As filed with the Securities and Exchange Commission on March 1, 1999
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. 9 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 10
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).
[X] immediately upon filing pursuant to
paragraph (b) of Rule 485
[ ] on March 1, 1999 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
<PAGE>
PROSPECTUS
March 1, 1999
Oak Ridge Funds, Inc.
Oak Ridge Small Cap Equity Fund
Oak Ridge Large Cap Equity Fund
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-407-7298
The investment objective of both the Oak Ridge
Small Cap Equity Fund (the "Small Cap Fund")
(previously known as the Oak Ridge Growth Fund) and the
Oak Ridge Large Cap Equity Fund (the "Large Cap Fund")
is capital appreciation. Each Fund seeks to achieve
its investment objective by investing primarily in
equity securities of domestic small capitalization or
large capitalization, as the case may be, companies
that Oak Ridge Investments, LLC (the "Advisor")
believes have the potential to appreciate faster than
the general market.
This Prospectus contains information you should
consider before you invest in the Funds. Please read
it carefully and keep it for future reference.
___________________
Neither the Securities and Exchange Commission
("SEC") nor any state securities commission has approved
or disapproved of the securities offered by this Prospectus,
nor has the SEC or any state securities commission passed upon
the adequacy or accuracy of this Prospectus. Any representation
to the contrary is a criminal offense.
___________________
<PAGE>
TABLE OF CONTENTS
HIGHLIGHTS 3
FEES AND EXPENSES OF THE FUNDS 5
INVESTMENT OBJECTIVE 6
INVESTMENT STRATEGY 6
IMPLEMENTATION OF INVESTMENT OBJECTIVE 7
FINANCIAL HIGHLIGHTS OF THE FUNDS 8
PRIOR PERFORMANCE OF THE ADVISOR 10
FUND MANAGEMENT AND DISTRIBUTION 11
YOUR ACCOUNT 12
VALUATION OF FUND SHARES 17
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT 17
YEAR 2000 ISSUE 18
ADDITIONAL INFORMATION 19
No one has been authorized to give any information
or to make any representations other than those
contained in this Prospectus and the Funds' Statement
of Additional Information ("SAI"), and if given or
made, the information or representations may not be
relied upon as having been made by the Funds. This
Prospectus is not an offer to sell securities in any
state or jurisdiction in which an offering may not
lawfully be made.
<PAGE>
HIGHLIGHTS
Investment Objective
The investment objective of both Funds is capital
appreciation. The Small Cap Fund seeks to achieve its
investment objective by investing primarily in equity
securities of domestic, small capitalization companies.
The Large Cap Fund seeks to achieve its investment
objective by investing primarily in equity securities
of domestic, large capitalization companies. The
Advisor will not consider dividend or interest income
in the selection of investments. See "Investment
Objective."
Investment Strategy
The Small Cap Fund seeks to achieve its investment
objective by investing primarily in equity securities
of small capitalization U.S. companies that the Advisor
believes have the potential to appreciate faster than
the general market. For this purpose, a small
capitalization company would typically have a market
capitalization of $2 billion or less. The Large Cap
Fund seeks to achieve its investment objective by
investing primarily in equity securities of large
capitalization U.S. companies that the Advisor believes
have the potential to appreciate faster than the
general market. For this purpose, a large
capitalization company would typically have a market
capitalization of $5 billion or more. Equity
securities in which the Funds may invest include common
stocks, preferred stocks, warrants to purchase common
and preferred stocks and securities convertible or
exchangeable into common and preferred stocks. Under
normal market conditions, each Fund will invest at
least 65% of its total assets in these securities. Under
unusual circumstances, as a temporary defensive
technique, a Fund may invest up to 35% of its assets in
cash and cash equivalents.
Risk Factors
Because the Funds will invest primarily in equity
securities, you should expect that the value of the
Funds' shares will be more volatile than the shares of
a fund that invests in fixed-income securities. The share
price will fluctuate and may, at redemption, be worth more,
or less, than the initial purchase price _ accordingly,
you may lose money on your investment.
Other risks of investing in the Funds include:
Liquidity Certain securities may be difficult or
Risk: impossible to sell at the time and price
that a Fund seeks.
Market The market value of a security will move
Risk: up and down, sometimes rapidly and
unpredictably due to economic or market
trends.
Opportunity An investment opportunity may be missed
Risk because the assets necessary to take
advantage of it are tied up in less
desirable investments.
Management A strategy used by the Advisor may fail to
Risk: produce the intended result.
Who Should Invest
The Funds are suitable for long-term investors
only. The Funds are not designed as short-term
investment vehicles. An investment in one or both
Funds may be appropriate for you if you:
seek long-term capital appreciation;
want to include an equity fund in your investment
portfolio; and
<PAGE>
are willing to accept the risk that your
investment may fluctuate over the short term in
exchange for the potential to realize greater
financial gains in the future.
Performance Bar Chart and Tables
The performance of the Small Cap Fund is provided
in the bar chart and tables below. This performance
information illustrates how the Small Cap Fund's
performance can vary, which is one indication of the
risks of investing in the Fund. The information shows
changes in the Small Cap Fund's performance from year
to year and shows how the Fund's average annual returns
compare with those of a broad-based measure of market
performance over the life of the Fund. Please keep in
mind that the Small Cap Fund's past performance does
not necessarily represent how it will perform in the
future. There is no performance information to report
for the Large Cap Fund.
Small Cap Fund
Class A Shares Calendar Year Total Returns
1994(1) 1995 1996 1997 1998
------- ------ ------ ------ -------
3.18% 43.55% 19.15% 25.95% (1.35)%
[bar chart]
____________
(1) The Class A shares commenced operations on January 3, 1994.
Small Cap Fund
Class A Shares Best and Worst Quarterly Performance
1/3/94 to 12/31/98
Best quarter Worst quarter
return return
23.05% (24.92)%
(4th quarter, (3rd quarter,
1998) 1998)
Small Cap Fund
Average Annual Total Returns
as of December 31, 1998
Fund/Index One Year Five Since
Years Inception
Class A (5.52)% 16.01%(1) 16.01%(1)
Class C (1.95)% 16.75%(2) 16.75%(2)
Russell 2000 (2.55)% 11.86% 11.86%
Index(3)
____________
(1) The Class A shares commenced operations on
January 3, 1994.
(2) The Class C shares commenced operations on
March 1, 1997.
(3) The Russell 2000 Stock Index is an unmanaged
index generally representative of the U.S. market
for small capitalization stocks.
Please note that the returns presented in the
chart entitled "Small Cap Fund Class A Shares Calendar
Year Total Returns" and in the table entitled "Small
Cap Fund Class A Shares Best and Worst Quarterly
Performance" do not reflect the 4.25% maximum sales
charge imposed on purchases of the Small Cap Fund's
Class A shares. If this sales charge was reflected,
the returns would be less than those shown. The
returns presented in the "Small Cap Fund Average Annual
Total Returns" table do, however, reflect this sales
charge.
<PAGE>
FEES AND EXPENSES OF THE FUNDS
The following table describes the fees and
expenses that you may pay if you buy and hold shares of
the Funds.
Small Cap Large Cap
Fund Fund
Class A Class C Class A Class C
Shareholder Fees (fees paid directly
from your investment) (1)
Maximum sales charge (load) imposed on
purchases (as a percentage of offering
price) 4.25%(2) None 4.25%(3) None
Maximum deferred sales charge (load)
imposed on redemptions (as a percentage
of amount redeemed) None None None None
Redemption fee (as a percentage of None None None None
amount redeemed)
Annual Fund Operating Expenses
(expenses that are deducted
from Fund assets) (4)
Management fee 0.75% 0.75% 0.60% 0.60%
Distribution and service (12b-1) 0.25% 1.00% 0.25% 1.00%
fees(5)
Other expenses 1.51% 1.51% 0.40% 0.40%
Total Annual Fund Operating Expenses 2.51% 3.26% 1.25%(7) 2.00%(7)
Fee waiver/expense reimbursement .51(6) .51(6) N/A N/A
Net expenses 2.00% 2.75% N/A N/A
____________
(1) If you purchase or redeem shares by wire, you
will be charged a $12.00 service fee. See "Your
Account _ Buying Shares" and "Your Account _
Redeeming Shares."
(2) This sales charge is the maximum applicable to
purchases of Class A shares by persons first
purchasing shares on and after January 1, 1996.
Persons who were shareholders as of December 31,
1995, as well as certain other persons, do not have
to pay this sales charge. See "Your Account _ Class
A Sales Charge Waivers."
(3) This sales charge is the maximum applicable to
purchases of Class A shares. You may not have to
pay this sales charge because waivers are available.
See "Your Account _ Class A Sales Charge Waivers."
(4) Fund operating expenses are deducted from Fund
assets before computing the daily share price or
making distributions. As a result, they do not
appear on your account statement, but instead reduce
the amount of total return you receive.
(5) Because distribution and service fees are paid
out of each Fund's assets on an on-going basis, over
time these fees will increase the cost of your
investment and may cost you more than paying other
types of sales charges. See "Your Account _
Distribution Plans."
(6) Pursuant to an expense cap agreement dated
March 1, 1999, the Advisor has agreed to waive its
management fee and/or reimburse the Small Cap Fund's
operating expenses to the extent necessary to ensure
that (i) the total operating expenses for the Class
A shares do not exceed 2.00% and (ii) the total
operating expenses for the Class C shares
<PAGE>
do not
exceed 2.75% until April 1, 2000. After such date
the expense cap may be terminated or revised at any
time. "Other expenses" are presented before
waivers/reimbursements.
(7) Pursuant to an expense cap agreement dated
March 1, 1999, the Advisor has agreed, if necessary,
to waive its management fee and/or reimburse the
Large Cap Fund's operating expenses to the extent
necessary to ensure that (i) the total operating
expenses for the Class A shares do not exceed 2.00%
and (ii) the total operating expenses for the Class
C shares do not exceed 2.75% until April 1, 2000.
After such date the expense cap may be terminated or
revised at any time. "Other expenses" have been
estimated.
Example
The following Example is intended to help you
compare the cost of investing in one or both of the
Funds with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in each
Fund for the time periods indicated and then redeem all
of your shares at the end of those periods. The
Example also assumes that you have a 5% return each
year and that each Fund's total operating expenses
remain the same each year. Although your actual costs
may be higher or lower, based on these assumptions,
your costs would be as follows:
1 Year 3 Years 5 Years 10 Years
Small Cap Fund
Class A(1) $668 $1,173 $1,703 $3,149
Class C $329 $1,004 $1,702 $3,557
Large Cap Fund
Class A(1) $546 $ 797 $1,064 $1,826
Class C $202 $ 616 $1,044 $2,184
____________
(1)The 4.25% maximum sales charge imposed on purchases
of Class A shares is reflected in the Example.
INVESTMENT OBJECTIVE
The investment objective of both Funds is to seek
capital appreciation. Under normal market conditions,
each Fund will attempt to achieve this objective by
investing at least 65% of its assets in equity
securities of domestic companies. The Funds may also
invest up to 35% of their respective assets in cash and
cash equivalents to provide them with liquidity and
flexibility.
INVESTMENT STRATEGY
In managing the Funds' portfolios, the Advisor
seeks investments in domestic companies that the
Advisor believes have the potential to grow or
appreciate faster than the general market. For the
Small Cap Fund, the Advisor invests primarily in small
capitalization companies, and for the Large Cap Fund,
the Advisor invests primarily in large capitalization
companies. For this purpose, a small capitalization
company would typically have a market capitalization of
$2 billion or less, while a large capitalization
company would typically have a market capitalization of
$5 billion or more. The Advisor's general strategy is
to invest at least 65% of each Fund's total assets in the
equity securities of these companies (i.e., small
capitalization companies for the Small Cap Fund and
large capitalization companies for the Large Cap Fund).
When making purchase decisions for the Funds, the
Advisor uses a "buy discipline" that involves three key
components:
Research
The Advisor gathers research on potential
investment candidates from a wide variety of
internal and external sources, including research
provided by institutions and the brokerage
community, internally-generated analysis, business
and trade publications and annual reports,
prospectuses and publicly available filings made
with the SEC. To further qualify prospective
investments, the Advisor analyzes information from
corporate contacts, industry conferences and
conversations and visits with company management.
Fundamentals
Once the research phase is complete, the Advisor
reviews certain fundamental attributes that it
believes a "buy" candidate should possess relating
to, among other things, (i) growth of sales and
earnings, (ii) earnings power, trends and
predictability, (iii) quality of management, (iv)
competitive position of products and/or services,
(v) fundamentals of the industry in which the
company operates and (vi) economic and political
trends affecting the company. The Advisor also
assesses the liquidity of the investment to
determine whether it has the potential to
appreciate faster than the general market.
Valuation
Finally, the Advisor values companies by
considering price to sales ratios and price to
earnings ratios within a peer group.
From this process, the Advisor constructs a list
of securities for the Funds to purchase.
The Advisor makes sell decisions for the Funds
based on a number of factors, including deterioration
in a company's underlying fundamentals (as detailed
above) and better relative value in other securities.
IMPLEMENTATION OF INVESTMENT OBJECTIVE
In implementing its investment objective, each
Fund may invest in the following securities and use the
following investment techniques. Some of these
securities and investment techniques involve special
risks, which are described below, elsewhere in this
Prospectus and in the Funds' SAI.
Common Stocks and Other Equity Securities
Each Fund will invest in common stocks and other equity
securities. Other equity securities may include
preferred stocks, warrants to purchase common and
preferred stocks and securities convertible or
exchangeable into common and preferred stocks. Common
stocks and other equity securities generally increase
or decrease in value based on the earnings of a
company, expectations for the company's prospects and
general industry and market conditions. A fund that
invests a significant amount of its assets in common
stocks and other equity securities is likely to have
greater fluctuations in share price than a fund that
invests a significant portion of its assets in fixed-
income securities.
Temporary Strategies
Prior to investing the proceeds from sales of Fund
shares, to meet ordinary daily cash needs and to retain
the flexibility to respond promptly to changes in
market and economic conditions, each Fund may invest up
to 35% of its assets in cash and cash equivalents.
Cash equivalents are short-term fixed-income securities
issued by private and governmental institutions. It is
impossible to predict when and for how long the Advisor
may employ these strategies for the Funds. To the
extent a Fund engages in any of these temporary
strategies, the Fund may not achieve its investment
objective.
<PAGE>
Small Capitalization Companies
The Small Cap Fund will invest primarily in the
common stocks and other equity securities of small
companies. While companies with smaller market
capitalizations have the potential for significant
capital appreciation, the equity securities of these
companies also involve greater risks than larger, more
established companies. Small capitalization companies
may lack the management experience or depth, financial
resources, product diversification and competitive
strength of large capitalization companies. Moreover,
the market for small capitalization securities is
generally less liquid and subject to greater price
volatility than the market for large capitalization
securities.
<PAGE>
FINANCIAL HIGHLIGHTS OF THE FUNDS
Financial data for the Small Cap Fund is presented
in the table below. The financial highlights table is
intended to help you understand the Small Cap Fund's
financial performance for the past five years. The
total returns presented in the table represent the rate
that an investor would have earned on an investment in
the Small Cap Fund for the stated period (assuming
reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers
LLP, whose report, along with the Small Cap Fund's
financial statements, are included in the Small Cap
Fund's annual report, which is available upon request.
The information below is for the Small Cap Fund's Class
A shares from January 3, 1994 (commencement of
operations for Class A) through November 30, 1998 and
for the Small Cap Fund's Class C shares from March 1,
1997 (commencement of operations for Class C) through
November 30, 1998. There is no financial data to
report for the Large Cap Fund.
<TABLE>
<CAPTION>
Jan. 3, Nine
1994(1) Year Year Year Months
to Ended Ended Ended Ended Year Ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1994 1995 1996 1997 1997(2) 1998
Class A Class A Class A Class A Class C Class A Class C
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data:
Net asset value, $10.00 $10.48 $14.32 $16.57 $15.91 $19.84 $19.75
beginning of period
Income from investment
operations:
Net investment (0.07)(3) (0.13)(3) (0.16)(3) (0.22)(3) (0.13)(3) (0.18)(3) (0.34)(4)
income (loss)
Net realized and 0.55 4.00 3.01 4.58 3.97 (1.67) (1.61)
unrealized
gains on
investments
Total from investment 0.48 3.87 2.85 4.36 3.84 (1.85) (1.95)
operations
Less distributions:
From capital gains _ (0.03) (0.60) (1.09) _ (1.26) (1.26)
Total distributions _ (0.03) (0.60) (1.09) _ (1.26) (1.26)
Net asset value, end $10.48 $14.32 $16.57 $19.84 $19.75 $16.73 $16.54
of period
Total Return 4.8%(5) 37.0% 20.9%(6) 28.0%(5) 24.1%(6) (9.8)%(6) (10.4)%
</TABLE>
____________
(1)Commencement of operations.
(2)Effective March 1, 1997, the Small Cap Fund offered
a second class of shares, Class C.
(3)Net investment income (loss) per share is
calculated using the ending balance of
undistributed net investment income (loss) prior to
consideration of adjustments for permanent book and
tax differences.
(4)Net investment (loss) per share represents net
investment (loss) divided by the average shares
outstanding throughout the year.
(5)Not annualized.
(6)Effective January 1, 1996, the Small Cap Fund
instituted a maximum 4.25% front-end sales load on
Class A shares. The total return calculation does
not reflect the 4.25% front-end sales load.
<TABLE>
<CAPTION>
Jan. 3, Nine
1994(1) Year Year Year Months
to Ended Ended Ended Ended Year Ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1994 1995 1996 1997 1997(2) 1998
Class A Class A Class A Class A Class C Class A Class C
<S> <C> <C> <C> <C> <C> <C> <C>
Supplemental data and
ratios:
Net assets, end of $2,708,546 $4,182,246 $7,725,072 $11,758,733 $334,836 $13,215,299 $1,255,930
period
Ratio of expenses to
average net assets:
Before expense 9.0%(7) 6.5% 3.5% 2.9% 3.6%(7) 2.7% 3.4%
reimbursement
After expense 2.0%(7) 2.0% 2.0% 2.0% 2.8%(7) 1.9% 2.6%
reimbursement
Ratio of net
investment income
(loss) to average
net assets:
Before expense (8.1)%(7) (5.8)% (2.7)% (2.2)% (3.0)%(7) (1.9)% (2.6)%
reimbursement
After expense (1.1)%(7) (1.3)% (1.2)% (1.3)% (2.2)%(7) (1.1)% (1.9)%
reimbursement
Portfolio turnover 80% 109% 71% 55% 55% 57% 55%
rate(8)
</TABLE>
____________
(7)Annualized.
(8)Calculated on the basis of the Small Cap Fund as a
whole without distinguishing between the classes of
shares issued.
<PAGE>
PRIOR PERFORMANCE OF THE ADVISOR
The performance information set forth below for
the private accounts of the Advisor has been calculated
in accordance with recommended standards of the
Association of Investment Management and Research
("AIMR"), retroactively applied to all time periods.
All returns presented were calculated on a total return
basis and include all dividends and interest, if any,
accrued income, if any, and realized and unrealized
gains and losses, if any. Total return is calculated
quarterly in accordance with the "time-weighted" rate
of return method provided for by AIMR standards,
accounted for on a trade-date and accrual basis. AIMR
standards for calculation of total return differ from
the standards required by the SEC for calculation of
average annual total return. Principal additions and
withdrawals are weighted in computing the quarterly
returns based on the timing of these transactions. The
quarterly returns are geometrically linked to derive
annual total returns.
Since April 1990, the Advisor has managed separate
private accounts (the "Private Accounts") which pursue
substantially the same investment objective, policies
and strategies, and which are managed in the same
manner, as the Large Cap Fund. The Private Accounts
are not subject to the same types of expenses to which
the Large Cap Fund is subject nor to the specific tax
restrictions and investment limitations imposed on the
Large Cap Fund by the Internal Revenue Code of 1986, as
amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), respectively. The following
chart illustrates how the performance of the Advisor's
Large Cap Equity Composite (a composite including all
of the Advisor's large cap equity Private Accounts)
compares to the average performance of the S&P 500 for
the nine years ended December 31, 1998. The
performance results of the composite described below
could have been adversely affected if the Private
Accounts included in the composite had been regulated
as investment companies under the federal tax and
securities laws.
Large Cap Equity Composite
Performance vs. S&P 500
Performance from April 1990 through December 31, 1998
Total Return
Large Cap
Time Period Equity S&P 500
Composite
1/1/98-12/31/98 21.38% 28.58%
1/1/97-12/31/97 29.21% 33.36%
1/1/96-12/31/96 28.65% 22.97%
1/1/95-12/31/95 43.83% 37.59%
1/1/94-12/31/94 2.05% 1.32%
1/1/93-12/31/93 8.24% 10.08%
1/1/92-12/31/92 (0.06)% 7.62%
1/1/91-12/31/91 40.24% 30.47%
4/1/90-12/31/90 (2.16)% (0.90)%
<PAGE>
The composite performance presented above
reflects the performance of the Private Accounts
included in the Large Cap Equity Composite reduced by
the estimated annual total operating expenses of the
Large Cap Fund's Class A shares, as set forth under the
heading "Fees and Expenses of the Funds." The S&P 500
returns assume reinvestment of all dividends paid by
the stocks included in the index, but do not include
brokerage commissions or other fees an investor would
incur by investing in the portfolio of stocks
comprising the index. The Large Cap Equity Composite
represents the Advisor's past performance for all
similarly managed private accounts and should not be
interpreted as indicative of the future performance of
the Large Cap Fund.
FUND MANAGEMENT AND DISTRIBUTION
Management
The Funds have entered into an Investment Advisory
Agreement with the Advisor pursuant to which the
Advisor manages the Funds' investments and business
affairs, subject to the supervision of the Funds' Board
of Directors.
Advisor. The Advisor is a growth equity capital
management firm which serves as investment advisor to
individual and institutional clients. The Advisor,
including its predecessor, Oak Ridge Investments, Inc.,
has been in the investment management business since
September 1989.
Under an Amended and Restated Investment Advisory
Agreement dated March 1, 1999, the Small Cap Fund pays
the Advisor an annual management fee of 0.75% and the
Large Cap Fund pays the Advisor an annual fee of 0.60%
of the respective Fund's average daily net assets
attributable to each class. The advisory fee is
accrued daily and paid monthly. For the fiscal year
ended November 30, 1998, the Advisor voluntarily agreed
to waive its management fee and/or reimburse operating
expenses for the Small Cap Fund to the extent necessary
to ensure that (i) the total operating expenses for the
Class A shares would not exceed 2.00% of average daily
net assets and (ii) the total operating expenses for
the Class C shares would not exceed 2.75% of average
daily net assets. Pursuant to an expense cap
agreement, dated March 1, 1999, the Advisor has agreed
to continue this waiver/reimbursement policy until
April 1, 2000. The Advisor has also agreed to waive
its management fee and/or reimburse operating expenses
for the Large Cap Fund to the extent necessary to
ensure that (i) the total operating expenses for the
Class A shares do not exceed 2.00% of average daily net
assets and (ii) the total operating expenses for the
Class C shares do not exceed 2.75% of average daily net
assets. After April 1, 2000, the Advisor may from time
to time voluntarily (but is not required to) waive all
or a portion of its fee and/or reimburse all or a
portion of a Fund's operating expenses for either
class. Any waivers or reimbursements have the effect
of lowering the overall expense ratio for the
applicable Fund and class and increasing the overall
return to investors at the time any such amounts are
waived and/or reimbursed.
Under the Investment Advisory Agreement, not only
is the Advisor responsible for management of the Funds'
assets, but also for portfolio transactions and
brokerage.
Portfolio Manager. The Fund is managed by David
M. Klaskin, who is the Chairman, Treasurer and Chief
Investment Officer of the Advisor. Mr. Klaskin has
held the position of Chairman of the Advisor since
November 1998, and has held the other positions with
the Advisor (and its predecessor) since December 1989.
Mr. Klaskin served as the President of the Advisor (and
its predecessor) from December 1989 until November
1998. From May 1982 until December 1989, Mr. Klaskin
was a Financial Consultant with Shearson Lehman Hutton
in Chicago, Illinois. Mr. Klaskin received his B.S.
degree in Finance from Indiana University in 1982.
Custodian, Transfer Agent and Administrator
Firstar Bank Milwaukee, N.A. acts as custodian of
the Fund's assets. Firstar Mutual Fund Services, LLC
serves as transfer agent for the Fund (the "Transfer
Agent") and as the Fund's administrator. Firstar Bank
<PAGE>
Milwaukee, N.A. and Firstar Mutual Fund Services, LLC
are affiliated entities and are collectively referred
to in this Prospectus as "Firstar."
Distributor
Oak Ridge Investments, Inc., a registered broker-
dealer and member of the National Association of
Securities Dealers, Inc., acts as distributor of the
Funds' shares (the "Distributor"). Prior to July 1997,
the Distributor also served as the investment advisor
to the Small Cap Fund (the Large Cap Fund was not
available at that time). In July 1997, the Advisor
succeeded to the investment advisory business of the
Distributor, which included management of the Small Cap
Fund's assets. The Distributor is managed and owned by
the same persons who manage and own the Advisor.
Accordingly, the Distributor and the Advisor are
affiliates.
YOUR ACCOUNT
Choosing a Fund
This Prospectus offers two Funds to prospective
investors: the Small Cap Fund and the Large Cap Fund.
The only difference between the two Funds is that the
Small Cap Fund will invest primarily in equity
securities of small capitalization companies (i.e.,
companies with a market capitalization of $2 billion or
less), while the Large Cap Fund will invest primarily
in equity securities of large capitalization companies
(i.e., companies with a market capitalization of $5
billion or more).
Choosing a Class
Each Fund offers two classes of shares to
prospective investors: 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
charge with break charge.
points and certain
exceptions.
Rule 12b-1 Rule 12b-1 expenses equal
expenses equal to 0.25% to 1.00% of the average daily
of the average daily net assets of the class
net assets of the
class.
Class A Shares
Class A shares 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 (computed after the purchase order and funds are
received by the Transfer Agent) and the sales charge
indicated below:
Total Sales Charge
As a As a
Your Investment Percentage Percentage of
of Your
Offering Investment
Price
Less than $50,000 4.25% 4.44%
$50,000 but less 3.75% 3.90%
than $100,000
$100,000 but less 3.25% 3.36%
than $250,000
$250,000 but less 2.25% 2.30%
than $500,000
$500,000 but less 1.75% 1.78%
than $1,000,000
$1,000,000 or more 1.00% 1.01%
<PAGE>
No sales charge is imposed on the reinvestment of
dividends or capital gains. To determine whether you
qualify to purchase shares at net asset value, see
"_ Class A Sales Charge Waivers," below.
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," below.
Class C Shares
Class C shares are offered and sold on a continual
basis at net asset value (computed after the purchase
order and funds are received by the Transfer Agent)
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.
Class A Sales Charge Waivers
The following persons may purchase Class A shares
without any 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 relevant Fund:
employee benefit plans qualified under Section
401(k) of the Internal Revenue Code, as amended,
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;
directors, officers and full-time employees of the
Funds, the Advisor, the Distributor and affiliates of
such companies, and spouses and family members of such
persons;
registered securities brokers and dealers which
have entered into a sales agreement with the
Distributor, and their affiliates, for their investment
accounts only;
registered personnel and employees of such
securities brokers and dealers referred to above, and
their spouses and family members, in accordance with
the internal policies and procedures of the employing
securities dealer; and
registered investment advisors affiliated with the
Advisor and/or the Distributor, 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.
Distribution Plans
Each Fund has adopted a plan pursuant to Rule
12b-1 under the 1940 Act for each class of shares (the
"Class A Plan" and the "Class C Plan") pursuant to
which certain distribution and/or service fees are paid
to the Distributor. Under the Class A Plan, each 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
each 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.
Because these fees are paid out of each Fund's assets
on an ongoing basis, over time these fees will increase
the cost of your investment and may cost you more than
paying other types of sales charges.
<PAGE>
Investing in the Funds
Before opening an account and investing in Fund
shares, you should:
(1) Read this Prospectus carefully.
(2) Determine which Fund or Funds you would like
to invest in and which class or classes of
shares you would like to buy.
(3) Determine how much you would like to invest.
The minimum initial investment requirements
for both Class A and Class C shares are:
Non-retirement account: $2,000
Traditional IRA: $1,000
Education IRA: $500
Subsequent investments: $100(if by check)
$1,000(if by wire or
telephone)
Automatic Investment Plan ("AIP"): $100
(to maintain the plan, you must
invest at least $100 per month)
Employee benefit plans qualified Minimum is waived
under Sections 401, 403(b)(7) or
457 of the Internal Revenue Code
The Funds may change or waive these minimums
at any time; you will be given at least 30
days' notice of any increase in the minimum
dollar amount of purchases.
(4) Complete the appropriate parts of the account
application, carefully following the
instructions. If you have questions, please
contact your investment professional or the
Funds at 1-800-407-7298. Account
applications will be accepted by the
Distributor, the Transfer Agent or investment
professionals who have entered into a selling
or service agreement with the Distributor.
(5) Make your initial investment, and any
subsequent investments, following the
instructions set forth below.
Buying Shares
Opening an Account. You may open an account by
completing an account application and paying for your
shares by check or wire. You may also open an account
using the Funds' exchange privilege, which is described
in detail in the SAI. All new account applications
should be given to your investment professional or
forwarded to the Distributor or the Transfer Agent,
whose addresses appear on the back cover page of this
Prospectus. A confirmation indicating the details of
each purchase transaction will be sent to you promptly.
By check
Make out a check for the investment amount,
payable to "Oak Ridge Small Cap Equity Fund," if you
are purchasing shares in the Small Cap Fund, or "Oak
Ridge Large Cap Equity Fund," if you are purchasing
shares in the Large Cap Fund. Payment should be made
in U.S. funds by check drawn on a U.S. bank, savings
and loan or credit union. Neither cash nor third-party
checks will be accepted.
You may be charged a transaction fee in addition
to the sales charge with respect to Class A shares sold
by certain broker-dealers. Certain broker-dealers may
also charge a transaction fee for purchases of Class C
shares.
<PAGE>
If your check does not clear, you will be charged
a $25 service fee. You will also be responsible for
any losses suffered by the Funds as a result.
All applications to purchase Fund shares are
subject to acceptance by the Funds and are not binding
until so accepted. The Funds reserve the right to
decline a purchase application in whole or in part.
By wire
Instruct your bank to use the following
instructions when wiring funds:
Wire to: Firstar Bank Milwaukee, N.A.
ABA Number 075000022
Credit: Firstar Mutual Fund Services, LLC
Account 112-952-137
Further credit: (name of Fund being purchased)
(class of shares being purchased)
(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 confirm the wire instructions. The
Transfer Agent may charge a $12.00 service fee for wire
transactions.
The Funds are not responsible for the consequences
of delays resulting from the banking or Federal Reserve
wire system.
Adding to an Account. You may add to your account
by check, wire or telephone. You may also add to your
account using the Funds' exchange privilege. Please
see the SAI for more information. A confirmation
indicating the details of each subsequent purchase
transaction will be sent to you promptly.
By check
Make out a check for the investment amount,
payable to "Oak Ridge Small Cap Equity Fund," if you
are purchasing shares in the Small Cap Fund, or "Oak
Ridge Large Cap Equity Fund," if you are purchasing
shares in the Large Cap Fund. Neither cash nor third-
party checks will be accepted.
Fill out the detachable investment form from your
account statement or send a note specifying your
account number and the name(s) in which the account is
registered.
Deliver the check and your investment form or note
to your investment professional, the Distributor or the
Transfer Agent.
By wire
Follow the wire instructions used to open an
account.
By telephone
Please call 1-800-407-7298 for information
regarding the purchase of Fund shares by telephone.
Automatic Investment Plan. The Automatic
Investment Plan ("AIP") is a method of using dollar
cost averaging, which is an investment strategy that
involves investing a fixed amount of money at a regular
time interval. 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. The AIP
allows you to make regular, systematic investments in
Class A or Class C shares of one or both of the Funds
from your bank checking or NOW account. The minimum
initial investment for investors using the AIP is $100.
Please refer to the SAI for instructions as to how you
may establish the AIP for your account, or call 1-800-
407-7298.
<PAGE>
Redeeming Shares
To Redeem Some or All of Your Shares. You may
request redemption of part or all of your Fund shares
at any time. The price per share will be the net asset
value next computed after the time the redemption
request is received in proper form by the Transfer
Agent. See "Valuation of Fund Shares." The Funds
normally will mail your redemption proceeds the next
business day and, in any event, no later than seven
days after receipt by the Transfer Agent of a
redemption request in good order. However, the Funds
may hold payment until investments which were made by
check, telephone or pursuant to the AIP have been
collected (which may take up to 15 days from the
initial investment date). Redemptions may be made by
written request, telephone or wire. You may also
redeem shares using the Funds' exchange privilege, as
discussed in the SAI.
By written request
Write a letter of instruction indicating the Fund
name, your share class, your account number, the
name(s) in which the account is registered and the
dollar value or number of shares you wish to sell.
Include all signatures and any additional
documents that may be required. See "Redeeming
Shares_Special Situations," below.
Forward the materials to the Transfer Agent.
A check will be mailed to the name(s) and address
in which the account is registered, or otherwise
according to your letter of instruction.
By telephone
Fill out the "Telephone Redemption" section of
your new account application.
To place your redemption request, please call
1-800-407-7298.
Redemption requests by telephone are available for
redemptions of $25,000 or less. Redemption requests
for more than $25,000 must be in writing.
Proceeds redeemed by telephone will be mailed or
wired only to your address or bank of record as shown
on the records of the Transfer Agent.
In order to arrange for telephone redemptions
after an account has been opened or to change the bank,
account or address designated to receive redemption
proceeds, a written request must be sent to the
Transfer Agent. The request must be signed by each
shareholder of the account, with the signatures
guaranteed. Further documentation may be requested
from corporations, executors, administrators, trustees
and guardians. See "Redeeming Shares_Special
Situations," below.
The Funds reserve the right to refuse any request
made by telephone and may limit the amount involved or
the number of telephone redemptions.
Once you place a telephone redemption request, it
cannot be canceled or modified.
Neither the Funds nor the Transfer Agent will be
responsible for the authenticity of redemption
instructions received by telephone. Accordingly, you
bear the risk of loss. However, the Funds will use
reasonable procedures to ensure that instructions
received by telephone are genuine, including recording
telephonic transactions and sending written
confirmation of such transactions to investors.
You may experience difficulty in implementing a
telephone redemption during periods of drastic economic
or market changes. If you are unable to contact the
Transfer Agent by telephone, you may also redeem shares
by written request, as noted above.
By wire
Redemptions by wire may be made pursuant to a
written redemption request or pursuant to a telephone
instruction.
Please call 1-800-407-7298 for information
regarding redemptions by wire.
Funds will be wired on the next business day after
receipt of redemption instructions. A $12 fee will be
deducted from your account.
Systematic Withdrawal Plan. You may set up
automatic withdrawals from your account with the Funds
at regular intervals. To begin distributions, you must
have an initial balance of $5,000 in your account and
<PAGE>
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. These institutions
include banks, saving associations, credit unions,
brokerage firms and others. A notary public stamp or
seal is not acceptable.
IRAs. Shareholders who have an Individual
Retirement Account or other retirement plan must
indicate on their redemption requests whether or not to
withhold federal income taxes. Redemption requests
failing to indicate an election will be subject to
withholding.
Termination of Accounts. Your account may be
terminated by the Funds 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. A check for the proceeds of
redemption will be sent to you within seven days of the
redemption.
VALUATION OF FUND SHARES
The price of Fund shares is based on each Fund's
net asset value, which is calculated using the market
price method of valuation and is determined as of the
close of trading (generally 4:00 p.m. Eastern Time) on
each day the New York Stock Exchange ("NYSE") is open
for business. The Fund does not determine net asset
value on days the NYSE is closed. 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. In addition,
if any of these 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 yearly accounting period. The
price at which a purchase order or redemption request
is effected is based on the next calculation of net
asset value after the order or request is placed.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX
TREATMENT
For federal income tax purposes, all dividends and
distributions of net realized short-term capital gains
you receive from the Funds are taxable as ordinary
income, whether reinvested in additional shares or
received in cash. Distributions of net realized long-
term capital gains you receive from the Funds, whether
reinvested in additional shares or received in cash,
are taxable as a capital gain. The capital gain
holding period (and the applicable tax rate) is
determined by the length of time the Funds have held
the security and not the length of time you have held
shares in the Funds. You will be informed annually as
to the amount and nature of all dividends and capital
gains paid during the prior year. Such capital gains
and dividends may also be subject to state or local
taxes. If you are not required to pay taxes on your
income, you are generally not required to pay federal
income taxes on the amounts distributed to you.
Dividends and capital gains, if any, will be
distributed annually in December. Please note,
however, that the objective of both Funds is capital
appreciation, not the production of distributions. You
should measure the success of your investment by the
value of your investment at any given time and not by
the distributions you receive. The Funds expect that,
because of this investment objective, their
distributions will consist primarily of long-term
capital gains.
All dividends or capital gains distributions will
automatically be reinvested in additional Fund shares
at the then prevailing net asset value unless you
specifically request that dividends or capital gains
or both be paid in cash. The election to receive
dividends in cash or reinvest them in shares may be
changed by writing to the Funds
<PAGE>
at Oak Ridge Funds,
Inc., c/o Firstar Mutual Fund Services, LLC, P. O. Box
701, Milwaukee, Wisconsin 53201-0701. Such notice must
be received at least ten days prior to the record date
of any dividend or capital gain distribution. If you
choose to have distribution checks mailed to you and
either the U.S. Postal Service is unable to deliver the
check to you or the check remains outstanding for at
least six months, the Funds reserve the right to
reinvest the check at the then current net asset value
until you notify us with different instructions.
YEAR 2000 ISSUE
The Funds' operations depend on the seamless
functioning of computer systems in the financial
service industry. Many computer software systems in
use today cannot properly process date-related
information after December 31, 1999 because of the
method by which dates are encoded and calculated. This
failure, commonly referred to as the "Year 2000 Issue,"
could adversely affect the handling of security trades,
pricing and account servicing for the Funds.
The Funds have made compliance with the Year 2000
Issue a high priority and are taking steps that they
believe are reasonably designed to address the Year
2000 Issue. Because the Funds have no computer
software of their own, and the Advisor's systems are
not used in connection with the operation of the Funds,
the computer software systems of the Funds' service
providers are the focus of the Funds' efforts.
Although, at this time, there can be no assurance that
there will be no adverse impact on the Funds, the
Funds' service providers have advised the Funds that
they have been actively working on necessary changes to
their computer systems to prepare for the Year 2000 and
expect that their systems, and those of other parties
they deal with, will be adapted in time for that event.
<PAGE>
ADDITIONAL INFORMATION
INVESTMENT ADVISOR TRANSFER AGENT AND
ADMINISTRATOR
Oak Ridge
Investments, LLC Firstar Mutual Fund
10 South LaSalle Services, LLC
Street, Suite 1050
Chicago, Illinois For overnight
60603 deliveries, use:
Oak Ridge Funds, Inc.
DISTRIBUTOR c/o Firstar Mutual
Fund Services, LLC
Oak Ridge Third Floor
Investments, Inc. 615 East Michigan
10 South LaSalle Street
Street, Suite 1050 Milwaukee, Wisconsin
Chicago, Illinois 53202
60603
For regular mail
deliveries, use:
CUSTODIAN Oak Ridge Funds,
Inc.
Firstar Bank c/o Firstar Mutual
Milwaukee, N.A. Fund Services, LLC
P.O. Box 701
For overnight Milwaukee, Wisconsin
deliveries, use: 53202
Oak Ridge Funds,
Inc. LEGAL COUNSEL
c/o Firstar Bank
Milwaukee, N.A. Godfrey & Kahn, S.C.
Third Floor 780 North Water
615 East Michigan Street
Street Milwaukee, Wisconsin
Milwaukee, Wisconsin 53202
53202
ACCOUNTANTS
For regular mail
deliveries, use:
Oak Ridge Funds, PricewaterhouseCoopers
Inc. LLP
c/o Firstar Bank 100 East Wisconsin
Milwaukee, N.A. Avenue
P.O. Box 701 Suite 1500
Milwaukee, Wisconsin Milwaukee, Wisconsin
53202 53202
Additional information regarding the Funds is included
in the SAI which has been filed with the SEC and is
incorporated in this Prospectus by reference. Because
the Large Cap Fund was not available to investors until
March 1, 1999, there is no information available
regarding the Large Cap Fund's investments or
performance. Further information about the Small Cap
Fund's investments, however, is contained in its annual
and semi-annual reports to shareholders. The Small Cap
Fund commenced operations in January 1994. The Small
Cap Fund's annual report provides a discussion of the
market conditions and investment strategies that
significantly affected the Fund's performance during
its last fiscal year. You may receive the SAI, annual
reports and semi-annual reports free of charge, request
other information about the Funds and make shareholder
inquiries by writing to the address listed on the cover
page of this Prospectus or by calling, toll-free,
1-800-407-7298.
Information about the Funds (including the SAI) can be
reviewed and copied at the SEC's Public Reference Room
in Washington, D.C. Please call the SEC at 1-800-SEC-
0330 for information relating to the operation of the
Public Reference Room. Reports and other information
about the Funds are also available on the SEC's
Internet Website located at http://www.sec.gov.
Alternatively, copies of this information may be
obtained, upon payment of a duplicating fee, by writing
the Public Reference Section of the SEC, Washington,
D.C. 20549-6009.
The Funds' 1940 Act File Number is 811-8088.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
Oak Ridge Funds, Inc.
Oak Ridge Small Cap Equity Fund
Oak Ridge Large Cap Equity Fund
P. O. Box 701
Milwaukee, Wisconsin 53201-0701
1-800-407-7298
This Statement of Additional Information ("SAI")
is not a prospectus and should be read in conjunction
with the Prospectus of the Oak Ridge Small Cap Equity
Fund (the "Small Cap Fund") (previously known as the
Oak Ridge Growth Fund) and the Oak Ridge Large Cap
Equity Fund (the "Large Cap Fund"), dated March 1,
1999. Each Fund is a series of Oak Ridge Funds, Inc.
(the "Corporation").
The Large Cap Fund is first being made available
to investors as of the date of this SAI. Accordingly,
there are no financial statements for the Large Cap
Fund. However, the Small Cap Fund's audited financial
statements for the year ended November 30, 1998 are
incorporated herein by reference to its 1998 Annual
Report.
A copy of the Small Cap Fund's 1998 Annual Report
and/or the Funds' Prospectus is available without
charge upon request to the above address or toll-free
telephone number.
This Statement of Additional Information is dated March 1, 1999.
<PAGE>
TABLE OF CONTENTS
FUND ORGANIZATION 3
FUND POLICIES: FUNDAMENTAL & NON-FUNDAMENTAL 3
IMPLEMENTATION OF INVESTMENT OBJECTIVE 4
DIRECTORS AND OFFICERS 13
PRINCIPAL SHAREHOLDERS 15
INVESTMENT ADVISOR AND DISTRIBUTOR 15
FUND TRANSACTIONS AND BROKERAGE 17
ADMINISTRATOR AND FUND ACCOUNTANT 19
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT 19
DISTRIBUTION PLANS 19
PURCHASE, EXCHANGE AND PRICING OF SHARES 21
TAXATION OF THE FUNDS 22
PERFORMANCE INFORMATION 23
INDEPENDENT ACCOUNTANTS 24
FINANCIAL STATEMENTS 24
No person has been authorized to give any
information or to make any representations other than
those contained in this SAI and related Prospectus, and
if given or made, the information or representations
may not be relied upon as having been made by the
Funds. This SAI is not an offer to sell securities in
any state or jurisdiction in which an offering may not
lawfully be made.
<PAGE>
FUND ORGANIZATION
The Corporation is an open-end, diversified,
management investment company, commonly referred to as
a mutual fund. The Corporation is organized as a
Maryland corporation and was incorporated on October
15, 1993. From January 3, 1994 until March 19, 1998,
the Small Cap Fund and the Corporation were known as
the O.R.I. Growth Fund and O.R.I. Funds, Inc.,
respectively. From March 20, 1998 until March 1, 1999,
the Small Cap Fund and the Corporation were known as
the Oak Ridge Growth Fund and the Oak Ridge Funds,
Inc., respectively. On March 1, 1999, the Small Cap
Fund's name was changed to the Oak Ridge Small Cap
Equity Fund and the Large Cap Fund was created.
The Corporation is authorized to issue shares of
common stock in series and classes. The Corporation
currently offers two series of shares: the Oak Ridge
Small Cap Equity Fund and the Oak Ridge Large Cap
Equity Fund. The shares of common stock of each Fund
are further divided into two classes: Class A and
Class C. Each share of common stock of each class of
shares of each Fund is entitled to one vote, and each
share is entitled to participate equally in dividends
and capital gains distributions by the respective class
of shares and in the residual assets of the respective
class in the event of liquidation. However, each class
of shares of each Fund bears its own expenses, is
subject to its own sales charges, if any, and has
exclusive voting rights on matters pertaining to the
Rule 12b-1 plan as it relates to that class.
No certificates will be issued for shares held in
your account. You will, however, have full shareholder
rights.
Generally, the Funds will not hold annual
shareholders' meetings unless required by the
Investment Company Act of 1940, as amended (the "1940
Act"), or Maryland law.
FUND POLICIES: FUNDAMENTAL & NON-FUNDAMENTAL
The following are the fundamental investment
policies applicable to each Fund which cannot be
changed without the approval of a majority of the
relevant Fund's outstanding voting securities. As used
herein, a "majority of the relevant Fund's outstanding
voting securities" means the lesser of (i) 67% of the
shares of common stock of the Fund represented at a
meeting at which more than 50% of the outstanding
shares are present or (ii) more than 50% of the
outstanding shares of common stock of the Fund.
Neither Fund may:
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;
<PAGE>
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; and
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.
The investment objective of both Funds, which is
to seek capital appreciation, is also a fundamental
investment policy which cannot be changed without the
approval of a majority of the relevant Fund's
outstanding voting securities.
The following are the non-fundamental investment
policies applicable to each Fund which may be changed
by the Board of Directors of the Funds without
shareholder approval.
Neither Fund may:
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 1940 Act; and
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.
With the exception of fundamental investment
restriction number 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.
IMPLEMENTATION OF INVESTMENT OBJECTIVE
The following information supplements the
discussion of the Funds' investment objective and
strategy described in the Prospectus under the heading
"Investment Objective" and "Investment Strategy."
In General
Neither Fund will 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 or exchangeable into common
or preferred stock;
investment grade debt securities;
<PAGE>
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.
Investment grade debt securities include 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").
Bonds rated Baa by Moody's or BBB by S&P, although
considered investment grade, have speculative
characteristics and may be subject to greater
fluctuations in value than higher-rated bonds.
Warrants
Each 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. 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.
Convertible Securities
Each Fund may invest up to 5% of its net assets in
convertible securities, which are bonds, debentures,
notes or other securities that may be converted into or
exchanged for a specified amount of common or preferred
stock of the same or a different company within a
particular period of time at a specified price or
formula. A convertible security entitles the holder to
receive interest normally paid or accrued on debt until
the convertible security matures or is redeemed,
converted or exchanged. Convertible securities have
unique investment characteristics in that they
generally (i) have higher yields than common or
preferred stocks, but lower yields than comparable non-
convertible securities, (ii) are less subject to
fluctuation in value than the underlying stock since
they have fixed income characteristics and (iii)
provide the potential for capital appreciation if the
market price of the underlying stock increases. A
convertible security may be subject to redemption at
the option of the issuer at a price established in the
convertible security's governing instrument. If a
convertible security held by a Fund is called for
redemption, the Fund will be required to permit the
issuer to redeem the security, convert it into the
underlying stock or sell it to a third party.
Repurchase Obligations
Each 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, a 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 Funds'
investment advisor, Oak Ridge Investments, LLC (the
"Advisor"), will monitor 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 a 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 Funds enter into repurchase agreements
to evaluate those risks.
<PAGE>
Illiquid Securities
Each 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"), except 144A securities which are
considered liquid under guidelines adopted by the Board,
repurchase agreements with maturities in excess of seven
days and other securities that are not readily marketable.
The Board of Directors of the Funds 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.
The Board of Directors has delegated the day-to-
day determination of the liquidity of any security to
the Advisor, 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, a 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, or its delegate. If, through the
appreciation of restricted securities or the
depreciation of unrestricted securities, a 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.
When-Issued Securities
Each Fund may 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 a 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 a Fund's other
assets. While when-issued securities may be sold prior
to the settlement date, the Funds intend to purchase
such securities with the purpose of actually acquiring
them. At the time a 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 Funds 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 Funds will meet their obligations from then
available cash flow, sale of the securities held in the
separate account described above, sale of other
securities or, although they 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 Funds' payment obligation).
<PAGE>
Derivative Instruments
In General. Each Fund may invest up to 5% of its
net assets in derivative instruments. A Fund may use
derivative instruments for any lawful purpose
consistent with its 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."
Hedging. The Funds may use derivative instruments
to protect against possible adverse changes in the
market value of securities held in, or anticipated to
be held in, their portfolios. Derivatives may also be
used by the Funds to "lock-in" realized but
unrecognized gains in the value of their 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 Funds may also use derivative
instruments to manage the risks of their portfolios.
Risk management strategies include, but are not limited
to, facilitating the sale of portfolio securities,
managing the effective maturity or duration of debt
obligations in the Funds' portfolios, 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
Funds to invest than "traditional" securities (i.e.,
stocks or bonds) would.
Exchange or OTC Derivatives. Derivative
instruments may be exchange-traded or traded in over-
the-counter ("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. OTC 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 Funds 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 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 a Fund and its
shareholders and is consistent with its 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 relevant Fund's entire
portfolio and investment objective.
(2) Credit Risk. The Funds 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
Funds 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 Funds. The Funds will
enter into transactions in derivative instruments only
with counterparties that the Advisor reasonably
believes are capable of performing under the contract.
<PAGE>
(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) can 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 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. A 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 a
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. A 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 Funds.
(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 Funds have 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
notice of eligibility for the Funds includes
representations that the Funds will use futures
contracts and related options solely for bona fide
hedging purposes within the meaning of CFTC
regulations, provided that the Funds 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
<PAGE>
such futures contracts and related options
positions are "in the money," do not exceed 5% of each
Fund's net assets. Adherence to these guidelines does
not, however, limit a Fund's risk to 5% of its net
assets.
The SEC has identified certain trading practices
involving derivative instruments that involve the
potential for leveraging a Fund's assets in a manner
that raises issues under the 1940 Act. In order to
limit the potential for the leveraging of Fund assets,
the SEC has stated that a Fund may use coverage or the
segregation of its assets. 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 a Fund's assets to segregated accounts
could impede portfolio management or the Fund's ability
to meet redemption requests or other current
obligations.
In some cases, a 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 a 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. A Fund may use options for any lawful
purpose consistent with its 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 Funds may purchase (buy) or write (sell) put and
call options on assets, such as securities 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 Funds 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 Funds 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 Funds 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 Funds 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 Funds would be
considered illiquid to the extent described under "_
Illiquid Securities," above. 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
Funds 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.
A Fund may effectively terminate its right or
obligation under an option by entering into a closing
transaction. For example, a 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, a 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
<PAGE>
transaction. Closing transactions permit the Funds to
realize the profit or limit the loss on an option
position prior to its exercise or expiration.
The Funds 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 a Fund and the other party to the transaction
("counterparty") (usually a securities dealer or a
bank) with no clearing organization guarantee. Thus,
when the Funds purchase or write an OTC option, they
rely on the counterparty to 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 Funds as well as
the loss of any expected benefit of the transaction.
The Funds' ability to establish and close out
positions in exchange-listed options depends on the
existence of a liquid market. The Funds intend 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 Funds will enter into OTC options
only with counterparties that are expected to be
capable of entering into closing transactions with the
Funds, there is no assurance that the Funds 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 Funds might be unable to close
out an OTC option position at any time prior to its
expiration. If a 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 Funds 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.
Futures Contracts. A Fund may use futures
contracts for any lawful purpose consistent with its
investment objective such as hedging and managing risk
but not for speculation. The Funds may enter into
futures contracts, including interest rate and index
futures, and purchase put and call options, and write
covered put and call options, on such futures. 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 Funds' hedging may include purchases of futures as
an offset against the effect of expected increases in
securities prices and sales of futures as an offset
against the effect of expected declines in securities
prices. The Funds 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 Funds will engage in this
strategy only when the Advisor believes it is more
advantageous than purchasing the futures contract.
To the extent required by regulatory authorities,
the Funds 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 by the CFTC. Although techniques other
than sales and purchases of futures contracts could be
used to reduce the Funds' exposure to market
fluctuations, the Funds may be able to hedge their
exposure more effectively and perhaps at a lower cost
through using futures contracts.
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) 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
<PAGE>
purchase, as the case may be,
of the instrument 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 Funds realize a loss; if it is more,
the Funds realize a gain. Conversely, if the
offsetting sale price is more than the original
purchase price, the Funds realize a gain; if it is
less, the Funds realize a loss. The transaction costs
must also be included in these calculations. There can
be no assurance, however, that the Funds will be able
to enter into an offsetting transaction with respect to
a particular futures contract at a particular time. If
the Funds are not able to enter into an offsetting
transaction, they will continue to be required to
maintain the margin deposits on the futures contract.
No price is paid by the Funds upon entering into
futures contracts. Instead, at the inception of a
futures contract, the Funds are required to deposit in
a segregated account with their custodian, in the name
of the futures broker through whom the transaction was
effected, "initial margin," consisting of cash or other
liquid assets, 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 Funds at the termination of the
transaction if all contractual obligations have been
satisfied. Under certain circumstances, such as
periods of high volatility, the Funds may be required
by an exchange to increase the level of their 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 Funds'
obligations to or from a futures broker. When a Fund
purchases an option on a future, the premium paid plus
transaction costs is all that is at risk. In contrast,
when a 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 a 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 Funds intend 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 a 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.
Under these circumstances, 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.
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
<PAGE>
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.
Lending of Portfolio Securities
Each Fund may lend its portfolio securities, up to
5% of its total assets, to broker-dealers or
institutional investors as a means of earning income.
In return, the Funds will receive collateral in cash or
money market instruments. The collateral will be
maintained at all times in an amount equal to at least
100% of the current market value of the loaned
securities. The purpose of such securities lending is
to permit the borrower to use such securities for
delivery to purchasers when such borrower has sold
short. The Funds will continue to receive the
equivalent of the interest or dividends paid by the
issuer of the securities lent. The Funds may also
receive interest on the investment of the collateral or
a fee from the borrower as compensation for the loan.
The Funds may pay reasonable custodial and
administrative fees in connection with a loan. The
Funds will retain the right to call, upon notice, 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.
Temporary Strategies
As described in the Prospectus under the heading
"Implementation of Investment Objective," prior to
investing the proceeds from sales of Fund shares, to
meet ordinary cash needs and to retain the flexibility
to respond promptly to changes in market and economic
conditions, each Fund may invest up to 35% of its
assets in cash and cash equivalents. Cash equivalents
are short-term fixed income securities issued by
private and governmental institutions which are 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. Such
securities include, without limitation, the following:
U.S. Government Securities. These securities
include 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.
Certificates of Deposit. These securities
are issued against funds deposited in a U.S. bank
or savings and loan association and are for a
definite period of time, earn a specified rate of
return and are normally negotiable. If a
certificate of deposit is non-negotiable, it will
be considered illiquid and will be subject to each
Fund's 5% restriction on investments in illiquid
securities. A certificate of deposit requires the
issuer to pay the amount deposited plus interest
to the holder 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 Funds will not generally be fully insured.
Bank Time Deposits. Bank time deposits 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 time
deposits, in which case the yields of these
investments will be reduced.
<PAGE>
Bankers' Acceptances. Bankers' acceptances
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.
Repurchase Agreements. For this purpose,
repurchase agreements include only those entered
into with respect to obligations of the U.S.
government, its agencies or instrumentalities. In
such a transaction, at the time a Fund purchases
the security, it simultaneously agrees to resell
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 Funds to invest temporarily
available cash. Repurchase agreements may be
considered loans to the seller, collateralized by
the underlying securities. The risk to the Funds
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 Funds are 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 Funds 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
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
Funds. If the seller were to be subject to a
federal bankruptcy proceeding, the ability of the
Funds to liquidate the collateral could be delayed
or impaired because of certain provisions of the
bankruptcy laws.
Commercial Paper. These securities include
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). Master demand
notes are direct lending arrangements between a
Fund and a corporation. There is no secondary
market for such notes; however, they are
redeemable by the Funds 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 a Fund's
liquidity might be impaired if the corporation
were unable to pay principal and interest on
demand.
DIRECTORS AND OFFICERS
Under the laws of the State of Maryland, the Board
of Directors of the Funds is responsible for managing
the Funds' business and affairs.
Directors and officers of the Funds, together with
information as to their principal business occupations
during at least the last five years, and other
information, are shown below. Each director and
officer 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
Funds (DOB 8/6/60).
Mr. Klaskin has been the Chairman of the Advisor
since November 1998 and the Treasurer and Chief
Investment Officer of the Advisor (and its
predecessor) since December 1989. Mr. Klaskin
served as the President of the Advisor (and its
predecessor) from December 1989 until November
1998. Mr. Klaskin has held the same positions
(with the exception of Chief Investment Officer)
for the same time periods with the Funds'
principal distributor, Oak Ridge Investments, Inc.
(the "Distributor"). From May 1982 until December
1989, Mr. Klaskin was a Financial Consultant with
Shearson Lehman Hutton, Chicago, Illinois, where
he was
<PAGE>
responsible for managing funds for both
individual and institutional clients. Mr. Klaskin
graduated from Indiana University with a B.S. in
Finance in 1982.
*Samuel Wegbreit, Chairman of the Board, Treasurer,
Assistant Secretary and a Director of the Funds (DOB
9/28/57).
Mr. Wegbreit has been the Vice-Chairman of the
Advisor since November 1998 and the Secretary of
the Advisor (and its predecessor) since September
1989. Mr. Wegbreit served as the Chairman of the
Advisor (and its predecessor) from September 1989
until November 1998. Mr. Wegbreit has held the
same positions for the same time periods with the
Distributor. From April 1988 until September
1989, Mr. Wegbreit was self-employed as a
Securities Trader in New York, New York. From
October 1983 until April 1988, Mr. Wegbreit was a
Securities Trader and Vice-President with Morgan
Stanley & Co. in New York, New York. Mr. Wegbreit
graduated from Brown University with a B.S. in
Applied Mathematics in 1979.
Daniel A. Kaplan, a Director of the Funds (DOB 4/5/60).
Mr. Kaplan is a Certified Public Accountant and
the President of Loft Development Corporation, a
real estate development company located in
Chicago, Illinois. Mr. Kaplan has been employed
by Loft Development Corporation since 1986.
A. Charlene Sullivan, Ph.D., a Director of the Funds
(DOB 1/21/49).
Dr. Sullivan has been an Associate Professor of
Finance at Purdue University since 1978.
Angelo Louis Spoto, a Director of the Funds (DOB
4/12/29).
Mr. Spoto has been a private investor since 1990.
Prior to 1990 Mr. Spoto was a Senior Vice
President - Investments with Blunt Ellis & Loewi,
Inc., in Rockford, Illinois. Mr. Spoto has been a
Director of the Funds since January 1999.
*John Peters, Secretary of the Funds (11/14/47).
Mr. Peters has been the President of the
Distributor since July 15, 1998. From September
1, 1997 until June 1, 1998, Mr. Peters was
President of Dreman Value Management, Jersey City,
New Jersey. From January 1, 1990 until January 1,
1997, Mr. Peters was the Managing Director of
Kemper Financial Services, Inc.
Except for Mr. Kaplan, Dr. Sullivan and Mr. Spoto,
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.
Spoto's address is 828 Gulf Pavilion Drive, Naples,
Florida 33863.
<PAGE>
As of February 1, 1999, officers and directors of
the Funds beneficially owned 7.32% of the shares of the
Small Cap Fund's then outstanding Class A shares and 0%
of the Small Cap Fund's then outstanding Class C
shares. The Large Cap Fund was not available for
investment until March 1, 1999.
Directors and officers of the Funds who are
officers, directors, employees or shareholders of the
Advisor do not receive any remuneration from the Funds
for serving as directors or officers. Accordingly,
Messrs. Klaskin, Wegbreit and Peters do not receive any
remuneration from the Funds for their services as
directors and/or officers. However, Mr. Kaplan and Dr.
Sullivan received the following fees in 1998 for their
services as directors of the Funds:
Name Cash Other Total
Compensation(1) Compensation
Daniel A. Kaplan $1,000 $ - $1,000
A. Charlene Sullivan $1,000 $ - $1,000
Mr. Spoto did not join the Board until January 1999.
___________________
(1) Each director who is not deemed an "interested
person" of the Funds, as defined in the 1940 Act,
receives $250 per Fund for each Board of Directors
meeting attended by such person. The Board held four
meetings during fiscal 1998 (during which time only
the Small Cap Fund was in operation).
PRINCIPAL SHAREHOLDERS
As of February 1, 1999, the following persons
owned of record or are known by the Funds to own
beneficially 5% or more of the outstanding shares of
one or both classes of shares of the Small Cap Fund
(the Large Cap Fund was not available until March 1,
1999):
Class Number Percent Percent
Name and Address of of of of
Shares Shares Fund Class
AG Edwards & Sons Class C 5,385.543 0.62% 7.09%
Custodian For
Donald E. West - IRA
10359 156th Street
Chippewa Falls, WI 54729-6194
Dain Rauscher, Inc. FBO Class C 4,770.588 0.55% 6.28%
John L. Kelliher
2512 N. Bosworth #407
Chicago, IL 60614
<PAGE>
Von Hagge Design Class C 4,429.679 0.51% 5.83%
Associates
Profit Sharing Plan U/A
DTD 1/1/98
Robert Von Hagge TTEE
17823 Theiss Mail Route
Spring, TX 77379
Based on the foregoing, as of February 1, 1999, no
one owned a controlling interest in the Small Cap Fund.
Shareholders with a controlling interest could affect
the outcome of proxy voting or the direction of
management of the Funds.
INVESTMENT ADVISOR AND DISTRIBUTOR
Background. Prior to July 1997, Oak Ridge
Investments, Inc., the Funds' principal distributor,
also served as the Small Cap Fund's investment advisor
(the Large Cap Fund was not available at that time).
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
Small Cap Fund. Oak Ridge Investments, Inc. continues
to serve as the Funds' 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 Chairman, Treasurer
and Chief Investment Officer of the Advisor; Mr.
Wegbreit is the Vice-Chairman and Secretary 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 Chairman and Treasurer of
the Distributor; Mr. Wegbreit also serves as the Vice-
Chairman and Secretary 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.
Advisor. The Funds' amended and restated
investment advisory agreement is dated as of March 1,
1999 (the "Advisory Agreement"). The term of the
Advisory Agreement began on March 1, 1999 and will
continue in effect for successive periods of one year
if such continuation is approved annually by the Board
of Directors of the Funds or by vote of a majority of
each 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 Funds'
directors who are not parties to the 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 7, 1999. The Advisory Agreement
is terminable without penalty, on 60 days' written
notice by the Board of Directors of the Funds, by vote
of a majority of each Fund'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 Funds' investments and business
affairs, subject to the supervision of the Board of
Directors. At its expense, the Advisor provides office
space and all necessary office facilities, equipment
and personnel for managing the investments of the
Funds. Prior to March 1, 1999, the Small Cap Fund paid
the Advisor an annual management fee of 1.00% of the
Fund's average daily net assets attributable to each
class of its shares. Effective March 1, 1999, the
Advisor agreed to reduce its advisory fee to 0.75% of
the Fund's average daily net assets. The Large Cap
Fund pays the Advisor an annual management fee of 0.60%
of its average daily net assets attributable to each
class of its shares. The advisory fee is accrued daily
and paid monthly.
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
one or both of the Funds. For the fiscal years ended
November 30, 1996,
<PAGE>
1997 and 1998, the Advisor agreed to
waive its management fee and/or reimburse operating
expenses for the Small Cap Fund to the extent necessary
to ensure that (i) total operating expenses for the
Class A shares would not exceed 2.00% of average daily
net assets and (ii) total operating expenses for the
Class C shares would not exceed 2.75% of average daily
net assets. Accordingly, for the fiscal year ended
November 30, 1996, the Small Cap Fund did not pay any
management fee to the Advisor because the Advisor
waived its entire fee. If the Advisor had not waived
its fee, it would have received $62,131 in 1996 for its
investment advisory services. For the fiscal years
ended November 30, 1997 and 1998, the Small Cap Fund
paid the Advisor $12,006 and $32,670, respectively, for
its investment advisory services, and the Advisor
waived $85,111 and $102,836, respectively, of its fee.
Of the fees paid in 1997, $11,674 was attributable to
Class A shares and $332 was attributable to Class C
shares; of the fees paid in 1998, $29,835 was
attributable to Class A shares and $2,835 was
attributable to Class C shares. The Advisor did not
receive any management fees during this time from the
Large Cap Fund because the Large Cap Fund did not
commence operations until March 1, 1999.
Pursuant to an expense cap agreement, dated March
1, 1999, the Advisor has agreed to continue this
waiver/reimbursement policy for both the Small Cap and
the Large Cap Fund until April 1, 2000. After April 1,
2000, the Advisor may (but is not required to) waive
all or a portion of its fee and/or reimburse all or a
portion of operating expenses for one or both classes
of shares of one or both of the Funds.
Distributor. Oak Ridge Investments, Inc., an
affiliate of the Advisor and the Funds, acts as the
principal distributor of the Funds' shares. The
Distributor's principal business address is 10 South
LaSalle Street, Suite 1050, Chicago, Illinois 60603.
Under an amended and restated distribution
agreement dated as of March 1, 1999 (the "Distribution
Agreement"), the Distributor has agreed to use its best
efforts to distribute the Funds' shares. Each Fund's
Class A shares are offered for sale continuously at net
asset value per share plus a maximum initial sales
charge of 4.25% of the offering price. Each Fund's
Class C shares are offered continuously at net asset
value. Existing shareholders of the Small Cap Fund's
Class A shares as of December 31, 1995 are not subject
to the sales charge on additional purchases of Small
Cap Fund shares. In addition, no sales charge is
imposed on the reinvestment of dividends or capital
gains with respect to both the Small Cap and Large Cap
Funds. Moreover, directors, officers and full-time
employees of the Funds, the Advisor, the Distributor
and affiliates thereof, as well as spouses and family
members of such persons, may purchase Class A shares of
one or both of the Funds at net asset value. Certain
other exceptions to the imposition of the sales charge
apply, as discussed more fully in the Prospectus under
the caption "Your Account _ Class A Sales Charge
Waivers." These exceptions are made available because
minimal or no sales effort is required with respect to
the categories of investors so excepted. Any sales
charges which are assessed become the property of the
Distributor. With respect to Class A shares, the
Distributor may pay a portion of the applicable initial
sales charge due upon the purchase of such shares to
the broker-dealer, if any, involved in the trade as
follows:
Portion of Initial
Dollar Amount of Initial Sales Sales Charge
Shares Purchased Charge(1) Paid to Broker-
Dealer(1), (2)
Less than $50,000 4.25% 4.00%
$50,000 but less than $100,000 3.75% 3.50%
$100,000 but less than $250,000 3.25% 3.00%
$250,000 but less than $500,000 2.25% 2.00%
$500,000 but less than $1,000,000 1.75% 1.50%
$1,000,000 or more 1.00% 0.90%
__________________________
(1) Reflected as a percentage of the offering price of
Class A shares. The offering price is the sum of
the net asset value per share plus the initial
sales charge indicated in the table (the "Offering
Price").
(2) At the discretion of the Distributor, all sales
charges may at times be paid to the broker-dealer,
if any, involved in the trade. A broker-dealer
paid all or substantially all of the sales charge
may be deemed an "underwriter" under the
Securities Act.
<PAGE>
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.
Certain of these expenses may be reimbursed pursuant to
the terms of the Rule 12b-1 distribution plans
discussed below.
As compensation for its services under the
Distribution Agreement, the Distributor may retain all
or a portion of (i) the initial sales charge from
purchases of Class A shares and (ii) the Rule 12b-1
fees payable with respect to the Class A and Class C
shares (as described under "Distribution Plans,"
below). For the fiscal years ended November 30, 1997
and 1998, the aggregate dollar amount of initial sales
charges imposed on purchases of the Small Cap Fund's
Class A shares was $15,152 and $22,276, respectively,
and the aggregate dollar amount of Rule 12b-1 fees
payable with respect to the Small Cap Fund's Class A
and Class C shares was $1,003 and $23,445,
respectively. During this period, the Distributor
retained the following amounts of the Small Cap Fund's
Class A sales charge and the Rule 12b-1 fees: 1997 -
$11,998 and $0; and 1998 - $19,757 and $14,730.
FUND TRANSACTIONS AND BROKERAGE
Under the Advisory Agreement, the Advisor is
responsible for decisions to buy and sell securities
for the Funds and for the placement of the Funds'
securities business, the negotiation of the commissions
to be paid on such transactions and the allocation of
portfolio brokerage and principal business. Trades may
be done with brokers, dealers and, on occasion,
issuers. Remuneration for trades may include
commissions, dealer spreads, mark-ups and mark-downs.
In executing transactions on behalf of the Funds,
the Advisor has no obligation to deal with any
particular broker or dealer. Rather, the Advisor seeks
the best qualitative execution. The best net price is
an important factor, but the Advisor also considers the
full range and quality of the broker's services, as
described below. Recognizing the value of the range of
services, the Funds may not pay the lowest commission
or spread available on a particular transaction.
Brokerage will not be allocated based on the sale of
the Funds' shares.
Pursuant to guidelines adopted by the Funds' 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 Funds; however,
in order for the Distributor to effect any portfolio
transactions for the Funds 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 Small Cap Fund for the fiscal years ended
November 30, 1996, 1997 and 1998 was $14,333, $8,501
and $21,597, respectively. Of these total brokerage
commissions, the Distributor received $6,352, $8,021
and $16,657 in 1996, 1997 and 1998, respectively.
Accordingly, for the year ended November 30, 1998, 77%
of the aggregate brokerage commissions paid by the
Small Cap Fund were paid to the Distributor, and 23% of
the aggregate dollar amount of the Small Cap Fund's
transactions involving the payment of commissions were
effected through the Distributor. Information relating
to the Large Cap Fund is not contained herein, since
the Large Cap Fund did not commence operations until
the date of this SAI.
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 (i) 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;
(ii) furnishing analyses and reports concerning
issuers, industries, securities, economic factors
<PAGE>
and
trends, portfolio strategy and the performance of
accounts; and (iii) effecting securities transactions
and performing functions incidental thereto (such as
clearance, settlement and custody).
In selecting brokers or dealers, the Advisor
considers investment and market information and other
research, such as economic, securities and performance
measurement research provided by such brokers or
dealers and the quality and reliability of brokerage
services, including execution capability, performance
and financial responsibility. Accordingly, the
commissions charged by any such broker or dealer 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 or dealer to the Funds. The
Advisor believes that the research information received
in this manner provides the Funds with benefits by
supplementing the research otherwise available to them.
Such higher commissions will not, however, be paid by
the Funds unless (i) 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 with
respect to the accounts, including the Funds, as to
which it exercises investment discretion; (ii) such
payment is made in compliance with the provisions of
Section 28(e) and other applicable state and federal
laws; and (iii) in the opinion of the Advisor, the
total commissions paid by the Funds are reasonable in
relation to the benefits to the Funds over the long-
term. In addition, such higher commissions will not be
paid by the Funds with respect to portfolio
transactions in which the Distributor is serving as
broker to the Funds. The Small Cap Fund did not pay
brokerage commissions for the fiscal years ended
November 30, 1996, 1997 and 1998 for transactions for
which research services were provided. Information
relating to the Large Cap Fund is not contained herein,
since the Large Cap Fund did not commence operations
until the date of this SAI.
The Advisor places portfolio transactions for
other advisory accounts in addition to the Funds.
Research services furnished by firms through which the
Funds effect securities transactions may be used by the
Advisor in servicing all of its accounts; that is, not
all of such services may be used by the Advisor in
connection with the Funds. The Advisor believes it is
not possible to measure separately the benefits from
research services to each of the accounts (including
the Funds) 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 or dealer paid by each
account for brokerage and research services will vary.
However, the Advisor believes such costs to the Funds
will not be disproportionate to the benefits received
by the Funds on a continuing basis. The Advisor seeks
to allocate portfolio transactions equitably whenever
concurrent decisions are made to purchase or sell
securities by the Funds 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 Funds. There can be no assurance that
a particular purchase or sale opportunity will be
allocated to the Funds. In making such allocations
between the Funds 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.
<PAGE>
ADMINISTRATOR AND FUND ACCOUNTANT
Pursuant to separate administration and fund
accounting agreements dated as of December 1, 1995, as
amended (the "Administration Agreement" and "Fund
Accounting Agreement," respectively), Firstar Mutual
Fund Services, LLC ("Firstar") provides administrative
and fund accounting services to the Funds. Under these
Agreements, Firstar calculates the daily net asset
value of each class of shares of each Fund; prepares
and files all federal and state tax returns; oversees
the Funds' insurance relationships; participates in the
preparation of registration statements, proxy
statements and reports; prepares compliance filings
relating to the registration of the Funds' shares
pursuant to state securities laws; compiles data for
and prepares notices to the SEC; prepares financial
statements for annual and semi-annual reports; monitors
the Funds' expense accruals and performs securities
valuations; monitors compliance with the Funds'
investment policies; and generally assists in the
Funds' administrative operations. For the foregoing
services and for the fiscal years ended November 30,
1996, 1997 and 1998, Firstar received $20,000, $30,955
and $36,415, respectively, under the Administration
Agreement and $19,998, $26,161 and $26,071,
respectively, under the Fund Accounting Agreement.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND-DISBURSING AGENT
As custodian of the Funds' assets, Firstar Bank
Milwaukee, N.A., 615 East Michigan Street, Milwaukee,
Wisconsin 53202, has custody of all securities and
cash of the Funds, delivers and receives payment for
securities sold, receives and pays for securities
purchased, collects income from investments, if any,
and performs other duties, all as directed by the
officers of the Funds.
Firstar Mutual Fund Services, LLC, an affiliate of
Firstar Bank Milwaukee, N.A., acts as transfer agent
and dividend-disbursing agent for the Funds.
DISTRIBUTION PLANS
Description of Plans
The Funds have adopted plans pursuant to Rule 12b-
1 under the 1940 Act for each class of shares (the
"Class A Plan" and the "Class C Plan") pursuant to
which certain distribution and/or service fees are paid
to the Distributor. Under the Class A Plan, each 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 relevant Fund attributable to the
Class A shares. The Class C Plan requires each Fund to
pay the Distributor (i) a distribution fee of up to
0.75% per annum of the average daily net assets of the
relevant 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 relevant 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 Funds 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 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 Funds' shares and, with
respect to the Class C shares only, for any of its
shareholder servicing expenses
<PAGE>
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.
Both the Class A Plan and the Class C Plan are
"compensation plans" which means that the fees paid by
the Funds under the plans are intended to compensate
(rather than reimburse) the Distributor (and
Recipients, as applicable) for services rendered and
commission fees borne. Accordingly, payments under the
plans are based on a percentage of average daily net
assets attributable to each class of shares of each
Fund regardless of the amount of expenses actually
incurred, which means that distribution and service
related fees payable under the plans may be more or
less than distribution and service related expenses.
However, neither plan allows for the payment of
distribution and/or service fees in later periods that
relate to expenses incurred in prior periods.
Payment of the distribution and/or service fee is
made quarterly. The aggregate payments by each Fund
under the Class A Plan to the Distributor and all
Recipients may not exceed 0.25% (on an annualized
basis) of the relevant Fund's average net assets
attributable to the Class A shares for that quarter,
and the aggregate payments by each Fund under the Class
C Plan to the Distributor and all Recipients may not
exceed 1.00% (on an annualized basis) of the relevant
Fund's average net assets attributable to the Class C
shares for that quarter.
From time to time, the Distributor may engage in
activities which jointly promote the sale of shares of
one or both classes of shares of one or both of the
Funds, the costs of which may not be readily
identifiable as related to any one class or Fund.
Generally, the expenses attributable to joint
distribution activities will be allocated between each
class of shares of each Fund on the basis of its
respective net assets, although the Board of Directors
may allocate such expenses in any other manner it deems
fair and equitable.
Both plans, and a form of Rule 12b-1 Related
Agreement, have been approved by a majority of the
Board of Directors, including a majority of the members
of the Board who are not "interested persons" of the
Funds as defined in the 1940 Act and who have no direct
or indirect financial interest in the operation of the
plans or any Rule 12b-1 Related Agreement (the
"Disinterested Directors") voting separately.
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 Funds' 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 with respect
to either or both classes of either or both Funds at
any time, without penalty, by vote of a majority of the
outstanding voting securities of the applicable class
of the applicable Fund, or by vote of a majority of
Disinterested Directors (on not more than 60 days'
written notice in the case of the Rule 12b-1 Related
Agreement only).
Amounts Expensed Under the Plans
No amounts have been expensed under either plan
for the Large Cap Fund, since the Large Cap Fund did
not commence operations until the date of this SAI.
For the fiscal year ended November 30, 1998, however,
the Small Cap Fund paid out $17,916 under the Class A
Plan and $5,529 under the Class C Plan. Of the $23,445
expensed, $7,268 was spent on printing and mailing
prospectuses to other than current shareholders, $6,096
was spent on advertising and $10,081 was spent on
dealer compensation. The Distributor retained $14,730
of the amounts expensed under the Class A and Class C
Plan for the fiscal year ended November 30, 1998.
Interests of Certain Persons
With the exception of the Advisor, in its capacity
as the Funds' investment advisor, and the Distributor,
in its capacity as principal distributor of Fund
shares, no "interested person" of the Funds, as defined
in the 1940 Act, and no director of the Funds 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.
<PAGE>
Benefits to the Funds
Small Cap Fund. The Small Cap Fund's Class A Plan
has been in effect since January 1, 1996. The benefits
to the holders of the Small Cap 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.
The Small Cap Fund's Class C Plan has been in
effect since March 1, 1997. The Board of Directors
believes that the Class C Plan has 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 Small Cap 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.
Large Cap Fund. The Large Cap Fund's Class A and
Class C Plans became effective on the date of this SAI
(i.e., March 1, 1999). In deciding whether to approve
these plans, the Board of Directors determined, in the
exercise of its business judgment, that it is
reasonably likely that the plans will benefit the Large
Cap Fund and its future shareholders in at least one or
more ways. Specifically, the Board concluded that the
Distributor and any Recipients would have little or no
incentive to incur promotional expenses on behalf of
the Large Cap Fund if a Rule 12b-1 plan were not in
place to compensate them, thus making the adoption of
these plans important to the viability of the Fund. In
addition, the Board determined that the payment of
service fees to these persons (with respect to the
Class C Plan only) should motivate them to provide an
enhanced level of personal services to holders of Class
C shares, which would, of course, benefit such
shareholders. Finally, the adoption of these plans
will likely lead to an increase in assets under
management, given the enhanced marketing efforts on the
part of the Distributor and Recipients to sell Large
Cap Fund shares. While the Board of Directors
recognizes that the Advisor will benefit from such an
increase since its fees are based upon a percentage of
assets, the increase in assets should also benefit the
Large Cap Fund and its shareholders by reducing the per
share operating expenses of the Fund which should
result since the Fund's fixed expenses will be spread
over a larger asset base. While there can be no
assurance that the expenditure of Fund assets to
finance the distribution of the Large Cap Fund's shares
will have the anticipated results, the Board of
Directors believes there is a reasonable likelihood
that one or more of such benefits will result, and
since the Board will be in a position to monitor the
distribution expenses of the Fund, it will be able to
evaluate the benefit of such expenditures in deciding
whether to continue the Class A and Class C plans for
the Large Cap Fund.
PURCHASE, EXCHANGE AND PRICING OF SHARES
Purchase of Shares
Each Fund offers two classes: Class A and Class
C. As discussed above under the heading "Investment
Advisor and Distributor - Distributor," the Class A
shares are offered and sold subject to an initial sales
charge (with certain exceptions), while the Class C
shares are offered and sold without being subject to an
initial sales charge. Please see "Your Account" in the
Prospectus for more information.
The Funds offer an Automatic Investment Plan
("AIP"), which is a method of using dollar cost
averaging. Dollar cost averaging is an investment
strategy that involves investing a fixed amount of
money at regular time intervals. 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. A
program of regular investment cannot ensure a profit or
protect against a loss from declining markets.
The AIP allows you to make regular, systematic
investments in either or both of the Fund's Class A or
Class C shares from your bank checking account. The
minimum initial investment for investors using the AIP
is $100. If you elect this option, all dividends and
capital gains distributions will automatically be
reinvested in Fund shares. To establish the AIP,
complete the appropriate section in the account
application. Under certain circumstances (such as
discontinuation of the AIP before the minimum initial
investment is reached, or, after
<PAGE>
reaching the minimum
initial investment, the account balance is reduced to
less than $500), the Funds reserve the right to close
your account. Prior to closing any account for failure
to reach the minimum initial investment, the Funds will
give you written notice and 60 days in which to
reinstate the AIP or otherwise reach the minimum
initial investment. Your account may be closed during
periods of declining share prices.
Under the AIP, you may choose to make investments
on the fifth and/or twentieth day of each month in
amounts of $100 or more. There is no service fee
charged by the Funds 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 Funds in writing or by telephone of your
intention to terminate the plan, you close your bank
account or in any manner prevent withdrawal of funds
from the designated checking account. You can set up
the AIP with most financial institutions.
Exchange of Shares
You may exchange Class A shares of one Fund with
Class A shares of the other Fund. You may also
exchange Class C shares of one Fund with Class C shares
of the other Fund. The value of the shares to be
exchanged will be the net asset value next determined
after receipt of instructions for exchange; the price
of the shares being purchased will be the net asset
value (plus the initial sales charge, if applicable)
next determined after receipt of instructions for
exchange.
The Funds reserve the right to modify or terminate
the exchange privilege at any time. Call the Transfer
Agent at 1-800-407-7298 to request instructions for an
exchange. An exchange is not a tax-free transaction.
Pricing of Shares
The Class A shares of each Fund are offered to the
public at the Offering Price, which is the sum of the
net asset value per share (next computed after the time
the purchase application and funds are received in
proper order by the Transfer Agent) and the applicable
initial sales charge. The Class C shares of each Fund
are offered to the public at their net asset value
(next computed after the time the purchase application
and funds are received in proper order by the Transfer
Agent) without any initial sales charge.
As previously noted, the initial sales charge may
be waived for certain individuals and institutions due
to anticipated economies of scale in sales efforts and
expenses. For more information, please see "Your
Account _ Class A Sales Charge Waivers" in the
Prospectus.
The net asset value per share for each class of
shares of each Fund 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 and redemption requests
received 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. A Fund is not required to
calculate its net asset value on days during which the
Fund receives no orders to purchase or redeem shares.
Net asset value per share for each class of shares of
each Fund 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
in that class. 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 average of the most recent bid and asked
prices. 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 or its delegate. The Board of Directors
may approve the use of pricing services to assist the
Funds in the determination of net asset value. Short-
term fixed income securities held by the Funds are
generally valued on an amortized cost basis.
<PAGE>
TAXATION OF THE FUNDS
Each Fund intends to qualify annually for
treatment as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended,
and, if so qualified, will not be liable for federal
income taxes to the extent earnings are distributed to
shareholders on a timely basis. In the event a Fund
fails to qualify as a "regulated investment company,"
it will be treated as a regular corporation for federal
income tax purposes. Accordingly, the disqualifying
Fund would be subject to federal income taxes and any
distributions that it makes would be taxable and non-
deductible by the Fund. What this means for
shareholders of such Fund is that the cost of investing
in the Fund would increase. Under these circumstances,
it would be more economical for shareholders to invest
directly in securities held by the Fund, rather than
invest indirectly in such securities through the Fund.
PERFORMANCE INFORMATION
The historical performance or return of the Funds
may be shown in the form of various performance
figures, including average annual total return, total
return and cumulative total return. The Funds'
performance figures are based upon historical results
and are not necessarily representative of future
performance. Factors affecting the Funds' 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
Average annual total return and total return
figures measure both the net investment income
generated by, and the effect of any realized and
unrealized appreciation or depreciation of, the
underlying investments in a class of shares over a
specified period of time, assuming the reinvestment of
all dividends and distributions. 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
therefore represent the aggregate percentage or dollar
value change over the period.
The average annual total return of each class of
shares of each 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.
Performance for a specific period is calculated by
first taking an investment (assumed to be $1,000)
("initial investment") in a class of shares of a Fund
on 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 Funds' Class A shares only, this
calculation reflects the deduction of the maximum 4.25%
initial sales charge. In addition, the calculation
assumes that all income and capital gains dividends
paid by the Funds 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.
<PAGE>
The non-load adjusted total return for the Class A
shares of the Small Cap Fund for the year ended
November 30, 1998 was (9.82)%. The load-adjusted total
return for the Class A shares of the Small Cap Fund for
the same period was (13.65)%. The total return for the
Class C shares of the Small Cap Fund for the one year
ended November 30, 1998 was (10.40)% (the Class C
shares commenced operations on March 1, 1997).
Return information for the Large Cap Fund is not
available, since the Large Cap Fund did not commence
operations until March 1, 1999.
Comparisons
From time to time, in marketing and other fund
literature, the performance of one or both classes of
shares of one or both of the Funds 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 each Fund will be
compared to Lipper's appropriate fund category; that
is, by fund objective and portfolio holdings.
The Funds' performance may also be compared to the
performance of other mutual funds tracked 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 3, 5 and 10
year periods. Ratings are not absolute or necessarily
predictive of future performance.
Evaluations of Fund performance made by
independent sources may also be used in advertisements
concerning the Funds, including reprints of or
selections from editorials or articles about the Funds.
Sources for Fund performance and articles about the
Funds may include publications such as Money, Forbes,
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 Funds may also compare the performance of one
or both of their classes of shares to a wide variety of
indices and measures of inflation, including the
Russell 2000 Stock Index (for the Small Cap Fund) and
the S&P 500 Stock Index (for the Large Cap Fund).
There are differences and similarities between the
investments that the Funds may purchase and the
investments measured by these indices.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 100 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, have been selected
as the independent accountants for the Funds.
FINANCIAL STATEMENTS
The following audited financial statements of the
Small Cap Fund are incorporated herein by reference to
its Annual Report for the year ended November 30, 1998
as filed with the SEC on February 4, 1999:
(a) Schedule of Investments as of November 30, 1998.
(b) Statement of Assets and Liabilities as of November 30, 1998.
(c) Statement of Operations for the year ended November 30, 1998.
<PAGE>
(d) Statement of Changes in Net Assets for the years ended
November 30, 1997 and 1998.
(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, 1997
and 1998; and Financial Highlights for the Class C shares for
the period March 1, 1997 (commencement of operations) to November
30, 1997, and for the year ended November 30, 1998.
(f) Notes to Financial Statements.
(g) Report of Independent Accountants dated December 29, 1998.
Financial statements for the Large Cap Fund are
not available, since the Large Cap Fund did not
commence operations until March 1, 1999.
<PAGE>
PART C
OTHER INFORMATION
Item 23. Exhibits
See "Exhibit Index."
Item 24. Persons Controlled by or under Common Control
with Registrant
Registrant neither controls any person nor is
under common control with any other person.
Item 25. 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 26. Business and Other Connections of Investment
Advisor
Besides serving as investment advisor to the
Registrant and other private accounts, Oak Ridge
Investments, LLC (the "Advisor") is not currently and
has not during the past two fiscal years engaged in any
other business, profession, vocation or employment of a
substantial nature, although the Advisor's predecessor,
Oak Ridge Investments, Inc., was not only an investment
advisor but also a broker-dealer. Information
regarding the business, profession, vocation or
employment of a substantial nature of the Advisor's
directors and officers is hereby incorporated by
reference to the information contained under "Fund
Management and Distribution _ Management" in the
Prospectus and "Directors and Officers" in the
Statement of Additional Information.
Item 27. Principal Underwriters
(a) None.
(b) The principal business address of Oak Ridge
Investments, Inc. (the "Distributor"), the Registrant's
principal underwriter, is 10 South LaSalle Street,
Suite 1050, Chicago, Illinois 60603. Information
relating to directors and officers of the Distributor
is hereby incorporated by reference to the
information contained under "Directors and Officers" in
the Statement of Additional Information.
(c) None.
Item 28. 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
<PAGE>
maintained by Firstar Bank Milwaukee,
N.A. and Firstar Mutual Fund Services, L.L.C., 615 East
Michigan Street, Milwaukee, Wisconsin 53202, relating
to the former's function as custodian and the latter's
function as transfer agent, administrator and fund
accountant.
Item 29. Management Services
All management-related service contracts entered
into by Registrant are discussed in Parts A and B of
this Registration Statement.
Item 30. Undertakings.
(a) Registrant undertakes to furnish without
charge a copy of its Annual Report to each person to
whom a Statement of Additional Information is delivered
if the person is not a shareholder of the Funds at the
time the Statement of Additional Information is so
delivered.
(b) Registrant undertakes to furnish a copy of
its Annual Report to each person to whom a Prospectus
is delivered, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933 and the Investment Company Act of 1940, the
Registrant has duly caused this Post-Effective
Amendment No. 9 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 25th day of February, 1999.
OAK RIDGE FUNDS, INC.
(Registrant)
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. 9 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, February 25, 1999
- ----------------------- a Director, Treasurer
Samuel Wegbreit and Assistant Secretary
(principal financial and
accounting officer)
/s/ David M. Klaskin Director and President February 25, 1999
- ----------------------- (principal executive
David M. Klaskin officer)
/s/ Daniel A. Kaplan Director February 25, 1999
- ------------------------
Daniel A. Kaplan
Director ___________, 1999
- ------------------------
Dr. A. Charlene Sullivan
/s/ Angelo Spoto Director February 25, 1999
- -----------------------
Angelo Spoto
<PAGE>
EXHIBIT INDEX
Exhibit Exhibit
No.
(a.1) Articles of Amendment dated as of March
1, 1999 to Registrant's Articles of
Incorporation.
(a.2) Articles Supplementary dated as of March
1, 1999 to Registrant's Articles of
Incorporation.
(a.3) Articles of Amendment dated as of March
2, 1998 to Registrant's Articles of
Incorporation.(1)
(a.4) Articles of Amendment dated as of
February 26, 1997 to Registrant's
Articles of Incorporation.(1)
(a.5) Articles Supplementary dated as of
February 26, 1997 to Registrant's
Articles of Incorporation.(1)
(a.6) Registrant's Articles of Incorporation
dated October 15, 1993.(1)
(b) Registrant's Amended and Restated
By-Laws.(1)
(c) None.
(d.1) Amended and Restated Investment Advisory
Agreement with Oak Ridge Investments,
LLC dated as of March 1, 1999.
(d.2) Expense Cap/Reimbursement Agreement
dated as of March 1, 1999.
(e.1) Amended and Restated Distribution
Agreement with Oak Ridge Investments,
Inc. dated as of March 1, 1999.
(e.2) Amended and Restated Form of Dealer
Agreement.
(f) None.
(g.1) Custodian Agreement with Firstar Trust
Company dated December 1, 1995.(2)
(g.2) Addendum to Custodian Agreement
effective September 30, 1998.
(g.3) Amendment to Custodian Agreement dated
January 7, 1999.
(h.1) Transfer Agent Agreement with Firstar
Trust Company dated December 1, 1995.(2)
(h.2) Fund Administration Servicing Agreement
with Firstar Trust Company dated
December 1, 1995.(2)
(h.3) Fund Accounting Servicing Agreement with
Firstar Trust Company dated December 1,
1995.(2)
<PAGE>
(h.4) Addendum to Firstar Servicing Agreements
effective September 30, 1998.
(h.5) Amendment to Firstar Fund Administration
Servicing Agreement dated January 7,
1999.
(h.6) Amendment to Fund Accounting Servicing
Agreement dated January 7, 1999.
(h.7) Amendment to Transfer Agent Agreement
dated January 7, 1999.
(i) Opinion and Consent of Godfrey & Kahn,
S.C.(1)
(j) Consent of PricewaterhouseCoopers LLP.
(k) None.
(l) Subscription Agreements.(1)
(m.1) Amended and Restated Class A Rule 12b-1
Distribution Plan.
(m.2) Amended and Restated Class C Rule 12b-1
Distribution and Servicing Plan.
(n) Financial Data Schedule.(3)
(o) Amended and Restated Rule 18f-3 Multiple
Class Plan.
______________________
(1) Incorporated by reference to Registrant's Post-
Effective Amendment No. 7 to its Registration
Statement on Form N-1A as filed with the Securities
and Exchange Commission on March 31, 1998.
(2) Incorporated by reference to 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.
(3) Incorporated by reference to Registrant's N-SAR
as filed with the Securities and Exchange Commission
on January 28, 1999.
MW1-145244-3
MW1-145167-3
MW1-145272-3
Exhibit a.1
OAK RIDGE FUNDS, INC.
Articles of Amendment
Oak Ridge 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: 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 Oak
Ridge Growth Fund series are hereby redesignated as
Class A and Class C shares, respectively, of the Oak
Ridge Small Cap Equity Fund series.
SECOND: 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 7,
1999.
THIRD: 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.
FOURTH: The Corporation is registered as an open-
end investment company under the Investment Company Act
of 1940.
FIFTH: These Articles of Amendment will become
effective at 12:00 a.m. on March 1, 1999.
IN WITNESS WHEREOF, Oak Ridge Funds, Inc. has
caused these Articles of Amendment to be signed as of
the 12th day of February, 1999 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: Oak Ridge Funds, Inc.
/s/ John Peters /s/ Samuel Wegbreit
--------------------- ------------------------
John Peters Samuel Wegbreit
Secretary Chairman of the Board
Exhibit a.2
OAK RIDGE FUNDS, INC.
Articles Supplementary
Oak Ridge 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 on January 7, 1999 approved the
classification of Fifty Million (50,000,000) shares of
the Corporation's authorized but unissued and
unclassified common stock as the Class A shares of the
Oak Ridge Large Cap Equity Fund (the "Large Cap Fund")
series and Fifty Million (50,000,000) shares of the
Corporation's authorized but unissued and unclassified
common stock as the Class C shares of the Large Cap
Fund series.
SECOND: The Class A and Class C shares of
the Large Cap 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 A and Class C shares of the Large Cap Fund
series shall be invested in a common investment
portfolio, together with the shares of any other class
of the Large Cap Fund series hereafter established, and
the assets, liabilities, income, expenses, dividends
and related liquidation rights of the various classes
of the shares of the Large Cap 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 A and Class C shares of
the Large Cap 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, 1999.
IN WITNESS WHEREOF, Oak Ridge Funds, Inc. has
caused these Articles Supplementary to be signed as of
the 12th day of February, 1999 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: Oak Ridge Funds, Inc.
/s/ John Peters /s/ Samuel Wegbreit
- ----------------- -----------------------
John Peters Samuel Wegbreit
Secretary Chairman of the Board
Exhibit d.1
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
This Agreement, entered into as of March 1, 1999,
is between OAK RIDGE FUNDS, INC., a Maryland
corporation (the "Corporation"), 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
(the "Funds"), and the beneficial interest in each such
series or class will be represented by a separate
series or class of shares.
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
each of the Funds of the Corporation on whose behalf
the Corporation executes an Exhibit to this Agreement,
and Oak Ridge, by execution of each such Exhibit,
accepts the appointments. 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 each 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 each 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 Funds, Oak Ridge
shall have the following responsibilities:
(a) To furnish continuous advice and
recommendations to the Funds, as to the
acquisition, holding or disposition of any or all
of the securities or other assets which the Funds
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
Funds, 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 Funds or to any shareholder of the
Funds 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 Funds'
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 Funds' 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 Funds a monthly fee as
set forth on the Exhibits hereto, payable on the last
day of each month during which or during part of which
this Agreement is in effect. 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 one
or more of the Funds.
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. Each 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 each Fund's 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 Funds,
including but not limited to, all costs involved
in the registration or qualification of shares of
the Funds 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 Funds.
(b) If expenses borne by a 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 a 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 a 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 transactions
for the Funds 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 business for the Funds 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 transactions for the Funds,
and the Directors may establish policies or guidelines
to be followed by Oak Ridge in placing transactions for
the Funds 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 a 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 a 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 for each
Fund on March 1, 1999 and shall continue in effect with
respect to each Fund 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 each
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 each
Fund.
13. Governing Law. This Agreement shall be
governed by and construed in accordance with the
internal laws of the State of Maryland; 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.
This Agreement will become binding on the parties
hereto upon their execution of the Exhibits to this
Agreement.
EXHIBIT A
to the
Investment Advisory Agreement
OAK RIDGE SMALL CAP EQUITY FUND
For all services rendered by Oak Ridge hereunder,
the above-named Fund of the Corporation shall pay Oak
Ridge and Oak Ridge agrees to accept as full
compensation for all services rendered hereunder, an
annual investment advisory fee equal to 0.75% of the
average daily net assets of the Fund.
The portion of the fee based upon the average
daily net assets of the Fund shall be accrued daily at
the rate of 1/365th of 1% applied to the daily net
assets of the Fund.
The advisory fee so accrued shall be paid to Oak
Ridge monthly.
Executed as of this 1st day of March, 1999.
OAK RIDGE FUNDS, INC.
By:/s/ Samuel Wegbreit
-------------------------
Samuel Wegbreit,
Chairman of the Board
OAK RIDGE INVESTMENTS, LLC
By:/s/ David M. Klaskin
----------------------------
David M. Klaskin,
Chairman of the Board
EXHIBIT B
to the
Investment Advisory Agreement
OAK RIDGE LARGE CAP EQUITY FUND
For all services rendered by Oak Ridge hereunder,
the above-named Fund of the Corporation shall pay Oak
Ridge and Oak Ridge agrees to accept as full
compensation for all services rendered hereunder, an
annual investment advisory fee equal to 0.60% of the
average daily net assets of the Fund.
The portion of the fee based upon the average
daily net assets of the Fund shall be accrued daily at
the rate of 1/365th of 1% applied to the daily net
assets of the Fund.
The advisory fee so accrued shall be paid to Oak
Ridge monthly.
Executed as of this 1st day of March, 1999.
OAK RIDGE FUNDS, INC.
By:/s/ Samuel Wegbreit
----------------------
Samuel Wegbreit,
Chairman of the Board
OAK RIDGE INVESTMENTS, LLC
By:/s/ David M. Klaskin
------------------------
David M. Klaskin,
Chairman of the Board
EXPENSE CAP/REIMBURSEMENT AGREEMENT
This Agreement is entered into as of the 1st day
of March, 1999, between Oak Ridge Investments, LLC (the
"Adviser") and Oak Ridge Funds, Inc. on behalf of the
Oak Ridge Small Cap Equity Fund and the Oak Ridge Large
Cap Equity Fund (collectively, the "Funds").
WHEREAS, the Adviser has previously voluntarily
agreed to reduce its advisory fee and/or reimburse the
Funds for certain operating expenses to the extent
necessary to cap a Fund's total operating expenses at
certain levels.
WHEREAS, the Adviser now desires to contractually
agree to waive a portion of its advisory fee or
reimburse certain of the Funds' operating expenses to
ensure that the Funds' total operating expenses do not
exceed the levels described below.
NOW THEREFORE, the parties agree as follows:
The Adviser agrees that, for the term of this
Agreement, it will reduce its compensation as provided
for in the Amended and Restated Investment Advisory
Agreement between the Funds and the Adviser dated March
1, 1999, and/or assume expenses for the Funds to the
extent necessary to ensure that the total operating
expenses of each Fund's Class A shares do not exceed
2.00% and the total operating expenses of each Fund's
Class C shares do not exceed 2.75%, of each Fund's
average daily net assets on an annual basis.
The Adviser shall be entitled to recoup such
amounts for a period of up to three (3) years form the
date the Adviser reduced its compensation and/or
assumed expenses for the Funds.
This Agreement shall terminate on April 1, 2000,
unless extended by the mutual agreement of the parties,
as provided for in an amendment to this Agreement.
OAK RIDGE INVESTMENTS, LLC
By:/s/ David Klaskin
----------------------
OAK RIDGE FUNDS, INC.
By:/s/ Samuel Wegbreit
-----------------------
Exhibit e.1
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
This Agreement, entered into as of this 1st
day of March, 1999, is between OAK RIDGE FUNDS, INC., a
Maryland corporation (the "Fund"), and OAK RIDGE
INVESTMENTS, INC., an Illinois corporation (the
"Distributor").
W I T N E S S E T H :
WHEREAS, the Fund is an open-end investment
company registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"), and
has registered one or more distinct series of shares of
common stock (the "Shares") for sale to the public
under the Securities Act of 1933, as amended (the
"Securities Act"), and has qualified its shares for
sale to the public under various state securities laws.
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, Inc. (the "NASD"); and
WHEREAS, the Fund desires to retain the
Distributor as the distributor of the Shares of each
series listed on Schedule A (as amended from time to
time) to this Agreement.
NOW, THEREFORE, the Fund and the 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, 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 Fund.
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.
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 Fund 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 applicable rules of the NASD
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 Fund (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
March 1, 2000, 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 each series 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 Fund shall request and evaluate, and the
Distributor shall furnish, such information as may
reasonably be necessary to enable the Fund'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
Fund, or by vote of a majority of the outstanding
voting securities of each series 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, as amended, or any rule or order of the
Securities and Exchange Commission under such Acts or
any rule of the NASD.
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 as of the day and year first
written above.
OAK RIDGE FUNDS, INC.
By:/s/ Samuel Wegbreit
-----------------------
Samuel Wegbreit,
Chairman of the Board
Attest:/s/ John Peters
------------------------
John Peters,
Secretary
OAK RIDGE INVESTMENTS, INC.
By:/s/ David M. Klaskin
------------------------
David M. Klaskin,
Chairman of the Board
Attest:/s/ Samuel Wegbreit
-----------------------------
Samuel Wegbreit,
Secretary
SCHEDULE A
to the
DISTRIBUTION AGREEMENT
between
OAK RIDGE FUNDS, INC.
and
OAK RIDGE INVESTMENTS, INC.
Pursuant to section 1 of the Distribution
Agreement between Oak Ridge Funds, Inc. (the "Fund")
and Oak Ridge Investments, Inc. (the "Distributor"),
the Fund hereby appoints the Distributor as its agent
to be the principal underwriter of the Fund with
respect to its following series:
Oak Ridge Small Cap Equity Fund
Oak Ridge Large Cap Equity Fund
Dated March 1, 1999
Exhibit e.2
Amended and Restated
Form of Dealer Agreement
Oak Ridge Investments, Inc.
10 South LaSalle Street, Suite 1050
Chicago, IL 60603
_______ __, 1999
[Dealer Name and
Address]
Dear Sir or Madam:
Oak Ridge Investments, Inc. ("Oak Ridge"), as the
Distributor of the shares of the Oak Ridge Small Cap
Equity Fund (previously known as the Oak Ridge Growth
Fund), the Oak Ridge Large Cap Equity Fund and any
other series offered from time to time by Oak Ridge
Funds, Inc. to which the terms of this Agreement may be
extended as provided herein (collectively, the
"Funds"), understands that you are a member in good
standing of the National Association of Securities
Dealers, Inc. (the "NASD") (your signature below
constitutes a representation of such membership in good
standing) and, on the basis of such understanding,
invites you to become a Selected Dealer to distribute
any or all shares of these Funds on the following
terms:
1. You and ourselves agree to abide by the
applicable rules of the NASD and all other federal and
state rules and regulations that are now or may become
applicable to transactions hereunder. Your expulsion
or suspension from the NASD will automatically
terminate this Agreement without notice. Oak Ridge may
terminate this Agreement at any time upon notice either
in its entirety or with respect to any one or more of
the Funds.
2. Orders for shares received from you and
accepted by us will be at the public offering price
applicable to each order, as established by the then
effective prospectus of each Fund. All orders are
subject to acceptance by us, and we reserve the right
in our sole discretion to reject any order. We also
reserve the right to establish minimum orders for
individual purchasers as well as for selected dealers.
3. You will be compensated for your services
herein with respect to sales made to investors who are
not excepted from having to pay a front-end sales
charge on the basis of a dealer concession from the
public offering price, as established in the then
current statement of additional information of each
Fund. You will not, however, be compensated for your
services herein with respect to sales made to investors
who, according to the then current prospectus of the
relevant Fund, may purchase shares of the Fund at net
asset value (without the imposition of a front-end
sales charge). The front-end sales charge and related
dealer concession or sales commission, as the case may
be, applicable to sales of the shares of a Fund may be
increased or decreased in our discretion in the manner
described in Section 10 below.
4. You agree that your transactions in shares of
the Funds will be limited to the purchase of shares
from us for resale to your customers at the public
offering price then in effect or for your own bona fide
investment and to repurchases which are made in
accordance with the procedures set forth in the then
current prospectus of the relevant Fund.
5. Except for sales pursuant to plans established
by the Funds providing for the periodic investment of
new monies, orders will be not be accepted for less
than the minimum number of shares or dollar amounts set
forth in the then current prospectus of the relevant
Fund.
6. You agree that you will not withhold placing
customers' orders so as to profit yourself as a result
of such withholding.
7. You agree to sell shares only to your
customers at the applicable public offering price or to
the Funds or us as Distributor of the Funds at net
asset value, in each case determined as set forth in
the current prospectus of the relevant Fund. You
further agree only to sell shares of the Funds in those
states in which the Funds' shares may legally be
offered for sale.
8. Settlement shall be made within three business
days after our acceptance of the order. If payment is
not so received or made, we reserve the right forthwith
to cancel the sale or, at our option, to resell the
shares at the then prevailing net asset value in which
latter case you agree to be responsible for any loss
resulting to any Fund or to us from your failure to
make payments as aforesaid.
9. If any shares sold to you under the terms of
this Agreement are redeemed by a Fund or repurchased
for the account of a Fund or are tendered to a Fund for
redemption or repurchase within seven business days
after the date of our confirmation to you of your
original purchase order therefor, you agree to pay
forthwith to us the full amount of any dealer
concession allowed or commission paid to you on the
original sale, and we agree to pay the amount of any
such dealer concession to the Fund when received by us.
We also agree to pay to the Fund the amount of our
share, if any, of any front-end sales charge on the
original sale of such shares.
10. All sales will be subject to receipt of
shares by us from the Funds. We reserve the right in
our discretion without notice to you to suspend sales
or withdraw any offering of shares entirely or with
respect to one or more Funds, or to change the public
offering prices or sales charges and dealer
concessions. We further reserve the right upon written
notice to you to amend this Agreement to include one or
more additional Funds, to exclude from this Agreement
one or more Funds then covered by this Agreement, to
increase or decrease the amount of any commissions to
be paid to you by us on the sale of shares of any of
the Funds, or otherwise amend or cancel this Agreement.
You agree that any order to purchase shares of a Fund
placed by you after your receipt of a revised or
supplemented prospectus relating to such Fund and
reflecting any such amendment, or your receipt of
written notice of any such amendment, as the case may
be, shall constitute your agreement to such amendment.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
11. No person is authorized to make any
representation concerning any Fund or its shares except
those contained in its effective prospectus and any
such information as may be officially designated as
information supplemental to the prospectus. In
purchasing shares from us you shall rely solely on the
representations contained in the relevant Fund's
effective prospectus and supplemental information
mentioned above.
12. We will supply to you additional copies of
the then effective prospectus and statement of
additional information for each Fund in reasonable
quantities upon request.
13. In no transaction shall you have any
authority whatsoever to act as agent of a Fund or of us
or of any other selected dealer and nothing in this
Agreement shall constitute either of us the agent of
the other or shall constitute you or the Fund the agent
of the other. Except as otherwise indicated herein,
all transactions in these shares between you and us are
as principal, each for his own account. This Agreement
shall not be assignable by you.
14. Any notice to you shall be duly given if
mailed or telegraphed to you at your address as
registered from time to time with the NASD. Any notice
to Oak Ridge shall be sent to 10 South LaSalle Street,
Suite 1050, Chicago, Illinois 60603, Attention: Samuel
Wegbreit.
15. All expenses incurred in connection with your
activities under this Agreement shall be borne by you.
16. This Agreement shall become effective on the
date accepted by you, as reflected on the signature
page hereof. This Agreement constitutes the entire
agreement between Oak Ridge and you and supersedes all
prior oral or written agreements between the parties
hereto.
Sincerely,
OAK RIDGE INVESTMENTS, INC.
Samuel Wegbreit, Vice-Chairman of the Board
The undersigned has caused this Agreement to be
executed by its duly authorized officer as of this
____ day of _________, 19__, to evidence its acceptance
of your invitation to become a selected dealer and
agrees to abide by the foregoing terms and conditions.
- ---------------------------
(Selected Dealer)
By:------------------------
(Authorized Signature)
Exhibit g.2
Addendum to Custodian Agreement
This Addendum to the Custodian Agreement dated
December 1, 1995, is entered into by and between
Firstar Bank Milwaukee, N.A. and Oak Ridge Investments,
LLC as of the 30th day of September, 1998; and
WHEREAS, the entity known as Firstar Trust Company
ceased operations on September 30, 1998; and
WHEREAS, Firstar Bank Milwaukee, N.A. represents
that it has the necessary trust and custodial powers to
enter into this Agreement;
NOW, THEREFORE, Firstar Bank Milwaukee, N.A. will
be the successor responsible party to each of the
Agreements referenced above and will assume all
responsibility for any acts or omissions during the
time Firstar Trust Company was the named service
provider under these same Agreements.
FIRSTAR BANK MILWAUKEE, N.A. OAK RIDGE INVESTMENTS, LLC
BY: /s/ Joseph Neuberger BY: /s/ Samuel Wegbreit
- ------------------------- ------------------------
ATTEST: /s/ Victoria Kampa ATTEST: /s/ David Klaskin
- -------------------------- -------------------------
Exhibit g.3
ADDITION OF THE
OAK RIDGE LARGE CAP FUND
TO THE
CUSTODIAN AGREEMENT
Between
OAK RIDGE FUNDS, INC.
and
FIRSTAR BANK MILWAUKEE, N.A.
Dated December 1, 1995
WHEREAS, the above parties have entered into a
Custodian Agreement (the "Agreement") whereby Firstar
Bank Milwaukee, N.A. ("FBM") has agreed to provide
custody services to Oak Ridge Funds, Inc. (the
"Company"); and
WHEREAS, the parties would like to add the Oak
Ridge Large Cap Fund (the "Fund") to the Agreement;
NOW THEREFORE, the Company and FBM agree to add
the Fund to the Agreement and compensation for the
addition of the Fund is as follows:
Annual fee based upon market value
2 basis points per year
Minimum annual fee per fund - $3,000
Investment transactions (purchase, sale, exchange,
tender, redemption, maturity, receipt, delivery):
$12.00 per book entry security (depository or Federal Reserve system)
$25.00 per definitive security (physical)
$25.00 per mutual fund trade
$75.00 per Euroclear
$ 8.00 per principal reduction on pass-through certificates
$35.00 per option/futures contract
$15.00 per variation margin
$15.00 per Fed wire deposit or withdrawl
Variable Amount Demand Notes: Used as a short-term
investment, variable amount notes offer safety and
prevailing high interest rates. Our charge, which is
1/4 of 1%, is deducted from the variable amount note
income at the time it is credited to your account.
Plus out-of-pocket expenses, and extraordinary expenses
based upon complexity
Fees are billed monthly, based upon market value at the
beginning of the month
Dated this 7th day of January, 1999.
OAK RIDGE FUNDS, INC. FIRSTAR BANK MILWAUKEE, N.A.
BY: /s/ Samuel Wegbreit BY: /s/ Joseph Redwine
- ------------------------- ------------------------------
Exhibit h.4
Addendum to Firstar Servicing Agreements
This Addendum to the Fund Administration, Fund
Accounting, and Transfer Agent Agreements dated
December 1, 1995, is entered into by and between
Firstar Mutual Fund Services, LLC and Oak Ridge
Investments, LLC as of the 30th day of September, 1998.
WHEREAS, the mutual funds servicing division of
Firstar Trust Company became a limited liability
company and separate subsidiary of Firstar Bank,
Milwaukee on September 30, 1998; and
WHEREAS, the entity known as Firstar Trust Company
ceased operations on September 30, 1998; NOW,
THEREFORE, Firstar Mutual Fund Services, LLC will
be the successor responsible party to each of the
Agreements referenced above and will assume all
responsibility for any acts or omissions during the
time Firstar Trust Company was the named service
provider under these same Agreements.
Firstar Mutual Fund Services, LLC Oak Ridge Investments, LLC
BY:/s/ Joseph Neuberger BY:/s/ Samuel Wegbreit
- --------------------------------- ----------------------------
ATTEST: /s/ Victoria Kampa ATTEST: /s/ David Klaskin
Exhibit h.5
ADDITION OF THE
OAK RIDGE LARGE CAP FUND
TO THE
FUND ADMINISTRATION SERVICING AGREEMENT
Between
OAK RIDGE FUNDS, INC.
and
FIRSTAR MUTUAL FUND SERVICES, LLC
Dated December 1, 1995
WHEREAS, the above parties have entered into a Fund
Administration Servicing Agreement (the "Agreement")
whereby Firstar Mutual Fund Services, LLC ("FMFS") has
agreed to provide administration services to Oak Ridge
Funds, Inc. (the "Company"); and
WHEREAS, the parties would like to add the Oak Ridge
Large Cap Fund (the "Fund") to the Agreement;
NOW THEREFORE, the Company and FMFS agree to add the
Fund to the Agreement and compensation for the addition
of the Fund is as follows:
First class of funds:
Minimum annual of $25,000 for the first year.
Minimum annual of $30,000 for the second year.
Second class of funds:
Minimum annual of $10,000 for the first year.
Minimum annual of $15,000 after the first year.
6 basis points (.0006) on the first $200,000,000
5 basis points (.0005) on the next $500,000,000
3 basis points (.0003) on the balance
Plus out-of-pocket expenses, including but not limited to:
Postage
Special Reports
Stationary
Federal and State regulatory filing fees
Programming
Certain insurance premiums
Proxies
All other out of pocket expenses
Records Retention
Expense from Board of Directors meetings
Audit and Legal Expenses
Dated this 7th day of January, 1999.
OAK RIDGE FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
BY: /s/ Samuel Wegbreit BY: /s/ Joseph Neuberger
- ------------------------- -----------------------------------
Exhibit h.6
ADDITION OF THE
OAK RIDGE LARGE CAP FUND
TO THE
FUND ACCOUNTING SERVICING AGREEMENT
Between
OAK RIDGE FUNDS, INC.
and
FIRSTAR MUTUAL FUND SERVICES, LLC
Dated December 1, 1995
WHEREAS, the above parties have entered into a
Fund Accounting Servicing Agreement (the "Agreement")
whereby Firstar Mutual Fund Services, LLC ("FMFS") has
agreed to provide accounting services to Oak Ridge
Funds, Inc. (the "Company"); and
WHEREAS, the parties would like to add the Oak
Ridge Large Cap Fund (the "Fund") to the Agreement;
NOW THEREFORE, the Company and FMFS agree to add
the Fund to the Agreement and compensation for the
addition of the Fund is as follows:
Annual fee per fund based on market value of
assets for two classes of funds:
$27,500 for the first $40,000,000
1/100 of 1% (1 basis point) on the next $200,000,000
5/1000 of 1% (1/2 basis point) on the balance
Out-of-pocket expenses, including daily pricing service.
Dated this 7th day of January, 1999.
OAK RIDGE FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
BY: /s/ Samuel Wegbreit BY: /s/ Joseph Neuberger
- -------------------------- ------------------------------------
Exhibit h.7
ADDITION OF THE
OAK RIDGE LARGE CAP FUND
TO THE
TRANSFER AGENT AGREEMENT
Between
OAK RIDGE FUNDS, INC.
and
FIRSTAR MUTUAL FUND SERVICES, LLC
Dated December 1, 1995
WHEREAS, the above parties have entered into a
Transfer Agent Agreement (the "Agreement") whereby
Firstar Mutual Fund Services, LLC ("FMFS") has agreed
to provide transfer agent services to Oak Ridge Funds,
Inc. (the "Company"); and
WHEREAS, the parties would like to add the Oak
Ridge Large Cap Fund (the "Fund") to the Agreement;
NOW THEREFORE, the Company and FMFS agree to add
the Fund to the Agreement and compensation for the
addition of the Fund is as follows:
First class of fund:
$16.00 per shareholder account
$10.00 per Fed wire transfer (billed to
investor)
$5.00 per telephone exchange (billed to
investor)
Annual minimum fee $10,000
Second class of fund:
$16.00 per shareholder account
$10.00 per Fed wire transfer (billed to investor)
$5.00 per telephone exchange (billed to investor)
Annual minimum fee $10,000
Plus out-of-pocket expenses, including but not limited to:
Telephone - toll free lines Postage
Programming Stationary/envelopes
Mailing Insurance
Proxies Retention of records
Microfilm/fiche of records Special reports
All other out-of-pocket expenses
Dated this 7th day of January, 1999.
OAK RIDGE FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
BY: /s/ Samuel Wegbreit BY: /s/ Joseph Neuberger
- ------------------------- -------------------------------------
Exhibit j
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in
the Prospectus and Statement of Additional Information
constituting parts of this Post-Effective Amendment No.
9 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated December
29, 1998 relating to the financial statements and
financial highlights of the Oak Ridge Small Cap Equity
Fund, previously known as the Oak Ridge Growth Fund,
and one of the two portfolios of the Oak Ridge Funds,
Inc. appearing in the November 30, 1998 Annual Report
to Shareholders, which is also incorporated by
reference into the Registration Statement. We also
consent to the references to us under the heading
"Financial Highlights of the Funds" in such Prospectus
and under the heading "Independent Accountants" in the
Statement of Additional Information.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
February 25, 1999
OAK RIDGE FUNDS, INC.
AMENDED AND RESTATED RULE 12b-1 DISTRIBUTION PLAN
AS AMENDED AS OF MARCH 1, 1999
CLASS A SHARES OF OAK RIDGE SMALL CAP EQUITY FUND AND
OAK RIDGE LARGE CAP EQUITY FUND
The following Rule 12b-1 Distribution Plan, as
amended (the "Plan"), has been adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940, as
amended, by Oak Ridge Funds, Inc. (the "Company"), a
Maryland corporation, on behalf of the Class A shares
of the Oak Ridge Small Cap Equity Fund (previously
known as the Oak Ridge Growth Fund) and the Class A
shares of the Oak Ridge Large Cap Equity Fund (each, a
"Fund"). Each Fund is a series of shares 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 or in any Rule
12b-1 Related Agreement (as defined below) (the
"Disinterested Directors"), cast in person at a meeting
called for the purpose of voting on such Plan.
In considering whether the Company should amend
the Plan, the Board of Directors of the Company
evaluated such information as it deemed necessary and
determined that there was a reasonable likelihood that
the amendment of the Plan would benefit the Company and
the Class A shareholders of each Fund.
The provisions of the Plan are as follows:
1. PAYMENTS BY THE COMPANY TO PROMOTE THE SALE OF THE
CLASS A SHARES
(a) The Company, on behalf of the Class A
shares of each Fund, will pay Oak Ridge
Investments, Inc. (the "Distributor"), as
principal underwriter of the Funds' shares, a
distribution fee of up to 0.25% per annum of the
average daily net assets of the Class A shares in
connection with the promotion and distribution of
each Fund's Class A shares, including, but not
necessarily limited to, advertising, compensation
to underwriters, dealers and seller personnel, the
printing and mailing of prospectuses to other than
current Class A shareholders of a Fund, and the
printing and mailing of sales literature. 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
with respect to the Oak Ridge Small Cap Equity
Fund and Appendix B with respect to the Oak Ridge
Large Cap Equity Fund. Payment of these fees
shall be made promptly following the close of the
quarter, provided that the aggregate payments by
the Company on behalf of each Fund's Class A
shares shall not exceed 0.25% per annum of the
average net assets of the Class A shares.
(b) No Rule 12b-1 Related Agreement shall be
entered into with respect to either Fund, 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 relating
to the Oak Ridge Small Cap Equity Fund attached
hereto as Appendix A and the form of Rule 12b-1
Related Agreement relating to the Oak Ridge Large
Cap Equity Fund attached hereto as Appendix B have
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 with respect to a Fund 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 such 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) The 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, 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 as of March
1, 1999, assuming prior approval by the vote of a
majority of the Board of Directors, 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 with respect
to each Fund from year to year, provided that such
continuance is approved at least annually by a
vote of a majority of the Board of Directors, 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 with
respect to a Fund 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 A
shares of such Fund.
4. SELECTION OF DISINTERESTED DIRECTORS
During the period in which the Plan is
effective, the selection and nomination of those
Directors 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 a Fund, without approval by a majority
of the outstanding voting securities of the Class
A shares of each Fund affected thereby.
6. RECORDKEEPING
The Company shall preserve copies of the
Plan, any Rule 12b-1 Related Agreement and all
reports made pursuant to Section 2 for a period of
not less than six years from the date of this
Plan, the first two years in an easily accessible
place.
APPENDIX A
Rule 12b-1 Related Agreement
Oak Ridge Investments, Inc.
10 South LaSalle, Suite 1050
Chicago, Illinois 60603
_____________, 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 Small Cap Equity Fund (previously
known as 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 there was a
reasonable likelihood that the Plan would benefit the
Company and the Class A shareholders of the Fund.
1. To compensate you for promoting and
distributing the Fund's Class A shares, we shall pay
you a fee of up to 0.25% per annum 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 Company 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, and pay to you, on
the basis of such determination, the fee specified
above, to the extent permitted under the Plan. Payment
of such fee shall be made promptly after the close of
each quarter for which such fee is payable. No such
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 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 $25.00.
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,
for its review, on a quarterly basis, a written report
of the amounts expended under the Plan 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 or by the vote of a majority of
the outstanding 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 Plan.
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. 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 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 to you at the address specified by you below.
OAK RIDGE INVESTMENTS, INC.
on behalf of Oak Ridge Small Cap
Equity Fund
Class A shares
By:_________________________________
(Name and Title)
Accepted:
---------------------------------
(Dealer or Service Provider Name)
---------------------------------
(Street Address)
---------------------------------
(City) (State) (ZIP)
---------------------------------
(Telephone No.)
---------------------------------
(Facsimile No.)
By:_________________________________
(Name and Title)
APPENDIX B
Rule 12b-1 Related Agreement
Oak Ridge Investments, Inc.
10 South LaSalle, Suite 1050
Chicago, Illinois 60603
_____________, 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 Large Cap Equity 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 there was a
reasonable likelihood that the Plan would benefit the
Company and the Class A shareholders of the Fund.
1. To compensate you for promoting and
distributing the Fund's Class A shares, we shall pay
you a fee of up to 0.25% per annum 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 Company 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, and pay to you, on
the basis of such determination, the fee specified
above, to the extent permitted under the Plan. Payment
of such fee shall be made promptly after the close of
each quarter for which such fee is payable. No such
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 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 $25.00.
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,
for its review, on a quarterly basis, a written report
of the amounts expended under the Plan 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 or by the vote of a majority of
the outstanding 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 Plan.
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. 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 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 to you at the address specified by you below.
OAK RIDGE INVESTMENTS, INC.
on behalf of Oak Ridge Large Cap
Equity Fund
Class A shares
By:___________________________________
(Name and Title)
Accepted:
----------------------------------
(Dealer or Service Provider Name)
----------------------------------
(Street Address)
----------------------------------
(City) (State) (ZIP)
-----------------------------------
(Telephone No.)
------------------------------------
(Facsimile No.)
By:______________________________________
(Name and Title)
OAK RIDGE FUNDS, INC.
AMENDED AND RESTATED RULE 12b-1 DISTRIBUTION
AND SERVICING PLAN AS AMENDED AS OF MARCH 1, 1999
CLASS C SHARES OF OAK RIDGE SMALL CAP EQUITY FUND AND
OAK RIDGE LARGE CAP EQUITY FUND
The following Rule 12b-1 Distribution and
Servicing Plan, as amended (the "Plan"), has been
adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, as amended, by Oak Ridge Funds,
Inc. (the "Company"), a Maryland corporation, on behalf
of the Class C shares of the Oak Ridge Small Cap Equity
Fund (previously known as the Oak Ridge Growth Fund)
and the Class C shares of the Oak Ridge Large Cap
Equity Fund (each, a "Fund"). Each Fund is a series of
shares 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 or in any Rule 12b-1 Related Agreement (as defined
below) (the "Disinterested Directors"), cast in person
at a meeting called for the purpose of voting on such
Plan.
In considering whether the Company should amend
the Plan, the Board of Directors of the Company
evaluated such information as it deemed necessary and
determined that there was a reasonable likelihood that
the amendment of the Plan would benefit the Company and
the Class C shareholders of each Fund.
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 each Fund, will pay Oak Ridge
Investments, Inc. (the "Distributor"), as
principal underwriter of the Funds' shares, a
distribution fee of up to 0.75% per annum of the
average daily net assets of the Class C shares and
a service fee of up to 0.25% per annum of the
average daily net assets of the Class C shares.
Such fees shall be paid for services rendered in
connection with the promotion and distribution of
each Fund's Class C shares and the provision of
personal services to holders of such shares,
including, but not necessarily limited to,
advertising, compensation to underwriters, dealers
and seller personnel, the printing and mailing of
prospectuses to other than current Class C
shareholders of a Fund, and the printing and
mailing of sales literature. 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 distributing or
promoting 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 with respect to
the Oak Ridge Small Cap Equity Fund and Appendix B
with respect to the Oak Ridge Large Cap Equity
Fund. Payment of the distribution and service fee
shall be made promptly following the close of the
quarter, provided that the aggregate payments by
the Company on behalf of each Fund's Class C
shares shall not exceed 1.00% per annum of the
average net assets of the Class C shares.
(b) No Rule 12b-1 Related Agreement shall be
entered into with respect to either Fund, 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 relating
to the Oak Ridge Small Cap Equity Fund attached
hereto as Appendix A and the form of Rule 12b-1
Related Agreement relating to the Oak Ridge Large
Cap Equity Fund attached hereto as Exhibit B have
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 with respect to a Fund 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 such 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) The 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, 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 as of March
1, 1999, assuming prior approval by the vote of a
majority of the Board of Directors, 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 with respect
to each Fund from year to year, provided that such
continuance is approved at least annually by a
vote of a majority of the Board of Directors, 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 with
respect to a Fund 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 such Fund.
4. SELECTION OF DISINTERESTED DIRECTORS
During the period in which the Plan is
effective, the selection and nomination of those
Directors 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 a Fund, without approval by a majority
of the outstanding voting securities of the Class
C shares of each Fund affected thereby.
6. RECORDKEEPING
The Company shall preserve copies of the
Plan, any Rule 12b-1 Related Agreement and all
reports made pursuant to Section 2 for a period of
not less than six years from the date of this
Plan, the first two years in an easily accessible
place.
MW1-54463-4
APPENDIX A
Rule 12b-1 Related Agreement
Oak Ridge Investments, Inc.
10 South LaSalle, Suite 1050
Chicago, Illinois 60603
____________, 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 Small
Cap Equity Fund (previously known as 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 there was a reasonable likelihood that the Plan
would benefit the Company and the Class C shareholders
of the Fund.
1(a). To compensate you for distribution and
marketing services in the promotion of the Fund's Class
C shares, we shall pay you a distribution fee 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 compensate you for providing personal
services to holders of the Fund's Class C shares,
including furnishing services and assistance to your
customers who invest in and own such class of shares,
answering routine inquiries regarding the Fund and the
Class C shares and assisting in changing 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, on
the basis of such determination, the fees specified
above, to the extent permitted under the Plan. Payment
of such fees shall be made promptly after the close of
each quarter for which such fees are payable. No such
fees 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 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 $25.00.
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,
for its review, on a quarterly basis, a written report
of the amounts expended under the Plan 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 or by the vote of a majority of
the outstanding 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 Plan.
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. 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 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 communi
cations to us should be sent to the above address. Any
notice to you shall be duly given if mailed to you at
the address specified by you below.
OAK RIDGE INVESTMENTS, INC.
on behalf of the Oak Ridge Small
Cap Equity Fund
Class C shares
By: ______________________
(Name and Title)
Accepted:
_________________________
(Dealer or Service Provider Name)
_________________________
(Street Address)
_________________________
(City) (State) (ZIP)
_________________________
(Telephone No.)
_________________________
(Facsimile No.)
By:______________________
(Name and Title)
MW1-54463-4
APPENDIX B
Rule 12b-1 Related Agreement
Oak Ridge Investments, Inc.
10 South LaSalle, Suite 1050
Chicago, Illinois 60603
____________, 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 Large
Cap Equity 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 there was a reasonable likelihood that the Plan
would benefit the Company and the Class C shareholders
of the Fund.
1(a). To compensate you for distribution and
marketing services in the promotion of the Fund's Class
C shares, we shall pay you a distribution fee 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 compensate you for providing personal
services to holders of the Fund's Class C shares,
including furnishing services and assistance to your
customers who invest in and own such class of shares,
answering routine inquiries regarding the Fund and the
Class C shares and assisting in changing 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, on
the basis of such determination, the fees specified
above, to the extent permitted under the Plan. Payment
of such fees shall be made promptly after the close of
each quarter for which such fees are payable. No such
fees 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 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 $25.00.
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,
for its review, on a quarterly basis, a written report
of the amounts expended under the Plan 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 or by the vote of a majority of
the outstanding 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 Plan.
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. 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 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 communi
cations to us should be sent to the above address. Any
notice to you shall be duly given if mailed to you at
the address specified by you below.
OAK RIDGE INVESTMENTS, INC.
on behalf of the Oak Ridge Large
Cap Equity Fund
Class C shares
By: ______________________
(Name and Title)
Accepted:
_________________________
(Dealer or Service Provider Name)
_________________________
(Street Address)
_________________________
(City) (State) (ZIP)
_________________________
(Telephone No.)
_________________________
(Facsimile No.)
By:______________________
(Name and Title)
Exhibit o
OAK RIDGE FUNDS, INC.
AMENDED AND RESTATED RULE 18f-3
MULTIPLE CLASS PLAN
Oak Ridge Funds, Inc. (the "Company"), a
registered investment company currently consisting of
the Oak Ridge Small Cap Equity Fund (previously known
as the Oak Ridge Growth Fund) and the Oak Ridge Large
Cap Equity Fund (each, a "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 each 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 compensate each
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 compensate each Fund's
distributor for distributing the
Class C shares.
3. Expense Allocations. The following expenses
for each Fund 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 a 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 a 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
conversion features associated with the Class A or
Class C shares; however, Class A or Class C shares in
one Fund may be exchanged for Class A or Class C
shares, respectively, in another Fund at any time.
5. General. Each class of shares of each Fund
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. Each 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.
