UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X]Preliminary Proxy Statement
[ ]CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS
[ ]Definitive Proxy Statement PERMITTED BY RULE 14A-6(E)(2))
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BURRIDGE FUNDS
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1)Title of each class of securities to which transaction applies:
2)Aggregate number of securities to which transaction applies:
3)Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4)Proposed maximum aggregate value of transaction:
5)Total fee paid:
[ ]Fee paid previously with preliminary materials.
[ ]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1)Amount Previously Paid:
2)Form, Schedule or Registration Statement No.:
3)Filing Party:
4)Date Filed:
<PAGE>
PRELIMINARY
BURRIDGE FUNDS
115 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(888) BURRIDGE
(1-888-287-7434)
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
THURSDAY DECEMBER 18, 1997
A special meeting of shareholders of Burridge Funds will be held at the
offices of Burridge Funds, 115 South LaSalle Street, Chicago, Illinois 60603, at
10:00 a.m., Central time, on Thursday, December 18, 1997. At the meeting,
shareholders will be asked to consider and act upon the following proposals:
1. To approve a proposed new investment advisory agreement for Burridge
Capital Development Fund between Burridge Funds and The Burridge Group
LLC;
2. To approve a proposed new investment sub-advisory advisory agreement
for Burridge Capital Development Fund between The Burridge Group LLC
and GeoCapital LLC; and
3. To transact any other business that properly comes before the meeting.
Shareholders of record as of the close of business on November 14, 1997 are
entitled to vote at the meeting (or any adjournments of the meeting). This proxy
statement and proxy card are being mailed to shareholders on or about November
____, 1997.
By Order of the Board of Trustees,
/s/ Kenneth M. Arenberg
--------------------
Kenneth M. Arenberg
President
November ____, 1997
Chicago, Illinois
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
COMPLETE AND RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL
VOTE IN PERSON IF YOU ATTEND THE MEETING.
<PAGE>
BURRIDGE FUNDS
115 SOUTH LASALLE STREET
CHICAGO, ILLINOIS 60603
(888) BURRIDGE
(1-888-287-7434)
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 18, 1997
This proxy statement is being sent to you by the board of trustees of
Burridge Funds. The board is asking you to complete and return the enclosed
proxy card, permitting your shares of Burridge Capital Development Fund to be
voted at the meeting, even if you cannot attend the meeting in person.
The meeting will be held at the offices of Burridge Funds, 115 South
LaSalle Street, Chicago, Illinois 60603, at 10:00 a.m. Central time, on
Thursday, December 18, 1997.
Shareholders of record at the close of business on November 14, 1997
(called the "record date") are entitled to vote at the meeting.
You should also have received the Fund's annual report to shareholders for
the fiscal period ended June 30, 1997. IF YOU WOULD LIKE ANOTHER COPY OF THE
REPORT, PLEASE CALL OR WRITE TO BURRIDGE AT THE ADDRESS AND TELEPHONE NUMBER
SHOWN AT THE TOP OF THIS PAGE. THE REPORT WILL BE SENT TO YOU WITHOUT CHARGE.
For convenience, Burridge Funds is referred to in this proxy statement as
"the Trust" and Burridge Capital Development Fund is referred to as "the
Fund."
SUMMARY OF PROPOSALS
You are being asked to vote on two proposals - a new advisory agreement,
and a new sub-advisory agreement for the Fund.
<PAGE>
PROPOSAL 1
NEW ADVISORY AGREEMENT
SUMMARY
The Trust's board of trustees has unanimously approved a new advisory
agreement for the Fund. The new agreement makes two principal changes from the
old agreement. First, the investment advisory fee charged by The Burridge Group
LLC (called "Burridge" in this proxy statement) would be increased. Second,
the new agreement would allow Burridge to engage a sub-adviser to manage a
portion of the Fund's portfolio.
The board of trustees unanimously urges you to vote in favor of the new
advisory agreement. The changes are explained in the discussion below and the
reasons for the board's decision are given. The terms of the new agreement are
summarized and compared to the old agreement (and a complete copy of the new
agreement is attached as Exhibit A to this proxy statement). Finally, more
information about Burridge is provided.
INCREASED ADVISORY FEES
Burridge has served as investment adviser to the Fund since its inception
in December of 1996. The current fee schedule for the Fund has been in effect
since the Fund began operations.
The following table sets forth the current rate of the advisory fee paid by
the Fund, as well as the annual rates of compensation that will be paid by the
Fund if the new agreement is approved by shareholders:
PROPOSED
ASSETS CURRENT NEW
- ------ ------- --------
$0 to $500 million 1.00% 1.25%
$500 million to $1 billion 0.85% 1.10%
over $1 billion 0.75% 1.00%
Burridge 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 1.75% of the Fund's average
daily net assets.
The table below shows the total advisory fees paid by the Fund from its
inception on December 27, 1996 through June 30, 1997, and the fees that would
have been paid if the new agreement had been in place throughout that same
period:
ACTUAL PRO FORMA FEES
ADVISORY FEES NEW AGREEMENT DIFFERENCE
------------- -------------- ----------
$1,330 $1,662 25%
<PAGE>
The next table shows the actual operating expenses incurred by the Fund
from its inception in December 1996, and the expenses that would have been
incurred had the new fee arrangements been in place throughout that period, in
each case expressed as a percentage of the Fund's average net assets:
Actual Pro-Forma
------ ---------
Management fee 1.00% 1.25%
12b-1 fee None None
Other expenses (after .50% .50%
reimbursement)
Total fund operating expenses 1.50% 1.75%
(after reimbursement)
Without expense reimbursements of $77,648 for the period December 27, 1996
through June 30, 1997, "Other expenses" would have been 58.90% and "Total
fund operating expenses' would have been 59.90%. Had the proposed new advisory
agreement been in place throughout that period, "Other expenses" would have
been 58.90% and "Total fund operating expenses" would have been 60.15%.
Example
The following illustrates the expenses on a $1,000 investment in the Fund
under the existing and new fee arrangements using the data shown above, and
assuming (1) a five percent annual return and (2) redemption at the end of each
time period:
1 Year 3 Years
------ -------
Present Fee $15 $48
Arrangement
New Fee Arrangement $18 $55
The purpose of this example and table is to assist investors in
understanding the various costs and expenses of investing in shares of the Fund,
and how those costs and expenses would be changed by the new advisory agreement.
This example 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.
ENGAGEMENT OF SUB-ADVISER
Under the new advisory agreement, Burridge would be authorized to retain a
sub-adviser, at its own expense, to manage a portion of the Fund's portfolio.
The sub-adviser would be required to be registered as an investment adviser
under the Investment Advisers Act of 1940, and a written sub-advisory agreement
would be required.
<PAGE>
The sub-adviser would be responsible for managing a portion of the Fund's
assets, the amount of which would be determined in the sole discretion of
Burridge. However, Burridge would not be permitted to allocate all of the Fund's
assets to the sub-adviser for management.
All investment sub-advisory fees would be borne by Burridge. No additional
costs would be incurred by the Fund as a result of the engagement of a sub-
adviser.
CONCLUSION OF THE BOARD OF TRUSTEES
The board of trustees held a meeting on November 14, 1997, at which the
trustees, including all of the trustees who are not interested persons of the
Trust or Burridge, concluded that the new agreement was in the best interests of
the Trust and the shareholders of the Fund.
In evaluating the new agreement, the board received and reviewed
information on the fees and expense ratios of the Fund compared to similar
mutual funds, and the investment performance of the Fund compared to relevant
market indexes and other funds. The board also received and considered
financial information about Burridge, including the profitability to Burridge of
its relationship to the Fund. In considering the proposed new advisory fee and
Burridge's financial information, the board took into account the significantly
increased expenses to Burridge that would result from the proposed engagement of
a sub-adviser. The board considered the desirability of shifting the focus of
the Fund's investments from medium and large companies, to medium and smaller
companies, and concluded that such a change would be desirable and presented an
opportunity for improvement of the Fund's investment performance. The board
also considered the retention by Burridge of overall responsibility for
management of the Fund's investments and business affairs even though a sub-
adviser would be engaged to manage a portion of the Fund's portfolio.
After considering the factors and information described above, the board of
trustees concluded that the new advisory agreement is in the best interests of
the Fund and its shareholders. THE TRUSTEES, INCLUDING A MAJORITY OF THE
TRUSTEES WHO ARE NOT "INTERESTED PERSONS" OF THE TRUST OR BURRIDGE,
UNANIMOUSLY VOTED TO APPROVE THE NEW ADVISORY AGREEMENT AND RECOMMEND THAT THE
SHAREHOLDERS OF THE FUND VOTE FOR ITS APPROVAL.
INFORMATION ABOUT BURRIDGE
Burridge serves as the investment adviser for the Fund and for certain
other institutional accounts. At October 1, 1997, Burridge had over $1.5 billion
under management for clients, including the Fund.
Other Investment Companies Advised by Burridge
In addition to serving as investment adviser to the Fund, Burridge is also
the investment manager for the Growth Equity Portfolio, a series of the Alameda-
Contra Costa Medical Association Investment Trust for Retirement Plans (the
"ACCMA Trust"). The ACCMA Trust is an open-end diversified management
investment company currently with seven series. Shares of the ACCMA Trust are
sold only to retirement plans and tax-exempt organizations.
<PAGE>
As of October 31, 1997, the Growth Equtiy Portfolio had net assets of
$3,910,141. Burridge receives a quarterly investment management fee at the
annual rate of 0.75% of the first $10 million in assets under its management;
0.625% of the next $10 million; 0.5% of the next $20 million; 0.375% of the next
$20 million; and 0.25% of the next $40 million. The fee on managed assets in
excess of $100 million is subject to negotiation and shareholder approval.
Ownership and Management of Burridge
Burridge is a Delaware limited liability company, the Member Manager of
which is The Burridge Group Inc., an Illinois corporation. Presently, seven
principals, including Richard M. Burridge, Chairman, and Kenneth M. Arenberg,
Vice Chairman, hold member interests in Burridge representing an interest in the
aggregate of 45% of Burridge's profits, subject to reduction under certain
conditions. The remaining 55% interest in the profits of Burridge is owned by
Affiliated Managers Group, Inc. ("AMG"). The Burridge Group, Inc. is a wholly
owned subsidiary of AMG.
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.
The offices of Burridge are located at 115 South LaSalle Street, Chicago,
Illinois 60603.
DESCRIPTION OF THE NEW ADVISORY AGREEMENT
The proposed new agreement is attached to this proxy statement as Exhibit
A. The discussion here is only a summary and for more details you should refer
to the new agreement.
Under the new agreement, subject to the overall supervision and control of
the board of trustees, Burridge will have supervisory responsibility for the
general management and investment of the Fund's assets, just as it does under
the current agreement. Burridge is authorized to make the decisions to buy and
sell securities, options and futures contracts and other assets for the Fund, to
place the Fund's portfolio transactions with broker-dealers, and to negotiate
the terms of such transactions, including brokerage commissions on behalf of the
Fund. Burridge is authorized to exercise discretion within the Fund's policy
concerning allocation of portfolio brokerage, as permitted by law, including but
not limited to Section 28(e) of the Securities Exchange Act of 1934, and in so
doing shall not be required to make any reduction in its investment advisory
fees. These provisions are essentially unchanged from the current agreement.
The new agreement also provides, as does the current one, that Burridge
shall furnish, at its own expense, office space 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. Burridge is also responsible for all other expenses
incurred by it in connection with managing the assets of the Fund, all sub-
advisory fees, all expenses of marketing shares of the Fund, all compensation of
trustees who are
<PAGE>
"interested persons" of the Trust as defined in the 1940 Act
and all expenses incurred in connection with their services to the Trust. Except
for the provision authorizing engagement of a sub-adviser and payment by
Burridge of the sub-advisory fees, these provisions are essentially unchanged
from the current agreement.
Like the old agreement, the new agreement provides that neither Burridge
nor any of its members, officers, agents or employees shall be liable to the
Trust, the Fund, or their shareholders for any loss suffered by the Fund or its
shareholders as a result of any error of judgment, or any loss arising out of
any investment, or as a consequence of any other act or omission of Burridge in
the performance of its duties, except for liability resulting from willful
misfeasance, bad faith or gross negligence on the part of Burridge, or by reason
of reckless disregard by Burridge of its obligations and duties.
If approved by shareholders, the new agreement will be signed and become
effective on December 19, 1997. It will continue in effect through December 19,
1999, and thereafter from year to year so long as its continuance is approved at
least annually (i) by the board of trustees or by the holders of a "majority of
the Fund's outstanding voting securities' as defined in the Investment Company
Act of 1940; and (ii) by a majority of the members of the Trust's board of
trustees who are not otherwise affiliated with the Trust or Burridge, cast in
person at a meeting called for that purpose. Any amendment to the new agreement
must be approved in the same manner. The new agreement may be terminated without
penalty by the vote of the board of trustees of the Trust or the shareholders of
the Fund (by a majority as defined in the Investment Company Act) on sixty days'
written notice to Burridge or by Burridge on sixty days' written notice to the
Trust, and will terminate automatically in the event of its assignment.
DETAILS ABOUT THE CURRENT AGREEMENT
Burridge currently serves as investment adviser to the Fund under an
investment advisory agreement dated December 31, 1996. The current agreement
will expire on December 31, 1998. The agreement was approved by the Fund's
initial shareholders before the Fund began offering its shares to the public.
BOARD RECOMMENDATION
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING ALL OF THE TRUSTEES WHO ARE
NOT AFFILIATED WITH BURRIDGE, UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF THE
FUND VOTE FOR THE APPROVAL OF THE NEW ADVISORY AGREEMENT BETWEEN THE TRUST AND
BURRIDGE.
<PAGE>
PROPOSAL 2
NEW SUB-ADVISORY AGREEMENT
SUMMARY
The new investment advisory agreement discussed above authorizes Burridge
to engage a sub-adviser. The Trust's board of trustees has unanimously approved
a new investment sub-advisory agreement for the Fund between Burridge and
GeoCapital LLC (called "GeoCapital" in this proxy statement). The sub-advisory
agreement would allow Burridge to engage GeoCapital as sub-adviser and allocate
a portion of the Fund's assets to it for management.
The board of trustees unanimously urges you to vote in favor of the new
sub-advisory agreement. Information about the sub-advisory agreement is set
forth below and the reasons for the board's decision are given. The terms of the
sub-advisory agreement are summarized and a complete copy of the sub-advisory
agreement is attached as Exhibit B to this proxy statement). Finally, more
information about GeoCapital is provided.
SUB-ADVISORY FEES
In return for its services under the sub-advisory agreement, GeoCapital
would receive a sub-advisory fee from Burridge. These fees will be paid by
Burridge, and will not increase the costs borne by the Fund. The following
table sets forth the rate of the sub-advisory fees to be paid to GeoCapital by
Burridge (based on the average daily net assets allocated to GeoCapital for
management) if the sub-advisory agreement is approved. The proposed fees would
be based on the assets of the Fund under GeoCapital's management.
PROPOSED
ASSETS RATE OF FEE
- ------ -----------
$0 to $500 million 0.75%
$500 million to $1 billion 0.65%
over $1 billion 0.60%
DESCRIPTION OF THE NEW SUB-ADVISORY AGREEMENT
The proposed new sub-advisory agreement is attached to this proxy statement
as Exhibit B. The discussion here is only a summary and for more details you
should refer to the new agreement.
Under the sub-advisory agreement, subject to the overall supervision and
control of Burridge and the board of trustees, GeoCapital will have supervisory
responsibility for the general management and investment of a portion of the
Fund's assets. Burridge will have the sole discretion to determine what portion
of the Fund's assets to allocate to GeoCapital. GeoCapital would be authorized
to make the decisions to buy and sell securities, options and futures
<PAGE>
contracts and other assets for the Fund, to place the Fund's portfolio
transactions with broker-dealers, and to negotiate the terms of such
transactions, including brokerage commissions on behalf of the Fund. GeoCapital
would be authorized to exercise discretion within the Fund's policy concerning
allocation of portfolio brokerage, as permitted by law, including but not
limited to Section 28(e) of the Securities Exchange Act of 1934, and in so
doing shall not be required to make any reduction in its investment advisory
fees. These provisions are essentially identical to the corresponding provisions
in the investment advisory agreement.
The sub-advisory agreement also provides that GeoCapital shall furnish, at
its own expense, office space and all necessary office facilities, equipment,
and personnel for managing its portion of the Fund's assets, providing
shareholder servicing and providing general administrative services to the Fund
and to the Trust with respect to the assets allocated to it for management.
GeoCapital would also be responsible for all other expenses incurred by it in
connection with managing its portion of the Fund's assets. These provisions are
also essentially identical to the corresponding provisions in the investment
advisory agreement.
Like the advisory agreement, the sub-advisory agreement provides that
neither GeoCapital nor any of its members, officers, agents or employees shall
be liable to Burridge, the Trust, the Fund, or their members or shareholders for
any loss suffered by the Fund as a result of any error of judgment, or any loss
arising out of any investment, or as a consequence of any other act or omission
of GeoCapital in the performance of its duties, except for liability resulting
from willful misfeasance, bad faith or gross negligence on the part of
GeoCapital, or by reason of reckless disregard by GeoCapital of its obligations
and duties.
The sub-advisory agreement expressly provides that Burridge's obligations
and liabilities under the sub-advisory agreement are not binding upon the Trust,
the Fund or their shareholders.
If approved by shareholders, the sub-advisory agreement will be signed and
become effective on December 19, 1997. It will continue in effect through
December 19, 1999, and thereafter from year to year so long as its continuance
is approved at least annually (i) by the board of trustees or by the holders of
a "majority of the Fund's outstanding voting securities" as defined in the
Investment Company Act of 1940; and (ii) by a majority of the members of the
Trust's board of trustees who are not otherwise affiliated with the Trust,
Burridge or GeoCapital, cast in person at a meeting called for that purpose. Any
amendment to the sub-advisory agreement must be approved in the same manner. The
sub-advisory agreement may be terminated without penalty by (i) Burridge, (ii)
the vote of the board of trustees of the Trust, or (iii) the shareholders of the
Fund (by a majority as defined in the Investment Company Act) on sixty days'
written notice to GeoCapital, or by GeoCapital on sixty days' written notice to
Burridge, and will terminate automatically in the event of its assignment.
CONCLUSION OF THE BOARD OF TRUSTEES
In evaluating the proposed sub-advisory agreement, the board received and
reviewed information on the ownership and management of GeoCapital, as
summarized later in this proxy statement, and its historical record of
investment performance. The board considered the desirability of shifting the
focus of the Fund's investments from medium and large companies, to
<PAGE>
medium and smaller companies, and concluded that such a change would be
desirable and presented an opportunity for improvement of the Fund's investment
performance. The board also considered the retention by Burridge of overall
responsibility for management of the Fund's investments and business affairs
even though GeoCapital would be engaged to manage a portion of the Fund's
portfolio.
After considering the factors and information described above, the board of
trustees concluded that the sub-advisory agreement is fair and reasonable. THE
TRUSTEES, INCLUDING A MAJORITY OF THE TRUSTEES WHO ARE NOT "INTERESTED
PERSONS' OF THE TRUST, BURRIDGE OR GEOCAPITAL UNANIMOUSLY VOTED TO APPROVE THE
SUB-ADVISORY AGREEMENT AND RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE FOR
ITS APPROVAL.
INFORMATION ABOUT GEOCAPITAL
GeoCapital invests in small-capitalization equities in emerging technology
and service industries, based on its own fundamental analysis of the companies
and industries. As of October 1, 1997, GeoCapital managed $2.2 billion in assets
for clients.
Ownership and Management of GeoCapital
If the new advisory and sub-advisory agreements are approved, Irwin Lieber
and Barry K. Fingerhut will be responsible for overseeing the implementation of
GeoCapital's strategy for managing its portion of the Fund's portfolio. Mr.
Lieber is chairman and chief investment officer of GeoCapital, and formed
GeoCapital's predecessor in 1979. Mr. Fingerhut is GeoCapital's president and
joined the firm in 1981.
GeoCapital is a Delaware limited liability company, the member manager of
which is GeoCapital Corporation. Currently, seven principals, including Mr.
Lieber and Mr. Fingerhut, hold member interests in GeoCapital representing an
interest in the aggregate of 40% of GeoCapital's profits, subject to reduction
under certain conditions. The remaining 60% interest in the profits of
GeoCapital is owned by GeoCapital Corporation. GeoCapital Corporation is a
wholly-owned subsidiary of Affiliated Managers Group, Inc. ("AMG"). AMG also
owns a 55% interest in the profits of Burridge, and is the parent corporation of
The Burridge Group, Inc., the member-manager of Burridge.
The offices of GeoCapital are located at 767 Fifth Avenue, New York, New
York 10153.
BOARD RECOMMENDATION
THE BOARD OF TRUSTEES OF THE TRUST, INCLUDING ALL OF THE TRUSTEES WHO ARE
NOT AFFILIATED WITH BURRIDGE OR GEOCAPITAL, UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE FUND VOTE FOR THE APPROVAL OF THE NEW SUB-ADVISORY AGREEMENT
BETWEEN BURRIDGE AND GEOCAPITAL.
<PAGE>
MORE INFORMATION ABOUT THE TRUST
ORGANIZATION AND MANAGEMENT OF THE TRUST
The Trust is a Massachusetts business trust organized on August 29, 1996.
The Trust is an open-end management investment company, currently with one
series-Burridge Capital Development Fund.
The board of trustees has overall responsibility for the conduct of the
Trust's affairs. The trustees serve indefinite terms of unlimited duration
provided that a majority of trustees always has been elected by the
shareholders. The trustees appoint their own successors, provided that at least
two-thirds of the trustees, after such appointment, have been elected by the
shareholders. Shareholders may remove a trustee, with or without cause, upon the
declaration in writing or vote, at a meeting called for that purpose, 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.
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.
Principal Occupations
Name and Age Positions Held During Past 5 Years
- ------------ -------------- ---------------------
Richard M. Burridge Chairman Chairman, The Burridge
[(68)] Group LLC, since September
1996, and president
prior thereto.
Kenneth M. Arenberg* Trustee, President Vice Chairman, The Burridge
[(67)] and Treasurer Group LLC, since September 1996,
and executive vice president
prior thereto.
Principal Occupations
Name and Age Positions Held During Past 5 Years
- ------------ -------------- ---------------------
J. Thomas Hurvis Trustee Chairman, Old World Industries,
[(59)] Inc.
Angelo L. Spoto Trustee Private investor, 1990 to present;
[(68)] Senior Vice President -
Investments,Blunt, Ellis & Loewi,
Inc., prior thereto.
Robert L. Underwood Trustee Executive Vice President, North
[(52)] American Business Development
Companies, LLC.
John H. Streur, Jr. Senior Vice President, The Burridge Group LLC
[(37)] President since September 1996, and vice
and Secretary president and director of marketing
prior thereto.
Robert L. Worthington Vice President Senior Vice President, The Burridge
[(37)] Group LLC since September 1996,
and vice president, September 1993
to September 1996; Vice
President-Corporate Finance,
Westpac Banking Corporation,
September 1990 to August 1993.
Bradley P. Schluter Vice President Vice President, The Burridge
[(39)] Group LLC, November 1995 to
present; Vice President-Marketing,
Nicholas Applegate Capital
Management, February 1991 to
November 1995
References in the preceding table to The Burridge Group LLC include its
predecessor, The Burridge Group Inc., for periods prior to January 1, 1997.
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 by the Trust during the fiscal
year ended June 30, 1997 to each of the trustees of the Trust. The Trust is not
part of a complex of mutual funds.
AGGREGATE
COMPENSATION
NAME OF TRUSTEE FROM TRUST
--------------- ----------
Kenneth M. Arenberg $0
J. Thomas Hurvis $500
Angelo L. Spoto $1,000
Robert L. Underwood $1,000
At October 20, 1997, the following persons owned 5% or more of the Fund's
outstanding shares:
Name and Address Shares % Outstanding
- ---------------- ------ -------------
Kenneth M. Arenberg 5,000 14.81%
The Burridge Group LLC
115 S. LaSalle Street
Chicago, IL 60603
Richard M. Burridge 5,000 14.81%
The Burridge Group LLC
115 S. LaSalle Street
Chicago, IL 60603
J. Thomas Hurvis 23,764.26 70.38%
Old World Industries, Inc.
4065 Commercial Avenue
Northbrook, IL 60062
DISTRIBUTION OF SHARES OF THE FUNDS
Shares of the Fund are offered for sale on a continuous basis through Funds
Distributor, Inc. ("the Distributor"), 60 State Street, Boston, Massachusetts
02109, without any sales commissions or charges to the Fund or its 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 Fund and (ii) by a
majority of the trustees who are not parties to the agreement or interested
persons of any such party. Burridge 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.
MORE INFORMATION ABOUT THE MEETING
DATE OF MAILING. This proxy statement and enclosed proxy are being mailed
to shareholders on or about November ____, 1997.
SHAREHOLDERS. At the record date, the Fund had 33,764.26 shares
outstanding.
HOW PROXIES WILL BE VOTED. All proxies solicited by the board of trustees
that are properly executed and received prior to the meeting, and which are not
revoked, will be voted at the meeting. Shares represented by those proxies will
be voted in accordance with the
<PAGE>
instructions marked on the proxy. If no instructions are specified, shares will
be voted for both proposals.
REVOKING A PROXY. At any time before it has been voted, you may revoke your
proxy by: (1) sending a letter saying that you are revoking your proxy to the
Secretary of Burridge Funds at its offices located at 115 South LaSalle
Street, Chicago, Illinois 60603; (2) properly executing a later-dated proxy; or
(3) attending the meeting, requesting return of any previously delivered proxy
and voting in person.
HOW PROXIES ARE BEING SOLICITED. Solicitation of proxies by personal
interview, mail, telephone and electronic mail may be made by officers and
trustees of the Trust and employees of Burridge, none of whom will receive any
additional compensation for such service, and third-party solicitation agents.
All costs incurred in connection with the Meeting (including the cost of
solicitation of proxies) will be paid by the Trust.
QUORUM, VOTING AT THE MEETING AND ADJOURNMENT. Thirty percent of the
shares entitled to vote present in person or represented by proxy constitutes a
quorum for the transaction of business at the meeting. For purposes of
determining the presence or absence of a quorum and for determining whether
sufficient votes have been received for approval of any matter to be acted upon
at the meeting, abstentions and broker non-votes will be treated as shares that
are present at the meeting but have not been voted.
Approval of each of the proposals will require the affirmative vote of the
lesser of (a) 67 percent or more of the voting shares of the Fund present at the
meeting, if the holders of more than 50 percent of the outstanding voting shares
of the Fund are present or represented by proxy, or (b) more than 50 percent of
the outstanding voting shares of the Fund. Abstentions and broker non-votes will
have the practical effect of a "No" vote if adoption of a proposal is to be
determined pursuant to item (a) and will have no effect on the outcome of the
vote if adoption of a proposal is to be determined pursuant to item (b).
If the new advisory agreement is not approved, the Fund will continue to
operate under the current agreement. If the new agreement is not approved, the
board of trustees may consider whether any other action should be taken, which
might include submission of another proposed agreement for approval by
shareholders. Approval of the new sub-advisory agreement is contingent upon
approval of the new advisory agreement. If the new advisory agreement is not
approved, the new sub-advisory agreement will not be implemented, even if
approved.
If a quorum is not present in person or by proxy at the meeting, or if a
quorum is present at the meeting but not enough votes to approve a proposal are
received, the persons named as proxies may propose one or more adjournments of
the meeting to permit further solicitation of proxies. Any proposal for
adjournment will require the vote of a majority of the shares of the Fund
represented at the meeting in person or by proxy. A vote may be taken on one of
the proposals in this proxy statement before adjournment if a quorum is present
and sufficient votes have been received for approval.
<PAGE>
OTHER MATTERS
The board of trustees of the Trust knows of no other matters that are
intended to be brought before the meeting. If other matters are presented for
action, the proxies named in the enclosed form of proxy will vote on those
matters in their sole discretion.
SHAREHOLDER PROPOSALS
The Trust is not required, and does not intend, to hold annual meetings of
shareholders. Therefore, no date can be given by which a proposal by a
shareholder for consideration at such a meeting must be submitted. Any such
proposal should be submitted in writing to the Secretary of the Trust at its
principal offices at 115 South LaSalle Street, Chicago, Illinois 60603. Upon
submitting a proposal, the shareholder shall provide the Trust with a written
notice which includes the shareholder's name and address, the number of Shares
of the Fund that such shareholder holds of record or beneficially, the dates
upon which such Shares were acquired, and documentary support for a claim of
beneficial ownership.
By Order of the Board of Trustees,
/s/ Kenneth M. Arenberg
---------------------
Kenneth M. Arenberg
President
November ____, 1997
<PAGE>
PROXY BURRIDGE FUNDS
- ------------------------------------------------------------------------------
SPECIAL MEETING OF SHAREHOLDERS - DECEMBER 18, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Richard M. Burridge, Kenneth M. Arenberg
and John H. Streur, Jr., and each or any of them, as proxies, with full power
of substitution, to vote all shares of Burridge Capital Development Fund
represented by this proxy which the undersigned is entitled to vote at the
special meeting of shareholders to be held on December 18, 1997, and at any
adjournments thereof, with all powers the undersigned would possess if
personally present at such meeting.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. Approval of a proposed new investment advisory agreement between Burridge
Funds and The Burridge Group LLC relating to Burridge Capital Development
Fund.
FOR _____ AGAINST _____ ABSTAIN _____
2. Approval of a proposed new investment sub-advisory agreement between The
Burridge Group LLC and GeoCapital LLC relating to Burridge Capital
Development Fund.
FOR _____ AGAINST _____ ABSTAIN _____
3. In their sole discretion on any other matters properly coming before the
meeting or any adjournment or adjournments thereof.
(Please DATE AND SIGN on the reverse side
and return this proxy promptly in the enclosed envelope.)
<PAGE>
(continued from reverse side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSAL 1, FOR PROPOSAL 2, AND IN THE SOLE DISCRETION OF THE PROXIES UPON
SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
OR ADJOURNMENTS THEREOF.
Dated ___________________, 1997
_______________________________
Signature
_______________________________
Signature if held jointly
IMPORTANT: PLEASE DATE AND SIGN EXACTLY AS YOUR NAME APPEARS HEREON. WHEN
SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE, AGENT, ATTORNEY, GUARDIAN, OR
CORPORATE OFFICER, PLEASE SET FORTH YOUR FULL TITLE. JOINT OWNERS MUST EACH
SIGN.
<PAGE>
EXHIBIT A
BURRIDGE FUNDS
BURRIDGE CAPITAL DEVELOPMENT FUND
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, dated the ___day of December 1997, 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").
WITNESSETH:
WHEREAS, the Fund is a series of the Trust, an open-end management
investment company, registered as such under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, and is engaged in the business of supplying
investment advisory services as an independent contractor; and
WHEREAS, the Trust and the Fund desire to retain the Adviser as an
investment manager to render portfolio advice and services to the Fund pursuant
to the terms and provisions of this Agreement, and the Adviser desires to
furnish said advice and services; and
WHEREAS, this Agreement amends, restates, and supersedes the Investment
Advisory Agreement dated December 31, 1996, between the Trust and the Adviser.
NOW, THEREFORE, in consideration of the covenants and mutual promises
hereinafter set forth, the parties to this Agreement, intending to be legally
bound hereby, mutually agree as follows:
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as
manager and investment adviser to the Fund, 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 Actthe 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 Section 6 hereof. 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 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. ENGAGEMENT OF SUB-ADVISER. The Adviser may, at the Adviser's expense,
engage one or more sub-advisers (the "Sub-Adviser") to assist the Adviser in
the performance of its duties under this Agreement. The Sub-Adviser shall be a
registered investment adviser, and such engagement shall be pursuant to a
written agreement (the "Sub-Advisory Agreement"). To the extent provided in
the Sub-Advisory Agreement, the Sub-Adviser shall provide the same services to
the Fund as those provided by the Adviser pursuant to Section 2 hereof. The Sub-
Adviser shall be responsible for managing an allocated portion of the assets of
the Fund, the size of such allocated portion to be determined in the Adviser's
sole discretion; provided, however, that the Adviser may not allocate all of the
assets of the Fund to the Sub-Adviser.
4. 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.
5. 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 Sub-
Adviser fees, all expenses of marketing shares of the Fund, all compensation of
trustees who are "interested persons" of the Trust as defined in the 1940 Act
and all expenses incurred in connection with their services to the Trust.
6. 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: (i) all accounting, auditing and legal services, clerical and
statistical services, administrative costs; (ii) 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); (iii) 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; (iv) all expenses of determining daily price computations and
performing related bookkeeping services; (v) 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; (vi) insurance
expenses; (vii) all expenses of publication of notices and reports to the
Trust's shareholders; (viii) all expenses of proxy solicitations of the Trust or
its board of trustees; (ix) all expenses of maintaining the Trust's existence
and maintaining the registration of the Trust under the 1940 Act; (x) 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 1940 Act; (xi)
the compensation to the Adviser provided in Section 7 hereof; (xii) all taxes
and fees payable to federal, state, or other governmental agencies, domestic or
foreign; (xiii) all stamp or other transfer taxes; (xiv) all interest charges;
and (xv) 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.
7. 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) 1.25% of the first $500 million of the Fund's
average daily net assets; (ii) 1.10% of the Fund's average daily net assets in
excess of $500 million and less than $1 billion; and (iii) 1.00% of the average
daily net assets of $1 billion or more. 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.
8. 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.
9. 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.
10. 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.
11. 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 name by the
Trust shall not prevent the Adviser's permitting any other enterprise, including
another investment company, to use such name or names.
12. DURATION AND RENEWAL.
(a) Unless sooner terminated in accordance with Section 13 hereof,
this Agreement shall continue in effect until December ___, 1999, and thereafter
from year to year only so long as such continuance is specifically approved at
least annually by (a) 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) 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.
13. 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).
14. AMENDMENT. This Agreement may not be amended without the affirmative
vote of (a) 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) the holders of
a majority of the outstanding shares of the Fund.
15. GOVERNING LAW. The terms and provisions of this Agreement shall be
interpreted under and governed by the law of the State of Illinois.
16. RESTATEMENT OF PRIOR AGREEMENT. This Agreement amends, restates, and
supersedes in its entirety the Investment Advisory Agreement dated December ___,
1996 between the Trust and the Adviser.
175. 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.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
BURRIDGE FUNDS, on behalf of THE BURRIDGE GROUP LLC
BURRIDGE CAPITAL DEVELOPMENT FUND
By: By:
----------------------- -----------------------
Kenneth M. Arenberg Richard M. Burridge
President Chairman
<PAGE>
EXHIBIT B
BURRIDGE FUNDS
BURRIDGE CAPITAL DEVELOPMENT FUND
INVESTMENT SUB-ADVISORY AGREEMENT
THIS AGREEMENT, dated the ______ day of December, 1997, is made and entered
into by and between THE BURRIDGE GROUP LLC, a Delaware limited liability company
(the "Adviser") and GEOCAPITAL LLC, a Delaware limited liability company (the
"Sub-Adviser").
WITNESSETH:
WHEREAS, the Adviser has been retained as the investment adviser to the
Burridge Capital Development Fund (the "Fund"), a series of Burridge Funds, a
Massachusetts business trust (the "Trust"), an open-end management investment
company, registered as such under the Investment Company Act of 1940, as amended
(the "1940 Act"); and
WHEREAS, pursuant to the Amended and Restated Investment Advisory Agreement
(the "Advisory Agreement") dated December ____, 1997 between the Trust and the
Adviser, the Adviser is authorized to retain one or more sub-advisers to serve
as portfolio managers for a specified portion of the Fund's assets (the
"Allocated Portion"); and
WHEREAS, the Sub-Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advisory services as an independent contractor; and
WHEREAS, the Fund and the Adviser desire to retain the Sub-Adviser as an
investment manager to render portfolio advice and services to the Fund pursuant
to the terms and provisions of this Agreement, and Sub-Adviser desires to
furnish said advice and services; and
WHEREAS, the Trust and the Fund are third party beneficiaries of this
Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises
hereinafter set forth, the parties to this Agreement, which shall include the
Trust on behalf of the Fund as a third party beneficiary hereof, intending to be
legally bound hereby, mutually agree as follows:
1. APPOINTMENT OF SUB-ADVISER.
(a) Adviser hereby employs the Sub-Adviser, and the Sub-Adviser
hereby accepts such employment, to render investment advice and related services
with respect to the Allocated Portion of the assets of the Fund for the
compensation herein provided.
(b) The Sub-Adviser's employment shall be solely with respect to an
Allocated Portion of the Fund's assets, such Allocated Portion to be specified
by the Adviser and subject to periodic increases or decreases at the Adviser's
sole discretion; provided, however, that in no event shall the Allocated Portion
exceed 67% of the assets of the Fund.
2. DUTIES OF SUB-ADVISER.
(a) The Sub-Adviser shall act as an investment manager to the Fund
and shall invest the Sub-Adviser's Allocated Portion of the assets of the Fund,
subject to the supervision of Adviser and the board of trustees of the Trust for
the period and on the terms set forth herein. The Sub-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. Adviser shall
provide to the Sub-Adviser such information with respect to the Fund such that
the Sub-Adviser will be able to maintain compliance with all applicable laws,
regulations, policies, and restrictions with respect to the Sub-Adviser's
Allocated Portion. The Sub-Adviser shall for all purposes be an independent
contractor and not an agent of Adviser, the Trust, or the Fund, and unless
otherwise expressly provided or authorized, shall have no authority to act for
or represent the Trust or the Fund in any way.
(b) The Sub-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 Sub-Adviser, although the Fund will pay the actual brokerage
commissions on portfolio transactions in accordance with Section 5 of this
Agreement. In executing portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best efforts to seek on behalf of the Fund the best
overall terms available for any transaction. The Sub-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 Sub-
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 Sub-Adviser (or an affiliate of
the Sub-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 Sub-Adviser may consider sales of shares of the Fund as a factor
in the selection of broker-dealers to execute portfolio transactions for the
Fund. The Sub-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 Sub-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.
(d) The Sub-Adviser shall provide such information to the Adviser or
the Fund and permit compliance inspections by the Adviser or the Fund as shall
be reasonably necessary to permit the Adviser or the Fund to satisfy their
obligations to the reasonable requests of the Board of Trustees of the Trust.
3. SERVICES OTHER THAN AS SUB-ADVISER. The Sub-Adviser (or an affiliate
of the Sub-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 the Sub-
Adviser under this agreement, and, within the limits permitted by law and the
trustees, the Sub-Adviser (or an affiliate of the Sub-Adviser) may receive
brokerage commissions, fees or other remuneration from the Trust for such
services in addition to its fee for services as the Sub-Adviser. Within the
limits permitted by law, the Sub-Adviser may receive compensation from the
Adviser or the Trust for other services performed for the Adviser or the Trust
which are not within the scope of the duties of the Sub-Adviser under this
agreement.
4. EXPENSES TO BE PAID BY SUB-ADVISER. The Sub-Adviser shall furnish, at
its own expense, all necessary office facilities, equipment, and personnel for
managing its Allocated Portion, providing shareholder servicing and providing
general administrative services to the Fund and to the Trust with respect to its
Allocated Portion. The Sub-Adviser shall also assume and pay all other expenses
incurred by it in connection with managing its Allocated Portion. To the extent
the Sub-Adviser incurs any costs or expenses by assuming costs or expenses which
are an obligation of the Adviser or the Fund, the Adviser shall promptly
reimburse the Sub-Adviser for such costs and expenses. To the extent the Sub-
Adviser performs services for which the Adviser or the Fund is obligated to pay,
the Sub-Adviser shall be entitled to prompt reimbursement from the Adviser, but,
under no circumstances, shall such reimbursement exceed the Sub-Adviser's actual
costs for providing such services.
5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall assume and pay all
other costs and expenses not specifically assumed by the Sub-Adviser in Section
4 of this Agreement, or by the Adviser in the Advisory Agreement, including, but
not limited to: (i) all accounting, auditing and legal services, clerical and
statistical services, administrative costs; (ii) 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); (iii) 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; (iv) all expenses of determining daily price computations and
performing related bookkeeping services; (v) 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; (vi) insurance
expenses; (vii) all expenses of publication of notices and reports to the
Trust's shareholders; (viii) all expenses of proxy solicitations of the Trust or
its board of trustees; (ix) all expenses of maintaining the Trust's existence
and maintaining the registration of the Trust under the 1940 Act; (x) 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 1940 Act; (xi)
the compensation to the Adviser provided in Section 6 of this Agreement; (xii)
all taxes and fees payable to federal, state, or other governmental agencies,
domestic or foreign; (xiii) all stamp or other transfer taxes; (xiv) all
interest charges; and (xv) 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. SUB-ADVISORY FEE. For the services to be rendered and the charges and
expenses to be assumed and to be paid by the Sub-Adviser hereunder, the Adviser
shall pay to the Sub-Adviser a fee, accrued daily and paid monthly, at the
annual rate of (i) 0.75% of the first $500 million of the average daily net
assets of the Fund attributable to the Sub-Adviser's Allocated Portion; (ii)
0.65% of the average daily net assets of the Fund attributable to the Sub-
Adviser's Allocated Portion in excess of $500 million and less than $1 billion;
and (iii) 0.60% of the average daily net assets of the Fund attributable to the
Sub-Adviser's Allocated Portion of $1 billion or more. 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. NON-EXCLUSIVITY. The Adviser's employment of the Sub-Adviser hereunder
is not exclusive. The Sub-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. Likewise, the Adviser may employ other individuals or entities
in addition to the Sub-Adviser to furnish it with the services provided for
herein.
8. LIABILITY OF SUB-ADVISER.
(a) The Sub-Adviser shall be responsible for the accuracy and
completeness (and shall be liable for the lack thereof) of the statements and
information furnished by the Sub-Adviser for use by the Adviser in the Fund's
offering materials (including the prospectus, the statement of additional
information, advertising, and sales materials) that pertain to the Sub-Adviser
and the investment of the Sub-Adviser's Allocated Portion of the Fund. The Sub-
Adviser shall not be responsible or liable for any other disclosures
(b) Except as provided in subsection (a), the Sub-Adviser shall not
be liable to the Adviser, the Trust or its shareholders for any loss suffered by
the Adviser, the Trust or its shareholders from or as a consequence of any act
or omission of the Sub-Adviser, or of any of the directors, officers, employees,
or agents of the Sub-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 Sub-Adviser in the performance of its duties or by
reason of reckless disregard by the Sub-Adviser of such obligations and duties
under this Agreement.
9. LIABILITY OF ADVISER. The obligations of the Adviser hereunder shall
not be binding upon the Fund or upon any of the trustees, shareholders,
nominees, officers, agents or employees of the Trust.
10. DURATION AND RENEWAL.
(a) Unless sooner terminated in accordance with Section 11 hereof,
this Agreement shall continue in effect until December ____, 1999, and
thereafter from year to year only so long as such continuance is specifically
approved at least annually by (a) 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) 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.
11. TERMINATION. This agreement may be terminated at any time, without
payment of any penalty, by the Adviser, 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 Sub-Adviser. This agreement may be
terminated by the Sub-Adviser at any time upon 60 days' written notice to the
Adviser. This agreement shall terminate automatically in the event of its
assignment (as defined in section 2(a)(4) of the 1940 Act).
12. AMENDMENT. This agreement may not be amended without (i) the consent
of Adviser, and (ii) the affirmative vote of (a) 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) the holders of a majority of the outstanding shares
of the Fund.
13. GOVERNING LAW. The terms and provisions of this Agreement shall be
interpreted under and governed by the law of the State of Illinois.
14. 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 Sub-Adviser at 767 Fifth
Avenue, New York, New York 10153, and to the Adviser, the Trust or the Fund at
115 South LaSalle Street, Chicago, Illinois 60603, or at such other addresses as
either party may from time to time specify by notice to the other.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first above written.
THE BURRIDGE GROUP LLC GEOCAPITAL
By: By: -----------------------------
-----------------------
Richard M. Burridge -----------------------------
Chairman
-----------------------------
As a Third Party Beneficiary,
BURRIDGE FUNDS,
on behalf of
BURRIDGE CAPITAL DEVELOPMENT FUND
By: /s/ Kenneth M. Arenberg
-----------------------
Kenneth M. Arenberg
President
