<PAGE>
As filed with the Securities and Exchange Commission on November 22, 1996
1933 Act Reg. No. 333-11633
1940 Act File No. 811-7801
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
----------------------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 1 [X]
Burridge Funds
(Registrant)
115 South LaSalle Street
Chicago, Illinois 60603
Telephone Number: (312) 368-0066
Kenneth M. Arenberg Janet D. Olsen
Burridge Funds Bell, Boyd & Lloyd
115 South LaSalle Street Three First National Plaza, #Suite 3300
Chicago, Illinois 60603 Chicago, Illinois 60602
(Agents for Service)
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Registrant has previously elected to register pursuant to rule 24f-2 under the
Investment Company Act of 1940 an indefinite number of shares of Burridge
Capital Development Fund (previously named Burridge Growth Fund), a series of
Burridge Funds and paid the registration fee payable with respect to such
election.
- --------------------------------------------------------------------------------
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>
Burridge Funds
Cross-reference sheet pursuant to rule 495(a) of Regulation C
<TABLE>
<CAPTION>
Item Location or caption*
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<C> <S>
Part A
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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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item Location or caption*
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<C> <S>
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
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item Location or caption*
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<C> <S>
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>
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* References are to captions within the part of the registration statement to
which the particular item relates except as otherwise indicated.
<PAGE>
BURRIDGE CAPITAL DEVELOPMENT FUND
115 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(888) BURRIDGE
(888) 287-7434
December _____, 1996
BURRIDGE CAPITAL DEVELOPMENT 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 is managed in a tax-sensitive
manner. The Fund purchases common stocks believed to have superior earnings
growth potential and attempts to maximize long-term and unrealized capital gains
in producing investment returns.
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>
<CAPTION>
TABLE OF CONTENTS
Page
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<S> <C>
HIGHLIGHTS....................................................................1
EXPENSE INFORMATION...........................................................3
INVESTMENT OBJECTIVE AND POLICIES.............................................5
INVESTMENT PROCESS............................................................5
RISKS.........................................................................7
INVESTMENT RESTRICTIONS.......................................................7
PURCHASING SHARES.............................................................8
REDEEMING SHARES..............................................................9
NET ASSET VALUE..............................................................11
SHAREHOLDER SERVICES.........................................................11
Shareholder Accounts.....................................................11
IRA Plan for Rollover Accounts...........................................11
DIVIDENDS AND DISTRIBUTIONS..................................................11
TAXES........................................................................12
MANAGEMENT OF THE FUND.......................................................12
The Trustees.............................................................12
The Adviser..............................................................13
Administrator, Custodian and Transfer Agent..............................15
Distributor..............................................................15
Portfolio Transactions...................................................15
Performance..............................................................15
FUND AND ITS SHARES..........................................................16
Shares...................................................................16
Voting Rights............................................................16
Shareholder Inquiries....................................................16
</TABLE>
<PAGE>
HIGHLIGHTS
Burridge Capital Development 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 focuses on
after-tax investment returns for its
shareholders. 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 its industry group
and the broad market, at attractive levels.
In managing the Fund, the Adviser analyzes
the tax consequences of position changes to
the Fund and its shareholders subject to
federal income tax. The Adviser attempts to
maximize long-term capital gains and
unrealized capital gains, and minimize
short-term capital gains and ordinary
income, as components of the Fund's
investment returns. 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 $500,000 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 over $1.3 billion in assets as of
October 31, 1996. See "Management of the
Fund--The Adviser."
EXPENSES The Fund pays its own operating expenses,
including a management fee to the Adviser
of
<PAGE>
1.00% of the Fund's average daily net
assets. The Adviser has undertaken to
reimburse the Fund for any ordinary costs
and expenses of the Fund in excess of 1.50%
of the average net assets annually. See
"Management of the Fund--The Adviser."
DISTRIBUTOR Funds Distributor, Inc.
2
<PAGE>
EXPENSE INFORMATION
The Fund expects to incur the following expenses:
<TABLE>
<CAPTION>
<S> <C>
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)................. 1.00%
12b-1 Fees......................................................... none
Other Expenses (after expense reimbursement)....................... .50%
Total Operating Expenses
(after expense reimbursement).................................... 1.50%
</TABLE>
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(1) The Fund does not charge a redemption fee. A wire transfer fee (currently
$10) is required to have the proceeds of a redemption paid to you by wire
transfer.
(2) The Adviser has undertaken to reimburse the Fund to the extent its ordinary
operating expenses exceed 1.50% of the Fund's average net assets annually.
Without the Adviser's expense limitation, Other Expenses and Total
Operating Expenses would be estimated to be 2.35% and 3.35%, respectively.
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 current fiscal year, taking into account
the Adviser's voluntary expense limitation.
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
3
<PAGE>
This example illustrates the effect of expenses, but is not meant to
suggest actual PAST OR FUTURE EXPENSES 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.
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is long-term capital appreciation. The
Fund focuses on after-tax investment returns for its shareholders. 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 its industry group and the
broad market, at attractive levels. In managing the Fund, the Adviser analyzes
the tax consequences of position changes to the Fund and its shareholders
subject to federal income tax. The Adviser attempts to maximize long-term
capital gains and unrealized capital gains, and minimize short-term capital
gains and ordinary income, as components of the Fund's investment returns.
Under normal market conditions, the Fund expects to be substantially fully
invested in common stocks of medium and large growth 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:
. 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;
. 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 its industry group as measured by the
ratio of debt to capital; and
. a proven and effective management team.
5
<PAGE>
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.
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 with a focus on after-tax returns and attempts to
maximize long-term capital gains and unrealized capital gains as components of
investment return. The Fund invests in stocks which pay below average dividends
and under normal market conditions expects its portfolio turnover rate to be
below 50%, to minimize the amount of ordinary income and short-term capital
gains created for shareholders. A decision to sell a portfolio security is based
on, among other things, a company's long-term prospects for continued earnings
growth relative to its stock's price/earnings ratio and the tax effect of the
sale. The Adviser expects to offset realized capital gains by selling stocks in
which the Fund has a loss, to the extent losses are available and the sale of
the security would be consistent with prudent portfolio management.
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. The Fund may also invest in convertible securities, options and
futures to a limited extent. 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 (not ordinarily expected to exceed about 5% of the Fund's
total assets) may be held from time to time in cash or cash equivalents
6
<PAGE>
pending investment or to meet cash requirements. Up to 100% of the fund's
assets may be held in cash or cash equivalents under abnormal market or economic
conditions 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. The Fund's intention is to maximize after-tax
returns for investors subject to income tax. An investor not subject to federal
income tax may invest in the Fund, but should consider whether an investment as
sensitive to tax consequences as the Fund is appropriate. 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 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 25% or more 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.
7
<PAGE>
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.
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.
To establish a new account by wire please first call Firstar at 1-888-287-
7434 to advise it of the investment and dollar amount. This will ensure proper
and accurate handling of your investment. A completed share purchase application
form must also be sent to Firstar at the address above immediately after your
investment is made so that the necessary remaining information can be recorded
to your account. Your purchase request should be wired through the Federal
Reserve Bank as follows:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
ABA Number 075000022
For credit to Firstar Trust M.P.S.
Account Number 112-952-137
For further credit to Burridge Capital Development Fund
(Your account name and account number)
If you have authorized telephone transaction privileges in your
application, you may also make purchases by calling toll free 1-888-287-7434. By
using a telephone purchase option you may move money from your bank account to
your Fund account at your request. Only bank accounts held at domestic financial
institutions that are Automated Clearing House (ACH) members may be used for
telephone transactions. To have shares of the Fund purchased at the net asset
value determined as of the close of regular trading on a given date, Firstar
must receive both the purchase order and payment by Electronic Funds Transfer
through the ACH system before the close of regular trading on such date. Most
transfers are completed within three business days. You may not use telephonic
transactions for initial purchases. The minimum amount that can be transferred
by telephone is $10,000.
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 of regular session trading on
the New York Stock Exchange ("NYSE") (currently 3:00 p.m.,
8
<PAGE>
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
$500,000, and subsequent investments must be at least $10,000. Exceptions to the
minimum investment requirements may be made at the discretion of the Adviser
including, without limitation, for employees of the Adviser or investors who
are, or are related to, clients of the Adviser.
You may also purchase (or redeem) shares through investment dealers or
other institutions. Certain institutions that have entered into agreements with
the Fund or its Distributor may enter confirmed purchase orders or redemption
requests on behalf of customers on an expedited basis, including orders by
phone, with payment to follow no later than the time when the fund is priced on
the following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses. These
institutions may impose charges for their services, and those charges could
constitute a significant portion of a smaller account. 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) by mailing your purchase application and payment for shares directly
to Firstar as described in this prospectus.
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.
9
<PAGE>
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.
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
10
<PAGE>
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 which may take up
to 15 days from purchase.
The Fund reserves the right to redeem shares in any account with a balance
of less than 80% of the applicable minimum initial investment ($400,000) 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 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 $500,000. Call (888) BURRIDGE (1-888-287-7434) for an IRA
booklet and application. Because the Fund's intention is to maximize after-tax
returns for investors subject to federal income tax, an IRA investor should
consider whether an investment in the Fund is appropriate.
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.
11
<PAGE>
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.
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
12
<PAGE>
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.
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 over $400 million for taxable accounts.
The Adviser is privately owned by seven principals and has 25
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.
For its services, the Fund pays the Adviser a fee, accrued daily and paid
monthly, based on its average daily net asset value at the annual rates of 1.00%
of the first $500 million, 0.85% of average daily net assets in excess of $500
million, and 0.75% of average daily net assets in excess of $1 billion. The
anticipated overall expense ratio is shown in the "Expense Information" table in
this Prospectus.
In addition, the Adviser has voluntarily undertaken to limit the Fund's
expenses (including the advisory fee but excluding extraordinary costs or
expenses not incurred in the ordinary course of the Fund's operations) to 1.50%
of the Fund's average daily net assets.
The Adviser employs a team of investment professionals who participate in
investment strategy formulation and security selection. The individual
responsible for overseeing the implementation of the Adviser's strategy for the
Fund is Richard M. Burridge.
Mr. Burridge is chairman 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.
13
<PAGE>
On October 11, 1996, the Adviser entered into an agreement pursuant to
which, subject to the satisfaction of certain conditions, substantially all of
the Adviser's assets and liabilities, including its investment advisory
agreement with the Trust, will be transferred to The Burridge Group LLC
("Burridge LLC"), a newly created Delaware limited liability company of which
the Adviser is the Manager Member. Simultaneously with that asset transfer each
of the seven stockholders (the "Stockholders") of the Adviser, each of whom is
an officer and director of the Adviser, will sell his or her stock in the
Adviser to Affiliated Managers Group, Inc. ("AMG") and, with AMG, will become
members in Burridge LLC.
Upon consummation of such proposed transactions (collectively, the
"Transaction"), it is expected that Burridge LLC will operate with the same
management personnel who are presently responsible for the investment policies
and management of the Adviser and will become investment adviser to the Trust.
The new investment advisory agreement between Burridge LLC and the Trust (the
"New Agreement"), which has been approved by the Fund's initial stockholders,
has terms and conditions (including the fee and expense provisions) identical to
the terms and conditions of the existing agreement ("Existing Agreement"),
except for the named adviser therein.
The consummation of the Transaction is subject to several conditions set
forth in the Purchase Agreement, of which the principal condition is approval of
the Transaction by a certain minimum percentage of the clients of the Adviser.
Additional conditions include: (i) the continued absence of certain proceedings
that would be likely to restrain or prohibit consummation of the Transaction,
and (ii) registration of Burridge LLC as an investment adviser under the
Investment Advisers Act of 1940 and under the laws of such states as are
necessary to permit Burridge LLC to carry on the business currently conducted by
the Adviser. It is anticipated that the Transaction will be consummated around
December 31, 1996.
Following the consummation of the Transaction, the offices of Burridge LLC
will be located at the same location as the offices of the Adviser, 115 South
LaSalle Street, Chicago, Illinois 60603. Burridge LLC will be, effective upon
the consummation of the Transaction, registered as an investment adviser under
the Investment Advisers Act of 1940, as amended.
Effective on consummation of the Transaction, the present officers of the
Adviser will become officers of Burridge LLC and will have the authority to
operate and administer the investment advisory business of Burridge LLC, and to
provide investment management services. The Stockholders, as members of Burridge
LLC, will initially hold member interests representing an interest in the
aggregate of 45% of the profits of Burridge LLC, subject to reduction under
certain conditions. The remaining interest in the profits of Burridge LLC, and
100% of the Adviser, the Manager Member of Burridge LLC, will be owned by
AMG.
14
<PAGE>
AMG is a Delaware corporation which has its offices at Two International
Place, Boston, MA 02110. AMG may be deemed to have as its ultimate parent TA
Associates, Inc., a Delaware corporation. The address of TA Associates, Inc. is
High Street Tower, Suite 2500, 125 High Street, Boston, MA 02110.
Administrator, Custodian and Transfer Agent. Firstar Trust Company, P.O.
Box 701, Milwaukee, Wisconsin 53201, 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. Funds Distributor, Inc. (the "Distributor"), 60 State Street,
Suite 1300, Boston, Massachusetts 02109, 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 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
15
<PAGE>
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.
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. Burridge Capital
Development Fund is currently the only 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 believed to be remote, 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. The Fund does not intend to hold annual meetings of
shareholders.
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).
16
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
Shareholder Services: -----------------------------------------------------
BURRIDGE FUNDS
Burridge Funds
c/o Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201
(888) BURRIDGE
(1-888-287-7434)
Investment Adviser:
The Burridge Group Inc.
Chicago, IL
Distributor:
Funds Distributor, Inc. BURRIDGE CAPITAL DEVELOPMENT FUND
Boston, MA
Custodian and Transfer Agent: -----------------------------------------------------
Firstar Trust Company PROSPECTUS
Milwaukee, WI
Independent Auditors:
Arthur Andersen LLP
Chicago, IL
Legal Counsel:
Bell, Boyd & Lloyd
Chicago, IL
-----------------------------------------------------
DECEMBER ___, 1996
</TABLE>
<PAGE>
BURRIDGE FUNDS
115 South LaSalle Street
Chicago, Illinois 60603
(888) BURRIDGE
(1-888-287-7434)
STATEMENT OF ADDITIONAL INFORMATION
December _____, 1996
- --------------------------------------------------------------------------------
Burridge Capital Development 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
December ____, 1996, and any supplement to that Prospectus. That Prospectus can
be obtained without charge by calling or writing to the Trust.
<TABLE>
<CAPTION>
<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..........................................20
Purchase and Redemption of Shares.............................................21
Taxes.........................................................................22
General Information...........................................................22
Financial Statements..........................................................23
</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. The Fund
focuses on after-tax investment returns for its shareholders. 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 its industry group and the broad
market, at attractive levels. In managing the Fund, the Adviser analyzes the tax
consequences of position changes to the Fund and its shareholders subject to
federal income tax. The Adviser attempts to maximize long-term capital gains and
unrealized capital gains, and minimize short-term capital gains and ordinary
income, as components of the Fund's investment returns. 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.
B-2
<PAGE>
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. 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. The Fund will not invest more than 5% of its total assets in
convertible securities rated below investment grade, or considered by the
Adviser to be of comparable credit quality.
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. The Fund will limit its use of options and futures
so that not more than 5% of the Fund's total assets will be at risk.
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).
B-3
<PAGE>
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.)
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, assets of
equivalent value 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
B-4
<PAGE>
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 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
- -------------------
/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>
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 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.
B-6
<PAGE>
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 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 limit its use of options and futures so that not more
than 5% of the Fund's total assets will be at risk.
B-7
<PAGE>
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 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%).
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.
- ------------------
/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-8
<PAGE>
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.
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
- ------------------
/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>
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
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;
B-10
<PAGE>
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;
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 1/3% 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; or
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.
- ---------------
/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>
The Fund may not:
a. invest in companies for the purpose of exercising control or
management;
b. invest more than 10% of its total assets (valued at time of purchase)
in securities of foreign issuers;
B-12
<PAGE>
c. 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
d. 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.
In addition, the Investment Company Act of 1940 requires that the Fund not
(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.
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
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,
B-13
<PAGE>
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.
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.
B-14
<PAGE>
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:
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
B-15
<PAGE>
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 (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 (67) Chairman Chairman, The Burridge Group Inc.
- -------------------------------------------------------------------------------------------------
Kenneth M. Arenberg* (67) Trustee, President and Vice Chairman, The Burridge Group Inc.
Treasurer
- -------------------------------------------------------------------------------------------------
J. Thomas Hurvis (58) Trustee Chairman, Old World Industries, Inc.
- ---------------------------------------------------------------------------------------------------
Angelo Spoto (67) Trustee Private investor, 1990 to present;
Senior Vice President - Investments,
Blunt, Ellis & Loewi, Inc., prior
thereto.
- ---------------------------------------------------------------------------------------------------
Robert L. Underwood (51) Trustee Executive Vice President, North
American Business Development
Companies, LLC.
- ---------------------------------------------------------------------------------------------------
John H. Streur, Jr. (36) Senior Vice President and President, The Burridge Group Inc.
Secretary
- ---------------------------------------------------------------------------------------------------
Robert L. Worthington (36) Vice President Senior Vice President, The Burridge
Group Inc.
- --------------------------------------------------------------------------------------------------
Bradley P. Schluter (39) Vice President Vice President, The Burridge
Group Inc.
- --------------------------------------------------------------------------------------------------
</TABLE>
B-16
<PAGE>
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.
<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF TRUSTEE FROM TRUST
--------------- ------------
<S> <C>
Kenneth M. Arenberg $ 0
-------------------------------------
J. Thomas Hurvis 3,000
-------------------------------------
Angelo Spoto 3,000
-------------------------------------
Robert L. Underwood 3,000
-------------------------------------
</TABLE>
At the date of this Statement of Additional Information, Richard M.
Burridge and Kenneth M. Arenberg, who provided the Fund's organizational
capital, each owned 50% of the Fund's outstanding shares and therefore may be
deemed to control the Fund.
INVESTMENT ADVISORY SERVICES
The Burridge Group Inc. (the "Adviser") provides investment advisory
services to the Fund pursuant to an Investment Advisory Agreement dated December
____, 1996 (the "Advisory Agreement"). The Adviser is an Illinois 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
over $400 million for taxable accounts.
The Adviser is privately owned by seven principals and has 25 employees.
B-17
<PAGE>
In return for its services and for providing shareholder and investor
servicing the Adviser is paid a monthly fee from the Fund based on the Fund's
average daily net assets. Under the Advisory Agreement, the Fund pays the
Adviser a fee, accrued daily and paid monthly, at the annual rates of 1.00% of
the first $500 million of its average daily net assets, 0.85% of the next $500
million, and 0.75% of average daily net assets in excess of $1 billion.
The Agreement provides that the Adviser shall not be liable for any loss
suffered by the Trust or its shareholders as a consequence of any act or
omission in connection with investment 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 expires in December 1998, but 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 chairman 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.
On October 11, 1996 the Adviser entered into an agreement pursuant to
which, subject to the satisfaction of certain conditions, substantially all of
the Adviser's assets and liabilities, including its investment advisory
agreement with the Trust, will be transferred to The Burridge Group LLC
("Burridge LLC"), a newly created Delaware limited liability company of which
the Adviser is the Manager Member. Simultaneously with that asset transfer each
of the seven stockholders (the "Stockholders) of the Adviser, each of whom is an
officer and director the
B-18
<PAGE>
Adviser, will sell his or her stock in the Adviser to Affiliated Managers Group,
Inc. ("AMG") and, with AMG will become members in Burridge LLC.
Upon consummation of such proposed transactions (collectively, the
"Transaction"), it is expected that Burridge LLC will operate with the same
management personnel who are presently responsible for the investment policies
and management of the Adviser and will become investment adviser to the Trust.
The new investment advisory agreement between Burridge LLC and the Trust (the
"New Agreement"), which has been approved by the Fund's initial stockholders,
has terms and conditions (including the fee and expense provisions) identical to
the terms and conditions of the existing agreement ("Existing Agreement"),
except for the named adviser therein.
The consummation of the Transaction is subject to several conditions set
forth in the Purchase Agreement, of which the principal condition is approval of
the Transaction by a certain minimum percentage of the clients of the Adviser.
Additional conditions include: (i) the continued absence of certain proceedings
that would be likely to restrain or prohibit consummation of the Transaction,
and (ii) registration of Burridge LLC as an investment adviser under the
Investment Advisers Act of 1940 and under the laws of such states as are
necessary to permit Burridge LLC to carry on the business currently conducted by
the Adviser. It is anticipated that the Transaction will be consummated around
December 31, 1996.
Following the consummation of the Transaction, the offices of Burridge LLC
will be located at the same location as the offices of the Adviser, 115 South
LaSalle Street, Chicago, Illinois 60603.
Effective on consummation of the Transaction, the present officers of the
Adviser will become officers of Burridge LLC and will have the authority to
operate and administer the investment advisory business of Burridge LLC, and to
provide investment management services. The Stockholders, as members of
Burridge LLC, will initially hold member interests representing an interest in
the aggregate of 45% of the profits of Burridge LLC, subject to reduction under
certain conditions. The remaining interest in the profits of Burridge LLC and
100% of the Adviser, the Manager Member of Burridge LLC, will be owned by AMG.
AMG is a Boston-based private holding company that makes equity investments in
investment management firms in which management personnel retain a significant
interest in the future of the business.
AMG is a Delaware corporation which has its offices at Two International
Place, Boston, MA 02110. AMG may be deemed to have as its parent, Advent VII,
L.P., a Delaware limited partnership, because Advent VII, L.P. owns greater than
fifty percent of the voting stock of AMG. Advent VII, L.P. may be deemed to
have, as its parent, its sole general partner - TA Associates VII, L.P., which
is a Delaware limited partnership, and which in turn may be deemed to have, as
its parent, its sole general partner - TA Associates, Inc., a Delaware
corporation. The address of each of Advent VII, L.P., TA Associated VII, L.P.
and TA Associates, Inc., is c/o TA Associates, Inc., High Street Tower, Suite
2500, 125 High Street, Boston, MA 02110. AMG has
B-19
<PAGE>
advised the Trust that TA Associates, Inc., which was founded in 1968, has
invested directly or indirectly in over 200 enterprises prior to its investment
in AMG.
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.
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
B-20
<PAGE>
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, Funds Distributor, Inc. 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.
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.
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.
B-21
<PAGE>
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.
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
B-22
<PAGE>
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 Services 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 Transfer Agency 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 Funds Distributor, Inc. ("Distributor"), 60 State Street, Boston,
Massachusetts 02109, 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 expires in December, 1998, but may continue from
year to year thereafter, 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 any such party. The Adviser pays the
fees and expenses of the Distributor and all sales and promotional expenses from
its own resources.
As agent, the Distributor offers the Fund's shares only on a best-efforts
basis. The Distributor offers shares of the Fund to investors at net asset
value, without sales commissions, sales loads or other sales charges.
FINANCIAL STATEMENTS
To the Shareholders and Board of Trustees of Burridge Funds
B-23
<PAGE>
We have audited the accompanying statement of net assets of Burridge Funds (a
Massachusetts business trust) comprising the Burridge Capital Development Fund
as of November 18, 1996. The statement of net assets is the responsibility of
Burridge Funds' management. Our responsibility is to express an opinion on the
statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of net assets. Our procedures
included confirmation of cash held by the custodian as of November 18, 1996. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the statement of net assets referred to above presents fairly,
in all material respects, the net assets of Burridge Capital Development Fund
constituting the Burridge Funds as of November 18, 1996, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 18, 1996
<PAGE>
BURRIDGE FUNDS STATEMENT OF NET ASSETS
NOVEMBER 18, 1996
Burridge Capital Development Fund
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Cash $100,000
Prepaid Expenses 26,770
Deferred organizational costs 55,500
--------
Total Assets $182,270
========
LIABILITIES
Payable to Adviser 82,270
--------
NET ASSETS $100,000
========
Shares Outstanding 10,000
--------
Net asset value, offering and
redemption price per share $10.00
========
</TABLE>
NOTES TO STATEMENT OF NET ASSETS
NOVEMBER 18, 1996
1.) The Trust:
Burridge Funds (the Trust) was organized as a Massachusetts business trust on
August 30, 1996 and has been inactive since that date except for matters
relating to its organization, its registration as an open-end series investment
company and the registration of its shares under the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended, and the sale of
the outstanding shares to two principals of The Burridge Group Inc., the Trust's
investment adviser. Burridge Capital Development Fund (the Fund), a series of
Burridge Funds, is authorized to issue an unlimited number of shares of
beneficial interest, without par value.
2.) Deferred Organization Costs:
The Trust expects to incur approximately $55,500 in organization costs. These
costs will be amortized over a 60-month period beginning with the commencement
of Trust operations.
The Trust's initial shareholders have agreed that if any of the initial shares
are redeemed during the first 60 months of the Trust's operations by any holder
thereof, the proceeds of the redemption will be reduced by the pro rata share of
the unamortized organization expenses as of the date of the redemption. The pro
rata share by which the redemption proceeds shall be
B-25
<PAGE>
reduced shall be derived by dividing the number of original shares redeemed by
the total number of original shares outstanding at the time of the redemption.
3.) Related Parties:
The Burridge Group Inc. will act as investment adviser for and manage the
investment and reinvestment of the assets of the Fund. For these services, the
Fund has agreed to pay an annual management fee declining from 1.00% of its
average daily net assets as described in the Prospectus.
The Burridge Group Inc. expects, pursuant to an agreement, to transfer its
assets, including the investment advisory agreement, to The Burridge Group LLC.
The new investment advisory agreement between The Burridge Group LLC and the
Fund has terms and conditions identical to the terms and conditions of the
current agreement, except for the advisor named therein.
4.) Taxes:
The Fund intends to comply with the requirements of the Internal Revenue Code
necessary to qualify as a regulated investment company and make the requisite
distributions of income to its shareholder which will be sufficient to relieve
it from all or substantially all Federal income taxes.
B-26
<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:
Statement of Net Assets at November 18, 1996.
(b) Exhibits:
1 Agreement and Declaration of Trust of the registrant/*/
2 Bylaws, as amended, 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.
- ---------------------
* Incorporated by reference to previous filing of registration statement on Form
N1-A filed by Burridge Funds on September 9, 1996 with the Securities and
Exchange Commission pursuant to the Securities Act of 1933 (File No. 333-
11633).
1
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
5.1 Form of Investment Advisory Agreement between the registrant and
The Burridge Group LLC
6 Form of Distributor Agreement between the registrant and Funds
Distributor, Inc.
7 None
8 Form of Custodian Agreement between the registrant and Firstar
Trust Company
9.1 Form of Transfer Agency Agreement between the registrant and
Firstar Trust Company
9.2 Form of Fund Accounting Services Agreement between the
registrant and Firstar Trust Company
9.3 Form of Fund Administration Servicing Agreement between the
registrant and Firstar Trust Company
9.4 Form of Fulfillment Servicing Agreement between the registrant
and Firstar Trust Company
10 Opinion and Consent of Counsel
11 Consent of Independent Auditors
12 None
13 Subscription Agreement
14 Burridge Funds Individual Retirement Account Custodial Agreement
and Disclosure Statement and related applications
15 None
16 Not applicable
17 Financial Data Schedule
18 Form of account application
</TABLE>
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.
<PAGE>
Number of Record Holders
Title of Series as of November 18, 1996
--------------- ------------------------
Burridge Capital Development Fund 2
ITEM 27. Indemnification.
See Article VIII of registrant's Agreement and Declaration of Trust.
The registrant, its trustees and officers, the investment adviser to
registrant and certain affiliated persons of the adviser are insured under a
policy of insurance maintained by registrant and the adviser, within the limits
and subject to the limitations of the policy, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities that might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
trustees, directors or officers. The policy expressly excludes coverage for any
trustee or officer whose personal dishonesty, fraudulent breach of trust, lack
of good faith, or intention to deceive or defraud has been finally adjudicated
or may be established or who willfully fails to act prudently.
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. The
general effect of the indemnification provisions of the Agreement and
Declaration of Trust is to protect, out of assets of the Registrant,
Registrant's officers and trustees from liabilities to which they would
otherwise be subject.
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 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) Funds Distributor, Inc. (the "Distributor") also acts as principal
underwriter for the following investment companies:
3
<PAGE>
BJB Investment Funds
Burridge Funds
Foreign Fund, Inc.
Fremont Mutual Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc., d/b/a Harris Insight Funds
The JPM Advisor Funds
The JPM Institutional Funds
The JPM Pierpont Funds
LKCM Fund
The Munder Funds Trust
The Munder Funds, Inc.
The PanAgora Institutional Funds
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
St. Clair Money Market Fund
The Skyline Funds
Waterhouse Investors Cash Management Fund, Inc.
Funds Distributor is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National Association of
Securities Dealers. Funds Distributor is an indirect wholly-owned subsidiary of
Boston International Group, Inc., a holding company all of whose outstanding
shares are owned by key employees.
(b) The information required by this Item 29(b) with respect to each
director, officer or partner of Funds Distributor is incorporated by reference
to Schedule A of Form BD filed by Funds Distributor with the Securities and
Exchange Commission pursuant to the Securities Act of 1934 (File No. 8-20518).
(c) Not applicable.
4
<PAGE>
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 Capital Development
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.
5
<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 amendment to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Chicago and state of
Illinois on November ___, 1996.
Burridge Funds
By /s/ Kenneth M. Arenberg
-----------------------
President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the 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)
November ___, 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, as amended, 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.
5.1 Form of Investment Advisory Agreement between the
registrant and The Burridge Group LLC
6 Form of Distributor Agreement between the registrant
and Funds Distributor, Inc.
7 None
8 Form of Custodian Agreement between the registrant
and Firstar Trust Company
9.1 Form of Transfer Agency Agreement between the
registrant and Firstar Trust Company
9.2 Form of Fund Accounting Services Agreement between
the registrant and Firstar Trust Company
9.3 Form of Fund Administration Servicing Agreement between
the registrant and Firstar Trust Company
9.4 Form of Fulfillment Servicing Agreement between the
registrant and Firstar Trust Company
10 Opinion and Consent of Counsel
11 Consent of Independent Auditors
12 None
13 Subscription Agreement
14 The Burridge Funds Individual Retirement Account Custodial
Agreement and Disclosure Statement and Related applications
</TABLE>
- ------------------
* previously filed.
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
15 None
16 Not applicable
17 Financial Data Schedule
18 Form of account application
</TABLE>
<PAGE>
Exhibit 2
BURRIDGE FUNDS
BYLAWS
------
<PAGE>
Table of Contents
-----------------
<TABLE>
<C> <S> <C>
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............................................. 3
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 Chairman........................................... 3
4.6 President.......................................... 4
4.7 Vice Presidents.................................... 4
</TABLE>
<PAGE>
AMENDED AND RESTATED
--------------------
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
<PAGE>
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.
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 add 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
2
<PAGE>
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.
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 chairman,
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 chairman, 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 chairman, 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 Chairman. The chairman shall preside at all the meetings of the Board of
Trustees and all the shareholders' meetings. As a spokesman of the Trust, the
chairman shall consult from time to time with the officers concerning the
Trust's policies and business, as may be requested by the Board of Trustees or
by the officers, or on his own initiative. The chairman shall engage or
participate in a senior capacity in other matters of concern to the Board of
Trustees or other officers, as may be requested.
4.6 President. The president shall be the chief executive officer of the Trust
and shall have such duties as customarily pertain to that office. The president
shall have general management and supervision of the property, business and
affairs of the Trust and over its other officers. If there is no chairman or in
the absence of the chairman, the president shall preside over all meetings of
the Board of Trustees and all shareholders' meetings.
3
<PAGE>
4.7 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.
4.8 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.
4.9 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
4
<PAGE>
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.
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
5
<PAGE>
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.
6
<PAGE>
Exhibit 5
BURRIDGE FUNDS
BURRIDGE CAPITAL DEVELOPMENT FUND
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated the ____ day of December 1996, is made and entered
into by and between BURRIDGE FUNDS, a Massachusetts business trust (the "Trust")
on behalf of its series Burridge Capital Development Fund (the "Fund"), and THE
BURRIDGE GROUP INC., an Illinois corporation (the "Adviser").
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as
manager and investment adviser to Burridge Capital Development Fund (the
"Fund"), a series of the Trust, for the period and on the terms herein set
forth. The Adviser accepts that appointment and agrees to provide the services
set forth in this Agreement, for the compensation herein provided.
2. SERVICES OF ADVISER.
(a) The Adviser shall manage the business and affairs of the Fund and
the investment and reinvestment of the assets of the Fund, subject to the
supervision of the board of trustees of the Trust, for the period and on the
terms set forth in this agreement. The Adviser shall give due consideration to
the investment policies and restrictions and the other statements concerning the
Fund in the Trust's Agreement and Declaration of Trust, bylaws and registration
statements under the 1940 Act and the Securities Act of 1933 (the "1933 Act"),
and to the provisions of the Internal Revenue Code applicable to the Trust as a
regulated investment company. The Adviser shall be deemed for all purposes to
be an independent contractor and not an agent of the Trust or the Fund, and
unless otherwise expressly provided or authorized, shall have no authority to
act or represent the Trust or the Fund in any way.
(b) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Adviser, although the Fund will pay the actual brokerage
commissions on portfolio transactions in accordance with Paragraph 4. In
executing portfolio transactions and selecting brokers or dealers, the Adviser
will use its best efforts to seek on behalf of the Fund the best overall terms
available for any transaction. The Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis).
(c) To the extent contemplated by the Trust's registration statement
under the 1933 Act, in evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Adviser
may also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Fund and/or other accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. Consistent with the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. and subject to seeking the
most favorable combination of net price and execution available, the Adviser may
consider sales of shares of the Fund as a
<PAGE>
factor in the selection of broker-dealers to execute portfolio transactions for
the Fund. The Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised.
3. SERVICES OTHER THAN AS ADVISER. The Adviser (or an affiliate of the
Adviser) may act as broker for the Trust in connection with the purchase or sale
of securities by or to the Trust if and to the extent permitted by procedures
adopted from time to time by the board of trustees of the Trust. Such brokerage
services are not within the scope of the duties of the Adviser under this
agreement, and, within the limits permitted by law and the trustees, the Adviser
(or an affiliate of the Adviser) may receive brokerage commissions, fees or
other remuneration from the Trust for such services in addition to its fee for
services as Adviser. Within the limits permitted by law, the Adviser may
receive compensation from the Trust for other services performed by or for the
Trust which are not within the scope of the duties of the Adviser under this
agreement.
4. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its
own expense, office space to the Trust and all necessary office facilities,
equipment, and personnel for managing the assets of the Fund, providing
shareholder servicing and providing general administrative services to the Fund
and to the Trust. The Adviser shall also assume and pay all other expenses
incurred by it in connection with managing the assets of the Fund, all expenses
of marketing shares of the Fund, all compensation of trustees who are
"interested persons" of the Trust as defined in the Act and all expenses
incurred in connection with their services to the Trust.
5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall assume and pay all
other costs and expenses not specifically assumed by the Adviser, including, but
not limited to: all accounting, auditing and legal services, clerical and
statistical services, administrative costs; all costs attributable to
shareholder and investor services relating to the Fund (including, without
limitation, telephone and personnel expenses and the charges, if any, of third
parties performing such services); all expenses of maintaining the registration
of shares of the Fund under the 1933 Act and of qualifying and maintaining
qualification of shares of the Fund under the securities laws of such United
States jurisdictions as the Trust may from time to time reasonably designate;
all expenses of determining daily price computations and performing related
bookkeeping services; all charges of depositories, custodians, and other
agencies for the safekeeping and servicing of the Fund's cash, securities, and
other property and of the Trust's transfer, dividend disbursing, and redemption
agents and registrars, if any; insurance expenses; all expenses of publication
of notices and reports to the Trust's shareholders; all expenses of proxy
solicitations of the Trust or its board of trustees; all expenses of maintaining
the Trust's existence and maintaining the registration of the Trust under the
Act; all fees and expenses incurred in connection with the services to the Trust
of trustees who are not "interested persons" of the Trust as defined in the Act;
the compensation to the Adviser provided in Section 6 of this Agreement;
2
<PAGE>
all taxes and fees payable to federal, state, or other governmental agencies,
domestic or foreign; all stamp or other transfer taxes; all interest charges;
and any extraordinary costs or expenses such as legal, accounting, or other
costs or expenses not incurred in the course of the Trust's ongoing operation.
In addition to the payment of the foregoing expenses the Trust shall also pay
all brokers' commissions and other portfolio transaction costs. Any expenses
borne by the Trust that are attributable solely to the organization, operation
or business of the Fund are charged against the Fund. Other expenses of the
Trust are allocated among its portfolios on a reasonable basis as determined by
the Trust's board of trustees.
6. COMPENSATION OF ADVISER. For the services to be rendered and the
charges and expenses to be assumed and to be paid by the Adviser hereunder, the
Trust shall pay out of Fund assets to the Adviser a fee, accrued daily and paid
monthly, at the annual rate of (i) 1.00% of the first $500 million of the Fund's
average daily net assets; (ii) 0.85% of the Fund's average daily net assets in
excess of $500 million; and (iii) 0.75% of the average daily net assets in
excess of $1 billion. The fee payable hereunder shall be reduced
proportionately during any month in which this agreement is not in effect for
the entire month. The fee for each calendar month or portion thereof shall be
payable on the first business day of the next month.
7. SERVICES OF ADVISER NOT EXCLUSIVE. The services of the Adviser to the
Trust hereunder are not exclusive, and the Adviser shall be free to render
similar services to others so long as its services under this agreement are not
impaired by such other activities.
8. LIABILITY OF ADVISER. The Adviser shall not be liable to the Trust or
its shareholders for any loss suffered by the Trust or its shareholders from or
as a consequence of any act or omission of the Adviser, or of any of the
directors, officers, employees, or agents of the Adviser, in connection with,
pursuant to or arising out of this 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 by reason of reckless disregard by the Adviser of
such obligations and duties under this Agreement.
9. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not
be binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the assets and property
of the Trust as provided in the Agreement and Declaration of Trust of the Trust.
10. USE OF ADVISER'S NAME. The Trust may use the name "Burridge Funds" or
any other name derived from the name "Burridge," only for so long as this
agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have succeeded
to the business of the Adviser as investment adviser. At such time as this
agreement or any extension, renewal or amendment hereof, or such other similar
agreement shall no longer be in effect, the Trust will (by amendment of its
Agreement and Declaration of Trust, if necessary) cease to use any name derived
from the name "Burridge," any name similar thereto or any other name indicating
that it is advised by or otherwise connected with the Adviser, or with any
organization which shall have succeeded to the Adviser's business as investment
adviser. The consent of the Adviser to the use of such
3
<PAGE>
name by the Trust shall not prevent the Adviser's permitting any other
enterprise, including another investment company, to use such name or names.
11. DURATION AND RENEWAL.
(a) Unless terminated as provided in section 13, this agreement shall
continue in effect until December __, 1998, and thereafter from year to year
only so long as such continuance is specifically approved at least annually (a)
by a majority of those trustees who are not interested persons of the Trust or
of the Adviser, voting in person at a meeting called for the purpose of voting
on such approval, and (b) by either the board of trustees of the Trust or a vote
of the holders of a majority of the outstanding shares of the Fund (which term
as used throughout this agreement shall be construed in accordance with the
definition of "vote of a majority of the outstanding voting securities of a
company" in section 2(a)(42) of the 1940 Act).
(b) Any approval of this agreement by the holders of a majority of the
outstanding shares of the Fund shall be effective to continue this agreement
notwithstanding that it has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be required by any
other applicable law or otherwise.
12. TERMINATION. This agreement may be terminated at any time, without
payment of any penalty, by the board of trustees of the Trust, or by a vote of
the holders of a majority of the outstanding shares of the Fund, upon 60 days'
written notice to the Adviser. This agreement may be terminated by the Adviser
at any time upon 60 days' written notice to the Trust. This agreement shall
terminate automatically in the event of its assignment (as defined in section
2(a)(4) of the 1940 Act).
13. AMENDMENT. This agreement may not be amended without the affirmative
vote (a) of a majority of those trustees who are not "interested persons" (as
defined in Section 2(a)(19) of the 1940 Act) of the Trust and (b) of the holders
of a majority of the outstanding shares of the Fund.
14. GOVERNING LAW. The terms and provisions of this Agreement shall be
interpreted under and governed by the law of the State of Illinois.
15. NOTICES. Any notices and communications required hereunder shall be
in writing and shall be deemed given when delivered in person or when sent by
first-class, registered or certified mail to the Adviser at 115 South LaSalle
Street, Chicago, Illinois 60603 and to the Fund at 115 South LaSalle Street,
Chicago, Illinois 60603, or at such address as either party may from time to
time specify by notice to the other.
4
<PAGE>
Dated: December __, 1996
BURRIDGE FUNDS
_________________________________
Name: Kenneth M. Arenberg
Title: President
THE BURRIDGE GROUP INC.
_________________________________
Name: Richard M. Burridge
Title: Chairman
5
<PAGE>
Exhibit 5.1
BURRIDGE FUNDS
BURRIDGE CAPITAL DEVELOPMENT FUND
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated the ____ day of December 1996, is made and entered
into by and between BURRIDGE FUNDS, a Massachusetts business trust (the "Trust")
on behalf of its series Burridge Capital Development Fund (the "Fund"), and THE
BURRIDGE GROUP LLC, a Delaware limited liability company (the "Adviser").
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as
manager and investment adviser to Burridge Capital Development Fund (the
"Fund"), a series of the Trust, for the period and on the terms herein set
forth. The Adviser accepts that appointment and agrees to provide the services
set forth in this Agreement, for the compensation herein provided.
2. SERVICES OF ADVISER.
(a) The Adviser shall manage the business and affairs of the Fund and
the investment and reinvestment of the assets of the Fund, subject to the
supervision of the board of trustees of the Trust, for the period and on the
terms set forth in this agreement. The Adviser shall give due consideration to
the investment policies and restrictions and the other statements concerning the
Fund in the Trust's Agreement and Declaration of Trust, bylaws and registration
statements under the 1940 Act and the Securities Act of 1933 (the "1933 Act"),
and to the provisions of the Internal Revenue Code applicable to the Trust as a
regulated investment company. The Adviser shall be deemed for all purposes to
be an independent contractor and not an agent of the Trust or the Fund, and
unless otherwise expressly provided or authorized, shall have no authority to
act or represent the Trust or the Fund in any way.
(b) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with brokers or dealers
selected by the Adviser, although the Fund will pay the actual brokerage
commissions on portfolio transactions in accordance with Paragraph 4. In
executing portfolio transactions and selecting brokers or dealers, the Adviser
will use its best efforts to seek on behalf of the Fund the best overall terms
available for any transaction. The Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any (for the specific
transaction and on a continuing basis).
(c) To the extent contemplated by the Trust's registration statement
under the 1933 Act, in evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, the Adviser
may also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Fund and/or other accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. Consistent with the Rules of Fair Practice of
the National Association of Securities Dealers, Inc. and subject to seeking the
most favorable combination of net price and execution available, the Adviser may
consider sales of shares of the Fund as a
<PAGE>
factor in the selection of broker-dealers to execute portfolio transactions for
the Fund. The Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of that particular transaction or in terms of
all of the accounts over which investment discretion is so exercised.
3. SERVICES OTHER THAN AS ADVISER. The Adviser (or an affiliate of the
Adviser) may act as broker for the Trust in connection with the purchase or sale
of securities by or to the Trust if and to the extent permitted by procedures
adopted from time to time by the board of trustees of the Trust. Such brokerage
services are not within the scope of the duties of the Adviser under this
agreement, and, within the limits permitted by law and the trustees, the Adviser
(or an affiliate of the Adviser) may receive brokerage commissions, fees or
other remuneration from the Trust for such services in addition to its fee for
services as Adviser. Within the limits permitted by law, the Adviser may
receive compensation from the Trust for other services performed by or for the
Trust which are not within the scope of the duties of the Adviser under this
agreement.
4. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its
own expense, office space to the Trust and all necessary office facilities,
equipment, and personnel for managing the assets of the Fund, providing
shareholder servicing and providing general administrative services to the Fund
and to the Trust. The Adviser shall also assume and pay all other expenses
incurred by it in connection with managing the assets of the Fund, all expenses
of marketing shares of the Fund, all compensation of trustees who are
"interested persons" of the Trust as defined in the Act and all expenses
incurred in connection with their services to the Trust.
5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall assume and pay all
other costs and expenses not specifically assumed by the Adviser, including, but
not limited to: all accounting, auditing and legal services, clerical and
statistical services, administrative costs; all costs attributable to
shareholder and investor services relating to the Fund (including, without
limitation, telephone and personnel expenses and the charges, if any, of third
parties performing such services); all expenses of maintaining the registration
of shares of the Fund under the 1933 Act and of qualifying and maintaining
qualification of shares of the Fund under the securities laws of such United
States jurisdictions as the Trust may from time to time reasonably designate;
all expenses of determining daily price computations and performing related
bookkeeping services; all charges of depositories, custodians, and other
agencies for the safekeeping and servicing of the Fund's cash, securities, and
other property and of the Trust's transfer, dividend disbursing, and redemption
agents and registrars, if any; insurance expenses; all expenses of publication
of notices and reports to the Trust's shareholders; all expenses of proxy
solicitations of the Trust or its board of trustees; all expenses of maintaining
the Trust's existence and maintaining the registration of the Trust under the
Act; all fees and expenses incurred in connection with the services to the Trust
of trustees who are not "interested persons" of the Trust as defined in the Act;
the compensation to the Adviser provided in Section 6 of this Agreement;
2
<PAGE>
all taxes and fees payable to federal, state, or other governmental agencies,
domestic or foreign; all stamp or other transfer taxes; all interest charges;
and any extraordinary costs or expenses such as legal, accounting, or other
costs or expenses not incurred in the course of the Trust's ongoing operation.
In addition to the payment of the foregoing expenses the Trust shall also pay
all brokers' commissions and other portfolio transaction costs. Any expenses
borne by the Trust that are attributable solely to the organization, operation
or business of the Fund are charged against the Fund. Other expenses of the
Trust are allocated among its portfolios on a reasonable basis as determined by
the Trust's board of trustees.
6. COMPENSATION OF ADVISER. For the services to be rendered and the
charges and expenses to be assumed and to be paid by the Adviser hereunder, the
Trust shall pay out of Fund assets to the Adviser a fee, accrued daily and paid
monthly, at the annual rate of (i) 1.00% of the first $500 million of the Fund's
average daily net assets; (ii) 0.85% of the Fund's average daily net assets in
excess of $500 million; and (iii) 0.75% of the average daily net assets in
excess of $1 billion. The fee payable hereunder shall be reduced
proportionately during any month in which this agreement is not in effect for
the entire month. The fee for each calendar month or portion thereof shall be
payable on the first business day of the next month.
7. SERVICES OF ADVISER NOT EXCLUSIVE. The services of the Adviser to the
Trust hereunder are not exclusive, and the Adviser shall be free to render
similar services to others so long as its services under this agreement are not
impaired by such other activities.
8. LIABILITY OF ADVISER. The Adviser shall not be liable to the Trust or
its shareholders for any loss suffered by the Trust or its shareholders from or
as a consequence of any act or omission of the Adviser, or of any of the
directors, officers, employees, or agents of the Adviser, in connection with,
pursuant to or arising out of this 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 by reason of reckless disregard by the Adviser of
such obligations and duties under this Agreement.
9. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not
be binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but shall bind only the assets and property
of the Trust as provided in the Agreement and Declaration of Trust of the Trust.
10. USE OF ADVISER'S NAME. The Trust may use the name "Burridge Funds" or
any other name derived from the name "Burridge," only for so long as this
agreement or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall have succeeded
to the business of the Adviser as investment adviser. At such time as this
agreement or any extension, renewal or amendment hereof, or such other similar
agreement shall no longer be in effect, the Trust will (by amendment of its
Agreement and Declaration of Trust, if necessary) cease to use any name derived
from the name "Burridge," any name similar thereto or any other name indicating
that it is advised by or otherwise connected with the Adviser, or with any
organization which shall have succeeded to the Adviser's business as investment
adviser. The consent of the Adviser to the use of such
3
<PAGE>
name by the Trust shall not prevent the Adviser's permitting any other
enterprise, including another investment company, to use such name or names.
11. DURATION AND RENEWAL.
(a) Unless terminated as provided in section 13, this agreement shall
continue in effect until December __, 1998, and thereafter from year to year
only so long as such continuance is specifically approved at least annually (a)
by a majority of those trustees who are not interested persons of the Trust or
of the Adviser, voting in person at a meeting called for the purpose of voting
on such approval, and (b) by either the board of trustees of the Trust or a vote
of the holders of a majority of the outstanding shares of the Fund (which term
as used throughout this agreement shall be construed in accordance with the
definition of "vote of a majority of the outstanding voting securities of a
company" in section 2(a)(42) of the 1940 Act).
(b) Any approval of this agreement by the holders of a majority of the
outstanding shares of the Fund shall be effective to continue this agreement
notwithstanding that it has not been approved by the vote of a majority of the
outstanding shares of the Trust, unless such approval shall be required by any
other applicable law or otherwise.
12. TERMINATION. This agreement may be terminated at any time, without
payment of any penalty, by the board of trustees of the Trust, or by a vote of
the holders of a majority of the outstanding shares of the Fund, upon 60 days'
written notice to the Adviser. This agreement may be terminated by the Adviser
at any time upon 60 days' written notice to the Trust. This agreement shall
terminate automatically in the event of its assignment (as defined in section
2(a)(4) of the 1940 Act).
13. AMENDMENT. This agreement may not be amended without the affirmative
vote (a) of a majority of those trustees who are not "interested persons" (as
defined in Section 2(a)(19) of the 1940 Act) of the Trust and (b) of the holders
of a majority of the outstanding shares of the Fund.
14. GOVERNING LAW. The terms and provisions of this Agreement shall be
interpreted under and governed by the law of the State of Illinois.
15. NOTICES. Any notices and communications required hereunder shall be
in writing and shall be deemed given when delivered in person or when sent by
first-class, registered or certified mail to the Adviser at 115 South LaSalle
Street, Chicago, Illinois 60603 and to the Fund at 115 South LaSalle Street,
Chicago, Illinois 60603, or at such address as either party may from time to
time specify by notice to the other.
4
<PAGE>
Dated: December __, 1996
BURRIDGE FUNDS
_______________________________
Name: Kenneth M. Arenberg
Title: President
THE BURRIDGE GROUP LLC
_______________________________
Name: Richard M. Burridge
Title: Chairman
5
<PAGE>
EXHIBIT 6
DISTRIBUTION AGREEMENT
BURRIDGE FUNDS
115 South LaSalle Street
Chicago, Illinois 60603
____________, 1996
Funds Distributor, Inc.
60 State Street
Suite 1300
Boston, Massachusetts 02109
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company (the "Fund") has agreed that you
shall be, for the period of this agreement, the distributor of (a) shares of
each Series of the Fund set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series are set forth
on such Exhibit, shares of the Fund. For purposes of this agreement the term
"Shares" shall mean the authorized shares of the relevant Series, if any, and
otherwise shall mean the Fund's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares covered by, and
in accordance with, the registration statement and prospectus then in effect
under the Securities Act of 1933, as amended, and will transmit promptly any
orders received by you for purchase or redemption of Shares to the Transfer and
Dividend Disbursing Agent for the Fund of which the Fund has notified you in
writing.
1.2 You agree to use your best efforts to solicit orders for the sale of
Shares. It is contemplated that you may enter into sales or servicing agreements
with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitations, the
Investment Company Act of 1940, as amended, the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended and the National
Association of Securities Dealers, Inc.'s (the "NASD") Rules of Fair Practice,
Constitution and By-Laws. You represent and warrant that you are a broker-dealer
registered with the Securities and Exchange Commission and that you are
registered with the relevant securities regulatory agencies in all fifty states,
the District of Columbia and Puerto Rico. You also represent and warrant that
you are a member of the NASD.
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1.4 You shall file Fund advertisements, sales literature and other
marketing and sales related materials with the appropriate regulatory agencies
and shall obtain such approvals for their use as may be required by the
Securities and Exchange Commission, the National Association of Securities
Dealers, Inc. and/or state securities administrators.
1.5 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind
deemed by the parties hereto to render sales of a Fund's Shares not in the best
interest of the Fund, the parties hereto may decline to accept any orders for,
or make any sales of, any Shares until such time as those parties deem it
advisable to accept such orders and to make such sales and each party shall
advise promptly the other party of any such determination.
1.6 The Fund agrees to pay all costs and expenses in connection with the
registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Fund hereunder, and all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of additional information for
regulatory purposes and for distribution to shareholders; provided however, that
the Fund shall not pay any of the costs of advertising or promotion for the sale
of Shares.
1.7 The Fund agrees to execute any and all documents and to furnish any
and all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Fund's officers in connection with the
qualification of Shares for sale in such states as you may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all expenses which may be
incurred in connection with such qualification. You shall pay all expenses
connected with your own qualification as a dealer under state or Federal laws
and, except as otherwise specifically provided in this agreement, all other
expenses incurred by you in connection with the sale of Shares as contemplated
in this agreement.
1.8 The Fund shall furnish you from time to time, for use in connection
with the sale of Shares, such information with respect to the Fund or any
relevant Series and the Shares as you may reasonably request, all of which shall
be signed by one or more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information, when so signed
by the Fund's officers, shall be true and correct. The Fund also shall furnish
you upon request with: (a) semi-annual reports and annual audited reports of the
Fund's books and accounts made by independent public accountants regularly
retained by the Fund, (b) quarterly earnings statements prepared by the Fund,
(c) a monthly itemized list of the securities in the Fund's or, if applicable,
each Series' portfolio, (d) monthly balance sheets as soon as practicable after
the end of each month, and (e) from time to time such additional information
regarding the Fund's financial condition as you may reasonably request.
1.9 The Fund represents to you that all registration statements and
prospectuses filed by the Fund with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, and under the Investment Company Act of
1940, as amended, with respect to the Shares have been carefully prepared in
conformity with the requirements of said Acts and rules and regulations of the
Securities and Exchange Commission thereunder. As used in this
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agreement the terms "registration statement" and "prospectus" shall mean any
registration statement and prospectus, including the statement of additional
information incorporated by reference therein, filed with the Securities and
Exchange Commission and any amendments and supplements thereto which at any time
shall have been filed with said Commission. The Fund represents and warrants to
you that any registration statement and prospectus, when such registration
statement becomes effective, will contain all statements required to be stated
therein in conformity with said Acts and the rules and regulations of said
Commission; that all statements of fact contained in any such registration
statement and prospectus will be true and correct when such registration
statement becomes effective; and that neither any registration statement nor any
prospectus when such registration statement becomes effective will include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
The Fund may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement or
supplements to any prospectus as, in the light of future developments, may, in
the opinion of the Fund's counsel, be necessary or advisable. If the Fund shall
not propose such amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Fund of a written request from you to do so,
you may, at your option, terminate this agreement or decline to make offers of
the Fund's securities until such amendments are made. The Fund shall not file
any amendment to any registration statement or supplement to any prospectus
without giving you reasonable notice thereof in advance; provided, however, that
nothing contained in this agreement shall in any way limit the Fund's right to
file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and unconditional.
1.10 The Fund authorizes you and any dealers with whom you have entered
into dealer agreements to use any prospectus in the form furnished by the Fund
in connection with the sale of Shares. The Fund agrees to indemnify, defend and
hold you, your several officers and directors, and any person who controls you
within the meaning of Section 15 of the Securities Act of 1933, as amended, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the reasonable cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which you, your officers and directors, or any such
controlling persons, may incur under the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, or common law or otherwise, arising
out of or on the basis of any untrue statement, or alleged untrue statement, of
a material fact required to be stated in either any registration statement or
any prospectus or any statement of additional information, or arising out of or
based upon any omission, or alleged omission, to state a material fact required
to be stated in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any of them not
misleading, except that the Fund's agreement to indemnify you, your officers or
directors, and any such controlling person will not be deemed to cover any such
claim, demand, liability or expense to the extent that it arises out of or is
based upon any such untrue statement, alleged untrue statement, omission or
alleged omission made in any registration statement, any prospectus or any
statement of additional information in reliance upon information furnished by
you, your officers, directors or any such controlling person to the Fund or its
representatives for use in the preparation thereof, and except that the Fund's
agreement to indemnify you and the Fund's representations and warranties set out
in paragraph 1.9 of this Agreement will not be
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deemed to cover any liability to the Funds or their shareholders to which you
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties, or by reason of your reckless
disregard of your obligations and duties under this Agreement ("Disqualifying
Conduct"). The Fund's agreement to indemnify you, your officers and directors,
and any such controlling person, as aforesaid, is expressly conditioned upon the
Fund's being notified of any action brought against you, your officers or
directors, or any such controlling person, such notification to be given by
letter, by facsimile or by telegram addressed to the Fund at its address set
forth above within a reasonable period of time after the summons or other first
legal process shall have been served. The failure so to notify the Fund of any
such action shall not relieve the Fund from any liability which the Fund may
have to the person against whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, or alleged omission, otherwise
than on account of the Fund's indemnity agreement contained in this paragraph
1.10. The Fund will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by the Fund and approved
by you. In the event the Fund elects to assume the defense of any such suit and
retain counsel of good standing approved by you, the defendant or defendants in
such suit shall bear the fees and expenses of any additional counsel retained by
any of them; but in case the Fund does not elect to assume the defense of any
such suit, the Fund will reimburse you, your officers and directors, or the
controlling person or persons named as defendant or defendants in such suit, for
the reasonable fees and expenses of any counsel retained by you or them. The
Fund's indemnification agreement contained in this paragraph 1.10 and the Fund's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
you, your officers and directors, or any controlling person, and shall survive
the delivery of any Shares. This agreement of indemnity will inure exclusively
to your benefit, to the benefit of your several officers and directors, and
their respective estates, and to the benefit of any controlling persons and
their successors. The Fund agrees promptly to notify you of the commencement of
any litigation or proceedings against the Fund or any of its officers or Board
members in connection with the issue and sale of Shares.
1.11 You agree to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund within the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands, liabilities and expenses
(including the reasonable cost of investigating or defending such claims,
demands or liabilities and any reasonable counsel fees incurred in connection
therewith) which the Fund, its officers or Board members, or any such
controlling person, may incur under the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, or under common law or otherwise,
but only to the extent that such liability or expense incurred by the Fund, its
officers or Board members, or such controlling person resulting from such claims
or demands, (a) shall arise out of or be based upon any unauthorized sales
literature, advertisements, information, statements or representations or any
Disqualifying Conduct in connection with the offering and sale of any Shares, or
(b) shall arise out of or be based upon any untrue, or alleged untrue, statement
of a material fact contained in information furnished in writing by you to the
Fund specifically for use in the Fund's registration statement and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or alleged
omission, to state a material fact in connection with such
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information furnished in writing by you to the Fund and required to be stated in
such answers or necessary to make such information not misleading. Your
agreement to indemnify the Fund, its officers and Board members, and any such
controlling person, as aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its officers or Board members,
or any such controlling person, such notification to be given by letter, by
facsimile or by telegram addressed to you at your address set forth above within
a reasonable period of time after the summons or other first legal process shall
have been served. You shall have the right to control the defense of such
action, with counsel of your own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or omission on your part,
and in any other event the Fund, its officers or Board members, or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify you of
any such action shall not relieve you from any liability which you may have to
the Fund, its officers or Board members, or to such controlling person by reason
of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity agreement contained in
this paragraph 1.11. This agreement of indemnity will inure exclusively to the
Fund's benefit, to the benefit of the Fund's officers and Board members, and
their respective estates, and to the benefit of any controlling persons and
their successors. You agree promptly to notify the Fund of the commencement of
any litigation or proceedings against you or any of your officers or directors
in connection with the issue and sale of Shares.
1.12 No Shares shall be offered by either you or the Fund under any of the
provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as a current prospectus as
required by Section 10 of said Act, as amended, is not on file with the
Securities and Exchange Commission; provided, however, that nothing contained in
this paragraph 1.12 shall in any way restrict or have an application to or
bearing upon the Fund's obligation to repurchase any Shares from any shareholder
in accordance with the provisions of the Fund's prospectus or charter documents.
1.13 The Fund agrees to advise you immediately in writing:
(a) of any request by the Securities and Exchange Commission for
amendments to the registration statement or prospectus then in effect or
for additional information;
(b) in the event of the issuance by the Securities and Exchange
Commission of any stop order suspending the effectiveness of the
registration statement or prospectus then in effect or the initiation of
any proceeding for that purpose;
(c) of the happening of any event which makes untrue any statement of
a material fact made in the registration statement or prospectus then in
effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not
misleading; and
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(d) of all actions of the Securities and Exchange Commission with
respect to any amendments to any registration statement or prospectus which
may from time to time be filed with the Securities and Exchange Commission.
2. Offering Price
Shares of any class of the Fund offered for sale by you shall be offered at
a price per share (the "offering price") approximately equal to (a) the net
asset value (determined in the manner set forth in the Fund's charter documents)
plus (b) a sales charge, if any and except to those persons set forth in the
then-current prospectus, which shall be the percentage of the offering price of
such Shares as set forth in the Fund's then-current prospectus. The offering
price, if not an exact multiple of one cent, shall be adjusted to the nearest
cent. In addition, Shares of any class of the Fund offered for sale by you may
be subject to a contingent deferred sales charge as set forth in the Fund's
then-current prospectus. You shall be entitled to receive any sales charge or
contingent deferred sales charge in respect of the Shares. Any payments to
dealers shall be governed by a separate agreement between you and such dealer
and the Fund's then-current prospectus.
3. Term
This Agreement shall become effective with respect to the Fund as of the
date hereof and will continue for an initial two-year term and will continue
thereafter so long as such continuance is specifically approved at least
annually (i) by the Fund's Board or (ii) by a vote of a majority of the Shares
of the Fund or the relevant Series, as the case may be, provided that in either
event its continuance also is approved by a majority of the Board members who
are not "interested persons" of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
agreement is terminable with respect to a Fund, without penalty, on not less
than sixty days' notice, by the Fund's Board of Trustees, by vote of a majority
of the outstanding voting securities of such Fund, or by you. This Agreement
will automatically and immediately terminate in the event of its "assignment."
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the Investment Company Act of 1940). You agree to notify
the Fund immediately upon the event of your expulsion or suspension by the NASD.
This Agreement will automatically and immediately terminate in the event of your
expulsion or suspension by the NASD.
4. Miscellaneous
4.1 The Fund recognizes that, except to the extent otherwise agreed to by
the parties hereto, your directors, officers and employees may from time to time
serve as directors, trustees, officers and employees of corporations and
business trusts (including other investment companies), and that you or your
affiliates may enter into distribution or other agreements with such other
corporations and trusts.
4.2 No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
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4.3 This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts without giving effect to principles of conflicts
of laws.
4.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
Please confirm that the foregoing is in accordance with your
understanding and indicate your acceptance hereof by signing below, whereupon it
shall become a binding Agreement between us.
Very truly yours,
BURRIDGE FUNDS
By: ____________________________
Name: _________________________
Title: __________________________
Accepted:
FUNDS DISTRIBUTOR, INC.
By: ________________________________
Name: _____________________________
Title: ______________________________
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EXHIBIT A
Series of Funds
---------------
BURRIDGE FUNDS
--------------
Burridge Capital Development Fund
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Dear Sirs:
As the principal underwriter of shares of certain registered
investment companies presently or hereafter managed, advised or administered by
The Burridge Group Inc. or its successor The Burridge Group LLC, shares of which
companies are distributed by us at their respective net asset values plus sales
charges as applicable, pursuant to our Distribution Agreements with such
companies (the "Funds"), we invite you to participate as a non-exclusive agent
in the distribution of shares of any and all of the Funds upon the following
terms and conditions:
1. You are to offer and sell such shares only at the public offering prices
that shall be currently in effect, in accordance with the terms of the then
current prospectuses and statements of additional information of the Funds
subject in each case to the delivery prior to or at the time of such sales
of the then current prospectus. You agree to act only as agent in such
transactions and nothing in this Agreement shall constitute either of us
the agent of the other or shall constitute you or the Fund the agent of the
other. In all transactions in these shares between you and us, we are
acting as agent for the Fund and not as principal. All orders are subject
to acceptance by us and become effective only upon confirmation by us. We
reserve the right in our sole discretion to reject any order. The minimum
dollar purchase of shares of the Funds shall be the applicable minimum
amounts described in the then current prospectuses and statements of
additional information and no order for less than such amounts will be
accepted.
2. On each purchase of shares by you from us, the total sales charges and
discount to selected dealer, if any, shall be as stated in each Fund's then
current prospectus.
Such sales charges and discount to selected dealers are subject to
reductions under a variety of circumstances as described in each Fund's
then current prospectus and statement of additional information. To obtain
these reductions, we must be notified when the sale takes place which would
qualify for the reduced charge.
There is no sales charge or discount to selected dealers on the
reinvestment of any dividends or distributions.
3. All purchases of shares of a Fund made under any cumulative purchase
privilege as set forth in a Fund's then current effective Prospectus shall
be considered an individual transaction for the purpose of determining the
concession from the public offering price to which you are entitled as set
forth in paragraph 2 hereof.
4. As an authorized agent to sell shares of the Fund, you agree to purchase
shares of the Funds only through us or from your customers. Purchases
through us shall be made only for your own investment purposes or for the
purpose of covering purchase orders already received from your customers,
and we agree that we will not place orders for the purchase of shares from
a Fund except to cover purchase orders already received by us. Purchases
from your
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customers shall be at a price not less than the net asset value quoted by
each such Fund at the time of such purchase. Nothing herein contained shall
prevent you from selling any shares of a Fund for the account of a record
holder to us or to such Fund at the net asset value quoted by us and
charging your customer a fair commission for handling the transaction.
5. You agree that you will not withhold placing customers' orders so as to
profit yourself as a result of such withholding.
6. You agree to sell shares of the Funds only (a) to your customers at the
public offering prices then in effect or (b) to us as agent for the Funds
or to each such Fund itself at the redemption price, as described in each
Fund's then current effective Prospectus.
7. Settlement shall be made promptly, but in no case later than the time
customary for such payments after our acceptance of the order or, if so
specified by you, we will make delivery by draft on you, the amount of
which draft you agree to pay on presentation to you. If payment is not so
received or made, the right is reserved forthwith to cancel the sale or at
our option to resell the shares to the applicable Fund, at the then
prevailing net asset value in which latter case you agree to be responsible
for any loss resulting to such Fund or to us from your failure to make
payment as aforesaid.
8. If any shares sold to you under the terms of this Agreement are repurchased
by a Fund or by us as agent, or purchased for the account of that Fund or
tendered to that Fund for purchase at liquidating value under the terms of
the Declaration of Trust or other document governing such Fund within seven
(7) business days after the date of confirmation to you of your original
purchase order therefor, you agree to pay forthwith to us the full amount
of the concession allowed to you on the original sale and we agree to pay
such amount to the Fund when received by us. We shall notify you of such
repurchase within ten (10) days of the effective date of such repurchase.
9. All sales will be subject to receipt of shares by us from the Funds. We
reserve the right in our discretion, without notice to you, to suspend
sales or withdraw the offering of shares entirely, or to modify or cancel
this Agreement.
10. No person is authorized to make any representations concerning the Funds or
shares of the Funds except those contained in each Fund's then current
effective Prospectus or Statement of Additional Information and any such
information as may be released by a Fund as information supplemental to
such Prospectus or Statement of Additional Information. In purchasing
shares through us you shall rely solely on the representations contained in
each Fund's then current effective Prospectus or Statement of Additional
Information and above-mentioned supplemental information.
11. Additional copies of each such Prospectus or Statement of Additional
Information and any printed information issued as supplemental to each such
Prospectus or Statement of
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Additional Information will be supplied by us to you and your selling
agents in reasonable quantities upon request.
12. With respect to Funds offering shares subject to a front-end sales charge,
shares subject to a contingent deferred sales charge, and/or institutional
class shares not subject to a sales charge, you shall conform to such
written compliance standards as we have provided you in the past or may
from time to time provide to you in the future.
13. We, our affiliates and the Funds shall not be liable for any losses,
expenses, damages, costs or other claims arising out of any redemption or
exchange pursuant to telephone instructions from any person, or our refusal
to execute such instructions for any reason.
14. All notices or other communications hereunder to either party shall be in
writing and shall be deemed sufficient if mailed to such party at the
address of such party set forth on page 5 of this Agreement or at such
other address as such party may be designated by written notice to the
other, or by telex, telecopier, telegram or similar means of same day
delivery (with a confirming copy by mail as provided herein).
15. This Agreement may be terminated upon written notice by either party at any
time, and shall automatically terminate upon its attempted assignment by
you, whether by operation of law or otherwise, or by us otherwise than by
operation of law.
16. By accepting this Agreement, you represent that you are registered as a
broker-dealer under the Securities Exchange Act of 1934, are qualified to
act as a broker or dealer in the states or other jurisdictions where you
transact business, and are a member in good standing of the National
Association of Securities Dealers, Inc., and you agree that you will
maintain such registrations, qualifications, and membership in good
standing and in full force and effect throughout the term of this
Agreement. You further agree to comply with all applicable Federal laws,
the laws of the states or other jurisdictions concerned, and the rules and
regulations promulgated thereunder and with the Constitution, By-Laws and
Rules of Fair Practice of the National Association of Securities Dealers,
Inc., and that you will not offer or sell shares of the Funds in any state
or jurisdiction where they may not lawfully be offered and/or sold.
If you are offering and selling shares of the Funds in jurisdictions
outside the several states, territories, and possessions of the United
States and are not otherwise required to be registered, qualified, or a
member of the National Association of Securities Dealers, Inc., as set
forth above you, you nevertheless agree to observe the applicable laws of
the jurisdiction in which such offer and/or sale is made, to comply with
the full disclosure requirements of the Securities Act of 1933 and the
regulations promulgated thereunder, to conduct your business in accordance
with the spirit of the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. You agree to indemnify and hold the Funds,
their investment advisor, and us harmless from loss or damage resulting
from any failure on your part to comply with applicable laws.
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17. You agree to maintain records of all sales of shares made through you and
to furnish us with copies of each record on request.
18. This Agreement and all amendments to this Agreement shall take effect with
respect to and on the date of any orders placed by you after the date set
forth below or, as applicable, after the date of the notice of amendment
sent to you by the undersigned.
19. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and shall be binding upon both parties hereto
when signed and accepted by you in the space provided below.
For Funds Distributor, Inc.
60 State Street, Suite 1300
Boston, MA 02109
- ---------------------------------------------------------------------------
By: Date
FOR:
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Address of Principal Office
- ---------------------------------------------------------------------------
City State Zip Code
By: Its:
- ----------------------------- ---------------------- --------------------
Authorized Signature Title Date
- -----------------------------
Print Name
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Exhibit 8
CUSTODIAN AGREEMENT
THIS AGREEMENT made on _______________________________, 1996, between
Burridge Funds, a Massachusetts business trust 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 Capital Development Fund, hereinafter called the
"Fund"; and
WHEREAS, the Fund desires that its securities and cash shall be hereafter
held and administered by Custodian pursuant to the terms of this Agreement;
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.
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
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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
Section15 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
(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
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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
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 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
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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 ___ 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
paragraph5 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;
(e) upon conversion of such securities pursuant to their terms into other
securities;
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(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;
(i) upon receipt of payment in connection with any repurchase agreement
related to such securities entered into by the Funds; or
(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.
8. Registration of Securities
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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 and for all
other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
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
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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 as compensation for its services pursuant to this
Agreement such compensation as may from time to time be agreed upon in writing
between 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.
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
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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:
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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.
16. Independent Accountants
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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 and 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.
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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
Attest: BURRIDGE FUNDS
________________________________ By ____________________________
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Exhibit 9.1
TRANSFER AGENT AGREEMENT
THIS AGREEMENT is made and entered into on this ___________________________
day of August, 1996, between Burridge Funds, a Massachusetts business trust 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 Capital Development Fund,
hereinafter called 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 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 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;
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;
<PAGE>
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 Fund 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 Fund 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;
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;
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<PAGE>
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; and
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.
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 the 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.
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.
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<PAGE>
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 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 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.
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
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<PAGE>
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.
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.
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<PAGE>
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 Mutual Fund Services, 615
E. Michigan Street, Milwaukee, Wisconsin 53202. If to the Fund, such
notice should be sent to Burridge Funds, 115 South La Salle Street,
Chicago, Illinois 60603.
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 Fund.
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
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<PAGE>
Exhibit 9.2
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Burridge Funds, a Massachusetts business trust 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 Capital Development Fund, hereinafter
called the "Fund"; and
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.
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<PAGE>
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
(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 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.
2
<PAGE>
(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.
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 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 the 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 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
3
<PAGE>
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 Fund, 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.
4
<PAGE>
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
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.
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 Advisor 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 Capital Development 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
5
<PAGE>
expense of the Fund, 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 Fund 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 Mutual Fund Services, 615
E. Michigan Street, Milwaukee, Wisconsin 53202, and notice to Fund shall be
sent to Burridge Funds, 115 South La Salle Street, Chicago, Illinois 60603.
15. Choice of Law. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
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 ___________________________________
6
<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") 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 Capital Development Fund, hereinafter
called 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 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 Fund 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 Fund 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 is: Burridge Capital Development Fund
V. Performance of Service; Limitation of Liability
4
<PAGE>
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 compromise in any case in which the Fund will be asked
to indemnify FTC except with the Fund's prior written consent.
5
<PAGE>
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 Fund, 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 Fund 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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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 Burridge Funds, 115 South LaSalle Street, Chicago,
Illinois 60603.
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: _________________________________
7
<PAGE>
Exhibit 9.4
Fulfillment Servicing Agreement
This Agreement between Firstar Trust Company (FTC) and Burridge Funds, a
Massachusetts business trust is entered into on this _____day of
_____________________, 1996.
WHEREAS, Burridge Funds provides investment opportunities to prospective
shareholders through a family of open end mutual funds and currently has shares
of a single series designated Burridge Capital Development Fund, hereinafter
called the "Fund"; and
WHEREAS, FTC is in the business of providing, among other things,
fulfillment services to mutual funds;
NOW THEREFORE, the parties do mutually promise and agree as follows:
Duties and responsibilities of FTC. FTC agrees to provide the following
fulfillment services to the Fund:
1. Answer all prospective shareholder calls concerning the Fund listed in
the attached Schedule A which may be modified from time to time.
2. Send all available Fund materials requested by the prospect which may
include the prospectus, statement of additional information, reports to
shareholders, and other materials, including advertising or sales
literature, provided to FTC by the Fund from time to time, within 24
hours from time of call.
3. Receive and update all the Fund fulfillment literature so that most
current information is sent and quoted.
4. Provide 24 hour answering service to record prospect calls made after
hours (7 p.m. to 8 a.m. CT).
5. Maintain and store the Fund fulfillment inventory.
6. Send periodic fulfillment reports to the Fund as agreed upon between the
parties.
Duties and responsibilities of the Fund. Fund agrees to provide the following
to FTC:
1. Provide the Fund fulfillment literature updates to FTC as necessary.
2. Supply FTC with sufficient inventory of fulfillment materials as
requested from time to time by FTC.
3. Provide FTC with any sundry information about the Fund in order to
answer prospect questions.
Performance of Service; Limitation of Liability
<PAGE>
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
compromise in any case in which the Fund will be asked to indemnify FTC
except with the Fund's prior written consent.
<PAGE>
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.
Compensation
The Fund agrees to compensate FTC for the services performed under this
agreement in accordance with the attached Schedule B; the Fund agrees to pay all
invoices within ten days of receipt.
Proprietary and Confidential Information
FTC agrees on behalf of itself and its directors, officers, and employees to
treat confidentiality and as proprietary information of the Fund all records and
other information relative to the Fund and prior, present, or potential
shareholders of the Fund (and clients of said shareholders), and not to use such
records and information for any purpose other than performance of its
responsibilities and duties thereunder, except after prior notification to and
approval in writing by Burridge Funds, which approval shall not be unreasonably
withheld and may not be withheld where FTC may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by Burridge
Funds.
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
is: Burridge Capital Development Fund
Termination
This agreement may be terminated by any of the parties upon 30 days written
notice to the parties.
<PAGE>
Notices
Notices of any kind to be given to 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 Mutual Fund Services, 615 E. Michigan
Street, Milwaukee, Wisconsin 53202 and notice to Fund shall be sent to Burridge
Funds, 115 South La Salle Street, Chicago, Illinois 60603.
Non-Liability of Trustees and Shareholders
Any obligation of Burridge Funds hereunder shall be binding upon the assets of
Burridge Funds (or applicable series thereof) and shall not be binding upon any
trustee, officer, employee, agent, or shareholder or Burridge Funds. Neither the
authorization of any action by the trustees or shareholders of Burridge Funds
nor the execution of this agreement on behalf of Burridge Funds shall impose
liability upon any trustee, officer, or shareholder of Burridge Funds.
Choice of Law
This Agreement shall be construed in accordance with the laws of the State
of Wisconsin.
Dated this _____ day of _______________________, 1996.
FIRSTAR TRUST COMPANY BURRIDGE FUNDS
By: _____________________________ By: _____________________________________
Attest: _________________________ Attest: _________________________________
<PAGE>
BELL, BOYD & LLOYD
Three First National Plaza
Suite 3300
Chicago, Illinois 60602-4207
312 372-1121
Fax 312 372-2098
JANET D. OLSEN
312 807-4311
[email protected]
November 20, 1996
Burridge Funds
115 South LaSalle Street
Chicago, Illinois 60603
Ladies and Gentlemen:
BURRIDGE FUNDS
BURRIDGE CAPITAL DEVELOPMENT FUNDS
We have acted as counsel for Burridge Funds (the "Trust") in connection
with the registration under the Securities Act of 1933 (the "Act") of an
indefinite number of shares of beneficial interest of the series of the Trust
designated Burridge Capital Development Fund (the "Shares") in registration
statement no. 333-11633 on form N-1A (the "Registration Statement").
In this connection we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate and other
records, certificates and other papers as we deemed it necessary to examine for
the purpose of this opinion, including the agreement and declaration of trust
(the "Trust Agreement") and bylaws (the "Bylaws") of the Trust, actions of the
sole trustee of the Trust authorizing the issuance of shares of the Funds and
the Registration Statement.
Based on the foregoing examination, we are of the opinion that upon the
issuance and delivery of the Shares of each Fund in accordance with the Trust
Agreement and the actions of the sole trustee authorizing the issuance of the
Shares, and the receipt by the Trust of the authorized consideration therefor,
the Shares so issued will be validly issued, fully paid and nonassessable
(although shareholders of the Fund may be subject to liability under certain
circumstances as described in the statement of additional information of the
Trust included as Part B of the Registration Statement under the caption "The
Trust").
In giving this opinion we have relied upon the opinion of Ropes & Gray to
us dated November 20, 1996, and have made no independent inquiry with respect to
any matter covered by such opinion.
<PAGE>
Burridge Funds
November 20, 1996
Page 2
We consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, we do not admit that we are in the category
of persons whose consent is required under section 7 of the Act.
Very truly yours,
BELL, BOYD & LLOYD
<PAGE>
[LETTERHEAD OF ROPES & GRAY]
November 20, 1996
Bell, Boyd & Lloyd
Three First National Plaza
70 West Madison Street, Suite 3300
Chicago, IL 60602
Ladies and Gentlemen:
We are furnishing this opinion in connection with the proposed offer and
sale from time to time by Burridge Capital Development Fund (the "Fund"), a
series of Burridge Funds (the "Trust"), of an indefinite number of shares of
beneficial interest, without par value, of the Fund (the "Shares"), pursuant to
the Trust's Registration Statement on Form N-1A (No. 333-11633) under the
Securities Act of 1933, as amended.
We are familiar with the action taken by the Trustees of the Trust to
authorize the issuance of the Shares. We have examined the Trust's records of
Trustee action, its By-Laws and its Agreement and Declaration of Trust. We have
examined such other documents as we deem necessary for the purposes of this
opinion.
We assume that, upon sale of the Shares, the Trust will receive the net
asset value thereof.
Based upon the foregoing, we are of the opinion that the Trust is
authorized to issue an unlimited number of Shares, and that, when the Shares are
issued and sold after the Registration Statement has been declared effective and
the authorized consideration therefor is received by the Trust, they will be
validly issued, fully paid and nonassessable by the Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust or any
series of the Trust (a "Series"). However, the Agreement and Declaration of
Trust disclaims shareholder liability for acts or obligations of the Trust or
any Series and requires that notice of such disclaimer be given in every note,
bond, contract or other undertaking issued by or on behalf of the Trust. The
Agreement and
<PAGE>
Bell, Boyd & Lloyd -2- November 20, 1996
Declaration of Trust provides for indemnification out of the property of the
Trust or a particular Series for all loss and expense of any shareholder held
personally liable for the obligations of the Trust or that particular Series.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Trust or the
particular Series itself would be unable to meet its obligations.
We consent to the filing of this opinion as an exhibit to the aforesaid
Registration Statement.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated November 18, 1996, and to all references to our firm included in or made a
part of this Registration Statement on Form N-1A of the Burridge Funds
(comprising the Burridge Capital Development Fund).
ARTHUR ANDERSEN LLP
Chicago, Illinois
November 18, 1996
<PAGE>
Exhibit 13
BURRIDGE FUNDS
Subscription Agreement
1. Subscription for Shares. Richard M. Burridge and Kenneth M. Arenberg
(each, a "Purchaser") severally agree to purchase from Burridge Funds ("Burridge
Funds") that number of share listed opposite his name shares of the series
designated Burridge Capital Development Fund (the "Fund") for a price of $10.00
per share, on the terms and conditions set forth herein and in the preliminary
prospectus described below, and agree to tender in payment therefor cash in an
amount equal to $10.00 multiplied by the number of shares shown below at such
time as the board of trustees or the president of Burridge Funds determines:
Purchaser Number of Shares
--------- ----------------
Richard M. Burridge 5,000
Kenneth M. Arenberg 5,000
Each Purchaser understands that Burridge Funds has filed a registration
statement with the Securities and Exchange Commission (No. 333-11633) on Form N-
1A, which contains the preliminary prospectus describing Burridge Funds, the
Fund and the shares. Each Purchaser acknowledges receipt of a copy of the
preliminary prospectus.
Each Purchaser recognizes that Burridge Funds will not be fully operational
until it commences a public offering of its shares. Accordingly, a number of
features of the Fund described in the preliminary prospectus, including
redemption of shares upon request of shareholders, will not be available until
Burridge Funds' registration statement becomes effective under the Securities
Act of 1933.
2. Representations and Warranties. Each Purchaser represents and warrants
as follows:
(a) Each Purchaser is aware that no federal or state agency has made any
finding or determination as to the fairness for investment, nor any
recommendation nor endorsement, of the shares;
(b) Each Purchaser has such knowledge and experience of financial and
business matters as will enable each Purchaser to utilize the
information made available to such Purchaser in connection with the
offering of the shares to evaluate the merits and risks of the
prospective investment and to make an informed investment decision;
(c) Each Purchaser recognizes that Burridge Funds has only recently been
organized, that the Fund has no financial or operating history and,
further, that investment in the Fund involves certain risks, and each
Purchaser has taken full cognizance of and understands all of the
risks related to the purchase of the shares and each
<PAGE>
Purchaser acknowledges that he has suitable financial resources and
anticipated income to bear the economic risks of such an investment;
(d) Each Purchaser is purchasing the shares for his own account, for
investment, and not with any intention of redemption, distribution, or
resale of the shares, either in whole or in part;
(e) Each Purchaser will sell the shares purchased by him without
registration of them under the Securities Act of 1933 or exemption
therefore;
(f) Each Purchaser has been furnished with and has read this agreement,
the preliminary prospectus and such other documents relating to the
Fund and Burridge Funds as he has requested and as have been provided
to him by Burridge Funds, and
(g) Each Purchaser has also had the opportunity to ask questions of, and
receive answers from, officers of Burridge Funds concerning Burridge
Funds and the terms of the offering.
3. Rejection of Subscriptions. Each Purchaser recognizes that Burridge
Funds reserves the right to reject or limit any subscription.
4. Limitation on Redemption. I acknowledge that redemption of the shares
purchased pursuant to this subscription may be limited during the period in
which any organizational expenses of the Fund remain unamortized, to the extent
necessary to comply with applicable law or regulation, or interpretations
thereof.
5. Social Security Number. Each Purchaser certifies under penalties of
perjury that the number shown beside his name on this form is the correct social
security number and that he is not subject to backup withholding as a result of
a failure to report all interest and dividend income to the Internal Revenue
Service.
Purchaser Social Security Number
--------- ----------------------
Richard M. Burridge ###-##-####
Kenneth M. Arenberg ###-##-####
Dated: November 18, 1996
/s/ Richard M. Burridge /s/ Kenneth M. Arenberg
- ------------------------------- -------------------------------
Richard M. Burridge Kenneth M. Arenberg
2
<PAGE>
BURRIDGE FUNDS ROLLOVER IRA PLAN
December 15, 1996
- --------------------------------------------------------------------------------
115 S. LaSalle Street Chicago, Illinois 60603 . 1-888-BURRIDGE
- --------------------------------------------------------------------------------
HOW TO OPEN A BURRIDGE FUNDS ROLLOVER IRA ACCOUNT
Fill out the application and beneficiary form at the back of this booklet and
mail it, together with your check, to Firstar Trust Company at the address shown
on the application.
If you and your spouse are each setting up an IRA, two separate accounts will be
required. Have your spouse fill out the extra application and beneficiary form,
and return it along with yours to Firstar Trust Company.
MINIMUM CONTRIBUTION
The initial contribution must be at least $500,000. Subsequent investments
must be at least $10,000. Because the minimum contributions exceed the maximum
annual contributions that can be made to a regular IRA, a Burridge Rollover IRA
can only be established by "rolling over" a distribution from a qualified
retirement plan, a tax-sheltered annuity, or another IRA.
<TABLE>
<CAPTION>
CUSTODIAN FEES
<S> <C>
Acceptance fee..................................... no charge
Transfer to successor trustee...................... $15.00
Transfer from prior trustee........................ $12.00
Annual maintenance fee............................. $12.50
Distribution(s) to a participant (single annual
charge for any number of distributions)........... $15.00
Refund of excess contribution...................... $15.00
Periodic distributions per participant............. $ 2.50
Any outgoing wire.................................. $ 7.50
</TABLE>
Note: Each IRA account is subject to the above fees, including accounts for
spouses and each of multiple accounts for the same participant.
The $12.50 annual maintenance fee will be charged to each account by the end
of September for each year and enough Fund shares will be redeemed to cover this
fee. You may also pay this fee by mailing a check for $12.50 made payable to
Firstar Trust Company before September 15th.
<PAGE>
ROLLOVER CONTRIBUTIONS
Because of the minimum required contribution, a Burridge Funds IRA can only
be established by "rolling over" a distribution from a qualified employer
retirement plan, tax-sheltered annuity, or IRA. If you receive a distribution
from the qualified retirement plan of a former employer, you may be eligible to
roll over the distribution to an IRA free of tax. You may under certain
circumstances make a rollover again to the profit sharing or pension plan of a
new employer. If you want to have that right, however, your rollover IRA derived
from an employer's qualified plan must be kept separate from any other IRA you
may have.
Qualified retirement plans are required to withhold 20% of most distributions
to you for payment of income taxes unless your plan balance is transferred
directly to an IRA or another qualified plan. This means that a direct transfer
may be preferable to a rollover for moving your qualified plan balance to a
Burridge Funds IRA. See "Transfer From a Qualified Retirement Plan to a Burridge
Funds IRA," below.
Distributions from tax-sheltered annuity plans, also known as "403(b) plans",
maintained by certain governmental and nonprofit employers, may also be eligible
to be rolled over or transferred directly to a Burridge Funds IRA under rules
similar to those applicable to distributions from qualified retirement plans.
Finally, you may also make a rollover to a Burridge Funds IRA from another
IRA. However, a rollover of the same funds from one IRA to another may be made
no more than once during a 12-month period. Any rollover must be made within 60
days after receipt of the distribution from your employer's qualified plan or
your previous IRA. Otherwise, the distribution will be subject to tax for the
year you receive it.
See Disclosure Statement, Section 2, "Requirements for Rollovers and Direct
Transfers."
TRANSFER FROM A RETIREMENT PLAN TO A BURRIDGE FUNDS IRA
You may also make a direct transfer of funds from your employer's qualified
retirement plan, or from a tax-sheltered annuity, to a Burridge Funds IRA.
Retirement and annuity plans are required to transfer distributions directly to
an IRA if the employee directs, and are also required to withhold 20% of the
distribution for taxes if a distribution is not transferred directly to an IRA
or another plan. Generally speaking, these rules regarding direct transfers
apply to any distribution that could be rolled over into an IRA.
The procedure for making a direct transfer from a retirement plan into a
Burridge Funds IRA is the same as the procedure for a direct transfer from
another IRA, discussed below.
TRANSFER TO A BURRIDGE FUNDS IRA FROM ANOTHER IRA
You may also make a direct transfer of funds from another IRA to a Burridge
Funds IRA. The 12-month restriction on IRA rollovers does not apply to direct
transfers. The transfer must be direct from your existing IRA to a Burridge
Funds IRA without your having physical contact with the funds transferred. To
make a transfer:
2
<PAGE>
1) Follow the procedure for opening an account.
2) Complete the enclosed Transfer Form to instruct your present custodian
or trustee to transfer the assets of your present account to Firstar
Trust Company as successor custodian. Have your signature guaranteed if
required by your present custodian.
3) Send the completed transfer form, along with the Burridge Funds IRA
application and beneficiary form, to Firstar Trust Company.
4) Firstar Trust Company and your present custodian or trustee will
complete the details of transferring your funds to your Burridge Funds
IRA.
TAX BENEFITS
Rollover contributions are not in themselves tax-deductible, but may defer
taxation of a distribution from a qualified employer plan, tax-sheltered annuity
or IRA. The Burridge Funds IRA is in the form of IRS Form 5305-A, which is
automatically deemed acceptable by the Internal Revenue Service. The approval by
the IRS relates only to the form of the account and not to the merits of using
the account as a retirement plan.
WHEN CAN AN ACCOUNT BE OPENED?
You can open your account and make a rollover contribution or direct transfer
from another IRA or retirement plan at any time during the year, so long as a
rollover contribution is made within 60 days after the distribution from the
other IRA or retirement plan is received by you. A distribution from a qualified
plan may be subject to income tax even if the distribution is rolled over to an
IRA. See "Rollover Contributions" and "Transfer From a Qualified Plan to a
Burridge Funds IRA," above.
DO I PAY TAX ON DIVIDENDS AND DISTRIBUTIONS?
No, all dividends and distributions accumulate tax-free. Tax is paid when you
(or your beneficiary) withdraw your retirement benefits. See the Disclosure
Statement, Section (5), "Income and Penalty Taxes."
WHEN MAY I MAKE WITHDRAWALS?
Withdrawals can start after age 59 1/2 without penalty, and must start by
April 1 after the end of the year in which you (or your spouse, in the case of a
spousal account) reach age 70 1/2. Withdrawals can be made in a lump sum or in
installments. The Internal Revenue Code imposes complex limits on the length of
time over which withdrawals from an IRA can be made. See the Disclosure
Statement, Section (4), "Distributions from your IRA." Withdrawals are subject
to tax as ordinary income, except for any portion rolled over to another IRA or
considered to be a return of nondeductible contributions. See Disclosure
Statement, Section (5), "Income and Penalty Taxes."
3
<PAGE>
WHAT IF I MAKE A WITHDRAWAL BEFORE AGE 59 1/2?
A withdrawal can be made without penalty before age 59 1/2 only in case of
death or permanent disability, in the case of certain periodic payments, or to
pay certain large medical expenses (including certain medical insurance premiums
if you are unemployed). Otherwise, a withdrawal before age 59 1/2 is a premature
withdrawal and is subject to a penalty tax of 10% of the portion that is
included in your income, in addition to the regular income tax. But neither the
regular income tax nor the 10% penalty tax applies to any portion rolled over to
another IRA or considered as a return of your nondeductible contributions.
HOW ARE DISTRIBUTIONS MADE AFTER MY DEATH?
If you die on or after April 1 of the year after you reach age 70 1/2, the
remaining balance of your IRA will continue to be distributed to your designated
beneficiary at least as rapidly as under the method of distribution in effect
before your death.
If you die before April 1 of the year after you reach age 70 1/2, the entire
balance of your IRA account must be distributed by December 31 of the year in
which the 5th anniversary of your death occurs. However, distribution need not
be made within this 5-year period if your beneficiary receives payments over a
period measured by his or her life or life expectancy beginning no later than
December 31 of the year following the year in which you die.
If the beneficiary is your spouse, those installment payments don't have to
begin until the later of December 31 of the year following the year in which you
die or December 31 of the year in which you would have reached age 70 1/2. In
addition, a distribution need not be made within 5 years of your death if your
spouse is your beneficiary and he or she elects to treat the entire interest in
the IRA (or the remaining part of such interest if distribution has already
begun) as his or her own IRA subject to the regular IRA distribution
requirements. In such a case, your spouse will be considered to be the covered
individual under the IRA.
If you die before the entire IRA has been distributed to you and your spouse
is not your beneficiary, no additional cash contributions or rollover
contributions may be accepted by the IRA.
If distributions are made from your IRA to your surviving spouse (or to a
trust of which your surviving spouse is the income beneficiary), the amount
which your surviving spouse or the trust is entitled to receive in each year
must be at least equal to the income of your IRA (or of the portion of your IRA
which benefits your surviving spouse or the trust) for that year.
You have the right to elect the manner in which your life expectancy and the
life expectancy of your beneficiary will be calculated. This election must
generally be made by the April 1 of the year following the year in which you
reach age 70 1/2, and can have a significant effect on your tax and estate
planning. If you have a substantial balance in your IRA, you should consult a
qualified tax advisor before deciding how to calculate life expectancies.
------------------------------------
4
<PAGE>
The Burridge Funds IRA Plan is sponsored by Burridge Funds. This brief outline
of the Plan is not intended as a full explanation of the Individual Retirement
Plan, but we hope that we have answered some of the questions that occur to you.
WE URGE YOU TO READ THE ENCLOSED MATERIAL THOROUGHLY.
5
<PAGE>
BURRIDGE FUNDS ROLLOVER INDIVIDUAL RETIREMENT ACCOUNT
Disclosure Statement
--------------------
(December 15, 1996)
This Disclosure Statement is being given to you to assure that you are
informed and understand the nature of an Individual Retirement Account ("IRA").
This disclosure statement explains the rules governing IRAs.
Your Right to Revoke this IRA. You may revoke this IRA at any time
within seven days after the later of the date you received this Disclosure
Statement or the day you established this IRA. For purposes of revocation, it
will be assumed that you received the Disclosure Statement no later than the
date of your check or transfer direction with which you opened your IRA. To
revoke the IRA, you must either mail or deliver a notice of revocation to the
following address:
Firstar Trust Company, Custodian
Burridge Funds
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
If a notice of revocation is mailed, it will be deemed mailed on the
date of the postmark (or if sent by certified or registered mail, the date of
certification or registration) if it is deposited in the mail in the United
States, first class postage prepaid and properly addressed. If you revoke your
IRA, you are entitled to a return of the entire amount contributed.
(1) TYPES OF IRAS
An individual retirement account, or IRA, is a trust or custodial
account created in the United States for the exclusive benefit of the depositor
and his beneficiaries. In order to be tax exempt, the trust or custodial
agreement establishing the IRA must meet the following requirements under
Section 408 of the Internal Revenue Code: (1) annual contributions must be
limited as described below; (2) the trustee or custodian must either be a bank,
or another financial institution that has been approved by the IRS; (3) no part
of the IRA can be invested in life insurance contracts; (4) the interest of the
depositor must be nonforfeitable; (5) the assets of the IRA cannot be
commingled with other property except in a common trust fund or common
investment fund; and (6) the IRA must satisfy the minimum distribution
requirements summarized below.
There are several types of IRAs. Many IRAs permit the depositor to
make regular annual contributions, either directly to a regular IRA or through a
simplified employee pension plan ("SEP-IRA") or, beginning January 1, 1997, a
Salary Incentive Match Plan ("SIMPLE-IRA") established by your employer. The
amount of contributions is limited by the Internal Revenue Code, and the
contributions may or may not be tax deductible. Because the minimum
contribution to a Burridge Funds Rollover IRA is $500,000, it is not suitable
for use as a regular IRA, SEP-IRA or SIMPLE-IRA. A Burridge Funds IRA can only
be used to receive a rollover
6
<PAGE>
or direct transfer from a qualified retirement plan, a tax-sheltered annuity
plan, or another IRA. For this reason, the limits on the contributions that can
be made to other types of IRAs, and on the deductibility of such contributions,
will not be described in this Disclosure Statement. You should be aware that
some of the rules governing regular IRAs, SEP-IRAs, and SIMPLE-IRAs are
different from those described in this Disclosure Statement.
(2) REQUIREMENTS FOR ROLLOVERS AND DIRECT TRANSFERS
A rollover contribution is a contribution made to an IRA within 60
days after a potentially taxable distribution is received from a qualified
employer retirement plan, tax-sheltered annuity, or IRA. To the extent that it
is rolled over, the original distribution will not be subject to tax. However,
the rollover contribution is not itself tax-deductible. If the original
distribution was subject to income tax withholding, you may still roll over the
entire pre-tax amount of the distribution. For example, if you receive a lump
sum distribution of $500,000 from a qualified retirement plan, the plan will be
required to withhold 20%, or $100,000, for income taxes, and you will receive a
net distribution of $400,000. You may still defer tax on the entire amount of
the distribution by rolling over $500,000 to an IRA, in which event you may be
eligible to receive a refund of the $100,000 withheld when you file your tax
return for the year, depending on your total tax liability. You could also roll
over only the $400,000 you actually received (or any lesser amount), but in that
case the amount not rolled over will be subject to tax.
There are three basic types of rollovers: rollovers from a qualified
pension or profit-sharing plan, rollovers from another IRA, and rollovers from a
tax-sheltered annuity. All distributions must be rolled over within 60 days
after you receive the distribution to receive tax-free treatment.
From a Qualified Plan. In general, you may roll over any portion of a
distribution that you receive from a qualified employer-sponsored pension or
profit-sharing plan (including a 401(k) plan), except that you cannot roll over
(1) one of a series of substantially equal periodic payments (such as an
annuity), (2) a minimum distribution required to be made after you reach the age
of 70 1/2, or (3) the portion of a distribution that represents the return of
your own after-tax contributions. If you receive a distribution of property
rather than cash, you can sell the property and roll over the sale proceeds, as
long as you complete the rollover within 60 days from the original date of
distribution.
Distributions from a self-employed retirement plan, commonly known as
an "H.R. 10" or "Keogh" plan, are treated as distributions from a qualified
employer retirement plan, and may also be rolled over.
If you make a rollover from a qualified employer plan to an IRA, you
may in turn, under certain circumstances, make a rollover from the IRA into the
qualified plan of a subsequent employer. To preserve that right, however, you
must keep the rollover IRA separate from any other IRA you may have, since you
cannot make a rollover to an employer plan from an IRA to which you have made
other types of contributions.
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Instead of receiving a distribution from a qualified plan and rolling
it over, you may also direct the trustee or custodian of any qualified
retirement plan to transfer a distribution from the plan directly to an IRA. If
a distribution from a plan can be rolled over, the plan is required by law to
transfer the distribution directly to an IRA, or another employer's plan, if you
so direct. If you do not direct the distribution to be transferred directly to
an IRA or another plan, the plan making the distribution will be required to
withhold 20% of the distribution for the payment of income taxes, even if you
subsequently roll over the distribution.
If you should die while still a participant in a qualified plan, in
certain cases your spouse may be allowed to make a tax-free rollover to an IRA.
However, your spouse may not subsequently roll that amount over into another
employer's qualified plan. Beneficiaries other than your spouse are not allowed
to roll over distributions they receive after your death.
If you have a loan outstanding from your employer's plan when you
receive a distribution, the taxable distribution will usually include the amount
of the loan. You may roll over the entire taxable distribution, including the
amount of the loan balance. However, you may not roll over an outstanding loan
to an IRA, or otherwise borrow from an IRA. See "Income and Penalty Taxes -
Prohibited Transactions and Pledging Account Assets" below.
From Another IRA. In general, any distribution or withdrawal that you
receive from an IRA can be rolled over into another IRA within 60 days, except
that (1) you cannot roll over the minimum distributions you are required to
receive after age 70 1/2, (2) you can only make a rollover from one IRA to
another once in any twelve-month period, and (3) a distribution from a SIMPLE-
IRA that is made within the first two years after you first begin to participate
in the SIMPLE-IRA can only be rolled over to another SIMPLE-IRA. You may also
request the trustee or custodian of an IRA to make a direct transfer to the
trustee or custodian of another IRA. Such direct transfers are not limited to
one in a twelve month period. Unlike the trustees of qualified retirement
plans, trustees of IRAs are not legally required to make direct transfers, but
most of them do. Your spouse may generally roll over distributions that he or
she receives from your IRA after your death, but no beneficiaries other than
your spouse may do so.
Tax Sheltered Annuities. Tax-sheltered annuity plans, sometimes
called "403(b) plans", are a retirement benefit offered by certain governmental
and not-for-profit employers, such as schools and hospitals. If you receive a
distribution from a tax sheltered annuity plan other than in the form of an
annuity, it may generally be rolled over to an IRA under rules similar to those
that apply to distributions from qualified employer plans, as described above.
As with a rollover distribution from an employer plan, you should keep a
rollover from a tax sheltered annuity plan in a separate IRA account and not
make any other contributions to it (including rollovers from other types of
plans) if you wish to preserve the right to roll over to another tax sheltered
annuity plan in the future. Distributions from other types of governmental
retirement plans may or may not be eligible for a rollover depending on whether
the employer has chosen to comply with IRS guidelines. Distributions from
voluntary deferred compensation plans maintained by government and not-for-
profit employers, sometimes known as "Section 457 plans", are not eligible for a
rollover to an IRA.
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Strict requirements must be met to qualify for tax-free rollover
treatment. You should consult your personal tax advisor in connection with
rollovers to and from your IRA.
(3) INVESTMENT AND HOLDING OF CONTRIBUTIONS
Contributions to your IRA, and the earnings thereon, are invested in
shares of Burridge Capital Development Fund, a series of Burridge Funds. The
assets in your account are held in a custodial account exclusively for your
benefit and the benefit of such beneficiaries as you may designate in writing
delivered to the Custodian. The balance in your IRA represents a separate
account which is clearly identified as your property and generally may not be
combined for investment with the property of another individual. Your right to
the entire balance in your account is nonforfeitable. No part of the assets of
your account may be invested in life insurance contracts or in collectibles such
as works of art, antiques, coins, stamps, etc.
(4) DISTRIBUTIONS FROM YOUR IRA
Distribution During Your Life. The law permits distributions to be
made from an IRA at any time after you attain age 59 1/2 without penalty, and
requires that distributions commence no later than April 1 following the
calendar year in which you attain age 70 1/2. Distributions may be in the form
of a single payment or, in accordance with regulations, in substantially equal
monthly, quarterly or annual payments over your life or the joint lives of you
and your designated beneficiary, or over a period certain not extending beyond
your life expectancy or the joint and last survivor life expectancy of you and
your designated beneficiary. However, if your beneficiary is not your spouse,
the law imposes an additional requirement called the minimum distribution
incidental benefit requirement. In general, this requirement puts a further
limit on the maximum payout period. This further limit is based on a table in
the income tax regulations, and if this limit applies to you, you should consult
your tax advisor to determine your minimum distribution.
If you direct distributions over your life or the joint lives of you
and your designated beneficiary, the Custodian will use your IRA balance to
purchase an immediate annuity contract from an insurance company you choose and
your payments will be made under the annuity. You must provide a completed
annuity application from the insurance company of your choosing.
Any distribution instruction must specify the reason for the
distribution. Examples of such reasons are: premature distributions (i.e.,
distributions before age 59 1/2), rollovers, disability, death, normal (59 1/2
or over), excess contribution returns and other.
Distributions After Your Death. If you die after the April 1 after
you reach age 70 1/2, but before the entire amount of your IRA has been
distributed to you, the balance of your IRA must be distributed to your
designated beneficiary at least as rapidly as under the method of distribution
in effect before your death.
If you die before the April 1 following the year in which you reach
age 70 1/2, the entire balance of the account must be distributed by December 31
of the year in which the 5th an-
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niversary of your death occurs. However, distribution need not be made within
this 5-year period if your beneficiary receives payments over a period measured
by his or her life or life expectancy beginning no later than December 31 of the
year following the year in which you die. If the beneficiary is your spouse,
those installment payments don't have to begin until the later of December 31 of
the year following the year in which you die or December 31 of the year in which
you would have reached age 70 1/2. In addition, a distribution need not be made
within 5 years of your death if your spouse is your beneficiary and he or she
elects to treat the entire interest in the IRA (or the remaining part of such
interest if distribution has already begun) as his or her own IRA subject to the
regular IRA distribution requirements. In such a case, your spouse will be
considered to be the covered individual under the IRA. If you die before the
entire IRA has been distributed to you and your spouse is not your beneficiary,
no additional cash contributions or rollover contributions may be accepted by
the IRA.
If distributions are made from your IRA to your surviving spouse (or
to a trust of which your surviving spouse is the income beneficiary), the amount
which your surviving spouse or the trust is entitled to receive in each year
must be at least equal to the income of your IRA (or of the portion of your IRA
which benefits your surviving spouse or the trust) for that year.
Calculations of Life Expectancy. As discussed above, the minimum
amount that you or your beneficiary must withdraw from your IRA is in many cases
determined by your life expectancy or your beneficiary's life expectancy. In
general, life expectancies are determined based on actuarial tables issued by
the IRS for each year in which you or your beneficiary is required to receive a
minimum distribution. If you die before reaching age 70 1/2 and your beneficiary
is your surviving spouse, your spouse will also generally recalculate his or her
life expectancy for each year in which a minimum distribution is required. Since
life expectancies go up as people get older, recalculating your or your spouse's
life expectancy each year will ordinarily result in a lower required annual
distribution. However, it can also result in an acceleration of the amount that
must be distributed, and the tax that must be paid, when you or you and your
primary beneficiary die. To avoid this, you (or your surviving spouse) may elect
instead to calculate your life expectancy at the time that you are required to
begin receiving mandatory distributions. This election must be made before the
date on which mandatory distributions must begin, and can't be changed after
that date. Accordingly, it is very important that you consult a qualified tax
advisor before you are required to begin receiving distributions.
(5) INCOME AND PENALTY TAXES
Income Tax Treatment. Income tax on distributions that are rolled
over into an IRA and earnings on the IRA account balance are generally deferred
until you receive distributions. If you have made both deductible and
nondeductible contributions to IRAs you maintain, a portion of each distribution
you receive from any IRA (whether or not it is the one to which you made
nondeductible contributions) will be considered to be a return of nondeductible
contributions and therefore not included in your income for tax purposes. The
balance of each distribution will be taxed as ordinary income regardless of its
original source. The amount of any distribution which is considered to be a
return of nondeductible contributions (and therefore not taxed) is determined by
multiplying the amount of the distribution by a fraction. The
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numerator of the fraction is the aggregate amount of nondeductible contributions
you have made to all of your IRAs over the years and the denominator is the
balance in all your IRAs at the end of the year (after adding back any
distributions you received during the year). The aggregate amount which can be
excluded from income for all years cannot exceed the amount of nondeductible
contributions that you made in those years.
Taxable distributions from your account are taxed as ordinary income
regardless of their original source. They are not eligible for special tax
treatment that may apply to lump sum distributions from qualified employer
plans.
Penalty Tax for Premature Distributions. Your IRA is intended to
provide income for you upon retirement. Accordingly, the law generally imposes a
penalty on premature distributions. If you receive a taxable distribution from
the IRA before reaching age 59 1/2 and do not roll it over, a nondeductible 10%
penalty will be imposed on the portion of the distribution which is included in
your gross income. This penalty is in addition to any income tax you must pay on
the distribution itself. The penalty does not apply to the extent that the
distribution is considered a return of nondeductible contributions or a return
of an excess contribution which is permitted tax-free (see below). The penalty
also will not apply if the distribution is made due to your permanent disability
or death or if the distribution is one of a series of substantially equal
periodic payments made over your life (or life expectancy) or over the joint
lives (or life expectancies) of you and your beneficiary. Beginning in 1997, the
penalty does not apply to certain withdrawals used to pay medical insurance
premiums after you have been unemployed for at least 12 weeks, or certain larger
medical bills.
Penalty Tax for Excess Contributions. Contributions to an IRA above
the permissible limits are nondeductible and are subject to an annual
nondeductible excise tax of 6% of the amount of such excess contributions for
each year that the excess is not withdrawn or eliminated. The tax is paid by the
person for whose benefit the IRA is established. If the person who contributed
the excess takes no deduction for it and withdraws the excess amount plus the
net earnings attributable to such excess on or before the due date (including
extensions) for filing the Federal income tax return for the year for which the
contribution was made, the 6% excise tax will not be applied but the 10% tax on
premature distributions will be applied to the amount of net earnings.
Generally, if the excess is withdrawn after the due date (including extensions)
for filing the tax return for the year for which the contribution was made, not
only will the excess contribution be subject to the 6% excise tax, but the
amount of such excess and the net income attributable to it will also be
includible in income; and if you have not attained the age of 59 1/2, or are not
disabled, you will also be subject to the previously mentioned 10% penalty tax
on premature distributions. The law provides, however, that if an individual has
made a contribution to an IRA for a year which does not exceed $2,000 (excluding
rollover amounts), all or part of which is an excess contribution for which he
did not claim a deduction, and he does not correct the excess contribution
before the due date (including extensions) for filing his tax return for the
year, he nevertheless may withdraw the excess amount contributed (without the
net income attributable thereto) at any time without incurring the 10% penalty
tax on premature distributions or being required to include the amount withdrawn
in income. The 6% excise tax
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will be imposed even in this special situation for the year of the excess
contribution and each subsequent year until the excess is withdrawn or
eliminated.
As noted above, a Burridge IRA is intended only for rollover
contributions, which are not subject to the annual limit on contributions.
However, if for any reason a contribution should fail to qualify as a rollover,
the penalty tax would be potentially applicable. The law provides that an
erroneous rollover contribution may be withdrawn on the same basis as other
excess contributions, but the special rules applicable to an excess contribution
withdrawn after the due date for filing your tax return apply to the withdrawal
of a non-qualifying rollover only if you reasonably relied on erroneous
information required to be supplied by the plan, trust or institution making the
distribution that was the subject of the rollover.
As an alternative to withdrawing excess contributions made to an IRA,
such amounts may be eliminated by making reduced contributions in future years;
however, you will be required to pay the 6% excise tax on the amount of the
excess for the year of the contribution and for each subsequent year until the
amount of the excess is deducted in a later year for which you have not
contributed the maximum deductible amount. If a contribution is made to your
account in an amount less than the permissible limit in order to correct an
excess contribution for a previous year for which you did not claim a deduction,
you may under certain circumstances, taking into account the limits on
contributions, be allowed to treat the amount of the reduction in the current
year's contribution as an additional contribution for the current taxable year.
Penalty Tax for Under-Distribution. If after April 1 following the
year in which you attain age 70 1/2, the amount distributed is less than the
minimum amount required by law to be distributed, a 50% excise tax may be
imposed on any such deficiency. The minimum amount required by law to be
distributed is generally based on your life expectancy or the joint and survivor
life expectancy of you and your beneficiary. However, if your beneficiary is not
your spouse, the law imposes an additional requirement which is called the
minimum distribution incidental benefit requirement. In general, this
requirement is designed to prevent you from naming a beneficiary who is much
younger than yourself in order to extend your payout period. You should consult
your tax advisor to determine your maximum distribution.
The Internal Revenue Service may waive the penalty tax for under-
distribution if the deficiency was due to reasonable error and reasonable steps
are being taken to correct the deficiency.
Penalty Tax for Excess Distributions and Accumulations. A 15% penalty
tax is generally imposed on annual distributions from retirement arrangements
(including IRAs) to the extent that such distributions in a year are considered
"excess distributions." A distribution is an "excess distribution" if it exceeds
$160,000 (or such higher amount as may be specified by the IRS) during any
calendar year. In addition, upon your death, your estate may be subject to a tax
of 15% of the excess of the balance in all such retirement arrangements over an
amount equal to the present value of an annuity of $160,000 per year. The tax on
excess distributions (but not the additional estate tax on excess accumulations)
has been suspended for distributions received
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during 1997, 1998 and 1999. You should discuss how these rules apply to you with
your tax advisor.
Prohibited Transactions and Pledging Account Assets. If during any
taxable year you engage in a so-called "prohibited transaction" with respect to
your IRA, the account will lose its tax-exempt status. In this event, the fair
market value of all account assets, valued as of the first day of such taxable
year, will be deemed distributed to you and includible in your gross income.
These prohibited transactions would include borrowing money from your account.
If you pledge your account or any portion thereof as security for a loan, such
pledged portion will be deemed distributed to you and, to the extent that it
does not represent a return of nondeductible contributions, includible in your
gross income. If you have not yet attained age 59 1/2, the 10% or 25% penalty
tax on premature distributions discussed above will also apply. If your spouse
engages in a prohibited transaction with respect to his or her account, the
results will be the same.
(6) MISCELLANEOUS
Federal Income Tax Withholding. Distributions from an IRA to the
covered individual or to a beneficiary are subject to Federal income tax
withholding unless the covered individual or beneficiary elects to have no
withholding apply. The current withholding rate required by the Internal Revenue
Code is 10%. Additional information concerning withholding and election forms
will be available no later than at the time a distribution is requested.
Federal Estate and Gift Taxes. Generally, your IRA will be included
in your estate for Federal estate tax purposes. If your spouse is your
beneficiary, your IRA may qualify for a deduction for purposes of that tax. An
election under an IRA to have a distribution payable to a beneficiary on the
death of the covered individual will not be treated as a gift subject to Federal
gift tax.
Reports to the Internal Revenue Service. You are not required to file
Form 5329 with the IRS unless you owe one of the IRA penalty taxes. These are
the taxes on excess contributions, premature distributions, prohibited
transactions and under distributions after age 70 1/2.
Financial Information. The growth in value of the mutual fund shares
held in your account can neither be guaranteed nor projected.
Plan Sponsor. Burridge Funds is the sponsor of the Burridge Funds IRA
and performs most of the ministerial functions in connection with the
maintenance of the accounts established under the Burridge Funds IRA.
Custodian Fees. Firstar Trust Company as the Custodian of your IRA
currently charges an annual maintenance fee of $12.50 per account. You should
refer to the fee schedule for other fees which may be applicable. Note that IRAs
for spouses require separate accounts, even if only one spouse makes the
contributions. Each spouse's account is subject to the above fees.
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The $12.50 annual maintenance fee will be deducted from your account
by the end of September for each year and enough Fund shares will be redeemed to
cover this fee. You may also pay this fee by mailing a check for $12.50 payable
to Firstar Trust Company before September 15.
The Custodian may change any of the above fees from time to time.
Requirements for Tax Qualification. The Burridge Funds IRA is in the
form of IRS Form 5305-A, which is automatically deemed acceptable by the IRS as
to form. The approval by the IRS relates only to the form of the account and not
to the merits of using the account as a retirement plan.
Additional Information. You may obtain additional information
regarding the taxation of IRAs from any district office of the Internal Revenue
Service.
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Form 5305-A
(Rev. October, 1992)
Department of the Treasury
Internal Revenue Service
BURRIDGE FUNDS INDIVIDUAL RETIREMENT
CUSTODIAL ACCOUNT
(Under Section 408(a) of the Internal Revenue Code)
(December 15, 1996)
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified
employee pension plan as described in section 408(k). Rollover contributions
before January 1, 1993 include rollovers described in section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a simplified employee pension plan as described in section
408(k).
ARTICLE II
The Depositor's interest in the balance in the custodial account is
nonforfeitable.
ARTICLE III
1. No part of the custodial funds may be invested in life insurance
contracts, nor may the assets of the custodial account be commingled with other
property except in a common trust fund or common investment fund (within the
meaning of section 408(a)(5)).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of section 408(m)) except as otherwise permitted by section
408(m)(3) which provides an exception for certain gold and silver coins and
coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the custodial account shall be made
in accordance with the following requirements and shall otherwise comply with
section 408(a)(6) and Proposed Regulations section 1.408-8, including the
incidental death benefit provisions of Proposed Regulations section 1.401(a)(9)-
2, the provisions of which are incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies shall
be recalculated annually. Such election shall be irrevocable as to the
Depositor and the surviving spouse and shall apply to all subsequent years. The
life expectancy of a nonspouse beneficiary may not be recalculated.
3. The Depositor's entire interest in the custodial account must be, or
begin to be, distributed by the Depositor's required beginning date, (April 1
following the calendar year end in which the Depositor reaches age 70 1/2). By
that date, the Depositor may elect, in a manner acceptable to the Custodian, to
have the balance in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the Depositor.
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(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last survivor lives of
the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last survivor expectancy
of the Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance with
paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the Depositor
or, if the Depositor has not so elected, at the election of the beneficiary or
beneficiaries, either
(i) Be distributed by December 31 of the year containing the
fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the
Depositor's death. If, however, the beneficiary is the Depositor's
surviving spouse, then this distribution is not required to begin
before December 31 of the year in which the Depositor would have
turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of section 408(b)(3) and its related regulations has irrevocably
commenced, distributions are treated as having begun on the Depositor's required
beginning date, even though payments may actually have been made before that
date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in the
account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual payment for
each year, divide the Depositor's entire Interest in the Custodial account as of
the close of business on December 31 of the preceding year by the life
expectancy of the Depositor (or the joint life and last survivor expectancy of
the Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of distributions
under paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and designated
beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2.
In the case of a distribution in accordance with paragraph 4(b)(ii), determine
life expectancy using the attained age of the designated beneficiary as of the
beneficiary's birthday in the year distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above. This method permits an
individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information
necessary for the Custodian to prepare any reports required under section 408(i)
and Regulations section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
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ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with section 408(a) and related
regulations will be invalid.
ARTICLE VII
This agreement will be amended from time to time to comply with the
provisions of the Code and related regulations. Other amendments may be made
with the consent of the persons whose signatures appear below.
ARTICLE VIII
1. Definitions.
"Investment Company" shall mean an investment company as defined in
Internal Revenue Code Section 851(a), shares of which Burridge Funds has agreed
to offer for investment under this Account. "Investment Company Shares" or
"Shares" shall mean shares of beneficial interest or capital stock of the
Investment Company.
2. Investment of Account Assets.
(a) Each contribution forwarded by the Depositor to the Custodian shall
identify the Depositor's account number and be accompanied by a statement signed
by the Depositor identifying the Investment Company Shares in which that
contribution is to be invested. The Custodian may return to the Depositor,
without liability for interest thereon, any contributions which are not
accompanied by adequate account identification or an appropriate signed
statement directing investment of those contributions.
(b) Contributions shall be invested in whole and fractional Investment
Company Shares at the price and in the manner in which such shares are then
being publicly offered by the Investment Company. All distributions received on
Investment Company Shares held in the Custodial Account shall be reinvested in
like Shares and credited to such Account. If any distribution of Investment
Company Shares may be received at the election of the shareholder in additional
like Shares or in cash or other property, the Custodian shall elect to receive
such distribution in additional like Investment Company Shares.
(c) All Investment Company Shares acquired by the Custodian shall be
registered in the name of the Custodian or its registered nominee. The Depositor
shall be the beneficial owner of all Investment Company Shares held in the
Custodial Account and the Custodian shall not vote any of such shares, except
upon written direction of the Depositor. The Custodian agrees to forward to
every Depositor a then current Prospectus, reports, notices, proxies and related
proxy soliciting materials applicable to Investment Company Shares received by
the Custodian.
(d) The Depositor may at any time, by a manually signed direction
delivered to the Custodian, redeem any number of Investment Company Shares held
for his account and reinvest the proceeds in the Shares of any other Investment
Company. Telephone redemptions and reinvestments shall be done at the price and
in the manner in which such Shares are then being redeemed or offered by the
respective Investment Companies.
3. Amendment and Termination.
(a) Burridge Funds may, with the written approval of the Custodian, amend
the Custodial Account in whole or in part (including retroactive amendments) by
delivering to the Depositor written notice of such amendment setting forth the
substance and effective date of the amendment. The Depositor shall be deemed to
have consented to any such amendments not objected to in writing by the
Depositor within thirty (30) days of receipt of the notice, provided that no
amendment shall cause or permit any part of the assets of the Custodial Account
to be diverted to purposes other than for the exclusive benefit of the Depositor
or his beneficiaries, nor shall any amendment be made except in accordance with
the applicable law and regulations affecting this Custodial Account.
(b) The Depositor may at any time terminate the Custodial Account by
delivering to the Custodian a written notice of such termination setting forth
the effective date thereof, together with any required withholding information.
17
<PAGE>
(c) The Custodial Account created by this Agreement shall automatically
terminate upon distribution to the Depositor or the beneficiary designated under
Paragraph 6 of Article VIII hereof of the entire balance in the Custodial
Account.
(d) The Custodian may be removed by the Depositor at any time upon thirty
(30) days written notice to the Custodian. The Custodian may elect to terminate
the Custodial Account upon thirty (30) days written notice to the Depositor.
(e) In the event that the assets of any Investment Company in which the
Custodial Account is invested are transferred to or acquired by any other
investment company or other commingled investment fund which is a permissible
investment for an individual retirement account, by merger or otherwise, the
Custodian may make such amendments to this Agreement, or take such other action,
as it may determined to be necessary or appropriate to accomplish such
transaction and the exchange of Investment Company Shares for shares or other
appropriate units of ownership in such successor fund. The consent of the
Depositor shall not be required for any such amendment or action, but the
Depositor shall be promptly notified thereof, and shall have the right to
withdraw the funds in the Custodial Account without fee, charge, load or penalty
of any kind.
4. Taxes and Custodial Fees. Any income taxes or other taxes of any kind
whatsoever that may be levied or assessed upon or in respect of the assets of
the Custodial Account, or the income arising therefrom, any transfer taxes
incurred, all other administrative expenses incurred by the Custodian in the
performance of its duties, including fees for legal services rendered to the
Custodian, and the Custodian's compensation, shall be paid from the Custodial
Account. Unusual administrative responsibilities not contemplated by the fee
schedule will result in such additional charges as will reasonably compensate
the Custodian for the services performed.
The custodian fee listed in the fee schedule will be deducted by the
Custodian from the initial contribution received from the Depositor. The annual
maintenance fee will be deducted on the last business day in September for each
year and enough fund shares will be redeemed to cover this fee. Fees as listed
on the fee schedule will be deducted from the refund or redemption proceeds at
the time of distribution or redemption and the remaining balance will be
remitted to the Depositor in the case of distribution, or will be reinvested in
accordance with the Depositor's instructions.
5. Reports and Notices.
(a) The Custodian shall keep adequate records of transactions it is
required to perform hereunder. No later than sixty (60) days after the close of
each calendar year, or after the Custodian's resignation or removal pursuant to
Article VIII, Paragraph 3, the Custodian shall render to Depositor a written
report or reports reflecting the transactions effected by it during such period
and the assets and liabilities of the Custodial Account at the close of the
period.
(b) All communications or notices required or permitted to be given herein
shall be deemed to be given upon receipt by the Custodian at P.O. Box 701,
Milwaukee, Wisconsin 53201-0701, the Investment Company and Burridge Funds at
P.O. Box 701, Milwaukee, Wisconsin 53201-0701, or the Depositor at his most
recent address shown in the Custodian's records. The Depositor agrees to advise
the Custodian promptly, in writing, of any change of address.
6. Designation of Beneficiary. The Depositor shall have the right, by written
notice to the Custodian, to designate a beneficiary or beneficiaries, primary
and contingent, to receive any benefit to which such Depositor may be entitled
in the event of his death prior to the complete distribution of such benefit. In
the event the Depositor has not designated any beneficiaries, or if all
beneficiaries shall predecease the Depositor, the following persons shall take
in the order named:
(a) Spouse of the Depositor;
(b) If the spouse shall predecease the Depositor, then in equal shares to
any children surviving the Depositor and to the descendants then living of a
deceased child, by the right of representation, or
(c) If the Depositor shall leave neither spouse nor descendants surviving,
then to the personal representative of the Depositor's estate.
18
<PAGE>
The determination of the Custodian as to the person entitled to receive any
distribution from the Custodial Account following the death of the Depositor, if
made in good faith, shall be conclusive and binding on all persons claiming an
interest in the Depository Account; provided that nothing provided herein shall
be construed to preclude the Custodian from filing an action in the nature of
interpleader or other appropriate proceeding in a court of competent
jurisdiction to determine the person entitled to receive such distribution. Any
expenses incurred by the Custodian in determining the person entitled to receive
a distribution from the Custodial Account, including without limitation
attorneys fees in any such action, shall be reimbursed from the Custodial
Account.
7. Inalienability of Benefits. The benefits provided hereunder shall not be
subject to alienation, assignment, garnishment, attachment, execution or levy of
any kind of any attempt to cause such benefits to be so subjected shall not be
recognized except to the extent as may be required by law.
8. Rollover Contributions. The Custodian may receive rollover contributions as
described in section 408(d)(3) or any other applicable provisions of the Code,
and regulations promulgated thereunder. If any property is transferred to the
Custodian as a rollover contribution, such property shall be sold by the
Custodian and the proceeds reinvested as provided in section 2 of this Article
VIII. The Custodian reserves the right to refuse to accept any contributions
which are not in the form of cash.
9. Conflict in Provisions. To the extent that any of the provisions of Article
VIII shall conflict with the provisions of Articles IV, V, or VII, the
provisions of Article VIII shall prevail.
10. Status of Depositors. Neither the Depositor nor any other person shall have
any legal or equitable right against the Custodian or the Investment Company
except as provided herein. The Depositor agrees to indemnify and hold the
Custodian harmless from and against any liability that the Custodian may incur
in the administration of the Account unless arising from the Custodian's own
negligence or misconduct.
11. Loss of Exemption. If the Custodian receives notice that the Depositor's
Account has lost its tax-exempt status under section 408 of the Code for any
reason, including by reason of a transaction prohibited by section 4975 of the
Code, the Custodian shall distribute to the Depositor the entire balance in the
Account, in cash or in kind, in the sole discretion of the Custodian no later
than 90 days after the date the Custodian receives such notice.
12. Applicable State Law. This Custodial Account shall be construed,
administered and enforced according to the laws of the State of Wisconsin except
to the extent Federal law supersedes Wisconsin law.
13. Distributions to Surviving Spouse. If distributions from the Custodial
Account are to be made to the Depositor's surviving spouse, or to a trust of
which the Depositor's surviving spouse is the income beneficiary, the amount
which the surviving spouse (or such trust) is entitled to receive in each year
shall not be less than the income of the Custodial Account (or of the portion of
the Custodial Account with respect to which the surviving spouse or such trust
is the beneficiary) for such year, as determined under section 2056(b)(7) of the
Code.
14. Minimum Distributions; Election not to Recalculate Life Expectancies. The
following provisions supplement the provisions of Article IV with respect to
minimum required distributions, and shall control over the provisions of Article
IV in the event of any inconsistency. All paragraph references in this paragraph
14 are to paragraphs of Article IV unless otherwise provided.
(a) If the Depositor fails to withdraw the entire balance in the Custodial
Account by the April 1 of the year following the year in which he attains age
70 1/2, he shall be deemed to have elected to receive payments under paragraph
3(d) or, if he has a designated beneficiary (as determined under Part D of
Proposed Regulations section 1.401(a)(9)-1) under paragraph 3(e). A beneficiary
shall be deemed to have elected the method described in paragraph 4(b)(ii) if
either he withdraws the minimum amount required for the first year under the
method described in paragraph 4(b)(ii) and does not specifically elect the
method described in paragraph 4(b)(i) by the end of such year, or if the date
specified in paragraph 4(b)(i) occurs first and he has not withdrawn the entire
balance in the Custodial Account by that time; otherwise, the beneficiary shall
be deemed to have elected the method described in paragraph 4(b)(i).
(b) If there is more than one beneficiary entitled to receive
distributions on equal priority upon the death of the Depositor or a prior
beneficiary then, to the extent permitted by Proposed Regulations section
19
<PAGE>
1.401(a)(9)-1, Q&A H-2, and subject to such requirements and limitations as the
Custodian may establish, the Custodial Account may be divided into separate
accounts for purposes of Article IV and this paragraph.
(c) Notwithstanding the references to "equal or substantially equal"
payments, if the Depositor or a beneficiary is receiving distributions under
paragraph 3(d), 3(e), or 4(b)(ii), he may withdraw amounts that exceed the
minimum amount required by paragraph 5 in any year, provided that any excess
shall not be credited against the minimum amount required to be withdrawn in
subsequent years. Withdrawals may also be made at irregular intervals, provided
that the minimum amount required for each year shall be withdrawn by the last
day of such year, except that the minimum amount for the year in which the
Depositor attains age 70 1/2, but no subsequent year, may be withdrawn by April
1 of the following year.
(d) In lieu of the methods of recalculating life expectancies annually as
specified in paragraph 2, the Depositor may elect for purposes of paragraph 3(c)
or 3(d), and the Depositor's surviving spouse may elect for purposes of
paragraph 4(b)(ii), to have his life expectancy, or his and his designated
beneficiary's joint and last survivor life expectancy, or the surviving spouse's
life expectancy, initially calculated in the year specified in paragraph 5 and
thereafter reduced by one year in each subsequent year. All elections described
in this paragraph 14(d) shall be made in writing in accordance with procedures
established by the Custodian and the Proposed Regulations or successors thereto.
Such elections must be made and, if made, shall be irrevocable after the date
upon which distributions are required to commence under paragraph 3 or 4(b)(ii).
(e) All references to the Proposed Regulations section 1.401(a)(9)-1 and
1.401(a)(9)-2 contained in Article IV and this paragraph 14 include the
applicable provisions of Proposed Regulations section 1.408-8 applying such
Proposed Regulations to individual retirement accounts, any subsequent
amendments to any such Proposed Regulations, and the applicable provisions of
the permanent Regulations, when issued, all of which are incorporated by
reference and shall control over any contrary provision of this Agreement.
Reference to specific provisions of the Proposed Regulations shall not be
construed to limit reference to other provisions where appropriate in the
interpretation of Article IV and this paragraph 14.
20
<PAGE>
BURRIDGE FUNDS ROLLOVER IRA APPLICATION
COMPLETE THIS APPLICATION AND SEND ALONG WITH YOUR CHECK MADE PAYABLE TO
BURRIDGE FUNDS, TO: FIRSTAR TRUST COMPANY, Attn: Burridge Funds, P.O. Box 701,
Milwaukee, Wisconsin, 53201-0701.
1. IRA APPLICANT
Name of Individual: Social Security No.:
-------------------------------------- -------------------------------------
Street Address: Birth Date:
-------------------------------------- -------------------------------------
City: State: Zip Code:
-------------------------------------- -------------------------------------
Home Phone: ( ) Business Phone: ( )
-------------------------------------- -------------------------------------
2. CONTRIBUTION TYPE Contributions are limited to rollovers or direct transfers
from qualified retirement plans, tax-sheltered annuities, and other IRAs.
Indicate whether this is a [ ] rollover or [ ] direct transfer (CHECK ONE)
and indicate the source of the funds below:
[ ] Qualified employer plan or IRA derived from a rollover from such a
plan
[ ] Tax-sheltered annuity (403(b)) plan or IRA derived from a rollover
from such a plan
[ ] Other type of IRA (NOTE: certain distributions from a SIMPLE-IRA can
only be rolled into another SIMPLE-IRA)
3. INVESTMENT OF CONTRIBUTIONS Your contribution will be invested in whole and
fractional shares of Burridge Capitol Development Fund at the price and in
the manner in which such shares are being offered by Burridge Funds
Investment Minimums: $________________.
There is an Annual Maintenance Fee charged by the Custodian of $12.50. This
fee is paid automatically by redeeming shares from your account.
4. BENEFICIARY DESIGNATION I hereby designate the following as my
Beneficiary(ies) under my Burridge Funds Rollover Individual Retirement
Account (IRA):
- -------------------------------------- ---------------------------------------
Name Relationship
- -------------------------------------- ---------------------------------------
Street Address Social Security No.
- ------------------- ------------------- ------------------- --------------
City State Zip Code Birth Date
Every payment under my IRA by reason of my death shall be made to my
Beneficiary if he or she is living at the time such payment becomes due; and if
there is no designated Beneficiary living at the time any such payment becomes
due, the payment shall be made to my estate.
A Beneficiary Designation shall be valid only if dated, signed and filed
with the Custodian under the Plan before my death. I understand that I may
change my beneficiary designation by completing a new Beneficiary Designation
and returning it to the Custodian.
SIGNATURE OF APPLICANT:
I hereby adopt the Burridge Funds Individual Retirement Plan and Custodial
Agreement. I appoint Firstar Trust Company as Custodian and agree to be bound
by the provisions of the Plan and Custodial Agreement. I certify that the
foregoing information is correct and that I received a copy of the Disclosure
Statement relating to the Plan and custodian fees, as well as a copy of the
current prospectus(es) of the Fund(s) in which my initial investment is to be
made. The terms, provisions and limitations of the IRA plan and Custodial
Agreement, as amended from time to time, are controlling and shall always govern
all rights of myself, my Beneficiaries and all persons claiming under, by or
through them, or any of them.
- ------------------------------ -------------------------------------------
Date Signature of Applicant
THIS DOCUMENT WILL BE RETAINED BY FIRSTAR TRUST COMPANY.
<PAGE>
TRANSFER FORM
BURRIDGE FUNDS
COMPLETE THIS FORM TO TRANSFER
AN EXISTING IRA OR PLAN BALANCE
TO A BURRIDGE FUNDS ROLLOVER IRA
PART I (To be completed by investor and mailed to Firstar Trust Company,
Attention: Burridge Funds, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701. If you are opening a new account, enclose a Burridge Funds IRA
application.)
TO: FIRSTAR TRUST COMPANY: IF THIS IS A DIRECT TRANSFER FROM AN EMPLOYER'S
QUALIFIED PLAN, OR TAX-SHELTERED ANNUITY SEE THE
NOTICE ON THE NEXT PAGE.
The assets received are to be invested in:
[ ] My existing Burridge Funds IRA in Burridge
Funds Account No. ______________________________________________________.
[ ] My new Burridge Funds IRA. (A signed IRA Application must be completed
and returned with this Transfer Form.)
- -------------------------------------- --------------------------------------
Investor's Name Daytime Phone
- --------------------------- ---------------- --------------- ----------------
Street City State Zip Code
Investor's Signature____________________________________ Date__________________
TO: NAME OF PRESENT CUSTODIAN/TRUSTEE:
----------------------------------------------------------------------------
Mutual Fund (if applicable)_______________________ Acct. No.___________________
Address _________________________________________ Phone No.___________________
Street
_____________________________________ _______________ ______________
City State Zip Code
Present Custodian/Trustee:
I have established an account under the Burridge Funds Individual
Retirement Account. Please transfer the assets (cash only) indicated below to
Firstar Trust Company as successor custodian.
[ ] All Assets [ ] $__________only [ ] At maturity date of ______________
[ ] Immediately (I am aware of any penalties which may occur)
- --------------------------------------------------------------------------------
PART II (To be completed by Firstar Trust Company)
TO: THE ABOVE-NAMED CUSTODIAN/TRUSTEE:
Firstar Trust Company accepts its appointment as custodian for the above
account. Please forward a check, as directed above by the investor, payable to:
Firstar Trust Company, FBO_________________________________________________
Mail check and accompanying documents, if any, to:
Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701
FIRSTAR TRUST COMPANY
<PAGE>
IMPORTANT NOTICE
To recipients of Distributions from Qualified Retirement Plans or Tax-Sheltered
(403(b)) Annuities:
The law requires that 20% of your distribution from your employer's
qualified retirement plan or tax-sheltered annuity eligible for rollover be
withheld for tax purposes unless the distribution is made payable directly to
the custodian of your rollover IRA or another qualified plan or tax-sheltered
annuity.
If you are about to receive a distribution from your employer plan or
annuity which is eligible for rollover, that distribution may take one of the
three forms:
1. Your employer or plan trustee may deliver a check to you. If so, make
sure the check is payable as follows:
Burridge Funds
Firstar Trust Company, Custodian
A/O ____________________________________________________ IRA Rollover
(your name)
and deliver it along with a completed application to the following:
Firstar Trust Company
P.O. Box 701
Milwaukee, WI 53201
2. Your employer or plan trustee may forward your distribution directly
to us. If this occurs, follow the same instructions as above.
3. If your employer requires that an account is opened before sending the
check, make sure that you have sent a completed application to Firstar
Trust Company with the indication that you are about to receive a
rollover.
4. If your employer will be wiring funds to Firstar Trust Company, the
wiring instructions are as follows:
Firstar Bank Milwaukee, N.A. For further credit to:
ABA No. 0750-00022 ----------------------
BURRIDGE FUNDS
For credit to:
- --------------
FIRSTAR TRUST COMPANY -----------------------------------------
Account No. 112-950-027 (Your Name)
-----------------------------------------
(Account Number)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Statement of Net Assets-November 18, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> Capital Development Fund
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> NOV-18-1996
<PERIOD-END> NOV-18-1996
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 182,270
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 182,270
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 82,270
<TOTAL-LIABILITIES> 82,270
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100,000
<SHARES-COMMON-STOCK> 10,000
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100,000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,000
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 100,000
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 100,000
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
Exhibit 18
Burridge Capital Development Fund
PURCHASE APPLICATION
Mail To: Burridge Funds Overnight Express Mail To: Burridge Funds
C/O Firstar Trust Company Mutual Funds Services
PO Box 701 615 E. Michigan St.
Milwaukee, WI 53201-0701 Milwaukee, WI 53202
DO NOT USE FOR AN IRA
Use this form for individual, custodial, trust, profit sharing or pension plan
accounts. Do not use this form for the Burridge Funds sponsored IRA or SEP IRA
account types. For any additional information please call Burridge Funds at
1-888-287-7343.
================================================================================
A. INVESTMENT
[_] By check Payable to Burridge Funds
[_] By wire: Call 1-888-287-7343.
Indicate total amount and date of wire $___________ Date________________
The initial minimum investment is $500,000 Amount
Minimum additions to the Fund are $10,000 $_______________________
DISTRIBUTION OPTIONS:
Capital Gains Capital Gains Capital Gains Capital Gains
& Dividends & Dividends Cash & Dividends Reinvested &
Reinvested In Cash Reinvested Dividends In
Cash
[_] [_] [_] [_]
Capital gains & dividends will be reinvested if no option is selected.
================================================================================
B. REGISTRATION
1._____________________________ _________ ____________________________________
FIRST NAME M.I. LAST NAME
_____________________________ _______________________________________________
SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr)
1._____________________________ _________ ____________________________________
FIRST NAME M.I. LAST NAME
_____________________________ _______________________________________________
SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr)
*If two names are given, registration will be Joint Tenancy with Rights of
Survivorship (JTWROS), unless otherwise specified.
2._____________________________________________________________ ______________
CUSTODIAN'S FIRST NAME (ONLY ONE PERMITTED) M.I.
_____________________________________________________________
LAST NAME
_____________________________________________________________ ______________
MINOR'S FIRST NAME (ONLY ONE PERMITTED) M.I.
_____________________________________________________________
LAST NAME
_____________________________________________ ______________________________
MINOR'S SOCIAL SECURITY # MINOR'S BIRTH DATE (Mo/Dy/Yr)
_____________________________________________
STATE OF RESIDENCE
3.______________________________________________________________________________
NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION)
______________________________________________________________________________
NAME OF TRUST/CORPORATION/PARTNERSHIP
_____________________________________________ ______________________________
SOCIAL SECURITY #/TAX ID# DATE OF AGREEMENT (Mo/Dy/Yr)
* Additional documentation and certification may be requested
**Corporate Resolution is required
================================================================================
C. ADDRESS
Mailing Address
___________________________________________________ ________________________
STREET APT/SUITE
_______________________________________ ________________________ __________
CITY STATE ZIP
_______________________________________ ____________________________________
DAYTIME PHONE# EVENING PHONE#
[_] Duplicate Confirmation to:
_____________________________ _________ ___________________________________
FIRST NAME M.I. LAST NAME
___________________________________________________ ________________________
STREET APT/SUITE
_______________________________________ ________________________ __________
CITY STATE ZIP
================================================================================
DO NOT WRITE BELOW THIS LINE, FOR FIRSTAR TRUST COMPANY USE ONLY.
<PAGE>
================================================================================
D. TELEPHONE OPTIONS Please select the following option(s) that you would like
on your account:
INITIAL PURCHASES MAY NOT BE MADE BY TELEPHONE.
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings account deposit
slip is required with your application.
[_] TELEPHONE PURCHASE. Permits any subsequent purchase of shares to be made
using your bank account to clear the transaction. Complete bank account
information below.
[_] TELEPHONE REDEMPTION. The proceeds (up to $50,000) will be mailed to the
address in section C or deposited (via wire payment) to your bank account.
Complete bank account information below. A $10.00 fee will be charged to your
account for each wire payment.
*To ensure proper crediting/debiting of your bank account, please attach a
voided check or a deposit slip.
____________________________________________ _______________________________
STREET ROUTING NUMBER
____________________________________________ _______________________________
ADDRESS CITY
___________________________ _______________ _______________________________
STATE ZIP ACCOUNT NUMBER
================================================================================
E. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE
I have received and read the Prospectus for the Burridge Capital Development
Fund (the "Fund"). I understand the Fund's investment objectives and policies
and agree to be bound by the terms of the prospectus. I am of legal age in my
state of residence and have full authority to purchase shares of the Fund and
to establish and use related privileges.
Neither the Fund nor its transfer agent will be responsible for the
authenticity of transaction instructions received by telephone, provided the
reasonable security procedures have been followed.
By selecting the option in Section D , I hereby authorize the Fund to
initiate credits and debits to my account at the bank indicated in Section D
and for the bank to credit or debit the same to such account through the
Automated Clearing House ("ACH") system.
UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER
OR TAXPAYER IDENTIFICATION NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
IDENTIFICATION NUMBER, AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER
AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. THE IRS DOES
NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
_____________________________________________________________________________
DATE (Mo/Dy/Yr) SIGNATURE OF OWNER*
_____________________________________________________________________________
DATE (Mo/Dy/Yr) SIGNATURE OF CO-OWNER, if any
*If shares are to be registered in (1) joint names, both persons should sign,
(2) a custodian for a minor, the custodian should sign, (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer
should sign and print name and title on space provided below.
_____________________________________________________________________________
PRINT NAMES AND TITLE OF OFFICER SIGNING FOR A CORPORATION OR OTHER ENTITY
================================================================================
