<PAGE>
As filed with the Securities and Exchange Commission on September 9, 1996
1933 Act Reg. No. 33-_____
1940 Act File No. 811-_______
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
_________________________________
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
_________________________________
Burridge Funds
(Registrant)
115 South LaSalle Street
Chicago, Illinois 60603
Telephone Number:
Kenneth M. Arenberg Janet D. Olsen
Burridge Funds Bell, Boyd & Lloyd
115 South LaSalle Street Three First National Plaza, #3300
Chicago, Illinois 60603 Chicago, Illinois 60602
(Agents for Service)
________________________________________________________________________________
Registrant hereby elects to register pursuant to rule 24f-2 under the Investment
Company Act of 1940 an indefinite number of shares of Burridge Growth Fund, a
series of Burridge Funds. Pursuant to rule 24f-2, the registration fee payable
with respect to such election is $500.
________________________________________________________________________________
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
________________________________________________________________________________
Page 1 of ___ pages (including exhibits).
The index of exhibits is on sequential page ___.
<PAGE>
Burridge Funds
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Item Location or caption*
--------- ------------------------------------------
Part A
------
1(a)-(b) Front cover
2(a) Expense Information
(b)-(c) Highlights
3(a) Not applicable
(b) Not applicable
(c)-(d) Management of the Fund - Performance
4(a)(i) The Fund and its Shares
(ii) Investment Objective and Policies; Investment Restrictions
(b) Investment Objective and Policies; Investment Restrictions
(c) Risks
5(a) Management of the Fund
(b) Management of the Fund; Back cover; Expense Information
(c) Management of the Fund
(d) Not applicable
(e) Back cover
(f) Management of the Fund; Expense Information
(g) Management of the Fund
5A Not applicable
6(a) The Fund and its Shares
(b)-(d) Not applicable
(e) The Fund and its Shares
(f)-(g) Dividends and Distributions
<PAGE>
7 Purchasing Shares
(a) Back cover
(b) Purchasing Shares; Net Asset Value
(c) Not applicable
(d) Purchasing Shares
(e)-(f) Not applicable
8(a)-(d) Redeeming Shares
9 Not applicable
<PAGE>
Item Location or caption*
--------- ------------------------------------------
Part B (Statement of Additional Information)
--------------------------------------------
10 Front cover
11 Table of contents
12 Not applicable
13(a)-(c) Investment Objectives and Policies; Investment
Restrictions
(d) Investment Objective and Policies
14(a)-(c) Management of the Fund
15(a)-(b) Not applicable
(c) Management of the Fund
16(a)(i) Investment Advisory Services
(ii) Management of the Fund
(iii) Investment Advisory Services
(b) Investment Advisory Services
(c)-(g) Not applicable
(h) General Information
(i) Not applicable
17(a) Portfolio Transactions
(b)-(e) Not applicable
18(a)-(b) Not applicable
19(a)-(c) Purchase and Redemption of Shares
20 Taxes
21(a)-(b) General Information - Distributor
(c) Not applicable
22(a) Not applicable
(b) Performance Information
23 Financial Statements
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Item Location or caption*
- --------- -------------------
Part C - Other Information
--------------------------
24 Financial Statements and Exhibits
25 Persons Controlled by or Under Common Control With Registrant
26 Number of Holders of Securities
27 Indemnification
28 Business and Other Connections of Investment Adviser
29 Principal Underwriters
30 Location of Accounts and Records
31 Management Services
32 Undertakings
</TABLE>
- -------------------------
* References are to captions within the part of the registration statement
to which the particular item relates except as otherwise indicated.
<PAGE>
BURRIDGE GROWTH FUND
115 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(888) BURRIDGE
(888) 287-7434
November __, 1996
BURRIDGE GROWTH FUND (THE "FUND"), a series of Burridge Funds (the
"Trust"), invests for long-term capital appreciation. The Fund attempts to
generate long-term capital appreciation and minimize ordinary income and short-
term capital gains and losses by investing in common stocks with low dividend
yields and holding stocks as long as prudence allows to defer recognition of
taxable gain.
THE FUND is a "no-load" fund. There are no sales or redemption charges, and
there are no "12b-1" fees.
This Prospectus is a concise statement of information you should know
before investing. Please retain it for future reference.
A Statement of Additional Information regarding the Fund dated the date of
this Prospectus has been filed with the Securities and Exchange Commission and
(together with any supplement to it) is incorporated in this Prospectus by
reference. The Statement of Additional Information may be obtained without
charge by calling or writing the Trust at the telephone numbers or address shown
above.
______________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
----
HIGHLIGHTS ............................................................. 1
EXPENSE INFORMATION .................................................... 2
INVESTMENT OBJECTIVE AND POLICIES ...................................... 3
INVESTMENT PROCESS ..................................................... 3
RISKS .................................................................. 4
INVESTMENT RESTRICTIONS ................................................ 5
PURCHASING SHARES ...................................................... 5
REDEEMING SHARES ....................................................... 6
NET ASSET VALUE ........................................................ 9
SHAREHOLDER SERVICES ................................................... 9
Shareholder Accounts ............................................... 9
IRA Plan for Rollover Accounts ..................................... 9
DIVIDENDS AND DISTRIBUTIONS ............................................ 9
TAXES .................................................................. 9
MANAGEMENT OF THE FUND ................................................. 10
The Trustees ....................................................... 10
The Adviser ........................................................ 11
Administrator, Custodian and Transfer Agent ........................ 11
Distributor ........................................................ 11
Portfolio Transactions ............................................. 11
Performance ........................................................ 12
THE FUND AND ITS SHARES ................................................ 12
Shares ............................................................. 13
Voting Rights ...................................................... 13
Shareholder Inquiries .............................................. 13
<PAGE>
HIGHLIGHTS
- --------------------------------------------------------------------------------
Burridge Growth Fund (the "Fund") is a series of Burridge Funds (the
"Trust"). The Fund is a "no-load" fund. There are no sales or redemption
charges, and no 12b-1 fees.
INVESTMENT OBJECTIVE AND POLICIES The Fund's investment objective is long-term
capital appreciation. The Fund attempts to
generate long-term capital appreciation and
minimize ordinary income and short-term
capital gains and losses by investing in
common stocks with low dividend yields and
holding stocks as long as prudence allows to
defer recognition of taxable gain. The Fund
employs a growth-oriented investment
approach to create a diversified portfolio
of medium and large capitalization common
stocks. The Adviser believes that long-term
capital appreciation can be achieved by
purchasing stocks of companies with superior
operating fundamentals relative to industry
peers and the broad market, at attractive
levels relative to long-term earnings growth
potential. See "Investment Objective and
Policies."
INVESTMENT RISKS The Fund's performance and price per share
will change daily based on many factors,
including general economic and market
conditions and the performance of individual
stocks selected for the Fund's portfolio.
The Fund is intended as a long-term
investment for investors willing to bear the
volatility inherent in any investment in
common stocks. There can be no assurance
that the Fund will achieve its investment
objective.
MINIMUM PURCHASE $250,000 for initial investments and $10,000
for subsequent investments. Some exceptions
apply. See "Purchasing Shares."
DIVIDENDS AND CAPITAL GAINS Income dividends and capital gains, if any,
are distributed at least annually.
Distributions are automatically reinvested
in additional shares at net asset value
unless payment in cash is requested. See
"Dividends and Distributions."
REDEMPTION PRICE Current net asset value, without charge.
See "Redeeming Shares."
INVESTMENT ADVISER The Burridge Group Inc. (the "Adviser") is
investment adviser to the Fund. The Adviser
managed more than $1.3 billion in assets as
of July 31, 1996 [to be updated]. See
"Management of the Fund--The Adviser."
EXPENSES The Fund pays the Adviser a comprehensive
fee at an annual rate declining from 1.50%
of its average daily net asset value. The
Adviser pays out of its fee all of the
ordinary costs and expenses of the Fund.
See "Management of the Fund--The Adviser."
DISTRIBUTOR [insert name]
- --------------------------------------------------------------------------------
<PAGE>
EXPENSE INFORMATION
The Fund expects to incur the following expenses:
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage
of offering price)................................... none
Maximum Sales Load Imposed on Reinvested Dividends (as a
percentage of offering price)........................ none
Deferred Sales Load..................................... none
Redemption Fees (1)..................................... none
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees (including operating expenses) (2)...... 1.50%
12b-1 Fees.............................................. none
Other Expenses.......................................... .01%
------
Total Operating Expenses................................ 1.51%
_________________
(1) The Fund does not charge a redemption fee, but you must pay the wire
transfer fee (currently $10) to have the proceeds of a redemption paid to
you by wire transfer.
(2) Under the advisory agreement, the Adviser pays from its comprehensive fee
all of the ordinary operating expenses of the Fund, except the fees and
expenses of the Trust's non-interested trustees. See "Management of the
Fund--The Adviser" in this Prospectus for more information.
The purpose of the table is to assist you in understanding the various
costs and expenses that an investor in the Fund will bear, directly or
indirectly. The estimate of "Other Expenses" is based on the estimated expenses
the Fund expects to incur during its initial full fiscal year.
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period for the Fund:
1 year............................. $15
3 years............................ $48
This example illustrates the effect of expenses, but is not meant to
suggest actual or expected costs or returns, all of which may be more or less
than those shown in the example. Because the Fund is new, the above amounts are
estimates.
2
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is long-term capital appreciation. The
Fund attempts to generate long-term capital appreciation and minimize ordinary
income and short-term capital gains and losses by investing in common stocks
with low dividend yields and holding stocks as long as prudence allows to defer
recognition of taxable gain.
The Fund employs a growth-oriented investment approach to create a
diversified portfolio of medium and large capitalization common stocks. The
Adviser believes that long-term capital appreciation can be achieved by
purchasing stocks of companies with superior operating fundamentals relative to
industry peers and the broad market, at attractive levels relative to long-term
earnings growth potential. See "Investment Objective and Policies."
Under normal market conditions, the Fund expects to be substantially fully
invested in common stocks of medium and large companies generally having a
market capitalization in excess of $1 billion.
INVESTMENT PROCESS
The Adviser uses a disciplined investment process in managing the Fund's
portfolio. The first step is the identification of those companies exhibiting
superior operating characteristics and fundamentals which the Adviser believes
are important to potential above average and sustainable earnings growth. Among
other things, the Adviser looks for:
. a focus in one business segment;
. an increasing market share versus industry competition;
. stable or increasing margins versus industry competition;
. a strong balance sheet relative to industry peers as measured by the
ratio of debt to capital;
. a proven and effective management team; and
. historic long-term earnings growth of 15% or more for medium-sized
companies and 12% or more for large-sized companies and projected
long-term earnings growth of 15% or more for all companies.
In conducting disciplined fundamental research, the investment team focuses on
industry fundamentals, a company's products or services, its revenue growth
prospects, its costs and margins and the strategic business plan of management.
As a long-term investor, the Adviser believes personal visits with senior
management are an important element of its fundamental research and security
valuation. Through this research process, the Adviser projects quarterly and
annual earnings growth for those companies being considered for purchase and
those held by the Fund.
3
<PAGE>
Although investing in companies with superior earnings growth is important,
the Adviser applies a valuation discipline in order to eliminate those
securities that may be overvalued. The key valuation discipline used by the
Adviser is based on projected long-term earnings growth and price/earnings
ratios.
The Fund's portfolio generally consists of investments in approximately 20
to 50 companies, based on a "bottom-up" approach where individual companies meet
the operating characteristics outlined above and the Fund's valuation
discipline. In order to insure broad diversification and control risk in the
Fund's portfolio, the Fund maintains representation in most economic sectors.
Investments are made in sectors and industry groups in which the greatest
earnings growth is found at the most attractive prices.
The Fund is managed to minimize the recognition of ordinary income and
favors the potential for long-term capital appreciation over current income. To
reduce or defer federal income taxes, the Fund invests in stocks which may have
low dividend yields, and holds investments as long as the Adviser believes is
prudent to attempt to ensure that any realized capital gains are long-term
rather than short-term and to delay the recognition of taxable gain. The Fund's
portfolio turnover rate will vary from year to year, but under normal market
conditions is expected to be below 50%. In making a decision to sell a
portfolio security, the Adviser considers the mix of available information
including, the status of a company's fundamentals and the prospects for
continued earnings growth, other available investment opportunities and the tax
effect of the sale.
The Fund may sell short securities the Fund owns or has the right to
acquire without further consideration, a technique called selling short "against
the box." Short sales against the box may be used to lock in a profit on a
security when, for tax reasons or otherwise, the Adviser does not want to sell
the security. For a more complete explanation, please refer to the Statement of
Additional Information. The Fund may invest up to 10% of its total assets in
American Depository Receipts (ADRs), which are securities traded in the United
States but representing interests in foreign securities. A portion of the
Fund's assets may be held from time to time in cash or cash equivalents pending
investment, to meet cash requirements or if the Adviser determines that a
temporary defensive position is advisable. Because the Fund tries to minimize
ordinary income subject to income tax, cash equivalents held by the Fund may
include high-quality, short-term municipal securities producing income exempt
from federal income tax.
RISKS
The Fund's performance and price per share will change daily based on many
factors, including general economic and market conditions and the performance of
individual stocks selected for the Fund's portfolio. The Fund is intended as a
long-term investment for investors willing to bear the volatility inherent in
any investment in common stocks. There can be no assurance that the Fund will
achieve its investment objective.
Stocks of medium-sized companies tend to be more volatile and less liquid
than stocks of larger companies. Medium-sized companies, as compared to larger
companies, may have a
4
<PAGE>
shorter history of operations, may have a less diversified product line making
them susceptible to market pressure, and may have a smaller public market for
their securities.
Investment in ADRs representing foreign securities may represent a greater
degree of risk (including risk related to exchange rate fluctuations, tax
provisions, exchange and currency controls, and expropriation of assets) than
investment in securities of domestic issuers. Other risks of investing in ADRs
include less complete financial information on issuers of the underlying
securities, less developed and regulated markets, and greater political
instability.
The Fund's investment objective and policies may be changed by the Trust's
board of trustees without shareholder approval. However, shareholder approval
is required for changes in the Fund's fundamental investment restrictions. Any
change in the investment objective of the Fund might result in the Fund having
an investment objective that differs from the investment objective a shareholder
considered appropriate when investing.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions, among others,
that may be changed only with the approval of a majority of the outstanding
shares of the Fund as defined in the Investment Company Act of 1940. The Fund
may not: (1) with respect to 75% of its total assets, invest more than 5% of
its total assets (taken at market value at the time of a particular purchase) in
the securities of any single issuer, except for securities issued or guaranteed
by the Government of the U.S. or any of its agencies or instrumentalities or
repurchase agreements for such securities; (2) acquire more than 10% (taken at
the time of a particular purchase) of the outstanding voting securities of any
one issuer; or (3) invest in a security if more than 25% of its total assets
(taken at market value at the time of a particular purchase) would be invested
in the securities of issuers in a single industry, except that this restriction
does not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities. All of the investment restrictions of the Fund
are stated in the Statement of Additional Information.
PURCHASING SHARES
Shares of the Fund may be purchased by completing a share purchase
application and forwarding it, together with a check for the investment,
directly to the Fund c/o Firstar Trust Company, P.O. Box 701, Milwaukee, WI
53201. The transfer agent is unable to accept third party checks both on
initial and subsequent share purchases.
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with such
services, or receipt at Firstar Trust Company's Post Office Box of purchase
applications does not constitute receipt by Firstar Trust Company or the Fund.
DO NOT mail letters by overnight courier to the Post Office Box address.
Correspondence mailed by overnight courier should be sent to Firstar Trust
Company, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
The purchase price of shares in the Fund is the net asset value per share
next computed after receipt by Firstar, as agent for the Fund, of an order
completed in accordance with the instructions on the account application. Your
order must be received by Firstar before the close
5
<PAGE>
of regular session trading on the New York Stock Exchange ("NYSE") (currently
3:00 p.m., Chicago time) to receive the net asset value calculated on that day.
See "Net Asset Value." All purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks. The minimum initial investment to open an account
is $250,000, and subsequent investments must be at least $10,000. The minimum
initial investment for an IRA account is $50,000. Exceptions to the minimum
investment requirements may be made for employees of the Adviser or investors
who are, or are related to, clients of the Adviser. The minimum initial
investment to open an account for an IRA is $50,000.
You may also purchase (or redeem) shares through investment dealers, banks,
or other institutions. However, these institutions may charge for their
services or place limitations on the extent to which you may use the services
offered by the Fund. There are no charges or limitations imposed by the Fund
(other than nominal charges for returned checks, and similar items, as described
in this Prospectus) if shares are purchased (or redeemed) directly from
[Distributor.]
The Fund reserves the right to reject purchase orders under circumstances
or in amounts considered disadvantageous to existing shareholders. The Fund
believes that frequent purchases and redemptions of Fund shares by investors
utilizing market-timing strategies would adversely affect the Fund. The Fund
therefore intends to reject purchase orders from investors identified by the
Fund as market-timers. Should an order to purchase shares of the Fund be
canceled because a shareholder's check does not clear, the shareholder will be
responsible for any resulting loss incurred by the Fund. A charge (currently
$20) will be assessed for any returned check.
The Fund does not issue share certificates.
REDEEMING SHARES
You may redeem your Fund's shares at the net asset value next determined
after the request is received by Firstar, as agent for the Fund, in writing or
by telephone. Telephone redemptions are limited to $50,000. Your redemption
request in proper form must be received by Firstar before the close of regular
session trading on the New York Stock Exchange ("NYSE") (currently 3:00 p.m.,
Chicago time) to receive the net asset value calculated on that day. See "Net
Asset Value."
To redeem shares in writing, a written request must be received by Firstar.
A written request for redemption must be signed by all persons in whose names
the shares are registered. Redemption requests received by facsimile
transmission or other electronic means will not be accepted. Signatures must
conform exactly to the account registration.
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with such
services, or receipt at Firstar Trust Company's Post Office Box of redemption
requests does not constitute receipt by Firstar Trust Company or the Fund. DO
NOT mail letters by overnight courier to the Post Office Box
6
<PAGE>
address. Correspondence mailed by overnight courier should be sent to Firstar
Trust Company, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202.
7
<PAGE>
A signature guarantee is required on the written redemption request if (i)
the redemption proceeds are to be sent to a bank or brokerage account not
previously authorized by the shareholder in accordance with the instructions on
the account application, (ii) the proceeds of the requested redemption would be
more than $50,000, or (iii) THE ADDRESS OF RECORD HAS CHANGED WITHIN THE LAST 60
DAYS. The guarantor must be a bank, member firm of a national securities
exchange, savings and loan association, credit union or other entity authorized
by state law to guarantee signatures. A NOTARY PUBLIC IS NOT AN ACCEPTABLE
GUARANTOR. Additional documentary evidence of authority is required in the
event redemption is requested by a corporation, partnership, trust, fiduciary,
executor, or administrator. CHECKS TO THIRD PARTIES OTHER THAN A BANK OR
BROKERAGE ACCOUNT AS AUTHORIZED ABOVE ARE NOT PERMITTED. Redemption checks will
not be forwarded if the redeeming shareholder moves. The redemption request
should also indicate the change of address and include a signature guarantee.
Telephone redemptions of not more than $50,000 can be authorized on the
account application. If telephone redemptions are authorized, the Fund will
honor requests by telephone at (888) BURRIDGE (1-888-287-7434). Reasonable
procedures are used to confirm that instructions received by telephone are
genuine, such as requesting personal identification information that appears on
the purchase application and recording the conversation. You bear the risk of
any loss that might result from a fraudulent instruction, although the Fund may
bear such risk if reasonable procedures were not used. To reduce the risk of a
fraudulent instruction, proceeds of telephone redemptions may be sent only to
your address of record or to a bank or brokerage account you designated, in
writing, on the purchase application or in a letter with the signature(s)
guaranteed. The Fund reserves the right to record all telephone redemption
requests.
The redemption price per share is the net asset value next determined after
receipt of the redemption request, which may be more or less than your cost
depending upon the value of the Fund's investment securities at the time of
redemption. See "Net Asset Value."
Payment for shares redeemed is made by check or wire. Payment by check
normally is mailed within seven days after receipt of the redemption request in
proper form. If specified in the account application, the check will be payable
and sent to a designated financial institution. A wire will be sent only to
your bank or brokerage account as shown on the account application. Wire
requests generally are paid the next business day, after deduction of the cost
of the wire transfer (currently $10). That charge and any similar service fee
may be changed without prior notice to shareholders. Wires to third parties are
not permitted.
The Fund may suspend or postpone the right of redemption at times when
trading on the NYSE is restricted or as otherwise permitted by the Securities
and Exchange Commission. If you attempt to redeem shares within 15 days after
they have been purchased by check, the Fund may delay payment of the redemption
proceeds until it can verify that payment for the purchase of the shares has
been (or will be) received.
The Fund reserves the right to redeem shares in any account with a balance
of less than 80% of the applicable minimum initial investment ($200,000 for most
accounts; $40,000 for certain related accounts) in share value. Prior to any
such redemption, the Fund will give the shareholder 30 days' written notice
during which time you may increase your investment to
8
<PAGE>
avoid having your shares redeemed. The minimum balance will be waived if the
account balance drops below the applicable minimum due to market activity.
NET ASSET VALUE
The price per share for a purchase order or redemption request is the net
asset value next determined after receipt of the order or request.
The net asset value of a share of the Fund is determined as of the close of
regular session trading on the NYSE (currently 3:00 p.m., Chicago time) each day
the NYSE is open for trading. The net asset value per share is determined by
dividing the difference between the values of the Fund's assets and liabilities
by the number of shares outstanding. Each security traded on a national stock
exchange or on the Nasdaq National Market is valued at the last sale price or,
if there have been no sales on the valuation day, at the most recent bid price.
Other securities traded over the counter are valued at the last reported bid
price. Other assets and securities are valued by methods the Fund's board of
trustees believes will determine a fair value.
SHAREHOLDER SERVICES
Shareholder Accounts. You will receive an annual account statement showing
transactions in Fund shares with a balance denominated in Fund shares. In
addition, confirmations are sent to you upon purchase, redemption, dividend
reinvestment, and change of shareholder address. For a fee, you may obtain a
historical transcript of your account by requesting one in writing from Firstar
Trust Company.
IRA Plan for Rollover Accounts. The Fund has a prototype Individual
Retirement Account ("IRA") plan for your rollover IRA. The minimum investment
in an IRA account is $50,000. Call (800) BURRIDGE (1-800-287-7434) for an IRA
booklet and application.
DIVIDENDS AND DISTRIBUTIONS
You may receive two kinds of distributions from the Fund: dividends and
capital gains distributions. All dividends and capital gains distributions are
paid in the form of additional shares credited to your account at net asset
value per share unless you have requested on the account application or in
writing that distributions be paid in cash. The Fund expects to declare and pay
net investment income dividends and distributions of net realized short- and
long-term capital gains, if any, at least annually.
TAXES
Your distributions will be taxable to you, under income tax law, whether
received in cash or reinvested in additional shares. For federal income tax
purposes, any distribution that is paid in January but was declared in the prior
calendar year is deemed paid in the prior calendar year.
9
<PAGE>
You will be subject to federal income tax at ordinary rates on income
dividends and distributions of net short-term capital gain. Distributions of net
long-term capital gain will be taxable to you as long-term capital gain
regardless of the length of time you have held your shares.
You will be advised annually as to the source of distributions for tax
purposes. If you are not subject to tax on your income, you will not be required
to pay tax on these amounts.
If you realize a loss on the sale of Fund shares held for six months
or less, your short-term loss is recharacterized as long-term to the extent of
any long-term capital gain distributions you have received with respect to those
shares.
This discussion of taxation is not intended to be a full discussion of
income tax laws and their effect on shareholders. You may wish to consult your
own tax advisor. The foregoing information applies to U.S. shareholders. Foreign
shareholders should consult their tax advisors as to the tax consequences of
ownership of Fund shares.
The Fund may be required to withhold federal income tax ("backup
withholding") from certain payments to you, generally redemption proceeds.
Backup withholding may be required if:
. You fail to furnish your properly certified social security or
other tax identification number;
. You fail to certify that your tax identification number is
correct or that you are not subject to backup withholding due to
the underreporting of certain income;
. The Internal Revenue Service informs the Trust that your tax
identification number is incorrect.
These certifications are contained in the Application that you should
complete and return when you open an account. The Fund must promptly pay to the
IRS all amounts withheld. Therefore, it is usually not possible for the Fund to
reimburse you for amounts withheld. You may, however, claim the amount withheld
as a credit on your federal income tax return.
MANAGEMENT OF THE FUND
The Trustees. The board of trustees has overall responsibility for the
conduct of the Trust's affairs. The trustees serve indefinite terms of unlimited
duration provided that a majority of trustees always has been elected by the
shareholders. The trustees appoint their own successors, provided that at least
two-thirds of the trustees, after such appointment, have been elected by the
shareholders. Shareholders may remove a trustee, with or without cause, upon the
declaration in writing or vote of two-thirds of the Fund's outstanding shares. A
trustee may be removed with or without cause upon the written declaration of a
majority of the trustees.
10
<PAGE>
The Adviser. The Fund's investment adviser is The Burridge Group Inc.
The Burridge Group was founded as a registered investment adviser in March, 1986
by Richard M. Burridge and Kenneth M. Arenberg. It employees a growth oriented
investment approach in creating a diversified portfolio of equities for
corporate, public, and Taft-Hartley pension plans, endowments, foundations and
private investors. As of [October 31, 1996], it managed over [$1.3] billion in
assets for clients, including approximately [$240] million for taxable accounts.
The Adviser is privately owned by seven principals and has 24
employees.
The Adviser manages the investment and reinvestment of the assets of
the Fund. In addition the Adviser provides office space, facilities, equipment,
and personnel for managing the assets and administering the Fund's day-to-day
operations, and provides shareholder and investor services.
In return for the comprehensive fee described below, the Adviser bears
all ordinary costs and expenses attendant to operating the Fund except fees paid
to non-interested trustees, interest expense, portfolio transaction costs and
any extraordinary costs or expenses not incurred in the course of the Fund's
ongoing operation. The anticipated overall expense ratio is shown in the
"Expense Information" table in this Prospectus.
For its advisory, management and administrative services, and for the
assumption of the Fund's ordinary operating expenses, the Fund pays the Adviser
a monthly comprehensive fee based on its average daily net asset value at the
annual rate of 1.50% of the first $500 million and 1.25% of average daily net
assets in excess of $500 million. Unlike most mutual funds, the Adviser rather
than the Fund pays out of its fee the Fund's ordinary operating expenses.
The Adviser employs a team of investment professionals who participate
in investment strategy formulation and issue selection. The individual
responsible for overseeing the implementation of the Adviser's strategy for the
Fund is Richard M. Burridge.
Mr. Burridge is president and chief investment officer of the Adviser.
He has been engaged in the investment management business since 1974 and founded
the Adviser in 1986. Mr. Burridge holds a B.S. from the University of Colorado
and is a Chartered Financial Analyst.
Administrator, Custodian and Transfer. Firstar Trust Company is the
Fund's Administrator and generally assists the Fund in all aspects of its
administration and operation. Firstar is also the Fund's custodian and transfer
agent. Firstar is responsible for maintaining many of the Fund's books and
records, handling compliance and regulatory issues, processing purchase and
redemption requests, shareholder services and safekeeping of the Fund's
securities.
Distributor. ________________ (the "Distributor") is the distributor
of shares of the Fund. Fees for the Distributor's services are paid by the
Adviser from its own resources. See the Statement of Additional Information for
more information.
Portfolio Transactions. Decisions as to the purchase and sale of
securities for the Fund and the execution of these transactions, including the
negotiation of brokerage commissions on such transactions, are the
responsibility of the Adviser. In general, the Adviser seeks to obtain
11
<PAGE>
prompt and reliable execution of purchase and sale orders at the most favorable
net prices or yields. In determining the best net price and execution, the
Adviser may take into account a broker's or dealer's operational and financial
capabilities and the type of transaction involved.
The Adviser may consider research services provided by the broker or
dealer, some of which may be useful to the Adviser in its other business
functions. To the extent such research services are taken into account, the
execution price paid may be higher, but only in reasonable relation to the
benefit of such research services as determined in good faith by the Adviser.
The Adviser is authorized to place portfolio transactions with brokers or
dealers participating in the distribution of shares of the Fund, but only if the
Adviser reasonably believes that the execution and commission are comparable to
those available from other qualified firms.
The Fund's portfolio turnover rate will vary from year to year, but is
expected to be below 50% under normal market conditions.
Performance. From time to time, in advertisements and sales
literature, the Fund may present information regarding the total return on a
hypothetical investment in the Fund for various periods of performance and may
make comparisons of such total return to various stock indexes (groups of
unmanaged common stocks), to the Consumer Price Index, or to groups of
comparable mutual funds.
Total return for a period is the percentage change in value during the
period of an investment in the Fund shares, including the value of shares
acquired through reinvestment of all dividends and capital gains distributions.
The average annual total return for a given period may be calculated by finding
the average annual compounded rate of return that would equate a hypothetical
$1,000 investment to the value of that investment that could be redeemed at the
end of the period, assuming reinvestment of all distributions. All of the
calculations described above will assume the reinvestment of dividends and
distributions in additional shares of the Fund. Income taxes will not be taken
into account.
In addition to the figures described above, the Fund might use
rankings or ratings determined by Lipper Analytical Services, Inc., Morningstar,
Inc., or another service to compare the performance of the Fund with the
performance of (i) other funds of similar size and investment objective or (ii)
broader groups of funds. The Fund may also provide information about, or compare
its performance to, the historical returns on various types of financial assets.
Performance of the Fund will vary from time to time, and past results
are not indicative of likely future performance. Performance information
supplied by the Fund may not provide a basis of comparison with other
investments using different reinvestment assumptions or time periods.
THE FUND AND ITS SHARES
The Fund was organized as a Massachusetts business trust on August 30,
1996 and is an open-end, diversified management investment company.
12
<PAGE>
Shares. Under the terms of the Agreement and Declaration of Trust, the
Fund may issue an unlimited number of shares of beneficial interest without par
value for each series of shares authorized by the trustees. There are currently
two series authorized and outstanding. All shares issued will be fully paid and
non-assessable and will have no preemptive or conversion rights. Each share of a
series is entitled to participate pro rata in any dividends and other
distributions declared by the Fund's board of trustees on shares of that series.
All shares of a series have equal rights in the event of liquidation of that
series.
Under Massachusetts law, the shareholders of the Fund may, under
certain circumstances, be held personally liable for the Fund's obligations.
However, the Trust's Agreement and Declaration of Trust disclaims liability of
shareholders, the Trust's trustees, or the Fund's officers for acts or
obligations of the Trust or the Fund and requires that notice of such disclaimer
be given in each agreement, obligation, or contract entered into or executed by
the Trust or the board of trustees. The Trust's Agreement and Declaration of
Trust provides for indemnification out of the assets of the Fund of all losses
and expenses of any shareholder held personally liable for the obligations of
the Fund. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is remote, since it is limited to circumstances in which
the disclaimer is inoperative and the Fund itself is unable to meet its
obligations.
Voting Rights. Each share has one vote and fractional shares have
fractional votes.
Shareholder Inquiries. Inquiries should be addressed to Burridge
Funds, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201.
Telephone inquiries may be made at (888) BURRIDGE (1-888-287-7434).
13
<PAGE>
Shareholder Services: -------------------------------
Burridge Funds
Burridge Funds
c/o Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201
(888) BURRIDGE
(1-800-287-7434)
Investment Adviser:
The Burridge Group Inc.
115 South LaSalle Street
Chicago, IL 60603
Distributor:
Custodian and Transfer Agent:
Burridge Growth Fund
Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201
Independent Auditors: -------------------------------
Arthur Andersen LLP PROSPECTUS
33 West Monroe Street
Chicago, IL 60603
Legal Counsel:
Bell, Boyd & Lloyd
Three First National Plaza, #3300
Chicago, Illinois 60602
-------------------------------
November ___, 1996
<PAGE>
BURRIDGE FUNDS
115 South LaSalle Street
Chicago, Illinois 60603
(888) BURRIDGE
(1-888-287-7434)
STATEMENT OF ADDITIONAL INFORMATION
November _____, 1996
- --------------------------------------------------------------------------------
Burridge Growth Fund (the "Fund") is a series of Burridge Funds (the
"Trust"). The Fund represents shares of beneficial interest in a separate
portfolio of securities and other assets, with its own investment objective and
policies. This Statement of Additional Information is not a prospectus. It
should be read in conjunction with the Fund's Prospectus dated November ____,
1996, and any supplement to that Prospectus. That Prospectus can be obtained
without charge by calling or writing to the Trust.
<TABLE>
<S> <C>
Investment Objective and Policies..............................................2
Investment Techniques and Risk.................................................2
Investment Restrictions.......................................................10
Performance Information.......................................................13
Management of the Fund........................................................16
Investment Advisory Services..................................................17
Portfolio Transactions and Brokerage..........................................18
Purchase and Redemption of Shares.............................................19
Taxes.........................................................................20
General Information...........................................................21
Financial Statements..........................................................22
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is long-term capital appreciation.
The Fund attempts to generate long-term capital appreciation, and to
minimize ordinary income and short-term gains and losses by investing in common
stocks with low dividend yields and holding stocks as long as prudence allows to
defer recognition of taxable gain. The Fund employs a growth-oriented investment
approach to create a diversified portfolio of medium and large capitalization
common stocks. The Adviser believes that long-term capital appreciation can be
achieved by purchasing stocks of companies with superior operating fundamentals
relative to industry peers and the broad market, at attractive levels relative
to long-term earnings growth potential. See "Investment Objective and Policies."
Under normal market conditions, the Fund is expected to be substantially
fully invested in common stocks of medium and large companies generally having a
market capitalization in excess of $1 billion.
INVESTMENT TECHNIQUES AND RISKS
Foreign Securities
The Fund may invest up to 10% of its total assets in foreign securities
(including American Depository Receipts ("ADRs")), which may entail a greater
degree of risk (including risks relating to exchange rate fluctuations, tax
provisions, or expropriation of assets) than does investment in securities of
domestic issuers. ADRs are receipts typically issued by an American bank or
trust company evidencing ownership of the underlying securities. The Fund may
invest in sponsored or unsponsored ADRs. In the case of an unsponsored ADR, the
Fund is likely to bear its proportionate share of the expenses of the depository
and it may have greater difficulty in receiving shareholder communications than
it would have with a sponsored ADR. The Fund does not intend to invest more than
5% of its net assets in unsponsored ADRs.
Short-Term Investments
The Fund intends to be substantially fully invested in common stocks in
ordinary circumstances, although the Fund may invest without limitation in high-
quality fixed-income securities or hold assets in cash or cash equivalents
pending investment, to meet anticipated cash requirements, or if the Adviser
determines that a temporary defensive position is advisable. Because the Fund
tries to minimize its ordinary income subject to income tax, the Fund's short-
term investments may include short-term, high quality securities producing
income exempt from federal income tax.
Convertible Securities
Convertible securities include any corporate debt security or preferred
stock that may be converted into underlying shares of common stock. The common
stock underlying convertible securities may be issued by a different entity than
the issuer of the convertible securities.
B-2
<PAGE>
Convertible securities entitle the holder to receive interest payments paid on
corporate debt securities or the dividend preference on a preferred stock until
such time as the convertible security matures or is redeemed or until the holder
elects to exercise the conversion privilege.
The value of convertible securities is influenced by both the yield of non-
convertible securities of comparable issuers and by the value of a convertible
security viewed without regard to its conversion feature (i.e., strictly on the
basis of its yield) is sometimes referred to as its 'investment value.' The
investment value of the convertible security will typically fluctuate inversely
with changes in prevailing interest rates. However, at the same time, the
convertible security will be influenced by its 'conversion value,' which is the
market value of the underlying common stock that would be obtained if the
convertible security were converted. Conversion value fluctuates directly with
the price of the underlying common stock.
By investing in convertible securities, the Fund obtains the right to
benefit from the capital appreciation potential in the underlying stock upon
exercise of the conversion right, while earning higher current income than would
be available if the stock were purchased directly. In determining whether to
purchase a convertible security, the Adviser will consider the same criteria
that would be considered in purchasing the underlying stock. Although
convertible securities purchased by the Fund are frequently rated investment
grade, the Fund also may purchase unrated securities or securities rated below
investment grade if the securities meet the Adviser's other investment criteria.
Convertible securities rated below investment grade (a) tend to be more
sensitive to interest rate and economic changes, (b) may be obligations of
issuers who are less creditworthy than issuers of higher quality convertible
securities, and (c) may be more thinly traded due to such securities being less
well known to investors than either common stock or conventional debt
securities. As a result, the Adviser's own investment research and analysis
tends to be more important in the purchase of such securities than other
factors.
Options on Securities and Indexes. The Fund may purchase and sell put
options and call options on securities, indexes or foreign currencies in
standardized contracts traded on recognized securities exchanges, boards of
trade, or similar entities, or quoted on NASDAQ. The Fund may purchase
agreements, sometimes called cash puts, that may accompany the purchase of a new
issue of bonds from a dealer.
An option on a security (or index) is a contract that gives the purchaser
(holder) of the option, in return for a premium, the right to buy from (call) or
sell to (put) the seller (writer) of the option the security underlying the
option (or the cash value of the index) at a specified exercise price at any
time during the term of the option (normally not exceeding nine months). The
writer of an option on an individual security or on a foreign currency has the
obligation upon exercise of the option to deliver the underlying security or
foreign currency upon payment of the exercise price or to pay the exercise price
upon delivery of the underlying security or foreign currency. Upon exercise, the
writer of an option on an index is obligated to pay the difference between the
cash value of the index and the exercise price multiplied by the specified
multiplier for the index option. (An index is designed to reflect specified
facets of a particular financial or securities market, a specific group of
financial instruments or securities, or certain economic indicators.)
B-3
<PAGE>
The Fund will write call options and put options only if they are
"covered." For example, in the case of a call option on a security, the option
is "covered" if the Fund owns the security underlying the call or has an
absolute and immediate right to acquire that security without additional cash
consideration (or, if additional cash consideration is required, cash or cash
equivalents in such amount are held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio.
If an option written by the Fund expires, the Fund realizes a capital gain
equal to the premium received at the time the option was written. If an option
purchased by the Fund expires, the Fund realizes a capital loss equal to the
premium paid.
Prior to the earlier of exercise or expiration, an option may be closed out
by an offsetting purchase or sale of an option of the same series (type,
exchange, underlying security or index, exercise price, and expiration). There
can be no assurance, however, that a closing purchase or sale transaction can be
effected when the Fund desires.
The Fund will realize a capital gain from a closing purchase transaction if
the cost of the closing option is less than the premium received from writing
the option, or, if it is more, the Fund will realize a capital loss. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, the Fund will realize a capital gain or, if it is less,
the Fund will realize a capital loss. The principal factors affecting the
market value of a put or a call option include supply and demand, interest
rates, the current market price of the underlying security or index in relation
to the exercise price of the option, the volatility of the underlying security
or index, and the time remaining until the expiration date.
A put or call option purchased by the Fund is an asset of the Fund, valued
initially at the premium paid for the option. The premium received for an option
written by the Fund is recorded as a deferred credit. The value of an option
purchased or written is marked-to-market daily and is valued at the closing
price on the exchange on which it is traded or, if not traded on an exchange or
no closing price is available, at the mean between the last bid and asked
prices.
Risks Associated with Options on Securities and Indexes. There are several
risks associated with transactions in options. For example, there are
significant differences between the securities markets, the currency markets,
and the options markets that could result in an imperfect correlation between
these markets, causing a given transaction not to achieve its objectives. A
decision as to whether, when and how to use options involves the exercise of
skill and judgment, and even a well-conceived transaction may be unsuccessful to
some degree because of market behavior or expected events.
There can be no assurance that a liquid market will exist when the Fund
seeks to close out an option position. If the Fund were unable to close out an
option that it had purchased on a security, it would have to exercise the option
in order to realize any profit or the option would expire and become worthless.
If the Fund were unable to close out a covered call option that it had written
on a security, it would not be able to sell the underlying security until the
option expired. As the writer of a covered call option on a security, the Fund
foregoes, during the
B-4
<PAGE>
option's life, the opportunity to profit from increases in the market value of
the security covering the call option above the sum of the premium and the
exercise price of the call.
If trading were suspended in an option purchased or written by the Fund,
the Fund would not be able to close out the option. If restrictions on exercise
were imposed, the Fund might be unable to exercise an option it has purchased.
Futures Contracts and Options on Futures Contracts. The Fund may use
interest rate futures contracts, index futures contracts, and foreign currency
futures contracts. An interest rate, index or foreign currency futures contract
provides for the future sale by one party and purchase by another party of a
specified quantity of a financial instrument or the cash value of an index/1/ at
a specified price and time. A public market exists in futures contracts
covering a number of indexes (including, but not limited to: the Standard &
Poor's 500 Index, the Value Line Composite Index, and the New York Stock
Exchange Composite Index) as well as financial instruments (including, but not
limited to: U.S. Treasury bonds, U.S. Treasury notes, Eurodollar certificates
of deposit, and foreign currencies). Other index and financial instrument
futures contracts are available and it is expected that additional futures
contracts will be developed and traded.
The Fund may purchase and write call and put futures options. Futures
options possess many of the same characteristics as options on securities,
indexes and foreign currencies (discussed above). A futures option gives the
holder the right, in return for the premium paid, to assume a long position
(call) or short position (put) in a futures contract at a specified exercise
price at any time during the period of the option. Upon exercise of a call
option, the holder acquires a long position in the futures contract and the
writer is assigned the opposite short position. In the case of a put option,
the opposite is true. The Fund might, for example, use futures contracts to
hedge against or gain exposure to fluctuations in the general level of stock
prices, anticipated changes in interest rates or currency fluctuations that
might adversely affect either the value of the Fund's securities or the price of
the securities that the Fund intends to purchase. Although other techniques
could be used to reduce or increase the Fund's exposure to stock price, interest
rate and currency fluctuations, the Fund may be able to achieve its exposure
more effectively and perhaps at a lower cost by using futures contracts and
futures options.
The Fund will only enter into futures contracts and futures options that
are standardized and traded on an exchange, board of trade, or similar entity,
or quoted on an automated quotation system.
The success of any futures transaction depends on the Adviser correctly
predicting changes in the level and direction of stock prices, interest rates,
currency exchange rates and
- -------------------------------
/1/ All futures contract on an index is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to the
difference between the value of the index at the close of the last trading day
of the contract and the price at which the index contract was originally
written. Although the value of a securities index is a function of the value of
certain specified securities, no physical delivery of those securities is made.
B-5
<PAGE>
other factors. Should those predictions be incorrect, the Fund's return might
have been better had the transaction not been attempted; however, in the absence
of the ability to use futures contracts, the Adviser might have taken portfolio
actions in anticipation of the same market movements with similar investment
results but, presumably, at greater transaction costs.
When a purchase or sale of a futures contract is made by the Fund, the Fund
is required to deposit with its custodian (or broker, if legally permitted) a
specified amount of cash or U.S. Government securities or other securities
acceptable to the broker ("initial margin"). The margin required for a futures
contract is set by the exchange on which the contract is traded and may be
modified during the term of the contract. The initial margin is in the nature
of a performance bond or good faith deposit on the futures contract, which is
returned to the Fund upon termination of the contract, assuming all contractual
obligations have been satisfied. The Fund expects to earn interest income on
its initial margin deposits. A futures contract held by the Fund is valued
daily at the official settlement price of the exchange on which it is traded.
Each day the Fund pays or receives cash, called "variation margin," equal to the
daily change in value of the futures contract. This process is known as
"marking-to-market." Variation margin paid or received by the Fund does not
represent a borrowing or loan by the Fund but is instead settlement between the
Fund and the broker of the amount one would owe the other if the futures
contract had expired at the close of the previous day. In computing daily net
asset value, the Fund will mark-to-market its open futures positions.
The Fund is also required to deposit and maintain margin with respect to
put and call options on futures contracts written by it. Such margin deposits
will vary depending on the nature of the underlying futures contract (and the
related initial margin requirements), the current market value of the option,
and other futures positions held by the Fund.
Although some futures contracts call for making or taking delivery of the
underlying securities, usually these obligations are closed out prior to
delivery by offsetting purchases or sales of matching futures contracts (same
exchange, underlying security or index, and delivery month). If an offsetting
purchase price is less than the original sale price, the Fund engaging in the
transaction realizes a capital gain, or if it is more, the Fund realizes a
capital loss. Conversely, if an offsetting sale price is more than the original
purchase price, the Fund engaging in the transaction realizes a capital gain, or
if it is less, the Fund realizes a capital loss. The transaction costs must
also be included in these calculations.
Risks Associated with Futures. There are several risks associated with the
use of futures contracts and futures options. A purchase or sale of a futures
contract may result in losses in excess of the amount invested in the futures
contract. In trying to increase or reduce market exposure, there can be no
guarantee that there will be a correlation between price movements in the
futures contract and in the portfolio exposure sought. In addition, there are
significant differences between the securities and futures markets that could
result in an imperfect correlation between the markets, causing a given
transaction not to achieve its objectives. The degree of imperfection of
correlation depends on circumstances such as: variations in speculative market
demand for futures, futures options and the related securities, including
technical influences in futures and futures options trading and differences
between the securities
B-6
<PAGE>
market and the securities underlying the standard contracts available for
trading. For example, in the case of index futures contracts, the composition of
the index, including the issuers and the weighting of each issue, may differ
from the composition of the Fund's portfolio, and, in the case of interest rate
futures contracts, the interest rate levels, maturities, and creditworthiness of
the issues underlying the futures contract may differ from the financial
instruments held in the Fund's portfolio. A decision as to whether, when and how
to use futures contracts involves the exercise of skill and judgment, and even a
well-conceived transaction may be unsuccessful to some degree because of market
behavior or unexpected stock price or interest rate trends.
Futures exchanges may limit the amount of fluctuation permitted in certain
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 the
current trading session. Once the daily limit has been reached in a futures
contract subject to the limit, 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 work to prevent the liquidation of unfavorable positions. For
example, futures prices have occasionally moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some holders of futures contracts to
substantial losses. Stock index futures contracts are not normally subject to
such daily price change limitations.
There can be no assurance that a liquid market will exist at a time when
the Fund seeks to close out a futures or futures option position. The Fund
would be exposed to possible loss on the position during the interval of
inability to close, and would continue to be required to meet margin
requirements until the position is closed. In addition, many of the contracts
discussed above are relatively new instruments without a significant trading
history. As a result, there can be no assurance that an active secondary market
will develop or continue to exist.
Limitations on Options and Futures. If other options, futures contracts,
or futures options of types other than those described herein are traded in the
future, the Fund also may use those investment vehicles, provided the board of
directors determines that their use is consistent with the Fund's investment
objective.
The Fund will not enter into a futures contract or purchase an option
thereon if, immediately thereafter, the initial margin deposits for futures
contracts held by the Fund plus premiums paid by it for open futures option
positions, less the amount by which any such positions are "in-the-money,"/2/
would exceed 5% of the Fund's total assets.
When purchasing a futures contract or writing a put option on a futures
contract, the Fund must maintain with its custodian (or broker, if legally
permitted) cash or cash equivalents (including any margin) equal to the market
value of such contract. When writing a call option on a futures
- ---------------------------
/2/ A call option is "in-the-money" if the value of the futures contract that
is the subject of the option exceeds the exercise price. A put option is
"in-the-money" if the exercise price exceeds the value of the futures
contract that is the subject of the option.
B-7
<PAGE>
contract, the Fund similarly will maintain with its custodian cash or cash
equivalents (including any margin) equal to the amount by which such option is
in-the-money until the option expires or is closed out by the Fund.
The Fund may not maintain open short positions in futures contracts, call
options written on futures contracts or call options written on indexes if, in
the aggregate, the market value of all such open positions exceeds the current
value of the securities in its portfolio, plus or minus unrealized gains and
losses on the open positions, adjusted for the historical relative volatility of
the relationship between the portfolio and the positions. For this purpose, to
the extent the Fund has written call options on specific securities in its
portfolio, the value of those securities will be deducted from the current
market value of the securities portfolio.
In order to comply with Commodity Futures Trading Commission Regulation 4.5
and thereby avoid being deemed a "commodity pool operator," the Fund will use
commodity futures or commodity options contracts solely for bona fide hedging
purposes within the meaning and intent of Regulation 1.3(z), or, with respect to
positions in commodity futures and commodity options contracts that do not come
within the meaning and intent of Regulation 1.3(z), the aggregate initial margin
and premiums required to establish such positions will not exceed 5% of the fair
market value of the assets of the Fund, after taking into account unrealized
profits and unrealized losses on any such contracts it has entered into (in the
case of an option that is in-the-money at the time of purchase, the in-the-money
amount (as defined in Section 190.01(x) of the Commission Regulations) may be
excluded in computing such 5%).
As long as the Fund continues to sell its shares in certain states and
applicable state law or regulation so requires, the Fund's options and futures
transactions also will be subject to certain non-fundamental investment
restrictions set forth under "Investment Restrictions" in this statement of
additional information.
Taxation of Options and Futures. If the Fund exercises a call or put
option that it holds, the premium paid for the option is added to the cost basis
of the security purchased (call) or deducted from the proceeds of the security
sold (put). For cash settlement options and futures options exercised by the
Fund, the difference between the cash received at exercise and the premium paid
is a capital gain or loss.
If a call or put option written by the Fund is exercised, the premium is
included in the proceeds of the sale of the underlying security (call) or
reduces the cost basis of the security purchased (put). For cash settlement
options and futures options written by the Fund, the difference between the cash
paid at exercise and the premium received is a capital gain or loss.
Entry into a closing purchase transaction will result in capital gain or
loss. If an option written by the Fund is in-the-money at the time it was
written and the security covering the option was held for more than the long-
term holding period prior to the writing of the option, any loss realized as a
result of a closing purchase transaction will be long-term. The holding period
of the securities covering an in-the-money option will not include the period of
time the option is outstanding.
B-8
<PAGE>
If the Fund writes an equity call option/3/ other than a "qualified covered
call option," as defined in the Internal Revenue Code, any loss on such option
transaction, to the extent it does not exceed the unrealized gains on the
securities covering the option, may be subject to deferral until the securities
covering the option have been sold.
A futures contract held until delivery results in capital gain or loss
equal to the difference between the price at which the futures contract was
entered into and the settlement price on the earlier of delivery notice date or
expiration date. If the Fund delivers securities under a futures contract, the
Fund also realizes a capital gain or loss on those securities.
For Federal income tax purposes, the Fund generally is required to
recognize for each taxable year its net unrealized gains and losses as of the
end of the year on futures, futures options and non-equity options positions
("year-end mark-to-market"). Generally, any gain or loss recognized with
respect to such positions (either by year-end mark-to-market or by actual
closing of the positions) is considered to be 60% long-term and 40% short-term,
without regard to the holding periods of the contracts. However, in the case of
positions classified as part of a "mixed straddle," the recognition of losses on
certain positions (including options, futures and futures options positions, the
related securities and certain successor positions thereto) may be deferred to a
later taxable year. Sale of futures contracts or writing of call options (or
futures call options) or buying put options (or futures put options) that are
intended to hedge against a change in the value of securities held by the Fund
may affect the holding period of the hedged securities.
If the Fund were to enter into a short index future, short index futures
option or short index option position and the Fund's portfolio were deemed to
"mimic" the performance of the index underlying such contract, the option or
futures contract position and the Fund's stock positions may be deemed to be
positions in a mixed straddle, subject to the above-mentioned loss deferral
rules.
In order for the Fund to continue to qualify for Federal income tax
treatment as a regulated investment company, at least 90% of its gross income
for a taxable year must be derived from qualifying income; i.e., dividends,
interest, income derived from loans of securities, and gains from the sale of
securities or foreign currencies, or other income (including but not limited to
gains from options, futures, or forward contracts). In addition, gains realized
on the sale or other disposition of securities held for less than three months
must be limited to less than 30% of the Fund's annual gross income. Any net
gain realized from futures (or futures options) contracts will be considered
gain from the sale of securities and therefore be qualifying income for purposes
of the 90% requirement. In order to avoid realizing excessive gains on
securities
- -------------------------------
/3/ An equity option is defined to mean any option to buy or sell stock, and
any other option the value of which is determined by reference to an index
of stocks of the type that is ineligible to be traded on a commodity
futures exchange (e.g., an option contract on a sub-index based on the
price of nine hotel-casino stocks). The definition of equity option
excludes options on broad-based stock indexes (such as the Standard &
Poor's 500 index).
B-9
<PAGE>
held less than three months, the Fund may be required to defer the closing out
of certain positions beyond the time when it would otherwise be advantageous to
do so.
The Fund intends to distribute to shareholders annually any capital gains
that have been recognized for Federal income tax purposes (including year-end
mark-to-market gains) on options and futures transactions, together with gains
on other Fund investments, to the extent such gains exceed recognized capital
losses and any net capital loss carryovers of the Fund. Shareholders will be
advised of the nature of such capital gain distributions.
Portfolio Turnover
Under normal market conditions, the Fund's portfolio turnover rate will
vary from year to year, but is expected to be below 50%. Portfolio turnover can
occur for a number of reasons such as general conditions in the securities
markets, more favorable investment opportunities in other securities, or other
factors relating to the desirability of holding or changing a portfolio
investment. Because of the Fund's emphasis on minimizing the recognition of
ordinary income, the Fund intends to keep portfolio turnover low. A high rate
of portfolio turnover in the Fund, if it should occur, would result in increased
transaction expense, which must be borne by the Fund. High portfolio turnover
also may result in the realization of capital gains or losses and, to the extent
net short-term capital gains are realized, any distributions resulting from such
gains will be considered ordinary income for Federal income tax purposes. See
"Taxes" in the prospectus, and "Additional Tax Information" in this statement of
additional information.
INVESTMENT RESTRICTIONS
The Fund has adopted the following investment restrictions (which may not
be changed without the approval of a majority of the Fund's outstanding shares),
under which the Fund may not:
1. with respect to 75% of its total assets, invest more than 5% of its
total assets, taken at market value at the time of a particular purchase, in the
securities of a single issuer, except for securities issued or guaranteed by the
Government of the U.S. or any of its agencies or instrumentalities or repurchase
agreements for such securities;
2. acquire more than 10%, taken at the time of a particular purchase, of
the outstanding voting securities of any one issuer;
3. act as an underwriter of securities, except insofar as it may be deemed
an underwriter for purposes of the Securities Act of 1933 on disposition of
securities acquired subject to legal or contractual restrictions on resale;
4. purchase or sell real estate (although it may purchase securities
secured by real estate or interests therein, or securities issued by companies
which invest in real estate or interests therein), commodities, or commodity
contracts, except that it may enter into (a) futures and options on futures and
(b) forward contracts;
B-10
<PAGE>
5. make loans, but this restriction shall not prevent the Fund from (a)
investing in debt securities, (b) investing in repurchase agreements, or (c)
lending portfolio securities, provided that it may not lend securities if, as a
result, the aggregate value of all securities loaned would exceed 33% of its
total assets (taken at market value at the time of such loan);/4/
6. borrow (including entering into reverse repurchase agreements), except
that it may (a) borrow up to 33 1/3% of its total assets, taken at market value
at the time of such borrowing, as a temporary measure for extraordinary or
emergency purposes, but not to increase portfolio income and (b) enter into
transactions in options, futures, and options on futures;/5/
7. invest in a security if more than 25% of its total assets (taken at
market value at the time of a particular purchase) would be invested in the
securities of issuers in any particular industry, except that this restriction
does not apply to securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities;
8. issue any senior security except to the extent permitted under the
Investment Company Act of 1940;
The Fund's investment objective is not a fundamental restriction and,
therefore, a change in the objective is not subject to shareholder approval.
However, investors in the Fund will receive written notification at least 30
days' prior to any change in the Fund's investment objective.
Non-Fundamental Restrictions
The Fund also is subject to the following non-fundamental restrictions and
policies, which may be changed by the board of trustees, without shareholder
approval. Many of these restrictions are currently required by law or
regulation of one or more states in which shares of the Fund are offered for
sale. If such laws or regulations were no longer applicable, the Fund expects
that certain of the following restrictions (including restrictions (a), (d)
through (g), and (i) through (k)) would be revised or eliminated, although no
change in the Fund's operations would be expected to result.
The Fund may not:
a. invest in any of the following: (i) interests in oil, gas, or other
mineral leases or exploration or development programs (except readily marketable
securities, including but not limited to master limited partnership interests,
that may represent indirect interests in oil, gas, or other mineral exploration
or development programs); (ii) puts, calls, straddles, spreads, or any
- -----------------------
/4/ The Fund has no present intention of investing in repurchase agreements or
lending portfolio securities.
/5/ The Fund will not purchase securities when total borrowings by the Fund
are greater than 5% of its net asset value.
B-11
<PAGE>
combination thereof if by reason thereof the value of the Fund's aggregate
investment in such securities exceed 5% of its total assets (except that the
Fund may enter into transactions in options, futures, and options on futures);
and (iii) limited partnerships in real estate unless they are readily
marketable;
b. invest in companies for the purpose of exercising control or management;
c. (i) purchase more than 3% of the stock of another investment company or
(ii) purchase stock of other investment companies equal to more than 5% of the
Fund's total assets (valued at time of purchase) in the case of any one other
investment company or (iii) purchase stock of other investment companies equal
to more than 10% of the Fund's total assets (valued at time of purchase) in the
case of all other investment companies in the aggregate; any such purchases are
to be made in the open market where no profit to a sponsor or dealer results
from the purchase, other than the customary broker's commission, except for
securities acquired as part of a merger, consolidation, acquisition or
reorganization;/6/
d. purchase or hold securities of an issuer if 5% of the securities of such
issuer are owned by those officers, directors or partners of the Fund or of its
investment adviser, who each own beneficially more than 1/2 of 1% of the
securities of that issuer;
e. purchase securities of issuers (other than issuers of Federal agency
obligations or securities issued or guaranteed by any foreign country or asset-
backed securities) that, including their predecessors or unconditional
guarantors, have been in operation for less than three years, if by reason of
such purchase the value of the Fund's investment in all such securities will
exceed 5% of its total assets (valued at time of purchase);
f. mortgage, pledge, or hypothecate its assets, except as may be necessary
in connection with permitted borrowings or in connection with options, futures,
and options on futures;
g. invest more than 5% of its net assets (valued at time of purchase) in
warrants, nor more than 2% of its net assets in warrants that are not listed on
the New York or American stock exchange;
h. invest more than 10% of its total assets (valued at time of purchase) in
securities of foreign issuers;
i. buy or sell an option on a security, a futures contract, or an option on
a futures contract unless the option, the futures contract, or the option on the
futures contract is offered through the facilities of a recognized securities
association or listed on a recognized exchange or similar entity;
/6/ As long as Fund shares are offered for sale in California and applicable
California law or regulation so requires, the Fund will not acquire or
retain the shares of other open-end investment companies.
B-12
<PAGE>
j. purchase a put or call option if the aggregate premiums paid for all put
and call options exceed 20% of its net assets (less the amount by which any such
positions are in-the-money), excluding put and call options purchased as closing
transactions;
k. invest more than 5% of its net assets in restricted securities, other
than securities eligible for resale pursuant to Rule 144A of the Securities Act
of 1933;
l. purchase securities on margin (except for use of short-term credits as
are necessary for the clearance of transactions), or sell securities short
unless (i) the Fund owns or has the right to obtain securities equivalent in
kind and amount to those sold short at no added cost or (ii) the securities sold
are "when issued" or "when distributed" securities which the Fund expects to
receive in recapitalization, reorganization, or other exchange for securities
the Fund contemporaneously owns or has the right to obtain and provided that
transactions in options, futures, and options on futures are not treated as
short sales; or
m. invest more than 15% of its net assets (taken at market value at the
time of each purchase) in illiquid securities, including repurchase agreements
maturing in more than seven days.
PERFORMANCE INFORMATION
From time to time the Fund may quote total return figures. Total return for
a period is the percentage change in value during the period of an investment in
a shares of a fund, including the value of shares acquired through reinvestment
of all dividends and capital gains distributions. An average annual total return
for a given period may be computed by finding the average annual compounded rate
that would equate a hypothetical initial amount invested of $1,000 to the value
of that investment that could be redeemed at the end of the period, assuming
reinvestment of all distributions. Average annual total return is computed as
follows:
ERV = P(l+T)n
Where: P = a hypothetical initial investment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the period, at
the end of the period (or fractional portion thereof)
The Fund imposes no sales charges and pays no distribution expenses. Income
taxes are not taken into account. Performance figures quoted by the Fund are not
necessarily indicative of future results. The Fund's performance is a function
of conditions in the securities markets, portfolio management and operating
expenses. Although information about past performance is useful in reviewing the
Fund's performance and in providing some basis for comparison with other
investment alternatives, it should not be used for comparison with other
investments using different reimbursement assumptions or time periods.
B-13
<PAGE>
In advertising and sales literature, the performance of the Fund may be
compared with that of other mutual funds, indexes or averages of other mutual
funds, indexes of related financial assets or data, other accounts, limited
liability investment companies or partnerships managed or advised by the
Adviser, and other competing investment and deposit products available from or
through other financial institutions. The composition of these indexes, averages
or accounts differs from that of the Fund. The comparison of the Fund to an
alternative investment should consider differences in features and expected
performance.
All of the indexes and averages noted below will be obtained from the
indicated sources or reporting services, which the Fund generally believes to be
accurate. The Fund also may note (or provide reprints of articles or charts
containing) its mention (including performance or other comparative rankings) in
newspapers, magazines, or other media from time to time. However, the Fund
assumes no responsibility for the accuracy of such data. Newspapers and
magazines which might mention the Fund include, but are not limited to, the
following:
Business Week Money
Changing Times The Mutual Fund Letter
Chicago Mutual Fund Values (Morningstar)
Chicago Tribune Newsweek
Chicago Sun-Times The New York Times
Crain's Chicago Business Pensions and Investments
Consumer Reports Personal Investor
Consumer Digest Smart Money
Financial World Stanger Reports
FA Advisor Time
Forbes USA Today
Fortune U.S. News and World Report
Institutional Investor The Wall Street Journal
Investor's Daily Worth
Los Angeles Times
When a newspaper, magazine, or other publication mentions the Fund, such
mention may include: (i) listings of some or all of the Fund's holdings; (ii)
descriptions of characteristics of some or all of the securities held by the
Fund, including price-earnings ratios, earnings, growth rates and other
statistical information, and comparisons of that information to similar
statistics for the securities comprising any of the indexes or averages listed
below; and (iii) descriptions of the Fund's or a portfolio manager's economic
and market outlook, generally and for the Fund.
The Fund may compare its performance to the Consumer Price Index (All
Urban), a widely recognized measure of inflation.
The performance of the Fund may be compared to stock market indexes or
averages, including the following widely recognized indicators of general U.S.
stock market results:
B-14
<PAGE>
Russell Mid-Cap Stock Index
Russell Mid-Cap Growth Index
Russell 1,000 Index
Russell 1,000 Growth Index
Standard & Poor's 500 Stock Index
Standard & Poor's Mid-Cap 400 Index
S&P/Barra Mid-Cap Growth Index
The Fund's performance may also be compared to mutual fund industry indexes
or averages, including the following: Value Line Index; Lipper Capital
Appreciation Fund Average; Lipper Growth Funds Average; Lipper General Equity
Funds Average; Lipper Equity Funds Average; Lipper Mid-Cap Average; Morningstar
Growth Average; Morningstar Aggressive Growth Average; Morningstar U.S.
Diversified Average; Morningstar Equity Fund Average; Morningstar Hybrid Fund
Average; Morningstar All Equity Funds Average; and Morningstar General Equity
Average; Morningstar MidCap/Value Average.
The Lipper and Morningstar averages are unweighted averages of total return
performance of mutual funds as classified, calculated, and published by Lipper
and by Morningstar, Inc. ("Morningstar"), respectively. The Fund may also use
comparative performance as computed in a ranking by Lipper or category averages
and rankings provided by another independent service. Should Lipper or another
service reclassify the Fund to a different category or develop (and place the
Fund into) a new category, the Fund may compare its performance or ranking
against other funds in the newly assigned category, as published by the service.
Moreover, the Fund may compare its performance or ranking against all funds
tracked by Lipper or another independent service, and may cite its rating,
recognition or other mention by Morningstar or any other entity. Morningstar's
rating system is based on risk-adjusted total return performance and is
expressed in a star-rating format. The risk-adjusted number is computed by
subtracting the Fund's risk score (which is a function of the Fund's monthly
returns less the 3-month Treasury bill return) from the Fund's load-adjusted
total return score. This numerical score is then translated into rating
categories, with the top 10% labeled five star, the next 22.5% labeled four
star, the next 35% labeled three star, the next 22.5% labeled two star and the
bottom 10% one star. A high rating reflects either above-average returns or
below-average risk, or both.
To illustrate the historical returns on various types of financial assets,
the Fund may use historical data provided by Ibbotson Associates, Inc.
("Ibbotson"), a Chicago-based investment firm. Ibbotson constructs (or obtains)
very long-term (since 1926) total return data (including, for example, total
return indexes, total return percentages, average annual total returns and
standard deviations of such returns) for the following asset types: common
stocks, small company stocks, long-term corporate bonds, long-term government
bonds, intermediate-term government bonds and U.S. Treasury bills. Similarly,
the Fund may use Ibbotson's historical data regarding the Consumer Price Index.
The Fund may also use historical data compiled by sources believed by the Fund
to be accurate, illustrating the past performance of small-capitalization
stocks, large-capitalization stocks, common stocks, equity securities, growth
stocks
B-15
<PAGE>
(small-capitalization, large-capitalization, or both) and value stocks
(small-capitalization, large-capitalization, or both).
MANAGEMENT OF THE FUND
Trustees and officers of the Trust, and their principal business
occupations during at least the last five (5) years, are shown below. Trustees
deemed to be "interested persons" of the Trust for purposes of the Investment
Company Act of 1940 are indicated with an asterisk.
<TABLE>
<CAPTION>
Positions Held Principal Occupations during
Name and Age with Registrant Past 5 Years
- ------------ --------------- ------------------------------
<S> <C> <C>
Richard M. Burridge* Trustee, _____ President, Chief Investment
(67) Officer and Portfolio
Manager of The Burridge
Group Inc.
Kenneth M. Arenberg* Trustee, _____ Executive Vice President of The
(66) Burridge Group Inc.
[name] Trustee
(____)
[name] Trustee
(____)
[name] Trustee
(____)
</TABLE>
The only compensation paid to trustees and officers of the Trust for their
services as such consists of a fee of $500 per meeting of the board or any
committee thereof attended, paid to trustees who are not interested persons of
the Trust or the Adviser. The Trust has no retirement or pension plans.
The following table sets forth compensation expected to be paid by the
Trust during the fiscal year ending June 30, 1997 to each of the trustees of the
Trust. The Trust is not part of a complex of mutual funds.
B-16
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF TRUSTEE FROM TRUST
- --------------- ----------
<S> <C>
Richard M. Burridge $ 0
Kenneth M. Arenberg 0
[Trustee #3] 3,000
[Trustee #4] 3,000
[Trustee #5] 3,000
</TABLE>
No shares of the Fund were outstanding on the date of this Statement of
Additional Information. However, prior to the commencement of public offering of
shares of the Fund, the Adviser or one or more of its principals will purchase
shares of the Fund at an initial price of $10.00 per share.
INVESTMENT ADVISORY SERVICES
The Burridge Group Inc. (the "Adviser") provides investment advisory
services to the Fund pursuant to an Investment Advisory Agreement dated
_________, 1996 (the "Advisory Agreement"). The Adviser is a [Delaware]
corporation founded as a registered investment adviser in March, 1986 by Richard
M. Burridge and Kenneth M. Arenberg. It employs a growth oriented investment
approach in creating a diversified portfolio of equities for corporate, public
and Taft-Hartley pension plans, endowments, foundations and private investors.
As of [October 31, 1996] it managed over [$1.3 ] billion in assets for clients,
including approximately [$420] million for taxable accounts.
The Adviser is privately owned by seven principals and has 24 employees.
Under the Advisory Agreement, the Adviser bears all ordinary costs and
expenses attendant to operating the Fund except the advisory fees, fees paid to
non-interested trustees, interest expenses, taxes, portfolio transaction costs,
and any extraordinary costs or expenses such as legal, accounting, or other
costs or expenses not incurred in the course of the Fund's ongoing operation.
For its management and advisory services, for providing shareholder and
investor servicing, and for the assumption of the Fund's ordinary operating
expenses, the Adviser is paid a monthly comprehensive fee from the Fund based on
the Fund's average daily net assets. Under the Advisory Agreement, the Fund pays
the Adviser a fee at the annual rate of 1.50% of the first $500 million of its
average daily net assets and 1.25% of any excess over $500 million.
The Agreements provide that the Adviser shall not be liable for any loss
suffered by the Trust or its shareholders as a consequence of any act of
omission in connection with investment
B-17
<PAGE>
advisory or portfolio services under the Advisory Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence on the part of the Adviser
in the performance of its duties or from reckless disregard by the Adviser of
its obligations and duties under the Advisory Agreement.
The Advisory Agreement may be continued from year to year only so long as
the continuance of each is approved annually (a) by the vote of a majority of
the trustees of the Trust who are not "interested persons" of the Trust or the
Adviser cast in person at a meeting called for the purpose of voting on such
approval, and (b) by the board of trustees of the Trust or by the vote of a
majority (as defined in the 1940 Act) of the outstanding shares of the Fund. The
Advisory Agreement is terminable without penalty, on 60 days' notice, by the
trustees of the Trust or by vote of a majority of the outstanding shares of the
Fund, or, on not less than 90 days' notice, by the Adviser. The Advisory
Agreement automatically terminates in the event of its assignment (as defined in
the 1940 Act).
The Adviser employs a team of investment professionals who participate in
investment strategy formulation and issue selection. The individual responsible
for overseeing the implementation of the Adviser's strategy for the Fund is
Richard M. Burridge.
Mr. Burridge is president and chief investment officer of the Adviser. He
has been engaged in the investment management business since 1974 and founded
the Adviser in 1986. Mr. Burridge holds a B.S. from the University of Colorado
and is a Chartered Financial Analyst.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Portfolio transactions are placed with those securities brokers and dealers
that the Adviser believes will provide the best value in transaction and
research services either in a particular transaction or over a period of time.
Although some transactions involve only brokerage services, many involve
research services as well.
In valuing brokerage services, the Adviser makes a judgment as to which
brokers are capable of providing the most favorable net price (not necessarily
the lowest commission considered alone) and the best execution in a particular
transaction. Best execution connotes not only general competence and reliability
of a broker, but specific expertise and effort of a broker in overcoming the
anticipated difficulties in fulfilling the requirements of particular
transactions, because the problems of execution and the required skills and
effort vary greatly among transactions.
In valuing research services, the Adviser makes a judgment of the
usefulness of the research information provided by a broker to the Adviser in
managing the Fund. Although the information, e.g., data or recommendations
concerning particular securities, sometimes relates to the specific transaction
placed with the broker, the research predominately consists of a wide variety of
information concerning companies, industries, investment strategy, and economic,
financial and political conditions and prospects useful to the Adviser in
advising the Fund and other accounts.
B-18
<PAGE>
The reasonableness of brokerage commissions paid in relation to transaction
and research services received is evaluated by the staff of the Adviser on an
ongoing basis. The general level of brokerage charges and other aspects of the
portfolio transactions for the Fund are reviewed periodically by Trust's board
of trustees.
The Adviser is the principal source of information and advice to the Fund
and is responsible for making and initiating the execution of investment
decisions. However, the board of trustees recognizes that it is important for
the Adviser, in performing its responsibilities to the Fund, to continue to
receive and evaluate the broad spectrum of economic and financial information
which many securities brokers have customarily furnished in connection with
brokerage transactions, and that in compensating brokers for their services, it
is in the interest of the Fund to take into account the value of the information
received for use in advising the Fund. Consequently, the Adviser is authorized
to allocate the orders placed by it on behalf of the Trust to brokers and
dealers who provide research services to the Trust or the Adviser and the
commission paid to a broker providing research services may be greater than the
amount of commission another broker would charge for the same transaction. The
extent, if any, to which receipt of such information may reduce the expenses of
the Adviser in providing management services to the Fund is not determinable. In
addition, the board of trustees understands that other clients of the Adviser
also may benefit from the information obtained for the Fund, in the same manner
that the Fund also may benefit from information obtained by the Adviser in
performing services for others.
Transactions of the Fund in the over-the-counter market and the third
market are executed with primary market makers acting as principals except where
it is believed that better prices and execution may be obtained from others.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to the policy of seeking the best price and
execution as stated above, sales of shares of the Fund by a broker-dealer may be
considered by the Adviser in the selection of broker-dealers to execute
portfolio transactions for the Fund.
Although investment decisions for the Fund are made independently from
those for other investment advisory clients of the Adviser, the same investment
decision may be made for both the Fund and one or more other advisory clients.
If both the Fund and other clients purchase or sell the same class of securities
on the same day, the transactions will be allocated as to amount and price in a
manner considered equitable to each.
[The Adviser may place brokerage transactions with brokers affiliated with
the distributor, __________________. Commissions paid to such brokers on any
transaction will not exceed those paid by the Fund in similar transactions to
other brokers.]
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions are discussed in the prospectus under the
headings "Purchasing Shares," "Redeeming Shares," "Shareholder Services," and
"Net Asset Value." All of that information is incorporated herein by reference.
B-19
<PAGE>
You may purchase (or redeem) shares of the Fund through investment dealers,
banks, or other institutions. However, these institutions may charge for their
services or place limitations on the extent to which you may use the services
offered by the Fund. The Fund imposes no charges other than those described in
the Prospectus and this Statement of Additional Information if shares are
purchased (or redeemed) directly from the Fund. The State of Texas requires that
the Fund disclose in this Statement of Additional Information, as a reminder to
such institutions, that registration as a dealer in Texas is required in order
to engage in that activity in Texas. The State of Nebraska requires that the
Fund disclose in this Statement of Additional Information, as a reminder to such
institutions, that although some such institutions may be exempt from
registration under Nebraska law, their agents or employees may be required to
register.
Net Asset Value. The net asset value of the shares of the Fund is
determined as of the close of regular session trading on the New York Stock
Exchange ("NYSE") (currently 3:00 p.m., Chicago time) each day the NYSE is open
for trading. The net asset value per share of the Fund is determined by dividing
the value of all its securities and other assets, less its liabilities, by the
number of shares of the Fund outstanding.
Investments are stated at current value. Securities listed or admitted to
trading on a national securities exchange or the Nasdaq National Market are
valued at the last sales price or, if there has been no sale that day, at the
most recent bid price. Other securities traded over-the-counter are valued at
the last reported bid price. Money market instruments with sixty days or less
remaining from the valuation date until maturity are valued on an amortized cost
basis. Securities or other assets for which market quotations are not readily
available will be valued at a fair value as determined in good faith by or under
the direction of Trust's board of trustees.
The NYSE is currently closed on weekends and on the following holidays: New
Year's Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day.
Redemption in Kind. The Fund intends to pay all redemptions in cash and is
obligated to redeem shares solely in cash up to the lesser of $250,000 or one
percent of the net assets of the Fund during any 90-day period for any one
shareholder. However, redemptions in excess of such limit may be paid wholly or
partly by a distribution in kind of readily marketable securities. If
redemptions are made in kind, the redeeming shareholders might incur brokerage
fees in selling the securities received in the redemptions.
TAXES
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, and thus not be subject to federal
income taxes on amounts which it distributes to shareholders.
B-20
<PAGE>
GENERAL INFORMATION
Administrator. Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202 (the "Administrator") is the Fund's Administrator. The Fund
Administration Servicing Agreement entered into between the Fund and the
Administrator relating to the Fund (the "Administration Agreement") will remain
in effect until terminated by either party. The Administration Agreement may be
terminated at any time, without the payment of any penalty, by the Board of
Trustees of the Fund upon the giving of ninety (90) days' written notice to the
Administrator, or by the Administrator upon the giving of ninety (90) days'
written notice to the Fund.
Under the Administration Agreement, the Administrator shall exercise
reasonable care and is not liable for any error or judgment or mistake of law or
for any loss suffered by the Corporation in connection with the performance of
the Administration Agreement, except a loss resulting from willful misfeasance,
bad faith or negligence on the part of the Administrator in the performance of
its duties under the Administration Agreement.
Custodian and Fund Accounting Agent. Firstar Trust Company ("Firstar"),
P.O. Box 701, Milwaukee, Wisconsin 53201, acts as Custodian of the securities
and other assets of the Fund. As Custodian, Firstar is responsible for, among
other things, safeguarding and controlling the Fund's cash and securities,
handling the receipt and delivery of securities, and collecting interest and
dividends on the Fund's investments. Firstar also performs portfolio accounting
services for the Fund. Firstar is not an affiliate of the Adviser or its
affiliates.
In addition the Fund has entered into a Fund Accounting Servicing Agreement
with Firstar Trust Company pursuant to which Firstar Trust Company has agreed to
maintain the financial accounts and records of the Fund and provide other
accounting services to the Fund.
Transfer Agent. Firstar Trust Company also serves as transfer agent and
dividend disbursing agent for the Fund under a Shareholder Servicing Agent
Agreement. As transfer and dividend disbursing agent, Firstar Trust Company has
agreed to (i) issue and redeem shares of the Fund, (ii) make dividend and other
distributions to shareholders of the Fund, (iii) respond to correspondence by
Fund shareholders and others relating to its duties, (iv) maintain shareholder
accounts, and (v) make periodic reports to the Fund.
Auditors. Arthur Andersen LLP, 33 West Monroe Street, Chicago, Illinois
60603 serves as the Trust's independent auditors, providing services including
(i) audit of the annual financial statements, (ii) assistance and consultation
in connection with Securities and Exchange Commission filings, and (iii) review
of the annual income tax returns filed on behalf of the Fund.
Distributor. The shares of the Fund are offered for sale on a continuous
basis through _________________ ("Distributor") without any sales commissions or
charges to the Fund or to their shareholders. The Distributor acts pursuant to a
written Distribution Agreement with the Trust which continues from year to year,
provided such continuance is approved annually (i) by a majority of the trustees
or by a majority of the outstanding voting securities of the affected Fund and
(ii) by a majority of the trustees who are not parties to the Agreement or
interested persons of
B-21
<PAGE>
any such party. The Adviser pays, as a part of its agreement to pay all of the
ordinary operating expenses of the Fund, all expenses in connection with
registration of shares of the Fund with the Securities and Exchange Commission
and fees in connection with registration of shares under the various state blue
sky laws and assumes the cost of preparation of prospectuses and other expenses.
The Adviser bears all sales and promotional expenses from its own resources.
As agent, the Distributor offers shares of the Fund to investors in states
where the shares are qualified for sale, at net asset value, without sales
commissions or other sales load. The Distributor offers the Fund's shares only
on a best-efforts basis.
[The Distributor or another broker affiliated with the Distributor may
receive brokerage commissions on purchases and sales of portfolio securities by
the Fund. Those amounts, if any, are described under "Portfolio Transactions and
Brokerage."]
FINANCIAL STATEMENTS
[Seed money balance sheet to be inserted by amendment.]
B-22
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Financial Statements included in Part A of this
registration statement:
None.
(2) Financial Statements included in Part B of this amendment:
Statements of Assets and Liabilities at ________________,
1996 (to be filed by amendment)
(b) Exhibits:
1 Agreement and Declaration of Trust of the registrant
2 Bylaws of the registrant
3 None
4 None (registrant does not issue share certificates.)
5 Form of Investment Advisory Agreement between the registrant
and The Burridge Group Inc. (To be filed by amendment)
6 None
7 None
8 Form of Custodian Agreement among the registrant, The Burridge
Group Inc. and Firstar Trust Company
9.1 Form of Transfer Agency Agreement among the registrant, The
Burridge Group Inc. and Firstar Trust Company
9.2 Form of Fund Accounting Services Agreement among the
registrant, The Burridge Group Inc. and Firstar Trust Company
9.3 Form of Fund Administration Servicing Agreement among the
registrant, The Burridge Group Inc. and Firstar Trust Company
10 Opinion and Consent of Counsel (to be filed by amendment)
11 Consent of Independent Auditors (to be filed by amendment)
12 None
<PAGE>
13 Form of Subscription Agreement between the registrant and The
Burridge Group Inc. (to be filed by amendment)
14 Burridge Funds Individual Retirement Account Custodial
Agreement and Disclosure Statement and related applications (to
be filed by amendment)
15 None
16 Not applicable
17 Not applicable
18 Form of account application (to be filed by amendment)
ITEM 25. Persons Controlled by or Under Common Control With Registrant.
The registrant does not consider that there are any persons directly or
indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the caption "Management of the Fund" and in the Statement of Additional
Information under the caption "Management of the Fund" and the first paragraph
under the caption "Investment Advisory Services" is incorporated herein by
reference.
ITEM 26. Number of Holders of Securities.
Number of Record Holders
Title of Series as of , 1996
--------------- ---------------------
Burridge Growth Fund 0
ITEM 27. Indemnification.
See Article VIII of registrant's Agreement and Declaration of Trust.
[In addition, Burridge Funds maintains a trustees and officers liability
insurance policy with maximum coverage of $____million under which Burridge
Funds and its trustees and officers will be named insureds.]
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Securities Act") may be permitted to trustees,
officers, and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer, or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
ITEM 28. Business and Other Connections of Investment Adviser.
The information in the prospectus in the second, third and fourth
paragraphs under the caption "Management of the Fund" is incorporated herein
by reference. For a description of other
<PAGE>
business, profession, vocation or employment of a substantial nature in which
any general partner, managing general partner, director or officer of The
Burridge Group Inc. has engaged during the last two years for his account or
in the capacity of director, officer, employee, partner or trustee, see the
information under the caption "Management of the Fund" in the statement of
additional information.
ITEM 29. Principal Underwriters.
(a) [insert name of distributor] (the "Distributor") also acts as
principal underwriter for the following investment companies:
(b) The following table sets forth information regarding each
director and executive officer of the Distributor:
Position and Offices Position and Offices
Name with Distributor with Registrant
------------------------- -------------------- --------------------
The principal business address of all officers and directors of the
Distributor is.
ITEM 30. Location of Accounts and Records.
(1) Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201
(2) Kenneth M. Arenberg
Burridge Funds
115 South LaSalle Street
Chicago, Illinois 60603
ITEM 31. Management Services.
Not applicable.
ITEM 32. Undertakings.
(a) Not applicable.
(b) Registrant undertakes to file a post-effective amendment, using
financial statements of the series designated Burridge Growth Fund that
need not be certified, within four to six months after effectiveness of
this registration statement.
(c) Registrant undertakes to furnish to each person to whom a
prospectus is delivered with a copy of the registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Chicago and state of
Illinois on September 9, 1996.
Burridge Funds
By /s/ Kenneth M. Arenberg
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following person in the
capacities and on the date indicated.
/s/ Kenneth M. Arenberg
Trustee and President (principal executive and accounting officer)
September 9, 1996
<PAGE>
Index of Exhibits Filed with this Registration Statement
--------------------------------------------------------
<TABLE>
<CAPTION>
Exhibit Sequential
number Exhibit page
- ------- ------- ----------
<C> <S> <C>
1 Agreement and Declaration of Trust of the registrant
2 Bylaws of the registrant
3 None
4 None (registrant does not issue share certificates.)
5 Form of Investment Advisory Agreement between the *
registrant and The Burridge Group Inc.
6 None
7 None
8 Form of Custodian Agreement among the registrant,
The Burridge Group Inc. and Firstar Trust Company
9.1 Form of Transfer Agency Agreement among the
registrant, The Burridge Group Inc. and
Firstar Trust Company
9.2 Form of Fund Accounting Services Agreement among
the registrant, The Burridge Group Inc. and
Firstar Trust Company
9.3 Form of Fund Administration Servicing Agreement among the
registrant, The Burridge Group Inc. and Firstar
Trust Company
10 Opinion and Consent of Counsel *
11 Consent of Independent Auditors *
12 None
13 Form of Subscription Agreement between the registrant and *
The Burridge Group Inc.
14 The Burridge Funds Individual Retirement Account Custodial
Agreement and Disclosure Statement and Related applications *
15 None
16 Not applicable
17 Not applicable
18 Form of account application *
* To be filed by amendment.
</TABLE>
<PAGE>
EXHIBIT 1
BURRIDGE FUNDS
------------------------
AGREEMENT AND DECLARATION OF TRUST
------------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 29th
day of August, 1996 by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner as Trustees hereunder, IN TRUST to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders from
time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Name
- ----
Section 1. This Trust shall be known as "Burridge Funds", and the Trustees
shall conduct the business of the Trust under that name or any other name as
they may from time to time determine.
Definitions
- -----------
Section 2. Whenever used herein, unless otherwise required by the context
or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust established
by this Agreement and Declaration of Trust, as amended from time to time;
<PAGE>
(b) "Trustees" refers to the Trustee or Trustees of the Trust named
herein or elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided
from time to time or, if more than one series of Shares is authorized by
the Trustees, the equal proportionate units into which each series of
Shares shall be divided from time to time or, if more than one class of
Shares of any series is authorized by the Trustees, the equal proportionate
units into which each class of such series of Shares shall be divided from
time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section 2(a)(42)
of the 1940 Act, whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
ARTICLE II
PURPOSE
The purpose of the Trust is to engage in the business of a management
investment company and to provide investors a managed investment primarily in
securities, commodities and debt instruments.
ARTICLE III
SHARES
Division of Beneficial Interest
- -------------------------------
Section 1. The Shares of the Trust shall be issued in one or more series as
the Trustees may, without Shareholder approval, authorize. The Trustees may,
without Shareholder approval, divide the Shares of any series into two or more
classes, Shares of each such class having such preferences or special or
relative rights or privileges (including conversion rights, if any) as the
2
<PAGE>
Trustees may determine and as are not inconsistent with any provision of
this Declaration of Trust. Each series shall be preferred over all other series
in respect of the assets allocated to that series. The beneficial interest in
each series shall at all times be divided into Shares, without par value, each
of which shall, except as the Trustees may otherwise authorize in the case of
any series that is divided into two or more classes, represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. The number of Shares
authorized shall be unlimited, and the Shares so authorized may be represented
in part by fractional shares. The Trustees may from time to time divide or
combine the Shares of any series or class into a greater or lesser number
without thereby changing the proportionate beneficial interests in the series or
class.
Ownership of Shares
- -------------------
Section 2. The ownership of Shares shall be recorded on the books of the
Trust or its transfer or similar agent. No certificates certifying the ownership
of Shares shall be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider appropriate for
the issuance of Share certificates, the transfer of Shares and similar matters.
The record books of the Trust as kept by the Trust or any transfer or similar
agent of the Trust, as the case may be, shall be conclusive as to who are the
Shareholders of each series and class and as to the number of Shares of each
series and class held from time to time by each Shareholder.
Investments in the Trust; Assets of the Series
- ----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so handled upon the books
of account of the Trust and are herein referred to as "assets of" such series.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to receive,
purchase or subscribe for any additional Shares or other securities issued by
the Trust.
3
<PAGE>
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
Section 5. Shares shall be deemed to be personal property giving only
the rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms hereof and to have become a party hereto. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust. Ownership of Shares shall
not entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust, shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
Derivative Claims
- -----------------
Section 6. No Shareholder shall have the right to bring or maintain any
court action, proceeding or claim on behalf of this Trust or any series without
first making demand on the Trustees requesting the Trustees to bring or maintain
such action, proceeding or claim. Such demand shall be excused only when the
plaintiff makes a specific showing that irreparable injury to the Trust or
series would otherwise result. Such demand shall be mailed to the Secretary of
the Trust at the Trust's principal office and shall set forth in reasonable
detail the nature of the proposed court action, proceeding or claim and the
essential facts relied upon by the Shareholder to support the allegations made
in the demand. The Trustees shall consider such demand within 45 days of its
receipt by the Trust. In their sole discretion, the Trustees may submit the
matter to a vote of Shareholders of the Trust or series, as appropriate. Any
decision by the Trustees to bring, maintain or settle (or not to bring, maintain
or settle) such court action, proceeding or claim, or to submit the matter to a
vote of Shareholders shall be made by the Trustees in their business judgment
and shall be binding upon the Shareholders.
ARTICLE IV
THE TRUSTEES
Election; Removal
- -----------------
Section 1. The number of Trustees shall be fixed by the Trustees, except
that, subsequent to any sale of Shares pursuant to a public offering, there
shall be not less than three Trustees. Any vacancies occurring in the Board of
Trustees may be filled by the Trustees if, immediately after filling any such
vacancy, at least two-thirds of the Trustees then holding office shall have been
elected to such office by the Shareholders. In the event that at any time less
than a majority of the Trustees then holding office were elected to such office
by the Shareholders, the Trustees shall call a meeting of Shareholders for the
purpose of electing Trustees. Each Trustee elected by
4
<PAGE>
the Shareholders or by the Trustees shall serve until the next meeting of
Shareholders called for the purpose of electing Trustees and until the election
and qualification of his or her successor, or until he or she sooner dies,
resigns or is removed. The initial Trustees, each of whom shall serve until the
first meeting of Shareholders at which Trustees are elected and until his or her
successor is elected and qualified, or until he or she sooner dies, resigns or
is removed, shall be John Kingston, III and such other persons as the Trustee or
Trustees then in office shall, prior to any sale of Shares pursuant to a public
offering, appoint. By vote of a majority of the Trustees then in office, the
Trustees may remove a Trustee with or without cause. At any meeting called for
the purpose, a Trustee may be removed, with or without cause, by vote of the
holders of two-thirds of the outstanding Shares.
Effect of Death, Resignation, etc. of a Trustee
- -----------------------------------------------
Section 2. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the power and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent or a Shareholder services agent,
or both, provide for the distribution of Shares by the Trust, through one or
more principal underwriters or otherwise, set record dates for the determination
of Shareholders with respect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest in securities, options, futures contracts,
options on futures contracts and other property, and to hold cash
uninvested;
5
<PAGE>
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities or other assets;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depository or a nominee or nominees or otherwise;
(f) Subject to the provisions of Article III, Section 3, to allocate
assets, liabilities and expenses of the Trust to a particular series of
Shares or to apportion the same among two or more series, provided that any
liabilities or expenses incurred by a particular series of Shares shall be
payable solely out of the assets of that series; and to the extent
necessary or appropriate to give effect to the preferences and special or
relative rights and privileges of any classes of Shares, to allocate
assets, liabilities, income and expenses of a series to a particular class
of Shares of that series or to apportion the same among two or more classes
of Shares of that series;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security of which
is or was held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust on any matter in controversy, including but not limited
to claims for taxes;
6
<PAGE>
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds, securities or other assets;
(1) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge
the Trust property or any part thereof to secure any of or all of such
obligations or obligations incurred pursuant to subparagraph (k) hereof;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters or independent contractors of the Trust individually
against all claims and liabilities of every nature arising by reason of
holding, being or having held any such office or position, or by reason of
any action alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser or
manager, principal underwriter or independent contractor, including any
action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such person
against such liability; and
(n) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as otherwise
provided herein or from time to time in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
the Trustees (a quorum being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office.
Payment of Expenses by Trust
- ----------------------------
Section 4. The Trustees are authorized to pay or to cause to be paid out of
the principal or income of the Trust, or partly out of principal and partly out
of income, as they deem fair, all
7
<PAGE>
expenses, fees, charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof, including, but not
limited to, the Trustees' compensation and such expenses and charges for the
services of the Trust's officers, employees, investment adviser or manager,
principal underwriter, auditor, counsel, custodian, transfer agent, Shareholder
services agent and such other agents or independent contractors, and such other
expenses and charges, as the Trustees may deem necessary or proper to incur,
provided, however, that all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with a particular series of Shares, as
determined by the Trustees, shall be payable solely out of the assets of that
series.
Ownership of Assets of the Trust
- --------------------------------
Section 5. Title to all of the assets of each series of Shares and of the
Trust shall at all times be considered as vested in the Trustees.
Advisory, Management and Distribution
- -------------------------------------
Section 6. Subject to a favorable Majority Shareholder Vote, the Trustees
may, at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with The Burridge Group Inc., or any other
partnership, corporation, trust, association or other organization (the
"Adviser"), every such contract to comply with such requirements and
restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine, including, without limitation,
authority to determine from time to time what investments shall be purchased,
held, sold or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested, and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract with the Adviser
or any other corporation, trust, association or other organization, appointing
it exclusive or nonexclusive distributor or principal underwriter for the
Shares, every such contract to comply with such requirements and restrictions as
may be set forth in the By-Laws; and any such contract may contain such other
terms interpretive of or in addition to said requirements and restrictions as
the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
corporation, trust, association or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, shareholder services or other agency contract may have been or
may hereafter be made, or that any organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the Trust, or that
8
<PAGE>
(ii) any corporation, trust, association or other organization with
which an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, Shareholder services or other agency
contract may have been or may hereafter be made also has an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, shareholder services or other agency contract with one or more
other corporations, trusts, associations or other organizations, or has
other business or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Voting Powers
- -------------
Section 1. The Shareholders shall have power to vote only (i) for the
election of Trustees as provided in Article IV, Section 1, (ii) with respect to
any Adviser as provided in Article IV, Section 6, (iii) with respect to any
termination of this Trust to the extent and as provided in Article IX, Section
4, (iv) with respect to any amendment of this Declaration of Trust to the extent
and as provided in Article IX, Section 7, and (v) with respect to such
additional matters relating to the Trust as may be required by law, this
Declaration of Trust, the By-Laws or any registration of the Trust with the
Securities and Exchange Commission (or any successor agency) or any state, or as
the Trustees may consider necessary or desirable. Each whole Share (or
fractional share) outstanding on the record date established in accordance with
the By-Laws shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional Share shall be entitled to a proportionate
fractional vote. Notwithstanding any other provision of this Declaration of
Trust, on any matter submitted to a vote of Shareholders, all Shares of the
Trust then entitled to vote shall be voted in the aggregate as a single class
without regard to series or class except: (1) when required by the 1940 Act or
when the Trustees shall have determined that the matter affects one or more
series or classes materially differently, Shares shall be voted by individual
series or class; and (2) when the Trustees have determined that the matter
affects only the interests of one or more series or classes, then only
Shareholders of such series or classes shall be entitled to vote thereon. There
shall be no cumulative voting in the election of Trustees.
Shares may be voted in person or by proxy. A proxy with respect to Shares
held in the name of two or more persons shall be valid if executed by any one of
them unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to be
executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger. The placing of a shareholder's name on a proxy
pursuant to telephone or electronically transmitted instructions obtained
pursuant to procedures reasonably designed to
9
<PAGE>
verify that such instructions have been authorized by such shareholder shall
constitute execution of such proxy by or on behalf of such shareholder in
writing. At all meetings of Shareholders, unless inspectors of election have
been appointed, all questions relating to the qualification of voters and the
validity of proxies and the acceptance or rejection of votes shall be decided by
the chairman of the meeting. Unless otherwise specified in the proxy, the proxy
shall apply to all Shares of each series of the Trust owned by the Shareholder.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the By-Laws to be taken by Shareholders.
Voting Power and Meetings
- -------------------------
Section 2. Meetings of Shareholders of the Trust or of any series or class
may be called by the Trustees or such other person or persons as may be
specified in the By-Laws and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Meetings of Shareholders of
the Trust or of any series or class shall be called by the Trustees or such
other person or persons as may be specified in the By-Laws upon written
application. The Shareholders shall be entitled to at least seven days' written
notice of any meeting of the Shareholders.
Quorum and Required Vote
- ------------------------
Section 3. Shares representing thirty percent of the votes entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of Trust
permits or requires that holders of any series or class shall vote as a series
or class, then Shares representing thirty percent of the votes of that series or
class entitled to vote shall be necessary to constitute a quorum for the
transaction of business by that series or class. Any lesser number, however,
shall be sufficient for adjournments. Any adjourned session or sessions may be
held within a reasonable time after the date set for the original meeting
without the necessity of further notice. Except when a larger vote is required
by any provision of this Declaration of Trust or the By-Laws, Shares
representing a majority of the votes voted shall decide any questions and a
plurality shall elect a Trustee, provided that where any provision of law or of
this Declaration of Trust permits or requires that the holders of any series or
class shall vote as a series or class, then Shares representing a majority of
the votes of that series or class voted on the matter (or a plurality with
respect to the election of a Trustee) shall decide that matter insofar as that
series or class is concerned.
Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a meeting
if a majority of Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of
10
<PAGE>
Shareholders. Such consent shall be treated for all purposes as a vote taken at
a meeting of Shareholders.
Additional Provisions
- ---------------------
Section 5. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES,
AND DETERMINATION OF NET ASSET VALUE
Distributions
- -------------
Section 1. The Trustees may, but need not, each year distribute to the
Shareholders of each series or class such income and gains, accrued or realized,
as the Trustees may determine, after providing for actual and accrued expenses
and liabilities (including such reserves as the Trustees may establish)
determined in accordance with good accounting practices. The Trustees shall have
full discretion to determine which items shall be treated as income and which
items as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates and as of a record date or dates determined by the Trustees. At
any time and from time to time in their discretion, the Trustees may distribute
to the Shareholders of any one or more series or classes as of a record date or
dates determined by the Trustees, in Shares, in cash or otherwise, all or part
of any gains realized on the sale or disposition of property of the series or
otherwise, or all or part of any other principal of the Trust attributable to
the series. In the case of any series not divided into two or more classes of
Shares, each distribution pursuant to this Section 1 shall be made ratably
according to the number of Shares of the series held by the several Shareholders
on the applicable record date thereof, provided that no distribution need be
made on Shares purchased pursuant to orders received, or for which payment is
made, after such time or times as the Trustees may determine. In the case of any
series divided into two or more classes, each distribution pursuant to this
Section 1 may be made in whole or in such parts as the Trustees may determine to
the Shareholders of any one or more classes, and the distribution to the
Shareholders of any class shall be made ratably according to the number of
Shares of the class (but need not be made ratably according to the number of
Shares of the series, considered without regard to class) held by the several
Shareholders on the record date thereof, provided that no distribution need be
made on Shares purchased pursuant to orders received, or for which payment is
made, after such time or times as the Trustees may determine. Any such
distribution paid in Shares will be paid at the net asset value thereof as
determined in accordance with Section 7 of this Article VI.
11
<PAGE>
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his or her certificates, if any, for such Shares,
in proper form for transfer, at the office of the Trust or at a principal office
of a transfer agent appointed by the Trust, redeem his or her Shares for the net
asset value thereof determined and computed in accordance with the provisions of
this Section 2 and the provisions of Section 7 of this Article VI.
Upon receipt by the Trust or its transfer agent of such written request for
redemption of Shares, such Shares shall be redeemed at the net asset value per
share of the appropriate series next determined after such Shares are tendered
in proper order for transfer to the Trust or determined as of such other time
fixed by the Trustees as may be permitted or required by the 1940 Act, provided
that no such tender shall be required in the case of Shares for which a
certificate or certificates have not been issued, and in such case such Shares
shall be redeemed at the net asset value per share of the appropriate series
next determined after such request has been received or determined at such other
time fixed by the Trustees as may be permitted or required by the 1940 Act.
The obligation of the Trust to redeem its Shares of each series or class as
set forth above in this Section 2 shall be subject to the conditions that during
any time of emergency, as hereinafter defined, such obligation may be suspended
by the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares, the applicable net asset
value of which would but for such suspension be calculated as of a time during
such period. Upon such withdrawal, the Trust shall return to the Shareholder the
certificates therefor, if any. For the purposes of any such suspension, "time of
emergency" shall mean, either with respect to all Shares or any series of
Shares, any period during which:
a. the New York Stock Exchange is closed other than for customary
weekend and holiday closings; or
b. the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations of the
Securities and Exchange Commission, either that trading on the New York
Stock Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not reasonably
practicable or (ii) it is not reasonably practicable for the Trust fairly
to determine the current value of its net assets; or
c. the suspension or postponement of such obligations is permitted
by order of the Securities and Exchange Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance with
such other methods, upon such other terms and subject to such other conditions
as the Trustees may from
12
<PAGE>
time to time authorize at a price not exceeding the net asset value of such
Shares in effect when the purchase or repurchase or any contract to purchase or
repurchase is made.
Payment in Kind
- ---------------
Section 3. Subject to any generally applicable limitation imposed by the
Trustees, any payment on redemption of Shares may, if authorized by the
Trustees, be made wholly or partly in kind, instead of in cash. Such payment in
kind shall be made by distributing securities or other property constituting, in
the opinion of the Trustees, a fair representation of the various types of
securities and other property then held by the series of Shares being redeemed
(but not necessarily involving a portion of each of the series' holdings) and
taken at their value used in determining the net asset value of the Shares in
respect of which payment is made.
Redemptions at the Option of the Trust
- --------------------------------------
Section 4. The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof as determined in
accordance with Section 7 of Article VI of this Declaration of Trust: (i) if at
such time such Shareholder owns fewer Shares than, or Shares having an aggregate
net asset value of less than, an amount determined from time to time by the
Trustees; or (ii) to the extent that such Shareholder owns Shares of a
particular series of Shares equal to or in excess of a percentage of the
outstanding Shares of that series (determined without regard to class)
determined from time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage equal to or in
excess of such percentage of the aggregate number of outstanding Shares of the
Trust or the aggregate net asset value of the Trust determined from time to time
by the Trustees.
Dividends, Distributions, Redemptions and Repurchases
- -----------------------------------------------------
Section 5. No dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any series) with respect
to, nor any redemption or repurchase of, the Shares of any series (or of any
class) shall be effected by the Trust other than from the assets of such series
(or of the series of which such class is a part).
Additional Provisions Relating to Redemptions and Repurchases
- -------------------------------------------------------------
Section 6. The completion of redemption of Shares shall constitute a full
discharge of the Trust and the Trustees with respect to such shares, and the
Trustees may require that any certificate or certificates issued by the Trust to
evidence the ownership of such Shares shall be surrendered to the Trustees for
cancellation or notation.
Determination of Net Asset Value
- --------------------------------
Section 7. The term "net asset value" of the Shares of each series or
class shall mean: (i) the value of all the assets of such series or class; (ii)
less the total liabilities of such series or class; (iii) divided by the number
of Shares of such series or class outstanding, in each case at the time of each
determination. The "number of Shares of such series or class outstanding" for
the
13
<PAGE>
purposes of such computation shall be exclusive of any Shares of such series or
class to be redeemed and not then redeemed as to which the redemption price has
been determined, but shall include Shares of such series or class presented for
repurchase and not then repurchased and Shares of such series or class to be
redeemed and not then redeemed as to which the redemption price has not been
determined and Shares of such series or class the sale of which has been
confirmed. Any fractions involved in the computation of net asset value per
share shall be adjusted to the nearer cent unless the Trustees shall determine
to adjust such fractions to a fraction of a cent.
The Trustees, or any officer or officers or agent of this Trust designated
for the purpose by the Trustees, shall determine the net asset value of the
Shares of each series or class, and the Trustees shall fix the times as of which
the net asset value of the Shares of each series or class shall be determined
and shall fix the periods during which any such net asset value shall be
effective as to sales, redemptions and repurchases of, and other transactions
in, the Shares of such series or class, except as such times and periods for any
such transaction may be fixed by other provisions of this Declaration of Trust
or by the By-Laws.
In valuing the portfolio investments of any series or class for
determination of net asset value per share of such series or class:
(a) Each security for which market quotations are readily available shall
be valued at current market value determined by methods specified by
the Board of Trustees;
(b) Each other security, including any security within (a) for which the
specified price does not appear to represent a dependable quotation
for such security as of the time of valuation, shall be valued at a
fair value as determined in good faith by the Trustees;
(c) Any cash on hand shall be valued at the face amount thereof;
(d) Any cash on deposit, accounts receivable, and cash dividends and
interest declared or accrued and not yet received, any prepaid
expenses, and any other current asset shall be valued at the face
amount thereof, unless the Trustees shall determine that any such item
is not worth its face amount, in which case such asset shall be valued
at a fair value determined in good faith by the Trustees; and
(e) Any other asset shall be valued at a fair value determined in good
faith by the Trustees.
Notwithstanding the foregoing, short-term debt obligations, commercial paper and
repurchase agreements may be, but need not be, valued on the basis of quoted
yields for securities of comparable maturity, quality and type, or on the basis
of amortized cost.
Liabilities of any series or class for accounts payable for investments
purchased and for Shares tendered for redemption and not then redeemed as to
which the redemption price has been
14
<PAGE>
determined shall be stated at the amounts payable therefor. In determining the
net asset value of any series or class, the person or persons making such
determination on behalf of the Trust may include in liabilities such reserves,
estimated accrued expenses and contingencies as such person or persons may in
its, his or their best judgment deem fair and reasonable under the
circumstances. Any income dividends and gains distributions payable by the Trust
shall be deducted as of such time or times on the record date therefor as the
Trustees shall determine.
The manner of determining the net assets of any series or class or of
determining the net asset value of the Shares of any series or class may from
time to time be altered as necessary or desirable in the judgment of the
Trustees to conform to any other method prescribed or permitted by any
applicable law or regulation.
Determinations under this Section 7 made in good faith and in accordance
with the provisions of the 1940 Act shall be binding on all parties concerned.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.
Limitation of Liability
- -----------------------
Section 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, adviser or
principal underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, but nothing herein contained shall protect
any Trustee against any liability to which he or she would otherwise be subject
by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
15
<PAGE>
ARTICLE VIII
INDEMNIFICATION
Trustees, Officers, etc.
- ------------------------
Section 1. The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil, criminal, administrative or investigative, and any
appeal therefrom, before any court or administrative or legislative body, in
which such Covered Person may be or may have been involved as a party or
otherwise or with which such person may be or may have been threatened, while in
office or thereafter, by reason of being or having been such a Covered Person,
except that no Covered Person shall be indemnified against any liability to the
Trust or its Shareholders to which such Covered Person would otherwise be
subject by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.
Expenses, including counsel fees so incurred by any such Covered Person
(but excluding amounts paid in satisfaction of judgments, in compromise or as
fines or penalties), may be paid from time to time by the Trust in advance of
the final disposition of any such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Covered Person to repay amounts so paid to
the Trust if it is ultimately determined that indemnification of such expenses
is not authorized under this Article, provided that (a) such Covered Person
shall provide security for his undertaking, (b) the Trust shall be insured
against losses arising by reason of such Covered Person's failure to fulfill his
undertaking or (c) a majority of the Trustees who are disinterested persons and
who are not Interested Persons (provided that a majority of such Trustees then
in office act on the matter), or independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts (but not a full
trial-type inquiry), that there is reason to believe such Covered Person
ultimately will be entitled to indemnification.
Compromise Payment
- ------------------
Section 2. As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication in a decision
on the merits by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office,
indemnification shall be provided if (a) approved as in the best interest of the
Trust, after notice that it involves such indemnification, by at least a
majority of the Trustees who are disinterested persons and are not Interested
Persons (provided that a majority of such Trustees then in office act on the
matter), upon a determination, based upon a review of readily available facts
(but not a
16
<PAGE>
full trial-type inquiry) that such Covered Person is not liable to the Trust or
its Shareholders by reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts (but
not a full-trial type inquiry) to the effect that such indemnification would not
protect such Covered Person against any liability to the Trust to which such
Covered Person would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office.
Any approval pursuant to this Section shall not prevent the recovery from
any Covered Person of any amount paid to such Covered Person in accordance with
this Section as indemnification if such Covered Person is subsequently
adjudicated by a court of competent jurisdiction to have been liable to the
Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office.
Indemnification Not Exclusive; Definitions
- ------------------------------------------
Section 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which any such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall include
such person's heirs, executors and administrators, and a "disinterested person"
is a person against whom none of the actions, suits or other proceedings in
question or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this article shall
affect any rights to indemnification to which personnel of the Trust, other than
Trustees and officers, and other persons may be entitled by contract or
otherwise under law, nor the power of the Trust to purchase and maintain
liability insurance on behalf of such persons.
Shareholders
- ------------
Section 4. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled to
be held harmless from and indemnified against all loss and expense arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
17
<PAGE>
ARTICLE IX
MISCELLANEOUS
Trustees, Shareholders, etc. Not Personally Liable; Notice
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series of Shares shall look only to the
assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim; and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
- ------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
18
<PAGE>
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least two-thirds of the Shares of each series entitled
to vote or by the Trustees by written notice to the Shareholders. Any series of
Shares may be terminated at any time by vote of Shareholders holding at least
two-thirds of the votes represented by the outstanding Shares of such series
entitled to vote or by the Trustees by written notice to the Shareholders of
such series.
Upon termination of the Trust or of any one or more series of Shares, after
paying or otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated as may be determined by the Trustees, the
Trust shall in accordance with such procedures as the Trustees consider
appropriate reduce the remaining assets to distributable form in cash or shares
or other securities, or any combination thereof, and distribute the proceeds to
the Shareholders of the series involved, ratably according to the number of
Shares of such series held by the several Shareholders of such series on the
date of termination, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes of
Shares of that series, provided that any distribution to the Shareholders of a
particular class of Shares shall be made to such Shareholders pro rata in
proportion to the number of Shares of such class held by each of them.
Filing of Copies, References, Headings
- --------------------------------------
Section 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Clerk of the City of Boston, as well as any other
governmental office where such filing may from time to time be required. Anyone
dealing with the Trust may rely on a certificate by an officer of the Trust as
to whether or not any such amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions such as "herein,"
"hereof" and "hereunder," shall be deemed to refer to this instrument as amended
or affected by any such amendments. Headings are placed herein for convenience
of reference only and shall not be taken as a part hereof or control or affect
the meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts, each of which shall be deemed an
original.
Applicable Law
- --------------
Section 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts
19
<PAGE>
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
Amendments
- ----------
Section 7. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
so to do by a vote of the holders of a majority of the votes represented by
outstanding Shares entitled to vote, except that an amendment which shall affect
the holders of one or more series or classes of Shares but not the holders of
all outstanding series and classes shall be authorized by vote of holders of a
majority of the votes represented by outstanding Shares entitled to vote of each
series and class affected and no vote of Shareholders of a series or class not
affected shall be required. Amendments having the purpose of changing the name
of the Trust or of supplying any omission, curing any ambiguity or curing,
correcting or supplementing any defective or inconsistent provision contained
herein shall not require authorization by Shareholder vote.
IN WITNESS WHEREOF the undersigned has hereunto set his hand in the City of
Boston, Massachusetts for himself and his assigns, as of this 29th day of
August, 1996.
/s/ John Kingston, III
-------------------------------
John Kingston, III
One International Place
Boston, Massachusetts 02110
THE COMMONWEALTH OF MASSACHUSETTS
Boston ss. August 29, 1996
Then personally appeared the above-named Trustee and acknowledged the
foregoing instrument to be his free act and deed, before me,
-----------------------------
Notary Public
My commission expires: ___
(Notary's Seal)
The address of the Trust is 115 South LaSalle Street, Chicago, Illinois 60603.
The Resident Agent of the Trust is CT Corporation, 2 Oliver Street, Boston,
Massachusetts 02109.
20
<PAGE>
EXHIBIT 2
BURRIDGE FUNDS
BYLAWS
------
<PAGE>
Table of Contents
-----------------
Section 1. Agreement and Declaration of Trust and Principal Office.... 1
1.1 Agreement and Declaration of Trust...................... 1
1.2 Principal Office of the Trust........................... 1
Section 2. Shareholders............................................... 1
2.1 Shareholder Meetings.................................... 1
2.2 Place of Meetings....................................... 1
2.3 Notice of Meetings...................................... 1
2.4 Ballots................................................. 2
2.5 Proxies................................................. 2
Section 3. Trustees................................................... 2
3.1 Committees.............................................. 2
3.2 Regular Meetings........................................ 2
3.3 Special Meetings........................................ 2
3.4 Notice.................................................. 2
3.5 Quorum.................................................. 2
3.6 Trustee Retirement...................................... 3
Section 4. Officers and Agents........................................ 3
4.1 Enumeration; Qualification.............................. 3
4.2 Powers.................................................. 3
4.3 Election................................................ 3
4.4 Tenure.................................................. 3
4.5 President............................................... 3
4.6 Vice Presidents......................................... 3
4.7 Treasurer............................................... 3
<PAGE>
4.8 Secretary.........................................................4
Section 5. Resignations and Removals..........................................4
Section 6. Vacancies..........................................................4
Section 7. Shares of Beneficial Interest......................................4
7.1 Share Certificates................................................4
7.2 Loss of Certificates..............................................5
7.3 Discontinuance of Issuance of Certificates........................5
Section 8. Record Date and Closing Transfer Books.............................5
Section 9. Seal...............................................................5
Section 10. Execution of Papers................................................5
Section 11. Fiscal Year........................................................5
Section 12. Amendments.........................................................5
ii
<PAGE>
BYLAWS
------
OF
--
BURRIDGE FUNDS
--------------
Section 1. Agreement and Declaration of
Trust and Principal Office
--------------------------
1.1 Agreement and Declaration of Trust. These Bylaws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of Burridge Funds, a Massachusetts business trust
established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust shall be
located in Chicago, Illinois.
Section 2. Shareholders.
-----------------------
2.1. Shareholder Meetings. A meeting of the shareholders of the Trust or of any
one or more series or classes of shares may be called at any time by the
Trustees, by the chairman, the president or, if the Trustees, the chairman and
the president shall fail to call any meeting of shareholders for a period of 30
days after written application of one or more shareholders who hold at least 10%
of all outstanding shares of the Trust, if shareholders of all series are
required under the Declaration of Trust to vote in the aggregate and not by
individual series at such meeting, or of any series or class, if shareholders of
such series or class are entitled under the Declaration of Trust to vote by
individual series or class at such meeting, then such shareholders may call such
meeting. If the meeting is a meeting of the shareholders of one or more series
or classes of shares, but not a meeting of all shareholders of the Trust, then
only the shareholders of such one or more series or classes shall be entitled to
notice of and to vote at the meeting. Each call of a meeting shall state the
place, date, hour and purposes of the meeting.
2.2 Place of Meetings. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
2.3 Notice of Meetings. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or her or at his or her residence or
usual place of business or by mailing it, postage prepaid, and addressed to such
shareholder at his or her address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary or by an
officer designated by the Trustees. No notice of any meeting of shareholders
need be given to a shareholder if a written waiver of notice, executed before or
after the meeting by such shareholder or his or her attorney thereunto duly
authorized, is filed with the records of the meeting.
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2.4 Ballots. No ballot shall be required for any election unless requested by a
shareholder present or represented at the meeting and entitled to vote in the
election.
2.5. Proxies. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted. Unless
otherwise specifically limited by their terms, such proxies shall entitle the
holders thereof to vote at any adjournment of such meeting but shall not be
valid after the final adjournment of such meeting.
Section 3. Trustees
-------------------
3.1 Committees. The Trustees may appoint from their number an executive
committee and other committees. Except as the Trustees may otherwise determine,
any such committee may make rules for conduct of its business. Unless otherwise
provided by resolution of the Board of Trustees, the Executive Committee shall
have and may exercise all powers of the Board of Trustees in the management of
the business and affairs of the Trust that may lawfully be exercised by an
executive committee, except the power to recommend to shareholders any matter
requiring shareholder approval, amend the Declaration of Trust or By-Laws, or
approve any merger or share exchange that does not require shareholder approval.
3.2 Regular Meetings. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees.
3.3 Special Meetings. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting; when called by the
chairman, the president or the treasurer or by two or more Trustees, sufficient
notice thereof being given to each Trustee by the secretary or an assistant
secretary or by the officer or one of the Trustees calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail
at least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him or her
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor a
waiver of a notice need specify the purposes of the meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in
office shall constitute a quorum; provided, however, a quorum shall not be less
than two. Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
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3.6 Trustee Retirement. Any Trustee shall retire as a Trustee as of the end of
the calendar year in which the Trustee attains the age of 75 years.
Section 4. Officers and Agents
------------------------------
4.1 Enumeration; Qualification. The officers of the Trust shall be a president,
a treasurer, a secretary and such other officers, if any, as the Trustees from
time to time may in their discretion elect or appoint. The Trust may also have
such agents, if any, as the Trustees from time to time may in their discretion
appoint. Any officer may be but none need be a Trustee or shareholder. Any two
or more offices may be held by the same person.
4.2 Powers. Subject to the other provisions of these Bylaws, each officer shall
have, in addition to the duties and powers herein and in the Declaration of
Trust set forth, such duties and powers as are commonly incident to his or her
office as if the Trust were organized as a Massachusetts business corporation
and such other duties and powers as the Trustees may from time to time
designate, including without limitation the power to make purchases and sales of
portfolio securities of the Trust pursuant to recommendations of the Trust's
investment adviser in accordance with the policies and objectives of the Trust
set forth in its prospectus and with such general or specific instructions as
the Trustees may from time to time have issued.
4.3 Election. The president, the treasurer and the secretary shall be elected
annually by the Trustees. Other officers, if any, may be elected or appointed by
the Trustees at any time.
4.4 Tenure. The president, the treasurer and the secretary shall hold office
until their respective successors are chosen and qualified, or in each case
until he or she sooner dies, resigns, is removed or becomes disqualified. Each
other officer shall hold office at the pleasure of the Trustees. Each agent
shall retain his or her authority at the pleasure of the Trustees.
4.5 President. The president shall be the chief executive officer of the Trust
and shall preside at all shareholders' meetings and at all meetings of the Board
of Trustees.
4.6 Vice Presidents. In the absence of the president, or in the event of the
president's inability or refusal to act, the vice president (or in the event
there be more than one vice president, the vice presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting shall
have all the powers of the president. Any vice president shall have such other
duties and powers as shall be designated from time to time by the Trustees or
the president.
4.7 Treasurer. The treasurer shall be the chief financial and accounting
officer of the Trust and subject to any arrangement made by the Trustees with a
bank or trust company or other organization as custodian or transfer or
shareholder services agent, shall be in charge of its valuable papers and its
books of account and accounting records, and shall have such duties and powers
as shall be designated from time to time by the Trustees or the president. Any
assistant treasurer shall have such duties and powers as shall be designated
from time to time by the Trustees.
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4.8 Secretary. The secretary shall record all proceedings of the shareholders
and the Trustees in books to be kept therefor, which books shall be kept at the
principal office of the Trust. In the absence of the secretary from any meeting
of shareholders or Trustees, an assistant secretary, or if there be none or he
or she is absent, a temporary clerk chosen at the meeting, shall record the
proceedings thereof in the aforesaid books.
Section 5. Resignations and Removals
------------------------------------
Any Trustee, officer or board committee member may resign at any time by
delivering his or her resignation in writing to the president, the treasurer or
the secretary or to a meeting of the Trustees. The Trustees may remove any
officer elected by them with or without cause by the vote of a majority of the
Trustees then in office. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee, officer, or board committee member
resigning, and no officer, or board committee member removed, shall have any
right to any compensation for any period following his or her resignation or
removal, or any right to damages on account of such removal.
Section 6. Vacancies
--------------------
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Shares of Beneficial Interest
----------------------------------------
7.1 Share Certificates. No certificates certifying the ownership of shares shall
be issued except as the Trustees may otherwise authorize. In the event that the
Trustees authorize the issuance of share certificates, subject to the provisions
of Section 7.3, each shareholder shall be entitled to a certificate stating the
number of whole shares owned by him or her, in such form as shall be prescribed
from time to time by the Trustees. Such certificate shall be signed by the
chairman, the president or a vice president and by the treasurer or secretary.
Such signatures may be facsimiles if the certificate is signed by a transfer
agent or by a registrar, other than a Trustee, officer or employee of the Trust.
In case any officer who has signed or whose facsimile signature has been placed
on such certificate shall have ceased to be such officer before such certificate
is issued, it may be issued by the Trust with the same effect as if he or she
were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees or the transfer agent
may either issue receipts therefor or keep accounts upon the books of the Trust
for the record holders of such shares, who shall in either case be deemed, for
all purposes hereunder, to be the holders of certificates for such shares as if
they had accepted such certificates and shall be held to have expressly assented
and agreed to the terms hereof.
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7.2 Loss of Certificates. In the case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
Section 8. Record Date and Closing Transfer Books
-------------------------------------------------
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date; or without fixing such record date the
Trustees may for any of such purposes close the transfer books for all or any
part of such period.
Section 9. Seal
---------------
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts," together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
-------------------------------
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and all transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
Section 11. Fiscal Year
-----------------------
Except as from time to time otherwise provided by the Trustees, the fiscal year
of the Trust shall end on June 30.
Section 12. Amendments
----------------------
These Bylaws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such a majority.
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EXHIBIT 8
CUSTODIAN AGREEMENT
THIS AGREEMENT made on _______________________________, 1996, between
Burridge Funds, a Massachusetts business trust, the Burridge Group, Inc. (the
"Adviser"), and FIRSTAR TRUST COMPANY, a corporation organized under the laws of
the State of Wisconsin (hereinafter called "Custodian"),
WHEREAS, Burridge Funds is an open-ended management investment company
under the Investment Company Act of 1940 currently having shares of a single
series, Burridge Growth Fund, hereinafter called the "Fund";
WHEREAS, the Fund desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement; and
WHEREAS, the Fund and the Adviser have entered into an Investment
Advisory Agreement with Burridge Funds (the "Investment Advisory Agreement") for
the Fund whereby the Adviser has agreed, among other things, to pay certain
expenses on behalf of the Fund;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Fund and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of Burridge Funds on behalf of the
Fund by any two of the President, a Vice President, the Secretary and the
Treasurer of Burridge Funds, or any other persons duly authorized to sign by the
Board of Trustees.
The word "Board" shall mean Board of Trustees of Burridge Funds.
2. NAMES, TITLES, AND SIGNATURES OF THE FUND'S OFFICERS
An officer of Burridge Funds will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board,
together with any changes which may occur from time to time.
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ADDITIONAL SERIES. The Burridge Funds is authorized to issue separate
classes of shares of beneficial interest representing interests in separate
investment portfolios. In the event Burridge Funds establishes one or more
additional series of shares with respect to which it desires to have the
Custodian render services under the terms hereof, it shall so notify the
Custodian in writing, and if the Custodian agrees in writing to provide such
services, such services will be covered by the terms and conditions of this
Agreement.
3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts in
the name of the Fund, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the Fund. Upon receipt of proper instructions, which may by
their terms be continuing instructions when deemed appropriate by the parties,
Custodian shall make payments of cash to, or for the account of, the Fund from
such cash only:
(a) for the purchase of securities for the portfolio of the Fund upon
the delivery of such securities to Custodian, registered in the
name of the Fund or of the nominee of Custodian referred to in
Section 7 or in proper form for transfer; all securities accepted
by Custodian shall be accompanied by payment of, or a "due bill"
for, (a) any dividends, interest, or other distributions of the
issuer, due the purchaser; (b) in the case of a purchase effected
through a clearing agency or book entry system, in accordance with
the conditions set forth in Section 15 hereof; (c) in the case of
repurchase agreements entered into between the Fund and Custodian,
or another bank; (i) against delivery of the securities either in
certificate form or through an entry crediting Custodian's account
at the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by Custodian along with written evidence of the
agreement by Custodian to repurchase such securities from the Fund.
(b) for the repurchase or redemption of shares of beneficial interest
of the Fund upon delivery thereof to Custodian, or upon proper
instructions from Burridge Funds;
(c) for the payment of interest, dividends, taxes, investment adviser's
fees or operating expenses (including, without limitation thereto,
fees for legal, accounting, auditing and custodian services and
expenses for printing and postage);
(d) for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Fund held by
or to be delivered to Custodian; or
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(e) for other proper corporate purposes certified by resolution of the
Board.
Before making any such payment, Custodian shall receive (and may rely
upon) an officers' certificate requesting such payment and stating that it is
for a purpose permitted under the terms of items (a), (b), (c), or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument, or
any other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of Burridge Funds issues appropriate
oral or facsimile instructions to Custodian and an appropriate officers'
certificate is received by Custodian within two business days thereafter.
B. Custodian shall collect on a timely basis all income and other
payments with respect to registered securities held hereunder to which the Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payables.
Custodian is hereby authorized to endorse and collect all checks, drafts or
other orders for the payment of money received by Custodian for the account of
the Fund. Custodian shall collect on a timely basis all income and other
payment with respect to bearer of securities if, on the date of payment by the
issuer, such securities are held by Custodian and shall credit such income, as
collected, to the Fund's custodian account. In any case in which Custodian does
not receive any such due and unpaid income within a reasonable time after it has
made proper demands for the same (which shall be presumed to consist of at least
one demand letter and at least three telephonic demands), it shall so notify the
applicable Fund in writing, including copies of all demand letters, any written
responses thereto, and memoranda of all oral responses thereto and to telephonic
demands, and await proper instructions; Custodian shall not be obliged to take
legal action for collection unless and until reasonably indemnified to its
satisfaction. It shall also notify the applicable Fund as soon as reasonably
practicable whenever income due on securities, in respect to which such Fund
requests such notice, is not collected in due course.
C. Custodian shall, upon receipt of proper instructions, make federal
funds available to the Fund as of specified times agreed upon from time to time
by the Fund and the custodian in the amount of checks received in payment for
shares of the Fund which are deposited into the Fund's account.
D. In any and every case where payment for purchase of securities for
the account of the Fund is made by Custodian in advance of receipt of the
securities purchased, in the absence of specific written instructions from
Burridge Funds on behalf of the Fund to so pay in advance, Custodian shall be
absolutely liable to the Fund for such securities to the same extent as if the
securities had been received by Custodian, except that in the case of repurchase
agreements entered into by the Fund with a bank which is a member of the Federal
Reserve System, Custodian may transfer funds to the account of such bank prior
to the receipt of written evidence that the securities subject to such
repurchase agreement have been transferred by book-entry into a segregated non-
proprietary account of Custodian maintained with a Federal
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Reserve Bank or of the safe-keeping receipt, provided that such securities have
in fact been so transferred by book entry.
4. RECEIPT OF SECURITIES
Custodian shall hold in a separate account, and physically segregated at
all times from those of any other persons, firms, or corporations, pursuant to
the provisions of this Agreement, all non-cash property, including securities
received by it from or for the account of the Fund, provided that securities may
be maintained in a securities depository or book entry system in accordance with
the conditions set forth in Section 15 of this Agreement. All such non-cash
property, including securities, shall be held or disposed of by Custodian for,
and subject at all times to the instructions, of Burridge Funds on behalf of the
Fund and pursuant to the terms of this Agreement. Custodian shall have no power
or authority to assign, hypothecate, pledge, or otherwise dispose of any such
securities and investments, except pursuant to the direction of Burridge Funds
on behalf of the Fund and only for the account of the Fund as set forth in
paragraph 5 of this Agreement.
5. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account(s) for and on behalf of the portfolio, into which
account(s) may be transferred cash and/or securities.
6. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities of
the Fund held by it pursuant to this Agreement. Custodian agrees to transfer,
exchange or deliver securities held by it hereunder only upon receipt of proper
instructions, which may by their terms be continuing instructions when deemed
appropriate by the parties, and only:
(a) for sales of such securities for the account of the Fund upon
receipt by Custodian of payment therefor;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone or
other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or
otherwise;
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(e) upon conversion of such securities pursuant to their terms into
other securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary
securities for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of the
Fund upon delivery thereof to Custodian; or
(i) upon receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Funds;
(j) for other proper corporate purposes.
As to any deliveries made by Custodian pursuant to items (a), (b), (d),
(e), (f), and (g), securities or cash receivable in exchange therefore shall be
deliverable to Custodian.
Before making any such transfer, exchange or delivery, Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g), (h), or (i) of this Section 5
and also, in respect of item (j), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not precede
any such transfer, exchange or delivery of a money market instrument, or any
other security with same or next-day settlement, if the President, a Vice
President, the Secretary or the Treasurer of the Fund issues appropriate oral or
facsimile instructions to Custodian and an appropriate officers' certificate is
received by Custodian within two business days thereafter.
7. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Fund, which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Fund; (b) collect interest and cash dividends received, with notice to
the Fund, for the account of the Fund; (c) hold for the account of the Fund
hereunder all stock dividends, rights and similar securities issued with respect
to any securities held by it hereunder; and (d) execute, as agent on behalf of
the Fund, all necessary ownership certificates required by the Internal Revenue
Code or the Income Tax Regulations of the United States Treasury Department or
under the laws of any state now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to the
extent it may lawfully do so.
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8. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
the Fund or of any nominee for the Fund or of any registered nominee of
Custodian as defined in the Internal Revenue Code and any Regulations of the
Treasury Department issued hereunder or in any provision of any subsequent
federal tax law exempting such transaction from liability for stock transfer
taxes, and shall execute and deliver all such certificates in connection
therewith as may be required by such laws or regulations or under the laws of
any state. Custodian shall use its best efforts to the end that the specific
securities held by it hereunder shall be at all times identifiable in its
records.
Burridge Funds shall from time to time furnish to Custodian appropriate
instruments to enable Custodian to hold or deliver in proper form for transfer,
or to register in the name of its registered nominee, any securities which it
may hold for the account of the Fund and which may from time to time be
registered in the name of the Fund. All securities accepted by Custodian on
behalf of the Fund shall be in "street" or other good delivery form.
9. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Fund, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the Fund all
notices, proxies and proxy soliciting materials with relation to such
securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Fund), but without
indicating the manner in which such proxies are to be voted.
Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith) received by Custodian from
issuers of the securities being held for the Fund. With respect to tender or
exchange offers, Custodian shall transmit promptly to the Fund all written
information received by Custodian from issuers of the securities being held for
the Fund. With respect to tender or exchange offers, Custodian shall transmit
promptly to the Fund all written information received by Custodian from issuers
of the securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the fund desires to take action
with respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify Custodian at least two business days prior to
the date on which Custodian is to take action.
10. TRANSFER TAX AND OTHER DISBURSEMENTS
The Fund shall pay or reimburse Custodian from time to time for any
transfer taxes payable upon transfers of securities made hereunder. The Adviser
shall pay or reimburse Custodian from time to time for all other necessary and
proper disbursements and expenses made or incurred by Custodian in the
performance of this Agreement.
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Custodian shall execute and deliver such certificates in connection with
securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
11. CONCERNING CUSTODIAN
Custodian shall be paid by the Adviser as compensation for its services
pursuant to this Agreement such compensation as may from time to time be agreed
upon in writing among the parties. Until modified in writing, such compensation
shall be as set forth in Exhibit A attached hereto.
So long as and to the extent that it exercises reasonable care,
Custodian shall not be liable for any action taken in good faith upon any
certificate herein described or certified copy of any resolution of the Board,
and may rely on the genuineness of any such document which it may in good faith
believe to have been validly executed.
The Fund agrees to indemnify and hold harmless Custodian and its nominee
from all taxes, charges, expenses, assessments, claims and liabilities
(including counsel fees) incurred or assessed against it or by its nominee in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's own negligent action, negligent failure to act or willful
misconduct. Custodian is authorized to charge any account of the Fund for such
items.
In the event of any advance of cash for any purpose made by Custodian
resulting from orders or instructions of the Fund, or in the event that
Custodian or its nominee shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct, any property
at any time held for the account of the Fund shall be security therefore.
Custodian agrees to indemnify and hold harmless Fund from all charges,
expenses, assessments, and claims/liabilities (including counsel fees) incurred
or assessed against it in connection with the performance of this agreement,
except such as may arise from the Fund's own negligent action, negligent failure
to act, or willful misconduct.
12. SUBCUSTODIANS
Custodian is hereby authorized to engage another bank or trust company
as a Subcustodian for all or any part of the Fund's assets, so long as any such
bank or trust company is a bank or trust company organized under the laws of any
state of the United States, having an aggregate capital, surplus and undivided
profit, as shown by its last published report, of not less than Two Million
Dollars ($2,000,000) and provided further that, if the Custodian utilizes the
services of a Subcustodian, the Custodian shall remain fully liable and
responsible for any losses caused to the Fund by the Subcustodian as fully as if
the Custodian was directly responsible for any such losses under the terms of
the Custodian Agreement.
7
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Notwithstanding anything contained herein, if the Fund requires the
Custodian to engage specific Subcustodians for the safekeeping and/or clearing
of assets, the Fund agrees to indemnify and hold harmless Custodian from all
claims, expenses and liabilities incurred or assessed against it in connection
with the use of such Subcustodian in regard to the Fund's assets, except as may
arise from its own negligent action, negligent failure to act or willful
misconduct.
13. REPORTS BY CUSTODIAN
Custodian shall furnish the Fund periodically as agreed upon with a
statement summarizing all transactions and entries for the account of Fund.
Custodian shall furnish to the Fund, at the end of every month, a list of the
portfolio securities showing the aggregate cost of each issue and a list of all
securities transactions that remain unsettled at such time. The books and
records of Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at reasonable times by officers of, and of auditors
employed by, the Fund.
14. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Fund, or by Custodian, on
ninety (90) days notice, given in writing and sent by registered mail to
Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at 115
South La Salle Street, Chicago, Illinois 60603, as the case may be. Upon any
termination of this Agreement, pending appointment of a successor to Custodian
or a vote of the shareholders of the Fund to dissolve or to function without a
custodian of its cash, securities and other property, Custodian shall not
deliver cash, securities or other property of the Fund to the Fund, but may
deliver them to a bank or trust company, which is a "bank" defined in the
Investment Company Act of 1940, of its own selection, having an aggregate
capital, surplus and undivided profits, as shown by its last published report of
not less than Twenty-five Million Dollars ($25,000,000) as a Custodian for the
Fund to be held under terms similar to those of this Agreement, provided,
however, that Custodian shall not be required to make any such delivery or
payment until full payment shall have been made by the Fund of all liabilities
constituting a charge on or against the properties then held by Custodian or on
or against Custodian, and until full payment shall have been made to Custodian
of all its fees, compensation, costs and expenses, subject to the provisions of
Section 10 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Fund, authorized or approved by a resolution of its Board.
15. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
Custodian may deposit and/or maintain securities owned by the Funds in
a clearing agency registered with the Securities and Exchange Commission under
Section 17A of the system authorized by the U.S. Department of the Treasury and
certain federal agencies, each of which is referred to herein as "a Securities
System," in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the following
provisions:
8
<PAGE>
1. Custodian may keep securities of the Fund in a Securities System
provided that such securities are represented in an account ("Account")
of Custodian in the Securities System which shall not include any
assets of Custodian other than assets held as a fiduciary, custodian,
or otherwise for customers.
2. The records of Custodian with respect to securities of the Fund which
are maintained in the Securities System shall identify by book-entry
those securities belonging to the Fund.
3. Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of
an entry on the records of Custodian to reflect such payment and
transfer for the account of the Fund. Custodian shall transfer
securities sold or loaned for the account of a Fund upon (i) receipt of
advice from the Securities System that payment or collateral for such
securities has been transferred to the Account, and (ii) the making of
an entry on the records of Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the
Securities System of transfers of securities for the account of the
Fund shall identify the Fund, be maintained for the Fund by Custodian
and be provided to the Fund at its request.
4. Custodian shall promptly provide Burridge Funds with any report
obtained by Custodian on the Securities System's accounting system,
internal accounting control, and procedures for safeguarding securities
deposited in the Securities System.
5. Anything to the contrary herein notwithstanding, Custodian shall be
liable to the Fund for any loss or damage to the Fund resulting from
use of the Securities System by reasons of any negligence, misfeasance,
or misconduct or Custodian or any of its agents or of any of its or
their employees or from failure of Custodian or any such agent to
enforce effectively such rights as it may have against the Securities
System; at the election of the Fund, it shall be entitled to be
subrogated to the rights of Custodian with respect to any claim against
the Securities System or any other person which Custodian may have as a
consequence of any such loss or damage if and to the extent that the
Fund has not been made whole for any such loss or damage.
6. Custodian shall not be authorized to act under this Section in the
absence of an appropriate certificate of Burridge Funds that the Board
has approved the use of a particular Securities Systems and any changes
to arrangements in connection therewith.
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<PAGE>
16. INDEPENDENT ACCOUNTANTS
Custodian shall provide the Fund, at such times as Burridge Funds may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, including securities deposited and/or maintained in a Securities
System, relating to the services provided by Custodian under this Agreement;
such reports, which shall be of sufficient scope and in sufficient detail, as
may reasonably be required by Burridge Funds, to provide reasonable assurance
that any material inadequacies would be disclosed by such examination, and, if
there are not such inadequacies, shall so state.
17. RECORDS
Custodian shall prepare and maintain any records relating to its
activities hereunder in such manner as will meet the obligations of Burridge
Funds pursuant to the provisions of the Investment Company Act of 1940, as
amended, or the rules and regulations promulgated thereunder, and applicable
federal and state tax laws and regulations. To the extent that Custodian in any
capacity prepares or maintains any records required to be maintained and
preserved by the Fund pursuant to the provisions of the Investment Company Act
of 1940, as amended, or the rules and regulations promulgated thereunder,
Custodian agrees to make any such records available to the Fund, its auditors,
and the Securities Exchange Commission upon request and to preserve such records
for the periods prescribed in Rule 31a-2 under the Investment Company Act of
1940, as amended and applicable federal and state tax laws and regulations.
18. DISCLAIMER OF LIABILITY
This Agreement is executed on behalf of Burridge Funds by its officers
in their capacity as officers and not individually. The obligations of Burridge
Funds under this Agreement are not binding upon Burridge Funds' trustees,
officers, or shareholders individually but are binding only upon the assets and
property of the Fund. Burridge Funds' Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRSTAR TRUST COMPANY
By
- -------------------------------- -----------------------------
Assistant Secretary Vice President
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<PAGE>
Attest: BURRIDGE FUNDS
By
- -------------------------------- -----------------------------
Attest: THE BURRIDGE GROUP, INC.
By
- -------------------------------- -----------------------------
11
<PAGE>
EXHIBIT 9.1
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this ___________________________
day of August, 1996, by and among Burridge Funds, a Massachusetts business
trust, the Burridge Group, Inc. (the "Adviser"), and Firstar Trust Company, a
corporation organized under the laws of the state of Wisconsin (hereinafter
referred to as the "Agent").
WHEREAS, Burridge Funds is an open-ended management investment company
which is registered under the InvestmenT Company Act of 1940 currently having
shares of a single series designated Burridge Growth Fund, hereinafter called
the "Fund."
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with
Burridge Funds (the "Investment Advisory Agreement") for the fund whereby the
Adviser has agreed, among other things, to pay certain expenses on behalf of the
Fund; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions for
the benefit of its customers;
NOW, THEREFORE, the Fund, the Adviser, and the Agent do mutually promise
and agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE AGENT
Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints the Agent to act as transfer agent and dividend
disbursing agent.
The Agent shall perform all of the customary services of a transfer agent
and dividend disbursing agent, and as relevant, agent in connection with
accumulation, open account or similar plans (including without limitation any
periodic investment plan or periodic withdrawal program), in accordance with the
conditions and procedures set forth in the prospectus and Statement of
Additional Information relating to the Fund as in effect from time to time
(together, the "Prospectus") including but not limited to:
A. Receive orders for the purchase of shares, with prompt delivery where
appropriate, of payment and supporting documentation to the Fund's
custodian;
B. Process purchase orders and issue the appropriate number of
certificated or uncertificated shares with such uncertificated shares
being held in the appropriate shareholder account;
C. Process redemption requests received in good order and, where
relevant, deliver appropriate of payment and supporting documentation
to the Fund's custodian;
D. Pay monies in accordance with the instructions of redeeming
shareholders;
E. Process transfers of shares in accordance with the shareholder's
instructions;
F. Process exchanges between funds within the same family of funds;
<PAGE>
G. Issue and/or cancel certificates as instructed; replace lost, stolen
or destroyed certificates upon receipt of satisfactory
indemnification or surety bond;
H. Prepare and transmit or credit payments for dividends and
distributions declared by the Fund;
I. Make changes to shareholder records, including, but not limited to,
address changes in plans (i.e., systematic withdrawal, automatic
investment, dividend reinvestment, etc.);
J. Record the issuance of shares of the Fund and maintain, pursuant to
Securities Exchange Act of 1934 Rule 17ad-10(e), a record of the total
number of shares of the Fund which are authorized, issued and
outstanding;
K. Prepare shareholder meeting lists and, if applicable, mail, receive
and tabulate proxies;
L. Mail shareholder reports and prospectuses to current shareholders;
M. Prepare and file U.S. Treasury Department forms 1099 and other
appropriate information returns required with respect to dividends and
distributions for all shareholders;
N. Provide shareholder account information upon request and prepare and
mail confirmations and statements of account to shareholders for all
purchases, redemptions and other confirmable transactions as agreed
upon with the Fund; and
O. Provide a Blue Sky System which will enable the Fund to monitor the
total number of shares sold in each state. In addition, the Fund
shall identify to the Agent in writing those transactions and assets
to be treated as exempt from the Blue Sky reporting to the Fund for
each state. The responsibility of the Agent for the Fund's Blue Sky
state registration status is solely limited to the initial
compliance by the Fund and the reporting of such transactions to the
Fund.
2. COMPENSATION
The Adviser agrees to pay the Agent for performance of the duties listed in
this Agreement fees as may be agreed from time to time in writing and for
reasonable out-of-pocket expenses which shall include, but are not limited to
the following: printing, postage, forms, stationery, record retention, mailing,
insertion, programming, labels, shareholder lists and proxy expenses.
These fees and reimbursable expenses may be changed from time to time
subject to mutual written agreement between the Fund and the Agent.
The Adviser agrees to pay all fees and reimbursable expenses within thirty
(30) calendar days following the mailing of the billing notice.
3. REPRESENTATIONS OF AGENT
The Agent represents and warrants to the Fund that:
A. It is a trust company duly organized, existing and in good standing
under the laws of Wisconsin;
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<PAGE>
B. It is a registered transfer agent under the Securities Exchange Act of
1934 as amended.
C. It is duly qualified to carry on its business in the state of
Wisconsin;
D. It is empowered under applicable laws and by its charter and bylaws to
enter into and perform this Agreement;
E. All requisite corporate proceedings have been taken to authorize it to
enter and perform this Agreement;
F. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
G. It will comply with all applicable requirements of the Securities Act
of 1933 and the Securities Exchange Act of 1934, as amended, the
Investment Company Act of 1940, as amended, and any laws, rules, and
regulations of governmental authorities having jurisdiction.
4. REPRESENTATIONS OF THE FUND
The Fund represents and warrants to the Agent that:
A. The Fund is an open-ended diversified investment company under the
Investment Company Act of 1940;
B. The Fund is a business trust organized, existing, and in good standing
under the laws of Massachusetts;
C. The Fund is empowered under applicable laws and by its Declaration of
Trust and bylaws to enter into and perform this Agreement;
D. All necessary proceedings required by the Declaration of Trust have
been taken to authorize it to enter into and perform this Agreement;
E. The Fund will comply with all applicable requirements of the Securities
and Exchange Acts of 1933 and 1934, as amended, the Investment Company
Act of 1940, as amended, and any laws, rules and regulations of
governmental authorities having jurisdiction; and
F. A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect
to all shares of the Fund being offered for sale.
5. COVENANTS OF FUND AND AGENT
The Fund shall furnish the Agent a certified copy of the resolution of the
Board of Trustees of the Fund authorizing the appointment of the Agent and the
execution of this Agreement. The Fund shall provide to the Agent a copy of the
Declaration of Trust, bylaws of the Trust, and all amendments thereto.
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<PAGE>
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the rules thereunder, the Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such section and rules and will be surrendered
to the Fund on and in accordance with its request.
6. INDEMNIFICATION; REMEDIES UPON BREACH
The Agent shall exercise reasonable care and act in good faith in the
performance of its duties under this Agreement. The Agent shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with matters to which this Agreement relates, including losses
resulting from mechanical breakdowns or the failure of communication or power
supplies beyond the Agent's control, except a loss resulting from the Agent's
refusal or failure to comply with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the performance of its duties
under this Agreement. Notwithstanding any other provision of this Agreement,
the Fund shall indemnify and hold harmless the Agent from and against any and
all claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable attorneys'
fees) which the Agent may sustain or incur or which may be asserted against the
Agent by any person arising out of any action taken or omitted to be taken by it
in performing the services hereunder (i) in accordance with the foregoing
standards, or (ii) in reliance upon any written or oral instruction provided to
the Agent by any duly authorized officer of the Fund, such duly authorized
officer to be included in a list of authorized officers furnished to the Agent
and as amended from time to time in writing by resolution of the Board of
Trustees of the Fund.
Further, the Fund will indemnify and hold the Agent harmless against any
and all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action, or suit as
a result of the negligence of the Fund or the principal underwriter (unless
contributed to by the Agent's breach of this Agreement or other Agreements
between the Fund and the Agent, or the Agent's own negligence or bad faith); or
as a result of the Agent acting upon telephone instructions relating to the
exchange or redemption of shares received by the Agent and reasonably believed
by the Agent under a standard of care customarily used in the industry to have
originated from the record owner of the subject shares; or as a result of acting
in reliance upon any genuine instrument or stock certificate signed,
countersigned, or executed by any person or persons authorized to sign,
countersign, or execute the same.
In the event of a mechanical breakdown or failure of communication or power
supplies beyond its control, the Agent shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond the Agent's control. The Agent will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such a
breakdown at the expense of the Agent. The Agent agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provisions for emergency use of electrical data processing equipment
to the extent appropriate equipment is available. Representatives of the Fund
shall be entitled to inspect the Agent's premises and operating capabilities at
any time during regular business hours of the Agent, upon reasonable notice to
the Agent.
Regardless of the above, the Agent reserves the right to reprocess and
correct administrative errors at its own expense.
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<PAGE>
In order that the indemnification provisions contained in this section
shall apply, it is understood that if in any case the Fund may be asked to
indemnify or hold the Agent harmless, the Fund shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Agent will use all reasonable care to notify the
Fund promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the Fund.
The Fund shall have the option to defend the Agent against any claim which may
be the subject of this indemnification. In the event that the Fund so elects, it
will so notify the Agent and thereupon the Fund shall take over complete defense
of the claim, and the Agent shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this section. The
Agent shall in no case confess any claim or make any compromise in any case in
which the Fund will be asked to indemnify the Agent except with the Fund's prior
written consent.
The Agent shall indemnify and hold the Fund harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Fund by any person arising
out of any action taken or omitted to be taken by the Agent as a result of the
Agent's refusal or failure to comply with the terms of this Agreement, its bad
faith, negligence, or willful misconduct.
7. CONFIDENTIALITY
The Agent agrees on behalf of itself and its employees to treat
confidentially all records and other information relative to the Fund and its
shareholders, which shall not be disclosed to any other party, except after
prior notification to and approval in writing by the Fund, which approval shall
not be unreasonably withheld and may not be withheld where the Agent may be
exposed to civil or criminal contempt proceedings for failure to comply after
being requested to divulge such information by duly constituted authorities.
8. ADDITIONAL SERIES.
The Burridge Funds is authorized to issue separate classes of shares of
beneficial interest representing interests in separate investment portfolios.
In the event Burridge Funds establishes one or more additional series of shares
with respect to which it desires to have the Agent render services under the
terms hereof, it shall so notify the Agent in writing, and if the Agent agrees
in writing to provide such services, such services will be covered by the terms
and conditions of this agreement.
9. RECORDS
The Agent shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem advisable
and is agreeable to the Fund but not inconsistent with the rules and regulations
of appropriate government authorities, in particular, Section 31 of The
Investment Company Act of 1940 as amended (the "Investment Company Act"), and
the rules thereunder. The Agent agrees that all such records prepared or
maintained by the Agent relating to the services to be performed by the Agent
hereunder are the property of the Fund and will be preserved, maintained, and
made available with such section and rules of the Investment Company Act and
will be promptly surrendered to the Fund on and in accordance with its request.
10. WISCONSIN LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the state of Wisconsin.
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<PAGE>
11. AMENDMENT, ASSIGNMENT, TERMINATION AND NOTICE
A. This Agreement may be amended by the mutual written consent of the
parties.
B. This Agreement may be terminated upon ninety (90) day's written notice
given by one party to the other.
C. This Agreement and any right or obligation hereunder may not be assigned
by either party without the signed, written consent of the other party.
D. Any notice required to be given by the parties to each other under the
terms of this Agreement shall be in writing, addressed and delivered, or
mailed to the principal place of business of the other party. If to the
Agent, such notice should to be sent to _______________. If to the
Adviser, such notice should be sent to __________________. If to the
Fund, such notice should be sent to _________________.
E. In the event that the Fund gives to the Agent its written intention to
terminate and appoint a successor transfer agent, the Agent agrees to
cooperate in the transfer of its duties and responsibilities to the
successor, including any and all relevant books, records and other data
established or maintained by the Agent under this Agreement.
F. Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
paid by the Adviser.
12. DISCLAIMER OF LIABILITY
This Agreement is executed on behalf of Burridge Funds by its officers in
their capacity as officers and not individually. The obligations of Burridge
Funds under this Agreement are not binding upon Burridge Funds' trustees,
officers, or shareholders individually but are binding only upon the assets and
property of the Fund. Burridge Funds' Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts.
BURRIDGE FUNDS FIRSTAR TRUST COMPANY
By: By:
------------------------------ ------------------------------
Attest: Attest:
-------------------------- --------------------------
Assistant Secretary
BURRIDGE GROUP, INC.
By:
------------------------------
Attest:
--------------------------
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EXHIBIT 9.2
FUND ACCOUNTING SERVICING AGREEMENT
This contract among Burridge Funds, a Massachusetts business trust, the Burridge
Group, Inc. (the "Adviser"), and Firstar Trust Company, a Wisconsin corporation,
hereinafter called "FTC," is entered into on this _________ day of
___________________, 1996.
WHEREAS, Burridge Funds is an open-ended management investment company
registered under the Investment Company Act of 1940 currently having shares of a
single series designated Burridge Growth Fund, hereinafter called the "Fund";
and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with
Burridge Funds (the "Investment Advisory Agreement") for the Fund whereby the
Adviser has agreed, among other things, to pay certain expenses on behalf of the
Fund.
WHEREAS, FTC is in the business of providing, among other things, mutual
fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund accounting
services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager on a
timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Trustees shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as to
short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual amounts
as directed by the Fund as to methodology, rate or dollar amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
1
<PAGE>
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges, transfers,
dividend reinvestments, and other Fund share activity as reported by the
transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Fund.
(3) Determine net investment income (earnings) for the Fund as of
each valuation date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances
as of each valuation date.
(4) Maintain a general ledger for the Fund in the form as agreed
upon.
(5) For each business day the Fund is open as defined in the
prospectus relating to shares of the Fund as in effect from time to
time, determine the net asset value per share of the Fund according to
the accounting policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net earnings, and
other per share amounts reflective of Fund operation at such time as
required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of the
Fund to support the tax reporting required for IRS-defined regulated
investment companies under the Internal Revenue Code of 1986, as
amended, and regulations thereunder.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax lot
relief method designated by the Fund.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
2
<PAGE>
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the Fund accounting records available to
Burridge Funds, the Adviser, the Securities and Exchange Commission, and
the outside auditors.
(2) Create and maintain accounting records according to the
Investment Company Act of 1940 and regulations provided thereunder.
2. PRICING OF SECURITIES. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Fund's Board and apply those
prices to the portfolio positions. For those securities where market quotations
are not readily available, the Fund's Board shall approve, in good faith, the
method for determining a fair value for such securities.
If the Fund desires to provide a price which varies from the pricing
source, the Fund shall promptly notify and supply FTC with the valuation of any
such security on each valuation date. All pricing changes made by the Fund will
be in writing and must specifically identify the securities the value of which
is to be changed by CUSIP, name of security, new price or rate to be applied,
and, if applicable, the time period for which the new price is effective.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Burridge
Funds' Board of Trustees that affects accounting practices and procedures under
this agreement shall be effective upon written receipt and acceptance by FTC.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right to
make changes from time to time, as it deems advisable, relating to its services,
systems, programs, rules, operating schedules and equipment, so long as such
changes do not adversely affect the service provided to the Fund under this
Agreement.
5. COMPENSATION. FTC shall be compensated by the Adviser for providing the
services set forth in this Agreement in accordance with the Fee Schedule
attached hereto as Exhibit A and as mutually agreed upon and amended from time
to time.
6. PERFORMANCE OF SERVICE.
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement. FTC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which this Agreement relates, including
losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond FTC's control, except a loss
resulting from FTC's refusal or failure to comply with the terms of this
Agreement or from bad faith, negligence, or willful misconduct on its
part in the performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, the Fund shall
indemnify and hold harmless FTC from and against any and all claims,
demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which FTC may sustain or incur or which may be asserted
against FTC by any person arising out of any action taken or omitted to
be taken by it in performing the services hereunder (i) in accordance
with the foregoing standards, or (ii) in reliance upon any written or
oral instruction provided to FTC by any duly authorized
3
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officer of Burridge Funds, such duly authorized officer to be included
in a list of authorized officers furnished to FTC and as amended from
time to time in writing by resolution of the Board of Trustees of
Burridge Funds.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, FTC shall take all reasonable
steps to minimize service interruptions for any period that such
interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and correct any
errors resulting from such a breakdown at the expense of FTC. FTC
agrees that it shall, at all times, have reasonable contingency plans
with appropriate parties, making reasonable provision for emergency use
of electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Fund shall be entitled
to inspect FTC's premises and operating capabilities at any time during
regular business hours of FTC, upon reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the Fund may
be asked to indemnify or hold FTC harmless, the Fund shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that FTC will use all reasonable
care to notify the Fund promptly concerning any situation which presents
or appears likely to present the probability of such a claim for
indemnification against the Fund. The Fund shall have the option to
defend FTC against any claim which may be the subject of this
indemnification. In the event that the Fund so elects, it will so
notify FTC and thereupon the Fund shall take over complete defense of
the claim, and FTC shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this
section. FTC shall in no case confess any claim or make any compromise
in any case in which the Fund will be asked to indemnify FTC except with
the Fund's prior written consent.
C. FTC shall indemnify and hold the Fund harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which may be asserted against the Fund by
any person arising out of any action taken or omitted to be taken by FTC
as a result of FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
7. RECORDS. FTC shall keep records relating to the services to be
performed hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
The Investment Company Act of 1940, as amended (the "Investment Company Act"),
and the rules thereunder. FTC agrees that all such records prepared or
maintained by FTC relating to the services to be performed by FTC hereunder are
the property of the Fund and will be preserved, maintained, and made available
in accordance with such section and rules of the Investment Company Act and will
be promptly surrendered to the Fund on and in accordance with its request.
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<PAGE>
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Funds' business, which is received by FTC during the course of
rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Fund or its agent, which may be
the Adviser or FTC, shall furnish to FTC the data necessary to perform the
services described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. The Fund will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Fund, or within three (3) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
11. ADDITIONAL SERIES. In the event that the Burridge Funds establishes one
or more additional series of shares with respect to which it desires to have FTC
render accounting services under the terms hereof, it shall so notify FTC in
writing, and if FTC agrees in writing to provide such services, such series will
be subject to the terms and conditions of this Agreement, and shall be
maintained and accounted for by FTC on a discrete basis. The series currently
covered by this Agreement are: Burridge Growth Fund.
12. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
13. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a successor to any of FTC's duties or responsibilities
hereunder is designated by Burridge Funds by written notice to FTC, FTC will
promptly, upon such termination and at the expense of the Adviser, transfer to
such Successor all relevant books, records, correspondence and other data
established or maintained by FTC under this Agreement in a form reasonably
acceptable to Burridge Funds (if such form differs from the form in which FTC
has maintained the same, the Adviser shall pay any expenses associated with
transferring the same to such form), and will cooperate in the transfer of such
duties and responsibilities, including provision for assistance from FTC's
personnel in the establishment of books, records and other data by such
successor.
14. NOTICES. Notices of any kind to be given by any party hereto to any of
the other parties shall be in writing and shall be duly given if mailed or
delivered as follows: Notice to FTC shall be sent to ___________________,
notice to Fund shall be sent to ___________________, and notice to the Adviser
shall be sent to __________________.
15. CHOICE OF LAW. This Agreement shall be construed in accordance with the
laws of the State of Wisconsin.
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<PAGE>
16. DISCLAIMER OF LIABILITY. This Agreement is executed on behalf of
Burridge Funds by its officers in their capacity as officers and not
individually. The obligations of Burridge Funds under this Agreement are not
binding upon Burridge Funds' trustees, officers, or shareholders individually
but are binding only upon the assets and property of the Fund. Burridge Funds'
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Trust Company
__________________________________ By ___________________________________
ATTEST: Burridge Funds
__________________________________ By ___________________________________
ATTEST: The Burridge Group, Inc.
__________________________________ By ___________________________________
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<PAGE>
Exhibit 9.3
FUND ADMINISTRATION SERVICING AGREEMENT
This agreement is made and entered into on this _____________ day of
__________________, 1996, by and between Burridge Funds, a Massachusetts
business trust (the "Trust"), The Burridge, Inc. (the "Adviser"), and Firstar
Trust Company, a corporation organized under the laws of the State of Wisconsin
(hereinafter referred to as "FTC").
WHEREAS, the Trust is an open-ended management investment company which is
registered under the Investment Company Act of 1940 currently having shares of a
single series designated Burridge Growth Fund, hereinafter called the "Fund";
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with the
Trust (the "Investment Advisory Agreement") for the Fund whereby the Adviser has
agreed, among other things, to pay certain expenses of the Fund; and
WHEREAS, FTC is a trust company and, among other things, is in the business of
providing fund administration services for the benefit of its customers;
NOW, THEREFORE, the parties hereto do mutually promise and agree as follows:
I. Appointment of Administrator
The Fund hereby appoints FTC as Administrator of the Fund to perform
certain administrative services, subject to the control and direction of
the Trust's Board of Trustees (the "Board") on the terms and conditions set
forth in this Agreement, and FTC hereby accepts such appointment and agrees
to perform the services and assume the obligations set forth in this
Agreement in consideration of the compensation provided for herein. FTC
shall, for all purposes herein, be deemed to be an independent contractor
and shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Trust in any way
or otherwise be deemed an agent of the Trust.
II. Duties and Responsibilities of FTC
FTC undertakes to provide the following services and to assume the
following obligations:
A. General Fund Management
1. Act as liaison among all Fund service providers including custodian,
distributor, transfer agent, and the Adviser
<PAGE>
2. Coordinate Board communication by:
a. Assisting fund counsel in establishing meeting agendas for the
Board
b. Preparing Board reports for the Board based on financial and
administrative data
c. Evaluating independent auditors
d. Securing and monitoring fidelity bond and director and officers
liability insurance coverage, and making the necessary filings
with the Securities and Exchange Commission (SEC) relating thereto
3. Audits
a. Prepare appropriate schedules and assist the independent auditors
as required
b. Provide the appropriate information to the SEC and facilitate the
audit process
c. Provide office facilities for the Fund
4. Assist in overall administrative operations of the Fund
B. Compliance
1. Regulatory Compliance
a. Periodically monitor compliance with investment Company Act of
1940 requirements including, but not limited to, the following:
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule 31a-2 and rule
31a-3
4) Code of ethics
b. Periodically monitor the Fund's compliance with the policies and
investment limitations of the Fund as set forth in its prospectus
and statement of additional information
2
<PAGE>
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities authorities
any and all required compliance filings relating to the
registration of the securities of the Fund so as to enable the
Fund to make a continuous offering of its shares
b. Monitor status and maintain registrations in each state
3. SEC Registration and Reporting
a. Assisting Fund's counsel in updating the Fund's prospectus and
statement of additional information; and in preparing proxy
statements, and Rule 24f-2 notices
b. Prepare and file annual and semiannual reports
4. IRS Compliance
a. Periodically monitor the Fund's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986,
as amended, and regulations thereunder through review of the
following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Monitor short short testing
c. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by the Fund's prospectus and
statement of additional information
2. Prepare financial reports for shareholders, the Board, the SEC, and
independent auditors
3. Supervise the Fund's Custodian and Fund Accountants in the
maintenance of the Fund's general ledger and in the preparation of
the Fund's financial statements including oversight of expense
accruals and payments, of the determination of net asset value of the
Fund's net assets and of the Fund's shares, and of the declaration
and payment of dividends and other distributions to shareholders
3
<PAGE>
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and state tax
returns including forms 1120 and 8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. Prepare and file Form 1099 Miscellaneous for payments to directors
and other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate shareholders
E. Trust Organizational Existence
1. Maintain the Trust's governing documents including the Declaration of
Trust, the Bylaws, and minutes of meetings of Trustees' committees of
the Board or shareholders, and prepare certain materials for such
meetings.
2. Prepare and file any reports required to maintain the Trusts
organizational existence with the appropriate regulatory bodies
III. Compensation
The Adviser agrees to pay FTC for performance of the duties listed in this
Agreement and the fees and out-of-pocket expenses as set forth in the
attached Schedule A.
These fees may be changed from time to time, subject to mutual written
Agreement between the Trust and FTC.
The Adviser agrees to pay all fees and reimbursable expenses within ten
(10) business days following the mailing of the billing notice.
IV. Additional Series
In the event that the Trust establishes one or more additional series of
shares with respect to which it desires to have FTC render fund
administration services under the terms hereof, it shall so notify FTC in
writing, and if FTC agrees in writing to provide such services, such series
will be subject to the terms and conditions of this Agreement, and shall be
maintained and accounted for by FTC on a discrete basis. The fund
currently covered by this Agreement are: Burridge Growth Fund
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<PAGE>
V. Performance of Service; Limitation of Liability
A. FTC shall exercise reasonable care in the performance of its duties
under this Agreement. FTC shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with
matters to which this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or power supplies
beyond FTC'S control, except a loss resulting from FTC'S refusal or failure
to comply with the terms of this Agreement or from bad faith, negligence,
or willful misconduct on its part in the performance of its duties under
this Agreement. Notwithstanding any other provision of this Agreement, the
Fund shall indemnify and hold harmless FTC from and against any and all
claims, demands, losses, expenses, and liabilities (whether with or without
basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which FTC may sustain or incur or which may be asserted
against FTC by any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to FTC by any duly authorized officer of the Trust,
such duly authorized officer to be included in a list of authorized
officers furnished to FTC and as amended from time to time in writing by
resolution of the Board of Trustees of the Trust.
In the event of a mechanical breakdown or failure of communication
or power supplies beyond its control, FTC shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues beyond FTC'S control. FTC will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such
a breakdown at the expense of FTC. FTC agrees that it shall, at all times,
have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing
equipment to the extent appropriate equipment is available. Representatives
of the Fund shall be entitled to inspect FTC'S premises and operating
capabilities at any time during regular business hours of FTC, upon
reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the Fund may be
asked to indemnify or hold FTC harmless, the Fund shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that FTC will use all reasonable
care to notify the Fund promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Fund. The Fund shall have the option to defend
FTC against any claim which may be the subject of this indemnification. In
the event that the Fund so elects, it will so notify FTC and thereupon the
Fund shall take over complete defense of the claim, and FTC shall in such
situation initiate no further legal or other expenses for which it shall
seek indemnification under this section. FTC shall in no case confess any
claim or make any
5
<PAGE>
compromise in any case in which the Fund will be asked to indemnify FTC
except with the Fund's prior written consent.
C. FTC shall indemnify and hold the Fund harmless from and against any
and all claims, demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Fund by any person
arising out of any action taken or omitted to be taken by FTC as a result
of FTC's refusal or failure to comply with the terms of this Agreement, its
bad faith, negligence, or willful misconduct.
VI. Confidentiality
FTC shall handle, in confidence, all information relating to the Fund's
business which is received by FTC during the course of rendering any
service hereunder.
VII. Data Necessary to Perform Service
The Fund or its agent, which may be the Adviser or FTC, shall furnish to
FTC the data necessary to perform the services described herein at times
and in such form as mutually agreed upon.
VIII. Terms of Agreement
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue automatically in
effect for successive annual periods. The Agreement may be terminated by
any party hereto upon giving ninety (90) days prior written notice to the
other parties or such shorter period as is mutually agreed upon by the
parties.
IX. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any of
FTC's duties or responsibilities hereunder is designated by the Trust by
written notice to FTC, FTC will promptly, upon such termination and at the
expense of the Adviser, transfer to such successor all relevant books,
records, correspondence, and other data established or maintained by FTC
under this Agreement in a form reasonably acceptable to the Trust (if such
form differs from the form in which FTC has maintained, the Adviser shall
pay any expenses associated with transferring the data to such form), and
will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from FTC's personnel in the
establishment of books, records, and other data by such successor.
X. Choice of Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin.
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<PAGE>
XI. Notices
Notices of any kind to be given by any party hereto to the other parties
shall be in writing and shall be duly given if mailed or delivered as
follows: Notice to FTC shall be sent to ___________________, notice to
the Fund shall be sent to The Burridge Group, Inc., 115 South LaSalle
Street, Chicago, Illinois 60603, and notice to the Adviser shall be sent
to
___________________.
XII. Records
FTC shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Fund but not inconsistent with the
rules and regulations of appropriate government authorities, in
particular, Section 31 of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the rules thereunder. FTC agrees that
all such records prepared or maintained by FTC relating to the services
to be performed by FTC hereunder are the property of the Fund and will be
preserved, maintained, and made available in accordance with such section
and rules of the Investment Company Act and will be promptly surrendered
to the Fund on and in accordance with its request.
XIII. Non-Liability of Trustees and Shareholders
Any obligation of the Trust hereunder shall be binding upon the assets of
the Trust (or applicable series thereof) and shall not be binding upon
any trustee, officer, employee, agent, or shareholder of the Trust.
Neither the authorization of any action by the trustees or shareholders
of the Trust nor the execution of this agreement on behalf of the Trust
shall impose liability upon any trustee, officer, or shareholder of the
Trust.
BURRIDGE FUNDS FIRSTAR TRUST COMPANY
BY: _____________________________ BY: ______________________________
ATTEST: __________________________ ATTEST: __________________________
THE BURRIDGE GROUP, INC.
BY: _____________________________
ATTEST: _________________________
7
