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Exhibit (d)(7)
SUBADVISORY AGREEMENT
This Subadvisory Agreement (this "Agreement") is entered into as of the first
day of January, 1999, by and between OHIO NATIONAL INVESTMENTS, INC., an Ohio
corporation(the "Adviser") and FEDERATED GLOBAL RESEARCH CORP., a Delaware
corporation ("FGR").
WHEREAS, the Adviser has entered into advisory agreements dated May 1,
1996, (the "Advisory Agreements") with OHIO NATIONAL FUND, INC. and ONE FUND,
INC., Maryland corporations (the "Companies"), pursuant to which the Adviser
provides portfolio management services to the INTERNATIONAL PORTFOLIO, and
INTERNATIONAL SMALL COMPANY PORTFOLIO (presently designated as the Global
Contrarian Portfolio) of Ohio National Fund, Inc. and the INTERNATIONAL
PORTFOLIO and GLOBAL CONTRARIAN PORTFOLIO of ONE Fund, Inc. (said Portfolios
being referred to herein as the "Funds");
WHEREAS, the Advisory Agreements provide that the Adviser may delegate
any or all of its portfolio management responsibilities under the Advisory
Agreements to one or more subadvisers; and
WHEREAS, the Adviser and the Boards of Directors (the "Board") of the
Companies desire to retain FGR to render portfolio management services in the
manner and on the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Adviser and FGR agree as follows:
1. Appointment of Subadviser. The Adviser hereby appoints FGR as
subadviser for each of the Funds and authorizes FGR, in its discretion and
without prior consultation with the Adviser, to buy, sell, lend and otherwise
trade in any stocks, bonds, instruments, financial contracts and other
investment assets ("Securities") on behalf of the Funds. Subject to the
supervision of the Adviser and the Board, FGR will manage the investment
operations of the Funds and the composition of the Funds' respective portfolios,
including the purchase, retention and disposition of, and exercise of all rights
pertaining to, the Securities comprising the Funds. FGR may invest the Funds in
such proportions of stocks, bonds, instruments, financial contracts, cash and
other investment assets as FGR shall determine, and may dispose of Securities
without regard to the length of time the Securities have been held, the
resulting rate of portfolio turnover or any tax considerations, provided that
all investments shall conform with:
(a) the Funds' investment objectives, policies, limitations,
procedures and guidelines set forth in the documents listed on
Schedule 1 to this Agreement;
(b) any additional objectives, policies or guidelines established
by the Adviser or by the Board that have been furnished in
writing to FGR;
(c) the provisions of Section 851 of the Internal Revenue Code
("IRC") applicable to "regulated investment companies";
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(d) the diversification requirements specified in Section 817(h)
of the IRC, and the regulations thereunder; and
(e) the provisions of the Investment Company Act of 1940 (the
"1940 Act") and the rules and regulations thereunder
applicable to the Funds.
2. Representations and Warranties.
(a) FGR hereby represents and warrants to the Adviser that: (i) it
is a corporation duly formed and validly existing under the
laws of Delaware, (ii) it is duly authorized to execute and
deliver this Agreement and to perform its obligations
hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (iii) it is registered
with the Securities and Exchange Commission ("SEC") as an
investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act") and is registered or licensed as an
investment adviser under the laws of all jurisdictions in
which its activities require it to be so registered or
licensed, except where the failure to be so licensed would not
have a material adverse effect on its business and (iv) it has
furnished to the Adviser true and complete copies of all the
documents listed on Schedule 2 to this Agreement.
(b) The Adviser hereby represents and warrants to FGR that: (i) it
is a corporation duly formed and validly existing under the
laws of Ohio, (ii) it is duly authorized to execute and
deliver this Agreement and to perform its obligations
hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (iii) it is registered
with the SEC as an investment adviser under the Advisers Act
and is registered or licensed as an investment adviser under
the laws of all jurisdictions in which its activities require
it to be so registered or licensed, except where the failure
to be so licensed would not have a material adverse effect on
its business and (iv) it has furnished to FGR true and
complete copies of all the documents listed on Schedule 1 to
this Agreement.
3. Information and Reports.
(a) The Adviser will promptly notify FGR of any material change in
any of the documents listed on Schedule 1 to this Agreement
and will provide FGR with copies of any such modified
document. The Adviser will also provide FGR with a list, to
the best of the Adviser's knowledge, of all affiliated persons
of Adviser (and any affiliated person of such an affiliated
person) and will promptly update the list whenever the Adviser
becomes aware of any additional affiliated persons.
(b) FGR will maintain books and records relating to its management
of the Funds under its customary procedures and in compliance
with applicable regulations under the 1940 Act and the
Advisers Act. All such records pertaining to the Funds shall
be the property of the Companies and FGR will permit the
Adviser, the Companies and the SEC to inspect such books and
records at all reasonable times during normal business hours,
upon reasonable notice. Prior to each Board meeting, FGR will
provide the Adviser and the Board with reports regarding its
management of the Funds during the interim period, in such
form as may be mutually agreed upon by FGR and the Adviser.
FGR will also provide the Adviser with any information
regarding its management of the Fund
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required for any shareholder report, amended registration
statement or prospectus supplement filed by the Company with
the SEC.
4. Conditions to Agreement. FGR's and the Adviser's obligations under
this Agreement are subject to the satisfaction of the following conditions
precedent:
(a) Receipt by FGR of a certificate of an officer of each of the
Companies stating that (i) this Agreement and the Advisory
Agreement have been approved by the vote of a majority of the
directors, who are not interested persons of FGR or the
Adviser, cast in person at a meeting of the Board called for
the purpose of voting on such approval, and (ii) this
Agreement and the Advisory Agreement have been approved by the
vote of a majority of the outstanding voting securities of
each of the Funds;
(b) Receipt by FGR of certified copies of instructions from the
Companies to their custodian designating the persons specified
by FGR as "Authorized Persons" under each Company's custody
agreement;
(c) The Companies' execution and delivery of limited powers of
attorney in favor of FGR, in a form mutually agreeable to FGR,
the Adviser and the Board;
(d) Receipt by FGR of Board resolutions, certified by an officer
of each Company, adopting all procedures and guidelines
required by any exemptive order listed on Schedule 2 to this
Agreement; and
(e) Any other documents, certificates or other instruments that
FGR or the Adviser may reasonable request from either Company.
5. Compensation. For the services provided under this Agreement, the
Adviser will pay to FGR a fee at an annual rate of 0.40% of the first $200
million and 0.35% of each of the International Portfolios' average daily net
assets in excess of $200 million, and 0.75% of the first $100 million and 0.65%
of the Global Contrarian and International Small Company Portfolios' average
daily net assets in excess of $100 million. Such fees will accrue daily and will
be paid monthly. If this Agreement is effective for only a portion of a month,
the fees will be prorated for the portion of such month during which this
Agreement is in effect.
6. Allocation of Transactions and Brokerage.
(a) To the extent consistent with applicable law, FGR may
aggregate purchase or sell orders for each of the Funds with
contemporaneous purchase or sell orders of the other Funds or
of other clients of FGR or its affiliated persons. In such
event, allocation of the Securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made
by FGR in the manner FGR considers to be the most equitable
and consistent with its and its affiliates' fiduciary
obligations to the Funds and to such other clients. The
Adviser hereby acknowledges that such aggregation of orders
may not result in a more favorable price or lower brokerage
commissions in all instances.
(b) FGR will place purchase and sell orders for the Funds with or
through such banks, brokers, dealers, futures commission
merchants or other firms dealing in Securities ("Brokers") as
it determines, which may include Brokers that are affiliated
persons of
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FGR, provided such orders are exempt from the provisions of
Section 17(a), (d) and (e) of the 1940 Act. FGR will use its
best efforts to obtain execution of transactions for the Funds
at prices which are advantageous to the Funds and at
commission rates that are reasonable in relation to the
services received. FGR may, however, select Brokers on the
basis that they provide brokerage or research services or
research products to the Funds and/or other advisory clients
of FGR and its affiliated investment advisers as to which FGR
and those affiliated investment advisers exercise investment
discretion. In selecting Brokers, FGR may also consider the
reliability, integrity and financial condition of the Broker,
and the size of and difficulty in executing the order.
(c) To the extent consistent with applicable law, and subject to
review by the Board, FGR may pay a Broker an amount of
commission for effecting a Securities transaction in excess of
the amount of commission or dealer spread another Broker would
have charged for effecting that transaction, if FGR determines
in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research products
and/or research services provided by such Broker to the Funds
and/or other clients of FGR and its affiliated investment
advisers as to which FGR and those affiliated investment
advisers exercise investment discretion. This determination,
with respect to brokerage and research services or research
products, may be viewed in terms of either that particular
transaction or the overall responsibilities which FGR and its
affiliates have with respect to the Funds or their other
clients as to which FGR and its affiliates exercise investment
discretion, and may include services or products that FGR does
not use in managing the Funds.
7. Nonexclusive Agreement. The investment management services provided by
FGR hereunder are not to be deemed to be exclusive, and FGR shall be free to
render similar services to other advisers, investment companies, and other types
of clients.
8. Limitation of Liability. In the absence of willful misfeasance, bad
faith or gross negligence on the part of FGR, or of reckless disregard by FGR of
its obligations and duties hereunder, FGR, shall not be subject to any liability
to the Adviser, the Funds, the Companies, any shareholder of the Funds, or to
any person, firm or organization. Subject to the above-stated standard of care,
FGR shall be liable for any taxes or tax penalties incurred by a Fund for any
failure of a Fund to qualify as a regulated investment company under Section 851
of the IRC as a result of FGR's management of the Funds. The Adviser, the
Companies and the Funds are hereby expressly put on notice of the limitation of
liability as set forth in the Certificate of Incorporation of FGR and each
agrees that the obligations assumed by FGR pursuant to this Agreement will be
limited in any case to FGR and its assets and the Adviser, the Companies and the
Funds shall not seek satisfaction of any such obligations from the shareholders
of FGR, the trustees of FGR, officers, employees or agents of FGR, or any of
them.
FGR shall have no liability for any investment losses incurred by the Funds or
arising from transactions by the Funds prior to the effective date of this
Agreement.
The Adviser, the Companies and the Funds hereby acknowledge that FGR is not
responsible for foreign custody registration or foreign custody.
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9. Pricing. The Adviser, the Companies and the Funds hereby acknowledge
that FGR is not responsible for pricing portfolio Securities, and that the
Adviser, the Companies, the Funds and FGR will rely on the pricing agent chosen
by the Board for prices of Securities, for any purposes.
10. Limited Power of Attorney. Subject to any other written instructions of
the Adviser or the Companies, FGR is hereby appointed the Companies' agent and
attorney-in-fact for the limited purposes of executing account documentation,
agreements, contracts and other documents as FGR shall be requested by brokers,
dealers, counter parties and other persons in connection with its management of
the Funds' assets. The Adviser and the Companies hereby ratify and confirm as
good and effectual, at law or in equity, all that FGR and its officers and
employees, may do in its capacity as attorney-in-fact. However, nothing herein
shall be construed as imposing a duty on FGR to act or assume responsibility for
any matters in its capacity as attorney-in-fact for the Companies. Any person,
partnership, corporation or other legal entity dealing with FGR in its capacity
as attorney-in-fact hereunder for the Companies is hereby expressly put on
notice that FGR is acting solely in the capacity as an agent of the Companies
and that any such person, partnership, corporation or other legal entity must
look solely to the Companies for enforcement of any claim against the Companies
as FGR assumes no personal liability whatsoever for obligations of the Companies
entered into by FGR in its capacity as attorney-in-fact for the Companies. FGR
agrees to provide the Adviser and the Companies with copies of any such
agreements executed on behalf of the Companies.
11. Term. This Agreement shall begin as of the date first above written
and, provided that it shall have been approved by a majority vote of the voting
securities of each of the Funds not more than one hundred and twenty days after
the effective date hereof, this Agreement shall continue in effect for a period
of two years from the date hereof and thereafter for successive periods of one
year, subject to the provisions for termination and all of the other terms and
conditions hereof if such continuance is specifically approved at least annually
in conformity with the requirements of the 1940 Act; provided, however, that
this Agreement may be terminated by one or more of the Funds at any time,
without the payment of any penalty, by the Board or by vote of a majority of the
outstanding voting securities (as defined in the 0000 Xxx) of one or more of the
Funds, or by the Adviser or FGR at any time, without the payment of any penalty,
on not more than 60 days' nor less that 30 days' written notice to the other
party. This Agreement will terminate automatically as to any Fund in the event
of its assignment (as defined in the 0000 Xxx) or upon the termination of the
Adviser's Advisory Agreement as to that Fund.
12. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
13. Governing Law and Construction. This Agreement will be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania. Any
terms defined in 1940 Act, and not otherwise defined in this Agreement, are used
with the same meaning in this Agreement.
14. Use of FGR's Name. FGR hereby agrees that the Adviser, the Companies,
their affiliated broker-dealers and affiliated life insurance companies may use
FGR's name and logo in advertising and marketing materials for the Companies and
any variable insurance products through which one or more of the Funds may be
offered as funding vehicles, provided, that FGR has reviewed and approved any
such materials prior to their use.
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15. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their duly authorized officers to be effective as of the
dates written below.
For OHIO NATIONAL INVESTMENTS, INC.: For FEDERATED GLOBAL RESEARCH CORP.:
s/Xxxxxx X. Xxxx s/Xxxxx Xxxxxxxx
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Xxxxxx X. Xxxx, President Xxxxx Xxxxxxxx
Chief Financial Officer, International
Date: Date:
December 29, 1998 December 28, 1998
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Accepted and Agreed by Accepted and Agreed by
OHIO NATIONAL FUND, INC.: ONE FUND, INC.:
s/Xxxx X. Xxxxxx s/Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, President Xxxx X. Xxxxxx, President
Date: Date:
January 4, 1999 January 4, 1999
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