As filed with the Securities and Exchange Commission on March 20, 1998
Securities Act Registration No. 33-70590
Investment Company Act Registration No. 811-8088
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [X]
Amendment No. 8
OAK RIDGE FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
10 South LaSalle Street, Suite 1050 60603
Chicago, Illinois (Zip Code)
(Address of Principal Executive
Offices)
Registrant's Telephone Number, including Area Code: (312) 857-1040
Samuel Wegbreit
Oak Ridge Funds, Inc.
10 South LaSalle Street, Suite 1050
Chicago, Illinois 60603
(Name and Address of Agent for Service)
Copies to:
Carol A. Gehl
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
It is proposed that this filing will become
effective (check appropriate box).
[ ] immediately upon filing pursuant to
paragraph (b) of Rule 485
[X] on March 31, 1998 pursuant to paragraph
(b) of Rule 485
[ ] 60 days after filing pursuant to
paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1)
of Rule 485
[ ] 75 days after filing pursuant to
paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2)
of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates
a new effective date for a previously
filed post-effective amendment
<PAGE>
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the
Prospectus and the Statement of Additional Information
of the responses to the Items of Parts A and B of Form
N-1A).
Caption or Subheading in
Prospectus or Statement
Item No. on Form N-1A of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Summary; Summary of Fund
Expenses
3. Condensed Financial Financial Highlights; Fund
Information Performance; Comparison of
Investment Results
4. General Description of Investment Objective and
Registrant Policies; Investment
Restrictions; Investment
Techniques and Risks; Fund
Organization
5. Management of the Fund Management; Administrator;
Custodian, Transfer Agent and
Distributor; Portfolio
Transactions
5A. Management's Discussion Fund Performance
of Fund Performance
6. Capital Stock and Other Summary; Income Dividends,
Securities Capital Gains Distributions
and Tax Treatment; Fund
Organization
7. Purchase of Securities How to Purchase Shares;
Being Offered Determination of Net Asset
Value; Distribution Plans;
Custodian, Transfer Agent and
Distributor
8. Redemption or Repurchase How to Redeem Shares;
Determination of Net Asset
Value
9. Pending Legal Proceedings *
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and *
History
13. Investment Objectives and Investment Restrictions;
Policies Investment Techniques and
Risks; Portfolio Transactions
and Brokerage
<PAGE>
14. Management of the Fund Directors and Officers of the
Corporation
15. Control Persons and Directors and Officers of the
Principal Holders of Corporation; Principal
Securities Shareholders
16. Investment Advisory and Investment Advisor and
Other Services Distributor; Distribution
Plans; Management (in
Prospectus); Custodian;
Transfer Agent; Independent
Accountants
17. Brokerage Allocation and Portfolio Transactions and
Other Practices Brokerage
18. Capital Stock and Other Included in Prospectus under
Securities the heading Fund Organization
19. Purchase, Redemption and Included in Prospectus under
Pricing of Securities the headings How to Purchase
Being Offered Shares; Determination of Net
Asset Value; How to Redeem
Shares; and in the Statement
of Additional Information
under the heading Investment
Advisor and Distributor
20. Tax Status Included in Prospectus under
the heading Income Dividends,
Capital Gains Distributions
and Tax Treatment; and in the
Statement of Additional
Information under the heading
Taxes
21. Underwriters Investment Advisor and
Distributor
22. Calculations of Performance Information
Performance Data
23. Financial Statements Financial Statements
____________________________
*Answer negative or inapplicable
<PAGE>
PROSPECTUS
March 31, 1998
OAK RIDGE INVESTMENTS, LLC
Presents
Oak Ridge Growth Fund
a Series of
Oak Ridge Funds, Inc.
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-407-7298
The Oak Ridge Growth Fund (the "Fund") is a series of
Oak Ridge Funds, Inc. (the "Corporation"), an open-end,
diversified, management investment company commonly
referred to as a mutual fund (the Fund and the
Corporation were formerly known as the O.R.I. Growth
Fund and O.R.I. Funds, Inc., respectively). The
investment objective of the Fund is to seek capital
appreciation. The Fund will seek, under normal market
conditions, to achieve its investment objective by
investing its assets primarily in equity securities of
domestic companies. The Fund may invest in all types
of equity securities that, in the opinion of the Fund's
investment advisor, Oak Ridge Investments, LLC (the
"Advisor"), have the potential to appreciate faster
than the general market.
The Fund offers two classes of shares which may be
purchased at a price equal to their net asset value (i)
plus an initial sales charge imposed at the time of
purchase (the "Class A shares"), or (ii) without any
initial sales charge (the "Class C shares"). Each
class of shares of the Fund is subject to a separate
Rule 12b-1 Plan pursuant to which aggregate annual fees
of 0.25% and 1.00% of the average net assets of the
Fund attributable to the Class A and Class C shares,
respectively, are charged.
This Prospectus sets forth concisely the information
that you should be aware of prior to investing in the
Fund's Class A or Class C shares. Please read this
Prospectus carefully and retain it for future
reference. Additional information regarding the Fund
is included in the Statement of Additional Information
dated March 31, 1998, which has been filed with the
Securities and Exchange Commission (the "SEC") and is
incorporated in this Prospectus by reference. A copy
of the Fund's Statement of Additional Information is
available without charge by writing to the Fund at the
address listed above or by calling 1-800-407-7298.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY 3
SUMMARY OF FUND EXPENSES 4
FINANCIAL HIGHLIGHTS 6
FUND PERFORMANCE 8
INVESTMENT OBJECTIVE AND POLICIES 8
INVESTMENT RESTRICTIONS 8
INVESTMENT TECHNIQUES AND RISKS 9
MANAGEMENT 10
HOW TO PURCHASE SHARES 10
DETERMINATION OF NET ASSET VALUE 14
HOW TO REDEEM SHARES 14
DISTRIBUTION PLANS 16
TAX SHELTERED RETIREMENT PLANS 17
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND
TAX TREATMENT 17
FUND ORGANIZATION 17
ADMINISTRATOR 18
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR 18
PORTFOLIO TRANSACTIONS 19
COMPARISON OF INVESTMENT RESULTS 19
____________________
No person has been authorized to give any information
or to make any representations other than those
contained in this Prospectus and the Statement of
Additional Information, and if given or made, such
information or representations may not be relied upon
as having been authorized by the Fund. This Prospectus
does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such
offer in such state.
____________________
<PAGE>
SUMMARY
Investment Objective
The investment objective of the Fund is to seek
capital appreciation. The Fund will seek to achieve
its investment objective by investing its assets
primarily in equity securities of domestic companies
that, in the opinion of the Advisor, have the potential
to appreciate faster than the general market. The
Fund's investments are subject to market risk and the
value of its shares will fluctuate with changing market
valuations of its portfolio holdings. See "INVESTMENT
OBJECTIVE AND POLICIES" and "INVESTMENT TECHNIQUES AND
RISKS."
Investment Advisor
Oak Ridge Investments, LLC is the investment
advisor to the Fund. The predecessor to the Advisor
was organized in September 1989; the Advisor was
organized in March 1997. The Advisor acts as the
investment advisor to individual and institutional
clients with investment portfolios of approximately
$210 million. See "MANAGEMENT."
Purchase and Redemptions
Class A shares of the Fund are offered at net
asset value per share plus a maximum initial sales
charge of 4.25% of the offering price. Persons who
were shareholders of the Fund as of December 31, 1995
are not subject to this front-end sales load on
additional purchases of Class A shares. Certain other
exceptions may also apply. In addition, the Fund has
adopted a distribution plan under Rule 12b-1 of the
Investment Company Act of 1940, as amended (the "1940
Act"), with respect to Class A shares sold on or after
January 1, 1996 (the "Class A Plan"), which authorizes
the Fund to pay a distribution fee of up to 0.25% per
annum of the average daily net assets of the Fund
attributable to the Class A shares.
Class C shares of the Fund are offered without the
imposition of a sales charge. Therefore, the entire
amount of an investor's purchase is invested in the
shares. However, the Fund has adopted a distribution
plan under Rule 12b-1 of the 1940 Act for the Class C
shares (the "Class C Plan"), which authorizes the Fund
to pay a distribution fee of up to 0.75% and a service
fee of up to 0.25% per annum of the average daily net
assets of the Fund attributable to the Class C shares.
For additional information, see "HOW TO PURCHASE
SHARES" and "DISTRIBUTION PLANS."
The minimum initial investment required by the
Fund is $2,000. The minimum subsequent investment is
$100, if made by mail, or $1,000, if made by wire. The
minimum initial investment for traditional individual
retirement accounts ("IRAs") is $1,000 and for
Education IRAs, the minimum initial investment is $500.
For investors using the Automatic Investment Plan
("AIP"), the minimum initial investment is $100.
Minimum investments are waived for employee benefit
plans qualified under Sections 401, 403(b)(7) or 457 of
the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"). These minimums may be
changed or waived at any time at the discretion of the
Fund. See "HOW TO PURCHASE SHARES."
Shares may be redeemed using either written or
telephone redemption procedures at net asset value per
share without the imposition of any redemption charges.
See "HOW TO REDEEM SHARES."
Shareholder Services
Questions regarding the Fund may be directed to
the Fund at the address and telephone number on the
front page of this Prospectus.
<PAGE>
SUMMARY OF FUND EXPENSES
The purpose of the following table is to assist an
investor in understanding the various costs and
expenses that an investor in the Fund will bear
directly (shareholder transaction expenses) and
indirectly (annual fund operating expenses).
Fee Table
Class A Class C
Shareholder Transaction Expenses(1)
Maximum Sales Load Imposed on Purchases 4.25%(2) NONE
(as a percentage of offering price)
Deferred Sales Load Imposed on Redemptions NONE NONE
Sales Load Imposed on Reinvested Dividends NONE NONE
Redemption Fees NONE NONE
Annual Fund Operating Expenses (after waivers
and/or reimbursements) (as a percentage of average
net assets)
Class A Class C
Management Fee 1.00% 1.00%
Rule 12b-1 Distribution Fees 0.25%(3) 1.00%(3),(4)
Other Expenses (net of
reimbursement) 0.75%(5) 0.75%(5)
TOTAL FUND OPERATING EXPENSES 2.00%(5) 2.75%(5)
(after waivers and/or
reimbursements)
_________________________
(1) In addition to the shareholder transaction
expenses listed in the Fee Table, shareholders who
choose to purchase and/or redeem shares by wire
may be charged a $12.00 service fee. See "HOW TO
PURCHASE SHARES - Initial Investment" and "HOW TO
REDEEM SHARES - Written Redemption."
(2) The sales load illustrated is the maximum rate
applicable to purchases of Class A shares by new
shareholders on or after January 1, 1996.
Existing shareholders as of December 31, 1995 as
well as certain other investors are exempt from
having to pay this sales load, as described more
fully under "HOW TO PURCHASE SHARES - Purchases at
Net Asset Value - Class A Shares."
(3) Consistent with the Rules of the National
Association of Securities Dealers, Inc. (the
"NASD"), it is possible that the Rule 12b-1 fees
could cause long-term investors of the Fund to pay
more than the economic equivalent of the maximum
front-end sales charges permitted under those same
Rules.
(4) The Rule 12b-1 distribution fee for the Class C
shares consists of a service fee not exceeding
0.25% of the average daily net assets of the Fund
attributable to the Class C shares and a
distribution fee up to 0.75%. See "DISTRIBUTION
PLANS."
(5) For the fiscal year ended November 30, 1997, the
Advisor voluntarily agreed to waive its management
fee and/or reimburse the Fund's operating expenses
to the extent necessary to ensure that (i) the
Total Operating Expenses for the Class A shares
would not exceed 2.00% of the class' average daily
net assets and (ii) the Total Operating Expenses
for the Class C shares would not exceed 2.75% of
the class' average daily net assets. Other
Expenses for the Class A and Class C shares are
presented net of reimbursement. Absent these
reimbursements, Other Expenses and Total Fund
Operating Expenses for the fiscal year ended
November 30, 1997 would have been 1.62% and 2.87%
for the Class A shares, respectively, and 1.63%
and 3.63% for the Class C shares, respectively.
The Advisor has voluntarily agreed to continue
this waiver/reimbursement policy for the fiscal
year ending November
<PAGE>
30, 1998. For additional
information concerning management fees and
operating expenses, see "MANAGEMENT."
Example
You would pay the following expenses on a $1,000
investment, assuming (i) 5% annual return, and (ii)
redemption at the end of each time period.
1 Year 3 Years 5 Years 10 Years
Class A $62 $103 $146 $265
Class C $28 $85 $145 $308
The Example is based on the Total Fund Operating
Expenses specified in the table above. In addition,
the maximum front-end sales load is reflected in the
Class A Example. The amounts in the Example may
increase absent the waivers or reimbursements. Please
remember that the Example should not be considered
representative of past or future expenses and that
actual expenses may be greater or lesser than those
shown. The assumption in the Example of a 5% annual
rate of return is required by regulations of the SEC
applicable to all mutual funds. This return is
hypothetical and should not be considered
representative of past or future performance of the
Fund.
<PAGE>
FINANCIAL HIGHLIGHTS
The following table of selected financial
information has been audited by Price Waterhouse LLP,
independent accountants, as indicated in their report
which appears in the Fund's 1997 Annual Report. The
Annual Report is incorporated by reference into the
Fund's Statement of Additional Information. The
following information should be read in conjunction
with the financial statements and related notes
included in the Fund's Annual Report, a copy of which
may be obtained without charge by calling or writing to
the Fund.
Nine Jan. 3,
Months 1994(1)
Year Ended Year Year to
Ended Ended Ended
Nov. Nov. 30, Nov. Nov. Nov.
30, 1997(2) 30, 30, 30,
1997 1996 1995 1994
Class A Class C Class A Class A Class A
Per share data:
Net asset value,
beginning of $16.57 $15.91 $14.32 $10.48 $10.00
period
Income from
investment
operations:
Net investment (0.22) (0.13) (0.16) (0.13) (0.07)
(loss)(3)
Net realized and
unrealized
gains on 4.58 3.97 3.01 4.00 0.55
investments
Total from
investment
operations 4.36 3.84 2.85 3.87 0.48
Less distributions:
Distributions from
capital gains (1.09) _ (0.60) (0.03) _
Net asset value,
end of period $19.84 $19.75 $16.57 $14.32 $10.48
Total Return 28.0%(5) 24.1%(4) 20.9%(5) 37.0% 4.8%(4)
Supplemental data
and ratios:
Net assets, $11,758,733 $334,836 $7,725,072 $4,182,246 $2,708,546
end of period
Ratio of expenses
to average
net assets:
Before expense
reimbursement 2.9% 3.6%(6) 3.5% 6.5% 9.0%(6)
After expense 2.0% 2.8%(6) 2.0% 2.0% 2.0%(6)
reimbursement
Ratio of net
investment (loss)
to average net
assets:
Before expense
reimbursement (2.2)% (3.0)%(6) (2.7)% (5.8)% (8.1)%(6)
After expense (1.3)% (2.2)%(6) (1.2)% (1.3)% (1.1)%(6)
reimbursement
Portfolio turnover 55% 55% 71% 109% 80%
rate(7)
Average commission
rate paid per $0.0560 $0.0560 $0.0512
share(7),(8)
____________
(1)Commencement of operations.
(2)Effective March 1, 1997, the Fund offered a second
class of shares, Class C.
(3)Net investment (loss) per share is calculated using
the ending balance of undistributed net investment
(loss) prior to consideration of adjustments for
permanent book and tax differences.
(4)Not annualized.
(5)Effective January 1, 1996, the Fund instituted a
maximum 4.25% front end sales load. The total
return calculation does not reflect the 4.25% front-
end sales load.
(6)Annualized.
(7)Calculated on the basis of the Fund as a whole
without distinguishing between the classes of
shares issued.
(8)Disclosure not required prior to 1996.
FUND PERFORMANCE
Information regarding the performance of the
Fund's Class A and Class C shares is contained in the
Fund's 1997 Annual Report, a copy of which may be
obtained without charge by calling or writing to the
Fund.
INVESTMENT OBJECTIVE AND POLICIES
The Fund is the first and presently, the only
series of the Corporation, an open-end, diversified
management company. The Fund's investment objective is
to seek capital appreciation. The generation of
investment income is not an investment objective and,
therefore, any income earned by the Fund will be
incidental to the Fund's objective. The Fund will
seek, under normal market conditions, to achieve its
investment objective by investing its assets primarily
in equity securities of domestic companies, which
include but are not limited to common stocks; preferred
stocks; warrants to purchase common or preferred
stocks; and securities convertible into common or
preferred stocks, such as convertible bonds and
debentures. The Fund will limit its investment in each
of the following to 5% of its net assets: preferred
stock; warrants to purchase common or preferred stock;
and securities convertible into common or preferred
stock. The Fund may invest in all types of equity
securities that, in the opinion of the Advisor, have
the potential to appreciate faster than the general
market. In addition, the Fund may invest up to 5% of
its net assets in "investment grade debt securities,"
as defined below. The Fund may, when the Advisor deems
a more conservative approach is warranted, invest up to
35% of its total assets in short-term, fixed income
securities (commonly referred to as cash equivalents)
as a temporary defensive measure, pending investment or
reinvestment or to meet anticipated redemption
requests. Since the Fund's assets will, under normal
market conditions, consist primarily of equity
securities, the Fund's net asset value may be subject
to greater principal fluctuation than a portfolio
containing a substantial amount of fixed income
securities.
When making investment decisions, the Advisor
utilizes information and analyses from numerous sources
regarding a company's sales and earnings growth;
earnings power, trends and predictability; industry,
economic and political trends; relative valuation; and
liquidity to determine whether the security has the
potential to appreciate faster than the general market.
While the Fund has no policy regarding market
capitalizations of issuers of equity securities in
which it may invest, the Advisor believes that the Fund
will generally invest in medium capitalization growth
companies. The Fund is only intended to be an
investment vehicle for that part of an investor's
capital which can appropriately be exposed to above
average risk in anticipation of greater rewards. The
Fund is not designed to offer a balanced investment
program suitable for all investors.
Except for the Fund's investment objective and the
investment restrictions contained in the Statement of
Additional Information, some of which are set forth
below, the Fund's policies may be changed without a
vote of the Fund's shareholders.
INVESTMENT RESTRICTIONS
The Fund has adopted several restrictions on its
investments and other activities that may not be
changed without shareholder approval. Specifically,
(1) With respect to 75% of its total assets,
the Fund may not purchase securities of any issuer
(except securities of the U.S. government or any
agency or instrumentality thereof) if such action
would cause more than 5% of the Fund's total
assets to be invested in securities of any one
issuer, or purchase more than 10% of the
outstanding voting securities of any one issuer;
(2) The Fund may not borrow money except
from banks for temporary or emergency purposes
(but not for the purchase of investments) and
then, only in an amount not to exceed 33-1/3% of
the value of the Fund's net assets at the time the
borrowing is incurred; provided however, the Fund
may engage in transactions in options, futures
contracts and options on futures contracts. The
Fund may not purchase securities when borrowings
exceed 5% of its total assets; and
<PAGE>
(3) The Fund may not pledge, mortgage,
hypothecate or otherwise encumber any of its
assets, except to secure permitted borrowings and
except that the Fund may invest in options,
futures contracts and options on futures
contracts.
For additional investment restrictions, see the Fund's
Statement of Additional Information.
INVESTMENT TECHNIQUES AND RISKS
In General
The Fund will not invest more than 5% of its net
assets in any one of the following types of
investments: preferred stocks; warrants to purchase
common or preferred stock; securities convertible into
common or preferred stock; investment grade debt
securities; repurchase agreements with member banks of
the Federal Reserve System or certain non-bank dealers;
illiquid securities; securities purchased on a when-
issued or delayed delivery basis; and derivative
instruments, such as transactions in options, futures
and options on futures. The ability of the Fund to
effectively use derivative instruments is largely
dependent upon the Advisor's ability to correctly use
these instruments, which may involve different skills
than are associated with securities generally.
Investment grade debt securities are (i) long-term debt
obligations rated Baa or higher by Moody's Investors
Service ("Moody's") or BBB or higher by Standard &
Poor's Corporation ("S&P"), Duff & Phelps, Inc. ("D&P")
or Fitch IBCA Information, Inc. ("Fitch"); or (ii)
short-term debt obligations rated A-1 or higher by S&P,
Prime-1 or higher by Moody's, D-2 or higher by D&P, or
F-2 or higher by Fitch. Bonds rated BBB by S&P or Baa
by Moody's, although considered investment grade, have
speculative characteristics and may be subject to
greater fluctuations in value than higher-rated bonds.
For a more extensive discussion of these investment
techniques and risks associated therewith, see the
Fund's Statement of Additional Information.
Short-Term Fixed Income Securities
In times when the Advisor believes that adverse
economic or market conditions justify such action, up
to 35% of the Fund's total assets may be held
temporarily in short-term fixed-income securities,
including without limitation: U.S. government
securities, including bills, notes and bonds, differing
as to maturity and rate of interest, which are either
issued or guaranteed by the U.S. Treasury or by U.S.
government agencies or instrumentalities; certificates
of deposit issued against funds deposited in a U.S.
bank or savings and loan association; bank time
deposits, which are monies kept on deposit with U.S.
banks or savings and loan associations for a stated
period of time at a fixed rate of interest; bankers'
acceptances which are short-term credit instruments
used to finance commercial transactions; repurchase
agreements entered into only with respect to
obligations of the U.S. government, its agencies or
instrumentalities; or commercial paper and commercial
paper master notes (which are demand instruments
without a fixed maturity bearing interest at rates
which are fixed to known lending rates and
automatically adjusted when such lending rates change)
rated A-1 or higher by S&P, Prime-1 or higher by
Moody's, D-2 or higher by D&P or F-2 or higher by
Fitch. The Fund may also invest up to 35% of its total
assets in such instruments pending investment or
reinvestment of funds and to meet anticipated
redemption requests.
Portfolio Turnover
The Fund's historical portfolio turnover rate is
listed under "Financial Highlights." The portfolio
turnover rate indicates changes in the Fund's
investments. A turnover rate of 100% would occur, for
example, if all of the securities held by the Fund were
replaced within one year. The turnover rate may vary
from year to year, as well as within a year. It may be
affected by sales of portfolio securities necessary to
meet cash requirements for redemption of shares. Under
normal market conditions, the Fund anticipates that its
portfolio turnover rate will not exceed 100%. In the
event the Fund were to have a turnover rate of 100% or
more in any year, it would result in the payment by the
Fund of above average transaction costs and could
result in the payment by shareholders of above average
amounts of taxes on realized investment gains.
<PAGE>
MANAGEMENT
Under the laws of the State of Maryland, the Board
of Directors of the Corporation is responsible for
managing its business and affairs. The Corporation, on
behalf of the Fund, has entered into an investment
advisory agreement with Oak Ridge Investments, LLC (the
"Advisor") pursuant to which the Advisor manages the
Fund's investments and business affairs, subject to the
supervision of the Corporation's Board of Directors
(the "Investment Advisory Agreement"). The Board of
Directors also oversees duties required by applicable
state and federal law.
The Advisor, which is a growth equity capital
management firm, is the investment advisor to the Fund.
The predecessor to the Advisor, Oak Ridge Investments,
Inc., was founded in September 1989. In March 1997,
the Advisor was formed to succeed to the investment
advisory business of Oak Ridge Investments, Inc., which
succession occurred in July 1997. Oak Ridge
Investments, Inc. continues to conduct business;
however, its operations are limited to providing
brokerage services. Accordingly, Oak Ridge
Investments, Inc. continues to serve as the Fund's
principal distributor (the "Distributor"). The Advisor
is managed and owned by the same persons who manage and
own the Distributor. The Advisor is located at 10
South LaSalle Street, Suite 1050, Chicago, IL 60603.
Under the Investment Advisory Agreement, the
Corporation, on behalf of the Fund, compensates the
Advisor for its investment advisory services for each
class of shares at the annual rate of 1.00% of the
Fund's average daily net assets attributable to each
such class of shares. The Corporation's Board of
Directors believes that this fee is reasonable in light
of the Fund's investment objective. For the fiscal
year ended November 30, 1997, the Advisor voluntarily
agreed to waive its management fee and/or reimburse the
Fund's operating expenses to the extent necessary to
ensure that the total operating expenses for the Class
A shares would not exceed 2.00% of the class' average
daily net assets and the total operating expenses for
the Class C shares would not exceed 2.75% of the class'
average daily net assets. Any such waiver or
reimbursement has the effect of lowering the overall
expense ratio for the applicable class and increasing
the overall return to investors at the time any such
amounts are waived and/or reimbursed. The Advisor has
voluntarily agreed to continue this
waiver/reimbursement policy for the fiscal year ending
November 30, 1998.
The Fund is managed by David M. Klaskin, who has
been the President, Treasurer and Chief Investment
Officer of the Advisor since July 1997 and who held the
same positions with the Advisor's predecessor, Oak
Ridge Investments, Inc., since its founding in
September 1989. From 1982 until September 1989, Mr.
Klaskin was a financial consultant with Shearson/Lehman
Brothers.
The Advisor provides continuous advice and
recommendations concerning the Fund's investments, and
is responsible for selecting the broker-dealers who
execute the portfolio transactions for the Fund. The
Advisor provides office space for the Corporation and
pays the salaries, fees and expenses of all the
Corporation's officers and directors who are interested
persons of the Advisor. In addition to providing
investment advice to the Fund, the Advisor serves as
investment advisor to pension and profit-sharing plans
and other institutional and private investors. As of
November 30, 1997, the Advisor had approximately $210
million under management. Mr. David M. Klaskin and Mr.
Samuel Wegbreit each own more than 35% but less than
51% of the voting interests of the Advisor.
HOW TO PURCHASE SHARES
In General
Shares of the Fund may be purchased through any
dealer which has entered into a sales agreement with
the Distributor, or through the Distributor directly.
Firstar Trust Company, the Fund's transfer agent (the
"Transfer Agent"), may also accept purchase
applications.
Applications will not be accepted unless they are
accompanied by payment in U.S. funds. Payment should
be made by check or money order drawn on a U.S. bank,
savings and loan or credit union. The minimum initial
investment in the Fund is $2,000. Subsequent
investments may be made by mail ($100 minimum) or by
wire
<PAGE>
($1,000 minimum). The minimum initial investment
for traditional IRAs is $1,000 and $500 for Education
IRAs. For investors using the AIP, as described below,
the minimum initial investment is $100. Minimum
investments are waived for employee benefit plans
qualified under Sections 401, 403(b)(7) or 457 of the
Internal Revenue Code. These minimums can be changed
or waived by the Fund at any time. Shareholders will
be given at least 30 days' notice of any increase in
the minimum dollar amount of subsequent investments.
A confirmation indicating the details of each
purchase transaction will be sent to you promptly
following such transaction. If a purchase order is
placed through a dealer, the dealer must promptly
forward the order, together with payment, to the
Transfer Agent.
If you purchase shares of the Fund by check or the
AIP and request the redemption of such shares within
fifteen days of the initial purchase, the redemption
will not be effective, and the Fund will not forward
the redemption proceeds, until the Fund is reasonably
satisfied that your check or purchase order has
cleared. This is a security precaution only and does
not affect your investment.
Choosing a Class
The Fund offers two classes of shares: Class A
and Class C. Each class has its own cost structure, as
follows:
Class A Class C
Front-end sales No front-end sales
charges with break charges.
points and certain
exceptions. Rule 12b-1
expenses equal to 1.00%
Rule 12b-1 of the average daily
expenses equal to 0.25% net assets of the
of the average daily class.
net assets of the
class.
Class A Shares
Class A shares of the Fund are offered and sold on
a continual basis at the next offering price (the
"Offering Price"), which is the sum of the net asset
value per share (next computed following receipt of an
order in proper form by a dealer, the Distributor or
the Transfer Agent, as the case may be) and the sales
charge as set forth below. See "DETERMINATION OF NET
ASSET VALUE." The sales charge imposed on purchases of
Class A shares is as follows:
Total Sales Charge
As a As a Portion of
Your Investment Percentage Percentage of Offering Price
of Your Retained by
Offering Investment Dealers*
Price
Less than $50,000 4.25% 4.44% 4.00%
$50,000 but less 3.75% 3.90% 3.50%
than $100,000
$100,000 but less 3.25% 3.36% 3.00%
than $250,000
$250,000 but less 2.25% 2.30% 2.00%
than $500,000
$500,000 but less 1.75% 1.78% 1.50%
than $1,000,000
$1,000,000 or more 1.00% 1.01% 0.90%
_______________
*At the discretion of the Distributor, all sales
charges may at times be paid to the securities
dealer, if any, involved in the trade. A securities
dealer which is paid all or substantially all of the
sales charges may be deemed an "underwriter" under
the Securities Act of 1933, as amended.
<PAGE>
Investors described under "Purchases at Net Asset
Value - Class A Shares," below, may purchase Class A
shares without the imposition of a sales charge. In
addition, no sales charge is imposed on the
reinvestment of dividends or capital gains.
In addition to the sales charge described above,
Class A shares are also subject to Rule 12b-1 fees in
an aggregate amount of 0.25% of the average daily net
assets attributable to such shares. For more
information, see "DISTRIBUTION PLANS."
Class C Shares
Class C shares are offered and sold on a continual
basis at net asset value without the imposition of any
sales charge. However, as described under
"DISTRIBUTION PLANS," Class C shares are subject to
higher Rule 12b-1 fees than Class A shares.
Purchases at Net Asset Value - Class A Shares
Class A shares of the Fund may be purchased at net
asset value without the imposition of a sales charge,
upon the written assurance that the purchase is made
for investment purposes and that the shares will not be
transferred or resold except through redemption or
repurchase by or on behalf of the Fund, by any of the
following: (i) employee benefit plans qualified under
Section 401(k) of the Internal Revenue Code, subject to
minimum requirements with respect to the number of
employees or amount of purchase, which may be
established by the Distributor; currently, those
criteria require that the employer establishing the
plan have 1,000 or more eligible employees; (ii)
directors, officers and full-time employees of the
Fund, the Distributor and affiliates of such companies
(including the Advisor), and by spouses and family
members of such persons; (iii) registered securities
brokers and dealers which have entered into a sales
agreement with the Distributor, and their affiliates,
for their investment account only; (iv) registered
personnel and employees of such securities brokers and
dealers referred to in (iii) above, and their spouses
and family members, in accordance with the internal
policies and procedures of the employing securities
dealer; and (v) registered investment advisors
affiliated with the Distributor (including the
Advisor), by agreement or otherwise, on behalf of their
clients, who are participating in a comprehensive fee
program (also known as a wrap fee program). Please
call 1-800-407-7298 for more information on purchases
of Class A shares at net asset value.
Initial Investment
You may purchase Class A or Class C shares by
completing the enclosed application form and mailing it
along with a check or money order payable to "Oak Ridge
Growth Fund" to your securities dealer, the Distributor
or the Transfer Agent, as the case may be. If mailing
to the Distributor or Transfer Agent, please send to
the following address: Oak Ridge Growth Fund, c/o
Firstar Trust Company, Mutual Fund Services, P. O. Box
701, Milwaukee, Wisconsin 53201-0701. Overnight mail
should be sent to the following address: Oak Ridge
Growth Fund, c/o Firstar Trust Company, Mutual Fund
Services, Third Floor, 615 East Michigan Street,
Milwaukee, Wisconsin 53202. Do not send mail by
overnight courier to the P.O. Box address listed above;
please use the overnight mail address. You may also
purchase Fund shares by telephone. For information
regarding this option, please call 1-800-407-7298.
If the securities dealer you have chosen to
purchase Fund shares through has not entered into a
sales agreement with the Distributor, such dealer may,
nevertheless, offer to place your order for the
purchase of Fund shares. Purchases made through such
dealers will be affected at the applicable Offering
Price for Class A shares and at net asset value for
Class C shares. Such dealers may also charge a
transaction fee, as determined by the dealer. With
respect to Class A shares, that fee will be in addition
to the sales charge payable by you upon purchase of
such shares, and may be avoided if shares are purchased
through a dealer who has entered into a sales agreement
with the Distributor or through the Transfer Agent.
If your check does not clear, you will be charged
a $20 service fee. You will also be responsible for
any losses suffered by the Fund as a result. Neither
cash nor third-party checks will be accepted. All
applications to
<PAGE>
purchase Fund shares are subject to
acceptance by the Fund and are not binding until so
accepted. The Fund reserves the right to decline or
accept a purchase order application in whole or in
part.
You may also purchase Fund shares by wire. The
following instructions should be followed when wiring
funds to the Transfer Agent for the purchase of Fund
shares:
Wire to: Firstar Bank
ABA Number 075000022
Credit: Firstar Trust Company
Account 112-952-137
Further Credit: Oak Ridge Growth Fund -
Class A or Class C
(shareholder account number)
(shareholder name/account
registration)
Please call 1-800-407-7298 prior to wiring any
funds to notify the Transfer Agent that the wire is
coming and to verify the proper wire instructions so
that the wire is properly applied when received. The
Transfer Agent may charge a $12.00 service fee for wire
transactions. The Fund is not responsible for the
consequences of delays resulting from the banking or
Federal Reserve wire system.
Automatic Investment Plan
The Automatic Investment Plan ("AIP") allows you
to make regular, systematic investments in the Fund's
Class A or Class C shares from your bank checking or
NOW account. The Fund will reduce the minimum initial
investment to $100 for investors using the AIP. To
establish the AIP, complete the appropriate section in
the Fund's application attached to this Prospectus.
Under certain circumstances (such as discontinuation of
the AIP before the Fund's minimum initial investment is
reached, or, after reaching the minimum initial
investment, the account balance is reduced to less than
$500), the Fund reserves the right to close the
investor's account. Prior to closing any account for
failure to reach the minimum initial investment, the
Fund will give the investor written notice and 60 days
in which to reinstate the AIP or otherwise reach the
minimum initial investment. You should consider your
financial ability to continue in the AIP until the
minimum initial investment amount is met because the
Fund has the right to close an investor's account for
failure to reach the minimum initial investment. Such
closing may occur in periods of declining share prices.
Under the AIP, you may choose to make investments
on the fifth and/or twentieth day of each month from
your financial institution in amounts of $100 or more.
There is no service fee for participating in the AIP.
However, a service fee of $20 will be deducted from
your Fund account for any AIP purchase that does not
clear due to insufficient funds or, if prior to
notifying the Fund in writing or by telephone to
terminate the plan, you close your bank account or in
any manner prevent withdrawal of funds from the
designated checking or NOW account. You can set up the
AIP with any financial institution that is a member of
the Automated Clearing House.
The AIP is a method of using dollar cost averaging
which is an investment strategy that involves investing
a fixed amount of money at regular time intervals.
However, a program of regular investment cannot ensure
a profit or protect against a loss from declining
markets. By always investing the same amount, you will
be purchasing more shares when the price is low and
fewer shares when the price is high. Since such a
program involves continuous investment regardless of
fluctuating share values, you should consider your
financial ability to continue the program through
periods of low share price levels.
Subsequent Investments
Additions to your account may be made by mail
($100 minimum) or by wire ($1,000 minimum). When
making an additional purchase by mail, enclose a check
payable to "Oak Ridge Growth Fund" along with the
Additional Investment Form provided on the lower
portion of your account statement. To make an
additional
<PAGE>
purchase by wire, please call 1-800-407-7298
for complete wiring instructions. You may also make
additional purchases by telephone. Information
regarding this option can be obtained by calling 1-800-
407-7298.
Share Certificates
Although share purchases are credited to your
account, certificates will not be issued.
Nevertheless, you will have full shareholder rights.
DETERMINATION OF NET ASSET VALUE
The net asset value per share for each class of
shares is determined as of the close of trading
(generally 4:00 p.m. Eastern Time) on each day the New
York Stock Exchange (the "NYSE") is open for business.
Purchase orders received or shares tendered for
redemption on a day the NYSE is open for trading, prior
to the close of trading on that day, will be valued as
of the close of trading on that day. Applications for
purchase of shares and requests for redemption of
shares received after the close of trading on the NYSE
will be valued as of the close of trading on the next
day the NYSE is open. The Fund is not required to
calculate its net asset value on days during which the
Fund receives no orders to purchase shares and no
shares are tendered for redemption. Net asset value per
share for each class of shares is calculated by taking
the fair value of the total assets per class, including
interest or dividends accrued, but not yet collected,
less all liabilities, and dividing by the total number
of shares outstanding. The result, rounded to the
nearest cent, is the net asset value per share. In
determining net asset value, expenses are accrued and
applied daily and securities and other assets for which
market quotations are available are valued at market
value. Common stocks and other equity-type securities
are valued at the last sales price on the national
securities exchange or NASDAQ on which such securities
are primarily traded; provided, however, securities
traded on an exchange or NASDAQ for which there were no
transactions on a given day, and securities not listed
on an exchange or NASDAQ, are valued at the most recent
bid prices. Debt securities are valued by a pricing
service that utilizes electronic data processing
techniques to determine values for normal institutional
sized trading units of debt securities without regard
to the existence of sale or bid prices when such values
are believed to more accurately reflect the fair market
value of such securities; otherwise, actual sale or bid
prices are used. Any securities or other assets for
which market quotations are not readily available are
valued at fair value as determined in good faith by the
Board of Directors. Debt securities having remaining
maturities of 60 days or less when purchased are valued
by the amortized cost method when the Board of
Directors determines that the fair market value of such
securities is their amortized cost. Under this method
of valuation, a security is initially valued at its
acquisition cost, and thereafter, amortization of any
discount or premium is assumed each day, regardless of
the impact of fluctuating interest rates on the market
value of the security.
HOW TO REDEEM SHARES
In General
Investors may request redemption of part or all of
their Fund shares at any time at the next determined
net asset value. See "DETERMINATION OF NET ASSET
VALUE." The Fund normally will mail your redemption
proceeds the next business day and, in any event, no
later than seven business days after receipt of a
redemption request in good order. However, the Fund
may hold payment until investments which were made by
check, telephone or the AIP have been collected.
Redemptions may also be made through brokers or
dealers. Such redemptions will be effected at the net
asset value next determined after receipt by the Fund
of the broker or dealer's instruction to redeem shares.
In addition, some brokers or dealers may charge a fee
in connection with such redemptions.
Written Redemption
For most redemption requests, an investor need
only furnish a written, unconditional request to redeem
his or her shares at net asset value to the Fund's
Transfer Agent: Oak Ridge Growth Fund, c/o Firstar
Trust Company, Mutual Fund Services, P. O. Box 701,
Milwaukee, Wisconsin 53201-0701. Overnight mail should
be sent to Oak Ridge Growth Fund, c/o Firstar Trust
Company, Mutual Fund Services, Third Floor, 615 East
<PAGE>
Michigan Street, Milwaukee, Wisconsin 53202. Do not
send mail by overnight courier to the P.O. Box address
listed above; please use the overnight address.
Requests for redemption must be signed exactly as the
shares are registered, including the signature of each
joint owner. You must also specify the number of
shares or dollar amount to be redeemed. Redemption
proceeds made by written redemption request may also be
wired to a commercial bank that you have authorized on
your account application. The Transfer Agent may
charge a $12.00 service fee for wire transactions.
Additional documentation may be requested from
corporations, executors, administrators, trustees,
guardians, agents or attorneys-in-fact.
Telephone Redemption
You may redeem shares by telephone if you have
checked the appropriate box and supplied the necessary
information on the Fund's Account Application.
Proceeds redeemed by telephone will be mailed or wired
only to an investor's address or bank of record as
shown on the records of the Transfer Agent. To effect
a telephone redemption, you may call 1-800-407-7298.
The Fund reserves the right to refuse any request made
by telephone and may limit the amount involved or the
number of telephone redemptions. Please call the
Transfer Agent at 1-800-407-7298 to obtain current
instructions. Once you place a telephone redemption
request, it cannot be canceled or modified. Neither
the Fund nor its Transfer Agent will be responsible for
the authenticity of redemption instructions received by
telephone. Accordingly, the investor bears the risk of
loss. The Fund will use reasonable procedures to
ensure that instructions received by telephone are
genuine. These procedures may include recording
telephonic transactions and sending written
confirmation of such transactions. However, if the
Fund or its Transfer Agent fails to employ such
procedures, the Fund may be liable for any losses due
to unauthorized or fraudulent instructions.
Shareholders may experience difficulty in implementing
a telephone redemption during periods of drastic
economic or market changes. If an investor is unable
to contact the Transfer Agent by telephone, shares may
also be redeemed by delivering the redemption request
to the Transfer Agent in person or by mail. If in
person or by overnight mail, deliver such request to
Oak Ridge Growth Fund, c/o Firstar Trust Company,
Mutual Fund Services, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202; if by regular mail,
such request may be sent to Oak Ridge Growth Fund, c/o
Firstar Trust Company, Mutual Fund Services, P. O. Box
701, Milwaukee, Wisconsin 53201-0701. Do not send mail
by overnight courier to the P.O. Box address listed
above; please use the overnight address.
Systematic Withdrawal Plan
You may set up automatic withdrawals from your
account with the Fund at regular intervals. To begin
distributions, you must have an initial balance of
$5,000 in your account and withdraw at least $50 per
payment. To establish the Systematic Withdrawal Plan,
please call 1-800-407-7298. Depending upon the size of
the account and the withdrawals requested (and
fluctuations in the net asset value of the shares
redeemed), redemptions for the purpose of satisfying
such withdrawals may reduce or even exhaust your
account. If the amount remaining in your account is
not sufficient to meet a plan payment, the remaining
amount will be redeemed and the plan will be
terminated.
Special Situations
In certain circumstances, such as when
corporations, executors, administrators, trustees,
guardians, agents or attorneys-in-fact are involved or
when the proceeds of redemption are requested to be
sent to other than the address of record, additional
documentation and signature guarantees may be required.
Questions regarding such circumstances may be directed
to the Transfer Agent by calling 1-800-407-7298. In
addition, redemptions over $25,000 must be made in
writing and require a signature guarantee. A signature
guarantee may be obtained from any eligible guarantor
institution, as defined by the SEC. These institutions
include banks, saving associations, credit unions,
brokerage firms and others. Please note that a notary
public stamp or seal is not acceptable.
Shareholders who have an IRA or other retirement
plan must indicate on their redemption request whether
or not to withhold federal income tax. Redemption
requests failing to indicate an election not to have
federal tax withheld will be subject to withholding.
<PAGE>
Termination of Accounts
Your account may be terminated by the Fund on not
less than 30 days' notice if, at the time of any
redemption of shares in your account, the value of the
remaining shares in the account falls below $500. Upon
any such termination, a check for the proceeds of
redemption will be sent to you within seven days of the
redemption.
DISTRIBUTION PLANS
The Fund has adopted a plan of distribution for
each class of shares (the "Class A Plan" and the "Class
C Plan") in accordance with Rule 12b-1 under the 1940
Act pursuant to which certain distribution and/or
service fees are paid. Under the Class A Plan, the
Fund is required to pay the Distributor a distribution
fee for the promotion and distribution of the Class A
shares of up to 0.25% of the average daily net assets
of the Fund attributable to the Class A shares,
computed on an annual basis. The Class C Plan requires
the Fund to pay the Distributor (i) a distribution fee
of up to 0.75% of the average daily net assets of the
Fund attributable to the Class C shares, computed on an
annual basis, and (ii) a service fee for personal
services provided to shareholders and/or the
maintenance of shareholder accounts of up to 0.25% of
the average daily net assets of the Fund attributable
to the Class C shares, computed on an annual basis.
Under both plans, the Distributor is authorized to, in
turn, pay all or a portion of the fee it receives from
the Fund to any securities dealer, financial
institution or any other person (the "Recipient") who
renders assistance in distributing or promoting the
sale of Fund shares or, with respect to the Class C
shares only, who provides certain shareholder services
to the holders of such class of shares, pursuant to a
written agreement (the "Rule 12b-1 Related Agreement").
To the extent such fee is not paid to such persons, the
Distributor may use the fee for its own distribution
expenses incurred in connection with the sale of the
Fund's shares and, with respect to the Class C shares
only, for any of its shareholder servicing expenses
incurred in connection with servicing the holders of
such class of shares, although it is the Distributor's
current intention to pay out all or most of the fee
under both plans. A form of the 12b-1 Related
Agreement referred to above has been approved by a
majority of the Board of Directors, and of the members
of the Board who are not "interested persons" of the
Fund as defined in the 1940 Act and who have no direct
or indirect financial interest in the operation of the
plans or any related agreements (the "Disinterested
Directors") voting separately. Accordingly, the
Distributor may enter into 12b-1 Related Agreements
with securities dealers, financial institutions or
other persons without further Board approval.
Payment of the distribution and/or service fee is
to be made quarterly, within 30 days after the close of
the quarter for which the fee is payable, upon the
Distributor forwarding to the Board of Directors a
written report of all amounts expensed pursuant to the
applicable plan; provided, however, that the aggregate
payments by the Fund under the Class A Plan to the
Distributor and all Recipients may not exceed 0.25% (on
an annualized basis) of the Fund's average net assets
attributable to the Class A shares for that quarter,
and the aggregate payments by the Fund under the Class
C Plan to the Distributor and all Recipients may not
exceed 1.00% (on an annualized basis) of the Fund's
average net assets attributable to the Class C shares
for that quarter; and provided further that no fee may
be paid in excess of the expenses as set forth in the
quarterly written report. Thus, neither the Class A
Plan nor the Class C Plan provide for the payment of
distribution and/or service fees in subsequent quarters
that relate to expenses incurred in prior quarters.
From time to time, the Distributor may engage in
activities which jointly promote the sale of shares of
one or both classes of shares, the costs of which may
not be readily identifiable as related to any one
class. Generally, the expenses attributable to joint
distribution activities will be allocated among each
class of shares on the basis of its respective net
assets.
Each plan, and any Rule 12b-1 Related Agreement
which is entered into, will continue in effect for a
period of more than one year only so long as its
continuance is specifically approved at least annually
by a vote of a majority of the Fund's Board of
Directors, and of the Disinterested Directors, cast in
person at a meeting called for the purpose of voting on
the plan, or the Rule 12b-1 Related Agreement, as
applicable. In addition, both plans, and any Rule
12b-1 Related Agreement, may be terminated at any time,
without penalty, by vote of a majority of the
outstanding voting securities of the applicable class
of shares to which the plan relates, or by vote of a
majority
<PAGE>
of Disinterested Directors (on not more than
sixty (60) days' written notice in the case of the Rule
12b-1 Related Agreement only).
TAX SHELTERED RETIREMENT PLANS
The Fund offers, through Firstar Trust Company in
its capacity as custodian of Fund assets (the
"Custodian"), several qualified retirement plans for
adoption by individuals and employers. Participants in
these plans can accumulate shares of the Fund on a tax
deferred basis. Contributions to these plans are
generally tax deductible and earnings are tax deferred
until distributed. A complete description of the
various plans, as well as a description of the
applicable service fees, are available from the Fund
and may be obtained by calling 1-800-407-7298 or
writing to the Fund at Oak Ridge Growth Fund, c/o
Firstar Trust Company, P. O. Box 701, Milwaukee,
Wisconsin 53201-0701.
INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX
TREATMENT
The Fund intends to continue to qualify for
treatment as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, and, if so
qualified, will not be liable for federal income taxes
to the extent earnings are distributed on a timely
basis.
For federal income tax purposes, all dividends
paid by the Fund and net realized short-term capital
gains are taxable as ordinary income whether reinvested
or received in cash unless you are exempt from taxation
or entitled to a tax deferral. Distributions paid by
the Fund from net realized long-term capital gains,
whether received in cash or reinvested in additional
shares, are taxable as such. The capital gain holding
period is determined by the length of time the Fund has
held the security and not the length of time you have
held shares in the Fund. Investors are informed
annually as to the amount and nature of all dividends
and capital gains paid during the prior year. Such
gains and dividends may also be subject to state or
local taxes. If you are not required to pay taxes on
your income, you will not be required to pay federal
income taxes on the amounts distributed to you.
Dividends are usually paid, and capital gains, if
any, are usually distributed annually in December.
When a dividend or capital gain is distributed, the
Fund's net asset value will decrease by the amount of
the payment. A dividend paid shortly after the
purchase of shares will reduce the net asset value of
the shares purchased by the amount of the dividend.
All dividends or capital gains distributions will
automatically be reinvested in shares of the Fund at
the then prevailing net asset value unless an investor
specifically requests that either dividends or capital
gains or both be paid in cash. The election to receive
dividends or reinvest them may be changed by writing to
the Fund at Oak Ridge Growth Fund, c/o Firstar Trust
Company, P. O. Box 701, Milwaukee, Wisconsin 53201-
0701. Such notice must be received at least 10 days
prior to the record date of any dividend or capital
gain distribution.
If you do not furnish the Fund with your correct
social security number or employer identification
number, the Fund is required by federal law to withhold
federal income tax at a rate of 31% from your
distributions and redemption proceeds.
This section is not intended to be a full
discussion of federal income tax laws and the effect of
such laws on you. There may be other federal, state,
or local tax considerations applicable to a particular
investor. You are urged to consult your own tax
advisor.
FUND ORGANIZATION
The Corporation was organized as a Maryland
corporation on October 15, 1993. The Corporation is
authorized to issue 500,000,000, $.01 par value shares
of common stock and series and classes of series of
shares of common stock. The Fund, which has been
allocated 100,000,000 of those shares, is the first and
presently, the only series of the Corporation. If the
Corporation issues additional series, the assets
belonging to each series of shares will be held
separately by the Custodian, and in effect each series
will be a separate fund. Of the 100,000,000 shares
allocated to the Fund, 50,000,000 shares have been
designated Class A shares and 50,000,000 shares have
been designated Class C shares. Each class of shares
of the Fund represents an interest in the Fund's assets
<PAGE>
and has identical voting, dividend, liquidation and
other rights on the same terms and conditions, except
that each class of shares bears differing class-
specific expenses, is subject to differing sales loads
and has exclusive voting rights on matters pertaining
to the distribution plan for that class.
Each share, irrespective of series or class, is
entitled to one vote on all questions, except that
certain matters must be voted on separately by the
series or class of shares affected, and matters
affecting only one series or class are voted upon only
by that series or class. All shares have non-
cumulative voting rights, which means that the holders
of more than 50% of the shares voting for the election
of directors can elect all of the directors if they
choose to do so, and in such event, the holders of the
remaining shares will not be able to elect any person
or persons to the board of directors.
The Corporation will not hold annual shareholders'
meetings except when required by the 1940 Act. The
Corporation has adopted procedures in its Bylaws for
the removal of directors by the shareholders. As of
February 28, 1998, no person owned a controlling
interest in the Fund.
Like other mutual funds, financial and business
organizations and individuals around the world, the
Fund could be adversely affected if the computer
systems used by the Advisor, the Administrator and
other service providers do not properly process and
calculate date-related information and data from and
after January 1, 2000. This is commonly known as the
"Year 2000 Problem." The Advisor and the Administrator
are taking steps that they believe are reasonably
designed to address the Year 2000 Problem with respect
to computer systems that they use and to obtain
reasonable assurances that comparable steps are being
taken by the Fund's other major service providers.
ADMINISTRATOR
Pursuant to separate Administration and Accounting
Service Agreements, Firstar Trust Company (the
"Administrator"), Mutual Fund Services, Third Floor,
615 East Michigan Street, Milwaukee, Wisconsin 53202,
calculates the daily net asset value of each class of
shares, prepares and files all federal and state tax
returns, oversees the Fund's insurance relationships,
participates in the preparation of registration
statements, proxy statements and reports, prepares
compliance filings relating to the registration of the
securities of the Fund pursuant to state securities
laws, compiles data for and prepares notices to the
SEC, prepares the financial statements for the annual
and semi-annual reports, monitors the Fund's expense
accruals and performs securities valuations, monitors
the Fund's status as a regulated investment company
under Subchapter M of the Internal Revenue Code,
monitors compliance with the Fund's investment policies
and restrictions and generally assists in the Fund's
administrative operations. The Administrator, at its
own expense and without reimbursement from the Fund,
furnishes office space and all necessary office
facilities, equipment, supplies and clerical and
executive personnel for performing the services
required to be performed by it under the Administration
and Accounting Service Agreements. For the foregoing
services and until the Fund's net assets total $25
million, the Administrator receives from the Fund the
following aggregate fees, computed daily and payable
monthly based on the Fund's aggregate average net
assets: (a) pursuant to the Administration Agreement,
the Administrator receives an aggregate fee at the
annual rate of .05 of 1% on the first $100 million of
average net assets, .04 of 1% on the next $400 million
of average net assets and .03 of 1% on average net
assets in excess of $500 million, subject to an annual
aggregate minimum of $45,000, plus out of pocket
expenses; and (b) pursuant to the Accounting Service
Agreement, the Administrator receives an aggregate fee
of $27,500 for the first $40 million of average net
assets, .01 of 1% on the next $200 million of average
net assets and .005 of 1% on the balance, plus out of
pocket expenses.
CUSTODIAN, TRANSFER AGENT AND DISTRIBUTOR
Firstar Trust Company, Mutual Fund Services, Third
Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202, acts as Custodian of the Fund's assets and as
Transfer Agent for the Fund's shares. Oak Ridge
Investments, Inc., an affiliate of the Advisor and the
Fund, acts as the Distributor of the Fund's shares.
<PAGE>
PORTFOLIO TRANSACTIONS
As provided in the Investment Advisory Agreement,
the Advisor is responsible for the Fund's portfolio
decisions and the placing of portfolio transactions.
In executing such transactions, the Advisor seeks to
obtain the best net results for the Fund. Pursuant to
guidelines adopted by the Corporation's Board of
Directors, on behalf of the Fund, and in accordance
with rules of the SEC, Oak Ridge Investments, Inc., the
Fund's Distributor and an affiliate of the Advisor and
the Fund, may serve as a broker for the Fund; however,
in order for the Distributor to effect any portfolio
transactions for the Fund, the commissions, fees or
other remuneration received by the Distributor must be
reasonable and fair compared to the commissions, fees
or other remuneration paid to other brokers in
connection with comparable transactions involving
similar securities being purchased or sold on any
exchange during a comparable period of time. This
standard allows the Distributor to receive no more than
the remuneration which would be expected to be received
by an unaffiliated broker in a commensurate arm's-
length transaction.
COMPARISON OF INVESTMENT RESULTS
Each class may, from time to time, compare its
investment results to various passive indices or other
mutual funds and cite such comparisons in reports to
shareholders, sales literature and advertisements. The
results may be calculated on the basis of average
annual total return, total return or cumulative total
return.
Average annual total return and total return
figures assume the reinvestment of all dividends and
measure the net investment income generated by, and the
effect of, any realized and unrealized appreciation or
depreciation of the underlying investments in the Fund
over a specified period of time. Average annual total
return figures are annualized and therefore represent
the average annual percentage change over the specified
period. Total return figures are not annualized and
represent the aggregate percentage or dollar value
change over the period. Cumulative total return simply
reflects the applicable class' performance over a
stated period of time. All performance figures for
Class A shares reflect the deduction of the 4.25%
maximum initial sales charge. Average annual total
return, total return and cumulative total return are
based upon the historical results of the Fund and are
not necessarily representative of the future
performance of the Fund.
The Fund reserves the right to change any of its
policies, practices and procedures described in this
Prospectus, including the Statement of Additional
Information, without shareholder approval except in
those instances where shareholder approval is expressly
required.
<PAGE>
DIRECTORS INDEPENDANT ACCOUNTANTS
David M. Klaskin Price Waterhouse LLP
Samuel Wegbreit 100 East Wisconsin Avenue
Daniel A. Kaplan Milwaukee, Wisconsin 53202
Dr. A. Charlene Sullivan
Martin Z. Craig
OFFICERS LEGAL COUNSEL
David M. Klaskin Godfrey & Kahn, S.C.
President 780 North Water Street
Milwaukee, Wisconsin 53202
Samuel Wegbreit
Chairman of the Board
Mark C. Pappas
Secretary
INVESTMENT ADVISOR
Oak Ridge Investments, LLC
10 South LaSalle Street, Suite 1050
Chicago, IL 60603
DISTRIBUTOR
Oak Ridge Investments, Inc.
10 South LaSalle Street, Suite 1050
Chicago, IL 60603
CUSTODIAN, ADMINISTRATOR AND TRANSFER AGENT
Firstar Trust Company
Mutual Fund Services
Third Floor
615 East Michigan Street
Milwaukee, WI 53202
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Oak Ridge Growth Fund
a series of
Oak Ridge Funds, Inc.
sponsored by
Oak Ridge Investments, LLC
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-407-7298
This Statement of Additional Information is not a
prospectus and should be read in conjunction with the
Prospectus of the Oak Ridge Growth Fund (the "Fund"), a
series of Oak Ridge Funds, Inc. (the "Corporation"),
dated March 31, 1998. The Fund and the Corporation
were formerly known as the O.R.I. Growth Fund and
O.R.I. Funds, Inc., respectively. Requests for copies
of the Prospectus should be made by writing to the Fund
at the address listed above or by calling 1-800-407-
7298.
This Statement of Additional Information is dated March 31, 1998.
<PAGE>
OAK RIDGE GROWTH FUND
TABLE OF CONTENTS
Page No.
INVESTMENT RESTRICTIONS 3
INVESTMENT POLICIES AND TECHNIQUES 4
DIRECTORS AND OFFICERS OF THE CORPORATION 13
PRINCIPAL SHAREHOLDERS 14
INVESTMENT ADVISOR AND DISTRIBUTOR 15
DISTRIBUTION PLANS 16
PORTFOLIO TRANSACTIONS AND BROKERAGE 18
CUSTODIAN 19
TRANSFER AGENT 19
TAXES 19
DETERMINATION OF NET ASSET VALUE 20
SHAREHOLDER MEETINGS 20
PERFORMANCE INFORMATION 20
INDEPENDENT ACCOUNTANTS 22
FINANCIAL STATEMENTS 22
APPENDIX A-1
No person has been authorized to give any
information or to make any representations other than
those contained in this Statement of Additional
Information and the Prospectus dated March 31, 1998,
and if given or made, such information or
representations may not be relied upon as having been
authorized by the Fund.
________________
This Statement of Additional Information does not
constitute an offer to sell securities.
<PAGE>
INVESTMENT RESTRICTIONS
The investment objective of the Oak Ridge Growth
Fund (the "Fund") is to seek capital appreciation. The
Fund's investment objective and policies are described
in detail in the Prospectus under the caption
"INVESTMENT OBJECTIVE AND POLICIES." The following is
a complete list of the Fund's fundamental investment
restrictions which cannot be changed without
shareholder approval.
The Fund may not:
1. With respect to 75% of its total assets,
purchase securities of any issuer (except
securities of the U.S. government or any agency or
instrumentality thereof) if such action would
cause more than 5% of the Fund's total assets to
be invested in securities of any one issuer, or
purchase more than 10% of the outstanding voting
securities of any one issuer.
2. Borrow money except from banks for
temporary or emergency purposes (but not for the
purpose of purchase of investments) and then, only
in an amount not to exceed 33 1/3% of the value of
the Fund's net assets at the time the borrowing is
incurred; provided however, the Fund may engage in
transactions in options, futures contracts and
options on futures contracts. The Fund may not
purchase securities when borrowings exceed 5% of
its total assets.
3. Act as an underwriter of another issuer's
securities except for the sale of restricted
securities.
4. Pledge, mortgage, hypothecate or
otherwise encumber any of its assets, except to
secure permitted borrowings and except that the
Fund may invest in options, futures contracts and
options on futures contracts.
5. Make loans, except through (i) the
purchase of investments permissible under the
Fund's investment policies, or (ii) the lending of
portfolio securities provided that no such loan of
portfolio securities may be made by it if, as a
result, the aggregate of such loans would exceed
5% of the value of the Fund's total assets.
6. Purchase any securities on margin, except
for the use of short-term credit necessary for
clearance of purchases of portfolio securities,
the payment of initial and variation margin
deposits in connection with futures contracts and
options thereon, and the purchase and sale of
options.
7. Purchase, hold or deal in commodities or
commodity contracts (except that the Fund may
engage in futures and options on futures), or
purchase or sell real estate including real estate
limited partnerships, other than, to the extent
permitted under the Fund's investment policies,
instruments secured by real estate or interests
therein or instruments issued by entities that
invest in real estate or interests therein.
8. Issue senior securities. For purposes of
this investment restriction, the futures, options
and borrowing actions permitted under the Fund's
investment policies are not deemed to be the
issuance of senior securities.
9. Concentrate more than 25% of the value of
its total assets (taken at market value at the
time of each investment) in securities of issuers
whose principal business activities are in the
same industry or group of industries.
With the exception of the investment restriction
set out in item 2 above, if a percentage restriction is
adhered to at the time of investment, a later increase
in percentage resulting from a change in market value
of the investment or the total assets will not
constitute a violation of that restriction.
<PAGE>
The following investment limitations may be
changed by the Corporation's Board of Directors without
shareholder approval.
The Fund may not:
1. Invest in illiquid securities (i.e.,
securities that are not readily marketable) if, as
a result of such investments, more than 5% of the
Fund's net assets (taken at market value at the
time of each investment) would be invested in
illiquid securities.
2. Invest in any investment company, except
to the extent permitted under the Investment
Company Act of 1940, as amended (the "1940 Act").
3. Enter into futures contracts or related
options if more than 5% of the Fund's net assets
would be represented by futures contracts or
related options, or more than 5% of the Fund's net
assets would be committed to initial margin and
premiums on futures contracts and related options.
INVESTMENT POLICIES AND TECHNIQUES
The following information supplements the
discussion of the Fund's investment objective, policies
and techniques that are described in the Prospectus
under the captions "INVESTMENT OBJECTIVE AND POLICIES"
and "INVESTMENT TECHNIQUES AND RISKS."
Illiquid Securities
The Fund may invest up to 5% of its net assets in
illiquid securities (i.e., securities that are not
readily marketable). For purposes of this restriction,
illiquid securities include, but are not limited to,
restricted securities (i.e., securities the disposition
of which is restricted under the federal securities
laws), securities which may only be resold pursuant to
Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act"), repurchase agreements with
maturities in excess of seven days and other securities
that are not readily marketable. The Board of
Directors or its delegate has the ultimate authority to
determine, to the extent permissible under the federal
securities laws, which securities are liquid or
illiquid for purposes of this 5% limitation. Certain
securities exempt from registration or issued in
transactions exempt from registration under the
Securities Act, including securities that may be resold
to institutional investors pursuant to Rule 144A under
the Securities Act, may be considered liquid under
guidelines adopted by the Board.
The Board of Directors of the Corporation has
delegated to Oak Ridge Investments, LLC ( the
"Advisor"), the Fund's investment advisor, the day-to-
day determination of the liquidity of any security,
although it has retained oversight and ultimate
responsibility for such determinations. Although no
definitive liquidity criteria are used, the Board of
Directors has directed the Advisor to look to such
factors as (i) the nature of the market for a security
(including the institutional private resale market),
(ii) the terms of certain securities or other
instruments allowing for the disposition to a third
party or the issuer thereof (e.g., certain repurchase
obligations and demand instruments), (iii) the
availability of market quotations (e.g., for securities
quoted in the PORTAL system) and (iv) other permissible
relevant factors.
Restricted securities may be sold only in
privately negotiated transactions or in a public
offering with respect to which a registration statement
is in effect under the Securities Act. Where
registration is required, the Fund may be obligated to
pay all or part of the registration expenses and a
considerable period may elapse between the time of the
decision to sell and the time the Fund may be permitted
to sell a security under an effective registration
statement. If, during such a period, adverse market
conditions were to develop, the Fund might obtain a
less favorable price than prevailed when it decided to
sell. Restricted securities will be priced at fair
value as determined in good faith by the Board of
Directors of the Corporation. If, through the
appreciation of restricted securities or the
depreciation of unrestricted securities, the Fund
should be in a position where more than 5% of the value
of its net assets are invested in illiquid securities,
including restricted securities which are not readily
marketable, the Fund will take such steps as is deemed
advisable, if any, to protect liquidity.
<PAGE>
Short-Term Fixed Income Securities
The Fund may invest, for temporary defensive
purposes, pending investment or reinvestment of funds
and to meet anticipated redemption requests, up to 35%
of its total assets in short-term fixed income
securities, including without limitation, the
following:
1. U.S. government securities, including
bills, notes and bonds differing as to maturity
and rate of interest, which are either issued or
guaranteed by the U.S. Treasury or by U.S.
government agencies or instrumentalities. U.S.
government agency securities include securities
issued by (a) the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of
the United States, Small Business Administration
and the Government National Mortgage Association,
whose securities are supported by the full faith
and credit of the United States; (b) the Federal
Home Loan Banks, Federal Intermediate Credit Banks
and the Tennessee Valley Authority, whose
securities are supported by the right of the
agency to borrow from the U.S. Treasury; (c) the
Federal National Mortgage Association, whose
securities are supported by the discretionary
authority of the U.S. government to purchase
certain obligations of the agency or
instrumentality; and (d) the Student Loan
Marketing Association, the Interamerican
Development Bank and the International Bank for
Reconstruction and Development, whose securities
are supported only by the credit of such agencies.
While the U.S. government provides financial
support to such U.S. government-sponsored agencies
or instrumentalities, no assurance can be given
that it always will do so since it is not so
obligated by law. The U.S. government, its
agencies and instrumentalities do not guarantee
the market value of their securities, and
consequently, the value of such securities may
fluctuate.
2. Certificates of deposit issued against
funds deposited in a U.S. bank or savings and loan
association. Such certificates are for a definite
period of time, earn a specified rate of return
and are normally negotiable. If such certificates
of deposit are non-negotiable, they will be
considered illiquid securities and be subject to
the Fund's 5% restriction on investments in
illiquid securities. Pursuant to a certificate of
deposit, the issuer agrees to pay the amount
deposited plus interest to the bearer of the
certificate on the date specified thereon. Under
current FDIC regulations, the maximum insurance
payable as to any one certificate of deposit is
$100,000; therefore, certificates of deposit
purchased by the Fund will not generally be fully
insured.
3. Bank time deposits, which are monies kept
on deposit with U.S. banks or savings and loan
associations for a stated period of time at a
fixed rate of interest. There may be penalties
for the early withdrawal of such time deposits, in
which case the yields of these investments will be
reduced.
4. Bankers' acceptances which are short-term
credit instruments used to finance commercial
transactions. Generally, an acceptance is a time
draft drawn on a bank by an exporter or an
importer to obtain a stated amount of funds to pay
for specific merchandise. The draft is then
"accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value
of the instrument on its maturity date. The
acceptance may then be held by the accepting bank
as an asset or it may be sold in the secondary
market at the going rate of interest for a
specific maturity.
5. Repurchase agreements entered into only
with respect to obligations of the U.S.
government, its agencies or instrumentalities. In
such a transaction, at the time the Fund purchases
the security, it simultaneously agrees to resell
and redeliver the security to the seller, who also
simultaneously agrees to buy back the security at
a fixed price and time. This assures a
predetermined yield for the Fund during its
holding period since the resale price is always
greater than the purchase price and reflects an
agreed-upon market rate. Such transactions afford
an opportunity for the Fund to invest temporarily
available cash. Repurchase agreements may be
considered loans to the seller, collateralized by
the underlying securities. The risk to the Fund is
limited to the ability of the seller to pay the
agreed-upon sum on the repurchase date; in the
event of default, the repurchase agreement
provides that the Fund is entitled to sell the
underlying collateral. If the value of the
collateral declines after the agreement is entered
into, however, and if the seller defaults under a
repurchase agreement when the value of the
underlying collateral is less than the repurchase
price, the Fund could incur a loss of both
principal and interest. The Advisor monitors the
value of the collateral at the time the
transaction is entered into and at all times
during the term of the repurchase agreement. The
<PAGE>
Advisor does so in an effort to determine that the
value of the collateral always equals or exceeds
the agreed-upon repurchase price to be paid to the
Fund. If the seller were to be subject to a
federal bankruptcy proceeding, the ability of the
Fund to liquidate the collateral could be delayed
or impaired because of certain provisions of the
bankruptcy laws.
6. Commercial paper and commercial paper
master notes (which are demand instruments without
a fixed maturity bearing interest at rates which
are fixed to known lending rates and automatically
adjusted when such lending rates change) rated A-1
or higher by Standard & Poor's Corporation, Prime-
1 or higher by Moody's Investors Service, D-2 or
higher by Duff & Phelps, Inc. or F-2 or higher by
Fitch IBCA Information, Inc. Master demand notes
are direct lending arrangements between the Fund
and a corporation. There is no secondary market
for such notes; however, they are redeemable by
the Fund at any time. The Advisor will consider
the financial condition of the corporation (e.g.,
earning power, cash flow and other liquidity
ratios) and will continuously monitor the
corporation's ability to meet all of its financial
obligations, because the Fund's liquidity might be
impaired if the corporation were unable to pay
principal and interest on demand.
Derivative Instruments
In General. The Fund may invest up to 5% of its
net assets in derivative instruments. The Fund may use
derivative instruments for any lawful purpose
consistent with the Fund's investment objective such as
hedging or managing risk, but not for speculation.
Derivative instruments are commonly defined to include
securities or contracts whose value depend on (or
"derive" from) the value of one or more other assets,
such as securities, currencies or commodities. These
"other assets" are commonly referred to as "underlying
assets."
A derivative instrument generally consists of, is
based upon or exhibits characteristics similar to
options or forward contracts. Options and forward
contracts are considered to be the basic "building
blocks" of derivatives. For example, forward-based
derivatives include forward contracts, swap contracts
and exchange-traded futures. Option-based derivatives
include privately negotiated, over-the-counter ("OTC")
options (including caps, floors, collars and options on
forward and swap contracts) and exchange-traded options
on futures. Diverse types of derivatives may be
created by combining options or forward contracts in
different ways, and by applying these structures to a
wide range of underlying assets.
An option is a contract in which the "holder" (the
buyer) pays a certain amount (the "premium") to the
"writer" (the seller) to obtain the right, but not the
obligation, to buy from the writer (in a "call") or
sell to the writer (in a "put") a specific asset at an
agreed upon price at or before a certain time. The
holder pays the premium at inception and has no further
financial obligation. The holder of an option-based
derivative generally will benefit from favorable
movements in the price of the underlying asset but is
not exposed to corresponding losses due to adverse
movements in the value of the underlying asset. The
writer of an option-based derivative generally will
receive fees or premiums but generally is exposed to
losses due to changes in the value of the underlying
asset.
A forward is a sales contract between a buyer
(holding the "long" position) and a seller (holding the
"short" position) for an asset with delivery deferred
until a future date. The buyer agrees to pay a fixed
price at the agreed future date and the seller agrees
to deliver the asset. The seller hopes that the market
price on the delivery date is less than the agreed upon
price, while the buyer hopes for the contrary. The
change in value of a forward-based derivative generally
is roughly proportional to the change in value of the
underlying asset.
Hedging. The Fund may use derivative instruments
to protect against possible adverse changes in the
market value of securities held in, or anticipated to
be held in, the Fund's portfolio. Derivatives may also
be used by the Fund to "lock-in" its realized but
unrecognized gains in the value of its portfolio
securities. Hedging strategies, if successful, can
reduce the risk of loss by wholly or partially
offsetting the negative effect of unfavorable price
movements in the investments being hedged. However,
hedging strategies can also reduce the opportunity for
gain by offsetting the positive effect of favorable
price movements in the hedged investments.
Managing Risk. The Fund may also use derivative
instruments to manage the risks of the Fund's
portfolio. Risk management strategies include, but are
not limited to, facilitating the sale of portfolio
securities, managing the
<PAGE>
effective maturity or duration
of debt obligations in the Fund's portfolio,
establishing a position in the derivatives markets as a
substitute for buying or selling certain securities or
creating or altering exposure to certain asset classes,
such as equity, debt and foreign securities. The use
of derivative instruments may provide a less expensive,
more expedient or more specifically focused way for the
Fund to invest than "traditional" securities (i.e.,
stocks or bonds) would.
Exchange or OTC Derivatives. Derivative
instruments may be exchange-traded or traded in OTC
transactions between private parties. Exchange-traded
derivatives are standardized options and futures
contracts traded in an auction on the floor of a
regulated exchange. Exchange contracts are generally
liquid. The exchange clearinghouse is the counterparty
of every contract. Thus, each holder of an exchange
contract bears the credit risk of the clearinghouse
(and has the benefit of its financial strength) rather
than that of a particular counterparty. Over-the-
counter transactions are subject to additional risks,
such as the credit risk of the counterparty to the
instrument, and are less liquid than exchange-traded
derivatives since they often can only be closed out
with the other party to the transaction.
Risks and Special Considerations. The use of
derivative instruments involves risks and special
considerations as described below. Risks pertaining to
particular derivative instruments are described in the
sections that follow.
(1) Market Risk. The primary risk of derivatives
is the same as the risk of the underlying assets;
namely, that the value of the underlying asset may go
up or down. Adverse movements in the value of an
underlying asset can expose the Fund to losses.
Derivative instruments may include elements of leverage
and, accordingly, the fluctuation of the value of the
derivative instrument in relation to the underlying
asset may be magnified. The successful use of
derivative instruments depends upon a variety of
factors, particularly the Advisor's ability to predict
movements of the securities, currencies and commodities
markets, which requires different skills than
predicting changes in the prices of individual
securities. There can be no assurance that any
particular strategy adopted will succeed. A decision
to engage in a derivative transaction will reflect the
Advisor's judgment that the derivative transaction will
provide value to the Fund and its shareholders and is
consistent with the Fund's objectives, investment
limitations and operating policies. In making such a
judgment, the Advisor will analyze the benefits and
risks of the derivative transaction and weigh them in
the context of the Fund's entire portfolio and
investment objective.
(2) Credit Risk. The Fund will be subject to the
risk that a loss may be sustained as a result of the
failure of a counterparty to comply with the terms of a
derivative instrument. The counterparty risk for
exchange-traded derivative instruments is generally
less than for privately-negotiated or OTC derivative
instruments, since generally a clearing agency, which
is the issuer or counterparty to each exchange-traded
instrument, provides a guarantee of performance. For
privately-negotiated instruments, there is no similar
clearing agency guarantee. In all transactions, the
Fund will bear the risk that the counterparty will
default, and this could result in a loss of the
expected benefit of the derivative transaction and
possibly other losses to the Fund. The Fund will enter
into transactions in derivative instruments only with
counterparties that the Advisor reasonably believes are
capable of performing under the contract.
(3) Correlation Risk. When a derivative
transaction is used to completely hedge another
position, changes in the market value of the combined
position (the derivative instrument plus the position
being hedged) result from an imperfect correlation
between the price movements of the two instruments.
With a perfect hedge, the value of the combined
position remains unchanged for any change in the price
of the underlying asset. With an imperfect hedge, the
value of the derivative instrument and its hedge are
not perfectly correlated. Correlation risk is the risk
that there might be imperfect correlation, or even no
correlation, between price movements of an instrument
and price movements of investments being hedged. For
example, if the value of a derivative instrument used
in a short hedge (such as writing a call option, buying
a put option or selling a futures contract) increased
by less than the decline in value of the hedged
investments, the hedge would not be perfectly
correlated. Such a lack of correlation might occur due
to factors unrelated to the value of the investments
being hedged, such as speculative or other pressures on
the markets in which these instruments are traded. The
effectiveness of hedges using instruments on indices
will depend, in
<PAGE>
part, on the degree of correlation
between price movements in the index and price
movements in the investments being hedged.
(4) Liquidity Risk. Derivatives are also subject
to liquidity risk. Liquidity risk is the risk that a
derivative instrument cannot be sold, closed out or
replaced quickly at or very close to its fundamental
value. Generally, exchange contracts are very liquid
because the exchange clearinghouse is the counterparty
of every contract. OTC transactions are less liquid
than exchange-traded derivatives since they often can
only be closed out with the other party to the
transaction. The Fund might be required by applicable
regulatory requirements to maintain assets as "cover,"
maintain segregated accounts and/or make margin
payments when it takes positions in derivative
instruments involving obligations to third parties
(i.e., instruments other than purchased options). If
the Fund is unable to close out its positions in such
instruments, it might be required to continue to
maintain such assets or accounts or make such payments
until the position expired, matured or is closed out.
The requirements might impair the Fund's ability to
sell a portfolio security or make an investment at a
time when it would otherwise be favorable to do so, or
require that the Fund sell a portfolio security at a
disadvantageous time. The Fund's ability to sell or
close out a position in an instrument prior to
expiration or maturity depends on the existence of a
liquid secondary market or, in the absence of such a
market, the ability and willingness of the counterparty
to enter into a transaction closing out the position.
Therefore, there is no assurance that any derivatives
position can be sold or closed out at a time and price
that is favorable to the Fund.
(5) Legal Risk. Legal risk is the risk of loss
caused by the legal unenforceability of a party's
obligations under the derivative. While a party
seeking price certainty agrees to surrender the
potential upside in exchange for downside protection,
the party taking the risk is looking for a positive
payoff. Despite this voluntary assumption of risk, a
counterparty that has lost money in a derivative
transaction may try to avoid payment by exploiting
various legal uncertainties about certain derivative
products.
(6) Systemic or "Interconnection" Risk.
Interconnection risk is the risk that a disruption in
the financial markets will cause difficulties for all
market participants. In other words, a disruption in
one market will spill over into other markets, perhaps
creating a chain reaction. Much of the OTC derivatives
market takes place among the OTC dealers themselves,
thus creating a large interconnected web of financial
obligations. This interconnectedness raises the
possibility that a default by one large dealer could
create losses for other dealers and destabilize the
entire market for OTC derivative instruments.
General Limitations. The use of derivative
instruments is subject to applicable regulations of the
Securities and Exchange Commission (the "SEC"), the
several options and futures exchanges upon which they
may be traded, the Commodity Futures Trading Commission
(the "CFTC") and various state regulatory authorities.
The Corporation has filed a notice of eligibility
for exclusion from the definition of the term
"commodity pool operator" with the CFTC and the
National Futures Association, which regulate trading in
the futures markets. In accordance with Rule 4.5 of
the regulations under the Commodities Exchange Act (the
"CEA"), the notice of eligibility for the Fund includes
representations that the Fund will use futures
contracts and related options solely for bona fide
hedging purposes within the meaning of CFTC
regulations, provided that the Fund may hold other
positions in futures contracts and related options that
do not qualify as a bona fide hedging position if the
aggregate initial margin deposits and premiums required
to establish these positions, less the amount by which
any such futures contracts and related options
positions are "in the money," do not exceed 5% of the
Fund's net assets. Adherence to these guidelines does
not, however, limit the Fund's risk to 5% of the Fund's
assets.
The SEC has identified certain trading practices
involving derivative instruments that involve the
potential for leveraging the Fund's assets in a manner
that raises issues under the 1940 Act. In order to
limit the potential for the leveraging of the Fund's
assets, as defined under the 1940 Act, the SEC has
stated that the Fund may use coverage or the
segregation of the Fund's assets. The Fund will also
set aside permissible liquid assets in a segregated
custodial account if required to do so by SEC and CFTC
regulations. Assets used as cover or held in a
segregated account cannot be sold while the derivative
position is open, unless they are replaced with similar
assets. As a result, the commitment of a large portion
of the Fund's assets to segregated accounts could
impede portfolio management or the Fund's ability to
meet redemption requests or other current obligations.
<PAGE>
In some cases the Fund may be required to maintain
or limit exposure to a specified percentage of its
assets to a particular asset class. In such cases,
when the Fund uses a derivative instrument to increase
or decrease exposure to an asset class and is required
by applicable SEC guidelines to set aside liquid assets
in a segregated account to secure its obligations under
the derivative instruments, the Advisor may, where
reasonable in light of the circumstances, measure
compliance with the applicable percentage by reference
to the nature of the economic exposure created through
the use of the derivative instrument and by reference
to the nature of the exposure arising from the assets
set aside in the segregated account.
Options. The Fund may use options for any lawful
purpose consistent with the Fund's investment objective
such as hedging or managing risk but not for
speculation. An option is a contract in which the
"holder" (the buyer) pays a certain amount (the
"premium") to the "writer" (the seller) to obtain the
right, but not the obligation, to buy from the writer
(in a "call") or sell to the writer (in a "put") a
specific asset at an agreed upon price (the "strike
price" or "exercise price") at or before a certain time
(the "expiration date"). The holder pays the premium
at inception and has no further financial obligation.
The holder of an option will benefit from favorable
movements in the price of the underlying asset but is
not exposed to corresponding losses due to adverse
movements in the value of the underlying asset. The
writer of an option will receive fees or premiums but
is exposed to losses due to changes in the value of the
underlying asset. The Fund may purchase (buy) or write
(sell) put and call options on assets, such as
securities, currencies, commodities and indices of debt
and equity securities ("underlying assets") and enter
into closing transactions with respect to such options
to terminate an existing position. Options used by the
Fund may include European, American and Bermuda style
options. If an option is exercisable only at maturity,
it is a "European" option; if it is also exercisable
prior to maturity, it is an "American" option. If it
is exercisable only at certain times, it is a "Bermuda"
option.
The Fund may purchase (buy) and write (sell) put
and call options and enter into closing transactions
with respect to such options to terminate an existing
position. The purchase of call options serves as a
long hedge, and the purchase of put options serves as a
short hedge. Writing put or call options can enable
the Fund to enhance income by reason of the premiums
paid by the purchaser of such options. Writing call
options serves as a limited short hedge because
declines in the value of the hedged investment would be
offset to the extent of the premium received for
writing the option. However, if the security
appreciates to a price higher than the exercise price
of the call option, it can be expected that the option
will be exercised and the Fund will be obligated to
sell the security at less than its market value or will
be obligated to purchase the security at a price
greater than that at which the security must be sold
under the option. All or a portion of any assets used
as cover for OTC options written by the Fund would be
considered illiquid to the extent described under
"INVESTMENT POLICIES AND TECHNIQUES _ Illiquid
Securities." Writing put options serves as a limited
long hedge because increases in the value of the hedged
investment would be offset to the extent of the premium
received for writing the option. However, if the
security depreciates to a price lower than the exercise
price of the put option, it can be expected that the
put option will be exercised and the Fund will be
obligated to purchase the security at more than its
market value.
The value of an option position will reflect,
among other things, the historical price volatility of
the underlying investment, the current market value of
the underlying investment, the time remaining until
expiration, the relationship of the exercise price to
the market price of the underlying investment and
general market conditions.
The Fund may effectively terminate its right or
obligation under an option by entering into a closing
transaction. For example, the Fund may terminate its
obligation under a call or put option that it had
written by purchasing an identical call or put option;
this is known as a closing purchase transaction.
Conversely, the Fund may terminate a position in a put
or call option it had purchased by writing an identical
put or call option; this is known as a closing sale
transaction. Closing transactions permit the Fund to
realize the profit or limit the loss on an option
position prior to its exercise or expiration.
The Fund may purchase or write both exchange-
traded and OTC options. Exchange-traded options are
issued by a clearing organization affiliated with the
exchange on which the option is listed that, in effect,
guarantees completion of every exchange-traded option
transaction. In contrast, OTC options are contracts
between the Fund and the other party to the transaction
("counterparty") (usually a securities dealer or a
bank) with no clearing organization guarantee. Thus,
when the Fund purchases or writes an OTC option, it
relies on the counterparty to
<PAGE>
make or take delivery of
the underlying investment upon exercise of the option.
Failure by the counterparty to do so would result in
the loss of any premium paid by the Fund as well as the
loss of any expected benefit of the transaction.
The Fund's ability to establish and close out
positions in exchange-listed options depends on the
existence of a liquid market. The Fund intends to
purchase or write only those exchange-traded options
for which there appears to be a liquid secondary
market. However, there can be no assurance that such a
market will exist at any particular time. Closing
transactions can be made for OTC options only by
negotiating directly with the counterparty, or by a
transaction in the secondary market if any such market
exists. Although the Fund will enter into OTC options
only with counterparties that are expected to be
capable of entering into closing transactions with the
Fund, there is no assurance that the Fund will in fact
be able to close out an OTC option at a favorable price
prior to expiration. In the event of insolvency of the
counterparty, the Fund might be unable to close out an
OTC option position at any time prior to its
expiration. If the Fund were unable to effect a
closing transaction for an option it had purchased, it
would have to exercise the option to realize any
profit.
The Fund may engage in options transactions on
indices in much the same manner as the options on
securities discussed above, except the index options
may serve as a hedge against overall fluctuations in
the securities market in general.
The writing and purchasing of options is a highly
specialized activity that involves investment
techniques and risks different from those associated
with ordinary portfolio securities transactions.
Imperfect correlation between the options and
securities markets may detract from the effectiveness
of attempted hedging.
Spread Transactions. The Fund may use spread
transactions for any lawful purpose consistent with the
Fund's investment objective such as hedging or managing
risk, but not for speculation. The Fund may purchase
covered spread options from securities dealers. Such
covered spread options are not presently exchange-
listed or exchange-traded. The purchase of a spread
option gives the Fund the right to put, or sell, a
security that it owns at a fixed dollar spread or fixed
yield spread in relationship to another security that
the Fund does not own, but which is used as a
benchmark. The risk to the Fund in purchasing covered
spread options is the cost of the premium paid for the
spread option and any transaction costs. In addition,
there is no assurance that closing transactions will be
available. The purchase of spread options will be used
to protect the Fund against adverse changes in
prevailing credit quality spreads (i.e., the yield
spread between high quality and lower quality
securities). Such protection is only provided during
the life of the spread option.
Futures Contracts. The Fund may use futures
contracts for any lawful purpose consistent with the
Fund's investment objective such as hedging and
managing risk but not for speculation. The Fund may
enter into futures contracts, including interest rate
and index futures. The Fund may also purchase put and
call options, and write covered put and call options,
on futures in which it is allowed to invest. The
purchase of futures or call options thereon can serve
as a long hedge, and the sale of futures or the
purchase of put options thereon can serve as a short
hedge. Writing covered call options on futures
contracts can serve as a limited short hedge, and
writing covered put options on futures contracts can
serve as a limited long hedge, using a strategy similar
to that used for writing covered options in securities.
The Fund's hedging may include purchases of futures as
an offset against the effect of expected increases in
currency exchange rates and securities prices and sales
of futures as an offset against the effect of expected
declines in currency exchange rates and securities
prices. The Fund may also write put options on futures
contracts while at the same time purchasing call
options on the same futures contracts in order to
create synthetically a long futures contract position.
Such options would have the same strike prices and
expiration dates. The Fund will engage in this
strategy only when the Advisor believes it is more
advantageous to the Fund than purchasing the futures
contract.
To the extent required by regulatory authorities,
the Fund may enter into futures contracts that are
traded on national futures exchanges and are
standardized as to maturity date and underlying
financial instrument. Futures exchanges and trading
are regulated under the CEA by the CFTC. Although
techniques other than sales and purchases of futures
contracts could be used to reduce the Fund's exposure
to market, currency or interest rate fluctuations, the
Fund may be able to hedge its exposure more effectively
and perhaps at a lower cost through using futures
contracts.
<PAGE>
An interest rate futures contract provides for the
future sale by one party and purchase by another party
of a specified amount of a specific financial
instrument (e.g., debt security) or currency for a
specified price at a designated date, time and place.
An index futures contract is an agreement pursuant to
which the parties agree to take or make delivery of an
amount of cash equal to the difference between the
value of the index at the close of the last trading day
of the contract and the price at which the index
futures contract was originally written. Transaction
costs are incurred when a futures contract is bought or
sold and margin deposits must be maintained. A futures
contract may be satisfied by delivery or purchase, as
the case may be, of the instrument or the currency or
by payment of the change in the cash value of the
index. More commonly, futures contracts are closed out
prior to delivery by entering into an offsetting
transaction in a matching futures contract. Although
the value of an index might be a function of the value
of certain specified securities, no physical delivery
of those securities is made. If the offsetting
purchase price is less than the original sale price,
the Fund realizes a gain; if it is more, the Fund
realizes a loss. Conversely, if the offsetting sale
price is more than the original purchase price, the
Fund realizes a gain; if it is less, the Fund realizes
a loss. The transaction costs must also be included in
these calculations. There can be no assurance,
however, that the Fund will be able to enter into an
offsetting transaction with respect to a particular
futures contract at a particular time. If the Fund is
not able to enter into an offsetting transaction, the
Fund will continue to be required to maintain the
margin deposits on the futures contract.
No price is paid by the Fund upon entering into a
futures contract. Instead, at the inception of a
futures contract, the Fund is required to deposit in a
segregated account with its custodian, in the name of
the futures broker through whom the transaction was
effected, "initial margin," consisting of cash, U.S.
government securities or other liquid debt obligations,
in an amount generally equal to 10% or less of the
contract value. Margin must also be deposited when
writing a call or put option on a futures contract, in
accordance with applicable exchange rules. Unlike
margin in securities transactions, initial margin on
futures contracts does not represent a borrowing, but
rather is in the nature of a performance bond or good-
faith deposit that is returned to the Fund at the
termination of the transaction if all contractual
obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the
Fund may be required by an exchange to increase the
level of its initial margin payment, and initial margin
requirements might be increased generally in the future
by regulatory action.
Subsequent "variation margin" payments are made to
and from the futures broker daily as the value of the
futures position varies, a process known as "marking to
market." Variation margin does not involve borrowing,
but rather represents a daily settlement of the Fund's
obligations to or from a futures broker. When the Fund
purchases an option on a future, the premium paid plus
transaction costs is all that is at risk. In contrast,
when the Fund purchases or sells a futures contract or
writes a call or put option thereon, it is subject to
daily variation margin calls that could be substantial
in the event of adverse price movements. If the Fund
has insufficient cash to meet daily variation margin
requirements, it might need to sell securities at a
time when such sales are disadvantageous. Purchasers
and sellers of futures positions and options on futures
can enter into offsetting closing transactions by
selling or purchasing, respectively, an instrument
identical to the instrument held or written. Positions
in futures and options on futures may be closed only on
an exchange or board of trade that provides a secondary
market. The Fund intends to enter into futures
transactions only on exchanges or boards of trade where
there appears to be a liquid secondary market.
However, there can be no assurance that such a market
will exist for a particular contract at a particular
time.
Under certain circumstances, futures exchanges may
establish daily limits on the amount that the price of
a future or option on a futures contract can vary from
the previous day's settlement price; once that limit is
reached, no trades may be made that day at a price
beyond the limit. Daily price limits do not limit
potential losses because prices could move to the daily
limit for several consecutive days with little or no
trading, thereby preventing liquidation of unfavorable
positions.
If the Fund were unable to liquidate a futures or
option on a futures contract position due to the
absence of a liquid secondary market or the imposition
of price limits, it could incur substantial losses.
The Fund would continue to be subject to market risk
with respect to the position. In addition, except in
the case of purchased options, the Fund would continue
to be required to make daily variation margin payments
and might be required to maintain the position being
hedged by the future or option or to maintain certain
liquid securities in a segregated account.
<PAGE>
Certain characteristics of the futures market
might increase the risk that movements in the prices of
futures contracts or options on futures contracts might
not correlate perfectly with movements in the prices of
the investments being hedged. For example, all
participants in the futures and options on futures
contracts markets are subject to daily variation margin
calls and might be compelled to liquidate futures or
options on futures contracts positions whose prices are
moving unfavorably to avoid being subject to further
calls. These liquidations could increase the price
volatility of the instruments and distort the normal
price relationship between the futures or options and
the investments being hedged. Also, because initial
margin deposit requirements in the futures markets are
less onerous than margin requirements in the securities
markets, there might be increased participation by
speculators in the future markets. This participation
also might cause temporary price distortions. In
addition, activities of large traders in both the
futures and securities markets involving arbitrage,
"program trading" and other investment strategies might
result in temporary price distortions.
Warrants
The Fund may invest in warrants, valued at the
lower of cost or market, if, after giving effect
thereto, not more than 5% of its net assets will be
invested in warrants, other than warrants acquired in
units or attached to other securities. Warrants are
options to purchase equity securities at a specific
price for a specific period of time. They do not
represent ownership of the securities but only the
right to buy them. Investing in warrants is purely
speculative in that they have no voting rights, pay no
dividends and have no rights with respect to the assets
of the corporation issuing them. In addition, the
value of the warrant does not necessarily change with
the value of the underlying security, and a warrant
ceases to have value if it is not exercised prior to
its expiration date.
When-Issued Securities
The Fund may from time to time invest up to 5% of
its net assets in securities issued on a "when-issued"
basis. The price of securities purchased on a when-
issued basis is fixed at the time the commitment to
purchase is made, with delivery and payment for the
securities occurring at a later date. Normally, the
settlement date occurs within 45 days of the purchase.
During the period between the purchase and settlement,
no payment is made by the Fund to the issuer, and no
interest is accrued on debt securities or dividend
income is earned on equity securities. Forward
commitments involve a risk of loss if the value of the
security to be purchased declines prior to the
settlement date, which risk is in addition to the risk
of decline in value of the Fund's other assets. While
when-issued securities may be sold prior to the
settlement date, the Fund intends to purchase such
securities with the purpose of actually acquiring them.
At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it will record the
transaction and reflect the value of the security in
determining its net asset value.
The Fund will maintain liquid securities equal in
value to commitments for when-issued securities. Such
segregated securities either will mature or, if
necessary, be sold on or before the settlement date.
When the time comes to pay for when-issued securities,
the Fund will meet its obligations from then available
cash flow, sale of the securities held in the separate
account described above, sale of other securities or,
although it would not normally expect to do so, from
the sale of the when-issued securities themselves
(which may have a market value greater or less than the
Fund's payment obligation).
Repurchase Obligations
The Fund may enter into repurchase agreements with
respect to no more than 5% of its net assets with
certain banks and certain non-bank dealers. In a
repurchase agreement, the Fund buys a security at one
price and, at the time of the sale, the seller agrees
to repurchase the obligation at a mutually agreed upon
time and price (usually within seven days). The
repurchase agreement, thereby, determines the yield
during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the
value of the underlying security. The Advisor will
monitor, on an ongoing basis, the value of the
underlying securities to ensure that the value always
equals or exceeds the repurchase price plus accrued
interest. Repurchase agreements could involve certain
risks in the event of a default or insolvency of the
other party to the agreement, including possible delays
or restrictions upon the Fund's ability to dispose of
the underlying securities. Although no definitive
creditworthiness criteria are used, the Advisor reviews
the creditworthiness of the banks and non-bank dealers
with which the Fund enters into repurchase agreements
to evaluate those risks.
<PAGE>
Lending of Portfolio Securities
The Fund may lend its portfolio securities, up to
5% of its total assets, to broker-dealers or
institutional investors. The loans will be secured
continuously by collateral equal at least to the value
of the securities lent by "marking to market" daily.
The collateral may consist of cash, government
securities, letters of credit or other collateral
permitted by regulatory agencies. The Fund will
continue to receive the equivalent of the interest or
dividends paid by the issuer of the securities lent.
The Fund may also receive interest on the investment of
the collateral or a fee from the borrower as
compensation for the loan. The Fund may pay reasonable
custodial and administrative fees in connection with a
loan. The Fund will retain the right to call, upon
notice, the lent securities. While there may be delays
in recovery or even loss of rights in the collateral
should the borrower fail financially, the Advisor will
review the creditworthiness of the entities to which
loans are made to evaluate those risks.
DIRECTORS AND OFFICERS OF THE CORPORATION
Directors and officers of the Corporation,
together with information as to their principal
business occupations during at least the last five
years, and other information, are shown below. Each
director who is deemed an "interested person," as
defined in the 1940 Act, is indicated by an asterisk.
*David M. Klaskin, President and a Director of the
Corporation (DOB 8/6/60).
Mr. Klaskin has been the President, Treasurer,
Chief Investment Officer and a Managing Member of
the Advisor since it began operations in July
1997. Mr. Klaskin has also been the President,
Treasurer, Chief Investment Officer and a Director
of the Advisor's predecessor and the Fund's
principal distributor, Oak Ridge Investments, Inc.
(the "Distributor"), since its founding in
September 1989. For the eight years prior to
that, Mr. Klaskin was a Financial Consultant with
Shearson/Lehman Brothers responsible for managing
funds for both individual and institutional
clients. Mr. Klaskin graduated from Indiana
University with a B.S. in Finance.
*Samuel Wegbreit, Chairman of the Board, Treasurer,
Assistant Secretary and a Director of the Corporation
(DOB 9/28/57).
Mr. Wegbreit has been the Chairman, Secretary and
a Managing Member of the Advisor since July 1997.
Mr. Wegbreit has also been the Chairman, Secretary
and a Director of the Distributor since September
1989. From April 1988 until September 1989, Mr.
Wegbreit was a self-employed Securities Trader.
From 1983 until 1988, Mr. Wegbreit was a
Securities Trader and Vice-President with Morgan
Stanley & Co. Mr. Wegbreit graduated from Brown
University with a B.S. in Applied Mathematics.
Daniel A. Kaplan, a Director of the Corporation (DOB
4/5/60).
Mr. Kaplan is a Certified Public Accountant and
the President of Loft Development Corporation.
Mr. Kaplan has been employed by Loft Development
Corporation since 1986.
Mark C. Pappas, Secretary of the Corporation (DOB
5/16/68).
Mr. Pappas has been Senior Vice President of the
Advisor since July 1997, and has held the same
position with the Distributor since 1993. From
1992 until 1993, Mr. Pappas was the Senior
Portfolio Analyst for the General Board of
Pensions of the United Methodist Church. From
1990 until 1992, Mr. Pappas was a Consultant with
the Distributor. Mr. Pappas graduated from Purdue
University with a B.S. in Economics/Finance.
A. Charlene Sullivan, Ph.D., a Director of the
Corporation (DOB 1/21/49).
Dr. Sullivan has been an Associate Professor of
Finance at Purdue University since 1978.
<PAGE>
Martin Z. Craig, a Director of the Corporation (DOB
9/5/54).
Mr. Craig has been the principal of Craig Capital
Investments since January 1991. From 1988 until
1990, Mr. Craig was the Executive Vice President
and a Director of HHL Financial Services, Inc.
Except for Mr. Kaplan, Dr. Sullivan and Mr. Craig,
the address of all of the above persons is Oak Ridge
Investments, LLC, 10 South LaSalle Street, Suite 1050,
Chicago, Illinois 60603. Mr. Kaplan's address is 641
West Lake Street, Suite 401, Chicago, Illinois 60661;
Dr. Sullivan's address is Purdue University, Krannert
Center, #217, West Lafayette, Indiana 47907; and Mr.
Craig's address is 854 Bluff Street, Glencoe, Illinois
60022.
As of February 28, 1997, officers and directors of
the Corporation beneficially owned 24,989 shares of the
Fund's Class A shares, which was 3.81% of the class'
then outstanding shares, and none of the Fund's Class C
shares. Directors and officers of the Corporation who
are officers, directors, employees or shareholders of
the Advisor do not receive any remuneration from the
Corporation or the Fund for serving as directors or
officers.
The following table provides information relating
to compensation paid to directors of the Corporation
for their services as such for the fiscal year ended
November 30, 1997:
Name Cash Other Total
Compensation(1) Compensation
David M. Klaskin $ 0 $ 0 $ 0
Samuel Wegbreit $ 0 $ 0 $ 0
Daniel A. Kaplan $1,000 $ 0 $1,000
A. Charlene Sullivan $1,000 $ 0 $1,000
Martin Z. Craig $250 $ 0 $250
All directors as $2,250 $ 0 $2,250
a group (5
persons)
___________________
(1) Each director who is not deemed an "interested
person," as defined in the 1940 Act, receives $250
for each Board of Directors meeting attended by
such person. The Board held four meetings during
fiscal 1997.
PRINCIPAL SHAREHOLDERS
As of February 28, 1998, the following persons
owned of record or are known by the Corporation to own
of record or beneficially 5% or more of the outstanding
shares of one or both classes of shares of the Fund:
Name and Address of Number of Percent of Percent of
Beneficial Owner Shares Class Total Fund
Firstar Trust Company 3,527,917 19.26% 0.57%
- - Custodian for Class C shares
Margaret P. McGuire -
IRA Rollover
545 N. Eagle Island Road
Kankakee, IL 60901-7551
Rauscher Pierce Refsnes 2,529,933 13.81% 0.41%
George Sokulski - IRA Class C shares
928 N. Crestview Drive
Palatine, IL 60067-3414
<PAGE>
Firstar Trust Company 1,367,605 7.46% 0.22%
- - Custodian for Kerry Class C shares
S. Fisher - IRA
Rollover
688 Wortham Circle
Mundelein, IL 60060
David M. Togliatti & 1,326,040 7.24% 0.21%
Donna L. Togliatti - Class C shares
Joint Tenants
1115 E. 3rd Street
Coal City, IL 60416-1324
Rauscher Pierce Refsnes 1,163,511 6.35% 0.19%
John L. Kelliber Class C shares
c/o R.R. Donnelly
2512 N. Bosworth
Avenue, Apt. 407
Chicago, IL 60614-2085
Gary Nickander 1,132,781 6.18% 0.18%
112 Park 32 Drive West Class C shares
Noblesville, IN
46060-9252
Rauscher Pierce Refsnes 1,074,505 5.87% 0.17%
Lance Laconi - IRA Class C shares
698 Mayfair Lane
Carmel, IN 46032-8650
As of February 28, 1998 no person owned a
controlling interest in the Fund.
INVESTMENT ADVISOR AND DISTRIBUTOR
Prior to July 1997, Oak Ridge Investments, Inc.,
the Fund's principal distributor, also served as the
Fund's investment advisor. In July 1997, Oak Ridge
Investments, LLC succeeded to Oak Ridge Investments,
Inc.'s investment advisory business. Accordingly, at
that time, Oak Ridge Investments, LLC became the
investment advisor to the Fund. Oak Ridge Investments,
Inc. continues to serve as the Fund's principal
distributor.
Oak Ridge Investments, LLC (the "Advisor") is
managed and owned by the same persons who manage and
own Oak Ridge Investments, Inc. (the "Distributor").
Specifically, Mr. Klaskin is the President, Treasurer,
Chief Investment Officer and a Managing Member of the
Advisor; Mr. Wegbreit is the Chairman, Secretary and a
Managing Member of the Advisor; and each such person
owns shares representing more than 35% but less than
51% of the Advisor. Mr. Klaskin also serves as the
President, Treasurer, Chief Investment Officer and a
Director of the Distributor; Mr. Wegbreit also serves
as the Chairman, Secretary and a Director of the
Distributor; and each such person owns shares
representing more than 35% but less than 51% of the
Distributor. Mr. Pappas is the Senior Vice President
of both the Advisor and the Distributor.
The Fund's amended and restated investment
advisory agreement is dated as of March 31, 1998 (the
"Advisory Agreement"). The term of the Advisory
Agreement begins on March 31, 1998 and will continue in
effect for successive periods of one year if such
continuation is approved annually by the Board of
Directors of the Corporation or by vote of a majority
of the Fund's outstanding voting securities (as defined
in the 1940 Act). Each annual renewal must also be
approved by the vote of a majority of the Corporation's
directors who are not parties to the
<PAGE>
Advisory Agreement
or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such
approval. The Advisory Agreement was approved by the
directors, including a majority of the disinterested
directors, on January 22, 1998. The Advisory Agreement
is terminable without penalty, on 60 days' written
notice by the Board of Directors of the Corporation, by
vote of a majority of the Corporation's outstanding
voting securities or by the Advisor, and will terminate
automatically in the event of its assignment.
Under the terms of the Advisory Agreement, the
Advisor manages the Fund's investments subject to the
supervision of the Corporation's Board of Directors.
The Advisor is responsible for investment decisions and
supplies investment research and portfolio management.
At its expense, the Advisor provides office space and
all necessary office facilities, equipment and
personnel for servicing the investments of the Fund.
As compensation for its services, the Corporation, on
behalf of the Fund, pays to the Advisor a monthly
advisory fee at the annual rate of 1.00% of the average
daily net assets of the Fund. From time to time, the
Advisor may voluntarily waive all or a portion of its
management fee and/or absorb expenses for one or both
classes of shares of the Fund. For the fiscal years
ended November 30, 1995 and 1996, the Fund did not pay
an advisory fee to the Advisor because the Advisor
waived its entire advisory fee. If the Advisor had not
agreed to waive the advisory fee, the Advisor would
have received $33,642 and $62,131 in 1995 and 1996,
respectively, for its investment advisory services.
For the fiscal year ended November 30, 1997, the Fund
paid the Advisor $12,006 for its investment advisory
services. The Advisor would have received $97,117 had
it not waived $25,111 of its fee in 1997. A brief
description of the Fund's Advisory Agreement is set
forth in the Prospectus under "MANAGEMENT." The
organizational expenses of the Fund were advanced by
the Advisor and will be reimbursed by the Fund over a
period of not more than 60 months. The organizational
expenses for the Fund were approximately $44,002.
Under a Distribution Agreement dated January 3,
1994 (the "Distribution Agreement"), the Distributor
acts as the principal distributor of the Fund's shares.
The Distribution Agreement provides that the
Distributor will use its best efforts to distribute the
Fund's shares. The Fund's Class A shares are offered
for sale by the Fund continuously at net asset value
per share plus a maximum initial sales charge of 4.25%
of the offering price. The Fund's Class C shares are
offered continuously at net asset value. Existing
shareholders of the Fund's Class A shares as of
December 31, 1995 are not subject to the sales charge
on additional purchases of Fund shares. In addition,
no sales charge is imposed on the reinvestment of
dividends or capital gains. Certain other exceptions
to the imposition of the sales charge apply, as
discussed more fully in the Prospectus under the
caption "HOW TO PURCHASE SHARES _ Purchases at Net
Asset Value _ Class A Shares." These exceptions are
made available because minimal or no sales effort is
required with respect to the categories of investors so
excepted. Pursuant to the terms of the Distribution
Agreement, the Distributor bears the costs of printing
prospectuses and shareholder reports which are used for
selling purposes, as well as advertising and any other
costs attributable to the distribution of Fund shares.
For the fiscal years ended November 30, 1995, 1996 and
1997, the Distributor did not receive any compensation
for its services under the Distribution Agreement. The
Distribution Agreement is subject to the same
termination and renewal provisions as are described
above with respect to the Advisory Agreement, except
that the Distribution Agreement need not be approved by
the Fund's shareholders.
DISTRIBUTION PLANS
Description of Plans
The Fund has adopted a plan of distribution for
each class of shares (the "Class A Plan" and the "Class
C Plan") pursuant to Rule 12b-1 under the 1940 Act,
which requires it to pay the Distributor certain
distribution and/or service fees. Under the Class A
Plan, the Fund is required to pay the Distributor a
distribution fee for the promotion and distribution of
the Class A shares of up to 0.25% per annum of the
average daily net assets of the Fund attributable to
the Class A shares. The Class C Plan requires the Fund
to pay the Distributor (i) a distribution fee of up to
0.75% per annum of the average daily net assets of the
Fund attributable to the Class C shares, and (ii) a
service fee for personal services provided to
shareholders and/or the maintenance of shareholder
accounts of up to 0.25% per annum of the average daily
net assets of the Fund attributable to the Class C
shares. Under both plans, the Distributor is
authorized to, in turn, pay all or a portion of the fee
it receives from the Fund to any securities dealer,
financial institution or any other person (the
"Recipient") who renders assistance in distributing or
promoting the sale of Fund shares or, with respect to
the Class C shares only, who provide certain
shareholder services to the holders of such class
<PAGE>
of
shares, pursuant to a written agreement (the "Rule
12b-1 Related Agreement"). To the extent such fee is
not paid to such persons, the Distributor may use the
fee for its own distribution expenses incurred in
connection with the sale of the Fund's shares and, with
respect to the Class C shares only, for any of its
shareholder servicing expenses incurred in connection
with servicing the holders of such class of shares,
although it is the Distributor's current intention to
pay out all or most of the fee under both plans. A
form of the 12b-1 Related Agreement referred to above
has been approved by a majority of the Board of
Directors, and of the members of the Board who are not
"interested persons" of the Fund as defined in the 1940
Act and who have no direct or indirect financial
interest in the operation of the plans or any related
agreements (the "Disinterested Directors") voting
separately. Accordingly, the Distributor may enter
into 12b-1 Related Agreements with securities dealers,
financial institutions or other persons without further
Board approval.
Payment of the distribution and/or service fee is
to be made quarterly, within 30 days after the close of
the quarter for which the fee is payable, upon the
Distributor forwarding to the Board of Directors a
written report of all amounts expensed pursuant to the
applicable plan; provided, however, that the aggregate
payments by the Fund under the Class A Plan to the
Distributor and all Recipients may not exceed 0.25% (on
an annualized basis) of the Fund's average net assets
attributable to the Class A shares for that quarter,
and the aggregate payments by the Fund under the Class
C Plan to the Distributor and all Recipients may not
exceed 1.00% (on an annualized basis) of the Fund's
average net assets attributable to the Class C shares
for that quarter; and provided further that no fee may
be paid in excess of the expenses as set forth in the
quarterly written report. Thus, neither the Class A
Plan nor the Class C Plan provide for the payment of
distribution and/or service fees in subsequent periods
that relate to expenses incurred in prior periods.
Each plan, and any Rule 12b-1 Related Agreement
which is entered into, will continue in effect for a
period of more than one year only so long as its
continuance is specifically approved at least annually
by a vote of a majority of the Fund's Board of
Directors, and of the Disinterested Directors, cast in
person at a meeting called for the purpose of voting on
the plan, or the Rule 12b-1 Related Agreement, as
applicable. In addition, both plans, and any Rule
12b-1 Related Agreement, may be terminated at any time,
without penalty, by vote of a majority of the
outstanding voting securities of the applicable class
of shares to which the plan relates, or by vote of a
majority of Disinterested Directors (on not more than
sixty (60) days' written notice in the case of the Rule
12b-1 Related Agreement only).
Amounts Expensed Under the Plans
For the fiscal year ended November 30, 1997, the
Fund paid out $4,375 under the Class A Plan and $581
under the Class C Plan. The Class C Plan became
effective on March 1, 1997. With respect to the Class
A Plan, of the $4,375 expensed, $2,339 was spent on
printing and mailing prospectuses to other than current
shareholders, $1,093 was spent on advertising and $943
was spent on dealer compensation. With respect to the
Class C Plan, of the $581 expensed, $44 was spent on
printing and mailing prospectuses to other than current
shareholders, $0 was spent on advertising and $537 was
spent on dealer compensation. The Distributor did not
retain any of the amounts expensed under the Class A or
Class C Plan.
Interests of Certain Persons
With the exception of the Advisor, in its capacity
as the Fund's investment advisor, and the Distributor,
in its capacity as principal distributor of Fund
shares, no "interested person" of the Fund, as defined
in the 1940 Act, and no director of the Fund who is not
an "interested person" has or had a direct or indirect
financial interest in either the Class A or the Class C
Plan or any Rule 12b-1 Related Agreement.
Benefits to the Fund
Class A Plan. The Class A Plan has been in effect
since January 1, 1996. The benefits to the holders of
the Fund's Class A shares resulting from the
implementation of the Class A Plan include providing
Recipients with incentives to promote the sale of such
shares, which in turn has resulted in an increase in
assets under management with respect to the Class A
shares. This increase has benefited the holders of the
Class A shares by providing the class with a larger
asset base over which to spread expenses.
<PAGE>
Class C Plan. The Class C Plan has been in effect
since March 1, 1997. Accordingly, as of November 30,
1997, the plan had been in place for only eight months.
Nevertheless, the Board of Directors believes that the
Class C Plan has already provided the holders of Class
C shares with certain benefits, including an enhanced
level of personal service from Recipients who receive
service fees from the Fund under the Class C Plan. The
Board also believes that over time, the Class C Plan
will help to increase the size of the class, thereby
providing the class with a larger asset base over which
to spread expenses. Should the Class C Plan not
provide the benefits the Board anticipates, the Board
will re-evaluate whether to continue the plan.
PORTFOLIO TRANSACTIONS AND BROKERAGE
As investment advisor to the Fund, the Advisor is
responsible for decisions to buy and sell securities
for the Fund and for the placement of the Fund's
portfolio business, the negotiation of the commissions
to be paid on such transactions and the allocation of
portfolio brokerage and principal business. It is the
policy of the Advisor to seek the best execution at the
best security price available with respect to each
transaction, in light of the overall quality of
brokerage and research services provided to the Advisor
or the Fund. The best price to the Fund means the best
net price without regard to the mix between purchase or
sale price and commission, if any. Purchases may be
made from underwriters, dealers and, on occasion, the
issuers. Commissions will be paid on the Fund's
futures and options transactions, if any. The purchase
price of portfolio securities purchased from an
underwriter or dealer may include underwriting
commissions and dealer spreads. The Fund may pay
mark-ups on principal transactions. In selecting
broker-dealers and in negotiating commissions, the
Advisor considers the firm's reliability, the quality
of its execution services on a continuing basis and its
financial condition. Brokerage will not be allocated
based on the sale of the Fund's shares. As noted in
the Prospectus under the caption "PORTFOLIO
TRANSACTIONS," pursuant to guidelines adopted by the
Corporation's Board of Directors and in accordance with
the rules of the SEC, the Distributor, which is an
affiliate of the Advisor, may serve as a broker to the
Fund; however, in order for the Distributor to effect
any portfolio transactions for the Fund on an exchange,
the commissions, fees or other remuneration received by
the Distributor must be reasonable and fair compared to
the commissions, fees or other remuneration paid to
other brokers in connection with comparable
transactions involving similar securities being
purchased or sold on any exchange during a comparable
period of time. This standard allows the Distributor
to receive no more than the remuneration which would be
expected to be received by an unaffiliated broker in a
commensurate arm's-length transaction.
The aggregate amount of brokerage commissions paid
by the Fund for the fiscal years ended November 30,
1995, 1996 and 1997 was $4,635, $14,333 and $8,501,
respectively. Of these total brokerage commissions,
the Distributor received $2,058, $6,352 and $8,021 in
1995, 1996 and 1997, respectively. Accordingly, for
the year ended November 30, 1997, 94% of the aggregate
brokerage commissions paid by the Fund were paid to the
Distributor, and 95% of the aggregate dollar amount of
Fund transactions involving the payment of commissions
were effected hrough the Distributor.
Section 28(e) of the Securities Exchange Act of
1934, as amended ("Section 28(e)"), permits an
investment advisor, under certain circumstances, to
cause an account to pay a broker or dealer who supplies
brokerage and research services a commission for
effecting a transaction in excess of the amount of
commission another broker or dealer would have charged
for effecting the transaction. Brokerage and research
services include (a) furnishing advice as to the value
of securities, the advisability of investing,
purchasing or selling securities and the availability
of securities or purchasers or sellers of securities;
(b) furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts; and
(c) effecting securities transactions and performing
functions incidental thereto (such as clearance,
settlement and custody).
The Advisor is responsible for selecting brokers
in connection with securities transactions. In
selecting such brokers, the Advisor considers
investment and market information and other research,
such as economic, securities and performance
measurement research provided by such brokers and the
quality and reliability of brokerage services,
including execution capability, performance and
financial responsibility. Accordingly, the commissions
charged by any such broker may be greater than the
amount another firm might charge if the Advisor
determines in good faith that the amount of such
commissions is reasonable in relation to the value of
the research information and brokerage services
provided by such broker to the Fund. The Advisor
believes that the research information
<PAGE>
received in this
manner provides the Fund with benefits by supplementing
the research otherwise available to the Fund. The
Advisory Agreement provides that such higher
commissions will not be paid by the Fund unless (a) the
Advisor determines in good faith that the amount is
reasonable in relation to the services in terms of the
particular transaction or in terms of the Advisor's
overall responsibilities; and (b) such payment is made
in compliance with the provisions of Section 28(e) and
other applicable state and federal laws. In addition,
such higher commissions will not be paid by the Fund
with respect to portfolio transactions in which the
Distributor is serving as broker to the Fund. The
investment advisory fees paid by the Fund under the
Advisory Agreement are not reduced as a result of the
Advisor's receipt of research services. The Fund did
not pay brokerage commissions for the fiscal years
ended November 30, 1995, 1996 and 1997 for transactions
for which research services were provided.
The Advisor places portfolio transactions for
other advisory accounts managed by the Advisor.
Research services furnished by firms through which the
Fund effects its securities transactions may be used by
the Advisor in servicing all of its accounts; not all
of such services may be used by the Advisor in
connection with the Fund. The Advisor believes it is
not possible to measure separately the benefits from
research services to each of the accounts (including
the Fund) managed by it. Because the volume and nature
of the trading activities of the accounts are not
uniform, the amount of commissions in excess of those
charged by another broker paid by each account for
brokerage and research services will vary. However,
the Advisor believes such costs to the Fund will not be
disproportionate to the benefits received by the Fund
on a continuing basis. The Advisor seeks to allocate
portfolio transactions equitably whenever concurrent
decisions are made to purchase or sell securities by
the Fund and another advisory account. In some cases,
this procedure could have an adverse effect on the
price or the amount of securities available to the
Fund. In making such allocations between the Fund and
other advisory accounts, the main factors considered by
the Advisor are the respective investment objectives,
the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for
investment and the size of investment commitments
generally held.
The Fund's portfolio turnover rate for the fiscal
years ended November 30, 1995, 1996 and 1997 was 109%,
71% and 55%, respectively. The Fund anticipates that
its portfolio turnover rate may continue to exceed 50%,
although such rate is not expected to exceed 100%. The
annual portfolio turnover rate indicates changes in the
Fund's portfolio; for instance, a rate of 100% would
result if all the securities in the portfolio
(excluding securities whose maturities at acquisition
were one year or less) at the beginning of an annual
period had been replaced by the end of the period. The
turnover rate may vary from year to year, as well as
within a year, and may be affected by portfolio sales
necessary to meet cash requirements for redemptions of
the Fund's shares.
CUSTODIAN
As custodian of the Fund's assets, Firstar Trust
Company ("Firstar") has custody of all securities and
cash of the Fund, delivers and receives payment for
securities sold, receives and pays for securities
purchased, collects income from investments and
performs other duties, all as directed by the officers
of the Corporation. The custodian is in no way
responsible for any of the investment policies or
decisions of the Fund. The principal business address
of Firstar is 615 East Michigan Street, Milwaukee,
Wisconsin 53202.
TRANSFER AGENT
Firstar also acts as transfer agent for the Fund.
Firstar is compensated based on an annual fee per open
account of $16 for Class A shares and $14 for Class C
shares, plus out-of-pocket expenses such as postage and
printing expenses in connection with shareholder
communications. Firstar also receives an annual fee
per closed account of $16 for Class A shares and $14
for Class C shares.
TAXES
As indicated under "INCOME DIVIDENDS, CAPITAL
GAINS DISTRIBUTIONS AND TAX TREATMENT" in the
Prospectus, it is the Fund's intent to continue to
qualify annually as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended.
This qualification does not involve government
supervision of the Fund's management practices or
policies.
<PAGE>
A dividend or capital gains distribution received
shortly after the purchase of shares reduces the net
asset value of shares by the amount of the dividend or
distribution and, although in effect a return of
capital, will be subject to income taxes. Net gains on
sales of securities when realized and distributed are
taxable as capital gains. If the net asset value of
shares were reduced below a shareholder's cost by
distribution of gains realized on sales of securities,
such distribution would be a return of investment
although taxable as stated above.
DETERMINATION OF NET ASSET VALUE
As set forth in the Prospectus under the same
caption, the net asset value of each class of shares of
the Fund will be determined as of the close of trading
on each day the New York Stock Exchange (the "NYSE") is
open for trading. The Fund does not determine net
asset value on days the NYSE is closed and at other
times described in the Prospectus. The NYSE is closed
on New Year's Day, Martin Luther King Day, President's
Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Additionally,
if any of the aforementioned holidays falls on a
Saturday, the NYSE will not be open for trading on the
preceding Friday and when such holiday falls on a
Sunday, the NYSE will not be open for trading on the
succeeding Monday, unless unusual business conditions
exist, such as the ending of a monthly or the yearly
accounting period.
SHAREHOLDER MEETINGS
Maryland law permits registered investment
companies, such as the Corporation, to operate without
an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by
the 1940 Act. The Corporation has adopted the
appropriate provisions in its Bylaws and may, at its
discretion, not hold an annual meeting in any year in
which the election of directors is not required to be
acted on by shareholders under the 1940 Act.
The Corporation's Bylaws also contain procedures
for the removal of directors by shareholders. At any
meeting of shareholders, duly called and at which a
quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the
votes entitled to be cast thereon, remove any director
or directors from office and may elect a successor or
successors to fill any resulting vacancies for the
unexpired terms of removed directors.
PERFORMANCE INFORMATION
As described under the heading "COMPARISON OF
INVESTMENT RESULTS" in the Fund's Prospectus, the
historical performance or return of both classes of
shares of the Fund may be shown in the form of various
performance figures. The Fund may occasionally cite
statistics to reflect the volatility or risk of one or
both classes of shares. These performance figures are
based upon historical results and are not necessarily
representative of future performance. Factors
affecting performance include general market
conditions, operating expenses, the imposition of sales
charges and investment management. Any additional fees
charged by a dealer or other financial services firm
would reduce the returns described in this section.
Total Return
The average annual total return of each class of
shares of the Fund is computed by finding the average
annual compounded rates of return over the periods that
would equate the initial amount invested to the ending
redeemable value, according to the following formula:
P(1+T)n = ERV
P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable
value of a hypothetical $1,000
payment made at the beginning of
the stated periods at the end of
the stated periods.
Calculation of total return is not subject to a
standardized formula. Total return performance for a
specific period is calculated by first taking an
investment (assumed to be $1,000) ("initial
investment") in a class of shares on
<PAGE>
the first day of
the period and computing the "ending value" of that
investment at the end of the period. The total return
percentage is then determined by subtracting the
initial investment from the ending value and dividing
the remainder by the initial investment and expressing
the result as a percentage. With respect to the Class
A shares only, this calculation reflects the deduction
of the maximum initial sales charge. In addition, the
calculation assumes that all income and capital gains
dividends paid by the Fund have been reinvested at the
net asset value of the applicable class of shares on
the reinvestment dates during the period. Total return
may also be shown as the increased dollar value of the
hypothetical investment over the period.
Cumulative total return represents the simple
change in value of an investment over a stated period
and may be quoted as a percentage or as a dollar
amount. Total returns may be broken down into their
components of income and capital (including capital
gains and changes in share price) in order to
illustrate the relationship between these factors and
their contributions to total return.
Performance figures for the Class A shares for the
fiscal years ended November 30, 1995, 1996 and 1997 and
for the Class C shares for the period ended November
30, 1997 may be found in the Fund's 1997 Annual Report,
which may be obtained free of charge by calling or
writing to the Fund.
Volatility
Occasionally statistics may be used to specify
volatility or risk of one or both classes of shares of
the Fund. Measures of volatility or risk are generally
used to compare the net asset value or performance of a
class of shares relative to a market index. One
measure of volatility is beta. Beta is the volatility
of a fund relative to the total market as represented
by the Standard & Poor's 500 Stock Index. A beta of
more than 1.00 indicates volatility greater than the
market, and a beta of less than 1.00 indicates
volatility less than the market. Another measure of
volatility or risk is standard deviation. Standard
deviation is used to measure variability of net asset
value or total return around an average, over a
specified period of time. The premise is that greater
volatility connotes greater risk undertaken in
achieving performance.
Comparisons
The Fund may compare the performance of one or
both classes of shares to that of United States
treasury bills, notes or bonds. Treasury obligations
are issued in selected denominations. Rates of
treasury obligations are fixed at the time of issuance
and payment of principal and interest is backed by the
full faith and credit of the United States Treasury.
The market value of such instruments will generally
fluctuate inversely with interest rates prior to
maturity and will equal par value at maturity.
Generally, the values of obligations with shorter
maturities will fluctuate less than those with longer
maturities.
From time to time, in marketing and other fund
literature, the performance of one or both classes of
shares of the Fund may be compared to the performance
of other mutual funds in general or to the performance
of particular types of mutual funds with similar
investment goals, as tracked by independent
organizations. Among these organizations, Lipper
Analytical Services, Inc. ("Lipper"), a widely used
independent research firm which ranks mutual funds by
overall performance, investment objectives and assets,
may be cited. Lipper performance figures are based on
changes in net asset value, with all income and capital
gains dividends reinvested. Such calculations do not
include the effect of any sales charges. Each class of
shares of the Fund will be compared to Lipper's
appropriate fund category, that is, by fund objective
and portfolio holdings.
The performance of the Fund's classes of shares
may also be compared to the performance of other mutual
funds by Morningstar, Inc. ("Morningstar"), which rates
funds on the basis of historical risk and total return.
Morningstar's ratings range from five stars (highest)
to one star (lowest) and represent Morningstar's
assessment of the historical risk level and total
return of a fund as a weighted average for three, five
and ten year periods. Ratings are not absolute or
necessarily predictive of future performance.
Evaluations of performance of the Fund's classes
of shares made by independent sources may also be used
in advertisements concerning the Fund, including
reprints of or selections from, editorials or articles
about the Fund. Sources for Fund performance and
articles about the Fund may include publications such
as Money, Forbes,
<PAGE>
Kiplinger's, Financial World,
Business Week, U.S. News and World Report, the Wall
Street Journal, Barron's and a variety of investment
newsletters.
The Fund may compare the performance of one or
both classes of shares to a wide variety of indices and
measures of inflation including the Russell 2000 Stock
Index. There are differences and similarities between
the investments that the Fund may purchase and the
investments measured by these indices.
Investors may want to compare the performance of
one or both classes of shares of the Fund to that of
certificates of deposit offered by banks and other
depository institutions. Certificates of deposit may
offer fixed or variable interest rates and principal is
guaranteed and may be insured. Withdrawal of the
deposits prior to maturity normally will be subject to
a penalty. Rates offered by banks and other depository
institutions are subject to change at any time
specified by the issuing institution.
Investors may also want to compare performance of
one or both classes of shares of the Fund to that of
money market funds. Money market fund yields will
fluctuate and shares are not insured, but share values
usually remain stable.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 100 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, have been selected as the
independent accountants for the Fund.
FINANCIAL STATEMENTS
The following audited financial statements of the
Fund are incorporated herein by reference to the Fund's
Annual Report for the year ended November 30, 1997 as
filed with the SEC on January 29, 1998:
(a) Schedule of Investments as of November
30, 1997.
(b) Statement of Assets and Liabilities as
of November 30, 1997.
(c) Statement of Operations for the year
ended November 30, 1997.
(d) Statement of Changes in Net Assets for
the years ended November 30, 1996 and
November 30, 1997.
(e) Financial Highlights for the Class A
shares for the period January 3, 1994
(commencement of operations) to November
30, 1994, and for the years ended
November 30, 1995, 1996 and 1997; and
Financial Highlights for the Class C
shares for the period March 1, 1997
(commencement of operations) to November
30, 1997.
(f) Notes to Financial Statements.
(g) Report of Independent Accountants dated
December 18, 1997.
The Annual Report may be obtained without charge by
calling or writing to the Fund.
<PAGE>
APPENDIX
SHORT-TERM RATINGS
Standard & Poor's Short-Term Debt Credit Ratings
A Standard & Poor's credit rating is a current
opinion of the creditworthiness of an obligor with
respect to a specific financial obligation, a specific
class of financial obligations or a specific financial
program. It takes into consideration the
creditworthiness of guarantors, insurers or other forms
of credit enhancement on the obligation and takes into
account the currency in which the obligation is
denominated. The credit rating is not a recommendation
to purchase, sell or hold a financial obligation,
inasmuch as it does not comment as to market price or
suitability for a particular investor.
Credit ratings are based on current information
furnished by the obligors or obtained by Standard &
Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in
connection with any credit rating and may, on occasion,
rely on unaudited financial information. Credit
ratings may be changed, suspended or withdrawn as a
result of changes in, or unavailability of, such
information, or based on other circumstances.
Short-term ratings are generally assigned to those
obligations considered short-term in the relevant
market. In the U.S., for example, that means
obligations with an original maturity of no more than
365 days_including commercial paper. Short-term
ratings are also used to indicate the creditworthiness
of an obligor with respect to put features on long-term
obligations. The result is a dual rating, in which the
short-term rating addresses the put feature, in
addition to the usual long-term rating.
Ratings are graded into several categories,
ranging from `A-1' for the highest quality obligations
to `D' for the lowest. These categories are as
follows:
A-1 A short-term obligation rated `A-1' is
rated in the highest category by Standard &
Poor's. The obligor's capacity to meet its
financial commitment on the obligation is
strong. Within this category, certain
obligations are designated with a plus sign
(+). This indicates that the obligor's
capacity to meet its financial commitment on
these obligations is extremely strong.
A-2 A short-term obligation rated `A-2' is
somewhat more susceptible to the adverse
effects of changes in circumstances and
economic conditions than obligations in
higher rating categories. However, the
obligor's capacity to meet its financial
commitment on the obligation is satisfactory.
A-3 A short-term obligation rated `A-3'
exhibits adequate protection parameters.
However, adverse economic conditions or
changing circumstances are more likely to
lead to a weakened capacity of the obligor to
meet its financial commitment on the
obligation.
B A short-term obligation rated `B' is
regarded as having significant speculative
characteristics. The obligor currently has
the capacity to meet its financial commitment
on the obligation; however, it faces major
ongoing uncertainties which could lead to the
obligor's inadequate capacity to meet its
financial commitment on the obligation.
C A short-term obligation rated `C' is
currently vulnerable to nonpayment and is
dependent upon favorable business, financial
and economic conditions for the obligor to
meet its financial commitment on the
obligation.
<PAGE>
D A short-term obligation rated `D' is in
payment default. The `D' rating category is
used when payments on an obligation are not
made on the date due even if the applicable
grace period has not expired, unless Standard
& Poor's believes that such payments will be
made during such grace period. The `D'
rating also will be used upon the filing of a
bankruptcy petition or the taking of a
similar action if payments on an obligation
are jeopardized.
Moody's Short-Term Debt Ratings
Moody's short-term debt ratings are opinions of
the ability of issuers to repay punctually senior debt
obligations. These obligations have an original
maturity not exceeding one year, unless explicitly
noted. Moody's ratings are opinions, not
recommendations to buy or sell, and their accuracy is
not guaranteed.
Moody's employs the following three designations,
all judged to be investment grade, to indicate the
relative repayment ability of rated issuers:
PRIME-1 Issuers rated `Prime-1' (or supporting
institutions) have a superior ability for
repayment of senior short-term debt
obligations. Prime-1 repaying ability will
often be evidenced by many of the following
characteristics:
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) 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.
PRIME-3 Issuers rated `Prime-3' (or supporting
institutions) have an acceptable ability for
repayment of senior short-term obligations.
The effect of industry characteristics and
market compositions may be more pronounced.
Variability in earnings and profitability may
result in changes in the level of debt
protection measurements and may require
relatively high financial leverage. Adequate
alternate liquidity is maintained.
NOT PRIME Issuers rated `Not Prime' do not fall within
any of the Prime rating categories.
Fitch IBCA International Short-Term Debt Credit Ratings
Fitch IBCA's international debt credit ratings are
applied to the spectrum of corporate, structured and
public finance. They cover sovereign (including
supranational and subnational), financial, bank,
insurance and other corporate entities and the
securities they issue, as well as municipal and other
public finance entities, securities backed by
receivables or other financial assets and
counterparties. When applied to an entity, these
<PAGE>
short-
term ratings assess its general creditworthiness on a
senior basis. When applied to specific issues and
programs, these ratings take into account the relative
preferential position of the holder of the security and
reflect the terms, conditions and covenants attaching
to that security.
International credit ratings assess the capacity
to meet foreign currency or local currency commitments.
Both "foreign currency" and "local currency" ratings
are internationally comparable assessments. The local
currency rating measures the probability of payment
within the relevant sovereign state's currency and
jurisdiction and therefore, unlike the foreign currency
rating, does not take account of the possibility of
foreign exchange controls limiting transfer into
foreign currency.
A short-term rating has a time horizon of less
than 12 months for most obligations, or up to three
years for U.S. public finance securities, and thus
places greater emphasis on the liquidity necessary to
meet financial commitments in a timely manner.
F-1 Highest credit quality. Indicates the
strongest capacity for timely payment of
financial commitments; may have an added "+"
to denote any exceptionally strong credit
feature.
F-2 Good credit quality. A satisfactory
capacity for timely payment of financial
commitments, but the margin of safety is not
as great as in the case of the higher
ratings.
F-3 Fair credit quality. The capacity for
timely payment of financial commitments is
adequate; however, near term adverse changes
could result in a reduction to non-investment
grade.
B Speculative. Minimal capacity for
timely payment of financial commitments, plus
vulnerability to near term adverse changes in
financial and economic conditions.
C High default risk. Default is a real
possibility. Capacity for meeting financial
commitments is solely reliant upon a
sustained, favorable business and economic
environment.
D Default. Denotes actual or imminent
payment default.
Duff & Phelps, Inc. Short-Term Debt Ratings
Duff & Phelps Credit Ratings' short-term debt
ratings are consistent with the rating criteria used by
money market participants. The ratings apply to all
obligations with maturities of under one year,
including commercial paper, the uninsured portion of
certificates of deposit, unsecured bank loans, master
notes, bankers acceptances, irrevocable letters of
credit and current maturities of long-term debt. Asset-
backed commercial paper is also rated according to this
scale.
Emphasis is placed on liquidity which is defined
as not only cash from operations, but also access to
alternative sources of funds including trade credit,
bank lines and the capital markets. An important
consideration is the level of an obligor's reliance on
short-term funds on an ongoing basis.
The distinguishing feature of Duff & Phelps Credit
Ratings' short-term debt ratings is the refinement of
the traditional `1' category. The majority of short-
term debt issuers carry the highest rating, yet quality
differences exist within that tier. As a consequence,
Duff & Phelps Credit Rating has incorporated gradations
of `1+' (one plus) and `1-` (one minus) to assist
investors in recognizing those differences.
These ratings are recognized by the SEC for broker-
dealer requirements, specifically capital computation
guidelines. These ratings meet Department of Labor
ERISA guidelines governing pension and profit sharing
<PAGE>
investments. State regulators also recognize the
ratings of Duff & Phelps Credit Rating for insurance
company investment portfolios.
Rating Scale: Definition
High Grade
D-1+ Highest certainty of timely
payment. Short-term liquidity,
including internal operating factors
and/or access to alternative sources of
funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-
term obligations.
D-1 Very high certainty of timely
payment. Liquidity factors are
excellent and supported by good
fundamental protection factors. Risk
factors are minor.
D-1- High certainty of timely payment.
Liquidity factors are strong and
supported by good fundamental protection
factors. Risk factors are very small.
Good Grade
D-2 Good certainty of timely payment.
Liquidity factors and company
fundamentals are sound. Although ongoing
funding needs may enlarge total
financing requirements, access to
capital markets is good. Risk factors
are small.
Satisfactory Grade
D-3 Satisfactory liquidity and other
protection factors qualify issue as to
investment grade. Risk factors are
larger and subject to more variation.
Nevertheless, timely payment is
expected.
Non-investment Grade
D-4 Speculative investment
characteristics. Liquidity is not
sufficient to insure against disruption
in debt service. Operating factors and
market access may be subject to a high
degree of variation.
Default
D-5 Issuer failed to meet scheduled
principal and/or interest payments.
LONG-TERM RATINGS
Standard & Poor's Long-Term Debt Credit Ratings
A Standard & Poor's credit rating is a current
opinion of the creditworthiness of an obligor with
respect to a specific financial obligation, a specific
class of financial obligations or a specific financial
program. It takes into consideration the
creditworthiness of guarantors, insurers or other forms
of credit enhancement on the obligation and takes into
account the currency in which the obligation is
denominated. The credit rating is not a recommendation
to purchase, sell or hold a financial obligation,
inasmuch as it does not comment as to market price or
suitability for a particular investor.
Credit ratings are based on current information
furnished by the obligors or obtained by Standard &
Poor's from other sources it considers reliable.
Standard & Poor's does not perform an audit in
connection with any credit rating and may, on occasion,
rely on unaudited financial information. Credit
ratings may be changed,
<PAGE>
suspended or withdrawn as a
result of changes in, or unavailability of, such
information, or based on other circumstances.
Credit ratings are based, in varying degrees, on
the following considerations: (1) likelihood of
payment_capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance
with the terms of the obligation; (2) nature of and
provisions of the obligation; and (3) protection
afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.
The rating definitions are expressed in terms of
default risk. As such, they pertain to senior
obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to
reflect the lower priority in bankruptcy. (Such
differentiation applies when an entity has both senior
and subordinated obligations, secured and unsecured
obligations, or operating company and holding company
obligations.) Accordingly, in the case of junior debt,
the rating may not conform exactly with the category
definition.
AAA An obligation rated `AAA' has the
highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial
commitment on the obligation is EXTREMELY
STRONG.
AA An obligation rated `AA' differs from
the highest rated obligations only in small
degree. The obligor's capacity to meet its
financial commitment on the obligation is
VERY STRONG.
A An obligation rated `A' is somewhat more
susceptible to the adverse effects of changes
in circumstances and economic conditions than
obligations in higher rated categories.
However, the obligor's capacity to meet its
financial commitment on the obligation is
still STRONG.
BBB An obligation rated `BBB' exhibits
ADEQUATE protection parameters. However,
adverse economic conditions or changing
circumstances are more likely to lead to a
weakened capacity of the obligor to meet its
financial commitment on the obligation.
Obligations rated `BB', `B', `CCC, `CC', and `C'
are regarded as having significant speculative
characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such
obligations will likely have some quality and
protective characteristics, these may be outweighed by
large uncertainties or major exposures to adverse
conditions.
BB An obligation rated `BB' is LESS
VULNERABLE to nonpayment than other
speculative issues. However, it faces major
ongoing uncertainties or exposure to adverse
business, financial or economic conditions
which could lead to the obligor's inadequate
capacity to meet its financial commitment on
the obligation.
B An obligation rated `B' is MORE
VULNERABLE to nonpayment than obligations
rated `BB', but the obligor currently has the
capacity to meet its financial commitment on
the obligation. Adverse business, financial
or economic conditions will likely impair the
obligor's capacity or willingness to meet its
financial commitment on the obligation.
CCC An obligation rated `CCC' is CURRENTLY
VULNERABLE to nonpayment, and is dependent
upon favorable business, financial and
economic conditions for the obligor to meet
its financial commitment on the obligation.
In the event of adverse business, financial
or economic conditions, the obligor is not
likely to have the capacity to meet its
financial commitment on the obligation.
CC An obligation rated `CC' is CURRENTLY
HIGHLY VULNERABLE to nonpayment.
<PAGE>
C The `C' rating may be used to cover a
situation where a bankruptcy petition has
been filed or similar action has been taken,
but payments on this obligation are being
continued.
D An obligation rated `D' is in payment
default. The `D' rating category is used
when payments on an obligation are not made
on the date due even if the applicable grace
period has not expired, unless Standard &
Poor's believes that such payments will be
made during such grace period. The `D'
rating also will be used upon the filing of a
bankruptcy petition or the taking of a
similar action if payments on an obligation
are jeopardized.
Plus (+) or minus (_): The ratings from `AA'
to `CCC' may be modified by the addition of a
plus or minus sign to show relative standing
within the major rating categories.
Moody's Long-Term Debt Ratings
Aaa Bonds which are rated `Aaa' 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 by 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.
Aa Bonds which are rated `Aa' are judged to be of
high quality by all standards. Together with the
Aaa group 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 Aaa securities.
A 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 some time
in the future.
Baa Bonds which are 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.
Ba 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.
B 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.
Caa 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.
Ca 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.
<PAGE>
C 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.
Moody's applies numerical modifiers 1, 2 and 3 in
each generic rating classification from `Aa' through
`B.' The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category;
the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates a ranking in the lower end of that
generic rating category.
Fitch IBCA International Long-Term Debt Credit Ratings
Fitch IBCA's international debt credit ratings are
applied to the spectrum of corporate, structured and
public finance. They cover sovereign (including
supranational and subnational), financial, bank,
insurance and other corporate entities and the
securities they issue, as well as municipal and other
public finance entities, securities backed by
receivables or other financial assets and
counterparties. When applied to an entity, these long-
term ratings assess its general creditworthiness on a
senior basis. When applied to specific issues and
programs, these ratings take into account the relative
preferential position of the holder of the security and
reflect the terms, conditions and covenants attaching
to that security.
International credit ratings assess the capacity
to meet foreign currency or local currency commitments.
Both "foreign currency" and "local currency" ratings
are internationally comparable assessments. The local
currency rating measures the probability of payment
within the relevant sovereign state's currency and
jurisdiction and therefore, unlike the foreign currency
rating, does not take account of the possibility of
foreign exchange controls limiting transfer into
foreign currency.
Investment Grade
AAA Highest credit quality. `AAA' ratings
denote the lowest expectation of credit risk.
They are assigned only in case of
exceptionally strong capacity for timely
payment of financial commitments. This
capacity is highly unlikely to be adversely
affected by foreseeable events.
AA Very high credit quality. `AA' ratings
denote a very low expectation of credit risk.
They indicate very strong capacity for timely
payment of financial commitments. This
capacity is not significantly vulnerable to
foreseeable events.
A High credit quality. `A' ratings denote
a low expectation of credit risk. The
capacity for timely payment of financial
commitments is considered strong. This
capacity may, nevertheless, be more
vulnerable to changes in circumstances or in
economic conditions than is the case for
higher ratings.
BBB Good credit quality. `BBB' ratings
indicate that there is currently a low
expectation of credit risk. The capacity for
timely payment of financial commitments is
considered adequate, but adverse changes in
circumstances and in economic conditions are
more likely to impair this capacity. This is
the lowest investment grade category.
Speculative Grade
BB Speculative. `BB' ratings indicate that
there is a possibility of credit risk
developing, particularly as the result of
adverse economic change over time; however,
business or financial alternatives may be
available to allow financial commitments to
be met.
<PAGE>
B Highly speculative. `B' ratings
indicate that significant credit risk is
present, but a limited margin of safety
remains. Financial commitments are currently
being met; however, capacity for continued
payment is contingent upon a sustained,
favorable business and economic environment.
CCC,
CC, C High default risk. Default is a
real possibility. Capacity for meeting
financial commitments is solely reliant upon
sustained, favorable business or economic
developments. A `CC' rating indicates that
default of some kind appears probable. `C'
ratings signal imminent default.
DDD,
DD
and D Default. Securities are not
meeting current obligations and are extremely
speculative. `DDD' designates the highest
potential for recovery of amounts outstanding
on any securities involved. For U.S.
corporates, for example, `DD' indicates
expected recovery of 50% - 90% of such
outstandings, and `D' the lowest recovery
potential, i.e. below 50%.
Duff & Phelps, Inc. Long-Term Debt Ratings
These ratings represent a summary opinion of the
issuer's long-term fundamental quality. Rating
determination is based on qualitative and quantitative
factors which may vary according to the basic economic
and financial characteristics of each industry and each
issuer. Important considerations are vulnerability to
economic cycles as well as risks related to such
factors as competition, government action, regulation,
technological obsolescence, demand shifts, cost
structure and management depth and expertise. The
projected viability of the obligor at the trough of the
cycle is a critical determination.
Each rating also takes into account the legal form
of the security (e.g., first mortgage bonds,
subordinated debt, preferred stock, etc.). The extent
of rating dispersion among the various classes of
securities is determined by several factors including
relative weightings of the different security classes
in the capital structure, the overall credit strength
of the issuer and the nature of covenant protection.
The Credit Rating Committee formally reviews all
ratings once per quarter (more frequently, if
necessary). Ratings of `BBB-` and higher fall within
the definition of investment grade securities, as
defined by bank and insurance supervisory authorities.
Structured finance issues, including real estate, asset-
backed and mortgage-backed financings, use this same
rating scale. Duff & Phelps Credit Rating claims
paying ability ratings of insurance companies use the
same scale with minor modification in the definitions.
Thus, an investor can compare the credit quality of
investment alternatives across industries and
structural types. A "Cash Flow Rating" (as noted for
specific ratings) addresses the likelihood that
aggregate principal and interest will equal or exceed
the rated amount under appropriate stress conditions.
Rating Scale Definition
AAA Highest credit quality. The risk
factors are negligible, being only slightly more
than for risk-free U.S. Treasury debt.
AA+ High credit quality. Protection factors
are strong. Risk is modest but may
AA vary slightly from time to time because
of economic conditions.
AA-
<PAGE>
A+ Protection factors are average but
adequate. However, risk factors are more
A variable and greater in periods of
economic stress.
A-
BBB+ Below-average protection factors but
still considered sufficient for prudent
BBB investment. Considerable variability in
risk during economic cycles.
BBB-
BB+ Below investment grade but deemed likely
to meet obligations when due.
BB Present or prospective financial
protection factors fluctuate according to
BB- industry conditions or company fortunes.
Overall quality may move up or
down frequently within this category.
B+ Below investment grade and possessing
risk that obligations will not be met
B when due. Financial protection factors
will fluctuate widely according to
B- economic cycles, industry conditions
and/or company fortunes. Potential
exists for frequent changes in the
rating within this category or into a higher
or lower rating grade.
CCC Well below investment grade securities.
Considerable uncertainty exists as to
timely payment of principal, interest or
preferred dividends.
Protection factors are narrow and risk
can be substantial with unfavorable
economic/industry conditions, and/or
with unfavorable company developments.
DD Defaulted debt obligations. Issuer
failed to meet scheduled principal and/or
interest payments.
DP Preferred stock with dividend
arrearages.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements (included in or
incorporated by reference into in Parts A and
B)
Schedule of Investments as of November
30, 1997.
Statement of Assets and
Liabilities as of November 30, 1997.
Statement of Operations for
the year ended November 30, 1997.
Statement of Changes in Net
Assets for the years ended November 30,
1996 and November 30, 1997.
Financial Highlights for the
Class A shares for the period January 3,
1994 (commencement of operations) to
November 30, 1994, and for the years
ended November 30, 1995, 1996 and 1997;
and Financial Highlights for the Class C
shares for the period March 1, 1997
(commencement of operations) to November
30, 1997.
Notes to Financial Statements.
Report of Independent Accountants dated
December 18, 1997.
(b) Exhibits
(1) Articles of Amendment dated
March 2, 1998 to Registrant's Articles
of Incorporation, as amended and
supplemented.
(2) Registrant's Amended and
Restated By-Laws.
(3) None.
(4) None.
(5) Amended and Restated
Investment Advisory Agreement with Oak
Ridge Investments, LLC dated as of March
31, 1998.
(6.1) Distribution Agreement
with Oak Ridge Investments, Inc. dated
January 3, 1994.
(6.2) Form of Dealer
Agreement.(1)
(7) None.
(8) Custodian Agreement with
Firstar Trust Company dated December 1,
1995.(1)
(9.1) Transfer Agent Agreement
with Firstar Trust Company dated
December 1, 1995.(1)
<PAGE>
(9.2) Fund Administration
Servicing Agreement with Firstar Trust
Company dated December 1, 1995.(1)
(9.3) Fund Accounting Servicing
Agreement with Firstar Trust Company
dated December 1, 1995.(1)
(10) Opinion and Consent of Godfrey
& Kahn, S.C.
(11) Consent of Price Waterhouse
LLP.
(12) None.
(13) Subscription Agreements.
(14) (a) Individual
Retirement Account Disclosure
Statement for Traditional IRAs and
Traditional Individual Retirement
Custodial Account.
(b) Individual
Retirement Account Disclosure
Statement for Roth (American Dream)
IRAs and Roth Individual Retirement
Custodial Account.
(c) Individual
Retirement Account Disclosure
Statement for Education IRAs and
Education Individual Retirement
Custodial Account.
(15.1) Class A Rule 12b-1
Distribution Plan.
(15.2) Class C Rule 12b-1
Distribution and Servicing Plan.
(16) Schedule for Computations of
Performance Quotations.(2)
(17) Financial Data Schedule.(3)
(18) Rule 18f-3 Multiple Class
Plan.
_______________
(1) Incorporated by reference from Registrant's Post-
Effective Amendment No. 4 to its Registration
Statement on Form N-1A as filed with the
Securities and Exchange Commission on December 26,
1995.
(2) Incorporated by reference from Registrant's Post-
Effective Amendment No. 6 to its Registration
Statement on Form N-1A as filed with the
Securities and Exchange Commission on February 26,
1997.
(3) Incorporated by reference from Registrant's N-SAR
as filed with the Securities and Exchange
Commission on January 29, 1998.
<PAGE>
Item 25. Persons Controlled by or under Common Control
with Registrant
Registrant neither controls any person nor is
under common control with any other person.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Securities as of February 28, 1998
Common Stock, $.01 par value 559
Item 27. Indemnification
Pursuant to the authority of the Maryland General
Corporation Law, Article VI of Registrant's By-Laws
provides as follows:
ARTICLE VI INDEMNIFICATION
The Corporation shall indemnify (a) its
Directors and officers, whether serving the
Corporation or at its request any other entity, to
the full extent required or permitted by (i)
Maryland law now or hereafter in force, including
the advance of expenses under the procedures and
to the full extent permitted by law, and (ii) the
Investment Company Act of 1940, as amended, and
(b) other employees and agents to such extent as
shall be authorized by the Board of Directors and
be permitted by law. The foregoing rights of
indemnification shall not be exclusive of any
other rights to which those seeking
indemnification may be entitled. The Board of
Directors may take such action as is necessary to
carry out these indemnification provisions and is
expressly empowered to adopt, approve and amend
from time to time such resolutions or contracts
implementing such provisions or such further
indemnification arrangements as may be permitted
by law.
Item 28. Business and Other Connections of Investment
Advisor
Incorporated by reference to the information
contained under "Management" in the Prospectus and
under "Directors and Officers of the Corporation"
and "Investment Advisor and Distributor" in the
Statement of Additional Information.
Item 29. Principal Underwriters
(a) None.
(b) Incorporated by reference to the
information contained under "MANAGEMENT" in
the Prospectus and under "DIRECTORS AND
OFFICERS OF THE CORPORATION" and "INVESTMENT
ADVISOR AND DISTRIBUTOR" in the Statement of
Additional Information.
(c) None.
Item 30. Location of Accounts and Records
All accounts, books or other documents required to
be maintained by Section 31(a) of the Investment
Company Act of 1940, as amended, and the rules
promulgated thereunder are in the possession of Oak
Ridge Investments, LLC, Registrant's investment
advisor, at Registrant's corporate offices, except
records held and maintained by Firstar Trust Company,
Mutual Fund Services, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202, relating to its
function as custodian, transfer agent and
administrator.
Item 31. Management Services
All management-related service contracts entered
into by Registrant are discussed in Parts A and B of
this Registration Statement.
Item 32. Undertakings.
Registrant undertakes to furnish each person to
whom a Prospectus is delivered with a copy of its 1997
Annual Report to Shareholders, upon request and without
charge. A copy of the 1997 Annual Report to
Shareholders will be provided to each person to whom a
Statement of Additional Information is delivered if the
person is not a shareholder of the Fund at the time the
Statement of Additional Information is so delivered.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the
Registrant certifies that it meets all of the
requirements for effectiveness of this Registration
Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective
Amendment No. 7 to the Registration Statement on Form
N-1A to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago and
State of Illinois on the 20th day of March, 1998.
OAK RIDGE FUNDS, INC. (Registrant)
formerly known as O.R.I. Funds, Inc.
By:/s/ Samuel Wegbreit
-----------------------------
Samuel Wegbreit
Chairman of the Board
Pursuant to the requirements of the Securities Act
of 1933, this Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A has been signed
below by the following persons in the capacities and on
the date(s) indicated.
Name Title Date
/s/ Samuel Wegbreit
- ----------------------------- Chairman of the Board, a Director, March 20, 1998
Samuel Wegbreit Treasurer and Assistant Secretary
(principal financial and accounting
officer)
/s/ David M. Klaskin
- ----------------------------- Director and President March 20, 1998
David M. Klaskin (principal executive officer)
/s/ Daniel A. Kaplan
- ----------------------------- Director March 20, 1998
Daniel A. Kaplan
/s/ Dr. A. Charlene Sullivan
- ----------------------------- Director March 20, 1998
Dr. A. Charlene Sullivan
- ----------------------------- Director _________, 1998
Martin Z. Craig
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(1) Articles of
Amendment dated March 2,
1998 to Registrant's
Articles of Incorpora
tion, as amended and
supplemented.
(2) Registrant's
Amended and Restated
By-Laws.
(3) None.
(4) None.
(5) Amended and
Restated Investment
Advisory Agreement with
Oak Ridge Investments,
LLC dated as of March 31,
1998.
(6.1)
Distribution Agreement
with Oak Ridge
Investments, Inc. dated
January 3, 1994.
(6.2) Form of
Dealer Agreement
(previously filed as
Exhibit 6.2 to
Registrant's Post-
Effective Amendment No. 4
to Registration Statement
on Form N-1A, File Nos.
811-8088 and 33-70590).
(7) None.
(8) Custodian
Agreement with Firstar
Trust Company dated
December 1, 1995
(previously filed as
Exhibit 8 to Registrant's
Post-Effective Amendment
No. 4 to Registration
Statement on Form N-1A,
File Nos. 811-8088 and
33-70590).
(9.1) Transfer
Agent Agreement with
Firstar Trust Company
dated December 1, 1995
(previously filed as
Exhibit 9.1 to
Registrant's Post-
Effective Amendment No. 4
to Registration Statement
on Form N-1A, File Nos.
811-8088 and 33-70590).
(9.2) Fund
Administration Servicing
Agreement with Firstar
Trust Company dated
December 1, 1995 (previ
ously filed as Exhibit
9.2 to Registrant's Post-
Effective Amendment No. 4
to Registration Statement
on Form N-1A, File Nos.
811-8088 and 33-70590).
(9.3) Fund
Accounting Servicing
Agreement with Firstar
Trust Company dated
December 1, 1995 (previ
ously filed as Exhibit
9.3 to Registrant's Post-
Effective Amendment No. 4
to Registration Statement
on Form N-1A, File Nos.
811-8088 and 33-70590).
(10) Opinion and
Consent of Godfrey &
Kahn, S.C., counsel for
Registrant.
(11) Consent of Price Waterhouse
LLP.
<PAGE>
(12) None.
(13) Subscription
Agreements.
(14) (a) Individual Retirement Account
Disclosure Statement for Traditional
IRAs and Traditional Individual
Retirement Custodial Account.
(b) Individual Retirement Account
Disclosure Statement for Roth (American
Dream) IRAs and Roth Individual
Retirement Custodial Account.
(c) Individual Retirement Account
Disclosure Statement for Education IRAs
and Education Individual Retirement
Custodial Account.
(15.1) Class A
Rule 12b-1 Distribution
Plan.
(15.2) Class C
Rule 12b-1 Distribution
and Servicing Plan.
(16) Schedule for
Computations of
Performance Quotations
(previously filed as
Exhibit 16 to
Registrant's Post-
Effective Amendment No. 6
to Registration Statement
on Form N-1A, File Nos.
811-8088 and 33-70590).
(17) Financial Data
Schedule (previously
filed in response to
question 77Q1 of
Registrant's N-SAR, as
filed with the Securities
and Exchange Commission
on January 29, 1998).
(18) Rule 18f-3
Multiple Class Plan.
Exhibit 1
O.R.I. FUNDS, INC.
Articles of Amendment
O.R.I. Funds, Inc., a Maryland corporation having
its principal office in Maryland in Baltimore City
(hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Article II, Section 2.1 of the
Corporation's Articles of Incorporation is amended in
its entirety to read as follows:
ARTICLE II
NAME
2.1 Name. The name of the corporation
is Oak Ridge Funds, Inc. (the "Corporation").
SECOND: All of the issued and unissued shares of
capital stock of the Corporation currently designated
as Class A and Class C shares, respectively, of the
O.R.I. Growth Fund series are hereby redesignated as
Class A and Class C shares, respectively, of the Oak
Ridge Growth Fund series.
THIRD: The foregoing amendments to the
Corporation's Articles of Incorporation (the
"Amendments") were approved by a majority of the entire
Board of Directors of the Corporation on January 22,
1998.
FOURTH: The Amendments are limited to changes
expressly permitted by Section 2-605 of Title II of the
Maryland General Corporation Law to be made without
action by the stockholders of the Corporation.
FIFTH: The Corporation is registered as an open-
end investment company under the Investment Company Act
of 1940.
SIXTH: The Articles of Amendment will become
effective at 12:00 a.m. on March 20, 1998.
IN WITNESS WHEREOF, O.R.I. Funds, Inc. has caused
these Articles of Amendment to be signed as of the 2nd
day of March, 1998 in its name and on its behalf by its
duly undersigned authorized officers, who acknowledge
that these Articles of Amendment are the act of the
Corporation and that, to the best of their knowledge,
information and belief, all matters and facts set forth
herein relating to the authorization and approval of
the Articles of Amendment are true in all material
respects and that this statement is made under
penalties of perjury.
Witness: O.R.I. Funds, Inc.
/s/ Mark C. Pappas By:/s/ Samuel Wegbreit
-------------------- ------------------------
Mark C. Pappas Samuel Wegbreit
Secretary Chairman of the Board
ARTICLES OF INCORPORATION
OF
O.R.I. FUNDS, INC.
ARTICLE I
INCORPORATOR
THE UNDERSIGNED, Carol A. Gehl, whose-post office
address is Godfrey & Kahn, S.C., 780 North Water
Street, Milwaukee, Wisconsin 53202, being at least
eighteen (18) years of age, does hereby act as
incorporator to form a corporation under and by virtue
of the Maryland General Corporation Law.
ARTICLE II
NAME
2.1. Name. The name of the corporation is O.R.I.
Funds, Inc. (the "Corporation").
2.2. Name Reservation. The Corporation
acknowledges that it uses the initials "O.R.I." in its
corporate name and in the name of any series designated
pursuant to Article V hereof only with the permission
of Oak Ridge Investments, Inc., ("Oak Ridge") the
Corporation's investment adviser, and agrees that Oak
Ridge shall control the use of the initials "O.R.I." by
the Corporation. The Corporation further agrees that
if Oak Ridge, its successors or assigns should at any
time cease to be the investment adviser to the
Corporation, the Corporation shall, at the written
request of Oak Ridge or its successors or assigns
eliminate the initials "O.R.I." from its corporate name
and any materials or documents referring to the
Corporation, and will not henceforth use the initials
"O.R.I." in the conduct of the Corporation's business,
except to any extent specifically agreed to by Oak
Ridge. The Corporation further acknowledges that Oak
Ridge reserves the right to grant the non-exclusive
right to use the initials "O.R.I." to any other persons
or entities, including other investment companies,
whether now in existence or hereafter created. The
provisions of this paragraph are binding on the
Corporation, its successors and assigns and on its
directors, officers, stockholders, creditors and all
other persons claiming under or through it.
ARTICLE III
CORPORATE PURPOSES AND POWERS
The purpose or purposes for which the Corporation
is formed is to act as an investment company under the
federal Investment Company Act of 1940, and to exercise
and enjoy all the powers, rights and privileges granted
to, or conferred upon, corporations by the General Laws
of the State of Maryland. The Corporation shall
exercise and enjoy all such powers, rights and
privileges to the extent not inconsistent with these
Articles of Incorporation.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
The post office address of the principal office of
the Corporation in the State of Maryland is c/o The
Corporation Trust Incorporated, 32 South Street,
Baltimore, Maryland 21202-3242. The name of the
Corporation's resident agent in the State of Maryland
is The Corporation Trust Incorporated, a corporation of
the State of Maryland, and the post office address of
the resident agent is 32 South Street, Baltimore,
Maryland 21202-3242.
ARTICLE V
CAPITAL STOCK
5.1. Authorized Shares. The total number of
shares of capital stock which the Corporation shall
have authority to issue is Five Hundred Million
(500,000,000) shares of the par value of one cent
($0.01) per share and of the aggregate par value of
Five Million Dollars ($5,000,000), all of which shares
are designated Common Stock.
5.2. Authorization of Stock Issuance. The Board
of Directors may authorize the issuance and sale of
capital stock of the Corporation, including stock of
any class or series, from time to time in such amounts
and on such terms and conditions, for such purposes and
for such amount or kind of consideration as the Board
of Directors shall determine, subject to any limits
required by then applicable law. All shares shall be
issued on a fully paid and non-assessable basis.
5.3. Fractional Shares. The Corporation may
issue fractional shares. Any fractional share shall
carry proportionately the rights of a whole share,
excepting the right to receive a certificate evidencing
such fractional share, but including, without
limitation, the right to vote and the right to receive
dividends.
5.4. Power to Classify. The Board of Directors
of the Corporation may classify and reclassify any
unissued shares of capital stock into one or more
additional or other classes or series as may be
established from time to time by setting or changing in
any one or more respects the designations, preferences,
conversion or other rights, voting powers,
restrictions, limitations as to dividends,
qualifications or terms of such shares of stock and
pursuant to such classification or reclassification to
increase or decrease the number of authorized shares of
stock, or shares of any existing class or series of
stock. Except as otherwise provided herein, all
references herein to capital stock shall apply without
discrimination to the shares of each class or series of
stock. Pursuant to such power, the Board of Directors
has initially designated 100,000,000 shares of its
capital stock into one series of shares of capital
stock of the Corporation, the names of which and the
number of shares allocated to each are as follows:
Name of Series Number of Shares Initially
Allocated
O.R.I. Growth Fund 100,000,000
5.5. Classes and Series - General. The relative
preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption
of each class or series of stock of the Corporation
shall be as follows, unless otherwise provided in
Articles Supplementary hereto:
(a) Assets Belonging to Class or Series.
All consideration received by the Corporation for
the issue or sale of stock of a particular class
or series, together with all assets in which such
consideration is invested or reinvested, all
income, earnings, profits and proceeds thereof,
including any proceeds derived from the sale,
exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of
such proceeds in whatever form the same may be,
shall irrevocably belong to that class or series
for all purposes, subject only to the rights of
creditors, and shall be so recorded on the books
of account of the Corporation. Any assets,
income, earnings, profits or proceeds thereof,
funds or payments which are not readily
attributable to a particular class or series shall
be allocated to and among any one or more series
or classes in such manner and on such basis as the
Board of Directors, in its sole discretion, shall
deem fair and equitable, and items so allocated to
a particular series or class shall belong to that
series or class. Each such allocation shall be
conclusive and binding upon the stockholders of
all classes and series for all purposes.
(b) Liabilities Belonging to Class or
Series. The assets belonging to each class or
series shall be charged with the liabilities of
the Corporation in respect of that class or series
and with all expenses, costs, charges and reserves
attributable to that class or series and shall be
so recorded on the books of account of the
Corporation. Any general liabilities, expenses,
costs, charges or reserves of the Corporation
which are not readily identifiable as belonging to
any particular class or series shall be allocated
and charged to and among any one or more of the
classes or series in such manner and on such basis
as the Board of Directors in its sole discretion
deems fair and equitable, and any items so
allocated to a particular class or series shall be
charged to, and shall be a liability belonging to,
that class or series. Each such allocation shall
be conclusive and binding upon the stockholders of
all classes and series for all purposes.
(c) Income. The Board of Directors shall
have full discretion, to the extent not
inconsistent with the General Laws of the State of
Maryland and the Investment Company Act of 1940,
to determine which items shall be treated as
income and which items shall be treated as
capital. Each such determination shall be
conclusive and binding.
(d) Dividends and Distributions. The
holders of each class or series of capital stock
of record as of a date determined by the Board of
Directors from time to time shall be entitled,
from funds or other assets legally available
therefor, to dividends and distributions,
including distributions of capital gains, in such
amounts and at such times as may be determined by
the Board of Directors. Any such dividends or
distributions may be declared payable in cash,
property or shares of the class or series, as
determined by the Board of Directors or pursuant
to a standing resolution or program adopted or
approved by the Board of Directors. Dividends and
distributions may be declared with such frequency,
including daily, as the Board of Directors may
determine and in any reasonable manner, including
by standing resolution, by resolutions adopted
only once or with such frequency as the Board of
Directors may determine, or by formula or other
similar method of determination, whether or not
the amount of the dividend or distribution so
declared can be calculated at the time of such
declaration. The Board of Directors may establish
payment dates for such dividends and distributions
on any basis, including payment that is less
frequent than the effectiveness of such
declarations. The Board of Directors shall have
the discretion to designate for such dividends and
distributions amounts sufficient to enable the
Corporation or any class or series thereof to
qualify as a "regulated investment company" under
the Internal Revenue Code of 1986 or any successor
or comparable statute, and regulations promulgated
thereunder (collectively, the "IRC"), and to avoid
liability of the Corporation or any class or
series for Federal income tax in respect of a
given year and to make other appropriate
adjustments in connection therewith. Nothing in
the foregoing sentence shall limit the authority
of the Board of Directors to designate greater or
lesser amounts for such dividends or distribu
tions. The amounts of dividends and distributions
declared and paid with respect to the various
classes or series of capital stock and the timing
of declaration and payment of such dividends and
distributions may vary among such classes and
series.
(e) Tax Elections. The Board of Directors
shall have the power, in its discretion, to make
such elections as to the tax status of the
Corporation or any series or class of the
Corporation as may be permitted or required by the
IRC without the vote of stockholders of the
Corporation or any series or class.
(f) Liquidation. At any time there are no
shares outstanding for a particular class or
series, the Board of Directors may liquidate such
class or series in accordance with applicable law.
In the event of the liquidation or dissolution of
the Corporation, or of a class or series thereof
when there are shares outstanding of the
Corporation or of such class or series, as
applicable, the stockholders of such, or of each,
class or series, as applicable, shall be entitled
to receive, when and as declared by the Board of
Directors, the excess of the assets of that class
or series over the liabilities of that class or
series, determined as provided herein and
including assets and liabilities allocated
pursuant to sections (a) and (b) of this Article
5.5. Any such excess amounts will be distributed
to each stockholder of the applicable class or
series in proportion to the number of outstanding
shares of that class or series held by that
stockholder and recorded on the books of the
Corporation. Subject to the requirements of
applicable law, dissolution of a class or series
may be accomplished by distribution of assets to
stockholders of that class or series as provided
herein, by the transfer of assets of that class or
series to another class or series of the
Corporation, by the exchange of shares of that
class or series for shares of another class or
series of the Corporation, or in any other legal
manner.
(g) Voting Rights. On each matter submitted
to a vote of stockholders, each holder of a share
of capital stock of the Corporation shall be
entitled to one vote for each full share, and a
fractional vote for each fractional share of stock
standing in such holder's name on the books of the
Corporation, irrespective of the class or series
thereof, and all shares of all classes and series
shall vote together as a single class, provided
that (a) when the Maryland General Corporation Law
or the Investment Company Act of 1940 requires
that a class or series vote separately with
respect to a given matter, the separate voting
requirements of the applicable law shall govern
with respect to the affected class[es] and/or
series and other classes and series shall vote as
a single class and (b) unless otherwise required
by those laws, no class or series shall vote on
any matter which does not affect the interest of
that class or series.
(h) Quorum. The presence in person or by
proxy of the holders of one-third of the shares of
stock of the Corporation entitled to vote thereat,
without regard to class or series, shall
constitute a quorum at any meeting of the
stockholders, except with respect to any matter
which, under applicable statutes or regulatory
requirements, requires approval by a separate vote
of one or more classes or series of stock, in
which case the presence in person or by proxy of
the holders of one-third of the shares of stock of
each class or series required to vote as a class
on the matter shall constitute a quorum. If at
any meeting of the stockholders there shall be
less than a quorum present, the stockholders
present at such meeting may, without further
notice, adjourn the same from time to time until a
quorum shall be present.
(i) Equality. Each share of each series or
class shall be equal to each other share of that
class or series and shall represent an equal
proportionate interest in the assets belonging to
that series or class, subject to the liabilities
belonging to that series or class. The Board of
Directors may from time to time divide or combine
the shares of any particular series or class into
a greater or lesser number of shares of that
series or class without thereby changing the
proportionate beneficial interest in the assets
belonging to that series or class or in any way
affecting the rights of shares of any other series
or class.
(j) Conversion or Exchange Rights. Subject
to compliance with the requirements of the
Investment Company Act of 1940, the Board of
Directors shall have the authority to provide that
holders of shares of any series or class shall
have the right to convert or exchange such shares
into shares of one or more other series or classes
in accordance with such requirements and
procedures as may be established by the Board of
Directors.
(k) Change of Name. The Board of Directors
shall have the authority to change part or all of
the name of any series created herein or
hereafter.
5.6. Authorizing Vote. Notwithstanding any
provision of the General Laws of the State of Maryland
requiring for any purpose a proportion greater than a
majority of the votes of all classes or series, the
affirmative vote of the holders of a majority of the
total number of shares of the Corporation, or of a
class or series of the Corporation, as applicable,
outstanding and entitled to vote under such
circumstances pursuant to these Articles of
Incorporation and the By-Laws of the Corporation shall
be effective for such purpose, except to the extent
otherwise required by the Investment Company Act of
1940 and rules thereunder; provided that, to the extent
consistent with the General Laws of the State of
Maryland and other applicable law, the By-Laws may
provide for authorization to be by the vote of a
proportion less than a majority of the votes of the
Corporation, or of a class or series.
5.7. Preemptive Rights. No stockholder of the
Corporation shall be entitled as of right to subscribe
for, purchase, or otherwise acquire any shares of any
classes or series, or any other securities of the
Corporation which the Corporation proposes to issue or
sell, and any or all of such shares or securities of
the Corporation, whether now or hereafter authorized or
created, may be issued, or may be reissued or
transferred if the same have been reacquired, and sold
to such persons, firms, corporations and associations,
and for such lawful consideration, and on such terms as
the Board of Directors in its discretion may determine,
without first offering the same, or any thereof, to any
said stockholder.
5.8. Redemption.
(a) The Board of Directors shall authorize
the Corporation, to the extent it has funds or
other property legally available therefor and
subject to such reasonable conditions as the
directors may determine, to permit each holder of
shares of capital stock of the Corporation, or of
any class or series, to require the Corporation to
redeem all or any part of the shares standing in
the name of such holder on the books of the
Corporation, at the applicable redemption price of
such shares (which may reflect such fees and
charges as the Board of Directors may establish
from time to time) determined in accordance with
procedures established by the Board of Directors
of the Corporation from time to time in accordance
with applicable law.
(b) Without limiting the generality of the
foregoing, the Board of Directors may authorize
the Corporation, at its option and to the extent
permitted by and in accordance with the conditions
of applicable law, to redeem stock of the
Corporation, or of any class or series, owned by
any stockholder under circumstances deemed
appropriate by the Board of Directors in its sole
discretion from time to time, such circumstances
including but not limited to (1) failure to
provide the Corporation with a tax identification
number and (2) failure to maintain ownership of a
specified minimum number or value of shares of any
class or series of stock of the Corporation, such
redemption to be effected at such price, at such
time and subject to such conditions as may be
required or permitted by applicable law.
(c) Payment for redeemed stock shall be made
in cash unless, in the opinion of the Board of
Directors, which shall be conclusive, conditions
exist which make it advisable for the Corporation
to make payment wholly or partially in securities
or other property or assets of the class or series
of the shares being redeemed. Payment made wholly
or partially in securities or other property or
assets may be delayed to such reasonable extent,
not inconsistent with applicable law, as is
reasonably necessary under the circumstances. No
stockholder shall have the right, except as
determined by the Board of Directors, to have his
shares redeemed in such securities, property or
other assets.
(d) All rights of a stockholder with respect
to a share redeemed, including the right to
receive dividends and distributions with respect
to such share, shall cease and determine as of the
time as of which the redemption price to be paid
for such shares shall be fixed, in accordance with
applicable law, except the right of such
stockholder to receive payment for such shares as
provided herein.
(e) Notwithstanding any other provision of
this Article 5.8, the Board of Directors may
suspend the right of stockholders of any or all
classes or series of shares to require the
Corporation to redeem shares held by them for such
periods and to the extent permitted by, or in
accordance with, the Investment Company Act of
1940. The Board of Directors may, in the absence
of a ruling by a responsible regulatory official,
terminate such suspension at such time as the
Board of Directors, in its discretion, shall deem
reasonable, such determination to be conclusive.
(f) Shares of any class or series which have
been redeemed shall constitute authorized but
unissued shares subject to classification and
reclassification as provided in these Articles of
Incorporation.
5.9. Repurchase of Shares. The Board of
Directors may by resolution from time to time authorize
the Corporation to purchase or otherwise acquire,
directly or through an agent, shares of any class or
series of its outstanding stock upon such terms and
conditions and for such consideration as permitted by
applicable law and determined to be reasonable by the
Board of Directors and to take all other steps deemed
necessary in connection therewith. Shares so purchased
or acquired shall have the status of authorized but
unissued shares.
5.10. Valuation. Subject to the requirements of
applicable law, the Board of Directors may, in its
absolute discretion, establish the basis or method,
timing and frequency for determining the value of
assets belonging to each class or series and for
determining the net asset value of each share of each
class or series for purposes of sales, redemptions,
repurchases or otherwise. Without limiting the
foregoing, the Board of Directors may determine that
the net asset value per share of any class or series
should be maintained at a designated constant value and
may establish procedures, not inconsistent with
applicable law, to accomplish that result. Such
procedures may include a requirement, in the event of a
net loss with respect to the particular class or series
from time to time, for automatic pro rata capital
contributions from each stockholder of that class or
series in amounts sufficient to maintain the designated
constant share value.
5.11. Certificates. Subject to the requirements
of the Maryland General Corporation Law, the Board of
Directors may authorize the issuance of some or all of
the shares of any or all classes or series without
certificates and may establish such conditions as it
may determine in connection with the issuance of
certificates.
5.12. Shares Subject to Articles and By-laws.
All persons who shall acquire shares of capital stock
in the Corporation shall acquire the same subject to
the provisions of these Articles of Incorporation and
the By-Laws of the Corporation, as each may be amended,
supplemented and/or restated from time to time.
ARTICLE VI
BOARD OF DIRECTORS
6.1. Number of Directors. The number of
directors of the Corporation shall be as provided in
the By-Laws and subject to the limitations of the
Maryland General Corporation Law, may fix a different
number of directors and may authorize a majority of the
directors to increase or decrease the number of
directors set by these Articles or the By-Laws within
limits set by the By-Laws and to fill vacancies created
by an increase in the number of directors. Unless
otherwise provided by the By-Laws, the directors of the
Corporation need not be stockholders of the
Corporation. The names of the directors who will serve
until the first annual meeting and until their
successors are elected and qualify are:
Samuel Wegbreit
David M. Klaskin
Daniel A. Kaplan
6.2. Removal of Directors. Subject to the limits
of the Investment Company Act of 1940 and unless
otherwise provided by the By-Laws, a director may be
removed, with or without cause, by the affirmative vote
of a majority of (a) the Board of Directors, (b) a
committee of the Board of Directors appointed for such
purpose, or (c) the stockholders by vote of a majority
of the outstanding shares of the Corporation.
6.3. Liability of Directors and Officers.
(a) To the fullest extent permitted by the
Maryland General Corporation Law and the
Investment Company Act of 1940, no director or
officer of the Corporation shall be liable to the
Corporation or to its stockholders for money
damages. No amendment to these Articles of
Incorporation or repeal of any of its provisions
shall limit or eliminate the benefits provided to
directors and officers under this provision with
respect to any act or omission which occurred
prior to such amendment or repeal.
(b) In performance of his duties, a director
is entitled to rely on any information, opinion,
report, or statement, including any financial
statement or other financial data, prepared by
others, to the extent not inconsistent with the
General Laws of the State of Maryland. A person
who performs his duties in accordance with the
standards of Article 2-405.1 of the Maryland
General Corporation Law or otherwise in accordance
with applicable law shall have no liability by
reason of being or having been a director of the
Corporation.
6.4. Powers of Directors. In addition to any
powers conferred herein or in the By-Laws, the Board of
Directors may, subject to any express limitations
contained in these Articles of Incorporation or in the
By-Laws, exercise the full extent of powers conferred
by the General Laws of the State of Maryland or other
applicable law upon corporations or directors thereof
and the enumeration and definition of particular powers
herein or in the By-Laws shall in no way be deemed to
restrict or otherwise limit those lawfully conferred
powers. In furtherance and without limitation of the
foregoing, the Board of Directors shall have power:
(a) to make, alter, amend or repeal from
time to time the By-Laws of the Corporation except
as otherwise provided by the By-Laws;
(b) subject to requirements of the
Investment Company Act of 1940 and the General
Laws of the State of Maryland, to authorize the
Corporation to enter into contracts with any
person, including any firm, corporation, trust or
association in which a director, officer, employee
or stockholder of the Corporation may be
interested. Such contracts may be for any lawful
purpose, whether or not such purpose involves
delegating functions normally performed by the
board of directors or officers of a corporation,
including, but not limited to, the provision of
investment management for the Corporation's
investment portfolio, the distribution of
securities issued by the Corporation, the
administration of the Corporation's affairs, the
provision of transfer agent services with respect
to the Corporation's shares of capital stock, and
the custody of the Corporation's assets. Any
person (including its affiliates) may be retained
in multiple capacities pursuant to one or more
contracts and may also perform services, including
similar or identical services, for others,
including other investment companies. Subject to
the requirements of applicable law, such contracts
may provide for compensation to be paid by the
Corporation in such amounts, including payments of
multiple amounts for persons (including their
affiliates) acting in multiple capacities, as the
Board of Directors shall determine in its
discretion to be proper and reasonable.
(c) to authorize from time to time the
payment of compensation to the Directors for
services to the Corporation, including fees for
attendance at meetings of the Board of Directors
and committees thereof.
6.5. Determinations by Board of Directors. Any
determination made by or pursuant to the direction of
the Board of Directors and in accordance with the
standards set by the General Laws of the State of
Maryland shall be final and conclusive and shall be
binding upon the Corporation and upon all stockholders,
past, present and future, of each class and series.
ARTICLE VII
PROVISIONS FOR DEFINING, LIMITING AND REGULATING THE
POWERS
OF THE CORPORATION AND THE: DIRECTORS AND STOCKHOLDERS
7.1. Location of Meetings, Offices and Books.
Both directors and stockholders may hold meetings
within or without the State of Maryland and abroad, and
the Corporation may have one or more offices and may
keep its books within or without the State of Maryland
and abroad at such places as the directors shall
determine.
7.2. Meetings of Shareholders. Except as
otherwise provided in the By-Laws, in accordance with
applicable law, the Corporation shall not be required
to hold an annual meeting of shareholders in any year
unless required by applicable law. Election of
directors, whether by the directors or by stockholders,
need not be by ballot unless the By-Laws so provide.
7.3. Inspection of Records. Stockholders of the
Corporation shall have only such rights to inspect and
copy the records, documents, accounts and books of the
Corporation and to request statements regarding its
affairs as are provided by the Maryland General
Corporation Law, subject to such reasonable
regulations, not contrary to the General Laws of the
State of Maryland, as the Board of Directors may from
time to time adopt regarding the conditions and limits
of such rights.
7.4. Indemnification. The Corporation, including
its successors and assigns, shall indemnify its
directors and officers and make advance payment of
related expenses to the fullest extent permitted, and
in accordance with the procedures required, by the
General Laws of the State of Maryland and the
Investment Company Act of 1940. The By-Laws may
provide that the Corporation shall indemnify its
employees and/or agents in any manner and within such
limits as permitted by applicable law. Such
indemnification shall be in addition to any other right
or claim to which any director, officer, employee or
agent may otherwise be entitled. The Corporation may
purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of
the Corporation as a director, officer, partner,
trustee, employee or agent of another foreign or
domestic corporation, partnership, joint venture, trust
or other enterprise or employee benefit plan, against
any liability (including, with respect to employee
benefit plans, excise taxes) asserted against and
incurred by such person in any such capacity or arising
out of such person's position, whether or not the
Corporation would have had the power to indemnify
against such liability. The rights provided to any
person by this Article 7.4 shall be enforceable against
the Corporation by such person who shall be presumed to
have relied upon such rights in serving or continuing
to serve in the capacities indicated herein. No
amendment of these Articles of Incorporation shall
impair the rights of any person arising at any time
with respect to events occurring prior to such
amendment.
7.5. Wholly-Owned Subsidiaries. The Corporation
may own all or any portion of the securities of, make
loans to, or contribute to the costs or other financial
requirements of any company which is wholly owned by
the Corporation or by the Corporation and by one or
more other investment companies and is primarily
engaged in the business of providing, at cost,
management, administrative or related services to the
Corporation or to the Corporation and other investment
companies.
7.6. Amendments. The Corporation reserves the
right to amend, alter, change or repeal any provision
of these Articles of Incorporation, and all rights
conferred upon stockholders herein are granted subject
to this reservation.
7.7. References to Statutes, Articles and
By-Laws. All references herein to statutes, to these
Articles of Incorporation or to the By-Laws shall be
deemed to refer to those statutes, Articles or By-Laws
as they are amended and in effect from time to time.
7.8. Specific Powers and Purposes. Without
limiting the foregoing, the Corporation shall have the
following specific powers:
(a) To hold, invest and reinvest its funds,
and in connection therewith, to hold part or all
of its funds in cash, and to purchase, subscribe
for or otherwise acquire, hold for investment or
otherwise, to trade and deal in, write, sell,
assign, negotiate, transfer, exchange, lend,
pledge or otherwise dispose of or turn to account
or realize upon, securities (which term
"securities" shall, for the purposes of these
Articles of Incorporation, without limiting the
generality thereof, be deemed to include any
stocks, shares, bonds, debentures, bills, notes,
mortgages or other obligations or evidences of
indebtedness, and any options, certificates,
receipts, warrants, futures contracts or other
instruments representing rights to receive,
purchase or subscribe for the same, or evidencing
or representing any other rights or interests
therein, or in any property or assets; and any
negotiable or non-negotiable instruments and money
market instruments, including bank certificates of
deposit, finance paper, commercial paper, bankers'
acceptances and all kinds of repurchase and
reverse repurchase agreements) created or issued
by any United States or foreign issuer (which term
"issuer" shall, for the purpose of these Articles
of Incorporation, without limiting the generality
thereof, be deemed to include any persons, firms,
associations, partnerships, corporations,
syndicates, combinations, organizations,
governments or subdivisions, agencies or
instrumentalities of any government); and to
exercise, as owner or holder of any securities,
all rights, powers and privileges in respect
thereof, including the right to vote thereon and
otherwise act with respect thereto and to do any
and all acts and things for the preservation,
protection, improvement and enhancement in value
of any and all such securities.
(b) To issue and sell shares of its own
capital stock in such amounts and on such terms
and conditions, for such purposes and for such
amount or kind of consideration (including,
without limitation, securities) now or hereafter
permitted by the laws of the State of Maryland.
(c) To the extent not inconsistent with
applicable law, to acquire all or any part of the
goodwill, rights, property and business of any
person, firm, association or corporation and to
hold, utilize, enjoy and in any manner dispose of
the whole or any part of the rights, property and
business so acquired, and to assume in connection
therewith any liabilities of any such person,
firm, association or corporation.
(d) To acquire (by purchase, lease or
otherwise) and to hold, use, maintain, develop and
dispose of (by sale or otherwise) any property,
real or personal, and any interest therein.
(e) To borrow money and, in this connection,
to issue notes or other evidence of indebtedness.
(f) To buy, hold, sell, and otherwise deal
in and with foreign exchange.
(g) To apply for, obtain, purchase or
otherwise acquire, any patents, copyrights,
licenses, trademarks, trade names and the like and
to use, exercise, develop, grant licenses in
respect of, sell and otherwise turn to account,
the same.
(h) To aid by further investment any issuer,
any obligation of or interest in which is held by
the Corporation or in the affairs of which the
Corporation has any direct or indirect interest;
to do all acts and things designed to protect,
preserve, improve or enhance the value of such
obligation or interest; to guarantee or become
surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of
any corporation, company, trust, association or
firm.
(i) To purchase or otherwise acquire, hold,
dispose of, resell, transfer, reissue or cancel
(all without the vote or consent of the
stockholders of the Corporation) shares of its
capital stock in any manner and to the extent now
or hereafter permitted by applicable law and by
these Articles of Incorporation.
(j) To carry out all or any of the foregoing
objects and purposes as principal or agent, and
alone or with associates or, to the extent now or
hereafter permitted by the General Laws of the
State of Maryland, as a member of, or as the owner
or holder of any security of, or interest in, any
firm, association, corporation, partnership, trust
or syndicate; and in connection therewith to make
or enter into such deeds or contracts with any
persons, firms, associations, corporations,
partnerships, syndicates, governments or political
subdivisions or agencies or instrumentalities
thereof and to do such acts and things and to
exercise such powers, as a natural person could
lawfully make, enter into, do or exercise.
(k) In general to carry on any other
business in connection with or incidental to any
of the foregoing objects and purposes; to have and
exercise all the powers conferred upon
corporations by the General Laws of the State of
Maryland as in force from time to time; to do
everything necessary, suitable or proper for the
accomplishment of any purpose or the attainment of
any object or the furtherance of any power set
forth herein, either alone or in association with
others; and to do every other act or thing
incidental or appurtenant to or growing out of or
connected with the aforesaid business or purposes,
objects or powers.
(l) To conduct and carry on its business, or
any part thereof, and to exercise and enjoy, in
Maryland and anywhere else in the world, all of
the powers, rights and privileges granted to, or
conferred upon, corporations by the General Laws
of the State of Maryland now or hereafter in force
and by the laws of any other such location
applicable to the Corporation, and the enumeration
of the foregoing powers shall not be deemed to
exclude any powers, rights or privileges so
granted or conferred.
(m) The foregoing objects and-purposes
shall, except as otherwise expressly provided, be
in no way limited or restricted by reference to,
or inference from, the terms of any other clause
of this or any other Article of these Articles of
Incorporation, and shall each be regarded as
independent and construed as a power as well as an
object and a purpose, and the enumeration of
specific purposes, objects and powers shall not be
construed to limit or restrict in any manner the
meaning of general terms or the general powers of
the Corporation now or hereafter conferred by the
General Laws of the State of Maryland, nor shall
the expression of one thing be deemed to exclude
another, though it be of like nature, not
expressed; provided, however, that the Corporation
shall not have power to carry on within the State
of Maryland any business whatsoever the carrying
on of which would preclude it from being
classified as an ordinary business corporation
under the laws of said State; nor shall it carry
on any business, or exercise any powers, in any
other state, territory, district or country except
to the extent that the same may lawfully be
carried on or exercised under the laws thereof.
7.9. Merger or Consolidation. In connection with
the acquisition of all or substantially all the assets
or stock of another investment company or investment
trust, the Board of Directors may issue or cause to be
issued shares of capital stock of the Corporation and
accept in payment therefor, in lieu of cash, such
assets at their market value, or such stock at the
market value of the assets held by such investment
company or investment trust, either with or without
adjustment for contingent costs or liabilities,
provided such assets are of the character in which the
Corporation is permitted to invest.
7.10. Liability of Stockholders. The
stockholders of the Corporation shall not be liable
for, and their private property shall not be subject
to, claim, levy or other encumbrance on account of
debts or liabilities of the Corporation, to any extent
whatsoever.
7.11. Owner of Shares. The Corporation shall be
entitled to treat the person in whose name any share of
the capital stock of the Corporation is registered as
the owner thereof for purposes of dividends and other
distributions in the course of business or in the
course of recapitalization, consolidation, merger,
reorganization, liquidation, sale of the property and
assets of the Corporation, or otherwise, and for the
purpose of votes, approvals and consents by
stockholders, and for the purpose of notices to
stockholders, and for all other purposes whatever; and
the Corporation shall not be bound to recognize any
equitable or other claim to or interest in such share,
on the part of any other person, whether or not the
Corporation shall have notice thereof, save as
expressly required by law.
IN WITNESS WHEREOF, the undersigned incorporator
of O.R.I. Funds, Inc. hereby executes the foregoing
Articles of Incorporation and acknowledges the same to
be her act.
Dated this 15th day of October, 1993.
/s/ Carol A. Gehl
----------------------
Carol A. Gehl
O.R.I. FUNDS, INC.
Articles of Amendment
O.R.I. Funds, Inc., a Maryland corporation
having its principal office in Maryland in Baltimore
City (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Articles of Incorporation are
amended by redesignating all of the One Hundred Million
(100,000,000) issued and unissued shares of capital
stock of the Corporation currently designated as O.R.I.
Growth Fund series stock as Class A stock of the O.R.I.
Growth Fund series.
SECOND: The foregoing amendment to the
charter of the Corporation was unanimously approved by
the entire Board of Directors of the Corporation
pursuant to a consent action effective December 27,
1996.
THIRD: The charter amendment is limited to
a change expressly permitted by Section 2-605 of Title
II of the Maryland General Corporation Law to be made
without action by the stockholders of the Corporation.
FOURTH: The Corporation is registered as an
open-end investment company under the Investment
Company Act of 1940.
FIFTH: The Articles of Amendment will
become effective at 12:00 a.m. on March 1, 1997.
IN WITNESS WHEREOF, O.R.I. Funds, Inc. has
caused these Articles of Amendment to be signed as of
the 26th day of February, 1997 in its name and on its
behalf by its duly undersigned authorized officers, who
acknowledge that these Articles of Amendment are the
act of the Corporation and that, to the best of their
knowledge, information and belief, all matters and
facts set forth herein relating to the authorization
and approval of the Articles of Amendment are true in
all material respects and that this statement is made
under penalties of perjury.
Witness: O.R.I. Funds, Inc.
/s/ Mark C. Pappas By: /s/ Samuel Wegbreit
- ------------------- -------------------------
Mark C. Pappas Samuel Wegbreit
Secretary Chairman of the Board
O.R.I. FUNDS, INC.
Articles Supplementary
O.R.I. Funds, Inc., a Maryland corporation
having its principal office in Maryland in Baltimore
City (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Board of Directors of the
Corporation by consent action effective on December 27,
1996, unanimously approved the adoption of a resolution
reclassifying Fifty Million (50,000,000) shares of the
One Hundred Million (100,000,000) shares of Class A
stock of the O.R.I. Growth Fund series as Fifty Million
(50,000,000) shares of Class C stock of the O.R.I.
Growth Fund series.
SECOND: The Class C shares of the O.R.I.
Growth Fund series as so classified by the Board of
Directors of the Corporation shall have the
preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption
as set forth in Article V, Section 5.5 of the Articles
of Incorporation of the Corporation, and shall be
subject to all of the provisions of the Articles of
Incorporation of the Corporation relating to the stock
of the Corporation generally, and to the following:
The Class C shares of the O.R.I. Growth Fund series
shall be invested in a common investment portfolio with
the Class A shares of the O.R.I. Growth Fund series and
with the shares of any other class of the O.R.I. Growth
Fund series hereafter established, and the assets,
liabilities, income, expenses, dividends and related
liquidation rights of the various classes of the shares
of the O.R.I. Growth Fund series shall be allocated
among the various classes of the series in such manner
as shall be determined by the Board of Directors of the
Corporation in accordance with law.
THIRD: The Class C shares of the O.R.I.
Growth Fund series aforesaid have been duly classified
by the Board of Directors pursuant to authority and
power contained in the Articles of Incorporation of the
Corporation.
FOURTH: These Articles Supplementary will
become effective at 12:01 a.m. on March 1, 1997.
IN WITNESS WHEREOF, O.R.I. Funds, Inc. has
caused these Articles Supplementary to be signed as of
the 26th day of February, 1997 in its name and on its
behalf by its duly undersigned authorized officers, who
acknowledge that these Articles Supplementary are the
act of the Corporation and that, to the best of their
knowledge, information and belief, all matters and
facts set forth herein relating to the authorization
and approval of these Articles Supplementary are true
in all material respects and that this statement is
made under penalties of perjury.
Witness: O.R.I. Funds, Inc.
/s/ Mark C. Pappas By: /s/ Samuel Wegbreit
- --------------------- -------------------------
Mark C. Pappas Samuel Wegbreit
Secretary Chairman of the Board
Exhibit 2
AMENDED AND RESTATED BY-LAWS
FOR
OAK RIDGE FUNDS, INC.
ARTICLE I
Offices
Section 1. Principal Office. The principal
office of the Corporation in the State of Maryland
shall be in the City of Baltimore.
Section 2. Other Offices. The Corporation
may have such other offices in such places as the Board
of Directors may from time to time determine.
ARTICLE II
Meetings of Stockholders
Section 1. Annual Meeting. Subject to this
Article II, an annual meeting of stockholders for the
election of Directors and the transaction of such other
business as may properly come before the meeting shall
be held at such time and place as the Board of
Directors shall select. The Corporation shall not be
required to hold an annual meeting of its stockholders
in any year in which the election of directors is not
required to be acted upon under the Investment Company
Act of 1940.
Section 2. Special Meetings. Special
meetings of stockholders may be called at any time by
the President, the Secretary or by a majority of the
Board of Directors and shall be held at such time and
place as may be stated in the notice of the meeting.
Special meetings of the stockholders shall be called by
the Secretary upon receipt of written request of the
holders of shares entitled to cast not less than 10% of
the votes entitled to be cast at such meeting, provided
that such request shall state the purposes of such
meeting and the matters proposed to be acted on.
Section 3. Place of Meetings. Meetings of
stockholders shall be held at such place within the
United States as the Board of Directors may from time
to time determine.
Section 4. Notice of Meetings; Waiver of
Notice. Notice of the place, date and time of the
holding of each stockholders' meeting and, if the
meeting is a special meeting, the purpose or purposes
of the meeting, shall be given personally or by mail,
not less than ten nor more than ninety days before the
date of such meeting, to each stockholder entitled to
vote at such meeting and to each other stockholder
entitled to notice of the meeting. Notice by mail
shall be deemed to be duly given when deposited in the
United States mail addressed to the stockholder at his
or her address as it appears on the records of the
Corporation, with postage thereon prepaid. Notice of
any meeting of stockholders shall be deemed waived by
any stockholder who shall attend such meeting in person
or by proxy, or who shall, either before or after the
meeting, submit a signed waiver of notice which is
filed with the records of the meeting.
Section 5. Quorum, Adjournment of Meetings. The
presence at any stockholders' meeting, in person or by
proxy, of stockholders of one third of the shares of
the stock of the Corporation thereat shall be necessary
and sufficient to constitute a quorum for the
transaction of business, except for any matter which,
under applicable statutes or regulatory requirements,
requires approval by a separate vote of one or more
classes of stock, in which case the presence in person
or by proxy of stockholders of one third of the shares
of stock of each class required to vote as a class on
the matter shall constitute a quorum. The holders of a
majority of shares entitled to vote at the meeting and
present in person or by proxy, whether or not
sufficient to constitute a quorum, or, any officer
present entitled to preside or act as Secretary of such
meeting may adjourn the meeting without determining the
date of the new meeting or from time to time without
further notice to a date not more than 120 days after
the original record date. Any business that might have
been transacted at the meeting originally called may be
transacted at any such adjourned meeting at which a
quorum is present.
Section 6. Organization. At each meeting of
the stockholders, the Chairman of the Board (if one has
been designated by the Board), or in his or her absence
or inability to act, the President, or in the absence
or inability to act of the Chairman of the Board and
the President, a Senior Vice President or a Vice
President, shall act as chairman of the meeting;
provided, however, that if no such officer is present
or able to act, a chairman of the meeting shall be
elected at the meeting. The Secretary, or in his or
her absence or inability to act, any person appointed
by the chairman of the meeting, shall act as secretary
of the meeting and keep the minutes thereof.
Section 7. Order of Business. The order of
business at all meetings of the stockholders shall be
as determined by the chairman of the meeting.
Section 8. Voting. Except as otherwise
provided by statute or the Articles of Incorporation,
each holder of record of shares of stock of the
Corporation having voting power shall be entitled at
each meeting of the stockholders to one vote for every
full share of such stock, with a fractional vote for
any fractional shares, standing in his or her name on
the record of stockholders of the Corporation as of the
record date determined pursuant to Section 9 of this
Article or if such record date shall not have been so
fixed, then at the later of (i) the close of business
on the day on which notice of the meeting is mailed or
(ii) the thirtieth day before the meeting. Each
stockholder entitled to vote at any meeting of
stockholders may authorize another person or persons to
act for him or her by a proxy signed by such
stockholder or his or her
attorney-in-fact. No proxy shall be valid after the
expiration of eleven months from the date thereof,
unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the stockholder
executing it, except in those cases where such proxy
states that it is irrevocable and where an irrevocable
proxy is permitted by law. Except as otherwise
provided by statute, the Articles of Incorporation or
these By-Laws, any corporate action to be taken by vote
of the stockholders shall be authorized by a majority
of the total votes validly cast at a meeting of
stockholders at which a quorum is present. If a vote
shall be taken on any question other than the election
of directors, which shall be by written ballot, then
unless required by statute or these By-Laws, or
determined by the chairman of the meeting to be
advisable, any such vote need not be by ballot. On a
vote by ballot, each ballot shall be signed by the
stockholder voting, or by his or her proxy, if there be
such proxy, and shall state the number of shares voted.
Section 9. Fixing of Record Date. The Board
of Directors may fix a time not less than 10 nor more
than 90 days prior to the date of any meeting of
stockholders or prior to the last day on which the
consent or dissent of stockholders may be effectively
expressed for any purpose without a meeting, as the
time as of which stockholders entitled to notice of and
to vote at such a meeting or whose consent or dissent
is required or may be expressed for any purpose, as the
case may be, shall be determined; and all persons who
were holders of record of voting stock at such time and
no other shall be entitled to notice of and to vote at
such meeting or to express their consent or dissent, as
the case may be. If no record date has been fixed, the
record date for the determination of stockholders
entitled to notice of or to vote at a meeting of
stockholders shall be the later of the close of
business on the day on which notice of the meeting is
mailed or the thirtieth day before the meeting, or, if
notice is waived by all stockholders, at the close of
business on the tenth day next preceding the day on
which the meeting is held. The Board of Directors may
fix a record date for determining stockholders entitled
to receive payment of a dividend or distribution, but
such date shall be not more than 90 days before the
date on which such payment is made. If no record date
has been fixed, the record date for determining
stockholders entitled to receive dividends or
distributions shall be the close of business on the day
on which the resolution of the Board of Directors
declaring the dividend or distribution is adopted, but
the payment shall not be made more than 60 days after
the date on which the resolution is adopted.
Section 10. Consent of Stockholders in Lieu
of Meeting. Except as otherwise provided by statute or
the Articles of Incorporation, any action required to
be taken at any meeting of stockholders, or any action
which may be taken at any meeting of such stockholders,
may be taken without a meeting, without prior notice
and without a vote, if the following are filed with the
records of stockholders meetings: (i) a unanimous
written consent which sets forth the action and is
signed by each stockholder entitled to vote on the
matter and (ii) a written waiver of any right to
dissent signed by each stockholder entitled to notice
of the meeting but not entitled to vote thereat.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and
affairs of the Corporation shall be managed under the
direction of the Board of Directors and all powers of
the Corporation may be exercised by or under authority
of the Board of Directors.
Section 2. Number of Directors. The number
of directors shall be fixed from time to time by
resolution of the Board of Directors adopted by a
majority of the Directors then in office; provided,
however, that the number of Directors shall in no event
be less than three (3) nor more than fifteen (15)
except that the Corporation may have less than three
(3) but no less than one (1) Director if there is no
stock outstanding, and may have a number of Directors
no fewer than the number of stockholders so long as
there are fewer than three (3) stockholders. Any
vacancy created by an increase in Directors may be
filled in accordance with Section 6 of this Article
III. No reduction in the number of Directors shall
have the effect of removing any Director from office
prior to the expiration of his or her term unless such
Director is specifically removed pursuant to Section 5
of this Article III at the time of such decrease.
Directors need not be stockholders.
Section 3. Election and Term of Directors.
Directors shall be elected annually, by written ballot
at the annual meeting of stockholders or a special
meeting held for that purpose; provided, however, that
if no annual meeting of the stockholders of the
Corporation is required to be held in a particular year
pursuant to Section 1 of Article II of these By-Laws,
Directors shall be elected at the next annual meeting
held. The term of office of each Director shall be
from the time of his or her election and qualification
until the election of Directors next succeeding his or
her election and until his or her successor shall have
been elected and shall have qualified.
Section 4. Resignation. A Director of the
Corporation may resign at any time by giving written
notice of his or her resignation to the Board or the
Chairman of the Board or the President or the
Secretary. Any such resignation shall take effect at
the time specified therein or, if the time when it
shall become effective shall not be specified therein,
immediately upon its receipt; and, unless otherwise
specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 5. Removal of Directors. Any
Director of the Corporation may be removed by the
stockholders by a vote of a majority of the votes
entitled to be cast for the election of Directors.
Section 6. Vacancies. If any vacancies
shall occur in the Board of Directors (i) by reason of
death, resignation, removal or otherwise, the remaining
Directors shall continue to act, and, subject to the
provisions of the Investment Company Act of 1940, such
vacancies (if not previously filled by the stock
holders) may be filled by a majority of the remaining
Directors, although less than a quorum, and (ii) by
reason of an increase in the authorized number of
Directors, such vacancies (if not previously filled by
the stockholders) may be filled only by a majority vote
of the entire Board of Directors.
Section 7. Place of Meeting. The Directors
may hold their meetings, have one or more offices, and
keep the books of the Corporation, outside the State of
Maryland, and within or without the United States of
America, at any office or offices of the Corporation or
at any other place as they may from time to time by
resolution determine, or in the case of meetings, as
they may from time to time by resolution determine or
as shall be specified or fixed in the respective
notices or waivers of notice thereof..
Section 8. Regular Meetings. The Board of
Directors from time to time may provide by resolution
for the holding of regular meetings and fix their time
and place as the Board of Directors may determine.
Notice of such regular meetings need not be in writing,
provided that notice of any change in the time or place
or such fixed regular meetings shall be communicated
promptly to each Director not present at the meeting at
which such change was made in the manner provided in
Section 9 of this Article III for notice of special
meetings. Members of the Board of Directors or any
committee designated thereby may participate in a
meeting of such Board or committee by means of a
conference telephone or similar communications
equipment by means of which all persons participating
in the meeting can hear each other at the same time,
and participation by such means shall constitute
presence in person at a meeting, except where meetings
are required to be held in person pursuant to the
Investment Company Act of 1940.
Section 9. Special Meetings. Special
meetings of the Board of Directors may be held at any
time or place and for any purpose when called by the
President, the Secretary or two or more of the
Directors. Notice of special meetings, stating the
time and place, shall be communicated to each Director
personally by telephone or transmitted to him or her by
telegraph, telefax, telex, cable or wireless at least
one day before the meeting.
Section 10. Waiver of Notice. No notice of
any meeting of the Board of Directors or a committee of
the Board need be given to any Director who is present
at the meeting or who waives notice of such meeting in
writing (which waiver shall be filed with the records
of such meeting), either before or after the time of
the meeting.
Section 11. Quorum and Voting. At all
meetings of the Board of Directors, the presence of one
third of the entire Board of Directors shall constitute
a quorum unless there are only two or three Directors,
in which case two Directors shall constitute a quorum.
If there is only one Director, the sole Director shall
constitute a quorum. At any adjourned meeting at which
a quorum is present, any business may be transacted
which might have been transacted at the meeting as
originally called.
Section 12. Organization. The Board may, by
resolution adopted by a majority of the entire Board,
designate a Chairman of the Board, who shall preside at
each meeting of the Board. In the absence or inability
of the Chairman of the Board to preside at a meeting,
the President, or, in his or her absence or inability
to act, another Director chosen by a majority of the
Directors present, shall act as chairman of the meeting
and preside thereat. The Secretary (or, in his or her
absence or inability to act, any person appointed by
the Chairman) shall act as secretary of the meeting and
keep the minutes thereof..
Section 13. Written Consent of Directors in
Lieu of a Meeting. Subject to the provisions of the
Investment Company Act of 1940, as amended, any action
required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be
taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the
minutes of the proceedings of the Board or committee.
Section 14. Compensation. Directors may
receive compensation for services to the Corporation in
their capacities as directors or otherwise in such
manner and in such amounts as may be fixed from time to
time by the Board.
ARTICLE IV
Committees
Section 1. Organization. By resolution
adopted by the Board of Directors, the Board may
designate one or more committees, including an
Executive Committee, composed of two or more Directors.
The Chairmen of such committees shall be elected by the
Board of Directors. The Board of Directors shall have
the power at any time to change the members of such
committees and to fill vacancies in the committees.
The Board may delegate to these committees any of its
powers, except the power to authorize the issuance of
stock, declare a dividend or distribution on stock,
recommend to stockholders any action requiring
stockholder approval, amend these By-Laws, or approve
any merger or share exchange which does not require
stockholder approval. If the Board of Directors has
given general authorization for the issuance of stock,
a committee of the Board, in accordance with a general
formula or method specified by the Board by resolution
or by adoption of a stock option or other plan, may fix
the terms of stock subject to classification or
reclassification and the terms on which any stock may
be issued, including all terms and conditions required
or permitted to be established or authorized by the
Board of Directors.
Section 2. Proceedings and Quorum. In the
absence of an appropriate resolution of the Board of
Directors, each committee may adopt such rules and
regulations governing its proceedings, quorum and
manner of acting as it shall deem proper and desirable.
In the event any member of any committee is absent from
any meeting, the members thereof present at the
meeting, whether or not they constitute a quorum, may
appoint a member of the Board of Directors to act in
the place of such absent member.
ARTICLE V
Officers, Agents and Employees
Section 1. General. The officers of the
Corporation shall be a Chairman, a President, a
Secretary and a Treasurer, and may include one or more
additional Senior Vice Presidents, Vice Presidents,
Assistant Secretaries or Assistant Treasurers, and such
other officers as may be appointed in accordance with
the provisions of Section 8 of this Article.
Section 2. Election, Tenure and
Qualifications. The officers of the Corporation,
except those appointed as provided in Section 8 of this
Article V, shall be elected by the Board of Directors
at its first meeting and thereafter annually at an
annual meeting. If any officers are not chosen at any
annual meeting, such officers may be chosen at any
subsequent regular or special meeting of the Board.
Except as otherwise provided in this Article V, each
officer chosen by the Board of Directors shall hold
office until the next annual meeting of the Board of
Directors and until his or her successor shall have
been elected and qualified. Any person may hold one or
more offices of the Corporation except the offices of
President and Vice President.
Section 3. Removal and Resignation.
Whenever in the judgment of the Board of Directors the
best interest of the Corporation will be served
thereby, any officer may be removed from office by the
vote of a majority of the members of the Board of
Directors at any regular meeting or at a special
meeting called for such purpose. Any officer may
resign his office at any time by delivering a written
resignation to the Board of Directors, the President,
the Secretary, or any Assistant Secretary. Unless
otherwise specified therein, such resignation shall
take effect upon delivery.
Section 4. Chairman. Subject to supervision
of the Board of Directors, the Chairman shall have
general charge of the business, affairs and property of
the Corporation and general supervision over its
officers, employees and agents. Except as the Board of
Directors may otherwise order, he or she may sign in
the name and on behalf of the Corporation all deeds,
bonds, contracts, or agreements. He or she shall
exercise such other powers and perform such other
duties as from time to time may be assigned to him or
her by the Board of Directors.
Section 5. President. The President shall
be the chief executive officer of the Corporation.
Except as the Board of Directors may otherwise order,
he or she may sign in the name and on behalf of the
Corporation all deeds, bonds, contracts, or agreements.
He or she shall exercise such other powers and perform
such other duties as from time to time may be assigned
to him or her by the Board of Directors.
Section 6. Senior Vice President. The Board
of Directors may from time to time elect one or more
Senior Vice Presidents who shall have such powers and
perform such duties as from time to time may be
assigned to them by the Board of Directors or the
President. At the request or in the absence or
disability of the President, the Senior Vice President
(or, if there are two or more Senior Vice Presidents,
then the more senior of such officers present and able
to act) may perform all the duties of the President
and, when so acting, shall have all the powers of and
be subject to all the restrictions upon the President.
Any Vice President may perform such duties as the Board
of Directors may assign.
Section 7. Treasurer and Assistant
Treasurer. The Treasurer shall be the principal
financial and accounting officer of the Corporation and
shall have general charge of the finances and books of
account of the Corporation. Except as otherwise
provided by the Board of Directors, he or she shall
have general supervision of the funds and property of
the Corporation and of the performance by the Custodian
of its duties with respect thereto. He or she shall
render to the Board of Directors, whenever directed by
the Board, an account of the financial condition of the
Corporation and of all his or her transactions as
Treasurer; and as soon as possible after the close of
each fiscal year he or she shall make and submit to the
Board of Directors a like report for such fiscal year.
He or she shall perform all acts incidental to the
Office of Treasurer, subject to the control of the
Board of Directors. Any Assistant Treasurer may
perform such duties of the Treasurer as the Treasurer
or the Board of Directors may assign, and, in the
absence of the Treasurer, the Assistant Treasurer (or
if there are two or more Assistant Treasurers, then the
more senior of such officers present and able to act)
may perform all of the duties of the Treasurer.
Section 8. Secretary and Assistant
Secretaries. The Secretary shall attend to the giving
and serving of all notices of the Corporation and shall
record all proceedings of the meetings of the
stockholders and Directors in books to be kept for that
purpose. He or she shall keep in safe custody the seal
of the Corporation, and shall have charge of the
records of the Corporation, including the stock books
and such other books and papers as the Board of
Directors may direct and such books, reports,
certificates and other documents required by law to be
kept, all of which shall at all reasonable times be
open to inspection by any Director. He or she shall
perform such other duties as appertain to his or her
office or as may be required by the Board of Directors.
Any Assistant Secretary may perform such duties of the
Secretary as the Secretary of the Board of Directors
may assign, and, in the absence of the Secretary, he or
she may perform all the duties of the Secretary.
Section 9. Subordinate Officers. The Board
of Directors from time to time may appoint such other
officers or agents as it may deem advisable, each of
whom shall have such title, hold office for such
period, have such authority and perform such duties as
the Board of Directors may determine. The Board of
Directors from time to time may delegate to one or more
officers or agents the power to appoint any such
subordinate officers or agents and to prescribe their
rights, terms of office, authorities and duties.
Section 10. Remuneration. The salaries or
other compensation of the officers of the Corporation
shall be fixed from time to time by resolution of the
Board of Directors, except that the Board of Directors
may by resolution delegate to any person or group of
persons the power to fix the salaries or other
compensation of any subordinate officers or agents
appointed in accordance with the provisions of Section
8 of this Article V.
Section 11. Surety Bonds. The Board of
Directors may require any officer or agent of the
Corporation to execute a bond (including, without
limitation, any bond required by the Investment Company
Act of 1940, as amended, and the rules and regulations
of the Securities and Exchange Commission) to the
Corporation in such sum and with such surety or
sureties as the Board of Directors may determine,
conditioned upon the faithful performance of his or her
duties to the Corporation, including responsibility for
negligence and for the accounting of any of the
corporation's property, funds or securities that may
come into his or her hands.
ARTICLE VI
Indemnification
The corporation shall indemnify (a) its
Directors and officers, whether serving the Corporation
or at its request any other entity, to the full extent
required or permitted by (i) Maryland law now or
hereafter in force, including the advance of expenses
under the procedures and to the full extent permitted
by law, and (ii) the Investment Company Act of 1940, as
amended, and (b) other employees and agents to such
extent as shall be authorized by the Board of Directors
and be permitted by law. The foregoing rights of
indemnification shall not be exclusive of any other
rights to which those seeking indemnification may be
entitled. The Board of Directors may take such action
as is necessary to carry out these indemnification
provisions and is expressly empowered to adopt, approve
and amend from time to time such resolutions or
contracts implementing such provisions or such further
indemnification arrangements as may be permitted by
law.
ARTICLE VII
Capital Stock
Section 1. Stock Certificates. The interest
of each stockholder of the Corporation may be evidenced
by certificates for shares of stock in such form as the
Board of Directors may from time to time prescribe.
The certificates representing shares of stock shall be
signed by or in the name of the Corporation by the
President, a Senior Vice President or a Vice President
and countersigned by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer.
Certificates may be sealed with the actual corporate
seal or a facsimile of it or in any other form. Any or
all of the signatures or the seal on the certificate
may be manual or a facsimile. In case any officer,
transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or
registrar before such certificate shall be issued, it
may be issued by the Corporation with the same effect
as if such officer, transfer agent or registrar were
still in office at the date of issue unless written
instructions of the Corporation to the contrary are
delivered to such officer, transfer agent or registrar.
Section 2. Stock Ledgers. The stock ledgers
of the Corporation, containing the names and addresses
of the stockholders and the number of shares held by
them respectively, shall be kept at the principal
offices of the Corporation or, if the Corporation
employs a transfer agent, at the offices of the
transfer agent of the Corporation.
Section 3. Transfers of Shares. Transfers
of shares of stock of the Corporation shall be made on
the stock records of the Corporation only by the
registered holder thereof, or by his or her attorney
thereunto authorized by power of attorney duly executed
and filed with the Secretary or with a transfer agent
or transfer clerk, and on surrender of the certificate
or certificates, if issued, for such shares properly
endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, with
such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require and
the payment of all taxes thereon. Except as otherwise
provided by law, the Corporation shall be entitled to
recognize the exclusive right of a person in whose name
any share or shares stand on the record of stockholders
as the owner of such share or shares for all purposes,
including, without limitation, the rights to receive
dividends or other distributions, and to vote as such
owner, and the Corporation shall not be bound to
recognize any equitable or legal claim to or interest
in any such share or shares on the part of any other
person. The Board may make such additional rules and
regulations, not inconsistent with these By-Laws, as it
may deem expedient concerning the issue, transfer and
registration of certificates for shares of stock of the
Corporation.
Section 4. Transfer Agents and Registrars.
The Board of Directors may from time to time appoint or
remove transfer agents and/or registrars of transfers
of shares of stock of the Corporation, and it may
appoint the same person as both transfer agent and
registrar. Upon any such appointment being made all
certificates representing shares of capital stock
thereafter issued shall be countersigned by one of such
transfer agents or by one of such registrars of
transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both
transfer agent and registrar, only one countersignature
by such person shall be required.
Section 5. Lost, Destroyed or Mutilated
Certificates. The holder of any certificates
representing shares of stock of the Corporation shall
immediately notify the Corporation of any loss,
destruction or mutilation of such certificate, and the
Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it which
the owner thereof shall allege to have been lost or
destroyed or which shall have been mutilated, and the
Board may, in its discretion, require such owner or his
or her legal representatives to give to the Corporation
a bond in such sum, limited or unlimited, and in such
form and with such surety or sureties, as the Board in
its absolute discretion shall determine, to indemnify
the Corporation against any claim that may be made
against it on account of the alleged loss or
destruction of any such certificate, or issuance of a
new certificate. Anything herein to the contrary
notwithstanding, the Board, in its absolute discretion,
may refuse to issue any such new certificate, except
pursuant to legal proceedings under the laws of the
State of Maryland.
ARTICLE VIII
Seal
The seal of the Corporation shall be circular
in form and shall bear, in addition to any other emblem
or device approved by the Board of Directors, the name
of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Maryland." The form of
the seal may be altered by the Board of Directors.
Said seal may be used by causing it or a facsimile
thereof to be impressed or affixed or in any other
manner reproduced. Any Officer or Director of the
Corporation shall have the authority to affix the
corporate seal of the Corporation to any document
requiring the same.
ARTICLE IX
Fiscal Year
The fiscal year of the Company shall be
determined by resolution of the Board of Directors.
ARTICLE X
Depositories and Custodians
Section 1. Depositories. The funds of the
Corporation shall be deposited with such banks or other
depositories as the Board of Directors of the
Corporation may from time to time determine.
Section 2. Custodians. All securities and
other investments shall be deposited in the safe
keeping of such banks or other companies as the Board
of Directors of the Corporation may from time to time
determine. Every arrangement entered into with any
bank or other company for the safe keeping of the
securities and investments of the Corporation shall
contain provisions complying with the Investment
Company Act of 1940, as amended, and the general rules
and regulations thereunder.
ARTICLE XI
Execution of Instruments
Section 1. Checks, Notes, Drafts, etc.
Checks, notes, drafts, acceptances, bills of exchange
and other orders obligations for the payment of money
shall be signed by such officer or officers or person
or persons as the Board of Directors by resolution
shall from time to time designate or as these By-Laws
provide.
Section 2. Sale or Transfer of Securities.
Stock certificates, bonds or other securities at any
time owned by the Corporation may be held on behalf of
the Corporation or so, transferred or otherwise
disposed of subject to any limits imposed by these By-
Laws and pursuant to authorization by the Board and,
when so authorized to be held on behalf of the
Corporation or sold, transferred or otherwise disposed
of, may be transferred from the name of the Corporation
by the signature of the President, any Senior Vice
President, any Vice President or the Treasurer or
pursuant to any procedure approved by the Board of
Directors, subject to applicable law.
ARTICLE XII
Independent Public Accountants
The Corporation shall employ an independent
public accountant or a firm of independent public
accountants as its accountants to examine the accounts
of the Corporation and to sign and certify financial
statements filed by the Corporation.
ARTICLE XIII
Amendments
These By-Laws or any of them may be amended,
altered or repealed at any regular meeting of the
stockholders or at any special meeting of the
stockholders at which a quorum is present or
represented, provided that notice of the proposed
amendment, alteration or repeal be contained in the
notice of such special meeting. These By-Laws may also
be amended, altered or repealed by the affirmative vote
of a majority of the Board of Directors at any regular
or special meeting of the Board of Directors, except
any particular By-Law which is specified as not subject
to alteration or repeal by the Board of Directors,
subject to the requirements of the Investment Company
Act of 1940, as amended.
Exhibit 5
OAK RIDGE FUNDS, INC.
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of March 31, 1998,
is between OAK RIDGE FUNDS, INC., a Maryland
corporation (the "Corporation"), formerly known as
O.R.I. Funds, Inc. and OAK RIDGE INVESTMENTS, LLC, a
Delaware limited liability company ("Oak Ridge").
WITNESSETH:
WHEREAS, the Corporation is an open-end investment
company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Corporation is
authorized to create separate series, and classes of
shares, each with its own separate investment
portfolio, and the beneficial interest in each such
series or class will be represented by a separate
series or class of shares. The first such series
created by the Corporation has been designated as the
OAK RIDGE GROWTH FUND (the "Fund"), formerly known as
the O.R.I. Growth Fund.
WHEREAS, Oak Ridge is a registered investment
adviser, engaged in the business of rendering
investment advisory services.
WHEREAS, in managing the Corporation's assets, as
well as in the conduct of certain of its affairs, the
Corporation seeks the benefit of the services of Oak
Ridge and its assistance in performing certain
managerial functions. Oak Ridge desires to furnish
such services and to perform the functions assigned to
it under this Agreement for the consideration provided
for herein.
NOW, THEREFORE, the parties have agreed as
follows:
1. Appointment of Oak Ridge. The Corporation
hereby appoints Oak Ridge as investment adviser for the
Fund, and Oak Ridge accepts the appointment. Subject
to the direction of the Board of Directors (the
"Directors") of the Corporation, Oak Ridge shall manage
the investment and reinvestment of the assets of the
Fund in accordance with the Fund's investment objective
and policies and limitations, for the period and upon
the terms herein set forth. The investment of funds
shall also be subject to all applicable restrictions of
the Articles of Incorporation and Bylaws of the
Corporation as may from time to time be in force.
2. Expenses Paid by Oak Ridge. In addition to
the expenses which Oak Ridge may incur in the
performance of its responsibilities under this
Agreement, and the expenses which it may expressly
undertake to incur and pay, Oak Ridge shall incur and
pay the following expenses relating to the Fund's
operations:
(a) Reasonable compensation, fees and
related expenses of the Corporation's officers and
Directors, except for such Directors who are not
interested persons (as that term is defined in
Section 2(a)(19) of the 1940 Act) of Oak Ridge;
and
(b) Rental of offices of the Corporation.
3. Investment Advisory Functions. In its
capacity as investment adviser to the Fund, Oak Ridge
shall have the following responsibilities:
(a) To furnish continuous advice and
recommendations to the Fund, as to the
acquisition, holding or disposition of any or all
of the securities or other assets which the Fund
may own or contemplate acquiring from time to
time;
(b) To cause its officers to attend meetings
and furnish oral or written reports, as the
Corporation may reasonably require, in order to
keep the Board of Directors and appropriate
officers of the Corporation fully informed as to
the condition of the investment portfolio of the
Fund, the investment recommendations of Oak Ridge,
and the investment considerations which have given
rise to those recommendations; and
(c) To supervise the purchase and sale of
securities or other assets as directed by the
appropriate officers of the Corporation.
The services of Oak Ridge are not to be deemed
exclusive and Oak Ridge shall be free to render similar
services to others as long as its services for others
does not in any way hinder, preclude or prevent Oak
Ridge from performing its duties and obligations under
this Agreement. In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of Oak
Ridge, Oak Ridge shall not be subject to liability to
the Corporation, the Fund or to any shareholder of the
Fund for any act or omission in the course of, or
connected with, rendering services hereunder or for any
losses that may be sustained in the purchase, holding
or sale of any security.
4. Obligations of the Corporation. The
Corporation shall have the following obligations under
this Agreement:
(a) To keep Oak Ridge continuously and fully
informed as to the composition of the Fund's
investments and the nature of all of its assets
and liabilities;
(b) To furnish Oak Ridge with a copy of any
financial statement or report prepared for it by
certified or independent public accountants, and
with copies of any financial statements or reports
made to the Fund's shareholders or to any
governmental body or securities exchange;
(c) To furnish Oak Ridge with any further
materials or information which Oak Ridge may
reasonably request to enable it to perform its
functions under this Agreement; and
(d) To compensate Oak Ridge for its services
in accordance with the provisions of paragraph 5
hereof.
5. Compensation. The Corporation will pay to Oak
Ridge for its services to the Fund a monthly fee,
payable on the last day of each month during which or
during part of which this Agreement is in effect, of
1/12 of 1% (.0008333) of the average daily closing net
asset value of the Fund for each month. For the month
during which this Agreement becomes effective and any
month during which it terminates, however, there shall
be an appropriate proration of the fee payable for such
month based on the number of calendar days of such
month during which this Agreement is effective. Oak
Ridge may from time to time and for such periods as it
deems appropriate voluntarily reduce its compensation
hereunder (and/or voluntarily assume expenses) for the
Fund.
6. Expenses Paid by Corporation.
(a) Except as provided in this paragraph,
nothing in this Agreement shall be construed to
impose upon Oak Ridge the obligation to incur,
pay, or reimburse the Corporation for any expenses
not specifically assumed by Oak Ridge under
paragraph 2 above. The Fund shall pay or cause to
be paid all of its expenses including, but not
limited to, investment adviser fees; any
compensation, fees, or reimbursements which the
Corporation pays to its Directors who are not
interested persons (as that phrase is defined in
Section 2(a)(19) of the 1940 Act) of Oak Ridge;
fees and expenses of the custodian, transfer
agent, registrar or dividend disbursing agent;
current legal, accounting and printing expenses;
administrative, clerical, recordkeeping and
bookkeeping expenses; brokerage commissions and
all other expenses in connection with the
execution of Fund transactions; interest; all
federal, state and local taxes (including stamp,
excise, income and franchise taxes); expenses of
shareholders' meetings and of preparing, printing
and distributing proxy statements, notices and
reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and
state regulatory authorities; and all expenses
incurred in complying with all federal and state
laws and the laws of any foreign country
applicable to the issue, offer, or sale of shares
of the Fund, including but not limited to, all
costs involved in the registration or
qualification of shares of the Fund for sale in
any jurisdiction and all costs involved in
preparing, printing and distributing prospectuses
and statements of additional information to
existing shareholders of the Fund.
(b) If expenses borne by the Fund in any
fiscal year exceed those set forth in any
statutory or regulatory formula applicable to the
Fund, Oak Ridge will reimburse the Fund for any
excess in accordance with the applicable statutory
or regulatory formula. In addition, Oak Ridge
may, in its discretion, waive its fees and/or
reimburse the Fund's operating expenses from time
to time and for such periods as it deems
appropriate. Any reimbursement of expenses will
be made on a monthly basis and will be paid to the
Fund by reduction of Oak Ridge's fee hereunder,
subject to later adjustment, month by month for
the remainder of the Fund's fiscal year.
7. Brokerage Commissions. For purposes of this
Agreement, brokerage commissions paid by the
Corporation upon the purchase or sale of the securities
for the Fund shall be considered a cost of the
securities of the Fund and shall be paid by the
Corporation. Oak Ridge is authorized and directed to
place Fund transactions only with brokers and dealers
who render satisfactory service in the execution of
orders at the most favorable prices and at reasonable
commission rates; provided, however, that Oak Ridge may
pay a broker or dealer an amount of commission for
effecting a securities transaction in excess of the
amount of commission another broker or dealer would
have charged for effecting that transaction, if Oak
Ridge determines in good faith that such amount of
commission was reasonable in relation to the value of
the brokerage and research services provided by such
broker or dealer viewed in terms of either that
particular transaction or the overall responsibilities
of Oak Ridge. In placing Fund business with such
brokers or dealers, Oak Ridge shall seek the best
execution of each transaction, and all such brokerage
placement shall be made in compliance with Section
28(e) of the Securities Exchange Act of 1934, as
amended, and other applicable state and federal laws.
Notwithstanding the foregoing, the Corporation shall
retain the right to direct the placement of all Fund
transactions, and the Directors may establish policies
or guidelines to be followed by Oak Ridge in placing
Fund transactions pursuant to the foregoing provisions.
8. Purchases by Affiliates. Except for an
initial investment in shares of the Corporation,
neither Oak Ridge nor any officer or director thereof
shall take a long or short position in the shares of
the Corporation. This prohibition, however, shall not
prevent the purchase from the Fund of shares of the
Fund by the officers or directors of Oak Ridge at the
current price available to the public.
9. Termination. This Agreement may be terminated
at any time, without penalty, by the Directors or by
the shareholders of the Fund acting by vote of at least
a majority of its outstanding voting securities (as
that phrase is defined in Section 2(a)(42) of the 1940
Act), provided in either case that 60 days' written
notice of termination be given to Oak Ridge at its
principal place of business. This Agreement may also
be terminated by Oak Ridge at any time by giving 60
days' written notice of termination to the Corporation,
addressed to its principal place of business.
10. Assignment. This Agreement shall terminate
automatically in the event of any assignment (as the
term is defined in Section 2(a)(4) of the 1940 Act) of
this Agreement.
11. Term. This Agreement shall begin on March
31, 1998 and shall continue in effect for successive
periods of one year, subject to the provisions for
termination and all of the other terms and conditions
hereof if such continuation shall be specifically
approved at least annually thereafter by either (i) the
vote of a majority of the Directors who are not parties
to this Agreement or "interested persons" of any such
party (as that term is defined in Section 2(a)(19) of
the 1940 Act), cast in person at a meeting called for
that purpose, or (ii) the vote of a majority of the
outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the 1940 Act) of the
Fund.
12. Amendments. This Agreement may be amended by
mutual consent of the parties, provided that the terms
of each such amendment shall be approved by the
Directors or by the vote of a majority of the
outstanding voting securities (as that phrase is
defined in Section 2(a)(42) of the 1940 Act) of the
Fund.
13. Governing Law. This Agreement shall be
governed by and construed in accordance with the
internal laws of the State of Delaware; provided,
however, that nothing herein shall be construed in a
manner that is inconsistent with the 1940 Act, the
Investment Advisers Act of 1940, as amended, or the
rules and regulations promulgated with respect to such
respective Acts.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on one or more counterparts as
of this 1st day of March, 1998.
OAK RIDGE FUNDS, INC. OAK RIDGE INVESTMENTS, LLC
on behalf of Oak Ridge
Growth Fund
By:/s/ Samuel Wegbreit By:/s/ David M. Klaskin
- ---------------------- -----------------------
Samuel Wegbreit David M. Klaskin
Chairman President
Exhibit 6.1
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into on
this 3rd day of January, 1994 between O.R.I. FUNDS,
INC., a Maryland corporation (the "Corporation"), and
OAK RIDGE INVESTMENTS, INC., an Illinois corporation
(the "Distributor");
W I T N E S S E T H :
WHEREAS, the Corporation is an open-end
investment company registered under the Investment
Company Act of 1940, as amended (the "Investment
Company Act"). The Corporation is authorized to create
separate series, each with its own separate investment
portfolio, and the beneficial interest in each such
series will be represented by a separate series of
shares. The first such series created by the
Corporation has been designated as O.R.I. GROWTH FUND
(the "Fund").
WHEREAS, the Distributor is a registered
broker-dealer under state and federal laws and
regulations and is a member of the National Association
of Securities Dealers; and
WHEREAS, the Fund desires to retain
Distributor as the distributor of shares of its common
stock, $.01 par value (the "Shares").
NOW, THEREFORE, the Fund and Distributor
mutually agree and promise as follows:
1. Appointment of Distributor
The Fund hereby appoints the Distributor as
its agent for the distribution of the Shares in
jurisdictions wherein the Shares may legally be offered
for sale; provided, however, that the Fund in its
absolute discretion may issue or sell Shares directly
to holders of shares of the Fund upon such terms and
conditions and for such consideration, if any, as it
may determine, whether in connection with the
distribution of subscription or purchase rights, the
payment or reinvestment of dividends or distributions,
or otherwise.
2. Acceptance; Services of Distributor
The Distributor hereby accepts appointment as
agent for the distribution of the Shares and agrees
that it will use its best efforts with reasonable
promptness to sell such part of the authorized Shares
remaining unissued as from time to time shall be
effectively registered under the Securities Act of 1933
(the "Securities Act"), at prices determined as
hereinafter provided and on terms hereinafter set
forth, all subject to applicable federal and state laws
and regulations and to the Articles of Incorporation
and By-Laws of the Corporation.
3. Manner of Sale; Compliance with
Securities Laws and Regulations
a. The Distributor shall sell Shares to or
through qualified dealers or others in such manner, not
inconsistent with the provisions hereof and the then
effective Registration Statement of the Fund under the
Securities Act (and the related prospectus), as the
Distributor may determine from time to time provided
that no dealer or other person shall be appointed or
authorized to act as agent of the Fund without the
prior consent of the Fund. The Distributor shall cause
subscriptions for Shares to be transmitted in
accordance with the Subscription Agreement then in
force for the purchase of Shares.
b. The Distributor, as agent of and for the
account of the Fund, may repurchase Shares at such
prices and upon such terms and conditions as shall be
specified in the current prospectus of the Fund.
c. The Fund will furnish to the Distributor
from time to time such information with respect to the
Fund and its Shares as the Distributor may reasonably
request for use in connection with the sale of the
Shares. The Distributor agrees that it will not use or
distribute or authorize the use, distribution or
dissemination by its dealers or others, in connection
with the sale of such Shares, of any statements, other
than those contained in the Fund's current prospectus,
except such supplemental literature or advertising as
shall be lawful under federal and state securities laws
and regulations, and that it will furnish the
Corporation with copies of all such material.
d. In selling or reacquiring Shares for the
account of the Fund, the Distributor will in all
respects conform to the requirements of all state and
federal laws and the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.,
relating to such sale or reacquisition, as the case may
be, and will indemnify and save harmless the Fund and
each person who has been, is or may hereafter be a
director or officer of the Fund from any damage or
expense on account of any wrongful act by the
Distributor or any employee, representative or agent of
the Distributor. The Distributor will observe and be
bound by all the provisions of the Articles of
Incorporation of the Corporation (and of any
fundamental policies adopted by the Fund pursuant to
the Investment Company Act, notice of which shall have
been given to the Distributor) which at the time in any
way require, limit, restrict or prohibit or otherwise
regulate any action on the part of the Distributor.
e. The Distributor will require each dealer
to conform to the provisions hereof and the
Registration Statement (and related prospectus) at the
time in effect under the Securities Act with respect to
the public offering price of the Shares.
4. Price of Shares
a. Shares offered for sale or sold by the
Distributor for the account of the Fund shall be so
offered or sold at a price per Share determined in
accordance with the then current prospectus relating to
the sale of such Shares except as departure from such
prices shall be permitted by the rules and regulations
of the Securities and Exchange Commission.
b. The price the Fund shall receive for all
Shares purchased from the Fund shall be the net asset
value used in determining the public offering price
applicable to the sale of such Shares.
5. Registration of Shares and Distributor
a. The Fund agrees that it will use its best
efforts to keep effectively registered under the
Securities Act for sale as herein contemplated such
Shares as the Distributor shall reasonably request and
as the Securities and Exchange Commission shall permit
to be so registered.
b. The Fund will execute any and all
documents and furnish any and all information which may
be reasonably necessary in connection with the
qualification of its Shares for sale (including the
qualification of the Fund as a dealer where necessary
or advisable) in such states as the Distributor may
reasonably request (it being understood that the Fund
shall not be required without its consent to comply
with any requirement which in its opinion is unduly
burdensome). The Distributor, at its own expense, will
effect all required qualifications of the Distributor
as a dealer or broker or otherwise under applicable
state or federal laws in order that the Shares may be
sold in as broad a territory as reasonably practicable.
c. Notwithstanding any other provision
hereof, the Fund may terminate, suspend or withdraw the
offering of Shares whenever, in its sole discretion, it
deems such action to be desirable.
6. Expenses
The Fund will pay or cause to be paid the
expenses (including the fees and disbursements of its
own counsel) of any registration of the Shares under
the Securities Act, expenses of qualifying or
continuing the qualification of the Shares for sale,
and in connection therewith, of qualifying or
continuing the qualification of the Fund as a dealer or
broker under the laws of such states as may be
designated by the Distributor under the conditions
herein specified, and expenses incident to the issuance
of Shares, such as, issue taxes and fees of the
transfer agent. The Distributor will pay all other
expenses (other than expenses which one or more dealers
may bear pursuant to any agreement with the
Distributor) incident to the sale and distribution of
the Shares issued or sold hereunder, including, without
limiting the generality of the foregoing, all (a)
expenses of printing and distributing or disseminating
any other literature, advertising and selling aids in
connection with such offering of the Shares for sale
(except that such expenses shall not include expenses
incurred by the Fund in connection with the
preparation, printing and distribution of any report or
other communication to holders of Shares in their
capacity as such); and (b) expenses of advertising in
connection with such offering. No transfer taxes, if
any, which may be payable in connection with the issue
or delivery of Shares sold as herein contemplated shall
be borne by the Fund, and the Distributor will
indemnify and hold harmless the Fund against liability
for all such transfer taxes.
7. Duration and Termination
a. This Agreement shall become effective as
of the date hereof and shall continue in effect until
December 31, 1994, and from year to year thereafter,
but only so long as such continuance is specifically
approved each year by either (i) the Board of Directors
of the Fund, or (ii) by the affirmative vote of a
majority of the Fund's outstanding voting securities.
In addition to the foregoing, each renewal of this
Agreement must be approved by the vote of a majority of
the Fund's directors 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. Prior to voting on the renewal of
this Agreement, the Board of Directors of the
Corporation shall request and evaluate, and the
Distributor shall furnish, such information as may
reasonably be necessary to enable the Corporation's
Board of Directors to evaluate the terms of this
Agreement.
b. Notwithstanding whatever may be provided
herein to the contrary, this Agreement may be
terminated at any time, without payment of any penalty,
by vote of a majority of the Board of Directors of the
Corporation, or by vote of a majority of the
outstanding voting securities of the Fund, or by the
Distributor, in each case, on not more than sixty (60)
days' written notice to the other party and shall
terminate automatically in the event of its assignment
as set forth in paragraph 9 of this Agreement.
8. Notice
Any notice under this Agreement shall be in
writing, addressed and delivered or mailed, postage
prepaid, to the other party at such address as such
other party may from time to time designate for the
receipt of such notice.
9. Assignment
This Agreement shall neither be assignable
nor subject to pledge or hypothecation and in the event
of assignment, pledge or hypothecation shall
automatically terminate. For purposes of determining
whether an "assignment" has occurred, the definition of
"assignment" in Section 2(a)(4) of the Investment
Company Act shall control.
10. Miscellaneous
a. This Agreement shall be construed in
accordance with the laws of the State of Maryland,
provided that nothing herein shall be construed in a
manner inconsistent with the Investment Company Act,
the Securities Act, the Securities Exchange Act of 1934
or any rule or order of the Securities and Exchange
Commission under such Acts or any rule of the National
Association of Securities Dealers.
b. The captions of this Agreement are
included for convenience only and in no way define or
delimit any of the provisions hereof or otherwise
affect their construction or effect.
c. 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 and, to this extent, the
provisions of this Agreement shall be deemed to be
severable.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the day and year first
written above.
O.R.I. FUNDS, INC.
By:/s/ Samuel Wegbreit
------------------------
Attest:/s/ Mark C. Pappas
--------------------
Mark C. Pappas,
Secretary
OAK RIDGE INVESTMENTS, INC.
By:/s/ David Klaskin
---------------------
Attest:/s/ Samuel Wegbreit
-----------------------
Samuel Wegbreit,
Secretary
Exhibit 10
GODFREY & KAHN, S.C.
ATTORNEYS AT LAW
780 North Water Street
Milwaukee, Wisconsin 53202
Phone (414) 273-3500 Fax (414) 273-5198
December 14, 1993
O.R.I. Funds, Inc.
233 N. Michigan Avenue
Suite 1807
Chicago, Illinois 60601
Ladies and Gentlemen:
We have acted as your counsel in connection with
the preparation of a Registration Statement on Form N-
1A (Registration No. 33-70590) (the "Registration
Statement") relating to the sale by you of an
indefinite number of shares of O.R.I. Funds, Inc. (the
"Company") common stock, $0.01 par value (the
"Shares"), in the manner set forth in the Registration
Statement (and the prospectus included therein).
We have examined: (a) the Registration Statement
(and the prospectus included therein), (b) the
Company's Articles of Incorporation, and By-Laws, (c)
certain resolutions of the Company's Board of
Directors, and (d) such other proceedings, documents
and records as we have deemed necessary to enable us to
render this opinion.
Based on the foregoing, we are of the opinion that
the Shares, when sold as contemplated in the
Registration Statement, will be duly authorized and
validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an
exhibit to the Registration Statement. In giving this
consent, however, we do not admit that we are "experts"
within the meaning of Section 11 of the Securities Act
of 1933, as amended, or within the category of persons
whose consent is required by Section 7 of said Act.
Very truly yours,
Godfrey & Kahn, S.C.
/s/ Godfrey & Kahn, S.C.
Godfrey & Kahn, S.C.
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in
Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A of Oak Ridge Funds, Inc. of our
report dated December 18, 1997, relating to the
financial statements and financial highlights of the
O.R.I. Growth Fund, which report is included in the
Annual Report to Shareholders for the year ended
November 30, 1997, which is also incorporated by
reference in the Registration Statement. We also
consent to the reference to us under the heading
"Independent Accountants" in the Statement of
Additional Information and to the reference to us under
the heading "Financial Highlights" in the Prospectus.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
March 19, 1998
Exhibit 13
O.R.I. FUNDS, INC.
STOCK SUBSCRIPTION AGREEMENT
To the Board of Directors of O.R.I. Funds, Inc.:
The undersigned purchaser (the "Purchaser")
hereby subscribes to 7,500 shares (the "Shares") of
common stock, $.01 par value (the "Common Stock"), of
O.R.I. Funds, Inc. (the "Fund") in consideration for
which the Purchaser agrees to transfer to you upon
demand Seventy-Five Thousand Dollars ($75,000) in cash.
It is understood that a certificate
representing the Shares shall not be issued to the
undersigned, but such ownership shall be recorded on
the books and records of the Fund's transfer agent.
Notwithstanding the fact that a certificate
representing ownership will not be issued, said Shares
shall be deemed fully paid and nonassessable.
The Purchaser agrees that the Shares are
being purchased for investment with no present
intention of reselling or redeeming said Shares.
The Purchaser acknowledges that costs
incurred by the Fund in connection with its
organization, registration and initial public offering
of Shares of the Fund have been deferred and are being
amortized over a period of five years from the date
upon which the Fund commences its investment
activities.
The Purchaser agrees that in the event any of
the Shares purchased hereunder are redeemed during such
five year period, the Fund is authorized to reduce the
redemption proceeds to cover any unamortized
organizational expenses in the same proportion as the
number of Shares being redeemed bears to the number of
Shares outstanding at the time of redemption. If, for
any reason, said reduction of redemption proceeds is
not in fact made by the Fund in the event of such a
redemption, the Purchaser agrees to reimburse the Fund
immediately for any unamortized organizational expenses
in the proportion stated above.
Dated and effective this 7th day of December,
1993.
/s/ Richard O. Klaskin
------------------------
Richard O. Klaskin,
Individual
Retirement Account
Page Two
Subscription Agreement
ACCEPTANCE
The foregoing subscription is hereby
accepted. Dated and effective as of this 7th day of
December, 1993.
O.R.I. FUNDS, INC.
By:/s/ David M. Klaskin
--------------------------
David M. Klaskin,
President
Attest:/s/ Mark C. Pappas
----------------------
Mark C. Pappas,
Secretary
O.R.I. FUNDS, INC.
STOCK SUBSCRIPTION AGREEMENT
To the Board of Directors of O.R.I. Funds, Inc.:
The undersigned purchaser (the "Purchaser")
hereby subscribes to 2,500 shares (the "Shares") of
common stock, $.01 par value (the "Common Stock"), of
O.R.I. Funds, Inc. (the "Fund") in consideration for
which the Purchaser agrees to transfer to you upon
demand Twenty-Five Thousand Dollars ($25,000) in cash.
It is understood that a certificate
representing the Shares shall not be issued to the
undersigned, but such ownership shall be recorded on
the books and records of the Fund's transfer agent.
Notwithstanding the fact that a certificate
representing ownership will not be issued, said Shares
shall be deemed fully paid and nonassessable.
The Purchaser agrees that the Shares are
being purchased for investment with no present
intention of reselling or redeeming said Shares.
The Purchaser acknowledges that costs
incurred by the Fund in connection with its
organization, registration and initial public offering
of Shares of the Fund have been deferred and are being
amortized over a period of five years from the date
upon which the Fund commences its investment
activities.
The Purchaser agrees that in the event any of
the Shares purchased hereunder are redeemed during such
five year period, the Fund is authorized to reduce the
redemption proceeds to cover any unamortized
organizational expenses in the same proportion as the
number of Shares being redeemed bears to the number of
Shares outstanding at the time of redemption. If, for
any reason, said reduction of redemption proceeds is
not in fact made by the Fund in the event of such a
redemption, the Purchaser agrees to reimburse the Fund
immediately for any unamortized organizational expenses
in the proportion stated above.
Dated and effective this 7th day of December,
1993.
/s/ Samual Wegbreit
------------------------
Samual Wegbreit,
Individual
Retirement Account
Page Two
Subscription Agreement
ACCEPTANCE
The foregoing subscription is hereby
accepted. Dated and effective as of this 7th day of
December, 1993.
O.R.I. FUNDS, INC.
By:/s/ David M. Klaskin
-------------------------
David M. Klaskin,
President
Attest:/s/ Mark C. Pappas
----------------------
Mark C. Pappas,
Secretary
Exhibit 14(a)
Individual Retirement Account Disclosure Statement
GENERAL INFORMATION
Please read the following information together with the
Individual Retirement Account Custodial Agreement and
the Prospectus(es) for the fund(s) you select for
investment of IRA contributions.
GENERAL PRINCIPLES
1. Are There Different Types of IRAs?
Yes. Upon creation of an IRA, you must designate
whether the IRA will be a Traditional IRA, a Roth IRA,
or an Education IRA. (In addition, there are SEP-IRAs
and SIMPLE IRAs, which are discussed in the Disclosure
Statement for Traditional IRAs).
In a Traditional IRA, amounts contributed to the
IRA may be tax deductible at the time of contribution.
Distributions from the IRA will be taxed at
distribution except to the extent that the distribution
represents a return of your own contributions for which
you did not claim (or where not eligible to claim) a
deduction.
In a Roth IRA, amounts contributed to your IRA are
taxed at the time of contribution, but distributions
from the IRA are not subject to tax if you have held
the IRA for certain minimum periods of time (generally,
until age 59 1/2 but in some cases longer).
In an Education IRA, you contribute to an IRA
maintained on behalf of a beneficiary and do not
receive a current deduction. However, if amounts are
used for certain educational purposes, neither you nor
the beneficiary of the IRA are taxed upon distribution.
Each type of IRA is a custodial account created
for the exclusive benefit of the beneficiary you (or
your spouse) in the case of the Traditional IRA and
Roth IRA, and a named beneficiary in the case of an
Education IRA. Firstar Trust Company serves as
custodian of the IRA. Your, your spouse's or your
beneficiary's (as applicable) interest in the account
is nonforfeitable.
2. Can I Revoke My Account?
This account may be revoked any time within seven
calendar days after it is established by mailing or
delivering a written request for revocation to: Oak
Ridge Growth Fund, c/o Firstar Trust Company, 615 East
Michigan Street, 3rd Floor, Milwaukee, Wisconsin
53202, Attention: Mutual Fund Department. If the
revocation is mailed, the date of the postmark (or the
date of certification if sent by certified or
registered mail) will be considered the revocation
date. Upon proper revocation, a full refund of the
initial contribution will be issued, without any
adjustments for items such as administrative fees or
fluctuations in market value. You may always revoke
your account after this time, but the amounts
distributed to you will be subject to the tax rules
applicable upon distribution from an IRA account as
discussed below. (While current regulations technically
only extend the right to revoke to Traditional IRAs, it
has been assumed that that right applies to all Roth
and Education IRAs as well and such IRAs will thus be
administered consistent with that interpretation until
the IRS issues guidance to the contrary.)
3. How Will My Account Be Invested?
Contributions made to an IRA will be invested, at
your election, in one or more of the regulated
investment companies for which Oak Ridge Investments,
L.L.C. serves as Investment Advisor or any other
regulated investment company designated by Oak Ridge
Investments, L.L.C. No part of the IRA may be invested
in life insurance contracts; further, the assets of the
IRA may not be commingled with other property.
Information about the shares of each mutual fund
available for investment by your IRA must be furnished
to you in the form of a prospectus governed by rules of
the Securities and Exchange Commission. Please refer to
the prospectus for detailed information concerning your
mutual fund. You may obtain further information
concerning IRAs from any District Office of the
Internal Revenue Service.
Fees and other expenses of maintaining the account
may be charged to you or the account. The Custodian's
current fee schedule follows. The fee schedule may be
changed from time to time.
Transfer to successor trustee $ 15.00
Distribution to a participant 15.00
(exclusive of systematic withdrawal plans)
Refund of excess contribution 15.00
Federal wire fee 12.00
Traditional & Roth IRA annual maintenance fee
per account 12.50*
Education IRA annual maintenance fee
per account 5.00*
*capped at $25.00 per social security number.
Individual Retirement Account Disclosure Statement For
Traditional IRAs
1. Am I Eligible to Contribute to a Traditional IRA?
Employees with compensation income and self-
employed individuals with earned income are eligible to
contribute to a Traditional IRA. (For convenience, all
future references to compensation are deemed to mean
"earned income" in the case of a self-employed
individual.) Employers may also contribute to
Traditional IRAs established for the benefit of their
employees. In addition, you may establish a Traditional
IRA to receive rollover contributions and transfers
from the trustee or custodian of another Traditional
IRA or the custodian or trustee of certain other
retirement plans.
2. When Can I Make Contributions?
You may make regular contributions to your
Traditional IRA any time up to and including the due
date for filing your tax return for the year, not
including extensions. You may continue to make regular
contributions to your Traditional IRA up to (but not
including) the calendar year in which you reach age 70
1/2. (If you are over age 70 1/2 but your spouse has
not yet attained that age, contributions to your
spouse's Traditional IRA may continue so long as you
and your spouse, based on a joint tax return, have
sufficient compensation income.) Employer
contributions to a Simplified Employee Pension Plan or
a SIMPLE Plan may be continued after you attain age 70
1/2. Eligible rollover contributions and transfers may
be made at any time, including after you reach age 70
1/2.
3. How Much May I Contribute to a Traditional IRA?
You may make annual contributions to a Traditional
IRA in any amount up to 100% of your compensation for
the year or $2,000, whichever is less. The $2,000
limitation is reduced by contributions you make to a
Roth IRA, but is not reduced by contributions to an
Educational IRA for the benefit of another taxpayer.
Qualifying rollover contributions and transfers are not
subject to these limitations.
In addition, if you are married and file a joint
return, you may make contributions to your spouse's
Traditional IRA. However, the maximum amount
contributed to both your own and to your spouse's
Traditional IRA may not exceed 100% of your combined
compensation or $4,000, whichever is less. The maximum
amount that may be contributed to either your
Traditional IRA or your spouse's Traditional IRA is
$2,000. Again, these dollar limits are reduced by any
contributions you or your spouse make to a Roth IRA,
but are not affected by contributions either of you
make to an Education IRA for the benefit of another
taxpayer.
If you are the beneficiary of an Education IRA,
certain additional limits may apply to you. Please
contact your tax advisor for more information.
4. Can I Roll Over or Transfer Amounts from Other
IRAs or Employer Plans?
You are allowed to "roll over" a distribution or
transfer your assets from one Traditional IRA to
another without any tax liability. Rollovers between
Traditional IRAs may be made once per year and must be
accomplished within 60 days after the distribution.
Also, under certain conditions, you may roll over (tax-
free) all or a portion of a distribution received from
a qualified plan or tax-sheltered annuity in which you
participate or in which your deceased spouse
participated. However, strict limitations apply to such
rollovers, and you should seek competent advice in
order to comply with all of the rules governing
rollovers.
Most distributions from qualified retirement plans
will be subject to a 20% withholding requirement. The
20% withholding can be avoided by electing a "direct
rollover" of the distribution to a Traditional IRA or
to certain other types of retirement plans. You should
receive more information regarding these withholding
rules and whether your distribution can be transferred
to a Traditional IRA from the plan administrator prior
to receiving your distribution. (Note that legislation
pending as of this printing would deny your ability to
roll over a hardship distribution from an employer's
plan to your IRA.)
5. Are My Contributions to a Traditional IRA Tax
Deductible?
Although you may make a contribution to a
Traditional IRA within the limitations described above,
all or a portion of your contribution may be
nondeductible. No deduction is allowed for a rollover
contribution (including a "direct rollover") or
transfer. For "regular" contributions, the taxability
of your contribution depends upon your tax filing
status, whether you (and in some cases your spouse) are
an "active participant" in an employer-sponsored
retirement plan, and your income level.
*If you are not married (including a taxpayer filing
under the "head of household" status), the following
rules apply:
If you are not an "active participant" in an
employer-sponsored retirement plan, you may make a
fully deductible contribution to a Traditional IRA
(up to the contribution limits described above).
If you are an "active participant" in an employer-
sponsored retirement plan, you may make a fully
deductible contribution to a Traditional IRA (up
to the contribution limits described above) if
your adjusted gross income (as defined below) does
not exceed $30,000 for 1998. If your 1998 adjusted
gross income is between $30,000 and $40,000, your
deduction will be limited as described below. If
your adjusted gross income exceeds $40,000, your
contribution will not be deductible. After 1998,
the deductibility of a contribution is as follows:
Eligible To Eligible To Not Eligible
Make A Make A To Make A
Year Deductible Partially Deductible
Contribution Deductible Contribution
If AGI Less Contribution If AGI Over
Than Or Equal If AGI
To Between
1999 $31,000 $31,001- $41,000
$40,999
2000 $32,000 $32,001- $42,000
$41,999
2001 $33,000 $33,001- $43,000
$42,999
2002 $34,000 $34,001- $44,000
$43,999
2003 $40,000 $40,001- $50,000
$49,999
2004 $45,000 $45,001- $55,000
$54,999
2005 and $50,000 $50,001- $60,000
thereafter $59,999
*If you are married, the following rules apply:
If you and your spouse file a joint tax return and
neither you nor your spouse is an "active
participant" in an employer-sponsored retirement
plan, you and your spouse may make a fully
deductible contribution to a Traditional IRA (up
to the contribution limits described above).
If you and your spouse file a joint tax return and
both you and your spouse are "active participants"
in employer-sponsored retirement plans, you and
your spouse may make fully deductible
contributions to a Traditional IRA (up to the
contribution limits described above, if your 1998
combined adjusted gross income (as defined below)
does not exceed $50,000. If your 1998 adjusted
gross income is between $50,000 and $60,000, your
deduction will be limited as described below. If
your adjusted gross income exceeds $60,000, your
contribution will not be deductible. After 1998,
the deductibility of a contribution is as follows:
Eligible To Eligible To Not Eligible
Make A Make A To Make A
Year Deductible Partially Deductible
Contribution Deductible Contribution
If AGI Less Contribution If AGI Over
Than Or Equal If AGI
To Between
1999 $51,000 $51,001- $61,000
$60,999
2000 $52,000 $52,001- $62,000
$61,999
2001 $53,000 $53,001- $63,000
$62,999
2002 $54,000 $54,001- $64,000
$63,999
2003 $60,000 $60,001- $70,000
$69,999
2004 $65,000 $65,001- $75,000
$74,999
2005 $70,000 $71,001- $80,000
$79,999
2006 $75,000 $75,001- $85,000
$84,999
2007 and $80,000 $80,001- $100,000
thereafter $99,999
If you and your spouse file a joint tax return and
only one of you is an "active participant" in an
employer-sponsored retirement plan, special rules
apply. If your spouse is the "active participant",
a fully deductible contribution can be made to
your IRA (up to the contribution limits described
above) if your combined adjusted gross income does
not exceed $150,000. If your combined adjusted
gross income is between $150,000 and $160,000,
your deduction will be limited as described below.
If your combined adjusted gross income exceeds
$160,000, your contribution will not be
deductible. Your spouse, as an active participant
in an employer-sponsored retirement plan, may make
a fully deductible contribution to a Traditional
IRA if your 1998 combined adjusted gross income
does not exceed $50,000 (with a partial deduction
being available if 1998 combined adjusted gross
income is between $50,000 and $60,000).
Conversely, if you are an "active participant" and
your spouse is not, a contribution to your
Traditional IRA will be deductible if your 1998
combined adjusted gross income does not exceed
$50,000 (with a partial deduction being available
if 1998 combined adjusted gross income is between
$50,000 and $60,000). After 1998, the $50,000 and
$60,000 amounts are adjusted in the manner
described in the preceding table; the $150,000 and
$160,000 amounts are not adjusted.
If you are married and file a separate return and
are not an "active participant" in an employer-
sponsored retirement plan, you may make a fully
deductible contribution to a Traditional IRA (up
to the contribution limits described above). If
you are married and filing separately and are an
"active participant" in an employer-sponsored
retirement plan, you may not make a fully
deductible contribution to a Traditional IRA. A
partial deduction is available if your 1998
adjusted gross income is less than $10,000. This
amount is not adjusted for cost-of-living changes
or otherwise.
*An employer-sponsored retirement plan includes any of
the following types of retirement plans:
a qualified pension, profit-sharing, or stock
bonus plan established in accordance with IRC
401(a) or 401(k);
a Simplified Employee Pension Plan (SEP) (IRC
408(k));
a deferred compensation plan maintained by a
governmental unit or agency;
tax-sheltered annuities and custodial accounts
(IRC 403(b) and 403(b)(7));
a qualified annuity plan under IRC Section 403(a); or
a Savings Incentive Match Plan for Employees of
Small Employers (SIMPLE Plan).
*Generally, you are considered an "active participant"
in a defined contribution plan if an employer
contribution or forfeiture was credited to your account
during the year. You are considered an "active
participant" in a defined benefit plan if you are
eligible to participate in a plan, even though you
elect not to participate. You are also treated as an
"active participant" if you make a voluntary or
mandatory contribution to any type of plan, even if
your employer makes no contribution to the plan.
For purposes of these rules, adjusted gross income (1)
is determined without regard to the exclusions from
income arising under Section 135 (exclusion of certain
savings bond interest), Section 137 (exclusion of
certain employer provided adoption expenses) and
Section 911 (certain exclusions applicable to U.S.
citizens or residents living abroad) of the Code, (2)
is not reduced for any deduction that you may be
entitled to for IRA contributions, and (3) takes into
account the passive loss limitations under Section 469
of the Code and any taxable benefits under the Social
Security Act and Railroad Retirement Act as determined
in accordance with Section 86 of the Code.
*Please note that the deduction limits are not the same
as the contribution limits. You can contribute to your
Traditional IRA in any amount up to the contribution
limits described above (the lesser of $2,000 or 100
percent of your compensation income). The amount of
your contribution that is deductible for federal income
tax purposes is based upon the rules described in this
section. If you (or where applicable, your spouse) is
an "active participant" in an employer-sponsored
retirement plan, you can use the following steps to
calculate whether your contribution will be fully or
partially deductible:
(a) Subtract the applicable income limit from your
adjusted gross income as determined above. (For
example, if you are a single taxpayer, your 1998
income limit is $30,000.) If the result is $10,000
or more (after 2006, $20,000 or more for a married
individual filing jointly), you can only make a
nondeductible contribution to your Traditional
IRA.
(b) Divide the above figure by $10,000 (after 2006,
$20,000 for a married individual filing jointly),
and multiply that percentage by $2,000.
(c) Subtract the dollar amount (result from (b) above)
from $2,000 to determine the amount that is
deductible.
*If the deduction limit is not a multiple of $10 then
it should be rounded up to the next $10. If you are
eligible to make any deductible contribution, you may
make a $200 minimum deductible contribution. Even if
your income exceeds the limits described above, you may
make a contribution to your IRA up to the contribution
limitations described in Item 3 above. To the extent
that your contribution exceeds the deductible limits,
it will be nondeductible. However, earnings on all IRA
contributions are tax deferred until distribution.
6. What if I Make an Excess Contribution?
Contributions that exceed the allowable maximum
for federal income tax purposes are treated as excess
contributions. A nondeductible penalty tax of 6% of the
excess amount contributed will be added to your income
tax for each year in which the excess contribution
remains in your account.
7. How Do I Correct an Excess Contribution?
If you make a contribution in excess of your
allowable maximum, you may correct the excess
contribution and avoid the 6% penalty tax for that year
by withdrawing the excess contribution and its earnings
on or before the date, including extensions, for filing
your tax return for the tax year for which the
contribution was made. Any earnings on the withdrawn
excess contribution may be subject to a 10% early
distribution penalty tax if you are under age 59 1/2.
In addition, in certain cases an excess contribution
may be withdrawn after the time for filing your tax
return. Finally, excess contributions for one year may
be carried forward and applied against the contribution
limitation in succeeding years.
8. Can a Simplified Employee Pension Plan Be Used in
Conjunction with a Traditional IRA?
A Traditional IRA may also be used in connection
with a Simplified Employee Pension Plan established by
your employer (or by you if you are self-employed). In
addition, if your SEP Plan as in effect on December 31,
1996 permitted salary reduction contributions, you may
elect to have your employer make salary reduction
contributions. Several limitations on the amount that
may be contributed apply. First, salary reduction
contributions (for plans that are eligible) may not
exceed $10,000 per year (certain lower limits may apply
for highly compensated employees). The $10,000 limit
applies for 1998 and is adjusted periodically for cost
of living increases. Second, the combination of all
contributions for any year (including employer
contributions and, if your SEP Plan is eligible, salary
reduction contributions) cannot exceed 15 percent of
compensation (disregarding for this purpose
compensation in excess of $160,000 per year). The
$160,000 compensation limit applies for 1998 and is
adjusted periodically for cost of living increases. A
number of special rules apply to SEP Plans, including a
requirement that contributions generally be made on
behalf of all employees of the employer (including for
this purpose a sole proprietorship or partnership) who
satisfy certain minimum participation requirements. It
is your responsibility and that of your employer to see
that contributions in excess of normal IRA limits are
made under and in accordance with a valid SEP Plan.
9. Can a Savings and Incentive Match Plan for
Employees of Small Employers ("SIMPLE") Be Used in
Conjunction with a Traditional IRA?
A Traditional IRA may also be used in connection
with a SIMPLE Plan established by your employer (or by
you if you are self-employed). When this is done, the
IRA is known as a SIMPLE IRA, although it is similar to
a Traditional IRA with the exceptions described below.
Under a SIMPLE Plan, you may elect to have your
employer make salary reduction contributions of up to
$6,000 per year to your SIMPLE IRA. The $6,000 limit
applies for 1998 and is adjusted periodically for cost
of living increases. In addition, your employer will
contribute certain amounts to your SIMPLE IRA, either
as a matching contribution to those participants who
make salary reduction contributions or as a non-
elective contribution to all eligible participants
whether or not making salary reduction contributions. A
number of special rules apply to SIMPLE Plans,
including (1) a SIMPLE Plan generally is available only
to employers with fewer than 100 employees, (2)
contributions must be made on behalf of all employees
of the employer (other than bargaining unit employees)
who satisfy certain minimum participation requirements,
(3) contributions are made to a special SIMPLE IRA that
is separate and apart from your other IRAs, (4) if you
withdraw from your SIMPLE IRA during the two-year
period during which you first began participation in
the SIMPLE Plan, the early distribution excise tax (if
otherwise applicable) is increased to 25 percent; and
(5) during this two-year period, any amount withdrawn
may be rolled over tax-free only into another SIMPLE
IRA (and not to a Traditional IRA (that is not a SIMPLE
IRA) or to a Roth IRA). It is your responsibility and
that of your employer to see that contributions in
excess of normal IRA limits are made under and in
accordance with a valid SIMPLE Plan.
10. What Forms of Distribution Are Available from a
Traditional IRA?
You may at any time request distribution of all or
any portion of your account. However, distributions
made prior to your attainment of age 59 1/2 may be
subject to an additional 10 percent penalty tax. Once
you reach your "required beginning date" (see Item 11
below), distribution of your account may be made in any
one of three methods:
(a) a lump-sum distribution,
(b) installments over a period not extending beyond
your life expectancy (as determined by actuarial
tables), or
(c) installments over a period not extending beyond
the joint life expectancy of you and your
designated beneficiary (as determined by actuarial
tables).
You may also use your account balance to purchase
an annuity contract, in which case your custodial
account will terminate.
11. When Must Distributions from aTraditional IRA
Begin?
You must begin receiving the assets in your
account no later than April 1 following the calendar
year in which you reach age 70 1/2 (your "required
beginning date"). In general, the minimum amount that
must be distributed each year is equal to the amount
obtained by dividing the balance in your Traditional
IRA on the last day of the prior year (or the last day
of the year prior to the year in which you attain age
70 1/2) by your life expectancy, the joint life
expectancy of you and your beneficiary, or the
specified payment term, whichever is applicable. A
federal tax penalty may be imposed against you if the
required minimum distribution is not made for the year
you reach age 70 1/2 and for each year thereafter. The
penalty is equal to 50% of the amount by which the
actual distribution is less than the required minimum.
Unless you or your spouse elects otherwise, your life
expectancy and/or the life expectancy of your spouse
will be recalculated annually. (The election, if you
choose to make it, must be made by your required
beginning date.) Once you reach your required
beginning date, an election not to recalculate life
expectancy(ies) is irrevocable and will apply to all
subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.
If you have two or more Traditional IRAs, you may
satisfy the minimum distribution requirements by
receiving a distribution from one of your Traditional
IRAs in an amount sufficient to satisfy the minimum
distribution requirements for your other Traditional
IRAs. You must still calculate the required minimum
distribution separately for each Traditional IRA, but
then such amounts may be totaled and the total
distribution taken from one or more of your individual
Traditional IRAs.
Distribution from your Traditional IRA must satisfy the
special "incidental death benefit" rules of the
Internal Revenue Code. These provisions set forth
certain limitations on the joint life expectancy of you
and your beneficiary. If your beneficiary is not your
spouse, your beneficiary will be generally considered
to be no more than 10 years younger than you for the
purpose of calculating the minimum amount that must be
distributed.
12. Are There Distribution Rules that Applyafter My
Death?
Yes. If you die before receiving the balance of
your Traditional IRA, distribution of your remaining
account balance is subject to several special rules. If
you die on or after your required beginning date,
distribution must continue in a method at least as
rapid as under the method of distribution in effect at
your death. If you die before your required beginning
date, your remaining interest will, at the election of
your beneficiary or beneficiaries, (i) be distributed
by December 31 of the year in which occurs the fifth
anniversary of your death, or (ii) commence to be
distributed by December 31 of the year following your
death over a period not exceeding the life or life
expectancy of your designated beneficiary or
beneficiaries.
Two additional distribution options are available
if your spouse is the beneficiary: (i) payments to
your spouse may commence as late as December 31 of the
year you would have attained age 70 1/2 and be
distributed over a period not exceeding the life or
life expectancy of your spouse, or (ii) your spouse can
simply elect to treat your Traditional IRA as his or
her own, in which case distributions will be required
to commence by April 1 following the calendar year in
which your spouse attains age 70 1/2.
13. How Are Distributions From a Traditional IRA Taxed
for Federal Income Tax Purposes?
Amounts distributed to you are generally
includable in your gross income in the taxable year you
receive them and are taxable as ordinary income. To the
extent, however, that any part of a distribution
constitutes a return of your nondeductible
contributions, it will not be included in your income.
The amount of any distribution excludable from income
is the portion that bears the same ratio as your
aggregate nondeductible contributions bear to the
balance of your Traditional IRA at the end of the year
(calculated after adding back distributions during the
year). For this purpose, all of your Traditional IRAs
are treated as a single Traditional IRA. Furthermore,
all distributions from a Traditional IRA during a
taxable year are to be treated as one distribution. The
aggregate amount of distributions excludable from
income for all years cannot exceed the aggregate
nondeductible contributions for all calendar years.
No distribution to you or anyone else from a
Traditional IRA can qualify for capital gains treatment
under the federal income tax laws. Similarly, you are
not entitled to the special five- or ten-year averaging
rule for lump-sum distributions that may be available
to persons receiving distributions from certain other
types of retirement plans. All distributions are taxed
to the recipient as ordinary income except the portion
of a distribution that represents a return of
nondeductible contributions. Historically, so-called
"excess distributions" to you as well as "excess
accumulations" remaining in your account as of your
date of death were subject to additional taxes. These
additional taxes no longer apply.
You must indicate on distribution requests whether
or not federal income taxes should be withheld.
Redemption requests not indicating an election not to
have federal income tax withheld will be subject to
withholding.
Any distribution that is properly rolled over will
not be includable in your gross income.
14. Are There Penalties for Early Distribution from
aTraditional IRA?
Distributions from your Traditional IRA made
before age 59 1/2 will be subject (in addition to
ordinary income tax) to a 10% nondeductible penalty tax
unless (i) the distribution is a return of
nondeductible contributions, (ii) the distribution is
made because of your death, disability, or as part of a
series of substantially equal periodic payments over
your life expectancy or the joint life expectancy of
you and your beneficiary, (iii) the distribution is
made for medical expenses in excess of 7.5% of adjusted
gross income or is made for reimbursement of medical
premiums while you are unemployed, (iv) the
distribution is made to pay for certain higher
education expenses for you, your spouse, your child,
your grandchild, or the child or grandchild of your
spouse, (v) subject to various limits, the distribution
is used to purchase a first home or, in limited cases,
a second or subsequent home for you, your spouse, or
your or your spouse's child, grandchild or ancestor, or
(vi) the distribution is an exempt withdrawal of an
excess contribution. The penalty tax may also be
avoided if the distribution is rolled over to another
individual retirement account. See Item 9 above for
special rules applicable to distributions from a SIMPLE
IRA.
15. What If I Engage in a Prohibited Transaction?
If you engage in a "prohibited transaction," as
defined in Section 4975 of the Internal Revenue Code,
your account will be disqualified, and the entire
balance in your account will be treated as if
distributed to you and will be taxable to you as
ordinary income. Examples of prohibited transactions
are:
(a) the sale, exchange, or leasing of any property
between you and your account,
(b) the lending of money or other extensions of credit
between you and your account,
(c) the furnishing of goods, services, or facilities
between you and your account.
If you are under age 59 1/2, you may also be
subject to the 10% penalty tax on early distributions.
16. What If I Pledge My Account?
If you use (pledge) all or part of your
Traditional IRA as security for a loan, then the
portion so pledged will be treated as if distributed to
you and will be taxable to you as ordinary income
during the year in which you make such pledge. The 10%
penalty tax on early distributions may also apply.
17. How Are Contributions to a Traditional IRA
Reported for Federal Tax Purposes?
Deductible contributions to your Traditional IRA
may be claimed as a deduction on your IRS Form 1040 for
the taxable year contributed. If any nondeductible
contributions are made by you during a tax year, such
amounts must be reported on Form 8606 and attached to
your Federal Income Tax Return for the year
contributed. If you report a nondeductible contribution
to your Traditional IRA and do not make the
contribution, you will be subject to a $100 penalty for
each overstatement unless a reasonable cause is shown
for not contributing. Other reporting will be required
by you in the event that special taxes or penalties
described herein are due. You must also file Form 5329
with the IRS for each taxable year in which the
contribution limits are exceeded, a premature
distribution takes place, or less than the required
minimum amount is distributed from your Traditional
IRA.
18. How Are Earnings on My Account Calculated and
Allocated?
The method of computing and allocating annual
earnings is set forth in Article VIII, Section 1 of the
Individual Retirement Account Custodial Agreement. The
growth in value of your IRA is neither guaranteed nor
projected.
Your Individual Retirement Account Plan has been
approved as to form by the Internal Revenue Service.
The Internal Revenue Service approval is a
determination only as to the form of the Plan and does
not represent a determination of the merits of the Plan
as adopted by you. You may obtain further information
with respect to your Individual Retirement Account from
any district office of the Internal Revenue Service.
19. Income Tax Withholding
You must indicate on distribution requests whether
or not federal income taxes should be withheld.
Redemption requests not indicating an election not to
have federal income tax withheld will be subject to
withholding.
20. Other Information
Information about the shares of each mutual fund
available for investment by your IRA must be furnished
to you in the form of a prospectus governed by rules of
the Securities and Exchange Commission. Please refer to
the prospectus for detailed information concerning your
mutual fund. You may obtain further information
concerning IRAs from any District Office of the
Internal Revenue Service.
Traditional Individual Retirement Custodial Account
The following constitutes an agreement
establishing an Individual Retirement Account (under
Section 408(a) of the Internal Revenue Code) between
the Depositor and the Custodian.
Article I
The Custodian may accept additional cash contributions
on behalf of the Depositor for a tax year of the
Depositor. The total cash contributions are limited to
$2,000 for the tax year unless the contribution is a
rollover contribution described in Section 402(c) (but
only after December 31, 1992), 403(a)(4), 403(b)(8),
408(d)(3), or an employer contribution to a simplified
employee pension plan as described in Section 408(k).
Rollover contributions before January 1, 1993, include
rollovers described in Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an
employer contribution to a simplified employee pension
plan as described in Section 408(k).
Article II
The depositor's interest in the balance in the
custodial account is nonforfeitable.
Article III
1. No part of the custodial funds may be invested in
life insurance contracts, nor may the assets of the
custodial account be commingled with other property
except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
2. No part of the custodial funds may be invested in
collectibles (within the meaning of Section 408(m))
except as otherwise permitted by Section 408(m)(3)
which provides an exception for certain gold and silver
coins and coins issued under the laws of any state.
Article IV
1. Notwithstanding any provision of this agreement to
the contrary, the distribution of the depositor's
interest in the custodial account shall be made in
accordance with the following requirements and shall
otherwise comply with Section 408(a)(6) and Proposed
Regulations Section 1.408-8, including the incidental
death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are
herein incorporated by reference.
2. Unless otherwise elected by the time distributions
are required to begin to the Depositor under Item 3, or
to the surviving spouse under Item 4, other than in the
case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be
irrevocable as to the Depositor and the surviving
spouse and shall apply to all subsequent years. The
life expectancy of a nonspouse beneficiary may not be
recalculated.
3. The depositor's entire interest in the custodial
account must be, or begin to be, distributed by the
depositor's required beginning date, April 1 following
the calendar year end in which the Depositor reaches
age 70 1/2. By that date, the Depositor may elect, in a
manner acceptable to the Custodian, to have the balance
in the custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or
substantially equal monthly, quarterly, or annual
payments over the life of the Depositor.
(c) An annuity contract that provides equal or
substantially equal monthly, quarterly, or annual
payments over the joint and last survivor lives of
the Depositor and his or her designated
beneficiary.
(d) Equal or substantially equal annual payments over
a specified period that may not be longer than
the depositor's life expectancy.
(e) Equal or substantially equal annual payments over
a specified period that may not be longer than
the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire
interest is distributed to him or her, the entire
remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of
his or her interest has begun, distribution must
continue to be made in accordance with Item 3.
(b) If the Depositor dies before distribution of his
or her interest has begun, the entire remaining
interest will, at the election of the Depositor
or, if the Depositor has not so elected, at the
election of the beneficiary or beneficiaries,
either:
(i) Be distributed by the December 31 of the year
containing the fifth anniversary of the
depositor's death, or
(ii) Be distributed in equal or substantially equal
payments over the life or life expectancy of the
designated beneficiary or beneficiaries starting
by December 31 of the year following the year of
the depositor's death. If, however, the
beneficiary is the depositor's surviving spouse,
then this distribution is not required to begin
before December 31 of the year in which the
Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an
annuity meeting the requirements of Section
408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated
as having begun on the depositor's required
beginning date, even though payments may actually
have been made before that date.
(d) If the Depositor dies before his or her entire
interest has been distributed and if the
beneficiary is other than the surviving spouse, no
additional cash contributions or rollover
contributions may be accepted in the account.
5. In the case of a distribution over life expectancy
in equal or substantially equal annual payments, to
determine the minimum annual payment for each year,
divide the depositor's entire interest in the custodial
account as of the close of business on December 31 of
the preceding year by the life expectancy of the
Depositor (or the joint life and last survivor
expectancy of the Depositor and the depositor's
designated beneficiary, or the life expectancy of the
designated beneficiary, whichever applies). In the case
of distributions under Item 3, determine the initial
life expectancy (or joint life and last survivor
expectancy) using the attained ages of the Depositor
and designated beneficiary as of their birthdays in the
year the Depositor reaches age 70 1/2. In the case of a
distribution in accordance with Item 4(b)(ii),
determine life expectancy using the attained age of the
designated beneficiary as of the beneficiary's birthday
in the year distributions are required to commence.
6. The owner of two or more individual retirement
accounts may use the "alternative method" described in
Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum
distribution requirements described above. This method
permits an individual to satisfy these requirements by
taking from one individual retirement account the
amount required to satisfy the requirement for another.
Article V
1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any
reports required under Section 408(i) and Regulations
Section 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the
Internal Revenue Service and the Depositor prescribed
by the Internal Revenue Service.
Article VI
Notwithstanding any other articles which may be added
or incorporated, the provisions of Articles I through
III and this sentence will be controlling. Any
additional articles that are not consistent with
Section 408(a) and related regulations will be invalid.
Article VII
This agreement will be amended from time to time to
comply with the provisions of the Code and related
regulations.
Article VIII
1. Investment of Account Assets
(a) All contributions to the custodial account shall
be invested in the shares of the Oak Ridge Growth
Fund or, if available, any other series of Oak
Ridge Growth Fund or other regulated investment
companies for which Oak Ridge Investments, L.L.C.
serves as Investment Advisor or designates as
being eligible for investment ("Investment
Company"). Shares of stock of an Investment
Company shall be referred to as "Investment
Company Shares." To the extent that two or more
funds are available for investment, contributions
shall be invested in accordance with the
depositor's investment election.
(b) Each contribution to the custodial account shall
identify the depositor's account number and be
accompanied by a signed statement directing the
investment of that contribution. The Custodian may
return to the Depositor, without liability for
interest thereon, any contribution which is not
accompanied by adequate account identification or
an appropriate signed statement directing
investment of that contribution.
(c) Contributions shall be invested in whole and
fractional Investment Company Shares at the price
and in the manner such shares are offered to the
public. All distributions received on Investment
Company Shares, including both dividend and
capital gain distributions, held in the custodial
account shall be reinvested in like shares. If any
distribution of Investment Company Shares may be
received in additional like shares or in cash or
other property, the Custodian shall elect to
receive such distribution in additional like
Investment Company Shares.
(d) All Investment Company Shares acquired by the
Custodian shall be registered in the name of the
Custodian or its nominee. The Depositor shall be
the beneficial owner of all Investment Company
Shares held in the custodial account and the
Custodian shall not vote any such shares, except
upon written direction of the Depositor, timely
received, in a form acceptable to the Custodian.
The Custodian agrees to forward to the Depositor
each prospectus, report, notice, proxy and related
proxy soliciting materials applicable to
Investment Company Shares held in the custodial
account received by the Custodian.
(e) The Depositor may, at any time, by written notice
to the Custodian, in a form acceptable to the
Custodian, redeem any number of shares held in the
custodial account and reinvest the proceeds in the
shares of any other Investment Company upon the
terms and within the limitations imposed by then
current prospectus of such other Investment
Company in which the Depositor elects to invest.
By giving such instructions, the Depositor will be
deemed to have acknowledged receipt of such
prospectus. Such redemptions and reinvestments
shall be done at the price and in the manner such
shares are then being redeemed or offered by the
respective Investment Companies.
2. Amendment and Termination
(a) Oak Ridge Investments, L.L.C., the Investment
Advisor for Oak Ridge Investments, L.L.C., may
amend the Custodial Account (including retroactive
amendments) by delivering to Custodian and to the
Depositor written notice of such amendment setting
forth the substance and effective date of the
amendment. The Custodian and the Depositor shall
be deemed to have consented to any such amendment
not objected to in writing by the Custodian or
Depositor as applicable within thirty (30)
days of receipt of the notice, provided that no
amendment shall cause or permit any part of the
assets of the custodial account to be diverted to
purposes other than for the exclusive benefit of
the Depositor or his or her beneficiaries.
(b) The Depositor may terminate the custodial account
at any time by delivering to the Custodian a
written notice of such termination.
(c) The custodial account shall automatically
terminate upon distribution to the Depositor or
his or her beneficiaries of its entire balance.
3. Taxes and Custodial Fees
Any income taxes or other taxes levied or assessed upon
or in respect of the assets or income of the custodial
account and any transfer taxes incurred shall be paid
from the custodial account. All administrative expenses
incurred by the Custodian in the performance of its
duties, including fees for legal services rendered to
the Custodian, in connection with the custodial
account, and the custodian's compensation shall be paid
from the custodial account, unless otherwise paid by
the Depositor or his or her beneficiaries. Sufficient
shares will be liquidated from the custodial account to
pay such fees and expenses.
The custodian's fees are set forth in a schedule
provided to the Depositor. Extraordinary charges
resulting from unusual administrative responsibilities
not contemplated by the schedule will be subject to
such additional charges as will reasonably compensate
the Custodian. Fees for refund of excess contributions,
transferring to a successor trustee or custodian, or
redemption/reinvestment of Investment Company Shares
will be deducted from the refund or redemption proceeds
and the remaining balance will be remitted to the
Depositor, or reinvested or transferred in accordance
with the depositor's instructions.
4. Reports and Notices
(a) The Custodian shall keep adequate records of
transactions it is required to perform hereunder.
After the close of each calendar year, the
Custodian shall provide to the Depositor or his or
her legal representative a written report or
reports reflecting the transactions effected by it
during such year and the assets and liabilities of
the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to
be given upon receipt by the Custodian at:
Firstar Trust Company, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701 or the Depositor at his or
her most recent address shown in the custodian's
records. The Depositor agrees to advise the
Custodian promptly, in writing, of any change of
address.
5. Designation of Beneficiary
The Depositor may designate a beneficiary or
beneficiaries to receive benefits from the custodial
account in the event of the depositor's death. In the
event the Depositor has not designated a beneficiary,
or if all beneficiaries shall predecease the Depositor,
the following persons shall take in the order named:
(a) The spouse of the Depositor;
(b) If the spouse shall predecease the Depositor or if
the Depositor does not have a spouse, then to the
depositor's estate.
The Depositor may also change or revoke any previously
made designation of beneficiary. A designation or
change or revocation of a designation shall be made by
written notice in a form acceptable to and filed with
the Custodian, prior to the complete distribution of
the balance in the custodial account. The last such
designation on file at the time of the depositor's
death shall govern. If a beneficiary dies after the
Depositor, but prior to receiving his or her entire
interest in the custodial account, the remaining
interest in the custodial account shall be paid to the
beneficiary's estate.
6. Multiple Individual Retirement Accounts
In the event the Depositor maintains more than one
individual retirement account (as defined in Section
408(a)) and elects to satisfy his or her minimum
distribution requirements described in Article IV above
by making a distribution for another individual
retirement account in accordance with Item 6 thereof,
the Depositor shall be deemed to have elected to
calculate the amount of his or her minimum distribution
under this custodial account in the same manner as
under the individual retirement account from which the
distribution is made.
7. Inalienability of Benefits
The benefits provided under this custodial account nor
the assets held therein shall be subject to alienation,
assignment, garnishment, attachment, execution or levy
of any kind and any attempt to cause such benefits or
assets to be so subjected shall not be recognized
except to the extent as may be required by law.
8. Rollover Contributions and Transfers
The Custodian shall have the right to receive rollover
contributions and to receive direct transfers from
other custodians or trustees. All contributions must be
made in cash or check.
9. Conflict in Provisions
To the extent that any provisions of this Article VIII
shall conflict with the provisions of Articles IV, V
and/or VII, the provisions of this Article VIII shall
govern.
10. Applicable State Law
This custodial account shall be construed, administered
and enforced according to the laws of the State of
Wisconsin.
11. Resignation or Removal of Custodian
The Custodian may resign at any time upon thirty (30)
days notice in writing to the Investment Company. Upon
such resignation, the Investment Company shall notify
the Depositor, and shall appoint a successor custodian
under this Agreement. The Depositor or the Investment
Company at any time may remove the Custodian upon 30
days written notice to that effect in a form acceptable
to and filed with the Custodian. Such notice must
include designation of a successor custodian. The
successor custodian shall satisfy the requirements of
Section 408(h) of the Code. Upon receipt by the
Custodian of written acceptance of such appointment by
the successor custodian, the Custodian shall transfer
and pay over to such successor the assets of and
records relating to the Custodial Account. The
Custodian is authorized, however, to reserve such sum
of money as it may deem advisable for payment of all
its fees, compensation, costs and expenses, or for
payment of any other liability constituting a charge on
or against the assets of the Custodial Account or on or
against the Custodian, and where necessary may
liquidate shares in the Custodial Account for such
payments. Any balance of such reserve remaining after
the payment of all such items shall be paid over to the
successor Custodian. The Custodian shall not be liable
for the acts or omissions of any predecessor or
successor custodian or trustee.
12. Limitation on Custodian Responsibility
The Custodian will not under any circumstances be
responsible for the timing, purpose or propriety of any
contribution or of any distribution made hereunder, nor
shall the Custodian incur any liability or
responsibility for any tax imposed on account of any
such contribution or distribution. Further, the
custodian shall not incur any liability or
responsibility in taking or omitting to take any action
based on any notice, election, or instruction or any
written instrument believed by the Custodian to be
genuine and to have been properly executed. The
Custodian shall be under no duty of inquiry with
respect to any such notice, election, instruction, or
written instrument, but in its discretion may request
any tax waivers, proof of signatures or other evidence
which it reasonably deems necessary for its protection.
The Depositor and the successors of the Depositor
including any executor or administrator of the
Depositor shall, to the extent permitted by law,
indemnify the Custodian and its successors and assigns
against any and all claims, actions or liabilities of
the Custodian to the Depositor or the successors or
beneficiaries of the Depositor whatsoever (including
without limitation all reasonable expenses incurred in
defending against or settlement of such claims, actions
or liabilities) which may arise in connection with this
Agreement or the Custodial Account, except those due to
the custodian's own bad faith, gross negligence or
willful misconduct. The Custodian shall not be under
any duty to take any action not specified in this
Agreement, unless the Depositor shall furnish it with
instructions in proper form and such instructions shall
have been specifically agreed to by the Custodian, or
to defend or engage in any suit with respect hereto
unless it shall have first agreed in writing to do so
and shall have been fully indemnified to its
satisfaction.
Exhibit 14(b)
Individual Retirement Account Disclosure Statement For
Roth (American Dream) IRAs
1. Am I Eligible to Contribute to a Roth IRA?
Anyone with compensation income whose adjusted
gross income does not exceed the limits described below
is eligible to contribute to a Roth IRA. You may also
establish a Roth IRA to receive rollover contributions
or transfers from another Roth IRA or, in some cases,
from a Traditional IRA. You may not roll amounts into a
Roth IRA from other retirement plans such as an
employer-sponsored qualified plan. However, current law
does not appear to prohibit a rollover from a qualified
plan into a Traditional IRA and then from the
Traditional IRA into a Roth IRA.
2. When Can I Make Contributions?
You may make annual contributions to your Roth IRA
any time up to and including the due date for filing
your tax return for the year, not including extensions.
Unlike a Traditional IRA, you may continue to make
regular contributions to your Roth IRA even after you
attain age 70 1/2. In addition, rollover contributions
and transfers (to the extent permitted as discussed
below) may be made at any time, regardless of your age.
3. How Much May I Contribute to a Roth IRA?
You may make annual contributions to a Roth IRA in
any amount up to 100% of your compensation for the year
or $2,000, whichever is less. The $2,000 limitation is
reduced by any contributions made by you or on your
behalf to any other individual retirement plan (such as
a Traditional IRA). (Legislation pending as of this
printing clarifies that, for this purpose, the term
individual retirement plan does not include SEP IRAs or
SIMPLE IRAs.) However, your annual contribution
limitation is not reduced by contributions you make to
an Education IRA that covers someone other than
yourself. Qualifying rollover contributions and
transfers are not subject to these limitations.
In addition, if you are married and file a joint
return, you may make contributions to your spouse's
Roth IRA. However, the maximum amount contributed to
both your own and to your spouse's Roth IRA may not
exceed 100% of your combined compensation or $4,000,
whichever is less. The maximum amount that may be
contributed to either your Roth IRA or your spouse's
Roth IRA is $2,000. Again, these dollar limits are
reduced by any contributions made by or on behalf of
you or your spouse to any other individual retirement
plan (such as a Traditional IRA), except that the limit
is not reduced for contributions either of you make to
an Education IRA for someone other than yourselves.
As noted in Item 1, your eligibility to contribute
to a Roth IRA depends on your adjusted gross income (as
defined below). The amount that you may contribute to a
Roth IRA is reduced proportionately for adjusted gross
income as calculated above which exceeds the applicable
dollar amount. The applicable dollar amount is $95,000
for a taxpayer filing as an individual or head of
household and $150,000 for a taxpayer filing as a
married individual filing a joint tax return. The
applicable dollar limit for a taxpayer filing as a
married individual filing a separate return is $0. If
your adjusted gross income as calculated above exceeds
the applicable dollar amount by $15,000 or less
($10,000 or less in the case of a married individual
filing jointly), you may make a contribution to a Roth
IRA. The amount you may contribute, however, will be
less than $2,000. (Legislation pending as of this
printing would change the phaseout range for a married
individual filing separately from $0 to $10,000.) Note
that the amount you may contribute to a Roth IRA is not
affected by your participation in an employer-sponsored
retirement plan.
For this purpose, your adjusted gross income (1)
is determined without regard to the exclusions from
income arising under Section 135 (exclusion of certain
savings bond interest), Section 137 (exclusion of
certain employer provided adoption expenses) and
Section 911 (certain exclusions applicable to U.S.
citizens or residents living abroad) of the Code, (2)
is reduced by the amount paid under an endowment
contract described in Section 408(b) of the Code which
is properly allocated to the cost of life insurance,
(3) takes into account the passive loss limitations
under Section 469 of the Code and any taxable benefits
under the Social Security Act and Railroad Retirement
Act as determined in accordance with Section 86 of the
Code, (4) does not take into account income from
rollovers of Traditional IRAs, and (5) does take into
account the deduction for a Traditional IRA.
(Legislation pending as of this printing indicates that
the deduction for a contribution to a Traditional IRA
would not be taken into account for determining your
adjusted gross income.)
To determine the amount you may contribute to a
Roth IRA (assuming you have at least $2,000 of income),
use the following calculations:
(a) Subtract the amount contributed on your behalf to
all Traditional IRAs and employer-sponsored
individual retirement plans from $2,000. This
amount is known as the "maximum potential
contribution."
(b) Subtract the applicable dollar amount from your
adjusted gross income as determined above. If the
result is $15,000 or more ($10,000 or more in the
case of a married individual filing jointly), you
cannot make a contribution to a Roth IRA.
(c) Divide the above figure by $15,000 ($10,000 in the
case of a married individual filing jointly), and
multiply that percentage by the maximum possible
contribution.
(d) Subtract the dollar amount (result from (c) above)
from the maximum possible contribution to
determine the amount you may contribute to a Roth
IRA.
(Legislation pending as of this printing indicates
that you are eligible to make a contribution to a Roth
IRA of the lesser of: (i) $2,000 (assuming you have at
least $2,000 of income) less contributions to all other
individual retirement accounts or (ii) $2,000 minus the
quantity $2,000 times the fraction determined in part
(c))
If the contribution limit is not a multiple of $10
then it should be rounded up to the next $10. If you
are eligible to make any contribution, you may make a
minimum $200 contribution.
Your contribution to a Roth IRA is not reduced by any
amount you contribute to an Education IRA for the
benefit of someone other than yourself. If you are the
beneficiary of an Education IRA, additional limits may
apply to you. Please contact your tax advisor for more
information.
4. Can I Roll Over or Transfer Amounts from Other
IRAs?
You are allowed to "roll over" a distribution or
transfer your assets from one Roth IRA to another
without any tax liability. Rollovers between Roth IRAs
are permitted once per year and must be accomplished
within 60 days after the distribution. In addition, if
you are a single, head of household or married filing
jointly taxpayer and your adjusted gross income is not
more than $100,000, you may roll over amounts from
another individual retirement plan (such as a
Traditional IRA) to a Roth IRA. Such amounts are
subject to tax as if they were additional income to you
for the year, but are not subject to the 10% penalty
tax. (However, under legislation pending as of this
printing, if the amount rolled over is distributed
before the end of the five-tax-year period beginning
with the beginning of the tax year of the rollover, a
10% penalty tax will apply to the taxed portion of the
rollover.)
If you roll over amounts from a Traditional IRA to
a Roth IRA during 1998, you may take advantage of
special tax treatment. Under the special rules, you may
take your rollover into income as if one quarter of the
amount rolled over was distributed to you in 1998 and
one quarter of the amount was distributed to you in
each of the following three years.
(Legislation pending as of this printing indicates
that if you die prior to taking all four amounts into
income, the remaining amounts are included in income
for the year of your death unless you have a spouse and
your spouse elects to take those amounts into the
spouse's income over the remaining period.)
Subject to the foregoing limits, you may also
directly convert a Traditional IRA to a Roth IRA with
similar tax results.
Furthermore, if you have made contributions to a
Traditional IRA during the year in excess of the
deductible limit, you may convert those nondeductible
IRA contributions to contributions to a Roth IRA
(subject to the contribution limit for a Roth IRA).
You may not roll over amounts to a Roth IRA from a
qualified retirement plan or any other retirement plan
that is not an individual retirement plan.
5. What if I Make an Excess Contribution?
Contributions that exceed the allowable maximum
for federal income tax purposes are treated as excess
contributions. A nondeductible penalty tax of 6% of the
excess amount contributed will be added to your income
tax for each year in which the excess contribution
remains in your account.
6. How Do I Correct an Excess Contribution?
If you make a contribution in excess of your
allowable maximum, you may correct the excess
contribution and avoid the 6% penalty tax for that year
by withdrawing the excess contribution and its earnings
on or before the date, including extensions, for filing
your tax return for the tax year for which the
contribution was made. Any earnings on the withdrawn
excess contribution may also be subject to the 10%
early distribution penalty tax if you are under age 59
1/2 or have not satisfied the five-year requirement
described below. In addition, although you will still
owe penalty taxes for one or more years, excess
contributions may be withdrawn after the time for
filing your tax return. Finally, excess contributions
for one year may be carried forward and applied against
the contribution limitation in succeeding years.
(Legislation pending as of this printing would permit
an individual who is partially or entirely ineligible
for a Roth IRA to transfer amounts of up to $2,000 to a
nondeductible Traditional IRA (subject to reduction for
amounts remaining in the Roth IRA and for other
Traditional IRA contributions).)
7. What Forms of Distribution Are Available from a
Roth IRA?
You may at any time request distribution of all or
any portion of your account. However, distributions
made prior to your attainment of age 59 1/2 (or in some
cases within five years of establishing your account)
may produce adverse tax consequences.
8. When Must Distributions from a Roth IRA Begin?
Unlike Traditional IRAs, there is no requirement
that you begin distribution of your account at any
particular age.
9. Are There Distribution Rules that Apply after My
Death?
Your account must be distributed after your death
in accordance with rules similar to those that apply to
distributions from a Traditional IRA. Thus, although
the IRS has not issued guidance it is expected that the
rules will require that your remaining interest in your
Roth IRA will, at the election of your beneficiary or
beneficiaries, (i) be distributed by December 31 of the
year in which occurs the fifth anniversary of your
death, or (ii) commence to be distributed by December
31 of the year following your death over a period not
exceeding the life or life expectancy of your
designated beneficiary or beneficiaries.
It is expected that two additional distribution
options will be available if your spouse is the
beneficiary: (i) payments to your spouse may commence
as late as December 31 of the year you would have
attained age 70 1,U2 and be distributed over a period
not exceeding the life or life expectancy of your
spouse, or (ii) your spouse can simply elect to treat
your Roth IRA as his or her own, in which case
distributions will be required to commence by April 1
following the calendar year in which your spouse
attains age 70 1/2.
10. How Are Distributions from a Roth IRA Taxed for
Federal Income Tax Purposes?
Amounts distributed to you are generally
excludable from your gross income if they (i) are paid
after you attain age 59 1/2, (ii) are made to your
beneficiary after your death, (iii) are attributable to
your becoming disabled, (iv) subject to various limits,
are made for the purchase of a first home (or for a
second or subsequent home in certain limited cases) for
you, your spouse, or your or your spouse's children,
grandchildren, or parents, or (v) are rolled over to
another Roth IRA.
Regardless of the foregoing, if you or your
beneficiary receive a distribution within the five-
taxable-year period starting with the beginning of the
year to which your initial contribution to your Roth
IRA applies, the earnings on your account are
includable in taxable income. In addition, if you roll
over funds to your Roth IRA from another individual
retirement plan (such as a Traditional IRA or another
Roth IRA into which amounts were rolled from a
Traditional IRA), the portion of a distribution
attributable to rolled-over amounts which exceeds the
amounts taxed in connection with the conversion to a
Roth IRA is includable in income (and subject to
penalty tax) if it is distributed prior to the end of
the five-tax-year period beginning with the start of
the tax year during which the rollover occurred. (Under
legislation pending at the date of this printing, an
amount taxed in connection with a rollover would be
subject to a 10% penalty tax if it is distributed
before the end of the five-tax-year period. The pending
legislation also suggests that if an individual makes
multiple taxable rollovers to the same Roth IRA, the
five-year period runs from the date of the most recent
rollover.)
In any event, any part of a distribution to you
that constitutes a return of your contributions will
not be included in your taxable income. Amounts
distributed to you are treated as coming first from
your nondeductible contributions. (Legislation pending
as of this printing clarifies that the next portion of
a distribution is treated as coming from amounts which
have been rolled over from a Traditional IRA and are
subject to the four-year recognition treatment
described above. Next, amounts are treated as coming
from other rollovers from a Traditional IRA. Any
remaining amounts are treated as distributed last.)
Any portion of your distribution which does not meet
the criteria for exclusion from gross income is also
subject to a 10% penalty tax.
Note that to the extent a distribution would be
taxable to you, neither you nor anyone else can qualify
for capital gains treatment for amounts distributed
from your account. Similarly, you are not entitled to
the special five- or ten-year averaging rule for lump-
sum distributions that may be available to persons
receiving distributions from certain other types of
retirement plans. Rather, the taxable portion of any
distribution is taxed to you as ordinary income. Your
Roth IRA is not subject to taxes on excess
distributions or on excess amounts remaining in your
account as of your date of death.
You may be required to indicate on distribution
requests whether or not federal income taxes should be
withheld on the taxable portion (if any) of a
distribution from a Roth IRA. Redemption requests not
indicating an election not to have federal income tax
withheld will be subject to withholding with respect to
the taxable portion (if any) of a distribution to the
extent required under federal law. (Note that
legislation pending as of this printing clarifies that,
for federal tax purposes, Roth IRAs are taxed
separately from Traditional IRAs, Roth IRAs with
rollovers are taxed separately from Roth IRAs without
rollovers, and Roth IRAs with rollovers with different
five-year periods are taxed separately.)
11. Are There Penalties for Early Distribution from a
Roth IRA?
As indicated above, earnings on your contributions
that are distributed before certain events are subject
to various taxes.
12. What if I Engage in a Prohibited Transaction?
If you engage in a "prohibited transaction," as
defined in Section 4975 of the Internal Revenue Code,
your account could lose its tax-favored status.
Examples of prohibited transactions are:
(a) the sale, exchange, or leasing of any property
between you and your account,
(b) the lending of money or other extensions of credit
between you and your account,
(c) the furnishing of goods, services, or facilities
between you and your account.
13. What if I Pledge My Account?
If you use (pledge) all or part of your Roth IRA
as security for a loan, your account may lose its tax-
favored status.
14. How Are Contributions to a Roth IRA Reported for
Federal Tax Purposes?
As of the date of this printing, the Internal
Revenue Service had not issued forms for reporting
information related to contributions to and
distributions from a Roth IRA.
15. How Are Earnings on My Account Calculated and
Allocated?
The method of computing and allocating annual
earnings is set forth in the Roth Individual Retirement
Account Custodial Agreement. The growth in value of
your IRA is neither guaranteed nor projected.
16. Is There Anything Else I Should Know?
Your Roth Individual Retirement Account Plan has
been approved as to form by the Internal Revenue
Service. The Internal Revenue Service approval is a
determination only as to the form of the Plan and does
not represent a determination of the merits of the Plan
as adopted by you. You may obtain further information
with respect to your Roth Individual Retirement Account
from any district office of the Internal Revenue
Service. The statute provides that Roth IRAs are to be
treated the same as Traditional IRAs for most purposes.
As the IRS clarifies its interpretation of the statute,
revised or updated information will be provided.
Roth Individual Retirement Custodial Account
The following constitutes an agreement
establishing a Roth IRA (under Section 408A of the
Internal Revenue Code) between the depositor and the
custodian.
Article I
1. If this Roth IRA is not designated as a Roth
Conversion IRA, then, except in the case of a rollover
contribution described in Section 408A(e), the
custodian will accept only cash contributions and only
up to a maximum amount of $2,000 for any tax year of
the depositor.
2. If this Roth IRA is designated as a Roth
Conversion IRA, no contributions other than IRA
Conversion Contributions made during the same tax year
will be accepted.
Article II
The $2,000 limit described in Article I is gradually
reduced to $0 between certain levels of adjusted gross
income (AGI). For a single depositor, the $2,000 annual
contribution is phased out between AGI of $95,000 and
$110,000; for a married depositor who files jointly,
between AGI of $150,000 and $160,000; and for a married
depositor who files separately, between $0 and $10,000.
In the case of a conversion, the custodian will not
accept IRA Conversion Contributions in a tax year if
the depositor's AGI for that tax year exceeds $100,000
or if the depositor is married and files a separate
return. Adjusted gross income is defined in Section
408A(c)(3) and does not include IRA Conversion
Contributions.
Article III
The depositor's interest in the balance in the
custodial account is nonforfeitable.
Article IV
1. No part of the custodial funds may be invested in
life insurance contracts, nor may the assets of the
custodial account be commingled with other property
except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
2. No part of the custodial funds may be invested in
collectibles (within the meaning of Section 408(m)
except as otherwise permitted by Section 408(m)(3),
which provides an exception for certain gold, silver,
and platinum coins, coins issued under the laws of any
state, and certain bullion.
Article V
1. If the depositor dies before his or her entire
interest is distributed to him or her and the grantor's
surviving spouse is not the sole beneficiary, the
entire remaining interest will, at the election of the
depositor or, if the depositor has not so elected, at
the election of the beneficiary or beneficiaries,
either:
(a) Be distributed by December 31 of the year
containing the fifth anniversary of the depositors
death, or
(b) Be distributed over the life expectancy of the
designated beneficiary starting no later than
December 31 of the year following the year of the
depositor's death.
If distributions do not begin by the date
described in (b), distribution method (a) will
apply.
2. In the case of distribution method 1.(b) above, to
determine the minimum annual payment for each year,
divide the grantor's entire interest in the trust as of
the close of business on December 31 of the preceding
year by the life expectancy of the designated
beneficiary using the attained age of the designated
beneficiary as of the beneficiary's birthday in the
year distributions are required to commence and
subtract 1 for each subsequent year.
3. If the depositor's spouse is the sole beneficiary
on the depositor's date of death, such spouse will then
be treated as the depositor.
Article VI
1. The depositor agrees to provide the custodian with
information necessary for the custodian to prepare any
reports required under Section 408(i) and
408A(d)(3)(E), regulations Sections 1.408-5 and 1.408-
6, and under guidance published by the Internal Revenue
Service.
2. The custodian agrees to submit reports to the
Internal Revenue Service and the depositor prescribed
by the Internal Revenue Service.
Article VII
Notwithstanding any other articles which may be added
or incorporated, the provisions of Articles I through
IV and this sentence will be controlling. Any
additional articles that are not consistent with
Section 408A, the related regulations, and other
published guidance will be invalid.
Article VIII
This Agreement will be amended from time to time to
comply with the provisions of the Code, related
regulations, and other published guidance. Other
amendments may be made with the consent of the persons
whose signatures appear below.
Article IX
1. Investment of Account Assets.
(a) All contributions to the custodial account shall
be invested in the shares of any regulated
investment company ("Investment Company") for
which Oak Ridge Investments, L.L.C. serves as
Investment Advisor, or any other regulated
investment company designated by the Investment
Advisor. Shares of stock of an Investment Company
shall be referred to as "Investment Company
Shares."
(b) Each contribution to the custodial account shall
identify the depositor's account number and be
accompanied by a signed statement directing the
investment of that contribution. The custodian
may return to the depositor, without liability for
interest thereon, any contribution which is not
accompanied by adequate account identification or
an appropriate signed statement directing
investment of that contribution.
(c) Contributions shall be invested in whole and
fractional Investment Company Shares at the price
and in the manner such shares are offered to the
public. All distributions received on Investment
Company Shares held in the custodial account shall
be reinvested in like shares. If any distribution
of Investment Company Shares may be received in
additional like shares or in cash or other
property, the custodian shall elect to receive
such distribution in additional like Investment
Company Shares.
(d) All Investment Company Shares acquired by the
custodian shall be registered in the name of the
custodian or its nominee. The depositor shall be
the beneficial owner of all Investment Company
Shares held in the custodial account and the
custodian shall not vote any such shares, except
upon written direction of the depositor. The
custodian agrees to forward to the depositor each
prospectus, report, notice, proxy and related
proxy soliciting materials applicable to
Investment Company Shares held in the
custodial account received by the custodian.
(e) The depositor may, at any time, by written notice
to the custodian, redeem any number of shares
held in the custodial account and reinvest the
proceeds in the shares of any other Investment
Company. Such redemptions and reinvestments shall
be done at the price and in the manner such shares
are then being redeemed or offered by the
respective Investment Companies.
2. Amendment and Termination.
(a) The custodian may amend the Custodial Account
(including retroactive amendments) by delivering
to the depositor written notice of such amendment
setting forth the substance and effective date of
the amendment. The depositor shall be deemed to
have consented to any such amendment not objected
to in writing by the depositor within thirty (30)
days of receipt of the notice, provided that no
amendment shall cause or permit any part of the
assets of the custodial account to be diverted to
purposes other than for the exclusive benefit of
the depositor or his or her beneficiaries.
(b) The depositor may terminate the custodial account
at any time by delivering to the custodian a
written notice of such termination.
(c) The custodial account shall automatically
terminate upon distribution to the depositor or
his or her beneficiaries of its entire balance.
3. Taxes and Custodial Fees.
Any income taxes or other taxes levied or assessed upon
or in respect of the assets or income of the custodial
account and any transfer taxes incurred shall be paid
from the custodial account. All administrative expenses
incurred by the custodian in the performance of its
duties, including fees for legal services rendered to
the custodian, and the custodian's compensation shall
be paid from the custodial account, unless otherwise
paid by the depositor or his or her beneficiaries.
The custodian's fees are set forth in a schedule
provided to the depositor. Extraordinary charges
resulting from unusual administrative responsibilities
not contemplated by the schedule will be subject to
such additional charges as will reasonably compensate
the custodian. Fees for refund of excess contributions,
transferring to a successor trustee or custodian, or
redemption/reinvestment of Investment Company Shares
will be deducted from the refund or redemption proceeds
and the remaining balance will be remitted to the
depositor, or reinvested or transferred in accordance
with the depositor's instructions.
4. Reports and Notices.
(a) The custodian shall keep adequate records of
transactions it is required to perform hereunder.
After the close of each calendar year, the
custodian shall provide to the depositor or his or
her legal representative a written report or
reports reflecting the transactions effected by it
during such year and the assets and liabilities of
the Custodial Account at the close of the year.
(b) All communications or notices shall be deemed to
be given upon receipt by the custodian at 615 E.
Michigan St., Milwaukee, WI 53202 or the depositor
at his most recent address shown in the
custodian's records. The depositor agrees to
advise the custodian promptly, in writing, of any
change of address.
5. Designation of Beneficiary.
The depositor may designate a beneficiary or
beneficiaries to receive benefits from the custodial
account in the event of the depositor's death. In the
event the depositor has not designated a beneficiary,
or if all beneficiaries shall predecease the depositor,
the following persons shall take in the order named:
(a) The spouse of the depositor;
(b) If the spouse shall predecease the depositor or if
the depositor does not have a spouse, then to the
personal representative of the depositor's estate.
6. Inalienability of Benefits.
The benefits provided under this custodial account
shall not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind
and any attempt to cause such benefits to be so
subjected shall not be recognized except to the extent
as may be required by law.
7. Rollover Contributions and Transfers.
Subject to the restrictions in Article I, the custodian
shall have the right to receive rollover contributions
and to receive direct transfers from other custodians
or trustees. All contributions must be made in cash or
check.
8. Conflict in Provisions.
To the extent that any provisions of this Article VIII
shall conflict with the provisions of Articles V, VI
and/or VIII, the provisions of this Article IX shall
govern.
9. Applicable State Law.
This custodial account shall be construed, administered
and enforced according to the laws of the State of
Wisconsin.
Exhibit 14(c)
Individual Retirement Account Disclosure Statement For
Education IRAs
1. Who is Eligible for an Education IRA?
Anyone may contribute to an Education IRA
regardless of his or her relationship to the
beneficiary. The beneficiary of an Education IRA must
be under age 18 at the time a contribution is made to
an Education IRA on his or her behalf. An Education
IRA may also be established to receive rollover
contributions or transfers from another Education IRA.
Education IRAs are subject to limitations based on the
status of the contributor as well as the status of the
beneficiary. For purposes of this discussion, except
as noted, the term "beneficiary" is used to refer to an
individual whose education is to be financed, in part
or in whole, through an Education IRA.
2. When Can I Make Contributions to an Education IRA?
You may make contributions to an Education IRA for
the calendar year regardless of your age; however, you
may not make a contribution to an Education IRA after
the beneficiary attains age 18. In addition, rollover
contributions and transfers (as discussed below) may be
made at any time, regardless of the age of the
beneficiary.
3. How Much May I Contribute to an Education IRA?
The total of all contributions made to all
Education IRAs that cover a particular beneficiary may
not exceed $500 in a taxable year. It is the joint
responsibility of the contributor and the beneficiary
to verify that excess contributions are not made on
behalf of a particular beneficiary. Qualifying
rollover contributions and transfers are not subject to
these limitations. Note that special rules apply to
contributions to Education IRAs for purposes of gift
and estate taxes.
In addition, if your adjusted gross income (or
combined income if you file a joint tax return) as
modified below exceeds certain limits, you are not
eligible to make a contribution to an Education IRA.
For this purpose your adjusted gross income is
increased by amounts excluded under Section 911
(certain exclusions applicable to U.S. citizens or
residents living abroad), Section 931 (certain
exclusions applicable to U.S. citizens or residents
living in Guam, American Samoa, or the Northern Mariana
Islands), and Section 933 (certain exclusions
applicable to U.S. citizens and residents living in
Puerto Rico) of the Code.
The amount you may contribute to an Education IRA
for a particular beneficiary is reduced proportionately
for adjusted gross income (as modified above) which
exceeds the applicable dollar amount. The applicable
dollar amount is $95,000 for an individual, a married
individual filing a separate tax return, or a head of
household and $150,000 for a married individual filing
a joint tax return. (These amounts are not adjusted
for cost-of-living changes or otherwise.) If your
adjusted gross income as modified above exceeds the
applicable dollar amount by $15,000 or less ($10,000 or
less in the case of a married individual filing
jointly), you may make a contribution to an Education
IRA. The amount you may contribute, however, will be
less than $500.
To determine the amount you may contribute to an
Education IRA, use the following calculations:
(a) Subtract the applicable dollar amount from your
adjusted gross income as modified above. If the
result is $15,000 or more ($10,000 or more in the
case of a married individual filing jointly), you
may not make a contribution to an Education IRA.
(b) Divide the above figure by $15,000 ($10,000 in the
case of a married individual filing jointly), and
multiply that percentage by $500.
(c) Subtract the dollar amount (result from (b) above)
from $500 to determine the amount that you may
contribute to an Education IRA.
In addition to the limitations described above,
the $500 may be reduced by other amounts contributed to
an individual retirement plan for the benefit of a
particular beneficiary, but is not affected by the
adjusted gross income of the beneficiary.
If the beneficiary of the Education IRA also
maintains a Traditional or Roth IRA, his or her overall
contributions to other individual retirement plans may
be limited. Please contact your tax advisor for more
information.
4. Can I Roll Over or Transfer Amounts from Another
Education IRA?
Amounts may be "rolled over" from one Education
IRA to another Education IRA benefiting the same
beneficiary. In addition, amounts may be rolled over
without any tax liability to benefit (i) the spouse of
the beneficiary, (ii) an ancestor of the beneficiary,
(iii) a descendant of the beneficiary, of the
beneficiary's parents, or of the beneficiary's spouse,
or (iv) the spouse of a lineal descendant of an
individual described in (iii). Rollovers between
Education IRAs may be made once per year and must be
accomplished within 60 days after the distribution.
5. What if I Make an Excess Contribution?
Contributions that exceed the allowable maximum
for federal income tax purposes are treated as excess
contributions. A nondeductible penalty tax of 6% of
the excess amount contributed must be paid for each
year in which the excess contribution remains in the
beneficiary's account.
6. How Do I Correct an Excess Contribution?
If a contribution in excess of the allowable
maximum is made, it may be corrected to avoid the 6%
penalty tax for that year by withdrawing the excess
contribution and its earnings on or before the date,
including extensions, for filing the tax return for the
contributor's tax year for which the contribution was
made. (Legislation pending as of this printing would
use the beneficiary's tax year rather than the
contributor's.) Any earnings on the withdrawn excess
contribution will be taxable in the year the excess
contribution was made and will be subject to a 10% tax
penalty.
7. What Forms of Distribution Are Available from an
Education IRA?
Distributions may be made as a lump sum of the
entire account, or distributions of a portion of the
account may be as requested.
8. When Must Distributions from an Education IRA
Begin?
There is no requirement that a beneficiary begin
distribution of an Education IRA account at any
particular age. (Legislation pending as of the date of
this printing would in general require distribution
within 30 days of the earlier of the beneficiary's
death or attainment of age 30 and would deem
distribution to occur for any amounts not distributed
within such time.)
9. Are There Distribution Rules That Apply After
Death?
Special rules apply in the case of the divorce or
death of a beneficiary of an Education IRA. (In
particular, under legislation pending as of this
printing, any balances to the credit of a beneficiary
must be distributed to his or her beneficiary within 30
days of death.)
10. How Are Distributions from an Education IRA Taxed
For Federal Income Tax Purposes?
Amounts distributed are generally excludable from
gross income if they do not exceed the beneficiary's
"qualified higher education expenses" for the year or
are rolled over to another Education IRA. "Qualified
higher education expenses" generally include the cost
of tuition, fees, books, supplies, and equipment for
enrollment at (i) accredited post-secondary educational
institutions offering credit toward a bachelor's
degree, an associate's degree, a graduate-level or
professional degree or another recognized post-
secondary credential and (ii) certain vocational
schools. In addition, room and board may be covered if
the beneficiary is at least a "half-time" student.
This amount may be reduced by certain scholarships,
qualified state tuition programs, HOPE, Lifetime
Learning tax credits, and other amounts paid on the
beneficiary's behalf. To the extent payments during
the year exceed such amounts, they are partially
taxable and partially nontaxable similar to payments
received from an annuity. Any taxable portion of a
distribution is subject to a 10% penalty tax in
addition to income tax unless the distribution is due
to the death or disability of the beneficiary or made
on account of scholarship received by the beneficiary.
A beneficiary may elect to waive the exclusion from
gross income for qualified higher education expenses
and treat the entire distribution as if it were a
payment from an annuity.
To the extent a distribution is taxable, capital
gains treatment does not apply to amounts distributed
from the account. Similarly, the special five- and ten-
year averaging rules for lump-sum distributions do not
apply to distributions from an Education IRA. The
taxable portion of any distribution is taxed as
ordinary income except the portion of a distribution
that represents a return of nondeductible
contributions.
The recipient of a distribution may need to
indicate on certain distribution requests whether or
not federal income taxes should be withheld.
Redemption requests not indicating an election not to
have federal income tax withheld will be subject to
withholding with respect to the taxable portion (if
any) of the distribution to the extent required under
federal law.
11. What if a Prohibited Transaction Occurs?
If a "prohibited transaction," as defined in
Section 4975 of the Internal Revenue Code, occurs, the
Education IRA could be disqualified. Rules similar to
those that apply to Traditional IRAs will apply.
12. What if the Education IRA is Pledged?
If all or part of the Education IRA is pledged as
security for a loan, rules similar to those that apply
to Traditional IRAs will apply. In general, those
rules provide that the amount pledged is treated as
distributed.
13. How Are Contributions to an Education IRA Reported
for Federal Tax Purposes?
As of the date of this Disclosure Statement, the
Internal Revenue Service had not issued forms for
reporting information related to contributions to and
distributions from an Education IRA.
14. How Are Earnings on an Education IRA Calculated
and Allocated?
The method of computing and allocating annual
earnings is expected to be set forth in an IRS pre-
approved Education Individual Retirement Account
Custodial Agreement. The growth in value of the IRA is
neither guaranteed nor projected.
15. Is There Anything Else I Should Know?
As the IRS clarifies its interpretation of the
Education IRA provisions of the Code, revised or
updated information will be provided to you.
Education Individual Retirement Custodial Account
The deposit whose name appears above is
establishing an education individual retirement
custodial account under Section 530 for the benefit of
the designated beneficiary whose name appears above
exclusively to pay for the qualified higher education
expenses, within the meaning of Section 530(b)(2), of
such designated beneficiary.
The custodian named above has provided the
depositor with a concise statement disclosing the
provisions governing Section 530. This disclosure
statement must include an explanation of the statutory
requirements applicable to, and the income tax
consequences of establishing and maintaining an account
under, Section 530. Providing the depositor with a copy
of Notice 97-60, 1997-46 I.R.B. 8 (November 17, 1997)
is considered a sufficient disclosure statement. The
custodian also will provide a copy of this form and the
disclosure statement to the responsible individual, as
defined in Article VI below, if the responsible
individual is not the same person as the depositor.
The depositor and the custodian make the following
agreement:
Article I
The custodian may accept additional cash contributions.
These contributions may be from the depositor, or from
any other individual, for the benefit of the designated
beneficiary, provided the designated beneficiary has
not attained the age of 18 as of the date such
contributions are made. Total contributions that are
not rollover contributions described in Section
530(d)(5) are limited to a maximum amount of $500 for
the taxable year.
Article II
The maximum aggregate contribution that an individual
may make to the custodial account in any year may not
exceed the $500 in total contributions that the
custodial account can receive. In addition, the maximum
aggregate contribution that an individual may make to
the custodial account in any year is phased out for
unmarried individuals who have modified adjusted gross
income (AGI) between $95,000 and $110,000 for the year
of the contribution and for married individuals who
file joint returns with modified AGI between $150,000
and $160,000 for the year of the contribution.
Unmarried individuals with modified AGI above $110,000
for the year and married individuals who file joint
returns and have modified AGI above $160,000 for the
year may not make a contribution for that year.
Modified AGI is defined in Section 530(c)(2).
Article III
No part of the custodial account funds may be invested
in life insurance contracts, nor may the assets of the
custodial account be commingled with other property
except in a common investment fund (within the meaning
of Section 530(b)(1)(D)).
Article IV
1. Any balance to the credit of the designated
beneficiary on the date on which such designated
beneficiary attains age 30 shall be distributed to the
designated beneficiary within 30 days of such date.
2. Any balance to the credit of the designated
beneficiary shall be distributed to the estate of the
designated beneficiary within 30 days of the date of
such designated beneficiary's death.
Article V
The depositor shall have the power to direct the
custodian regarding the investment of the above-listed
amount assigned to the custodial account (including
earnings thereon) in the investment choices offered by
the custodian. The responsible individual, however,
shall have the power to redirect the custodian
regarding the investment of such amounts, as well as
the power to direct the custodian regarding the
investment of all additional contributions (including
earnings thereon) to the custodial account. In the
event that the responsible individual does not direct
the custodian regarding the investment of additional
contributions (including earnings thereon), the initial
investment direction of the depositor also will govern
all additional contributions made to the custodial
account until such time as the responsible individual
otherwise directs the custodian. Unless otherwise
provided in this agreement, the responsible individual
also shall have the power to direct the custodian
regarding the administration, management, and
distribution of the account.
Article VI
The "responsible individual" named by the depositor
shall be a parent or guardian of the designated
beneficiary. The custodial account shall have only one
responsible individual at any time. If the responsible
individual becomes incapacitated or dies while the
designated beneficiary is a minor under state law, the
successor responsible individual shall be the person
named to succeed in that capacity by the preceding
responsible individual in a witnessed writing or, if no
successor is so named, the successor responsible
individual shall be the designated beneficiary's other
parent or successor guardian. Unless otherwise directed
by checking the option below, at the time that the
designated beneficiary attains the age of majority
under state law, the designated beneficiary becomes the
responsible individual.
_____ Option (This provision is effective only if
checked): The responsible individual shall continue to
serve as the responsible individual for the custodial
account after the designated beneficiary attains the
age of majority under state law and until such time as
all assets have been distributed from the custodial
account and the custodial account terminates. If the
responsible individual becomes incapacitated or dies
after the designated beneficiary reaches the age of
majority under state law, the responsible individual
shall be the designated beneficiary.
Article VII
The responsible individual _____ may or _____ may not
change the beneficiary designated under this agreement
to another member of the designated beneficiary's
family described in Section 529(e)(2) in accordance
with the custodian's procedures.
Article VIII
1. The depositor agrees to provide the custodian with
the information necessary for the custodian to prepare
any reports required under Section 530(h).
2. The custodian agrees to submit reports to the
Internal Revenue Service and the responsible individual
as prescribed by the Internal Revenue Service.
Article IX
Notwithstanding any other articles which may be added
or incorporated, the provisions of Articles I through
IV will be controlling. Any additional articles that
are not consistent with Section 530 and related
regulations will be invalid.
Article X
This agreement will be amended from time to time to
comply with the provisions of the Code and related
regulations. Other amendments may be made with the
consent of the depositor and the custodian whose
signatures appear below.
Article XI
1. Investment of Account Assets.
(a) All contributions to the custodial account shall
be invested in the shares of any regulated
investment company ("Investment Company") for
which Oak Ridge Investments, L.L.C. serves as
Investment Advisor, or any other regulated
investment company designated by the Investment
Advisor. Shares of stock of an Investment Company
shall be referred to as "Investment Company
Shares."
(b) Each contribution to the custodial account shall
identify the designated beneficiary's account
number and shall be accompanied by a signed
statement directing the investment of that
contribution into the designated beneficiary's
account. The custodian may return to the
contributor, without liability for interest
thereon, any contribution which is not accompanied
by such information and such appropriate signed
statement directing investment of that
contribution.
(c) Contributions shall be invested in whole and
fractional Investment Company Shares at the price
and in the manner such shares are offered to the
public. All distributions received on Investment
Company Shares held in the custodial account shall
be reinvested in like shares. If any distribution
of Investment Company Shares may be received in
additional like shares or in cash, the custodian
shall elect to receive such distribution in
additional like Investment Company Shares.
(d) All Investment Company Shares acquired by the
custodian shall be registered in the name of the
custodian or its nominee. The designated
beneficiary shall be the beneficial owner of all
Investment Company Shares held in the custodial
account and the custodian shall not vote any such
shares, except upon written direction of the
responsible individual. The custodian agrees to
forward to the responsible individual each
prospectus, report, notice, proxy and related
proxy soliciting materials applicable to
Investment Company Shares held in the custodial
account received by the custodian.
(e) The responsible individual may, at any time, by
written notice to the custodian, redeem any number
of shares held in the custodial account and
reinvest the proceeds in the shares of any other
Investment Company. Such redemptions and
reinvestments shall be done at the price and in
the manner such shares are then being redeemed or
offered by the respective Investment Companies.
(f) To the extent a responsible individual for the
designated beneficiary makes or has power to make
decisions as to the investment of the designated
beneficiary's account, that party acknowledges
that such decisions are binding and nonvoidable.
2. Amendment and Termination
(a) The custodian may amend the Custodial Account
(including retroactive amendments) by delivering
to the responsible individual written notice of
such amendment setting forth the substance and
effective date of the amendment. The responsible
individual shall be deemed to have consented to
any such amendment not objected to in writing by
the responsible individual within thirty (30) days
of receipt of the notice, provided that no
amendment shall cause or permit any part of the
assets of the custodial account to be diverted to
purposes other than for the exclusive benefit of
the designated beneficiary.
(b) The responsible individual may terminate the
custodial account at any time by delivering to the
custodian a written notice of such termination.
(c) The custodial account shall automatically
terminate upon distribution to the designated
beneficiary or his or her estate of its entire balance.
3. Taxes and Custodial Fees
Any income taxes or other taxes levied or assessed upon
or in respect of the assets or income of the custodial
account and any transfer taxes incurred shall be paid
from the custodial account. All administrative expenses
incurred by the custodian in the performance of its
duties, including fees for legal services rendered to
the custodian, and the custodian's compensation shall
be paid from the custodial account, unless otherwise
paid by the beneficiary or his or her estate.
The custodian's fees are set forth in a schedule
provided to the responsible individual. Extraordinary
charges resulting from unusual administrative
responsibilities not contemplated by the schedule will
be subject to such additional charges as will
reasonably compensate the custodian. Fees for refund of
excess contributions, transferring to a successor
trustee or custodian, or redemption /reinvestment of
Investment Company Shares will be deducted from the
refund or redemption proceeds and the remaining balance
will be remitted to the designated beneficiary, or
reinvested or transferred in accordance with the
responsible individual's instructions.
4. Reports and Notices
(a) The custodian shall keep adequate records of
transactions it is required to perform hereunder.
After the close of each calendar year, the
custodian shall provide to the responsible
individual a written report or reports reflecting
the transactions effected by it during such year
and the assets and liabilities of the Custodial
Account at the close of the year.
(b) All communications or notices shall be deemed to
be given upon receipt by the custodian at 615 E.
Michigan St., Milwaukee, WI 53202 or the
responsible individual at his most recent address
shown in the custodian's records. The responsible
individual agrees to advise the custodian
promptly, in writing, of any change of address.
5. Monitoring of Contribution Limitations Information
The custodian shall not be responsible for monitoring
the amount of contributions made to the designated
beneficiary's account or the income levels of any
depositor or contributor for purposes of assuring
compliance with applicable state or federal tax laws.
6. Inalienability of Benefits
The benefits provided under this custodial account
shall not be subject to alienation, assignment,
garnishment, attachment, execution or levy of any kind
and any attempt to cause such benefits to be so
subjected shall not be recognized except to the extent
as may be required by law. However, the responsible
individual may change the designated beneficiary under
the agreement to another member of the designated
beneficiary's family described in Internal Revenue Code
Section 529(e)(2) in accordance with the custodian's
procedures.
7. Rollover Contributions and Transfers
The custodian shall have the right to receive rollover
contributions and to receive direct transfers from
other custodians or trustees. All contributions must be
made in cash or check.
8. Conflict in Provisions
To the extent that any provisions of this Article XI on
the Education IRA Application shall conflict with the
provisions of Articles V through VIII or X, the
provisions of this Article XI shall govern.
9. Applicable State Law
This custodial account shall be construed, administered
and enforced according to the laws of the State of
Wisconsin.
Exhibit 15.1
OAK RIDGE FUNDS, INC.
RULE 12b-1 DISTRIBUTION PLAN
CLASS A SHARES OF OAK RIDGE GROWTH FUND
The following Rule 12b-1 Distribution Plan (the
"Plan") has been adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended (the
"Act"), by the Board of Directors of Oak Ridge Funds,
Inc. (the "Company"), a Maryland Corporation, on behalf
of the Class A shares of the Oak Ridge Growth Fund (the
"Fund"), the first and, currently, only series of the
Company. The Plan has been adopted so as to allow the
Company to make payments as contemplated herein, in
conjunction with the distribution of the Class A shares
of the Fund. In considering whether the Company should
adopt and implement the Plan, the Board of Directors of
the Company has evaluated such information as it deemed
necessary to make an informed determination as to
whether the Plan should be adopted and implemented and
has considered such pertinent factors as it deemed
necessary to form the basis for its decision with
respect thereto, and has determined that there is a
reasonable likelihood that the adoption and
implementation of the Plan will benefit the Company and
the Class A shareholders of the Fund.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE COMPANY TO PROMOTE THE SALE OF THE
FUND'S CLASS A SHARES
(a) The Company, on behalf of the Class A
shares of the Fund, will pay Oak Ridge
Investments, Inc. (the "Distributor"), as a
principal underwriter of the Fund's shares, a
distribution fee of up to 0.25% per annum of the
average daily net assets of the Class A shares.
The Distributor may pay all or a portion of this
fee to any securities dealer, financial
institution or any other person (the "Recipient")
who renders assistance in distributing or
promoting the sale of the Class A shares pursuant
to a written agreement (the "Rule 12b-1 Related
Agreement"), a form of which is attached hereto as
Appendix A. To the extent such fee is not paid to
such persons, the Distributor may use the fee for
its distribution expenses incurred in connection
with the sale of the Class A shares. Payment of
the distribution fee shall be made quarterly,
within 30 days after the close of the quarter for
which the fee is payable, upon the Distributor
forwarding to the Board of Directors of the
Company the written report required by Section 2
of this Plan; provided that the aggregate payments
by the Company, on behalf of the Fund's Class A
shares, under the Plan in any month to the
Distributor and all Recipients shall not exceed
0.25% of the average net assets of the Class A
shares for that quarter; and provided further that
no fee shall be paid in excess of the distribution
expenses verified in a written report and
submitted by the Distributor to the Board of
Directors of the Company as required under Section
2 of this Plan.
(b) No Rule 12b-1 Related Agreement shall be
entered into, and no payments shall be made
pursuant to any Rule 12b-1 Related Agreement,
unless such Rule 12b-1 Related Agreement is in
writing and has first been delivered to and
approved by a vote of a majority of the Board of
Directors of the Company, and of a majority of the
members of the Board of Directors of the Company
who are not "interested persons" of the Company,
as defined in the Act, and who have no direct or
indirect financial interest in the operation of
the Plan or in any Rule 12b-1 Related Agreement
(the "Disinterested Directors"), cast in person at
a meeting called for the purpose of voting on such
Rule 12b-1 Related Agreement.
(c) Any Rule 12b-1 Related Agreement shall
describe the services to be performed by the
Recipient and shall specify the amount of, or the
method for determining, the compensation to the
Recipient.
(d) No Rule 12b-1 Related Agreement may be
entered into unless it provides (i) that it may be
terminated at any time, without the payment of any
penalty, by vote of a majority of the
Disinterested Directors or by vote of a majority
of the outstanding voting securities of the Class
A shares of the Fund on not more than 60 days'
written notice to the other party to the Rule 12b-
1 Related Agreement, and (ii) that the Rule 12b-1
Related Agreement shall automatically terminate in
the event of its assignment.
(e) Any Rule 12b-1 Related Agreement shall
continue in effect for a period of more than one
year from the date of its execution only if such
continuance is specifically approved at least
annually by a vote of a majority of the Board of
Directors of the Company, and of the Disinterested
Directors, cast in person at a meeting called for
the purpose of voting on such Rule 12b-1 Related
Agreement.
2. QUARTERLY REPORTS
The Distributor shall provide to the Board of
Directors of the Company, and the Board of
Directors shall review, at least quarterly, a
written report of all amounts expended pursuant to
the Plan. This report shall include the identity
of the Recipient of each payment and the purpose
for which the amounts were expended and such other
information as the Board of Directors may
reasonably request.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective immediately upon
approval by both (a) the vote of a majority of the
Board of Directors of the Company, and of the
Disinterested Directors, cast in person at a
meeting called for the purpose of voting on the
approval of the Plan and (b) the vote of a
majority of the outstanding voting securities of
the Class A shares of the Fund. The Plan shall
continue in effect for a period of one year from
its effective date unless terminated pursuant to
its terms. Thereafter, the Plan shall continue
from year to year, provided that such continuance
is approved at least annually by a vote of a
majority of the Board of Directors of the Company,
and of the Disinterested Directors, cast in person
at a meeting called for the purpose of voting on
such continuance. The Plan may be terminated at
any time by the vote of (a) a majority of the
Disinterested Directors or (b) a majority of the
outstanding voting securities of the Class A
shares of the Fund.
4. SELECTION OF DISINTERESTED DIRECTORS
During the period in which the Plan is effective,
the selection and nomination of those directors of
the Company who are Disinterested Directors of the
Company shall be committed to the discretion of
the Disinterested Directors.
5. AMENDMENTS
All material amendments of the Plan shall be in
writing and shall be approved by a vote of a
majority of the Board of Directors of the Company,
and of the Disinterested Directors, cast in person
at a meeting called for the purpose of voting on
such amendment. In addition, the Plan may not be
amended to increase materially the amount to be
spent by the Company, on behalf of the Class A
shares of the Fund, hereunder without approval by
a majority of the outstanding voting securities of
the Class A shares of the Fund.
APPENDIX A
Rule 12b-1 Related Agreement
Oak Ridge Investments, Inc.
233 North Michigan Avenue, Suite 1807
Chicago, Illinois 60601
_____________, 199_
[Recipient's Name and Address]
_____________________
_____________________
Ladies and Gentlemen:
This letter will confirm our understanding and
agreement with respect to payments to be made to you
pursuant to a plan of distribution (the "Plan") adopted
by Oak Ridge Funds, Inc. (the "Company") pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "Act"), with respect to the Class A shares
of the Oak Ridge Growth Fund (the "Fund"), the
Company's first and, currently, only series of shares.
The Plan and this related agreement (the "Rule 12b-1
Related Agreement") have been approved by a majority of
the Board of Directors of the Company, including a
majority of the Board of Directors who are not
"interested persons" of the Company, as defined in the
Act, and who have no direct or indirect financial
interest in the operation of the Plan or in this or any
other Rule 12b-1 Related Agreement (the "Disinterested
Directors"), cast in person at a meeting called for the
purpose of voting thereon. Such approval included a
determination by the Board of Directors of the Company
that, in the exercise of its reasonable business
judgment and in light of its fiduciary duties, there is
a reasonable likelihood that the Plan will benefit the
Company and the Class A shareholders of the Fund. The
Plan has also been approved by a vote of at least a
majority of the outstanding voting securities, as
defined in the Act, of the Class A shares of the Fund.
1. To the extent you provide distribution and
marketing services in the promotion of the Fund's Class
A shares, including furnishing services and assistance
to your customers who invest in and own Class A shares
of the Fund, including, but not limited to, answering
routine inquiries regarding the Fund and assisting in
changing distribution options, account designations and
addresses, we shall pay you a fee [of up to 0.25%]
______ on an annual basis of the average daily net
assets of the Fund's Class A shares which are owned of
record by your firm as nominee for your customers or
which are owned by those customers of your firm whose
records, as maintained by the Fund or its agent,
designate your firm as the customer's dealer of record.
We reserve the right to increase, decrease or
discontinue the fee at any time in our sole discretion
upon written notice to you.
We shall make the determination of the net asset
value of Class A shares, which determination shall be
made in the manner specified in the current Prospectus
relating to such shares, on or about the [45th day] of
each quarter and pay to you quarterly, on the basis of
such determination, the fee specified above. No such
quarterly fee will be paid to you with respect to
shares purchased by you and redeemed or repurchased by
the Fund, its agent or us within [seven (7) business
days] after the date of our confirmation of such
purchase. In addition, no such quarterly fee will be
paid to you with respect to any of your customers if
the amount of such fee based upon the value of such
customer's Class A shares will be [less than $1.00.]
Payment of such quarterly fee shall be made within 45
days after the close of each quarter for which such fee
is payable.
2. You shall furnish us with such information as
shall reasonably be requested by the Board of Directors
of the Company, on behalf of the Fund, with respect to
the fees paid to you pursuant to this Rule 12b-1
Related Agreement.
3. We shall furnish to the Board of Directors of
the Company, for its review, on a quarterly basis, a
written report of the amounts expended under the Plan
by us and the purposes for which such expenditures were
made.
4. This Rule 12b-1 Related Agreement may be
terminated (i) by the vote of a majority of the
Disinterested Directors of the Company or by a vote of
majority of the outstanding shares of the Class A
shares of the Fund on sixty (60) days' written notice,
without payment of any penalty or (ii) by any act which
terminates the Distribution Agreement between the
Company and us. In addition, this Rule 12b-1 Agreement
shall terminate immediately in the event of its
assignment. This Rule 12b-1 Related Agreement may be
amended by us upon written notice to you, and you shall
be deemed to have consented to such amendment upon
effecting any purchases of shares for your own account
or on behalf of any of your customer's accounts
following your receipt of such notice.
5. The provisions of the Distribution Agreement
between the Company and us are incorporated herein by
reference. This Rule 12b-1 Related Agreement shall
become effective on the date accepted by you and shall
continue in full force and effect so long as the
continuance of the Distribution Agreement, the Plan and
this Rule 12b-1 Related Agreement are approved at least
annually by a vote of the Board of Directors of the
Company and of the Disinterested Directors, cast in
person at a meeting called for the purpose of voting
thereon. All communications to us should be sent to
the above address. Any notice to you shall be duly
given if mailed or telegraphed to you at the address
specified by you below. This Rule 12b-1 Related
Agreement shall be construed under the laws of the
State of Illinois.
Oak Ridge Investments, Inc.
By:__________________________
(Authorized Signature)
Accepted:
__________________________
(Dealer's Name)
___________________________
(Street Address)
___________________________
(City) (State) (ZIP)
___________________________
(Telephone No.)
___________________________
(Facsimile No.)
By:___________________________
(Authorized Signature of Dealer)
Exhibit 15.2
OAK RIDGE FUNDS, INC.
RULE 12b-1 DISTRIBUTION AND SERVICING PLAN
CLASS C SHARES OF OAK RIDGE GROWTH FUND
The following Rule 12b-1 Distribution and
Servicing Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940,
as amended (the "Act"), by Oak Ridge Funds, Inc. (the
"Company"), a Maryland Corporation, on behalf of the
Class C shares of the Oak Ridge Growth Fund (the
"Fund"), a series of the Company. The Plan has been
approved by a majority of the Company's Board of
Directors, including a majority of the directors who
are not interested persons of the Company and who have
no direct or indirect financial interest in the
operation of the Plan (the "Disinterested Directors"),
cast in person at a meeting called for the purpose of
voting on such plan.
In approving the Plan, the Board of Directors
determined, in the exercise of its reasonable business
judgment and in light of its fiduciary duties, that
adoption of the Plan would be prudent and in the best
interests of the shareholders of the Class C shares and
that, as a result, there is a reasonable likelihood
that the Plan will benefit such shareholders.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE COMPANY TO PROMOTE THE SALE OF,
AND TO SERVICE, THE CLASS C SHARES
(a) The Company, on behalf of the Class C
shares of the Fund, will pay Oak Ridge
Investments, Inc. (the "Distributor"), as a
principal underwriter of the Fund's shares, a
distribution fee for the promotion and
distribution of the Class C shares of up to 0.75%
per annum of the average daily net assets of the
Class C shares. The Company will also pay the
Distributor a service fee for personal services
provided to shareholders and/or the maintenance of
shareholder accounts of up to 0.25% per annum of
the average daily net assets of the Class C
shares. The Distributor may pay all or a portion
of the distribution and/or service fee to any
securities dealer, financial institution or any
other person (the "Recipient") who renders
assistance in promoting or distributing the sale
of the Class C shares or who provides certain
shareholder services to Class C shareholders
pursuant to a written agreement (the "Rule 12b-1
Related Agreement"), a form of which is attached
hereto as Appendix A. To the extent such
distribution and/or service fee is not paid to
such persons, the Distributor may use the fee for
its distribution expenses incurred in connection
with the sale of Class C shares and for any of its
shareholder servicing expenses incurred in
connection with servicing the holders of the Class
C shares. Payment of the distribution and service
fee shall be made quarterly, within 30 days after
the close of the quarter for which the fee is
payable, upon the Distributor forwarding to the
Board of Directors of the Company the written
report required by Section 2 of this Plan;
provided that the aggregate payments by the
Company, on behalf of the Fund's Class C shares,
under the Plan to the Distributor and all
Recipients shall not exceed 1.00% (on an
annualized basis) of the average net assets of the
Class C shares for that quarter; and provided
further that no fee shall be paid in excess of the
distribution and servicing expenses verified in a
written report and submitted by the Distributor to
the Board of Directors of the Company as required
under Section 2 of this Plan.
(b) No Rule 12b-1 Related Agreement shall be
entered into, and no payments shall be made
pursuant to any Rule 12b-1 Related Agreement,
unless such Rule 12b-1 Related Agreement is in
writing and has first been delivered to and
approved by a vote of a majority of the Board of
Directors of the Company, and of a majority of the
Disinterested Directors, cast in person at a
meeting called for the purpose of voting on such
Rule 12b-1 Related Agreement. The form of the
Rule 12b-1 Related Agreement attached hereto as
Appendix A has been approved by the Company's
Board of Directors as specified above.
(c) Any Rule 12b-1 Related Agreement shall
describe the services to be performed by the
Recipient and shall specify the amount of, or the
method for determining, the compensation to the
Recipient.
(d) No Rule 12b-1 Related Agreement may be
entered into unless it provides (i) that it may be
terminated at any time, without the payment of any
penalty, by vote of a majority of the
Disinterested Directors or by vote of a majority
of the outstanding voting securities of the Class
C shares of the Fund on not more than 60 days'
written notice to the other party to the Rule 12b-
1 Related Agreement, and (ii) that it shall
automatically terminate in the event of its
assignment.
(e) Any Rule 12b-1 Related Agreement shall
continue in effect for a period of more than one
year from the date of its execution only if such
continuance is specifically approved at least
annually by a vote of a majority of the Board of
Directors of the Company, and of the Disinterested
Directors, cast in person at a meeting called for
the purpose of voting on such Rule 12b-1 Related
Agreement.
2. QUARTERLY REPORTS
The Distributor shall provide to the Board of
Directors of the Company, and the Board of
Directors shall review, at least quarterly, a
written report of all amounts expended pursuant to
the Plan. This report shall include the identity
of the Recipient of each payment and the purpose
for which the amounts were expended and such other
information as the Board of Directors may
reasonably request.
3. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective immediately
upon approval by the vote of a majority of the
Board of Directors of the Company, and of the
Disinterested Directors, cast in person at a
meeting called for the purpose of voting on the
approval of the Plan. The Plan shall continue in
effect for a period of one year from its effective
date unless terminated pursuant to its terms.
Thereafter, the Plan shall continue from year to
year, provided that such continuance is approved
at least annually by a vote of a majority of the
Board of Directors of the Company, and of the
Disinterested Directors, cast in person at a
meeting called for the purpose of voting on such
continuance. The Plan may be terminated at any
time, without the payment of any penalty, by the
vote of (a) a majority of the Disinterested
Directors, or (b) a majority of the outstanding
voting securities of the Class C shares of the
Fund.
4. SELECTION OF DISINTERESTED DIRECTORS
During the period in which the Plan is
effective, the selection and nomination of those
directors of the Company who are Disinterested
Directors of the Company shall be committed to the
discretion of the Disinterested Directors.
5. AMENDMENTS
All material amendments of the Plan shall be
in writing and shall be approved by a vote of a
majority of the Board of Directors of the Company,
and of the Disinterested Directors, cast in person
at a meeting called for the purpose of voting on
such amendment. In addition, the Plan may not be
amended to increase materially the amount to be
spent by the Company, on behalf of the Class C
shares of the Fund, hereunder without approval by
a majority of the outstanding voting securities of
the Class C shares of the Fund.
APPENDIX A
Rule 12b-1 Related Agreement
Oak Ridge Investments, Inc.
233 North Michigan Avenue, Suite 1807
Chicago, Illinois 60601
____________, 199__
[Recipient's Name and Address]
Ladies and Gentlemen:
This letter will confirm our understanding and
agreement with respect to payments to be made to you
pursuant to a distribution and servicing plan (the
"Plan") adopted by Oak Ridge Funds, Inc. (the
"Company") pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended (the "Act"), with
respect to the Class C shares of the Oak Ridge Growth
Fund (the "Fund"), a series of the Company. The Plan
and this related agreement (the "Rule 12b-1 Related
Agreement") have been approved by a majority of the
Board of Directors of the Company, including a majority
of the Board of Directors who are not "interested
persons" of the Company, as defined in the Act, and who
have no direct or indirect financial interest in the
operation of the Plan or in this or any other Rule 12b-
1 Related Agreement (the "Disinterested Directors"),
cast in person at a meeting called for the purpose of
voting thereon. Such approval included a determination
by the Board of Directors of the Company that, in the
exercise of its reasonable business judgment and in
light of its fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Class C
shareholders of the Fund.
1(a). To the extent you provide distribution
and marketing services in the promotion of shares of
the Fund's Class C shares, we shall pay a distribution
fee to you of up to 0.75% per annum of the average
daily net assets of the Fund's Class C shares which are
owned of record by your firm as nominee for your
customers or which are owned by those customers of your
firm whose records, as maintained by the Company or its
agent, designate your firm as the customer's dealer of
record. We reserve the right to increase, decrease or
discontinue the distribution fee at any time in our
sole discretion upon written notice to you.
(b). To the extent you provide personal services
to holders of the Fund's Class C shares, including
furnishing services and assistance to your customers
who invest in and own shares of such class of shares,
answering routine inquiries regarding the Fund and the
Class C shares and assisting in changing distribution
options, account designations and addresses, we shall
pay to you a service fee of up to 0.25% per annum of
the average daily net assets of the Fund's Class C
shares which are owned of record by your firm as
nominee for your customers or which are owned by those
customers of your firm whose records, as maintained by
the Company or its agent, designate your firm as the
customer's dealer of record. We reserve the right to
increase, decrease or discontinue the service fee at
any time in our sole discretion upon written notice to
you.
(c). We shall make the determination of the net
asset value of the Class C shares, which determination
shall be made in the manner specified in the current
Prospectus relating to such shares, and pay to you
quarterly, on the basis of such determination, the fees
specified above; provided that the aggregate payments
by us to you in any one quarter shall not exceed 1.00%
(on an annualized basis) of the average net assets of
the Class C shares for such quarter. No such quarterly
fees will be paid to you with respect to shares
purchased by you and redeemed or repurchased by the
Company, its agent or us within seven (7) business days
after the date of our confirmation of such purchase.
In addition, no such quarterly fees will be paid to you
with respect to any of your customers if the amount of
such fees based upon the value of such customer's Class
C shares will be less than $1.00. Payment of such
quarterly fees shall be made within 45 days after the
close of each quarter for which such fees are payable.
2. You shall furnish us with such information as
shall reasonably be requested by the Board of Directors
of the Company with respect to the fees paid to you
pursuant to this Rule 12b-1 Related Agreement.
3. We shall furnish to the Board of Directors of
the Company, for its review, on a quarterly basis, a
written report of the amounts expended under the Plan
by us and the purposes for which such expenditures were
made.
4. This Rule 12b-1 Related Agreement may be
terminated (i) by the vote of a majority of the
Disinterested Directors of the Company or by a vote of
majority of the outstanding shares of the Class C
shares of the Fund on sixty (60) days' written notice,
without payment of any penalty or (ii) by any act which
terminates the Distribution Agreement between the
Company and us. In addition, this Rule 12b-1 Related
Agreement shall terminate immediately in the event of
its assignment. This Rule 12b-1 Related Agreement may
be amended by us upon written notice to you, and you
shall be deemed to have consented to such amendment
upon effecting any purchases of shares for your own
account or on behalf of any of your customer's accounts
following your receipt of such notice.
5. The provisions of the Distribution Agreement
between the Company and us are incorporated herein by
reference. This Rule 12b-1 Related Agreement shall
become effective on the date accepted by you and shall
continue in full force and effect so long as the
continuance of the Distribution Agreement, the Plan and
this Rule 12b-1 Related Agreement are approved at least
annually by a vote of the Board of Directors of the
Company and of the Disinterested Directors, cast in
person at a meeting called for the purpose of voting
thereon. All communications to us should be sent to
the above address. Any notice to you shall be duly
given if mailed or telegraphed to you at the address
specified by you below. This Rule 12b-1 Related
Agreement shall be construed under the laws of the
State of Illinois.
Oak Ridge Investments, Inc.
By: ______________________
(Authorized Signature)
Accepted:
_________________________
(Dealer's Name)
_________________________
(Street Address)
_________________________
(City) (State) (ZIP)
_________________________
(Telephone No.)
_________________________
(Facsimile No.)
By:______________________
(Authorized Signature of Dealer)
Exhibit 18
OAK RIDGE FUNDS, INC.
RULE 18f-3
MULTIPLE CLASS PLAN
Oak Ridge Funds, Inc. (the "Company"), a
registered investment company currently consisting of
the Oak Ridge Growth Fund (the "Fund"), has elected to
rely on Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), in offering multiple
classes of shares of the Fund. The Board of Directors
of the Company has determined that the following plan
(the "Plan") is in the best interests of each class
individually and the Company as a whole:
1. Class Designation. Fund shares will be
designated either Class A or Class C.
2. Class Characteristics. Each class of shares
will represent interests in the same portfolio of
investments and will be identical in all respects to
the other class, except as set forth below:
Class A: Class A shares will
be sold subject to a maximum front-
end sales charge of 4.25%, subject
to certain exceptions as set forth
in the current prospectus for the
Class A shares. Class A shares
will also be subject to a
distribution plan adopted pursuant
to Rule 12b-1 under the 1940 Act
which provides for an annual
distribution fee of up to 0.25% of
the average daily net assets of
Class A shares. The distribution
plan fees for the Class A shares
will be used to reimburse the
Fund's distributor for distributing
the Class A shares.
Class C: Class C shares will
be offered for sale at net asset
value per share without the
imposition of a sales charge.
However, Class C shares will be
subject to a distribution plan
adopted pursuant to Rule 12b-1
under the 1940 Act which provides
for an annual distribution fee of
up to 1.00% of the average daily
net assets of Class C shares.
(0.25%) of this fee constitutes a
service fee which is used for
personal service and/or the
maintenance of shareholder
accounts). The distribution plan
fees for the Class C shares will be
used to reimburse the Fund's
distributor for distributing the
Class C shares.
3. Expense Allocations. The following expenses
will be allocated on a class-by-class basis, to the
extent practicable: (i) fees under the distribution
plans; (ii) printing and postage expenses related to
preparing and distributing materials to existing
shareholders of a particular class; (iii) Securities
and Exchange Commission and blue sky registration fees
incurred on behalf of the shareholders of a particular
class; (iv) the expense of administrative personnel and
services required to support the shareholders of a
particular class; (v) accounting, auditor, litigation
or other legal expenses relating solely to a particular
class; (vi) transfer agent fees identified by the
transfer agent as being attributable to a particular
class; and (vii) expenses incurred in connection with
shareholder meetings as a result of issues relating to
a particular class. Income, realized and unrealized
capital gains and losses, and expenses of the Fund not
allocated to a particular class will be allocated on
the basis of the net asset value of each class.
Notwithstanding the foregoing, a service provider for
the Fund may waive or reimburse the expenses of a
specific class or classes to the extent permitted under
Rule 18f-3 of the 1940 Act.
4. Exchanges and Conversions. There are no
exchange or conversion features associated with the
Class A or Class C shares.
5. General. Each class will vote exclusively
with respect to any matter related solely to that
class. Each class will vote separately with respect to
any matter in which the interests of one class differ
from the interests of the other class. On an ongoing
basis, the Board of Directors will monitor the Plan for
any material conflicts between the interests of the
classes of shares. The Board of Directors will take
such action as is reasonably necessary to eliminate any
conflict that develops. The Fund's investment adviser
and distributor will be responsible for alerting the
Board of Directors to any material conflicts that may
arise. Any material amendment to this Plan must be
approved by a majority of the Board of Directors,
including a majority of the directors who are not
interested persons of the Company, as defined in the
1940 Act. This Plan is qualified by and subject to the
then current prospectus for the applicable class, which
contains additional information about that class.
