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File No. 811 -
File No. 333 -
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
OAK ASSOCIATES FUNDS
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
2 OLIVER STREET
BOSTON, MASSACHUSETTS 02109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 1-888-462-5386
DAVID G. LEE
C/O SEI INVESTMENTS COMPANY
OAKS, PENNSYLVANIA 19456
(NAME AND ADDRESS OF AGENT FOR SERVICE)
Copies to:
RICHARD W. GRANT, ESQUIRE JOHN H. GRADY, JR., ESQUIRE
MORGAN, LEWIS & BOCKIUS LLP MORGAN, LEWIS & BOCKIUS LLP
2000 ONE LOGAN SQUARE 1800 M STREET, N.W.
PHILADELPHIA, PENNSYLVANIA 19103 WASHINGTON, D.C. 20036
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/X/ Appropriate date of Proposed Public Offering as soon as practicable
after the effective date of this Registration Statement.
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OAK ASSOCIATES FUNDS
CROSS REFERENCE SHEET
N-1A ITEM NO. LOCATION
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PART A - WHITE OAK GROWTH STOCK PORTFOLIO AND
PIN OAK AGGRESSIVE STOCK PORTFOLIO
Item 1. Cover Page Cover Page
Item 2. Synopsis Summary; Expense Summary
Item 3. Condensed Financial Information Financial Highlights
Item 4. General Description of Registrant The Trust and the Portfolios;
Investment Objective and
Policies; Investment
Limitations; General
Information - The Trust
Item 5. Management of the Trust General Information - Trustees
of the Trust; The Adviser; The
Administrator; The Transfer
Agent
Item 5A. Management's Discussion of Fund **
Performance
Item 6. Capital Stock and Other Securities General Information - Voting
Rights; General Information -
Shareholder Inquiries; General
Information - Dividends and
Distributions; Taxes
Item 7. Purchase of Securities Being Offered Purchase and Redemption of
Shares
Item 8. Redemption or Repurchase Purchase and Redemption of
Shares
Item 9. Pending Legal Proceedings *
PART B - WHITE OAK GROWTH STOCK PORTFOLIO AND
PIN OAK AGGRESSIVE STOCK PORTFOLIO
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. General Information and History The Trust
Item 13. Investment Objectives and Policies Investment Objective and
Policies (Prospectus);
Investment Limitations
Item 14. Management of the Registrant General Information - Trustees
of the Trust (Prospectus);
Trustees and Officers of the
Trust; The Adviser; The
Administrator
Item 15. Control Persons and Principal Trustees and Officers of the
Holders of Securities Trust
Item 16. Investment Advisory and Other The Adviser (Prospectus and
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Services Statement of Additional
Information); The
Administrator (Prospectus and
Statement of Additional
Information); The Distributor
(Prospectus and Statement of
Additional Information); The
Transfer Agent (Prospectus);
General Information - Counsel
and Independent Public
Accountants (Prospectus);
General Information -
Custodian (Prospectus)
Item 17. Brokerage Allocation Portfolio Transactions
Item 18. Capital Stock and Other Securities Description of Shares
Item 19. Purchase, Redemption, and Pricing of Purchase and Redemption of
Securities Being Offered Shares (Prospectus and
Statement of Additional
Information); Determination of
Net Asset Value
Item 20. Tax Status Taxes (Prospectus); Taxes
Item 21. Underwriters The Distributor
Item 22. Calculation of Performance Data Computation of Total Return
Item 23. Financial Statements *
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
*Not Applicable
**Information required under Item 5A will be contained in the Trust's Annual
Reports to Shareholders.
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OAK ASSOCIATES FUNDS
Investment Adviser:
OAK ASSOCIATES, LTD.
Oak Associates Funds (the "Trust") provides a convenient and economical means of
investing in professionally managed portfolios of securities. This Prospectus
offers shares of the following mutual funds (each, a "Portfolio"), each of which
is a separate series of the Trust.
- WHITE OAK GROWTH STOCK PORTFOLIO
- PIN OAK AGGRESSIVE STOCK PORTFOLIO
This Prospectus sets forth concisely the information about the Trust and the
Portfolios that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated , 1998 has been filed with
the Securities and Exchange Commission and is available without charge by
calling 1-888-462-5386. The Statement of Additional Information is incorporated
into this Prospectus by reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
, 1998
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SUMMARY
The following summary provides basic information about the White Oak Growth
Stock Portfolio ("White Oak Portfolio") and Pin Oak Aggressive Stock Portfolio
("Pin Oak Portfolio"). The White Oak Portfolio and the Pin Oak Portfolio are
sometimes referred to individually as a "Portfolio" and collectively as the
"Portfolios." The Portfolios are two of the mutual funds comprising Oak
Associates Funds (the "Trust"). This summary is qualified in its entirety by
reference to the more detailed information provided elsewhere in this Prospectus
and in the Statement of Additional Information.
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES? Each Portfolio seeks long-term
capital growth by investing primarily in common stocks of companies that, in the
Adviser's opinion, have strong earnings potential and reasonable market
valuations relative to the market as a whole and common stocks of companies in
the same respective industry classifications. The White Oak Portfolio invests
primarily in established companies with large market capitalization (in excess
of $1 billion). The Pin Oak Portfolio invests primarily in companies with small
to medium market capitalization; such companies may be positioned in emerging
growth industries. There is no assurance that either Portfolio will achieve its
investment objective.
WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIOS? An investment
in each Portfolio entails certain risks and considerations of which an investor
should be aware. Each Portfolio invests in securities that fluctuate in value,
and investors should expect each Portfolio's net asset value per share to
fluctuate in value. The share value of the Pin Oak Portfolio may experience
greater volatility than the share value of the White Oak Portfolio because it
invests in less established, smaller capitalization companies.
For more information about each Portfolio, see "Investment Objectives and
Policies," "Risk Factors" and "Description of Permitted Investments and Risk
Factors."
WHO IS THE ADVISER? Oak Associates, Ltd. (the "Adviser") serves as the
investment adviser of each Portfolio. In addition to advising the Portfolios,
the Adviser provides advisory services to pension plans, religious and
educational endowments, corporations, 401(k) plans, profit sharing plans,
individual investors and trusts and estates. See "Expense Summary" and "The
Adviser."
WHO IS THE ADMINISTRATOR? SEI Fund Resources (the "Administrator") serves as the
administrator and shareholder servicing agent of the Portfolios. See "The
Administrator."
WHO IS THE TRANSFER AGENT? DST Systems, Inc. (the "Transfer Agent") serves as
the transfer agent and dividend disbursing agent for the Portfolios. See "The
Transfer Agent."
WHO IS THE DISTRIBUTOR? SEI Investments Distribution Co. (the "Distributor")
acts as the distributor of the Portfolios' shares. See "The Distributor."
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IS THERE A SALES LOAD? No, shares of each Portfolio are offered on a no-load
basis.
IS THERE A MINIMUM INVESTMENT? Each Portfolio has a minimum initial investment
of $2,000, and requires subsequent purchases to be at least $50. The Distributor
may waive these minimums at its discretion.
HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Transfer Agent on a day when the New York Stock Exchange is open for
business (a "Business Day"). A purchase order will be effective as of the
Business Day received by the Transfer Agent if the Transfer Agent receives an
order and payment by check or with readily available funds prior to 4:00 p.m.,
Eastern time. Redemption orders placed with the Transfer Agent prior to 4:00
p.m., Eastern time on any Business Day will be effective that day. The
Portfolios also offer both a Systematic Investment Plan and a Systematic
Withdrawal Plan. The purchase and redemption price for shares is the net asset
value per share determined as of the end of the day the order is effective. See
"Purchase and Redemption of Shares."
HOW ARE DISTRIBUTIONS PAID? Substantially all of the net investment income
(exclusive of capital gains) of each Portfolio is distributed in the form of
quarterly dividends. Any capital gain is distributed at least annually.
Distributions are paid in additional shares unless the shareholder elects to
take the payment in cash. See "Dividends and Distributions."
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EXPENSE SUMMARY
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES
WHITE OAK GROWTH STOCK PORTFOLIO
PIN OAK AGGRESSIVE STOCK PORTFOLIO
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<S> <C>
Sales Load Imposed on Purchases...................... None
Sales Load Imposed on Reinvested Dividends........... None
Deferred Sales Load.................................. None
Redemption Fees(1)................................... None
Exchange Fees........................................ None
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</TABLE>
(1) A wire redemption charge of $10.00 is deducted from the amount of a
Federal Reserve wire redemption payment made at the request of a
shareholder.
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets)
WHITE OAK PIN OAK AGGRESSIVE
GROWTH STOCK PORTFOLIO STOCK PORTFOLIO
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<S> <C> <C>
Advisory Fees (after fee waivers)(2)................. .59% .50%
12b-1 Fees........................................... None None
Other Expenses....................................... .41% .50%
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Total Operating Expenses (after fee waivers)(2)...... 1.00% 1.00%
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</TABLE>
(2) The Adviser has voluntarily agreed to waive all or a portion of its fee
for each Portfolio and to reimburse expenses of each Portfolio in order to
limit total operating expenses of that Portfolio to an annual rate of not
more than 1.00% of average daily net assets. The Adviser reserves the
right, in its sole discretion, to terminate its voluntary fee waivers and
reimbursements at any time. Absent such waivers the annual advisory fees
for the White Oak Growth Stock Portfolio and the Pin Oak Aggressive Stock
Portfolio would be .74% and .74%, respectively, and annual total operating
expenses (restated to reflect current expenses) would be 1.14% and 1.97%,
respectively, of average daily net assets. See "The Adviser."
<TABLE>
<CAPTION>
EXAMPLE
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1 year 3 years 5 years 10 years
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<S> <C> <C> <C> <C>
An investor in a Portfolio 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.
White Oak Growth Stock Portfolio $ 10 $ 32 $ 55 $ 122
Pin Oak Aggressive Stock Portfolio $ 10 $ 32 $ 55 $ 122
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</TABLE>
THE EXAMPLE IS BASED UPON ESTIMATED TOTAL OPERATING EXPENSES OF A PORTFOLIO
AFTER FEE WAIVERS AND EXPENSE REIMBURSEMENTS. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The purpose of this table is to assist the
investor in understanding the various costs and expenses that may be directly or
indirectly borne by investors in a Portfolio. Additional information may be
found under "The Adviser" and "The Administrator."
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FINANCIAL HIGHLIGHTS
On , 1998, the White Oak Growth Stock Portfolio acquired all of the
assets and liabilities of the White Oak Growth Stock Fund of The Advisors' Inner
Circle Fund (the "AIC White Oak Fund") and the Pin Oak Aggressive Portfolio
acquired all of the assets and liabilities of the Pin Oak Aggressive Stock Fund
of The Advisors' Inner Circle Fund (the "AIC Pin Oak Fund" and together with the
AIC White Oak Fund, the "AIC Oak Funds"). The information prior to that date
relates to the AIC Oak Funds. The financial statements of the AIC Oak Funds were
audited by Arthur Andersen LLP as indicated in their report dated October 31,
1997 on the Advisors' Inner Circle Fund's financial statements as of October 31,
1997. This table should be read in conjunction with the Trust's financial
statements and notes thereto when they become available. The AIC Oak Funds'
financial statements and additional performance information are contained in The
Advisors' Inner Circle Fund's Annual Report to Shareholders, which is available
without charge by calling 1-800-932-7781. All references herein to the White Oak
Growth Stock Portfolio and Pin Oak Aggressive Stock Portfolio shall be deemed to
include the AIC White Oak Fund and AIC Pin Oak Fund respectively.
<TABLE>
<CAPTION>
REALIZED
AND
UNREALIZED NET NET
NET ASSET GAINS DISTRIBUTIONS DIVIDENDS ASSET ASSETS
VALUE NET (LOSSES) FROM NET FROM VALUE END OF
BEGINNING INVESTMENT ON INVESTMENT CAPITAL END OF TOTAL PERIOD
OF PERIOD INCOME SECURITIES INCOME GAINS PERIOD RETURN (000)
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
WHITE OAK GROWTH STOCK PORTFOLIO
1997............................... $21.88 0.03 7.49 (0.04) (0.07) $29.29 34.46% $362,395
1996............................... 18.08 0.05 3.80 (0.05) -- 21.88 21.33% 26,109
1995............................... 11.92 0.04 6.15 (0.03) -- 18.08 52.07% 10,495
1994............................... 10.64 0.02 1.28 (0.02) -- 11.92 12.24% 5,942
1993............................... 10.33 0.05 0.32 (0.06) -- 10.64 3.59% 5,539
1992(1)............................ 10.00 0.02 0.33 (0.02) -- 10.33 14.30%* 3,195
PIN OAK AGGRESSIVE STOCK PORTFOLIO
1997............................... $19.45 (0.11) 2.49 -- -- $19.45 13.93% $ 31,688
1996............................... 17.32 (0.09) (0.15) -- -- 17.08 (1.39)% 23,738
1995............................... 11.60 (0.08) 5.80 -- -- 17.32 49.31% 15,652
1994............................... 12.62 (0.06) (0.96) -- -- 11.60 (8.08)% 9,624
1993............................... 10.28 (0.05) 2.39 -- -- 12.62 22.76% 9,079
1992(1)............................ 10.00 -- 0.28 -- -- 10.28 11.57% 4,127
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<CAPTION>
RATIO OF
NET RATIO OF
RATIO OF RATIO OF INCOME NET INCOME
EXPENSES EXPENSES TO (LOSS) (LOSS) TO
TO AVERAGE NET TO AVERAGE
AVERAGE ASSETS AVERAGE NET ASSETS PORTFOLIO AVERAGE
NET (EXCLUDING NET (EXCLUDING TURNOVER COMMISSION
ASSETS WAIVERS) ASSETS WAIVERS) RATE RATE
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<S> <C> <C> <C> <C> <C> <C>
WHITE OAK GROWTH STOCK PORTFOLIO
1997............................... 0.98% 0.06% 1.14% (0.10)% 7.90% $ 0.059
1996............................... 0.95% 1.50% 0.23% (0.32)% 8.07% 0.0599
1995............................... 0.97% 2.06% 0.29% (0.80)% 22.43% N/A
1994............................... 0.97% 2.24% 0.19% (1.08)% 37.42% N/A
1993............................... 0.97% 2.71% 0.54% (1.20)% 27.48% N/A
1992(1)............................ 1.00%* 4.78%* 0.74%* (3.04)%* -- N/A
PIN OAK AGGRESSIVE STOCK PORTFOLIO
1997............................... 0.99% (0.75)% 1.97% (1.73)% 17.30% $ 0.56
1996............................... 0.96% 1.47% (0.62)% (1.13)% 31.65% 0.0617
1995............................... 0.98% 1.65% (0.70)% (1.37)% 49.28% N/A
1994............................... 0.96% 1.74% (0.62)% (1.40)% 48.88% N/A
1993............................... 0.98% 2.07% (0.48)% (1.57)% 68.32% N/A
1992(1)............................ 1.00%* 4.06%* 0.03%* (3.03)%* 4.00% N/A
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</TABLE>
* Annualized
(1) The AIC Pin Oak Fund and AIC White Oak Fund each commenced operations on
August 3, 1992.
(2) Average commission rate paid per share for the security purchases and sales
made during the period.
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THE TRUST AND THE PORTFOLIOS
Oak Associates Funds (the "Trust") offers shares of two separately-managed
mutual funds, each of which is a separate series ("portfolio") of the Trust.
Each share of each mutual fund represents an undivided, proportionate interest
in that mutual fund. This Prospectus offers shares of the Trust's White Oak
Growth Stock Portfolio ("White Oak Portfolio") and Pin Oak Aggressive Stock
Portfolio ("Pin Oak Portfolio") (the White Oak Portfolio and the Pin Oak
Portfolio are sometimes referred to individually as a "Portfolio" and
collectively as the "Portfolios"), each a diversified portfolio.
INVESTMENT OBJECTIVES AND POLICIES
WHITE OAK PORTFOLIO
The White Oak Portfolio seeks long-term capital growth. There can be no
assurance that the Portfolio will be able to achieve this investment objective.
The White Oak Portfolio will normally be as fully invested as practicable in
common stocks, but also may invest in warrants and rights to purchase common
stocks, debt securities and preferred stocks convertible into common stocks, and
American Depositary Receipts ("ADRs"). Under normal market conditions, the White
Oak Portfolio will invest at least 65% of its total assets in common stocks. The
Portfolio will purchase securities primarily of established companies with large
market capitalizations (an equity market capitalization in excess of $1
billion). The Portfolio may also purchase securities of smaller established
companies if its investment adviser, Oak Associates, Ltd. (the "Adviser"),
believes that such securities offer comparable investment opportunities.
PIN OAK PORTFOLIO
The Pin Oak Portfolio seeks long-term growth of capital. There can be no
assurance that the Portfolio will be able to achieve this investment objective.
The Pin Oak Portfolio will normally be as fully invested as practicable in
common stocks, but may also invest in warrants and rights to purchase common
stocks, debt securities and preferred stocks convertible into common stocks, and
ADRs. Under normal market conditions, the Pin Oak Portfolio will invest at least
65% of its total assets in common stocks. The Portfolio will purchase securities
primarily of companies with small to medium market capitalizations (an equity
market capitalization between $100 million and $1 billion); these companies may
be positioned in emerging growth industries. The Pin Oak Portfolio may purchase
the securities of larger companies if the Adviser believes that they offer
comparable investment opportunities or will stabilize the Portfolio's net asset
value.
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IN GENERAL
Each Portfolio will purchase securities that the Adviser believes have strong
earnings potential and reasonable market valuations relative to the market as a
whole and common stocks of companies in the same respective industry
classifications. Each Portfolio will purchase only those securities that are
traded in the United States on registered exchanges or the over-the-counter
market.
Each Portfolio may invest in debt securities rated AAA by Standard & Poor's
Corporation ("S&P"). Debt rated AAA has the highest rating S&P assigns to a debt
obligation. Such a rating indicates an extremely strong capacity to pay
principal and interest.
Under normal conditions, each Portfolio may hold up to 15% of its total assets
in cash and investments in the money market instruments described below in order
to maintain liquidity or if the Adviser determines that securities meeting the
Portfolio's investment objective and policies are not otherwise readily
available for purchase.
The Adviser will enter into repurchase agreements on behalf of a Portfolio only
with financial institutions deemed to present minimal risk of bankruptcy during
the term of the agreement based on guidelines established and periodically
reviewed by the Trustees.
A Portfolio will not invest more than 15% of its net assets in illiquid
securities.
For temporary defensive purposes during periods when the Adviser determines that
conditions warrant, each Portfolio may invest up to 100% of its assets in money
market instruments (including securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities; certificates of deposit, time
deposits and bankers' acceptances issued by banks or savings & loan associations
having net assets of at least $500 million as of the end of their most recent
fiscal year; commercial paper rated at least A-1 by S&P or Prime-1 by Moody's
Investors Service, Inc.; repurchase agreements involving the foregoing
securities; and, to the extent permitted by applicable law, shares of other
investment companies investing solely in money market instruments) and in cash.
For a description of certain permitted investments, see "Description of
Permitted Investments and Risk Factors" and "Description of Permitted
Investments" in the Statement of Additional Information. For a description of
ratings, see the Appendix in the Statement of Additional Information.
RISK FACTORS
Investments in common stocks and other equity securities are subject to market
risks that may cause their prices to fluctuate over time. The value of
securities convertible into equity securities, such as warrants or convertible
debt, is also affected by prevailing interest rates, the credit quality of
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the issuer and any call provision. Fluctuations in the value of equity
securities in which a Portfolio invests will cause the net asset value of that
Portfolio to fluctuate. An investment in either Portfolio may therefore be more
suitable for long-term investors who can bear the risk of short-term principal
fluctuations.
The Pin Oak Portfolio will invest primarily in securities of issuers with small
to medium market capitalizations. Investing in smaller capitalization companies
involves greater risk than is customarily associated with investments in larger,
more established companies. This increased risk may be due to the greater
business risks of smaller size, limited markets and financial resources, narrow
product lines and frequent lack of depth of management. The securities of
smaller companies are often traded in the over-the-counter market and even if
listed on a national securities exchange may not be traded in volumes typical
for that exchange. Consequently, the securities of smaller companies are less
likely to be liquid, may have limited market stability, and may be subject to
more abrupt or erratic market movements than securities of larger, more
established growth companies or the market averages in general. As a result, the
value of the shares of the Pin Oak Portfolio can be expected to fluctuate more
than the value of shares of an investment company investing solely in larger,
more established companies.
SECURITIES OF FOREIGN ISSUERS - Investments in the securities of foreign issuers
may subject a Portfolio to investment risks that differ in some respects from
those related to investments in securities of U.S. issuers. Such risks include
future adverse political and economic developments, possible imposition of
withholding taxes on income, possible seizure, nationalization or expropriation
of foreign deposits, possible establishment of exchange controls or taxation at
the source or greater fluctuation in value due to changes in exchange rates.
Foreign issuers of securities often engage in business practices different from
those of domestic issuers of similar securities, and there may be less
information publicly available about foreign issuers. In addition, foreign
issuers are, generally speaking, subject to less government supervision and
regulation and different accounting treatment than are those in the United
States.
INVESTMENT LIMITATIONS
The investment objective of each Portfolio and the investment limitations set
forth here and in the Statement of Additional Information are fundamental
policies of that Portfolio. Fundamental policies cannot be changed with respect
to a Portfolio without the consent of the holders of a majority of that
Portfolio's outstanding shares.
No Portfolio may:
1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States, its agencies or instrumentalities and repurchase agreements
involving such securities) if as a result
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more than 5% of the total assets of the Portfolio would be invested in the
securities of such issuer. This restriction applies to 75% of the Portfolio's
total assets.
2. Purchase any securities which would cause 25% or more of the total assets of
a Portfolio to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in obligations issued or guaranteed by
the U.S. Government, its agencies or instrumentalities and repurchase agreements
involving such securities. For purposes of this limitation, (i) utility
companies will be divided according to their services, for example, gas
distribution, gas transmission, electric and telephone will each be considered a
separate industry, and (ii) financial service companies will be classified
according to the end users of their services, for example, automobile finance,
bank finance and diversified finance will each be considered a separate
industry.
The foregoing percentages will apply at the time of the purchase of a security.
THE ADVISER
Oak Associates, Ltd. (the "Adviser") is a professional investment management
firm and registered investment adviser formed in December 1995 by James D.
Oelschlager to continue the business of Oak Associates, a sole proprietorship
founded in 1985. As of , 199 , the Adviser had discretionary
management authority with respect to approximately $ billion of assets under
management. The principal business address of the Adviser is 3875 Embassy
Parkway, Suite 250, Akron, Ohio 44333.
The Adviser serves as the investment adviser for each Portfolio under an
investment advisory agreement (the "Advisory Agreement"). Under the Advisory
Agreement, the Adviser makes the investment decisions for the assets of the
Portfolios and continuously reviews, supervises and administers the investment
program of each Portfolio, subject to the supervision of, and policies
established by, the Trustees of the Trust. In addition to advising the
Portfolios, the Adviser provides advisory services to pension plans, religious
and educational endowments, corporations, 401(k) plans, profit sharing plans,
individual investors and trusts and estates.
For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .74% of the average daily net assets of
the White Oak Portfolio and .74% of the average daily net assets of the Pin Oak
Portfolio, respectively. The Adviser has voluntarily agreed to waive all or a
portion of its fee for each Portfolio and to reimburse expenses of each
Portfolio in order to limit total operating expenses of that Portfolio to an
annual rate of not more than 1.00% of average daily net assets. The Adviser
reserves the right, in its sole discretion, to terminate its voluntary fee
waivers and reimbursements at any time. For the fiscal year ended October 31,
1997, the Adviser performed advisory services to each fund's predecessor
portfolio and received an
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advisory fee equal to . % and . %, respectively, of the AIC White Oak and
AIC Pin Oak Portfolios' average daily net assets.
James D. Oelschlager, President of the Adviser and its predecessor since 1985,
has managed the portfolios of the White Oak Portfolio and the Pin Oak Portfolio
(and their predecessor funds) since their inception, with both Donna Barton and
Doug MacKay serving as assistant portfolio managers during this period. Ms.
Barton has been a trader for the Adviser and its predecessor since 1985. Mr.
MacKay has been a research analyst for the Adviser and its predecessor since
1990.
THE ADMINISTRATOR
SEI Fund Resources (the "Administrator") provides the Trust with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel and facilities.
For these administrative services, the Administrator is entitled to a fee from
each Portfolio, which fee is calculated daily and paid monthly, at an annual
rate of .15% on the first $250 million of average daily net assets; .12% on the
next $200 million; .10% on the next $200 million; and .08% on average daily net
assets over $650 million. However, each Portfolio pays the Administrator a
minimum annual fee of $50,000.
The Administrator also serves as the shareholder servicing agent for each
Portfolio under a shareholder servicing agreement with the Trust.
THE TRANSFER AGENT
DST Systems, Inc., 210 W. 10th Street, Kansas City, Missouri 64105 (the
"Transfer Agent") serves as the transfer agent and dividend disbursing agent for
the Trust under a transfer agency agreement with the Trust.
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), Oaks, Pennsylvania 19456,
a wholly-owned subsidiary of SEI Investments Company, serves as the Trust's
distributor pursuant to a distribution agreement (the "Distribution Agreement").
No compensation is paid to the Distributor for distribution services for the
shares of either Portfolio.
PORTFOLIO TRANSACTIONS
The Advisory Agreement authorizes the Adviser to select broker-dealers that will
execute the purchase or sale of investment securities for each Portfolio and
directs the Adviser to seek to obtain the best net results.
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Each Portfolio may execute brokerage or other agency transactions through the
Distributor for which the Distributor may receive usual and customary
compensation.
Because shares of the Portfolios are not marketed through intermediary
broker-dealers, it is not a Portfolio's practice to allocate brokerage or effect
principal transactions with broker-dealers on the basis of sales of shares that
may be made through such firms. However, the Adviser may place orders for a
Portfolio with qualified broker-dealers who refer clients to that Portfolio.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions may be made through the Transfer Agent on each day
that the New York Stock Exchange is open for business (a "Business Day").
Investors may purchase and redeem shares of either Portfolio directly through
the Transfer Agent at: Oak Associates Funds, [P.O. Box 419009, Kansas City,
Missouri 64141-6009] by mail or wire transfer. All shareholders may place wire
transfer orders, and exchange and redemption orders, by telephone; when market
conditions are extremely busy, it is possible that investors may experience
difficulties placing orders by telephone and may wish to place orders by mail.
Purchases and redemptions of shares of each Portfolio may be made on any
Business Day. Shares of the Portfolios are offered only to residents of states
in which such shares are eligible for purchase. Certain broker-dealers assist
their clients in the purchase or redemptions of shares from the Distributor and
charge a fee for this service in addition to a Portfolio's public offering
price.
The minimum initial investment in the Portfolio is $2,000, and subsequent
purchases must be at least $50. The Distributor may waive these minimums at its
discretion. No minimum applies to subsequent purchases effected by dividend
reinvestment. As described below, subsequent purchases through the Portfolios'
Systematic Investment Plan must be at least $25.
PURCHASES BY MAIL
An account may be opened by mailing a check or other negotiable bank draft
(payable to the name of the appropriate Portfolio) for $2,000 or more, together
with a completed Account Application to the Transfer Agent at: Oak Associates
Funds, [P.O. Box 419009, Kansas City, Missouri 64141-6009]. Third-party checks,
credit cards, credit card checks and cash will not be accepted. Subsequent
investments may also be mailed directly to the Transfer Agent.
PURCHASES BY WIRE TRANSFER
Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of either Portfolio by requesting
their bank to transmit funds by wire to: [United Missouri Bank, N.A.; ABA
#10-10-00695; for Account Number 98-7052-396-5; Further Credit: either White Oak
Growth Stock Portfolio or Pin Oak Aggressive Stock Portfolio]. The shareholder's
name and account number must be specified in the wire.
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INITIAL PURCHASES: Before making an initial investment by wire, an investor
must first telephone 1-888-462-5386 to be assigned an account number. The
investor's name, account number, taxpayer identification number or Social
Security number, and address must be specified in the wire. In addition, an
Account Application should be promptly forwarded to the Transfer Agent at: Oak
Associates Funds, [P.O. Box 419009, Kansas City, Missouri 64141-6009].
SUBSEQUENT PURCHASES: Additional investments may be made at any time through
the wire procedures described above, which must include a shareholder's name and
account number. The investor's bank may impose a fee for investments by wire.
GENERAL INFORMATION REGARDING PURCHASES
A purchase order will be effective as of the day received by the Transfer Agent
if the Transfer Agent receives the order and payment before 4:00 p.m., Eastern
time. Payment may be made by check or readily available funds. The purchase
price of shares of a Portfolio is the net asset value per share next determined
after a purchase order is effective. Purchases will be made in full and
fractional shares of a Portfolio calculated to three decimal places. The Trust
will not issue certificates representing shares of the Portfolios.
If a check received for the purchase of shares does not clear, the purchase will
be canceled, and the investor could be liable for any losses or fees incurred.
The Trust reserves the right to reject a purchase order when the Trust
determines that it is not in the best interest of the Trust or its shareholders
to accept such order.
SYSTEMATIC INVESTMENT PLAN - A shareholder may also arrange for periodic
additional investments in the Portfolios through automatic deductions by
Automated Clearing House ("ACH") transfers from a checking or savings account by
completing the appropriate section of the Account Application form. This
Systematic Investment Plan is subject to account minimum initial purchase
amounts and a minimum pre-authorized investment amount of $25 per month. An
Account Application form may be obtained by calling 1-888-462-5386.
EXCHANGES
Shareholders of either Portfolio may exchange their shares for shares of the
other Portfolio. Exchanges are made at net asset value. An exchange is
considered a sale of shares and will result in a capital gain or loss for
federal income tax purposes. The shareholder must have received a current
prospectus for the new Portfolio before any exchange will be effected, and the
exchange privilege may be exercised only in those states where shares of the new
Portfolio may legally be sold. If the Transfer Agent receives exchange
instructions in writing or by telephone (an "Exchange Request") in good order by
4:00 p.m., Eastern time on any Business Day, the exchange will be effected that
day. The liability of the Trust or the Transfer Agent for fraudulent or
unauthorized telephone
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instructions may be limited as described below. The Trust reserves the right to
modify or terminate this exchange offer on 60 days' notice.
REDEMPTIONS
Redemption orders received by the Transfer Agent prior to 4:00 p.m., Eastern
time on any Business Day will be effective that day. The redemption price of
shares is the net asset value per share of the Portfolio next determined after
the redemption order is effective. Payment on redemption will be made as
promptly as possible and, in any event, within seven days after the redemption
order is received, provided, however, that the investment being redeemed has
been in the shareholder's account for a minimum of 15 days. Shareholders may not
close their accounts by telephone.
Shareholders may receive redemption payments in the form of a check or by
Federal Reserve wire transfer or ACH wire transfer. There is no charge for
having a check for redemption proceeds mailed. The custodian will deduct a wire
charge, currently $10.00, from the amount of a Federal Reserve wire redemption
payment made at the request of a shareholder. Shareholders cannot redeem shares
of a Portfolio by Federal Reserve wire on federal holidays restricting wire
transfers. The Trust does not charge for ACH wire transfers; however, such
transactions will not be posted to a shareholder's bank account until the second
Business Day following the transaction.
SYSTEMATIC WITHDRAWAL PLAN - Each Portfolio offers a Systematic Withdrawal Plan
("SWP") for shareholders who wish to receive regular distributions from their
account. Upon commencement of the SWP, the account must have a current value of
$25,000 or more. Shareholders may elect to receive automatic payments via ACH
wire transfers of $100 or more on a monthly, quarterly, semi-annual or annual
basis. An application form for SWP may be obtained by calling 1-888-462-5386.
Shareholders should realize that if withdrawals exceed income dividends, their
invested principal in the account will be depleted. Thus, depending on the
frequency and amounts of the withdrawal payments and/or any fluctuations in the
net asset value per share, their original investment could be exhausted
entirely. To participate in the SWP, shareholders must have their dividends
automatically reinvested. Shareholders may change or cancel the SWP at any time,
upon written notice to the Transfer Agent.
ADDITIONAL REDEMPTION INFORMATION
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of the redemption instructions received by telephone if it
reasonably believes those instructions to be genuine. The Trust and the Transfer
Agent will each employ reasonable procedures to confirm that telephone
instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include taping of telephone conversations.
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The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.
CALCULATION OF NET ASSET VALUE
The net asset value per share of each Portfolio is determined by dividing the
total market value of that Portfolio's investments and other assets, less any
liabilities, by the total outstanding shares of that Portfolio. Net asset value
per share is determined daily as of the close of business of the New York Stock
Exchange (normally, 4:00 p.m., Eastern time) on any Business Day.
PERFORMANCE
From time to time, each Portfolio may advertise its yield and total return.
These figures will be based on historical earnings and are not intended to
indicate future performance. No representation can be made regarding actual
future yields or returns. The yield of a Portfolio refers to the annualized
income generated by an investment in the Portfolio over a specified 30-day
period. The yield is calculated by assuming that the same amount of income
generated by the investment during that period is generated in each 30-day
period over one year and is shown as a percentage of the investment.
The total return of a Portfolio refers to the average compounded rate of return
on a hypothetical investment, for designated time periods (including but not
limited to the period from which the Portfolio commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions.
A Portfolio may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical
Services, Inc.), or by financial and business publications and periodicals, of
broad groups of comparable mutual funds and unmanaged indices. The performance
of unmanaged indices may assume investment of dividends but generally do not
reflect deductions for administrative and management costs, or other investment
alternatives. A Portfolio may quote Morningstar, Inc., a service that ranks
mutual funds on the basis of risk-adjusted performance. A Portfolio may quote
Ibbotson Associates of Chicago, Illinois, which provides historical returns of
the capital markets in the U.S. The Portfolios may use long term performance of
these capital markets to demonstrate general long-term risk versus reward
scenarios and could include the value of a hypothetical investment in any of the
capital markets. The Portfolios may also quote financial and business
publications and periodicals as they relate to fund management, investment
philosophy, and investment techniques.
A Portfolio may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds. Measures
of volatility attempt to compare
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historical share price fluctuations or total returns to a benchmark while
measures of benchmark correlation indicate how valid a comparative benchmark
might be. Measures of volatility and correlation are calculated using averages
of historical data and cannot be calculated precisely.
TAXES
The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action.
No attempt has been made to present a detailed explanation of the federal,
state, or local income tax treatment of a Portfolio or its shareholders.
Accordingly, shareholders are urged to consult their tax advisors regarding
specific questions as to federal, state and local income taxes.
TAX STATUS OF THE PORTFOLIOS:
Each Portfolio is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other portfolios. Each Portfolio intends to
qualify or to continue to qualify for the special tax treatment afforded
regulated investment companies as defined under Subchapter M of the Internal
Revenue Code of 1986, as amended. So long as a Portfolio qualifies for this
special tax treatment, it will be relieved of federal income tax on that part of
its net investment income and net capital gain (the excess of net long-term
capital gain over net short-term capital loss) which it distributes to
shareholders.
TAX STATUS OF DISTRIBUTIONS:
Each Portfolio will distribute all of its net investment income (including, for
this purpose, net short-term capital gain) to shareholders. Dividends from net
investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations. It can be expected that only certain dividends of
each Portfolio will qualify for that deduction. Any net capital gains will be
distributed annually and will be taxed to shareholders as long-term capital
gains, regardless of how long the shareholder has held shares. Each Portfolio
will make annual reports to shareholders of the federal income tax status of all
distributions, including the amount of dividends eligible for the
dividends-received deduction.
Certain securities purchased by a Portfolio (such as STRIPS) are sold with
original issue discount and thus generally do not make periodic cash interest
payments. For a further description of such securities, see "Description of
Permitted Investments and Risk Factors" below. Each Portfolio will be required
to include as part of its current income the accrued discount on such
obligations even though the Portfolio has not received any interest payments on
such obligations during that period. Because each Portfolio distributes all of
its net investment income to its shareholders, a Portfolio
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may have to sell portfolio securities to distribute such accrued income, which
may occur at a time when the Adviser would not have chosen to sell such
securities and which may result in a taxable gain or loss.
Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly and may be exempt, depending on the state,
when received by a shareholder from a Portfolio provided certain state-specific
conditions are satisfied. The Portfolios will inform shareholders annually of
the percentage of income and distributions derived from direct U.S. obligations.
Shareholders should consult their tax advisers to determine whether any portion
of the income dividends received from a Portfolio is considered tax exempt in
their particular state.
Dividends declared by a Portfolio in October, November or December of any year
and payable to shareholders of record on a date in one of those months will be
deemed to have been paid by the Portfolio and received by the shareholders on
December 31 of that year, if paid by the Portfolio at any time during the
following January.
Each Portfolio intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.
A sale, exchange or redemption of a Portfolio's shares is a taxable event to the
shareholder.
Income derived by a Portfolio from securities of foreign issuers may be subject
to foreign withholding taxes. A Portfolio will not be able to elect to treat
shareholders as having paid their proportionate share of such foreign taxes.
GENERAL INFORMATION
THE TRUST
The Portfolio, an open-end investment management company, was organized under
Massachusetts law as a business trust under a Declaration of Trust dated
November 6, 1997. The Declaration of Trust permits the Trust to offer separate
series ("portfolios") of shares. All consideration received by the Trust for
shares of any portfolio and all assets of such portfolio belong to that
portfolio and would be subject to liabilities related thereto. The Trust
reserves the right to create and issue shares of additional portfolios.
The Trust pays its (i) operating expenses, including fees of its service
providers, expenses of preparing prospectuses, proxy solicitation material and
reports to shareholders, costs of custodial services and registering its shares
under federal and state securities laws, pricing and insurance expenses,
brokerage costs, interest charges, taxes and organization expenses and (ii) pro
rata share of the Trust's other expenses, including audit and legal expenses.
Expenses not attributable to a specific portfolio are allocated across all of
the portfolios on the basis of relative net assets.
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TRUSTEES OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Trust.
VOTING RIGHTS
Each share held entitles the shareholder of record to one vote for each dollar
invested. In other words, each shareholder of record is entitled to one vote for
each dollar of net asset value of the shares held on the record date for the
meeting. Each Portfolio will vote separately on matters relating solely to it.
As a Massachusetts business trust, the Trust is not required to hold annual
meetings of shareholders but shareholders' approval will be sought for certain
changes in the operation of the Trust and for the election of Trustees under
certain circumstances.
In addition, a Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written request of shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the shareholders requesting the meeting.
REPORTING
The Trust issues unaudited financial information semi-annually and audited
financial statements annually for each Portfolio. The Trust also furnishes
periodic reports and, as necessary, proxy statements to shareholders of record.
SHAREHOLDER INQUIRIES
Shareholder inquiries should be directed to Oak Associates Funds, [P.O. Box
419009, Kansas City, Missouri 64141-6009 or by calling 1-800-932-7781].
Purchases, redemptions and exchanges of shares should be made through the
Transfer Agent by calling 1-800-808-4921.
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the net investment income (exclusive of capital gain) of
each Portfolio is distributed in the form of quarterly dividends. Shareholders
of record on the next to last Business Day of each quarter will be entitled to
receive the quarterly dividend distribution, which is generally paid within 10
Business Days after the end of the quarter. If any capital gain is realized,
substantially all of it will be distributed at least annually.
Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the shareholder has elected to take
such payment in cash. Shareholders may change
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their election by providing written notice to the Transfer Agent at least 15
days prior to the distribution. Shareholders may receive payments for cash
distributions in the form of a check or by Federal Reserve wire transfer or ACH
wire transfers.
Dividends and other distributions of a Portfolio are paid on a per share basis.
The value of each share will be reduced by the amount of the payment. If shares
are purchased shortly before the record date for a distribution of ordinary
income or capital gains, a shareholder will pay the full price for the shares
and receive some portion of the price back as a taxable dividend or
distribution.
COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS
Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Arthur Andersen LLP
serves as the independent public accountants of the Trust.
CUSTODIAN
CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101 acts as the custodian (the "Custodian") of the Trust. The
Custodian holds cash, securities and other assets of the Trust as required by
the Investment Company Act of 1940, as amended (the "1940 Act").
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
The following is a description of certain of the permitted investments for each
Portfolio:
AMERICAN DEPOSITARY RECEIPTS ("ADRS") - ADRs are securities, typically issued by
a U.S. financial institution (a "depositary"), that evidence ownership interests
in a security or a pool of securities issued by a foreign issuer and deposited
with the depositary. ADRs may be available through "sponsored" or "unsponsored"
facilities. A sponsored facility is established jointly by the issuer of the
security underlying the receipt and a depositary, whereas an unsponsored
facility may be established by a depositary without participation by the issuer
of the underlying security. Holders of unsponsored depositary receipts generally
bear all the costs of the unsponsored facility. The depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through, to the holders of the receipts, voting rights with respect to the
deposited securities.
BANKERS' ACCEPTANCE - Bankers' acceptances are bills of exchange or time drafts
drawn on and accepted by a commercial bank. Bankers' acceptances are used by
corporations to finance the shipment and storage of goods. Maturities are
generally six months or less.
CERTIFICATE OF DEPOSIT - Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of
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funds and normally can be traded in the secondary market prior to maturity.
Certificates of deposit with penalties for early withdrawal will be considered
illiquid.
COMMERCIAL PAPER - Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations and
other entities. Maturities on these issues vary from a few to 270 days.
CONVERTIBLE SECURITIES - Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics of both fixed income and
equity securities. Because of the conversion feature, the market value of a
convertible security tends to move with the market value of the underlying
stock. The value of a convertible security is also affected by prevailing
interest rates, the credit quality of the issuer and any call provisions.
ILLIQUID SECURITIES - Illiquid securities are securities that cannot be disposed
of within seven business days at approximately the price at which they are being
carried on a Portfolio's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with a remaining
term to maturity in excess of seven days.
REPURCHASE AGREEMENTS - Repurchase agreements are agreements by which the
Portfolio obtains a security and simultaneously commits to return the security
to the seller at an agreed upon price on an agreed upon date within a number of
days from the date of purchase. The Custodian will hold the security as
collateral for the repurchase agreement. The Portfolio bears a risk of loss in
the event the other party defaults on its obligations and the Portfolio is
delayed or prevented from exercising its right to dispose of the collateral or
if the Portfolio realizes a loss on the sale of the collateral. The Portfolio
will enter into repurchase agreements only with financial institutions deemed to
present minimal risk of bankruptcy during the term of the agreement based on
established guidelines. Repurchase agreements are considered loans under the
1940 Act.
TIME DEPOSITS - Time deposits are non-negotiable receipts issued by a bank in
exchange for the deposit of funds. Like a certificate of deposit, it earns a
specified rate of interest over a definite period of time; however, it cannot be
traded in the secondary market. Time deposits with a withdrawal penalty or that
mature in more than seven days are considered to be illiquid securities.
U.S. GOVERNMENT AGENCIES - Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the Federal
Land Banks and the U.S. Postal Service. Some of these securities are supported
by the full faith and credit of the U.S. Treasury, others are supported by the
right of the issuer to borrow from the Treasury, while still others are
supported only by the credit of the instrumentality. Guarantees
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of principal by agencies or instrumentalities of the U.S. Government may be a
guarantee of payment at the maturity of the obligation so that in the event of a
default prior to maturity there might not be a market and thus no means of
realizing on the obligation prior to maturity. Guarantees as to the timely
payment of principal and interest do not extend to the value or yield of these
securities nor to the value of the Portfolio's shares.
U.S. GOVERNMENT DIRECT OBLIGATIONS - U.S. Treasury obligations consist of bills,
notes and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
federal book-entry system known as Separately Traded Registered Interest and
Principal Securities ("STRIPS").
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TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY.................................................................................. 2
EXPENSE SUMMARY.......................................................................... 4
FINANCIAL HIGHLIGHTS..................................................................... 5
THE TRUST AND THE PORTFOLIOS............................................................. 6
INVESTMENT OBJECTIVES AND POLICIES....................................................... 6
RISK FACTORS............................................................................. 7
INVESTMENT LIMITATIONS................................................................... 8
THE ADVISER.............................................................................. 9
THE ADMINISTRATOR........................................................................ 10
THE TRANSFER AGENT....................................................................... 10
THE DISTRIBUTOR.......................................................................... 10
PORTFOLIO TRANSACTIONS................................................................... 10
PURCHASE AND REDEMPTION OF SHARES........................................................ 11
PERFORMANCE.............................................................................. 14
TAXES.................................................................................... 15
GENERAL INFORMATION...................................................................... 16
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS.................................... 18
</TABLE>
<PAGE>
Trust:
OAK ASSOCIATES PORTFOLIOS
Funds:
WHITE OAK GROWTH STOCK PORTFOLIO
PIN OAK AGGRESSIVE STOCK PORTFOLIO
Adviser:
OAK ASSOCIATES, Ltd.
Distributor:
SEI INVESTMENTS DISTRIBUTION CO.
Administrator:
SEI FUND RESOURCES
Legal Counsel:
MORGAN, LEWIS & BOCKIUS LLP
Independent Public Accountants:
ARTHUR ANDERSEN LLP
, 1998
<PAGE>
TRUST:
OAK ASSOCIATES FUNDS
FUNDS:
WHITE OAK GROWTH STOCK PORTFOLIO
PIN OAK AGGRESSIVE STOCK PORTFOLIO
INVESTMENT ADVISER:
OAK ASSOCIATES LTD.
This STATEMENT OF ADDITIONAL INFORMATION is not a prospectus and relates only to
the White Oak Growth Stock Portfolio (the "White Oak Portfolio") and Pin Oak
Aggressive Stock Portfolio (the "Pin Oak Portfolio")(each a "Portfolio" and
collectively, the "Portfolios"). It is intended to provide additional
information regarding the activities and operations of Oak Associates Funds (the
"Trust") and the Portfolios and should be read in conjunction with the
Portfolios' Prospectus dated ___________________, 1998. The Prospectus for the
Portfolios may be obtained by calling 1-888-462-5386.
TABLE OF CONTENTS
THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S - 2
DESCRIPTION OF PERMITTED INVESTMENTS . . . . . . . . . . . . . . . . . . S - 2
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . S - 3
THE ADVISER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S - 5
THE ADMINISTRATOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . S - 6
THE DISTRIBUTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . S - 7
TRUSTEES AND OFFICERS OF THE TRUST . . . . . . . . . . . . . . . . . . . S - 7
COMPUTATION OF YIELD AND TOTAL RETURN. . . . . . . . . . . . . . . . . .S - 11
PURCHASE AND REDEMPTION OF SHARES. . . . . . . . . . . . . . . . . . . .S - 12
DETERMINATION OF NET ASSET VALUE . . . . . . . . . . . . . . . . . . . .S - 13
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .S - 13
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . .S - 15
DESCRIPTION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . .S - 17
SHAREHOLDER LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . .S - 17
LIMITATION OF TRUSTEES' LIABILITY. . . . . . . . . . . . . . . . . . . .S - 17
5% SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .S - 18
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .S - 19
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A - 1
________________, 1998
_____-___-__
<PAGE>
THE TRUST
This Statement of Additional Information relates only to the White Oak Growth
Stock Portfolio (the "White Oak Portfolio") and Pin Oak Aggressive Stock
Portfolio (the "Pin Oak Portfolio") (each a "Portfolio"). Each Portfolio is a
separate series of Oak Associates Funds (the "Trust"), an open-end investment
management company established under Massachusetts law as a Massachusetts
business trust under a Declaration of Trust dated November 6, 1997. The
Declaration of Trust permits the Trust to offer separate series ("portfolios")
of shares of beneficial interest ("shares"). Each portfolio is a separate
mutual fund, and each share of each portfolio represents an equal
proportionate interest in that portfolio. On ______________, 1998, the White
Oak Portfolio and Pin Oak Portfolio acquired substantially all of the assets
and liabilities of the White Oak Growth Stock Fund and Pin Oak Aggressive
Stock Fund (the "AIC White Oak" and the "AIC Pin Oak", respectively, and
collectively the "Predecessor Funds") of the Advisors' Inner Circle Fund.
See "Description of Shares." No investment in shares of a portfolio should
be made without first reading that portfolio's prospectus. Capitalized terms
not defined herein are defined in the Prospectus offering shares of the
Portfolios.
DESCRIPTION OF PERMITTED INVESTMENTS
REPURCHASE AGREEMENTS are agreements by which a person (e.g., a Portfolio)
obtains a security and simultaneously commits to return the security to the
seller (a member bank of the Federal Reserve System or primary securities dealer
as recognized by the Federal Reserve Bank of New York) at an agreed upon price
(including principal and interest) on an agreed upon date within a number of
days (usually not more than seven) from the date of purchase. The resale price
reflects the purchase price plus an agreed upon market rate of interest which is
unrelated to the coupon rate or maturity of the underlying security. A
repurchase agreement involves the obligation of the seller to pay the agreed
upon price, which obligation is in effect secured by the value of the underlying
security.
Repurchase agreements are considered to be loans by a Portfolio for purposes of
its investment limitations. The repurchase agreements entered into by a
Portfolio will provide that the underlying security at all times shall have a
value at least equal to 102% of the resale price stated in the agreement (the
Adviser monitors compliance with this requirement). Under all repurchase
agreements entered into by a Portfolio, the custodian or its agent must take
possession of the underlying collateral. However, if the seller defaults, the
Portfolio could realize a loss on the sale of the underlying security to the
extent that the proceeds of the sale, including accrued interest, are less than
the resale price provided in the agreement including interest. In addition,
even though the Bankruptcy Code provides protection for most repurchase
agreements, if the seller should be involved in bankruptcy or insolvency
proceedings, a Portfolio may
S-2
<PAGE>
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Portfolio is treated as an unsecured creditor and
is required to return the underlying security to the seller's estate.
INVESTMENT COMPANY SHARES
Each Portfolio may invest in shares of other investment companies, to the extent
permitted by applicable law and subject to certain restrictions. These
investment companies typically incur fees that are separate from those fees
incurred directly by the Portfolio. A Portfolio's purchase of such investment
company securities results in the layering of expenses, such that shareholders
would indirectly bear a proportionate share of the operating expenses of such
investment companies, including advisory fees, in addition to paying Portfolio
expenses. Under applicable regulations, a Portfolio is prohibited from
acquiring the securities of another investment company if, as a result of such
acquisition: (1) the Portfolio owns more than 3% of the total voting stock of
the other company; (2) securities issued by any one investment company represent
more than 5% of the Portfolio's total assets; or (3) securities (other than
treasury stock) issued by all investment companies represent more than 10% of
the total assets of the Portfolio. See also "Investment Limitations."
It is the position of the staff of the Securities and Exchange Commission
("SEC") that certain non-governmental issuers of CMOs constitute investment
companies pursuant to the Investment Company Act of 1940, as amended (the "1940
Act"), and either (a) investments in such instruments are subject to the
limitations set forth above or (b) the issuers of such instruments have received
orders from the SEC exempting such instruments from the definition of investment
company.
OPTIONS
It is an operating policy of the Portfolios not to write or purchase PUTS,
CALLS, OPTIONS or combinations thereof.
WARRANTS
A Portfolio may invest in WARRANTS in accordance with the Prospectus.
INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations are fundamental policies of each Portfolio
that cannot be changed without the consent of the holders of a majority of that
Portfolio's outstanding shares. The phrase "majority of the outstanding shares"
means the vote of (i) 67% or more of a Portfolio's shares
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present at a meeting, if more than 50% of the outstanding shares of a Portfolio
are present or represented by proxy, or (ii) more than 50% of a Portfolio's
outstanding shares, whichever is less.
Each Portfolio may not:
1. Acquire more than 10% of the voting securities of any one issuer.
2. Invest in companies for the purpose of exercising control.
3. Issue any class of senior security or sell any senior security of
which it is the issuer, except that the Portfolio may borrow from any
bank, provided that immediately after any such borrowing there is
asset coverage of at least 300% for all borrowings of the Portfolio,
and further provided that, to the extent that such borrowings exceed
5% of the Portfolio's total assets, all borrowings shall be repaid
before the Portfolio makes additional investments. The term "senior
security" shall not include any temporary borrowings that do not
exceed 5% of the value of the Portfolio's total assets at the time the
Portfolio makes such temporary borrowing. In addition, investment
strategies that either obligate the Portfolio to purchase securities
or require the Portfolio to segregate assets will not be considered
borrowings or senior securities. This investment limitation shall not
preclude the Portfolio from issuing multiple classes of shares in
reliance on SEC rules or orders.
4. Make loans if, as a result, more than 33 1/3% of its total assets
would be lent to other parties, except that the Portfolio may (i)
purchase or hold debt instruments in accordance with its investment
objective and policies; (ii) enter into repurchase agreements; and
(iii) lend its securities.
5. Purchase or sell real estate, real estate limited partnership
interests, physical commodities or commodities contracts except that
the Portfolio may purchase commodities contracts relating to financial
instruments, such as financial futures contracts and options on such
contracts.
6. Make short sales of securities, maintain a short position or purchase
securities on margin, except that a Portfolio may obtain short-term
credits as necessary for the clearance of security transactions and
sell securities short "against the box."
7. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling the Portfolio security.
8. Purchase securities of other investment companies except as permitted
by the Investment Company Act of 1940, as amended (the "1940 Act"),
the rules and regulations thereunder or pursuant to an exemption
therefrom.
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NON-FUNDAMENTAL POLICIES
The following investment limitation of each Portfolio is non-fundamental and may
be changed by the Trust's Board of Trustees without shareholder approval:
1. A Portfolio may not invest in illiquid securities in an amount
exceeding, in the aggregate, 15% of the Portfolio's net assets.
THE ADVISER
The Trust and Oak Associates Ltd. (the "Adviser") have entered into an advisory
agreement (the "Advisory Agreement"). The Advisory Agreement provides that the
Adviser shall not be protected against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard of its
obligations or duties thereunder.
For the fiscal years ended October 31, 1995, 1996 and 1997, the Predecessor
Funds paid the Adviser the following advisory fees:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Fees Paid Fees Waived Fees Reimbursed
--------------------------------------------------------------------------------------
1995 1996 1997 1995 1996 1997 1995 1996 1997
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AIC White $0 $29,362 $929,875 $53,199 $88,667 $242,259 $25,326 $0 $0
Oak Fund
- ----------------------------------------------------------------------------------------------------
AIC Pin $7,803 $44,515 $148,297 $77,724 $98,194 $72,975 $0 $0 $0
Oak Fund
- ----------------------------------------------------------------------------------------------------
</TABLE>
The continuance of the Advisory Agreement as to any Portfolio must be
specifically approved at least annually (i) by the vote of the Trustees or by a
vote of the shareholders of the Portfolio and (ii) by the vote of a majority of
the Trustees who are not parties to the Advisory Agreement or "interested
persons" of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. The Advisory Agreement will terminate
automatically in the event of its assignment, and is terminable at any time
without penalty by the Trustees of the Trust or, with respect to any Portfolio,
by a majority of the outstanding shares of that Portfolio, on not less than 30
days' nor more than 60 days' written notice to the Adviser, or by the Adviser on
90 days' written notice to the Trust.
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<PAGE>
THE ADMINISTRATOR
The Trust and SEI Fund Resources (the "Administrator") have entered into an
administration agreement (the "Administration Agreement"). The Administration
Agreement provides that the Administrator shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the matters to which the Administration Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Administrator in the performance of its duties or from reckless disregard by
it of its duties and obligations thereunder. The Administration Agreement shall
remain in effect for a period of five years after the effective date of the
agreement and shall continue in effect for successive periods of two years
unless terminated by either party on not less than 90 days' prior written notice
to the other party.
For the fiscal years ended October 31, 1995, 1996 and 1997, the Predecessor
Funds paid the following administrative fees to the administrator:
- --------------------------------------------------------------
Administrative Fees Paid
---------------------------------------
1995 1996 1997
- --------------------------------------------------------------
AIC White Oak Fund $50,001 $50,030 $274,875
- --------------------------------------------------------------
AIC Pin Oak Fund $50,001 $50,030 $56,068
- --------------------------------------------------------------
The Trust and the Administrator have also entered into a shareholder servicing
agreement pursuant to which the Administrator provides certain shareholder
services in addition to those set forth in the Administration Agreement.
The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Investments Management Corporation ("SIMC"), a
wholly-owned subsidiary of SEI Investments Company ("SEI Investments"), is the
owner of all beneficial interest in the Administrator. SEI Investments and its
subsidiaries and affiliates, including the Administrator, are leading providers
of funds evaluation services, trust accounting systems, and brokerage and
information services to financial institutions, institutional investors, and
money managers. The Administrator and its affiliates also serve as
administrator or sub-administrator to the following other mutual funds: The
Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund, ARK
Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-,CoreFunds,
Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds, Inc., First
American Funds, Inc., First American Investment Funds, Inc.,
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First American Strategy Funds, Inc., HighMark Funds, Marquis Funds-Registered
Trademark-, Monitor Funds, Morgan Grenfell Investment Trust, The PBHG Funds,
Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, Profit Funds
Investment Trust, Rembrandt Funds-Registered Trademark-, Santa Barbara Group of
Mutual Funds, Inc., SEI Asset Allocation Trust, SEI Daily Income Trust, SEI
Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust,
STI Classic Funds, STI Classic Variable Trust, and TIP Funds.
THE DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), a wholly owned subsidiary
of SEI Investments, and the Trust are parties to a distribution agreement (the
"Distribution Agreement"). The Distributor will not receive compensation for
distribution of shares of any Portfolio.
The Distribution Agreement is renewable annually. The Distribution Agreement
may be terminated by the Distributor, by a majority vote of the Trustees who are
not interested persons and have no financial interest in the Distribution
Agreement or by a majority vote of the outstanding securities of the Trust upon
not more than 60 days' written notice by either party or upon assignment by the
Distributor.
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trust pays the fees for
unaffiliated Trustees.
The Trustees and Executive Officers of the Trust, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with the named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Trust also serve as officers of some or all of the following:
The Achievement Funds Trust, The Advisors' Inner Circle Fund, The Arbor Fund,
ARK Funds, Bishop Street Funds, Boston 1784 Funds-Registered Trademark-,
CoreFunds, Inc., CrestFunds, Inc., CUFUND, The Expedition Funds, FMB Funds,
Inc., First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., HighMark Funds, Marquis Funds-Registered
Trademark-, Monitor Funds, Morgan Grenfell Investment Trust, The PBHG Funds,
Inc., PBHG Insurance Series Fund, Inc.,The Pillar Funds, Profit Funds Investment
Trust, Rembrandt Funds-Registered Trademark-, Santa Barbara Group of Mutual
Funds, Inc., SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic
Funds, STI Classic Variable Trust and TIP Funds, each of which is an open-end
management investment company managed by SEI Fund Resources or its
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affiliates and, except for Profit Funds Investment Trust, Rembrandt
Funds-Registered Trademark-, and Santa Barbara Group of Mutual Funds, Inc., are
distributed by SEI Investments Distribution Co.
ROBERT A. NESHER (DOB 08/17/46) -- Chairman of the Board of Trustees* --
Currently performs various services on behalf of SEI Investments for which Mr.
Nesher is compensated. Executive Vice President of SEI Investments, 1986-1994.
Director and Executive Vice President of the Administrator and the Distributor,
1981-1994. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, Boston
1784 Funds-Registered Trademark-, The Expedition Funds, Marquis Funds-Registered
Trademark-, Oak Associates Funds, Pillar Funds, Rembrandt Funds-Registered
Trademark-, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds,
SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
JOHN T. COONEY (DOB 01/20/27) -- Trustee** -- 569 N. Post Oak Lane, Houston, TX
77024. Retired since 1992. Formerly Vice Chairman of Ameritrust Texas N.A.,
1989-1992, and MTrust Corp., 1985-1989. Trustee of The Advisors' Inner Circle
Fund, The Arbor Fund, The Expedition Funds, Marquis Funds-Registered Trademark-
and Oak Associates Funds.
WILLIAM M. DORAN (DOB 05/26/40) -- Trustee* -- 2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius LLP (law firm),
counsel to the Trust, Administrator and Distributor, Director and Secretary of
SEI Investments. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund,
The Expedition Funds, Marquis Funds-Registered Trademark-, Oak Associates
Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
FRANK E. MORRIS (DOB 12/30/23) -- Trustee** -- 105 Walpole Street, Dover, MA
02030. Retired since 1990. Peter Drucker Professor of Management, Boston
College, 1989-1990. President, Federal Reserve Bank of Boston, 1968-1988.
Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, The Expedition
Funds, Marquis Funds-Registered Trademark-, Oak Associates Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Investments Trust, SEI Institutional Managed Trust, SEI International Trust, SEI
Liquid Asset Trust and SEI Tax Exempt Trust.
ROBERT A. PATTERSON (DOB 11/05/27) -- Trustee** -- 208 Old Main, University
Park, PA 16802. Pennsylvania State University, Senior Vice President, Treasurer
(Emeritus). Financial and Investment Consultant, Professor of Transportation
(1984-present). Vice President-Investments, Treasurer, Senior Vice President
(Emeritus) (1982-1984). Director, Pennsylvania Research Corp.; Member and
Treasurer, Board of Trustees of Grove City College. Trustee of The Advisors'
Inner Circle Fund, The Arbor Fund, The Expedition Funds, Marquis
Funds-Registered Trademark- and Oak Associates Funds.
GENE PETERS (DOB 06/03/29) -- Trustee** -- 943 Oblong Road, Williamstown, MA
01267. Private investor from 1987 to present. Vice President and Chief
Financial Officer, Western Company of North America (petroleum service company)
(1980-1986). President of Gene Peters and Associates (import company)
(1978-1980). President and Chief Executive Officer of Jos. Schlitz
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<PAGE>
Brewing Company before 1978. Trustee of The Advisors' Inner Circle Fund, The
Arbor Fund, The Expedition Funds, Marquis Funds-Registered Trademark- and Oak
Associates Funds.
JAMES M. STOREY (DOB 04/12/31) -- Trustee** -- Partner, Dechert Price & Rhoads,
from September 1987 - December 1993; Trustee of The Advisors' Inner Circle Fund,
The Arbor Fund, The Expedition Funds, Marquis Funds-Registered Trademark-, Oak
Associates Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
International Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust.
DAVID G. LEE (DOB 04/16/52) -- President and Chief Executive Officer -- Senior
Vice President of the Administrator and Distributor since 1993. Vice President
of the Administrator and Distributor, 1991-1993. President, GW Sierra Trust
Funds before 1991.
SANDRA K. ORLOW (DOB 10/18/53) -- Vice President and Assistant Secretary -- Vice
President and Assistant Secretary of the Administrator and Distributor since
1988.
KEVIN P. ROBINS (DOB 04/15/61) -- Vice President and Assistant Secretary --
Senior Vice President, General Counsel and Assistant Secretary of SEI
Investments, Senior Vice President, General Counsel and Secretary of the
Administrator and Distributor since 1994. Vice President and Assistant
Secretary of SEI Investments, the Administrator and Distributor, 1992-1994.
Associate, Morgan, Lewis & Bockius LLP (law firm), 1988-1992.
RICHARD W. GRANT (DOB 10/25/45) -- Secretary -- 2000 One Logan Square,
Philadelphia, PA 19103, Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, Administrator and Distributor.
KATHRYN L. STANTON (DOB 11/19/58) -- Vice President and Assistant Secretary--
Deputy General Counsel of SEI Investments, Vice President and Assistant
Secretary of the Administrator and Distributor since 1994. Associate, Morgan,
Lewis & Bockius LLP (law firm), 1989-1994.
MARK E. NAGLE (DOB 10/20/59) -- Controller and Chief Financial Officer -- Vice
President of Fund Accounting and Administration of SEI Fund Resources since
November 1996. Vice President of Fund Accounting, BISYS Fund Services,
September 1995 to November 1996. Senior Vice President and Site Manager,
Fidelity Investments, 1981 to September 1995.
TODD B. CIPPERMAN (DOB 02/14/66) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI Investments, the Administrator and
the Distributor since 1995. Associate, Dewey Ballantine (law firm) (1994-1995).
Associate, Winston & Strawn (law firm) (1991-1994).
BARBARA A. NUGENT (DOB 06/18/56) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI Investments, the Administrator and
Distributor since 1996. Associate, Drinker Biddle & Reath (law firm)
(1994-1996). Assistant Vice President/Administration,
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<PAGE>
Delaware Service Company, Inc. (1992-1993); Assistant Vice President -
Operations of Delaware Service Company, Inc. (1988-1992).
MARC H. CAHN (DOB 06/19/57) -- Vice President and Assistant Secretary -- Vice
President and Assistant Secretary of SEI Investments, the Administrator and
Distributor since 1996. Associate General Counsel, Barclays Bank PLC
(1995-1996). ERISA counsel, First Fidelity Bancorporation (1994-1995),
Associate, Morgan, Lewis & Bockius LLP (1989-1994).
- ----------------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Portfolio as that term is defined in the 1940 Act.
**Messrs. Cooney, Morris, Patterson, Peters and Storey serve as members of the
Audit Committee of the Portfolio.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
The following table exhibits anticipated Trustee compensation for the fiscal
year ended October 31, 1998.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Aggregate Anticipated Compensation From Registrant Pension or Retirement Benefits
Name of Person, Position for the Fiscal Year Ended October 31, 1998 Accrued as Part of Trust Expenses
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John T. Cooney, Trustee $29,025 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Frank E. Morris, Trustee $29,025 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Robert Patterson, Trustee $29,025 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Eugene B. Peters, Trustee $29,025 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
James M. Storey, Esq., Trustee $29,025 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
William M. Doran, Esq., Trustee $0 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
Robert A. Nesher, Chairman of the Board $0 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
COMPUTATION OF YIELD AND TOTAL RETURN
From time to time the Trust may advertise yield and total return of the
Portfolios. These figures will be based on historical earnings and are not
intended to indicate future performance. No representation can be made
concerning actual future yields or returns. The yield of a Portfolio refers to
the annualized income generated by an investment in that Portfolio over a
specified 30-day period. The yield is calculated by assuming that the income
generated by the investment during that 30-day period is generated in each
period
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<PAGE>
over one year and is shown as a percentage of the investment. In particular,
yield will be calculated according to the following formula:
6
Yield = 2[((a-b)/cd+1) -1] where a = dividends and interest earned during the
period; b = expenses accrued for the period (net of reimbursement); c = the
average daily number of shares outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share on the last
day of the period.
For the 30-day period ended October 31, 1997, the Predeccesor Funds' yields were
0% for the White Oak Fund and 0% for the Pin Oak Fund.
The total return of a Portfolio refers to the average annual compounded rate
of return to a hypothetical investment for designated time periods (including
but not limited to, the period from which that Portfolio commenced operations
through the specified date), assuming that the entire investment is redeemed
at the end of each period. In particular, total return will be calculated
according to the following formula: P (1 + T) TO THE POWER OF n = ERV, where
P = a hypothetical initial payment of $1,000; T = average annual total
return; n = number of years; and ERV = ending redeemable value, as of the end
of the designated time period, of a hypothetical $1,000 payment made at the
beginning of the designated time period.
For the fiscal year ended October 31, 1997 and for the period from August 3,
1992 (commencement of operations) through October 31, 1997, the total return for
the Portfolios was 34.46% and 23.18% for the White Oak Fund, and 13.93% and
13.54% for the Pin Oak Fund, respectively.
PURCHASE AND REDEMPTION OF SHARES
Purchases and redemptions may be made through the Transfer Agent on any day the
New York Stock Exchange is open for business. Shares of each Portfolio are
offered on a continuous basis. Currently, the Trust is closed for business when
the following holidays are observed: New Year's Day, Martin Luther King Jr.
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
It is currently the Trust's policy to pay all redemptions in cash. The Trust
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by a Portfolio in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or valuation of a Portfolio's securities is not reasonably practicable,
or for such other periods as the SEC has by order
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<PAGE>
permitted. The Trust also reserves the right to suspend sales of shares of any
Portfolio for any period during which the New York Stock Exchange, the Adviser,
the Administrator, the Transfer Agent and/or the custodian are not open for
business.
DETERMINATION OF NET ASSET VALUE
The securities of the Portfolios are valued by the Administrator. The
Administrator will use an independent pricing service to obtain valuations of
securities. The pricing service relies primarily on prices of actual market
transactions as well as trade quotations. However, the service may also use a
matrix system to determine valuations of certain securities, which system
considers such factors as security prices, yields, maturities, call features,
ratings and developments relating to specific securities. The procedures of the
pricing service and its valuations are reviewed by the officers of the Trust
under the general supervision of the Trustees.
TAXES
The following is only a summary of certain tax considerations generally
affecting the Portfolios and their shareholders, and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult their
tax advisors with specific reference to their own tax situations, including
their state and local tax liabilities.
FEDERAL INCOME TAX
The following discussion of federal income tax consequences is based on the Code
and the regulations issued thereunder as in effect on the date of this Statement
of Additional Information. New legislation, as well as administrative changes
or court decisions, may significantly change the conclusions expressed herein,
and may have a retroactive effect with respect to the transactions contemplated
herein.
Each Portfolio intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Code. By following such a policy, each
Portfolio expects to eliminate or reduce to a nominal amount the federal taxes
to which it may be subject.
In order to qualify for treatment as a RIC under the Code, each Portfolio must
distribute annually to its shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
a Portfolio's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans and gains from the sale or
other disposition of stock or securities, or certain other income; (ii) at the
close of each quarter of each Portfolio's taxable year, at least 50% of the
value of its total assets must
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<PAGE>
be represented by cash and cash items, U.S. Government securities, securities of
other RICs and other securities, with such other securities limited, in respect
to any one issuer, to an amount that does not exceed 5% of the value of the
Portfolio's assets and that does not represent more than 10% of the outstanding
voting securities of such issuer; and (iii) at the close of each quarter of each
Portfolio's taxable year, not more than 25% of the value of its assets may be
invested in securities (other than U.S. Government securities or the securities
of other RICs) of any one issuer or of two or more issuers which the Portfolio
controls or which are engaged in the same, similar or related trades or
business.
Notwithstanding the Distribution Requirement described above, which requires
only that a Portfolio distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
each Portfolio will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year 98% of its
ordinary income for that year and 98% of its capital gain net income (the excess
of short- and long-term capital gains over short- and long-term capital losses)
for the one-year period ending on October 31 of that year, plus certain other
amounts.
Any gain or loss recognized on a sale or redemption of shares of a Portfolio by
a non-exempt shareholder who is not a dealer in securities generally will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise generally will be treated as a short-term
capital gain or loss. If shares of a Portfolio on which a net capital gain
distribution has been received are subsequently sold or redeemed and such shares
have been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the long-term capital gain distribution.
In certain cases, a Portfolio will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has not certified
to that Portfolio that such shareholder is not subject to backup withholding.
If any Portfolio fails to qualify as a RIC for any taxable year, it will be
taxable at regular corporate rates. In such an event, all distributions
(including capital gains distributions) will be taxable as ordinary dividends to
the extent of the Portfolio's current and accumulated earnings and profits and
such distributions will generally be eligible for the corporate
dividends-received deduction.
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<PAGE>
STATE TAXES
No Portfolio is liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by any
Portfolio to shareholders and the ownership of shares may be subject to state
and local taxes.
PORTFOLIO TRANSACTIONS
The Adviser is authorized to select brokers and dealers to effect securities
transactions for each Portfolio. Each Portfolio will seek to obtain the most
favorable net results by taking into account various factors, including price,
commission, if any, size of the transactions and difficulty of executions, the
firm's general execution and operational facilities and the firm's risk in
positioning the securities involved. While the Adviser generally seeks
reasonably competitive spreads or commissions, a Portfolio will not necessarily
be paying the lowest spread or commission available. The Adviser seeks to
select brokers or dealers that offer a Portfolio best price and execution or
other services which are of benefit to the Portfolio.
The Adviser may, consistent with the interests of the Portfolio, select brokers
on the basis of the research services they provide to the Adviser. Such
services may include analyses of the business or prospects of a company,
industry or economic sector, or statistical and pricing services. Information
so received by the Adviser will be in addition to and not in lieu of the
services required to be performed by the Adviser under the Advisory Agreement.
If, in the judgment of the Adviser, a Portfolio or other accounts managed by the
Adviser will be benefitted by supplemental research services, the Adviser is
authorized to pay brokerage commissions to a broker furnishing such services
which are in excess of commissions which another broker may have charged for
effecting the same transaction. These research services include advice, either
directly or through publications or writings, as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; furnishing of
analyses and reports concerning issuers, securities or industries; providing
information on economic factors and trends; assisting in determining portfolio
strategy; providing computer software used in security analyses; and providing
portfolio performance evaluation and technical market analyses. The expenses of
the Adviser will not necessarily be reduced as a result of the receipt of such
supplemental information, such services may not be used exclusively with respect
to the Portfolio or account generating the brokerage, and there can be no
guarantee that the Adviser will find all of such services of value in advising
that Portfolio.
It is expected that a Portfolio may execute brokerage or other agency
transactions through the Distributor, which is a registered broker-dealer, for a
commission in conformity with the 1940 Act, the Securities Exchange Act of 1934,
as amended, and rules promulgated by the SEC. Under these provisions, the
Distributor is permitted to receive and retain
S-14
<PAGE>
compensation for effecting portfolio transactions for a Portfolio on an exchange
if a written contract is in effect between the Distributor and the Portfolio
expressly permitting the Distributor to receive and retain such compensation.
These rules further require that commissions paid to the Distributor by a
Portfolio for exchange transactions not exceed "usual and customary" brokerage
commissions. The rules define "usual and customary" commissions to include
amounts which are "reasonable and fair compared to the commission, fee or other
remuneration received or to be received by other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
a securities exchange during a comparable period of time." The Trustees,
including those who are not "interested persons" of the Portfolio, have adopted
procedures for evaluating the reasonableness of commissions paid to the
Distributor and will review these procedures periodically. The following
table provides information related to brokerage commissions paid by the
Predecessor Funds for the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Total $ Amount Total $ Amount of
of Brokered Brokered
Transactions Brokerage Transactions With
Brokerage for Last Commissions Paid Affiliate for Last
Commissions Paid Year to Affiliates Year
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AIC White Oak Fund $135,382 $390,165,149 -- --
- ------------------------------------------------------------------------------------------------
AIC Pin Oak Fund $4,806 $50,517,300 -- --
- ------------------------------------------------------------------------------------------------
</TABLE>
Because neither Portfolio markets its shares through intermediary brokers or
dealers, it is not either Portfolio's practice to allocate brokerage or
principal business on the basis of sales of its shares which may be made through
such firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend a Portfolio's shares to clients, and may, when a
number of brokers and dealers can provide best net results on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.
The Portfolios are required to identify any securities of its "regular brokers
and dealers" (as such term is defined in the 1940 Act) which the Portfolios have
acquired during their most recent fiscal year. As of October 31, 1997, the AIC
White Oak Fund held $14,836,000 of equity securities of Morgan Stanley Group.
S-15
<PAGE>
For the fiscal years ended October 31, 1996 and 1997, the portfolio turnover
rate for each of the Predecessor Funds was as follows:
- ---------------------------------------------------------------------
TURNOVER RATE
--------------------------
1997 1996
- ---------------------------------------------------------------------
AIC White Oak Fund 7.90% 8.07%
- ---------------------------------------------------------------------
AIC Pin Oak Fund 17.30% 31.65%
- ---------------------------------------------------------------------
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and shares of each portfolio. Each share of a portfolio represents
an equal proportionate interest in that portfolio with each other share. Shares
are entitled upon liquidation to a pro rata share in the net assets of the
portfolio. Shareholders have no preemptive rights. All consideration received
by the Portfolio for shares of any portfolio and all assets in which such
consideration is invested would belong to that portfolio and would be subject to
the liabilities related thereto. Share certificates representing shares will
not be issued.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Trust were held to be a partnership, the
possibility of the shareholders incurring financial loss for that reason appears
remote because the Trust's Declaration of Trust contains an express disclaimer
of shareholder liability for obligations of the Trust and requires that notice
of such disclaimer be given in each agreement, obligation or instrument entered
into or executed by or on behalf of the Trust or the Trustees, and because the
Declaration of Trust provides for indemnification out of the Trust property for
any shareholder held personally liable for the obligations of the Trust.
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Trust will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Trust unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Trust. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any
S-16
<PAGE>
liability for his or her willful misfeasance, bad faith, gross negligence or
reckless disregard of his or her duties.
FINANCIAL STATEMENTS
The Advisors' Inner Circle Fund's financial statements with respect to the AIC
White Oak Fund and AIC Pin Oak Fund for the fiscal year ended October 31, 1997,
including notes thereto and the report of Arthur Andersen LLP thereon, follow.
Arthur Andersen LLP serves as the Trust's independent public accountants.
S-17
<PAGE>
APPENDIX
DESCRIPTION OF CORPORATE BOND RATINGS
The following descriptions of corporate bond ratings have been published by
Standard & Poor's Corporation ("S&P") and Moody's Investors Service, Inc.
("Moody's"), respectively.
Debt rated AAA has the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Debt rated AA also qualities as high-quality debt. Capacity to pay principal
and interest is very strong, and differs from AAA issues only in small degree.
Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Debt rated BBB is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Debt rated BB, B, CCC, CC and C is regarded as having predominately speculative
characteristics with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the least degree of
speculation and C the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties of major risk exposures to adverse conditions.
The rating CI is reserved for income bonds on which no interest is being paid.
Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.
Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.
Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
A-1
<PAGE>
Bonds rated Baa are considered as medium grade obligations (i.e., they are
neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Bonds which are rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
Bonds which are rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
The following descriptions of commercial paper ratings have been published by
S&P and Moody's, respectively.
Commercial paper rated A-1 by S&P is regarded by S&P as having the greatest
capacity for timely payment. Ratings are further refined by the use of a plus
sign to indicate the relative degree of safety. Issues rated A-1+ are those
with "extremely strong safety characteristics." Those rated A-1 reflect a
"strong" degree of safety regarding timely payment.
Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality respectively on the
basis of relative repayment capacity.
A-2
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
October 31, 1997
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Trustees of
Pin Oak Aggressive Stock Fund and
White Oak Growth Stock Fund of
The Advisors' Inner Circle Fund:
We have audited the accompanying statements of net assets of Pin Oak Aggressive
Stock Fund and White Oak Growth Stock Fund (the "Funds"), two of the funds
constituting The Advisors' Inner Circle Fund, as of October 31, 1997, and the
related statements of operations, changes in net assets and financial highlights
for the periods presented. These financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Pin
Oak Aggressive Stock Fund and White Oak Growth Stock Fund of The Advisors' Inner
Circle Fund as of October 31, 1997, the results of their operations, changes in
their net assets, and financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, PA
December 3, 1997
6
<PAGE>
STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND
October 31, 1997
Market
PIN OAK AGGRESSIVE Value
STOCK FUND Shares (000)
- ----------------------------------------------------
COMMON STOCK (97.7%)
COMPUTER COMMUNICATIONS EQUIPMENT (21.7%)
3Com* 60,375 $ 2,502
Cisco Systems* 42,400 3,478
Xylan* 55,300 885
--------
6,865
--------
COMPUTER-AIDED DESIGN SOFTWARE (12.1%)
Parametric Technology* 32,000 1,412
Synopsys* 62,029 2,411
--------
3,823
--------
COMPUTERS & SERVICES (4.5%)
International Network
Services* 65,700 1,445
--------
COMPUTERS - HARDWARE (12.0%)
Compaq Computer* 34,250 2,183
Sun Microsystems* 47,300 1,620
--------
3,803
--------
INSURANCE (3.2%)
Mutual Risk Management
Limited 39,732 1,031
--------
MANAGED HEALTH CARE SERVICES (7.1%)
Express Scripts* 40,000 2,255
--------
SEMI-CONDUCTORS/ELECTRONICS (20.0%)
Atmel* 53,400 1,382
Linear Technology 30,500 1,918
Maxim Integrated Products* 29,700 1,968
Xilinx* 30,900 1,054
--------
6,322
--------
SEMI-CONDUCTORS CAPITAL
EQUIPMENT MANUFACTURING (6.4%)
Applied Materials* 61,000 2,036
--------
TELECOMMUNICATIONS EQUIPMENT (10.7%)
Ascend Communications* 48,900 1,320
Aspect Telecommunications* 75,300 1,807
West Teleservices* 18,000 257
--------
3,384
--------
Market
PIN OAK AGGRESSIVE Value
STOCK FUND Shares (000)
- ----------------------------------------------------
TOTAL COMMON STOCK
(Cost $20,824) $ 30,964
--------
REPURCHASE AGREEMENT (2.4%)
Lehman Brothers 5.27%, dated
10/30/97, matures
11/03/97, repurchase price
$757,217 (collateralized
by U.S. Treasury Bond, par
value $623,983, 8.00%,
11/15/21: market value:
$781,411) 757 757
--------
TOTAL REPURCHASE AGREEMENT
(Cost $757) 757 757
--------
TOTAL INVESTMENTS (100.1%)
(Cost $21,581) 31,721
--------
OTHER ASSETS AND LIABILITIES, NET
(-0.1%) (40)
--------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 1,628,336 outstanding
shares of beneficial interest 22,919
Accumulated net realized loss on
investments (1,378)
Net unrealized appreciation on
investments 10,140
--------
TOTAL NET ASSETS (100.0%) $ 31,681
--------
--------
Net Asset Value, Offering &
Redemption Price Per Share $ 19.46
--------
--------
* NON-INCOME PRODUCING SECURITY
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND
October 31, 1997
Market
WHITE OAK GROWTH Value
STOCK FUND Shares (000)
- ----------------------------------------------------
COMMON STOCK (94.4%)
BANKS (14.2%)
Banker's Trust New York 66,500 $ 7,847
Citicorp 134,650 16,839
MBNA 339,750 8,940
Nationsbank 297,200 17,795
---------
51,421
---------
COMPUTER COMMUNICATIONS EQUIPMENT (12.3%)
3Com* 387,900 16,074
Bay Networks* 91,000 2,878
Cisco Systems* 313,300 25,700
---------
44,652
---------
COMPUTER-AIDED DESIGN SOFTWARE (4.5%)
Parametric Technology* 371,100 16,375
---------
COMPUTER HARDWARE (11.7%)
Compaq Computer 256,500 16,352
Hewlett Packard 171,800 10,598
Sun Microsystems* 450,200 15,419
---------
42,369
---------
FINANCIAL SERVICES (1.9%)
First Data 235,100 6,833
---------
INSURANCE (4.8%)
American International
Group 170,863 17,439
---------
MEDICAL INSTRUMENTS (4.7%)
Medtronic 389,600 16,948
---------
PHARMACEUTICALS (10.1%)
Merck 183,100 16,341
Pfizer 284,900 20,157
---------
36,498
---------
PREPACKAGED SOFTWARE (5.9%)
Microsoft* 18,600 2,418
Oracle* 527,750 18,884
---------
21,302
---------
SECURITIES BROKER (4.1%)
Morgan Stanley, Dean
Witter, Discover 302,775 14,836
---------
SEMI-CONDUCTOR CAPITAL
EQUIPMENT MANUFACTURING (4.8%)
Applied Materials* 527,200 17,595
---------
Market
WHITE OAK GROWTH Value
STOCK FUND Shares (000)
- ----------------------------------------------------
SEMI-CONDUCTORS/ELECTRONICS (8.2%)
Intel 217,200 $ 16,724
Linear Technology 206,300 12,971
---------
29,695
TELECOMMUNICATIONS EQUIPMENT (7.2%)
Ascend Communications* 560,133 15,133
Tellabs* 200,000 10,800
---------
25,933
---------
TOTAL COMMON STOCK
(Cost $319,165) 341,896
---------
REPURCHASE AGREEMENT (6.3%)
Lehman Brothers
5.65%, dated 10/31/97,
matures 11/03/97,
repurchase price
$22,994,003
(collateralized by U.S.
Treasury Note, par value
$23,275,000, 5.75%,
09/30/99: market value:
$23,443,534) 22,983 22,983
---------
TOTAL REPURCHASE AGREEMENT
(Cost $22,983) 22,983 22,983
---------
TOTAL INVESTMENTS (100.7%)
(Cost $342,148) 364,879
---------
OTHER ASSETS AND LIABILITIES, NET
(-0.7%) (2,475)
---------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 12,371,448 outstanding
shares of beneficial interest 338,827
Accumulated net realized gain on
investments 846
Net unrealized appreciation on
investments 22,731
TOTAL NET ASSETS (100.0%) $ 362,404
---------
Net Asset Value, Offering &
Redemption Price Per Share $ 29.29
---------
---------
* NON-INCOME PRODUCING SECURITY
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STATEMENT OF OPERATIONS THE ADVISORS' INNER CIRCLE FUND
<TABLE>
<CAPTION>
PIN OAK WHITE OAK
AGGRESSIVE STOCK GROWTH STOCK
FUND FUND
---------------- ------------
11/01/96 11/01/96
TO 10/31/97 TO 10/31/97
(000) (000)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Dividends................................................. $ 14 $ 1,050
Interest.................................................. 58 612
- ---------------------------------------------------------------------------------------------
Total Investment Income................................. 72 1,662
- ---------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees.................................. 221 1,172
Investment Advisory Fee Waiver............................ (73) (242)
Administrator Fees........................................ 56 275
Custodian Fees............................................ 4 4
Transfer Agent Fees....................................... 37 160
Professional Fees......................................... 12 26
Trustee Fees.............................................. 5 12
Registration Fees......................................... 23 144
Printing.................................................. 8 19
Insurance and Other Fees.................................. 3 4
- ---------------------------------------------------------------------------------------------
Total Expenses.......................................... 296 1,574
- ---------------------------------------------------------------------------------------------
Net Investment Income (Loss).......................... (224) 88
- ---------------------------------------------------------------------------------------------
Net Realized Gain (Loss) on Securities Sold............... (74) 898
Net Unrealized Appreciation of Investment Securities...... 3,097 15,492
- ---------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments......... 3,023 16,390
- ---------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations...... $2,799 $16,478
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS THE ADVISORS' INNER CIRCLE FUND
<TABLE>
<CAPTION>
PIN OAK WHITE OAK
AGGRESSIVE STOCK GROWTH STOCK
FUND FUND
------------------------- -------------------------
11/01/96 11/01/95 11/01/96 11/01/95
TO 10/31/97 TO 10/31/96 TO 10/31/97 TO 10/31/96
(000) (000) (000) (000)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Activities:
Net Investment Income (Loss)............................ $ (224) $ (120) $ 88 $ 37
Net Realized Gain (Loss) on Securities Sold............. (74) (492) 898 272
Net Unrealized Appreciation of Investment Securities.... 3,097 546 15,492 3,054
- -----------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting From
Operations.......................................... 2,799 (66) 16,478 3,363
- -----------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income................................... -- -- (87) (41)
Realized Capital Gains.................................. -- -- (158) --
- -----------------------------------------------------------------------------------------------------------------
Total Distributions................................... -- -- (245) (41)
- -----------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Shares Issued........................................... 19,483 11,945 374,803 13,907
Shares Issued in Lieu of Cash Distributions............. -- -- 238 40
Shares Redeemed......................................... (14,339) (3,793) (54,978) (1,655)
- -----------------------------------------------------------------------------------------------------------------
Increase in Net Assets From Capital Share
Transactions........................................ 5,144 8,152 320,063 12,292
- -----------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets..................... 7,943 8,086 336,295 15,614
- -----------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period................................... 23,738 15,652 26,109 10,495
- -----------------------------------------------------------------------------------------------------------------
End of Period......................................... $31,681 $ 23,738 $362,404 $26,109
- -----------------------------------------------------------------------------------------------------------------
Shares Issued and Redeemed:
Issued.................................................. 1,002 707 13,049 697
Issued in Lieu of Cash Distributions.................... -- -- 10 2
Redeemed................................................ (763) (220) (1,881) (86)
- -----------------------------------------------------------------------------------------------------------------
Net Increase in Share Transactions...................... 239 487 11,178 613
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
FINANCIAL HIGHLIGHTS THE ADVISORS' INNER CIRCLE FUND
For a Share Outstanding Throughout each Period
<TABLE>
<CAPTION>
Net Realized and Net
Asset Net Unrealized Distributions Distributions Asset Net Assets Ratio of
Value Investment Gains or from Net from Value End of Expenses to
Beginning Income (Losses) on Investment Capital End of Total Period Average
of Period (Loss) Securities Income Gains Period Return (000) Net Assets
--------- ---------- ------------ ------------- ------------- ------ ------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PIN OAK AGGRESSIVE STOCK FUND
1997 $17.08 (0.05) 2.43 -- -- $19.46 13.93 % $ 31,681 0.99%
1996 $17.32 (0.09) (0.15) -- -- $17.08 (1.39)% $ 23,738 0.96%
1995 $11.60 (0.08) 5.80 -- -- $17.32 49.31 % $ 15,652 0.98%
1994 $12.62 (0.06) (0.96) -- -- $11.60 (8.08)% $ 9,624 0.96%
1993 $10.28 (0.05) 2.39 -- -- $12.62 22.76 % $ 9,079 0.98%
1992(1) $10.00 -- 0.28 -- -- $10.28 11.57 % $ 4,127 1.00%*
WHITE OAK GROWTH STOCK FUND
1997 $21.88 0.03 7.49 (0.04) (0.07) $29.29 34.46 % $362,404 0.98%
1996 $18.08 0.05 3.80 (0.05) -- $21.88 21.33 % $ 26,109 0.95%
1995 $11.92 0.04 6.15 (0.03) -- $18.08 52.07 % $ 10,495 0.97%
1994 $10.64 0.02 1.28 (0.02) -- $11.92 12.24 % $ 5,942 0.97%
1993 $10.33 0.05 0.32 (0.06) -- $10.64 3.59 % $ 5,539 0.97%
1992(1) $10.00 0.02 0.33 (0.02) -- $10.33 14.30 % $ 3,195 1.00%*
<CAPTION>
Ratio of
Net Ratio of Ratio of Net
Income Expenses to Income (Loss)
(Loss) Average Net to Average Net
to Assets Assets
Average (Excluding (Excluding Portfolio Average
Net Waivers and Waivers and Turnover Commission
Assets Reimbursements) Reimbursements) Rate Rate (2)
-------- --------------- --------------- --------- ----------
<S> <C> <C> <C> <C> <C>
PIN OAK AGGRESSIVE STOCK FUND
1997 (0.75)% 1.23% (0.99)% 17.30% $0.0560
1996 (0.62)% 1.47% (1.13)% 31.65% $0.0617
1995 (0.70)% 1.65% (1.37)% 49.28% --
1994 (0.62)% 1.74% (1.40)% 48.88% --
1993 (0.48)% 2.07% (1.57)% 68.32% --
1992(1) 0.03 %* 4.06%* (3.03)%* 4.00% --
WHITE OAK GROWTH STOCK FUND
1997 0.06 % 1.14% (0.10)% 7.90% $0.0598
1996 0.23 % 1.50% (0.32)% 8.07% $0.0599
1995 0.29 % 2.06% (0.80)% 22.43% --
1994 0.19 % 2.24% (1.08)% 37.42% --
1993 0.54 % 2.71% (1.20)% 27.48% --
1992(1) 0.74 %* 4.78%* (3.04)%* -- --
</TABLE>
* Annualized
(1) The Pin Oak Aggressive Stock Fund and the White Oak Growth Stock Fund
commenced operations on August 3, 1992.
(2) Average commission rate paid per share for the security purchases and sales
made during the period.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS THE ADVISORS' INNER CIRCLE FUND
October 31, 1997
1. ORGANIZATION:
The Advisors' Inner Circle Fund (the "Trust") is organized as a Massachusetts
business trust under a Declaration of Trust dated July 18, 1991. The Trust is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company with nine portfolios. The
financial statements included herein are those of the Pin Oak Aggressive Stock
Fund and the White Oak Growth Stock Fund (the "Funds"). The financial statements
of the remaining portfolios are presented separately. The assets of each
portfolio are segregated, and a shareholder's interest is limited to the
portfolio in which shares are held. The Funds' prospectus provides a description
of each Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Funds.
SECURITY VALUATION -- Investments in equity securities which are traded on
a national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity for which market quotations
are readily available are valued at the most recently quoted bid price.
Debt obligations with sixty days or less remaining until maturity may be
valued at their amortized cost, which approximates market value.
FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a
regulated investment company by complying with the appropriate provisions
of the Internal Revenue Code of 1986, as amended. Accordingly, no
provisions for Federal income taxes are required.
SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Dividend income is recognized on the ex-dividend date, and interest income
is recognized on the accrual basis. Costs used in determining realized
gains and losses on the sales of investment securities are those of the
specific securities sold during the respective holding period.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated on each business day by dividing the total value of each Fund's
assets, less liabilities, by the number of shares outstanding.
EXPENSES -- Expenses that are directly related to one of the Funds are
charged to that Fund. Other operating expenses of the Trust are prorated to
the Funds on the basis of relative daily net assets.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income
are declared and paid to Shareholders on a quarterly basis. Any net
realized capital gains on sales of securities are distributed to
Shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which
may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. In accordance with Statement of Position 93-2,
"Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distribution by Investment Companies,"
the Pin Oak Aggressive Stock Fund
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE ADVISORS' INNER CIRCLE FUND
October 31, 1997
reclassed $225,000 from Net Investment Income to Paid In Capital in the
Statement of Net Assets. These reclassifications, which have no impact on
the net asset value of the Funds, are primarily attributable to net
operating losses and differences in the computation of distributable
income under federal income tax rules versus generally accepted accounting
principles.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. TRANSACTIONS WITH AFFILIATES:
Certain officers of the Trust are also officers of SEI Fund Resources (the
"Administrator") and/or SEI Investments Distribution Co. (the "Distributor").
Such officers are paid no fees by the Trust for serving as officers of the
Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING AND DISTRIBUTION AGREEMENTS:
The Trust and the Administrator were parties to an Administration Agreement
dated November 14, 1991, as amended and restated on May 17, 1994, under which
the Administrator provided management and administrative services for an annual
fee of .20% of the average daily net assets of each of the Funds. There was a
minimum annual fee of $50,000 per Fund.
Effective August 12, 1997, the Trust and the Administrator are parties to an
agreement under which the Administrator provides management and administrative
services for an annual fee of 0.15% of the average daily net assets of each of
the Funds up to $250 million, 0.12% on the next $200 million, 0.10% on the next
$200 million, and 0.08% of such assets in excess of $650 million. There is a
minimum annual fee of $50,000 per fund.
DST Systems, Inc. (the "Transfer Agent") serves as the transfer agent and
dividend distributing agent for the Funds under a transfer agency agreement with
the Trust.
The Trust and the Distributor are parties to a Distribution Agreement dated
November 14, 1991, as amended and restated on August 8, 1994. The Distributor
receives no fees for its distribution services under this agreement.
5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS:
The Trust and Oak Associates, Ltd. (the "Adviser") are parties to an Investment
Advisory Agreement dated July 20, 1992 under which the Adviser receives an
annual fee equal to .74% of the average daily net assets of each Fund. The
Adviser has voluntarily agreed to waive all or a portion of its fees (and to
reimburse the Funds' expenses) in order to limit operating expenses to not more
than 1.00% of the average daily net assets of each of the Funds. Fee waivers and
expense reimbursements are voluntary and may be terminated at any time.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) THE ADVISORS' INNER CIRCLE FUND
October 31, 1997
CoreStates Bank, N.A. acts as custodian (the "Custodian") for the Funds. Fees of
the Custodian are being paid on the basis of the net assets of the Funds. The
Custodian plays no role in determining the investment policies of the Funds or
which securities are to be purchased or sold by the Funds.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended October 31, 1997 are as follows:
PIN OAK WHITE OAK
AGGRESSIVE GROWTH
STOCK FUND STOCK FUND
(000) (000)
---------- ----------
Purchases
Government............ $ -- $ --
Other................. 9,478 312,761
Sales
Government............ $ -- $ --
Other................. 4,946 11,782
At October 31, 1997, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at October 31, 1997, are as follows:
PIN OAK WHITE OAK
AGGRESSIVE GROWTH
STOCK FUND STOCK FUND
(000) (000)
---------- ----------
Aggregate gross
unrealized
appreciation.......... $13,696 $45,617
Aggregate gross
unrealized
depreciation.......... (3,556) (22,886)
------- -------
Net unrealized
appreciation.......... $10,140 $22,731
------- -------
------- -------
7. CAPITAL LOSS CARRYFORWARDS:
The capital loss carryforwards at October 31, 1997 for federal income tax
purposes are as follows:
Pin Oak Aggressive
Stock Fund $ 17,985 expiring in 2000
288,322 expiring in 2001
153,978 expiring in 2002
351,788 expiring in 2003
492,382 expiring in 2004
73,224 expiring in 2005
----------
$1,377,659
----------
The capital loss carryforwards will be used to offset future net realized gains,
if any, and such gains so offset will not be distributed.
8. SUBSEQUENT EVENTS:
At the Trust's November 10, 1997 board meeting, the Board approved a
reorganization of the Funds, out of the Advisor's Inner Circle Fund into the Oak
Associates Funds. This transaction is expected to occur in the first quarter of
1998.
14
<PAGE>
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Part A: Financial Statements
Part B: The following audited financial statements for The Advisors'
Inner Circle Fund with respect to the White Oak Growth Stock Fund and
Pin Oak Aggressive Stock Fund as of October 31, 1997 and the report of
independent public accountants, Arthur Andersen LLP dated December 3,
1997 are included in the Statement of Additional Information.
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(b) Additional Exhibits
(1) Registrant's Agreement and Declaration of Trust is filed herewith.
(2) Registrant's By-Laws are filed herewith.
(3) Not Applicable.
(4) Not Applicable.
(5) Form of Investment Advisory Agreement between Registrant and Oak
Associates, Ltd. with respect to White Oak Growth Stock Portfolio and
Pin Oak Aggressive Stock Portfolio is filed herewith.
(6) Form of Distribution Agreement between Registrant and SEI Investments
Distribution Company is filed herewith.
(7) Not Applicable.
(8) Form of Custodian Agreement between Registrant and CoreStates Bank
N.A. is filed herewith.
(9) (a) Form of Administration Agreement between Registrant and SEI
Financial Fund Resources, including schedules relating to the White
Oak Growth Stock Portfolio and Pin Oak Aggressive Stock Portfolio is
filed herewith.
(b) Form of Agency Agreement between Registrant and DST Systems,
Inc. is filed herewith.
(10) Opinion and Consent of Counsel is filed herewith.
(11) Consent of Independent Public Accountants (Arthur Andersen LLP) is
filed herewith.
(12) Not Applicable.
(13) Not Applicable.
(14) Not Applicable.
(15) Form of Distribution Plan is filed herewith.
(16) Performance Quotation Computation is filed herewith.
(17) Not Applicable.
(18) Not Applicable.
C-1
<PAGE>
(24) Powers of Attorney for David G. Lee, Mark E. Nagle, John T. Cooney,
William M. Doran, Frank E. Morris, Robert A. Nesher, Eugene B. Peters,
Robert A. Patterson and James M. Storey are filed herewith.
Item 25. Persons Controlled by or under Common Control with Registrant
See the Prospectuses and the Statement of Additional Information regarding
the control relationships of Oak Associates Funds (the "Trust"). SEI
Investments Management Corporation, a wholly-owned subsidiary of SEI Investments
Company ("SEI"), is the owner of all beneficial interest in SEI Fund Resources
("the Administrator"). SEI and its subsidiaries and affiliates, including the
Administrator, are leading providers of funds evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors, and money managers.
Item 26. Number of Holders of Securities as of December 12, 1997:
Number of
Title of Class Record Holders
-------------- --------------
Units of beneficial interest, without par value-
White Oak Growth Stock Portfolio 0
Pin Oak Aggressive Stock Portfolio 0
Item 27. Indemnification:
Article VIII of the Agreement and Declaration of Trust filed as Exhibit 1
to the Registration Statement is incorporated by reference. Insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to trustees, directors, officers and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or otherwise,
the Registrant is aware that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and, therefore, is 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 trustees, directors, officers or
controlling persons of the Registrant in connection with the successful defense
of any act, suit or proceeding) is asserted by such trustees, directors,
officers or controlling persons in connection with the shares 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 whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
C-2
<PAGE>
Item 28. Business and Other Connections of Investment Advisor:
Other business, profession, vocation, or employment of a substantial nature
in which each director or principal officer of the Advisor is or has been, at
any time during the last two fiscal years, engaged for his own account or in the
capacity of director, officer, employee, partner or trustee are as follows:
OAK ASSOCIATES, LTD.
Oak Associates, Ltd. is the investment adviser for the White Oak Growth Stock
Portfolio and the Pin Oak Aggressive Stock Portfolio. The principal address of
Oak Associates, Ltd. is 3875 Embassy Parkway, Suite 250, Akron, OH 44333.
The list required by this Item 28 of general partners of Oak Associates, Ltd.,
together with information as to any other business profession, vocation, or
employment of a substantial nature engaged in by such general partners during
the past two years is incorporated by reference to Schedules B and D of Form ADV
filed by Oak Associates under the Advisers Act of 1940 (SEC File No. 801-23632).
Item 29. Principal Underwriters:
(a) Furnish the name of each investment company (other than the Registrant) for
which each principal underwriter currently distributing the securities of the
Registrant also acts as a principal underwriter, distributor or investment
advisor.
Registrant's distributor, SEI Investments Distribution Co. (the "Distributor"),
acts as distributor for:
SEI Daily Income Trust July 15, 1982
SEI Liquid Asset Trust November 29, 1982
SEI Tax Exempt Trust December 3, 1982
SEI Index Funds July 10, 1985
SEI Institutional Managed Trust January 22, 1987
SEI International Trust August 30, 1988
The Advisors' Inner Circle Fund November 14, 1991
The Pillar Funds February 28, 1992
CUFUND May 1, 1992
STI Classic Funds May 29, 1992
CoreFunds, Inc. October 30, 1992
First American Funds, Inc. November 1, 1992
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds-Registered Trademark- June 1, 1993
The PBHG Funds, Inc. July 16,1993
Marquis Funds-Registered Trademark- August 17, 1993
C-3
<PAGE>
Morgan Grenfell Investment Trust January 3, 1994
The Achievement Funds Trust December 27, 1994
Bishop Street Funds January 27, 1995
CrestFunds, Inc. March 1, 1995
STI Classic Variable Trust August 18, 1995
ARK Funds November 1, 1995
Monitor Funds January 11, 1996
FMB Funds, Inc. March 1, 1996
SEI Asset Allocation Trust April 1, 1996
TIP Funds April 28, 1996
SEI Institutional Investments Trust June 14, 1996
First American Strategy Funds, Inc. October 1, 1996
HighMark Funds February 15, 1997
Armada Funds March 8, 1997
PBHG Insurance Series Fund, Inc. April 1, 1997
Expedition Funds June 9, 1997
The Distributor provides numerous financial services to investment managers,
pension plan sponsors, and bank trust departments. These services include
portfolio evaluation, performance measurement and consulting services ("Funds
Evaluation") and automated execution, clearing and settlement of securities
transactions ("MarketLink").
Furnish the information required by the following table with respect to each
director, officer or partner of each principal underwriter named in the answer
to Item 21 of Part B. Unless otherwise noted, the principal business address of
each director or officer is Oaks, PA 19456.
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ---------------- ---------------
<S> <C> <C>
Alfred P. West, Jr. Director, Chairman & Chief Executive Officer --
Henry H. Greer Director, President & Chief Operating Officer --
Carmen V. Romeo Director, Executive Vice President & President --
- Investment Advisory Group
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President, President --
-Investment Services Division
Dennis J. McGonigle Executive Vice President --
Leo J. Dolan, Jr. Senior Vice President --
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
David G. Lee Senior Vice President President & Chief Executive Officer
Jack May Senior Vice President --
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
A. Keith McDowell Senior Vice President --
Hartland J. McKeown Senior Vice President --
Barbara J. Moore Senior Vice President --
Kevin P. Robins Senior Vice President,
General Counsel & Vice President,
Secretary Assistant Secretary
Robert Wagner Senior Vice President --
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Marc H. Cahn Vice President & Assistant Secretary Vice President,
Assistant Secretary
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President,
Assistant Secretary
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Kathy Heilig Vice President & Treasurer --
Michael Kantor Vice President --
Samuel King Vice President --
Kim Kirk Vice President & Managing Director --
John Krzeminski Vice President & Managing Director --
Carolyn McLaurin Vice President & Managing Director --
W. Kelso Morrill Vice President --
Joanne Nelson Vice President --
Barbara A. Nugent Vice President & Assistant Secretary Vice President,
Assistant Secretary
Sandra K. Orlow Vice President & Assistant Secretary Vice President,
Assistant Secretary
Cynthia W. Parrish Vice President & Assistant Secretary --
Donald Pepin Vice President & Managing Director --
Kim Rainey Vice President --
Mark Samuels Vice President & Managing Director --
Steve Smith Vice President --
Daniel Spaventa Vice President --
Kathryn L. Stanton Vice President & Assistant Secretary Vice President,
Assistant Secretary
Wayne M. Withrow Vice President & Managing Director --
James Dougherty Director of Brokerage Services --
</TABLE>
C-5
<PAGE>
Item 30. Location of Accounts and Records:
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the rules promulgated thereunder, are
maintained as follows:
(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6);
(8); (12); and 31a-I (d), the required books and records are maintained at
the offices of Registrant's Custodian:
CoreStates Bank, N.A.
Broad & Chestnut Streets
P.O. Box 7618
Philadelphia, PA 19101
(b)/(c) With respect to Rules 31a-1(a); 31a-1 (b)(1),(4); (2)(C) and (D);
(4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and
records are maintained at the offices of Registrant's Administrator:
SEI Fund Resources
Oaks, PA 19456
(c) With respect to Rules 31a-1 (b)(5), (6), (9) and (10) and 31a-1 (f),
the required books and records are maintained at the offices of the
Registrant's Advisors:
Oak Associates, Ltd.
3875 Embassy Parkway
Suite 250
Akron, OH 44333-8334
Item 31. Management Services: None.
Item 32. Undertakings:
Registrant hereby undertakes that whenever shareholders meeting the
requirements of Section 16(c) of the Investment Company Act of 1940 inform the
Board of Trustees of their desire to communicate with shareholders of the Trust,
the Trustees will inform such shareholders as to the approximate number of
shareholders of record and the approximate costs of mailing or afford said
shareholders access to a list of shareholders.
Registrant hereby undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a Trustee(s) when requested in
writing to do so by the holders of at least 10% of Registrant's outstanding
shares and in connection with such meetings to assist in
C-6
<PAGE>
communications with other shareholders as required by the provisions of Section
16(c) of the Investment Company Act of 1940.
Registrant hereby undertakes to furnish each prospective person to whom a
prospectus for any series of the Registrant is delivered with a copy of the
Registrant's latest annual report to shareholders for such series, when such
annual report is issued containing information called for by Item 5A of Form
N-1A, upon request and without charge.
Registrant hereby undertakes to file a post-effective amendment,
including financial statements which need not be audited, within 4-6 months
from the investment portfolio's commencement of operations.
C-7
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust for Oak Associates Funds
is on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this Registration Statement has been executed on
behalf of the Trust by an officer of the Trust as an officer and by its Trustees
as trustees and not individually and the obligations of or arising out of this
Registration Statement are not binding upon any of the Trustees, officers, or
shareholders individually but are binding only upon the assets and property of
the Trust.
C-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Oaks, Commonwealth of Pennsylvania on the 12th
day of December, 1997.
OAK ASSOCIATES FUNDS
By: /s/ David G. Lee
---------------------
David G. Lee, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacity and on
the dates indicated.
* Trustee December 12, 1997
- ----------------------
John T. Cooney
* Trustee December 12, 1997
- ----------------------
William M. Doran
* Trustee December 12, 1997
- ----------------------
Frank E. Morris
* Trustee December 12, 1997
- ----------------------
Robert A. Nesher
* Trustee December 12, 1997
- ----------------------
Robert A. Patterson
* Trustee December 12, 1997
- ----------------------
Eugene Peters
* Trustee December 12, 1997
- ----------------------
James M. Storey
/s/ David G. Lee President & December 12, 1997
- ---------------------- Chief Executive Officer
David G. Lee
/s/ Mark E. Nagle Controller & December 12, 1997
- ---------------------- Chief Financial Officer
Mark E. Nagle
*By: /s/ David G. Lee
-------------------------
David G. Lee
Attorney-in-Fact
C-9
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. AND DESCRIPTION
- ---------------------------
EX-99.B1 Registrant's Agreement and Declaration of Trust is filed herewith.
EX-99.B2 Registrant's By-Laws are filed herewith.
EX-99.B3 Not Applicable.
EX-99.B4 Not Applicable.
EX-99.B5 Form of Investment Advisory Agreement between Registrant and Oak
Associates, Ltd. with respect to White Oak Growth Stock Portfolio
and Pin Oak Aggressive Stock Portfolio is filed herewith.
EX-99.B6 Form of Distribution Agreement between Registrant and SEI
Investments Distribution Company is filed herewith.
EX-99.B7 Not Applicable.
EX-99.B8 Form of Custodian Agreement between Registrant and CoreStates Bank
N.A. is filed herewith.
EX-99.B9(a) Form of Administration Agreement between Registrant and SEI
Financial Fund Resources, including schedules relating to the White
Oak Growth Stock Portfolio and Pin Oak Aggressive Stock Portfolio
is filed herewith.
EX-99.B9(b) Form of Agency Agreement between Registrant and DST Systems, Inc.
is filed herewith.
EX-99.B10 Opinion and Consent of Counsel is filed herewith.
EX-99.B11 Consent of Independent Public Accountants (Arthur Andersen LLP) is
filed herewith.
EX-99.B12 Not Applicable.
EX-99.B13 Not Applicable.
EX-99.B14 Not Applicable.
EX-99.B15 Form of Distribution Plan is filed herewith.
EX-99.B16 Performance Quotation Computation is filed herewith.
EX-99.B17 Not Applicable.
EX-99.B18 Not Applicable.
EX-99.B24 Powers of Attorney for David G. Lee, Mark E. Nagle, John T. Cooney,
William M. Doran, Frank E. Morris, Robert A. Nesher, Eugene B.
Peters, Robert A. Patterson and James M. Storey are filed herewith.
C-10
<PAGE>
OAK ASSOCIATES FUNDS
AGREEMENT AND DECLARATION OF TRUST
AGREEMENT AND DECLARATION OF TRUST, as of this sixth day of November, 1997, the
Trustees hereunder, and by the holders of Shares of beneficial interest to be
issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an investment
company; and
WHEREAS, the Trustees elected in accordance with Article IV hereof have agreed
to manage all property coming into their hands as trustees of a Massachusetts
voluntary association with transferable Shares in accordance with the provisions
hereinafter set forth.
NOW, THEREFORE, the Trustees elected in accordance with Article IV hereof hereby
declare that they will hold all cash, securities and other assets, which they
may from time to time acquire in any manner as Trustees hereunder IN TRUST to
manage and dispose of the same for the pro rata benefit of the holders from time
to time of Shares in this Trust issued hereunder on the terms and conditions
hereinafter set forth.
ARTICLE I
NAME, PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT, AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as Oak Associates Funds and the Trustees
shall conduct the business of the Trust under that name or any other name as
they may from time to time determine.
PRINCIPAL PLACE OF BUSINESS AND RESIDENT AGENT
SECTION 2. The principal place of business of the Trust is 2 Oliver Street,
Boston, Massachusetts. The name of the Trust's resident agent in the
Commonwealth of Massachusetts is CT Corporation.
<PAGE>
DEFINITIONS
SECTION 3. Whenever used herein, unless otherwise required by the context or
specifically provided:
(a) The "Trust" refers to Oak Associates Trust the trust created hereby.
(b) "Trustee" or "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV hereof and then in office.
(c) "Shares" refers to units of beneficial interest in the assets of the Trust.
When used in relation to any particular series established by the Trustees
hereunder, "Shares" refers to units of beneficial interest in the assets
specifically allocated to that series. "Shares" includes fractional as
well as whole Shares.
(d) The "1940 Act" refers to the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time.
(e) "Shareholder" means a record owner of Shares.
(f) "Affiliated Person," "Assignment," "Commission," "Interested Person," and
"Principal Underwriter" shall have the meanings given them in the 1940 Act.
(g) "Majority Shareholder Vote" shall have the same meaning as "vote of a
majority of the outstanding voting securities" as that phrase is defined in
the 1940 Act, provided that such majority shall be calculated by reference
to the number of votes represented by shares entitled to vote and present
at the meeting, either in person or by proxy. Such term may be used herein
with respect to the Shares of the Trust as a whole or the Shares of a
particular series, as the context may require.
(h) "Declaration of Trust" shall mean this Agreement and Declaration of Trust,
as further amended or restated from time to time, provided that reference
made in this Agreement and Declaration of Trust and in any amendment hereto
to "hereby," "hereof," "herein," "hereunder" or similar terms shall be
deemed to refer to this Declaration of Trust, as amended from time to time,
rather than the Article or Section in which such words appear, unless the
context otherwise requires.
(i) "By-Laws" shall mean the By-Laws of the Trust referred to in Article IV,
Section 4 hereof, as amended from time to time.
(j) "Disinterested Trustees" shall mean Trustees who are not "interested
persons" as such term is defined in the 1940 Act (including any Trustee who
has been exempted from being an "interested person" by any rule, regulation
or order of the Commission). In limitation
2
<PAGE>
of the foregoing, however, as used in Article VIII hereof, a "Disinterested
Trustee" shall mean a Disinterested Trustee against whom, at the time of
the votes to be taken pursuant to said Article VIII, none of the actions,
suits or other proceedings referred to in such Article VIII, nor any other
action, suit or other proceeding on the same or similar grounds, is or has
been pending.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors with one or more managed
investment portfolio(s) consisting primarily of securities, including debt
instruments and other instruments and rights of a financial character.
ARTICLE III
SHARES
DIVISION OF BENEFICIAL INTEREST
SECTION 1. The Trustees may divide the beneficial interest in the Trust
into an unlimited number of Shares, authorize the issuance of Shares without
prior Shareholder approval, and may in their discretion provide in a By-Law or
otherwise that Shares may have voting rights based upon the value thereof.
Shares may be issued in series and, if so, Shares of any series will constitute
units of beneficial interest in assets of the Trust specifically allocated to
such series. Shares of the Trust, or any series thereof, shall have a par value
of $.001, shall represent equal and proportionate interests in the Trust, or
such series, with none having priority or preference over any other except as
specifically set forth in this Article III, and shall be transferable. All
Shares issued hereunder, including any Shares issued in payment of dividends or
other distributions or in connection with any split of Shares, shall be fully
paid and non-assessable. Shares of the Trust or of any series may be issued in
two or more classes, as the Trustees may, without Shareholder approval,
authorize, and Shares of any class shall be identical to those of any other
class of the Trust or such series except that, if the Trustees have authorized
the issuance of Shares of any particular series in two or more classes, then
such classes may, consistent with the 1940 Act, or pursuant to any exemptive
order issued by the Commission and other applicable law, have such variations as
to dividends, redemption charges, conversion, voting rights, net asset value,
expenses borne by the class, and other matters as the Trustees shall have
determined. The Trustees may from time to time, without Shareholder approval,
divide or combine the Shares of a series into a greater or lesser number without
thereby changing their proportionate beneficial interests in assets allocated to
such series.
3
<PAGE>
OWNERSHIP OF SHARES
SECTION 2. The ownership of Shares shall be recorded on the books of the
Trust or its transfer or similar agent, which books shall be maintained
separately for the Shares of each series. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series or class and as to the number of
Shares of each series or class held from time to time by each Shareholder.
INVESTMENTS IN THE TRUST; ASSETS OF THE SERIES
SECTION 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they may from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation thereof,
and any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to the series of Shares
with respect to which the same were received by the Trust for all purposes,
subject only to the rights of creditors, and shall be so recorded upon the books
of account of the Trust and are herein referred to as "assets of" such series.
In addition, any assets, income, earnings, profits, and proceeds thereof, funds,
or payments which are not readily identifiable as belonging to any particular
series shall be allocated by the Trustees between and among one or more of the
series in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation to any series shall be conclusive and binding
upon the Shareholders of all series for all purposes, and shall be referred to
as assets belonging to that series. No holder of Shares of any particular
series shall have any claim on or right to any assets allocated or belonging to
any other series.
ESTABLISHMENT OF CLASS OR SERIES
SECTION 4. The establishment and designation of any class or series of
Shares shall be effective upon the adoption of a resolution by a majority of the
Trustees (or of a committee thereof) setting forth such establishment and
designation and the relative rights and preferences of the Shares of such class
or series. Such establishment and designation shall not constitute an amendment
to this Declaration of Trust, although the Trustees may, at their option, set
forth such establishment and designation in a written instrument signed by them
or by an
4
<PAGE>
officer of the Trust. The Trustees (or a committee thereof) may by majority
vote amend such establishment and designation. At any time, if no Shares are
outstanding of a particular class or series previously so established and
designated, the Trustees (or a committee thereof) may by majority vote abolish
such class or series and said establishment and designation thereof.
NO PREEMPTIVE RIGHTS
SECTION 5. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust, except as otherwise provided herein or as the Trustees in
their sole discretion shall have determined by resolution.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
SECTION 6. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party hereto. The death
of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay. A Shareholder, as such, shall not be personally liable for any act,
omission or obligation, of the Trustees or of the Trust.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
SECTION 7. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares of the Trust to the same extent as if he or she were
not a Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person or any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the By-Laws.
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POWER OF TRUSTEES TO CHANGE PROVISIONS RELATING TO SHARES.
SECTION 8. Notwithstanding any other provisions of this Declaration of
Trust and without limiting the power of the Trustees to amend the Declaration of
Trust as provided elsewhere herein, the Trustees shall have the power to amend
this Declaration of Trust, at any time and from time to time, in such manner as
the Trustees may determine in their sole discretion, without the need for
Shareholder action, so as to add to, delete, replace or otherwise modify any
provisions relating to the Shares contained in this Declaration of Trust for the
purpose of responding to or complying with any regulations, orders, rulings or
interpretations of any governmental agency or any laws, now or hereafter
applicable to the Trust.
Without limiting the generality of the foregoing or of any other
provision of this Declaration of Trust, the Trustees may, for the purposes
stated above and in Section 4 of this Article III, amend the Declaration of
Trust to:
(a) Create one or more Series or classes of Shares (in addition to any
Series or classes already existing or otherwise) with such rights and
preferences and such eligibility requirements for investment therein as the
Trustees shall determine and reclassify any or all outstanding Shares as Shares
of particular Series or classes in accordance with such eligibility
requirements;
(b) Amend any of the provisions set forth in paragraphs (a) through (h) of
Section 8 of this Article III;
(c) Combine one or more Series or classes of Shares into a single Series
or class on such terms and conditions as the Trustees shall determine;
(d) Change or eliminate any eligibility requirements for investment in
Shares of any Series or class, including without limitation the power to provide
for the issue of Shares of any Series or class in connection with any merger or
consolidation of the Trust with another trust or company or any acquisition by
the Trust of part or all of the assets of another trust or company;
(e) Change the designation of any Series or class of Shares;
(f) Change the method of allocating dividends among the various Series and
classes of Shares;
(g) Allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series or
classes of Shares; and
(h) Specifically allocate assets to any or all Series or classes of Shares
or create one or more additional Series or classes of Shares which are preferred
over all other Series or classes of Shares in respect of assets specifically
allocated thereto or any dividends paid by the Trust with respect to any net
income, however determined, earned from the investment and reinvestment of
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any assets so allocated or otherwise provide for any special voting or other
rights with respect to such Series or classes.
ARTICLE IV
THE TRUSTEES
QUALIFICATION; NUMBER OF TRUSTEES; ELECTION
SECTION 1. Each Trustee shall be a natural person and may, but need not,
be a Shareholder. A Trustee may be elected either by the Trustees or the
Shareholders subject to the limitations of the 1940 Act. Each Trustee shall
hold office during the lifetime of this Trust until the election and
qualification of his or her successor, or until he or she sooner dies, resigns
or is removed. The number of Trustees shall be fixed from time to time by a
vote of a majority of the Trustees then in office, except that, commencing with
the first Shareholders' meeting at which Trustees are elected, there shall be
not fewer than three nor more than fifteen Trustees. The number of Trustees so
fixed may be increased either by the Shareholders of the Trust or by the
Trustees by a vote of a majority of the Trustees then in office. The number of
Trustees so fixed may be decreased either by the Shareholders of the Trust or by
the Trustees by vote of a majority of the Trustees then in office, but only to
eliminate vacancies existing by reason of the death, resignation or removal of
one or more Trustees.
In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the 1940 Act. Until any such
vacancy is filled as provided in this Section 1, the Trustees then in office
shall, regardless of their number, have all powers granted to and discharge all
duties imposed on the Trustees hereby. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office, even though
less than a quorum, or by recording in the records of the Trust, and shall take
effect upon such signing or recording and the acceptance of such appointment by
the Trustee so appointed. An appointment of a Trustee may be made by the
Trustees then in office in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees.
REMOVAL AND RESIGNATION
SECTION 2. By vote of the Shareholders holding a majority of the shares
entitled to vote, the Shareholders may remove a Trustee with or without cause.
By vote of a majority of the
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Trustees then in office, the Trustees may remove a Trustee with or without
cause. Any Trustee may resign at any time by written instrument signed by him
or her and delivered to any officer of the Trust, to each other Trustee or to a
meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee resigning
and no Trustee 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.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 3. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
POWERS
SECTION 4. Subject to the provisions of this Declaration of Trust, the
Trustees shall manage the business of the Trust as an investment company, and
they shall have all powers necessary or convenient to carry out that
responsibility. Without limiting the foregoing, the Trustees may adopt By-Laws
not inconsistent with this Declaration of Trust providing for the conduct of the
business of the Trust and may amend and repeal them to the extent that such
By-Laws do not reserve that right to the Shareholders; they may fill vacancies
in their number, including vacancies resulting from increases in their number,
may remove from their number with or without cause, and may elect and remove
such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the powers and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more investment advisers or
administrators as provided in Section 9 of this Article IV; they may employ one
or more custodians of the assets of the Trust and may authorize such custodians
to employ subcustodians and to deposit all or any part of such assets in a
system or systems for the central handling of securities, retain a transfer
agent or a shareholder servicing agent, or both, provide for the distribution of
Shares by the Trust through one or more principal underwriters or otherwise, set
record dates for the determination of Shareholders with respect to various
matters, and in general delegate such authority as they consider desirable to
any officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian or underwriter.
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Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on, or lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the
name of the Trustees or of the Trust or in the name of a custodian,
subcustodian or other depositary or a nominee or nominees or
otherwise;
(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and with
separately defined relative powers, rights, privileges and
liabilities, and to allocate assets, liabilities and expenses of the
Trust to a particular series of Shares or to apportion the same among
two or more series, provided that any liability or expense determined
by the Trustees to have been incurred by a particular series of Shares
shall be payable solely out of the assets of that series and to
establish separate classes of shares of each series, all in accordance
with Article III hereof;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is or was held in the Trust; to consent to any
contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect
to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees
shall deem proper;
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(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;
(j) To enter into joint ventures, general or limited partnerships, limited
liability companies, and any other combinations or associations;
(k) To borrow funds;
(l) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and
pledge the Trust property or any part thereof to secure any or all of
such obligations;
(m) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring
the assets of the Trust and payment of distributions and principal on
its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, investment
advisers or administrators, principal underwriters, or independent
contractors of the Trust individually against all claims and
liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as
Shareholder, Trustee, officer, employee, agent, investment adviser,
administrator, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power
to indemnify such person against such liability;
(n) To pay pensions, as deemed appropriate by the Trustees, and to adopt,
establish and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such
retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust;
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder;
(p) To enter into contracts of any kind and description;
(q) To name, or to change the name or designation of the Trust or any
series or class of the Trust;
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(r) To take whatever action may be necessary to enable the Trust to comply
with any applicable Federal, state or local statute, rule or
regulation; and
(s) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Law may engage.
The Trustees shall not in any way be bound or limited by any present
or future law or custom in regard to investments by Trustees. The Trustees
shall not be required to obtain any court order to deal with any assets of the
Trust or take any other action hereunder.
MANNER OF ACTING
SECTION 5. Except as otherwise provided herein or from time to time in the
By-Laws, any action to be taken by the Trustees, or a committee thereof, may be
taken by a majority of the Trustees present at a meeting of Trustees, or of the
committee members present at a meeting of such committee (if in either case a
quorum be present), within or without Massachusetts, including any meeting held
by means of a conference telephone or other communications equipment by means of
which all persons participating in the meeting can communicate with each other
simultaneously and participation by such means shall constitute presence in
person at a meeting, or by written consent of a majority of the Trustees, or
members of such committee, then in office. At any meeting of the Trustees, or a
committee thereof, one third of the Trustees or members of such committee, as
the case may be, shall constitute a quorum. If a quorum is present when a duly
called or held meeting is convened, the Trustees present at such meeting may,
following the withdrawal of one or more Trustees originally present, continue to
transact business until adjournment thereof, even though such Trustees would not
otherwise constitute a quorum. Meetings of the Trustees, or a committee
thereof, may be called orally or in writing by the Chairman of the Trustees or
of such committee or by any two other Trustees or committee members, as the case
may be. Notice of the time, date and place of all meeting of the Trustees, or a
committee thereof, shall be given to each Trustee or committee member as
provided in the By-Laws.
Notice of any meeting need not be given to any Trustee (or committee
member) who attends that meeting without objecting to the lack of notice or who
executes a written waiver of notice with respect to the meeting. Subject to the
requirements of the 1940 Act, the Trustees by majority vote may delegate to any
one of their number the authority to approve particular matters or take
particular actions on behalf of the Trust.
PAYMENT OF EXPENSES BY THE TRUST
SECTION 6. The Trustees are authorized to pay or to cause to be paid out
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all
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expenses, fees, charges, taxes and liabilities incurred or arising in connection
with the Trust, or in connection with the management thereof, including, but not
limited to, the Trustees' compensation, as authorized pursuant to Article VII,
Section 1 hereof, and reimbursement for expenses and disbursements and such
expenses and charges for the services of the Trust's officers, employees,
investment adviser, administrator, principal underwriter, auditor, counsel,
custodian, transfer agent, shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as the Trustees may
deem necessary or proper to incur, PROVIDED, however, that all expenses, fees,
charges, taxes and liabilities incurred or arising in connection with a
particular series of Shares or class as determined by the Trustees consistent
with applicable law, shall be payable solely out of the assets of that Series or
class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular series
shall be allocated and charged by the Trustees between or among any one or more
of the Series in such manner as the Trustees in their sole discretion deem fair
and equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes. Any creditor of any Series may
look only to the assets of that series to satisfy such creditor's debt.
SECTION 7. The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder, or each Shareholder of any particular
Series, to pay directly, in advance or arrears, for any and all expenses of the
Trust, an amount fixed from time to time by the Trustees, by setting off such
charges due from such Shareholder from declared but unpaid dividends owed such
Shareholder and/or by reducing the number of Shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such charges due from such Shareholder.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 8. Title to all of the assets of each series of Shares and the
Trust shall at all times be considered as vested in the Trustees as joint
tenants. The right, title and interest of the Trustees in such assets shall
vest automatically in each person who may hereafter become a Trustee, and upon
any Trustees' death, resignation or removal, such Trustee shall automatically
cease to have any right, title or interest in such assets. Vesting and
cessation of title as set forth in this Section 8 shall be effective
notwithstanding the absence of execution and delivery of any conveyancing
documents.
ADVISORY, ADMINISTRATION AND DISTRIBUTION SERVICES
SECTION 9. The Trustees may, at any time and from time to time, contract
with respect to the Trust or any series thereof for exclusive or nonexclusive
investment advisory and/or administration services with any corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws;
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and any such contract may contain such other terms interpretive of or in
addition to said requirements and restrictions as the Trustees may determine,
including, without limitation, in the case of a contract for investment advisory
or sub-advisory services, authority to determine from time to time what
investments shall be purchased, held, sold or exchanged and what portion, if
any, of the assets of the Trust or any series thereof shall be held uninvested
and to make changes in the investments of the Trust or any series thereof. Any
contract for investment advisory services shall be subject to such Shareholder
approval as required by the 1940 Act. The Trustees may also, at any time and
from time to time, contract with any corporation, trust, association or other
organization, appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such requirements
and restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee,
administrator, investment adviser, principal underwriter,
distributor or affiliate or agent of or for any corporation,
trust, association, or other organization, or of or for any
parent or affiliate of any organization, with which an investment
advisory or administration or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or
other agency contract may have been or may hereafter be made, or
that any such organization, or any parent or affiliate thereof,
is a Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other organization with
which an investment advisory or administration or principal
underwriter's or distributor's contract, or transfer, Shareholder
servicing or other agency contract may have been or may hereafter
be made also has an investment advisory or administration
contract, or principal underwriter's or distributor's contract,
or transfer, Shareholder servicing or other agency contract with
one or more other corporations, trusts, associations, or other
organizations, or has other businesses or interests
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
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ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
The Shareholders shall have power to vote only (i) for the election or
removal of Trustees as provided in Article IV, Section 1 hereof, (ii) with
respect to any investment adviser as provided in Article IV, Section 7 hereof,
(iii) with respect to any termination of the Trust or any series or class to the
extent and as provided in Article IX, Section 4 hereof, (iv) with respect to any
amendment of this Declaration of Trust to the extent and as provided in Article
IX, Section 9 hereof, (v) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, (vi) with
respect to any merger, consolidation, sale of assets, or incorporation of the
Trust or any series to the extent and as provided in Article IX, Sections 6 and
7 hereof, and (vii) with respect to such additional matters relating to the
Trust as may be required by law, by this Declaration of Trust, by the By-Laws or
by any registration of the Trust with the Securities and Exchange Commission or
any state, or as the Trustees may consider necessary or desirable.
Notwithstanding any other provisions of this Declaration of Trust, on any matter
submitted to a vote of Shareholders, all Shares of the Trust then entitled to
vote shall be voted by individual series or class, except that (1) when so
required by the 1940 Act, Shares shall be voted in the aggregate and not by
individual series or class, and (2) when the Trustees have determined that the
matter affects only the interests of one or more series or class, then only
Shareholders of such series or class(es) shall be entitled to vote thereon. The
Shareholders may hold meetings and take action as provided in the By-Laws,
subject to the requirements of the 1940 Act where applicable. At any time when
no Shares of a Series are outstanding, the Trustees may exercise all rights of
Shareholders of that Series and may take any action required by law, this
Declaration of Trust or the By-Laws to be taken by Shareholders.
ARTICLE VI
DISTRIBUTIONS, REDEMPTIONS, REPURCHASES
AND DETERMINATION OF NET ASSET VALUE
DISTRIBUTIONS
SECTION 1. The Trustees may, but need not, distribute from time to time to
the Shareholders of each series such income and gains, accrued or realized, as
the Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which
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shall be in Shares, in cash or otherwise and on a date or dates determined by
the Trustees. At any time and from time to time in their discretion, the
Trustees may distribute to the Shareholders of any one or more series as of a
record date or dates determined by the Trustees, in Shares, in cash or
otherwise, all or part of any gains realized on the sale or disposition of
property of the series or otherwise, or all or part of any other principal of
the Trust attributable to the series. Each distribution pursuant to this
Section 1 shall be made ratably according to the number of Shares of the series
or class held by the several Shareholders on the applicable record date thereof,
provided that no distributions need be made on Shares purchased pursuant to
orders received, or for which payment is made, after such time or times as the
Trustees may determine. Any such distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with this Declaration of
Trust.
REDEMPTIONS AND REPURCHASES
SECTION 2. Any holder of Shares of the Trust may, by presentation of a
written request, together with his or her certificates, if any, for such Shares,
in proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
shareholder services agent appointed by the Trust (as the Trustees may
determine), or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize, redeem his or her Shares in accordance
with the provisions of this Section 2 for the net asset value thereof determined
and computed in accordance with the By-Laws, less any redemption charge the
Trustees may establish, including any contingent deferred sales charge to which
redemption of such Shares may be subject. Upon receipt of such written request
for redemption of Shares by the Trust, the adviser, the underwriter or the
distributor, or the Trust's transfer or shareholder services agent, the Trust
shall purchase such Shares and shall pay therefor the net asset value thereof
next determined after such receipt or the net asset value thereof determined as
of such other time fixed by the Trustees, as may be permitted or required by the
1940 Act in each instance, less any applicable redemption charge.
The obligation of the Trust to redeem its Shares as set forth in this
Section 2 shall be subject to the condition that, during any time of emergency,
as hereinafter defined, such obligation may be suspended by the Trust by or
under authority of the Trustees for such period or periods during such time of
emergency as shall be determined by or under authority of the Trustees. If
there is such a suspension, any Shareholder may withdraw any demand for
redemption and any tender of Shares which has been received by the Trust during
any such period and any tender of Shares the applicable net asset value of which
would but for such suspension be calculated as of a time during such period.
Upon such withdrawal, the Trust shall return to the Shareholder the certificates
therefor, if any. Shareholders who do not so withdraw any such demand shall
receive payment based on the net asset value next determined after the
termination
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of such suspension. For the purposes of any such suspension "time of emergency"
shall mean, either with respect to all Shares or any series of Shares, as
appropriate, any period during which:
(a) the New York Stock Exchange is closed other than for customary weekend
and holiday closings; or
(b) the Trustees or authorized officers of the Trust shall have
determined, in compliance with any applicable rules and regulations or
orders of the Commission, either that trading on the New York Stock
Exchange is restricted, or that an emergency exists as a result of
which (i) disposal by the Trust of securities owned by it is not
reasonably practicable or (ii) it is not reasonably practicable for
the Trust fairly to determine the current value of the net assets of
the Trust or of a series; or
(c) the suspension or postponement of such obligations is permitted by
order of the Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
PAYMENT IN KIND
SECTION 3. Subject to any generally applicable limitation imposed by the
Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of that series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.
ADDITIONAL PROVISIONS RELATING TO REDEMPTIONS AND REPURCHASES
SECTION 4. The completion of redemption, purchase or repurchase of Shares
shall constitute a full discharge of the Trust and the Trustees with respect to
such Shares and the Trustees may require that any certificate or certificates
issued by the Trust to evidence the ownership of such Shares shall be
surrendered to the Trustees for cancellation or notation.
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ASSETS AVAILABLE FOR DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES
SECTION 5. No dividend or distribution (including, without limitation, any
distribution paid upon termination of the Trust or of any series) with respect
to, nor any redemption or repurchase of, the Shares of any series shall be
effected by the Trust other than from the assets of such series.
REDEMPTIONS AT THE OPTION OF THE TRUST
SECTION 6. The Trustees shall have the power at any time to redeem Shares,
of any class or any series, of a Shareholder at a redemption price determined in
accordance with the provisions of Section 2 of this Article if at such time the
aggregate net asset value of the Shares of that class of that series in such
Shareholder's account is less than the minimum investment amount established by
the Trustees for that class of that series. A Shareholder shall be notified
prior to any such redemption and shall be allowed 60 days to make additional
investments in Shares of that class or that series before such redemption is
effected.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
COMPENSATION
SECTION 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, administration, legal, accounting, investment banking or other
services and payment for the same by the Trust.
LIMITATION OF LIABILITY
SECTION 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser, administrator, principal underwriter or custodian, nor shall any
Trustee be responsible for any obligation of the Trust or the act or omission of
any other Trustee, but nothing herein contained shall protect any Trustee
against any liability to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.
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Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
TRUSTEES
SECTION 1. Subject to the exceptions and limitations contained in this
Article, every person who is, or has been, a Trustee or officer of the Trust
shall be indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or
officer:
(a) against any liability to the Trust or its Shareholders by reason of a
final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;
(b) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Trust;
(c) in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting
in a payment by a Trustee or officer, unless there has been either a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other
body approving the settlement or other disposition or a reasonable
determination, based
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on a review of readily available facts (as opposed to a full
trial-type inquiry) that he did not engage in such conduct:
(i) by a vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel other than Trustees and
officers may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the next to the last
paragraph of this Article shall be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of
any such advances; or
(b) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or independent legal counsel in a written opinion
shall determine, based upon a review of the readily available facts
(as opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.
As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
SHAREHOLDERS
SECTION 2. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his or her being or having been a
shareholder of the Trust or of a particular Series and not because of his or her
acts or omissions or for some other reason, the
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Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expenses arising from
such liability, but only out of the assets of the particular Series of which he
or she is or was a Shareholder.
ARTICLE IX
MISCELLANEOUS
TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE
SECTION 1. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series or class of Shares thereof shall
look only to the assets of the Trust, the assets of that particular series the
assets or attributable to that particular class, as the case may be for payment
under such credit, contract or claim; and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents, whether past,
present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking
made or issued by the Trustees or by any officers or officer shall give notice
that this Declaration of Trust is on file with the Secretary of the Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, or upon the assets belonging to the relevant
Series or attributable to the relevant class of Shares for the benefit of which
the Trustees have caused the note, land, content, instrument, certificate or
undertaking to be issued or made, and may contain such further recital as he,
she or they may deem appropriate, but the omission of any such recital shall not
operate to bind any Trustees or Trustee or officers or officer or Shareholders
or Shareholder or any other person individually.
TRUSTEES' GOOD FAITH ACTION, EXPERT ADVICE; NO BOND OR SURETY
SECTION 2. The exercise by the Trustees of their powers and discretion
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact
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or law. The Trustees may take advice of counsel or other experts with respect
to the meaning and operation of this Declaration of Trust, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice. The Trustees shall not be required to give any bond as
such, nor any surety if a bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
SECTION 3. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
DURATION AND TERMINATION OF TRUST
SECTION 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least 66 2/3% of the Shares of each Series entitled to
vote and voting separately by Series or by the Trustees by written notice to the
Shareholders. Any series or class of Shares may be terminated at any time by
vote of at least 66 2/3% of the Shares of such series or class entitled to vote
or by the Trustees by written notice to the Shareholders of such series or
class. Upon termination of the Trust or of any one or more series or classes of
Shares, after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular series or class as may be determined by the Trustees, the Trust
shall, in accordance with such procedures as the Trustees consider appropriate,
reduce the remaining assets to distributable form in cash or Shares or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the series or class involved, ratably according to the number of
Shares of such series or class held by the several Shareholders of such series
or class on the date of termination.
SECTION 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of the Commonwealth of Massachusetts and
with the Boston City Clerk, as well as any other governmental office where such
filing may from time to time be required. Anyone dealing with the Trust may
rely on a certificate by an officer of the Trust as to whether or not any such
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such amendments. Headings are placed herein for convenience of reference
only and shall not be taken as part hereof or control or affect the meaning,
construction or effect of this instrument. This instrument may be executed in
any number of counterparts each of which shall be deemed an original.
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MERGER, CONSOLIDATION AND SALE OF ASSETS
SECTION 6. Any one or more series of the Trust may, either as the
successor, survivor or non-survivor, (1) consolidate or merge with one or more
other trusts, partnerships, associations or corporations, including any series
or class thereof, organized under the laws of the Commonwealth of Massachusetts
or any other state of the United States; or (2) transfer a substantial portion
of its assets to one or more other trusts, partnerships, associations or
corporations, including any series or class thereof, organized under the laws of
the Commonwealth of Massachusetts or any other state of the United States, any
such consolidation, merger or transfer to be upon such terms and conditions as
are specified in an agreement and plan of reorganization authorized and approved
by the Trustees and entered into by the relevant series in connection therewith.
Any such consolidation, merger or transfer may be authorized by vote of a
majority of the Trustees then in office without the approval of shareholders of
any series.
INCORPORATION, REORGANIZATION
SECTION 7. The Trustees may cause to be organized or assist in organizing
a corporation or corporations under the laws of any jurisdiction, or any other
trust, unit investment trust, partnership, association or other organization to
take over the assets of any one or more series of the Trust or to carry on any
business in which such series of the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer such assets to any such corporation,
trust, partnership, association or organization in exchange for the shares or
securities thereof or otherwise, and to lend money to, subscribe for the shares
or securities of, and enter into any contracts with any such corporation, trust,
partnership, association or organization in which the Trust holds or is about to
acquire shares or any other interest. Subject to Section 6 of this Article IX,
the Trustees may also cause a merger or consolidation between such series of the
Trust or any successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted by law.
APPLICABLE LAW
SECTION 8. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust. This
Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.
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AMENDMENTS
SECTION 9. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote or written consent of Shareholders, except that an amendment
which shall affect the holders of one or more series or classes of Shares but
not the holders of all outstanding series or classes shall be authorized by vote
or written consent of the Shareholders of each series or classes affected and no
vote of Shareholders of a series or classes not affected shall be required.
Amendments having the purpose of changing the name of the Trust or of supplying
any omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of the
Trust, has executed this document this sixth day of November, 1997.
/s/ Cassandra Arnold
-------------------------------------
Cassandra Arnold
c/o SEI Investments Company
One Freedom Valley Road
Oaks, Pennsylvania 19456
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BY-LAWS
OF
OAK ASSOCIATES FUNDS
SECTION 1. AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to
the Agreement and Declaration of Trust, as from time to time in effect
(the "Declaration of Trust"), of Oak Associates 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 Boston, Massachusetts.
SECTION 2. SHAREHOLDERS
2.1 ANNUAL MEETING. The Trust will not hold annual meetings of the
shareholders.
2.2 SPECIAL MEETINGS. A special meeting of the Shareholders of the Trust or
of any series or class may be called at any time by the Trustees, by the
President or such other person or persons as may be specified in these
By-Laws, and held from time to time for the purpose of taking action
upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class as herein provided or upon any other
matter deemed by the Trustees to be necessary or desirable. Each call
of a meeting shall state the place, date, hour and purposes of the
meeting. If the Trustees shall fail to call or give notice of any
meeting of Shareholders for a period of thirty days after written
application by Shareholders holding at least 10% of the Shares then
outstanding requesting a meeting to be called for a purpose requiring
action by the Shareholders as provided herein, then Shareholders holding
at least 10% of the Shares then outstanding may call and give notice of
such meeting, and thereupon the meeting shall be held in the manner
provided for herein in case of call thereof by the Trustees. Notice of
a meeting need not be given to any Shareholder 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 Shareholder who attends the
meeting without protesting prior thereto or at its commencement the lack
of notice to him or her.
2.3 PLACE OF MEETINGS. All meetings of the shareholders shall be held at
such place within the United States as shall be designated by the
Trustees or the president of the Trust.
<PAGE>
2.4 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 at his
residence or usual place of business or by mailing it, postage prepaid,
and addressed to such shareholder at his address as it appears in the
records of the Trust. Such notice shall be given by the secretary or an
assistant secretary or by an officer designated by the Trustees. No
notice of any meeting of shareholders need be given to a shareholder if
a written waiver of notice, executed before or after the meeting by such
shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
2.5 VOTING POWER. Each whole Share held entitles the holder of record to
one vote for each dollar (carried forward to two decimal places) of net
asset value of such Share as of the close of business on the record date
for any meeting of Shareholders (or written consent in lieu thereof) at
which such Share may be voted, and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the
exercise of the proxy the Trust receives a specific written notice to
the contrary from any one of them. A proxy purporting to be executed by
or on behalf of a Shareholder shall be deemed valid unless challenged at
or prior to its exercise and the burden of proving invalidity shall rest
on the challenger.
2.6 QUORUM AND REQUIRED VOTE. A majority in interest of the Shares entitled
to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of the
Declaration of Trust permits or requires that holders of any series or
class shall vote as a series or class, then a majority in interest of
the Shares of that series or class entitled to vote shall be necessary
to constitute a quorum for the transaction of business by that series or
class. Any lesser number, however, shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a
reasonable time after the date set for the original meeting without the
necessity of further notice.
Except when a larger vote is required by any provisions of the
Declaration of Trust or these By-Laws, a majority in interest of the
Shares voted on any matter shall decide such matter and a plurality
shall elect a Trustee, provided that where any provision of law or of
this Declaration of Trust permits or requires that the holders of any
series or class shall vote as a series or class, then a majority in
interest of the Shares of that series or class voted on the matter shall
decide that matter insofar as that series or class is concerned.
A majority in interest shall mean 50.1% or more of total votes
represented by all Shares entitled to vote and present at the meeting
either in person or by proxy.
<PAGE>
2.7 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.
2.8 PROXIES. Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting
but shall not be valid after the final adjournment of such meeting.
2.9 ACTION BY WRITTEN CONSENT. Any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote
on the matter (or such larger vote as shall be required by any provision
of the Declaration of Trust or these By-Laws) consent to the action in
writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all
purposes as a vote taken at a meeting of Shareholders.
SECTION 3. TRUSTEES
3.1 COMMITTEES AND ADVISORY BOARD. 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. The Trustees may appoint an advisory board to
consist of not less than two nor more than five members. The members of
the advisory board shall be compensated in such manner as the Trustees
may determine and shall confer with and advise the Trustees regarding
the investments and other affairs of the Trust. Each member of the
advisory board shall hold office until the first meeting of the Trustees
following the next annual meeting of the shareholders and until his
successor is elected and qualified, or until he sooner dies, resigns, is
removed, or becomes disqualified, or until the advisory board is sooner
abolished by the Trustees.
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. A regular meeting of the Trustees may be held without call or
notice immediately after and at the same place as the annual meeting of
the shareholders.
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 of the Board, 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.
<PAGE>
3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice by
mail at least forty-eight hours or by telegram at least twenty-four
hours before the meeting addressed to the Trustee at his or her usual or
last known business or residence address or to give notice to him or her
in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver
of notice, executed by him or her before or after the meeting, is filed
with the records of the meeting, or to any Trustee who attends the
meeting without protesting prior thereto or at its commencement the lack
of notice to him or her. Neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.
3.5 QUORUM. At any meeting of the Trustees one-third of the Trustees then
in office shall constitute a quorum; provided, however, a quorum shall
not be less than two. Any meeting may be adjourned from time to time by
a majority of the votes cast upon the question, whether or not a quorum
is present, and the meeting may be held as adjourned without further
notice.
SECTION 4. OFFICERS AND AGENTS
4.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
president, a treasurer, a secretary and such other officers, if any, as
the Trustees from time to time may in their discretion elect or appoint.
The Trust may also have such agents, if any, as the Trustees from time
to time may in their discretion appoint. Any officer may be but none
need be a Trustee or shareholder. Any two or more offices may be held
by the same person.
4.2 POWERS. Subject to the other provisions of these By-Laws, 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.
4.3 ELECTION. The president, the treasurer and the secretary shall be
elected annually by the Trustees. Other officers, if any, may be
elected or appointed by the Trustees at any time.
4.4 TENURE. The president, the treasurer and the secretary shall hold
office for a one year term and 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 agent shall retain
his or her authority at the pleasure of the Trustees.
4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief
executive officer of the Trust. The president shall, subject to the
control of the Trustees, have general charge and supervision of the
business of the Trust. Any vice president shall have such duties and
powers as shall be designated from time to time by the Trustees.
<PAGE>
4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is
elected, he shall have the duties and powers specified in these By-Laws
and, except as the Trustees shall otherwise determine, preside at all
meetings of the shareholders and of the Trustees at which he or she is
present and have such other duties and powers as may be determined by
the Trustees.
4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief financial
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 shall have such other duties and powers as may be
designated from time to time by the Trustees or by the president. If at
any time there shall be no controller, the treasurer shall also be the
chief accounting officer of the Trust and shall have the duties and
powers prescribed herein for the controller. Any assistant treasurer
shall have such duties and powers as shall be designated from time to
time by the Trustees.
The controller, if any be elected, shall be the chief accounting officer
of the Trust and shall be in charge of its books of account and
accounting records. The controller shall be responsible for preparation
of financial statements of the Trust and shall have such other duties
and powers as may be designated from time to time by the Trustees or the
president.
4.8 SECRETARY AND ASSISTANT SECRETARIES. 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. RESIGNATION AND REMOVALS
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, 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 advisory board member resigning, and no officer or advisory board 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.
<PAGE>
SECTION 7. SHARES OF BENEFICIAL INTEREST
In lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may 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.
SECTION 8. RECORD DATE
The Trustees may fix in advance a time, which shall not be more than 90 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.
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 any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
SECTION 11. FISCAL YEAR
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
SECTION 12. PROVISIONS RELATING TO THE CONDUCT OF THE TRUST'S BUSINESS
12.1 DEALINGS WITH AFFILIATES. No officer, Trustee or agent of the Trust and
no officer, director or agent of any investment adviser shall deal for
or on behalf of the Trust with himself as
<PAGE>
principal or agent, or with any partnership, association or corporation
in which he has a material financial interest; provided that the
foregoing provisions shall not prevent (a) officers and Trustees of the
Trust from buying, holding or selling shares in the Trust, or from being
partners, officers or directors of or financially interested in any
investment adviser to the Trust or in any corporation, firm or
association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of
securities or other property if such transaction is permitted by or is
exempt or exempted from the provisions of the Investment Company Act of
1940 or any Rule or Regulation thereunder and if such transaction does
not involve any commission or profit to any security dealer who is, or
one or more of whose partners, shareholders, officers or directors is,
an officer or Trustee of the Trust or an officer or director of the
investment adviser, administrator or principal underwriter of the Trust;
(c) employment of legal counsel, registrar, transfer agent, shareholder
services, dividend disbursing agent or custodian who is, or has a
partner, stockholder, officer or director who is, an officer or Trustee
of the Trust; or (d) sharing statistical, research and management
expenses, including office hire and services, with any other company in
which an officer or Trustee of the Trust is an officer or director or
financially interested.
12.2 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment adviser,
any corporation, firm or association which may at any time have an
exclusive distributor's or principal underwriter's contract with the
Trust (the "distributor") and the officers and Trustees of the Trust and
officers and directors of every investment adviser and distributor,
shall not take long or short positions in the securities of the Trust,
except that:
(a) the distributor may place orders with the Trust for its shares
equivalent to orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset
value for investment by the investment adviser and by officers and
directors of the distributor, investment adviser, or the Trust and
by any trust, pension, profit-sharing or other benefit plan for
such persons, no such purchase to be in contravention of any
applicable state or federal requirement.
12.3 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any
officer, Trustee or employee of the Trust or any investment adviser or
distributor or their respective officers, directors or partners or
employees.
12.4 CUSTODIAN. All securities and cash owned by the Trust shall be
maintained in the custody of one or more banks or trust companies having
(according to its last published report) not less than two million
dollars ($2,000,000) aggregate capital, surplus and undivided profits
(any such bank or trust company is hereinafter referred to as the
"custodian"); provided, however, the custodian may deliver securities as
collateral on borrowings effected by the Trust, provided, that such
delivery shall be conditioned upon receipt of the borrowed funds by the
<PAGE>
custodian except where additional collateral is being pledged on an
outstanding loan and the custodian may deliver securities lent by the
Trust against receipt of initial collateral specified by the Trust.
Subject to such rules, regulations and orders, if any, as the Securities
and Exchange Commission may adopt, the Trust may, or may permit any
custodian to, deposit all or any part of the securities owned by the
Trust in a system for the central handling of securities operated by the
Federal Reserve Banks, or established by a national securities exchange
or national securities association registered with said Commission under
the Securities Exchange Act of 1934, or such other person as may be
permitted by said Commission, pursuant to which system all securities of
any particular class or series of any issue deposited with the system
are treated as fungible and may be transferred or pledged by bookkeeping
entry, without physical delivery of such securities.
The Trust shall upon the resignation or inability to serve of its
custodian or upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best
efforts to obtain a successor custodian;
(b) require that the cash and securities owned by this corporation be
delivered directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to
the shareholders, before permitting delivery of the cash and
securities owned by this Trust otherwise than to a successor
custodian, the question whether or not this Trust shall be
liquidated or shall function without a custodian.
12.5 LIMITATIONS ON INVESTMENT. Each series of shares may not invest in
securities other than those described in the Trust's then current
prospectus as appropriate for the series of shares for which such
securities are being purchased.
12.6 DETERMINATION OF NET ASSET VALUE. Determinations of net asset value
made in good faith shall be binding on all parties concerned.
The term "net asset value" with respect to Shares of any series shall
mean that amount by which the assets of that series exceed its
liabilities, all as determined by or under the direction of the
Trustees. Such value shall be determined on such days and at such times
as the Trustees may determine. Such determination shall be made with
respect to securities for which market quotations are readily available,
at the market value of such securities; and with respect to other
securities and assets, at the fair value as determined in good faith by
the Trustees, provided, however, that the Trustees, without Shareholder
approval, may alter the method of appraising portfolio securities
insofar as permitted under the 1940 Act and interpretations thereof
promulgated or issued by the Commission or insofar as permitted by any
order of the Commission. The Trustees may delegate any powers and
duties under this
<PAGE>
Section 12.6 with respect to appraisal of assets and liabilities. At
any time the Trustees may cause the value per Share last determined to
be determined again in similar manner and may fix the time when such
redetermined value shall become effective.
12.7 REPORTS TO SHAREHOLDERS; DISTRIBUTIONS FROM REALIZED GAINS. The Trust
shall send to each shareholder of record at least annually a statement
of the condition of the Trust and of the results of its operation,
containing all information required by applicable laws or regulations.
SECTION 13. AMENDMENTS
These By-Laws 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 majority.
<PAGE>
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this _____ day of ____________, 1997, by and between
Oak Associates Funds, a Massachusetts business trust (the "Trust"), and Oak
Associates, Ltd. (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended,
consisting of several series of shares, each having its own investment policies;
and
WHEREAS, the Trust has retained SEI Fund Resources (the "Administrator") to
provide administration of the Trust's operations, subject to the control of the
Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to the White Oak Growth Stock Portfolio and Pin
Oak Aggressive Stock Portfolio Portfolios (the "Portfolios") set forth in the
attached schedule and such other portfolios as the Trust and the Adviser may
agree upon, and the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, and to continuously review,
supervise, and administer the investment program of the Portfolios, to
determine in its discretion the securities to be purchased or sold, to
provide the Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain, and to
render regular reports to the Administrator and to the Trust's
Officers and Trustees concerning the Adviser's discharge of the
foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to
the control of the Board of Trustees of the Trust and in compliance
with such policies as the Trustees may from time to time establish,
and in compliance with the objectives, policies, and limitations for
each such Portfolio set forth in the Portfolio's prospectus and
statement of additional information as amended from time to time, and
applicable laws and regulations.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel required by it to perform the services on
the terms and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of
portfolio securities for the Portfolios and is directed to use its
best efforts to obtain the best net results as described from time to
time in the Portfolios' Prospectuses and Statement of Additional
Information. The Adviser will promptly communicate to the
Administrator and to the officers and
<PAGE>
the Trustees of the Trust such information relating to portfolio
transactions as they may reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, by reason of its having directed a securities transaction
on behalf of the Trust to a broker-dealer in compliance with the
provisions of Section 28(e) of the Securities Exchange Act of 1934 or
as described from time to time by the Portfolios' Prospectuses and
Statement of Additional Information.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Trust
shall pay to the Adviser compensation at the rate specified in the
Schedule(s) which are attached hereto and made a part of this
Agreement. Such compensation shall be paid to the Adviser at the end
of each month, and calculated by applying a daily rate, based on the
annual percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net assets
for the month involved (less any assets of such Portfolios held in
non-interest bearing special deposits with a Federal Reserve Bank).
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of printing and
mailing reports, prospectuses, statements of additional information,
and sales literature relating to the solicitation of prospective
clients. The Trust shall pay all expenses relating to mailing to
existing shareholders prospectuses, statements of additional
information, proxy solicitation material and shareholder reports.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any fiscal
year (including fees and other amounts payable to the Adviser, but
excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any jurisdiction in which shares of
a Portfolio are qualified for offer and sale, the Adviser shall bear
such excess cost.
However, the Adviser will not bear expenses of any Portfolio which
would result in the Portfolio's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
Payment of expenses by the Adviser pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end reconciliation)
by a reduction in the fee payable to the Adviser for such month
pursuant to Section 3 and, if such reduction shall be insufficient to
offset such expenses, by reimbursing the Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to
shareholders, certified copies
<PAGE>
of their financial statements, and such other information with regard
to their affairs as each may reasonably request.
7. STATUS OF ADVISER. The services of the Adviser to the Trust are not
to be deemed exclusive, and the Adviser shall be free to render
similar services to others so long as its services to the Trust are
not impaired thereby. The Adviser shall be deemed to be an
independent contractor and shall, unless otherwise expressly provided
or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the Investment Company Act of 1940 which are prepared or
maintained by the Adviser on behalf of the Trust are the property of
the Trust and will be surrendered promptly to the Trust on request.
9. LIMITATION OF LIABILITY OF ADVISER. The duties of the Adviser shall
be confined to those expressly set forth herein, and no implied duties
are assumed by or may be asserted against the Adviser hereunder. The
Adviser shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting
from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its
obligations and duties hereunder, except as may otherwise be provided
under provisions of applicable state law or Federal securities law
which cannot be waived or modified hereby. (As used in this Paragraph
9, the term "Adviser" shall include directors, officers, employees and
other corporate agents of the Adviser as well as that corporation
itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the
Trust are or may be interested in the Adviser (or any successor
thereof) as directors, partners, officers, or shareholders, or
otherwise; directors, partners, officers, agents, and shareholders of
the Adviser are or may be interested in the Trust as Trustees,
shareholders or otherwise; and the Adviser (or any successor) is or
may be interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected through
affiliates of the Adviser if approved by the Board of Trustees,
subject to the rules and regulations of the Securities and Exchange
Commission.
11. LICENSE OF ADVISER'S NAME. The Adviser hereby agrees to grant a
license to the Trust for use of its name in the names of the
Portfolios for the term of this Agreement and such license shall
terminate upon termination of this Agreement. Notwithstanding the
foregoing, the Adviser is hereby entitled to receive for review, in
advance of the use of such materials, copies of all materials produced
on behalf of the Trust wherein the Adviser's name is used pursuant to
this license.
12. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is
<PAGE>
specifically approved at least annually (a) by the vote of a majority
of those Trustees of the Trust who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of each Portfolio; provided, however, that if the
shareholders of any Portfolio fail to approve the Agreement as
provided herein, the Adviser may continue to serve hereunder in the
manner and to the extent permitted by the Investment Company Act of
1940 and rules and regulations thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the
Investment Company Act of 1940 and the rules and regulations
thereunder.
This Agreement may be terminated as to any Portfolio at any time,
without the payment of any penalty by vote of a majority of the
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Portfolio on not less than 30 days' nor more
than 60 days' written notice to the Adviser, or by the Adviser at any
time without the payment of any penalty, on 90 days' written notice to
the Trust. This Agreement will automatically and immediately
terminate in the event of its assignment. Any notice under this
Agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party at any office of such party.
As used in this Section 11, the terms "assignment", "interested
persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder; subject to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
13. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice
to the other party at the last address furnished by the other party to
the party giving notice: if to the Trust, at Oaks, PA 19456 and if to
the Adviser at 3875 Embassy Parkway, Suite 250, Akron, Ohio 44333.
14. SEVERABILITY. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of
the Commonwealth of Massachusetts, or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the latter
shall control.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given that this
instrument is executed on behalf of the Trustees of the Trust as Trustees, and
are not binding upon any of the Trustees, officers, or shareholders of the Trust
individually but binding only upon the assets and property of the Trust.
<PAGE>
Further, the obligations of the Trust with respect to any one Portfolio shall
not be binding upon any other Portfolio.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
OAK ASSOCIATES FUNDS
By:
--------------------------
Attest:
----------------------
OAK ASSOCIATES, LTD.
By:
--------------------------
Attest:
----------------------
<PAGE>
SCHEDULE A DATED _____________, 1997
TO THE
INVESTMENT ADVISORY AGREEMENT DATED
______________, 1997
BETWEEN OAK ASSOCIATES FUNDS
AND
OAK ASSOCIATES, LTD.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an
annual rate as follows:
Portfolio Fee (in basis points)
- --------- ---
White Oak Growth Stock Portfolio .74%
Pin Oak Aggressive Stock Portfolio .74%
<PAGE>
FORM OF
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the _____ day of ___________, 1997 by and
between Oak Associates Funds (the "Trust"), a Massachusetts business trust, and
SEI Investments Distribution Co. (the "Distributor"), a Pennsylvania
corporation.
WHEREAS, the Trust is registered as an investment company with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended ("1940 Act"), and its shares are registered with the SEC
under the Securities Act of 1933, as amended (the "1933 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC
under the Securities Exchange Act of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Trust and Distributor hereby agree as follows:
ARTICLE 1. SALE OF SHARES. The Trust grants to the Distributor the
exclusive right to sell units (the "Shares") of the portfolios (the
"Portfolios") of the Trust at the net asset value per Share, plus any applicable
sales charges in accordance with the current prospectuses, as agent and on
behalf of the Trust, during the term of this Agreement and subject to the
registration requirements of the 1933 Act, the rules and regulations of the SEC
and the laws governing the sale of securities in the various states (the "Blue
Sky Laws").
ARTICLE 2. SOLICITATION OF SALES. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Trust; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.
ARTICLE 3. Compensation. As compensation for providing the services under
this Agreement:
(a) The Distributor shall receive from the Trust:
(1) all distribution and service fees, as applicable, at the rate and
under the terms and conditions set forth in each Distribution and
Shareholder Services Plan adopted by the appropriate class of shares
of each of the Portfolios, as such Plans may be amended from time to
time, and subject to any further limitations on such fees as the Board
of Trustees of the Trust may impose;
<PAGE>
(2) all contingent deferred sales charges ("CDSC") applied on
redemptions of CDSC Class Shares of each Portfolio on the terms and
subject to such waivers as are described in the Trust's Registration
Statement and current prospectuses, as amended from time to time, or
as otherwise required pursuant to applicable law; and
(3) all front-end sales charges, if any, on purchases of Class A
Shares of each Portfolio sold subject to such charges as described in
the Trust's Registration Statement and current prospectuses, as
amended from time to time. The Distributor, or brokers, dealers and
other financial institutions and intermediaries that have entered into
sub-distribution agreements with the Distributor, may collect the
gross proceeds derived from the sale of such Class A Shares, remit the
net asset value thereof to the Trust upon receipt of the proceeds and
retain the applicable sales charge.
(b) The Distributor may reallow any or all of the distribution or service
fees, contingent deferred sales charges and front-end sales charges which
it is paid by the Trust to such brokers, dealers and other financial
institutions and intermediaries as the Distributor may from time to time
determine.
ARTICLE 4. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized
by the Trust to give any information or to make any representations other than
those contained in the current registration statements and prospectuses of the
Trust filed with the SEC or contained in Shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use.
The Distributor may prepare and distribute sales literature and other material
as it may deem appropriate, provided that such literature and materials have
been prepared in accordance with applicable rules and regulations.
ARTICLE 5. REGISTRATION OF SHARES. The Trust agrees that it will take all
action necessary to register Shares under the federal and state securities laws
so that there will be available for sale the number of Shares the Distributor
may reasonably be expected to sell and to pay all fees associated with said
registration. The Trust shall make available to the Distributor such number of
copies of its currently effective prospectuses and statements of additional
information as the Distributor may reasonably request. The Trust shall furnish
to the Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection with
the distribution of Shares of the Trust.
ARTICLE 6. INDEMNIFICATION OF DISTRIBUTOR. The Trust agrees to indemnify
and hold harmless the Distributor and each of its directors and officers and
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees and
disbursements incurred in connection therewith), arising by reason of any person
acquiring any Shares, based upon the ground that the registration statement,
prospectus, Shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements made not misleading. However, the Trust does not
agree to indemnify the Distributor or
<PAGE>
hold it harmless to the extent that the statements or omission was made in
reliance upon, and in conformity with, information furnished to the Trust by or
on behalf of the Distributor.
In no case (i) is the indemnity of the Trust to be deemed to protect the
Distributor against any liability to the Trust or its Shareholders to which the
Distributor or such person otherwise would be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable to the Distributor under the
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
other person shall have notified the Trust in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon the
Distributor or such other person (or after the Distributor or the person shall
have received notice of service on any designated agent). However, failure to
notify the Trust of any claim shall not relieve the Trust from any liability
which it may have to the Distributor or any person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph.
The Trust shall be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the Trust elects
to assume the defense of any such claim, the defense shall be conducted by
counsel chosen by the Trust and satisfactory to the indemnified defendants in
the suit whose approval shall not be unreasonably withheld. In the event
that the Trust elects to assume the defense of any suit and retain counsel,
the indemnified defendants shall bear the fees and expenses of any additional
counsel retained by them. If the Trust does not elect to assume the defense
of a suit, it will reimburse the indemnified defendants for the reasonable
fees and expenses of any counsel retained by the indemnified defendants.
The Trust agrees to notify the Distributor promptly of the commencement of
any litigation or proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of its Shares.
ARTICLE 7. INDEMNIFICATION OF TRUST. The Distributor covenants and agrees
that it will indemnify and hold harmless the Trust and each of its Trustees and
officers and each person, if any, who controls the Trust within the meaning of
Section 15 of the Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged loss,
liability, damages, claim or expense and reasonable counsel fees incurred in
connection therewith) based upon the 1933 Act or any other statute or common law
and arising by reason of any person acquiring any Shares, and alleging a
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, prospectus, Shareholder reports or other information
filed or made public by the Trust (as from time to time amended) included an
untrue statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon and in conformity
with information furnished to the Trust by or on behalf of the Distributor.
<PAGE>
In no case (i) is the indemnity of the Distributor in favor of the Trust or
any other person indemnified to be deemed to protect the Trust or any other
person against any liability to which the Trust or such other person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Trust or any person
indemnified unless the Trust or person, as the case may be, shall have notified
the Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the nature of
the claim shall have been served upon the Trust or upon any person (or after the
Trust or such person shall have received notice of service on any designated
agent). However, failure to notify the Distributor of any claim shall not
relieve the Distributor from any liability which it may have to the Trust or any
person against whom the action is brought otherwise than on account of its
indemnity agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought to
enforce the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Trust promptly of the commencement of
any litigation or proceedings against it in connection with the issue and sale
of any of the Trusts' Shares.
ARTICLE 8. EFFECTIVE DATE. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for two
years from the effective date and thereafter from year to year, provided that
such annual continuance is approved by (i) either the vote of a majority of the
Trustees of the Trust, or the vote of a majority of the outstanding voting
securities of the Trust, and (ii) the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or the Trust's Distribution Plan
or interested persons of any such party ("Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on the approval. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph the terms "vote of a majority of the outstanding voting securities",
"assignment" and "interested person" shall have the respective meanings
specified in the 1940 Act. In addition, this Agreement may at any time be
terminated without penalty by the Distributor, by a vote of a majority of
Qualified Trustees or by vote of a majority of the outstanding voting securities
of the Trust upon not less than 60 days prior written notice to the other party.
ARTICLE 9. NOTICES. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at _______________________, and if to the
Distributor, One Freedom Valley Road, Oaks, Pennsylvania 19456.
<PAGE>
ARTICLE 10. LIMITATION OF LIABILITY. A copy of the Declaration of Trust
of the Trust is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or unitholders of the Trust individually but binding only upon the
assets and property of the Trust. Further, obligations of the Trust with
respect to any one Portfolio shall not be binding upon any other Portfolio.
ARTICLE 11. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 12. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS, the Trust and Distributor have each duly executed this
Agreement, as of the day and year above written.
OAK ASSOCIATES FUNDS
By:
---------------------------
SEI INVESTMENTS DISTRIBUTION CO.
By:
---------------------------
Attest:
-----------------------
<PAGE>
CUSTODIAN AGREEMENTS
THE OAK ASSOCIATES FUNDS
This agreement dated as of the 7th day of November 1997 by and between The
Oak Associates Funds (the Trust"), a business trust duly organized under the
laws of the Commonwealth of Massachusetts and CoreStates Bank N.A. (the
"Bank").
WHEREAS, the Trust desires to appoint the Bank to act as Custodian of its
portfolio securities, cash and other property from time to time deposited with
or collected by the Bank for the Trust;
WHEREAS, the Bank is qualified and authorized to act as Custodian for the
Trust and the separate series thereof (each a "Fund" and collectively, the
"Funds"), and is willing to act in such capacity upon the terms and conditions
herein set forth;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
SECTION 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have meanings
herein specified unless the context otherwise requires.
CUSTODIAN: The term Custodian shall mean the Bank in its capacity as Custodian
under this Agreement.
DEPOSITORY: The term Depository means any depository service which acts as a
system for the central handling of securities where all securities of any
particular class or series of an issuer deposited within the system are treated
as fungible and may be transferred by bookkeeping entry without physical
delivery.
PROPER INSTRUCTIONS: For purposes of this Agreement, the Custodian shall be
deemed to have received Proper Instructions upon receipt of written (including
instructions received by means of computer terminals of facsimile
transmissions), telephone or telegraphic instructions from a person or persons
authorized from time to time by the Trustees of the Trust to give the particular
class of instructions. Telephone or telegraphic instructions shall be confirmed
in writing by such persons as said Trustees shall have from time to time
authorized to give the particular class of instructions in question. The
Custodian may act upon telephone or telegraphic instructions without awaiting
receipt of written confirmation, and shall not be liable for the Trust's failure
to confirm such instructions in writing.
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SECURITIES: The term Securities means stocks, bonds, rights, warrants and all
other negotiable or non-negotiable paper issued in certificated or book-entry
form commonly known as "Securities" in banking custom or practice.
SHAREHOLDERS: The term Shareholders shall mean the registered owners from time
to time of the Shares of the Trust in accordance with the registry records
maintained by the Trust or agents on its behalf.
SECTION 2. The Trust hereby appoints the Custodian as Custodian of the Trust's
cash. Securities and other property, to be held by the Custodian as provided in
this Agreement. The Custodian hereby accepts such appointment subject to the
terms and conditions hereinafter provided. The Bank shall open a separate
custodial account in the name of the Trust on the books and records of the Bank
to hold the Securities of the Trust deposited with, transferred to or collected
by the Bank for the account of each Fund of the Trust, and a separate cash
account to which the Bank shall credit monies received by the Bank for the
account of or from each Fund of the Trust. Such cash shall be segregated from
the assets of others and shall be and remain the sole property of the Trust.
SECTION 3. The Trust shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Trustees authorizing the
person or persons to give Proper Instructions and specifying the class of
instructions that may be given by each person to the Custodian under this
Agreement, together with certified signatures of such persons authorized to
sign, which shall constitute conclusive evidence of the authority of the
officers and signatories designated therein to act, and shall be considered in
full force and effect with the Custodian fully protected in acting in reliance
thereon until it receives written notice to the contrary; provided, however,
that if the certifying officer is authorized to give Proper Instructions, the
certification shall be also signed by a second officer of the Trust.
SECTION 4. The Trust will cause to be deposited with the Custodian hereunder
the applicable net asset value of Shares sold from time to time whether
representing initial issue, other stock or reinvestments of dividends and/or
distributions payable to Shareholders.
SECTION 5. The Bank, acting as agent for the Trust, is authorized, directed and
instructed subject to the further provisions of this Agreement.
(a) to hold Securities issued only in bearer from in bearer form;
(b) to register in the name of the nominee of the Bank, the Bank's
Depositories, or sub-custodians, (I) Securities issued only in
registered form, and (ii) Securities issued in both bearer and
registered form, which are freely interchangeable without penalty;
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(c) to deposit any securities which are eligible for deposit (I) with any
domestic or foreign Depository on such terms and conditions as such
Depository may require, including provisions for limitation or
exclusion of liability on the part of the Depository; and (ii) with
any sub-custodian which the Bank uses, including any subsidiary or
affiliate of the Bank;
(d) (i) to credit for the account of the Trust all proceeds received
and payable on or in respect of the assets maintained
hereunder.
(ii) to debit the account of the Trust for the cost of acquiring
Securities the Bank has received for the Trust, against
delivery of such Securities to the Bank,
(iii) to present for payment Securities and other obligations
(including coupons) upon maturity, when called for redemption,
and when income payments are due, and
(iv) to make exchanges of Securities which, in the Bank's opinion,
are purely ministerial as, for example, the exchange of
Securities in temporary form for Securities in definitive form
or the mandatory exchange of certificates;
(e) to forward to the Trust, and/or any other person designated by the
Trust, all proxies and proxy materials received by the Bank in
connection with Securities held in the Trust's account, which have
been registered in the name of the Bank's nominee, or are being held
by any Depository, or sub-custodian, on behalf of the Bank;
(f) to sell any fractional interest of any Securities which the Bank has
received resulting from any stock dividend, stock split, distribution,
exchange, conversion or similar activity;
(g) to release the Trust's name, address and aggregate share position to
the issuers of any domestic Securities in the account of the Trust,
provided any such information to any issuer;
(h) to endorse and collect all checks, drafts or other orders for the
payment of money received by the Bank for the account of or from the
Trust;
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(i) at the direction of the Trust, to enroll designated Securities
belonging to the Trust and held hereunder in a program for the
automatic reinvestment of all income and capital gains distributions
on those Securities in new shares (an "Automatic Reinvestment
Program"), or instruct any Depository holding such Securities to
enroll those Securities in an Automatic Reinvestment Program;
(j) at the direction of the Trust, to receive, deliver and transfer
Securities and make payments and collections of monies in connection
therewith, enter purchase and sale orders and perform any other acts
incidental or necessary to the performance of the above acts with
brokers, dealers or similar agents selected by the Trust, including
any broker, dealer or similar agent affiliated with the Bank, for the
account and risk of the Trust in accordance with accepted industry
practice in the relevant market, provided, however, if it si
determined that any certificated Securities transferred to a
Depository or sub-custodian, the Bank, or the Bank's nominee, the
Bank's sole responsibility for such Securities under this Agreement
shall be to safekeep the Securities in accordance with Section 11
hereof; and
(k) to notify the Trust and/or any other person designated by the Trust
upon receipt of notice by the Bank of any call for redemption, tender
offer, subscription rights, merger, consolidation, reorganization or
recapitalization which (I) appears in The Wall Street Journal (New
York edition), The Standard & Poor's Called Bond Record for Preferred
Stocks, Financial Daily Called Bond Service, JJ Kenny Services, any
official notifications from The Depository Trust Company and such
other publications or services to which the Bank may from time to time
subscribe, (ii) requires the Bank to act in response thereto, and
(iii) pertain to Securities belonging to the Trust and held hereunder
which have been registered in the name of the Bank's nominee or are
being held by a Depository or sub-custodian on behalf of the Bank.
Notwithstanding anything contained herein to the contrary, the Trust
shall have the sole responsibility for monitoring the applicable dates
on which Securities with put option features must be exercised. All
solicitation fees payable to the Bank as agent in connection herewith
will be retained by the Bank unless expressly agreed to the contrary
in writing by the Bank.
Notwithstanding anything in this Section to the contrary, the Bank is authorized
to hold Securities for the Trust which have transfer limitations imposed upon
them by the Securities Act of 1993, as amended, or represent shares of mutual
funds (I) in the name of the Trust, (ii) in the name of the Bank's nominee, or
(iii) with any Depository or sub-custodian.
SECTION 6. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Trust and to the extent such compensation relates to services
provided hereunder to such Fund. All expenses and taxes
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payable with respect to the Securities in the account of the Trust including,
without limitation, commission charges on purchases and sales and the amount of
any loss or liability for stockholders' assessments or otherwise, claimed or
asserted against the bank or against the Bank's nominee by reason of any
registration hereunder shall be charged to the Trust.
SECTION 7. In connection with its functions under this Agreement, the Custodian
shall:
(a) render to the Trust a daily report of all monies received or paid on
behalf of the Trust; and
(b) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Trust with respect to said Custodian's activities
in accordance with generally accepted accounting principles. All
records maintained by the Custodian in connection with the performance
of its duties under this Agreement will remain the property of the
Trust and in the event of termination of this Agreement will be
relinquished to the Trust.
SECTION 8. Any Securities deposited with any Depository or with any
sub-custodian will be represented in accounts int he name of the Bank which
include only property held by the Bank as Custodian for customers in which the
Bank acts in a fiduciary or agency capacity.
Should any Securities which are forwarded to the Bank by the Trust, and which
are subsequently deposited to the Bank's account in any Depository or with any
sub-custodian, or which the Trust may arrange to deposit in the Bank's account
in any Depository or with any sub-custodian, not be deemed acceptable for
deposit by such Depository or sub-custodian, for any reason, and as a result
thereof there is a short position in the account of the Bank with the Depository
for such Security, the Trust agrees to furnish the Bank immediately with like
Securities in acceptable form.
SECTION 9. The Trust represents and warrants that: (I) it has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) it has obtained all
necessary authorizations; (iii) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated hereby
will not be in conflict with, result in a breach of or constitute a default
under any agreement or other instrument to which the Trust is a party or which
is otherwise known to the Trust; (iv) it does not require the consent or
approval of any governmental agency or instrumentality, except any such consents
and approvals which the Trust has obtained; (v) the execution and delivery of
this Agreement by the Trust will not violate any law, regulation, charter,
by-law, order of any court or governmental agency or judgment applicable to the
Trust; and (vi) all persons executing this Agreement on behalf of the Trust and
carrying out the transactions contemplated hereby on behalf of the Trust are
duly authorized to do so.
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In the event any of the foregoing representations should become untrue,
incorrect or misleading, the Trust agrees to notify the Bank immediately in
writing thereof.
SECTION 10. The Bank represents and warrants that: (I) it has the legal right,
power and authority to execute, deliver and perform this Agreement and to carry
out all of the transactions contemplated hereby; (ii) it has obtained all
necessary authorizations; (iii) the execution, delivery and performance of this
Agreement and the carrying out of any of the transactions contemplated hereby
will not be in conflict with, result in a breach of or constitute a default
under any agreement or other instrument to which the Bank is a party or which is
otherwise known to the Bank; (iv) it does not require the consent or approval of
any governmental agency or instrumentality, except any such consents and
approvals which the Bank has obtained; (v) the execution and delivery of this
Agreement by the Bank will not violate any law, regulation, charter, by-law,
order of any court or governmental agency or judgment applicable to the Bank;
and (vi) all persons executing this Agreement on behalf of the Bank and carrying
out the transactions contemplated hereby on behalf of the Bank are duly
authorized to do so. In the event that any of the foregoing representations
should become untrue, incorrect or misleading, the Bank agrees to notify the
Trust immediately in writing thereof.
SECTION 11. All cash and Securities held by the Bank hereunder shall be kept
with the care exercised as to the Bank's own similar property. The Bank may at
its option insure itself against loss from any cause but shall be under no
obligation to insure for the benefit of the Trust.
SECTION 12. No liability of any kind shall be attached to or incurred by the
Custodian by reason of its custody of the Trust's assets held by it from time to
time under this Agreement, or otherwise by reason of its position as Custodian
hereunder except only for its own negligence, bad faith, or willful misconduct
in the performance of its duties as specifically set forth in the Custodian
Agreement. Without limiting the generality of the foregoing sentence, the
Custodian:
(a) may rely upon the advice of counsel for the Trust; and for any action
taken or suffered in good faith based upon such advice or statements
the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon
information furnished by, the Trust or its authorized officers or
agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Trust, or Proper Instructions, to the effect that a
resolution in the form submitted has been duly adopted by its Board of
Trustees or by the Shareholders, as conclusive evidence that such
resolution has been duly adopted and is in full force and effect; and
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(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request,
letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document
reasonably believed by it to be genuine and to have been signed,
forwarded or presented by the purchaser, Trust or other proper party
or parties.
SECTION 13. The Trust, its successors and assigns do hereby fully indemnify
and hold harmless the Custodian its successors and assigns, from any and all
loss, liability, claims, demand, actions, suits and expenses of any nature as
the same may arise from the failure of the Trust to comply with any law, rule
regulation or order of the United States, any state or any other
jurisdiction, governmental authority, body, or board relating to the sale,
registration, qualification of units of beneficial interest in the Trust, or
from the failure of the Trust to perform any duty or obligation under this
Agreement.
Upon written request of the Custodian, the Trust shall assume the entire defense
of any claim subject to the foregoing indemnity, or the joint defense with the
Custodian of such claim, as the Custodian shall request. The indemnities and
defense provisions of this Section 13 shall indefinitely survive termination of
this Agreement.
SECTION 14. This Agreement may be amended from time to time without notice to
or approval of the Shareholders by a supplemental agreement executed by the
Trust and the Bank and amending and supplementing this Agreement in the manner
mutually agreed.
SECTION 15. Either the Trust or the Custodian may give ninety (90) days'
written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice. In case such
notice of termination is given either by the Trust or by the Custodian, the
Trustees of the Trust shall, by resolution duly adopted, promptly appoint a
successor Custodian (the "Successor Custodian") which Successor Custodian shall
be a bank, trust company, or a bank and trust company in good standing, with
legal capacity to accept custody of the cash and Securities of a mutual fund.
Upon receipt of written notice from the Trust of the appointment of such
Successor Custodian and upon receipt of Proper Instructions, the Custodian shall
deliver such cash and Securities as it may then be holding hereunder directly
and only to the Successor Custodian. Unless or until a Successor Custodian has
been appointed as above provided, the Custodian then acting shall continue to
act as Custodian under this Agreement.
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Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of the
Trust and the Successor Custodian and upon payment of its charges and
disbursements, execute and instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's rights,
duties, obligations and custody.
Subject to the provisions of Section 21 hereof, in case the Custodian shall
consolidate with or merge into any other corporation, the corporation remaining
after or resulting from such consolidation or merger shall ipso facto without
the execution of filing of any papers or other documents, succeed to and be
substituted for the Custodian with like effect as though originally named as
such, PROVIDED, HOWEVER, in every case that said Successor corporation maintains
the qualifications set out in Section 17(f) of the Investment Company Act of
1940, as amended.
SECTION 16. This Agreement shall take effect when assets of the Trust are first
delivered to the Custodian.
SECTION 17. This Agreement may be executed in two or more counterparts, each of
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 18. A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusettes , and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees, officers or Shareholders of the Trust
individually, but binding only upon the assets and property of the Trust. No
Fund of the Trust shall be liable for the obligations of any other Fund of the
Trust.
SECTION 19. The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, as amended,
with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, applicable Federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Trust.
Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian, the books and
records of the Custodian pertaining to this Agreement shall be open to
inspection and audit at any reasonable times by officers of, attorneys for, and
auditors employed by, the Trust.
SECTION 20. Any sub-custodian appointed hereunder shall be qualified under
Section 17(f) of the 1940 Act and will perform its duties in accordance with the
requirements of this Agreement.
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SECTION 21. Nothing contained in this Agreement is intended to or shall require
the Custodian in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
SECTION 22. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Trust without the written
consent of the Custodian, or by the Custodian without the written consent of the
Trust, authorized or approved by a resolution of its Board of Trustees.
SECTION 23. All communications (other than Proper instructions which are to be
furnished hereunder to either party, or under any amendment hereto, shall be
sent by mail to the address listed below, provided that in the event that the
Bank, in its sole discretion, shall determine that an emergency exists, the Bank
may use such other means of communications as the Bank deems advisable.
To the Trust: Oak Associates Funds
co: SEI Investments
1 Freedom Valley Drive
Oaks, PA 19456
To the Bank: CoreStates Bank N.A.
530 Walnut St.
Philadelphia PA, 19101-7618
SECTION 20. This Agreement, and any amendments hereto, shall be governed,
construed and interpreted in accordance with the laws of The Commonwealth of
Pennsylvania applicable to agreements made and to be performed entirely within
such Commonwealth.
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IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
By: THE OAK ASSOCIATES FUNDS
-------------------------
Name:
Title:
By: CORESTATES BANK, N.A.
-------------------------
Name: Paul T. Cahill
Title: Vice President
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FORM OF
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this __ day of _______, 1997, by and between
Oak Associates Funds, a Massachusetts business trust, (the "Trust"), and SEI
Fund Resources (the "Administrator"), a Delaware business trust.
WHEREAS, the Trust is an open-end diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of Common Stock; and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such portfolios of the Trust as the Trust and the Administrator may agree on
("Portfolios") and as listed on the schedules attached hereto ("Schedules") and
made a part of this Agreement, on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Trust hereby retains the
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. ADMINISTRATIVE AND ACCOUNTING SERVICES. The Administrator
shall perform or supervise the performance by others of other administrative
services in connection with the operations of the Portfolios, and, on behalf of
the Trust, will investigate, assist in the selection of and conduct relations
with custodians, depositories, accountants, legal counsel, underwriters, brokers
and dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Trustees of the Trust with such reports
regarding investment performance and compliance with investment policies and
applicable laws, rules and regulations as they may reasonably request but shall
have no responsibility for supervising the performance by any investment adviser
or sub-adviser of its responsibilities. The Administrator may appoint a
sub-administrator to perform certain of the services to be performed by the
Administrator hereunder.
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The Administrator shall provide the Trust with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for Shareholders' and Trustees' meetings) for handling the
affairs of the Portfolios and such other services as the Trustees may, from time
to time, reasonably request and the Administrator shall, from time to time,
reasonably determine to be necessary to perform its obligations under this
Agreement. In addition, at the request of the Trust's Board of Trustees (the
"Trustees"), the Administrator shall make reports to the Trustees concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator shall:
(A) calculate contractual Trust expenses and control all
disbursements for the Trust, and as appropriate compute the
Trust's yields, total return, expense ratios, portfolio turnover
rate and, if required, portfolio average dollar-weighed maturity;
(B) assist Trust counsel with the preparation of prospectuses,
statements of additional information, registration statements,
and proxy materials;
(C) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with Federal and state securities
law) as may be necessary or desirable to register the Trust's
shares with state securities authorities, monitor sale of Trust
shares for compliance with state securities laws, and file with
the appropriate state securities authorities the registration
statements and reports for the Trust and the Trust's shares and
all amendments thereto, as may be necessary or convenient to
register and keep effective the Trust and the Trust's shares with
state securities authorities to enable the Trust to make a
continuous offering of its shares;
(D) develop and prepare communications to shareholders, including the
annual report to shareholders, coordinate mailing prospectuses,
notices, proxy statements, proxies and other reports to Trust
shareholders, and supervise and facilitate the solicitation of
proxies solicited by the Trust for all shareholder meetings,
including tabulation process for shareholder meetings;
(E) coordinate with Trust counsel the preparation and negotiation of,
and administer contracts on behalf of the Trust with, among
others, the Trust's investment adviser, distributor, custodian,
and transfer agent;
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(F) maintain the Trust's general ledger and prepare the Trust's
financial statements, including expense accruals and payments,
determine the net asset value of the Trust's assets and of the
Trust's shares, and supervise the Trust's transfer agent with
respect to the payment of dividends and other distributions to
shareholders;
(G) calculate performance data of the Trust and its portfolios for
dissemination to information services covering the investment
company industry;
(H) coordinate and supervise the preparation and filing of the
Trust's tax returns;
(I) examine and review the operations and performance of the various
organizations providing services to the Trust or any Portfolio of
the Trust, including, without limitation, the Trust's investment
adviser, distributor, custodian, transfer agent, outside legal
counsel and independent public accountants, and at the request of
the Trustees, report to the Trustees on the performance of
organizations;
(J) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and printing
of the Trust's semi-annual and annual reports to shareholders;
(K) provide internal legal and administrative services as requested
by the Trust from time to time;
(L) assist with the design, development, and operation of the Trust,
including new portfolio and class investment objectives, policies
and structure;
(M) provide individuals acceptable to the Trustees for nomination,
appointment, or election as officers of the Trust, who will be
responsible for the management of certain of the Trust's affairs
as determined by the Trustees;
(N) advise the Trust and its Trustees on matters concerning the Trust
and its affairs;
(O) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Trust in
accordance with the requirements of Rules 17g-1 and 17d-1(7)
under the 1940 Act as such bonds and policies are approved by the
Trust's Board of Trustees;
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(P) monitor and advise the Trust and its Portfolios on their
registered investment company status under the Internal Revenue
Code of 1986, as amended;
(Q) perform all administrative services and functions of the Trust
and each Portfolio to the extent administrative services and
functions are not provided to the Trust or such Portfolio
pursuant to the Trust's or such Portfolio's investment advisory
agreement, distribution agreement, custodian agreement and
transfer agent agreement;
(R) furnish advice and recommendations with respect to other aspects
of the business and affairs of the Portfolios as the Trust and
the Administrator shall determine desirable; and
(S) prepare and file with the SEC the semi-annual report for the
Trust on Form N-SAR and all required notices pursuant to Rule
24f-2.
Also, the Administrator will perform other services for the Trust as agreed from
time to time, including, but not limited to performing internal audit
examinations; mailing the annual reports of the Portfolios; preparing an annual
list of shareholders; and mailing notices of shareholders' meetings, proxies and
proxy statements, for all of which the Trust will pay the Administrator's
out-of-pocket expenses.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE ADMINISTRATOR. The Administrator shall furnish at its own expense
the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also
provide the items which it is obligated to provide under this
Agreement, and shall pay all compensation, if any, of officers of the
Trust as well as all Trustees of the Trust who are affiliated persons
of the Administrator or any affiliated corporation of the
Administrator; provided, however, that unless otherwise specifically
provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Trust retained by the Trustees of
the Trust to perform services on behalf of the Trust.
(B) THE TRUST. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including,
without limitation, organizational costs, taxes, expenses for legal
and auditing services, the expenses of preparing (including
typesetting), printing and mailing reports, prospectuses, statements
of additional information, proxy solicitation material and notices to
existing Shareholders, all expenses incurred in connection with
issuing and redeeming Shares, the costs of pricing services, the costs
of custodial services, the cost of initial and ongoing registration of
the Shares
<PAGE>
under Federal and state securities laws, fees and out-of-pocket
expenses of Trustees who are not affiliated persons of the
Administrator or the investment adviser to the Trust or any affiliated
corporation of the Administrator or the investment Adviser, the costs
of Trustees' meetings, insurance, interest, brokerage costs,
litigation and other extraordinary or nonrecurring expenses, and all
fees and charges of investment advisers to the Trust.
ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.
(A) ADMINISTRATION FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to
this Agreement, the Trust shall pay to the Administrator compensation
at an annual rate specified in the Schedules. Such compensation shall
be calculated and accrued daily, and paid to the Administrator
monthly. The Trust shall also reimburse the Administrator for its
reasonable out-of-pocket expenses, including the travel and lodging
expenses incurred by its officers and employees in connection with
attendance at meetings of the Trust's Board of Trustees.
If this Agreement becomes effective subsequent to the first day of a month
or terminates before the last day of a month, the Administrator's compensation
for that part of the month in which this Agreement is in effect shall be
prorated in a manner consistent with the calculation of the fees as set forth
above. Payment of the Administrator's compensation for the preceding month shall
be made promptly.
(B) COMPENSATION FROM TRANSACTIONS. The Trust hereby authorizes any
entity or person associated with the Administrator which is a member
of a national securities exchange to effect any transaction on the
exchange for the account of the Trust which is permitted by Section 11
(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T)
thereunder, and the Trust hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)
(a) (2) (iv).
(C) SURVIVAL OF COMPENSATION RATES. All rights of compensation under this
Agreement for services performed as of the termination date shall
survive the termination of this Agreement.
ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
law which cannot be waived or
<PAGE>
modified hereby. (As used in this Article 5, the term "Administrator" shall
include directors, officers, employees and other agents of the Administrator as
well as that corporation itself.)
So long as the Administrator, or its agents, acts in good faith and with
due diligence the Trust assumes full responsibility and shall indemnify the
Administrator and hold it harmless from and against any and all actions, suits
and claims, whether groundless or otherwise, and from and against any and all
losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of said administration, transfer agency, and
dividend disbursing relationships to the Trust or any other service rendered to
the Trust hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but failure to do so in good faith shall not affect the rights
hereunder.
The Trust shall be entitled to participate at its own expense or, if it so
elects, to assume the defense of any suit brought to enforce any claims subject
to this indemnity provision. If the Trust elects to assume the defense of any
such claim, the defense shall be conducted by counsel chosen by the Trust and
satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, the Administrator shall bear the fees and expenses of any
additional counsel retained by it. If the Trust does not elect to assume the
defense of a suit, it will reimburse the Administrator for the reasonable fees
and expenses of any counsel retained by the Administrator.
The Administrator may apply to the Trust at any time for instructions and
may consult counsel for the Trust or its own counsel and with accountants and
other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of
<PAGE>
authority of any officers, employee or agent of the Trust until receipt of
written notice thereof from the Trust.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and Shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Trust, and
that the Administrator may be or become interested in the Trust as a Shareholder
or otherwise.
ARTICLE 7. CONFIDENTIALITY. The Administrator agrees on behalf of itself
and its employees to treat confidentially all records and other information
relative to the Trust and its prior, present or potential Shareholders and
relative to the Adviser and its prior, present or potential customers, except,
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the
Administrator 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 the Trust.
ARTICLE 8. EQUIPMENT FAILURES. In the event of equipment failures beyond
the Administrator's control, the Administrator shall, at no additional expense
to the Trust, take reasonable steps to minimize service interruptions but shall
have no liability with respect thereto. The Administrator shall develop and
maintain a plan for recovery from equipment failures which may include
contractual arrangements with appropriate parties making reasonable provision
for emergency use of electronic data processing equipment to the extent
appropriate equipment is available.
ARTICLE 9. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The
Administrator undertakes to comply with all applicable requirements of the 1933
Act, the 1934 Act, the 1940 Act and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by the Administrator hereunder.
ARTICLE 10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement
shall become effective on the date set forth in the Schedules and shall remain
in effect for the initial term of the Agreement (the "Initial Term") and each
renewal term thereof (each, a "Renewal Term"), each as set forth in the
Schedules, unless terminated in accordance with the provisions of this Article
10. This Agreement may be terminated only: (a) by the mutual written agreement
of the parties; (b) by either party hereto on 90 days' written notice, as of the
end of the Initial Term or the end of any Renewal Term; (c) by either party
hereto on such date as is specified in written notice given by the terminating
party, in the event of a material breach of this Agreement by the other party,
provided the terminating party has notified the other party of such breach at
least 45 days prior to the specified date of termination and the
<PAGE>
breaching party has not remedied such breach by the specified date; (d)
effective upon the liquidation of the Administrator; or (e) as to any Portfolio
or the Trust, effective upon the liquidation of such Portfolio or the Trust, as
the case may be. For purposes of this Article 10, the term "liquidation" shall
mean a transaction in which the assets of the Administrator, the Trust or a
Portfolio are sold or otherwise disposed of and proceeds therefrom are
distributed in cash to the shareholders in complete liquidation of the interests
of such shareholders in the entity.
This Agreement shall not be assignable by the Administrator, without the
prior written consent of the Trust, except to an entity that is controlled by,
or under common control, with, the Administrator.
ARTICLE 11. AMENDMENTS. This Agreement or any part hereof may be changed
or waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
ARTICLE 12. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Trust has
agreed to indemnify the Administrator against such liability.
ARTICLE 13. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 14. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at ____________________________; and if to the
Administrator at One Freedom Valley Drive, Oaks, Pennsylvania, 19456.
ARTICLE 15. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of
<PAGE>
the provisions herein, conflict with the applicable provisions of the 1940 Act,
the latter shall control.
ARTICLE 16. MULTIPLE ORIGINALS. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 17. LIMITATION OF LIABILITY. The Administrator is hereby
expressly put on notice of the limitation of liability as set forth in Article
XI of the Trust's Declaration of Trust and agrees that the obligations pursuant
to this Agreement of a particular Portfolio and of the Trust with respect to
that Portfolio shall be limited solely to the assets of that Portfolio, and the
Administrator shall not seek satisfaction of any such obligation from any other
Portfolio, the shareholders of any Portfolio, the Trustees, officers, employees
or agents of the Trust, or any of them.
ARTICLE 18. BINDING AGREEMENT. This Agreement, and the rights and
obligations of the parties and the Portfolios hereunder, shall be binding on,
and inure to the benefit of, the parties and the Portfolios and the respective
successors and assigns of each of them.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
OAK ASSOCIATES FUNDS
By:
---------------------------
Attest:
-----------------------
SEI FUND RESOURCES
By:
---------------------------
Attest:
-----------------------
<PAGE>
SCHEDULE
TO THE ADMINISTRATION AGREEMENT
DATED AS OF ______________, 1997
BETWEEN
OAK ASSOCIATES FUNDS
AND
SEI FUND RESOURCES
Portfolios: This Agreement shall apply to all Portfolios of the Trust,
either now in the future created. The following is a listing of
the current portfolios of the Trust: White Oak Growth Stock
Portfolio and Pin Oak Aggressive Stock Portfolio Portfolios
(collectively, the "Portfolios").
Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the
Portfolios at an annual rate, which is calculated daily and paid
monthly, at a maximum administrative fee equal to the greater of
___ % of each Portfolios' average daily net assets, or
$___________.
Term: This Agreement shall become effective on ___________, 1997
and shall remain in effect for an Initial Term of five (5) years
from such date and, thereafter, for successive Renewal Terms of
two (2) years each, unless and until this Agreement is terminated
in accordance with the provisions of Article 10 hereof.
<PAGE>
FORM OF
AGENCY AGREEMENT
THIS AGREEMENT made the day of , 1998, by and between Oak Associates
Funds, a Massachusetts business trust existing under the laws of the
Commonwealth of Massachusetts, having its principal place of business at One
Freedom Valley Road, Oaks, Pennsylvania 19456 (the "Fund"), and DST SYSTEMS,
INC., a corporation existing under the laws of the State of Delaware, having
its principal place of business at 333 W. 11th. St., 5th Fl., Kansas City,
Missouri 64105 ("DST"):
WITNESSETH:
WHEREAS, the Fund desires to appoint DST as Transfer Agent and Dividend
Disbursing Agent, and DST desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
1. DOCUMENTS TO BE FILED WITH APPOINTMENT.
In connection with the appointment of DST as Transfer Agent and Dividend
Disbursing Agent for the Fund, there will be filed with DST the following
documents:
A. A certified copy of the resolutions of the Board of Directors of the
Fund (which term when used herein shall include any Board of Trustees,
or other governing body of the Fund, however styled) appointing DST as
Transfer Agent and Dividend Disbursing Agent, approving the form of
this Agreement, and designating certain persons to sign stock
certificates, if any, and give written instructions and requests on
behalf of the Fund;
B. A certified copy of the Articles of Incorporation (which term as used
herein shall include, where relevant, the Declaration of Trust, or
other basic instrument establishing the existence and nature of the
Fund) of the Fund and all amendments thereto;
C. A certified copy of the Bylaws of the Fund;
D. Copies of Registration Statements and amendments thereto, filed with
the Securities and Exchange Commission.
E. Specimens of all forms of outstanding stock certificates, in the forms
approved by the Board of Directors of the Fund, with a certificate of
the Secretary of the Fund, as to such approval;
F. Specimens of the signatures of the officers of the Fund authorized to
sign stock certificates and individuals authorized to sign written
instructions and requests;
G. An opinion of counsel for the Fund, as such opinion(s) have been filed
with the Fund's Registration Statement or notices required under Rule
24f-2 under the Investment Company Act of 1940 (the " 1940 Act"), with
respect to:
(1) The Fund's organization and existence under the laws of its
state of organization, and
(2) That all issued shares are validly issued, fully paid and
nonassessable.
2. CERTAIN REPRESENTATIONS AND WARRANTIES OF DST.
DST represents and warrants to the Fund that:
A. It is a corporation duly organized and existing and in good standing
under the laws of Delaware.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required under the
Securities Exchange Act of 1934 (the " 1934 Act").
<PAGE>
E. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
G. It is in compliance with Securities and Exchange Commission ("SEC")
regulations and is not subject to restrictions under Rule 17Ad.
H. Copies of DST's Rule 17Ad-13 reports will be provided to the Fund
annually as and to the extent required under Rule 17Ad-13 under the
1934 Act.
I. Its fidelity bonding and minimum capital meet the transfer agency
requirements of the New York Stock Exchange and the American Stock
Exchange.
3. CERTAIN REPRESENTATIONS AND WARRANTIES OF THE FUND.
The Fund represents and warrants to DST that:
A. It is a trust duly organized and existing and in good standing under
the laws of the Commonwealth of Massachusetts.
B. It is an open-end management investment company registered under the
1940 Act, as amended, the portfolios of which may be diversified or
non-diversified.
C. A registration statement under the Securities Act of 1933 has been
filed and will be effective with respect to all shares of the Fund
being offered for sale.
D. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states and such
registration will be effective at all times shares are offered for
sale in such state.
E. The Fund is empowered under applicable laws and by its charter and
Bylaws to enter into and perform this Agreement.
4. SCOPE OF APPOINTMENT.
A. Subject to the conditions set forth in this Agreement, the Fund hereby
appoints DST as Transfer Agent and Dividend Disbursing Agent.
B. DST hereby accepts such appointment and agrees that it will act as the
Fund's Transfer Agent and Dividend Disbursing Agent. DST agrees that
it will also act as agent in connection with the Fund's periodic
withdrawal payment accounts and other open accounts or similar plans
for shareholders, if any.
C. The Fund agrees to use its reasonable efforts to deliver to DST in
Kansas City, Missouri, as soon as they are available, all of its
shareholder account records.
D. DST, utilizing TA2000TM, DST's computerized data processing system for
securityholder accounting (the "TA2000TM System"), will perform the
following services as transfer and dividend disbursing agent for the
Fund, and as agent of the Fund for shareholder accounts thereof, in a
timely manner: issuing (including countersigning), transferring and
canceling share certificates, if any; maintaining all shareholder
accounts; providing transaction journals; as requested by the Fund and
subject to payment by the Fund of an additional fee, preparing
shareholder meeting lists for use in connection with any annual or
special meeting and arrange for an affiliate to print, mail and
receive back proxies and to certify the shareholder votes of the Fund
of any portfolios thereof; mailing shareholder reports and
prospectuses; withholding, as required by federal law, taxes on
shareholder accounts, disbursing income dividends and capital gains
distributions to shareholders, preparing, filing and mailing U.S.
Treasury Department Forms 1099, 1042, and 1042S and
<PAGE>
performing and paying backup withholding as required for all
shareholders; preparing and mailing confirmation forms to shareholders
and dealers, as instructed, for all purchases and liquidations of
shares of the Fund and other confirmable transactions in shareholders'
accounts; recording reinvestment of dividends and distributions in
shares of the Fund; providing or making available on-line daily and
monthly reports as provided by the TA2000TM System and as requested by
the Fund or its management company; maintaining those records
necessary to carry out DST's duties hereunder, including all
information reasonably required by the Fund to account for all
transactions in the Fund shares, calculating the appropriate sales
charge with respect to each purchase of the Fund shares as set forth
in the prospectus for the Fund, determining the portion of each sales
charge payable to the dealer participating in a sale in accordance
with schedules delivered to DST by the Fund's principal underwriter or
distributor (hereinafter "principal underwriter") from time to time,
disbursing dealer commissions collected to such dealers, determining
the portion of each sales charge payable to such principal underwriter
and disbursing such commissions to the principal underwriter;
receiving correspondence pertaining to any former, existing or new
shareholder account, processing such correspondence for proper
recordkeeping, and responding promptly to shareholder correspondence;
mailing to dealers confirmations of wire order trades; mailing copies
of shareholder statements to shareholders and registered
representatives of dealers in accordance with the Fund's instructions;
interfacing with, accepting and effectuating order for transactions
and registration and maintenance information, all on an automated
basis, from, and providing advices to the Fund's custodian bank and to
the Fund's settlement bank in connection with the settling of such
transactions, with, the National Securities Clearing Corporation
("NSCC") pertaining to NSCC's Fund/SERV and Networking programs; and
processing, generally on the date of receipt, purchases or redemptions
or instructions to settle any mail or wire order purchases or
redemptions received in proper order as set forth in the prospectus,
rejecting promptly any requests not received in proper order (as
defined by the Fund or its agents), and causing exchanges of shares to
be executed in accordance with the Fund's instructions and prospectus
and the general exchange privilege applicable.
E. DST shall use reasonable efforts to provide, reasonably promptly under
the circumstances, the same transfer agent services with respect to
any new, additional functions or features or any changes or
improvements to existing functions or features as provided for in the
Fund's instructions, prospectus or application as amended from time to
time, for the Fund provided (i) DST is advised in advance by the Fund
of any changes therein and (ii) the TA2000TM System and the mode of
operations utilized by DST as then constituted supports such
additional functions and features. If any addition to, improvement of
or change in the features and functions currently provided by the
TA2000TM System or the operations as requested by the Fund requires an
enhancement or modification to the TA2000TM System or to operations as
then conducted by DST, DST shall not be liable therefore until such
modification or enhancement is installed on the TA2000TM System or new
mode of operation is instituted. If any new, additional function or
feature or change or improvement to existing functions or features or
new service or mode of operation measurably increases DST's cost of
performing the services required hereunder at the current level of
service, DST shall advise the Fund of the amount of such increase and
if the Fund elects to utilize such function, feature or service, DST
shall be entitled to increase its fees by the amount of the increase
in costs. In no event shall DST be
<PAGE>
responsible for or liable to provide any additional function, feature,
improvement or change in method of operation until it has consented
thereto in writing.
F. The Fund shall have the right to add new series to the TA2000TM System
upon at least thirty (30) days' prior written notice to DST provided
that the requirements of the new series are generally consistent with
services then being provided by DST under this Agreement. Rates or
charges for additional series shall be as set forth in Exhibit A, as
hereinafter defined, for the remainder of the contract term except as
such series use functions, features or characteristics for which DST
has imposed an additional charge as part of its standard pricing
schedule. In the latter event, rates and charges shall be in
accordance with DST's then-standard pricing schedule.
5. LIMIT OF AUTHORITY.
Unless otherwise expressly limited by the resolution of appointment or by
subsequent action by the Fund, the appointment of DST as Transfer Agent
will be construed to cover the full amount of authorized stock of the class
or classes for which DST is appointed as the same will, from time to time,
be constituted, and any subsequent increases in such authorized amount. In
case of such increase the Fund will file with DST:
A. If the appointment of DST was theretofore expressly limited, a
certified copy of a resolution of the Board of Directors of the
Fund increasing the authority of DST;
B. A certified copy of the amendment to the Articles of
Incorporation of the Fund authorizing the increase of stock;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance
of the increased stock, and an opinion of counsel that the order
or consent of no other governmental or regulatory authority is
required;
D. Opinion of counsel for the Fund, as such opinion(s) have been
filed with the Fund's Registration Statement or notices required
under Rule 24f-2 under the 1940 Act, stating:
(1) The status of the additional shares of stock of the Fund
under the Securities Act of 1933, as amended, and any other
applicable federal or state statute; and
(2) That the additional shares are validly issued, fully paid
and nonassessable.
6. COMPENSATION AND EXPENSES.
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, the Fund will pay to DST from time to
time a reasonable compensation for all services rendered as
Agent, and also, all its reasonable billable expenses, charges,
counsel fees, and other disbursements ("Compensation and
Expenses") incurred in connection with the agency. Such
compensation is set forth in a separate schedule to be agreed to
by the Fund and DST, a copy of which is attached hereto as
Exhibit A. If the Fund has not paid such Compensation and
Expenses to DST within a reasonable time, DST may charge against
any monies held under this Agreement, the amount of any
Compensation and/or Expenses for which it shall be entitled to
reimbursement under this Agreement.
B. The Fund also agrees promptly to reimburse DST for all reasonable
billable expenses or disbursements incurred by DST in connection
with the performance of services under this Agreement including,
but not limited to,
<PAGE>
expenses for postage, express delivery services, freight charges,
envelopes, checks, drafts, forms (continuous or otherwise),
specially requested reports and statements, telephone calls,
telegraphs, stationery supplies, counsel fees, outside printing
and mailing firms (including Output Technology, Inc. and Support
Resources, Inc.), magnetic tapes, reels or cartridges (if sent to
the Fund or to a third party at the Fund's request) and magnetic
tape handling charges, off-site record storage, media for storage
of records (e.g., microfilm, microfiche, optical platters,
computer tapes), computer equipment installed at the Fund's
request at the Fund's or a third party's premises,
telecommunications equipment, telephone/telecommunication lines
between the Fund and its agents, on one hand, and DST on the
other, proxy soliciting, processing and/or tabulating costs,
second-site backup computer facility, transmission of statement
data for remote printing or processing, and National Securities
Clearing Corporation ("NSCC") transaction fees to the extent any
of the foregoing are paid by DST. The Fund agrees to pay postage
expenses at least one day in advance if so requested. In
addition, any other expenses incurred by DST at the request or
with the consent of the Fund will be promptly reimbursed by the
Fund.
C. Amounts due hereunder shall be due and paid on or before the
thirtieth (30th) business day after receipt of the statement
therefor by the Fund (the "Due Date"). The Fund is aware that
its failure to pay all amounts in a timely fashion so that they
will be received by DST on or before the Due Date will give rise
to costs to DST not contemplated by this Agreement, including but
not limited to carrying, processing and accounting charges.
Accordingly, subject to Section 6. D. hereof, in the event that
any amounts due hereunder are not received by DST by the Due
Date, the Fund shall pay a late charge equal to the lesser of the
maximum amount permitted by applicable law or the product of that
rate announced from time to time by State Street Bank and Trust
Company as its "Prime Rate" plus three (3) percentage points
times the amount overdue, times the number of days from the Due
Date up to and including the day on which payment is received by
DST divided by 365. The parties hereby agree that such late
charge represents a fair and reasonable computation of the costs
incurred by reason of late payment or payment of amounts not
properly due. Acceptance of such late charge shall in no event
constitute a waiver of the Fund's or DST's default or prevent the
non-defaulting party from exercising any other rights and
remedies available to it.
D. In the event that any charges are disputed, the Fund shall, on or
before the Due Date, pay all undisputed amounts due hereunder and
notify DST in writing of any disputed charges for billable
expenses which it is disputing in good faith. Payment for such
disputed charges shall be due on or before the close of the fifth
(5th) business day after the day on which DST provides to the
Fund documentation which an objective observer would agree
reasonably supports the disputed charges (the "Revised Due
Date"). Late charges shall not begin to accrue as to charges
disputed in good faith until the first business day after the
Revised Due Date.
E. The fees and charges set forth on Exhibit A shall increase or may
be increased as follows:
<PAGE>
(1) On the first day of each new term, but only in accordance
with the "Fee Increases" provision in Exhibit A;
(2) DST may increase the fees and charges set forth on Exhibit A
upon at least ninety (90) days prior written notice, if
changes in existing laws, rules or regulations: (i) require
substantial system modifications or (ii) materially increase
cost of performance hereunder; and
(3) Upon at least ninety (90) days prior written notice, DST may
impose a reasonable charge for additional features of TA2000
used by the Fund which features are not consistent with the
Fund's current processing requirements.
If DST notifies the Fund of an increase in fees or charges pursuant to
subparagraph (2) of this Section 6.E., the parties shall confer, diligently and
in good faith and agree upon a new fee to cover the amount necessary, but not
more than such amount, to reimburse DST for the Fund's aliquot portion of the
cost of developing the new software to comply with regulatory charges and for
the increased cost of operation.
If DST notifies the Fund of an increase in fees or charges under
subparagraph (3) of this Section 6.E., the parties shall confer, diligently and
in good faith, and agree upon a new fee to cover such new fund feature.
7. OPERATION OF DST SYSTEM.
In connection with the performance of its services under this Agreement,
DST is responsible for such items as:
A. That entries in DST's records, and in the Fund's records on the
TA2000TM System created by DST, accurately reflect the orders,
instructions, and other information received by DST from the Fund, the
Fund's distributor, manager or principal underwriter, the Fund's
investment adviser, or the Fund's administrator (each an "Authorized
Person"), broker-dealers and/or shareholders;
B. That shareholder lists, shareholder account verifications,
confirmations and other shareholder account information to be produced
from its records or data be available and accurately reflect the data
in the Fund's records on the TA2000TM System;
C. The accurate and timely issuance of dividend and distribution checks
in accordance with instructions received from the Fund and the data in
the Fund's records on the TA2000TM System;
D. That redemption transactions and payments be effected timely, under
normal circumstances on the day of receipt, and accurately in
accordance with redemption instructions received by DST from
Authorized Persons, broker-dealers or shareholders and the data in the
Fund's records on the TA2000TM System;
E. The deposit daily in the Fund's appropriate bank account of all checks
and payments received by DST from NSCC, broker-dealers or shareholders
for investment in shares;
F. Notwithstanding anything herein to the contrary, with respect to "as
of" adjustments, DST will not assume one hundred percent (100%)
responsibility for losses resulting from "as ofs" due to clerical
errors or misinterpretations of shareholder instructions, but DST will
discuss with the Fund DST's accepting liability for an "as of" on a
case-by-case basis and may accept financial responsibility for a
particular situation resulting in a financial loss to the Fund where
DST in its discretion deems that to be appropriate;
G. The requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting the
opening of shareholder accounts, transfers, redemptions and other
shareholder account transactions, all in conformance with DST's
present procedures as set forth in its Legal Manual, Third Party Check
Procedures, Checkwriting Draft Procedures, and Signature Guarantee
Procedures (collectively the
<PAGE>
"Procedures") with such changes or deviations therefrom as may be from
time to time required or approved by the Fund, its investment adviser
or principal underwriter, or its or DST's counsel and the rejection of
orders or instructions not in good order in accordance with the
applicable prospectus or the Procedures;
H. The maintenance of customary records in connection with its agency,
and particularly those records required to be maintained pursuant to
subparagraph (2)(iv) of paragraph (b) of Rule 3la-I under the
Investment Company Act of 1940, if any; and
I. The maintenance of a current, duplicate set of the Fund's essential
records at a secure separate location, in a form available and usable
forthwith in the event of any breakdown or disaster disrupting its
main operation.
8. INDEMNIFICATION.
A. DST shall not be responsible for, and the Fund shall on behalf of the
applicable Portfolio indemnify and hold DST harmless from and against,
any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability ("Adverse Consequences") arising out of or
attributable to:
(1) All actions of DST or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are
taken in good faith and without negligence or willful misconduct.
(2) The Fund's lack of good faith, negligence or willful misconduct
which arise out of the breach of any representation or warranty
of the Fund hereunder.
(3) The reliance on or use by DST or its agents or subcontractors of
information, records, documents or services which (i) are
received by DST or its agents or subcontractors, and (ii) have
been prepared, maintained or performed by the Fund or any other
person or firm on behalf of the Fund including but not limited to
any previous transfer agent or registrar.
(4) The reliance on, or the carrying out by DST or its agents or
subcontractors of any instructions or requests of the Fund on
behalf of the applicable Portfolio.
(5) The offer or sale of shares of the Fund or any applicable
Portfolio in violation of any requirement under the federal
securities laws or regulations or the securities laws or
regulations of any state relating to the registration, the sale
or the manner of sale of such shares or in violation of any stop
order or other determination or ruling by any federal agency or
any state with respect to the offer, the sale or the manner of
sale of such shares.
(6) The negotiation and processing by DST and the applicable bank on
which such check or draft is drawn of checks not made payable to
the order of DST, the Fund, the Fund's management company,
transfer agent or distributor or the retirement account custodian
or trustee for a plan account investing in shares, which checks
are tendered to DST for the purchase of shares (i.e., checks made
payable to prospective or existing Shareholders, such checks are
commonly known as "third party checks").
B. At any time DST may apply to any officer of the Fund for instructions,
and may consult with legal counsel with respect to any matter arising
in connection with the services to be performed by DST under this
Agreement, and DST and its agents or subcontractors shall not be
liable and shall be indemnified by the Fund on behalf of the
applicable Portfolio for any action taken or omitted by it in reliance
upon such instructions or upon the opinion of such counsel. DST, its
agents and subcontractors shall be protected and indemnified in acting
upon any paper or document furnished by or on behalf of the Fund,
reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data,
records or documents
<PAGE>
provided DST or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Fund.
DST, its agents and subcontractors shall also be protected and
indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the
officers of the Fund, and the proper countersignature of any former
transfer agent or former registrar, or of a co-transfer agent or
co-registrar.
C. In order that the indemnification provisions contained in this Section
8 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify DST, DST shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all
developments concerning such claim. The Fund shall have the option to
participate with DST in the defense of such claim or to defend against
said claim in its own name or in the name of DST. DST shall in no
case confess any claim or make any compromise in any case in which the
Fund may be required to indemnify DST except with the Fund's prior
written consent.
D. Standard of Care: DST shall at all times act in good faith and agrees
to use its best efforts within reasonable limits to insure the
accuracy of all services performed under this Agreement, but assumes
no responsibility and shall not be liable for loss or damage due to
errors unless said errors are caused by its negligence, bad faith, or
willful misconduct or that of its employees.
E. EXCEPT FOR VIOLATIONS OF SECTION 23, IN NO EVENT AND UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO
ANYONE, INCLUDING, WITHOUT LIMITATION TO THE OTHER PARTY, FOR
CONSEQUENTIAL DAMAGES FOR ANY ACT OR FAILURE TO ACT UNDER ANY
PROVISION OF THIS AGREEMENT EVEN IF ADVISED OF THE POSSIBILITY
THEREOF.
9. CERTAIN COVENANTS OF DST AND THE FUND.
A. All requisite steps will be taken by the Fund from time to time when
and as necessary to register the Fund's shares for sale in all states
in which the Fund's shares shall at the time be offered for sale and
require registration. If at any time the Fund receives notice of any
stop order or other proceeding in any such state affecting such
registration or the sale of the Fund's shares, or of any stop order or
other proceeding under the federal securities laws affecting the sale
of the Fund's shares, the Fund will give prompt notice thereof to DST.
B. DST hereby agrees to perform such transfer agency functions as are set
forth in Section 4.D. above and establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms, and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices, and to carry such insurance as
it considers adequate and reasonably available.
C. To the extent required by Section 31 of the Investment Company Act of
1940 as amended and Rules thereunder, DST agrees that all records
maintained by DST relating to the services to be performed by DST
under this Agreement are the
<PAGE>
property of the Fund and will be preserved and will be surrendered
promptly to the Fund on request.
D. DST agrees to furnish the Fund annual reports of its financial
condition, consisting of a balance sheet, earnings statement and any
other publicly available financial information reasonably requested by
the Fund and a copy of the report issued by its certified public
accountants pursuant to Rule 17Ad-13 under the 1934 Act as filed with
the SEC. The annual financial statements will be certified by DST's
certified public accountants and may be included in DST's publicly
distributed Annual Report.
E. DST represents and agrees that it will use its reasonable efforts to
keep current on the trends of the investment company industry relating
to shareholder services and will use its reasonable efforts to
continue to modernize and improve.
F. DST will permit the Fund and its authorized representatives to make
periodic inspections of its operations as such would involve the Fund
at reasonable times during business hours.
G. DST will provide in Kansas City at the Fund's request and expense
training for the Fund's personnel in connection with use and operation
of the TA2000TM System. All travel and reimbursable expenses incurred
by the Fund's personnel in connection with and during training at
DST's Facility shall be borne by the Fund. At the Fund's option and
expense, DST also agrees to use its reasonable efforts to provide two
(2) man weeks of training at the Fund's facility for the Fund's
personnel in connection with the continued operation of the TA2000
System. Reasonable travel, per them and reimbursable expenses
incurred by DST personnel in connection with and during training at
the Fund's facility or in connection with the conversion shall be
borne by the Fund.
10. RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
capital structure of the Fund requiring a change in the form of stock
certificates, DST will issue or register certificates in the new form in
exchange for, or in transfer of, the outstanding certificates in the old
form, upon receiving:
A. Written instructions from an officer of the Fund;
B. Certified copy of the amendment to the Articles of Incorporation or
other document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the stock in
the new form, and an opinion of counsel that the order or consent of
no other government or regulatory authority is required;
D. Specimens of the new certificates in the form approved by the Board of
Directors of the Fund, with a certificate of the Secretary of the Fund
as to such approval;
E. Opinion of counsel for the Fund stating:
(1) The status of the shares of stock of the Fund in the new
form under the Securities Act of 1933, as amended and any
other applicable federal or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be, when issued, validly issued, fully paid and
nonassessable.
11. RESERVED.
<PAGE>
12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.
The Fund will file promptly with DST written notice of any change in the
officers authorized to sign written requests or instructions to give
requests or instructions, together with two signature cards bearing the
specimen signature of each newly authorized officer.
13. FUTURE AMENDMENTS OF CHARTER AND BYLAWS.
The Fund will promptly file with DST copies of all material amendments to
its Articles of Incorporation or Bylaws made after the date of this
Agreement.
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.
At any time DST may apply to any person authorized by the Fund to give
instructions to DST, and may with the approval of a Fund officer and at the
expense of the Fund, either consult with legal counsel for the Fund or
consult with counsel chosen by DST and acceptable to the Fund, with respect
to any matter arising in connection with the agency and it will not be
liable for any action taken or omitted by it in good faith in reliance upon
such instructions or upon the opinion of such counsel. For purposes
hereof, DST's internal counsel and attorneys employed by Sonnenschein Nath
& Rosenthal, DST's primary outside counsel, are acceptable to the Fund.
DST will be protected in acting upon any paper or document reasonably
believed by it to be genuine and to have been signed by the proper person
or persons and will not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from the Fund. It
will also be protected in recognizing stock certificates which it
reasonably believes to bear the proper manual or facsimile signatures of
the officers of the Fund, and the proper countersignature of any former
Transfer Agent or Registrar, or of a co-Transfer Agent or co-Registrar.
15. FORCE MAJEURE AND DISASTER RECOVERY PLANS.
A. DST shall not be responsible or liable for its failure or delay in
performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation: any interruption, loss or
malfunction or any utility, transportation, computer hardware,
provided such equipment has been reasonably maintained, or third party
software or communication service; inability to obtain labor,
material, equipment or transportation, or a delay in mails;
governmental or exchange action, statute, ordinance, rulings,
regulations or direction; war, strike, riot, emergency, civil
disturbance, terrorism, vandalism, explosions, labor disputes,
freezes, floods, fires, tornadoes, acts of God or public enemy,
revolutions, or insurrection; or any other cause, contingency,
circumstance or delay not subject to DST's reasonable control which
prevents or hinders DST's performance hereunder.
B. DST currently maintains an agreement with a third party whereby DST is
to be permitted to use on a "shared use" basis a "hot site" (the
"Recovery Facility") maintained by such party in event of a disaster
rendering the DST Facilities inoperable. DST has developed and is
continually revising a business contingency plan (the "Business
Contingency Plan") detailing which, how, when, and by whom data
maintained by DST at the DST Facilities will be installed and operated
at the Recovery Facility. Provided the Fund is paying its pro rata
portion of the charge therefor, DST will, in the event of a disaster
rendering the DST Facilities inoperable, use reasonable efforts to
convert the TA2000TM System containing the designated Fund data to the
computers at the Recovery Facility in accordance with the then current
Business Contingency Plan.
<PAGE>
C. DST also currently maintains, separate from the area in which the
operations which provides the services to the Fund hereunder are
located, a Crisis Management Center consisting of phones, computers
and the other equipment necessary to operate a FULL service transfer
agency business in the event one of its operations areas is rendered
inoperable. The transfer of operations to other operating areas or to
the Crisis Management Center is also covered in DST's Business
Contingency Plan.
16. CERTIFICATION OF DOCUMENTS.
The required copy of the Articles of Incorporation of the Fund and copies
of all amendments thereto will be certified by the Secretary of State (or
other appropriate official) of the State of Incorporation, and if such
Articles of Incorporation and amendments are required by law to be also
filed with a county, city or other officer of official body, a certificate
of such filing will appear on the certified copy submitted to DST. A copy
of the order or consent of each governmental or regulatory authority
required by law to the issuance of the stock will be certified by the
Secretary or Clerk of such governmental or regulatory authority, under
proper seal of such authority. The copy of the Bylaws and copies of all
amendments thereto, and copies of resolutions of the Board of Directors of
the Fund, will be certified by the Secretary or an Assistant Secretary of
the Fund under the Fund's seal.
17. RECORDS.
DST will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained pursuant
to subparagraph (2) (iv) of paragraph (b) of Rule 3 I a-1 under the
Investment Company Act of 1940, if any.
18. DISPOSITION OF BOOKS, RECORDS AND CANCELED CERTIFICATES.
DST may send periodically to the Fund, or to where designated by the
Secretary or an Assistant Secretary of the Fund, all books, documents, and
all records no longer deemed needed for current purposes and stock
certificates which have been canceled in transfer or in exchange, upon the
understanding that such books, documents, records, and stock certificates
will be maintained by the Fund under and in accordance with the
requirements of Section 17Ad-7 adopted under the Securities Exchange Act of
1934. Such materials will not be destroyed by the Fund without the consent
of DST (which consent will not be unreasonably withheld), but will be
safely stored for possible future reference.
19. PROVISIONS RELATING TO DST AS TRANSFER AGENT.
A. Instructions for the transfer, exchange or redemption of shares of the
Fund will be accepted, the registration, redemption or transfer of the
shares be effected and, where applicable, funds remitted therefor.
Upon surrender of the old certificates in form or receipt by DST of
instructions deemed by DST properly endorsed for transfer, exchange or
redemption, accompanied by such documents as DST may deem necessary to
evidence the authority of the person making the transfer, exchange or
redemption, the transfer, exchange or redemption of the shares
reflected by such certificates be effected and any sums due in
connection therewith be remitted, in accordance with the instructions
contained herein. DST reserves the right to refuse to transfer or
redeem shares until it is satisfied that the endorsement or signature
on the instruction or any other document is valid and genuine, and for
that purpose it may require a guaranty of signature in accordance with
the Signature Guarantee Procedures. DST also reserves the right to
refuse to transfer, exchange or redeem shares until it is satisfied
that the requested transfer, exchange or redemption is legally
authorized, and DST will incur no liability for the refusal in good
faith to make transfers or redemptions which, in its judgment, are
improper or
<PAGE>
unauthorized. DST may, in effecting transfers, exchanges or
redemptions, rely upon DST's Procedures and Simplification Acts,
UNIFORM COMMERCIAL CODE or other statutes which protect it and the
Fund in not requiring complete fiduciary documentation. In cases in
which DST is not directed or otherwise required to maintain the
consolidated records of shareholder's accounts, DST will not be liable
for any loss which may arise by reason of not having such records.
B. DST will, at the expense of the Fund, issue and mail subscription
warrants, effectuate stock dividends, exchanges or split ups, or act
as Conversion Agent upon receiving written instructions from any
officer of the Fund and such other documents as DST deems necessary.
C. DST will, at the expense of the Fund, supply a shareholder's list to
the Fund for its annual meeting upon receiving a request from an
officer of the Fund. It will also, at the expense of the Fund, supply
lists at such other times as may be requested by an officer of the
Fund.
D. Upon receipt of written instructions of an officer of the Fund, DST
will, at the expense of the Fund, address and mail notices to
shareholders.
E. In case of any request or demand for the inspection of the stock books
of the Fund or any other books in the possession of DST, DST will
endeavor to notify the Fund and to secure instructions as to
permitting or refusing such inspection. DST reserves the right,
however, to exhibit the stock books or other books to any person in
case it is advised by its counsel that it may be held responsible for
the failure to exhibit the stock books or other books to such person.
20. PROVISIONS RELATING TO DIVIDEND DISBURSING, AGENCY,@c.
A. DST will, at the expense of the Fund, provide a special form of check
containing the imprint of any device or other matter desired by the
Fund. Said checks must, however, be of a form and size convenient for
use by DST.
B. If the Fund desires to include additional printed matter, financial
statements, etc., with the dividend checks, the same will be furnished
DST within a reasonable time prior to the date of mailing of the
dividend checks, at the expense of the Fund.
C. If the Fund desires its distributions mailed in any special form of
envelopes, sufficient supply of the same will be furnished to DST but
the size and form of said envelopes will be subject to the approval of
DST. If stamped envelopes are used, they must be furnished by the
Fund; or if postage stamps are to be affixed to the envelopes, the
stamps or the cash necessary for such stamps must be furnished by the
Fund.
D. DST shall establish and maintain on behalf of the Fund one or more
deposit accounts as Agent for the Fund, into which DST shall deposit
the funds DST receives for payment of dividends, distributions,
redemptions or other disbursements provided for hereunder and to draw
checks against such accounts.
E. DST is authorized and directed to stop payment of checks theretofore
issued hereunder, but not presented for payment, when the payees
thereof allege either that they have not received the checks or that
such checks have been mislaid, lost, stolen, destroyed or through no
fault of theirs, are otherwise beyond their control, and cannot be
produced by them for presentation and collection, and, to issue and
deliver duplicate checks in replacement thereof.
21. ASSUMPTION OF DUTIES BY THE FUND OR AGENTS DESIGNATED BY THE FUND.
A. The Fund or its designated agents other than DST may assume certain
duties and responsibilities of DST or those services of Transfer Agent
and Dividend Disbursing Agent as those terms are referred to in
Section 4.D. of this Agreement including but not limited to answering
and responding to telephone inquiries from shareholders and brokers,
accepting shareholder and broker instructions (either or both oral and
written) and transmitting orders based on such instructions to DST,
preparing and mailing confirmations, obtaining certified TIN numbers,
classifying the status of shareholders and shareholder accounts under
applicable tax law, establishing shareholder accounts on the TA2000TM
System and assigning social codes and Taxpayer Identification
<PAGE>
Number codes thereof, and disbursing monies of the Fund, said
assumption to be embodied in writing to be signed by both parties.
B. To the extent the Fund or its agent or affiliate assumes such duties
and responsibilities, DST shall be relieved from all responsibility
and liability therefor and is hereby indemnified and held harmless
against any liability therefrom and in the same manner and degree as
provided for in Section 8 hereof.
C. Initially the Fund or its designees shall be responsible for the
following: (i) answering and responding to phone calls from
shareholders and broker-dealers,
(ii) faxing information to DST as such calls or items are
received by the Fund,
(iii) monitoring and following up upon wire order trades which
failed to settle timely, and (iv) notifying and instructing DST
as to the establishment of and maintenance of information
pertaining to broker-dealers on the Broker-Dealer File.
22. TERMINATION OF AGREEMENT.
A. This Agreement shall be in effect for an initial period of three (3)
years and, thereafter, shall automatically extend for additional,
successive twelve (12) month terms upon the expiration of any term
hereof unless terminated as hereinafter provided.
B. Each party, in addition to any other rights and remedies, shall have
the right to terminate this Agreement forthwith upon the occurrence at
any time of any of the following events with respect to the other
party:
(1) The bankruptcy of the other party or its assigns or the
appointment of a receiver for the other party or its assigns; or
(2) Failure by the other party or its assigns to perform its duties
in accordance with the Agreement, which failure materially
adversely affects the business operations of the first party and
which failure continues for thirty (30) days after receipt of
written notice from the first party.
C. Either party may terminate this Agreement at any time by delivery to
the other party of six (6) months prior written notice of such
termination; provided, however, that the effective date of any
termination and conversion off the TA2000 System (a "deconversion")
shall not occur during the period from November 15 through March 15 of
any year to avoid adversely impacting year end.
D. In the event of any termination of this Agreement:
(1) The Fund will continue to pay to DST as invoiced all sums
due for DST's services until completion of the deconversion
and will pay to DST, no later than contemporaneously with
the dispatch by DST of the Fund's records, all amounts
payable to DST.
(2) If, for any reason, the Fund desires to convert from the
TA2000 System ("deconvert") other than on the first day
after six (6) months from the receipt by DST of the
termination notice (such first day after the expiration of
six (6) months being hereinafter referred to as the
"Termination Date"), and DST is able, through reasonable
efforts, to accomplish such earlier deconversion, the Fund
shall pay to DST on the day of or before the deconversion
the fees which DST would have earned had the Fund not
deconverted, and had DST remained the transfer/shareholder
servicing agent, until the Termination Date. The amount of
such fees shall be calculated by: (a) dividing the aggregate
fees charged to the Fund with respect to the six (6) whole
months immediately preceding receipt by DST of the six (6)
month termination notice by (b) the product of the number
six (6) times the number of weeks in such six (6) month
period to determine the
<PAGE>
average weekly fee and (c) multiplying the average weekly
fee times the number of whole or partial weeks between the
date on which deconversion actually occurs and the
Termination Date.
(3) Subsequent to any deconversion:
(a) The Fund shall continue to pay to DST, subject to and
in accordance with the terms and conditions set forth
in Sections 6.A., 6.B., 6.C. and 6.D. of this
Agreement, for all expenses incurred on the Fund's
behalf and the post-deconversion fees set forth in
Exhibit B to this Agreement until (i) the Fund accounts
are purged from the TA2000 System (no longer being
required for Year End Reporting) with respect to closed
account fees and (ii) so long as DST's services are
utilized with respect to all fees other than those for
closed accounts by the Fund, its new transfer agent and
its shareholders, former shareholders, broker-dealers
or other entities with whom the Fund does business and
persons claiming through or on behalf of any of the
foregoing; and
(b) To the extent applicable regulations of the Internal
Revenue Service and tax laws permit, the Fund shall
require its new transfer agent to perform and dispatch
or file all required year end reporting (tax or
otherwise and federal and state) to shareholders,
broker-dealers, beneficial owners, federal and state
agencies and any other recipients thereof and DST shall
have no, and the Fund hereby indemnities DST and holds
DST harmless against any, liability or Adverse
Consequences whatsoever with respect thereto, including
by way of example and not limitation, reports or
returns on Forms 1099, 5498, 945, 1042 and 1042S,
annual account valuations for retirement accounts and
year end statements for all accounts and any other
reports required to be made by state governments or the
federal government or regulatory or self-regulatory
agencies (the "returns");
(c) If the Fund is unable to obtain a commitment from the
new transfer agent that the new transfer agent will
perform year end reporting (tax or otherwise) for the
entire year, (i) DST shall perform year end reporting
as instructed by the Fund for the portion of the year
DST served as transfer agent and (ii) DST shall be paid
therefore a monthly per CUSIP fee through the end of
the last month during which the last return or form is
filed. The Fund will cause the new transfer agent to
timely advise DST of all changes to the shareholder
records effecting such reporting until all DST
reporting obligations cease; and DST shall have no, and
the Fund hereby indemnities DST and holds DST harmless
against any, liability or any Adverse Consequences
arising out of or resulting from the failure of the new
transfer agent to timely advise DST thereof or which
could have been avoided if the new transfer agent had
timely advised DST thereof. All amendments to, or
delivery of duplicate, returns after
<PAGE>
their initial dispatch or filing will be effectuated
and filed or dispatched by the new transfer agent
regardless of who filed or dispatched the original
return; and
(d) All of the records belonging to the Fund on the TA2000
System may be purged by DST without liability to the
Fund or its agents, shareholders, and parties with whom
the Fund has done or will do business, at any time on
or after the forty-fifth (45th) day after the
Termination Date. The Fund shall and hereby agrees to
indemnify and hold DST harmless against any Adverse
Consequences directly or indirectly arising out of or
resulting from any inability to produce such purged
records. The Fund
<PAGE>
will, and will cause the new transfer agent to,
maintain and preserve the records converted from the
TA2000 System or any hard copy records transferred by
DST to the Fund or the new transfer agent in accordance
with the requirements of all applicable laws, including
without limitation 17 C.F.R. Sections 240.17Ad-6, -7,
-IO and -I I (including without limitation to make
copies thereof available timely and at no charge to
appropriate regulatory agencies and, as reasonably
necessary, DST). Notwithstanding the foregoing, upon
the request and at the expense of the Fund, DST shall
not purge, but shall retain as closed accounts on the
TA2000 System, the records belonging to the Fund.
E. In addition, in the event of any termination, DST will, provided
the Fund contemporaneously pays all outstanding charges and fees,
promptly transfer all of the records of the Fund to the
designated successor transfer agent. DST shall also provide
reasonable assistance to the Fund and its designated successor
transfer agent and other information relating to its services
provided hereunder (subject to the recompense of DST for such
assistance and information at its standard rates and fees for
personnel then in effect at that time); provided, however, as
used herein "reasonable assistance" and "other information" shall
not include assisting any new service or system provider to
modify, alter, enhance, or improve its system or to improve,
enhance, or alter its current system, or to provide any new,
functionality or to require DST to disclose any DST Confidential
Information, as hereinafter defined, or any information which is
otherwise confidential to DST.
23. CONFIDENTIALITY.
A. DST agrees that, except as provided in the last sentence of Section
19.J. hereof, or as otherwise required by law, DST will keep
confidential all records of and information in its possession relating
to the Fund or its shareholders or shareholder accounts and will not
disclose the same to any person except at the request or with the
consent of the Fund.
B. The Fund owns all of the data supplied by or on behalf of the Fund to
DST. The Fund has proprietary rights to all such data, records and
reports containing such data, but not including the software programs
upon which such data is installed, and all records containing such
data will be transferred in accordance with Section 22.D above in the
event of termination.
C. The Fund agrees to keep confidential all non-public financial
statements and other financial records of DST received hereunder, all
accountants' reports relating to DST, the terms and provisions of this
Agreement, including all exhibits and schedules now or in the future
attached hereto and all manuals, systems and other technical
information and data, not publicly disclosed, relating to DST's
operations and programs furnished to it by DST pursuant to this
Agreement and will not disclose the same to any person except at the
request or with the consent of DST.
D. (1) The Fund acknowledges that DST has proprietary rights in and to
the TA2000TM System used to perform services hereunder including,
but not limited to the maintenance of shareholder accounts and
records, processing of related information and generation of
output, including, without limitation any changes or
modifications of the TA2000TM System and any other DST programs,
data bases, supporting documentation, or procedures (collectively
"DST Confidential Information") which the Fund's access to the
TA2000TM System or computer hardware or software may permit the
Fund or its employees or agents to become aware of or to access
and that the DST Confidential Information constitutes
<PAGE>
confidential material and trade secrets of DST. The Fund agrees
to maintain the confidentiality of the DST Confidential
Information.
(2) The Fund acknowledges that any unauthorized use, misuse,
disclosure or taking of DST Confidential Information which is
confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer, computer
system, or computer network, or the knowing and unauthorized
accessing or causing to be accessed of any computer, computer
system, or computer network, may be subject to civil liabilities
and criminal penalties under applicable state law. The Fund will
advise all of its employees and agents who have access to any DST
Confidential Information or to any computer equipment capable of
accessing DST or DST hardware or software of the foregoing.
(3) The Fund acknowledges that disclosure of the DST Confidential
Information may give rise to an irreparable injury to DST
inadequately compensable in damages. Accordingly, DST may seek
(without the posting of any bond or other security) injunctive
relief against the breach of the foregoing undertaking of
confidentiality and nondisclosure, in addition to any other legal
remedies which may be available, and the Fund consents to the
obtaining of such injunctive relief. All of the undertakings and
obligations relating to confidentiality and nondisclosure,
whether contained in this Section or elsewhere in this Agreement
shall survive the termination or expiration of this Agreement for
a period of ten (10) years.
24. CHANGES AND MODIFICATIONS.
A. During the term of this Agreement DST will use on behalf of the Fund
without additional cost all modifications, enhancements, or changes
which DST may make to the TA2000TM System in the normal course of its
business and which are applicable to functions and features offered by
the Fund, unless substantially all DST clients are charged separately
for such modifications, enhancements or changes, including, without
limitation, substantial system revisions or modifications necessitated
by changes in existing laws, rules or regulations. The Fund agrees to
pay DST promptly for modifications and improvements which are charged
for separately at the rate provided for in DST's standard pricing
schedule which shall be identical for substantially all clients, if a
standard pricing schedule shall exist. If there is no standard
pricing schedule, the parties shall mutually agree upon the rates to
be charged.
B. DST shall have the right, at any time and from time to time, to alter
and modify any systems, programs, procedures or facilities used or
employed in performing its duties and obligations hereunder; provided
that the Fund will be notified as promptly as possible prior to
implementation of such alterations and modifications and that no such
alteration or modification or deletion shall materially adversely
change or affect the operations and procedures of the Fund in using or
employing the TA2000TM System or DST Facilities hereunder or the
reports to be generated by such system and facilities hereunder,
unless the Fund is given thirty (30) days prior notice to allow the
Fund to change its procedures and DST provides the Fund with revised
operating procedures and controls at the time such notice is delivered
to the Fund.
<PAGE>
C. All enhancements, improvements, changes, modifications or new features
added to the TA2000TM System however developed or paid for shall be,
and shall remain, the confidential and exclusive property of, and
proprietary to, DST.
25. SUBCONTRACTORS.
Nothing herein shall impose any duty upon DST in connection with or
make DST liable for the actions or omissions to act of unaffiliated
third parties such as, by way of example and not limitation, Airborne
Services, the U.S. mails and telecommunication companies, provided,
if DST selected such company, DST shall have exercised due care in
selecting the same.
26. LIMITATIONS
A. If the Fund is comprised of more than one Portfolio, each Portfolio
shall be regarded for all purposes hereunder as a separate party apart
from each other Portfolio. Unless the context otherwise requires,
with respect to every transaction covered by this Agreement, every
reference herein to the Fund shall be deemed to relate solely to the
particular Portfolio to which such transaction relates. Under no
circumstances shall the rights, obligations or remedies with respect
to a particular Portfolio constitute a right, obligation or remedy
applicable to any other Portfolio. The use of this single document to
memorialize the separate agreement of each Portfolio is understood to
be for clerical convenience only and shall not constitute any basis
for joining the Portfolios for any reason.
B. Notice is hereby given that a copy of the Fund's Trust Agreement and
all amendments thereto is on file with the Secretary of State of the
state of its organization; that this Agreement has been executed on
behalf of the Fund by the undersigned duly authorized representative
of the Fund in his/her capacity as such and not individually; and that
the obligations of this Agreement shall only be binding upon the
assets and property of the Fund and shall not be binding upon any
trustee, officer or shareholder of the Fund individually.
27. MISCELLANEOUS.
A. This Agreement shall be construed according to, and the rights and
liabilities of the parties hereto shall be governed by, the laws of
the State of Missouri, excluding that body of law applicable to choice
of law.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
C. The representations and warranties, and the indemnification extended
hereunder, if any, are intended to and shall continue after and
survive the expiration, termination or cancellation of this Agreement.
D. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by each party hereto.
E. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
F. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
<PAGE>
G. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
H. This Agreement may not be assigned by the Fund or DST without the
prior written consent of the other.
I. Neither the execution nor performance of this Agreement shall be
deemed to create a partnership or joint venture by and between the
Fund and DST. It Is understood and agreed that all services performed
hereunder by DST shall be as an independent contractor and not as an
employee of the Fund. This Agreement is between DST and the Fund and
neither this Agreement nor the performance of services under it shall
create any rights in any third parties. There are no third party
beneficiaries hereto.
J. Except as specifically provided herein, this Agreement does not in any
way affect any other agreements entered into among the parties hereto
and any actions taken or omitted by any party hereunder shall not
affect any rights or obligations of any other party hereunder.
K. The failure of either party to insist upon the performance of any
terms or conditions of this Agreement or to enforce any rights
resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed as
a continuing or permanent waiver of any such terms, conditions, rights
or privileges, but the same shall continue and remain in full force
and effect as if no such forbearance or waiver had occurred.
L. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement, draft or agreement or
proposal with respect to the subject matter hereof, whether oral or
written, and this Agreement may not be modified except by written
instrument executed by both parties.
M. All notices to be given hereunder shall be deemed properly given if
delivered in person or if sent by U.S. mail, first class, postage
prepaid, or if sent by facsimile and thereafter, in the case of
non-operational notices only, confirmed by mail as follows:
If to DST:
DST Systems, Inc.
1055 Broadway, 7th Fl.
Kansas City, Missouri 64105
Attn: Senior Vice President-Full Service Phone No.: 816-435-8200
Facsimile No.: 816-435-3455
With a copy of non-operational notices to:
DST Systems, Inc.
333 W. 11th St., 5th Fl.
Kansas City, Missouri 64105 Attn: Legal Department Phone No.:
816-435-8688
Facsimile No.: 816-435-8630
If to the Fund:
<PAGE>
SEI Investments, Inc.
One Freedom Valley Drive Oaks, Pennsylvania 19456
Attn: Legal Department
or to such other address as shall have been specified in writing by
the party to whom such notice is to be given.
N. The representations and warranties contained herein shall survive the
execution of this Agreement. The representations and warranties
contained herein and the provisions of Section 8 hereof shall survive
the termination of the Agreement and the performance of services
hereunder until any statute of limitations applicable to the matter at
issues shall have expired.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized officers, to be effective as of the day and
year first above written.
DST SYSTEMS, INC.
By:
-------------------------------
Title:
----------------------------
OAK ASSOCIATES FUNDS
By:
-------------------------------
Title:
----------------------------
<PAGE>
December 11, 1997
Oak Associates Funds
2 Oliver Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
We are furnishing this opinion with respect to the proposed offer and sale from
time to time of an indefinite number of units of beneficial interest, with par
value of $.001 per share (the "Shares"), of Oak Associates Funds (the "Trust"),
a Massachusetts business trust, in registration under the Securities Act of 1933
by a Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement").
We have acted as counsel to the Trust since its inception, and we are familiar
with the actions taken by its Trustees to authorize the issuance of the Shares.
We have reviewed the Declaration of Trust, the By-laws, and the minute books of
the Trust, and such other certificates, documents and opinions of counsel as we
deem necessary for the purpose of this opinion.
We have reviewed the Trust's Notification of Registration on Form N-8A under the
Investment Company Act of 1940. We have assisted in the preparation of the
Trust's Registration Statement to be filed with the Securities and Exchange
Commission.
In our review we have assumed the genuineness of all signatures, the
authenticity and completeness of all documents purporting to be originals
(whether reviewed by us in original or in copy form), and the conformity to the
originals of all documents purporting to be copies.
We have assumed the appropriate action will be taken to register or qualify the
sale of the Shares under any applicable state and federal laws regulating sales
and offerings of securities.
Based upon the foregoing, we are of the opinion that:
1. The Trust is a business trust validly existing under the laws of the
Commonwealth of Massachusetts. The Trust is authorized under its
Declaration of Trust to issue an unlimited number of Shares in series
representing interests in the White Oak Growth Stock Portfolio and Pin Oak
Aggressive Stock Portfolio, and in such other series or classes as the
Trustees may hereafter duly authorize.
<PAGE>
Oak Associates Funds Portfolios
December 11, 1997
Page 2
2. Upon the issuance of any Shares of any of the series or classes of the
Trust for payment therefor as described in, and in accordance with the
Registration Statement and the Declaration of Trust and By-laws of the
Trust, the Shares so issued will be validly issued, fully paid and
non-assessable, except that, as set forth in the Registration Statement,
shareholders of the Shares of the Trust may under certain circumstances be
held personally liable for its obligations.
This opinion is intended only for your use in connection with the offering
of Shares and may not be relied upon by any other person.
We hereby consent to the inclusion of this opinion as Exhibit 10 to the
Trust's Registration Statement to be filed with the Securities and Exchange
Commission and to the reference to our firm under the caption "Counsel and
Independent Public Accountants" in the Prospectus filed as part of such
Registration Statement.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
- -------------------------------
Morgan, Lewis & Bockius LLP
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated December 3, 1997, on the October 31, 1997 financial statements of the
White Oak Growth Stock Portfolio and the Pin Oak Aggressive Stock Portfolio
of the Advisors' Inner Circle Fund, included in the Initial Registration
Statement on Form N-1A of the Oak Associates Funds, and to all references to
our firm included in or made part of the Initial Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, Pa.
December 12, 1997
<PAGE>
FORM OF
DISTRIBUTION PLAN
WHEREAS, Oak Associates Funds (the "Trust") is engaged in business as
an open-end investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units (the "shares") of beneficial interest (the
"Shareholders") in the Trust;
NOW, THEREFORE, the Trustees of the Trust hereby adopt this
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act.
SECTION 1. The Trust has adopted this Distribution Plan (the "Plan")
to enable the Trust to directly or indirectly bear expenses relating to the
distribution of certain of the classes of shares of certain of the portfolios of
the Trust (each, a "Portfolio") as may, from time to time, be added to the Plan
and listed on Schedule A attached hereto.
SECTION 2. The Trust will pay the Distributor of each such class of
shares a fee at the annual rate specified on Schedule A hereto. The Distributor
may retain all or a part of this fee as compensation for distribution or
shareholder services it provides or it may use such fees for compensation of
broker/dealers and other financial institutions and intermediaries that provide
distribution or shareholder services as specified by the Distributor. The
actual fee to be paid by the Distributor to broker/dealers and financial
institutions and intermediaries will be negotiated based on the extent and
quality of services provided.
SECTION 3. This Plan shall not take effect as to a class of shares of
a Portfolio until it has been approved (a) by a vote of at least a majority of
the outstanding shares of such class; and (b) together with any related
agreements, by votes of the majority of both (i) the Trustees of the Trust and
(ii) the Qualified Trustees (as defined herein), cast in person at a Board of
Trustees meeting called for the purpose of voting on this Plan or such
agreement.
SECTION 4. This Plan shall continue in effect for a period of more
than one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 3 herein for the approval of this Plan.
SECTION 5. Any person authorized to direct the disposition of monies
paid or payable by the Trust pursuant to this Plan or any related agreement
shall provide to the Trustees of the Trust, at least quarterly, a written report
of the amounts so expended and the purposes of which such expenditures were
made.
SECTION 6. This Plan may be terminated at any time by the vote of a
majority of the Qualified Trustees or, with respect to any such class of shares
of a Portfolio, by vote of a majority of the outstanding shares of the class.
Termination by the Shareholders of any class of a Portfolio will not affect the
validity of this Plan with respect to the shares of any other class of the
Portfolio.
<PAGE>
SECTION 7. All agreements with any person relating to implementation
of this Plan shall be in writing, and any agreement related to this Plan shall
provide (a) that such agreement may be terminated at any time, without payment
of any penalty, by the vote of a majority of the Qualified Trustees or with
respect to shares of any class of a Portfolio, by vote of a majority of the
outstanding shares of such class, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
SECTION 8. This Plan may be amended in the manner provided in
Part (b) of Section 3 herein for the approval of this Plan; provided, however,
that the Plan may not be amended to increase materially the amount of
distribution expenses permitted pursuant to Section 2 hereof with respect to the
shares of any class of a Portfolio without the approval of a majority of the
outstanding shares of such class.
SECTION 9. While this Plan is in effect, the selection and nomination
of those Trustees who are not interested persons of the Trust shall be committee
to the discretion of the Trustees then in office who are not interested persons
of the Trust.
SECTION 10. As used in this Plan, (a) the term "Qualified Trustees"
shall mean those Trustees of the Trust who are not interested persons of the
Trust, and have no direct or indirect financial interest in the operation of
this Plan or any agreements related to it, and (b) the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
SECTION 11. This Plan shall not obligate the Trust or any other party
to enter into an agreement with any particular person.
, 1997
- ---------------
<PAGE>
OAK ASSOCIATES FUNDS
SCHEDULE A
DATED __________ ___, 1997
TO DISTRIBUTION PLAN
Subject to any limitations imposed by Section 26(d) of the NASD's Conduct
Rules, the Distributor shall receive Rule 12b-1 fees, which shall be paid on a
monthly basis. These fees will be calculated based on the annual rate set forth
below, as applied to the average daily net assets of the respective Portfolios.
Portfolio Class of Shares Fee
- --------- --------------- ---
White Oak Growth Stock Portfolio
Pin Oak Aggressive Stock Portfolio
<PAGE>
Oak Associates
Average Annual Total Return
P(1+T) = ERV
Class A
One Year:
White Oak Fund Equity Index
-------------- ------------
P = 1,000 1,000
n = 1 1
ERV = 1,344.60 1,139.30
T = 34.46 13.93
(Fiscal Year (Fiscal Year
Ended 10/31/97) Ended 10/31/97)
Since Inception:
White Oak Fund Equity Index
-------------- ------------
P = 1,000 1,000
n = 5.17 5.17
ERV = 1,231.80 1,135.40
T = 23.18 13.54
(Fiscal Year (Fiscal Year
Ended 10/31/97) Ended 10/31/97)
The foregoing information relates to the predecessor funds of the White Oak
Growth Stock Fund and Pin Oak Aggressive Stock Fund.
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ William M. Doran Date: November 10, 1997
- ----------------------------------- -------------------
William M. Doran
Trustee
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned officer of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints Todd
B. Cipperman and Kevin P. Robins, and each of them singly, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
to sign for him in his name, place and stead, and in the capacity indicated
below, to sign any or all amendments (including post-effective amendments) to
the Trusts' Registration Statements on Form N-1A under the provisions of the
Investment Company Act of 1940 and the Securities Act of 1933, each such Act as
amended, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, acting alone, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ David G. Lee Date: November 10, 1997
- ------------------------------------- -------------------
David G. Lee
President and Chief Executive Officer
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned officer of The
Arbor Fund, The Advisors' Inner Circle Fund and Oak Associates Funds (the
"Trusts"), business trusts organized under the laws of The Commonwealth of
Massachusetts, hereby constitutes and appoints David G. Lee, Todd B. Cipperman
and Kevin P. Robins, and each of them singly, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
to sign for him in his name, place and stead, and in the capacity indicated
below, to sign any or all amendments (including post-effective amendments) to
the Trusts' Registration Statements on Form N-1A under the provisions of the
Investment Company Act of 1940 and the Securities Act of 1933, each such Act as
amended, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, acting alone, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Mark E. Nagle Date: November 17, 1997
- ------------------------------------- -------------------
Mark E. Nagle
Controller and Chief Financial Officer
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ James M. Storey Date: November 10, 1997
- ----------------------------------- -------------------
James M. Storey
Trustee
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Robert A. Nesher Date: November 10, 1997
- ----------------------------------- -------------------
Robert A. Nesher
Trustee
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ John T. Cooney Date: November 10, 1997
- ----------------------------------- -------------------
John T. Cooney
Trustee
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Eugene B. Peters Date: November 10, 1997
- ----------------------------------- -------------------
Eugene B. Peters
Trustee
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Frank E. Morris Date: November 10, 1997
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Frank E. Morris
Trustee
<PAGE>
MARQUIS FUNDS
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOWN ALL PERSONS BY THESE PRESENTS, that the undersigned trustee of the
Marquis Funds, The Arbor Fund, The Advisors' Inner Circle Fund, Expedition Funds
and Oak Associates Funds (the "Trusts"), business trusts organized under the
laws of The Commonwealth of Massachusetts, hereby constitutes and appoints David
G. Lee, Todd B. Cipperman and Kevin P. Robins, and each of them singly, his true
and lawful attorney-in-fact and agent with full power of substitution and
resubstitution, to sign for him in his name, place and stead, and in the
capacity indicated below, to sign any or all amendments (including
post-effective amendments) to the Trusts' Registration Statements on Form N-1A
under the provisions of the Investment Company Act of 1940 and the Securities
Act of 1933, each such Act as amended, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, acting alone, full power and authority to do and perform each and every
act and thing requisite or necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal as
of the date set forth below.
/s/ Robert A. Patterson Date: November 10, 1997
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Robert A. Patterson
Trustee
