AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 24, 1998
File No. 811 - 08549
File No. 333 - 42115
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 2 /X/
AND
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 2 /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
MARK E. NAGLE
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
2000 ONE LOGAN SQUARE
PHILADELPHIA, PENNSYLVANIA 19103
It is proposed that this filing become effective (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/ / on [date] pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/X/ 75 days after filing pursuant to paragraph (a)
/ / on [date] pursuant to paragraph (a) of Rule 485.
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OAK ASSOCIATES FUNDS
CROSS REFERENCE SHEET
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N-1A ITEM NO. LOCATION
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PART A - RED OAK TECHNOLOGY SELECT 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 Portfolio; 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 - RED OAK TECHNOLOGY SELECT 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
Services Statement of Additional Information); The
Administrator (Prospectus and Statement of
Additional Information); The Distributor
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(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 *
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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 fund (the "Portfolio"), which is a
separate series of the Trust.
RED OAK TECHNOLOGY SELECT PORTFOLIO
This Prospectus sets forth concisely the information about the Trust and the
Portfolio 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. The Statement of Additional Information,
material incorporated by reference into this document, and other information
regarding the Trust is maintained electronically with the Securities and
Exchange Commission at its internet web site (http://www.sec.gov).
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
[OAK-F-011-08]
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SUMMARY
The following summary provides basic information about the Red Oak Technology
Select Portfolio (the "Portfolio"). The Portfolio is one 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? The Portfolio seeks long-term
capital growth by investing primarily in common stocks of companies which rely
extensively on technology in their product development or operations, or which
are expected to benefit from technological advances and improvements, and that
may be experiencing growth in sales and earnings driven by technology related
products and services. There is no assurance that the Portfolio will achieve its
investment objective. The Portfolio will concentrate its investments (i.e.,
invest at least 25% of its total assets) in companies operating directly in the
"technology industry," which generally consists of companies which develop,
produce or distribute products or services related to computers, semi-conductors
and electronics.
WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIO? An investment
in the Portfolio entails certain risks and considerations of which an investor
should be aware. The Portfolio invests in securities that fluctuate in value,
and investors should expect the Portfolio's net asset value per share to
fluctuate in value. Technology companies face special risks due to the rapidly
changing nature of the technology sector. Because the Portfolio concentrates its
investments in the technology industry, it will likely be more volatile in price
than one with broader diversification that includes investments in more economic
sectors. Since the Portfolio is non-diversified, the Portfolio invests in a
relatively small number of issuers and may be more susceptible to a single
adverse economic or regulatory occurrence. For more information about the
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 the Portfolio as well as the White Oak Growth Stock
Portfolio and the Pin Oak Aggressive Stock Portfolio, each of which is a
separate series of the Trust. In addition, 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 Investments Mutual Funds Services (the
"Administrator") serves as the administrator and shareholder servicing agent of
the Portfolio. See "The Administrator."
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WHO IS THE TRANSFER AGENT? DST Systems, Inc. (the "Transfer Agent") serves as
the transfer agent and dividend disbursing agent for the Portfolio. See "The
Transfer Agent."
WHO IS THE DISTRIBUTOR? SEI Investments Distribution Co. (the "Distributor")
acts as the distributor of the Portfolio's shares. See "The Distributor."
IS THERE A SALES LOAD? No, shares of the Portfolio are offered on a no-load
basis.
IS THERE A MINIMUM INVESTMENT? The 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 any 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 the time the
Portfolio calculates its net asset value (normally 4:00 p.m., Eastern time).
Redemption orders placed with the Transfer Agent prior to the time the Portfolio
calculates its net asset value (normally 4:00 p.m., Eastern time) on any
Business Day will be effective that day. The Trust has also authorized certain
broker-dealers to accept purchase orders and redemption requests up to the times
mentioned above on behalf of the Portfolio. The Portfolio also offers 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 and
any capital gain of the Portfolio 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
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SHAREHOLDER TRANSACTION EXPENSES
RED OAK TECHNOLOGY SELECT PORTFOLIO
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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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(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.
ANNUAL OPERATING EXPENSES
(as a percentage of average net assets) RED OAK TECHNOLOGY SELECT PORTFOLIO
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Advisory Fees (after fee waivers) (2) 0.00%
12b-1 Fees None
Other Expenses (after fee reimbursements) (2) 1.00%
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Total Operating Expenses (after fee waivers and reimbursements)(2) 1.00%
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(2) The Adviser has voluntarily agreed to waive all or a portion of its fee
for the Portfolio and to reimburse expenses of the Portfolio in order
to limit total operating expenses of the Portfolio to an annual rate of
not more than 1.00% of average daily net assets. The advisory fee
waivers and expense reimbursements are expected to be in effect at
least through the current fiscal year. However, the Adviser reserves
the right, in its sole discretion, to terminate its voluntary fee
waivers and reimbursements at any time. Absent such waiver, the annual
advisory fees for the Portfolio would be .74% of average daily net
assets. Absent such reimbursements, Other Expenses and Total Operating
Expenses for the Portfolio are estimated to be 3.55% and 4.29%,
respectively, of average daily net assets for the current fiscal year.
See "The Adviser."
EXAMPLE RED OAK TECHNOLOGY SELECT PORTFOLIO
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1 year 3 years
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An investor in the 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. $10 $32
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THE EXAMPLE IS BASED UPON ESTIMATED TOTAL OPERATING EXPENSES OF THE 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 the Portfolio. Additional information may be
found under "The Adviser" and "The Administrator."
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THE TRUST AND THE PORTFOLIO
Oak Associates Funds (the "Trust") offers shares of three 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 Red Oak
Technology Select Portfolio (the "Portfolio").
INVESTMENT OBJECTIVES AND POLICIES
The Red Oak Technology Select Portfolio, a non-diversified portfolio, seeks
long-term capital growth. Current income is incidental to the Portfolio's
objective.
Under normal market conditions, the Portfolio will invest primarily in companies
which rely extensively on technology in their product development or operations,
or which are expected to benefit from technological advances and improvements,
and that may be experiencing growth in sales and earnings driven by technology
related products and services. As a result of this focus, the Portfolio offers
investors the significant growth potential of companies that may be responsible
for breakthrough products or technologies or that are positioned to take
advantage of cutting-edge developments.
The Portfolio will concentrate its investments (i.e., invest at least 25% of its
total assets) in companies operating directly in the "technology industry,"
which generally consists of companies which develop, produce or distribute
products or services related to computers, semi-conductors and electronics
("Technology Companies"). The Portfolio intends to invest the remainder of its
assets in companies that may operate in or be a part of many different
industries or fields which the Adviser believes may benefit either directly or
indirectly from technological advances. These industries may include network and
cable broadcasting, communication and telecommunication equipment and services,
satellite communications, defense and aerospace transportation systems, data
storage and retrieval, biotechnology and medical, environmental, and any other
industries which the Adviser believes may benefit from technology.
The Portfolio will normally be as fully invested as practicable in common stocks
of the companies described above, but may also invest in warrants and rights to
purchase common stocks, debt securities and preferred stocks convertible into
common stocks, and American Depositary Receipts ("ADRs").
Stock selections will not be based on company size, but rather on an assessment
of a company's fundamental prospects. As a result, the Portfolio's stock
holdings can range from small companies developing new technologies or pursuing
technological breakthroughs to large, established firms with track records in
developing and marketing
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technology advances. The 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. The Portfolio will purchase only those
securities that are traded in the United States on registered exchanges or the
over-the-counter market.
The 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, the 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 the 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.
The 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, the 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.
It is not expected that the portfolio turnover rate will exceed 100%.
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,
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the credit quality of the issuer and any call provision. Fluctuations in the
value of equity securities in which the Portfolio invests will cause the net
asset value of the Portfolio to fluctuate. An investment in the Portfolio may
therefore be more suitable for long-term investors who can bear the risk of
short-term principal fluctuations.
NON-DIVERSIFICATION - Since the Portfolio is non-diversified, it may invest in
the securities of a relatively small number of issuers. To the extent that the
Portfolio invests a significant percentage of its assets in a limited number of
issuers, the Portfolio is subject to the risks of investing in those few
issuers, and may be more susceptible to a single adverse economic or regulatory
occurrence. The Portfolio intends, however, to comply with the applicable
diversification requirements of the Internal Revenue Code.
CONCENTRATION - Since the Portfolio will concentrate its investments (i.e.,
invest at least 25% of its assets) in the securities of Technology Companies, it
is subject to the risk that those securities (or the technology industry) will
perform poorly, and the Portfolio will be negatively impacted by that poor
performance. As a result, the Portfolio may be more susceptible to the
particular risks associated with the technology industry than an investment
company that does not concentrate its investments in this manner.
SECURITIES OF TECHNOLOGY COMPANIES - Technology Companies face special risks due
to the rapidly changing nature of the technology sector. For example, the prices
of the securities of Technology Companies may fluctuate widely due to
competitive pressures, increased sensitivity to short product cycles and
aggressive pricing, or products or services which may not prove commercially
successful. Therefore, the Portfolio will likely be more volatile in price than
one with broader diversification that includes investments in more economic
sectors.
SECURITIES OF SMALL CAPITALIZATION ISSUERS - The Portfolio may invest in
securities of issuers with small market capitalizations (i.e., companies with
equity market capitalizations less than $1 billion). Small capitalization
companies may be more vulnerable than larger more established organizations to
adverse business or economic developments. In particular, small capitalization
companies may have limited product lines, markets and financial resources and
may be dependent on a relatively small management group. 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.
SECURITIES OF FOREIGN ISSUERS - Investments in the securities of foreign issuers
may subject the 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
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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.
YEAR 2000 - The Portfolio could be adversely affected by the year 2000 problem
(i.e.- if computer systems do not properly process dates on and after January 1,
2000 and fail to distinguish between the year 2000 and the year 1900). The
Technology Companies in which the Portfolio focuses its investments may be
especially dependent on the smooth functioning of computer systems in various
aspects of their respective businesses and/or may have revenues which are
directly impacted by their ability to provide year 2000-related services to
their clients. In addition, some Technology Companies may experience negative
financial results if they are held liable for any year 2000-related problems.
INVESTMENT LIMITATIONS
The investment objective of the Portfolio and the investment limitations set
forth here and in the Statement of Additional Information are fundamental
policies of the Portfolio. Fundamental policies cannot be changed with respect
to the Portfolio without the consent of the holders of a majority of the
Portfolio's outstanding shares.
The Portfolio may not:
1. Purchase any securities which would cause 25% or more of the total assets of
the 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 companies which develop, produce or
distribute products or services related to computers, semi-conductors and
electronics, 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.
2. 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
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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.
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 September 1, 1998, the Adviser had discretionary
management authority with respect to approximately $9 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 the Portfolio under an
investment advisory agreement (the "Advisory Agreement"). Under the Advisory
Agreement, the Adviser makes the investment decisions for the assets of the
Portfolio and continuously reviews, supervises and administers the investment
program of the Portfolio, subject to the supervision of, and policies
established by, the Trustees of the Trust. In addition to advising the
Portfolio, 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 as well as the White Oak Growth
Stock Portfolio and the Pin Oak Aggressive Stock Portfolio, two other series of
the Trust.
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 Portfolio. The Adviser has voluntarily agreed to waive all or a portion of
its fee for the Portfolio and to reimburse expenses of the Portfolio in order to
limit total operating expenses of the 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, 1998, the Portfolio had not yet
commenced operations. The Adviser may, from its own resources, compensate
broker-dealers whose clients purchase shares of the Portfolio.
The Portfolio is co-managed by James D. Oelschlager and Douglas S. MacKay.
Mr. Oelschlager is the Portfolio Manager of the White Oak Growth Stock Portfolio
and the Pin Oak Aggressive Stock Portfolio. He founded Oak Associates, Ltd. in
1985 and serves as its managing member and Chief Investment Officer/Chief
Executive Officer. He also served as the director of Pension
Investments/Assistant Treasurer for the Firestone Tire & Rubber Company
(1969-1985). In 1964, Mr. Oelschlager received a B.A. in Economics
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from Denison University. He earned his Juris Doctor in 1967 from Northwestern
University and from 1968-1969 he attended graduate studies at the University of
Chicago. He has 29 years of investment experience.
Mr. MacKay is Assistant Portfolio Manager/Research Analyst for the White Oak
Growth Stock Portfolio and the Pin Oak Aggressive Stock Portfolio and has been
with Oak Associates, Ltd. since 1991. Previously, he was a credit analyst with
the Pittsburgh National Bank. In 1990, he received a B.S. in Finance from Miami
University in Oxford, Ohio. In 1994, Mr. MacKay earned his MBA from Case Western
Reserve University in Cleveland, Ohio, In 1998, he earned the designation of
Chartered Financial Analyst and has 8 years of investment experience.
THE ADMINISTRATOR
SEI Investments Mutual Funds Services (the "Administrator") serves as the
Administrator of the Trust. 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 the 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, the Portfolio pays the Administrator a minimum annual fee of $75,000.
The Administrator also serves as the shareholder servicing agent for the
Portfolio under a shareholder servicing agreement with the Trust.
THE TRANSFER AGENT
DST Systems, Inc., 330 W. 9th St., 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 the Portfolio.
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PORTFOLIO TRANSACTIONS
The Advisory Agreement authorizes the Adviser to select broker-dealers that will
execute the purchase or sale of investment securities for the Portfolio. The
Advisory Agreement also directs the Adviser to seek to obtain the best net
results, i.e., the selection that the Adviser determines is most beneficial to
the Portfolio after taking into account various factors, including price,
commission, if any, size of the transactions and difficulty of execution, the
firm's general execution and operational facilities and the firm's risk in
positioning the securities involved.
The 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 Portfolio are not marketed through intermediary
broker-dealers, it is not the 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 the Portfolio with qualified broker-dealers who refer clients to the
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 the Portfolio directly through the
Transfer Agent at: Oak Associates Funds, P.O. Box 419441, Kansas City, Missouri
64141-6441 by mail or wire transfer. All shareholders are automatically entitled
to 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 the Portfolio may be made on any
Business Day. Shares of the Portfolio 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 the Portfolio's public offering price. In
addition, the Trust has authorized certain broker-dealers and other financial
intermediaries (collectively, "Authorized Broker-Dealers") to act as the
Portfolio's agent for the purposes of accepting purchase orders and redemption
requests. The Portfolio will be deemed to have received a purchase order or
redemption request upon receipt of the order or request by an Authorized
Broker-Dealer.
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,
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subsequent purchases through the Portfolio's 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 Red Oak Technology Select Portfolio) for $2,000 or more,
together with a completed Account Application to the Transfer Agent at: Oak
Associates Funds, P.O. Box 419441, Kansas City, Missouri 64141-6441. 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 the Portfolio by requesting their
bank to transmit funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account Number 98-7091-244-9; Further Credit: the Red Oak
Technology Select Portfolio. The shareholder's name and account number must be
specified in the wire.
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 419441, Kansas City, Missouri 64141-6441.
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
(or an Authorized Broker-Dealer) if the Transfer Agent (or an Authorized
Broker-Dealer) receives the order and payment before the Portfolio calculates
its net asset value (normally 4:00 p.m., Eastern time) in order for shares to be
purchased at that day's price. Payment may be made by check or readily available
funds. The purchase price of shares of the 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 the Portfolio calculated to three decimal
places. The Trust will not issue certificates representing shares of the
Portfolio.
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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 Portfolio 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 the Portfolio may exchange their shares for shares of either the
White Oak Growth Stock Portfolio or the Pin Oak Aggressive Stock 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
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 (or an Authorized
Broker-Dealer) prior to the time the Portfolio calculates its net asset value
(normally 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, generally, within seven
days after the redemption order is received. However, in order to protect the
Trust and its shareholders from fraud, redemption proceeds will not be forwarded
until the investment being redeemed has been in the account for 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,
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from the amount of a Federal Reserve wire redemption payment made at the request
of a shareholder. Shareholders cannot redeem shares of the 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 - The 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 AND EXCHANGE INFORMATION
Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of exchange, wire transfer, or 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.
The proceeds of non-telephone redemptions will be sent directly to a
shareholder's address (as listed in the Trust's records). If a shareholder
requests payment of redemption proceeds to a third party or to a location other
than the address on the shareholder's bank account (as listed in the Trust's
records), this request must be in writing and must include a signature
guarantee.
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.
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CALCULATION OF NET ASSET VALUE
The net asset value per share of the Portfolio is determined by dividing the
total market value of the Portfolio's investments and other assets, less any
liabilities, by the total outstanding shares of the Portfolio. Net asset value
per share is determined daily at the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time) on any Business Day. Purchase
or redemption orders received by the Portfolio after its net asset value has
been calculated will be priced at the next Business Day's net asset value.
PERFORMANCE
From time to time, the Portfolio may advertise its 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 returns.
The total return of the 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.
The 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. The Portfolio may quote Morningstar, Inc., a service that ranks
mutual funds on the basis of risk-adjusted performance. The Portfolio may quote
Ibbotson Associates of Chicago, Illinois, which provides historical returns of
the capital markets in the U.S. The Portfolio 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 Portfolio may also quote financial and business
publications and periodicals as they relate to fund management, investment
philosophy, and investment techniques.
The 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 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.
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TAXES
The following summary of certain 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 the 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 PORTFOLIO:
The Portfolio is treated as a separate entity for federal income tax purposes
and is not combined with the Trust's other portfolios. The 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 the 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:
The 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
the Portfolio will qualify for that deduction. Any net capital gains will be
distributed annually and will be taxed to shareholders as gain from the sale of
a capital asset held for more than one year, regardless of how long the
shareholder has held shares. The 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 the 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. The 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 the Portfolio distributes all of its net
investment income to its shareholders, the Portfolio may have to sell portfolio
securities to distribute such accrued income, which may occur at a time when the
Adviser
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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 the Portfolio provided certain
state-specific conditions are satisfied. The Portfolio 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 the Portfolio is considered
tax exempt in their particular state.
Dividends declared by the 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.
The 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 the Portfolio's shares is a taxable event to
the shareholder.
Income derived by the Portfolio from securities of foreign issuers may be
subject to foreign withholding taxes. The 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 Trust, 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
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expenses. Expenses not attributable to a specific portfolio are allocated across
all of the portfolios on the basis of relative net assets.
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. The Portfolio will vote separately on matters relating solely to it. As
a Massachusetts business trust, the Trust is not required, and does not intend,
to hold annual meetings of shareholders. Shareholders approval will be sought,
however, 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 the 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
419441, Kansas City, Missouri 64141-6441 or by calling 1-888-462-5386.
Purchases, redemptions and exchanges of shares should be made through the
Transfer Agent by calling the above telephone number.
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DIVIDENDS AND DISTRIBUTIONS
Substantially all of the net investment income of and any capital gain realized
by the Portfolio will be distributed at least annually. 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.
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 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 the 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
First Union National Bank, 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").
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DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS
The following is a description of certain of the permitted investments for the
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' ACCEPTANCES - 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.
CERTIFICATES 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 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 the Portfolio's books. An illiquid security includes a demand
instrument with a demand notice
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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 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
SUMMARY.....................................................................__
EXPENSE SUMMARY.............................................................__
FINANCIAL HIGHLIGHTS........................................................__
THE TRUST AND THE PORTFOLIO.................................................__
INVESTMENT OBJECTIVES AND POLICIES..........................................__
RISK FACTORS................................................................__
INVESTMENT LIMITATIONS......................................................__
THE ADVISER.................................................................__
THE ADMINISTRATOR...........................................................__
THE TRANSFER AGENT..........................................................__
THE DISTRIBUTOR.............................................................__
PORTFOLIO TRANSACTIONS......................................................__
PURCHASE AND REDEMPTION OF SHARES...........................................__
PERFORMANCE.................................................................__
TAXES.......................................................................__
GENERAL INFORMATION.........................................................__
DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS.......................__
<PAGE>
TRUST:
OAK ASSOCIATES FUNDS
FUND:
RED OAK TECHNOLOGY SELECT PORTFOLIO
ADVISER:
OAK ASSOCIATES, LTD.
DISTRIBUTOR:
SEI INVESTMENTS DISTRIBUTION CO.
ADMINISTRATOR:
SEI INVESTMENTS MUTUAL FUNDS SERVICES
LEGAL COUNSEL:
MORGAN, LEWIS & BOCKIUS LLP
INDEPENDENT PUBLIC ACCOUNTANTS:
ARTHUR ANDERSEN, LLP
______________, 1998
<PAGE>
TRUST:
OAK ASSOCIATES FUNDS
FUNDS:
RED OAK TECHNOLOGY SELECT PORTFOLIO
INVESTMENT ADVISER:
OAK ASSOCIATES LTD.
This STATEMENT OF ADDITIONAL INFORMATION is not a prospectus and relates only to
the Red Oak Technology Select Portfolio (the "Portfolio"). It is intended to
provide additional information regarding the activities and operations of Oak
Associates Funds (the "Trust") and the Portfolio and should be read in
conjunction with the Portfolio's Prospectus dated ___________, 1998. The
Prospectus for the Portfolio may be obtained by calling 1-888-462-5386.
TABLE OF CONTENTS
THE TRUST................................................................ ____
DESCRIPTION OF PERMITTED INVESTMENTS..................................... ____
INVESTMENT LIMITATIONS................................................... ____
THE ADVISER.............................................................. ____
THE ADMINISTRATOR........................................................ ____
THE DISTRIBUTOR.......................................................... ____
TRUSTEES AND OFFICERS OF THE TRUST....................................... ____
COMPUTATION OF TOTAL RETURN.............................................. ____
PURCHASE AND REDEMPTION OF SHARES........................................ ____
DETERMINATION OF NET ASSET VALUE......................................... ____
TAXES ................................................................ ____
PORTFOLIO TRANSACTIONS................................................... ____
DESCRIPTION OF SHARES.................................................... ____
SHAREHOLDER LIABILITY.................................................... ____
LIMITATION OF TRUSTEES' LIABILITY........................................ ____
COUNSEL.................................................................. ____
APPENDIX ................................................................ ____
[OAK-F-012-07]
_____________, 1998
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THE TRUST
This Statement of Additional Information relates to the Red Oak Technology
Select Portfolio (the "Portfolio") The 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. 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 Portfolio.
DESCRIPTION OF PERMITTED INVESTMENTS
REPURCHASE AGREEMENTS are agreements by which a person (e.g., the 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 the Portfolio for purposes
of its investment limitations. The repurchase agreements entered into by the
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 the 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
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the seller should be involved in bankruptcy or insolvency proceedings, the
Portfolio may 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
The 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. The 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, the 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 collateralized mortgage
obligations ("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 Portfolio not to write or purchase PUTS,
CALLS, OPTIONS or combinations thereof.
WARRANTS
The Portfolio may invest in WARRANTS in accordance with the Prospectus.
S - 3
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INVESTMENT LIMITATIONS
FUNDAMENTAL POLICIES
The following investment limitations are fundamental policies of the Portfolio
that cannot be changed with respect to the Portfolio without the consent of the
holders of a majority of the Portfolio's outstanding shares. The phrase
"majority of the outstanding shares" means the vote of (i) 67% or more of the
Portfolio's shares present at a meeting, if more than 50% of the outstanding
shares of the Portfolio are present or represented by proxy, or (ii) more than
50% of the Portfolio's outstanding shares, whichever is less.
The 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.
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6. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the 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.
NON-FUNDAMENTAL POLICIES
The following investment limitation of the Portfolio is non-fundamental and may
be changed by the Trust's Board of Trustees without shareholder approval:
1. The 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 year ended October 31, 1998, the Portfolio had not commenced
operations and therefore did not pay advisory fees.
The continuance of the Advisory Agreement as to the 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
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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 the Portfolio, by a majority of the outstanding shares of the
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.
THE ADMINISTRATOR
The Trust and SEI Investments Mutual Funds Services (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 year ended October 31, 1998, the Portfolio had not commenced
operations and therefore did not pay fees to the Administrator.
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
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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, Armada Funds,
Bishop Street Funds, Boston 1784 Funds(R), CrestFunds, Inc., CUFUND, The
Expedition Funds, First American Funds, Inc., First American Investment Funds,
Inc., First American Strategy Funds, Inc., HighMark Funds, Monitor Funds, Morgan
Grenfell Investment Trust, The Nevis Funds, The PBHG Funds, Inc., PBHG Advisor
Funds, Inc., PBHG Insurance Series Fund, Inc., The Pillar Funds, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
International Trust, SEI Institutional Investments Trust, SEI Institutional
Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, STI Classic Funds,
STI Classic Variable Trust, TIP Funds and TIP Institutional 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 the 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, Armada Funds, Bishop Street Funds, Boston 1784 Funds(R), CrestFunds,
Inc., CUFUND, The Expedition
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Funds, First American Funds, Inc., First American Investment Funds, Inc., First
American Strategy Funds, Inc., HighMark Funds, Monitor Funds, Morgan Grenfell
Investment Trust, The PBHG Funds, Inc., PBHG Advisor Funds, Inc., PBHG Insurance
Series Fund, Inc., The Pillar Funds, SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid
Asset Trust, SEI Tax Exempt Trust, STI Classic Funds, STI Classic Variable
Trust, TIP Funds and TIP Institutional Funds, each of which is an open-end
management investment company managed by SEI Investments Mutual Funds Services
or its affiliates and, except for PBHG Advisor Funds, Inc., 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(R), The Expedition Funds, Pillar Funds, SEI Asset Allocation Trust,
SEI Daily Income Trust, SEI Index Funds, SEI Institutional Investments Trust,
SEI Institutional Managed Trust, SEI Institutional International Trust, SEI
Liquid Asset Trust and SEI Tax Exempt Trust.
JOHN T. COONEY (DOB 01/20/27) -- Trustee** -- Vice Chairman of Ameritrust Texas
N.A., 1989-1992, and MTrust Corp., 1985-1989. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund and The Expedition 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, SEI Investments, the Administrator and the Distributor. Director
and Secretary of SEI Investments and Secretary of the Administrator and the
Distributor. Trustee of The Advisors' Inner Circle Fund, The Arbor Fund, The
Expedition Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
Institutional International Trust, SEI Liquid Asset Trust and SEI Tax Exempt
Trust.
FRANK E. MORRIS (DOB 12/30/23) -- Trustee** -- 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, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI
Index Funds, SEI Institutional Investments Trust, SEI Institutional Managed
Trust, SEI Institutional International Trust, SEI Liquid Asset Trust and SEI Tax
Exempt Trust.
ROBERT A. PATTERSON (DOB 11/05/27) -- Trustee** -- 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
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Treasurer, Board of Trustees of Grove City College. Trustee of The Advisors'
Inner Circle Fund, The Arbor Fund and The Expedition Funds.
EUGENE B. PETERS (DOB 06/03/29) -- Trustee** -- 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 Brewing Company before 1978. Trustee of The Advisors' Inner
Circle Fund, The Arbor Fund and The Expedition 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, SEI Asset Allocation Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional Investments Trust, SEI
Institutional Managed Trust, SEI Institutional International Trust, SEI Liquid
Asset Trust and SEI Tax Exempt Trust.
MARK E. NAGLE (DOB 10/20/59) -- President and Chief Executive Officer --Vice
President of Fund Accounting and Administration for SEI Investments Mutual Funds
Services and Vice President of the Administrator since 1996. Vice President of
the Distributor since December 1997. Vice President, 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.
LYDIA A. GAVALIS (DOB 06/05/64) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of the Administrator and the Distributor
since 1998. Assistant General Counsel and Director of Arbitration, Philadelphia
Stock Exchange, 1989-1998.
KATHY HEILIG (DOB 12/21/58) -- Vice President and Assistant Secretary --
Treasurer of SEI Investments since 1997; Assistant Controller of SEI Investments
since 1995; Vice President of SEI Investments since 1991; Director of Taxes of
SEI Investments, 1987 to 1991. Tax Manager, Arthur Anderson LLP prior to 1987.
JOSEPH M. O'DONNELL (DOB 11/13/54) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of the Administrator and the Distributor
since 1998. Vice President and General Counsel, FPS Services, Inc., 1993-1997.
Staff Counsel and Secretary, Provident Mutual Family of Funds, 1990-1993.
SANDRA K. ORLOW (DOB 10/18/53) -- Vice President and Assistant Secretary --
Secretary of the Distributor since 1998; Vice President of the Distributor since
1988. Vice President and
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Assistant Secretary of the Manager since 1988. Assistant Secretary of the
Distributor from 1988 to 1998.
KEVIN P. ROBINS (DOB 04/15/61) -- Vice President and Assistant Secretary --
Senior Vice President and General Counsel of SEI Investments, the Administrator
and the Distributor since 1994. Assistant Secretary of SEI Investments since
1992; Secretary of the Administrator since 1994. Vice President, General Counsel
and Assistant Secretary of the Administrator and the Distributor, 1992-1994.
Associate, Morgan, Lewis & Bockius LLP (law firm), 1988-1992.
LYNDA J. STRIEGEL (DOB 10/30/48) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of the Administrator and the Distributor
since 1998. Senior Asset Management Counsel, Barnett Banks, Inc., 1997-1998.
Partner, Groom and Nordberg, Chartered, 1996-1997. Associate General Counsel,
Riggs Bank, N.A., 1991-1995.
WILLIAM E. WHITE (DOB 03/09/65) -- Assistant Secretary -- Mutual Fund Product
Manager of Oak Associates, Ltd., the Adviser, since 1997. Accountant Director,
SEI Investments, 1994- 1997. Lieutenant, United States Navy, 1987-1994.
ROBERT DELLACROCE (DOB 12/17/63) -- Controller and Chief Financial Officer --
Director, Funds Administration and Accounting of SEI Investments since 1994.
Senior Audit Manager, Arthur Andersen LLP, 1986-1994.
JOHN H. GRADY, JR. (DOB 06/01/61) -- Secretary -- 2000 One Logan Square,
Philadelphia, PA 19103-6993, Partner since 1995, Morgan, Lewis & Bockius LLP
(law firm), counsel to the Trust, SEI Investments, the Administrator and the
Distributor.
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*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Trust 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 Trust.
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.
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The following table exhibits anticipated Trustee compensation for the fiscal
year ended October 31, 1998.
===============================================================================
Aggregate Compensation From
Name of Person, Position Registrant for the Fiscal Year Ended
October 31, 1998
- -------------------------------------------------------------------------------
John T. Cooney, Trustee $8,154
Frank E. Morris, Trustee $8,154
Robert Patterson, Trustee $8,154
Eugene B. Peters, Trustee $8,154
James M. Storey, Esq., Trustee $8,154
William M. Doran, Esq., Trustee $ 0
Robert A. Nesher, Chairman of the $ 0
Board
===============================================================================
* SEI Investments compensates Mr. Nesher for services he provides to SEI
Investments.
COMPUTATION OF TOTAL RETURN
From time to time the Trust may advertise total return of the Portfolio. These
figures will be based on historical earnings and are not intended to indicate
future performance.
The total return of the 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 the 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)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.
The Portfolio had not commenced operations as of the fiscal year ended October
31, 1998.
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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 the 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 the 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 the Portfolio's securities is not reasonably
practicable, or for such other periods as the SEC has by order permitted. The
Trust also reserves the right to suspend sales of shares of the 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 Portfolio 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 federal income tax considerations
generally affecting the Portfolio and its 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.
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FEDERAL INCOME TAX
The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986 (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.
The Portfolio intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Code. By following such a policy, the
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
the 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 the Portfolio's taxable year, at least 50% of the value
of its total assets must 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 the 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 the 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), the
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 the 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 eighteen months, will be treated as a
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mid-term capital gain if the shares have been held for more than twelve, but not
more than eighteen, months and otherwise generally will be treated as a
short-term capital gain or loss. If shares of the 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, the 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 the Portfolio that such shareholder is not subject to backup withholding.
If the 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.
STATE TAXES
The Portfolio is not liable for any income or franchise tax in Massachusetts if
it qualifies as a RIC for federal income tax purposes. Distributions by the
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 the Portfolio. The 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, the Portfolio will not
necessarily be paying the lowest spread or commission available. The Adviser
seeks to select brokers or dealers that offer the 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, the Portfolio or other accounts managed by the Adviser will be
benefitted by supplemental research services, the Adviser is authorized to pay
brokerage
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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
the Portfolio.
It is expected that the 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 compensation for effecting
portfolio transactions for the 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 the 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.
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The Portfolio had not commenced operations as of the fiscal year ended October
31, 1998, and therefor had no brokerage transactions and paid no commissions.
Because the Portfolio does not market its shares through intermediary brokers
or dealers, it is not the 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 the 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 Portfolio is required to identify any securities of its "regular brokers and
dealers" (as such term is defined in the 1940 Act) which the Portfolio has
acquired during its most
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recent fiscal year. The Portfolio had not commenced operations as of October 31,
1998.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and shares of the 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,
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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 liability for his or her willful misfeasance,
bad faith, gross negligence or reckless disregard of his or her duties.
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COUNSEL
Morgan, Lewis & Bockius LLP serves as counsel to the Trust.
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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.
A - 1
<PAGE>
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.
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.
A-1 - This is S&P's highest category and indicates that the degree of safety
regarding timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
PRIME-1 - Issues rated Prime-1 (or supporting institutions) by Moody's have a
superior ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:
A - 2
<PAGE>
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 - Issuers rated Prime-2 (or supporting institutions) by Moody's have a
strong ability for repayment of senior short-term debt obligations. This will
normally be evidenced by many of the characteristics cited above but to a lesser
degree. Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
A - 3
<PAGE>
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Part A: N/A
Part B:
(i) The following unaudited financial statements for Oak
Associates Funds with respect to the White Oak Growth Stock
Fund and Pin Oak Aggressive Stock Fund as of April 30, 1998
are incorporated by reference into the Statement of Additional
Information from Form N-30D filed on June 25, 1998 with
Accession Number 0000950115-98-001196.
Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
(ii) 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 incorporated by
reference into the Statement of Additional Information from
Form N-30D filed on December 29, 1997 with Accession Number
0000950115-97-002007.
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 incorporated
herein by reference to Registrant's Registration Statement on Form
N-1A (File No. 333-42115) filed with the Securities and Exchange
Commission ("SEC") on December 12, 1997.
(2) Registrant's By-Laws are incorporated herein by reference to
Registrant's Registration Statement on Form N-1A (File No.
333-42115) filed with the SEC on December 12, 1997.
(3) Not Applicable.
(4) Not Applicable.
(5) (a) 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.
(5) (b) Schedule A to the Investment Advisory Agreement between Oak
Associates Funds and Oak Associates, Ltd. is filed herewith.
(6) 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 incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 333-42115) filed
with the SEC on December 12, 1997.
C-1
<PAGE>
(9) (a) 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 Transfer Agency Agreement between Registrant and DST
Systems, Inc. is filed herewith.
(c) Sub-Transfer Agency Agreement between the Registrant and
Norwest Bank Minnesota, N.A. is filed herewith.
(d) Schedule A to the Administration Agreement between the
Registrant and SEI Fund Resources is filed herewith.
(10) Opinion and Consent of Counsel is incorporated herein by reference
to Registrant's Registration Statement on Form N-1A (File No.
333-42115) filed with the SEC on December 12, 1997.
(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 incorporated herein by reference to
Registrant's Registration Statement on Form N-1A (File No.
333-42115) filed with the SEC on December 12, 1997.
(16) Performance Quotation Computation is incorporated herein by
reference to Registrant's Registration Statement on Form N-1A
(File No. 333-42115) filed with the SEC on December 12, 1997.
(17) Not Applicable.
(18) Not Applicable.
(24) Powers of Attorney for 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 Investments Mutual Funds
Services ("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 September 21, 1998:
Number of
Title of Class Record Holders
-------------- --------------
Units of beneficial interest, without par value-
White Oak Growth Stock Portfolio 19,751
Pin Oak Aggressive Stock Portfolio 1,412
Red Oak Technology Select Fund --
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.
C-2
<PAGE>
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.
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 Institutional 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
First American Funds, Inc. November 1, 1992
C-3
<PAGE>
First American Investment Funds, Inc. November 1, 1992
The Arbor Fund January 28, 1993
Boston 1784 Funds(R) June 1, 1993
The PBHG Funds, Inc. July 16, 1993
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
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
The Expedition Funds June 9, 1997
TIP Institutional Funds January 1, 1998
The Nevis Fund, Inc. June 29, 1998
The Parkstone Group of Funds September 14, 1998
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 of the Board of Directors --
Henry H. Greer Director --
Carmen V. Romeo Director --
Mark J. Held President & Chief Operating Officer --
Gilbert L. Beebower Executive Vice President --
Richard B. Lieb Executive Vice President --
Dennis J. McGonigle Executive Vice President --
Robert M. Silvestri Chief Financial Officer & Treasurer --
Leo J. Dolan, Jr. Senior Vice President --
</TABLE>
C-4
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Carl A. Guarino Senior Vice President --
Larry Hutchison Senior Vice President --
Jack May 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 &
Assistant Secretary
Patrick K. Walsh Senior Vice President --
Robert Aller Vice President --
Gordon W. Carpenter Vice President --
Todd Cipperman Vice President & Assistant Secretary Vice President &
Assistant Secretary
S. Courtney E. Collier Vice President & Assistant Secretary --
Robert Crudup Vice President & Managing Director --
Barbara Doyne Vice President --
Jeff Drennen Vice President --
Vic Galef Vice President & Managing Director --
Lydia A. Gavalis Vice President & Assistant Secretary Vice President &
Assistant Secretary
Greg Gettinger Vice President & Assistant Secretary --
Kathy Heilig Vice President Vice President &
Assistant Secretary
Jeff Jacobs 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 --
Mark Nagle Vice President President
Joanne Nelson Vice President --
Joseph M. O'Donnell Vice President & Assistant Secretary Vice President &
Assistant Secretary
Sandra K. Orlow Vice President & Secretary Vice President &
Assistant Secretary
Cynthia M. Parrish Vice President & Assistant Secretary --
Kim Rainey Vice President --
Rob Redican Vice President --
Maria Rinehart Vice President --
Mark Samuels Vice President & Managing Director --
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
Position and Office Positions and Offices
Name with Underwriter with Registrant
- ---- ------------------- ---------------------
<S> <C> <C>
Kathryn L. Stanton Vice President & Assistant Secretary --
Lynda J. Striegel Vice President & Assistant Secretary Vice President &
Assistant Secretary
Lori L. White Vice President & Assistant Secretary --
Wayne M. Withrow Vice President & Managing Director --
</TABLE>
C-6
<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:
First Union National Bank
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 Investments Mutual Funds Services
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 communications with
other shareholders as required by the provisions of Section 16(c) of the
Investment Company Act of 1940.
C-7
<PAGE>
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.
C-8
<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-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Post-Effective
Amendment No. 2 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Oaks, Commonwealth of Pennsylvania on the 24th day of
September, 1998.
OAK ASSOCIATES FUNDS
By: /s/ Mark E. Nagle
--------------------
Mark E. Nagle, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following persons in the
capacity and on the dates indicated.
<TABLE>
<S> <C> <C>
* Trustee September 24, 1998
- --------------
John T. Cooney
* Trustee September 24, 1998
- ----------------
William M. Doran
* Trustee September 24, 1998
- ---------------
Frank E. Morris
* Trustee September 24, 1998
- ----------------
Robert A. Nesher
* Trustee September 24, 1998
- -------------------
Robert A. Patterson
* Trustee September 24, 1998
- -------------
Eugene Peters
* Trustee September 24, 1998
- ---------------
James M. Storey
/s/ Mark E. Nagle President September 24, 1998
- -----------------
Mark E. NagleE
/s/ Robert J. DellaCroce
- ------------------------ Controller & Chief September 24, 1998
Robert J. DellaCroce Financial Officer
*By: /s/ Mark E. Nagle
-----------------
Mark E. Nagle
Attorney-in-Fact
</TABLE>
C-10
<PAGE>
EXHIBIT INDEX
Exhibit No. and Description
- ---------------------------
EX-99.B1 Registrant's Agreement and Declaration of Trust is
incorporated herein by reference to Registrant's Registration
Statement on Form N-1A (File No. 333-42115) filed with the
Securities and Exchange Commission ("SEC") on December 12,
1997.
EX-99.B2 Registrant's By-Laws are incorporated herein by reference to
Registrant's Registration Statement on Form N-1A (File No.
333-42115) filed with the SEC on December 12, 1997.
EX-99.B3 Not Applicable.
EX-99.B4 Not Applicable.
EX-99.B5(a) 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.B5(b) Schedule A to the Investment Advisory Agreement between Oak
Associates Funds and Oak Associates, Ltd. is filed herewith.
EX-99.B6 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 incorporated herein by reference to Registrant's
Registration Statement on Form N-1A (File No. 333-42115) filed
with the SEC on December 12, 1997.
EX-99.B9(a) 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 Transfer Agency Agreement between Registrant and DST
Systems, Inc. is filed herewith.
EX-99.B9(c) Sub-Transfer Agency Agreement between the Registrant and
Norwest Bank Minnesota, N.A. is filed herewith.
EX-99.B9(d) Schedule A to the Administration Agreement between the
Registrant and SEI Fund Resources is filed herewith.
EX-99.B10 Opinion and Consent of Counsel is incorporated herein by
reference to Registrant's Registration Statement on Form N-1A
(File No. 333-42115) filed with the SEC on December 12, 1997.
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 incorporated herein by reference
to Registrant's Registration Statement on Form N-1A (File No.
333-42115) filed with the SEC on December 12, 1997.
C-11
<PAGE>
Exhibit No. and Description
- ---------------------------
EX-99.B16 Performance Quotation Computation is incorporated herein by
reference to Registrant's Registration Statement on Form N-1A
(File No. 333- 42115) filed with the SEC on December 12, 1997.
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.
EX-99.B27 Not Applicable.
C-12
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of this 27th day of February, 1998, 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 (the
"1940 Act"), 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 its White Oak Growth Stock Fund and Pin Oak
Aggressive Stock Fund and such other portfolios as the Trust and the Adviser may
agree upon (the "Portfolios"), 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 the Trustees of the Trust such information
relating to portfolio transactions as they may reasonably
request.
<PAGE>
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.
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 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
<PAGE>
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 1940 Act 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.
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
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 1940 Act and rules and
regulations thereunder. The foregoing requirement that
continuance of this Agreement be "specifically approved at
least annually" shall be
<PAGE>
construed in a manner consistent with the 1940 Act 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.
14. CHANGE IN THE ADVISER'S MEMBERSHIP. The Adviser agrees that it
shall notify the Trust of any change in the membership of the
Adviser within a reasonable time after such change.
15. 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 One Freedom Valley Road, Oaks, PA 19456 and if
to the Adviser at 3875 Embassy Parkway, Suite 250, Akron, Ohio
44333.
16. 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.
17. GOVERNING LAW. This Agreement shall be governed by the
internal laws of the Commonwealth of Massachusetts, without
regard to conflict of law principles; provided, however, that
nothing herein shall be construed as being inconsistent with
the 1940 Act.
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
is 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 portfolio of the Trust shall be liable for the obligations of any other
portfolio of the Trust. Without limiting the generality of the foregoing, the
Adviser shall look only to the assets of the Portfolios for payment of fees for
services rendered to the Portfolios.
<PAGE>
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: /s/ Wiiliam E. White
--------------------
Attest: /s/ Leslie Manna
----------------
OAK ASSOCIATES, LTD.
By: /s/ James Oelschlager
---------------------
Attest: /s/ Leslie Manna
----------------
Schedule A
to the
Investment Advisory Agreement
dated December 31, 1998
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 Fund .74%
Pin Oak Aggressive Stock Fund .74%
Red Oak Technology Select Portfolio .74%
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 27th day of February, 1998 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 prospectus, 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 ("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 ("CDSCs") 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 2 Oliver Street, Boston, MA 02109, and if to the
Distributor, One Freedom Valley Drive, 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 TRUST
By: /s/ William E. White
--------------------
Attest: /s/ Leslie Manna
----------------
SEI INVESTMENTS DISTRIBUTION CO.
By: /s/ Joseph M. O'Donnell
-----------------------
Attest: /s/ Laurie Brooks
-----------------
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 27th day of February, 1998, by and
between Oak Associates Trust, 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.
The Administrator shall provide the Trust with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office
<PAGE>
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;
(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
<PAGE>
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;
(P) monitor and advise the Trust and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
<PAGE>
(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 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
<PAGE>
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 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.)
<PAGE>
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 authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.
<PAGE>
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 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,
<PAGE>
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 2 Oliver Street, Boston, MA 02109; 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 the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
<PAGE>
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 TRUST
By: /s/ William E. White
--------------------
Attest: /s/ Leslie Manna
----------------
SEI FUND RESOURCES
By: /s/ Joseph M. O'Donnell
-----------------------
Attest: /s/ Laurie Brooks
-----------------
TRANSFER 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:
<PAGE>
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").
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 TA2000(TM), DST's computerized data processing system
for securityholder accounting (the "TA2000(TM) 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
2
<PAGE>
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 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 TA2000(TM) 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.
3
<PAGE>
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 TA2000(TM) 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
TA2000(TM) System or the operations as requested by the Fund requires
an enhancement or modification to the TA2000(TM) System or to
operations as then conducted by DST, DST shall not be liable therefore
until such modification or enhancement is installed on the TA2000(TM)
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 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 TA2000(TM)
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
4
<PAGE>
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, 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
5
<PAGE>
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:
(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(TM)
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.
6
<PAGE>
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
TA2000(TM) 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 TA2000(TM) 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 TA2000(TM) 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 TA2000(TM) 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;
7
<PAGE>
G. The requiring of proper forms of instructions, signatures and
signature guarantees(1) 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 "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 31a-1 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
- ----------
(1) DST shall ascertain that what reasonably purports to be an appropriate
signature guarantee is present if a signature guarantee is required, but
DST shall have no responsibility for verifying the authenticity thereof or
the authority of the person executing the signature guarantee.
8
<PAGE>
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 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.
9
<PAGE>
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 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 TA2000(TM) 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.
10
<PAGE>
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(TM) System. Reasonable travel, per
diem 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.
---------
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
11
<PAGE>
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 TA2000(TM) System containing the designated Fund data to
the computers at the Recovery Facility in accordance with the then
current Business Contingency Plan.
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
12
<PAGE>
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 31a-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 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
13
<PAGE>
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.
--------------------------------------------------
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,
14
<PAGE>
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
TA2000(TM) System and assigning social codes and Taxpayer
Identification 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
15
<PAGE>
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 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 indemnifies DST and holds DST
harmless against any,
16
<PAGE>
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 indemnifies 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 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 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.ss.ss.240.17Ad-6, -7, -10
and -11 (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
17
<PAGE>
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 TA2000(TM) 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 TA2000(TM) System and any other DST
programs, data bases, supporting documentation, or procedures
(collectively "DST Confidential Information") which the Fund's
access to the TA2000(TM) 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 confidential material and
18
<PAGE>
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 TA2000(TM) 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 TA2000(TM) System or DST Facilities hereunder or the
reports to be generated by such system and facilities hereunder,
unless the Fund is
19
<PAGE>
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.
C. All enhancements, improvements, changes, modifications or new features
added to the TA2000(TM) 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 on Liability.
-------------------------
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.
20
<PAGE>
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.
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
21
<PAGE>
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:
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.
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.
22
<PAGE>
DST SYSTEMS, INC.
By:
-------------------------------
Title:
----------------------------
OAK ASSOCIATES FUNDS
By:
-------------------------------
Title:
----------------------------
SUB-TRANSFER AGENCY AGREEMENT
THIS AGREEMENT made effective the 26th day of March, 1998 by and between Norwest
Bank Minnesota, N.A., (the "Sub-Transfer Agent") and Oak Associates Funds (the
"Fund"), a Massachusetts business trust.
WITNESSETH
WHEREAS, the Sub-Transfer Agent has agreed to provide participant accounting,
recordkeeping and administrative services for certain employee benefit plans;
and
WHEREAS, the Fund, an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), and each
separate series of the Fund (each a "Portfolio") set forth in Exhibit A,
authorizes investment by the Plans and hereby agrees to instruct DST SYSTEMS,
INC. (the "Transfer Agent") to execute and implement this Agreement; and
WHEREAS, the Transfer Agent provides services as transfer agent,
dividend disbursement agent, and shareholder servicing agent to the Fund; and
WHEREAS, SEI Fund Resources (the "Administrator") provides
administrative and accounting services to the Fund; and
WHEREAS, it is intended that the Fund will cause the Transfer Agent to
establish a master account on its mutual fund shareholder accounting system (the
"System") reflecting the aggregate ownership by each Plan of shares of each
Portfolio and all shareholder transactions by each such Plan involving such
shares (collectively, the "Accounts" or individually, the "Account"); and
WHEREAS, the Sub-Transfer Agent is registered as a transfer agent under
Section 17A(c)(2) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and is qualified to serve as sub-transfer agent for the Fund
for the purposes set forth herein; and
WHEREAS, it is intended that the Sub-Transfer Agent will establish
individual accounts on its recordkeeping system reflecting all transactions by
or on behalf of Plan Participants and beneficiaries which result in purchases or
redemptions by the Plan of shares of the Fund.
WHEREAS, it is intended that the Sub-Transfer Agent will act as the
sub-transfer agent of the Fund, and the Sub-Transfer Agent desires to accept
such appointment, solely for the limited purposes of receiving orders by the
Plan for purchases and redemptions of shares of the
<PAGE>
Fund resulting from transactions by or on behalf of the Plan participants and
beneficiaries, recording such purchases and redemptions, and making and
maintaining the Fund's shareholder records concerning the Plan Participants
which are recorded on the Sub-Transfer Agent's recordkeeping system;
WHEREAS, it is intended that the Fund will, or will cause the
Administrator to, provide to the Sub-Transfer Agent those prospectuses,
shareholder reports and other information with respect to the Fund as the Fund
is required under the federal securities laws to provide to Plan participants
which the Sub-Transfer Agent will furnish to fiduciaries, Plan Participants and
beneficiaries; and
WHEREAS, on the terms and conditions hereinafter set forth, the parties
have agreed to make shares of the Fund available as investment options under the
Plan and to retain the Sub-Transfer Agent to perform certain sub-transfer agency
and administrative services on behalf of the Fund, and the Sub-Transfer Agent is
willing and able to furnish such Plan services;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto, intending to be legally bound, hereby agree and
declare as follows:
Section 1. Appointment as Agent. The Sub-Transfer Agent is hereby appointed as
---------------------
the sub-transfer agent of the Fund solely for the limited purpose of receiving
Instructions, in accordance with the Procedures (as defined in Section 2 hereof
and set forth in Exhibit B, for the purchase and redemption by the Plans of
shares of the Fund and making and maintaining the records of the Fund relating
to such purchases and redemptions of the Plan Participants in the Plan. Such
purchases and redemptions shall be based on participant-level transactions made
by or on behalf of Plan Participants and beneficiaries, which transactions shall
be recorded on the Sub-Transfer Agent's recordkeeping system. Such records will
be deemed to be and are part of the Fund's master securityholder files, as
defined in Rule 17Ad-9(b) under the Exchange Act. For purposes of this
Agreement, "participant-level transactions" shall include:
(a) any authorized direction to invest contributions by or on behalf of any
participant to the Plan in the Fund in accordance with the terms and conditions
of the Plan and the Fund's Prospectus;
(b) any authorized direction to transfer or exchange existing amounts held on
behalf of any participant or beneficiary by the Plan to the Fund in accordance
with the terms and conditions of the Plan and the Fund's Prospectus;
(c) any authorized direction to transfer or exchange existing amounts invested
in the Fund on behalf of any participant or beneficiary by the Plan to any other
investment option offered under the Plan in accordance with the terms and
conditions of the Plan and the Fund's Prospectus; and
<PAGE>
(d) any authorized direction to pay, loan, withdraw or distribute proceeds to a
participant or beneficiary by the Plan from the Fund in accordance with the
terms and conditions of the Plan and the Fund's Prospectus.
The Sub-Transfer Agent shall maintain records on behalf of the Fund for the Plan
and for the Plan Participants and beneficiaries thereof reflecting all shares of
the Fund purchased and redeemed by the Plan based on participant-level
transactions (including the date and price for all transactions and share
balances) and all re-investment by the Plan of dividends and capital gains
distributions paid by the Fund. The Sub-Transfer Agent shall reconcile on each
day on which the New York Stock Exchange is open for trading (each, a "Business
Day"), (i) all transactions by the Plan involving shares of the Fund (including
purchases, redemptions and re-investments of dividends and capital gains
distributions) reflected on the Transfer Agent's recordkeeping system with the
corresponding participant-level transactions on the Sub-Transfer Agent's
recordkeeping system; and (ii) the aggregate position of all Plan Participants
and beneficiaries on the Sub-Transfer Agent's recordkeeping system with the
balance in the Account on the Transfer Agent's recordkeeping system for that
Business Day. In accordance with paragraph (e) of Exhibit B, the Sub-Transfer
Agent shall promptly advise the Transfer Agent of any discrepancies between the
Sub-Transfer Agent's records and the Transfer Agent's records. Notwithstanding
the Sub-Transfer Agent's appointment hereunder as the agent of the Fund to
receive orders for the purchases and redemptions by the Plan of shares of the
Fund and to net, and, thereafter to transmit such orders to the Fund's Transfer
Agent, the Sub-Transfer Agent shall have no authority under this Agreement or
otherwise to act as agent for the Transfer Agent or as sub-transfer agent for
the Fund in respect to or in connection with the distribution of shares of the
Fund.
Section 2. Procedures. The operating procedures governing the parties'
-----------
responsibilities under this Agreement with respect to (i) instructions for the
purchase and redemption of shares of the Fund (""Instructions") and (ii) net
asset value per share ("NAV") communication are set forth in Exhibit B (the
"Procedures"), which is attached hereto and is specifically made a part of this
Agreement. (All terms defined herein or in Exhibit B shall have the same meaning
when used herein or in Exhibit B.) In all material respects, the Procedures
shall be consistent with the terms of the Fund's Prospectus and Statement of
Additional Information ("SAI"), with the requirements of the 1940 Act and the
Exchange Act, and with any other applicable federal or state laws and
regulations.
Section 3. Representations and Warranties.
-------------------------------
(a) The Sub-Transfer Agent represents and warrants that:
(i) it has full power and authority to enter into and perform this
Agreement and, when executed and delivered, this Agreement shall constitute a
valid, legal and binding obligation of the Sub-Transfer Agent, enforceable in
accordance with its terms;
<PAGE>
(ii) it is registered and in good standing as a transfer agent pursuant
to Section 17A(c)(2) of the Exchange Act;
(iii) it is duly qualified and duly authorized by each Plan to act on
behalf of the Plan as contemplated by this Agreement;
(iv) the arrangements provided for in this Agreement will be disclosed
to the Plan through the Sub-Transfer Agent's representatives;
(v) it shall promptly notify the Fund in the event that the
Sub-Transfer Agent is, for any reason, unable to perform any of its obligations
under this Agreement; and
(vi) it is the sole and exclusive entity authorized to give
instructions to the Fund and the Transfer Agent on behalf of the Plan, Plan
Participants and the Accounts.
(b) The Fund represents and warrants that:
(i) it has full power and authority to enter into this Agreement and,
when executed and delivered, this Agreement shall constitute a valid, legal and
binding obligation of the Fund, enforceable in accordance with its terms;
(ii) it only conducts business on days on which the New York Stock
Exchange is open for trading (previously defined herein as Business Days).
Attached hereto as Exhibit C is a list setting forth the weekdays on which the
Fund does not conduct business;
(iii) its shares are registered or otherwise authorized for issuance
and sale in the jurisdictions set forth in Exhibit D hereto;
(iv) the Sub-Transfer Agent, on behalf of the Plan, may place
instructions with the Transfer Agent on each and every Business Day without
regard to the number or market value of transactions executed in any prior time
periods;
(v) the Registration Statement, Prospectus and SAI of the Fund comply,
in all material respects, with all applicable federal and state securities laws;
(vi) each Portfolio is a series of an investment company registered
under the 1940 Act;
(vii) if selected by any Plan as an investment option for the Plan's
assets, the Fund shall cooperate with the Plan and with the Sub-Transfer Agent
to establish in a timely and orderly manner necessary relationships;
<PAGE>
(viii) it shall promptly notify the Sub-Transfer Agent and the other
parties hereto in the event that the Fund is, for any reason, unable to perform
any of its obligations under this Agreement.
Section 4. Instructions.
-------------
(a) All Instructions received from the Plan's participants and transmitted by
the Sub-Transfer Agent to the Transfer Agent on any Business Day will be based
only upon Instructions that the Sub-Transfer Agent has received from an
authorized person under the Plan no later than the time when the NAV ("Share
Price") is determined for the Fund ("Close of Trading"). Such receipt of
Instructions by the Sub-Transfer Agent shall be deemed receipt by the Transfer
Agent and the Fund for Share Price purposes only.
(b) The Transfer Agent and the Fund are obligated hereunder to accept
Instructions only from the Sub-Transfer Agent with respect to the Plan and the
Accounts. Each may refuse to comply with Instructions, directions or
communications from anyone else concerning the Plan and the Accounts, except as
otherwise expressly provided for in Section 7 of this Agreement.
Section 5. Additional Covenants.
---------------------
(a) The Sub-Transfer Agent covenants that:
(i) it shall comply with all applicable federal and state securities,
insurance, ERISA, and tax laws, rules and regulations applicable to its
activities contemplated by this Agreement;
(ii) it shall not, without the written consent of the Fund, make
representations concerning the shares of the Portfolios, except those contained
in the then current Prospectus or SAI and in the then current printed sales
literature approved by the Fund or its representative;
(iii) the participant-level securityholder records to be made and
maintained by the Sub-Transfer Agent will be made, maintained and made available
in accordance with the requirements applicable to transfer agents under Section
17A and Rule 17Ad-7(g) under the Exchange Act and to registered investment
companies under Section 31 of the 1940 Act;
(iv) each participant-level transaction that contributes to, is a part
of, or is included in an Instruction communicated by the Sub-Transfer Agent to
the Transfer Agent will have been received by the Sub-Transfer Agent before the
Close of Trading on the Business Day immediately preceding the Business Day on
which such Instruction is communicated;
(v) it shall immediately verify all daily and monthly Account
statements provided or made available to it by the Transfer Agent, and trade
information made available by the Transfer Agent, via hard-copy or a terminal at
the Sub-Transfer Agent's site that can access the Transfer Agent's recordkeeping
system ("Terminal") and shall, in accordance with Paragraph (e) of
<PAGE>
Exhibit B hereof, notify the Transfer Agent of any discrepancies between the
records maintained by the Sub-Transfer Agent and the daily and monthly Account
statements and trade information provided or made available to the Sub-Transfer
Agent pertaining to the Plan and the Accounts; and
(vi) with respect to the other parties to this Agreement, the
Sub-Transfer Agent is and shall be solely responsible for: (A) all reporting -
whether daily, periodic, year-end, annual or special - to the Plan, participants
in the Plan, the federal and state taxation authorities and the U.S. Department
of Labor and the U.S. Treasury Department; (B) the actual delivery of all
redemption proceeds to Plan Participants and beneficiaries; (C) the collection
of all required withholding of taxes from all redemptions and distributions; (D)
the payment of all sums withheld from such redemptions and distributions to the
applicable taxation authority; and (E) the giving of instructions to the Fund
and the Fund's Transfer Agent with respect to the Plan, Plan Participants and
Accounts; and
(vii) the Sub-Transfer Agent is not providing broker-dealer or
investment advisory services under this Agreement.
(b) The Fund covenants that:
(i) any Portfolio selected by the Plan whose shares are not authorized
for issuance and sale in the required jurisdiction(s) shall immediately take the
necessary and appropriate steps to make such shares eligible for issuance and
sale in such jurisdiction(s), except where registration or other necessary
actions in such jurisdiction(s) would require an amendment to, or change in, a
Portfolio's material investment policies or techniques or fundamental investment
limitations;
(ii) it shall comply with all federal and state securities, insurance,
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and tax
laws, rules and regulations applicable to it as a result of the transactions
contemplated by this Agreement;
(iii) the Fund or its representative shall establish the Account(s) on
its or its representative's mutual fund shareholder accounting system, as
contemplated by this Agreement, and maintain the Accounts in accordance with all
applicable federal and state securities laws, and such Accounts shall be in the
name of the Sub-Transfer Agent (or its nominee) or the trustee or other designee
of the Plan (or its nominee) as the sole shareholder of record of shares of the
Fund owned by the Plans ("Record Owner").
Section 6. Payment for Instructions.
-------------------------
(a) Payment for Net Purchases. Payment for net purchases of shares in the Fund
will be wired by the custodian or trustee for the Plan to a Custodial account
designated by the Fund, in accordance with the Procedures described in Exhibit
B.
<PAGE>
(b) Payment for Net Redemptions. Payment for net redemptions of shares in the
Fund will be wired from the Fund's custodial account to the custodian or trustee
for the Plan, in accordance with the Procedures described in Exhibit B.
Section 7. Fund Communications. The Fund or its Administrator shall supply the
--------------------
Sub-Transfer Agent with the following materials and information with respect to
the Fund, which the Sub-Transfer Agent shall furnish or make available, where
appropriate and as required by applicable law, to fiduciaries, Plan Participants
and beneficiaries:
(a) Fund Prospectuses, Annual Reports and Proxy Materials. The Fund or its agent
shall supply the Sub-Transfer Agent, upon request, with a reasonably sufficient
quantity of current Prospectuses, and/or profile or summary prospectuses (as
permitted by interpretations or no-action letters issued by the SEC staff),
SAIs, shareholder reports, and proxy statements and related materials for the
Fund. The Sub-Transfer Agent shall be responsible for furnishing or making
available all Prospectuses, and/or profile or summary prospectuses, shareholder
reports, and proxy statements and related materials to Plan administrators to
the extent necessary to satisfy the U.S. Department of Labor's final regulation
under Section 404(c) of ERISA (29 CFR ss.2550.404c-1), Section 30 of the 1940
Act, Section 14 of the Exchange Act, or other applicable law, or as specifically
required under the Plan or reasonably requested by named fiduciaries of the
Plan.
The cost of preparing, printing and shipping to the Sub-Transfer Agent
Prospectuses, and/or profile summary prospectuses, SAIs, proxy materials,
shareholder reports and other materials of the Fund to the Sub-Transfer Agent
shall be paid by the Fund or its agent; provided, however, that if at any time
the Fund or its agent reasonably deems the usage by the Sub-Transfer Agent or
the Plan of such items to be excessive, it may, prior to the delivery of any
quantity of materials in excess of what is deemed reasonable, request that the
Sub-Transfer Agent or the Plan, as the case may be, satisfactorily demonstrate
the reasonableness of such usage. If the Fund believes the reasonableness of
such usage has not been adequately demonstrated, the Fund may request that the
party responsible for such excess usage pay the cost of printing (including
press time) and delivery of any excess copies of such materials. Unless the
Sub-Transfer Agent or the Plan, as the case may be, agree to make such payments,
the Fund may refuse to supply additional materials and this section shall not be
interpreted as requiring delivery by the Fund of any copies in excess of the
number of copies required by law.
The cost of any distribution to the Plan or its Plan Participants of
Prospectuses, and/or profile or summary prospectuses, SAIs, proxy materials,
shareholder reports and other materials of the Fund shall be paid by either the
Sub-Transfer Agent, the Plan, or the Plan sponsor, as determined by the
Sub-Transfer Agent's agreement with the Plan, and shall not be the
responsibility of the Fund or its agent.
<PAGE>
In addition, the cost of preparing and distributing confirmations, account
statements or other materials that may be prepared by the Sub-Transfer Agent as
part of the Plan Services to the Plan Participants shall be borne by the
Sub-Transfer Agent.
(b) Notice of Dividends and Other Distributions; Reports. The Fund or the
Administrator shall furnish the Sub-Transfer Agent, or its designee, notice of
any dividends or other distributions payable with respect to a Portfolio.
Dividends and distributions with respect to a Portfolio shall be automatically
reinvested in the Accounts in additional shares of that Portfolio held by the
custodian or trustee for each Plan, and the Fund shall notify the Sub-Transfer
Agent or its designee as to the number of additional shares so issued.
(c) Fund Performance Information. By the fifth (5th) Business Day of each
calendar month, the Fund shall provide to the Sub-Transfer Agent performance
information for the Portfolios as of the end of the preceding calendar month,
including each Portfolio's total return for the preceding calendar month and
calendar quarter, the calendar year-to-date, and the prior one-year, three-year,
five-year, and ten-year periods, if applicable.
(d) Monthly Statements by the Transfer Agent. By no later than the fifth (5th)
Business Day of each calendar month, the Transfer Agent shall mail to the
Sub-Transfer Agent a statement for the preceding calendar month reflecting the
shares of the Portfolios held by the Plans as of the end of such preceding month
and all shareholder-related activities by the Plans in the Portfolios during
such preceding month.
(e) Fund Toll-Free Number. It is understood by the parties that the Sub-Transfer
Agent licensed representatives will discuss with Plan Participants and
beneficiaries the investment objectives and policies of the Portfolios, solely
as set forth in the Fund's current Prospectus, and the recent investment
performance of the Portfolios based solely on the information supplied by the
Fund under Section 7(c) above. To the extent that the Plan Participants and
beneficiaries request additional information with respect to the Portfolios,,
the Fund shall supply a toll-free telephone number which the Plan Participants
and beneficiaries may use to request such additional information from an
appropriate representative of the Fund.
(f) Fund Review of Participant Communications Materials. It is understood by the
parties that, based on the Fund's current Prospectus and the information
supplied by the Fund under Section 7(c) above, the Sub-Transfer Agent may
prepare communications or disclosure materials for Plan Participants and
beneficiaries which describe the Fund or Portfolios in the same format as that
used for the other investment options offered under the Plans. The Sub-Transfer
Agent shall supply the Fund, or its designated representative, with copies of
such materials concerning the Fund or Portfolios within a reasonable time period
in advance of their intended distribution to the Plan Participants. The
Sub-Transfer Agent and the Fund shall establish a mutually agreeable time frame
in which such materials shall be reviewed and approved for use by the Fund, or
its designated representative. The Sub-Transfer Agent agrees not to use any such
materials without the prior written approval of the Fund or its designated
representative. Moreover, the
<PAGE>
Sub-Transfer Agent agrees not to use such materials until such materials have
been submitted to the National Association of Securities Dealers, Inc., if
necessary.
(g) Other Fund Information. The Fund agrees to supply the Sub-Transfer Agent
with any material information which it may have that could have a materially
adverse impact on the performance of the Portfolios in the same manner and time
frame in which such information is made available to the Fund's shareholders.
Section 8. The Sub-Transfer Agent's Services. The Sub-Transfer Agent agrees to
----------------------------------
provide all Plan Services, including but not limited to, those specified below.
Neither the Fund nor the Transfer Agent shall be required to provide Plan
Services for the benefit of the Plans or their Plan Participants, nor shall they
be required to maintain separate accounts or records for Plan Participants.
Neither the Sub-Transfer Agent nor its agents or representatives shall make any
statements that indicate otherwise to any Plan Representatives or Plan
Participants. The Sub-Transfer Agent shall maintain and preserve all records as
required by applicable federal and state law as well as all records required by
its agreements with the Plan Representatives to be maintained and preserved in
connection with providing the Plan Services, and shall otherwise comply with all
applicable laws, rules and regulations applicable to the Sub-Transfer Agent's
(i) provision of the Plan Services and (ii) acting as sub-transfer agent of the
Fund. The Sub-Transfer Agent shall:
(a) maintain separate records for each Plan Participant under the Plans, which
records shall reflect the shares purchased and redeemed (including the date and
Share Price for all transactions), share balances of such Plan Participants, the
name and address of each Plan Participant (including zip codes and tax
identification numbers);
(b) disburse or credit to the Accounts, and maintain records of, all proceeds of
redemptions of shares of the Portfolios and all dividends and other
distributions not reinvested in shares of the Portfolios;
(c) as required by law, this Agreement or any Plan, prepare and transmit to the
Plan Representatives periodic statements showing, among other things, the total
number of shares owned by the Accounts as of the statement closing date,
purchases, holdings and redemptions of shares by the Plan Representatives and/or
Plan Participants during the period covered by the statement, the Share Price of
the Portfolios as of the statement date, the dividends and other distributions
paid to the Plan during the statement period (whether paid in cash or reinvested
in shares), and such other information as may be required, from time to time, by
the Plans and/or Plan Representatives;
(d) transmit net purchase and redemption Instructions on behalf of the Plan
Representatives and/or Plan Participants to the Fund's Transfer Agent, in
accordance with the Procedures described in this Agreement and Exhibit B;
<PAGE>
(e) distribute to each Plan and/or the Plan Participants, as appropriate, copies
of the Fund's Prospectus, SAI, proxy materials, shareholder fund reports and
other materials that the Fund is required by law or otherwise to provide to its
current or prospective shareholders;
(f) maintain and preserve all records as required by law to be maintained and
preserved in connection with providing the Plan Services or acting as the Fund's
sub-transfer agent;
(g) prepare, transmit, and file federal and state reports and returns and
withhold and deposit sums withheld as required under applicable law, as agreed
upon between the Sub-Transfer Agent and the Plan Representatives or as required
under this Agreement, with respect to the Plan and each Account maintained on
behalf of each Plan;
(h) respond to inquiries of Plan Participants regarding, among other things,
NAV's, account balances, dividend options, dividend amounts, and dividend
payment dates; and
(i) maintain all Account balance information for each Plan.
Section 9. The Sub-Transfer Agent's Fees. The Fund anticipates that it will
------------------------------
derive a substantial savings in transfer agency and administrative expenses,
such as a reduction in expenses related to postage, shareholder communications
and recordkeeping, by virtue of having a single shareholder account per
Portfolio for each Plan rather than having each Plan Participant as a
shareholder. The Fund shall pay to the Sub-Transfer Agent, as compensation for
the Plan Services to be provided by The Sub-Transfer Agent under this Agreement,
a annual fee of .25% of all Plan assets invested in the Portfolios specified in
Exhibit A. The Sub-Transfer Agent's fee shall be calculated and paid quarterly
by determining the product of 0.0025 multiplied by the total of all Plan assets
invested in the Portfolios specified in Exhibit A as of the last Business Day of
the calendar quarter, divided by four. The exception to this fee schedule will
be for assets of the BF Performance plan, for which the fund will pay an annual
fee of .20% of Plan assets. The Sub-Transfer Agent shall notify the Fund in
writing of the amount due and payable hereunder, and shall provide such
documentation supporting its calculation as may be reasonably requested by the
Fund. Unless the Fund objects in writing, the Fund shall pay such fee to the
Sub-Transfer Agent within thirty (30) days after receiving notice from the
Sub-Transfer Agent of the amount due and payable. Upon providing reasonable
advance notice to the Sub-Transfer Agent, the Fund or its duly authorized agents
or representatives may review the Sub-Transfer Agent's books and records during
normal business hours for the purpose of verifying the accuracy of the amounts
billed by the Sub-Transfer Agent or the fees paid or payable by the Fund under
this Agreement.
Section 10. Cross-Indemnification of Parties.
---------------------------------
<PAGE>
(a) The Transfer Agent and the Fund shall not be held responsible and the
Sub-Transfer Agent shall indemnify and hold the Transfer Agent and the Fund and
their respective officers, directors, employees, agents, and person, if any, who
controls them within the meaning of the 1940 Act and Securities Act of 1933, as
amended, harmless from and against any and all reasonable losses, damages
(excluding consequential, punitive or other indirect damages), costs, charges,
counsel fees, payments, expenses, and liability arising out of or attributable
to: (i) the Sub-Transfer Agent's lack of good faith, negligence, reckless
disregard or willful misconduct in carrying out its duties and responsibilities
under this Agreement; (ii) any breach by the Sub-Transfer Agent of any material
provision of this Agreement; or (iii) any material breach by the Sub-Transfer
Agent of any representation, warranty, or covenant made in this Agreement.
(b) Neither the Sub-Transfer Agent nor its affiliates shall be held responsible
and the Fund shall severally indemnify and hold the Sub-Transfer Agent and its
affiliates and their officers, directors, employees, and agents harmless from
and against any and all reasonable losses, damages (excluding consequential,
punitive and other indirect damages), costs, charges, counsel fees, payments,
expenses, and liability arising out of or attributable to: (i) its lack of good
faith, negligence, reckless disregard or willful misconduct in carrying out its
respective duties and responsibilities under this Agreement; (ii) its breach of
any material provision of this Agreement; or (iii) its material breach of any
representation, warranty, or covenant made in this Agreement. It is understood
by the parties that the obligations of the Fund under this Section arise only
with respect to each such party's own acts or failure to act and not with
respect to an act or failure to act of any other party.
(c) In providing Plan Services pursuant to this Agreement, each party shall
comply with federal and state securities laws and regulations applicable to it
and each party hereto shall fully indemnify the other for any claims or
liabilities suffered by such other party, or its respective officers, directors,
employees or agents (including reasonable legal fees and other out-of-pocket
costs of defending against any such claim or liability or reasonable costs
incurred in enforcing this right of indemnification), arising from
non-compliance by such party with any such laws or regulations.
(d) Notwithstanding anything herein to the contrary, to the extent that a party
hereto shall cause its obligations hereunder to be fulfilled by an agent or
designee, such party shall be fully responsible for the performance by such
agent or designee of such party's obligations as if such party had performed
them itself.
(e) In providing the indemnifications set forth herein, each party agrees to
maintain such insurance coverage as shall be reasonably necessary under the
circumstances.
Section 11. Force Majeure. In the event any party is unable to perform its
--------------
obligations or duties under the terms of this Agreement because of acts of God,
strikes, riots, acts of war, equipment failures, or power or other utility
failures or damage or other cause reasonably beyond its control, such party
shall not be liable for any and all losses, damages, costs, charges, counsel
fees,
<PAGE>
payments, expenses or liability to any other party (whether or not a party to
this Agreement) resulting from such failure to perform its obligations or duties
under this Agreement or otherwise from such causes. This provision shall in no
way excuse any party from any liability that results from that party's failure
to have in place appropriate and reasonable disaster recovery plans designed to
enable that party to perform its obligations and duties under this Agreement.
Section 12. Confidentiality. Subject to the Fund's ownership of certain records
----------------
as set forth in Section 1 of this Agreement, all information, books, records,
and data supplied by one party to another party in connection with the
negotiation or carrying out of this Agreement are and shall remain the property
of the party supplying such information, books, records, or data and shall be
kept confidential by the other party except as may be required by law or this
Agreement and except as the other party also received such information, books,
records, or data from some other source not a party to this Agreement.
Section 13. Governing Law. This Agreement shall be construed in accordance with
--------------
the laws of the State of Minnesota without reference to choice of law
principles.
Section 14. Notices. Every Notice required by this Agreement shall be deemed
--------
given when sent in accordance with the Procedures or, as to any matter not
addressed by the Procedures, a Notice shall be deemed given on the next Business
Day if sent today by a nationally recognized overnight carrier service that
provides evidence of receipt or if sent the same Business Day by 3:00 p.m.
(receiving party's time) by personal delivery or facsimile transmission, in each
case to such person and to such facsimile number (if applicable) as shall be
designated from time to time by each party pursuant to a written notice. The
names and addresses of the persons to whom notices should be sent are set forth
in Exhibit E.
Section 15. Assignment. No party shall assign any of its rights, powers or
-----------
duties under this Agreement without the other parties' prior written consent.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective permitted successors and assigns.
Section 16. Amendment or Termination of Agreement. The parties to this Agreement
--------------------------------------
may agree in writing to amend this Agreement at any time in whole or in part.
This Agreement shall terminate at the option of any party upon thirty (30) days'
advance written notice to the other parties. This Agreement shall also terminate
upon written notice to the other parties that one or more of the parties to this
Agreement is in material breach of this Agreement, unless the party or parties
in material breach of this Agreement cures such breach to the reasonable
satisfaction of the party or parties alleging the breach within thirty (30) days
after written notice.
In addition, any party may terminate this Agreement upon written notice to the
other parties of: (i) the effective date of the termination of the Sub-Transfer
Agent as a service provider to the Plans; (ii) the discontinuance of the Fund as
an investment option offered under the Plans; (iii) the termination of the
Transfer Agent as service providers to the Fund; (iv) the lapse or cessation
<PAGE>
of the full force and effect of the authorizations, licenses, qualifications or
registrations required to be maintained by any of the parties to this Agreement
in connection with the performance of their respective duties hereunder; (v) any
action to be taken or service to be provided hereunder that becomes unlawful due
to changes in the laws or for other reasons; and (vi) a good faith determination
by the Fund that shares of any of the Portfolios are not being offered in
conformity with the terms of this Agreement, such Portfolio's then current
Prospectus or SAI or applicable law.
Termination of this Agreement shall not affect the obligations of the parties to
make payments in accordance with the Procedures specified in Exhibit B or to
provide compensation under Section 9 for any Instruction received by the
Transfer Agent prior to such termination and shall not affect the Fund's
obligation to maintain the Accounts in the name of the Plans or any successor
trustee or recordkeeper for such Plans. Following termination of this Agreement,
the Fund shall not have any payment obligation to the Sub-Transfer Agent for the
Plan Services contemplated herein, except such obligations as arose prior to the
date of termination of this Agreement. Upon termination of this Agreement for
any reason, purchases of shares of the Portfolios pursuant to this Agreement
shall no longer be permitted through the Sub-Transfer Agent.
Section 17. Use of Names. Except as otherwise expressly provided for in this
-------------
Agreement, the Fund shall not use (and the Fund agrees it shall cause the
Transfer Agent not to use) any trademark, trade name, service mark or logo of
the Sub-Transfer Agent, or any variation of any such trademark, trade name,
service mark or logo, without the Sub-Transfer Agent's prior written consent,
which consent may not be unreasonably withheld. Except as otherwise expressly
provided for in this Agreement, the Sub-Transfer Agent shall not use any
trademark, trade name, service mark or logo of the Transfer Agent, the Fund, or
any variation of any such trademarks, trade names, service marks, or logos,
without the prior written consent of the Fund, as appropriate, which consent may
not be unreasonably withheld.
Section 18. Non-Exclusivity. Each of the parties acknowledges and agrees that
----------------
this Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.
Section 19. Records. The parties hereto agree to make and to maintain all
--------
records required of such party under this Agreement or applicable law and to
cooperate in good faith in providing records to one another pursuant to this
Agreement.
(a) Upon the request of the other parties to this Agreement, except as otherwise
prohibited by law, the Sub-Transfer Agent shall provide copies of all the
historical records relating to transactions between the Fund and the Plans,
written communications regarding the Fund to or from the Plans and other
materials, in each case (i) as are maintained by the Sub-Transfer Agent in the
ordinary course of its business, and (ii) as may reasonably be requested to
enable the other parties to this Agreement, or their representatives, including
without limitation its auditors or legal counsel, to (1) monitor and review the
Plan Services, (2) comply with any request of a
<PAGE>
governmental body or self-regulatory organization or the Plans, (3) verify
compliance by the Sub-Transfer Agent with the terms of this Agreement, (4) make
required regulatory reports, (5) perform general customer supervision, or (6) as
required by Section 17Ad(7)(g) of the Exchange Act. The Sub-Transfer Agent
agrees that it will permit other parties to this Agreement or such
representatives of them to have reasonable access to its personnel and records
in order to facilitate the monitoring of the quality of the Plan Services.
(b) Upon the request of the Sub-Transfer Agent, the Fund shall, and the Fund
shall cause the Transfer Agent to, provide copies of all the historical records
relating to transactions between the Fund and the Accounts, written
communications regarding the Fund to or from the Accounts and other materials,
in each case (i) as are maintained by such party in the ordinary course of their
business, and (ii) as may reasonably be requested to enable the Sub-Transfer
Agent or its representatives, including without limitation its auditors or legal
counsel, to (1) comply with any request of a governmental body or
self-regulatory organization of the Plans, (2) verify compliance by the other
parties to this Agreement with the terms of this Agreement, (3) make required
regulatory reports, or (4) perform general customer supervision.
Section 20. Relationship of Parties: No Joint Venture, Etc. Except for the
-----------------------------------------------
limited purposes provided in this Agreement, it is understood and agreed that
all Plan Services performed hereunder by the Sub-Transfer Agent shall be as an
independent contractor and not as an employee or agent of the other parties to
this Agreement, and none of the parties shall hold itself out as an agent of any
other party with the authority to bind such party. Neither the execution nor
performance of this Agreement shall be deemed to create a partnership or joint
venture by and among any of the parties hereto nor give any rights to or create
any contractual obligations to any non-parties to this Agreement, including any
Plans, Plan Representatives and/or Plan Participants.
Section 21. Operations of Funds. In no way shall the provisions of this
--------------------
Agreement limit the authority of the Fund from taking such action as either may
deem appropriate or advisable in connection with all matters relating to the
operation of the Fund and the sale of shares of the Portfolios. In no way shall
the provisions of this Agreement limit the authority of the Sub-Transfer Agent
to take such action as it may deem appropriate or advisable in connection with
all matters relating to the provision of Plan Services or the shares of mutual
funds other than the Portfolios offered to the Plans.
Section 22. Survival. The provisions of Section 8(g), Section 9, Section 10,
---------
Section 12, and Section 16 of this Agreement shall survive termination of this
Agreement.
Section 23. Counterparts. This Agreement may be executed in one or more
-------------
counterparts, each of which shall be an original and all of which together shall
be deemed one and the same document.
Section 24. Severability. In case any one or more of the provisions contained in
-------------
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability
<PAGE>
of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.
Section 25. Entire Agreement. This Agreement, including any Exhibits hereto,
-----------------
constitutes the entire agreement by and between the Sub-Transfer Agent and the
Fund with respect to the matters dealt with herein, and supersedes all previous
agreements, written or oral with respect to such matters.
Section 26. Limitation of Liability. A copy of the Fund's Declaration of Trust
------------------------
is on file with the Secretary of State of the Commonwealth of Massachusetts and
notice is hereby given that this instrument is executed on behalf of the
trustees and not individually and that the obligations of this instrument are
not binding upon any of the trustee, officers or shareholders of the Fund
individually, but binding any upon the assets and property of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on their behalf by their duly authorized officers as of the day and year first
above written.
Attest: /s/ Kevin Ario NORWEST BANK MINNESOTA, N.A.
By: /s/ Alan Hogg
-------------
Title: Vice President
Attest: /s/ Cassandra Arnold OAK ASSOCIATES FUNDS
By: /s/ Joseph O'Donnell
--------------------
Title: Vice President
EXHIBIT A
PORTFOLIOS
Name of Portfolio Ticker
- ----------------- ------
White Oak Growth Stock Fund WOGSX
Pin Oak Aggressive Stock Fund POGSX
<PAGE>
EXHIBIT B
PROCEDURES
(a) On any day the New York Stock Exchange (the "Exchange") is open for business
(a "Business Day"), the Sub-Transfer Agent may receive Instructions from the
Plan and/or Plan Representatives for each Plan for the purchase or redemption of
shares of the Portfolios based solely upon each Plan's receipt of Instructions
from Plan, Plan Representatives and/or Plan Participants prior to the Close of
Trading on that Business Day. Instructions in good order received by the
Sub-Transfer Agent prior to 4:00 p.m. Eastern time ("ET") on any given Business
Day, or earlier if the Exchange closes earlier than 4:00 p.m. ET on any given
Business Day, (the "Trade Date") and transmitted to the Fund's Transfer Agent by
no later than 7:00 a.m. ET on the Business Day following the Trade Date ("Trade
Date plus One" or "TD+1"), will be executed at the NAV ("Share Price") of each
applicable Portfolio, determined as of the Close of Trading on the prior
Business Day ("Effective Trade Date").
(b) By no later than 7:00 p.m. ET on each Business Day ("Price Communication
Time"), the Fund's Administrator will use its best efforts to communicate to the
Sub-Transfer Agent via electronic transmission acceptable to both parties, the
Share Price of each applicable Portfolio, as well as dividend and capital gain
information and, in the case of income funds, the daily accrual for interest
rate factor (mil rate), determined at the Close of Trading on that Business Day.
It is understood and agreed that, in the context of Section 22 of the 1940 Act
and the rules and public interpretations thereunder by the staff of the
Securities and Exchange Commission ("SEC Staff"), receipt by the Sub-Transfer
Agent of any Instructions from the Plan Representatives and/or Plan Participants
in a timely manner shall be deemed to be receipt by the Fund of such
Instructions solely for pricing purposes and shall cause purchases and sales for
the Plans to be deemed to occur at the Share Price for such Business Day, except
as provided in (d)(iii) below.
(c) As noted in Paragraph (a) above, by 7: 00 a.m. ET on TD+1 ("Instruction
Cutoff Time") and after the Sub-Transfer Agent has processed all approved Plan
Representative and/or Plan Participant activity, the Sub-Transfer Agent will
transmit to the Fund's Transfer Agent via electronic transmission or
system-to-system, and to the Fund's Transfer Agent, by an "auto fax" or by a
method acceptable to the Sub-Transfer Agent and the Fund's Transfer Agent, a
report (the "Instruction Report") detailing the Instructions that were received
by the Sub-Transfer Agent prior to the Fund's daily determination of Share Price
for each Portfolio (i.e., the Close of Trading) on each Business Day. The Fund's
Transfer Agent, upon successful receipt of the file containing the Instruction
Report, will transmit (system to system) a file acknowledging the receipt of the
file containing the Instruction Report. If the Fund's Transfer Agent does not
receive a successful file from the Sub-Transfer Agent, an acknowledgment file
will not be sent from the Fund's Transfer Agent. In the event the Sub-Transfer
does not receive an acknowledgment file within thirty (30) minutes of
transmission of the file containing the Instruction Report, Sub-Transfer Agent
will contact a Financial Control Representative at the
<PAGE>
Fund's Transfer Agent to determine conclusively whether the Instruction Report
was received by the Fund's Transfer Agent or whether the Instruction Report
should be resubmitted via electric transmission or system-to-system. At the
present time, the Sub-Transfer Agent and the Fund's Transfer Agent have agreed
that the Sub-Transfer Agent will enter trades via the Terminal system to system
(i.e., by "TIP" files sent online to the Fund's Transfer Agent), by 7:00 a.m.
E.T. on TD+l.
(i) It is understood by the parties that all Instructions from the
Plan Representatives and/or Plan Participants shall be
received and processed by the Sub-Transfer Agent in accordance
with its standard transaction processing procedures that apply
to all investment options offered under the Plans. The
Sub-Transfer Agent shall maintain records sufficient to
identify the date and time of receipt of all Plan
Representative and/or Plan Participant transactions involving
the Portfolios and shall make such records available upon
reasonable request for examination by the Fund or its
designated representative or, at the request of the Fund, by
appropriate governmental authorities. Under no circumstances
shall the Sub-Transfer Agent change, alter or modify any
Instructions received by it in good order.
(ii) The Instruction Report shall state whether the Instructions
received by the Sub-Transfer Agent from the Plan
Representatives and/or Plan Participants by the Close of
Trading on such Business Day resulted in the Accounts being a
net purchaser or net seller of shares in each of the
Portfolios and shall indicate the net dollar value purchased
or net dollar value redeemed by each Account in each of the
Portfolios and the date of the transaction. On Business Days
where there are no Instructions in a Portfolio for an Account
or all the Accounts, the Instruction Report will so indicate.
Each transmission of Instructions by the Sub-Transfer Agent of
a net purchase or redemption Instruction relating to a
particular Portfolio and a Business Day shall constitute a
representation and covenant by the Sub-Transfer Agent that
such net purchase or redemption Instruction was based on Plan
Representative and/or Plan Participants transactions received
by the Sub-Transfer Agent prior to the Close of Trading (and
prior to the time the Share Price for each Portfolio) was
determined on such Business Day, and that each net purchase or
redemption Instruction included all such Plan Representative
and/or Plan Participant transactions so received by the Sub-
Transfer Agent. All Instructions will be communicated in U.S.
dollars.
(iii) As noted above, Instructions communicated by the Sub-Transfer
Agent to the Fund's Transfer Agent by mutually acceptable
means on any Business Day by the Instruction Cutoff Time will
be processed by the Fund's Transfer Agent at the Share Price
determined for each Portfolio as of the Close of Trading on
the Business Day on which the Sub-Transfer Agent received
those Instructions from the Plan Representatives and/or Plan
Participants (i.e., the Trade Date).
<PAGE>
(iv) Following the completion of the transmission of any
Instructions by the Sub-Transfer Agent to the Fund's Transfer
Agent by the Instruction Cutoff Time, the Sub-Transfer Agent
will verify that the Instruction was received by the Fund's
Transfer Agent and trades are pending by utilizing the LOOKUP
request function, entering the function "TP" with the
Portfolio and Account number to see the pending trades. If
there has been an error in the entry of the Instruction, the
Sub-Transfer Agent can use the "BMAINT" function to delete the
incorrect trade. Thereafter, the Sub-Transfer Agent can
reenter the correct Instruction. Any rejected Instruction will
be communicated to the Sub-Transfer Agent.
(v) In the event that an Instruction transmitted by the
Sub-Transfer Agent on any Business Day is not received by the
Fund's Transfer Agent by the Instruction Cutoff Time, due to
mechanical difficulties or for any other reason beyond the
Sub-Transfer Agent's reasonable control, such Instruction
shall nonetheless be treated by the Fund's Transfer Agent as
if it had been received by the Instruction Cutoff Time,
provided that (a) the Sub-Transfer Agent retransmits such
Instruction by facsimile transmission to the Fund's Transfer
Agent and the Adviser and such Instruction is received by the
Transfer Agent's Financial Control representative no later
than 9:00 a.m. ET on TD+1; and (b) the Sub-Transfer Agent
places a phone call to a Financial Control representative of
the Fund's Transfer Agent prior to 9:00 a.m. ET on TD+1 to
advise the Fund's Transfer Agent that a facsimile transmission
concerning the Instruction is then being sent. In such
circumstance, the Sub-Transfer Agent shall transmit the
Instruction using the date and reason code applicable to the
transaction.
(vi) With respect to all instructions, the Transfer Agent's
Financial Control representative will manually adjust the
"supersheet" for the Effective Trade Date to reflect any
Instructions sent by the Sub-Transfer Agent. The Transfer
Agent will fax a copy of all Instructions and supersheets to
the Fund which will promptly verify that the supersheets
accurately reflect the Instructions received and the deletion
of yesterday's manually added Instructions or, if not,
immediately advise the Transfer Agent of any discrepancy.
(vii) Following the transmission of any Instructions to the Fund's
Transfer Agent, the Sub-Transfer Agent will verify that the
Instructions have been sent to the Fund's Transfer Agent and
that the Sub-Transfer Agent's transmission to Transfer Agent
has been received.
(viii) By no later than 9:00 a.m. on TD+2, and based on the
information transmitted to the Sub-Transfer Agent pursuant to
Section 5(a)(v) and Paragraph (c)(iv) above, the Sub-Transfer
Agent will use its best efforts to verify that all
Instructions provided to the Fund's Transfer Agent on TD+l
were accurately received and that the trades for each Account
were accurately completed and the Sub-Transfer Agent will use
its best efforts to promptly notify the Fund's Transfer Agent
of any discrepancies.
<PAGE>
(d) As set forth below, upon the timely receipt from the Sub-Transfer
Agent of the Instruction Report, the Fund will execute the purchase or
redemption transactions (as the case may be) at the Share Price for each
Portfolio computed as of the Close of Trading on the Effective Trade Date.
(i) Except as otherwise provided herein, all purchase and
redemption transactions will settle on TD+1. Settlements will
be through net Federal Wire transfers between the trustee or
custodian for the Plans and a custodial account designated by
the Fund. In the case of Instructions which constitute a net
purchase order, settlement shall occur by the Sub-Transfer
Agent instructing the Plan Representative to initiate a wire
transfer by 1:00 p.m. ET on TD+1 to the custodian for the Fund
for receipt by the Fund's custodian by no later than the Close
of Business at the New York Federal Reserve Bank on TD+1,
causing the remittance of the requisite funds to cover such
net purchase order. In the case of Instructions which
constitute a net redemption order, settlement shall occur by
the Fund's Transfer Agent instructing the Fund's custodian to
initiate a wire transfer by 1:00 p.m. ET from on TD+1, from
the Fund's custodial accounts to the custodial accounts for
the Plans for their receipt by no later than the Close of
Business at the New York Federal Reserve Bank on the
Settlement Date, causing the remittance of the requisite funds
to cover such net redemption order. The Fund reserves the
right to (i) delay settlement of redemptions for up to five
(5) Business Days after receiving a net redemption order in
accordance with Section 22 of the 1940 Act and Rule 22c-I
thereunder, or (ii) suspend redemptions pursuant to the 1940
Act or as otherwise required by law. Settlements shall be in
U.S. dollars and a Portfolio may pay redemption proceeds in
whole or in part by a distribution in-kind of readily
marketable securities that it holds in lieu of cash in
conformity with applicable law or regulations.
(ii) The Fund agrees that shares shall be available for purchases
by the Plans so long as such shares are generally available
for purchase by the public. In the event that the Fund decides
to refuse an order for the purchase of shares, suspend the
sale of shares or withdraw the sale of shares of any or all of
the Funds, the Fund agrees to use commercially reasonable
efforts to provide the Sub-Transfer Agent with written notice
of its intention to refuse orders no later than 9:00 a.m.
Eastern time on the Business Day prior to the date of which
such orders will be refused.
(iii) The Sub-Transfer Agent, as record owner of each Account
("Record Owner"), will be provided with all written
confirmations required under federal and state securities laws
on a system to system basis by means of the Activity File
transmission. In this regard, confirmations will be made
available, system to system, by the Fund's Transfer Agent to
the Record Owner no later than 4:00 p.m. ET on TD+2.
<PAGE>
(iii) On any Business Day when the Federal Reserve Wire Transfer
System is closed, all communication and processing rules will
be suspended for the settlement of Instructions. Instructions
will be settled on the next Business Day on which the Federal
Reserve Wire Transfer System is open. The original TD+1
Settlement Date will not apply. Rather, for purposes of this
Paragraph (d)(iii) only, the Settlement Date will be the date
on which the Instruction settles.
(e) The Sub-Transfer Agent shall, upon the availability of any
confirmation or statement concerning the Accounts, promptly verify by use of the
Terminal the accuracy of the information contained therein against the
information contained in the Sub-Transfer Agent's internal recordkeeping system
and shall promptly advise the Fund's Transfer Agent in writing of any
discrepancies between such information. The Fund's Transfer Agent and the
Sub-Transfer Agent shall cooperate to resolve any such discrepancies as soon as
reasonably practicable.
(f) In the event of any error or delay with respect to the Procedures
outlined in Exhibit B herein: (i) which is caused by the Fund, the Fund's
Transfer Agent or its agents shall make any adjustments on the Fund's accounting
system necessary to correct such error or delay and the responsible party or
parties shall reimburse the Plan and the Sub-Transfer Agent for any losses or
reasonable costs incurred directly as a result of the error or delay but
specifically excluding any and all consequential punitive or other indirect
damages; or (ii) which is caused by the Sub-Transfer Agent or by any Plan
Representative, the Fund or its agent shall make any adjustment on the Fund's
accounting system necessary to correct such error or delay and the affected
party or parties shall be reimbursed by the Sub-Transfer Agent for any losses or
reasonable costs incurred directly as a result of the error or delay (or the
Sub-Transfer Agent shall make any adjustments on its recordkeeping system, if
appropriate), but specifically excluding any and all consequential punitive or
other indirect damages. In the event of any such adjustments on the Fund's
accounting system, the Sub-Transfer Agent shall make the corresponding
adjustments on its internal recordkeeping system. In the event that errors or
delays with respect to the Procedures are contributed to by more than one party
hereto, each party shall be responsible for that portion of the loss or
reasonable cost which results from its error or delay. THE PORTION OF ANY LOSS
OR COST FOR WHICH THE FUND IS RESPONSIBLE MAY BE ADJUSTED BETWEEN THE FUND AND
ITS AGENTS IN ACCORDANCE WITH THE AGREEMENT BETWEEN THE FUND AND SUCH AGENT
WHEREBY THE AGENCY IS CREATED. All parties agree to provide the other parties
prompt notice of any errors or delays of the type referred to herein and to use
reasonable efforts to take such action as may be appropriate to avoid or
mitigate any such costs or losses.
<PAGE>
EXHIBIT C
The weekdays on which the Fund is closed for business are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
<PAGE>
EXHIBIT D
The shares of each Portfolio listed in Exhibit A above are registered or
otherwise authorized for issuance and sale in the all fifty (50) states and the
District to Columbia.
<PAGE>
EXHIBIT E
Notices
Notices required by this Agreement should be sent as follows:
If to the Fund: SEI Investments Company
One Freedom Valley Rd
Oaks, PA 19456
Attn: Legal Dept.
Phone: (610) 676-1182
Fax: (610) 676-1040
If to The Sub-Transfer Agent: Norwest Center
6th & Marquette
10th floor
Minneapolis, MN 55479-0063
Attn: Kevin Ario
Phone: (612) 667-8398
Fax: (612) 667-7889
WHITE OAK GROWTH STOCK PORTFOLIO
PIN OAK AGGRESSIVE STOCK PORTFOLIO
RED OAK TECHNOLOGY SELECT PORTFOLIO
SCHEDULE A DATED AS OF DECEMBER 31, 1998
TO THE ADMINISTRATION AGREEMENT
BETWEEN
OAK ASSOCIATES FUNDS
AND
SEI FUND RESOURCES
Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the White Oak
Growth Stock Portfolio, Pin Oak Aggressive Stock Portfolio and Red Oak
Technology Select Portfolio ("Portfolios") at an annual rate of .15%
on the first $250 million of assets; .12% on the next $200 million of
assets; .10% on the next $200 million of assets and .08% on all assets
over $650 million. The fees are calculated daily per Portfolio and
paid monthly. There is a minimum annual administration fee of $50,000
on the existing Portfolios and $75,000 on any new portfolios.
Term: Pursuant to Article 9, the term of this Agreement shall commence on
August 12, 1997 and shall remain in effect for 3 years. In the event
of a material breach of this Agreement by either party, the
non-breaching party shall notify the breaching party in writing of
such breach and upon receipt of such notice, the breaching party shall
have 45 days to remedy the breach or the non-breaching party may
immediately terminate this Agreement.
Exhibit 99.B11
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our name
included in the Post-Effective Amendment No. 2 to the Registration Statement on
Form N-1A of the Oak Associates Funds (File No. 333-42115), and to all
references to our firm included in this Registration Statement.
/s/ Arthur Andersen LLP
-----------------------
Philadelphia, Pennsylvania
September 22, 1998
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 9-11-98
- ------------------------- -------
Robert A. Nesher, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 9-9-98
- ----------------------- ------
John T. Cooney, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 9/9/98
- ------------------------- ------
William M. Doran, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 9/9/98
- ------------------------ ------
Frank E. Morris, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 9-9-98
- ---------------------------- ------
Robert A. Patterson, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 10 Sept. '98
- ------------------------- ------------
Eugene B. Peters, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Mark E. Nagle, Joseph M. O'Donnell and Kevin P. Robins,
each of them singly, his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, to sign for him and in his name, place
and stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: 9/10/98
- ------------------------ -------
James M. Storey, Trustee
<PAGE>
THE ARBOR FUND
THE ADVISORS' INNER CIRCLE FUND
THE EXPEDITION FUNDS
OAK ASSOCIATES FUNDS
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned trustee and/or
officer of the above referenced funds (the "Trusts"), each a business trust
organized under the laws of The Commonwealth of Massachusetts, hereby
constitutes and appoints Kevin P. Robins and Joseph M. O'Donnell, each of them
singly, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, to sign for him and in his name, place and
stead, and in the capacity indicated below, to sign any and all Registration
Statements and all amendments thereto relating to the offering of the Trust's
shares under the provisions of the Investment Company Act of 1940 and/or 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: September 9, 1998
- ------------------------------------- -----------------
Mark E. Nagle, President
