<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:
[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 Section 240.14a-11(c) or Section 240.14a-12
THE LEGENDS FUND, INC.
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(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:
----------------------------------------------------------------------
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:
----------------------------------------------------------------------
<PAGE>
[ ] 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:
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<PAGE>
THE LEGENDS FUND, INC.
SCUDDER KEMPER VALUE PORTFOLIO
515 West Market Street
Louisville, Kentucky 40202
-----------------------------------------
Notice of Special Meeting of Shareholders
-----------------------------------------
To the Shareholders of Scudder Kemper Value Portfolio.:
A special meeting of shareholders of Scudder 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 November 20, 1998 at 3:00
p.m. The purpose of the meeting is:
(1) to approve or disapprove the proposed sub-advisory agreement between
Integrity Capital Advisors, Inc. 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 Board of Directors of the Fund has fixed the close of business on
October 16, 1998 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
October 23, 1998
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.
SCUDDER KEMPER VALUE PORTFOLIO.
515 West Market Street
Louisville, Kentucky 40202
------------------------------------
PROXY STATEMENT
Special Meeting of Shareholders
November 20, 1998 at 3:00 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 SCUDDER KEMPER VALUE
PORTFOLIO (THE "PORTFOLIO") (THE "MEETING"). The Meeting is scheduled to be
held at 515 West Market Street, Louisville, Kentucky 40202, on November 20,
1998 at 3:00 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 agreement between
Integrity Capital Advisors, Inc. (the "Manager") and Scudder Kemper Investments,
Inc. ("Scudder Kemper") 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 October 23, 1998 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 October 16, 1998 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
SHARES HELD HELD BY BY SEPARATE BY SEPARATE
TOTAL NUMBER BY SEPARATE SEPARATE ACCOUNT II ACCOUNT II OF
OF SHARES ACCOUNT II ACCOUNT II OF NATIONAL NATIONAL
OUTSTANDING OF INTEGRITY OF INTEGRITY INTEGRITY INTEGRITY
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
______ ______ ______% ______ ______%
- --------------------------------------------------------------------------------
</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 Scudder Kemper or its
majority owner.
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 Scudder Kemper or its majority
owner.
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 issued
and outstanding and entitled to vote at a meeting shall constitute a quorum for
the transaction of business at such meeting.
2
<PAGE>
All information in the Proxy Statement about Scudder Kemper has been
provided by Scudder Kemper 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
SCUDDER KEMPER VALUE PORTFOLIO
Scudder Kemper serves as sub-adviser to the Portfolio. Zurich Insurance
Company ("Zurich"), the majority owner of Scudder Kemper, entered into a merger
agreement with B.A.T. Industries p.l.c. ("B.A.T."), pursuant to which B.A.T.'s
financial services business was combined with Zurich (the "Transaction"). The
Transaction was consummated on September 7, 1998 (the "Closing Date"). Zurich
Financial Services owns, directly or indirectly, approximately 70% of the
outstanding voting securities of Scudder Kemper. No other individual owns,
directly or indirectly, more than 1% of the outstanding voting securities of
Scudder Kemper.
Consummation of the Transaction constituted an "assignment," as that term
is defined in the 1940 Act, of the existing sub-advisory agreement between the
Manager and Scudder Kemper (the "Current Scudder Kemper Sub-Advisory Agreement")
because of the change of "control" (within the meaning of the 1940 Act) of
Scudder Kemper. As required by the 1940 Act, the Current Scudder Kemper Sub-
Advisory Agreement provided for its automatic termination in the event of its
assignment. Accordingly, the current Scudder Kemper Sub-Advisory Agreement
terminated on the Closing Date. It is proposed that a new sub-advisory
agreement between the Manager and Scudder Kemper (the "New Scudder Kemper Sub-
Advisory Agreement"), be approved by shareholders of the Portfolio. The New
Scudder Kemper Sub-Advisory Agreement will take effect upon receipt of
shareholder approval. A copy of the form of the New Scudder Kemper Sub-Advisory
Agreement is attached hereto.
Scudder Kemper and Zurich have obtained an order of exemption (the "Order")
from the Securities and Exchange Commission (the "SEC") in connection with the
Transaction. Scudder Kemper has agreed to continue to provide sub-advisory
services during the period from the Closing Date through the date of shareholder
approval of the New Scudder Kemper Sub-Advisory Agreement (the "Interim
Period"). Under the terms of the Order, the Manager will escrow all sub-
advisory fees due to Scudder Kemper for its services during the Interim Period.
If shareholders approve the New Scudder Kemper Sub-Advisory Agreement at the
Meeting, Scudder Kemper will be entitled to receive the escrowed fees. If
shareholders do not approve such Agreement, the escrowed fees will be returned
to the Portfolio, and the manager will need to find a new sub-adviser for the
Portfolio.
Since July 1, 1997, shareholders of the Portfolio have had a number of
occasions to vote on the management and subadvisory arrangements for the
Portfolio. The Current Scudder Kemper Sub-Advisory Agreement is dated July 10,
1998, and was last approved by shareholders on July 10, 1998, in connection with
the termination of a prior subadvisory contract, brought about by a change in
control of the Manager. On July 10, 1998, the Portfolio's shareholders also
approved the current management agreement between the Fund, on behalf of the
Portfolio, and the
3
<PAGE>
Manager, and ratified an interim advisory agreement between the Fund, on behalf
of the Portfolio, and Scudder Kemper, pursuant to which Scudder Kemper rendered
advisory services to the Portfolio during the period from May 8, 1998 through
July 10, 1998. Prior thereto, on October 30, 1997, shareholders approved a new
management agreement and subadvisory agreement relating to the Portfolio that
reduced the rate of compensation payable by the Manager to Scudder Kemper's
predecessor by 10 basis points. On December 30, 1997, shareholders approved a
prior subadvisory contract brought about by a change in control of the parent of
Scudder Kemper.
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 Scudder Kemper pursuant to the Current Scudder Kemper 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 Scudder Kemper under the New Scudder Kemper Sub-Advisory Agreement
will be at the same rate of compensation as under the Current Scudder Kemper
Sub-Advisory Agreement. The terms of the Current Scudder Kemper and New Scudder
Kemper Sub-Advisory Agreements, which are substantially identical, are
summarized below.
For the fiscal year ended June 30, 1998, the advisory and sub-advisory fees
paid to Scudder Kemper were $161,781.
OTHER MATERIAL TERMS OF THE CURRENT SCUDDER KEMPER SUB-ADVISORY AGREEMENT AND
NEW SCUDDER KEMPER SUB-ADVISORY AGREEMENT
The terms of the New Scudder Kemper Sub-Advisory Agreement are the same in
all material respects as the terms of the Current Scudder Kemper Sub-Advisory
Agreement, differing only in the effective and termination dates. The following
is a summary of the material terms of the New Scudder Kemper Sub-Advisory
Agreement and Current Scudder Kemper Sub-Advisory Agreement:
ADVISORY SERVICES. Scudder Kemper 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. Scudder Kemper agrees to assume and pay
all of the costs and expenses of performing its obligations thereunder.
LIMITATION OF LIABILITY. Scudder Kemper 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 after an initial two-year term from year
to year, provided that its continuation is annually approved 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 Scudder Kemper, the Manager, the
Directors of the Fund, or by the affirmative vote of the holders of a
4
<PAGE>
"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 Scudder Kemper Sub-Advisory Agreement are
fair and reasonable and that the approval of the New Scudder Kemper 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 Scudder Kemper 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
rendered and to be rendered by Scudder Kemper, the fact that the sub-advisory
fee rate payable by the Manager to Scudder Kemper would not differ from the fee
rate currently payable to Scudder Kemper and that Scudder Kemper would continue
to provide the same services to the Portfolio under the New Scudder Kemper Sub-
Advisory Agreement as Scudder Kemper currently provides under the Current
Scudder Kemper Sub-Advisory Agreement.
At a meeting of the Board on September 3, 1998, Scudder Kemper provided
information to the Board to the effect that Scudder Kemper would retain its
investment philosophy and process, and provided assurances as to continuity of
key personnel. The Board also received information relating to the financial
condition and resources of Scudder Kemper following the Transaction. Scudder
Kemper 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 Scudder Kemper
following consummation of the 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 ITS MEETING ON SEPTEMBER 3, 1998, THE BOARD OF DIRECTORS, INCLUDING THE
INDEPENDENT DIRECTORS, AFTER TAKING INTO ACCOUNT THE CONSIDERATIONS DESCRIBED
ABOVE, UNANIMOUSLY APPROVED THE NEW SCUDDER KEMPER SUB-ADVISORY AGREEMENT AND
RECOMMENDED THAT SHAREHOLDERS VOTE FOR APPROVAL OF THE NEW SCUDDER KEMPER SUB-
ADVISORY AGREEMENT.
INFORMATION ABOUT SCUDDER KEMPER
SCUDDER KEMPER INVESTMENTS, INC. is headquartered at 345 Park Avenue, New
York, New York.
5
<PAGE>
It is anticipated that Scudder Kemper will also continue to serve as
investment adviser to other investment companies having similar investment
objectives to the Portfolio as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
NET ASSETS OF OTHER FUND(1)
(IN MILLIONS)
OTHER FUND ANNUAL FEE RATE -------------
---------- ---------------
- --------------------------------------------------------------------------------
<S> <C> <C>
.75% TO $250M
KEMPER CONTRARIAN FUND(2) .72% NEXT $750M $ 178,115,000.00
- ------------------------------ .70% NEXT $1.5B -----------------------------
.68% NEXT $2.5B
KEMPER-DREMAN HIGH RETURN .65% NEXT $2.5B N/A(4)
EQUITY FUND(2) .64% NEXT $2.5B
- ------------------------------ .63% NEXT $2.5B -----------------------------
.62% THEREAFTER
KEMPER SMALL CAP RELATIVE N/A(4)
VALUE FUND (FORMERLY KEMPER
SMALL CAP VALUE FUND)(2)
- --------------------------------------------------------------------------------
.75% TO $500M
SCUDDER LARGE COMPANY VALUE .65% NEXT $500M $ 2,212,733,138.00
FUND (FORMERLY SCUDDER .60% NEXT $500M
CAPITAL GROWTH FUND) .55% NEXT $500M
.50% THEREAFTER
- --------------------------------------------------------------------------------
VALUE FUND (FORMERLY SCUDDER .70% TO $500 $ 297,979,779.00
VALUE FUND) MILLION
.650% THEREAFTER
- --------------------------------------------------------------------------------
SCUDDER SMALL COMPANY VALUE .75% OF NET $ 123,398,822.00
FUND ASSETS(3)
- --------------------------------------------------------------------------------
</TABLE>
(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.
(4) ASSETS ARE NOT AVAILABLE FOR KEMPER-DREMAN HIGH RETURN EQUITY FUND,
WHICH COMMENCED OPERATIONS ON MAY 1, 1998 AND KEMPER SMALL CAP RELATIVE VALUE
FUND, WHICH COMMENCED OPERATIONS ON MAY 6, 1998.
AFTER CONSUMMATION OF THE TRANSACTION, IT IS ANTICIPATED THAT THE PRINCIPAL
EXECUTIVE OFFICERS AND DIRECTORS OF SCUDDER KEMPER WILL CONTINUE TO BE AS
FOLLOWS (NONE OF WHOM ARE OFFICERS OR DIRECTORS OF THE FUND):
NAME ADDRESS PRINCIPAL OCCUPATION
---- ------- --------------------
LYNN BIRDSONG, DIRECTOR 345 PARK AVENUE MANAGING DIRECTOR AND
NEW YORK, NEW YORK CORPORATE VICE PRESIDENT
10154 OF SCUDDER KEMPER
6
<PAGE>
LAWRENCE CHENG, DIRECTOR MYTHENQUAI 2 SENIOR PARTNER, CAPITAL Z
8002 ZURICH, PARTNERS (A PRIVATE
SWITZERLAND INVESTMENT FIRM)
ROLF HUEPPI, DIRECTOR MYTHENQUAI 2 CHAIRMAN AND CHIEF
8002 ZURICH, EXECUTIVE OFFICER,
SWITZERLAND ZURICH; CHAIRMAN OF BOARD
OF DIRECTORS, SCUDDER
KEMPER
CORNELIA SMALL, DIRECTOR 345 PARK AVENUE MANAGING DIRECTOR AND
NEW YORK, NEW YORK CORPORATE VICE PRESIDENT
10154 OF SCUDDER KEMPER
EDMOND VILLANI, CHIEF 345 PARK AVENUE PRESIDENT AND CHIEF
EXECUTIVE NEW YORK, NEW YORK EXECUTIVE OFFICER,
OFFICER AND DIRECTOR 10154 SCUDDER KEMPER
AFFILIATED BROKERS
Scudder Kemper is 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 it is affiliated are fair and reasonable.
For the fiscal year ended June 30, 1998, the Fund paid $600.00 in brokerage
commissions with respect to the Portfolio to Morgan Stanley & Co. Incorporated
("Morgan Stanley") which was an affiliated person of the Manager until
May 8, 1998. For the fiscal year ended June 30, 1998, the brokerage commissions
paid to Morgan Stanley as a percentage of the aggregate brokerage commissions
paid by the Portfolio was approximately 1.2%.
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 MANAGER AND THE BOARD OF DIRECTORS
WOULD CONSIDER AVAILABLE ALTERNATIVES, SINCE THE CURRENT SCUDDER KEMPER
SUB-ADVISORY AGREEMENT HAS TERMINATED.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL
No. 1.
7
<PAGE>
GENERAL INFORMATION
MANAGER
Integrity 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 May 8, 1998, 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
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.
8
<PAGE>
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: October 23, 1998
CONTRACT HOLDERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE VOTING
INSTRUCTIONS CARD AND RETURN IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
9
<PAGE>
EXHIBIT A
SUB-ADVISORY AGREEMENT
AGREEMENT, made this __th day of _____________, 1998, between Integrity
Capital Advisors, Inc., (MANAGER) a Delaware corporation, and Scudder Kemper
Investors, Inc (SUB-ADVISER), a Delaware 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 July 10, 1998 (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 Scudder Kemper 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
Sub-Adviser in writing of any changes in the investment objectives, policies,
procedures and restrictions governing the Portfolio.
<PAGE>
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.
(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
<PAGE>
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 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
<PAGE>
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.
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.
<PAGE>
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 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
<PAGE>
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 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;
<PAGE>
(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 "Zurich Kemper Value Advisors" (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 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);
<PAGE>
(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 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.
<PAGE>
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.
INTEGRITY CAPITAL ADVISORS, INC. SCUDDER KEMPER INVESTORS, INC.
By: By:
-------------------------------- -----------------------------------
Attest: Attest:
---------------------------- -------------------------------
<PAGE>
<TABLE>
<S><C>
THE LEGENDS FUND, INC.
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER /X/ USING BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK
- ------------------------------------------------------------------------------------------------------------------------------------
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 or disapprove the new sub-advisory agreement between Integrity Capital / / / / / /
Advisors, Inc. and Scudder Kemper Investments, Inc.
2. To transact such other matters as may properly come before the Meeting or any
adjournment thereof.
</TABLE>
<PAGE>
<TABLE>
<S><C>
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.
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 FOR THE PORTFOLIOS IN WHICH YOUR CONTRACT VALUES WERE
INVESTED AS OF OCTOBER 16, 1998.
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 3:00 p.m., Eastern Time, November 20, 1998, 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
</TABLE>
<PAGE>
<TABLE>
<S><C>
558-1253 - (Lisa or Rebecca)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.
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 FOR THE PORTFOLIOS IN WHICH YOUR CONTRACT VALUES
WERE INVESTED AS OF OCTOBER 16, 1998.
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 3:00 p.m., Eastern Time, November 20, 1998, 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
</TABLE>
