-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EyqHid5a1DuG+AeXlwJP/HaT18euaRrLcAtiuJfe6piy6B7c/QwJDXZROPuhF7cL o6cT6u97Z/fqLVYDOPEF3g== 0000950152-96-000762.txt : 19960304 0000950152-96-000762.hdr.sgml : 19960304 ACCESSION NUMBER: 0000950152-96-000762 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19960301 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO NATIONAL FUND INC CENTRAL INDEX KEY: 0000315754 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 310978635 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-67464 FILM NUMBER: 96530412 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03015 FILM NUMBER: 96530413 BUSINESS ADDRESS: STREET 1: 237 WILLIAM HOWARD TAFT RD CITY: CINCINNATI STATE: OH ZIP: 45219 BUSINESS PHONE: 5138613600 MAIL ADDRESS: STREET 1: 237 WILLIAM HOWARD TAFT RD CITY: CINCINNATI STATE: OH ZIP: 45219 FORMER COMPANY: FORMER CONFORMED NAME: ON MARKET YIELD FUND INC DATE OF NAME CHANGE: 19821026 485APOS 1 OHIO NATIONAL 485APOS 1 File No. 2-67464 File No. 811-3015 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/ Post-Effective Amendment No. 31 /X/ REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/ Amendment No. 20 /X/ OHIO NATIONAL FUND, INC. (Exact Name of Registrant) 237 William Howard Taft Road Cincinnati, Ohio 45219 (Address of Principal Executive Office) Area Code (513) 559-6316 (Registrant's Telephone Number) Ronald L. Benedict, Secretary Ohio National Fund, Inc. 237 William Howard Taft Road Cincinnati, Ohio 45219 (Name and Address of Agent for Service) Notice to: W. Randolph Thompson, Esq. Of Counsel Jones & Blouch L.L.P. Suite 405 West 1025 Thomas Jefferson Street, N.W. Washington, D.C. 20007 Approximate Date of Proposed Public Offering: as soon after the effective date of this amendment as is practicable. Registrant has heretofore registered an indefinite amount of securities under the Securities Act of 1933 pursuant to Rule 24f-2 and on February 23, 1996 filed its Rule 24f-2 Notice for its most recent fiscal year. It is proposed that this filing will become effective (check appropriate box): immediately upon filing pursuant to paragraph (b) --- on (date) pursuant to paragraph (b) --- 60 days after filing pursuant to paragraph (a)(i) --- X on May 1, 1996 pursuant to paragraph (a)(i) --- 75 days after filing pursuant to paragraph (a)(ii) --- on (date) pursuant to paragraph (a)(ii) of Rule 485. --- If appropriate, check the following box: this post-effective amendment designates a new effective date --- for a previously filed post-effective amendment. 2 OHIO NATIONAL FUND, INC. CROSS REFERENCE TO ITEMS REQUIRED BY RULE 404(a)
N-1A Item of Part A Caption in Prospectus - ------------------- --------------------- 1. Cover Page 2. Not Applicable 3. Financial Highlights 4. General Description of the Fund; Investment Objectives and Policies; Investment Restrictions 5. Management of the Fund 6. Capital Stock, Dividends, Distributions and Taxes 7. Purchase and Redemption of Shares 8. Purchase and Redemption of Shares 9. Not Applicable Caption in Statement of N-1A Item of Part B Additional Information - ------------------- ----------------------- 10. Cover Page 11. Table of Contents 12. The Fund 13. Investment Objectives and Policies (Money Market Instruments); Investment Restrictions (Hedging Transactions, Covered Call Options and Secured Put Options, Risk Factors with Options, Futures Contracts, Options on Futures Contracts and Financial Indexes, Risk Factors with Futures and Options on Futures, Risk Factors with Foreign Investments); Condensed Financial Information (Portfolio Turnover) 14. Management of the Fund (Directors and Officers of the Fund) 15. Management of the Fund (Controlling Shareholders) 16. Management of the Fund (Investment Advisory and Other Services); Experts
3
Caption in Statement of N-1A Item of Part B Additional Information - ------------------- ----------------------- 17. Brokerage Allocation 18. Not Applicable 19. Purchase and Redemption of Shares 20. Tax Status 21. Total Return 22. Financial Highlights (Current Yield of Money Market Portfolio) 23. Financial Statements
4 PART A. INFORMATION REQUIRED IN A PROSPECTUS 5 OHIO NATIONAL FUND, INC. 237 WILLIAM HOWARD TAFT ROAD CINCINNATI, OHIO 45219 TELEPHONE (513) 559-6316 MAY 1, 1996 Ohio National Fund, Inc. (the "Fund") is a series investment company which consists of nine separate investment portfolios that seek the following investment objectives: EQUITY PORTFOLIO - long-term growth of capital by investing principally in common stocks or other equity securities. Current income is a secondary objective. MONEY MARKET PORTFOLIO- maximum current income consistent with preservation of capital and liquidity by investing in high quality money market instruments. BOND PORTFOLIO - high level of return consistent with preservation of capital by investing primarily in high quality intermediate and long-term debt securities. OMNI PORTFOLIO - high level of long-term total return consistent with preservation of capital by investing in stocks, bonds and money market instruments. INTERNATIONAL PORTFOLIO - long-term capital growth by investing primarily in common stocks of foreign companies. CAPITAL APPRECIATION PORTFOLIO - maximum capital growth by investing primarily in common stocks that are (1) considered to be undervalued or temporarily out of favor with investors, or (2) expected to increase in price over the short term. SMALL CAP PORTFOLIO - maximum capital growth by investing primarily in common stocks of small and medium size companies. GLOBAL CONTRARIAN PORTFOLIO - long-term growth of capital by investing in foreign and domestic securities believed to be undervalued or presently out of favor. AGGRESSIVE GROWTH PORTFOLIO - capital growth. The Fund's shares are not offered directly to the public but are purchased principally for the account of certain separate accounts of The Ohio National Life Insurance Company ("ONLI"), Ohio National Life Assurance Corporation ("ONLAC") and other insurers. Some variable contracts do not permit allocations to all portfolios of the Fund. The accompanying variable contract prospectus identifies the portfolios available under that contract. THIS PROSPECTUS SETS FORTH CONCISELY THE INFORMATION ABOUT THE FUND THAT A PROSPECTIVE PURCHASER OF A VARIABLE CONTRACT DESCRIBED IN THE ACCOMPANYING PROSPECTUS OUGHT TO KNOW BEFORE PURCHASING SUCH A CONTRACT. THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. ADDITIONAL INFORMATION ABOUT THE FUND HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN A STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1996, WHICH IS INCORPORATED HEREIN BY REFERENCE. THE STATEMENT OF ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST AND WITHOUT CHARGE BY WRITING OR CALLING THE FUND AT THE ADDRESS SHOWN ABOVE. INVESTMENTS IN THE MONEY MARKET PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE UNITED STATES GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $10 PER SHARE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 1 6 TABLE OF CONTENTS
Page Financial Highlights...................................................................................................... 2 General Description of the Fund........................................................................................... 6 Investment Objectives and Policies........................................................................................ 7 Investment Restrictions................................................................................................... 11 Management of the Fund.................................................................................................... 14 Capital Stock............................................................................................................. 16 Dividends, Distributions and Taxes........................................................................................ 17 Purchase and Redemption of Shares......................................................................................... 17 Fund Performance.......................................................................................................... 18
FINANCIAL HIGHLIGHTS OF OHIO NATIONAL FUND, INC. FOR THE TEN YEARS ENDED DECEMBER 31, 1995 The following information for each of the years indicated herein has been audited by KPMG Peat Marwick LLP, independent certified public accountants, and is an integral part of the Fund's audited financial statements which appear in the Statement of Additional Information (which may be obtained by variable contract owners and prospectus purchasers), incorporated by reference herein, and should be read in conjunction with those financial statements.
EQUITY PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- ---- ---- Net asset value, beginning of period $23.20 $23.90 $21.63 $20.61 $18.02 $20.09 $17.99 ------ ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income .50 .45 .41 .50 .60 .86 .71 Net realized and unrealized gains (losses) on investments and foreign currency transactions 5.56 (.39) 2.57 1.02 2.97 (1.62) 3.42 ------ ------ ------ ------ ------ ------ ------ Total from investment operations 6.15 .06 2.98 1.52 3.57 (.76) 4.13 ------ ------ ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.39) (.44) (.42) (.50) (.63) (.87) (.66) Distributions from realized capital gains (.38) (.32) (.29) - (.35) (.44) (1.37) ------ ------ ------ ------ ------ ------ ------ Total distributions (.77) (.76) (.71) (.50) (.98) (1.31) (2.03) ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period $28.58 $23.20 $23.90 $21.63 $20.61 $18.02 $20.09 ====== ====== ====== ====== ====== ====== ====== Total return(a) 27.20% 0.25% 14.09% 7.55% 20.18% (3.85%) 23.21% ====== ====== ====== ====== ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $175,695 $123,327 $109,858 $87,396 $68,164 $49,209 $42,835 Ratio of expenses to average net assets .73% .62% .63% .65% .66% .69% 0.70% Ratio of net investment income to average net assets 1.90% 1.90% 1.91% 2.44% 3.12% 4.75% 3.55% Portfolio turnover rate 14% 8% 18% 12% 23% 5% 16%
EQUITY PORTFOLIO - ------------------------------------------------------------------------ 1988 1987 1986 ---- ---- ---- Net asset value, beginning of period $16.82 $15.94 $15.15 ------ ------ ------ Income from investment operations: Net investment income .66 .53 .44 Net realized and unrealized gains (losses) on investments and foreign currency transactions 1.86 1.22 3.10 ------ ------ ------ Total from investment operations 2.52 1.75 3.54 ------ ------ ------ Less distributions: Dividends from net investment income (.67) (.50) (.44) Distributions from realized capital gains (.68) (.37) (2.31) ------ ------ ------ Total distributions (1.35) (.87) (2.75) ------ ------ ------ Net asset value, end of period $17.99 $16.82 $15.94 ====== ====== ====== Total return(a) 15.01% 10.81% 23.31% ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $33,323 $30,828 $23,175 Ratio of expenses to average net assets 0.71% 0.68% 0.71% Ratio of net investment income to average net assets 3.59% 2.89% 2.50% Portfolio turnover rate 9% 7% 24%
2 7
MONEY MARKET PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- ---- ---- Net asset value, beginning of period $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 ------ ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income .54 .39 .27 .31 (.54) .76 .86 Net realized and unrealized gains (losses) on investments and foreign currency transactions. - - - - - - - Total from investment operations. .54 .39 .27 .31 .54 .76 .86 ------ ------ ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.54) (.39) (.27) (.31) (.54) (.76) (.86) Distributions from realized capital gains - - - - Total distributions (.54) (.39) (.27) (.31) (.54) (.76) (.86) ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 ====== ====== ====== ====== ====== ====== ====== Total return(a) 5.62% 4.00% 2.71% 3.12% 5.39% 7.60% 8.56% ====== ====== ====== ====== ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $15,716 $13,058 $19,123 $20,583 $24,230 $26,055 $23,643 Ratio of expenses to average net assets(c) .44% .39% .53% 0.66% 0.67% 0.68% 0.70% Ratio of net investment income to average net assets(c) 5.39% 3.69% 2.71% 3.16% 5.41% 7.57% 8.51%
MONEY MARKET PORTFOLIO - ------------------------------------------------------------------------ 1988 1987 1986 ---- ---- ---- Net asset value, beginning of period $10.00 $10.00 $10.00 ------ ------ ------ Income from investment operations: Net investment income .69 .61 .61 Net realized and unrealized gains (losses) on investments and foreign currency transactions. - - - Total from investment operations. .69 .61 .61 Less distributions: ------ ------ ------ Dividends from net investment income (.69) (.61) (.61) Distributions from realized capital gains - - - Total distributions (.69) (.61) (.61) ------ ------ ------ Net asset value, end of period $10.00 $10.00 $10.00 ====== ====== ====== Total return(a) 6.89% 6.10% 6.10% ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $22,796 $21,141 $21,023 Ratio of expenses to average net assets(c) 0.71% 0.76% 0.75% Ratio of net investment income to average net assets(c) 6.87% 6.06% 6.12%
BOND PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------- 1995 1994 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- ---- ---- Net asset value, beginning of period $ 9.70 $10.87 $10.45 $10.37 $ 9.89 $ 9.93 $ 9.72 ------ ------ ------ ------ ----- ----- ----- Income from investment operations: Net investment income .70 .67 .69 .67 .74 .79 .81 Net realized and unrealized gains (losses) on investments and foreign currency transactions 1.08 (1.07) .41 .10 .49 (.05) .20 ------ ------ ------ ------ ----- ----- ----- Total from investment operations 1.78 (.40) 1.10 .77 1.23 .74 1.01 ------ ------ ------ ------ ----- ----- ----- Less distributions: Dividends from net investment income (.55) (.69) (.68) (.69) (.75) (.78) (.80) Distributions from realized capital gains - (.08) - - - - - Total distributions (.55) (.77) (.68) (.69) (.75) (.78) (.80) ------ ------ ------ ------ ----- ----- ----- Net asset value, end of period $10.93 $ 9.70 $10.87 $10.45 $10.37 $ 9.89 $ 9.93 ====== ====== ====== ====== ====== ====== ====== Total return(a) 18.90% (3.84%) 10.69% 7.55% 12.96% 7.82% 10.71% ====== ====== ====== ====== ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $18,064 $13,148 $11,979 $8,872 $5,899 $4,686 $4,003 Ratio of expenses to average net assets .75% .63% .62% 0.65% 0.65% 0.70% 0.70% Ratio of net investment income to average% net assets 6.76% 6.71% 6.33% 6.73% 7.42% 8.02% 8.21% Portfolio turnover rate 4% 5% 13% 20% 18% 4% -
BOND PORTFOLIO - ------------------------------------------------------------------------ 1988 1987 1986 ---- ---- ---- Net asset value, beginning of period $ 9.84 $10.71 $10.36 ------ ------ ------ Income from investment operations: Net investment income .77 .83 .91 Net realized and unrealized gains (losses) on investments and foreign currency transactions (.13) (.76) .35 ------ ------ ------ Total from investment operations .64 .07 1.26 ------ ------ ------ Less distributions: Dividends from net investment income (.76) (.83) (.91) Distributions from realized capital gains - (.11) - Total distributions (.76) (.94) (.91) ------ ------ ------ Net asset value, end of period $ 9.72 $ 9.84 $10.71 ====== ====== ====== Total return(a) 6.74% 0.74% 12.49% ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $3,651 $3,830 $3,756 Ratio of expenses to average net assets 0.79% 1.09% 0.91% Ratio of net investment income to average% net assets 7.50% 7.78% 8.37% Portfolio turnover rate 27% 13% 70%
3 8
OMNI PORTFOLIO - ------------------------------------------------------------------------------------------------------------------------ 1995 1994 1993 1992 1991 1990 1989 ---- ---- ---- ---- ---- ---- ---- Net asset value, beginning of period $14.76 $15.38 $14.14 $13.63 $12.16 $12.76 $11.89 ------ ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income .58 .55 .58 .63 .65 .78 .75 Net realized and unrealized gains (losses) on investments and foreign currency transactions 2.72 (.63) 1.21 .51 1.49 (.54) 1.07 ------ ------ ------ ------ ------ ------ ------ Total from investment operations 3.30 (.08) 1.79 1.14 2.14 .24 1.82 ------ ------ ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.46) (.54) (.54) (.63) (.67) (.78) (.73) Distributions from realized capital gains - - - - - (06) (.22) ---- ----- ----- Total distributions (.46) (.54) (.55) (.63) (.67) (.84) (.95) ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period $17.60 $14.76 $15.38 $14.14 $13.63 $12.16 $12.76 ====== ====== ====== ====== ====== ====== ====== Total return(a) 22.75% (0.53%) 12.85% 8.61% 18.14% 1.92% 15.45% ====== ====== ====== ====== ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $109,577 $84,966 $74,208 $46,415 $36,484 $35,435 $31,842 Ratio of expenses to average net assets .75% .62% .62% 0.65% 0.67% 0.69% 0.70% Ratio of net investment income to average net assets 3.56% 3.67% 3.74% 4.66% 5.04% 6.32% 5.99% Portfolio turnover rate 10% 7% 17% 16% 15% 7% 24%
OMNI PORTFOLIO - ------------------------------------------------------------------------- 1988 1987 1986 ---- ---- ---- Net asset value, beginning of period $11.23 $12.18 $10.95 ------ ------ ------ Income from investment operations: Net investment income .67 .59 .49 Net realized and unrealized gains (losses) on investments and foreign currency transactions .99 (.76) 1.45 ------ ------ ------ Total from investment operations 1.66 (.17) 1.94 ------ ------ ------ Less distributions: Dividends from net investment income (.66) (.58) (.48) Distributions from realized capital gains (.34) (.20) (.23) ------ ------ ------ Total distributions (1.00) (.78) (.71) ------ ------ ------ Net asset value, end of period $11.89 $11.23 $12.18 ====== ====== ====== Total return(a) 15.05% (1.70%) 17.94% ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $26,096 $28,032 $19,637 Ratio of expenses to average net assets 0.71% 0.69% 0.60% Ratio of net investment income to average net assets 5.40% 4.88% 4.72% Portfolio turnover rate 14% 12% 29
INTERNATIONAL CAPITAL APPRECIATION SMALL CAP PORTFOLIO PORTFOLIO PORTFOLIO 1995 1994 1993(e) 1995 1994(e) 1995 1994(e) ---- ---- ------- ---- ------- ---- ------- Net asset value, beginning of period $13.30 $12.48 $10.00 $10.25 $10.00 $11.99 $10.00 ------ ------ ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) .31 .16 .02 .39 .22 (.02) .18 Net realized and unrealized gains (losses) on investments and foreign currency transactions 1.28 .84 2.47 1.85 .23 3.95 1.94 ------ ------ ------ ------ ------ ------ ------ Total from investment operations 1.59 1.00 2.49 2.24 .45 3.93 2.12 ------ ------ ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income (.28) (.12) (.01) (.29) (.20) (.07) (.13) Distributions from realized capital gains (.23) (.06) - (.21) - - - ------ ------ ------ ------ ------ ------ ------ Total distributions (.51) (.18) (.01) (.50) (.20) (.07) (1.31) ------ ------ ------ ------ ------ ------ ------ Net asset value, end of period $14.38 $13.30 $12.48 $11.99 $10.25 $15.85 $11.99 ====== ====== ====== ====== ====== ====== ====== Total return(a) 12.10% 8.07% 24.96% 22.62% 4.53% 33.01% 21.26% ====== ====== ====== ====== ====== ====== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $90,594 $62,875 $17,477 $19,320 $ 6,755 $16,038 $ 3,256 Ratio of expenses to average net assets(d) 1.12% 1.05% 1.13%(b) .96% .98%(b) .96% .91%(b) Ratio of net investment income to average net assets(d) 2.29% 1.23% .41%(b) 3.47% 3.24%(b) (11%) 3.27%(b) Portfolio turnover rate 7% 16% 8% 32% 20% 75% 222%
4 9
GLOBAL AGGRESSIVE CONTRARIAN GROWTH 1995(e) 1995(e) ------- ------- Net asset value, beginning of period $10.00 $10.00 ------ ------ Income from investment operations: Net investment income (loss) .13 1.56 Net realized and unrealized gains (losses) on investments and foreign currency transactions .75 1.08. --- ----- Total from investment operations .88 2.64 --- ---- Less distributions: Dividends from net investment income (.08) (.80) Distributions from realized capital gains - - Total distributions (.08) (.80) ----- ----- Net asset value, end of period $10.80 $11.84 ====== ====== Total return(a) 8.89% 26.95% ===== ====== Ratios/supplemental data: Net Assets, end of period (000's omitted) $4,421 $4,005 Ratio of expenses to average net assets(d) 1.58%(b) . 1.02%(b) Ratio of net investment income to average net assets(d) 1.64%(b) 18.18%(b) Portfolio turnover rate 6%(b) 1,488%(b)
FINANCIAL HIGHLIGHTS FOOTNOTES (a) This total return information does not reflect expenses that apply to any separate account or the related variable annuity or variable life insurance contracts. Inclusion of those charges would reduce the total return figures for all periods shown. (b) Annualized (c) On and after June 17, 1993, the investment adviser has waived part of the management fee with respect to the Money Market Portfolio, to the extent such fee exceeds an annual rate of 0.25% of the Money Market Portfolio's daily net asset value. Had the fee not been waived, the annualized ratio of net expenses to average net assets would have been 0.59%, 0.59% and 0.63%, and the annualized ratio of net investment income to average net assets would have been 5.27%, 3.51% and 2.60%, respectively, for 1995, 1994 and 1993. (d) The investment adviser reimbursed certain operating expenses of the International Portfolio in 1993, the Capital Appreciation and Small Cap Portfolios in 1994, and the Global Contrarian Portfolio in 1995. Had the investment adviser not reimbursed such expenses, the annualized ratio of expenses to average net assets would have been 1.39% and the annualized ratio of net investment income to average net assets would have been 0.15% for the International Portfolio in 1993. Had the investment adviser not reimbursed such expenses of the Capital Appreciation and Small Cap Portfolios, the annualized ratio of expenses to average net assets would have been 1.05% and 0.95%, respectively. The annualized ratio of net investment income to average net assets would have been 3.18% and 3.24%, respectively, for the Capital Appreciation and Small Cap Portfolios in 1994. Had the investment adviser not reimbursed such expenses of the Global Contrarian Portfolio, the annualized ratio of expenses to average net assets would have been 1.90% and the annualized ratio of net investment income to average net assets would have been 1.32% for the Global Contrarian Portfolio in 1995. 5 10 (e) Total return was calculated on an aggregate basis (not annualized) for the International Portfolio from the commencement of its operations on April 30, 1993, through December 31, 1993, for the Capital Appreciation and Small Cap Portfolios, from their commencement of operations, May 1, 1994, through December 31, 1994, and for the Global Contrarian and Aggressive Growth Portfolios from their commencement of operations, March 31, 1995, through December 31, 1995. GENERAL DESCRIPTION OF THE FUND The Fund, incorporated under the laws of Maryland on March 6, 1980, is an open-end diversified management investment company commonly referred to as a "mutual fund." It is a "no-load" fund which sells and redeems its shares at net asset value without any sales or redemption charge. The Fund is organized as a "series" company, which means that it has several different investment portfolios. Currently there are nine investment portfolios: the Equity Portfolio, the Money Market Portfolio, the Bond Portfolio, the Omni Portfolio, the International Portfolio, the Capital Appreciation Portfolio, the Small Cap Portfolio, the Global Contrarian Portfolio and the Aggressive Growth Portfolio. Interests in each portfolio are represented by a separate class of common stock, par value $1. Each class represents an undivided interest in the assets of the portfolio attributable to that class. Fund shares are currently offered only to the separate accounts of ONLI (a mutual life insurance company organized under Ohio law) and ONLAC (a stock life insurer organized under Ohio law and wholly owned by ONLI), but may in the future be offered to the separate accounts of other life insurance companies (the "separate accounts"). Such separate accounts use Fund shares as the underlying investment medium to support certain benefits under variable annuity and variable life insurance contracts. As is described in the accompanying variable contract prospectus, each contract owner will select the Fund portfolio or portfolios that will support certain benefits under his or her contract. The value of such benefits will vary with the investment experience of the underlying portfolio(s) of the Fund. Consequently, each prospective contract owner should carefully review the objectives, policies and risks of each portfolio and the operation of the Fund generally as set forth in this prospectus. It is conceivable that in the future it may become disadvantageous for both variable life and variable annuity separate accounts to invest in the Fund. Although ONLI, ONLAC and the Fund do not currently foresee any such disadvantage, the Board of Directors of the Fund will monitor events in order to identify any material conflict between variable life and variable annuity contract owners and to determine what action, if any, should be taken in response thereto. Such action could include the withdrawal of a separate account from participation in the Fund. Material conflicts could result from such things as (1) changes in state insurance law; (2) changes in federal income tax law; (3) changes in the investment management of any portfolio of the Fund; or (4) differences between voting instructions given by variable life and variable annuity contract owners. The Fund may be used in the future to support benefits under other types of contracts or for other purposes. Fund shares are not now, and without a change in applicable law will never be, offered directly to the public. Consequently, the separate accounts will be the sole shareholders of the Fund. Fund shares attributable to contracts participating in such separate accounts will be voted by such separate accounts as directed by the contract owners. The investment and reinvestment of Fund assets is directed by Ohio National Investments Inc. (the "Adviser"). See "Management of the Fund," page 14. The investment and reinvestment of the assets of the following portfolios is managed by the firms indicated as sub-advisers:
PORTFOLIO SUB-ADVISER - --------- ----------- International and Global Contrarian Societe Generale Asset Management Corp. ("SGAM") Captial Appreciation T. Rowe Price Associates, Inc. ("TRPA") Small Cap Founders Asset Management, Inc. ("FAM'') Aggressive Growth Strong Capital Management, Inc. ("SCM")
6 11 INVESTMENT OBJECTIVES AND POLICIES Each portfolio has a different investment objective which it pursues through separate investment policies as described below. The differences in objectives and policies among the portfolios can be expected to affect the return of each portfolio and the degree of market and financial risk to which each portfolio is subject. Financial risk refers to the ability of an issuer of a debt security to pay principal and interest on such security, and to the earnings stability and overall financial soundness of an issuer of an equity security. Market risk refers to the volatility of the price of a security in response to changes in conditions in the securities markets in general and, particularly in the case of debt securities, changes in the overall level of interest rates. There is no assurance that the investment objective of any portfolio will be realized. The investment objectives of each portfolio discussed below and in the Statement of Additional Information may not be changed without the approval of the holders of a majority of the outstanding shares of that portfolio. The Statement of Additional Information provides a fuller description of the types of financial instruments in which the Money Market Portfolio may invest and definitions of debt ratings of nationally recognized statistical rating organizations. EQUITY PORTFOLIO The principal investment objective of the Equity Portfolio is long-term growth of capital. Current income is a secondary consideration although growth of income may accompany growth of capital. This Portfolio will seek to attain its objective of capital growth by investing primarily in common stocks or securities convertible into, or which carry the right to buy, common stocks. It may also invest to a limited degree in non-convertible preferred stocks, debt securities and readily marketable mortgage notes. When in management's opinion market or economic conditions warrant a defensive posture, the Portfolio may place any portion of its assets in investment-grade debt securities, preferred stocks, Government securities or cash. (The short-term investment position of the Portfolio at December 31, 1995 was 14.1%). The Portfolio may also maintain reasonable amounts in cash or short-term debt securities pending selection of investments in accordance with its policies. This Portfolio will invest primarily in securities listed on national securities exchanges, but from time to time it may also purchase securities traded in the over-the-counter market and foreign securities. In general, investment in shares of this Portfolio should involve greater market and financial risk than an investment in any of the Money Market, Bond, Omni or Capital Appreciation Portfolios, but less risk than investments in the International, Small Cap, Global Contrarian or Aggressive Growth Portfolios. MONEY MARKET PORTFOLIO The objective of the Money Market Portfolio is to obtain maximum current income consistent with preservation of principal and liquidity. This Portfolio seeks to achieve its objective by investing in high quality money market instruments, including: 1. obligations maturing in 13 months or less and issued or guaranteed as to principal and interest by the United States Government, or any agency or authority controlled or supervised by and acting as an instrumentality of the U.S. Government pursuant to authority granted by Congress; 2. commercial paper, certificates of deposit and bankers' acceptances that have received the highest rating by any two nationally recognized statistical rating organizations ("NRSRO's"), or the highest rating by one NRSRO if that is the only NRSRO having rated the security, or whose issuer has received such a rating or ratings with respect to a class of short-term debt obligations that is now comparable in priority and security to those to be purchased; 3. commercial paper, certificates of deposit, bankers' acceptances or other corporate obligations maturing in 13 months or less and which, although not rated by any NRSRO, the Board of Directors determines to be of a quality comparable to that of instruments receiving either of the two highest ratings, provided, that any security determined to be comparable in quality to the second highest rating shall be included in the 5% limitation under item 5; and 4. repurchase agreements with respect to any of the foregoing obligations. 7 12 5. as to no more than 5% of the Portfolio's assets, in commercial paper, certificates of deposit or bankers' acceptances receiving the second highest rating by any two NRSRO's (or by one NRSRO if (a) that is the only NRSRO having rated the security or (b) one other NRSRO has given the security its highest rating), or whose issuer has received such a rating or ratings with respect to a class of short-term debt obligations that is now comparable in priority and security to those to be purchased, provided, that no more than $1 million (or 1% of Portfolio assets, if greater) may be invested in such securities of any one issuer; This Portfolio may invest up to 50% of its assets in the securities of foreign issuers (including private issuers and foreign governments or political subdivisions, agencies or instrumentalities of foreign governments), provided they meet the above quality standards and they are denominated in U.S. dollars and held in custody in the United States. The investments of this Portfolio in such money market instruments are subject to the terms and conditions of Rule 2a-7 under the Investment Company Act of 1940, including the requirement that they be limited to those instruments which the Board of directors determines, present minimal credit risks. Generally, this Portfolio will purchase money market securities with the intention of holding them until maturity, at which time they will be redeemed. To the extent it is able to do so, the Portfolio will not realize any gain or loss on these securities. There may be times, however, when it may be necessary or appropriate to sell securities prior to maturity in order to shorten the Portfolio's average maturity, to meet redemptions, or because of a reevaluation of an issuer's credit-worthiness. Rule 2a-7 permits this Portfolio to value its assets on the basis of amortized cost as a means of maintaining the net asset value of the Money Market shares at $10 per share. Under the terms of the rule, the Portfolio may neither purchase any debt security having a remaining maturity of more than 397 days nor maintain a dollar-weighted average portfolio maturity of more than 90 days. Under the amortized cost method, all such debt securities are valued at their cost on the date of acquisition with a daily adjustment being made to accrued income to reflect amortization of premium or accretion of discount to the maturity date. If such method results in a deviation in excess of 1/2 of 1% from value based on available market quotations, the Board of Directors will promptly consider what, if any, action it should initiate. Such action may include selling portfolio instruments; withholding dividends; recapitalizing outstanding shares; requiring shareholders to contribute shares to capital or using available market quotations. An investor's rate of return will vary as short-term interest rates vary. The rate of return will also be affected by other factors such as the operating expenses of the Portfolio and the sales, if any, of portfolio securities prior to maturity. On balance, however, investment in this Portfolio should involve less market and financial risk than an investment in any other portfolio. BOND PORTFOLIO The principal investment objective of the Bond Portfolio is to obtain a high level of income and opportunity for capital appreciation consistent with preservation of capital. Investments will be made primarily in intermediate-term and long-term fixed-income securities. At least 80% of the total assets of this Portfolio (exclusive of cash and Government securities) will be invested in: 1. publicly traded, investment grade, non-convertible corporate debt securities issued by United States corporations and assigned within the four highest bond ratings by Moody's or Standard and Poor's; and 2. corporate debt securities used for short-term investment and limited to the top grade of these two rating services. Up to 20% of the total assets of the Portfolio may be invested in: (1) securities having high potential for capital appreciation; (2) preferred stocks, convertible securities and securities carrying warrants to purchase equity securities; and (3) debt securities issued by U.S. banks and savings and loan associations which at the date of investment have capital, surplus and undivided profits as of the date of their most recent financial statements in excess of $100,000,000. This Portfolio will not invest in common stocks directly, but it may retain for reasonable periods of time up to 10% of its total assets in common stocks acquired upon the conversion of debt securities or upon the exercise of warrants acquired with debt securities. 8 13 It is expected that this Portfolio will include debt securities with varying maturities selected from various industries, depending upon the Adviser's evaluation of current and anticipated market conditions. The market values of debt instruments will vary depending upon their respective yields; therefore, the net asset value per share of the Portfolio will change from time to time as the general level of interest rates changes. Consequently, an investment in the shares of this Portfolio involves substantial market risk, but should involve less financial risk than an investment in any of the portfolios other than the Money Market Portfolio. OMNI PORTFOLIO The principal investment objective of the Omni Portfolio is to realize a high level of long-term total rate of return consistent with prudent investment risks. Total rate of return consists of current income including dividends, interest and discount accruals and capital appreciation. This Portfolio will seek to attain its objectives by investing in any of the securities in which the Equity, Money Market and Bond Portfolios may invest. The mix of investments will be adjusted from time to time among the various market sectors (stocks, bonds and money market instruments) to capitalize on perceived variations in return potential produced by the interaction of changing market and economic conditions. The Portfolio may at times be invested in less than all three of the market sectors. No minimum portion of the Portfolio is required to be invested in any sector. The frequency of changes in investment mix depends upon market and economic conditions. The Portfolio's principal investment objective is supplemented and limited by the investment objectives, policies and restrictions established for each of the market sectors. Within the equity sector, the Portfolio will attempt to obtain long-term growth of capital while current income will be a secondary consideration. Within the bond sector, the Portfolio will attempt to obtain a high level of income and opportunity for capital appreciation consistent with preservation of capital. Within the money market sector, the Portfolio will attempt to obtain maximum current income consistent with the preservation of principal and liquidity. Investment in this Portfolio involves all of the risks associated with investing in the other portfolios. In addition, there is the risk that at any given time this Portfolio will invest too much or too little in each of the respective market sectors. INTERNATIONAL PORTFOLIO The principal investment objective of the International Portfolio is to obtain long-term capital growth by investing primarily in common stocks (and securities convertible into common stocks) of foreign companies. This Portfolio may also invest in fixed-income securities of foreign issuers. When deemed appropriate for short-term investment or for defensive purposes, it may invest in short- term debt instruments of U.S. or foreign issuers, in U.S. Government obligations, or in U.S. common stocks. This Portfolio enables variable contractowners to diversify their investment by participating in companies and economies outside the U.S. However, investing in foreign securities may involve a greater degree of risk than investing in domestic securities because of the possibilities of currency exchange rate fluctuations, currency exchange controls, less publicly available information, more volatile markets, thinner markets (less trading volume), slower settlement of trades, greater likelihood of trade failures, less securities regulation, less favorable tax provisions, lack of uniformity of accounting, auditing and financial reporting standards, war and expropriation. Foreign investments also generally involve higher brokerage commissions, higher custodian costs, and currency conversion fees. Investment in this Portfolio will generally involve a greater degree of market and financial risk than any of the portfolios except for the Global Contrarian Portfolio. 9 14 CAPITAL APPRECIATION PORTFOLIO The principal investment objective of the Capital Appreciation Portfolio is to maximize capital growth through investment primarily in common stocks. This Portfolio seeks to achieve capital appreciation by investing in securities of companies that are undervalued in relation to the company's assets, earnings, market position or breakup value; are currently out of favor in the investment community; or have attractive growth potential in their business markets. Securities are also sought that have been over-discounted due to adverse operating results, deteriorating economic or industry conditions, or unfavorable publicity. The Portfolio may also invest in fixed-income securities and money market instruments to preserve its principal value during uncertain or declining market conditions. The Portfolio's total return will consist principally of capital appreciation (or depreciation) and, to a lesser extent, current income. The Portfolio's active management may result in a higher portfolio turnover rate and correspondingly higher brokerage costs. Investment in this Portfolio will generally involve market and financial risks that are comparable to, or somewhat less than, those of the Equity Portfolio. SMALL CAP PORTFOLIO To achieve its investment objective of capital appreciation, this Portfolio invests primarily in the common stocks of small and medium sized companies. Ordinarily, these companies are not listed on a national securities exchange but will be traded over the counter. Under normal market conditions, at least 65% of this Portfolio's assets will be invested in common stocks of companies with market capitalizations of less than $1 billion. However it may also invest in larger companies if they appear to present better prospects for capital appreciation. This Portfolio may invest up to 30% of its assets in foreign securities. Small and medium sized companies selected for this Portfolio are generally those that are still in the developing stages of their life cycles and are able to achieve rapid growth in sales, earnings and share prices. Investments in such companies involve greater volatility and risk than is customarily associated with more established companies because such companies often have limited product lines, markets or financial resources, and their securities may be subject to more abrupt or erratic movements in price than securities of larger companies or the market averages. Investment in this Portfolio generally involves a higher degree of market and financial risks than those of the Equity Portfolio. GLOBAL CONTRARIAN PORTFOLIO The objective of the Global Contrarian Portfolio is to provide long-term growth of capital by investing in foreign and domestic securities that, in the judgment of the portfolio manager, are undervalued or presently our of favor with other investors but have positive prospects for eventual appreciation. While this Portfolio will primarily invest in common stocks (and securities convertible into common stocks), it may also invest in fixed income securities that appear to be undervalued or out of favor. A substantial portion (at least 25%) of this Portfolio will be invested in foreign securities, in at least three countries, under normal market conditions. To that extent, the risk factors described in the second paragraph under "International Portfolio," above, will apply. In addition, "contrarian" investing generally involves substantial risks, particularly in the short term. Companies or markets that appear to be undervalued or are out of favor with investors may remain so for an extended period of time or may never recover. Therefore, this Portfolio should be considered primarily for long-term investments. Investment in this Portfolio generally involves a high degree of market and financial risk. 10 15 AGGRESSIVE GROWTH PORTFOLIO The investment objective of the Aggressive Growth Portfolio is to seek capital growth. The Portfolio invests in a diversified portfolio of securities believed to represent attractive growth opportunities. The Portfolio normally emphasizes equity securities, although it has the flexibility to invest in any type of security that is believed to have the potential for capital appreciation. The Portfolio may invest up to 100% of its assets in equity securities, including common stocks, preferred stocks, securities that are convertible into common or preferred stocks, such as convertible bonds, and warrants. The Portfolio may invest up to 100% of its assets in intermediate - to long-term corporate or U.S. government debt securities. When market conditions warrant a temporary defensive position, the Portfolio may invest without limitation in cash and short-term, fixed-income securities, including U.S. government securities, commercial paper, banker's acceptances, certificates of deposit, and time deposits. Although the debt securities in which the Portfolio invests will be primarily investment-grade debt securities, the Portfolio may invest up to 5% of its total assets in non-investment-grade debt securities. The Portfolio may invest up to 15% of its assets in foreign securities, which involve certain risks. The Portfolio seeks to uncover emerging investment trends and attractive growth opportunities. In its search for potential investments, the Portfolio attempts to identify companies that are poised for accelerated earnings growth due to innovative products or services, new management, or favorable economic or market cycles. These companies may be small, unseasoned firms in the early stages of development, or they may be mature organizations. The Portfolio engages in substantial short-term trading, which involves significant risk and may be deemed speculative. Such trading results in a higher portfolio turnover rate and correspondingly higher brokerage costs. Investment in this Portfolio involves a high degree of market and financial risk. INVESTMENT RESTRICTIONS The Fund is subject to a number of restrictions in implementing its investment policies. The following is a list of certain significant restrictions for all portfolios other than the Capital Appreciation and Aggressive Growth Portfolios, the restrictions for which are listed separately. The Statement of Additional Information provides a complete list of all investment restrictions applicable to the Fund. Restrictions number 4, 7 and 8 are nonfundamental policies of the Small Cap and Global Contrarian Portfolios, and restriction number 8 is a nonfundamental policy of the Small Cap Portfolio, and as such may be changed by the Board of Directors. Otherwise, none of the following restrictions may be changed without the affirmative vote of a majority of the outstanding voting securities of the Fund or of a particular portfolio, as appropriate. Each portfolio of the Fund (other than the Capital Appreciation and Aggressive Growth Portfolios) will not: 1. invest more than 5% of the value of the total assets of such portfolio in the securities of any one insurer (except U.S. Government securities); 2. purchase more than 10% of the outstanding voting securities of any one issuer, and the Money Market Portfolio will not acquire the voting securities of any issuer except in connection with a merger, consolidation or other reorganization; 3. invest more than 25% of the value of its total assets in any one industry, except that each portfolio may invest more than 25% of the value of its total assets in obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities or in certificates of deposit, bankers' acceptances, bank time deposits or other obligations of banks or financial institutions. However, it is the intention of management not to invest in time deposits which involve any penalty or other restriction on withdrawal; 4. invest more than 10% of the value of its assets (15% in the case of the Small Cap Portfolio) in securities or other investments, including repurchase agreements maturing in more than seven days, that are subject to legal or contractual restrictions upon resale or are otherwise not readily marketable; 11 16 5. borrow money, except for temporary or emergency purposes from banks, in which event the aggregate amount borrowed shall not exceed 5% of the value of the assets of the portfolio. In the case of such borrowing, each portfolio may pledge, mortgage or hypothecate up to 5% of its assets. Reverse repurchase agreements are not considered to be borrowing money for purposes of this restriction; 6. purchase or sell commodities or commodity contracts except that each portfolio other than the Money Market Portfolio may, for hedging purposes, purchase and sell financial futures contracts and options thereon within the limits of investment restriction 7 below; 7. purchase or sell put or call options, except that each portfolio other than the Money Market Portfolio may, for hedging purposes, (a) write call options traded on a registered national securities exchange if such portfolio owns the underlying securities subject to such options, and purchase call options for the purpose of closing out positions in options it has written, (b) purchase put options on securities owned, and sell such options in order to close its positions in put options, (c) purchase and sell financial futures contracts and options thereon, and (d) purchase and sell financial index options; provided, however, that no option or futures contract shall be purchased or sold if, as a result, more than one-third of the total assets of the portfolio would be hedged by options or futures contracts, and no more than 5% of any portfolio's total assets, at market value, may be used for premiums on open options and initial margin deposits on futures contracts; 8. other than the International and Global Contrarian Portfolios, invest in securities of foreign issuers except that (a) each of the Equity, Bond and Omni Portfolios may (i) invest up to 15% of their respective assets in securities of foreign issuers (including private issuers and foreign governments or political subdivisions, agencies or instrumentalities of foreign governments), American Depository Receipts, and securities of United States domestic issuers denominated in foreign currency, and (ii) invest up to an additional 10% of the assets of the portfolio in securities issued by foreign governments or political subdivisions, agencies or instrumentalities thereof, (b) the Small Cap Portfolio may invest up to 30% of its assets in the securities of such foreign issuers, and (c) the Money Market Portfolio may invest up to 50% of its assets in the securities of such foreign issuers, provided the securities are denominated in U.S. dollars and held in custody in the United States. (For purposes of this restriction number 8, U.S. dollar denominated depository receipts traded in domestic markets do not constitute foreign securities.) As nonfundamental policies of each portfolio other than the Capital Appreciation and Aggressive Growth Portfolios, which policies may be changed at any time by the vote of a majority of the Board of Directors, (a) no portfolio will invest more than 20% of its assets in securities of issuers located in any one foreign country, except that up to an additional 5% of its assets may be invested in securities of issuers located in each of any three of Australia, Canada, France, Germany, Japan or the United Kingdom; and (b) each portfolio other than the Money Market Portfolio, in order to hedge against changes in the exchange rates of foreign currencies in relation to the U.S. dollar, may engage in forward foreign currency contracts, foreign currency options and foreign currency futures contracts in connection with the purchase, sale or ownership of specific securities (but, not more than 5% of a portfolio's assets may be invested in such currency hedging contracts). If a percentage restriction is adhered to at the time of an investment, a later increase or decrease in the investment's percentage of the value of a portfolio's total assets resulting from a change in such values or assets will not constitute a violation of the percentage restriction. CAPITAL APPRECIATION PORTFOLIO FUNDAMENTAL POLICIES As a matter of fundamental policy, the Portfolio may not: C.A.1. Borrow money except that the Portfolio may (i) borrow for non-leveraging, temporary or emergency purposes and (ii) engage in reverse repurchase agreements and make other investments or engage in other transactions, which may involve a borrowing, in a manner consistent with the Portfolio's investment objective and program, provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the value of the Portfolio's total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law. Any borrowings which come to exceed this amount will be reduced in accordance with applicable law. 12 17 The Portfolio may borrow from banks, other portfolios managed by TRPA or other persons to the extent permitted by applicable law; C.A.2. Purchase or sell physical commodities; except that it may enter into futures contracts and options thereon; C.A.3. Purchase the securities of any issuer if, as a result, more than 25% of the value of the Portfolio's total assets would be invested in the securities of issuers having their principal business activities in the same industry; C.A.4. Make loans, although the Portfolio may (i) lend portfolio securities and participate in an interfund lending program with other portfolios managed by TRPA provided that no such loan may be made if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of the Portfolio's total assets; (ii) purchase money market securities and enter into repurchase agreements; and (iii) acquire publicly-distributed or privately-placed debt securities and purchase debt; C.A.5. Purchase a security if, as a result, with respect to 75% of the value of its total assets, more than 5% of the value of the Portfolio's total assets would be invested in the securities of a single issuer, except securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities; C.A.6. Purchase a security if, as a result, with respect to 75% of the value of the Portfolio's total assets, more than 10% of the outstanding voting securities of any issuer would be held by the Fund (other than obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities); C.A.7. Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business); C.A.8. Issue senior securities except in compliance with the Investment Company Act of 1940; or C.A.9. Underwrite securities issued by other persons, except to the extent that the Portfolio may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment program. With respect to investment restrictions C.A.1. and C.A.4., the Portfolio will not borrow from or lend to any other portfolios managed by TRPA unless they apply for and receive an exemptive order from the SEC or the SEC issues rules permitting such transactions. The Portfolio has no current intention of engaging in any such activity and there is no assurance the SEC would grant any order requested by the Portfolio or promulgate any rules allowing the transactions. With respect to investment restriction C.A.2., the Portfolio does not consider currency contracts or hybrid investments to be commodities. For purposes of investment restriction C.A.3., U.S., state or local governments, or related agencies or instrumentalities, are not considered an industry. For purposes of investment restriction C.A.4., the Portfolio will consider the acquisition of a debt security to include the execution of a note or other evidence of an extention of credit with a term of more than nine months. AGGRESSIVE GROWTH PORTFOLIO FUNDAMENTAL POLICIES As a matter of fundamental policy, the Portfolio: A.G.1. May not with respect to 75% of its total assets, purchase the securities of any issuer (except securities issued or guaranteed by the U.S. government or its agencies or instrumentalities) if, as a result, (i) more than 5% of the Portfolio's total assets would be invested in the securities of that issuer, or (ii) the Portfolio would hold more than 10% of the outstanding voting securities of that issuer. 13 18 A.G.2. May (i) borrow money from banks and (ii) make other investments or engage in other transactions permissible under the Investment Company Act of 1940 which may involve a borrowing, provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the value of the Portfolio's total assets (including the amount borrowed), less the Portfolio's liabilities (other than borrowings), except that the Portfolio may borrow up to an additional 5% of its total assets (not including the amount borrowed) from a bank for temporary or emergency purposes (but not for leverage or the purchase of investments). The Portfolio may also borrow money from the other mutual funds managed by SCM or other persons to the extent permitted by applicable law. A.G.3. May not issue senior securities, except as permitted under the Investment Company Act of 1940. A.G.4. May not act as an underwriter or another issuer's securities, except to the extent that the Portfolio may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of portfolio securities. A.G.5. May not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Portfolio from purchasing or selling options, futures contracts, or other derivative instruments, or from investing in securities or other instruments backed by physical commodities). A.G.6. May not make loans if, as a result, more than 33 1/3% of the Portfolio's total assets would be lent to other persons, except through (i) purchases of debt securities or other debt instruments, or (ii) engaging in repurchase agreements. A.G.7. May not purchase the securities of any issuer if, as a result, more than 25% of the Portfolio's total assets would be invested in the securities of issuers, the principal business activities of which are in the same industry. A.G.8. May not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prohibit the Portfolio from purchasing or selling securities or other instruments backed by real estate or of issuers engaged in real estate activities. FOREIGN INVESTMENTS. Investments in foreign securities involve considerations not normally associated with investing in domestic issuers. For a summary of such considerations, see the second paragraph under "International Portfolio" on page 9. RISKS RELATED TO HEDGING TECHNIQUES. The use for hedging purposes of options and futures contracts on securities and foreign currencies involves certain risks, including whether the Adviser or a sub-adviser will be able to predict correctly the direction of movement of stock prices, interest rates, currency prices and other economic factors, whether sufficient market liquidity will exist to permit a portfolio to close out positions taken, and whether price movements of portfolio securities subject to a hedge follow price movements of securities or currencies underlying options and futures contracts, none of which can be assured. A discussion of the risks involved in the use of such hedging techniques is contained in the Statement of Additional Information. MANAGEMENT OF THE FUND The Fund's Board of Directors is responsible for directing the management of the business and affairs of the Fund. The Board of Directors has the power to amend the Fund's By-laws, to elect its officers, to declare and pay dividends, and to exercise all the powers of the Fund except those reserved to the shareholders. The Adviser is a wholly-owned subsidiary of ONLI and is located at 237 William Howard Taft Road, Cincinnati, Ohio 45219. It has served as the Fund's investment adviser since May 1, 1996. Prior to that date, the Fund's investment adviser was O.N. Investment Management Company, an indirect wholly-owned subsidiary of ONLI which, like the Adviser, made use of ONLI's investment personnel and administrative systems. The Adviser engages sub-advisers to direct the investments and reinvestments of certain portfolios. SGAM, located at 1221 Avenue of the Americas, New York, NY 10020, is owned by Societe Generale, one of the largest banks in Europe. SGAM and its predecessors have been investment advisers to international mutual funds since 14 19 1970. It has managed the assets of the International Portfolio since 1993, and the Global Contrarian Portfolio since 1995. TRPA, located at 100 East Pratt Street, Baltimore, MD 21202, manages assets for various individual and institutional investors, particularly the T. Rowe Price group of mutual funds. It is the successor to an investment firm founded in 1937. It has managed the assets of the Capital Appreciation Portfolio since 1994. FAM, located at 2930 East Third Avenue, Denver, CO 80206, manages the assets of the Founders group of mutual funds as well as private accounts. It was established in 1938. It has managed the assets of the Small Cap Portfolio since 1994. SCM, located at 100 Heritage Reserve, Milwaukee, Wisconsin 53051, manages the assets of the Strong group of mutual funds as well as pension funds and private accounts. It was established in 1974. It has managed the assets of the Aggressive Growth Portfolio since 1995. The individuals primarily responsible for the day-to-day management of the Fund's portfolios are Joseph Brom, Michael Boedeker, Stephen Williams, Jean-Marie Eveillard, Richard Howard, Michael Haines and Richard Strong. Joseph Brom is president of the Adviser and senior vice president and chief investment officer of ONLI. He oversees the management of the Equity, Money Market, Bond and Omni Portfolios. He is a chartered financial analyst with a bachelor's degree in economics and finance and a law degree from the University of Wisconsin. He has been an investment officer of ONLI since 1975 and previously had 15 years of experience in securities management. Michael Boedeker, a vice president of the Adviser, has managed the Money Market and Bond Portfolios since 1989. He is a chartered financial analyst with a bachelor's degree in business and a master of business administration degree in finance from Indiana University. He has been vice president of fixed income securities for ONLI since 1989 and previously had over 20 years of experience in fixed income securities and mutual fund management, most recently as senior vice president and chief investment officer of Mutual Security Life Insurance Co. for more than 5 years. Stephen Williams, a vice president of the Adviser, has managed the Equity and Omni Portfolios since 1987. He has a bachelor's degree in finance from the University of Cincinnati. He has been an investment analyst and director of securities for ONLI since 1977. Jean-Marie Eveillard, president of SGAM, has managed the International Portfolio since its inception in 1993. He is a graduate of the Ecole des Hautes Etudes Commerciales in Paris. He has been president of SoGen International Fund since 1984 and for 21 years prior to that had been a securities analyst and mutual fund manager of Societe Generale and SoGen International Fund. Richard Howard, president of the T. Rowe Price Capital Appreciation Fund and a vice president of TRPA, is the portfolio manager of the Capital Appreciation Portfolio. He is a chartered financial analyst with a bachelor's degree in engineering from Millikin University and a master of business administration degree from Harvard. He joined TRPA in 1982 and previously worked as an industry specialist for Fidelity Management and Research and for CG Investment Management Company. Michael Haines, senior vice president of investment of FAM, is the portfolio manager of the Small Cap Portfolio. He has a bachelor's degree from the Colorado College and a master of business administration from the University of Denver. He has been a portfolio manager for FAM since 1990 and for 5 years prior to that was a financial analyst for FAM. Richard Strong, chairman of the board of SCM, is the portfolio manager of the Aggressive Growth Portfolio. He has a bachelor's degree from Baldwin Wallace College and a master's degree in finance from the University of Wisconsin. He founded SCM in 1974 after 8 years of investment experience with several other firms. 15 20 Under the Investment Advisory Agreement dated May 1, 1996, the Adviser provides portfolio management and investment advice to the Fund and administers its other affairs, subject to the supervision of the Fund's Board of Directors. As compensation for its services to the Equity, Bond and Omni Portfolios, the Adviser is paid fees at an annual rate of 0.60% of the first $100 million of each Portfolio's net assets, 0.50% of the next $150 million, 0.45% of the next $250 million, 0.40% of the next $500 million, 0.30% of the next $1 billion and 0.25% of net assets over $2 billion. For the Money Market Portfolio, the Adviser is paid a fee at an annual rate of 0.30% of the first $100 million, 0.25% of the next $150 million, 0.23% of the next $250 million, 0.20% of the next $500 million and 0.15% of net assets over $1 billion. However, as to the Money Market Portfolio, the Adviser is presently waiving any of its fee in excess of 0.25%. For the International and Global Contrarian Portfolios, the Adviser is paid fees at an annual rate of 0.90% of each Portfolio's average daily net asset value.The Adviser is paid fees at an annual rate of 0.80% of the average daily net asset value of each of the Capital Appreciation, Small Cap and Aggressive Growth Portfolios. Pursuant to Sub-Advisory Agreements dated May 1, 1996, the Adviser (1) pays SGAM fees at an annual rate of 0.75% of the International and Global Contrarian Portfolios' average daily net asset value for directing the investment and reinvestment of those Portfolios' assets, (2) pays TRPA a fee at an annual rate of 0.70% of the first $5 million, and 0.50% of average daily net asset value in excess of $5 million for directing the investment and reinvestment of the Capital Appreciation Portfolio's assets, (3) pays FAM a fee at an annual rate of 0.65% of the first $75 million, 0.60% of the next $75 million, and 0.55% of average daily net asset value in excess of $150 million for directing the investment and reinvestment of the Small Cap Portfolio's assets and (4) pays SCM a fee at an annual rate of 0.70% of the first $50 million and 0.50% of average daily net asset value in excess of $50 million for directing the investment and reinvestment of the Aggressive Growth Portfolio's assets. Under a service agreement among the Fund, the Adviser and ONLI, the latter has agreed to furnish the Adviser, at cost, such research facilities, services and personnel as may be needed by the Adviser in connection with its performance under the Investment Advisory Agreement. The Adviser reimburses ONLI for its expenses in this regard. The Fund also incurs other miscellaneous expenses for legal and accounting services, registration and filing fees, custodial services and shareholder services. The Fund's transfer agent and dividend paying agent is The Provident Bank, One East Fourth Street, Cincinnati, Ohio. The Provident Bank is also the custodian for those portfolios other than the International and Global Contrarian Portfolios. The custodian for the International and Global Contrarian Portfolios is Investors Fiduciary Trust Company, 127 West Tenth Street, Kansas City, Missouri. For assets held outside the United States, the custodians enter into subcustodial agreements, subject to approval by the Board of Directors. CAPITAL STOCK The Fund's authorized capital consists of 250 million shares of capital stock with a par value of $1 per share; 20 million of such shares are allocated to each of the Equity and Omni Portfolios, and 10 million of such shares are allocated to each of the other portfolios. These shares may be reallocated by the Board of Directors to another of the existing portfolios or to any new portfolio. All shares of all portfolios have equal voting rights, except that only shares of a particular portfolio are entitled to vote on matters pertaining only to that portfolio. Pursuant to the Investment Company Act of 1940 and the rules and regulations thereunder, certain matters approved by a vote of all Fund shareholders may not be binding on a portfolio whose shareholders have not approved such matter. 16 21 Each issued and outstanding share is entitled to one vote and to participate equally in dividends and distributions declared by the respective portfolio and in net assets of such portfolio remaining upon liquidation or dissolution after satisfaction of outstanding liabilities. The shares of each portfolio, when issued, will be fully paid and non-assessable, have no preemptive, conversion, cumulative dividend or similar rights, and are freely transferable. Fund shares do not have cumulative voting rights, which means that the holders of more than half of the Fund shares voting for election of directors can elect all of the directors if they so choose. In such event, the holders of the remaining shares would not be able to elect any directors. All of the outstanding Fund shares are owned of record by ONLI and ONLAC and are held in their various separate accounts. The shares held in connection with those separate accounts are voted by ONLI or ONLAC in accordance with instructions received from the owners of variable contracts issued in connection with such separate accounts and persons receiving payments under the variable contracts. Fund shares attributable to contracts owned by ONLI and ONLAC, and Fund shares not attributable to variable contracts, will be voted in proportion to instructions received from all variable contract owners. DIVIDENDS, DISTRIBUTIONS AND TAXES Each portfolio seeks to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code. It is the Fund's policy to comply with the provisions of the Code regarding distribution of investment income and net realized capital gains so that the Fund will not be subject to federal income tax on amounts distributed. Consequently, the Fund distributes to its shareholders each year substantially all of its net investment income and net realized capital gains (if any). For the Money Market Portfolio, all of the undistributed net investment income is determined and paid as a dividend to shareholders of record immediately before each computation of the net asset value of Money Market shares. For the other portfolios, dividends representing net investment income will normally be distributed quarterly and any net realized capital gains will be distributed annually. However, the Fund's Board of Directors may declare such dividends at more frequent intervals. Dividends and distributions are automatically reinvested in additional shares of their respective portfolios at net asset value without a sales charge unless a shareholder requests that they be paid in cash. PURCHASE AND REDEMPTION OF SHARES Fund shares are sold without a sales charge and may be redeemed at their net asset value next computed after a purchase or redemption order is received by the Fund. (The net asset value of the Money Market Portfolio is nomally $10 per share.) Depending upon the net asset values at that time, the amount paid upon redemption may be more or less than the cost of the shares redeemed. Payment for shares redeemed will be made as soon as possible, but in any event within seven days after evidence of ownership of the shares is tendered to the Fund except in extraordinary circumstances as described in the Statement of Additional Information. The net asset value of the Fund's shares is determined on each day on which an order for purchase or redemption of the Fund's shares is received and there is a sufficient degree of trading in portfolio securities that the current net asset value of its shares might be materially affected. Such determination is made as of 4:00 p.m. Eastern time on each business day. The net asset value of each portfolio is computed by dividing the value of the securities in that portfolio plus any cash or other assets less all liabilities of the portfolio, by the number of shares outstanding for that portfolio. Shares of one portfolio may be exchanged for shares of another portfolio of the Fund on the basis of the relative net asset values next computed after an exchange order is received by the Fund. 17 22 FUND PERFORMANCE From time to time, the current yield, average annual total return and cumulative total returns for the portfolios will be advertised. The results might be compared to other similar mutual funds or unmanaged indices. Management's discussion and analysis of the Fund's performance is included in the Fund's most-recent annual report and is available free upon request. Total return for a portfolio reflects the sum of all of its earnings plus any changes in the value of its assets, reduced by all expenses accrued during a measurement period. For this purpose, it is assumed that all dividends and capital gains distributions are reinvested. The average annual total return is expressed as a percentage of an amount invested for a one-year period. Each portfolio's average return is computed by a formula in which a hypothetical initial investment of $1,000 is equated to an ending redeemable value from the inception of the portfolio for one-, five- and ten-year periods. Cumulative total return reflects a portfolio's aggregate performance, expressed as a dollar amount change, from the beginning to the end of the period. Percentage changes in net asset value per share and total returns quoted for a portfolio include the effect of deducting that portfolio's expenses, but do not include charges and expenses attributable to any particular insurance product. The amount by which variable annuity separate account charges and expenses would reduce Fund's total return may be demonstrated by comparing the Fund's total return to that of the variable annuity separate account for the same period. Variable life insurance separate account charges vary significantly, depending upon a variety of demographic factors (such as age, sex and health status) and several contract-specific factors (such as stated amount of death benefit), but in all cases would have the result of lowering the total return of the Fund. From time to time the annualized yield and "effective" yield will be quoted for the Money Market Portfolio. The Money Market Portfolio's yield refers to the income generated by an investment in the Portfolio over the seven-day period indicated. This income is then "annualized" by assuming that the same amount of income generated by the Portfolio that week is generated over a 52- week period and is shown as a percentage of the investment. "Effective" yield is calculated similarly but, when annualized, the income earned by an investment in the Portfolio is assumed to be reinvested. The effective yield will be slightly higher than the yield because of the compounding effect of this assumed reinvestment. All performance quotations are based on historical investment performance and are not intended to indicate future performance. 18 23 PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION 24 OHIO NATIONAL FUND, INC. 237 William Howard Taft Road Cincinnati, Ohio 45219 Telephone (5l3) 559-6316 STATEMENT OF ADDITIONAL INFORMATION May 1, 1996 This Statement of Additional Information is not a prospectus. It should be read in conjunction with the prospectus of Ohio National Fund, Inc. (the "Fund") dated May 1, 1996. To obtain a free copy of the Fund's prospectus, write or call the Fund at the above address. Table of Contents
Page ---- The Fund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Fund Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Current Yield of Money Market Portfolio Total Return Portfolio Turnover Investment Objectives and Policies. . . . . . . . . . . . . . . . . . . . 5 Money Market Instruments Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . 7 Hedging Transactions Covered Call Options and Put Options Risk Factors with Options Futures Contracts Options on Futures Contracts and Financial Indexes Risk Factors with Futures, Options on Futures and Options on Indexes Risk Factors with Foreign Investments Foreign Currency Hedging Transactions Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . . 19 Directors and Officers Compensation of Directors Shareholders' Meetings Investment Advisory and Other Services Brokerage Allocation. . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Purchase and Redemption of Shares . . . . . . . . . . . . . . . . . . . . 23 Tax Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Legal Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Debt Security Ratings
1 25 THE FUND The Fund is an open-end diversified management investment company which currently consists of nine separate portfolios - the Equity Portfolio, the Money Market Portfolio, the Bond Portfolio, the Omni Portfolio, the International Portfolio, the Capital Appreciation Portfolio, the Small Cap Portfolio, the Global Contrarian Portfolio and the Aggressive Growth Portfolio. At present, the Fund sells its shares only to separate accounts of The Ohio National Life Insurance Company ("ONLI") and Ohio National Life Assurance Corporation ("ONLAC") to support certain benefits under variable contracts issued by ONLI and ONLAC. In the future, Fund shares may be used for other purposes, but absent a change in applicable law, will not be sold directly to the public. The Fund was created on November 2, 1982 as the result of a plan of reorganization and an agreement of merger entered into by O.N. Fund, Inc. and O.N. Market Yield Fund, Inc., both of which were Maryland corporations. O.N. Fund, Inc. was merged into O.N. Market Yield Fund, Inc., which acquired all of O.N. Fund's assets and assumed all of O.N. Fund's liabilities. The shares of O.N. Fund were converted to an equal number of shares of the Equity Portfolio of O.N. Market Yield Fund and all shares of O.N. Market Yield Fund were converted into an equal number of shares of the Money Market Portfolio. The name of O.N. Market Yield Fund was changed to the Fund's current name, Ohio National Fund, Inc., and a Bond Portfolio was created. The Omni Portfolio was added in 1984, the International Portfolio in 1993, and the Capital Appreciation and Small Cap Portfolios in 1994, and the Global Contrarian and Aggressive Growth Portfolios in 1995. The investments held by each portfolio are maintained separately from those held by the other portfolios. The investment and reinvestment of the assets of the Equity, Money Market, Bond and Omni Portfolios is directed by the Fund's investment adviser, Ohio National Investments, Inc. (the "Adviser"), a wholly-owned subsidiary of ONLI. The principal business address of ONLI, ONLAC and the Adviser is 237 William Howard Taft Road, Cincinnati, Ohio 45219. The investment and reinvestment of International and Global Contrarian Portfolio assets is managed by Societe Generale Asset Management Corp. ("SGAM") as sub-adviser. The principal business address of SGAM is 1221 Avenue of the Americas, New York, New York 10020. The investment and reinvestment of Capital Appreciation Portfolio assets is managed by T. Rowe Price Associates, Inc. ("TRPA") as sub-adviser. The principal business address of TRPA is 100 East Pratt Street, Baltimore, Maryland 21202. The investment and reinvestment of Small Cap Portfolio assets is managed by Founders Asset Management, Inc. ("FAM") as sub-adviser. The principal business address of FAM is 2930 East Third Avenue, Denver, Colorado 80206. The investment and reinvestment of Aggressive Growth Portfolio assets is managed by Strong Capital Management, Inc. ("SCM") as sub-adviser. The principal business address of SCM is 100 Heritage Reserve, Milwaukee, Wisconsin 53051. FUND PERFORMANCE The Fund may distribute sales literature comparing the percentage change in net asset value per share for any of its portfolios against the Consumer Price Index or such established market indices as the Dow Jones Industrial Average, the Standard & Poor's 500 Stock Index, one or more of Lehman Brothers Bond Indices, the Morgan Stanley Europe, Australia and Far East Index, the Morgan Stanley World Index, the Russell 2000 Index, the New York Stock Exchange Composite Index, the American Stock Exchange Index, the National Association of Securities Dealers Automated Quotations Composite Index, the Value Line Composite Index, the Investors Business Daily 6000 Index, IBC's Money Fund Reports, or other management investment companies having investment objectives similar to the portfolio being compared. These comparisons may include graphs, charts, tables or examples. The average annual total return and cumulative total returns for each portfolio may also be advertised. The Fund may also advertise the performance rankings assigned to certain portfolios or their subadvisers by various statistical services, including Morningstar, Inc. and Lipper Analytical Services, Inc., or as they appear in various publications including The Wall Street Journal, Investors Business Daily, The New York Times, 2 26 Barron's, Forbes, Fortune, Business Week, Financial Services Week, Financial World, Kiplinger's Personal Finance and Money Magazine. The prospectus sets forth in tabular form, under the caption "Financial Highlights," certain information concerning the Fund and its individual portfolios. The following discussion describes the methods of calculating the current yield of the Money Market Portfolio and the total return of all portfolios, and states the Fund's policy with respect to each portfolio's turnover rate. CURRENT YIELD OF MONEY MARKET PORTFOLIO Current annualized yield quotations for the Money Market Portfolio are based on the portfolio's net investment income for a seven-day period and exclude any realized or unrealized gains or losses on portfolio securities. Current annualized yield is computed by determining the net change (exclusive of realized gains and losses from the sale of securities and unrealized appreciation and depreciation) in the value of a hypothetical account having a balance of one share at the beginning of such seven-day period, dividing such net change in account value by the value of the account at the beginning of the period, and annualizing this quotient on a 365-day basis. The net change in account value reflects the value of any additional shares purchased with dividends from the original share in the account during the seven-day period, any dividends declared on such original share and any such additional shares during the period, and expenses accrued during the period. The Fund may also disclose the effective yield of the Money Market Portfolio for a seven-day period for which the current annualized yield is computed by expressing the unannualized return on a compounded, annualized basis. TOTAL RETURN Total returns quoted in advertising reflect all aspects of a portfolio's investment return, including the effects of reinvesting dividends and capital gain distributions as well as changes in the portfolio's net asset value per share over the period shown. Average annual returns are calculated by determining the growth or decline in value of a hypothetical historical investment in a portfolio over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result had the rate of growth or decline been constant over that period. While average annual returns are a convenient means of comparing investment alternatives, no portfolio will experience a constant rate of growth or decline over time. The average annual compounded rate of return for a portfolio over a given period is found by equating the initial amount invested to the ending redeemable value using the following formula: P(1 + T) to the nth degree = ERV where: P = a hypothetical initial payment of $1,000, T = the average annual total return, n = the number of years, and ERV = the ending redeemable value of a hypothetical $1,000 beginning-of-period payment at the end of the period (or fractional portion thereof). The average annual total returns for each of the portfolios from the inception of the portfolio and for the one-, five- and ten-year periods ending on December 31, 1995, are as stated on the next page: 3 27
One Five Ten From Inception Year Years Years Inception Date ---- ----- ----- --------- --------- Equity 27.20% 13.46% 13.35% 10.17% 10-06-69 Money Market 5.62% 4.21% 5.74% 7.57% 03-20-80 Bond 18.90% 8.98% 8.31% 9.05% 11-02-82 Omni 22.75% 12.07% 10.75% 11.22% 09-10-84 International 12.10% N/A N/A 16.87% 04-30-93 Capital Appreciation 22.62% N/A N/A 16.04% 05-01-94 Small Cap 33.01% N/A N/A 33.18% 05-01-94 Global Contrarian N/A N/A N/A 12.05% 03-31-95 Aggressive Growth N/A N/A N/A 37.53% 03-31-95
In addition to average annual total returns, advertising may reflect cumulative total returns that simply reflect the change in value of an investment in a portfolio over a period. This may be expressed as either a percentage change, from the beginning to the end of the period, or the end-of-period dollar value of an initial hypothetical investment. The cumulative total returns for each of the portfolios from the inception of the portfolio and for the five- and ten-year periods ending on December 31, 1995 (assuming a hypothetical initial investment of $1,000) were as follows:
Five Years Ten Years From Inception ---------- --------- -------------- Equity $1,880 $3,501 $ 13,676 Money Market $1,229 $1,747 $ 3,080 Bond $1,537 $2,221 $ 3,126 Omni $1,768 $2,353 $ 3,327 International N/A N/A $ 1,514 Capital Appreciation N/A N/A $ 1,282 Small Cap N/A N/A $ 1,613 Global Contrarian N/A N/A $ 1,089 Aggressive Growth N/A N/A $ 1,270
PORTFOLIO TURNOVER Each portfolio has a different expected rate of portfolio turnover. However, the rate of portfolio turnover will not be a limiting factor when the management of the Fund deems it appropriate to purchase or sell securities for a portfolio, except in the following circumstances. The Fund intends to comply with the various requirements of the Internal Revenue Code so as to qualify as a "regulated investment company" thereunder. Among such requirements is a limitation of less than 30% of the amount of gross income which each portfolio may derive from gains on the sale or other disposition of securities held for less than three months. Accordingly, the ability of any portfolio to effect certain portfolio transactions at a given time may be limited. The relatively high portfolio turnover rates expected for the Small Cap and Aggressive Growth Portfolios will result in correspondingly higher brokerage costs which must be borne by these two Portfolios. The Fund's policy with respect to each portfolio is as follows: Equity Portfolio - Although this Portfolio will not normally purchase securities with the intention of obtaining short-term capital appreciation, purchases and sales will be made whenever deemed prudent and consistent with the investment objectives of the Portfolio. During periods of relatively stable market and economic conditions, it is anticipated that the annual portfolio turnover rate of the Portfolio will be moderate. During periods when changing market or economic conditions are foreseen, shifts in portfolio emphasis may cause the rate of portfolio turnover to increase. During 1995, the turnover rate for this portfolio was 14%. 4 28 Money Market Portfolio - Since the assets of this Portfolio consist of short-term instruments, replacement of portfolio securities will occur frequently. However, since purchases are generally effected with dealers or issuers on a net basis, it is not expected that the Portfolio will incur significant brokerage commissions. Bond Portfolio - This Portfolio will engage in transactions when the Adviser believes that they will help to achieve the overall objectives of the Portfolio. Portfolio securities may or may not be held to maturity. The rate of portfolio turnover will vary from time to time but is not expected to exceed 50% annually. The turnover rate for this portfolio was 4% in 1995. Omni Portfolio - The rate of portfolio turnover will vary from time to time but is not expected to exceed 50% annually. The turnover rate for this portfolio was 10% in 1995. International Portfolio - Although this Portfolio will not normally engage in short-term trading, purchases and sales of securities will be made whenever deemed appropriate to achieve the Portfolio's objective of long-term capital growth. The rate of portfolio turnover will not be a limiting factor when portfolio changes are deemed appropriate to achieve this Portfolio's stated objective. Under normal circumstances, the portfolio turnover rate for this portfolio is not expected to exceed 75% annually. The turnover rate for this portfolio was 7% in 1995. Capital Appreciation Portfolio - Although TRPA generally seeks less volatile securities for this Portfolio, the Portfolio is also traded fairly aggressively. Its portfolio turnover rate is normally expected to be 50% to 150% annually. The turnover rate for this portfolio was 32% in 1995. Small Cap Portfolio - While this Portfolio purchases and holds securities with the goal of meeting its investment objectives, portfolio changes are made whenever FAM believes they are advisable, usually without reference to the length of time a security has been held. The engagement in a substantial number of short-term transactions is expected to result in annual portfolio turnover rates of 100% to 300%. The turnover rate for this portfolio was 75% in 1995. Global Contrarian Portfolio - Because of the long-term growth objective and the purchase of under-valued and out-of-favor securities, this portfolio will generally tend to hold portfolio securities for a relatively longer time with the expectation of eventual price appreciation. As a result, the portfolio turnover rate is not expected to exceed 50% annually, However, it could be substantially higher at times due to repositioning of the portfolio. The turnover rate for this portfolio was 4% for the period from March 31, 1995 to December 31, 1995 (an annualized rate of 6%). Aggressive Growth Portfolio - The securities of this portfolio are generally expected to be traded more aggressively than those of the other portfolios. Its portfolio turnover rate can normally be expected to be in the range of 100% to 300% annually. The turnover rate for this portfolio was 1,116% for the period from March 31, 1995 to December 31, 1995 (an annualized rate of 1,488%). INVESTMENT OBJECTIVES AND POLICIES The following descriptions of money market instruments supplement the Fund's "Investment Objectives and Policies" set forth in the prospectus. The Money Market Portfolio and the Omni Portfolio, to the extent the latter invests in the money market sector, will invest extensively in these instruments. The other three Portfolios may invest in such instruments to a very limited extent (to invest otherwise idle cash) or on a temporary basis (if invested for defensive purposes). The debt security ratings referred to in the prospectus in connection with the investment policies of the portfolios are defined in the Appendix to this Statement of Additional Information. 5 29 MONEY MARKET INSTRUMENTS U.S. Government Obligations - Bills, notes, bonds and other debt securities issued or guaranteed as to principal or interest by the United States or by agencies or authorities controlled or supervised by and acting as instrumentalities of the U.S. Government established under authority granted by Congress, including, but not limited to, the Government National Mortgage Association, the Tennessee Valley Authority, the Bank for Cooperatives, the Farmers Home Administration, and Federal Home Loan Banks. Some obligations of U.S. Government agencies, authorities and other instrumentalities are supported by the full faith and credit of the U.S. Treasury; others by the right of the issuer to borrow from the Treasury; and others only by the credit of the issuer. Certain of the foregoing may be purchased on a "when issued" basis at which time the rate of return will not have been set. Certificates of Deposit - Certificates issued against funds deposited in a bank for a definite period of time, at a specified rate of return. Normally they are negotiable. Bankers' Acceptances - Short-term credit instruments issued by corporations to finance the import, export, transfer or storage of goods. They are termed "accepted" when a bank guarantees their payment at maturity and reflect the obligation of both the bank and drawer to pay the face amount of the instrument at maturity. Commercial Paper - Promissory notes issued by corporations to finance their short-term credit needs. Commercial paper obligations may include variable amount master demand notes. Variable amount master demand notes are obligations that permit the investment of fluctuating amounts by the Portfolio at varying rates of interest pursuant to direct arrangements between the Portfolio, as lender, and the borrower. These notes permit daily changes in the amounts borrowed. The Portfolio has the right to increase the amount under the note at any time up to the full amount provided by the note agreement, or to decrease the amount, and the borrower may prepay up to the full amount of the note without penalty. Because variable amount master demand notes are direct lending arrangements between the lender and the borrower, it is not generally contemplated that such instruments will be traded, and there is no secondary market for these notes, although they are redeemable (and thus immediately repayable by the borrower) at face value, plus accrued interest, at any time. In connection with a master demand note arrangement, the Adviser will monitor, on an ongoing basis, the earning power, cash flow, and other liquidity ratios of the issuer, and the borrower's ability to pay principal and interest on demand. While master demand notes, as such, are not typically rated by credit rating agencies, if not so rated the Portfolio may invest in them only if at the time of an investment the issuer meets the criteria set forth above for all other commercial paper issuers. Such notes will be considered to have a maturity of the longer of the demand period or the period of the interest guarantee. Corporate Obligations - Bonds and notes issued by corporations in order to finance longer-term credit needs. Repurchase Agreements - Agreements by which the Portfolio purchases a security and obtains a simultaneous commitment from the seller (a member bank of the Federal Reserve System or a government securities dealer recognized by the Federal Reserve Board) to repurchase the security at a mutually agreed upon price and date. It may also be viewed as a loan of money by the Portfolio to the seller. The resale price is normally in excess of the purchase price and reflects an agreed upon market rate. The rate is effective for the period of time the Portfolio is invested in the agreement and unrelated to the coupon rate on the purchased security. The period of these repurchase agreements will usually be short, from overnight to one week, and at no time will the Portfolio invest in repurchase agreements for more than one year. These transactions afford an opportunity for the Portfolio to earn a return on temporarily available cash. Although repurchase agreements carry certain risks not associated with direct investments in securities, the Fund intends to enter into repurchase agreements only with financial institutions believed by ONIMCO to present minimal credit risks in accordance with criteria established by the Fund's Board of Directors. ONIMCO will review and monitor the creditworthiness of such institutions under the Board's general supervision. The Fund will only enter into repurchase agreements pursuant to a master repurchase agreement that provides that all transactions be fully collateralized and that the collateral be in the actual 6 30 or constructive possession of the Fund. The agreement must also provide that the Fund will always receive as collateral securities whose market value, including accrued interest, will be at least equal to 100% of the dollar amount invested by the Portfolio in each agreement, and the Portfolio will make payment for such securities only upon physical delivery or evidence of book entry transfer to the account of the Custodian. If the seller were to default, the Portfolio might incur a loss if the value of the collateral securing the repurchase agreement declines and may incur disposition costs in connection with liquidating the collateral. In addition, if bankruptcy proceedings are commenced with respect to the seller of the security, realization upon the collateral by the Portfolio may be delayed or limited and a loss may be incurred if the collateral securing the repurchase agreement declines in value during the bankruptcy proceedings. Investments in repurchase agreements will be limited to transactions with financial institutions believed by the Adviser to present minimal credit risks. The Portfolio will not enter into repurchase agreements with securities dealers unless it has obtained an exemptive order from the Commission or an opinion of counsel that such transactions will not violate a legal prohibition which in some circumstances bars an investment company from purchasing any securities issued by a securities dealer. INVESTMENT RESTRICTIONS The prospectus lists the most significant investment restrictions to which the Fund is subject. The following is a complete list of the Fund's investment restrictions. Except as otherwise specified, all of the investment restrictions stated in the prospectus and this Statement of Additional Information are fundamental policies. Restrictions number 4, 7, 12, 13 and 14 are nonfundamental policies of the Small Cap and Global Contrarian Portfolios, and restriction number 8 is a nonfundamental policy of the Small Cap Portfolio. The fundamental policies and nonfundamental operating policies of the Capital Appreciation and Aggressive Growth Portfolios are shown separately below. Fundamental policies may not be changed without the affirmative vote of the majority of the outstanding voting securities of the Fund or a particular portfolio, as appropriate. The Investment Company Act of l940 defines a majority vote as the vote of the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding voting securities. With respect to the submission of a change in an investment policy to the holders of outstanding voting securities of a particular portfolio, such matter shall be deemed to have been effectively acted upon with respect to such portfolio if a majority of the outstanding voting securities of such portfolio vote for the approval of such matter, notwithstanding (1) that such matter has not been approved by the holders of a majority of the outstanding voting securities of any other portfolio affected by such matter, and (2) that such matter has not been approved by the vote of a majority of the outstanding voting securities of the Fund. The Fund may not issue senior securities and each portfolio of the Fund (other than the Capital Appreciation and Aggressive Growth Portfolios) will not: l. invest more than 5% of the value of the total assets of such portfolio in the securities of any one issuer (except U.S. Government securities); 2. purchase more than l0% of the outstanding voting securities of any one issuer, and the Money Market Portfolio will not acquire the voting securities of any issuer except in connection with a merger, consolidation or other reorganization; 3. invest more than 25% of the value of its total assets in any one industry, except that each portfolio may invest more than 25% of the value of its total assets in obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities or in certificates of deposit, bankers' acceptances, bank time deposits or other obligations of banks or financial institutions. However, it is the intention of management not to invest in time deposits which involve any penalty or other restriction on withdrawal; 4. invest more than 10% of the value of its assets (15% in the case of the Small Cap Portfolio) in securities or other investments, including repurchase agreements maturing in more than seven days, that are subject to legal or contractual restrictions upon resale or are otherwise not readily marketable; 7 31 5. borrow money, except for temporary or emergency purposes from banks, in which event the aggregate amount borrowed shall not exceed 5% of the value of the assets of the portfolio. In the case of such borrowing, each portfolio may pledge, mortgage or hypothecate up to 5% of its assets. Reverse repurchase agreements are not considered to be borrowed money for purposes of this restriction; 6. purchase or sell commodities or commodity contracts except that each portfolio other than the Money Market Portfolio may, for hedging purposes, purchase and sell financial futures contracts and options thereon within the limits of investment restriction 7 below; 7. purchase or sell put or call options, except that each portfolio other than the Money Market Portfolio may, for hedging purposes, (a) write call options traded on a registered national securities exchange if such portfolio owns the underlying securities subject to such options, and purchase call options for the purpose of closing out positions in options it has written, (b) purchase put options on securities owned, and sell such options in order to close its positions in put options, (c) purchase and sell financial futures contracts and options thereon, and (d) purchase and sell financial index options; provided, however, that no option or futures contract shall be purchased or sold if, as a result, more than one-third of the total assets of the portfolio would be hedged by options or futures contracts, and no more than 5% of any portfolio's total assets, at market value, may be used for premiums on open options and initial margin deposits on futures contracts; 8. other than the International and Global Contrarian Portfolios, invest in securities of foreign issuers except that (a) each of the Equity, Bond and Omni Portfolios may (i) invest up to l5% of their respective assets in securities of foreign issuers (including foreign governments or political subdivisions, agencies or instrumentalities of foreign governments) American Depository Receipts, and securities of United States domestic issuers denominated in foreign currency, and (ii) invest up to an additional l0% of the assets of the portfolio in securities issued by foreign governments or political subdivisions, agencies or instrumentalities thereof, (b) the Small Cap Portfolio may invest up to 30% of its assets in the securities of such foreign issuers, and (c) the Money Market Portfolio may invest up to 50% of its assets in the securities of such foreign issuers, provided the securities are denominated in U.S. dollars and held in custody in the United States; (For purposes of this restriction number 8, U.S. dollar denominated depository receipts traded in domestic markets do not constitute foreign securities.) 9. underwrite securities of other issuers except insofar as the Fund may be considered an underwriter under the Securities Act of 1933 in selling portfolio securities; 10. purchase or sell real estate, except that each portfolio may invest in securities secured by real estate or interests therein or securities issued by companies which invest in real estate or interests therein. For purposes of this restriction, "real estate" does not include investments in readily marketable notes or other evidence of indebtedness secured by mortgages or deeds of trust relating to real property; 11. lend money to other persons except by the purchase of obligations in which the portfolio is authorized to invest and by entering into repurchase agreements. No more than 10% of a portfolio's total assets will be invested in repurchase agreements maturing in more than seven days; 12. sell securities short or purchase securities on margin except such short-term credits as are required to clear transactions; 8 32 13. participate on a joint or joint and several basis in any trading account in securities; 14. purchase securities for the purpose of exercising control or management; 15. purchase securities of other investment companies, except in connection with a merger, consolidation or reorganization, or except the purchase by any portfolio other than the Money Market or Bond Portfolios of the securities of closed-end investment companies if after the purchase: (i) a portfolio does not own more than 3% of the total outstanding voting stock of the other investment company or (ii) the value of the securities of all investment companies held by such portfolio does not exceed 10% of the value of the total assets of that portfolio. Purchases of investment company securities will be made (a) only on the open market or through dealers or underwriters receiving the customary sales loads, or (b) as part of a merger, consolidation or plan of reorganization. As nonfundamental policies of each portfolio other than the Capital Appreciation and Aggressive Growth Portfolios, which policies may be changed at any time by the vote of a majority of the Board of Directors, (a) no portfolio will invest more than 20% of its assets in securities of issuers located in any one foreign country, except that up to an additional 5% of its assets may be invested in securities of issuers located in each of any three of Australia, Canada, France, Germany, Japan or the United Kingdom; and (b) each portfolio other than the Money Market Portfolio, in order to hedge against changes in the exchange rates of foreign currencies in relation to the U.S. dollar, may engage in forward foreign currency contracts, foreign currency options and foreign currency futures contracts in connection with the purchase, sale or ownership of specific securities (but, not more than 5% of a portfolio's assets may be invested in such currency hedging contracts). In addition to the above restrictions, in order to comply with Rule 2a-7 under the Investment Company Act of 1940, no more than 5% of the assets of the Money Market Portfolio will be invested in "second-tier" short-term debt instruments, that is those receiving the second highest rating by any two nationally recognized statistical rating organizations ("NRSRO's") (or by one NRSRO if (a) that is the only NRSRO having rated the security or (b) one other NRSRO has given the security its highest rating), or whose issuer has received such a rating or ratings with respect to a class of short-term debt obligations that is now comparable in priority and security to those to be purchased. In addition, not more than $1 million (or 1% of this portfolio's assets, if greater) may be invested in the second-tier instruments of any one issuer. Under normal market conditions, at least 65% of the assets of the International Portfolio and at least 25% of the assets of the Global Contrarian Portfolio will be invested in foreign securities, including securities of issuers in at least three different foreign countries. As of the date of this Statement of Additional Information, the Board of Directors has approved investment by those portfolios other than the Money Market Portfolio in 50 countries with developed securities markets, including the following countries with developed economies: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Israel, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland and the United Kingdom; and the following countries with developing economies: Argentina, Bangla Desh, Brazil, Chile, China (Shanghai and Shenzhen Exchanges), Czech Republic, Egypt, Greece, Hong Kong, Hungary, Indonesia, Jordan, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Portugal, Singapore, South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, Uruguay, Venezuela and Zimbabwe. CAPITAL APPRECIATION PORTFOLIO FUNDAMENTAL POLICIES As a matter of fundamental policy, the Portfolio may not: C.A.1. Borrow money except that the Portfolio may (i) borrow for non-leveraging, temporary or emergency purposes and (ii) engage in reverse repurchase agreements and make other investments or engage in other transactions, which may involve a borrowing, in a manner consistent with the Portfolio's investment objective and program, provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the value of the Portfolio's total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law. Any borrowings which come to exceed this amount will be 9 33 reduced in accordance with applicable law. The Portfolio may borrow from banks, other portfolios managed by TRPA or other persons to the extent permitted by applicable law; C.A.2. Purchase or sell physical commodities; except that it may enter into futures contracts and options thereon; C.A.3. Purchase the securities of any issuer if, as a result, more than 25% of the value of the Portfolio's total assets would be invested in the securities of issuers having their principal business activities in the same industry; C.A.4. Make loans, although the Portfolio may (i) lend portfolio securities and participate in an interfund lending program with other portfolios managed by TRPA provided that no such loan may be made if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of the Portfolio's total assets; (ii) purchase money market securities and enter into repurchase agreements; and (iii) acquire publicly-distributed or privately-placed debt securities and purchase debt; C.A.5. Purchase a security if, as a result, with respect to 75% of the value of its total assets, more than 5% of the value of the Portfolio's total assets would be invested in the securities of a single issuer, except securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities; C.A.6. Purchase a security if, as a result, with respect to 75% of the value of the Portfolio's total assets, more than 10% of the outstanding voting securities of any issuer would be held by the Fund (other than obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities); C.A.7. Purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business); C.A.8. Issue senior securities except in compliance with the Investment Company Act of 1940; or C.A.9. Underwrite securities issued by other persons, except to the extent that the Portfolio may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of its portfolio securities in the ordinary course of pursuing its investment program. With respect to investment restrictions C.A.1. and C.A.4,, the Portfolio will not borrow from or lend to any other portfolios managed by TRPA unless they apply for and receive an exemptive order from the SEC or the SEC issues rules permitting such transactions. The Portfolio has no current intention of engaging in any such activity and there is no assurance the SEC would grant any order requested by the Portfolio or promulgate any rules allowing the transactions. With respect to investment restriction C.A.2., the Portfolio does not consider currency contracts or hybrid investments to be commodities. For purposes of investment restriction C.A.3., U.S., state or local governments, or related agencies or instrumentalities, are not considered an industry. For purposes of investment restriction C.A.4., the Portfolio will consider the acquisition of a debt security to include the execution of a note or other evidence of an extension of credit with a term of more than nine months. 10 34 CAPITAL APPRECIATION PORTFOLIO NONFUNDAMENTAL OPERATING POLICIES As a matter of nonfundamental operating policy, the Portfolio may not: C.A.10. Purchase additional securities when money borrowed exceeds 5% of its total assets; C.A.11. Invest in companies for the purpose of exercising management or control; C.A.12. Purchase a futures contract or an option thereon if, with respect to positions in futures or options on futures which do not represent bona fide hedging, the aggregate initial margin and premiums on such options would exceed 5% of the Portfolio's net asset value; C.A.13. Purchase illiquid securities and securities of unseasoned issuers if, as a result, more than 15% of its net assets would be invested in such securities, provided that the Portfolio will not invest more than 5% of its total assets in restricted securities and not more than 5% in securities of unseasoned issuers. Securities eligible for resale under Rule 144A of the Securities Act of 1933 are not included in the 5% limitation but are subject to the 15% limitation; C.A.14. Purchase securities of open-end or closed-end investment companies except in compliance with the Investment Company Act of 1940 and applicable state law; C.A.15. Purchase securities on margin, except (i) for use of short-term credit necessary for clearance of purchases of portfolio securities and (ii) to make margin deposits in connection with futures contracts or other permissible investments; C.A.16. Mortgage, pledge, hypothecate or, in any manner, transfer any security owned by the Portfolio as security for indebtedness except as may be necessary in connection with permissible borrowings or investments and then such mortgaging, pledging or hypothecating may not exceed 33 1/3% of the Portfolio's total assets at the time of borrowing or investment; C.A.17. Purchase participations or other direct interests in or enter into leases with respect to, oil, gas, or other mineral exploration or development programs; C.A.18. Invest in puts, calls, straddles, spreads, or any combination thereof, except to the extent permitted by the prospectus and Statement of Additional Information; C.A.19. Purchase or retain the securities of any issuer if, to the knowledge of the Fund's management, those officers and directors of the Fund, and of the Portfolio's investment manager, who each owns beneficially more than 0.5% of the outstanding securities of such issuer, together own beneficially more than 5% of such securities; C.A.20. Effect short sales of securities; C.A.21. Purchase a security (other than obligations issued or guaranteed by the U.S., any foreign, state of local government, their agencies or instrumentalities) if, as a result, more than 5% of the value of the Portfolio's total assets would be invested in the securities of issuers which at the time of purchase had been in operation for less than three years (for this purpose, the period of operation of any issuer shall include the period of operation of any predecessor or unconditional guarantor of such issuer). This restriction does not apply to securities of pooled investment vehicles or mortgage or asset-backed securities; or C.A.22. Invest in warrants if, as a result thereof, more than 2% of the value of the total assets of the Portfolio would be invested in warrants which are not listed on the New York Stock Exchange, the American Stock Exchange, or a recognized foreign exchange, or more than 5% of the value 11 35 of the total assets of the Portfolio would be invested in warrants whether or not so listed. For purposes of these percentage limitations, the warrants will be valued at the lower of cost or market and warrants acquired by the Portfolio in units or attached to securities may be deemed to be without value. AGGRESSIVE GROWTH PORTFOLIO FUNDAMENTAL POLICIES As a matter of fundamental policy, the Portfolio: A.G.1. May not with respect to 75% of its total assets, purchase the securities of any issuer (except securities issued or guaranteed by the U.S. government or its agencies or instrumentalities) if, as a result, (i) more than 5% of the Portfolio's total assets would be invested in the securities of that issuer, or (ii) the Portfolio would hold more than 10% of the outstanding voting securities of that issuer. A.G.2. May (i) borrow money from banks and (ii) make other investments or engage in other transactions permissible under the Investment Company Act of 1940 which may involve a borrowing, provided that the combination of (i) and (ii) shall not exceed 33 1/3% of the value of the Portfolio's total assets (including the amount borrowed), less the Portfolio's liabilities (other than borrowings), except that the Portfolio may borrow up to an additional 5% of its total assets (not including the amount borrowed) from a bank for temporary or emergency purposes (but not for leverage or the purchase of investments). The Portfolio may also borrow money from the other mutual funds managed by SCM or other persons to the extent permitted by applicable law. A.G.3. May not issue senior securities, except as permitted under the Investment Company Act of 1940. A.G.4. May not act as an underwriter of another issuer's securities, except to the extent that the Portfolio may be deemed to be an underwriter within the meaning of the Securities Act of 1933 in connection with the purchase and sale of portfolio securities. A.G.5. May not purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Portfolio from purchasing or selling options, futures contracts, or other derivative instruments, or from investing in securities or other instruments backed by physical commodities). A.G.6. May not make loans if, as a result, more than 33 1/3% of the Portfolio's total assets would be lent to other persons, except through (i) purchases of debt securities or other debt instruments, or (ii) engaging in repurchase agreements. A.G.7. May not purchase the securities of any issuer if, as a result, more that 25% of the Portfolio's total assets would be invested in the securities of issuers, the principal business activities of which are in the same industry. A.G.8. May not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prohibit the Portfolio from purchasing or selling securities or other instruments backed by real estate or of issuers engaged in real estate activities). 12 36 AGGRESSIVE GROWTH PORTFOLIO NONFUNDAMENTAL OPERATING POLICIES As a matter of nonfundamental operating policy, the Portfolio may not: A.G.9 . Sell securities short, unless the Portfolio owns or has the right to obtain securities equivalent in kind and amount to the securities sold short, or unless it covers such short sale as required by the current rules and positions of the SEC or its staff, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short. A.G.10. Purchase securities on margin, except that the Portfolio may obtain such short-term credits as are necessary for the clearance of transactions; and provided that margin deposits in connection with futures contacts, options on futures contracts, or other derivative instrumentsshall not constitute purchasing securities on margin. A.G.11. Invest in illiquid securities if, as a result of such investment, more than 15% of its net assets would be invested in illiquid securities, or such other amounts as may be permitted under the Investment Company Act of 1940. A.G.12. Purchase securities of other investment companies except in compliance with the Investment Company Act of 1940 and applicable state law. A.G.13. Purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of issuers that, including predecessor or unconditional guarantors, have a record of less than three years of continuous operation. This policy does not apply to securities of pooled investment vehicles or mortgage or asset-backed securities. A.G.14. Invest in direct interests in oil, gas, or other mineral exploration programs or leases; however, the Portfolio may invest in the securities of issuers that engage in these activities. A.G.15. Engage in futures or options on futures transactions which are impermissible pursuant to Rule 4.5 under the Commodity Exchange Act and, in accordance with Rule 4.5, will use futures or options on futures transactions solely for bona fide hedging transactions (within the meaning of the Commodity Exchange Act), provided, however, that the Portfolio may, in addition to bona fide hedging transactions, use futures and options on futures transactions if the aggregate initial margin and premiums required to establish such positions, less the amount by which any such options positions are in the money (within the meaning of the Commodity Exchange Act), do not exceed 5% of the Portfolio's net assets. In addition, (i) the aggregate value of securities underlying call options on securities written by the Portfolio or obligations underlying put options on securities written by the Portfolio determined as of the date the options are written will not exceed 50% of the Portfolio's net assets; (ii) the aggregate premiums paid on all options purchased by the Portfolio and which are being held will not exceed 20% of the Portfolio's net assets; (iii) the Portfolio will not purchase put or call options, other than hedging positions, if, as a result thereof, more than 5% of its total assets would be so invested; and (iv) the aggregate margin deposits required on all futures and options on futures transactions being held will not exceed 5% of the Portfolio's total assets. 13 37 A.G.16. Pledge, mortgage or hypothecate any assets owned by the Portfolio except as may be necessary in connection with permissible borrowings or investments and then such pledging, mortgaging, or hypothecating may not exceed 33 1/3% of the Portfolio's total assets at the time of the borrowing or investment. A.G.17. Purchase warrants, valued at the lower of cost or market value, in excess of 5% of the Portfolio's net assets. Included in that amount, but not to exceed 2% of the Portfolio's net assets, may be warrants that are not listed on the New York Stock Exchange or the American Stock Exchange. Warrants acquired by the Portfolio in units or attached to securities are not subject to these restrictions. A.G.18. Borrow money except (i) from banks or (ii) through reverse repurchase agreements or mortgage dollar rolls, and will not purchase securities when bank borrowings exceed 5% of its total assets. A.G.19. Make any loans other than loans of portfolio securities, except through (i) purchases of debt securities or other debt instruments, or (ii) engaging in repurchase agreements. HEDGING TRANSACTIONS The purpose of hedging transactions using put and call options on individual securities, financial futures contracts, and options on such contracts and on financial indexes, all to the extent provided in investment restriction 7, is to reduce the risk of fluctuation of portfolio securities values or to take advantage of expected market fluctuations. However, while such transactions are defensive in nature and are not speculative, some risks remain. The use of options and futures contracts may help the Fund to gain exposure or to protect itself from changes in market values. For example, the Fund may have a substantial amount of cash at the beginning of a market rally. Conventional procedures of purchasing a number of individual issues requires time and may result in missing a significant market movement. By using futures contracts, the Fund can obtain immediate exposure to the market. The buying program will then proceed and, once it is completed (or as it proceeds), the futures contracts will be closed. Conversely, in the early stages of a market decline, market exposure can be promptly offset by selling futures contracts, and individual securities can be sold over a longer period under cover of the resulting short contract position. COVERED CALL OPTIONS AND PUT OPTIONS In writing (i.e., selling) "covered" call options on securities owned by a portfolio, the portfolio gives the purchaser of the call option the right to purchase the underlying securities owned by the portfolio at a specified "exercise" price at any time prior to the expiration of the option, normally within nine months. In purchasing put options on securities owned by a portfolio, the portfolio pays the seller of the put option a premium for the right of the portfolio to sell the underlying securities owned by the portfolio at a specified exercise price prior to the expiration of the option. Whenever a portfolio has a covered call option outstanding, the underlying securities will be segregated by the Custodian and held in an escrow account to assure that such securities will be delivered to the option holder if the option is exercised. While the underlying securities are subject to the option, the portfolio remains the record owner of the securities, entitling it to receive dividends and to exercise any voting rights. In order to terminate its position as the writer of a call option or the purchaser of a put option, the portfolio may enter into a "closing" transaction, which is the purchase of a call option or sale of a put option on the same underlying securities and having the same exercise price and expiration date as the option previously sold or purchased by the portfolio. 14 38 RISK FACTORS WITH OPTIONS The purchaser of an option pays the option writer a "premium" for the option. In the case of a covered call option written by a portfolio, if the purchaser does not exercise the call option, the premium will generate additional capital gain to the portfolio. If the market price of the underlying security declines, the premium received for the call option will reduce the amount of the loss the portfolio would otherwise incur. However, if the market price of the underlying security rises above the exercise price and the call option is exercised, the portfolio will lose its opportunity to profit from that portion of the rise which is in excess of the exercise price plus the option premium. Therefore, the Fund will write call options only when the Adviser believes that the option premium will yield a greater return to the portfolio than any capital appreciation that might occur on the underlying security during the life of the option. In the case of a put option purchased by a portfolio, if the market price of the underlying security remains or rises above the exercise price of the option, the portfolio will not exercise the option and the premium paid for such option will reduce the gain the portfolio would otherwise have earned. Conversely, if the market price of the underlying security falls below the exercise price less the premium paid for the option, the portfolio will exercise the option, thereby reducing the loss the portfolio would have otherwise suffered. Accordingly, a portfolio will purchase put options only when the Adviser believes that the market price of the underlying security is more likely to decrease than increase. Whenever a portfolio enters into a closing transaction, the portfolio will realize a gain (or loss) if the premium plus commission it pays for a closing call option is less (or greater) than the premium it received on the sale of the original call option. Conversely, the portfolio will realize a gain (or loss) if the premium it receives, less commission, for a closing put option is greater (or less) than the premium it paid for the original put option. The portfolio will realize a gain if a call option it has written lapses unexercised, and a loss if a put option it has purchased lapses unexercised. FUTURES CONTRACTS The Fund may invest in two kinds of financial futures contracts: stock index futures contracts and interest rate futures contracts. Stock index futures contracts are contracts developed by and traded on national commodity exchanges whereby the buyer will, on a specified future date, pay or receive a final cash payment equal to the difference between the actual value of the stock index on the last day of the contract and the value of the stock index established by the contract multiplied by the specific dollar amount set by the exchange. Futures contracts may be based on broad-based stock indexes such as the Standard & Poor's 500 Index or on narrow-based stock indexes. A particular index will be selected according to the Adviser's investment strategy for the particular portfolio. An interest rate futures contract is an agreement whereby one party agrees to sell and another party agrees to purchase a specified amount of a specified financial instrument (debt security) at a specified price at a specified date, time and place. Although interest rate futures contracts typically require actual future delivery of and payment for financial instruments, the contracts are usually closed out before the delivery date. A public market exists in interest rate futures contracts covering primarily the following financial instruments: U.S. Treasury bonds; U.S. Treasury notes; Government National Mortgage Association (GNMA) modified pass-through mortgage-backed securities; three-month U.S. Treasury bills; 90-day commercial paper; bank certificates of deposit; and Eurodollar certificates of deposit. It is expected that futures contracts trading in additional financial instruments will be authorized. At the time the Fund enters into a contract, it sets aside a small portion of the contract value in an account with the Fund's custodian as a good faith deposit (initial margin) and each day during the contract period requests and receives or pays cash equal to the daily change in the contract value (variable margin). The Fund, its futures commission merchant and the Fund's custodian retain control of the initial margin until the contract is liquidated. 15 39 OPTIONS ON FUTURES CONTRACTS AND FINANCIAL INDEXES Instead of entering into a financial futures contract, the Fund may buy an option giving it the right to enter into such a contract at a future date. The price paid for such an option is called a premium. The Fund also may buy options on financial indexes that are traded on securities exchanges. Options on financial indexes react to changes in the value of the underlying index in the same way that options on financial futures contracts do. All settlements for options on financial indexes also are for cash. Financial futures contracts, options on such contracts and options on financial indexes will only be used for hedging purposes and will, therefore, be incidental to the Fund's activities in the securities market. Accordingly, portfolio securities subject to options, or money market instruments having the market value of any futures contracts, generally will be set aside to collateralize the options or futures contracts. RISK FACTORS WITH FUTURES, OPTIONS ON FUTURES AND OPTIONS ON INDEXES One risk of entering into financial futures contracts, buying options on such contracts and buying options on financial indexes is that there may not be enough buyers and sellers in the market to permit the Fund to close a position when it wants to do so. In such event, besides continuing to be subject to the margin requirements, the Fund would experience a gain or loss to the extent that the price movement of the securities subject to the hedge differed from the position. To limit the risk, the Fund will invest only where there is an established secondary market. A risk applicable to both futures contracts and related options is that changes in the value of the contracts or option may not correlate with changes in the underlying financial index or with changes in the value of the securities subject to hedge or both. This failure may be due, in part, to temporary activity of speculators in the futures markets. To the extent there is not a perfect correlation, changes in the value of the Fund's assets would not be offset by change in the value of the contracts and options it had bought. When the Fund buys an option on a futures contract or an option on a financial index, its risk of loss is limited to the amount of the premium paid. When the Fund enters into a futures contract, there is no such limit. However, the loss on an options contract would exceed that of a futures contract if the change in the value of the index does not exceed the premium paid for the option. The success of a hedge depends upon the Adviser's ability to predict increases or decreases in the relevant financial index. If this expectation proves incorrect, the Fund could suffer a loss, and would be better off if those futures contracts or options had not been purchased. The skills involved in determining whether to enter into a futures contract or purchase or sell an option are different from those involved in determining whether to buy or sell a security. The Adviser has had only limited experience using financial futures contracts, options on financial futures and options on financial indexes. Because of the low margin deposits required, futures trading involves a high degree of leverage. As a result, a relatively small price movement in a futures contract may result in immediate and substantial gain or loss. A purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract. However, the Fund would presumably have sustained comparable losses if, instead of the futures contract, it had invested in the underlying financial instrument. Most futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures and subjecting some futures traders to substantial losses. 16 40 RISK FACTORS WITH FOREIGN INVESTMENTS Investments in foreign securities involve considerations not normally associated with investing in domestic issuers. Such factors include changes in currency exchange rates, currency exchange control regulations, the possibility of seizure or nationalization of companies, political or economic instability, imposition of unforeseen taxes, the possibility of financial information being difficult to obtain or difficult to interpret under foreign accounting standards, the necessity of trading in markets that in relation to U.S. markets may be less efficient and have available less information concerning issuers, or the imposition of other restraints that might adversely affect investments. In selecting foreign investments, the Fund seeks to minimize these factors. It seeks to invest in securities having investment characteristics and qualities comparable to the kinds of domestic securities in which it invests. The Fund seeks to avoid investments in countries with volatile or unstable political or economic conditions. The Fund may invest in securities of foreign issuers either directly or in the form of American Depository Receipts (ADRs). ADRs are securities typically issued by an American bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. ADRs enable foreign stocks to be traded and cleared on United States markets. They bear the same investment risks as the underlying foreign stocks. Since investments in foreign securities, other than U.S. dollar denominated securities, involve currencies of foreign countries, the value of a portfolio's assets, as measured in U.S. dollars may be affected favorably or unfavorably by changes in currency exchange rates and in currency exchange control regulations. FOREIGN CURRENCY HEDGING TRANSACTIONS In order to hedge against changes in the exchange rates of foreign currencies in relation to the U.S. dollar, each portfolio, other than the Money Market Portfolio, may engage in forward foreign currency contracts, foreign currency options and foreign currency futures contracts in connection with the purchase, sale or ownership of a specific security. The portfolios generally conduct their foreign currency exchange transactions on a spot (i.e., cash) basis at the spot rate prevailing in the foreign exchange currency market. When a portfolio purchases or sells a security denominated in a foreign currency, it may enter into a forward foreign currency contract ("forward contract") for the purchase or sale, for a fixed amount of dollars, of the amount of currency involved in the underlying security transaction. A forward contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. In this manner, a portfolio may obtain protection against a possible loss resulting from an adverse change in the relationship between the U.S. dollar and the foreign currency during the period between the date the security is purchased or sold and the date upon which payment is made or received. Although such contracts tend to minimize the risk of loss due to the decline in the value of the hedged currency, at the same time they tend to limit any potential gain which might result should the value of such currency increase. Forward contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. Generally a forward contract has no deposit requirement, and no commissions are charged. Although foreign exchange dealers do not charge a fee for conversion, they do realize a profit based on the difference between the prices at which they buy and sell various currencies. When the portfolio manager believes that the currency of a particular foreign country may suffer a substantial decline against the U.S. dollar, a portfolio may enter into a forward contract to sell, for a fixed amount of dollars, the amount of foreign currency approximating the value of some or all of that portfolio's securities denominated in such foreign currency. No portfolio will enter into such forward contracts or maintain a net exposure to such contracts where the consummation of the contracts would obligate the portfolio to deliver an amount of foreign currency in excess of the value of its assets denominated in that currency. 17 41 At the consummation of a forward contract for delivery by a portfolio of a foreign currency, the portfolio may either make delivery of the foreign currency or terminate its contractual obligation to deliver the foreign currency by purchasing an offsetting contract obligating it to purchase, at the same maturity date, the same amount of the foreign currency. If the portfolio chooses to make delivery of the foreign currency, it may be required to obtain such currency through the sale of its securities denominated in such currency or through conversion of other portfolio assets into such currency. It is impossible to forecast the market value of portfolio securities at the expiration of the forward contract. Accordingly, it may be necessary for the portfolio to purchase additional foreign currency on the spot market (and bear the expense of such purchase) if the market value of the security is less than the amount of foreign currency the portfolio is obligated to deliver, and if a decision is made to sell the security and make delivery of the foreign currency. Conversely, it may be necessary for the portfolio to sell on the spot market some of the foreign currency received on the sale of its hedged security if the security's market value exceeds the amount of foreign currency the portfolio is obligated to deliver. If the portfolio retains the hedged security and engages in an offsetting transaction, it will incur a gain or loss to the extent that there has been movement in spot or forward contract prices. If a portfolio engages in an offsetting transaction, it may subsequently enter into a new forward contract to sell the foreign currency. Should forward prices decline during the period between the portfolio's entering into a forward contract for the sale of a foreign currency and the date it enters into an offsetting contract for the purchase of the foreign currency, the portfolio will realize a gain to the extent the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to purchase. Should forward prices increase, the portfolio will suffer a loss to the extent the price of the currency it has agreed to purchase exceeds the price of the currency it has agreed to sell. Buyers and sellers of foreign currency options and futures contracts are subject to the same risks previously described with respect to options and futures generally (see "Risk Factors with Options" and "Risk Factors with Futures, Options on Futures and Options on Indexes," above). In addition, settlement of currency options and futures contracts with respect to most currencies must occur at a bank located in the issuing nation. The ability to establish and close out positions on such options is subject to the maintenance of a liquid market that may not always be available. Currency rates may fluctuate based on political considerations and governmental actions as opposed to purely economic factors. Predicting the movements of foreign currency in relation to the U.S. dollar is difficult and requires different skills than those necessary to predict movements in the securities market. There is no assurance that the use of foreign currency hedging transactions can successfully protect a portfolio against loss resulting from the movements of foreign currency in relation to the U.S. dollar. In addition, it must be remembered that these methods of protecting the value of a portfolio's securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which can be achieved at some future point in time. Additionally, although such contracts tend to minimize the risk of loss due to the decline in the value of the hedged currency, at the same time they tend to limit any potential gain which might result should the value of such currency increase. 18 42 MANAGEMENT OF THE FUND DIRECTORS AND OFFICERS OF THE FUND The directors and officers of the Fund, together with information as to their principal occupations during the past five years are listed below:
Position with Principal Occupation Name and address the Fund during past five years - ---------------- ------------- ---------------------- Ronald L. Benedict* Secretary and Second Vice President and Counsel and 237 William H. Taft Rd. Director Assistant Secretary, ONLI; Secretary of Cincinnati, Ohio ONIMCO and of the Adviser George E. Castrucci Director Business consultant and private 8355 Old Stable Rd. investor; Chairman and Director of Cincinnati, Ohio Baldwin Piano & Organ Co.; Formerly President and Chief Operating Officer of Great American Communications Co. and Chairman and Chief Executive Officer of Great American Broadcasting Co.; Director of Benchmark Savings Bank Maurice H. Kirby, Jr. Director Retired. Formerly Senior Vice 6726 Farmbrook Drive President, First National Bank Cincinnati, Ohio of Cincinnati George M. Vredeveld Director Professor of Economics, University of University of Cincinnati of Cincinnati; Director of Center for P.O. Box 210223 Economic Education; Private Consultant; Cincinnati, Ohio Director of Benchmark Savings Bank Donald J. Zimmerman* President and Director and Senior Vice President, 237 William H. Taft Rd. Director Insurance Operations and Cincinnati, Ohio Secretary, ONLI Michael A. Boedeker Vice President Vice President, Fixed Income 237 William H. Taft Rd. Securities, ONLI; Vice President Cincinnati, Ohio and Director of ONIMCO and of the Adviser Joseph P. Brom Vice President Vice President, Investments, 237 William H. Taft Rd. ONLI; President and Director Cincinnati, Ohio of ONIMCO and of the Adviser Stephen T. Williams Vice President Director of Securities, ONLI; 237 William H. Taft Rd. Vice President and Director of Cincinnati, Ohio ONIMCO and of the Adviser Dennis R. Taney Treasurer Mutual Funds Financial Operations, 237 William H. Taft Rd. ONLI; Treasurer of ONIMCO and of the Cincinnati, Ohio Adviser
19 43 Barbara A. Hopewell Assistant Secretary Associate Counsel, ONLI; 237 William H. Taft Rd. Assistant Secretary of ONIMCO and of the Cincinnati, Ohio Adviser
*Indicates Directors who are "Interested Persons" as defined by the Investment Company Act of 1940, as amended. All directors and officers of the Fund hold similar positions with ONE Fund, Inc. ("ONE Fund"), another mutual fund sponsored by ONLI and managed by the Adviser. COMPENSATION OF DIRECTORS Directors who are not affiliated with the Adviser, ONLI, ONLAC or a sub-adviser were compensated as follows in 1995:
Aggregate Compensation Total Compensation Director From the Fund From Fund Complex* - -------- ------------- ------------------ James E.Baker $10,400 $15,000 George E. Castrucci 10,400 15,000 Maurice H. Kirby, Jr. 10,400 15,000
* The "Fund Complex" consists of the Fund and ONE Fund, Inc. Directors and officers of the Fund who are affiliated with the Adviser, ONLI or ONLAC receive no compensation from the Fund Complex. The Fund has no pension, retirement or deferred compensation plan for its directors or officers. SHAREHOLDERS' MEETINGS The Fund's by-laws provide that shareholders meetings need only be held every three years unless matters requiring shareholder approval should occur more frequently. It is anticipated that shareholder meetings will generally occur every three years. INVESTMENT ADVISORY AND OTHER SERVICES The Adviser is an Ohio corporation organized on January 17, 1996 to provide investment advice and management services to funds affiliated with ONLI. The Adviser is a wholly-owned subsidiary of ONLI. The Adviser succeeded O.N. Investment Management Company ("ONIMCO") as the Fund's investment adviser on May 1, 1996. Prior to that date, ONIMCO had been the investment adviser from the Fund's inception. The Adviser, like ONIMCO before it, uses ONLI's investment personnel and administrative systems. The Adviser regularly furnishes to the Fund's Board of Directors recommendations with respect to an investment program consistent with the investment policies of each portfolio. Upon approval of an investment program by the Fund's Board of Directors, the Adviser implements the program by placing the orders for the purchase and sale of securities or, in the case of the International, Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios, by delegating that implementation to SGAM, TRPA, FAM or SCM, as the case may be. The Adviser's services are provided under an Investment Advisory Agreement with the Fund. Under the Investment Advisory Agreement, the Adviser provides personnel, including executive officers for the Fund. The Adviser also furnishes at its own expense or pays the expenses of the Fund for clerical and related administrative services (other than those provided by the custodian and agency agreements with The Provident Bank and the custodian agreement with Investors Fiduciary Trust Company), office space, and other facilities. The Fund pays 20 44 corporate expenses incurred in its operations, including, among others, local income, franchise, issuance or other taxes; certain printing costs; brokerage commissions on portfolio transactions; custodial and transfer agent fees; auditing and legal expenses; and expenses relating to registration of its shares for sale and shareholders' meetings. As compensation for its services, the Adviser receives from the Fund annual fees on the basis of each portfolio's average daily net assets during the quarterly period for which the fees are paid based on the following schedule: (a) for each of the Equity, Bond and Omni Portfolios, 0.60% of the first $100 million of each Portfolio's net assets, 0.50% of the next $150 million of net assets, 0.45% of the next $250 million of net assets, 0.40% of the next $500 million of net assets, 0.30% of the next $1 billion of net assets, and 0.25% of net assets over $2 billion; (b) for the Money Market Portfolio, 0.30% of the first $100 million of net assets, 0.25% of the next $150 million of net assets, 0.23% of the next $250 million of net assets, 0.20% of the next $500 million of net assets, and 0.15% of net assets over $1 billion; (c) for the International and Global Contrarian Portfolios, 0.90% of each Portfolio's net assets; and (d) for the Capital Appreciation, Small Cap and Aggressive Growth Portfolios, 0.80% of each Portfolio's net assets. However, as to the Money Market Portfolio, the Adviser is presently waiving any of its fee in excess of 0.25%. Under the Investment Advisory Agreement, the Fund authorizes the Adviser to retain sub-advisers for the International, Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios, subject to the approval of the Fund's Board of Directors. The Adviser has entered into Sub-Advisory Agreements with SGAM, TRPA, FAM and SCM, respectively, to manage the investment and reinvestment of those Portfolios' assets, subject to the supervision of the Adviser. As compensation for their services, (a) SGAM receives from the Adviser fees at the annual rate of 0.75% of the International and Global Contrarian Portfolios' average daily net assets during the quarter for which the fee is paid; (b) TRPA receives from the Adviser a fee at an annual rate of 0.70% of the first $5 million, and 0.50% of average daily net asset value in excess of $5 million, of the Capital Appreciation Portfolio; (c) FAM receives from the Adviser a fee at an annual rate of 0.65% of the first $75 million, 0.60% of the next $75 million, and 0.55% of the average daily net asset value in excess of $150 million of the Small Cap Portfolio; and (d) SCM receives from the Adviser a fee at an annual rate of 0.70% of the first $50 million, and 0.50% of average daily net asset value in excess of $50 million of the Aggressive Growth Portfolio. For each of the indicated years, ending December 31*, the following investment advisory fees from each of the Fund's portfolios were paid to ONIMCO (the Adviser's predecessor) as follows:
1995 1994 1993 ---- ---- ---- Equity $ 812,156 $ 522,678 $445,082 Money Market** 31,228 33,012 70,380 Bond 87,798 55,332 45,516 Omni 542,756 367,235 262,444 International 678,133 380,483 40,886 Capital Appreciation 96,082 30,172 N/A Small Cap 69,124 9,398 N/A Global Contrarian 21,955 N/A N/A Aggressive Growth 11,898 N/A N/A ---------- ---------- -------- $2,351,130 $1,398,310 $864,308
* The International Portfolio commenced operations on April 30, 1993. The Capital Appreciation and Small Cap Portfolios commenced operations on May 1, 1994. The Global Contrarian and Aggressive Growth Portfolios commenced operations on March 31, 1995. ** An additional $14,932, $25,824 and $21,776 was earned but waived in 1995, 1994 and 1993, respectively, as described above. The Investment Advisory Agreement also provides that if the total expenses applicable to any portfolio during any calendar quarter (excluding taxes, brokerage commissions, interest and the investment advisory fee) exceed l%, on an annualized basis, of such portfolio's average daily net asset value, the Adviser will pay such expenses. Under the same terms, ONIMCO paid the Global Contrarian Portfolio $8,127 in 1995, ONIMCO paid the Capital 21 45 Appreciation and Small Cap Portfolios $2,669 and $458, respectively, during 1994, and ONIMCO paid the International Portfolio $11,917 in 1993. No other such amounts were paid to any portfolio during the three years ended December 31, 1995. Under a Service Agreement among the Fund, the Adviser and ONLI, the latter has agreed to furnish the Adviser, at cost, such research facilities, services and personnel as may be needed by the Adviser in connection with its performance under the Investment Advisory Agreement. The Adviser reimburses ONLI for its expenses in this regard. The Investment Advisory Agreement, the Service Agreement, and the Sub-Advisory Agreements for the International, Global Contrarian, Capital Appreciation, Small Cap and Aggressive Growth Portfolios were approved by the votes of the Board of Directors on January 24, 1996, and the shareholders on March 28, 1996. These agreements will continue in force from year to year hereafter, if such continuance is specifically approved at least annually by a majority of the Fund's directors who are not parties to such agreements or interested persons of any such party, with votes to be cast in person at a meeting called for the purpose of voting on such continuance, and also by a majority of the Board of Directors or by a majority of the outstanding voting securities of each portfolio voting separately. The Investment Advisory, Service, and Sub-Advisory Agreements may be terminated at any time, without the payment of any penalty, on 60 days' written notice to the Adviser by the Fund's Board of Directors or, as to any portfolio, by a vote of the majority of the portfolio's outstanding voting securities. The Investment Advisory Agreement may be terminated by the Adviser on 90 days' written notice to the Fund. The Service Agreement may be terminated, without penalty, by the Adviser or ONLI on 90 days' written notice to the Fund and the other party. The Sub-Advisory Agreements may be terminated, without penalty, by the Adviser or the sub-adviser on 90 days' written notice to the Fund and the other party. The Agreements will automatically terminate in the event of their assignment. BROKERAGE ALLOCATION The Adviser buys and sells the portfolio securities for the Equity, Money Market, Bond and Omni Portfolios and selects the brokers to handle such transactions. It is the Adviser's intention to place orders for the purchase and sale of securities with the primary objective of obtaining the most favorable price consistent with good brokerage service. The cost of securities transactions for each portfolio will consist primarily of brokerage commissions or dealer or underwriter spreads. Bonds and money market securities are generally traded on a net basis and do not normally involve either brokerage commissions or transfer taxes. Occasionally, securities may be purchased directly from the issuer. For securities traded primarily in the over-the-counter market, the Adviser will, where possible, deal directly with dealers who make a market in the securities unless better prices and execution are available elsewhere. Such dealers usually act as principals for their own account. In selecting brokers through whom to effect transactions, the Adviser considers a number of factors including the value, quality, efficiency of execution and research, statistical, quotation and valuation services provided. Research services by brokers include advice, either directly or through publications or writings, as to the value of securities, the advisability of purchasing or selling securities, the availability of securities or purchasers or sellers of securities, and analyses and reports concerning issuers, industries, securities, economic factors and trends and portfolio strategy. In making such determination, the Adviser may use a broker whose commission in effecting a securities transaction is in excess of that of some other broker if the Adviser determines in good faith that the amount of such commission is reasonable in relation to the value of the research and related services provided by such broker. SGAM selects the brokers and dealers that execute orders for the purchase and sale of International and Global Contrarian Portfolio securities. SGAM seeks to obtain the best price and execution available after taking into account research services provided by such brokers and dealers for the International or Global Contrarian Portfolio's benefit. Consistent with this policy, portfolio transactions may be executed by brokers affiliated with 22 46 Societe Generale (SGAM's ultimate controlling person) so long as the commission paid to the affiliated broker is reasonable and fair compared to the commission that would be charged by an unaffiliated broker in a comparable transaction. TRPA selects the brokers and dealers that execute orders for the purchase and sale of Capital Appreciation Portfolio securities. TRPA seeks to obtain quality execution at the most favorable prices through responsible brokers and dealers and, in the case of agency transactions, at competitive commission rates. Higher brokerage commissions may be paid in return for research services that benefit the Capital Appreciation Portfolio. Portfolio transactions may be executed by brokers affiliated with TRPA or its affiliates so long as the commission paid to any such broker is reasonable and fair compared to the commission that would be charged by an unaffiliated broker in a comparable transaction. FAM selects the brokers and dealers that execute orders for the purchase and sale of Small Cap Portfolio securities. FAM seeks to obtain the best execution of orders at the most favorable prices. Higher brokerage commissions may be paid in return for research services that may assist FAM in furtherance of its subadvisory responsibilities to the Portfolio. SCM selects the brokers and dealers that execute orders for the purchase and sale of Aggressive Growth Portfolio securities. SCM seeks to obtain the best execution and best security price available on each transaction in light of the overall quality of brokerage and research services provided to SCM or the Portfolio. SCM may cause the Portfolio to pay a broker which provides brokerage or research services to SCM a commission for effecting a securities transaction in excess of the amount another broker would have charged for effecting the transaction. Generally, it is not possible to place a dollar value on research and related services provided by brokers to the Adviser or a sub-adviser. However, receipt of such services may tend to reduce the expenses of the Adviser or the sub-advisers. Research, statistical and similar information furnished by brokers may be of incidental assistance to other clients of the Adviser or the sub- advisers and conversely, transaction costs paid by other clients of the Adviser or the sub-advisers may generate information which is beneficial to the Fund. For each of the indicated years, ending on December 3l, the following brokerage commission amounts were paid by each portfolio:
1995 1994 1993 ---- ---- ---- Equity $ 81,091 $ 52,713 $ 90,597 Money Market None None None Bond 630 None None Omni 39,073 25,413 34,582 International 153,524 131,000 34,625 Capital Appreciation 16,786 10,219 N/A Small Cap 16,688 8,265 N/A Global Contrarian 12,257 N/A N/A Aggressive Growth 42,839 N/A N/A -------- -------- -------- $362,888 $227,610 $159,804
In l995, substantially all of such commissions were paid to brokers who furnished statistical data and research information to ONIMCO (the predecessor to the Adviser), SGAM, TRPA, FAM, or SCM. 23 47 PURCHASE AND REDEMPTION OF SHARES Fund shares are sold without a sales charge and may be redeemed at their net asset value next computed after a purchase or redemption order is received by the Fund. (The net asset value for the Money Market Portfolio is normally $l0 per share.) Depending upon the net asset values at that time, the amount paid upon redemption may be more or less than the cost of the shares redeemed. Payment for shares redeemed will be made as soon as possible, but in any event within seven days after evidence of ownership of the shares is tendered to the Fund. However, the Fund may suspend the right of redemption or postpone the date of payment beyond seven days during any period when (a) trading on the New York Stock Exchange is restricted, as determined by the Securities and Exchange Commission, or such Exchange is closed for other than weekends and holidays; (b) an emergency exists, as determined by the Commission, as a result of which disposal by the Fund of securities owned by it is not reasonably practicable, or it is not reasonably practicable for the Fund fairly to determine the value of its net assets; or (c) the Commission by order so permits for the protection of security holders of the Fund. Shares of one portfolio may be exchanged for shares of another portfolio of the Fund on the basis of the relative net assets value next computed after an exchange order is received by the Fund. The net asset value of the Fund's shares is determined on each day on which an order for purchase or redemption of the Fund's shares is received and there is a sufficient degree of trading in portfolio securities that the current net asset value of its shares might be materially affected. Such determination is made as of 4:00 p.m. Eastern time on each business day. "Business day" means each weekday (Monday through Friday) except for the following holidays: New Years Day, Presidents Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas. The net asset value of each portfolio is computed by dividing the value of the securities in that portfolio plus any cash or other assets less all liabilities of the portfolio, by the number of shares outstanding for that portfolio. Securities which are held in a portfolio and listed on a securities exchange are valued at the last sale price or, if there has been no sale that day, at the last bid price reported as of 4 p.m. Eastern time. Over-the-counter securities are valued at the last bid price as of 4 p.m. Eastern time. Short-term debt securities in the Equity, Bond, International, Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios with remaining maturities of 60 days or less are valued at amortized cost. The Fund has obtained an exemptive order from the Commission permitting it to value all short-term debt securities in the Omni Portfolio at amortized cost. The Fund relies on Rule 2a-7 under the Investment Company Act of 1940 to value the assets of the Money Market Portfolio on the basis of amortized cost with a view toward stabilizing the net asset value at $10 per share and allowing dividend payments to reflect net interest income as earned. Accordingly, the short-term debt assets of the Omni and Money Market Portfolios are valued at their cost on the date of acquisition with a daily adjustment being made to accrued income to reflect amortization of premium or accretion of discount to the maturity date. All other assets of the Equity, Bond, Omni, International, Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios, including restricted debt securities and other investments for which market quotations are not readily available, are valued at their fair value as determined in good faith by the Fund's Board of Directors. As a condition of the exemptive order, the Fund has agreed, with respect to short-term debt securities in its Omni Portfolio, to maintain a dollar-weighted average maturity of not more than 120 days and to not purchase any such debt security having a maturity of more than one year. In relying on Rule 2a-7 with respect to short-term debt securities in its Money Market Portfolio, the Fund has agreed to maintain a dollar-weighted average portfolio maturity of not more than 90 days and to not purchase any such debt security having a maturity of more than 397 days. The dollar-weighted average maturity of short-term debt securities is determined by dividing the sum of the dollar value of each such security times the remaining days to maturity of such security by the sum of the dollar value of all short-term debt securities. Should the disposition of a short-term debt security result in a dollar- weighted average maturity of more than the number of days allowed under the exemptive order or Rule 2a-7, as the case may be, the Portfolio will invest its available cash so as to reduce such average maturity to the 24 48 required number of days or less as soon as reasonably practicable. The Fund normally holds short-term debt securities to maturity and realizes par therefor unless an earlier sale is required to meet redemption requirements. In addition, the Omni and Money Market Portfolios are required to limit their short-term debt investments, including repurchase agreements, to those United States dollar denominated instruments which the Board of Directors determines present minimal credit risks and which are in the top two rating categories of any nationally recognized statistical rating organizations or, in the case of any instrument that is not rated, of comparable quality as determined by the Board of Directors. Although the use of amortized cost provides certainty in valuation, it may result in periods during which value so determined is higher or lower than the price the Fund would receive if it liquidated its securities. The Fund's Board of Directors is obligated, as a particular responsibility within the overall duty of care owed to Money Market Portfolio shareholders, to establish procedures reasonably designed, taking into account current market conditions and the investment objective of such Portfolio, to stabilize the Portfolio's net asset value per share as computed for the purpose of distribution, redemption and repurchase, at $10 per share. The procedures adopted by the Board of Directors include periodically reviewing, as it deems appropriate and at such intervals as are reasonable in light of current market conditions, the extent of deviation, if any, between the net asset value per share based on available market quotations and such value based on the Portfolio's $10 amortized cost price. If such deviation exceeds 1/2 of 1 percent, or if there is any other deviation which the Board of Directors believes would result in a material dilution to shareholders or purchasers, the Board of Directors will promptly consider what action, if any, it should initiate. Such action may include redemption in kind; selling portfolio instruments prior to maturity to realize capital gains or losses, or to shorten the average portfolio maturity; withholding dividends; splitting, combining or otherwise recapitalizing outstanding shares; or using available market quotations to determine net asset value per share. The Portfolio may reduce the number of its outstanding shares by requiring shareholders to contribute to capital proportionately the number of full and fractional shares as is necessary to maintain the net asset value per share of $10. ONLI and ONLAC, the sole shareholders of the Money Market Portfolio, have agreed to this procedure and contract owners who allocate purchase payments to the Money Market Portfolio will be bound by such agreement. TAX STATUS December 31, 1995 the Fund qualified as a regulated investment company under Subchapter M of the Internal Revenue Code (the "Code"). Under such provisions, the Fund is not subject to federal income tax on such part of its net ordinary income and net realized capital gains which it distributes to shareholders. Each portfolio is treated as a separate entity for federal income tax purposes, including determining whether it qualifies as a regulated investment company and determining its net ordinary income (or loss) and net realized capital gains (or losses). To qualify for treatment as a regulated investment company, each portfolio must, among other things, derive in each taxable year at least 90% of its gross income from dividends, interest and gains from the sale or other disposition of securities and derive less than 30% of its gross income in each taxable year from the gains (without deduction for losses) from the sale or other disposition of securities held for less than three months. Each portfolio also intends to comply with the diversification requirements or regulations under Section 817(h) of the Code. The foregoing is a general and abbreviated summary of the applicable provisions of the Code and Treasury Regulations currently in effect. For the complete provisions, reference should be made to the pertinent Code sections and the Treasury Regulations promulgated thereunder. Since the only eligible shareholders of the Fund are separate accounts of ONLI, ONLAC and other insurance companies, no discussion is stated herein as to the federal income tax consequences at the shareholder level. 25 49 EXPERTS The financial statements of Ohio National Fund, Inc. as of December 31, 1995 and for the periods indicated herein included in this Statement of Additional Information and the Financial Highlights included in the prospectus have been included herein and in the prospectus in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, appearing in this Statement of Additional Information, and upon the authority of said firm as experts in accounting and auditing. KPMG Peat Marwick LLP's business address is 201 East Fifth Street, Cincinnati, Ohio 45202. LEGAL COUNSEL Messrs. Jones & Blouch L.L.P., Washington, D.C., have passed on matters pertaining to the federal securities laws and Ronald L. Benedict, Esq., Secretary of the Fund and Second Vice President and Counsel of ONLI, has passed on all other legal matters relating to the legality of the shares described in the prospectus and this Statement of Additional Information. 26 50 OHIO NATIONAL FUNDS, INC. INDEPENDENT AUDITORS' REPORT The Board of Directors and Shareholders Ohio National Fund, Inc.: We have audited the accompanying statements of assets and liabilities and the schedules of investments of Ohio National Fund, Inc. (comprising, respectively, the Equity, Money Market, Bond, Omni, International, Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios) as of December 31, 1995, and the related statements of operations, statements of changes in net assets and the financial highlights for each of the periods indicated herein. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1995, by correspondence with the custodian and brokers, and where replies are not received, we carried out other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the portfolios comprising Ohio National Fund, Inc. as of December 31, 1995, and the results of their operations, the changes in their net assets and their financial highlights for each of the periods indicated herein, in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP Cincinnati, Ohio January 26, 1996 51 OHIO NATIONAL FUND, INC. STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1995
Portfolio ---------------------------------------------------------------------- Money Equity Market Bond Omni ----------- ---------- ---------- ----------- Assets: Investments in securities at market value (note 1) ............................... $175,602,520 $14,867,269 $17,736,453 $109,938,908 Cash denominated in foreign currencies (cost $39,368) (note 1) ...................... 0 0 0 0 Cash in bank ................................... 80,517 20,415 5,796 157,526 Unrealized gain on foreign currency exchange contracts (note 6) .................. 0 0 0 0 Receivable for securities sold ................. 531,857 0 0 148,420 Receivable for shares sold ..................... 787,863 845,291 56,558 427,102 Dividends and interest receivable .............. 258,678 0 295,198 516,629 Other .......................................... 5,684 834 632 5,425 ----------- ---------- ---------- ----------- Total assets ................................. 177,267,119 15,733,809 18,094,637 111,194,010 ----------- ---------- ---------- ----------- Liabilities: Unrealized loss on foreign currency exchange contracts (note 6) .................. 0 0 0 0 Payable for securities purchased ............... 1,309,215 0 0 1,070,375 Dividends payable .............................. 0 6,620 0 0 Payable for shares redeemed .................... 0 0 1,742 374,667 Payable for investment management services (note 3) ............................ 239,177 8,318 25,910 158,287 Accrued expenses ............................... 23,529 3,085 2,592 13,465 ----------- ---------- ---------- ----------- Total liabilities ............................ 1,571,921 18,023 30,244 1,616,794 ----------- ---------- ---------- ----------- NET ASSETS AT MARKET VALUE ........................ $175,695,198 $15,715,786 $18,064,393 $109,577,216 =========== ========== ========== =========== Net assets consist of: Par value, $1 per share ........................ $ 6,146,729 $ 1,571,579 $ 1,652,878 $ 6,226,075 Paid-in capital in excess of par value ......... 113,036,283 14,144,207 15,348,472 79,912,413 Accumulated undistributed net realized gain (loss) on investments ................... 5,341,756 0 (85,093) 1,956,755 Net unrealized appreciation on: Investments .................................. 50,383,257 0 857,278 20,591,636 Forward currency contracts (note 6) .......... 0 0 0 0 Foreign currency related transactions ........ 0 0 0 0 Undistributed (overdistributed ) net investment income ............................ 787,173 0 290,858 890,337 ----------- ---------- ---------- ----------- NET ASSETS AT MARKET VALUE ........................ $175,695,198 $15,715,786 $18,064,393 $109,577,216 =========== ========== ========== =========== SHARES OUTSTANDING (note 5) ....................... 6,146,729 1,571,579 1,652,878 6,226,075 ----------- ---------- ---------- ----------- NET ASSET VALUE PER SHARE ......................... $ 28.58 $ 10.00 $ 10.93 $ 17.60 =========== ========== ========== ===========
Portfolio ---------------------------------------------------------------------- Capital Small Global Aggressive International Appreciation Cap Contrarian Growth ------------- ------------ --------- ---------- ---------- Assets: Investments in securities at market value (note 1) ............................... $87,447,951 $19,136,355 $13,496,712 $3,808,824 $5,261,827 Cash denominated in foreign currencies (cost $39,368) (note 1) ...................... 0 0 0 0 39,234 Cash in bank ................................... 1,990,848 9,525 2,721,747 541,075 775 Unrealized gain on foreign currency exchange contracts (note 6) .................. 670,868 0 0 5,067 12,008 Receivable for securities sold ................. 0 18,643 0 0 169,763 Receivable for shares sold ..................... 796,153 250,026 230,434 57,952 96,039 Dividends and interest receivable .............. 301,865 39,658 21,471 24,881 77,746 Other .......................................... 25,976 1,077 249 93 39 ---------- ---------- ---------- --------- --------- Total assets ................................. 91,233,661 19,455,284 16,470,613 4,437,892 5,657,431 ---------- ---------- ---------- --------- --------- Liabilities: Unrealized loss on foreign currency exchange contracts (note 6)................... 132,484 0 0 2,445 0 Payable for securities purchased ............... 298,086 93,525 401,436 0 1,644,793 Dividends payable .............................. 0 0 0 0 0 Payable for shares redeemed .................... 0 0 0 0 0 Payable for investment management services (note 3) ............................ 192,492 34,242 27,255 8,804 5,882 Accrued expenses ............................... 16,872 7,234 3,891 6,048 1,295 ---------- ---------- ---------- --------- --------- Total liabilities ............................ 639,934 135,001 432,582 17,297 1,651,970 ---------- ---------- ---------- --------- --------- NET ASSETS AT MARKET VALUE ..................... $90,593,727 $19,320,283 $16,038,031 $4,420,595 $4,005,461 ========== ========== ========== ========= ========= Net assets consist of: Par value, $1 per share ........................ $ 6,298,294 $ 1,611,642 $ 1,011,742 $ 409,218 $ 338,205 Paid-in capital in excess of par value ......... 75,407,025 15,764,214 12,600,728 3,769,059 3,380,489 Accumulated undistributed net realized gain (loss) on investments ................... 1,691,528 347,729 542,566 36,817 (47,306) Net unrealized appreciation on: Investments .................................. 5,858,066 1,453,071 1,906,139 158,445 156,233 Forward currency contracts (note 6) .......... 538,384 0 0 2,622 12,008 Foreign currency related transactions ....... 1,097 0 (34) 18 (134) Undistributed (overdistributed ) net investment income ............................ 799,333 143,627 (23,110) 44,416 165,966 ---------- ---------- ---------- --------- --------- NET ASSETS AT MARKET VALUE ..................... $90,593,727 $19,320,283 $16,038,031 $4,420,595 $4,005,461 ========== ========== ========== ========= ========= SHARES OUTSTANDING (note 5) ....................... 6,298,294 1,611,642 1,011,742 409,218 338,205 ---------- ---------- ---------- --------- --------- NET ASSET VALUE PER SHARE ......................... $ 14.38 $ 11.99 $ 15.85 $ 10.80 $ 11.84 ========== ========== ========== ========= =========
The accompanying notes are an integral part of these financial statements. 52 OHIO NATIONAL FUND, INC. STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1995
PORTFOLIO ------------------------------------------------------------------ Money Equity Market Bond Omni International --------- ---------- ---------- --------- ------------- Investment income: Interest ................................ $ 1,500,766 $ 739,126 $1,108,699 $ 2,766,140 $ 653,088 Dividends ............................... 2,444,879 0 55,287 1,367,428 1,915,401 (b) ---------- ---------- ---------- ---------- ---------- Total investment income ............... 3,945,645 739,126 1,163,986 4,133,568 2,568,489 ---------- ---------- ---------- ---------- ---------- Expenses: Management fees (note 3) ................ 812,156 46,160 87,798 542,756 678,133 Custodian fees (note 3) ................. 203,485 16,862 20,900 129,716 130,597 Directors' fees (note 3) ................ 13,205 998 1,310 8,656 6,302 Professional fees ....................... 28,599 1,888 2,768 15,038 11,919 Other ................................... 35,289 4,434 3,525 22,291 13,707 ---------- ---------- ---------- ---------- ---------- Total expenses ........................ 1,092,734 70,342 116,301 718,457 840,658 Less fees waived (note 3) ............. 0 (14,932) 0 0 0 ---------- ---------- ---------- ---------- ---------- Net expenses .......................... 1,092,734 55,410 116,301 718,457 840,658 ---------- ---------- ---------- ---------- ---------- Net investment income (loss) ........ 2,852,911 683,716 1,047,685 3,415,111 1,727,831 ---------- ---------- ---------- ---------- ---------- Realized and unrealized gain (loss) on investments and foreign currency Net realized gain (loss) from: Investments ........................... 5,341,756 0 (85,093) 1,972,001 1,691,528 Forward currency related transactions . 0 0 0 0 457,674 Net increase (decrease) in unrealized appreciation (depreciation) on: Investments ......................... 26,897,831 0 1,682,695 13,934,522 4,383,871 Foreign currency related transactions 0 0 0 0 523,701 ---------- ---------- ---------- ---------- ---------- Net gain on investments ............. 32,239,587 0 1,597,602 15,906,523 7,056,774 ---------- ---------- ---------- ---------- ---------- Net increase in net assets from operations .................. $35,092,498 $ 683,716 $2,645,287 $19,321,634 $8,784,605 ========== ========== ========== ========== ==========
PORTFOLIO ------------------------------------------------------- Capital Small Global Aggressive Appreciation Cap Contrarian (a) Growth (a) ------------ ---------- ------------- ---------- Investment income: Interest ................................ $ 343,156 $ 50,660 $ 18,114 $ 8,633 Dividends ............................... 191,184 23,684 63,446 (c) 303,789 ---------- ---------- ---------- ---------- Total investment income ............... 534,340 74,344 81,560 312,422 ---------- ---------- ---------- ---------- Expenses: Management fees (note 3) ................ 96,082 69,124 21,955 11,898 Custodian fees (note 3) ................. 16,214 11,665 25,000 2,008 Directors' fees (note 3) ................ 967 686 250 227 Professional fees ....................... 1,671 1,298 472 342 Other ................................... 1,048 1,355 493 2,099 ---------- ---------- ---------- ---------- Total expenses ........................ 115,982 84,128 48,170 16,574 Less fees waived (note 3) ............. 0 0 (8,127) 0 ---------- ---------- ---------- ---------- Net expenses .......................... 115,982 84,128 40,043 16,574 ---------- ---------- ---------- ---------- Net investment income (loss) ........ 418,358 (9,784) 41,517 295,848 ---------- ---------- ---------- ---------- Realized and unrealized gain (loss) on investments and foreign currency Net realized gain (loss) from: Investments ........................... 347,729 561,971 36,817 (47,306) Forward currency related transactions . 0 2,911 26,795 7,406 Net increase (decrease) in unrealized appreciation (depreciation) on: Investments ......................... 1,486,874 1,631,857 158,445 156,233 Foreign currency related transactions 0 (46) 2,639 11,874 ---------- ---------- ---------- ---------- Net gain on investments ............. 1,834,603 2,196,693 224,696 128,207 ---------- ---------- ---------- ---------- Net increase in net assets from operations .................. $2,252,961 $2,186,909 $ 266,213 $ 424,055 ========== ========== ========== ==========
(a) Commenced operations March 31, 1995. (b) Net of $131,617 foreign taxes withheld. (c) Net of $2,654 foreign taxes withheld. The accompanying notes are an integral part of these financial statements. 53 OHIO NATIONAL FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS YEARS ENDED DECEMBER 31, 1995 AND 1994
PORTFOLIO ---------------------------------------------------- EQUITY MONEY MARKET 1995 1994 1995 1994 ------------------------ ------------------------ From operations: Net investment income .................. $ 2,852,911 $ 2,234,955 $ 683,716 $ 497,759 Realized gain (loss) on investments and foreign currency related transactions ............ 5,341,756 2,034,408 0 0 Unrealized gain (loss) on investments and foreign currency related transactions ............ 26,897,831 (3,945,856) 0 0 ------------ ----------- ---------- ---------- Net increase (decrease) in assets from operations .......... 35,092,498 323,507 683,716 497,759 ------------ ----------- ---------- ---------- Dividends and distributions to shareholders: Dividends declared ...... (2,203,910) (2,223,380) (683,716) (497,759) Capital gains distribution .......... (2,034,408) (1,498,522) 0 0 ------------ ----------- ---------- ---------- Total dividends and distributions ...... (4,238,318) (3,721,902) (683,716) (497,759) ------------ ----------- ---------- ---------- From Capital Share Transactions (note 5): Received from shares sold ............. 27,001,671 22,670,224 14,165,258 12,731,281 Received from dividends reinvested .............. 4,238,318 3,721,902 683,716 497,759 Paid for shares redeemed ................ (9,726,105) (9,524,993) (12,191,289) (19,293,770) ------------ ----------- ---------- ---------- Increase (decrease) in net assets derived from capital share transactions ........ 21,513,884 16,867,133 2,657,685 (6,064,730) ------------ ----------- ---------- ---------- Increase (decrease) in net assets .... 52,368,064 13,468,738 2,657,685 (6,064,730) Net Assets: Beginning of period ....... 123,327,134 109,858,396 13,058,101 19,122,831 ------------ ----------- ---------- ---------- End of period (a) ......... $175,695,198 $123,327,134 $15,715,786 $13,058,101 ============ =========== ========== ========== (a) Includes undistributed net investment income of ............... $ 787,173 $ 138,172 $ 0 $ 0 ============ =========== ========== ==========
PORTFOLIO ------------------------------------------------------ BOND OMNI 1995 1994 1995 1994 ------------------------ ------------------------- From operations: Net investment income .................. $1,047,685 $ 834,629 $ 3,415,111 $ 3,012,739 Realized gain (loss) on investments and foreign currency related transactions ............ (85,093) 1,741 1,972,001 966,328 Unrealized gain (loss) on investments and foreign currency related transactions ............ 1,682,695 (1,308,762) 13,934,522 (4,325,399) ---------- ---------- ----------- ----------- Net increase (decrease) in assets from operations .......... 2,645,287 (472,392) 19,321,634 (346,332) ---------- ---------- ----------- ----------- Dividends and distributions to shareholders: Dividends declared ...... (802,639) (837,535) (2,700,506) (2,991,171) Capital gains distribution .......... (1,741) (86,626) 0 0 ---------- ---------- ----------- ----------- Total dividends and distributions ...... (804,380) (924,161) (2,700,506) (2,991,171) ---------- ---------- ----------- ----------- From Capital Share Transactions (note 5): Received from shares sold ............. 4,015,347 3,529,446 15,409,257 21,588,654 Received from dividends reinvested .............. 804,380 924,161 2,700,506 2,991,171 Paid for shares redeemed ................ (1,744,440) (1,887,483) (10,120,050) (10,483,526) ---------- ---------- ----------- ----------- Increase (decrease) in net assets derived from capital share transactions ........ 3,075,287 2,566,124 7,989,713 14,096,299 ---------- ---------- ----------- ----------- Increase (decrease) in net assets .... 4,916,194 1,169,571 24,610,841 10,758,796 Net Assets: Beginning of period ....... 13,148,199 11,978,628 84,966,375 74,207,579 ---------- ---------- ----------- ----------- End of period (a) ......... $18,064,393 $13,148,199 $109,577,216 $84,966,375 ========== ========== =========== =========== (a) Includes undistributed net investment income of ............... $ 290,858 $ 45,811 $ 890,337 $ 175,732 ========== ========== =========== ===========
The accompanying notes are an integral part of these financial statements. 54 OHIO NATIONAL FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS YEARS ENDED DECEMBER 31, 1995 AND 1994 (CONTINUED)
PORTFOLIO ------------------------------------------------------- International Capital Appreciation (b) 1995 1994 1995 1994 ------------------------ ------------------------ From operations: Net investment income (loss) ........... $ 1,727,831 $ 517,253 $ 418,358 $ 125,344 Realized gain (loss) on investments and foreign currency related transactions ............ 2,149,202 979,701 347,729 139,011 Unrealized gain (loss) on investments and foreign currency related transactions ............ 4,907,572 (53,567) 1,486,874 (33,803) ---------- ---------- ---------- --------- Net increase (decrease) in assets from operations .......... 8,784,605 1,443,387 2,252,961 230,552 ---------- ---------- ---------- --------- Dividends and distributions to shareholders: Dividends declared ...... (1,426,199) (376,185) (284,670) (115,406) Capital gains distribution .......... (1,090,908) (87,191) (139,011) 0 ---------- ---------- ---------- --------- Total dividends and distributions ...... (2,517,107) (463,376) (423,681) (115,406) ---------- ---------- ---------- --------- From Capital Share Transactions (note 5): Received from shares sold ............. 26,592,168 49,137,629 10,945,010 6,851,101 Received from dividends reinvested .............. 2,517,107 463,376 423,681 115,406 Paid for shares redeemed ................ (7,658,197) (5,182,893) (632,303) (327,038) ---------- ---------- ---------- --------- Increase in net assets derived from capital share transactions ........ 21,451,078 44,418,112 10,736,388 6,639,469 ---------- ---------- ---------- --------- Increase in net assets ........... 27,718,576 45,398,123 12,565,668 6,754,615 Net Assets: Beginning of period ....... 62,875,151 17,477,028 6,754,615 0 ---------- ---------- ---------- --------- End of period (a) ......... $90,593,727 $62,875,151 $19,320,283 $6,754,615 ========== ========== ========== ========= (a) Includes undistributed net investment income of ............... $ 799,333 $ 40,027 $ 143,627 $ 9,939 ========== ========== ========== ==========
PORTFOLIO -------------------------------------------------------- GLOBAL AGGRESSIVE Small Cap(b) Contrarian(c) Growth 1995 1994 1995 1995 ------------------------ ------------ ------------ From operations: Net investment income (loss) ........... $ (9,784) $ 42,276 $ 41,517 $ 295,848 Realized gain (loss) on investments and foreign currency related transactions ............ 564,882 (19,405) 63,612 (39,900) Unrealized gain (loss) on investments and foreign currency related transactions ............ 1,631,811 274,294 161,084 168,107 ---------- --------- --------- --------- Net increase (decrease) in assets from operations .......... 2,186,909 297,165 266,213 424,055 ---------- --------- --------- --------- Dividends and distributions to shareholders: Dividends declared ...... (28,120) (30,393) (23,897) (137,288) Capital gains distribution .......... 0 0 0 0 ---------- --------- --------- --------- Total dividends and distributions ...... (28,120) (30,393) (23,897) (137,288) ---------- --------- --------- --------- From Capital Share Transactions (note 5): Received from shares sold ............. 11,178,786 3,272,162 4,311,648 3,709,801 Received from dividends reinvested .............. 28,120 30,393 23,897 137,288 Paid for shares redeemed ................ (584,139) (312,852) (157,266) (128,395) ---------- --------- --------- --------- Increase in net assets derived from capital share transactions ........ 10,622,767 2,989,703 4,178,279 3,718,694 ---------- --------- --------- --------- Increase in net assets ........... 12,781,556 3,256,475 4,420,595 4,005,461 Net Assets: Beginning of period ....... 3,256,475 0 0 0 ---------- --------- --------- --------- End of period (a) ......... $16,038,031 $3,256,475 $4,420,595 $4,005,461 ========== ========= ========= ========= (a) Includes undistributed net investment income of ............... $ (23,110) $ 11,883 $ 44,416 $ 165,966 ========== ========= ========= =========
(b) Commenced operations May 1, 1994. (c) Commenced operations March 31, 1995. The accompanying notes are an integral part of these financial statements. 55 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 EQUITY PORTFOLIO
MARKET SHARES COMMON STOCK VALUE - -------------------------------------------------------------------- AEROSPACE (3.9%) 44,500 Allied Signal, Inc. $ 2,113,750 64,000 Raytheon Co. 3,024,000 31,350 Rockwell International Corp. 1,657,631 ----------- 6,795,381 ----------- AUTOMOTIVE AND RELATED (3.3%) 22,500 Arvin Industries, Inc. 371,250 15,500 Chrysler Corp. 858,312 43,000 * Custom Chrome, Inc. 994,375 29,400 Eaton Corp. 1,576,575 20,000 Magna International, Inc. 865,000 43,000 Modine Manufacturing Co. 1,032,000 ----------- 5,697,512 ----------- BANKING (3.0%) 15,000 Boatmen's Bancshares, Inc. 613,125 24,000 Charter One Financial Inc. 735,000 21,000 First Union Corp. 1,168,125 70,000 Hanson Trust, PLC 1,067,500 22,500 Mellon Bank Corp. 1,209,375 20,500 Susquehanna Bancshares Inc. 543,250 ----------- 5,336,375 ----------- BUSINESS SERVICES (6.5%) 26,500 * Andros, Inc. 404,125 34,500 * Banctec, Inc. 638,250 44,500 First Data Corp. 2,975,938 12,500 Fisher Scientific International 417,187 50,000 Manpower Inc. 1,406,250 50,000 * Mastec Inc. 662,500 38,000 Reynolds & Reynolds CL A 1,477,250 35,000 Standard Register Co. 704,375 30,000 * Symbol Technologies, Inc. 1,185,000 50,000 * Verifone, Inc. 1,431,250 ----------- 11,302,125 ----------- CHEMICALS (3.8%) 25,000 Betz Laboratories, Inc. 1,025,000 17,500 E I DuPont De Nemours & Co. 1,222,813 28,000 Lubrizol Corp. 780,500 17,000 Monsanto Co. 2,082,500 46,000 OM Group, Inc. 1,523,750 ----------- 6,634,563 ----------- COMPUTER AND RELATED (11.3%) 30,000 * Cisco Systems, Inc. 2,238,750 30,000 Computer Sciences Corp. 2,107,500 53,000 * Continental Circuits Corp. 861,250 20,000 * Exabyte Corp. 292,500 35,500 Hewlett-Packard Co. 2,973,125 32,000 Intel Corp. 1,816,000 20,500 * Medar Inc. 161,437 10,000 * Microsoft Corp. 877,500 40,000 Motorola, Inc. 2,280,000 35,000 * Netframe Systems 185,937 52,500 * Novell, Inc. 748,125 50,000 * Pyxis Corp. 731,250 40,000 * Sun Microsystems, Inc. 1,825,000 28,500 * Teradyne Inc. 712,500 40,000 Texas Instruments, Inc. 2,070,000 ----------- 19,880,874 ----------- COMMUNICATIONS (1.9%) 55,000 Andrew Corp. $ 2,103,750 66,000 * General Cable 990,000 25,000 * Granite Broadcasting, Corp. 265,625 ----------- 3,359,375 ----------- CONSUMER PRODUCTS (0.8%) 22,500 Panamerican Beverages, Inc. 720,000 23,000 Stanhome, Inc. 669,875 ----------- 1,389,875 ----------- CONTAINERS (0.8%) 90,000 * Owens-Illinois, Inc. 1,305,000 ----------- DIVERSIFIED (0.1%) 32,500 Quixote Corp. 251,875 ----------- ELECTRICAL EQUIPMENT (4.1%) 90,000 BMC Industries Inc. - Minn. 2,092,500 31,500 Federal Signal Corp. 815,063 40,000 General Electric Co. 2,880,000 30,000 Varian Associates, Inc. 1,432,500 ----------- 7,220,063 ----------- ENTERTAINMENT AND LEISURE (0.5%) 25,000 Cedar Fair 925,000 ----------- FINANCE (1.7%) 37,500 * Medaphis Corp. 1,387,500 15,000 PHH Corp. 701,250 40,000 SEI Corp. 870,000 ----------- 2,958,750 ----------- FOOD AND RELATED (0.9%) 33,000 Smart & Final, Inc. 701,250 25,500 H.J. Heinz Co. 844,687 ----------- 1,545,937 ----------- HOUSING, FURNITURE & RELATED (2.7%) 108,800 Clayton Homes, Inc. 2,325,600 64,000 Newell Co. 1,656,000 50,000 Shaw Industries, Inc. 737,500 ----------- 4,719,100 ----------- INDUSTRIAL SERVICES (3.9%) 30,000 Deere & Company 1,057,500 22,500 Fluor Corp. 1,485,000 38,000 * Nuclear Support Services, Inc. 47,500 50,000 Regal Beloit 1,087,500 32,000 Stewart & Stevenson Services 808,000 50,000 WMX Technologies, Inc. 1,493,750 20,000 York International, Corp. 940,000 ----------- 6,919,250 ----------- INSURANCE SERVICES (5.1%) 28,125 American International Group 2,601,563 18,000 Chubb Corp. 1,741,500 34,125 Cincinnati Financial Corp. 2,226,656 40,000 Equitable Cos., Inc. 960,000 34,500 Providian Corp. 1,405,875 ----------- 8,935,594 -----------
(continued) 56 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 EQUITY PORTFOLIO (CONTINUED)
Market Shares Common Stock Value - -------------------------------------------------------------------- MACHINERY (3.2%) 28,000 * Bridgeport Machines Inc. $ 588,000 24,000 Caterpillar, Inc. 1,410,000 40,000 Kysor Industrial Corp. 970,000 56,800 Trinity Industries 1,789,200 47,000 Walbro Corp. 846,000 ----------- 5,603,200 ----------- MEDICAL AND RELATED (6.0%) 32,000 Abbott Laboratories 1,336,000 36,000 Allergan, Inc. 1,170,000 44,000 Columbia HCA Healthcare Corp. 2,233,000 24,000 * Foundation Health Corp. 1,032,000 34,500 Healthcare Realty Trust 793,500 30,000 * Humana Inc. 821,250 29,500 National Health Investors, Inc. 977,188 13,500 National Healthcare-LP 526,500 23,500 * Quorum Health Group Inc. 517,000 24,000 U.S. Healthcare, Inc. 1,116,000 ----------- 10,522,438 ----------- METALS AND MINING (1.8%) 52,500 Easco Inc. 452,812 40,000 Greenbrier Companies, Inc. 485,000 35,300 Minerals Technologies, Inc. 1,288,450 16,000 Phelps Dodge Corp. 996,000 ----------- 3,222,262 ----------- METAL FABRICATING (1.2%) 96,000 Engelhard Corp. 2,088,000 ----------- OIL, ENERGY AND NATURAL GAS (6.2%) 40,000 Ashland, Inc. 1,405,000 65,500 Camco International, Inc. 1,834,000 27,000 Chevron Corp. 1,417,500 13,000 Coastal Corp. 484,250 17,500 Diamond Shamrock, Inc. 452,813 57,500 * Enserch Exploration Inc. 668,437 75,000 * Louis Dreyfus Natural Gas 1,134,375 20,000 Schlumberger, Ltd. 1,385,000 45,000 Union Texas Petroleum 871,875 90,000 Westcoast Energy, Inc. 1,316,250 ----------- 10,969,500 ----------- PAPER PRODUCTS (0.1%) 15,000 * Specialty Paperboard, Inc. 183,750 ----------- RETAIL (0.4%) 35,000 Family Dollar Stores 481,250 12,500 * Regis Corp. 300,000 ----------- 781,250 ----------- REAL ESTATE AND LEASING (0.4%) 51,000 Commercial Net Lease Realty 650,250 5,000 Kennedy-Wilson, Inc. 25,000 ----------- 675,250 ----------- TEXTILES AND RELATED (0.6%) 25,000 Oxford Industries, Inc. 418,750 25,000 Singer Co. NV 696,875 ----------- 1,115,625 ----------- TRANSPORTATION AND EQUIPMENT (4.5%) 41,382 Burlington Northern, Inc. $ 3,227,796 15,000 Conrail, Inc. 1,050,000 30,000 Consolidated Freightways Inc. 795,000 22,500 Illinois Central Corp. 863,438 25,000 Norfolk Southern Corp. 1,984,375 ----------- 7,920,609 ----------- UTILITIES (1.4%) 21,500 Entergy Corp. 628,875 27,500 FPL Group, Inc. 1,275,313 20,500 Montana Power Co. 463,812 ----------- 2,368,000 ----------- TOTAL COMMON STOCKS (80.1%) (COST $91,580,755) $140,626,533 -----------
MARKET SHARES PREFERRED STOCK VALUE - ------------------------------------------------------------------- AUTOMOTIVE AND RELATED (0.7%) 12,000 Ford Motor Depository Shares, Series A, cum., conv. $ 1,137,000 ----------- BANKING (0.9%) 14,000 Washington Mutual Series D 1,603,000 ----------- ELECTRICAL EQUIPMENT (0.5%) 55,000 Westinghouse Equity, red., cum., conv. 907,500 ----------- OIL AND GAS (0.4%) 13,000 Ashland Oil, cum., conv. 765,375 ----------- METALS AND MINING (0.9%) 50,000 Freeport McMoRan Copper & Gold, Series B 1,625,000 ----------- REAL ESTATE (0.3%) 20,000 Oasis Residential Inc. Series A cum., conv. 515,000 ----------- TOTAL PREFERRED STOCK (3.7%) (COST $6,078,590) 6,552,875 -----------
FACE MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - -------------------------------------------------------------------- AUTOMOTIVE AND RELATED (0.3%) $300,000 Arvin Industries, Inc., 7.500% conv. subordinated debentures, due 09-03-14 $ 296,625 200,000 Magna Intl. Inc. conv. subordinated debentures due 10-15-02 204,000 ----------- 500,625 ----------- COMPUTER AND RELATED (1.2%) 1,000,000 Seagate Technology, Inc., 6.750% conv. subordinated debentures, due 05-01-12 1,177,500 1,100,000 * Solectron Corp. liquid yield option, zero coupon contracts, due 05-05-12 976,250 ----------- 2,153,750 -----------
(continued) 57 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 EQUITY PORTFOLIO (CONTINUED)
FACE MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - ------------------------------------------------------------------- METAL FABRICATING (0.6%) $ 900,000 INCO, Ltd., 7.750% conv. subordinated debentures, due 03-15-16 $ 963,000 ----------- TOTAL CONVERTIBLE DEBENTURES (2.1%) (COST $2,754,181) $3,617,375 -----------
FACE MARKET AMOUNT SHORT-TERM NOTES VALUE - ------------------------------------------------------------------- AUTOMOTIVE AND RELATED (1.8%) $3,200,000 General Motors Acceptance Corp. 5.600% 01-11-96 $ 3,195,022 -----------
FACE MARKET AMOUNT SHORT-TERM NOTES VALUE - ------------------------------------------------------------------- FINANCE (12.3%) $4,700,000 American Express Credit Corp. 5.600% 01-08-96 $4,694,882 4,700,000 American General Capital Services 5.830% 01-10-96 4,693,150 3,300,000 Associates Corp. of N. America 5.620% 01-04-96 3,298,455 2,670,000 Household Finance 5.650% 01-05-96 2,668,324 4,160,000 Prudential Funding Corp. 5.810% 01-03-96 4,158,657 2,100,000 Sears, Roebuck Acceptance Corp. 5.900% 01-09-96 2,097,247 ------------ 21,610,715 ------------ TOTAL SHORT-TERM NOTES (14.1%) (Cost $24,805,737) 24,805,737 ------------ TOTAL HOLDINGS (Cost $125,219,263)(a) 175,602,520 ============
*Non-income producing securities. (a) Also represents cost for Federal income tax purposes. The accompanying notes are an integral part of these financial statements. 58 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 MONEY MARKET PORTFOLIO
FACE MARKET AMOUNT SHORT-TERM NOTES VALUE - -------------------------------------------------------------------------- AUTOMOTIVE AND RELATED (8.4%) $ 560,000 General Motors Acceptance Corp. 5.550% 03-04-96 $ 554,561 350,000 Echlin Inc. 5.680% 02-09-96 347,846 350,000 Ford Motor Credit Corp. 5.790% 01-10-96 349,493 ---------- 1,251,900 ---------- CHEMICALS (3.8%) 570,000 Dupont (EI) deNemours 5.630% 01-24-96 567,950 ---------- COMPUTER AND RELATED (7.8%) 600,000 Hewlett-Packard 5.630% 01-18-96 598,405 560,000 IBM Credit Corp. 5.750% 01-06-96 559,374 ---------- 1,157,779 ---------- COMMUNICATIONS (5.9%) 530,000 Gannett Co. 5.600% 01-26-96 527,939 350,000 Ameritech 5.620% 02-02-96 348,251 ---------- 876,190 ---------- COMMODITIES (1.1%) 165,000 Cargill, Inc. 5.680% 01-08-96 164,693 ---------- CONSUMER PRODUCTS (11.0%) 600,000 Pepsi Co. 5.650% 01-19-96 598,305 485,000 Sears, Roebuck Acceptance Corp. 5.720% 01-29-96 482,842 100,000 Sears Roebuck Acceptance Corp. 5.710% 01-29-96 99,556 440,000 Stanley Works 5.540% 03-11-96 435,260 ---------- 1,615,963 ---------- DRUGS (3.4%) 500,000 Glaxo Holdings 5.680% 01-22-96 498,343 ---------- FOOD & RELATED (3.7%) 550,000 H.J. Heinz Company 5.680% 01-16-96 548,698 ---------- FORESTRY AND PAPER PRODUCTS (4.0%) 600,000 Temple-Inland 5.620% 01-30-96 597,284 ---------- FINANCE (21.9%) $ 590,000 American Express Credit Corp. 5.700% 01-03-96 $ 589,813 500,000 American General Finance Corp. 5.660% 01-16-96 498,821 550,000 Associates Corp. 5.500% 01-25-96 547,983 410,000 G.E. Capital Corp. 5.690% 01-08-96 409,547 620,000 Heller Financial Inc. 5.770% 01-11-96 619,006 600,000 Household Finance Corp. 5.680% 02-02-96 596,971 ---------- 3,262,141 ---------- INSURANCE (2.4%) 360,000 Prudential Funding Inc. 5.780% 01-11-96 359,422 ---------- MACHINERY (2.7%) 100,000 Deere and Company 5.690% 01-02-96 99,984 100,000 Deere and Company 5.470% 01-02-96 99,985 200,000 Deere and Company 5.800% 01-02-96 199,968 ---------- 399,937 ---------- OIL, ENERGY AND NATURAL GAS (5.2%) 400,000 Chervon Oil Co. 5.800% 01-09-96 399,485 380,000 KN Energy 5.750% 01-17-96 379,029 ---------- 778,514 ---------- TRANSPORTATION (4.0%) 600,000 Consolidated Rail Corp. 5.680% 01-12-96 598,959 ---------- UTILITIES (14.7%) 500,000 AT&T Corp. 5.680% 01-16-96 498,817 550,000 Central and Southwest Corp. 5.700% 02-14-96 546,168 650,000 Illinois Power Co. 5.930% 02-08-96 645,931 500,000 Southern California Edison Co. 5.680% 01-19-96 498,580 ---------- 2,189,496 ---------- TOTAL HOLDINGS (COST $14,867,269)(a) 14,867,269 ==========
(a) Also represents cost for Federal income tax purposes. The accompanying notes are an integral part of these financial statements. 59 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 BOND PORTFOLIO
FACE MARKET AMOUNT LONG-TERM NOTES VALUE - ------------------------------------------------------------------------------- GOVERNMENT (13.8%) $ 300,000 U.S. Treasury Note 7.625% 04-30-96 $ 302,376 250,000 U.S. Treasury Note 6.375% 08-15-02 262,385 500,000 U.S. Treasury Note 7.375% 11-15-97 518,730 500,000 U.S. Treasury Note 7.875% 11-15-99 543,545 745,000 U.S. Treasury Note 7.750% 02-15-01 822,569 --------- 2,449,605 --------- AUTOMOTIVE AND RELATED (4.3%) 100,000 Arvin Industries 10.000% 08-01-00 112,250 500,000 GMAC 8.400% 10-15-99 541,875 100,000 Pep Boys 8.875% 04-15-96 100,875 --------- 755,000 --------- COMMUNICATIONS (1.5%) 250,000 Tele-communications, Inc. 8.250% 01-15-03 267,500 --------- COMPUTER AND RELATED (2.9%) 300,000 Apple Computer Inc. 6.500% 02-15-04 297,750 200,000 Comdisco, Inc. 7.750% 09-01-99 209,750 --------- 507,500 --------- CONSUMER GOODS (2.9%) 200,000 RJR Nabisco Inc. 8.750% 04-15-04 208,500 300,000 RJR Nabisco Inc. 8.625% 12-01-02 310,875 --------- 519,375 --------- ELECTRICAL EQUIPMENT (2.4%) 400,000 Tektronix Inc. 7.500% 08-01-03 417,000 --------- FINANCE (1.4%) 250,000 Aristar Inc. 5.750% 07-15-98 250,312 --------- FOOD AND RELATED (2.8%) 500,000 Wendy's Inc. 6.350% 12-15-05 503,750 --------- FORESTRY AND PAPER PRODUCTS (5.0%) 300,000 Boise Cascade Co. 9.850% 06-15-02 352,125 250,000 Champion International 7.700% 12-15-99 265,312 250,000 ITT Rayonier Inc. 7.500% 10-15-02 266,563 --------- 884,000 --------- GOVERNMENT (FOREIGN) (2.8%) $ 200,000 British Columbia 7.000% 01-15-03 $ 212,500 250,000 Province of Quebec 8.625% 01-19-05 288,438 --------- 500,938 --------- HOTEL/LODGING (1.9%) 300,000 Marriott International 7.780% 04-15-05 329,625 --------- HOUSING, FURNITURE AND RELATED (1.0%) 140,000 Armstrong World 9.750% 04-15-08 177,800 --------- INSURANCE (3.9%) 250,000 Continental Corp. 7.250% 03-01-03 260,000 400,000 Transamerica Finance Corp. 7.500% 03-15-04 428,000 --------- 688,000 --------- MEDICAL AND RELATED (3.2%) 250,000 Bergen Brunswig 7.375% 01-15-03 265,312 300,000 Cardinal Health Inc. 6.500% 02-15-04 303,375 --------- 568,687 --------- METALS AND MINING (2.8%) 500,000 Cyprus Minerals 6.625% 10-15-05 504,375 --------- OIL, ENERGY AND NATURAL GAS (10.9%) 200,000 Atlantic Richfield 8.550% 03-01-12 238,250 100,000 DeKalb Energy 9.875% 07-15-00 101,500 400,000 Dresser Industries, Inc. 6.250% 06-01-00 406,000 125,000 Marathon Oil 7.000% 06-01-02 128,750 500,000 Mobile Energy Services Co. 8.665% 01-01-17 552,613 400,000 PDV America, Inc. 7.875% 08-01-03 369,000 140,000 Shell Oil Co. 6.950% 12-15-98 145,250 --------- 1,941,363 --------- REAL ESTATE (1.7%) 300,000 Avalon Properties Inc. 7.375% 09-15-02 308,625 --------- TRANSPORTATION (3.4%) 250,000 American President Cos., Ltd. 7.125% 11-15-03 252,187 350,000 Illinois Central Gulf Railroad 6.750% 05-15-03 355,688 --------- 607,875 =========
(continued) 60 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 BOND PORTFOLIO (CONTINUED)
FACE MARKET AMOUNT LONG-TERM NOTES VALUE - -------------------------------------------------------------------------------- UTILITIES (17.6%) $ 200,000 Cleveland Electric Illum. 7.625% 08-01-02 $ 192,250 500,000 Great Lakes Power Inc. 8.900% 12-01-99 538,125 250,000 Kansas Gas & Electric 8.290% 03-29-16 282,813 150,000 Long Island Lighting 8.750% 05-01-96 151,875 550,000 Mississippi Power & Light 8.800% 04-01-05 579,563 200,000 Old Dominion Electric Co-op 8.760% 12-01-22 243,750 200,000 Sprint Corp. 8.125% 07-15-02 221,000 700,000 Texas Utilities Electric Co. 7.480% 01-01-17 728,000 200,000 Toledo Edison Co. 7.875% 08-01-04 183,000 ----------- 3,120,376 ---------- MISCELLANEOUS (6.4%) 375,000 New Orleans Public Service Co. 8.670% 04-01-05 413,438 700,000 ITT Destinations Inc. 6.750% 11-15-05 716,407 ----------- 1,129,845 ---------- TOTAL LONG-TERM NOTES (92.6%) (COST $15,607,023) 16,431,551 ---------- AUTOMOTIVE AND RELATED (2.5%) $ 200,000 Ford Motor Co. 5.920% 01-02-96 $ 199,967 240,000 General Motors Accepttance Corp. 5.600% 01-05-96 239,851 ---------- 439,818 ---------- FINANCE (1.5%) 270,000 American General Capital Services 5.950% 01-04-96 269,866 ---------- OIL, ENERGY AND NATURAL GAS (0.6%) 100,000 Chevron Oil Finance Co. 5.630% 01-03-96 99,968 ---------- TOTAL SHORT-TERM NOTES (4.6%) (COST $809,652) 809,652 ----------
MARKET SHARES PREFERRED STOCK VALUE - -------------------------------------------------------------------------------- UTILITIES (2.8%) 12,000 GTE Delaware, 8.750%, Series B $ 322,500 6,500 Phillips Gas Co., 9.320% Series A 172,250 ----------- TOTAL PREFERRED STOCKS (2.8%) (COST $462,500) $ 494,750 -----------
MARKET SHARES WARRANTS VALUE - -------------------------------------------------------------------------------- DIVERSIFIED 500 * Plastic Specialties & Tech Inc. $ 500 ----------- TOTAL WARRANTS (0.0%) $ 500 ----------- TOTAL HOLDINGS (COST $16,879,175)(A) $17,736,453 ===========
*Non-income producing securities. (a) Also represents cost for Federal income tax purposes. The accompanying notes are an integral part of these financial statements. 61 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 OMNI PORTFOLIO
FACE MARKET AMOUNT LONG-TERM NOTES VALUE - -------------------------------------------------------------------------------- GOVERNMENT (4.6%) $ 775,000 U.S. Treasury Note 6.375% 07-15-99 $ 801,257 1,500,000 U.S. Treasury Note 7.375% 05-15-96 1,511,535 500,000 U.S. Treasury Note 7.875% 11-15-99 543,545 2,005,000 U.S. Treasury Note 7.750% 02-15-01 2,213,761 ---------- 5,070,098 ---------- AUTOMOTIVE AND RELATED (0.6%) 300,000 Arvin Industries, Inc. 7.500% 09-30-14 296,625 400,000 Pep Boys 8.875% 04-15-96 403,500 ---------- 700,125 ---------- AVIATION (0.5%) 500,000 AAR Corp. 7.250% 10-15-03 493,750 ---------- COMPUTERS AND RELATED (0.6%) 700,000 Apple Computer, Inc. 6.500% 02-15-04 694,750 ---------- CONSUMER GOODS (1.1%) 700,000 Kroger Co. 9.750% 02-15-04 758,625 400,000 RJR Nabisco, Inc. 8.750% 04-15-04 417,000 ---------- 1,175,625 ---------- FINANCE (0.9%) 1,000,000 Green Tree Financial Corp. 8.700% 06-15-25 1,000,000 ---------- FORESTRY AND PAPER PRODUCTS (1.5%) 700,000 Boise Cascade Co. 9.850% 06-15-02 821,625 500,000 Champion International 9.875% 06-01-00 575,000 250,000 ITT Rayonier, Inc. 7.500% 10-15-02 266,563 ---------- 1,663,188 ---------- HOUSING, FURNITURE AND RELATED (0.3%) 250,000 Armstrong World 9.750% 04-15-08 317,500 ---------- INSURANCE (1.1%) 500,000 Continental Corp. 7.250% 03-01-03 520,000 600,000 Transamerica Finance Corp. 7.500% 03-15-04 642,000 ---------- 1,162,000 ---------- MEDICAL AND RELATED (0.5%) 500,000 Bergen Brunswig 7.375% 01-15-03 530,625 ---------- METALS AND MINING (0.5%) $ 500,000 Cyprus Minerals 6.625% 10-15-05 $ 504,375 ---------- OIL, ENERGY AND NATURAL GAS (2.0%) 400,000 Dekalb Energy 9.875% 07-15-00 406,000 350,000 Dresser Industries, Inc. 6.250% 06-01-00 355,250 375,000 Marathon Oil 7.00% 06-01-02 386,250 600,000 PDV America, Inc. 7.875% 08-01-03 553,500 500,000 Union Texas Petroleum 8.250% 11-15-99 530,000 ---------- 2,231,000 ---------- TRANSPORTATION (0.8%) 500,000 American President Cos., Ltd. 7.125% 11-15-03 504,375 400,000 Illinois Central Gulf Railroad 6.750% 05-15-03 406,500 ---------- 910,875 ---------- UTILITIES (3.4%) $ 400,000 Cleveland Electric Illum. 7.625% 08-01-02 384,500 1,000,000 Great Lakes Power 9.000% 08-01-04 1,122,500 350,000 Long Island Lighting 8.750% 05-01-96 354,375 500,000 Mississippi Power & Light 8.800% 04-01-05 526,875 400,000 Old Dominion Elec. Co. 8.760% 12-01-22 487,500 300,000 Sprint Corp. 8.125% 07-15--02 331,500 500,000 Texas New Mexico Power Co. 9.250% 09-15-00 520,625 ---------- 3,727,875 ---------- TOTAL LONG-TERM NOTES (18.4%) $20,181,786 ---------- (COST $19,252,122)
FACE MARKET AMOUNT SHORT-TERM NOTES VALUE - -------------------------------------------------------------------------------- FINANCE (17.1%) $ 100,000 American Express Credit Corp. 5.600% 01-08-96 $ 99,891 3,300,000 American General Finance 5.900% 01-02-96 3,299,459 4,460,000 Associates Corp. of N. America 5.620% 01-04-96 4,457,911 4,600,000 Household Finance Corp. 5.650% 01-05-96 4,597,112 2,800,000 Prudential Funding Corp. 5.740% 01-09-96 2,796,428 3,500,000 Sears Roebuck Acceptance Corp. 5.900% 01-03-96 3,498,853 ---------- TOTAL SHORT-TERM NOTES (17.1%) (COST $18,749,654) $18,749,654 ----------
(continued) 62 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 OMNI PORTFOLIO (CONTINUED)
FACE MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - -------------------------------------------------------------------------------- AUTOMOTIVE AND RELATED (0.1%) $ 100,000 Magna Intl. Inc., 5.000% conv. subordinated debentures, due 10-15-02 $ 102,000 --------- COMPUTER AND RELATED (1.1%) 1,000,000 Seagate Technology Inc., 6.750% conv. subordinated debentures, due 05-01-12 1,177,500 ---------- METAL FABRICATING (0.5%) 600,000 INCO, Ltd., 7.750% conv. subordinated debentures, due 03-15-16 642,000 ---------- TOTAL CONVERTIBLE DEBENTURES (1.7%) (COST $1,696,875) $1,921,500 ----------
MARKET SHARES COMMON STOCK VALUE - -------------------------------------------------------------------------------- AEROSPACE (2.7%) 22,000 Allied Signal, Inc. $1,045,000 21,600 Raytheon Co. 1,020,600 17,350 Rockwell International Corp. 917,381 --------- 2,982,981 --------- AUTOMOTIVE AND RELATED (1.5%) 7,500 Arvin Industries, Inc. 123,750 5,850 Chrysler Corp. 323,944 17,000 * Custom Chrome, Inc. 393,125 8,000 Eaton Corp. 429,000 10,000 Magna International, Inc. 432,500 --------- 1,702,319 --------- BANKING (3.0%) 10,000 Boatmen's Bancshares, Inc. 408,750 13,000 Charter One Financial, Inc. 398,125 10,000 First Union Corp. 556,250 13,650 Franklin National Bank 177,450 45,000 Hanson Trust, Plc 686,250 11,250 Mellon Bank Corp. 604,688 12,500 Susquehanna Bancshares, Inc. 331,250 --------- 3,162,763 --------- BUSINESS SERVICES (3.2%) 12,500 * Andros, Inc. 190,625 20,000 First Data Corp. 1,337,500 30,000 Manpower, Inc. 843,750 30,000 * Mastec, Inc. 397,500 5,000 Standard Register Co. 100,625 22,000 * Verifone, Inc. 629,750 --------- 3,499,750 --------- CHEMICALS (2.5%) 15,000 Betz Laboratories, Inc. 615,000 2,500 E I DuPont DeNemours & Co. 174,687 20,000 Learonal Inc. 460,000 12,000 Lubrizol Corp. 334,500 3,000 Monsanto Co. 367,500 25,000 OM Group, Inc. 828,125 --------- 2,779,812 --------- COMMUNICATIONS (1.6%) 24,000 * Andrew Corp. $ 918,000 49,000 * General Cable Plc 735,000 15,000 * Granite Broadcasting Corp. 159,375 --------- 1,812,375 --------- COMPUTER AND RELATED (7.1%) 15,000 * Cisco Systems, Inc. 1,119,375 6,600 Computer Sciences Corp. 463,650 10,000 * Exabyte Corp. 146,250 21,000 Hewlett-Packard Co. 1,758,750 14,000 Intel Corp. 794,500 5,000 * Microsoft Corp. 438,750 20,000 * Netframe Systems 106,250 32,500 * Novell, Inc. 463,125 20,000 * Pyxis Corp. 292,500 20,000 * Sun Microsystems, Inc. 912,500 16,000 * Teradyne Inc. 400,000 18,000 Texas Instruments, Inc. 931,500 --------- 7,827,150 --------- CONSUMER PRODUCTS (0.7%) 11,500 PanAmerican Beverages, Inc. 368,000 12,000 Stanhome, Inc. 349,500 --------- 717,500 --------- CONTAINERS (0.9%) 70,000 * Owens-Illinois, Inc. 1,015,000 --------- DIVERSIFIED (0.1%) 20,000 Quixote Corp. 155,000 --------- ELECTRICAL EQUIPMENT (2.9%) 40,000 BMC Industries, Inc.-Minn. 930,000 26,116 Federal Signal Corp. 675,752 14,000 General Electric Co. 1,008,000 12,000 Varian Associates, Inc. 573,000 --------- 3,186,752 --------- ENTERTAINMENT AND LEISURE (0.8%) 25,000 Cedar Fair 925,000 --------- FINANCE (1.4%) 27,500 * Medaphis Corp. 1,017,500 11,500 PHH Corp. 537,625 --------- 1,555,125 --------- FOOD AND RELATED (0.8%) 15,000 Smart & Final, Inc. 318,750 16,500 H.J. Heinz Co. 546,563 --------- 865,313 --------- HOUSING, FURNITURE AND RELATED (1.3%) 29,620 Clayton Homes, Inc. 633,133 24,000 Newell Co. 621,000 11,200 Shaw Industries, Inc. 165,200 --------- 1,419,333 --------- INDUSTRIAL SERVICES (0.7%) 20,000 * Nuclear Support Services, Inc. 25,000 1,600 Regal Beloit 34,800 28,000 Stewart & Stevenson Services 707,000 --------- 766,800 ---------
(continued) 63 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 OMNI PORTFOLIO (CONTINUED)
MARKET SHARES COMMON STOCK VALUE - -------------------------------------------------------------------------------- INSURANCE (5.3%) 16,125 American International Group $ 1,491,563 15,000 Chubb Corp. 1,451,250 23,625 Cincinnati Financial Corp. 1,541,531 20,000 Equitable Cos., Inc. 480,000 20,500 Providian Corporation 835,375 ---------- 5,799,719 ---------- MACHINERY (1.8%) 15,000 * Bridgeport Machines, Inc. 315,000 6,000 Caterpillar, Inc. 352,500 21,000 Trinity Industries 661,500 34,000 Walbro Corp. 612,000 ---------- 1,941,000 ---------- MEDICAL AND RELATED (4.6%) 28,000 Abbott Laboratories 1,169,000 14,000 Allergan, Inc. 455,000 15,000 * Foundation Health Corp. 645,000 33,500 Healthcare Realty Trust 770,500 18,000 * Humana, Inc. 492,750 24,000 National Health Investors, Inc. 795,000 15,000 U.S. Healthcare, Inc. 697,500 ---------- 5,024,750 ---------- METAL FABRICATING (1.0%) 27,000 Amcast Industrial Corp. 492,750 18,000 Engelhard Corp. 391,500 4,000 Phelps Dodge Corp. 249,000 ---------- 1,133,250 ---------- METALS AND MINING (1.2%) 32,500 Easco Inc. 280,312 24,000 Greenbrier Companies, Inc. 291,000 20,000 Minerals Technologies, Inc. 730,000 ---------- 1,301,312 ---------- OIL, ENERGY AND NATURAL GAS (6.2%) 15,000 Ashland, Inc. 526,875 45,500 Camco International, Inc. 1,274,000 23,000 Chevron Corp. 1,207,500 7,000 Coastal Corp. 260,750 7,500 Diamond Shamrock, Inc. 194,062 27,000 * Enserch Exploration, Inc. 313,875 40,000 * Louis Dreyfus Natural Gas 605,000 10,000 Schlumberger, Ltd. 692,500 35,000 Union Texas Petroleum Holdings, Inc. 678,125 45,000 Westcoast Energy, Inc. 658,125 10,000 WD-40 Co. 410,000 ---------- 6,820,812 ---------- REAL ESTATE (1.0%) 59,300 Commercial Net Lease Realty 756,075 2,000 * Kennedy-Wilson, Inc. 10,000 17,000 Liberty Property Trust 352,750 ---------- 1,118,825 ---------- TRANSPORTATION AND EQUIPMENT (3.6%) 24,255 Burlington Northern Santa Fe $ 1,891,890 8,000 Conrail, Inc. 560,000 15,000 Consolidated Freightways, Inc. 397,500 7,500 Illinois Central Corp. 287,812 10,000 Norfolk Southern Corp. 793,750 ---------- 3,930,952 ---------- UTILITIES (0.9%) 6,000 Entergy Corp. 175,500 15,000 FPL Group, Inc. 695,625 7,000 Montana Power Co. 158,375 ---------- 1,029,500 ---------- TOTAL COMMON STOCKS (56.8%) (COST $43,917,736) 62,473,093 ----------
MARKET SHARES PREFERRED STOCK VALUE - -------------------------------------------------------------------------------- AUTOMOTIVE AND RELATED (1.5%) 18,000 Ford Motor Co., cum., conv., Ser. A $1,705,500 ---------- BANKING (0.7%) 7,000 Washington Mutual 6.00% Series D 801,500 ---------- ELECTRICAL EQUIPMENT (0.6%) 40,000 Westinghouse Equity, cum., conv. 660,000 ---------- FOOD & RELATED (0.5%) 20,000 Conagra Capital LC, 9.350% cum., conv. Series C 550,000 ---------- METALS AND MINING (0.9%) 30,000 Freeport McMoran Copper & Gold cum., conv. 975,000 ---------- OIL, ENERGY AND NATURAL GAS (0.4%) 7,000 Ashland, Inc., cum., conv. 412,125 ---------- REAL ESTATE (0.4%) 15,000 Oasis Residential , Inc., 9.000% 386,250 ---------- cum., conv. Series A UTILITIES (1.0%) 20,000 GTE Delaware 8.750%, Series B 537,500 22,000 Phillips Gas Co. 9.320% Series A 583,000 ---------- 1,120,500 ---------- TOTAL PREFERRED STOCKS (6.0%) (COST $5,730,885) $6,610,875 ----------
MARKET SHARES WARRANTS VALUE - -------------------------------------------------------------------------------- DIVERSIFIED (0.00%) 2,000 * Plastic Specialties & Tech., Inc. $ 2,000 ------------ TOTAL WARRANTS (0.0%) $ 2,000 ------------ TOTAL HOLDINGS (COST $89,347,272)(A) $109,938,908 ============
*Non-income producing securities. (a) Also represents cost for Federal income tax purposes. The accompanying notes are an integral part of these financial statements. 64 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 INTERNATIONAL PORTFOLIO
MARKET SHARES COMMON AND PREFERRED STOCK VALUE - -------------------------------------------------------------------------------- JAPAN (19.8%) 85,000 Aida Engineering Limited (19) $ 650,435 18,000 Asatsu Inc. (20) 754,783 20,000 Chofu Seisakusho (9) 535,266 225,000 Dai-Tokyo Fire Marine Ins. Co. Ltd. (18) 1,713,043 75,000 Fuji Photo Film Co., Ltd. (9) 2,159,420 12,000 Hitachi Ltd. ADR (11) 1,206,000 115,000 * Iino Kaiun Kaisha (5) 653,333 35,000 Ito-Yokado Co. Ltd. (28) 2,150,725 35,000 Japan Airport Terminal Co. (32) 422,705 125,000 Nisshinbo Industries Inc. (8) 1,207,730 85,000 Nittetsu Mining Co., Ltd. (22) 845,894 65,000 Shimano Inc. (9) 1,142,995 10,000 Sotoh Co. (31) 98,551 45,000 Shoei Co. (27) 391,304 8,500 Toho Co. (20) 1,355,073 100,000 Tokyo Marine & Fire Ins. Co. Ltd. (18) 1,304,348 15,000 Tsutsumi Jewelry Co. (9) 749,275 ---------- 17,340,880 ---------- SWITZERLAND (7.9%) 1,000 Affichage (20) 441,941 275 Bank of Intl. Settlements (3) 2,311,525 1,650 Kuehne & Nagel Intl. AG (32) 979,419 400 Lindt & Sprungli AG PC (9) 582,322 5,500 Safra Republic Holdings SA (3) 491,563 1,350 Schindler Holding AG PC (5) 1,397,964 2,000 Sika Finanz AG Bearer (7) 485,269 1 Vetropack Holding AG Bearer (23) 2,990 650 Vetropack Holding AG PC (23) 174,610 ---------- 6,867,603 ---------- FRANCE (7.8%) 2,500 C.E.E. (Continentale d'Equipments Electriques) (10) 124,325 4,110 Crometal (5) 261,351 15,000 Elf Aquitaine (12) 1,103,027 5,528 Emin Leydier (24) 449,541 5,000 Eramet (22) 326,098 13,750 Gaumont SA (20) 882,759 3,500 La Brosse et DuPont (9) 220,921 16,500 Legrand ADP (10) 1,647,814 4,000 Nicolas Schlumberger et Cie (19) 671,762 1,500 Promodes C.I. (28) 256,802 2,500 SAGA (Societe Anontme de Gerance et d'Armement) (32) 85,091 1,000 Sucriere de Pithiviers-le-Vieil (1) 492,204 1,000 Taittinger (13) 262,917 ---------- 6,784,612 ---------- GERMANY (7.2%) 5,000 Bayer AG (7) 1,325,444 7,500 Bertelsmann AG D.R.C. (25) 984,163 4,750 Buderus AG (5) 1,851,723 10,000 Hornbach Holdings AG Pfd. (28) 870,171 1,000 SAP AG Pfd. (8) 151,619 1,250 Spar Handells AG Pfd. (28) 268,013 1,000 Axel Springer Verlag AG (20) 671,772 450 Sudzucker AG Pfd. (1) 181,535 ---------- 6,304,440 ---------- NEW ZEALAND (5.6%) 765,549 Carter Holt Harvey Limited (14) $ 1,650,313 50,000 Colonial Motor Co. Ltd. (2) 91,455 650,000 * Evergreen Forests Ltd. (14) 275,998 1,601,500 Shortland Properties, Ltd. (27) 899,715 889,900 Tasman Agriculture Limited (1) 906,870 125,000 Wilson Limited (20) 747,155 450,000 Wrightson Ltd. (1) 340,997 ---------- 4,912,503 ---------- CANADA(4.7%) 50,000 Canadian Pacific Ltd. (34) 906,250 50,000 Dofasco, Inc. (30) 631,984 85,000 Noranda, Inc. (21) 1,751,694 200,000 Redstone Resources, Inc. (22) 578,860 35,000 Le Groupe Videotron, Ltd. (20) 256,457 ---------- 4,125,245 ---------- HONG KONG (4.8%) 3,750,000 CDL Hotels Intl. Ltd. (16) 1,891,368 1,500,000 Shaw Brothers (Hong Kong) Ltd.(20) 1,648,885 1,000,000 South China Morning Post Holdings Corp. (25) 611,057 ---------- 4,151,310 ---------- NETHERLANDS (4.1%) 16,500 Apothekers Cooperatie OPG (17) 405,317 24,500 German City Estates NV (27) 370,242 1,500 Holdingmaatschappij de Telegraaf (25) 210,821 15,000 Philips Electronics NV ADR (11) 538,125 45,000 Randstad Holdings NV (29) 2,037,313 ---------- 3,561,818 ---------- LATIN AMERICA (3.9%) 165,000 Antofagasta Holdings plc (21) 750,242 20,000 Bladex (3) 930,000 595,000 Ledesma SA (1) 761,486 1,000,000 Siderca S.A.I.C. (12) 969,854 ---------- 3,411,582 ---------- UNITED KINGDOM (2.8%) 225,000 Blenheim Group plc (20) 872,915 100,000 Royal Doulton plc (9) 383,307 275,000 * McBride plc (10) 832,179 50,000 Scottish Television plc (20) 367,400 ---------- 2,455,801 ---------- SWEDEN (2.2%) 40,000 AssiDoman AB (14) 867,633 65,000 Bylock & Nordsjofrakt AB 'B' (32) 567,878 35,000 Orrefors Kosta Boda AB (9) 521,936 ---------- 1,957,447 ---------- SINGAPORE (2.1%) 250,000 Clipsal Industries Ltd. (10) 565,000 45,000 Rothmans Industries Limited (9) 170,226 85,000 Singapore Bus Service Ltd. (32) 607,014 225,000 Times Publishing Ltd. (25) 521,813 ---------- 1,864,053 ---------- DENMARK (1.8%) 3,500 Aarhus Oliefabrik A/S Class 'B' (1) 195,074 20,000 Carlsberg International A/S Class'B'(9) 1,114,707 3,500 Copenhagen Airport (32) 266,810 ---------- 1,576,591 ----------
(continued) 65 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 INTERNATIONAL PORTFOLIO (CONTINUED)
MARKET SHARES COMMON AND PREFERRED STOCK VALUE - -------------------------------------------------------------------------------- SOUTH AFRICA (1.8%) 10,332 Anglo American Platinum Corp.ADR(22) $ 58,809 35,000 Anglo American Platinum Corp.(22) 199,218 10,000 JCI Ltd. ADR (22) 78,864 25,000 JCI Ltd. (22) 197,161 10,103 Johnnies Industrial Corp. ADR (22) 152,422 15,000 Johnnies Industrial Corp. (22) 226,307 45,000 Omni Media Corporation (20) 715,951 ---------- 1,628,732 ---------- INDONESIA (1.8%) 10,000 Freeport McMoRan Pfd. 'B' (22) 325,000 20,000 Freeport McMoRan Pfd. 'C' (22) 607,500 28,500 Freeport McMoRan Pfd. 'D' (22) 602,062 ---------- 1,534,562 ---------- AUSTRIA (1.4%) 6,500 Flughafen Wien AG (32) 430,868 9,500 VAE AG (26) 798,912 ---------- 1,229,780 ---------- ITALY (1.2%) 50,000 Arnoldo Mondadori Editore SpA (25) 433,249 1,000,000 * Montedison non-conv. Savings SpA(34) 591,939 ---------- 1,025,188 ---------- NORWAY (1.2%) 75,000 Schibsted AS (25) 1,017,366 ---------- MEXICO (0.9%) 250,000 * Grupo Fernandez Editores SA de CV(25) 69,760 175,000 Industrias Penoles SA de CV (21) 722,258 ---------- 792,018 ---------- FINLAND (0.8%) 250,000 * Tampella Oy AB (5) 315,544 10,000 Vaisala Oy A (5) 364,884 ---------- 680,428 ---------- AUSTRALIA (0.6%) 185,000 Eltin Ltd. (22) 405,356 100,000 Motors Holdings Ltd. (2) 72,047 ---------- 477,403 ---------- ISRAEL (0.5%) 150,000 Israel Land Development Co. Ltd. (34) 433,294 ---------- BELGIUM (0.4%) 2,500 Deceuninck Plastics Ind. SA (4) 279,828 200 Societe Belge de Betons, SA (34) 108,375 ---------- 388,203 ---------- SPAIN (0.3%) 75,000 Energia e Ind. Aragonesas SA (33) 285,321 ---------- GREECE (0.3%) 48,200 H. Benrubi & Fils SA (9) 272,041 ---------- MISCELLANEOUS (3.0%) 50,000 North European Oil Royalty Tr. (12) 637,500 25,000 Minorco ADR (34) 715,625 450,000 Lonrho plc (34) 1,229,065 ---------- 2,582,190 ---------- TOTAL COMMON & PREFERRED STOCK (88.9%) (COST $72,650,619) $77,660,411 ----------
FACE MARKET AMOUNT NON-CONVERTIBLE BONDS VALUE - -------------------------------------------------------------------------------- U.S. DOLLAR (1.5%) $1,250,000 Federal Republic Of Brazil 7.250% due 04-15-24 (15) $ 767,969 850,000 Republic of Poland PDI 3.250% due 10-24-14 (15) 553,563 ---------- 1,321,532 ---------- NON-U.S. DOLLAR (0.4%) 500,000 NZ Republic of New Zealand 10.000% due 03-15-02 (15) 369,882 ---------- TOTAL NON-CONVERTIBLE BONDS(1.9%) (COST $1,614,599) $1,691,414 ----------
FACE MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - -------------------------------------------------------------------------------- U.S. DOLLAR (4.3%) $ 100,000 Acer Inc. 4.000% due 06-10-01 (8) $ 301,500 250,000 PT Inti Indorayon Utama 5.500% due 10-01-02 (24) 280,313 850,000 Cheil Foods & Chemicals Co 3.000% due 12-31-06 (9) 1,117,750 150,000 Sincere Navigation 3.750% due 05-26-03 (32) 159,000 500,000 Ssangyong Cement Co. 3.000% due 12-31-05 (6) 607,500 250,000 PT Pabrik Kertas Tjiwi Kimia 7.250% due 04-21-01 (24) 235,000 500,000 Tubos de Acero de Mexico SA 7.500% due 06-12-97 (12) 450,000 500,000 Tung Ho Steel Corp. 4.000% due 07-26-01 (30) 607,500 --------- TOTAL U.S. DOLLAR (4.3%) $3,758,563 --------- NON U.S. DOLLAR (2.3%) 1,000,000 FF Alcatel Alstholm 2.500% due 01-01-04 (11) 159,992 2,000,000 FF Michelin 6.000% due 01-02-98 (2) 414,247 2,050,000 FF Promodes 5.500% due 01-01-00 (27) 488,423 425,000 FF Compagnie Generale des Eaux 6.000% due 01-01-98 (33) 286,322 200,000 GBP Lonrho International Finance 6.000% due 02-27-04 (34) 306,684 18,000,000 JPY Nippon Yusen 2.000% due 09-29-00 (32) 205,217 320,000 NZ Shortland Properties Inc. 7.500% due 12-31-98 (27) 186,046 --------- TOTAL NON-U.S. DOLLAR (2.3%) $2,046,931 --------- TOTAL CONVERTIBLE SUBORDINATED DEBENTURES (6.6%) (COST $5,034,035) $5,805,494 ---------
(continued) 66 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 INTERNATIONAL PORTFOLIO
FACE MARKET AMOUNT SHORT-TERM NOTES VALUE - -------------------------------------------------------------------- UTILITIES (2.6%) $2,291,000 AT&T Capital Corp. 5.780% 01-02-96 $ 2,290,632 ----------- Total Short-term Notes (2.6%) (Cost $2,290,632) $ 2,290,632 ----------- Total Holdings $87,447,951 (Cost $81,589,885) (a) ===========
(a) Also represents cost for Federal income tax purposes. * Non-income producing securities. FOREIGN CURRENCIES NZ - New Zealand Dollar FF - French Franc GBP - British Pound JPY - Japanese Yen Industry Classifications (1) Agriculture (18) Insurance (2) Automotive (19) Machinery (3) Banking (20) Media (4) Building Products (21) Metal (non-ferrous) (5) Capital Goods (22) Mining (6) Cement (23) Packaging (7) Chemicals (24) Paper (8) Computer Products (25) Publishing (9) Consumer Products (26) Rail Equipment (10) Electrical Products (27) Real Estate (11) Electronics (28) Retailing (12) Energy and Oil (29) Services (13) Food & Beverage (30) Steel (14) Forest Products (31) Textile (15) Governmental (32) Transportation (16) Hotels (33) Utilities (17) Health Care (34) Miscellaneous The accompanying notes are an integral part of these financial statements. 67 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 CAPITAL APPRECIATION PORTFOLIO
FACE MARKET AMOUNT LONG-TERM NOTES VALUE - --------------------------------------------------------------- GOVERNMENT (1.1%) $ 100,000 U.S. Treasury Note 5.750% 10-31-97 $ 100,939 100,000 U.S. Treasury Note 7.375% 11-15-97 103,746 ----------- 204,685 ----------- BANKING (0.3%) 50,000 Fifth Third Bank 4.250% 01-15-98 57,062 ----------- BUILDING MATERIALS (0.7%) 138,000 Manville Corp. 9.000% 12-31-03 136,793 ----------- ELECTRICAL EQUIPMENT (0.2%) 45,000 Cooper Industries 7.050% 01-01-15 46,350 ----------- ENTERTAINMENT AND LEISURE (0.5%) 100,000 Comcast Cable 3.375% 09-09-05 94,500 ----------- FINANCE (0.3%) 50,000 UBS Finance 2.000% 12-15-00 50,000 ----------- FOREIGN (0.5%) 100,000 Homestake Mining 5.500% 06-23-00 102,000 ----------- INDUSTRIAL SERVICES (0.9%) 200,000 WMX Technologies 2.000% 01-24-05 173,000 ----------- INSURANCE (0.9%) 150,000 Chubb Capital Corp. 6.000% 05-15-98 168,375 ----------- OIL, ENERGY AND NATURAL GAS (1.0%) 100,000 Cross Timbers Oil Co. 5.250% 11-01-03 94,500 100,000 Price Co. 5.500% 02-28-12 97,000 ----------- 191,500 ----------- TOTAL LONG-TERM NOTES (6.4%) (COST $1,144,039) $ 1,224,265 ----------- FACE MARKET AMOUNT SHORT-TERM NOTES VALUE - --------------------------------------------------------------- GOVERNMENT (4.8%) $ 163,000 U.S. Treasury Bill 5.350 01-25-96 $ 162,480 760,000 FNMA Discount Note 5.450 02-13-96 755,115 ----------- 917,595 ----------- EDUCATION (1.9%) 360,000 Yale University 5.660% 02-20-96 357,170 ----------- FINANCE (8.5%) 450,000 Ciesco L.P. 5.730% 01-05-96 449,714 750,000 Preferred Receivables Funding 5.800% 01-10-96 748,913 425,000 PHH 5.850% 01-19-96 423,757 ----------- 1,622,384 ----------- FOOD AND RELATED (2.5%) 486,000 H.J. Heinz 5.780% 01-26-96 484,049 ----------- HOUSING AND RELATED (3.1%) 590,000 Home Depot 5.900% 01-05-96 589,613 ----------- MEDICAL AND RELATED (1.0%) 200,000 Abbott Laboratories 5.800% 01-11-96 199,678 ----------- UTILITIES (2.4%) 470,000 Tampa Electric 5.770% 01-08-96 469,472 ----------- MISCELLANEOUS (5.2%) 795,000 Corporate Asset Funding 5.670% 02-12-96 789,741 200,000 Siemens Co. 5.800% 01-29-96 199,098 ----------- 988,839 ----------- TOTAL SHORT-TERM NOTES (29.4%) (COST $5,628,800) $ 5,628,800 ----------- FACE MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - -------------------------------------------------------------- COMPUTER AND RELATED (5.2%) $2,000,000 Automatic Data Process, zero coupon contracts due 02-20-12 $ 987,500 ----------- DRUGS (0.9%) 300,000 Alza Corp., zero coupon contracts, due 07-14-14 123,000 50,000 Mckesson Co., 4.500% conv. subordinated debentures, due 03-01-04 46,625 ----------- 169,625 ----------- DURABLE GOODS (0.3%) 50,000 Outboard Marine, 7.000% conv. subordinated debentures, due 07-01-02 51,812 -----------
(continued) 68 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - ---------------------------------------------------------------------------- FOOD AND RELATED (0.5%) $ 100,000 Food Lion Inc.,5.000% conv. subordinated debentures, due 06-01-03 $ 100,375 ----------- MEDIA (1.7%) 300,000 TBS, zero coupon contracts due 02-13-07 135,000 550,000 US West, zero coupon contracts due 06-25-11 198,688 ----------- 333,688 ----------- OIL, ENERGY AND NATURAL GAS (0.2%) 50,000 Pennzoil Co.,4.750% conv. subordinated debenture, due 10-01-03 50,750 ----------- REAL ESTATE (1.4%) 75,000 Price Co., 6.750% conv. subordinated debenture, due 03-01-01 76,125 190,000 Rouse Co., 5.750% conv. subordinated debentures, due 07-23-02 189,762 ----------- 265,887 ----------- UTILITIES (1.0%) 200,000 Potomac Electricity & Power Co., 5.000% conv. subordinated debentures, due 09-01-02 190,000 ----------- TOTAL CONVERTIBLE DEBENTURES (11.2%) (COST $2,022,926) $ 2,149,637 ----------- MARKET SHARES COMMON STOCK VALUE - ---------------------------------------------------------------------------- AEROSPACE (0.7%) 5,000 Teledyne Inc. $ 128,125 ----------- BUILDING MATERIALS (4.2%) 6,600 Lowes Corp. 517,275 22,000 * Manville Corp. 288,750 ----------- 806,025 ----------- CHEMICALS (4.5%) 200 CIBA Geigy 175,843 10,500 * Genetech Inc. 556,500 1,500 Great Lakes Chemical Corp. 108,000 1,000 Petrolite Corp. 28,500 ----------- 868,843 ----------- COMPUTER AND RELATED (0.2%) 400 IBM Corp. 36,700 ----------- CONSUMER PRODUCTS (4.1%) 3,000 Corning Inc. 96,000 2,000 John Harland Co. 41,750 50,000 Petrie Stores 137,500 2,600 Phillip Morris Cos., Inc. 235,300 5,000 Polaroid Corp. 236,875 2,000 * Toys R Us 43,500 ----------- 790,925 ----------- DRUGS (0.9%) 2,000 Schering - Plough Corp. 109,500 1,450 Upjohn Co. 56,188 ----------- 165,688 ----------- DURABLE GOODS (0.1%) 2,000 A T Cross Co. 30,250 ----------- FINANCE (4.6%) 3,500 American Express 144,813 800 Federal Nat'l Mortgage Assn. 99,300 2,000 Fund American Enterprise 149,000 1,000 Greenpoint Financial Corp. 26,750 4,000 PHH Corp. 187,000 4,200 Student Loan Marketing 276,675 ----------- 883,538 ----------- FORESTRY AND PAPER PRODUCTS (1.6%) 1,500 Int'l Paper Co. 56,812 6,000 Weyerhaeuser Co. 259,500 ----------- 316,312 ----------- INSURANCE (2.7%) 2,000 Home Beneficial Corp.Class 'B' 48,000 6,500 Kemper Corp. 322,563 1,800 Unitrin Inc. 86,400 2,000 * Zurich Reinsurance 60,750 ----------- 517,713 ----------- MEDIA AND PUBLISHING (5.9%) 5,000 Chris-Craft Ind., Inc. 216,250 500 Meredith Corp. 20,937 17,000 New York Times Co. 503,625 1,200 Times Mirror Co. 40,650 1,200 Washington Post 338,400 ----------- 1,119,862 ----------- METALS AND MINING (2.7%) 6,000 * Helcla Mining Co. 41,250 6,000 Homestake Mining Co. 93,750 7,747 Newmont Mining Corp. 350,552 2,000 Santa Fe Pacific Gold 24,250 ----------- 509,802 ----------- OIL, ENERGY AND NATURAL GAS (7.9%) 2,500 Atlantic Richfield Co. 276,875 500 Cross Timbers Oil Co. 8,813 5,000 Helmerich & Payne Co. 148,750 6,000 Murphy Oil Corp. 249,000 3,500 * Oryx Energy Co. 46,812 1,600 Pennzoil Co. 63,375 12,000 Petro-Canada Inc. 138,516 2,500 Sun Company Inc. 68,438 4,000 Texaco, Inc. 314,000 10,000 Union Texas Petroleum 193,750 ----------- 1,508,329 ----------- REAL ESTATE (0.1%) 1,000 DeBartolo Realty 13,000 ----------- RECREATION (0.2%) 2,000 Skyline Corp. 41,500 ----------- RETAIL (0.2%) 4,000 * Hill Stores Co. 39,500 -----------
(continued) 69 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
MARKET SHARES COMMON STOCK VALUE - ---------------------------------------------------------------------------- TRANSPORTATION (0.9%) 4,000 Overseas Shipholding Inc. $ 76,000 4,000 Ryder System Inc. 99,000 ----------- 175,000 ----------- UTILITIES (4.9%) 25,000 Centerior Energy Corp. 221,875 16,000 Entergy Corp. 468,000 4,000 Niagara Mohawk Power Corp. 38,500 8,000 * Public Service Co. New Mexico 141,000 3,400 SCE Corp. 60,350 ----------- 929,725 ----------- MISCELLANEOUS (0.4%) 25,161 Lonrho Plc 68,689 ----------- TOTAL COMMON STOCK (46.8%) (COST $7,726,185) $ 8,949,526 ----------- MARKET SHARES PREFERRED STOCK VALUE - ---------------------------------------------------------------------------- 160 AEROSPACE (0.0%) Teledyne Inc., $15 cum. conv. $ 2,300 ----------- 8,000 BUILDING MATERIALS (1.1%) Manville Corp., $2.70 Series B 201,000 ----------- FINANCE (1.9%) 7,000 Kemper Co., 5.750% Series E 364,875 ----------- REAL ESTATE (0.5%) 2,000 Rouse Co. 6.500% cum. conv. 103,250 ----------- UTILITIES (2.7%) 140 Cleveland Electric 9.000% 124,477 50 Cleveland Electric 8.800% 44,444 3,000 Cleveland Electric 211,500 1,500 Gulf State Utilities, Series B 72,000 1,000 Niagara Mohawk Power Series A 16,125 2,000 Niagara Mohawk Power Series C 37,750 ----------- 506,296 ----------- TOTAL PREFERRED STOCK (6.2%) (COST $1,155,361) $ 1,177,721 ----------- PUT OPTION PURCHASES MARKET SHARES STOCK/EXPIRATION/EXERCISE PRICE VALUE - ------------------------------------------------------------------------------ 5 AUD"B"/May '96'/$85 $ 5,188 5 Times Mirror/June '96'/$35 1,218 ----------- TOTAL PUT OPTION PURCHASE (0.0%) (COST $5,973) $ 6,406 ----------- TOTAL HOLDINGS (COST $17,683,284) (a) $19,136,355 ===========
*Non-income producing securities. (a) Also represents cost for Federal income tax purposes. The accompanying notes are an integral part of these financial statements. 70 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 SMALL CAP PORTFOLIO
MARKET SHARES U.S. COMMON STOCK VALUE - ----------------------------------------------------------------- AEROSPACE (1.0%) 9,000 * Tracor Inc. $ 130,500 ----------- AUTOMOBILE AND RELATED (0.8%) 3,550 * Credit Acceptance Corp. 73,662 4,000 * Top Source Technologies Inc. 28,000 ----------- 101,662 ----------- BANKS (0.9%) 2,500 Banco Latinoamericao De Exp 116,250 ----------- BUSINESS SERVICES (3.7%) 1,500 * Desktop Data Inc. 36,750 10,250 * Dendrite International 184,500 3,900 Meta Group Inc. 119,438 2,700 Norrell Corp. 79,313 3,500 * US Office Products Co. 79,625 ----------- 499,626 ----------- COMMUNICATIONS (1.4%) 7,500 * Comcast UK Cable Partners 93,750 3,100 SFX Broadcasting, Inc. 93,775 ----------- 187,525 ----------- COMPUTER AND RELATED (23.2%) 1,500 Adobe Systems Inc. 93,000 5,000 * Astea Int'l Inc. 114,375 6,575 * Avant l Corp. 126,569 3,025 Broadway & Seymour 49,156 9,500 Computervision Corp. 146,063 7,000 * Computron Software Inc. 126,000 11,500 * Creative Computers Inc. 209,875 5,000 * Dialogic Corp. 192,500 4,900 * Eagle Point Software Corp. 105,350 5,725 * Gandalf Technologies Inc. 97,325 8,225 Geoworks 156,275 8,375 GT Interactive Software Corp. 117,250 3,500 * Informix Corp. 105,000 4,300 * Madge Networks NV 192,425 1,750 Manugistics Group Inc. 25,812 7,000 * Mylex Corp. 133,875 4,000 * Network General Corp. 133,500 1,000 * Parametric Technology Corp. 66,500 4,125 * Platinum Tech Inc. 75,797 3,650 * Printronix Inc. 51,100 8,375 * Radisys Corp. 98,406 2,300 Sync Research Inc. 104,075 3,975 Scopus Technology Inc. 100,369 3,000 * 7th Level Inc. 42,000 5,565 * Stormedia Inc. 203,123 4,000 * Symantec Corp. 93,000 8,550 * Triple P N.V. 85,500 5,200 * Woderware Corp. 89,050 ----------- 3,133,270 ----------- CONSUMER PRODUCTS (1.7%) 2,000 * Alantec Corp. 116,500 6,025 * Catalina Lighting 29,372 2,000 Loewen Group Inc. 50,625 2,000 * WMS Industries Inc. 32,750 ----------- 229,247 ----------- DRUGS (2.4%) 6,050 Pharmaceutical Resources Inc. 45,375 10,000 * SEQUUS Pharmaceuticals 142,500 3,000 Teva Pharmaceuticals 139,125 ----------- 327,000 ----------- ELECTRICAL EQUIPMENT (2.2%) 4,000 * Anadigics Inc. 85,000 9,750 * DSP Group 112,125 2,800 * Microchip Technology Inc. 102,200 ----------- 299,325 ----------- ELECTRONICS (11.6%) 750 * Altera Corp. 37,312 3,000 * LSI Logic Corp. 98,250 1,500 * Lam Research Corp. 68,625 6,000 * Maxim Integrated Products Inc. 231,000 7,700 Orbit Semiconductor Inc. 75,075 5,300 * PRI Automation Inc. 186,163 3,650 * Sanmina Corp. 189,344 11,150 * Speedfam International Inc. 125,438 14,400 * Tegal Corp. 147,600 3,250 * Tencor Instruments 79,219 5,000 Teradyne Inc. 125,000 11,000 Tylan General Inc. 134,750 5,225 Vitesse Semiconductor Corp. 66,619 ----------- 1,564,395 ----------- ENTERTAINMENT AND LEISURE (0.7%) 2,700 * Anchor Gaming 61,425 4,500 * Golf Enterprises Inc. 32,625 ----------- 94,050 ----------- HOTEL AND MOTEL (2.6%) 5,000 * Doubletree Corp. 131,250 10,400 * Trump Hotels & Casino Resort 223,600 ----------- 354,850 ----------- INSURANCE (3.7%) 4,000 * HCC Insurance Holdings Inc. 148,000 4,000 * Healthsource Inc. 144,000 2,250 Mercury Finance Co. 29,812 4,000 Reliastar Financial Corp. 177,500 ----------- 499,312 ----------- MACHINERY (2.0%) 7,900 * Asyst Technologies Inc. 278,475 ----------- MANUFACTURING (0.3%) 1,000 * Plantronics Inc. 36,125 ----------- MEDICAL AND RELATED (8.8%) 7,000 * Gulf South Medical Supply 211,750 5,000 * HCIA Inc. 233,750 5,450 * Horizon Healthcare Corp. 137,612 5,000 * Medaphis Corp. 185,000 6,000 * Multicare Companies Inc. 144,000 2,450 * Orthodontic Centers of America 118,212 6,000 * Sola International Inc. 151,500 ----------- 1,181,824 ----------- METALS AND MINING (1.9%) 4,500 Harsco Corp. 261,563 -----------
(continued) 71 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 SMALL CAP PORTFOLIO (CONTINUED)
MARKET SHARES U.S. COMMON STOCK VALUE - ----------------------------------------------------------------- OIL, ENERGY AND NATURAL GAS (2.6%) 9,000 * Falcon Drilling Co. Inc. $ 135,000 6,000 * Seitel Inc. 212,250 ----------- 347,250 ----------- RETAIL (9.3%) 8,000 Authentic Fitness Corp. 166,000 7,400 Insight Enterprises Inc. 92,500 4,500 Maxim Group Inc. 60,750 1,600 * Movie Gallery Inc. 48,800 3,775 * Officemax Inc. 84,465 5,300 Henry Shein Inc. 156,350 4,900 * Proffitt's Inc. 128,625 3,850 * The Sports Authority Inc. 78,444 1,500 Tiffany & Co. 75,563 9,000 * Trend-Lines Inc. 90,000 6,000 Warnaco Group 150,000 3,750 Wolverine World Wide 118,125 ----------- 1,249,622 ----------- TELECOMMUNICATIONS (6.5%) 4,000 * Arch Communications Group 96,000 6,000 Frontier Corp. 180,000 7,000 * Intermedia Comm. of Florida 122,500 9,925 Inter-Tel Inc. 153,217 8,000 * LCI International Inc. 164,000 6,000 * Periphonics Corp. 166,500 ----------- 882,217 ----------- TEXTILES (3.3%) 6,000 * Nautica Enterprises Inc. 262,500 2,300 * Quicksilver Inc. 78,631 6,900 * Supreme Int'l Corp. 110,400 ----------- 451,531 ----------- TRANSPORTATION (2.5%) 4,625 * Celadon Group Inc. 41,625 4,000 * Mark VII Inc. 62,000 3,975 * Western Pacific Airlines Inc. 66,581 2,625 * Wisconsin Central Transport 172,594 ----------- 342,800 ----------- UTILITIES (1.1%) 4,000 United Waste Systems Inc. 149,000 ----------- TOTAL U.S. COMMON STOCK (94.2%) (COST $10,910,542) $12,717,419 ----------- MARKET SHARES FOREIGN COMMON STOCK VALUE - -------------------------------------------------------------- BRITISH STERLING POUND: MEDIA 17,000 * Flextech Plc $ 125,108 RETAIL 21,500 * Next Plc 152,217 MISCELLANEOUS 11,000 Wetherspoon (J.D.) 110,157 ----------- TOTAL BRITISH STERLING POUND (2.9%) 387,482 ----------- JAPANESE YEN: MISCELLANEOUS 4,000 Hoya Corp. 137,661 ----------- TOTAL JAPANESE YEN (1.0%) 137,661 ----------- NETHERLANDS GUILDER: MISCELLANEOUS 2,500 * Hunter Douglas NV 116,033 TRANSPORTATION 4,100 * IHC Caland 138,117 ----------- TOTAL NETHERLANDS GUILDER (1.9%) 254,150 ----------- TOTAL FOREIGN COMMON STOCK (5.8%) (COST $680,031) $ 779,293 ----------- TOTAL HOLDINGS (COST $11,590,573) (a) $13,496,712 ===========
*Non-income producing securities. (a) Also represents cost for Federal income tax purposes. The accompanying notes are an integral part of these financial statements. 72 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 GLOBAL CONTRARIAN PORTFOLIO
MARKET SHARES COMMON AND PREFERRED STOCK VALUE - ------------------------------------------------------------- U.S. STOCKS CHEMICALS (0.9%) 3,000 Lawter International Inc. $ 34,875 ----------- CAPITAL GOODS (1.4%) 1,000 Bandag Inc. Class 'A' 53,000 ----------- CONSUMER PRODUCTS (6.4%) 1,000 Allen Organ Co. Class 'B' 41,500 333 * Castle & Cook Inc. 5,583 1,000 Dole Foods Company, Inc. 35,000 10,000 * Interco Incorporated 90,000 4,000 Unifirst Corp. 72,000 ----------- 244,083 ----------- ELECTRONICS (1.4%) 3,000 Zero Corp. 53,250 ----------- ENERGY AND OIL (5.0%) 2,535 * Enterra Corp. 73,198 4,000 North European Oil Royalty Trust 51,000 1,700 Rochester & Pittsburgh Coal Co. 47,600 3,000 * Sithe Energies, Inc. 18,000 ----------- 189,798 ----------- FINANCE (5.9%) 5,000 * East Texas Financial Services 80,000 3,000 Pioneer Group, Inc. 81,750 5,000 Southern Banc Co., Inc. 64,375 ----------- 226,125 ----------- FORESTRY PRODUCTS (3.4%) 600 Georgia Pacific Corp. 41,175 1,400 Greif Brothers Corp. Class 'A' 37,625 1,500 Rayonier Inc. 50,063 ----------- 128,863 ----------- MEDIA (1.6%) 5,000 * Integrity Music, Inc. Class 'A' 10,625 2,000 Cowles Media Co. Pfd. 52,000 ----------- 62,625 ----------- METALS AND MINING (1.5%) 1,000 Reynolds Metals Co. 56,625 ----------- REAL ESTATE (3.0%) 2,500 Alico, Inc. 52,500 1,500 Catellus Development Pfd. 60,750 ----------- 113,250 ----------- UTILITIES (1.2%) 2,000 Montana Power Co. 45,250 ----------- TOTAL U.S. (31.7%) $ 1,207,744 ----------- FOREIGN LATIN AMERICA (7.8%) 10,000 Antofagasta Holdings plc (21) $ 45,469 50,000 * Cresud SA (1) 67,990 25,000 IRSA Inversiones y Rep. SA (34) 62,991 60,000 Ledesma SA (1) 76,788 165,000 * Grupo Fernandez Editors (25) 46,042 ----------- 299,280 ----------- FRANCE (7.1%) 2 Bank for Intl. Settlements (3) 14,678 300 * Comptoir Lyon-Alemand-Louyot (34) 23,540 1,100 Gaumont SA (20) 70,621 500 Legrand ADP (10) 49,934 300 Nicolas Schlumberger et Cie (19) 50,382 600 Rougier SA (14) 61,266 ----------- 270,421 ----------- JAPAN (7.1%) 2,500 Fuji Photo Film Co. Ltd. (9) 71,981 7,000 Nittetsu Mining Co., Ltd. (22) 69,662 400 Toho Co. (20) 63,768 5,000 Yoshimoto Kogyo Co. (20) 65,217 ----------- 270,628 ----------- SWITZERLAND (6.0%) 7 Bank of Intl. Settlements (3) 58,839 100 Kuehne & Nagel Intl. AG (32) 59,359 65 Schindler Holding AG PC (5) 67,309 175 Sika Finanz AG Bearer (7) 42,461 ----------- 227,968 ----------- GERMANY (4.8%) 100 Axel Springer Verlag AG (20) 67,177 250 Bayer AG (7) 66,272 125 Buderus AG (5) 48,730 ----------- 182,179 ----------- CANADA (3.4%) 2,000 Noranda, Inc. (21) 41,216 30,000 Redstone Resources, Inc. (22) 86,829 ----------- 128,045 ----------- THAILAND (2.6%) 40,000 Oriental Hotel (16) 98,452 ----------- NEW ZEALAND (2.4%) 30,000 Carter Holt Harvey Limted (14) 64,672 5,500 Shortland Properties, Ltd. (27) 3,090 30,000 Wrightson Ltd. (1) 22,733 ----------- 90,495 ----------- NETHERLANDS (2.2%) 1,300 Bosch & Keuning NV (20) 53,762 2,000 German City Estates NV (27) 30,224 ----------- 83,986 ----------- SINGAPORE (1.9%) 10,000 Singapore Bus Service Ltd. (32) 71,413 ----------- SWEDEN (1.8%) 5,000 Bylock & Nordsjofrakt AB 'B'(32) 43,683 2,000 Terra Mining AB (22) 24,553 ----------- 68,236 ----------- HONG KONG (1.8%) 100,000 CDL Hotels Intl. Ltd. (16) 50,436 16,000 Shaw Brothers (Hong Kong) Ltd.(20) 17,588 ----------- 68,024 ----------- INDONESIA (1.6%) 2,000 Freeport McMoRan Pfd. 'C' (22) 60,750 ----------- AUSTRALIA (1.3%) 30,000 * Barlile Corp. Ltd. (1) 51,250 -----------
(continued) 73 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 GLOBAL CONTRARIAN PORTFOLIO (CONTINUED)
MARKET SHARES COMMON AND PREFERRED STOCK VALUE - -------------------------------------------------------------------- SOUTH AFRICA (1.1%) 6,000 Free State Consolidated Gold (22) $ 43,500 ----------- BELGIUM (1.1%) 30 Socfinasia (34) 41,606 ----------- UNITED KINGDOM (0.8%) 15,000 ED & F Man (34) 32,589 ----------- TOTAL FOREIGN (54.8%) $ 2,088,822 ----------- TOTAL COMMON & PREFERRED STOCKS (86.5%) (COST $3,205,227) $ 3,296,566 ----------- FACE MARKET AMOUNT NON-CONVERTIBLE BONDS VALUE - ----------------------------------------------------------------------- U.S. DOLLAR (9.1%) $ 50,000 Cemex SA 9.500% due 09-20-01 (6) $ 46,188 150,000 Federal Republic Of Brazil 6.812% due 04-15-06 (15) 103,125 200,000 Republic of Argentina FRB 6.812% due 03-31-05 (15) 141,625 50,000 PT Pabrik Kertas Tjiwi Kimia 13.250% due 08-01-01 (14) 55,000 TOTAL NON-CONVERTIBLE BONDS ----------- (9.1%) (COST $294,213) $ 345,938 ----------- FACE MARKET AMOUNT CONVERTIBLE DEBENTURES VALUE - ---------------------------------------------------------------------- U.S. DOLLAR (3.3%) $ 50,000 Cheil Foods & Chemicals Co. 3.000% due 12-31-06 (9) $ 65,750 50,000 Tung Ho Steel Corp. 4.000% due 07-26-01 (30) 60,750 ----------- 126,500 ----------- NON-U.S. DOLLAR (1.1%) 260,000 FF Immobiliere Hoteliere 5.000% due 01-01-01 (16) 33,425 11,000 NZ Shortland Properties Inc. 7.500% due 12-31-98 (27) 6,395 ----------- 39,820 ----------- TOTAL CONVERTIBLE DEBENTURES (4.4%) (COST $150,939) $ 166,320 ----------- TOTAL HOLDINGS (COST $3,650,379)(a) $ 3,808,824 ===========
(a) Also represents cost for Federal Income tax purposes. * Non-income producing securities. FOREIGN CURRENCIES NZ - New Zealand Dollar FF - French Franc Industry Classifications (1) Agriculture (18) Insurance (2) Automotive (19) Machinery (3) Banking (20) Media (4) Building Products (21) Metal (non-ferrous) (5) Capital Goods (22) Mining (6) Cement (23) Packaging (7) Chemicals (24) Paper (8) Computer Products (25) Publishing (9) Consumer Products (26) Rail Equipment (10) Electrical Products (27) Real Estate (11) Electronics (28) Retailing (12) Energy and Oil (29) Services (13) Food & Beverage (30) Steel (14) Forest Products (31) Textile (15) Governmental (32) Transportation (16) Hotels (33) Utilities (17) Health Care (34) Miscellaneous The accompanying notes are an integral part of these financial statements. 74 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 AGGRESSIVE GROWTH PORTFOLIO
MARKET SHARES COMMON AND PREFERRED STOCK VALUE - --------------------------------------------------------------- U.S. COMMON STOCKS: AUTOMOTIVE AND RELATED (4.7%) 1,875 Chrysler Corp. $103,828 425 * Custom Chrome Inc. 9,828 500 Exide Corp. 22,937 3,800 Harley-Davidson Inc. 109,218 -------- 245,811 -------- BANKING (0.4%) 100 HSBC Holdings 15,133 140 Mitsubishi Bank Ltd. 3,412 30 Sakura Bank Ltd. 3,830 -------- 22,375 -------- BUILDING AND CONSTRUCTION (0.0%) 62 Transpro Inc. 659 -------- BUSINESS SERVICES (3.8%) 300 * Access Health Inc. 13,275 1,575 * Accustaff, Inc. 69,300 575 America Online Inc. 21,562 225 * Career Horizons Inc. 7,594 550 * Consolidated Graphics Inc. 14,300 100 Corestaff Inc. 3,650 375 CUC International, Inc. 12,797 275 * Education Alternatives 1,237 25 * Equity Corp. Intl. 594 1,525 * Nu-Kote Holding 25,925 150 Paychex Inc. 7,481 150 Xerox Corp. 20,550 -------- 198,265 -------- CHEMICALS (0.1%) 50 Monsanto Co. 6,125 -------- COMPUTER AND RELATED (13.9%) 50 Adobe Systems Inc. 3,100 550 * Avant! Corp. 10,587 169 * Bay Networks, Inc. 6,940 150 * CBT Group 7,950 650 * Cheyenne Software, Inc. 16,981 100 * Compaq Computer Corp. 4,800 1,200 Computer Assoc. Intl., Inc. 68,222 3,025 Danka Business Systems 111,925 575 * Dialogic Corp. 22,137 225 * Diamond Multimedia Systems 8,072 250 * Informix Corp. 7,500 903 Mcafee Assoc. 39,619 5,500 Metatools Inc. 143,000 50 * Netscape Communications Corp. 6,950 250 * Network General Corp. 8,344 300 Ross Technology Inc. 2,925 25 * Seagate Technology, Inc. 1,187 5,400 SQA Inc. 103,950 200 * Sun Mirosystems, Inc. 9,125 400 Sync Research Inc. 18,100 5,850 System Software Assoc., Inc. 127,238 100 * 3 Com Corp. 4,662 -------- 733,314 -------- CONSUMER PRODUCTS (2.7%) 2,400 Central Garden & Pet Co. 22,800 2,725 Loewen Group Inc. 68,977 1,125 Physician Sales and Service Inc. 32,063 1,400 * Thompson PBE Inc. 19,600 -------- 143,440 -------- DRUGS (1.2%) 75 * Amerisource Health Corp. 2,475 1,495 Pharmacia & Upjohn, Inc. 57,931 -------- 60,406 -------- DURABLE GOODS (0.1%) 50 Bandag Inc. 2,650 100 Uniphase Corp. 3,575 -------- 6,225 -------- ELECTRICAL EQUIPMENT (0.6%) 375 * Fore Systems 22,312 125 * Kent Electronics Corp. 7,297 -------- 29,609 -------- ELECTRONICS (1.7%) 1,325 Marshall Industries 42,578 2,200 Sensormatic Electronics Corp. 38,225 250 * Xilinx Inc. 7,625 -------- 88,428 -------- ENTERTAINMENT AND LEISURE (0.1%) 125 The Walt Disney Co. 7,375 -------- FINANCE (2.9%) 225 American Express Co. 9,309 375 Citicorp 25,219 1,025 CWM Mortgage Holdings 17,425 25 Daiwa Securities 3,849 500 * Medaphis Corp. 18,500 950 Mercury Finance Co. 12,587 700 National Auto Credit Inc. 11,375 60 New Japan Securities 3,583 30 Nikko Securities Co. 3,889 50 North American Mortgage 1,062 100 Nomura Securities 21,928 600 Quick and Reilly Group, Inc. 12,300 75 Sunamerica Inc. 3,562 50 Yamaichi Securities 3,253 70 Yasuda Trust & Banking Ltd. 4,168 -------- 152,009 -------- FOOD AND RELATED (0.1%) 100 * Quality Dining Inc. 2,425 150 Rainforest Cafe Inc. 4,519 -------- 6,944 -------- HOUSING AND RELATED (0.3%) 3,400 Fedders Corp. 14,450 200 Scholodge Inc. 1,900 -------- 16,350 -------- HOTEL/LODGING (0.7%) 1,300 Harrah's Entertainment 31,525 100 * Promus Hotel Corp. 2,225 -------- 33,750 --------
(continued) 75 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 AGGRESSIVE GROWTH PORTFOLIO (CONTINUED)
MARKET SHARES COMMON AND PREFERRED STOCK VALUE - ------------------------------------------------------------------------- INSURANCE (2.0%) 100 * Compdent Corp. $ 4,150 650 * Oxford Health Plans 48,019 600 * Risk Capital Holdings Inc. 14,025 750 * United Dental Care Inc. 30,938 150 U.S. Healthcare Inc. 6,975 ----------- 104,107 ----------- MACHINERY (0.5%) 800 Applied Power Inc. 23,972 100 Deere and Co. 3,525 ----------- 27,497 ----------- MANUFACTURING (0.1%) 200 Oakley Inc. 6,800 ----------- MEDIA AND PUBLISHING (0.5%) 292 * Evergreen Media Corp. 9,344 400 Ha-Lo Industries Inc. 12,300 225 * Heartland Wireless Comm. Inc. 6,694 ----------- 28,338 ----------- MEDICAL AND RELATED (3.0%) 250 * American Oncology Resources 12,156 200 * Coram Healthcare Corp. 875 475 Dentsply International Inc. 19,000 250 * Enterprise Systems Inc. 7,625 400 Gulf South Medical Supply 12,100 800 Home Health Corp of America 8,800 600 * Humana Inc. 16,425 400 Omnicare, Inc. 17,900 50 * Phycor Inc. 2,528 225 * Physicians Health Services Inc. 8,325 2,200 Sheridan Healthcare Inc. 26,675 350 * Sybron Intl. Corp.-Wisconsin 8,313 310 * Vencor Inc. 10,091 150 * Wellpoint Health Networks Inc. 4,819 ----------- 155,632 ----------- METALS AND MINING (0.3%) 600 Buckeye Cellulose Corp. 13,200 ----------- OIL, ENERGY AND NATURAL GAS (0.4%) 1,400 * Flores & Rucks Inc. 20,300 ----------- RETAIL (1.9%) 300 * Autozone, Inc. 8,662 700 * Corporate Express Inc. 21,088 325 * Federated Department Stores 8,938 1,200 * Holloywood Entertainment Corp. 10,050 525 * Movie Gallery Inc. 16,013 300 MSC Industrial Direct Co. 8,250 1,200 * Office Depot Inc. 23,700 25 * Officemax, Inc. 559 ----------- 97,260 ----------- TRANSPORTATION (0.6%) 75 Burlington Northern Santa Fe 5,850 600 Kansas City Southern Ind., Inc. 27,450 ----------- 33,300 ----------- TELECOMMUNICATIONS (3.1%) 50 * Andrew Corp. 1,912 475 * Ascend Communications Inc. 38,534 50 * CAI Wireless Systems Inc. 481 125 * Cascade Communications Corp. 10,656 8 DDI Corp. 62,045 375 * Equalnet Holding Corp. 2,719 375 Network Equipment Tech Inc. 10,266 250 * Newbridge Networks Corp. 10,344 325 * Videoserver Inc. 10,238 825 Vtel Corp. 15,263 ----------- 162,458 ----------- MISCELLANEOUS (1.0%) 6,600 Morgan St. Nikkei 50,325 ----------- TOTAL U.S. (46.7%) (COST $2,305,050) $ 2,450,302 ----------- FOREIGN: DEUTSCHE MARK (0.9%) 320 SAP Preferred (2) $ 48,695 ----------- JAPANESE YEN (2.7%) 1,000 Daiwa Securities (4) 15,317 1 East Japan Railway Co. (6) 4,867 1,000 Kankaku Securities Co. (4) 4,265 1,000 Long-Term Credit Bank of Japan (1) 8,531 2,000 Marubeni Corp. (3) 10,838 1,000 Mitsui Trust & Banking (1) 10,955 1,000 Mitsui Fudosan Co. (5) 12,312 1,000 Nomura Securities Co. (4) 21,813 1 NTT Data Comm. Systems Corp. (2) 33,640 1,000 Sumitomo Trust & Banking (1) 14,154 1,000 Yasuda Trust & Banking (1) 5,923 ----------- Total Japanese Yen 142,615 ----------- TOTAL FOREIGN (3.6%) (COST $185,110) $ 191,310 ----------- MARKET SHARES WARRANTS VALUE - ------------------------------------------------------------------------ 81 Laboratory Corp of America $ 56 TOTAL WARRANTS (0.0%) ----------- (COST $190) $ 56 ----------- MARKET SHARES FUTURES VALUE - ------------------------------------------------------------------------ 2 March S&P 500 Futures $ 1,238,200 TOTAL FUTURES (23.5%) ----------- (COST $1,238,200) $ 1,238,200 -----------
(continued) 76 OHIO NATIONAL FUND, INC. SCHEDULE OF INVESTMENTS DECEMBER 31, 1995 AGGRESSIVE GROWTH PORTFOLIO (CONTINUED)
FACE MARKET AMOUNT LONG-TERM NOTES VALUE - ------------------------------------------------------------------------------------ $ 510,000 U.S. T-Bond 6.875% 08-15-25 $ 574,959 ------------ TOTAL LONG-TERM NOTES (10.9%) (COST $570,044) $ 574,959 ------------ FACE MARKET AMOUNT REPURCHASE AGREEMENTS VALUE - ------------------------------------------------------------------------------------ $ 807,000 Provident Bank 5.350% due 01-02-96, repurchase price $807,480, collateralized by U.S. Treasury Bills, due 03-07-96 (Cost $820,000) $ 807,000 ------------ TOTAL REPURCHASE AGREEMENTS (15.3%) (COST $807,000) $ 807,000 ------------ TOTAL HOLDINGS (COST $5,105,594) (a) $ 5,261,827 ============
*Non-income producing securities. (a) Also represents cost for Federal income tax purposes. Industry Classifications (1) Banking (2) Computer and Related (3) Consumer Products (4) Finance (5) Real Estate (6) Transportation The accompanying notes are an integral part of these financial statements. 77 OHIO NATIONAL FUND, INC. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1995 (1) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Ohio National Fund, Inc. (Fund) is registered under the Investment Company Act of 1940 as amended, as a diversified open-end management investment company. The Fund is a series investment company which consists of nine separate investment portfolios that seek the following investment objectives: EQUITY PORTFOLIO--long-term growth of capital by investing principally in common stocks or other equity securities. Current income is a secondary objective. MONEY MARKET PORTFOLIO--maximum current income consistent with preservation of capital and liquidity by investing in high quality money market instruments. BOND PORTFOLIO--high level of return consistent with preservation of capital by investing primarily in high quality intermediate and long-term debt securities. OMNI PORTFOLIO--high level of long-term total return consistent with preservation of capital by investing in stocks, bonds and money market instruments. INTERNATIONAL PORTFOLIO--long-term capital growth by investing primarily in common stocks of foreign companies. The following two portfolios commenced operations on May 1, 1994: CAPITAL APPRECIATION PORTFOLIO--maximum capital growth by investing primarily in common stocks that are (1) considered to be undervalued or temporarily out of favor with investors, or (2) expected to increase in price over the short term. SMALL CAP PORTFOLIO-maximum capital growth by investing primarily in common stocks of small and medium size companies. The following two portfolios commenced operations on March 31, 1995: GLOBAL CONTRARIAN PORTFOLIO--long-term growth of capital by investing in foreign and domestic securities believed to be undervalued or presently out of favor. AGGRESSIVE GROWTH PORTFOLIO--capital growth. The following is a summary of significant accounting policies: Investments in the Money Market Portfolio are valued at amortized cost in accordance with Rule 2a-7 which approximates market value. All net investment income of the Money Market Portfolio is declared and paid daily as a dividend to shareholders immediately before the computation of the net asset value of Money Market Portfolio shares. Dividends are automatically reinvested in additional Money Market Portfolio shares at the net asset value immediately following such computation. Distributions arising from net investment income from the remaining portfolios are declared and paid to shareholders quarterly and are recorded on the ex-dividend date. Distributions arising from accumulated net realized capital gains are recorded on the ex-dividend date and are distributed to shareholders at least once a year. For all other portfolios, securities which are traded on U.S. and foreign stock exchanges or in the over-the-counter markets are valued at the last sale price or, if there has been no sale that day, at the last bid price reported as of the close of trading on the New York Stock Exchange. Over-the-counter securities are valued at the last bid price as of the close of trading on the Exchange. Short-term investments (investments with remaining maturities of 60 days or less) are valued at amortized cost and fixed income securities are valued by using market quotations, or independent pricing services which use prices provided by market makers or estimates of market values obtained from yield data relating to instruments or securities with similar characteristics. All investments and cash quoted in foreign currencies are valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time of such valuation. Foreign currency exchange rates are generally determined prior to the close of the New York Stock Exchange (NYSE). Occasionally, events affecting the value of foreign investments and such exchange rates occur between the time at which they are determined and the close of the NYSE, which in the case of the International, Small Cap, Global Contrarian and Aggressive Growth Portfolios, would not be reflected in the computation of the portfolios' net asset value. If events materially affecting the value of such securities or currency exchange rates occurred during such time period, the securities are valued at their fair value as determined in good faith by or under the direction of the Fund's Board of Directors. In connection with purchases and sales of securities denominated in foreign currencies, the Fund may enter into forward foreign currency exchange contracts (forward contract). A forward contract is a commitment to purchase or sell a foreign currency at a future date, at a negotiated rate. Additionally, the Fund may enter into such contracts to hedge certain other foreign currency denominated investments. These contracts are recorded at market value, and the related realized and unrealized foreign exchange gains and losses are included in the statement of operations. In the event that counterparties fail to settle these currency contracts or the related foreign security trades, the Fund could be exposed to foreign currency fluctuations. 78 OHIO NATIONAL FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 The Fund may invest in two kinds of financial futures contracts: stock index futures contracts and interest rate futures contracts. Stock index futures contracts are contracts developed by and traded on national commodity exchanges whereby the buyer will, on a specified future date, pay or receive a final cash payment equal to the difference between the actual value of the stock index on the last day of the contract and the value of the stock index established by the contract multiplied by the specific dollar amount set by the exchange. Future contracts may be based on broad-based stock indexes such as the Standard & Poor's 500 Index or on narrow-based stock indexes. A particular index will be selected according to ONIMCO's investment strategy for the particular portfolio. Securities transactions are recorded on a trade date basis. Dividend income is recognized on the ex-dividend date (except in the case of securities in the International, Small Cap, Global Contrarian and Aggressive Growth Portfolios in which dividends are recorded as soon after the ex-dividend date as the fund becomes aware of such dividends), and interest income is accrued daily as earned. Net realized gain or loss on investments and foreign exchange transactions are determined on the basis of identified cost. The books and records of the International, Small Cap, Global Contrarian and Aggressive Growth Portfolios are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis: (1) market value of investments, other assets and liabilities -- at exchange rates prevailing at the end of the period. (2) purchases and sales of investments, income and expenses--at the rates of exchange prevailing on the respective dates of such transactions. Although the net assets and the market value of the International, Small Cap, Global Contrarian and Aggressive Growth Portfolios are presented at the foreign exchange rates at the end of the period, the portfolios do not generally isolate the effect of fluctuations in foreign exchange rates from the effect of changes in the market price of the investments. However, the portfolios do isolate the effect of fluctuations in foreign exchange rates when determining the gain or loss upon sale or maturity of foreign-currency denominated debt obligations pursuant to Federal income tax regulations. Foreign investment and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies and the U.S. Government. These risks, including re-evaluation of currency and future adverse political and economic developments, could cause investments and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and the U.S. Government. Each portfolio may acquire repurchase agreements from member banks of the Federal Reserve System which ONIMCO, the investment advisor to the Fund deems creditworthy under guidelines approved by the Board of Directors, subject to the seller's agreement to repurchase such securities at a mutually agreed upon date and price. The repurchase price generally equals the price paid by the portfolio plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller, under a repurchase agreement, is required to maintain as collateral for the repurchase transaction securities in which the portfolio has a perfected security interest with a value not less than 100% of the repurchase price (including accrued interest). Securities subject to repurchase agreements are held by the Fund's custodian or another qualified custodian or in the Federal Reserve/Treasury book-entry system. Repurchase agreements are considered to be loans by the portfolio under the 1940 Act. It is the policy of the Fund to distribute to its shareholders substantially all of its taxable income, thus gaining relief from Federal income taxes under provisions of current tax regulations applicable to investment companies of this type. Accordingly, no provision for Federal income taxes has been made. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The gross unrealized appreciation and depreciation on investments in each portfolio as of December 31, 1995 were as follows:
PORTFOLIO ------------------------------------------------------------------------------------------------------------ MONEY INTER- CAPITAL SMALL GLOBAL AGGRESS. EQUITY MARKET BOND OMNI NATIONAL APPREC. CAP CONTR. GROWTH ----------- ------ -------- ----------- ----------- ---------- ---------- --------- --------- Gross unrealized: Appreciation...... $54,531,937 -- $922,782 $22,725,436 $10,305,937 $2,030,208 $2,507,070 $ 389,421 $ 269,466 Depreciation...... (4,148,680) -- (65,504) (2,133,800) (4,447,871) (577,137) (600,931) (230,976) (113,233) ----------- ------ -------- ----------- ----------- ---------- ---------- --------- --------- Net unrealized Appreciation...... $50,383,257 -- $857,278 $20,591,636 $ 5,858,066 $1,453,071 $1,906,139 $ 158,445 $ 156,233 =========== ====== ======== =========== =========== ========== ========== ========= =========
79 OHIO NATIONAL FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 (2) INVESTMENT TRANSACTIONS Purchases and sales of investment securities (excluding short-term securities) for the year ended December 31, 1995 were as follows:
PORTFOLIO ----------------------------------------------------------------------------------------------------------- MONEY INTER- CAPITAL SMALL GLOBAL AGGRESS. EQUITY MARKET BOND OMNI NATIONAL APPREC. CAP CONTR. GROWTH ----------- ------ ---------- ----------- ----------- ---------- ----------- ---------- ----------- Common & Preferred Stocks & Bonds: Purchases ......... $31,232,576 -- $4,832,415 $20,928,330 $39,698,610 $9,188,610 $14,801,553 $3,748,996 $23,440,589 Sales ............. $17,807,254 -- $ 532,293 $ 7,216,069 $ 4,328,607 $2,796,614 $ 5,527,261 $ 135,434 $20,902,933 U.S. Government Obligations: Purchases ......... -- -- -- -- -- $ 196,656 -- -- $ 570,044 Sales ............. -- -- -- $ 500,000 -- -- -- -- --
(3) INVESTMENT ADVISORY AGREEMENT, SUB-ADVISORY AGREEMENTS AND TRANSACTIONS WITH AFFILIATED PERSONS The Fund has an investment advisory agreement dated November 2, 1982, with O.N. Investment Management Company (ONIMCO) under the terms of which ONIMCO provides portfolio management and investment advice to the Fund and administers its other affairs, subject to the supervision of the Fund's Board of Directors. As compensation for its services to the Equity, Bond and Omni Portfolios, ONIMCO is paid fees at an annual rate of 0.60% of the first $100 million of each of those Portfolios' net assets, 0.50% of the next $150 million, 0.45% of the next $250 million, 0.40% of the next $500 million, 0.30% of the next $1 billion and 0.25% of net assets over $2 billion. For the Money Market Portfolio, ONIMCO is paid a fee at an annual rate of 0.30% of the first $100 million, 0.25% of the next $150 million, 0.23% of the next $250 million, 0.20% of the next $500 million and 0.15% of net assets over $1 billion. However, as to the Money Market Portfolio, ONIMCO is presently waiving any of its fees in excess of 0.25%. The amount waived in 1995 was $14,932. For the International and Global Contrarian Portfolios, ONIMCO is paid fees at an annual rate of 0.90% of each of those Portfolios' average daily net asset value. ONIMCO is paid fees at an annual rate of 0.80% of the average daily net asset value of each of the Capital Appreciation, Small Cap and Aggressive Growth Portfolios. ONIMCO pays Societe Generale Asset Management Corporation (SGAM) fees at an annual rate of 0.75% of the International and Global Contrarian Portfolios' average daily net asset value for directing the investment and reinvestment of those Portfolios' assets pursuant to sub-advisory agreements between ONIMCO and SGAM dated March 18, 1993 and December 15, 1994, respectively. Under sub-advisory agreements dated March 17, 1994: (1) ONIMCO pays T. Rowe Price Associates, Inc. (TRPA) a fee at an annual rate of 0.70% of the first $5 million, and 0.50% of average daily net asset value in excess of $5 million for directing the investment and reinvestment of the Capital Appreciation Portfolio's assets, and (2) ONIMCO pays Founders Asset Management, Inc. (FAM) a fee at an annual rate of 0.65% of the first $75 million, 0.60% of the next $75 million, and 0.55% of average daily net asset value in excess of $150 million for directing the investment and reinvestment of the Small Cap Portfolio's assets. Under a sub-advisory agreement dated March 16, 1995, ONIMCO pays Strong Capital Management, Inc. (SCM) a fee at an annual rate of 0.70% of the first $50 million and 0.50% of average daily net asset value in excess of $50 million for directing the investment and reinvestment of the Aggressive Growth Portfolio's assets. Under the agreement between the Fund and ONIMCO, ONIMCO has agreed to reimburse the Portfolios for expenses, other than the advisory fee, taxes and interest, in excess of 1% of their average daily net assets. The amount reimbursed in 1995 to the Global Contrarian Portfolio was $8,127. Each director who is not an officer of the Fund or an employee of O.N. Investment Management Company (ONIMCO) or its corporate affiliates is paid a quarterly retainer fee of $2,000 plus $400 for each meeting attended. A special meeting of the shareholders of the Equity, Bond, Omni and Money Market Portfolios was held on March 1, 1995 for the purpose of approving an amendment to the Investment Advisory Agreement with O.N. Investment Management Company. Prior to approving the amendment, a solicitation of proxies of the variable contract owners of the four portfolios was conducted and the results were as follows:
TOTAL % ----- - EQUITY For 4,112,960 75.7 Against 900,994 16.6 Abstain 419,955 7.7 --------- ----- TOTAL 5,433,909 100.0 --------- -----
TOTAL % ----- - MONEY MARKET For 952,850 73.5 Against 112,430 8.7 Abstain 230,893 17.8 --------- ----- TOTAL 1,296,173 100.0 --------- -----
TOTAL % ----- - BOND For 1,198,743 87.8 Against 87,885 6.4 Abstain 77,986 5.8 --------- ----- TOTAL 1,364,614 100.0 --------- -----
TOTAL % ----- - OMNI For 4,116,501 71.3 Against 1,042,633 18.1 Abstain 610,848 10.6 --------- ----- TOTAL 5,769,982 100.0 --------- -----
The Fund's transfer agent and dividend paying agent is The Provident Bank, One East Fourth Street, Cincinnati, Ohio. The Provident Bank is also the custodian for those portfolios other than the International and Global Contrarian Portfolios. The custodian for the International and Global Contrarian Portfolios is Investors Fiduciary Trust Company, 127 West Tenth Street, Kansas City, Missouri. For International and Global Contrarian Portfolio assets held outside the United States, Investors Fiduciary Trust Company enters into subcustodial agreements, subject to approval by the Board of Directors. 80 OHIO NATIONAL FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 (4) DISTRIBUTIONS TO SHAREHOLDERS On January 2, 1996, the following dividends were paid from net investment income and net realized gains on investments to shareholders of record on December 29, 1995:
NET INVESTMENT INCOME - ----------------- ----------------- ---------------- ---------------- ---------------- ----------------- ---------------- Capital Equity Bond Omni Appreciation International Global Contrarian Aggress. Growth - ----------------- ----------------- ---------------- ---------------- ---------------- ----------------- ---------------- PER PER PER PER PER PER PER SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE - ----------------- ----------------- ---------------- ---------------- ---------------- ----------------- ---------------- .13 $787,173 .18 $290,858 .14 $890,337 .09 $143,627 .13 $799,333 .11 $44,416 .49 $165,966
NET REALIZED GAINS ON INVESTMENTS ----------------- ----------------- ---------------- ---------------- ---------------- ------------------ Capital Equity Omni Appreciation Small Cap International Global Contrarian ----------------- ----------------- ---------------- ---------------- ---------------- ------------------ PER PER PER PER PER PER SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE SHARE AGGREGATE ----------------- ----------------- ---------------- ---------------- ---------------- ----------------- .87 $5,341,756 .31 $1,956,755 .41 $655,102 .54 $542,566 .27 $1,691,528 .09 $36,817
For Federal income tax purposes, the Bond and Aggressive Growth portfolios had capital loss carryovers of $85,093 and $47,306 respectively, at December 31, 1995. If not offset by capital gains, the losses will expire in 2003. The Board of Directors does not intend to authorize a distribution of any net realized gain for a portfolio until the capital loss carryover has been offset or expires. (5) CAPITAL SHARES TRANSACTIONS Dividends, distributions and capital share transactions for the years ended December 31, 1995 and 1994 were as follows:
EQUITY MONEY MARKET BOND OMNI 1995 1994 1995 1994 1995 1994 1995 1994 ---- ---- ---- ---- ---- ---- ---- ---- Capital shares issued on sales 1,027,904 965,935 1,416,527 1,273,128 386,744 347,731 934,361 1,427,590 Capital shares issued on reinvested dividends 175,132 158,118 68,371 49,776 78,755 91,513 167,487 199,613 Capital shares redeemed 371,799 404,813 1,219,129 1,929,377 168,371 185,835 631,665 696,931
GLOBAL AGGRESSIVE INTERNATIONAL CAPITAL APPRECIATION(a) SMALL CAP(a) CONTRARIAN(b) GROWTH(b) 1995 1994 1995 1994 1995 1994 1995 1995 ---- ---- ---- ---- ---- ---- ---- ---- Capital shares issued on sales .......... 1,949,778 3,682,954 969,718 680,242 778,636 298,374 421,953 337,342 Capital shares issued on reinvested dividends .. 186,973 35,329 39,565 11,233 2,166 2,610 2,275 12,046 Capital shares redeemed ...... 564,813 392,237 56,759 32,357 40,666 29,378 15,010 11,183
(a)Commenced operations May 1, 1994 (b)Commenced operations March 31, 1995 The Fund is authorized to issue 250,000,000 of its capital shares. 20,000,000 shares have been allocated to the Equity and Omni Portfolios, and 10,000,000 shares are allocated to each of the other portfolios. The remaining 140,000,000 shares are unallocated at this time. 81 OHIO NATIONAL FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1995 (6) COMMITMENTS As of December 31, 1995 the International, Global Contrarian and Aggressive Growth Portfolios had entered into forward currency contracts, as set forth below summarized by currency:
INTERNATIONAL PORTFOLIO SETTLEMENT CURRENCY TO BE U.S. $ VALUE CURRENCY TO BE U.S. $ VALUE UNREALIZED DATES THROUGH DELIVERED AT 12/31/95 RECEIVED AT 12/31/95 GAIN (LOSS) 06/27/96 363,000 Swiss Franc 320,162 316,299 U.S. Dollar 316,299 -- $ (3,863) 02/09/96 5,500,000 Deutsche Mark 3,835,693 3,783,369 U.S. Dollar 3,783,369 -- (52,324) 04/04/96 1,439,000 Deutsche Mark 1,006,927 1,010,175 U.S. Dollar 1,010,175 $ 3,248 -- 07/03/96 1,092,000 Deutsche Mark 766,962 764,306 U.S. Dollar 764,306 -- (2,656) 02/09/96 12,500,000 French Franc 2,549,408 2,548,728 U.S. Dollar 2,548,728 -- (680) 04/05/96 6,770,000 French Franc 1,381,830 1,359,35 U.S. Dollar 1,359,335 -- (22,495) 07/11/96 20,670,000 French Franc 4,221,296 4,170,830 U.S. Dollar 4,170,830 -- (50,466) 02/09/96 555,000,000 Japanese Yen 5,389,396 5,921,412 U.S. Dollar 5,921,412 532,016 -- 04/04/96 334,250,000 Japanese Yen 3,279,211 3,371,833 U.S. Dollar 3,371,833 92,622 -- 07/18/96 240,950,000 Japanese Yen 2,390,140 2,433,121 U.S. Dollar 2,433,121 42,982 -- ---------- ---------- -------- --------- 25,141,025 25,679,408 $670,868 $(132,484) ========== ========== ======== =========
GLOBAL CONTRARIAN SETTLEMENT CURRENCY TO BE U.S. $ VALUE CURRENCY TO BE U.S. $ VALUE UNREALIZED DATES THROUGH DELIVERED AT 12/31/95 RECEIVED AT 12/31/95 GAIN (LOSS) 07/03/96 150,000 Deutsche Mark 105,352 104,969 U.S. Dollar 104,969 -- $ (383) 07/11/96 700,000 French Franc 142,956 141,223 U.S. Dollar 141,223 -- (1,733) 02/09/96 7,000,000 Japanese Yen 67,974 69,027 U.S. Dollar 69,027 $ 1,053 -- 04/04/96 5,500,000 Japanese Yen 53,959 56,341 U.S. Dollar 56,341 2,382 -- 07/18/96 9,000,000 Japanese Yen 89,277 90,909 U.S. Dollar 90,909 1,632 -- 06/27/96 125,000 Dutch Guilder 78,473 78,144 U.S. Dollar 78,144 -- (329) ------- ------- --------- ------- 537,991 540,613 $ 5,067 $(2,445) ======= ======= ========= =======
AGGRESSIVE GROWTH SETTLEMENT CURRENCY TO BE U.S. $ VALUE CURRENCY TO BE U.S. $ VALUE UNREALIZED DATES THROUGH DELIVERED AT 12/31/95 RECEIVED AT 12/31/95 GAIN (LOSS) 01/16/96 12,320 Deutsche Mark 8,608 8,707 U.S. Dollar 8,707 $ 99 -- 04/17/96 84,240 Deutsche Mark 58,857 59,904 U.S. Dollar 59,904 1,047 -- 05/09/96 9,500 Deutsche Mark 6,638 6,768 U.S. Dollar 6,768 130 -- 05/13/96 28,994,550 Japanese Yen 281,087 291,819 U.S. Dollar 291,819 10,732 -- ------- ------- -------- ------- 355,190 367,198 $ 12,008 -- ======= ======= ======== =======
(7) Financial Highlights The Financial Highlights on pages 2 to 5 of the prospectus are a part of these Financial Statements. 82 APPENDIX DEBT SECURITY RATINGS The Commission has designated six nationally recognized statistical rating organizations: Duff and Phelps, Inc. ("D & P"), Fitch Investors Service, Inc. ("Fitch"), Moody's Investors Service, Inc. (Moody's"), Standard & Poor's Corp. ("S & P"), and, with respect to bank-supported debt and debt issued by banks, broker-dealers and their affiliates, IBCA Inc. and its British affiliate, IBCA Limited ("IBCA") and Thompson Bankwatch, Inc. ("TBW"). ONIMCO may use the ratings of all six such rating organizations as factors to consider in determining the quality of debt securities, although it will generally only follow D&P, Fitch, Moody's and S&P. IBCA and TBW will only be consulted if fewer than two of the other four rating organizations have given their top rating to a security. Only the ratings of Moody's and S & P will be considered in determining the eligibility of bonds for acquisition by the Fund. MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") Commercial Paper: Moody's short-term debt ratings are opinions of the ability of issuers to punctually repay senior debt obligations having an original maturity not exceeding one year. P-1 The Prime-1 (P-1) rating is the highest commercial paper rating assigned by Moody's. Issuers (or supporting institutions) rated P-1 have a superior ability for repayment of senior short-term debt obligations. P-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well-established industries, high rates of return on funds employed, conservative capitalization structure with moderate reliance on debt and ample asset protection, broad margins in earnings coverage of fixed financial charges and high internal cash generation, and well-established access to a range of financial markets and assured sources of alternate liquidity. P-2 Issuers (or supporting institutions) rated Prime-2 (P-2) have a strong ability for repayment of senior short-term obligations. This will normally be evidenced by many of the characteristics cited above for P-1, but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Bonds: Aaa Bonds which are rated Aaa by Moody's are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edge." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa Bonds which are rated as Aa by Moody's are judged to be of high quality by all standards. Together with the Aaa group, they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A Bonds which are rated A by Moody's possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future. 55 83 Baa Bonds which are rated Baa by Moody's are considered as medium grade obligations, that is, they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. STANDARD & POOR'S CORP. ("S & P") Commercial Paper: An S & P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than one year. A-1 This is S & P's highest category and it indicates that the degree of safety regarding timely payment is strong. Those issues determined to possess extremely strong safety characteristics are designated A-1+. A-2 Capacity for timely payment on issues with this designation is satisfactory. However, the relative degree of safety is not as high as for issues designated as A-1. Bonds: AAA Bonds rated AAA by S&P are the highest grade obligations. They possess the ultimate degree of protection as to principal and interest. Market prices move with interest rates, and hence provide maximum safety on all counts. AA Bonds rated AA by S&P also qualify as high grade obligations, and in the majority of instances differ from AAA issues only in small degree. Here, too, prices move with the long-term money market. A Bonds rated A by S&P are regarded as upper medium grade. They have considerable investment strength but are not entirely free from the adverse effects of changes in economic and trade conditions. Interest and principal are regarded as safe. They predominantly reflect money rates in their market behavior, but to some extent, also economic conditions. BBB The BBB or medium grade category is the borderline between definitely sound obligations and those where the speculative element begins to predominate. These bonds have adequate asset coverage and normally are protected by satisfactory earnings. Their susceptibility to changing conditions, particularly to depressions, necessitates constant watching. Marketwise, the bonds are more responsive to business and trade conditions than to interest rates. This is the lowest group which qualifies for commercial bank investments. DUFF & PHELPS, INC. ("D & P") Commercial Paper: D & P's short-term ratings have incorporated gradations of "1+" and "1-" in recognition of quality differences within the first tier. D-1+ Highest certainty of timely payment. Short-term liquidity, including internal operating factors and/or access to alternative sources of funds, is outstanding, and safety is just below risk-free U.S. Treasury short-term obligations. D-1 Very high certainty of timely payment. Liquidity factors are excellent and supported by good fundamental protection factors. Risk factors are minor. D-1- High certainty of timely payment. Liquidity factors are strong and supported by good fundamental protection. 56 84 D-2 Good certainty of timely payment. Liquidity factors and company fundamentals are sound. Although ongoing funding needs may enlarge total financing requirements, access to capital markets is good. Risk factors are small. FITCH INVESTORS SERVICE, INC. ("FITCH") Commercial Paper Fitch's short-term ratings apply to debt obligations that are payable on demand or have original maturities of up to three years, including commercial paper, certificates of deposit, medium-term notes, and municipal and investment notes. Fitch's short-term ratings emphasize the existence of liquidity necessary to meet the issuer's obligations in a timely manner. F-1+ Exceptionally strong credit quality. Issues assigned this rating are regarded as having the strongest degree of assurance for timely payment. F-1 Very strong credit quality. Issues assigned this rating reflect an assurance of timely payment only slightly less in degree than issues rated F-1+. F-2 Good credit quality. Issues carrying this rating have a satisfactory degree of assurance for timely payment, but the margin of safety is not as great as the F-1+ and F-1 categories. 57 85 OHIO NATIONAL FUND, INC. FORM N-1A PART C. OTHER INFORMATION 86 FINANCIAL STATEMENTS AND EXHIBITS The following audited financial statements are included in Part B of this registration statement: Statements of Assets and Liabilities as of December 31, 1995 Statements of Operations for the Year Ended December 31, 1995 Statements of Changes in Net Assets for the Years Ended December 31, 1995 and 1994 Schedule of Investments at December 31, 1995 --Equity Portfolio Schedule of Investments at December 31, 1995 -- Money Market Portfolio Schedule of Investments at December 31, 1995 -- Bond Portfolio Schedule of Investments at December 31, 1995 -- Omni Portfolio Schedule of Investments at December 31, 1995 -- International Portfolio Schedule of Investments at December 31, 1995 -- Capital Appreciation Portfolio Schedule of Investments at December 31, 1995 -- Small Cap Portfolio Schedule of Investments at December 31, 1995 -- Global Contrarian Portfolio Schedule of Investments at December 31, 1995 -- Aggressive Growth Portfolio Notes to Financial Statements for December 31, 1995 Independent Auditors' Report of KPMG Peat Marwick LLP dated January 26, 1996 The following audited financial information is included in Part A of this registration statement: Financial Highlights (Ten years ended December 31, 1995) Written Consents of the Following Persons: Ronald L. Benedict, Esq. as Legal Counsel to the Registrant Jones & Blouch L.L.P. as Legal Counsel to the Registrant KPMG Peat Marwick LLP as Independent Certified Public Accountants for the Registrant Exhibits: (5)(a) Investment Advisory Agreement between the Registrant and Ohio National Investments, Inc., dated May 1, 1996. (5)(b) Sub-Advisory Agreement (for the International and Global Contrarian Portfolios) between Ohio National Investments, Inc. and Societe Generale Asset Management Corp., dated May 1, 1996. -1- 87 (5)(c) Sub-Advisory Agreement (for the Capital Appreciation Portfolio) between Ohio National Investments, Inc. and T. Rowe Price Associates, Inc., dated May 1, 1996. (5)(d) Sub-Advisory Agreement (for the Small Cap Portfolio) between Ohio National Invesments, Inc and Founders Asset Management, Inc., dated May 1, 1996. (5)(e) Sub-Advisory Agreement (for the Aggressive Growth Portfolio) between Ohio National Investments, Inc. and Strong Capital Management, Inc., dated May 1, 1996. (9)(b) Service Agreement among the Registrant, Ohio National Investments, Inc. and The Ohio National Life Insurance Company, dated May 1, 1996. (9)(d) Joint Insured Agreement among the Registrant, ONE Fund, Inc. and Ohio National Investments, Inc., dated May 1, 1996. (16) Computation of Performance Data (for the years ended December 31, 1995). All other relevant exhibits, which have previously been filed with the Commission and are incorporated herein by reference, are as follows: (1) Articles of Incorporation of the Registrant (amended as of November 2, 1982) were filed as Exhibit (1) of the Registrant's Form N-1, Post-effective Amendment No. 6, on August 3, 1982. (1)(a) Articles Supplementary of the Registrant, effective December 30, 1992, were filed as Exhibit (1)(a) of the Registrant's Form N-1A, Post-effective amendment No. 21, on February 26, 1993. (1)(b) Articles Supplementary of the Registrant, effective March 1, 1994, were filed as Exhibit (1)(b) of the Registrant's Form N-1A, Post-effective Amendment No. 24, on March 2, 1994. (1)(c) Articles Supplementary of the Registrant, effective December 15, 1994 were filed as Exhibit (1)(c) of the Registrant's Form N-1A, Post-effective Amendment No. 27, on December 30, 1994. (2) By-laws of the Registrant (as amended March 16, 1989) were filed as Exhibit (2) of the Registrant's Form N-1A, Post-effective Amendment No. 17, on March 27, 1989. (4) Specimen of certificated securities of the Registrant's International Portfolio was filed as Exhibit (4) of the Registrant's Form N-1A, Post-effective Amendment No. 21, on February 26, 1993. (4)(a) Specimen of certificated securities of the Registrant's Capital Appreciation Portfolio was filed as Exhibit (4)(a) of the Registrant's Form N-1A, Post-effective Amendment No. 25, on March 25, 1994. (4)(b) Specimen of certificated securities of the Registrant's Small Cap Portfolio was filed as Exhibit (4)(b) of the Registrant's Form N-1A, Post-effective Amendment No. 25, on March 25, 1994. (4)(c) Specimens of certificated securities of the Registrant's Global Contrarian and Aggressive Growth Portfolios were filed as Exhibit (4)(c) of the Registrant's Form N-1A, Post-effective Amendment No. 27, on December 30, 1994. -2- 88 (8) Custodian Agreement between the Registrant and The Provident Bank was filed as Exhibit No. (12) of the Registrant's Form N-1A, Post-effective Amendment No. 16, filed April 27, 1988. (8)(a) Custody Agreement (for the International Portfolio) between the Registrant and Investors Fiduciary Trust Company was filed as Exhibit (8)(a) of the Registrant's Form N-1A, Post-effective Amendment No. 22, on April 22, 1993. (8)(a)(i) First Amendment of Custody Agreement (adding the Global Contrarian Portfolio) between the Registrant and Investors Fiduciary Trust Company was filed as Exhibit (8)(a)(i) of the Registrant's Form N-1A, Post-effective Amendment No. 27, on December 30, 1994. (9)(a) Agency Agreement between the Registrant and The Provident Bank was filed as Exhibit No. (13) of the Registrant's Form N-1A, Post-effective Amendment No. 16, filed April 27, 1988. (9)(c) Repurchase Transactions, Terms and Conditions (master agreement) between the Registrant and The Provident Bank was filed as Exhibit (9)(c) of the Registrant's Form N-1A, Post-effective Amendment No. 21, on February 26, 1993. (9)(e) Services Agreement (for the International Portfolio) between the Registrant and Interactive Data Corporation was filed as Exhibit (9)(e) of the Registrant's Form N-1A, Post-effective Amendment No. 23, on October 29, 1993. (10) Opinion and consent of Ronald L. Benedict, Esq., as to the shares of the Registrant's International Portfolio was filed as Exhibit (10) of the Registrant's Form N-1A, Post-effective Amendment No. 21, on February 26, 1993. (10)(a) Opinion and consent of Ronald L. Benedict, Esq., as to the shares of the Registrant's Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios was filed as Exhibit (10)(a) of the Registrant's Form N-1A, Post-effective Amendment No. 27, on December 30, 1994. (13) Investment letter for the initial subscription of capital stock of the Registrant's International Portfolio was filed as Exhibit (13) of the Registrant's Form N-1A, Post-effective Amendment No. 22, on April 22, 1993. (13)(a) Investment letters for the initial subscriptions of capital stock of the Registrant's Capital Appreciation, Small Cap, Global Contrarian and Aggressive Growth Portfolios were filed as Exhibit (13)(a) of the Registrant's Form N-1A, Post-effective Amendment No. 27, on December 30, 1994. (16) Computation of Performance Data was filed as exhibits (16) of the Registrant's Form N-1A, Post-effective Amendments No. 18 on March 2, 1990, No. 19 on April 18, 1991, No. 20 on April 29, 1992, No. 21 on February 26, 1993, No. 24 on March 2, 1994, and No. 28 on February 17, 1995. -3- 89 PERSONS UNDER COMMON CONTROL WITH REGISTRANT The Registrant is an affiliate of The Ohio National Life Insurance Company ("ONLI"). The diagram on page 4A shows all persons under common control with the Registrant. ONLI is a mutual life insurer and it owns 100% of the voting securities of each of its subsidiaries. As of February 1, 1996, it also owned 92.9% of the voting securities of the Registrant, which are held of record in the separate accounts of ONLI. The remaining 7.1% of the Registrant's voting securities were owned by Ohio National Life Assurance Corporation ("ONLAC") and held of record in ONLAC's separate account. ONLI owns 100% of the voting securities of Ohio National Investments, Inc. (the "Adviser"). ONLI also owned 73.1% of the voting shares of ONE Fund, Inc. ("ONE Fund") as of that date. NUMBER OF HOLDERS OF SECURITIES As of February 1, 1996, the securities of the Registrant were held as follows:
Title of Class Number of Record Holders -------------- ------------------------ Equity 5 Money Market 5 Bond 5 Omni 5 International 5 Capital Appreciation 5 Small Cap 5 Global Contrarian 5 Aggressive Growth 5
INDEMNIFICATION Under Section 2-418 of the Maryland General Corporation Law, with respect to any proceedings against a present or former director, officer, agent or employee (a "corporate representative") of the Registrant (a Maryland corporation), except a proceeding brought by or on behalf of the Registrant, the Registrant may indemnify the corporate representative against expenses, including attorneys' fees, and judgments, fines, penalties, and amounts paid in settlement, if such expenses were actually and reasonably incurred by the corporate representative in connection with the proceeding, if: (i) he or she acted in good faith; (ii) in the case of conduct in his or her official capacity he or she reasonably believed that his or her conduct was in the best interests of the Registrant, and in all other cases he or she reasonably believed that his or her conduct was not opposed to the best interests of the Registrant; and (iii) with respect to any criminal proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful. The Registrant is also authorized under Section 2-418 of the Maryland General Corporation Law to indemnify a corporate representative under certain circumstances against reasonable expenses incurred in connection with the defense of a suit or action by or in the right of the Registrant except where the corporate representative has been adjudged liable to the Registrant. Under Article 11 of the Registrant's By-laws, directors and officers of Registrant are entitled to indemnification by the Registrant to the fullest extent permitted under Maryland law and the Investment Company Act of 1940. Reference is made to Article 11 of Registrant's By-laws and Section 2-418 of the Maryland General Corporation Law. -4- 90
THE OHIO NATIONAL LIFE INSURANCE COMPANY/Cincinnati A mutual life insurance company incorporated under the laws of Ohio - ---------------------------------------- -------------------------------------- Enterprise Park, Inc. Ohio National Equities Inc. A Georgia Corporation A Broker/Dealer Real Estate Development Company Capitalized by ONLI @ $30,000 Capitalized by ONLI $50,000 - ---------------------------------------- -------------------------------------- Pres. & Dir. M. Stohler Chm. & Dir. D. O'Maley V.P. & Dir. J. Brom Pres. & Dir. D. Zimmerman Secy. & Dir. T. Tews VP/COO/Dir. D. McClure Treas. & Dir. P. Bergmann VP & Dir. T. Backus Director T. Bowman Secretary R. Benedict Treasurer K. Jaeger Compliance Officer A. Starkey Asst. Secy. B. Hopewell - ---------------------------------------- --------------------------------------
91
- ------------------------------------------------------------------------------------------------------------------- THE OHIO NATIONAL LIFE INSURANCE COMPANY/CINCINNATI A MUTUAL LIFE INSURANCE COMPANY INCORPORATED UNDER THE LAWS OF OHIO - ------------------------------------------------------------------------------------------------------------------- | | S E P A R A T E A C C O U N T S | | | -------------------------------- | | | A B C D E F | | | -------------------------------- | | | | | | | | | - ------------------------------- ------------------------------ | ------------------------------------- OHIO NATIONAL INVESTMENTS, INC. THE O.N. EQUITY SALES COMPANY | OHIO NATIONAL LIFE | ASSURANCE CORPORATION AN INVESTMENT ADVISER AN OHIO CORPORATION | AN OHIO CORPORATION CAPITALIZED BY ONLI @ $10,000 A BROKER/DEALER | A STOCK LIFE INSURANCE COMPANY CAPITALIZED BY ONLI @ $790,000 | CAPITALIZED BY ONLI @ $32,000,000 | INCORPORATED UNDER THE LAWS OF OHIO - ------------------------------- ------------------------------ | ------------------------------------ Chm. & Dir. D. O'Maley | Chm./Pres/.CEO & Dir. D. O'Maley Pres. & Dir. J. Brom | Sr. VP & Dir. R. Dolan Pres. & Dir. D. Zimmerman | Sr. VP/Secy. & Dir. D. Zimmerman VP & Dir. M. Boedeker | Sr. VP & Dir. S. Summers V.P. & Dir. T. Bowman | Sr. VP & Dir. J. Brom VP & Dir. D. McClure | Sr. Vice Pres. D. Cook V.P., COO & Dir. D. McClure | Sr. Vice Pres. G. Smith VP & Dir. S. Williams | Vice President P. Bergmann Secy. & Dir. R. Benedict | Vice President M. Boedeker Treasurer D. Taney | Vice President R. DiTommaso Director S. Summers | Vice President J. Mettey Secretary R. Benedict | Vice President G. Pearson Treasurer K. Jaeger | Vice President D. Pennington Asst. Secy. B. Hopewell | Vice President M. Stohler Asst. Secretary B. Hopewell | Second Vice Pres. J. Houser | Asst. Secy. R. Benedict Compliance Director A. Starkey | Asst. Secy. T. Tews | Asst. Actuary K. Flischel - ------------------------------- ------------------------------ | ------------------------------------ | | SEPARATE ACCOUNT | |------------------------------------- | | R | | --- <- Advisor to | Advisor to -> | -------------------------------------------------------- | | | | - ----------------------------- -------------------------------- | | -------------------------------- ONE FUND, INC. O.N. Investment Management Co. | | Ohio National Fund | | A MARYLAND CORPORATION An Ohio Corporation | | A Maryland Corporation AN OPEN END DIVISIFIED A Financial Advisory service | | An open end diversified MANAGEMENT INVESTMENT COMPANY Capitalized by ONESCO @ $145,000 | | management investment company - ----------------------------- -------------------------------- | | -------------------------------- Pres. & Dir. D. Zimmerman Pres. & Dir. J. Brom | | Pres. & Dir. D. Zimmerman Vice. Pres. M. Boedeker | ----- Vice President M. Boedeker Vice Pres. J. Brom VP & Dir. M. Boedeker | Vice President J.Brom Vice Pres. D. McClure | Vice President S. Williams Vice Pres. S. Williams VP & Dir. D. McClure | Treasurer D. Taney Treasurer D. Taney -------- Secy. & Dir. R. Benedict Secy. & Dir. R. Benedict VP & Dir. S. Willams Asst. Secy. B. Hopewell Asst. Secy. B. Hopewell Director J. Baker Asst. Secy. A. Starkey Treasurer D. Taney Director G. Castrucci Director J. Baker Director M. Kirby Director G. Castrucci Secretary R. Benedict Director M. Kirby Asst. Secy. B. Hopewell - --------------------------------- -------------------------------- ---------------------------------
92 BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER The Adviser is engaged in providing investment management services to the Registrant and to ONE Fund. The Adviser is also authorized to provide such services to others. The Adviser has not engaged in any other business of a substantial nature during the past two fiscal years. The names of each director and officer of the Adviser and the business of a substantial nature of each during the past two fiscal years are as follows:
Position with Business of a Substantial Name the Adviser Nature During Past Two Years - ---- ----------- ---------------------------- Joseph P. Brom Director and Senior Vice President and Chief President Investment Officer of ONLI; Vice President of Registrant; Senior Vice President of ONLAC; Vice President of ONE Fund; Director and President of ONIMCO Michael A. Boedeker Director and Vice President, Fixed Income Securities Vice President of ONLI; Vice President of ONLAC; Vice President of Registrant; Vice President of ONE Fund; Director and Vice President of ONIMCO Stephen T. Williams Director and Director of Securities of ONLI; Vice Vice President President of Registrant; Vice President of ONE Fund; Director and Vice President of ONIMCO David G. McClure Director and Vice President, Variable Product Sales of Vice President ONLI; Vice President, Chief Operating Officer and Director of O.N. Equity Sales Co. ("ONESCO") and Ohio National Equities, Inc. ("ONE, Inc."); Vice President of ONE Fund; Director and Vice President of ONIMCO Ronald L. Benedict Secretary Second Vice President and Counsel of ONLI; Director and Secretary of Registrant; Director and Secretary of ONE Fund; Director and Secretary of ONESCO; Assistant Secretary of ONLAC; Secretary of ONIMCO; Secretary of ONE, Inc. Dennis R. Taney Treasurer Mutual Fund Financial Operations Director of ONLI; Treasurer of Registrant; Treasurer of ONE Fund; Treasurer of ONIMCO Barbara A. Hopewell Assistant Associate Counsel of ONLI; Assistant Secretary Secretary of Registrant; Assistant Secretary of ONESCO; Assistant Secretary of ONE Fund; Assistant Secretary of ONIMCO; Assistant Secretary of ONE, Inc.
-5- 93 BUSINESS AND OTHER CONNECTIONS OF SGAM SGAM provides investment management services to the International and Global Contrarian Portfolios of the Registrant and of ONE Fund. SGAM's primary business is managing SoGen International Fund, Inc. and SoGen Funds, Inc. ("SoGen"), diversified investment companies of the management type registered under the 1940 Act. The officers and directors of SGAM and their business of a substantial nature during the past two fiscal years are as follows:
Position Business of a Substantial Name with SGAM Nature During Past Two Years - ---- --------- ---------------------------- Philip J. Bafundo Secretary and VicePresident, Secretary and Treasurer Treasurer of SoGen; Certified Public Accountant (New York) Frances G. Bijon Director International Director of Societe Generale Asset Management S.A. Jean-Marie Eveillard President and President and Director of Director SoGen Jean-Pierre Gentil Chairman of the Chairman of the Board and Board and Director Director of SoGen; Manager of the Investment and Custody Department of Societe Generale Jean-Roger Huet Director President of New York Branch of Societe Generale. Jean-Marie Stein Director Director of French Funds of Societe Generale
BUSINESS AND OTHER CONNECTIONS OF TRPA TRPA provides investment management services to the Capital Appreciation Portfolio of the Registrant. TRPA's primary business is the management of assets for individual and institutional investors, particularly the T. Rowe Price group of mutual funds. The officers and directors of TRPA and their business of a substantial nature during the past two fiscal years are as follows:
Position Business of a Substantial Name with TRPA Nature during Past Two Years - ---- --------- ---------------------------- George J. Collins President, Chief Director of Rowe Price- Executive Officer Fleming International, Inc. and Managing Director ("Price-Fleming"); Director of T. Rowe Price Retirement Plan Services, Inc. ("RPS"); Director of T. Rowe Price Trust Company ("Trust Co."); Chairman of the Board of T. Rowe Price mutual funds ("Price Funds")
-6- 94
Position Business of a Substantial Name with TRPA Nature during Past Two Years - ---- --------- ---------------------------- James S. Riepe Managing Director Chairman of the Board of T. Rowe Price Services, Inc. ("Price Services"); Chairman of the Board of RPS; Chairman of the Board of Trust Co.; President and Director of T. Rowe Price Investment Services, Inc. ("Investment Services"); Vice President and Trustee of Price Funds Henry H. Hopkins Managing Director Vice President and Director of Investment Services; Vice President and Director of Price Services; Vice President and Director of Trust Co.; Vice President of Price- Fleming; Vice President of RPS; Director of ICI Mutual Insurance Company; Vice President of Price Funds James W. Halbkat, Jr. Director President of U.S. Monitor Corp. John W. Rosenblum Director Taylor Murphy Professor of Darden Graduate School of Business Administration, University of Virginia; Director of Chesapeake Corporation; Director of Cadmus Communications Corp.; Director of Comdial Corp.; Director of Cone Mills Corp. Robert L. Strickland Director Chairman of Lowe's Companies, Inc. Philip C. Walsh Director Consultant to and Director of Cyprus Minerals Corp.; Director of Piedmont Mining Co., Inc. George A. Roche Chief Financial Vice President and Director of Price-Fleming Officer and Managing Director M. David Testa Managing Director Chairman of the Board of Price-Fleming Charles P. Smith Managing Director Vice President of Price-Fleming Peter Van Dyke Managing Director Vice President of Price-Fleming Robert P. Campbell Vice President Vice President of Price-Fleming
-7- 95
Position Business of a Substantial Name with TRPA Nature during Past Two Years - ---- --------- ---------------------------- Robert C. Howe Vice President Vice President of Price-Fleming Veena A. Kutler Vice President Vice President of Price-Fleming George A. Murnaghan Vice President Vice President of Price-Fleming; Assistant Vice President of Investment Services William F. Wendler, II Vice President Vice President of Price-Fleming; Assistant Vice President of Investment Services Edward A. Wiese Vice President Vice President of Price-Fleming Price-Fleming Alvin M. Younger, Jr. Managing Director, Secretary and Treasurer of Secretary and Price-Fleming Treasurer Joseph P. Croteau Vice President Controller of Price-Fleming Nolan L. North Vice President and Assistant Treasurer of Price-Fleming Assistant Treasurer Arthur B. Cecil Vice President Vice President of Price Funds Charles A. Morris Vice President Vice President of Price Funds David A. Rea Vice President Vice President of Price Funds Alan R. Stuart Vice President Vice President of Price Funds Lenora V. Hornung Vice President Secretary of Price Funds Carmen F. Deyesu Vice President Vice President of Price Services; Vice President of Trust Co.; Treasurer of Price Funds David S. Middleton Vice President Vice President of Price Services; Vice President of Trust Co.; Controller of Price Funds Richard P. Howard Vice President President and portfolio manager of T. Rowe Price Capital Appreciation Fund
Wholly-owned subsidiaries of TRPA include the following: Investment Services, a Maryland corporation, is the principal underwriter and distributor of the Price Funds; Price Services, a Maryland corporation, provides transfer agent, dividend disbursing and shareholder services to the Price Funds; -8- 96 RPS, a Maryland corporation, provides administrative, recordkeeping and subaccounting services to administrators of employee benefit plans; Trust Co., a Maryland limited purpose trust company, provides fiduciary and custodial services to employee benefit plans and common trust funds; T. Rowe Price Real Estate Group, Inc., a Maryland corporation, provides real estate services and is the investment manager of several real estate investment trusts, funds and limited partnerships; T. Rowe Price Stable Asset Management, Inc., a Maryland corporation, is an investment adviser specializing in management of portfolios seeking stable and consistent returns; T. Rowe Price Recovery Fund Associates, Inc., a Maryland corporation, is the general partner of T. Rowe Price Recovery Fund, LP, a Delaware limited partnership that invests in financially distressed companies; T. Rowe Price (Canada), Inc., a Maryland corporation, is an investment adviser which may register as such under the Securities Act of Ontario. Tower Venture, Inc., a Maryland corporation, serves as a general partner of 100 East Pratt Street, LP, a Maryland limited partnership (whose limited partners include TRPA) formed to improve TRPA's headquarters property; TRP Suburban, Inc., a Maryland corporation, is involved in the construction of an office building to house certain administrative functions of TRPA in Owings Mills, MD; TRP Finance, Inc. and TRP Finance MRT, Inc., are Delaware corporations managing passive corporate investments and other intangible assets. TRP Distribution, Inc., a Maryland corporation, is a wholly-owned subsidiary of Investment Services and engages in the sale of investment products prepared by Investment Services. Price-Fleming, a Maryland corporation, is a joint venture 50% owned by TRP Finance, Inc., and provides investment counsel service with respect to foreign securities for U.S. institutional investors. BUSINESS AND OTHER CONNECTIONS OF FAM FAM provides investment management services to the Small Cap Portfolio of the Registrant. FAM's primary business is the management of the Founders group of mutual funds. It also serves as investment adviser to private accounts. The officers and directors of FAM and their business of a substantial nature during the past two fiscal years are as follows:
Position Business of a Substantial Name with FAM Nature During Past Two Years - ---- -------- ---------------------------- Bjorn K. Borgen President, Secretary, President, Executive Committee sole Director and member and Director of owner Founders Funds, Inc. Michael K. Haines SeniorVice President Portfolio manager for of Investments Founders Discovery Fund and Founders Frontier Fund
-9- 97
Position Business of a Substantial Name with FAM Nature During Past Two Years - ---- -------- ---------------------------- David L. Ray Vice President, Vice President, Secretary and Assistant Secretary Treasurer of Founders Funds, and Treasurer Inc. Michael W. Gerding Vice President of Portfolio manager for Investments Founders Worldwide Growth Fund and Founders Passport Fund Charles W. Hooper Vice President of Portfolio manager for Investments Founders Special Fund Gregory P. Contillo Vice President of N/A Institutional Marketing James P. Rankin Vice President of N/A Shareholder Services Lois F. Wong Vice President of N/A Advertising
BUSINESS AND OTHER CONNECTIONS OF SCM SCM provides investment management services to the Aggressive Growth Portfolio of the Registrant. SCM's primary business is the management of the Strong group of mutual funds ("Strong Funds"). It also serves as investment adviser to individual and institutional accounts. The officers and directors of SCM and their business of a substantial nature during the past two fiscal years are as follows:
Position Business of a Substantial Name with SCM Nature During Past Two Years - ---- -------- ---------------------------- Richard S. Strong Chairman and Director Chairman and Director of the Strong Funds; Chairman and Director of Strong Holdings, Inc.; Chairman and Director of Strong Funds Distributors, Inc.; Chairman and Director of Heritage Reserve Development Corp.; Managing board member of Fussville Real Estate Holdings LLC and Fussville Development LLC. John Dragisic Vice Chairman and Director Vice Chairman and Director of the Strong Funds; Director of Strong Holdings, Inc.; Director of Strong Funds Distributors, Inc.; Until July 1994 was President and Chief Executive Officer of Grunau Company, Inc. Richard T. Weiss Director N/A
-10- 98
Position Business of a Substantial Name with SCM Nature During Past Two Years - ---- -------- ---------------------------- Rochelle Lamm Wallach President and Director of Until November, 1994, was President and Strong Advisory Services, Director of AAL Capital Management a division of SCM Corporation and the AAL Mutual Funds. Thomas P. Lemke Senior Vice President, Senior Vice President of the Strong Funds; Secretary and General Until September 1994 was Resident Counsel Counsel for Funds Management at J.P. Morgan & Co. Ronald A. Neville Senior Vice President Until January, 1995, was Treasurer and Chief and Chief Financial Officer Financial Officer of Twentieth Century Securities. Bruce Behling Senior Vice President N/A Lloyd Cole Senior Vice President N/A Lawrence A. Totsky Senior Vice President Senior Vice President of the Strong Funds Thomas M. Zoeller Treasurer Treasurer of the Strong Funds; Treasurer of Strong Holdings, Inc.; Treasurer and Secretary of Strong Funds Distributors, Inc.; Treasurer of Heritage Reserve Development Corp.; Treasurer of Fussville Real Estate Holdings LLC and Fussville Development LLC.
Strong Holdings, Inc., a Wisconsin corporation, is a subsidiary of SCM. Strong Funds Distributors, Inc., a Wisconsin corporation, is a subsidiary of Strong Holdings, Inc. Heritage Reserve Development Corp., a Wisconsin corporation, is a subsidiary of Strong Holdings, Inc. Fussville Real Estate Holdings LLC and Fussville Development LLC, Wisconsin limited liability companies, are subsidiaries of SCM. PRINCIPAL UNDERWRITERS Not Applicable LOCATION OF ACCOUNTS AND RECORDS The books and records required under Section 31(a) and Rules thereunder are maintained and in the possession of the following persons: (a) Journals and other records of original entry: For those portfolios other than the International and Global Contrarian Portfolio: The Provident Bank ("Provident") One East Fourth Street Cincinnati, Ohio 45202 For the International and Global Contrarian Portfolios: -11- 99 Investors Fiduciary Trust Co. ("IFTC") 127 West Tenth Street Kansas City, Missouri 64105 (b) General and auxiliary ledgers: Provident and IFTC (c) Securities records for portfolio securities: Provident and IFTC (d) Corporate charter (Articles of Incorporation), By-Laws and Minute Books: Ronald L. Benedict, Secretary Ohio National Fund, Inc. 237 William Howard Taft Road Cincinnati, Ohio 45219 (e) Records of brokerage orders: ONIMCO (f) Records of other portfolio transactions: ONIMCO (g) Records of options: ONIMCO (h) Records of trial balances: Provident and ONIMCO (i) Quarterly records of allocation of brokerage orders and commissions: ONIMCO (j) Records identifying persons or group authorizing portfolio transactions: ONIMCO (k) Files of advisory materials ONIMCO MANAGEMENT SERVICES Not Applicable UNDERTAKINGS Not Applicable. -12- 100 SIGNATURES Pursuant to the requirements of the Securities Act of l933 and the Investment Company Act of l940, Ohio National Fund, Inc., has duly caused this post-effective amendment to the registration statement to be signed on its behalf by the undersigned thereunto duly authorized in the City of Cincinnati and the State of Ohio on the 28th day of February, 1996. OHIO NATIONAL FUND, INC. By /s/Donald J. Zimmerman ---------------------------- Donald J. Zimmerman, President Attest /s/Ronald L. Benedict ------------------------- Ronald L. Benedict, Secretary Pursuant to the requirements of the Securities Act of l933, this post-effective amendment to the registration statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- /s/Donald J. Zimmerman President and Director February 28, 1996 - ------------------------ (Principal Executive Officer) Donald J. Zimmerman /s/Dennis R. Taney Treasurer (Principal Financial February 28, 1996 - ------------------------ and Accounting Officer) Dennis R. Taney /s/James E. Baker Director February 28, 1996 - ------------------------ James E. Baker /s/Ronald L. Benedict Director February 28, 1996 - ------------------------ Ronald L. Benedict /s/George E. Castrucci Director February 28, 1996 - ------------------------ George E. Castrucci /s/Maurice H. Kirby, Jr. Director February 28, 1996 - ------------------------ Maurice H. Kirby, Jr.
101 INDEX OF CONSENTS AND EXHIBITS
Page Number in Exhibit Sequential Numbering Number Description System Where Located - ------ ----------- -------------------- Consent of Ronald L. Benedict, Esq. Consent of Jones & Blouch L.L.P. Consent of KPMG Peat Marwick LLP (5)(a) Investment Advisory Agreement between the Registrant and Ohio National Investments, Inc., dated May 1, 1996 (5)(b) Sub-Advisory Agreement (for the International and Global Contrarian Portfolios) between Ohio National Investments, Inc. and Societe Generale Asset Management Corp., dated May 1, 1996 (5)(c) Sub-Advisory Agreement (for the Capital Appreciation Portfolio) between Ohio National Investments, Inc. and T. Rowe Price Associates, Inc., dated May 1, 1996 (5)(d) Sub-Advisory Agreement (for the Small Cap Portfolio) between Ohio National Investments, Inc. and Founders Asset Management, Inc., dated May 1, 1996 (5)(e) Sub-Advisory Agreement (for the Aggressive Growth Portfolio) between Ohio National Investments, Inc. and Strong Capital Management, Inc., dated May 1, 1996 (9)(b) Service Agreement among the Registrant, Ohio National Investments, Inc. and The Ohio National Life Insurance Company, dated May 1, 1996 (9)(d) Joint Insured Agreement among the Registrant, ONE Fund, Inc. and Ohio National Investments, Inc., dated May 1, 1996 (16) Computation of Performance Data (for the years ended December 31, 1995)
102 CONSENTS 103 [Ohio National Fund, Inc. Letterhead] February 28, 1996 The Board of Directors Ohio National Fund, Inc. 237 William Howard Taft Road Cincinnati, Ohio 452l9 Re: Ohio National Fund, Inc. Registration Statement File Nos. 2-67464 and 811-3015 Gentlemen: The undersigned hereby consents to the use of my name under the caption of "Legal Counsel" in the registration statement on Form N-lA of the above captioned registrant. Sincerely, /s/ Ronald L. Bendict --------------------------- Ronald L. Benedict Secretary and Legal Counsel RLB/nh 104 JONES & BLOUCH L.L.P. 1025 Thomas Jefferson Street, N.W. Suite 405 West Washington, D.C. 20007 February 29, 1996 Board of Directors Ohio National Fund, Inc. 237 William Howard Taft Road Cincinnati, OH 45219 Re: Ohio National Fund, Inc. Registration Statement on Form N-1A File No. 2-67464 ------------------------------------ Dear Sirs: We hereby consent to the reference to this firm under the caption "Legal Counsel" in the statement of additional information included in post-effective amendment No. 31 under the Securities Act of 1933 to the above-referenced registration statement for Ohio National Fund, Inc. Very truly yours, /s/ Jones & Blouch L.L.P. ------------------------ Jones & Blouch L.L.P. 105 INDEPENDENT AUDITORS' CONSENT ----------------------------- The Board of Directors Ohio National Fund, Inc: We consent to the inclusion of our report included herein and to the reference to our firm under the heading "Experts" in the Statement of Additional Information. KPMG Peat Marwick LLP Cincinnati, Ohio February 29, 1996 106 EXHIBITS EX-5.A 2 EXHIBIT 5A 1 EXHIBIT (5)(a) INVESTMENT ADVISORY AGREEMENT BETWEEN THE REGISTRANT AND OHIO NATIONAL INVESTMENTS, INC. DATED MAY 1, 1996 2 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 3 (d) regularly report to the Fund's Board of Directors with respect to implementation of the approved investment programs and the Adviser's activities in connection with the administration of the Fund. 3. USE OF SUB-ADVISERS In providing the services and assuming the obligations set forth herein, in connection with any investment portfolio of the Fund, the Adviser may at its expense employ one or more Sub-Advisers, or may enter into such service agreements as the Adviser deems appropriate in connection with the performance of its duties and obligations hereunder. Reference herein to the duties and responsibilities of the Adviser shall include any Sub-Adviser employed by the Adviser to the extent the Adviser shall delegate such duties and responsibilities to any such Sub-Adviser. Any agreement between the Adviser and a Sub-Adviser shall be subject to the approval of the Fund, its Board of Directors, and shareholders of any portfolio affected thereby, as required by the Investment Company Act of 1940, as amended (the "1940 Act"), and any such Sub-Adviser shall at all times be subject to the direction of the Board of Directors of the Fund or any officer of the Fund acting pursuant to the Board's authority. Furthermore, the Adviser shall perform ongoing due diligence oversight of any such Sub-Adviser in order to assure continuing quality of performance by said Sub-Adviser. 4. TO BE FURNISHED BY THE ADVISER In addition to performing the obligations set forth in paragraph 2 hereof, the Adviser shall furnish at its own expense or pay the expenses of the Fund for the following: (a) office space in the offices of the Adviser or in such other place as may be agreed upon from time to time, and all necessary office facilities and equipment; (b) necessary executive and other personnel for managing the affairs of the Fund, including personnel to perform clerical, accounting and other office functions (exclusive of those related to and to be performed under contract for custodial, bookkeeping, transfer and dividend disbursing agency services by any bank or other agents selected to perform such services); and (c) all information and services, other than services of counsel, required in connection with the preparation of registration statements, prospectuses and statements of additional information, including amendments and revisions thereto; all annual, semi-annual and periodic reports; and notices and proxy solicitation material furnished to shareholders of the Fund or regulatory authorities. 5. ITEMS NOT REQUIRED TO BE FURNISHED BY THE ADVISER Nothing in paragraph 4 hereof shall require the Adviser to bear, or to reimburse the Fund for: 2 4 (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 3 5 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 4 6 interest shall not affect the validity hereof or of any transactions hereunder except as otherwise provided in the Articles of Incorporation of the Fund and the Adviser, respectively, or by specific provision of applicable law. 10. LIABILITIES OF ADVISER Neither the Adviser nor any of its directors, officers or employees, nor any person performing executive, administrative or trading functions shall be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except for loss resulting from willful misfeasance, bad faith or gross negligence in the performance of its, his or her duties on behalf of the Fund or from reckless disregard by the Adviser or any such person of the Adviser's duties under this Agreement. Without limiting the generality of the foregoing, neither the Adviser nor any such person shall be deemed to have acted unlawfully or to have breached any duty to the Fund under state or federal law in effect at the date of the enactment of Section 28(e) of the 1934 Act solely by reason of having caused the Fund to pay a member of any securities exchange, or any other securities broker or dealer, an amount of commission for effecting a securities transaction in excess of the commission another member of a securities exchange, or another securities broker or dealer, would have charged for effecting that transaction if the Adviser or such other person determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or the overall responsibilities of the Adviser with respect to any accounts to which the Adviser exercises investment discretion. 11. DURATION, TERMINATION AND AMENDMENT (a) This Agreement shall become effective as to any portfolio upon its approval for such portfolio by the Board of Directors of the Fund and the shareholders of the class of capital stock designated for that portfolio. This Agreement will continue in effect for a period more than two years from the date of its effectiveness as to any portfolio only so long as such continuance is specifically approved at least annually either by the Board of Directors of the Fund or by the vote of a majority of the outstanding voting securities of the portfolio, provided that in either event such continuance shall also be approved by the vote of a majority of the directors of the Fund who are not interested persons (as defined in the 1940 Act) of any party to this Agreement cast in person at a meeting called for the purpose of voting on such approval. The required shareholder approval of this Agreement or of any continuance of this Agreement shall be effective with respect to a portfolio if a majority of the outstanding voting securities of the class (as defined in Rule 18f-2(h) under the 1940 Act) of capital stock of the portfolio votes to approve the Agreement or its continuance, notwithstanding that this Agreement or its continuance may not have been approved by a majority of the outstanding voting securities of the entire Fund. 5 7 (b) If the shareholders of capital stock of any portfolio fail to approve any continuance of this Agreement, the Adviser will continue to act as investment adviser with respect to that portfolio pending the required approval of this Agreement or its continuance, or of a new contract with the Adviser or a different investment adviser or other definitive action; provided, that the compensation received by the Adviser in respect of that portfolio during such period will be no more than the Adviser's actual costs incurred in furnishing investment advisory and management services to such portfolio or the amount it would have received under this Agreement, whichever is less. (c) This Agreement may be terminated at any time, without the payment of any penalty, by the Board of Directors of the Fund or, with respect to any portfolio, by the vote of a majority of the outstanding voting securities of that portfolio on 60 days' written notice to the Adviser, or by the Adviser, on 90 days' written notice to the Fund. This Agreement will automatically terminate in the event of its assignment (as defined in the 1940 Act). (d) This Agreement may be amended by the parties only if such amendment is specifically approved by the vote of a majority of the outstanding voting securities of each affected portfolio and by the vote of a majority of the directors of the Fund who are not interested persons of any party to this Agreement cast in person at a meeting called for the purpose of voting on such approval. 12. NOTICES AND GOVERNING LAW (a) Any notice under the Agreement shall be in writing, addressed and delivered or mailed postage prepaid to the other party at such address as the other party may designate for the receipt of notices. Until further notice to the other party it is agreed that the address of the Fund and that of the Adviser for this purpose shall be 237 William Howard Taft Road, Cincinnati, Ohio 45219. (b) This Agreement shall be governed by the law of Ohio. IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to be executed by their duly authorized officers, in Cincinnati, Ohio, as of the date first above written. OHIO NATIONAL FUND, INC. OHIO NATIONAL INVESTMENTS, INC. By By ------------------------------- -------------------------------- Donald J. Zimmerman, President Joseph P. Brom, President 6 8 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 ------------ ------ ---- ---- ------ 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 ------------- ------------ ----- ---------- ---------- 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: ---------------------------- ----------------------------- Donald J. Zimmerman, President Joseph P. Brom, President EX-5.B 3 EXHIBIT 5B 1 EXHIBIT (5)(b) SUB-ADVISORY AGREEMENT (FOR THE INTERNATIONAL AND GLOBAL CONTRARIAN PORTFOLIOS) BETWEEN OHIO NATIONAL INVESTMENTS, INC. AND SOCIETE GENERALE ASSET MANAGEMENT CORP. DATED MAY 1, 1996 2 SUB-ADVISORY AGREEMENT This Agreement is made as of the first day of May, 1996 by and between OHIO NATIONAL INVESTMENTS, INC. , an Ohio corporation (the "Adviser"), and SOCIETE GENERALE ASSET MANAGEMENT CORP., a Delaware corporation (the "Sub-Adviser"). WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that is registered under the Investment Company Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "1940 Act"); and WHEREAS, the Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "Advisers Act"); and WHEREAS, the Adviser has been appointed as investment adviser to the Fund in accordance with the 1940 Act and the Advisers Act; and WHEREAS, the Sub-Adviser is registered as an investment adviser under the Advisers Act and engages in the business of providing investment advisory services; and WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser, subject to the requirements of the 1940 Act and the Advisers Act, as a sub-adviser with respect to those portions of the assets of the Fund designated as the INTERNATIONAL PORTFOLIO and the GLOBAL CONTRARIAN PORTFOLIO of the Fund on the terms and conditions set forth below; NOW, THEREFORE, IT IS HEREBY AGREED as follows: SECTION 1. Investment Advisory Services (a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby accepts engagement by the Adviser, to supervise and manage on a fully-discretionary basis the cash, securities and other assets of the International Portfolio and the Global Contrarian Portfolio that the Adviser shall from time to time place under the supervision of the Sub-Adviser (such cash, securities and other assets initially and as same shall thereafter be increased or decreased by the investment performance thereof and by additions thereto and withdrawals therefrom by the Adviser shall hereinafter be referred to as the "Portfolios"). (b) All activities by the Sub-Adviser on behalf of the Adviser and the Portfolios shall be in accordance with the investment objectives, policies and restrictions set forth in the 1940 Act and in the Fund's prospectus and statement of additional information, as amended from time to time (together, the "Prospectus") and as interpreted from time to time by the Board of Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on behalf of the Adviser and the Portfolios shall also be subject to the due diligence oversight and direction of the Adviser. (c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the sole and exclusive responsibility to select members of securities exchanges, brokers, dealers and futures commission merchants for the execution of transactions of the Portfolios and, when applicable, shall negotiate commissions in connection therewith. All such selections shall be made in accordance with the Fund's policies and restrictions regarding brokerage allocation set forth in the Prospectus. 3 (d) In carrying out its obligations to manage the investments and reinvestments of the assets of the Portfolios, the Sub-Adviser shall: (1) obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in each of the Portfolios or are under consideration for inclusion therein; (2) formulate and implement continuous investment programs for the Portfolios consistent with the investment objectives and related investment policies and restrictions for the Portfolios as set forth in the Prospectus; and (3) take any steps necessary to implement the aforementioned investment programs by placing orders for the purchase and sale of securities. (e) In connection with the purchase and sale of securities of the Portfolios, the Sub-Adviser shall arrange for the transmission to the Adviser and the Portfolios' custodian on a daily basis such confirmation, trade tickets and other documents as may be necessary to enable them to perform their administrative responsibilities with respect to the Portfolios. With respect to securities of the Portfolios to be purchased or sold through the Depository Trust Company, the Sub-Adviser shall arrange for the automatic transmission of the I.D. confirmation of the trade to the Portfolios' custodian. (f) In connection with the placement of orders for the execution of the Portfolios' securities transactions, the Sub-Adviser shall create and maintain all necessary records of the Portfolios as are required of an investment adviser of a registered investment company including, but not limited to, records required by the 1940 Act and the Advisers Act. All such records pertaining to the Portfolios shall be the property of the Fund and shall be available for inspection and use by the Securities and Exchange Commission, any other regulatory authority having jurisdiction, the Fund, the Adviser or any person retained by the Fund or the Adviser. Where applicable, such records shall be maintained by the Sub-Adviser for the period and in the place required by Rule 31a-2 under the 1940 Act. (g) The Sub-Adviser shall render such reports to the Adviser and/or to the Board of Directors of the Fund concerning the investment activity and composition of the Portfolios in such form and at such intervals as the Adviser or the Board may from time to time reasonably require. (h) In acting under this Agreement, the Sub-Adviser shall be an independent contractor and not an agent of the Adviser or the Fund. SECTION 2. Expenses (a) The Sub-Adviser shall assume and pay all of its own costs and expenses, including those for furnishing such office space, office equipment, office personnel and office services as the Sub-Adviser may require in the performance of its duties under this Agreement. (b) The Fund shall bear all expenses of organizing and registering the Portfolios, and the Fund and Adviser shall bear all of their respective expenses of their operations and businesses not expressly assumed or agreed to be paid by the Sub-Adviser under this Agreement. In particular, but without limiting the generality of the foregoing, the Fund shall pay any fees due to the Adviser, all interest, taxes, governmental charges or duties, fees, brokerage and commissions of every kind arising hereunder or in connection herewith, expenses of transactions with shareholders of the Portfolios, expenses of offering interests in the Portfolios for sale, insurance, association membership dues, all charges of custodians (including fees as custodian and for keeping books, performing portfolio valuations and rendering other services to the Fund), independent auditors and legal counsel, expenses of preparing, printing and distributing all prospectuses, proxy material, reports and notices to shareholders of the Fund, and all other costs incident to the existence of the Portfolios. 2 4 SECTION 3. Use of Services of Others The Sub-Adviser may (at its expense except as set forth in Section 2 hereof) employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Sub-Adviser with such statistical or factual information, such advice regarding economic factors and trends or such other information, advice or assistance as the Sub-Adviser may deem necessary, appropriate or convenient for the discharge of the Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the Portfolios. SECTION 4. Sub-Advisory Fees In consideration of the Sub-Adviser's services to the Fund hereunder, the Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, equal to 0.1875% of the average daily net assets of each of the Portfolios during the quarter preceding each payment (equivalent to an annual fee of three-quarters of one percent (0.75%) of the average daily net assets of each of the Portfolios during the year) (the "Sub-Advisory Fee"). The Sub-Advisory Fee shall be accrued for each calendar day and the sum of the daily Sub-Advisory Fee accruals shall be paid quarterly to the Sub-Adviser on or before the fifth business day of the next succeeding quarter. The daily fee accruals will be computed by multiplying the fraction of one over the number of calendar days in the quarter by 0.1875% and multiplying this product by the net assets of each Portfolio as determined in accordance with the Prospectus as of the close of business on the previous business day. The Sub-Advisory Fee shall be payable solely by the Adviser, and the Fund shall not be liable to the Sub-Adviser for any unpaid Sub-Advisory Fee. SECTION 5. Limitation of Liability of Sub-Adviser (a) The Sub-Adviser shall be liable for losses resulting from its own acts or omissions caused by the Sub-Adviser's willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or its reckless disregard of its duties under this Agreement, and nothing herein shall protect the Sub-Adviser against any such liability to the shareholders of the Fund or to the Adviser. The Sub-Adviser shall not be liable to the Fund or to any shareholder of the Fund or to the Adviser for any claim or loss arising out of any investment or other act or omission in the performance of the Sub-Adviser's duties under this Agreement, or for any loss or damage resulting from the imposition by any government of exchange control restrictions which might affect the liquidity of the Fund's assets maintained with custodians or securities depositories in foreign countries, or from any political acts of any foreign governments to which such assets might be exposed, or for any tax of any kind, including without limitation any statutory, governmental, state, provincial, regional, local or municipal imposition, duty, contribution or levy imposed by any government or governmental agency upon or with respect to such assets or income earned with respect thereto (collectively "Taxation"). (b) In the event the Sub-Adviser is assessed any Taxation in respect of the assets, income or activities of either Portfolio, the Adviser and the Fund jointly will indemnify the Sub-Adviser for all such amounts wherever imposed, together with all penalties, charges, costs and interest relating thereto and all expenditures, including reasonable attorney's fees, incurred by the Sub-Adviser in connection with the defense or settlement of any such assessment. The Sub-Adviser shall undertake and control the defense or settlement of any such assessment, including the selection of counsel or other professional advisers, provided that the selection of such counsel and advisers and the settlement of any assessment shall be subject to the approval of the Adviser and the Fund, which approvals shall not be unreasonably withheld. The Adviser and the Fund shall have the right to retain separate counsel and assume the defense or settlement on behalf of the Adviser and the Fund, as the case may be, of any such assessment if representation of the Adviser and the Fund by counsel selected by the Sub-Adviser would be inappropriate due to actual or potential conflicts of interest. 3 5 SECTION 6. Services to Other Clients and the Fund (a) Subject to compliance with the 1940 Act, nothing contained in this Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated persons from acting, and being separately compensated for acting, in one or more capacities on behalf of the Fund. The Adviser and the Fund understand that the Sub-Adviser may act as investment manager or in other capacities on behalf of other customers including entities registered under the 1940 Act. While information, recommendations and actions which the Sub-Adviser supplies to and does on behalf of the Portfolios shall in the Sub-Adviser's judgment be appropriate under the circumstances in light of the investment objectives and policies of the Fund, as set forth in the Prospectus delivered to the Sub-Adviser from time to time, it is understood and agreed that they may be different from the information, recommendations and actions the Sub-Adviser or its affiliated persons supply to or do on behalf of other clients. The Sub-Adviser and its affiliated persons shall supply information, recommendations and any other services to the Portfolios and to any other client in an impartial and fair manner in order to seek good results for all clients involved. As used herein, the term "affiliated person" shall have the meaning assigned to it in the 1940 Act. (b) On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of a Portfolio as well as other customers, the Sub-Adviser may, with the consent of the Adviser and to the extent permitted by applicable law, aggregate the securities to be so sold or purchased in order to obtain the best execution or lower brokerage commissions, if any. The Sub-Adviser may also on occasion purchase or sell a particular security for one or more customers in different amounts. On either occasion, and to the extent permitted by applicable law and regulations, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other customers. (c) The Sub-Adviser agrees to use the same skill and care in providing services to the Fund as it uses in providing services to fiduciary accounts for which it has investment responsibility. The Sub-Adviser will conform with all applicable rules and regulations of the Securities and Exchange Commission. SECTION 7. Reports to the Sub-Adviser The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements, reports and other information relating to the business and affairs of the Fund as the Sub-Adviser may, at any time or from time to time, reasonably require in order to discharge the Sub-Adviser's duties under this Agreement. SECTION 8. Term of Agreement Provided that this Agreement shall have first been approved by the Board of Directors of the Fund, including a majority of the members thereof who are not interested persons (as defined in the 1940 Act) of either party, by a vote cast in person at a meeting called for the purpose of voting such approval, then this Agreement shall be effective on the date hereof. Unless earlier terminated as hereinafter provided, this Agreement shall continue in effect until approved by a majority vote of the voting securities of each of the Portfolios, at a meeting to take place not more than one year after the effective date of the Fund's registration statement relating to that Portfolio. Thereafter, this Agreement shall continue in effect from year to year, subject to approval annually by the Board of Directors of the Fund or by vote of a majority of the voting securities of each of the Portfolios and also, in either event, by the vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority of the Directors of the Fund who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such person. 4 6 SECTION 9. Termination of Agreement; Assignment (a) This Agreement may be terminated by either party hereto without the payment of any penalty, upon 90 days' prior notice in writing to the other party and to the Fund, or upon 60 days' written notice by the Fund to the two parties; provided, that in the case of termination by the Fund such action shall have been authorized by resolution of a majority of the Board of Directors of the Fund or by vote of a majority of the voting securities of either or both of the Portfolios. In addition, this Agreement shall terminate upon the later of (1) the termination of the Adviser's agreement to provide investment advisory services to the Fund or (2) notice to the Sub-Adviser that the Adviser's agreement to provide investment advisory services to the Fund has terminated. (b) This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act). (c) Termination of this Agreement for any reason shall not affect rights of the parties that have accrued prior thereto. SECTION 10. Notices (a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of any of the following events: (1) any change in any of the Sub-Adviser's officers or portfolio managers; (2) the Sub-Adviser fails to be registered as an investment adviser under the Advisers Act or under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement; (3) the Sub-Adviser is the subject of any action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, involving the affairs of either Portfolio; or (4) any change in ownership or control of the Sub-Adviser. (b) Any notice given hereunder shall be in writing and may be served by being sent by telex, facsimile or other electronic transmission or sent by registered mail or by courier to the address set forth below for the party for which it is intended. A notice served by mail shall be deemed to have been served seven days after mailing and in the case of telex, facsimile or other electronic transmission twelve hours after dispatch thereof. Addresses for notice may be changed by written notice to the other party. If to the Adviser: Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 Fax No. (513) 559-6589 With a copy to: Joseph P. Brom, President Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 5 7 If to the Sub-Adviser: Societe Generale Asset Management Corp. 1221 Avenue of the Americas, Eighth Floor New York, New York 10020 Fax No. (212) 278-5911 With a copy to: Jean-Marie Eveillard, President Societe Generale Asset Management Corp. 1221 Avenue of the Americas, Eighth Floor New York, New York 10020 SECTION 11. Governing Law This Agreement shall be governed by and subject to the requirements of the laws of the State of New York without reference to the choice of law provisions thereof. SECTION 12. Applicable Provisions of Law The Agreement shall be subject to all applicable provisions of law, including, without limitation, the applicable provisions of the 1940 Act, and to the extent that any provisions herein contained conflict with any such applicable provisions of law, the latter shall control. SECTION 13. Counterparts This Agreement may be entered into in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the day and year first above written. OHIO NATIONAL INVESTMENTS, INC. By: ----------------------------------------- Joseph P. Brom, President SOCIETE GENERALE ASSET MANAGEMENT CORP. By: ------------------------------------------ Jean-Marie Eveillard, President Accepted and Agreed: OHIO NATIONAL FUND, INC. By: ----------------------------------- Donald J. Zimmerman, President 6 EX-5.C 4 EXHIBIT 5C 1 EXHIBIT (5)(c) SUB-ADVISORY AGREEMENT (FOR THE CAPITAL APPRECIATION PORTFOLIO) BETWEEN OHIO NATIONAL INVESTMENTS, INC. AND T. ROWE PRICE ASSOCIATES, INC., DATED MAY 1, 1996 2 SUB-ADVISORY AGREEMENT This Agreement is made as of the first day of May, 1996 by and between OHIO NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and T. ROWE PRICE ASSOCIATES, INC., a Maryland corporation (the "Sub-Adviser"). WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that is registered under the Investment Company Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "1940 Act"); and WHEREAS, the Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "Advisers Act"); and WHEREAS, the Adviser has been appointed as investment adviser to the Fund in accordance with the 1940 Act and the Advisers Act; and WHEREAS, the Sub-Adviser is registered as an investment adviser under the Advisers Act and engages in the business of providing investment advisory services; and WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser, subject to the requirements of the 1940 Act and the Advisers Act, as a sub-adviser with respect to that portion of the assets of the Fund designated as the CAPITAL APPRECIATION PORTFOLIO of the Fund on the terms and conditions set forth below; NOW, THEREFORE, IT IS HEREBY AGREED as follows: SECTION 1. Investment Advisory Services (a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby accepts engagement by the Adviser, to supervise and manage on a fully-discretionary basis the cash, securities and other assets of the Capital Appreciation Portfolio that the Adviser shall from time to time place under the supervision of the Sub-Adviser (such cash, securities and other assets initially and as same shall thereafter be increased or decreased by the investment performance thereof and by additions thereto and withdrawals therefrom by the Adviser shall hereinafter be referred to as the "Portfolio"). (b) All activities by the Sub-Adviser on behalf of the Adviser and the Portfolio shall be in accordance with the investment objectives, policies and restrictions set forth in the 1940 Act and in the Fund's prospectus and statement of additional information, as amended from time to time (together, the "Prospectus") and as interpreted from time to time by the Board of Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on behalf of the Adviser and the Portfolio shall also be subject to the due diligence oversight and direction of the Adviser. (c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the sole and exclusive responsibility to select members of securities exchanges, brokers, dealers and futures commission merchants for the execution of transactions of the Portfolio and, when applicable, shall negotiate commissions in connection therewith. All such selections shall be made in accordance with the Fund's policies and restrictions regarding brokerage allocation set forth in the Prospectus. 3 (d) In carrying out its obligations to manage the investments and reinvestments of the assets of the Portfolio, the Sub-Adviser shall: (1) obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in the Portfolio or are under consideration for inclusion therein; (2) formulate and implement a continuous investment program for the Portfolio consistent with the investment objectives and related investment policies and restrictions for such Portfolio as set forth in the Prospectus; and (3) take such steps as are necessary to implement the aforementioned investment program by placing orders for the purchase and sale of securities. (e) In connection with the purchase and sale of securities of the Portfolio, the Sub-Adviser shall arrange for the transmission to the Adviser and the Portfolio's custodian on a daily basis such confirmation, trade tickets and other documents as may be necessary to enable them to perform their administrative responsibilities with respect to the Portfolio. With respect to Portfolio securities to be purchased or sold through the Depository Trust Company, the Sub-Adviser shall arrange for the automatic transmission of the I.D. confirmation of the trade to the Portfolio's custodian. (f) In connection with the placement of orders for the execution of the Portfolio's securities transactions, the Sub-Adviser shall create and maintain all necessary records of the Portfolio as are required of an investment adviser of a registered investment company including, but not limited to, records required by the 1940 Act and the Advisers Act. All such records pertaining to the Portfolio shall be the property of the Fund and shall be available for inspection and use by the Securities and Exchange Commission, any other regulatory authority having jurisdiction, the Fund, the Adviser or any person retained by the Fund or the Adviser. Where applicable, such records shall be maintained by the Sub-Adviser for the period and in the place required by Rule 31a-2 under the 1940 Act. (g) The Sub-Adviser shall render such reports to the Adviser and/or to the Board of Directors of the Fund concerning the investment activity and composition of the Portfolio in such form and at such intervals as the Adviser or the Board may from time to time reasonably require. (h) In acting under this Agreement, the Sub-Adviser shall be an independent contractor and not an agent of the Adviser or the Fund. SECTION 2. Expenses (a) The Sub-Adviser shall assume and pay all of its own costs and expenses, including those for furnishing such office space, office equipment, office personnel and office services as the Sub-Adviser may require in the performance of its duties under this Agreement. (b) The Fund shall bear all expenses of the Portfolio's organization and registration, and the Fund and Adviser shall bear all of their respective expenses of their operations and businesses not expressly assumed or agreed to be paid by the Sub-Adviser under this Agreement. In particular, but without limiting the generality of the foregoing, the Fund shall pay any fees due to the Adviser, all interest, taxes, governmental charges or duties, fees, brokerage and commissions of every kind arising hereunder or in connection herewith, expenses of transactions with shareholders of the Portfolio, expenses of offering interests in the Portfolio for sale, insurance, association membership dues, all charges of custodians (including fees as custodian and for keeping books, performing portfolio valuations and rendering other services to the Fund), independent auditors and legal counsel, expenses of preparing, printing and distributing all prospectuses, proxy material, reports and notices to shareholders of the Fund, and all other costs incident to the Portfolio's existence. 2 4 SECTION 3. Use of Services of Others The Sub-Adviser may (at its expense except as set forth in Section 2 hereof) employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Sub-Adviser with such statistical or factual information, such advice regarding economic factors and trends or such other information, advice or assistance as the Sub-Adviser may deem necessary, appropriate or convenient for the discharge of the Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the Portfolio. SECTION 4. Sub-Advisory Fees In consideration of the Sub-Adviser's services to the Fund hereunder, the Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, at the annual rate of 0.7% of the first five million dollars ($5,000,000) of the average daily net assets of the Portfolio during the quarter preceding each payment and 0.5% of the average daily net assets of the Portfolio in excess of five million dollars ($5,000,000) (the "Sub-Advisory Fee"). The Sub-Advisory Fee shall be accrued for each calendar day and the sum of the daily Sub-Advisory Fee accruals shall be paid quarterly to the Sub-Adviser on or before the fifth business day of the next succeeding quarter. The daily fee accruals will be computed on the basis of the valuations of the total net assets of the Portfolio as of the close of business each day. The Sub-Advisory Fee shall be payable solely by the Adviser, and the Fund shall not be liable to the Sub-Adviser for any unpaid Sub-Advisory Fee. SECTION 5. Limitation of Liability of Sub-Adviser (a) The Sub-Adviser shall be liable for losses resulting from its own acts or omissions caused by the Sub-Adviser's willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or its reckless disregard of its duties under this Agreement, and nothing herein shall protect the Sub-Adviser against any such liability to the shareholders of the Fund or to the Adviser. The Sub-Adviser shall not be liable to the Fund or to any shareholder of the Fund or to the Adviser for any claim or loss arising out of any investment or other act or omission in the performance of the Sub-Adviser's duties under this Agreement, or for any loss or damage resulting from the imposition by any government of exchange control restrictions which might affect the liquidity of the Fund's assets maintained with custodians or securities depositories in foreign countries, or from any political acts of any foreign governments to which such assets might be exposed, or for any tax of any kind, including without limitation any statutory, governmental, state, provincial, regional, local or municipal imposition, duty, contribution or levy imposed by any government or governmental agency upon or with respect to such assets or income earned with respect thereto (collectively "Taxation"). (b) In the event the Sub-Adviser is assessed any taxation in respect of the assets, income or activities of the Portfolio, the Adviser and the Fund jointly will indemnify the Sub-Adviser for all such amounts wherever imposed, together with all penalties, charges, costs and interest relating thereto and all expenditures, including reasonable attorney's fees, incurred by the Sub-Adviser in connection with the defense or settlement of any such assessment. The Sub-Adviser shall undertake and control the defense or settlement of any such assessment, including the selection of counsel or other professional advisers, provided that the selection of such counsel and advisers and the settlement of any assessment shall be subject to the approval of the Adviser and the Fund, which approvals shall not be unreasonably withheld. The Adviser and the Fund shall have the right to retain separate counsel and assume the defense or settlement on behalf of the Adviser and the Fund, as the case may be, of any such assessment if representation of the Adviser and the Fund by counsel selected by the Sub-Adviser would be inappropriate due to actual or potential conflicts of interest. 3 5 SECTION 6. Services to Other Clients and the Fund (a) Subject to compliance with the 1940 Act, nothing contained in this Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated persons from acting, and being separately compensated for acting, in one or more capacities on behalf of the Fund. The Adviser and the Fund understand that the Sub-Adviser may act as investment manager or in other capacities on behalf of other customers including entities registered under the 1940 Act. While information, recommendations and actions which the Sub-Adviser supplies to and does on behalf of the Portfolio shall in the Sub-Adviser's judgment be appropriate under the circumstances in light of the investment objectives and policies of the Fund, as set forth in the Prospectus delivered to the Sub-Adviser from time to time, it is understood and agreed that they may be different from the information, recommendations and actions the Sub-Adviser or its affiliated persons supply to or do on behalf of other clients. The Sub-Adviser and its affiliated persons shall supply information, recommendations and any other services to the Portfolio and to any other client in an impartial and fair manner in order to seek good results for all clients involved. As used herein, the term "affiliated person" shall have the meaning assigned to it in the 1940 Act. (b) On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Portfolio as well as other customers, the Sub-Adviser may, to the extent permitted by applicable law, aggregate the securities to be so sold or purchased in order to obtain the best execution or lower brokerage commissions, if any. The Sub-Adviser may also on occasion purchase or sell a particular security for one or more customers in different amounts. On either occasion, and to the extent permitted by applicable law and regulations, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other customers. (c) The Sub-Adviser agrees to use the same skill and care in providing services to the Fund as it uses in providing services to other similar accounts for which it has investment responsibility. The Sub-Adviser will conform with all applicable rules and regulations of the Securities and Exchange Commission. SECTION 7. Reports to the Sub-Adviser The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements, reports and other information relating to the business and affairs of the Fund as the Sub-Adviser may, at any time or from time to time, reasonably require in order to discharge the Sub-Adviser's duties under this Agreement. SECTION 8. Term of Agreement Provided that this Agreement shall have first been approved by the Board of Directors of the Fund, including a majority of the members thereof who are not interested persons (as defined in the 1940 Act) of either party, by a vote cast in person at a meeting called for the purpose of voting such approval, then this Agreement shall be effective on the date hereof. Unless earlier terminated as hereinafter provided, this Agreement shall continue in effect until approved by a majority vote of the voting securities of the Portfolio, at a meeting to take place not more than one year after the effective date of the Fund's registration statement relating to the Portfolio. Thereafter, this Agreement shall continue in effect from year to year, subject to approval annually by the Board of Directors of the Fund or by vote of a majority of the voting securities of the Portfolio and also, in either event, by the vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority of the Directors of the Fund who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such person. 4 6 SECTION 9. Termination of Agreement; Assignment (a) This Agreement may be terminated by either party hereto without the payment of any penalty, upon 90 days' prior notice in writing to the other party and to the Fund, or upon 60 days' written notice by the Fund to the two parties; provided, that in the case of termination by the Fund such action shall have been authorized by resolution of a majority of the Board of Directors of the Fund or by vote of a majority of the voting securities of the Portfolio. In addition, this Agreement shall terminate upon the later of (1) the termination of the Adviser's agreement to provide investment advisory services to the Fund or (2) notice to the Sub-Adviser that the Adviser's agreement to provide investment advisory services to the Fund has terminated. (b) This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act). (c) Termination of this Agreement for any reason shall not affect rights of the parties that have accrued prior thereto. SECTION 10. Notices (a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of any of the following events: (1) any change in the Portfolio's portfolio manager; (2) the Sub-Adviser fails to be registered as an investment adviser under the Advisers Act or under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement; (3) the Sub-Adviser is the subject of any action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, involving the affairs of the Portfolio; or (4) any change in control of the Sub-Adviser. (b) Any notice given hereunder shall be in writing and may be served by being sent by telex, facsimile or other electronic transmission or sent by registered mail or by courier to the address set forth below for the party for which it is intended. A notice served by mail shall be deemed to have been served seven days after mailing and in the case of telex, facsimile or other electronic transmission twelve hours after dispatch thereof. Addresses for notice may be changed by written notice to the other party. If to the Adviser: Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 Fax No. (513) 559-6589 With a copy to: Joseph P. Brom, President Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 5 7 If to the Sub-Adviser: Hannes van Wagenberg T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, Maryland 21202 Fax No. (410) 547-0180 With a copy to: Henry H. Hopkins, Esq. T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, Maryland 21202 SECTION 11. Governing Law This Agreement shall be governed by and subject to the requirements of the laws of the State of Ohio without reference to the choice of law provisions thereof. SECTION 12. Applicable Provisions of Law The Agreement shall be subject to all applicable provisions of law, including, without limitation, the applicable provisions of the 1940 Act, and to the extent that any provisions herein contained conflict with any such applicable provisions of law, the latter shall control. SECTION 13. Counterparts This Agreement may be entered into in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the day and year first above written. OHIO NATIONAL INVESTMENTS, INC. By: --------------------------- Joseph P. Brom President T. ROWE PRICE ASSOCIATES, INC. By: --------------------------- George J. Collins President, Chief Executive Officer and Managing Director Accepted and Agreed: OHIO NATIONAL FUND, INC. By: ------------------------------------ Donald J. Zimmerman, President 6 EX-5.D 5 EXHIBIT 5D 1 EXHIBIT (5)(d) SUB-ADVISORY AGREEMENT (FOR THE SMALL CAP PORTFOLIO) BETWEEN OHIO NATIONAL INVESTMENTS, INC. AND FOUNDERS ASSET MANAGEMENT, INC., DATED MAY 1, 1996 2 SUB-ADVISORY AGREEMENT This Agreement is made as of the first day of May, 1996 by and between OHIO NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and FOUNDERS ASSET MANAGEMENT, INC., a Delaware corporation (the "Sub-Adviser"). WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that is registered under the Investment Company Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "1940 Act"); and WHEREAS, the Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "Advisers Act"); and WHEREAS, the Adviser has been appointed as investment adviser to the Fund in accordance with the 1940 Act and the Advisers Act; and WHEREAS, the Sub-Adviser is registered as an investment adviser under the Advisers Act and engages in the business of providing investment advisory services; and WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser, subject to the requirements of the 1940 Act and the Advisers Act, as a sub-adviser with respect to that portion of the assets of the Fund designated as the SMALL CAP PORTFOLIO of the Fund on the terms and conditions set forth below; NOW, THEREFORE, IT IS HEREBY AGREED as follows: SECTION 1. Investment Advisory Services (a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby accepts engagement by the Adviser, to supervise and manage on a fully-discretionary basis the cash, securities and other assets of the Small Cap Portfolio that the Adviser shall from time to time place under the supervision of the Sub-Adviser (such cash, securities and other assets initially and as same shall thereafter be increased or decreased by the investment performance thereof and by additions thereto and withdrawals therefrom by the Adviser shall hereinafter be referred to as the "Portfolio"). (b) All activities by the Sub-Adviser on behalf of the Adviser and the Portfolio shall be in accordance with the investment objectives, policies and restrictions set forth in the 1940 Act and in the Fund's prospectus and statement of additional information, as amended from time to time (together, the "Prospectus") and as interpreted from time to time by the Board of Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on behalf of the Adviser and the Portfolio shall also be subject to the due diligence oversight and direction of the Adviser. (c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the sole and exclusive responsibility to select members of securities exchanges, brokers, dealers and futures commission merchants for the execution of transactions of the Portfolio and, when applicable, shall negotiate commissions in connection therewith. All such selections shall be made in accordance with the Fund's policies and restrictions regarding brokerage allocation set forth in the Prospectus. 3 (d) In carrying out its obligations to manage the investments and reinvestments of the assets of the Portfolio, the Sub-Adviser shall: (1) obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in the Portfolio or are under consideration for inclusion therein; (2) formulate and implement a continuous investment program for the Portfolio consistent with the investment objectives and related investment policies and restrictions for such Portfolio as set forth in the Prospectus; and (3) take such steps as are necessary to implement the aforementioned investment program by placing orders for the purchase and sale of securities. (e) In connection with the purchase and sale of securities of the Portfolio, the Sub-Adviser shall arrange for the transmission to the Adviser and the Portfolio's custodian on a daily basis such confirmation, trade tickets and other documents as may be necessary to enable them to perform their administrative responsibilities with respect to the Portfolio. With respect to Portfolio securities to be purchased or sold through the Depository Trust Company, the Sub-Adviser shall arrange for the automatic transmission of the I.D. confirmation of the trade to the Portfolio's custodian. (f) In connection with the placement of orders for the execution of the Portfolio's securities transactions, the Sub-Adviser shall create and maintain all necessary records of the Portfolio as are required of an investment adviser of a registered investment company including, but not limited to, records required by the 1940 Act and the Advisers Act. All such records pertaining to the Portfolio shall be the property of the Fund and shall be available for inspection and use by the Securities and Exchange Commission, any other regulatory authority having jurisdiction, the Fund, the Adviser or any person retained by the Fund or the Adviser. Where applicable, such records shall be maintained by the Sub-Adviser for the period and in the place required by Rule 31a-2 under the 1940 Act. (g) The Sub-Adviser shall render such reports to the Adviser and/or to the Board of Directors of the Fund concerning the investment activity and composition of the Portfolio in such form and at such intervals as the Adviser or the Board may from time to time reasonably require. (h) In acting under this Agreement, the Sub-Adviser shall be an independent contractor and not an agent of the Adviser or the Fund. SECTION 2. Expenses (a) The Sub-Adviser shall assume and pay all of its own costs and expenses, including those for furnishing such office space, office equipment, office personnel and office services as the Sub-Adviser may require in the performance of its duties under this Agreement. (b) The Fund shall bear all expenses of the Portfolio's organization and registration, and the Fund and Adviser shall bear all of their respective expenses of their operations and businesses not expressly assumed or agreed to be paid by the Sub-Adviser under this Agreement. In particular, but without limiting the generality of the foregoing, the Fund shall pay any fees due to the Adviser, all interest, taxes, governmental charges or duties, fees, brokerage and commissions of every kind arising hereunder or in connection herewith, expenses of transactions with shareholders of the Portfolio, expenses of offering interests in the Portfolio for sale, insurance, association membership dues, all charges of custodians (including fees as custodian and for keeping books, performing portfolio valuations and rendering other services to the Fund), independent auditors and legal counsel, expenses of preparing, printing and distributing all prospectuses, proxy material, reports and notices to shareholders of the Fund, and all other costs incident to the Portfolio's existence. 2 4 SECTION 3. Use of Services of Others The Sub-Adviser may (at its expense except as set forth in Section 2 hereof) employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Sub-Adviser with such statistical or factual information, such advice regarding economic factors and trends or such other information, advice or assistance as the Sub-Adviser may deem necessary, appropriate or convenient for the discharge of the Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the Portfolio. SECTION 4. Sub-Advisory Fees In consideration of the Sub-Adviser's services to the Fund hereunder, the Sub-Adviser shall be entitled to a sub-advisory fee, payable quarterly, at the annual rate of 0.65% of the first seventy-five million dollars ($75,000,000) of the average daily net assets of the Portfolio during the quarter preceding each payment, 0.6% of the next seventy-five million dollars ($75,000,000), and 0.55% of the average daily net assets of the Portfolio in excess of one hundred and fifty million dollars ($150,000,000) (the "Sub-Advisory Fee"). The Sub-Advisory Fee shall be accrued for each calendar day and the sum of the daily Sub-Advisory Fee accruals shall be paid quarterly to the Sub-Adviser on or before the fifth business day of the next succeeding quarter. The daily fee accruals will be computed on the basis of the valuations of the total net assets of the Portfolio as of the close of business each day. The Sub-Advisory Fee shall be payable solely by the Adviser, and the Fund shall not be liable to the Sub-Adviser for any unpaid Sub-Advisory Fee. SECTION 5. Limitation of Liability of Sub-Adviser (a) The Sub-Adviser shall be liable for losses resulting from its own acts or omissions caused by the Sub-Adviser's willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or its reckless disregard of its duties under this Agreement, and nothing herein shall protect the Sub-Adviser against any such liability to the shareholders of the Fund or to the Adviser. The Sub-Adviser shall not be liable to the Fund or to any shareholder of the Fund or to the Adviser for any claim or loss arising out of any investment or other act or omission in the performance of the Sub-Adviser's duties under this Agreement, or for any loss or damage resulting from the imposition by any government of exchange control restrictions which might affect the liquidity of the Fund's assets maintained with custodians or securities depositories in foreign countries, or from any political acts of any foreign governments to which such assets might be exposed, or for any tax of any kind, including without limitation any statutory, governmental, state, provincial, regional, local or municipal imposition, duty, contribution or levy imposed by any government or governmental agency upon or with respect to such assets or income earned with respect thereto (collectively "Taxation"). (b) In the event the Sub-Adviser is assessed any taxation in respect of the assets, income or activities of the Portfolio, the Adviser and the Fund jointly will indemnify the Sub-Adviser for all such amounts wherever imposed, together with all penalties, charges, costs and interest relating thereto and all expenditures, including reasonable attorney's fees, incurred by the Sub-Adviser in connection with the defense or settlement of any such assessment. The Sub-Adviser shall undertake and control the defense or settlement of any such assessment, including the selection of counsel or other professional advisers, provided that the selection of such counsel and advisers and the settlement of any assessment shall be subject to the approval of the Adviser and the Fund, which approvals shall not be unreasonably withheld. The Adviser and the Fund shall have the right to retain separate counsel and assume the defense or settlement on behalf of the Adviser and the Fund, as the case may be, of any such assessment if representation of the Adviser and the Fund by counsel selected by the Sub-Adviser would be inappropriate due to actual or potential conflicts of interest. 3 5 SECTION 6. Services to Other Clients and the Fund (a) Subject to compliance with the 1940 Act, nothing contained in this Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated persons from acting, and being separately compensated for acting, in one or more capacities on behalf of the Fund. The Adviser and the Fund understand that the Sub-Adviser may act as investment manager or in other capacities on behalf of other customers including entities registered under the 1940 Act. While information, recommendations and actions which the Sub-Adviser supplies to and does on behalf of the Portfolio shall in the Sub-Adviser's judgment be appropriate under the circumstances in light of the investment objectives and policies of the Fund, as set forth in the Prospectus delivered to the Sub-Adviser from time to time, it is understood and agreed that they may be different from the information, recommendations and actions the Sub-Adviser or its affiliated persons supply to or do on behalf of other clients. The Sub-Adviser and its affiliated persons shall supply information, recommendations and any other services to the Portfolio and to any other client in an impartial and fair manner in order to seek good results for all clients involved. As used herein, the term "affiliated person" shall have the meaning assigned to it in the 1940 Act. (b) On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Portfolio as well as other customers, the Sub-Adviser may, to the extent permitted by applicable law, aggregate the securities to be so sold or purchased in order to obtain the best execution or lower brokerage commissions, if any. The Sub-Adviser may also on occasion purchase or sell a particular security for one or more customers in different amounts. On either occasion, and to the extent permitted by applicable law and regulations, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other customers. (c) The Sub-Adviser agrees to use the same skill and care in providing services to the Fund as it uses in providing services to other similar accounts for which it has investment responsibility. The Sub-Adviser will conform with all applicable rules and regulations of the Securities and Exchange Commission. SECTION 7. Reports to the Sub-Adviser The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements, reports and other information relating to the business and affairs of the Fund as the Sub-Adviser may, at any time or from time to time, reasonably require in order to discharge the Sub-Adviser's duties under this Agreement. SECTION 8. Term of Agreement Provided that this Agreement shall have first been approved by the Board of Directors of the Fund, including a majority of the members thereof who are not interested persons (as defined in the 1940 Act) of either party, by a vote cast in person at a meeting called for the purpose of voting such approval, then this Agreement shall be effective on the date hereof. Unless earlier terminated as hereinafter provided, this Agreement shall continue in effect until approved by a majority vote of the voting securities of the Portfolio, at a meeting to take place not more than one year after the effective date of the Fund's registration statement relating to the Portfolio. Thereafter, this Agreement shall continue in effect from year to year, subject to approval annually by the Board of Directors of the Fund or by vote of a majority of the voting securities of the Portfolio and also, in either event, by the vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority of the Directors of the Fund who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such person. 4 6 SECTION 9. Termination of Agreement; Assignment (a) This Agreement may be terminated by either party hereto without the payment of any penalty, upon 90 days' prior notice in writing to the other party and to the Fund, or upon 60 days' written notice by the Fund to the two parties; provided, that in the case of termination by the Fund such action shall have been authorized by resolution of a majority of the Board of Directors of the Fund or by vote of a majority of the voting securities of the Portfolio. In addition, this Agreement shall terminate upon the later of (1) the termination of the Adviser's agreement to provide investment advisory services to the Fund or (2) notice to the Sub-Adviser that the Adviser's agreement to provide investment advisory services to the Fund has terminated. (b) This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act). (c) Termination of this Agreement for any reason shall not affect rights of the parties that have accrued prior thereto. SECTION 10. Notices (a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of any of the following events: (1) any change in any of the Sub-Adviser's officers or any portfolio manager who is providing advisory services pursuant to this agreement; (2) the Sub-Adviser fails to be registered as an investment adviser under the Advisers Act or under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement; (3) the Sub-Adviser is the subject of any action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, involving the affairs of the Portfolio; or (4) any change in control of the Sub-Adviser. (b) Any notice given hereunder shall be in writing and may be served by being sent by telex, facsimile or other electronic transmission or sent by registered mail or by courier to the address set forth below for the party for which it is intended. A notice served by mail shall be deemed to have been served seven days after mailing and in the case of telex, facsimile or other electronic transmission twelve hours after dispatch thereof. Addresses for notice may be changed by written notice to the other party. If to the Adviser: Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 Fax No. (513) 559-6589 With a copy to: Joseph P. Brom, President Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 5 7 If to the Sub-Adviser: Gregory P. Contillo, Vice President Founders Asset Management, Inc. 2930 East Third Avenue Denver, Colorado 80206 Fax No. (303) 329-3848 With a copy to: David L. Ray, Chief Financial Officer Founders Asset Management, Inc. 2930 East Third Avenue Denver, Colorado 80206 SECTION 11. Governing Law This Agreement shall be governed by and subject to the requirements of the laws of the State of Ohio without reference to the choice of law provisions thereof. SECTION 12. Applicable Provisions of Law The Agreement shall be subject to all applicable provisions of law, including, without limitation, the applicable provisions of the 1940 Act, and to the extent that any provisions herein contained conflict with any such applicable provisions of law, the latter shall control. SECTION 13. Counterparts This Agreement may be entered into in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the day and year first above written. OHIO NATIONAL INVESTMENTS, INC. By: --------------------------------------- Joseph P. Brom President FOUNDERS ASSET MANAGEMENT, INC. By: --------------------------------------- David L. Ray Chief Financial Officer Accepted and Agreed: OHIO NATIONAL FUND, INC. By: ---------------------------------- Donald J. Zimmerman, President 6 EX-5.E 6 EXHIBIT 5E 1 EXHIBIT (5)(e) SUB-ADVISORY AGREEMENT (FOR THE AGGRESSIVE GROWTH PORTFOLIO) BETWEEN OHIO NATIONAL INVESTMENTS, INC. AND STRONG CAPITAL MANAGEMENT, INC., DATED MAY 1, 1996 2 SUB-ADVISORY AGREEMENT This Agreement is made as of the first day of May, 1996 by and between OHIO NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and STRONG CAPITAL MANAGEMENT, INC., a Wisconsin corporation (the "Sub-Adviser"). WHEREAS, OHIO NATIONAL FUND, INC. (the "Fund"), is a Maryland corporation that is registered under the Investment Company Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "1940 Act"); and WHEREAS, the Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, (together with the regulations promulgated pursuant thereto, the "Advisers Act"); and WHEREAS, the Adviser has been appointed as investment adviser to the Fund in accordance with the 1940 Act and the Advisers Act; and WHEREAS, the Sub-Adviser is registered as an investment adviser under the Advisers Act and engages in the business of providing investment advisory services; and WHEREAS, the Fund has authorized the Adviser to appoint the Sub-Adviser, subject to the requirements of the 1940 Act and the Advisers Act, as a sub-adviser with respect to that portion of the assets of the Fund designated as the AGGRESSIVE GROWTH PORTFOLIO of the Fund on the terms and conditions set forth below; NOW, THEREFORE, IT IS HEREBY AGREED as follows: SECTION 1. Investment Advisory Services (a) The Adviser hereby retains the Sub-Adviser, and the Sub-Adviser hereby accepts engagement by the Adviser, to supervise and manage on a fully-discretionary basis the cash, securities and other assets of the Aggressive Growth Portfolio that the Adviser shall from time to time place under the supervision of the Sub-Adviser (such cash, securities and other assets initially and as same shall thereafter be increased or decreased by the investment performance thereof and by additions thereto and withdrawals therefrom by the Adviser shall hereinafter be referred to as the "Portfolio"). (b) All activities by the Sub-Adviser on behalf of the Adviser and the Portfolio shall be in accordance with the investment objectives, policies and restrictions set forth in the 1940 Act and in the Fund's prospectus and statement of additional information, as amended from time to time (together, the "Prospectus") and as interpreted from time to time by the Board of Directors of the Fund and by the Adviser. All activities of the Sub-Adviser on behalf of the Adviser and the Portfolio shall also be subject to the due diligence oversight and direction of the Adviser. (c) Subject to the supervision of the Adviser, the Sub-Adviser shall have the sole and exclusive responsibility to select members of securities exchanges, brokers, dealers and futures commission merchants for the execution of transactions of the Portfolio and, when applicable, shall negotiate commissions in connection therewith. The Sub-Adviser is authorized, subject to the supervision of the Adviser and the Board of Directors of the Fund, to place orders for the purchase and sale of the Portfolio's investments with or through such persons, brokers or dealers, including the Sub-Adviser or affiliates thereof, and to negotiate commissions to be paid on such transactions in accordance with 3 the Fund's policy with respect to brokerage as set forth in the Statement of Additional Information. The Sub-Adviser may, on behalf of the Portfolio, pay brokerage commissions to a broker which provides brokerage and research services to the Sub-Adviser in excess of the amount another broker would have charged for effecting the transaction, provided (i) the Sub-Adviser determines in good faith that the amount is reasonable in relation to the value of the brokerage and research services provided by the executing broker in terms of the particular transaction or in terms of the Sub-Adviser's overall responsibilities with respect to the Portfolio and the accounts as to which the Sub-Adviser exercises investment discretion, (ii) such payment is made in compliance with Section 28(e) of the Securities Exchange Act of 1934, as amended, and any other applicable laws and regulations, and (iii) in the opinion of the Sub-Adviser, the total commissions paid by the Portfolio will be reasonable in relation to the benefits to the Portfolio over the long term. It is recognized that the services provided by such brokers may be useful to the Sub-Adviser in connection with the Sub-Adviser's services to other clients. (d) In carrying out its obligations to manage the investments and reinvestments of the assets of the Portfolio, the Sub-Adviser shall: (1) obtain and evaluate pertinent economic, statistical, financial and other information affecting the economy generally and individual companies or industries the securities of which are included in the Portfolio or are under consideration for inclusion therein; (2) formulate and implement a continuous investment program for the Portfolio consistent with the investment objectives and related investment policies and restrictions for such Portfolio as set forth in the Prospectus; and (3) take such steps as are necessary to implement the aforementioned investment program by placing orders for the purchase and sale of securities. (e) In connection with the purchase and sale of securities of the Portfolio, the Sub-Adviser shall arrange for the transmission to the Adviser and the Portfolio's custodian on a daily basis such confirmation, trade tickets and other documents as may be necessary to enable them to perform their administrative responsibilities with respect to the Portfolio. With respect to Portfolio securities to be purchased or sold through the Depository Trust Company, the Sub-Adviser shall arrange for the automatic transmission of the I.D. confirmation of the trade to the Portfolio's custodian. (f) The Sub-Adviser will maintain all books and records required to be maintained pursuant to the Investment Company Act and the rules and regulations promulgated thereunder with respect to transactions made by it on behalf of the Portfolio including, without limitation, the books and records required by Subsections (b)(1), (5), (6), (7), (9), (10) and (11) and Subsection (f) of Rule 31a-1 under the 1940 Act and shall timely furnish to the Adviser all information relating to the Sub-Adviser's services hereunder needed by the Adviser to keep such other books and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The Sub-Adviser will also preserve all such books and records for the periods prescribed in Rule 31a-2 under the 1940 Act, and agrees that such books and records shall remain the sole property of the Fund and shall be immediately surrendered to the Fund upon request. The Sub-Adviser further agrees that all books and records maintained hereunder shall be made available to the Fund or the Adviser at any time upon request, including telecopy without unreasonable delay, during any business day. (g) The Sub-Adviser shall render such reports to the Adviser and/or to the Board of Directors of the Fund concerning the investment activity and composition of the Portfolio in such form and at such intervals as the Adviser or the Board may from time to time reasonably require. (h) In acting under this Agreement, the Sub-Adviser shall be an independent contractor and not an agent of the Adviser or the Fund and shall have no authority to act for or represent the Fund or the Adviser in any way or otherwise be deemed an agent of the Fund or the Adviser. 2 4 SECTION 2. Expenses (a) The Sub-Adviser shall assume and pay all of its own costs and expenses, including those for furnishing such office space, office equipment, office personnel and office services as the Sub-Adviser may require in the performance of its duties under this Agreement. (b) The Fund shall bear all expenses of the Portfolio's organization and registration, and the Fund and Adviser shall bear all of their respective expenses of their operations and businesses not expressly assumed or agreed to be paid by the Sub-Adviser under this Agreement. In particular, but without limiting the generality of the foregoing, the Fund shall pay any fees due to the Adviser, all interest, taxes, governmental charges or duties, fees, brokerage and commissions of every kind arising hereunder or in connection herewith, expenses of transactions with shareholders of the Portfolio, expenses of offering interests in the Portfolio for sale, insurance, association membership dues, all charges of custodians (including fees as custodian and for keeping books, performing portfolio valuations and rendering other services to the Fund), independent auditors and legal counsel, expenses of preparing, printing and distributing all prospectuses, proxy material, reports and notices to shareholders of the Fund, and all other costs incident to the Portfolio's existence. SECTION 3. Use of Services of Others The Sub-Adviser may (at its expense except as set forth in Sections 1(c) and 2 hereof) employ, retain or otherwise avail itself of the services or facilities of other persons or organizations for the purpose of providing the Sub-Adviser with such statistical or factual information, such advice regarding economic factors and trends or such other information, advice or assistance as the Sub-Adviser may deem necessary, appropriate or convenient for the discharge of the Sub-Adviser's obligations hereunder or otherwise helpful to the Fund and the Portfolio. SECTION 4. Sub-Advisory Fees In consideration of the Sub-Adviser's services to the Fund hereunder, the Sub-Adviser shall be entitled to a sub-advisory fee, payable monthly, at the annual rate of 0.7% of the first fifty million dollars ($50,000,000) of the average daily net assets of the Portfolio during the month preceding each payment, and 0.5% of the average daily net assets of the Portfolio in excess of fifty million dollars ($50,000,000) (the "Sub-Advisory Fee") during such period. The Sub-Advisory Fee shall be accrued for each calendar day and the sum of the daily Sub-Advisory Fee accruals shall be paid monthly to the Sub-Adviser on or before the fifth business day of the next succeeding month. The daily fee accruals will be computed on the basis of the valuations of the total net assets of the Portfolio as of the close of business each day. The Sub-Advisory Fee shall be payable solely by the Adviser, and the Fund shall not be liable to the Sub-Adviser for any unpaid Sub-Advisory Fee. SECTION 5. Limitation of Liability of Sub-Adviser (a) In the absence of willful misfeasance, bad faith or gross negligence in the performance of its duties hereunder or its reckless disregard of its duties under this Agreement, the Sub-Adviser shall not be subject to any liability to the Fund, the shareholders of the Fund or to the Adviser. The Sub-Adviser shall not be liable to the Fund or to any shareholder of the Fund or to the Adviser for any claim or loss arising out of any investment or other act or omission in the performance of the Sub-Adviser's duties under this Agreement, or for any loss or damage resulting from the imposition by any government of exchange control restrictions which might affect the liquidity of the Fund's assets maintained with custodians or securities depositories in foreign countries, or from any political acts of any foreign governments to which such assets might be exposed, or for any tax of any kind, including without limitation any statutory, governmental, state, provincial, regional, local or municipal imposition, duty, contribution or levy imposed by any government or governmental agency upon or with respect to such assets or income earned with respect thereto (collectively "Taxation"). 3 5 (b) In the event the Sub-Adviser is assessed any taxation in respect of the assets, income or activities of the Portfolio, the Adviser and the Fund jointly will indemnify the Sub-Adviser for all such amounts wherever imposed, together with all penalties, charges, costs and interest relating thereto and all expenditures, including reasonable attorney's fees, incurred by the Sub-Adviser in connection with the defense or settlement of any such assessment. The Sub-Adviser shall undertake and control the defense or settlement of any such assessment, including the selection of counsel or other professional advisers, provided that the selection of such counsel and advisers and the settlement of any assessment shall be subject to the approval of the Adviser and the Fund, which approvals shall not be unreasonably withheld. The Adviser and the Fund shall have the right to retain separate counsel and assume the defense or settlement on behalf of the Adviser and the Fund, as the case may be, of any such assessment if representation of the Adviser and the Fund by counsel selected by the Sub-Adviser would be inappropriate due to actual or potential conflicts of interest. SECTION 6. Services to Other Clients and the Fund (a) Subject to compliance with the 1940 Act, nothing contained in this Agreement shall be deemed to prohibit the Sub-Adviser or any of its affiliated persons from acting, and being separately compensated for acting, in one or more capacities on behalf of the Fund. The Adviser and the Fund understand that the Sub-Adviser may act as investment manager or in other capacities on behalf of other customers including entities registered under the 1940 Act. While information, recommendations and actions which the Sub-Adviser supplies to and does on behalf of the Portfolio shall in the Sub-Adviser's judgment be appropriate under the circumstances in light of the investment objectives and policies of the Fund, as set forth in the Prospectus delivered to the Sub-Adviser from time to time, it is understood and agreed that they may be different from the information, recommendations and actions the Sub-Adviser or its affiliated persons supply to or do on behalf of other clients. The Sub-Adviser and its affiliated persons shall supply information, recommendations and any other services to the Portfolio and to any other client in an impartial and fair manner in order to seek good results for all clients involved. As used herein, the term "affiliated person" shall have the meaning assigned to it in the 1940 Act. (b) On occasions when the Sub-Adviser deems the purchase or sale of a security to be in the best interest of the Portfolio as well as other clients of the Sub-Adviser, the Sub-Adviser may, but shall be under no obligation, to the extent permitted by applicable law, aggregate the securities to be so sold or purchased in order to obtain the best execution or lower brokerage commissions, if any. The Sub-Adviser may also on occasion purchase or sell a particular security for one or more customers in different amounts. On either occasion, and to the extent permitted by applicable law and regulations, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Sub-Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and to such other clients. (c) The Sub-Adviser agrees to use the same skill and care in providing services to the Fund as it uses in providing services to fiduciary accounts for which it has investment responsibility. The Sub-Adviser will comply with all applicable rules and regulations of the Securities and Exchange Commission. SECTION 7. Reports to the Sub-Adviser (a) The Adviser shall furnish to the Sub-Adviser the Prospectus, proxy statements, reports and other information relating to the business and affairs of the Fund as the Sub-Adviser may, at any time or from time to time, reasonably require in order to discharge the Sub-Adviser's duties under this Agreement. 4 6 (b) The Adviser hereby agrees to provide to the Sub-Adviser any amendments, supplements or other changes to the Fund's Articles of Incorporation, By-Laws, currently effective registration statement under the 1940 Act, including any amendments or supplements thereto, and Notice of Eligibility under Rule 4.5 of the Commodity Exchange Act (collectively, "Governing Instruments and Regulatory Filings") as soon as practicable after such materials become available and, upon receipt by the Sub-Adviser, the Sub-Adviser will act in accordance with such amended, supplemented or otherwise changed Governing Instruments and Regulatory Filings. (c) Except for the restrictions necessary to comply with Section 817(h) of the Internal Revenue Code of 1986, as amended and Treasury Regulations Section 1.817-5 (the "Tax Restrictions"), Adviser represents and warrants that the investment objective of the Portfolio is identical to, and that investment policies, restrictions and limitations of the Portfolio are no more restrictive or limiting than, those contained in the current prospectus and statement of additional information of the Strong Discovery Fund, Inc. Except to the extent of the Tax Restrictions, and to the extent that the parties hereto may otherwise agree in writing, and subject to the approval of the Fund's Board of Directors and, in the case of fundamental policies, approval of the Portfolio's shareholders, Adviser shall cause the Fund to file such amendments, supplements and stickers to its Prospectus and Statement of Additional Information as are necessary to ensure that the investment policies, restrictions and limitations applicable to the Portfolio are at all times no more restrictive than those contained in the prospectus and statement of additional information, as the same may be amended or supplemented from time to time, of the Strong Discovery Fund, Inc., provided that the Sub-Adviser shall have afforded the Adviser sufficient notice of such changes to Strong Discovery Fund, Inc. so as to enable corresponding changes to be timely made with regard to the Portfolio's investment objectives, policies, restrictions and limitations. Adviser shall not permit the investment objective of the Portfolio to change without the prior written consent of the Sub-Adviser unless such change is in response to a change made to the Strong Discovery Fund, Inc. and then, only to the extent necessary to make the investment objective of the Portfolio substantially identical to that of the Strong Discovery Fund, Inc. SECTION 8. Term of Agreement This Agreement shall be effective on the date hereof. Unless earlier terminated as hereinafter provided, this Agreement shall continue in effect until approved by a majority vote of the voting securities of the Portfolio, at a meeting to take place not more than one year after the effective date of the Fund's registration statement relating to the Portfolio. Thereafter, this Agreement shall continue in effect from year to year, subject to approval annually by the Board of Directors of the Fund or by vote of a majority of the voting securities of the Portfolio and also, in either event, by the vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority of the Directors of the Fund who are not parties to this Agreement or interested persons (as defined in the 1940 Act) of any such person. SECTION 9. Termination of Agreement; Assignment (a) This Agreement may be terminated by either party hereto without the payment of any penalty, upon 90 days' prior notice in writing to the other party and to the Fund, or upon 60 days' written notice by the Fund to the two parties; provided, that in the case of termination by the Fund such action shall have been authorized by resolution of a majority of the Board of Directors of the Fund or by vote of a majority of the voting securities of the Portfolio. In addition, this Agreement shall terminate upon the later of (1) the termination of the Adviser's agreement to provide investment advisory services to the Fund or (2) notice to the Sub-Adviser that the Adviser's agreement to provide investment advisory services to the Fund has terminated. (b) This Agreement shall automatically terminate in the event of its assignment (as defined in the 1940 Act). 5 7 (c) Termination of this Agreement for any reason shall not affect rights of the parties that have accrued prior thereto. SECTION 10. Notices (a) The Sub-Adviser agrees to promptly notify the Adviser of the occurrence of any of the following events: (1) any change in the portfolio manager of the Strong Discovery Fund, Inc. or the Portfolio; (2) the Sub-Adviser fails to be registered as an investment adviser under the Advisers Act or under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement; or (3) the Sub-Adviser is the subject of any action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, public board or body, involving the affairs of the Portfolio. (b) Any notice given hereunder shall be in writing and may be served by being sent by telex, facsimile or other electronic transmission or sent by registered mail or by courier to the address set forth below for the party for which it is intended. A notice served by mail shall be deemed to have been served seven days after mailing and in the case of telex, facsimile or other electronic transmission twelve hours after dispatch thereof. Addresses for notice may be changed by written notice to the other party. If to the Adviser: Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 Fax No. (513) 559-6589 With a copy to: Joseph P. Brom, President Ohio National Investments, Inc. P.O. Box 237 Cincinnati, Ohio 45201 If to the Sub-Adviser: Strong Capital Management, Inc. 100 Heritage Reserve Milwaukee, Wisconsin 53051 Attention: Rochelle Lamm Wallach Fax No. (414) 359-3888 With a copy to: Thomas P. Lemke, General Counsel Strong Capital Management, Inc. 100 Heritage Reserve Milwaukee, Wisconsin 53051 Fax No. (414) 359-3948 6 8 SECTION 11. Governing Law This Agreement shall be governed by and subject to the requirements of the laws of the State of Ohio without reference to the choice of law provisions thereof. SECTION 12. Applicable Provisions of Law The Agreement shall be subject to all applicable provisions of law, including, without limitation, the applicable provisions of the 1940 Act, and to the extent that any provisions herein contained conflict with any such applicable provisions of law, the latter shall control. SECTION 13. Counterparts This Agreement may be entered into in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. SECTION 14. Representations and Warranties of Sub-Adviser The Sub-Adviser represents and warrants to the Adviser and the Fund as follows: (a) The Sub-Adviser is registered as an investment adviser under the Advisers Act; (b) The Sub-Adviser has filed a notice of exemption pursuant to Rule 4.14 under the CEA with the Commodity Futures Trading Commission (the "CFTC") and the National Futures Association; (c) The Sub-Adviser is a corporation duly organized and validly existing under the laws of the State of Wisconsin with the power to own and possess its assets and carry on its business as it is now being conducted; (d) The execution, delivery and performance by the Sub-Adviser of this Agreement are within the Sub-Adviser's powers and have been duly authorized, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Sub-Adviser for the execution, delivery and performance by the Sub-Adviser of this Agreement, and the execution, delivery and performance by the Sub-Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Sub-Adviser's governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Sub-Adviser; (e) This Agreement is a valid and binding agreement of the Sub-Adviser; (f) A true and complete copy of the Form ADV of the Sub-Adviser, as amended to the date hereof and filed with the Commission has been furnished to the Adviser, and the information contained therein is accurate and complete in all material respects and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. (g) The Sub-Adviser agrees to observe and comply with Rule 17j-1 under the 1940 Act and the Sub-Adviser's Code of Ethics, as may be amended from time to time. SECTION 15. Representations and Warranties of Adviser. The Adviser represents and warrants to the Sub-Adviser as follows: 7 9 (a) The Adviser is registered as an investment adviser under the Advisers Act; (b) The Fund has filed a Notice of Eligibility under Rule 4.5 of the CEA, with the Commodity Futures Trading Commission (the "CFTC") and the National Futures Association; (c) The Adviser is a corporation duly organized and validly existing under the laws of the State of Ohio with the power to own and possess its assets and carry on its business as it is now being conducted; (d) The execution, delivery and performance by the Adviser of this Agreement are within the Adviser's powers and have been duly authorized, and no action by or in respect of, or filing with, any governmental body, agency or official is required on the part of the Adviser for the execution, delivery and performance by the Adviser of this Agreement, and the execution, delivery and performance by the Adviser of this Agreement do not contravene or constitute a default under (i) any provision of applicable law, rule or regulation, (ii) the Adviser's governing instruments, or (iii) any agreement, judgment, injunction, order, decree or other instrument binding upon the Adviser; (e) This Agreement is a valid and binding agreement of the Adviser; (f) A true and complete copy of the Form ADV of the Adviser, as amended to the date hereof and filed with the Commission has been furnished to the Sub-Adviser, and the information contained therein is accurate and complete in all material respects and does not omit to state any material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; (g) The Adviser acknowledges that it received a copy of the Sub-Adviser's Form ADV at least 48 hours prior to the execution of this Agreement. (h) The Adviser agrees to observe and comply with Rule 17j-1 under the 1940 Act and the Adviser's Code of Ethics as may be amended from time to time. SECTION 16. Survival of Representations and Warranties: Duty to Update Information. All representations and warranties made by the Sub-Adviser and the Adviser pursuant to Sections 14 and 15 hereof shall survive for the duration of this Agreement and the Parties hereto shall immediately notify, but in no event later than five (5) business days, each other in writing upon becoming aware that any of the foregoing representations and warranties are no longer true. In addition, the Sub-Adviser will deliver to the Adviser and the Fund copies of any amendments, supplements or updates to any of the information provided to the Adviser and attached as exhibits hereto within fifteen (15) days after becoming available. SECTION 17. Voting of Proxies The Sub-Adviser shall direct the Fund's custodian as to how to vote such proxies as may be necessary or advisable in connection with the any matters submitted to a vote of shareholders of securities held by the Portfolio. SECTION 18. Confidentiality Subject to the duties of the Adviser, the Fund and the Sub-Adviser to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all information pertaining to the Fund and the actions of the Sub-Adviser, the Adviser and the Fund in respect thereof. 8 10 SECTION 19. Non-Exclusivity Adviser acknowledges and agrees that this Agreement and the arrangements described herein are intended to be non-exclusive and that Sub-Adviser is free to enter into similar agreements and arrangements with other entities. IN WITNESS WHEREOF this Agreement has been executed by the parties hereto as of the day and year first above written. OHIO NATIONAL INVESTMENTS, INC. By: --------------------------------------------- Joseph P. Brom President STRONG CAPITAL MANAGEMENT, INC. By: --------------------------------------------- Rochelle Lamm Wallach President of Strong Advisory Services, a division of Strong Capital Management, Inc. Accepted and Agreed: OHIO NATIONAL FUND, INC. By: ----------------------------- Donald J. Zimmerman President 9 EX-9.B 7 EXHIBIT 9B 1 EXHIBIT (9)(b) SERVICE AGREEMENT AMONG THE REGISTRANT, OHIO NATIONAL INVESTMENTS, INC. AND THE OHIO NATIONAL LIFE INSURANCE COMPANY, DATED MAY 1, 1996 2 SERVICE AGREEMENT THIS AGREEMENT, made this first day of May, 1996, by and among OHIO NATIONAL FUND, INC., (the "Fund"), a Maryland corporation, OHIO NATIONAL INVESTMENTS, INC. ("Adviser"), an Ohio corporation and THE OHIO NATIONAL LIFE INSURANCE COMPANY ("Ohio National Life"), a mutual life insurance company organized under the laws of the State of Ohio; WHEREAS, Ohio National Life has caused the Adviser to be organized to serve as investment adviser to investment companies and to others; and WHEREAS, the Adviser and the Fund have entered into an Investment Advisory Agreement dated May 1, 1996 whereby the Adviser undertakes to furnish the Fund with investment advisory services and to furnish or pay the expenses of the Fund for certain other services; and WHEREAS, Ohio National Life is willing to make available to the Adviser on a part-time basis certain employees of Ohio National Life for the purpose of better enabling the Adviser to fulfill its obligations under the Investment Advisory Agreement, provided that the Adviser bears all costs allocable to the time spent by them on the affairs of the Adviser, and the Adviser and the Fund believe that such an arrangement will be for their mutual benefit; NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: 1. The Adviser shall have the right to use, on a part-time basis, and Ohio National Life shall make available on such basis, such employees of Ohio National Life for such periods as may be agreed upon by the Adviser and Ohio National Life, as may be reasonably needed by the Adviser in the performance of its investment advisory functions. It is anticipated that most of such employees will be persons employed in the investment operations of Ohio National Life in addition to such clerical, stenographic and administrative services as the Adviser may reasonably request. 2. The employees of Ohio National Life in performing services for the Adviser hereunder may, to the full extent that they deem appropriate, have access to and utilize statistical and economic data, investment research reports and other materials prepared for or contained in the files of Ohio National Life which is relevant to making investment decisions within the investment objectives of the Fund, and may make such materials available to the Adviser; provided, that any such materials prepared or obtained in connection with a private placement or other nonpublic transaction need not be made available to the Adviser if Ohio National Life deems such materials confidential. 3. Employees of Ohio National Life performing services for the Adviser pursuant hereto shall report and be responsible solely to the officers and directors of the Adviser or persons designated by them. Ohio National Life shall have no responsibility for investment recommendations and decisions of the Adviser based upon information or advice given or obtained by or through such Ohio National Life employees. 4. Ohio National Life will, to the extent requested by the Adviser, supply to employees of the Adviser, including part-time employees of Ohio National Life serving the Adviser, such clerical, stenographic and administrative services and such office supplies and equipment as may be reasonably required in order that they may properly perform their respective functions on behalf of the Adviser in connection with its performance of the Investment Advisory Agreement. 3 5. The obligation of performance under the Investment Advisory Agreement is solely that of the Adviser, and Ohio National Life undertakes no obligation in respect thereto, except as otherwise expressly provided herein. 6. In consideration of the services to be rendered by Ohio National Life and its employees pursuant to this Agreement, the Adviser agrees to reimburse Ohio National Life for such costs, direct and indirect, as may be fairly attributable to the services performed for the Adviser. Such costs shall include, but not be limited to, an appropriate portion of salaries, employee benefits, general overhead expense, supplies and equipment, and a charge in the nature of rent for the cost of space in Ohio National Life offices fairly allocable to activities of the Adviser under the Investment Advisory Agreement. In the event of disagreement between the Adviser and Ohio National Life as to a fair basis for allocating or apportioning costs, such basis shall be fixed by the independent public accountants for the Fund. 7. (a) This Agreement shall continue in effect as to any portfolio of the Fund for a period more than two years from the date of its execution only so long as such continuation is specifically approved at least annually by either the Board of Directors of the Fund or by vote of a majority of that portfolio's outstanding voting securities, provided that in either event such continuation shall also be approved by the vote of a majority of the directors who are not interested persons of the Fund, cast by them in person at a meeting called for purpose of voting on such approval; provided, however, that: (b) This Agreement may at any time be terminated as to any portfolio of the Fund without the payment of any penalty on 60 days' notice to the Adviser and to Ohio National Life either by vote of the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of that portfolio. (c) This Agreement shall immediately terminate in event of its assignment (as that term is defined in the Investment Company Act of 1940). (d) This Agreement may be terminated by the Adviser or by Ohio National Life on 90 days' written notice to the other and to the Fund. 8. Any notice under this Agreement shall be in writing, addressed and delivered or mailed postage prepaid to the other party at such address as such other party may designate for the receipt of such notices. Until further notice to the other party it is agreed that the address of the Fund, that of the Adviser and that of Ohio National Life for this purpose shall be 237 William Howard Taft Road, Cincinnati, Ohio 45219. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers the day and year first above written. OHIO NATIONAL FUND, INC. By --------------------------------------- Donald J. Zimmerman, President 2 4 OHIO NATIONAL INVESTMENTS, INC. By --------------------------------------- Joseph P. Brom, President THE OHIO NATIONAL LIFE INSURANCE COMPANY By --------------------------------------- David B. O'Maley, Chairman, President & Chief Executive Officer 3 EX-9.D 8 EXHIBIT 9D 1 EXHIBIT (9)(d) JOINT INSURED AGREEMENT AMONG THE REGISTRANT, ONE FUND, INC,. AND OHIO NATIONAL INVESTMENTS, INC. DATED MAY 1, 1996 2 JOINT INSURED AGREEMENT AGREEMENT made this twenty-eighth day of March, 1996, to take effect the first day of May, 1996, by and among OHIO NATIONAL FUND, INC., ONE FUND, INC. (each individually referred to herein as a "Fund," and collectively as the "Funds"), both Maryland corporations, and OHIO NATIONAL INVESTMENTS, INC. (the "Adviser"), an Ohio corporation. WHEREAS, the Funds have purchased Financial Institution Bond No. SSB-FR7766 underwritten by Hartford Fire Insurance Company and will, in the future, purchase similar fidelity bonds in replacement thereof (the "Bond"); and WHEREAS, the Bond covers the Adviser and the Funds as joint insureds; and WHEREAS, the Boards of Directors of each of the Funds have determined that the Bond premiums shall be equitably borne by each portfolio of the Funds; and WHEREAS, future fidelity bonds issued in replacement of the Bond might include deductible provisions with respect to certain coverages thereunder; and WHEREAS, the Division of Investment Management of the Securities and Exchange Commission has adopted the position that applicable law does not permit an investment company to maintain a fidelity bond having a deductible clause unless such investment company's investment adviser agrees to indemnify the investment company for losses subject to the deductible clause and further provided that such investment adviser shall maintain an amount equal to the deductible amount in an escrow or similar account; NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Funds and the Adviser agree as follows: 1. In the event of the recovery under the Bond as a result of any loss sustained by the Adviser and either or both of the Funds, the recovering Fund or Funds shall receive an equitable and proportionate share of the recovery, but at least equal to the amount which each recovering Fund would have received had it provided and maintained a single insured bond with the minimum coverage required by paragraph (d)(1) of Rule 17g-1 under the Investment Company Act of 1940, as amended. 2. In the event of any loss by a Fund which the underwriter of the Bond determines would otherwise be payable under the Bond but for the limitations of any deductible clause, the Adviser agrees to indemnify that Fund and pay it for any such loss not to exceed the deductible amount. 3. The Adviser agrees that, in the event that the Bond should contain any deductible clause, the Adviser shall then maintain a special reserve account in the amount of no less than the deductible amount which amount shall be specifically reserved for payment by the Adviser to the Funds in the event of any claim by either of the Funds under this agreement. 4. In the event that either of the Funds should suffer any loss as a result of the Adviser's failure to maintain adequate reserves as provided in section 3 of this agreement, the amount of such loss, as determined by a majority of those directors of that Fund who are not defined as "interested persons" of the Fund under Section 2(a)(19) of the 3 Investment Company Act of 1940, shall be set off and deducted from any fees then or later owed by that Fund to the Adviser under the Investment Advisory Agreement, or any supplement thereto, between the Fund and the Adviser. 5. Each of the Funds shall pay, from the assets of each of their portfolios, that portion of the Bond's premium which is a fraction of the total premium which, on the date of payment, each respective portfolio's total net assets bears to the combined total net assets of both of the Funds. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed in triplicate in Cincinnati, Ohio on the twenty-eighth day of March, 1996. OHIO NATIONAL FUND, INC. By: --------------------------- Donald J. Zimmerman President ONE FUND, INC. By: --------------------------- Donald J. Zimmerman President OHIO NATIONAL INVESTMENTS, INC. By: --------------------------- Joseph P. Brom President 2 EX-16 9 EXHIBIT 16 1 EXHIBIT (16) COMPUTATION OF PERFORMANCE DATA (FOR THE YEARS ENDED DECEMBER 31, 1995) 2 Annual Report Calculations Equity
- ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 12/31/68 10.000000 8.82% 8.88% 9.18% 8.70% 1267.64% 10.17% 12/31/69 1.0090 10.090000 12/31/70 1.0763 10.859867 12/31/71 1.0766 11.691733 12/31/72 1.1340 13.258425 12/31/73 0.8989 11.917998 12/31/74 0.8047 9.590413 12/31/75 1.1985 11.494110 12/31/76 1.1680 13.425121 12/31/77 0.9116 12.238340 12/31/78 1.0726 13.126844 12/31/79 1.1587 15.210074 12/31/80 1.4147 21.517691 12/31/81 0.9707 20.887223 12/31/82 1.2874 26.890211 12/31/83 1.1849 31.862211 12/31/84 0.9912 31.581823 12/31/85 1.2369 39.063557 11.96% 12.02% 12.33% 11.83% 250.11% 13.35% 12/31/86 1.2331 48.169272 12/31/87 1.1082 53.381187 12/31/88 1.1503 61.404380 12/31/89 1.2321 75.656336 12/31/90 0.9614 72.736002 12.07% 12.13% 12.44% 11.94% 88.03% 13.46% 12/31/91 1.2018 87.414127 12/31/92 1.0754 94.005152 12/31/93 1.1409 107.250478 12/31/94 1.0025 107.518604 25.65% 25.71% 26.07% 25.51% 27.20% 27.20% 12/31/95 1.2720 136.763665 - ----------------------------------------------------------------------------------------------------------------------------------
3 Money Market
- ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 7/31/80 10.000000 6.25% 6.31% 6.89% 6.13% 208.04% 7.57% 12/31/80 1.0483 10.483000 12/31/81 1.1625 12.186488 12/31/82 1.1227 13.681770 12/31/83 1.0861 14.859770 12/31/84 1.1011 16.362093 12/31/85 1.0775 17.630155 4.44% 4.50% 5.23% 4.33% 74.72% 5.74% 12/31/86 1.0630 18.740855 12/31/87 1.0628 19.917780 12/31/88 1.0713 21.337918 12/31/89 1.0889 23.234859 12/31/90 1.0789 25.068089 2.93% 2.99% 3.28% 2.82% 22.88% 4.21% 12/31/91 1.0554 26.456861 12/31/92 1.0317 27.295544 12/31/93 1.0274 28.043442 12/31/94 1.0400 29.165179 4.32% 4.38% 4.67% 4.21% 5.62% 5.62% 12/31/95 1.0562 30.804262 - ----------------------------------------------------------------------------------------------------------------------------------
4 Bond
- ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 11/02/82 10.000000 7.70% 7.77% 8.07% 7.59% 212.58% 9.05% 12/31/82 1.0060 10.060000 12/31/83 1.0263 10.324578 12/31/84 1.1215 11.579014 12/31/85 1.2153 14.071976 6.98% 7.04% 7.34% 6.86% 122.13% 8.31% 12/31/86 1.1249 15.829566 12/31/87 1.0081 15.957785 12/31/88 1.0674 17.033340 12/31/89 1.1071 18.857611 12/31/90 1.0782 20.332276 7.64% 7.70% 8.00% 7.53% 53.74% 8.98% 12/31/91 1.1296 22.967339 12/31/92 1.0754 24.699076 12/31/93 1.1069 27.339407 12/31/94 0.9616 26.289574 17.44% 17.50% 17.83% 17.31% 18.90% 18.90% 12/31/95 1.1890 31.258304 - ----------------------------------------------------------------------------------------------------------------------------------
Omni - ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 9/10/84 10.000000 9.31% 9.38% 10.22% 9.20% 232.74% 11.22% 12/31/84 1.0374 10.374000 12/31/85 1.1559 11.991307 12/31/86 1.1794 14.142547 8.78% 8.84% 9.75% 8.66% 135.28% 10.75% 12/31/87 0.9832 13.904952 12/31/88 1.1503 15.994867 12/31/89 1.1546 18.467673 12/31/90 1.0191 18.820405 10.69% 10.75% 11.07% 10.58% 76.80% 12.07% 12/31/91 1.1815 22.236309 12/31/92 1.0860 24.148632 12/31/93 1.1285 27.251731 12/31/94 0.9947 27.107297 21.25% 21.31% 21.66% 21.12% 22.75% 22.75% 12/31/95 1.2275 33.274207 - ----------------------------------------------------------------------------------------------------------------------------------
5
International - ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 5/03/93 10.000000 15.41% 15.48% 15.80% 15.29% 51.38% 16.87% 12/31/93 1.2496 12.496000 12/31/94 1.0807 13.504427 10.73% 10.79% 11.10% 10.61% 12.10% 12.10% 12/31/95 1.1210 15.138463 - ----------------------------------------------------------------------------------------------------------------------------------
Small Cap - ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 4/30/94 10.000000 31.48% 31.56% 31.92% 31.34% 61.29% 33.18% 12/31/94 1.2126 12.126000 31.38% 31.44% 31.82% 31.24% 33.01% 33.01% 12/31/95 1.3301 16.128793 - ----------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation - ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 4/30/94 10.000000 14.59% 14.67% 14.97% 14.46% 28.17% 16.04% 12/31/94 1.0453 10.453000 21.12% 21.18% 21.52% 20.98% 22.62% 22.62% 12/31/95 1.2262 12.817469 - ----------------------------------------------------------------------------------------------------------------------------------
Aggressive Growth - ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 3/31/95 10.000000 25.78% 25.84% 26.10% 25.68% 26.95% 37.53% 12/31/95 1.2695 12.695000 - ----------------------------------------------------------------------------------------------------------------------------------
6
Global Contrarian - ---------------------------------------------------------------------------------------------------------------------------------- Fund Retirement Fund Fund Year ROR Value TOP A TOP B TOP + Advantage Cumulative Annualized - ---------------------------------------------------------------------------------------------------------------------------------- 3/31/95 10.000000 7.89% 7.95% 8.16% 7.80% 8.89% 12.05% 12/31/95 1.0889 10.889000 - ----------------------------------------------------------------------------------------------------------------------------------
EX-27 10 EXHIBIT 27 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
6 0000315754 OHIO NATIONAL FUND, INC. 01 EQUITY YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 23.30 0.50 5.65 (0.39) (0.38) 0 28.58 0.73 0 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 02 MONEY MARKET YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 10.00 [PER-SHARE-NII] 0.54 [PER-SHARE-GAIN-APPREC] 0 [PER-SHARE-DIVIDEND] (0.54) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 10.00 [EXPENSE-RATIO] 0.44 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 03 BOND YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 9.70 [PER-SHARE-NII] 0.70 [PER-SHARE-GAIN-APPREC] 1.08 [PER-SHARE-DIVIDEND] (0.55) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 10.93 [EXPENSE-RATIO] 0.75 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 04 OMNI YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 14.76 [PER-SHARE-NII] 0.58 [PER-SHARE-GAIN-APPREC] 2.72 [PER-SHARE-DIVIDEND] (0.46) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 17.60 [EXPENSE-RATIO] 0.75 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 05 INTERNATIONAL YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 13.30 [PER-SHARE-NII] 0.31 [PER-SHARE-GAIN-APPREC] 1.28 [PER-SHARE-DIVIDEND] (0.28) [PER-SHARE-DISTRIBUTIONS] (0.23) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 14.38 [EXPENSE-RATIO] 1.12 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 06 CAPITAL APPRECIATION YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 10.25 [PER-SHARE-NII] 0.39 [PER-SHARE-GAIN-APPREC] 1.85 [PER-SHARE-DIVIDEND] (0.29) [PER-SHARE-DISTRIBUTIONS] (0.21) [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 11.99 [EXPENSE-RATIO] 0.96 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 07 SMALL CAP YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 11.99 [PER-SHARE-NII] (0.02) [PER-SHARE-GAIN-APPREC] 3.95 [PER-SHARE-DIVIDEND] (0.07) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 15.85 [EXPENSE-RATIO] 0.96 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 08 GLOBAL CONTRARIAN YEAR DEC-31-1995 MAR-31-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 10.00 [PER-SHARE-NII] 0.13 [PER-SHARE-GAIN-APPREC] 0.75 [PER-SHARE-DIVIDEND] (0.08) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 10.80 [EXPENSE-RATIO] 1.58 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
6 0000315754 OHIO NATIONAL FUND, INC. [NUMBER] 09 AGGRESSIVE GROWTH YEAR DEC-31-1995 MAR-31-1995 DEC-31-1995 [INVESTMENTS-AT-COST] 0 [INVESTMENTS-AT-VALUE] 0 [RECEIVABLES] 0 [ASSETS-OTHER] 0 [OTHER-ITEMS-ASSETS] 0 [TOTAL-ASSETS] 0 [PAYABLE-FOR-SECURITIES] 0 [SENIOR-LONG-TERM-DEBT] 0 [OTHER-ITEMS-LIABILITIES] 0 [TOTAL-LIABILITIES] 0 [SENIOR-EQUITY] 0 [PAID-IN-CAPITAL-COMMON] 0 [SHARES-COMMON-STOCK] 0 [SHARES-COMMON-PRIOR] 0 [ACCUMULATED-NII-CURRENT] 0 [OVERDISTRIBUTION-NII] 0 [ACCUMULATED-NET-GAINS] 0 [OVERDISTRIBUTION-GAINS] 0 [ACCUM-APPREC-OR-DEPREC] 0 [NET-ASSETS] 0 [DIVIDEND-INCOME] 0 [INTEREST-INCOME] 0 [OTHER-INCOME] 0 [EXPENSES-NET] 0 [NET-INVESTMENT-INCOME] 0 [REALIZED-GAINS-CURRENT] 0 [APPREC-INCREASE-CURRENT] 0 [NET-CHANGE-FROM-OPS] 0 [EQUALIZATION] 0 [DISTRIBUTIONS-OF-INCOME] 0 [DISTRIBUTIONS-OF-GAINS] 0 [DISTRIBUTIONS-OTHER] 0 [NUMBER-OF-SHARES-SOLD] 0 [NUMBER-OF-SHARES-REDEEMED] 0 [SHARES-REINVESTED] 0 [NET-CHANGE-IN-ASSETS] 0 [ACCUMULATED-NII-PRIOR] 0 [ACCUMULATED-GAINS-PRIOR] 0 [OVERDISTRIB-NII-PRIOR] 0 [OVERDIST-NET-GAINS-PRIOR] 0 [GROSS-ADVISORY-FEES] 0 [INTEREST-EXPENSE] 0 [GROSS-EXPENSE] 0 [AVERAGE-NET-ASSETS] 0 [PER-SHARE-NAV-BEGIN] 10.00 [PER-SHARE-NII] 1.56 [PER-SHARE-GAIN-APPREC] 1.08 [PER-SHARE-DIVIDEND] (0.80) [PER-SHARE-DISTRIBUTIONS] 0 [RETURNS-OF-CAPITAL] 0 [PER-SHARE-NAV-END] 11.84 [EXPENSE-RATIO] 1.02 [AVG-DEBT-OUTSTANDING] 0 [AVG-DEBT-PER-SHARE] 0
-----END PRIVACY-ENHANCED MESSAGE-----