Exhibit (d)(11)
SUB-ADVISORY AGREEMENT
This Agreement is made as of the thirtieth day of April, 2004, by and between
OHIO NATIONAL INVESTMENTS, INC., an Ohio corporation (the "Adviser"), and ICON
ADVISERS, INC., a Colorado 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 U.S.
EQUITY PORTFOLIO, the BALANCED PORTFOLIO, and the COVERED CALL 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 each of the
U.S. Equity, Balanced and Covered Call Portfolios 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.
(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 the
Portfolios or are under consideration for inclusion therein;
(2) formulate and implement a continuous investment program for the
Portfolios consistent with the investment objectives and related
investment policies and restrictions for each 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 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
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 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 0000 Xxx.
(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 the Portfolios' 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 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
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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 Portfolios' existence.
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 sub-advisory fees, payable monthly, at the
annual rate of (a) 0.50% of the first two hundred million dollars ($200,000,000)
of the average daily net assets of each of the U.S. Equity Portfolio and the
Balanced Portfolio during the month preceding each payment, 0.45% of the next
three hundred million dollars ($300,000,000), and 0.40% of the average daily net
assets of each Portfolio in excess of five hundred million dollars
($500,000,000); and (b) 0.55% of the first two hundred million dollars
($200,000,000) of the average daily net assets of the Covered Call Portfolio
during the month preceding each payment, 0.50% of the next three hundred million
dollars ($300,000,000), and 0.45% of the average daily net assets of the Covered
Call Portfolio in excess of five hundred million dollars ($500,000,000) (the
"Sub-Advisory Fees"). The Sub-Advisory Fees shall be accrued for each calendar
day and the sum of the daily Sub-Advisory Fees 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 Portfolios as of the close of business each day. The
Sub-Advisory Fees shall be payable solely by the Adviser, and the Fund shall not
be liable to the Sub-Adviser for any unpaid Sub-Advisory Fees.
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
(other than taxes on the Sub-Adviser's income), 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"). Notwithstanding the foregoing sentence, the
Sub-Adviser shall be liable for taxes or tax penalties incurred by the Fund, or
by any legal or beneficial owner of the Fund's shares, for any failure of a
Portfolio to qualify as a regulated investment company under Subchapter M, or to
meet the diversification requirements of Section 817(h), of the Internal Revenue
Code of 1986, as amended, as a result of the Sub-Adviser's management of the
Portfolios.
(b) In the event the Sub-Adviser is assessed any Taxation in respect of the
assets, income or activities of the Portfolios, 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
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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, provided,
however, that the Sub-Adviser agrees that it shall not render any investment
advice to any investment company or other entity used as an investment vehicle
for variable contracts issued by any insurance company not affiliated with the
Adviser if such investment company or other entity employs investment strategies
similar to those used by any of the Portfolios. Further, the Adviser shall have
the right of first refusal for any other investment company strategy which the
Sub-Adviser might propose to employ as an investment vehicle for variable
contracts issued by any insurance company not affiliated with the Adviser.
(b) 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.
(c) On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolios 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.
(d) 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.
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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 0000 Xxx) 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. 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
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 0000 Xxx) 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 any 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 a 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 Portfolios;
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.
X.X. Xxx 000
Xxxxxxxxxx, Xxxx 00000
Fax No. (000) 000-0000
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With a copy to:
Xxxxxxxxxxx X. Xxxxxxx, President
Ohio National Investments, Inc.
X.X. Xxx 000
Xxxxxxxxxx, Xxxx 00000
If to the Sub-Adviser:
Xxxxx Xxxxxxxx, President
ICON Advisers, Inc.
0000 XXX Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
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:
-------------------------------------
Xxxxxxxxxxx X. Xxxxxxx, President
ICON ADVISERS, INC.
By:
-------------------------------------
Xxxxx Xxxxxxxx, President
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Accepted and Agreed:
OHIO NATIONAL FUND, INC.
By:
-------------------------------------
Xxxx X. Xxxxxx, President
Sub Advisory ICON
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