of 1940, as amended (the Advisers Act);
WHEREAS, the Sub-Adviser is an investment adviser registered under the
Advisers Act;
WHEREAS, pursuant to a Management Agreement dated November 26, 1993 (the
MANAGEMENT AGREEMENT), Manager acts as Investment Manager to The Legends Fund,
Inc. (the FUND), an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the 1940 ACT);
WHEREAS, the Fund is authorized to issue multiple series of shares, each
such series representing a separate portfolio of securities and investments; and
WHEREAS, Manager desires to retain the Sub-Adviser to furnish investment
advisory services to the _____________ Value Portfolio of the Fund (the
PORTFOLIO), and the Sub-Adviser is willing to accept such appointment on the
terms and conditions set forth herein.
NOW, THEREFORE, based on the premises and the consideration set forth
herein, Manager and the Sub-Adviser agree as follows:
SECTION 1. INVESTMENT ADVISORY SERVICES.
Subject to the supervision of the Fund's Board of Directors and Manager,
the Sub-Adviser will provide a continuous investment program for the Portfolio
and determine the composition of the assets of the Portfolio, including
determination of the purchase, retention or sale of the securities, cash, and
other investments contained in the Portfolio's holdings. The Sub-Adviser will
provide investment research and conduct a continuous program of evaluation,
investment, sales, and reinvestment of the Portfolio's assets by determining the
securities and other investments that shall be purchased, entered into, sold,
closed, or exchanged for the Portfolio, when these transactions should be
executed, and what portion of the assets of the Portfolio should be held in the
various securities and other investments in which it may invest, and the
Sub-Adviser is hereby authorized to execute and perform such services on behalf
of the Portfolio. To the extent, if any, permitted by the investment policies
of the Portfolio, the Sub-Adviser shall make determinations as to and execute
and perform futures contracts and options on behalf of the Portfolio. The
Sub-Adviser will provide the services under this Agreement in accordance with
the Portfolio's investment objective or objectives, policies, and restrictions
as stated in the Fund's Registration Statement filed with the Securities and
Exchange Commission (SEC). Manager agrees to supply the Sub-Adviser with a copy
of the Registration Statement and each amendment thereto (the Registration
Statement as amended from time to time hereinafter referred to as the
REGISTRATION STATEMENT) and any other documents that set forth investment
policies, procedures or restrictions governing the Portfolio and to notify the
<PAGE>
Sub-Adviser in writing of any changes in the investment objectives, policies,
procedures and restrictions governing the Portfolio.
The Sub-Adviser further agrees as follows:
(a) The Sub-Adviser will manage the Portfolio (i) so that it will
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the CODE), and (ii) so
as to ensure compliance by the Portfolio with the diversification
requirements of Section 817(h) of the Code and regulations issued
thereunder. In managing the Portfolio in accordance with these
requirements, the Sub-Adviser shall be entitled to receive and act
upon advice of counsel to the Fund, counsel to Manager or counsel
to the Sub-Adviser, provided the Sub-Adviser's counsel is
acceptable to Manager.
(b) In undertaking its duties under this Agreement, the Sub-Adviser
will comply with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's
Board of Directors of which it has notice and the provisions of the
Registration Statement.
(c) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as of
the Sub-Adviser's or the Sub-Adviser's affiliates' other investment
advisory clients, the Sub-Adviser may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be so sold or purchased with those of
its other clients where such aggregation is not inconsistent with
the policies set forth in the Registration Statement. In such
event, the Sub-Adviser will allocate the securities so purchased or
sold, as well as the expenses incurred in the transaction, in a
manner that is fair and equitable in the Sub-Adviser's judgment in
the exercise of the Sub-Adviser's fiduciary obligations to the Fund
and to such other clients.
(d) In connection with the purchase and sale of securities for the
Portfolio, the Sub-Adviser, together with Manager, will arrange for
the transmission to the custodian, transfer agent, dividend
disbursing agent and recordkeeping agent for the Fund (such
custodian and agent or agents hereinafter referred to as the
AGENT), on a daily basis, such confirmation, trade tickets (which
shall state industry classifications unless the Sub-Adviser has
previously furnished a list of classifications for portfolio
securities), and other documents and information, including (but
not limited to) CUSIP or other numbers that identify securities to
be purchased or sold on behalf of the Portfolio and, with respect
to mortgage derivative and asset-backed securities purchased by the
Sub-Adviser for the Portfolio, 1066Q reports and supplemental
information as required to be available pursuant to IRS Publication
938, as may be reasonably necessary to enable the Agent to perform
its administrative and recordkeeping responsibilities with respect
to the Portfolio. With respect to portfolio securities to be
purchased or sold through the Depositary Trust Company, the
Sub-Adviser will arrange for the automatic transmission of the
confirmation of such trades to the Fund's Agent, and if requested,
Manager.
<PAGE>
(e) The Sub-Adviser will monitor on a daily basis, by review of daily
pricing reports provided by the Agent to the Sub-Adviser, the
determination by the Agent for the Fund of the valuation of
portfolio securities and other investments of the Portfolio. The
Sub-Adviser shall not be obligated to independently verify the
Agent's pricing determinations, and the Agent's responsibility for
accurate pricing determinations of the value of the Portfolio's
securities shall not be reduced by the Sub-Adviser's duty to
monitor such determinations. The Sub-Adviser will assist the Agent
in determining or confirming, consistent with the procedures and
policies stated in the Registration Statement, the value of any
portfolio securities or other assets of the Portfolio for which the
Agent seeks assistance from or identifies for review by the
Sub-Adviser.
(f) The Sub-Adviser will make available to the Fund and Manager,
promptly upon request, all of the Portfolio's investment records
and ledgers maintained by the Sub-Adviser as are necessary to
assist the Fund and Manager to comply with requirements of the 1940
Act and the Advisers Act, as well as other applicable laws. The
Sub-Adviser will furnish to regulatory authorities having the
requisite authority any information or reports in connection with
its services which may be requested in order to ascertain whether
the operations of the Fund are being conducted in a manner
consistent with applicable laws and regulations.
(g) The Sub-Adviser will provide reports, which may be prepared by the
Agent, to the Fund's Board of Directors for consideration at
meetings of the Board on the investment program for the Portfolio
and the issuers and securities represented in the Portfolio's
securities holdings, including a schedule of the investments and
other assets held in the Portfolio and a statement of all purchases
and sales for the Portfolio since the last such statement, and will
furnish the Funds' Board of Directors with periodic and special
reports with respect to the Portfolio as the Directors and Manager
may reasonably request, including statistical information with
respect to the Portfolio's securities. In addition, the
Sub-Adviser will make available at each meeting of the Board of
Directors, either in person or by telephone conference call as
instructed by Manager on behalf of the Board of Directors of the
Fund, an appropriate person to discuss the investment performance
of the Portfolio.
(h) The Sub-Adviser will provide information and reports to Manager as
Manager shall reasonably request to enable it to review the
performance of the Sub-Adviser under this Agreement.
SECTION 2. BROKER-DEALER SELECTION.
The Sub-Adviser is responsible for decisions to buy and sell securities and
other investments for the Portfolio, broker-dealer and futures commission
merchant selection, and negotiation of brokerage commission and futures
commission merchants' rates. As a general matter, in executing portfolio
transactions the Sub-Adviser may employ or deal with such broker-dealers or
futures commission merchants as may, in the Sub-Adviser's best judgment, provide
prompt and reliable execution of the transactions at favorable prices and
reasonable commission rates. In selecting such broker-dealers or futures
commission merchants, the Sub-Adviser shall consider all relevant factors,
including price (including the applicable brokerage commission, dealer spread or
futures commission merchant rate), the size of the order, the nature
<PAGE>
of the market for the security or other investment, the timing of the
transaction, the reputation, experience and financial stability of the
broker-dealer or futures commission merchant involved, the quality of the
service, the difficulty of execution, and the execution capabilities and
operational facilities of the firm involved, and, in the case of securities, the
firm's risk in positioning a block of securities. Subject to such policies as
the Board of Directors may determine and consistent with Section 28(e) of the
Securities Exchange Act of 1934, as amended (the 1934 ACT), the Sub-Adviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of the Sub-Adviser's
having caused the Portfolio to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, if the Sub-Adviser determines 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 of an exchange,
broker or dealer, viewed in terms of either that particular transaction or the
Sub-Adviser's overall responsibilities with respect to the Portfolio and to the
Sub-Adviser's other clients as to which the Sub-Adviser exercises investment
discretion. In accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T)
thereunder, and subject to any other applicable laws and regulations including
Section 17(e) of the 1940 Act and Rule 17e-1 thereunder, the Sub-Adviser may
engage its affiliates, Manager and its affiliates or any other sub-adviser to
the Fund and its respective affiliates as broker-dealers or futures commission
merchants to effect portfolio transactions in securities and other investments
for the Portfolio.
SECTION 3. RECORDS, REPORTS, ETC.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records which the Sub-Adviser maintains for
the Portfolio are the property of the Fund and further agrees to surrender
promptly to the Fund any of such records upon the Fund's or Manager's request or
upon termination of this Agreement, although the Sub-Adviser may, at the
Sub-Adviser's own expense, make and retain a copy of such records. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act and to preserve the records required by the Rule 204-2 under the
Advisers Act for the period specified in the Rule.
SECTION 4. PAYMENT OF EXPENSES.
The Sub-Adviser shall assume and pay all of the costs and expenses of
performing its obligations under this Agreement.
SECTION 5. COMPENSATION FOR SERVICES.
Manager will pay to the Sub-Adviser a monthly sub-advisory fee (adjusted
pro rata for any shorter applicable period) at an annual rate of .40% of the
average daily net assets of the Portfolio from the management fee actually
received by Manager from the Fund; provided, however, that the sub-advisory fee
shall be reduced proportionately if the management fee actually paid to Manager
by the Portfolio shall have been reduced as a result of applicable state expense
limitations or fee waivers agreed to in writing by the Sub-Adviser. The
sub-advisory fee shall be computed, accrue and be payable in the same manner as
the management fee which is payable by the Fund to Manager pursuant to the
Management Agreement and as specified in the Fund's Registration Statement.
<PAGE>
SECTION 6. LIABILITY FOR SERVICES.
Except as may otherwise be required by the 1940 Act or the rules thereunder
or other applicable law, and except as set forth in the next paragraph, the Fund
and Manager agree that the Sub-Adviser, any of its affiliated persons, and each
person, if any, who, within the meaning of Section 15 of the Securities Act of
1933, as amended, controls the Sub-Adviser, shall not be liable for, or subject
to any damages, expenses, or losses in connection with, any act or omission
connected with or arising out of any services rendered under this Agreement,
except by reason of willful misfeasance, bad faith, or gross negligence in the
performance of the Sub-Adviser's duties, or by reason of reckless disregard of
the Sub-Adviser's obligations and duties under this Agreement.
SECTION 7. INDEMNIFICATION BY SUB-ADVISER.
The Sub-Adviser agrees to indemnify and hold harmless Manager against any
losses, expenses, claims, damages or liabilities (or actions or proceedings in
respect thereof), to which Manager may become subject arising out of or based on
the breach or alleged breach by the Sub-Adviser of any provisions of this
Agreement; provided, however, that the Sub-Adviser shall not be liable under
this paragraph in respect of any loss, expense, claim, damage or liability to
the extent that a court having jurisdiction shall have determined by a final
judgment, or independent counsel agreed upon by Manager and the Sub-Adviser
shall have concluded in a written opinion, that such loss, expense, claim,
damage or liability resulted primarily from Manager's willful misfeasance, bad
faith or gross negligence or by reason of the reckless disregard by Manager of
its duties. The foregoing indemnification shall be in addition to any rights
that Manager may have at common law or otherwise. The Sub-Adviser's agreements
in this paragraph shall, upon the same terms and conditions, extend to and inure
to the benefit of each person who may be deemed to control Manager, be
controlled by Manager or be under common control with Manager and its
affiliates, directors, officers, employees and agents. The Sub-Adviser's
agreements in this paragraph shall also extend to any of Manager's successors or
the successors of the aforementioned affiliates, directors, offices, employees
or agents.
SECTION 8. INDEMNIFICATION BY MANAGER.
Manager agrees to indemnify and hold harmless the Sub-Adviser against any
losses, expenses, claims, damages or liabilities (or actions or proceedings in
respect thereof), to which the Sub-Adviser may become subject arising out of or
based on the breach or alleged breach by Manager of any provisions of this
Agreement or the Management Agreement, or any wrongful action or alleged
wrongful action by Manager or its affiliates in the distribution of the Fund's
shares, or any wrongful action or alleged wrongful action by the Fund other than
wrongful action or alleged wrongful action that was caused by the breach by the
Sub-Adviser of the provisions of this Agreement; provided, however, that Manager
shall not be liable under this paragraph in respect of any loss, expense, claim,
damage or liability to the extent that a court having jurisdiction shall have
determined by a final judgment, or independent counsel agreed upon by Manager
and the Sub-Adviser shall have concluded in a written opinion, that such loss,
expense, claim, damage or liability resulted primarily from the Sub-Adviser's
willful misfeasance, bad faith or gross negligence or by reason of the reckless
disregard by the Sub-Adviser of its duties. The foregoing indemnification shall
be in addition to any rights that the Sub-Adviser may have at common law or
otherwise. Manager's agreements in this paragraph shall, upon the same terms
and conditions, extend to and inure to the benefit of each person who may be
deemed to control the Sub-Adviser, be controlled by the Sub-Adviser or be under
common control with the
<PAGE>
Sub-Adviser and to each of the Sub-Adviser's and each such person's respective
affiliates, directors, officers, employees and agents. Manager's agreements in
this paragraph shall also extend to any of the Sub-Adviser's successors or the
successors of the aforementioned affiliates, directors, officers, employees or
agents.
SECTION 9. NOTICE AND DEFENSE OF PROCEEDINGS, ETC.
Promptly after receipt by a party indemnified under paragraph 7 or 8 above
of notice of the commencement of any action, proceeding or investigation for
which indemnification will be sought, such indemnified party shall promptly
notify the indemnifying party in writing; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may
otherwise have to any indemnified party unless such omission results in actual
material prejudice to the indemnifying party. In case any action or proceeding
shall be brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, individually or jointly with any other
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of any action or
proceeding, the indemnifying party shall not be liable to the indemnified party
for any legal or other expenses subsequently incurred by the indemnified party
in connection with the defense thereof other than reasonable costs of
investigation. If the indemnifying party does not elect to assume the defense
of any action or proceeding the indemnifying party on a monthly basis shall
reimburse the indemnified party for the legal fees and expenses incurred by the
indemnified party for continuing its defense thereof. Regardless of whether or
not the indemnifying party shall have assumed the defense of any action or
proceeding the indemnified party shall not settle or compromise the action or
proceeding without the prior written consent of the indemnifying party.
SECTION 10. REPRESENTATIONS AND WARRANTIES; COVENANTS.
(a) The Sub-Adviser hereby represents and warrants as follows:
(i) The Sub-Adviser is registered with the SEC as an
investment adviser under the Advisers Act, and such
registration is current, complete and in full compliance
with all material applicable provisions of the Advisers
Act and the rules and regulations thereunder;
(ii) The Sub-Adviser has all requisite authority to enter into,
execute, deliver and perform the Sub-Adviser's obligations
under this Agreement;
(iii) The Sub-Adviser's performance of its obligations under
this Agreement does not conflict with any law, regulation
or order to which the Sub-Adviser is subject; and
(iv) The Sub-Adviser has reviewed the Registration Statement
for the Fund filed with the SEC, and with respect to the
disclosure about the Sub-Adviser and the Portfolio or
information relating, directly or indirectly, to the
Sub-Adviser or the Portfolio which was made in reliance
upon and in conformity with written information provided
by the Sub-Adviser to the Fund specifically for use
therein or, if written information was not provided, which
the Sub-Adviser had the opportunity to review prior to
<PAGE>
filing with the SEC, such Registration Statement contains,
as of its date, no untrue statement of any material fact
and does not omit any statement of a material fact which
was required to be stated therein or necessary to make the
statements contained therein not misleading.
(b) The Sub-Adviser hereby covenants and agrees that, so long as this
Agreement shall remain in effect:
(i) The Sub-Adviser shall maintain the Sub-Adviser's
registration as an investment adviser under the Advisers
Act, and such registration shall at all times remain
current, complete and in full compliance with all material
applicable provisions of the Advisers Act and the rules
and regulations thereunder;
(ii) The Sub-Adviser's performance of its obligations under
this Agreement shall not conflict with any law, regulation
or order to which the Sub-Adviser is then subject;
(iii) The Sub-Adviser shall at all times fully comply with the
Advisers Act, the 1940 Act, all applicable rules and
regulations under such Acts and all other applicable law;
and
(iv) The Sub-Adviser shall promptly notify Manager and the Fund
upon the occurrence of any event that might disqualify or
prevent the Sub-Adviser from performing its duties under
this Agreement. The Sub-Adviser further agrees to notify
Manager and the Fund promptly with respect to written
material that has been provided to the Fund or Manager by
the Sub-Adviser for inclusion in the Registration
Statement or prospectus for the Fund or any supplement or
amendment thereto, or, if written material has not been
provided, with respect to the information in the
Registration Statement or Prospectus, or any amendment or
supplement thereto, reviewed by the Sub-Adviser, in either
case of any untrue statement of a material fact or of any
omission of any statement of a material fact which is
required to be stated therein or is necessary to make the
statements contained therein not misleading.
SECTION 11. EXCLUSIVITY OF SERVICES AND USE OF NAMES.
The Sub-Adviser acknowledges and agrees that the names THE LEGENDS FUND
and PINNACLE, and abbreviations or logos associated with those names, are the
valuable property of Manager and its affiliates; that the Fund, Manager and its
affiliates have the right to use such names, abbreviations and logos; and that
the Sub-Adviser shall use the names THE LEGENDS FUND and PINNACLE, and
associated abbreviations and logos, only in connection with the Sub-Adviser's
performance of its duties hereunder.
Manager acknowledges that "_____________" (the Sub-Adviser's name) is
distinctive in connection with investment advisory and related services provided
by the Sub-Adviser, the Sub-Adviser's name is a property right of the
Sub-Adviser, and the Sub-Adviser's name in
<PAGE>
the name of the Portfolio are understood to be used by the Fund with the
Sub-Adviser's consent. The Sub-Adviser hereby grants to the Fund a
non-exclusive license to use the Sub-Adviser's name in the name of the Portfolio
upon the conditions hereinafter set forth; provided that the Fund may use such
name only so long as the Sub-Adviser shall be retained as the investment
sub-adviser of the Portfolio pursuant to the terms of this Agreement. Any such
use by the Fund shall in no way prevent the Sub-Adviser or any of its successors
or assigns from using or permitting the use of the Sub-Adviser's name along with
any other word or words, for, by or in connection with any other entity or
business, other than the Fund or its business, whether or not the same directly
competes or conflicts with the Fund or its business.
Manager acknowledges that the Fund shall use the Sub-Adviser's name in the
name of the Portfolio for the period set forth herein in a manner not
inconsistent with the interests of the Sub-Adviser and that the Fund's rights in
the Sub-Adviser's name are limited to their use as a component of the
Portfolio's name and in connection with accurately describing the activities of
the Portfolio. In the event that the Sub-Adviser shall cease to be the
investment sub-adviser of the Portfolio, then the Fund at its own expense, upon
the Sub- Adviser's written request:
(i) shall cease to use the Sub-Adviser's name as part of the
Portfolio's name or for any other commercial purpose
(other than the right to refer to the Portfolio's former
name in the Fund's Registration Statement, proxy materials
and other Fund documents to the extent required under the
1940 Act);
(ii) shall on all letterheads and other materials designed to
be read or used by salespersons, distributors or
investors, state in a prominent position and prominent
type that the Sub-Adviser has ceased to be the investment
sub-adviser of the Portfolio; and
(iii) shall use its best efforts to cause the Fund's officers
and directors to take any and all actions which may be
necessary or desirable to effect the foregoing and to
reconvey to the Sub-Adviser all rights which the Fund may
have to such name. Manager agrees to take any and all
actions as may be necessary or desirable to effect the
foregoing.
The Sub-Adviser hereby agrees and consents to the use of the Sub-Adviser's
name upon the foregoing terms and conditions.
SECTION 12. ENTIRE AGREEMENTS; AMENDMENT, WAIVER.
This Agreement supersedes all prior agreements between the parties and
constitutes the entire Agreement by the parties. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing singed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment of this
Agreement shall be effective with respect to the Portfolio until approved as
required by the 1940 Act.
SECTION 13. EFFECTIVENESS AND DURATION OF AGREEMENT.
Unless sooner terminated, this Agreement shall continue in effect for two
years and thereafter for successive one year periods, provided that continuation
of this Agreement and the terms thereof are specifically approved annually in
accordance with the requirements of the 1940 Act by a majority of the Directors
of the Fund, including a majority of the Directors who are not
<PAGE>
interested persons of the Sub-Adviser, Manager or the Fund, cast in person at a
meeting called for the purpose of voting on such approval.
SECTION 14. TERMINATION OF AGREEMENT, ASSIGNMENT.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Sub-Adviser or by Manager, upon sixty (60) days' written notice
from the terminating party to the other party and to the Fund, or by the Fund,
upon sixty (60) days written notice to the Sub-Adviser and Manager, acting
pursuant to a resolution adopted by a majority of the members of the Board of
Directors who are not interested persons or by a vote of the holders of the
lesser of (1) 67% of the Portfolio's voting shares present if the holders of
more than 50% of the outstanding shares are present in person or by proxy, or
(2) more than 50% of the outstanding shares of the Portfolio.
This Agreement shall automatically terminate in the event of its assignment
or the termination of the Management Agreement pertaining to the Portfolio.
Termination of this Agreement shall not affect rights of the parties which have
accrued prior thereto. The provisions of paragraphs 6,7,8,9, and 11 shall
survive the termination of this Agreement.
SECTION 15. DEFINITIONS.
The terms ASSIGNMENT and INTERESTED PERSON when used in this Agreement
shall have the meanings give such terms in the 1940 Act and the rules and
regulations thereunder.
SECTION 16. CONCERNING APPLICABLE PROVISIONS OF LAW.
This 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.
This Agreement shall be governed by the laws of the State of New York,
without reference to principles of conflicts of law.
SECTION 17. COUNTERPARTS.
This Agreement may be executed in counterparts, and each counterpart shall
for all purposed be deemed an original, and all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, authorized officers of Manager and the Sub-Adviser have
executed this Agreement as of the day and year first written above.
ARM CAPITAL ADVISORS, INC.
----------------------------------------
By: By:
-------------------------------- -------------------------------------
Attest: Attest:
---------------------------- ---------------------------------
<PAGE>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER / / USING
BLUE OR BLACK INK OR DARK PENCIL
- --------------------------------------------------------------------------------
THIS VOTING INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE CONTRACT HOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION
OF THE PROPOSALS.
FOR AGAINST ABSTAIN
1. To approve the proposed sub-advisory / / / / / /
agreements between ARM Capital Advisors,
Inc. and each of Zurich Kemper Value
Advisors, Inc. (formerly, Dreman Value
Advisors, Inc.) and Scudder Kemper
Investments, Inc.
2. To transact such other matters properly / / / / / /
come before the meeting or any
adjournment thereof.
<PAGE>
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT WHERE INDICATED, AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED BY DECEMBER
29, 1997 TO BE VOTED FOR THE MEETING TO BE HELD ON DECEMBER 30, 1997.
INTEGRITY LIFE INSURANCE COMPANY
THESE VOTING INSTRUCTIONS ARE SOLICITED BY INTEGRITY LIFE INSURANCE COMPANY
IN CONNECTION WITH A SOLICITATION OF PROXIES BY THE DIRECTORS OF THE LEGENDS
FUND, INC. A VOTING INSTRUCTIONS CARD IS PROVIDED IF YOUR CONTRACT VALUES
WERE INVESTED IN THE ZURICH KEMPER VALUE PORTFOLIO AS OF DECEMBER 1, 1997.
The undersigned hereby instructs Integrity Life Insurance Company to vote the
shares of The Legends Fund, Inc. (the "Fund") attributable to his or her
variable annuity contract at the Special Meeting of Shareholders to be held
at the Fund's offices, 515 West Market Street, Louisville, Kentucky 40202 at
3:30 p.m., Eastern Standard Time, December 30, 1997, and any adjournments
thereof, as indicated on the reverse side.
Dated:
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each contract owner should sign. If only one
signs, his or her signature will be binding. If the contract owner is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the contract owner is a partnership, a partner
should sign in his or her own name, indicating that he or she is a partner.
----------------------------------------
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT WHERE INDICATED, AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED BY DECEMBER
29, 1997 TO BE VOTED FOR THE MEETING TO BE HELD ON DECEMBER 30, 1997.
NATIONAL INTEGRITY LIFE INSURANCE COMPANY
THESE VOTING INSTRUCTIONS ARE SOLICITED BY NATIONAL INTEGRITY LIFE INSURANCE
COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY THE DIRECTORS OF THE
LEGENDS FUND, INC. A VOTING INSTRUCTIONS CARD IS PROVIDED IF YOUR CONTRACT
VALUES WERE INVESTED IN THE ZURICH KEMPER VALUE PORTFOLIO AS OF DECEMBER 1,
1997.
The undersigned hereby instructs National Integrity Life Insurance Company to
vote the shares of The Legends Fund, Inc. (the "Fund") attributable to his or
her variable annuity contract at the Special Meeting of Shareholders to be
held at the Fund's offices, 515 West Market Street, Louisville, Kentucky
40202 at 3:30 p.m., Eastern Standard Time, December 30, 1997, and any
adjournments thereof, as indicated on the reverse side.
Dated:
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each contract owner should sign. If only one
signs, his or her signature will be binding. If the contract owner is a
corporation, the President or a Vice President should sign in his or her own
name, indicating title. If the contract owner is a partnership, a partner
should sign in his or her own name, indicating that he or she is a partner.
----------------------------------------
----------------------------------------
Signature(s) Title(s), if applicable
