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EXHIBIT (5)(a)
INVESTMENT ADVISORY AGREEMENT
BETWEEN THE REGISTRANT AND OHIO NATIONAL INVESTMENTS, INC.
DATED MAY 1, 1996
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INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this first day of May, 1996, by and between OHIO NATIONAL
FUND, INC., a Maryland corporation (hereinafter called the "Fund") and OHIO
NATIONAL INVESTMENTS, INC., an Ohio corporation (hereinafter called the
"Adviser").
WHEREAS, the Fund and the Adviser wish to enter into an Agreement setting forth
the terms upon which the Adviser will perform certain services for the Fund;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF ADVISER
The Fund hereby appoints the Adviser to manage the investment and reinvestment
of the assets of the Fund and to perform the other services herein set forth,
subject to the supervision of the Board of Directors of the Fund, for the
period and on the terms herein set forth. The Adviser hereby accepts such
appointment and agrees during such period, to render the services and to assume
the obligations herein set forth for the compensation herein provided. Any
investment program undertaken by the Adviser pursuant to this Agreement and any
other activities undertaken by the Adviser on behalf of the Fund shall at all
times be subject to any directives of the Fund's Board of Directors, any duly
constituted committee thereof or any officer of the Fund acting pursuant to
like authority.
2. DUTIES OF ADVISER
In carrying out its obligations to manage the investment and reinvestment of
the assets of the Fund, the Adviser shall:
(a) obtain and evaluate pertinent economic, statistical and financial data
and other information relevant to the investment policies of the Fund,
affecting the economy generally and individual companies or industries the
securities of which are included in the Fund's investment portfolios or are
under consideration for inclusion therein;
(b) regularly furnish to the Board of Directors of the Fund for approval,
modification or rejection, recommendations with respect to investment programs
consistent with the fundamental policies and related investment policies for
each investment portfolio as set forth in the Fund's currently effective
prospectus and Statement of Additional Information;
(c) take such steps as are necessary to implement the investment programs
approved by the Fund's Board of Directors by purchase and sale of securities,
including the placing of orders for such purchase and sale; and
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(d) regularly report to the Fund's Board of Directors with respect to
implementation of the approved investment programs and the Adviser's activities
in connection with the administration of the Fund.
3. USE OF SUB-ADVISERS
In providing the services and assuming the obligations set forth herein, in
connection with any investment portfolio of the Fund, the Adviser may at its
expense employ one or more Sub-Advisers, or may enter into such service
agreements as the Adviser deems appropriate in connection with the performance
of its duties and obligations hereunder. Reference herein to the duties and
responsibilities of the Adviser shall include any Sub-Adviser employed by the
Adviser to the extent the Adviser shall delegate such duties and
responsibilities to any such Sub-Adviser. Any agreement between the Adviser
and a Sub-Adviser shall be subject to the approval of the Fund, its Board of
Directors, and shareholders of any portfolio affected thereby, as required by
the Investment Company Act of 1940, as amended (the "1940 Act"), and any such
Sub-Adviser shall at all times be subject to the direction of the Board of
Directors of the Fund or any officer of the Fund acting pursuant to the Board's
authority. Furthermore, the Adviser shall perform ongoing due diligence
oversight of any such Sub-Adviser in order to assure continuing quality of
performance by said Sub-Adviser.
4. TO BE FURNISHED BY THE ADVISER
In addition to performing the obligations set forth in paragraph 2 hereof, the
Adviser shall furnish at its own expense or pay the expenses of the Fund for
the following:
(a) office space in the offices of the Adviser or in such other place as
may be agreed upon from time to time, and all necessary office facilities and
equipment;
(b) necessary executive and other personnel for managing the affairs of
the Fund, including personnel to perform clerical, accounting and other office
functions (exclusive of those related to and to be performed under contract for
custodial, bookkeeping, transfer and dividend disbursing agency services by any
bank or other agents selected to perform such services); and
(c) all information and services, other than services of counsel, required
in connection with the preparation of registration statements, prospectuses and
statements of additional information, including amendments and revisions
thereto; all annual, semi-annual and periodic reports; and notices and proxy
solicitation material furnished to shareholders of the Fund or regulatory
authorities.
5. ITEMS NOT REQUIRED TO BE FURNISHED BY THE ADVISER
Nothing in paragraph 4 hereof shall require the Adviser to bear, or to
reimburse the Fund for:
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(a) any of the costs of printing and mailing the items referred to in
subparagraph (c) of paragraph 4;
(b) the costs of preparation, printing and mailing disclosure documents
required by regulatory authorities;
(c) compensation of directors of the Fund who are not directors, officers
or employees of the Adviser;
(d) registration, filing and other fees in connection with requirements of
regulatory authorities;
(e) the charges and expenses of any custodian appointed by the Fund for
custodial services;
(f) charges and expenses of independent accountants retained by the Fund;
(g) charges and expenses of any transfer, bookkeeping and dividend
disbursing agent appointed by the Fund;
(h) brokers' commissions and issue and transfer taxes chargeable to the
Fund in connection with securities transactions to which the Fund is a party;
(i) taxes and corporate fees payable by the Fund to federal, state or
other governmental agencies;
(j) the cost of stock certificates, if any, representing shares of the
Fund;
(k) legal fees and expenses in connection with the affairs of the Fund,
including registering and qualifying its shares with regulatory authorities;
and
(l) expenses of shareholders and directors meetings.
6. RELATED SERVICES
(a) The services of the Adviser to the Fund hereunder are not to be deemed
exclusive and the Adviser shall be free to render similar services to others so
long as its services hereunder are not impaired or interfered with thereby.
(b) To better enable it to fulfill its obligations hereunder, the Adviser
has entered into a service agreement with The Ohio National Life Insurance
Company, to which the Fund is also a party, under which The Ohio National Life
Insurance Company has agreed to furnish certain personnel and facilities to the
Adviser on a cost reimbursement basis.
(c) The Adviser and any persons performing executive, administrative or
trading functions for the Fund, whose services were made available to the Fund
by the Adviser, are specifically authorized to allocate brokerage business to
firms that
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provide such services or facilities and to cause the Fund to pay a member of a
securities exchange, or any other securities broker, an amount of commission
for effecting a securities transaction in excess of the amount another member
of an exchange or broker would have charged for effecting that transaction, if
the Adviser or such person determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services, as such services are defined in Section 28(e) of the Securities
Exchange Act of 1934 (the "1934 Act"), provided by such member or broker,
viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to any accounts as to which the
Adviser exercises investment discretion, as that term is defined in Section
3(a)(35) of the 1934 Act.
7. COMPENSATION OF ADVISER
(a) Each investment portfolio of the Fund shall pay the Adviser, as full
compensation for all services rendered and all facilities furnished hereunder,
a fee computed separately for each portfolio of the Fund at the annual rates
shown on Schedule A hereof or, as to any portfolios added to the Fund after the
date first above written, on any additional Schedules hereto, which rates shall
be based on the current value of the respective portfolio's average total net
assets.
(b) Fees shall be payable at such intervals, not more frequently than
monthly and not less frequently than quarterly, as the Board of Directors of
the Fund may from time to time determine and specify in writing to the Adviser.
The fees shall be calculated on the basis of the average of all valuations of
the net assets of each respective portfolio, made as of the time each business
day that the Board of Directors has set for valuing the current net assets of
the Fund, during the period for which the fees are paid.
8. REIMBURSEMENT OF EXCESS EXPENSES
If in any calendar quarter the total of all ordinary business expenses
applicable to any investment portfolio (excluding the fee payable under
paragraph 7 above to the Adviser, taxes, portfolio brokerage commissions and
interest) should exceed one percent of the average net assets of such
investment portfolio as computed above in paragraph 7, the Adviser shall pay
such excess. For the purposes of this paragraph the term "calendar quarter"
shall include the portion of any calendar quarter which shall have lapsed at
the date of termination of this agreement and the expense limitation shall be
that part of 1% proportional to the portion of a full calendar quarter lapsed.
9. INTERESTED PERSONS OF THE FUND AND THE ADVISER
It is understood that directors, officers, agents and shareholders of the Fund
are or may be interested in the Adviser as directors, officers, shareholders,
or otherwise, that directors, officers, agents and shareholders of the Adviser
are or may be interested in the Fund as directors, officers, shareholders or
otherwise, that the Adviser may be interested in the Fund and that the
existence of any such dual
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interest shall not affect the validity hereof or of any transactions hereunder
except as otherwise provided in the Articles of Incorporation of the Fund and
the Adviser, respectively, or by specific provision of applicable law.
10. LIABILITIES OF ADVISER
Neither the Adviser nor any of its directors, officers or employees, nor any
person performing executive, administrative or trading functions shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
for loss resulting from willful misfeasance, bad faith or gross negligence in
the performance of its, his or her duties on behalf of the Fund or from
reckless disregard by the Adviser or any such person of the Adviser's duties
under this Agreement. Without limiting the generality of the foregoing,
neither the Adviser nor any such person shall be deemed to have acted
unlawfully or to have breached any duty to the Fund under state or federal law
in effect at the date of the enactment of Section 28(e) of the 1934 Act solely
by reason of having caused the Fund to pay a member of any securities exchange,
or any other securities broker or dealer, an amount of commission for effecting
a securities transaction in excess of the commission another member of a
securities exchange, or another securities broker or dealer, would have charged
for effecting that transaction if the Adviser or such other person determined
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the overall
responsibilities of the Adviser with respect to any accounts to which the
Adviser exercises investment discretion.
11. DURATION, TERMINATION AND AMENDMENT
(a) This Agreement shall become effective as to any portfolio upon its
approval for such portfolio by the Board of Directors of the Fund and the
shareholders of the class of capital stock designated for that portfolio. This
Agreement will continue in effect for a period more than two years from the
date of its effectiveness as to any portfolio only so long as such continuance
is specifically approved at least annually either by the Board of Directors of
the Fund or by the vote of a majority of the outstanding voting securities of
the portfolio, provided that in either event such continuance shall also be
approved by the vote of a majority of the directors of the Fund who are not
interested persons (as defined in the 0000 Xxx) of any party to this Agreement
cast in person at a meeting called for the purpose of voting on such approval.
The required shareholder approval of this Agreement or of any continuance of
this Agreement shall be effective with respect to a portfolio if a majority of
the outstanding voting securities of the class (as defined in Rule 18f-2(h)
under the 0000 Xxx) of capital stock of the portfolio votes to approve the
Agreement or its continuance, notwithstanding that this Agreement or its
continuance may not have been approved by a majority of the outstanding voting
securities of the entire Fund.
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(b) If the shareholders of capital stock of any portfolio fail to approve
any continuance of this Agreement, the Adviser will continue to act as
investment adviser with respect to that portfolio pending the required approval
of this Agreement or its continuance, or of a new contract with the Adviser or
a different investment adviser or other definitive action; provided, that the
compensation received by the Adviser in respect of that portfolio during such
period will be no more than the Adviser's actual costs incurred in furnishing
investment advisory and management services to such portfolio or the amount it
would have received under this Agreement, whichever is less.
(c) This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Directors of the Fund or, with respect to any
portfolio, by the vote of a majority of the outstanding voting securities of
that portfolio on 60 days' written notice to the Adviser, or by the Adviser, on
90 days' written notice to the Fund. This Agreement will automatically
terminate in the event of its assignment (as defined in the 1940 Act).
(d) This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each affected portfolio and by the vote of a majority of the
directors of the Fund who are not interested persons of any party to this
Agreement cast in person at a meeting called for the purpose of voting on such
approval.
12. NOTICES AND GOVERNING LAW
(a) Any notice under the Agreement shall be in writing, addressed and
delivered or mailed postage prepaid to the other party at such address as the
other party may designate for the receipt of notices. Until further notice to
the other party it is agreed that the address of the Fund and that of the
Adviser for this purpose shall be 000 Xxxxxxx Xxxxxx Xxxx Xxxx, Xxxxxxxxxx,
Xxxx 00000.
(b) This Agreement shall be governed by the law of Ohio.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be
executed by their duly authorized officers, in Cincinnati, Ohio, as of the date
first above written.
OHIO NATIONAL FUND, INC. OHIO NATIONAL INVESTMENTS,
INC.
By By
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Xxxxxx X. Xxxxxxxxx, President Xxxxxx X. Xxxx, President
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SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
Each portfolio of Ohio National Fund, Inc. shall pay fees to Ohio National
Investments, Inc. computed at the following rates as provided in paragraph 7 of
the Agreement:
Net Assets Money
in Portfolio Equity Bond Omni Market
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First $100,000,000 0.60% 0.60% 0.60% 0.30%
Next $150,000,000 0.50% 0.50% 0.50% 0.25%
Next $250,000,000 0.45% 0.45% 0.45% 0.23%
Next $500,000,000 0.40% 0.40% 0.40% 0.20%
Next $1,000,000,000 0.30% 0.30% 0.30% 0.15%
All Portfolio Assets
over $2,000,000,000 0.25% 0.25% 0.25% 0.15%
Capital Small Aggressive Global
International Appreciation Cap Growth Contrarian
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All Portfolio Assets 0.90% 0.80% 0.80% 0.80% 0.90%
Agreed to and accepted as of May 1, 1996.
OHIO NATIONAL FUND, INC. OHIO NATIONAL INVESTMENTS, INC.
By: By:
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Xxxxxx X. Xxxxxxxxx, President Xxxxxx X. Xxxx, President
