-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DF9trLetkdIGWF8u48ClVdKNzn9RS3AxuADVMWuEp7YUkKMf4cDWM1/Sd3ZH4ueZ UQG8zY2f80KtN1vySUTiQA== 0000950131-96-006017.txt : 19961125 0000950131-96-006017.hdr.sgml : 19961125 ACCESSION NUMBER: 0000950131-96-006017 CONFORMED SUBMISSION TYPE: N-1A EL/A PUBLIC DOCUMENT COUNT: 16 FILED AS OF DATE: 19961122 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BURRIDGE FUNDS CENTRAL INDEX KEY: 0001022100 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FILING VALUES: FORM TYPE: N-1A EL/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-11633 FILM NUMBER: 96670532 FILING VALUES: FORM TYPE: N-1A EL/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-07801 FILM NUMBER: 96670533 BUSINESS ADDRESS: STREET 1: 115 SOUTH LASALLE STREET CITY: CHICAGO STATE: IL ZIP: 60603 BUSINESS PHONE: 3122877434 N-1A EL/A 1 PRE-EFFECTIVE AMENDMENT NO.1 FOR BURRIDGE FUNDS As filed with the Securities and Exchange Commission on November 22, 1996 1933 Act Reg. No. 333-11633 1940 Act File No. 811-7801 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A ---------------------------------- REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] PRE-EFFECTIVE AMENDMENT NO. 1 [X] and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X] AMENDMENT NO. 1 [X] Burridge Funds (Registrant) 115 South LaSalle Street Chicago, Illinois 60603 Telephone Number: (312) 368-0066 Kenneth M. Arenberg Janet D. Olsen Burridge Funds Bell, Boyd & Lloyd 115 South LaSalle Street Three First National Plaza, #Suite 3300 Chicago, Illinois 60603 Chicago, Illinois 60602 (Agents for Service) - -------------------------------------------------------------------------------- Registrant has previously elected to register pursuant to rule 24f-2 under the Investment Company Act of 1940 an indefinite number of shares of Burridge Capital Development Fund (previously named Burridge Growth Fund), a series of Burridge Funds and paid the registration fee payable with respect to such election. - -------------------------------------------------------------------------------- Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- Burridge Funds Cross-reference sheet pursuant to rule 495(a) of Regulation C
Item Location or caption* - -------- ------------------------------------------ Part A ------ 1(a)-(b) Front cover 2(a) Expense Information (b)-(c) Highlights 3(a) Not applicable (b) Not applicable (c)-(d) Management of the Fund - Performance 4(a)(i) The Fund and its Shares (ii) Investment Objective and Policies; Investment Restrictions (b) Investment Objective and Policies; Investment Restrictions (c) Risks 5(a) Management of the Fund (b) Management of the Fund; Back cover; Expense Information (c) Management of the Fund (d) Not applicable (e) Back cover (f) Management of the Fund; Expense Information (g) Management of the Fund 5A Not applicable 6(a) The Fund and its Shares (b)-(d) Not applicable (e) The Fund and its Shares (f)-(g) Dividends and Distributions
7 Purchasing Shares (a) Back cover (b) Purchasing Shares; Net Asset Value (c) Not applicable (d) Purchasing Shares (e)-(f) Not applicable 8(a)-(d) Redeeming Shares 9 Not applicable
Item Location or caption* - -------- ------------------------------------------ Part B (Statement of Additional Information) -------------------------------------------- 10 Front cover 11 Table of contents 12 Not applicable 13(a)-(c) Investment Objectives and Policies; Investment Restrictions (d) Investment Objective and Policies 14(a)-(c) Management of the Fund 15(a)-(b) Not applicable (c) Management of the Fund 16(a)(i) Investment Advisory Services (ii) Management of the Fund (iii) Investment Advisory Services (b) Investment Advisory Services (c)-(g) Not applicable (h) General Information (i) Not applicable 17(a) Portfolio Transactions (b)-(e) Not applicable 18(a)-(b) Not applicable 19(a)-(c) Purchase and Redemption of Shares 20 Taxes 21(a)-(b) General Information - Distributor (c) Not applicable 22(a) Not applicable (b) Performance Information 23 Financial Statements
Item Location or caption* - -------- ------------------------------------------ Part C - Other Information -------------------------- 24 Financial Statements and Exhibits 25 Persons Controlled by or Under Common Control With Registrant 26 Number of Holders of Securities 27 Indemnification 28 Business and Other Connections of Investment Adviser 29 Principal Underwriters 30 Location of Accounts and Records 31 Management Services 32 Undertakings
- ----------------- * References are to captions within the part of the registration statement to which the particular item relates except as otherwise indicated. BURRIDGE CAPITAL DEVELOPMENT FUND 115 SOUTH LASALLE STREET CHICAGO, ILLINOIS 60603 (888) BURRIDGE (888) 287-7434 December _____, 1996 BURRIDGE CAPITAL DEVELOPMENT FUND (THE "FUND"), a series of Burridge Funds (the "Trust"), invests for long-term capital appreciation. The Fund attempts to generate long-term capital appreciation and is managed in a tax-sensitive manner. The Fund purchases common stocks believed to have superior earnings growth potential and attempts to maximize long-term and unrealized capital gains in producing investment returns. THE FUND is a "no-load" fund. There are no sales or redemption charges, and there are no "12b-1" fees. This Prospectus is a concise statement of information you should know before investing. Please retain it for future reference. A Statement of Additional Information regarding the Fund dated the date of this Prospectus has been filed with the Securities and Exchange Commission and (together with any supplement to it) is incorporated in this Prospectus by reference. The Statement of Additional Information may be obtained without charge by calling or writing the Trust at the telephone numbers or address shown above. ---------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
TABLE OF CONTENTS Page ---- HIGHLIGHTS....................................................................1 EXPENSE INFORMATION...........................................................3 INVESTMENT OBJECTIVE AND POLICIES.............................................5 INVESTMENT PROCESS............................................................5 RISKS.........................................................................7 INVESTMENT RESTRICTIONS.......................................................7 PURCHASING SHARES.............................................................8 REDEEMING SHARES..............................................................9 NET ASSET VALUE..............................................................11 SHAREHOLDER SERVICES.........................................................11 Shareholder Accounts.....................................................11 IRA Plan for Rollover Accounts...........................................11 DIVIDENDS AND DISTRIBUTIONS..................................................11 TAXES........................................................................12 MANAGEMENT OF THE FUND.......................................................12 The Trustees.............................................................12 The Adviser..............................................................13 Administrator, Custodian and Transfer Agent..............................15 Distributor..............................................................15 Portfolio Transactions...................................................15 Performance..............................................................15 FUND AND ITS SHARES..........................................................16 Shares...................................................................16 Voting Rights............................................................16 Shareholder Inquiries....................................................16
HIGHLIGHTS Burridge Capital Development Fund (the "Fund") is a series of Burridge Funds (the "Trust"). The Fund is a "no-load" fund. There are no sales or redemption charges, and no 12b-1 fees. INVESTMENT OBJECTIVE AND POLICIES The Fund's investment objective is long-term capital appreciation. The Fund focuses on after-tax investment returns for its shareholders. The Fund employs a growth- oriented investment approach to create a diversified portfolio of medium and large capitalization common stocks. The Adviser believes that long-term capital appreciation can be achieved by purchasing stocks of companies with superior operating fundamentals relative to its industry group and the broad market, at attractive levels. In managing the Fund, the Adviser analyzes the tax consequences of position changes to the Fund and its shareholders subject to federal income tax. The Adviser attempts to maximize long-term capital gains and unrealized capital gains, and minimize short-term capital gains and ordinary income, as components of the Fund's investment returns. See "Investment Objective and Policies." INVESTMENT RISKS The Fund's performance and price per share will change daily based on many factors, including general economic and market conditions and the performance of individual stocks selected for the Fund's portfolio. The Fund is intended as a long-term investment for investors willing to bear the volatility inherent in any investment in common stocks. There can be no assurance that the Fund will achieve its investment objective. MINIMUM PURCHASE $500,000 for initial investments and $10,000 for subsequent investments. Some exceptions apply. See "Purchasing Shares." DIVIDENDS AND CAPITAL GAINS Income dividends and capital gains, if any, are distributed at least annually. Distributions are automatically reinvested in additional shares at net asset value unless payment in cash is requested. See "Dividends and Distributions." REDEMPTION PRICE Current net asset value, without charge. See "Redeeming Shares." INVESTMENT ADVISER The Burridge Group Inc. (the "Adviser") is investment adviser to the Fund. The Adviser managed over $1.3 billion in assets as of October 31, 1996. See "Management of the Fund--The Adviser." EXPENSES The Fund pays its own operating expenses, including a management fee to the Adviser of 1.00% of the Fund's average daily net assets. The Adviser has undertaken to reimburse the Fund for any ordinary costs and expenses of the Fund in excess of 1.50% of the average net assets annually. See "Management of the Fund--The Adviser." DISTRIBUTOR Funds Distributor, Inc. 2 EXPENSE INFORMATION The Fund expects to incur the following expenses:
SHAREHOLDER TRANSACTION EXPENSES Maximum Sales Load Imposed on Purchases (as a percentage of offering price).................................................. none Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price).................................... none Deferred Sales Load................................................ none Redemption Fees (1)................................................ none ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) Management Fees (including operating expenses) (2)................. 1.00% 12b-1 Fees......................................................... none Other Expenses (after expense reimbursement)....................... .50% Total Operating Expenses (after expense reimbursement).................................... 1.50%
- ----------------- (1) The Fund does not charge a redemption fee. A wire transfer fee (currently $10) is required to have the proceeds of a redemption paid to you by wire transfer. (2) The Adviser has undertaken to reimburse the Fund to the extent its ordinary operating expenses exceed 1.50% of the Fund's average net assets annually. Without the Adviser's expense limitation, Other Expenses and Total Operating Expenses would be estimated to be 2.35% and 3.35%, respectively. See "Management of the Fund--The Adviser" in this Prospectus for more information. The purpose of the table is to assist you in understanding the various costs and expenses that an investor in the Fund will bear, directly or indirectly. The estimate of "Other Expenses" is based on the estimated expenses the Fund expects to incur during its current fiscal year, taking into account the Adviser's voluntary expense limitation. EXAMPLE You would pay the following expenses on a $1,000 investment assuming (1) 5% annual return and (2) redemption at the end of each time period for the Fund: 1 year.................................. $15 3 years................................. $48 3 This example illustrates the effect of expenses, but is not meant to suggest actual PAST OR FUTURE EXPENSES or returns, all of which may be more or less than those shown in the example. Because the Fund is new, the above amounts are estimates. 4 INVESTMENT OBJECTIVE AND POLICIES The Fund's investment objective is long-term capital appreciation. The Fund focuses on after-tax investment returns for its shareholders. The Fund employs a growth-oriented investment approach to create a diversified portfolio of medium and large capitalization common stocks. The Adviser believes that long-term capital appreciation can be achieved by purchasing stocks of companies with superior operating fundamentals relative to its industry group and the broad market, at attractive levels. In managing the Fund, the Adviser analyzes the tax consequences of position changes to the Fund and its shareholders subject to federal income tax. The Adviser attempts to maximize long-term capital gains and unrealized capital gains, and minimize short-term capital gains and ordinary income, as components of the Fund's investment returns. Under normal market conditions, the Fund expects to be substantially fully invested in common stocks of medium and large growth companies generally having a market capitalization in excess of $1 billion. INVESTMENT PROCESS The Adviser uses a disciplined investment process in managing the Fund's portfolio. The first step is the identification of those companies exhibiting superior operating characteristics and fundamentals which the Adviser believes are important to potential above average and sustainable earnings growth. Among other things, the Adviser looks for: . historic long-term earnings growth of 15% or more for medium-sized companies and 12% or more for large-sized companies and projected long- term earnings growth of 15% or more for all companies; . a focus in one business segment; . an increasing market share versus industry competition; . stable or increasing margins versus industry competition; . a strong balance sheet relative to its industry group as measured by the ratio of debt to capital; and . a proven and effective management team. 5 In conducting disciplined fundamental research, the investment team focuses on industry fundamentals, a company's products or services, its revenue growth prospects, its costs and margins and the strategic business plan of management. As a long-term investor, the Adviser believes personal visits with senior management are an important element of its fundamental research and security valuation. Through this research process, the Adviser projects quarterly and annual earnings growth for those companies being considered for purchase and those held by the Fund. Although investing in companies with superior earnings growth is important, the Adviser applies a valuation discipline in order to eliminate those securities that may be overvalued. The key valuation discipline used by the Adviser is based on projected long-term earnings growth and price/earnings ratios. The Fund's portfolio generally consists of investments in approximately 20 to 50 companies, based on a "bottom-up" approach where individual companies meet the operating characteristics outlined above and the Fund's valuation discipline. In order to insure broad diversification and control risk in the Fund's portfolio, the Fund maintains representation in most economic sectors. Investments are made in sectors and industry groups in which the greatest earnings growth is found at the most attractive prices. The Fund is managed with a focus on after-tax returns and attempts to maximize long-term capital gains and unrealized capital gains as components of investment return. The Fund invests in stocks which pay below average dividends and under normal market conditions expects its portfolio turnover rate to be below 50%, to minimize the amount of ordinary income and short-term capital gains created for shareholders. A decision to sell a portfolio security is based on, among other things, a company's long-term prospects for continued earnings growth relative to its stock's price/earnings ratio and the tax effect of the sale. The Adviser expects to offset realized capital gains by selling stocks in which the Fund has a loss, to the extent losses are available and the sale of the security would be consistent with prudent portfolio management. The Fund may sell short securities the Fund owns or has the right to acquire without further consideration, a technique called selling short "against the box." Short sales against the box may be used to lock in a profit on a security when, for tax reasons or otherwise, the Adviser does not want to sell the security. The Fund may also invest in convertible securities, options and futures to a limited extent. For a more complete explanation, please refer to the Statement of Additional Information. The Fund may invest up to 10% of its total assets in American Depository Receipts (ADRs), which are securities traded in the United States but representing interests in foreign securities. A portion of the Fund's assets (not ordinarily expected to exceed about 5% of the Fund's total assets) may be held from time to time in cash or cash equivalents 6 pending investment or to meet cash requirements. Up to 100% of the fund's assets may be held in cash or cash equivalents under abnormal market or economic conditions if the Adviser determines that a temporary defensive position is advisable. Because the Fund tries to minimize ordinary income subject to income tax, cash equivalents held by the Fund may include high-quality, short-term municipal securities producing income exempt from federal income tax. RISKS The Fund's performance and price per share will change daily based on many factors, including general economic and market conditions and the performance of individual stocks selected for the Fund's portfolio. The Fund is intended as a long-term investment for investors willing to bear the volatility inherent in any investment in common stocks. The Fund's intention is to maximize after-tax returns for investors subject to income tax. An investor not subject to federal income tax may invest in the Fund, but should consider whether an investment as sensitive to tax consequences as the Fund is appropriate. There can be no assurance that the Fund will achieve its investment objective. Stocks of medium-sized companies tend to be more volatile and less liquid than stocks of larger companies. Medium-sized companies, as compared to larger companies, may have a shorter history of operations, may have a less diversified product line making them susceptible to market pressure, and may have a smaller public market for their securities. Investment in ADRs representing foreign securities may represent a greater degree of risk (including risk related to exchange rate fluctuations, tax provisions, exchange and currency controls, and expropriation of assets) than investment in securities of domestic issuers. Other risks of investing in ADRs include less complete financial information on issuers of the underlying securities, less developed and regulated markets, and greater political instability. The Fund's investment objective and policies may be changed by the Trust's board of trustees without shareholder approval. However, shareholder approval is required for changes in the Fund's fundamental investment restrictions. Any change in the investment objective of the Fund might result in the Fund having an investment objective that differs from the investment objective a shareholder considered appropriate when investing. INVESTMENT RESTRICTIONS The Fund has adopted the following investment restrictions, among others, that may be changed only with the approval of a majority of the outstanding shares of the Fund as defined in the Investment Company Act of 1940. The Fund may not: (1) with respect to 75% of its total assets, invest more than 5% of its total assets (taken at market value at the time of a particular purchase) in the securities of any single issuer, except for securities issued or guaranteed by the Government of the U.S. or any of its agencies or instrumentalities or repurchase agreements for such securities; (2) acquire more than 10% (taken at the time of a particular purchase) of the outstanding voting securities of any one issuer; or (3) invest in a security if 25% or more of its total assets (taken at market value at the time of a particular purchase) would be invested in the securities of issuers in a single industry, except that this restriction does not apply to securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities. 7 All of the investment restrictions of the Fund are stated in the Statement of Additional Information. PURCHASING SHARES Shares of the Fund may be purchased by completing a share purchase application and forwarding it, together with a check for the investment, directly to the Fund c/o Firstar Trust Company, P.O. Box 701, Milwaukee, WI 53201. The transfer agent is unable to accept third party checks both on initial and subsequent share purchases. DO NOT mail letters by overnight courier to the Post Office Box address. Correspondence mailed by overnight courier should be sent to Firstar Trust Company, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202. To establish a new account by wire please first call Firstar at 1-888-287- 7434 to advise it of the investment and dollar amount. This will ensure proper and accurate handling of your investment. A completed share purchase application form must also be sent to Firstar at the address above immediately after your investment is made so that the necessary remaining information can be recorded to your account. Your purchase request should be wired through the Federal Reserve Bank as follows: Firstar Bank Milwaukee, N.A. 777 East Wisconsin Avenue ABA Number 075000022 For credit to Firstar Trust M.P.S. Account Number 112-952-137 For further credit to Burridge Capital Development Fund (Your account name and account number) If you have authorized telephone transaction privileges in your application, you may also make purchases by calling toll free 1-888-287-7434. By using a telephone purchase option you may move money from your bank account to your Fund account at your request. Only bank accounts held at domestic financial institutions that are Automated Clearing House (ACH) members may be used for telephone transactions. To have shares of the Fund purchased at the net asset value determined as of the close of regular trading on a given date, Firstar must receive both the purchase order and payment by Electronic Funds Transfer through the ACH system before the close of regular trading on such date. Most transfers are completed within three business days. You may not use telephonic transactions for initial purchases. The minimum amount that can be transferred by telephone is $10,000. The purchase price of shares in the Fund is the net asset value per share next computed after receipt by Firstar, as agent for the Fund, of an order completed in accordance with the instructions on the account application. Your order must be received by Firstar before the close of regular session trading on the New York Stock Exchange ("NYSE") (currently 3:00 p.m., 8 Chicago time) to receive the net asset value calculated on that day. See "Net Asset Value." All purchases must be made in U.S. dollars and checks must be drawn on U.S. banks. The minimum initial investment to open an account is $500,000, and subsequent investments must be at least $10,000. Exceptions to the minimum investment requirements may be made at the discretion of the Adviser including, without limitation, for employees of the Adviser or investors who are, or are related to, clients of the Adviser. You may also purchase (or redeem) shares through investment dealers or other institutions. Certain institutions that have entered into agreements with the Fund or its Distributor may enter confirmed purchase orders or redemption requests on behalf of customers on an expedited basis, including orders by phone, with payment to follow no later than the time when the fund is priced on the following business day. If payment is not received by that time, the financial institution could be held liable for resulting fees or losses. These institutions may impose charges for their services, and those charges could constitute a significant portion of a smaller account. There are no charges or limitations imposed by the Fund (other than nominal charges for returned checks, and similar items, as described in this Prospectus) if shares are purchased (or redeemed) by mailing your purchase application and payment for shares directly to Firstar as described in this prospectus. The Fund reserves the right to reject purchase orders under circumstances or in amounts considered disadvantageous to existing shareholders. The Fund believes that frequent purchases and redemptions of Fund shares by investors utilizing market-timing strategies would adversely affect the Fund. The Fund therefore intends to reject purchase orders from investors identified by the Fund as market-timers. Should an order to purchase shares of the Fund be canceled because a shareholder's check does not clear, the shareholder will be responsible for any resulting loss incurred by the Fund. A charge (currently $20) will be assessed for any returned check. The Fund does not issue share certificates. REDEEMING SHARES You may redeem your Fund's shares at the net asset value next determined after the request is received by Firstar, as agent for the Fund, in writing or by telephone. Telephone redemptions are limited to $50,000. Your redemption request in proper form must be received by Firstar before the close of regular session trading on the New York Stock Exchange ("NYSE") (currently 3:00 p.m., Chicago time) to receive the net asset value calculated on that day. See "Net Asset Value." To redeem shares in writing, a written request must be received by Firstar. A written request for redemption must be signed by all persons in whose names the shares are registered. Redemption requests received by facsimile transmission or other electronic means will not be accepted. Signatures must conform exactly to the account registration. 9 DO NOT mail letters by overnight courier to the Post Office Box address. Correspondence mailed by overnight courier should be sent to Firstar Trust Company, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202. A signature guarantee is required on the written redemption request if (i) the redemption proceeds are to be sent to a bank or brokerage account not previously authorized by the shareholder in accordance with the instructions on the account application, (ii) the proceeds of the requested redemption would be more than $50,000, or (iii) THE ADDRESS OF RECORD HAS CHANGED WITHIN THE LAST 60 DAYS. The guarantor must be a bank, member firm of a national securities exchange, savings and loan association, credit union or other entity authorized by state law to guarantee signatures. A NOTARY PUBLIC IS NOT AN ACCEPTABLE GUARANTOR. Additional documentary evidence of authority is required in the event redemption is requested by a corporation, partnership, trust, fiduciary, executor, or administrator. CHECKS TO THIRD PARTIES OTHER THAN A BANK OR BROKERAGE ACCOUNT AS AUTHORIZED ABOVE ARE NOT PERMITTED. Redemption checks will not be forwarded if the redeeming shareholder moves. The redemption request should also indicate the change of address and include a signature guarantee. Telephone redemptions of not more than $50,000 can be authorized on the account application. If telephone redemptions are authorized, the Fund will honor requests by telephone at (888) BURRIDGE (1-888-287-7434). Reasonable procedures are used to confirm that instructions received by telephone are genuine, such as requesting personal identification information that appears on the purchase application and recording the conversation. You bear the risk of any loss that might result from a fraudulent instruction, although the Fund may bear such risk if reasonable procedures were not used. To reduce the risk of a fraudulent instruction, proceeds of telephone redemptions may be sent only to your address of record or to a bank or brokerage account you designated, in writing, on the purchase application or in a letter with the signature(s) guaranteed. The Fund reserves the right to record all telephone redemption requests. The redemption price per share is the net asset value next determined after receipt of the redemption request, which may be more or less than your cost depending upon the value of the Fund's investment securities at the time of redemption. See "Net Asset Value." Payment for shares redeemed is made by check or wire. Payment by check normally is mailed within seven days after receipt of the redemption request in proper form. If specified in the account application, the check will be payable and sent to a designated financial institution. A wire will be sent only to your bank or brokerage account as shown on the account application. Wire requests generally are paid the next business day, after deduction of the cost of the wire transfer (currently $10). That charge and any similar service fee may be changed without prior notice to shareholders. Wires to third parties are not permitted. The Fund may suspend or postpone the right of redemption at times when trading on the NYSE is restricted or as otherwise permitted by the Securities and Exchange Commission. If you attempt to redeem shares within 15 days after they have been purchased by check, the Fund 10 may delay payment of the redemption proceeds until it can verify that payment for the purchase of the shares has been (or will be) received which may take up to 15 days from purchase. The Fund reserves the right to redeem shares in any account with a balance of less than 80% of the applicable minimum initial investment ($400,000) in share value. Prior to any such redemption, the Fund will give the shareholder 30 days' written notice during which time you may increase your investment to avoid having your shares redeemed. The minimum balance will be waived if the account balance drops below the applicable minimum due to market activity. NET ASSET VALUE The price per share for a purchase order or redemption request is the net asset value next determined after receipt of the order or request. The net asset value of a share of the Fund is determined as of the close of regular session trading on the NYSE (currently 3:00 p.m., Chicago time) each day the NYSE is open for trading. The net asset value per share is determined by dividing the difference between the values of the Fund's assets and liabilities by the number of shares outstanding. Each security traded on a national stock exchange or on the Nasdaq National Market is valued at the last sale price or, if there have been no sales on the valuation day, at the most recent bid price. Other securities traded over the counter are valued at the last reported bid price. Other assets and securities are valued by methods the Fund's board of trustees believes will determine a fair value. SHAREHOLDER SERVICES Shareholder Accounts. You will receive an annual account statement showing transactions in Fund shares with a balance denominated in Fund shares. In addition, confirmations are sent to you upon purchase, redemption, dividend reinvestment, and change of shareholder address. For a fee, you may obtain a historical transcript of your account by requesting one in writing from Firstar Trust Company. IRA Plan for Rollover Accounts. The Fund has a prototype Individual Retirement Account ("IRA") plan for your rollover IRA. The minimum investment in an IRA account is $500,000. Call (888) BURRIDGE (1-888-287-7434) for an IRA booklet and application. Because the Fund's intention is to maximize after-tax returns for investors subject to federal income tax, an IRA investor should consider whether an investment in the Fund is appropriate. DIVIDENDS AND DISTRIBUTIONS You may receive two kinds of distributions from the Fund: dividends and capital gains distributions. All dividends and capital gains distributions are paid in the form of additional shares credited to your account at net asset value per share unless you have requested on the account application or in writing that distributions be paid in cash. The Fund expects to declare and pay net investment income dividends and distributions of net realized short- and long-term capital gains, if any, at least annually. 11 TAXES Your distributions will be taxable to you, under income tax law, whether received in cash or reinvested in additional shares. For federal income tax purposes, any distribution that is paid in January but was declared in the prior calendar year is deemed paid in the prior calendar year. You will be subject to federal income tax at ordinary rates on income dividends and distributions of net short-term capital gain. Distributions of net long-term capital gain will be taxable to you as long-term capital gain regardless of the length of time you have held your shares. You will be advised annually as to the source of distributions for tax purposes. If you are not subject to tax on your income, you will not be required to pay tax on these amounts. If you realize a loss on the sale of Fund shares held for six months or less, your short-term loss is recharacterized as long-term to the extent of any long-term capital gain distributions you have received with respect to those shares. This discussion of taxation is not intended to be a full discussion of income tax laws and their effect on shareholders. You may wish to consult your own tax advisor. The foregoing information applies to U.S. shareholders. Foreign shareholders should consult their tax advisors as to the tax consequences of ownership of Fund shares. The Fund may be required to withhold federal income tax ("backup withholding") from certain payments to you, generally redemption proceeds. Backup withholding may be required if: . You fail to furnish your properly certified social security or other tax identification number; . You fail to certify that your tax identification number is correct or that you are not subject to backup withholding due to the underreporting of certain income; . The Internal Revenue Service informs the Trust that your tax identification number is incorrect. These certifications are contained in the Application that you should complete and return when you open an account. The Fund must promptly pay to the IRS all amounts withheld. Therefore, it is usually not possible for the Fund to reimburse you for amounts withheld. You may, however, claim the amount withheld as a credit on your federal income tax return. MANAGEMENT OF THE FUND The Trustees. The board of trustees has overall responsibility for the conduct of the Trust's affairs. The trustees serve indefinite terms of unlimited duration provided that a majority of trustees always has been elected by the shareholders. The trustees appoint their own successors, provided that at least two-thirds of the trustees, after such appointment, have been elected by the shareholders. Shareholders may remove a trustee, with or without cause, upon the 12 declaration in writing or vote of two-thirds of the Fund's outstanding shares. A trustee may be removed with or without cause upon the written declaration of a majority of the trustees. The Adviser. The Fund's investment adviser is The Burridge Group Inc. The Burridge Group was founded as a registered investment adviser in March 1986 by Richard M. Burridge and Kenneth M. Arenberg. It employees a growth oriented investment approach in creating a diversified portfolio of equities for corporate, public, and Taft-Hartley pension plans, endowments, foundations and private investors. As of October 31, 1996, it managed over $1.3 billion in assets for clients, including over $400 million for taxable accounts. The Adviser is privately owned by seven principals and has 25 employees. The Adviser manages the investment and reinvestment of the assets of the Fund. In addition the Adviser provides office space, facilities, equipment, and personnel for managing the assets and administering the Fund's day-to-day operations, and provides shareholder and investor services. For its services, the Fund pays the Adviser a fee, accrued daily and paid monthly, based on its average daily net asset value at the annual rates of 1.00% of the first $500 million, 0.85% of average daily net assets in excess of $500 million, and 0.75% of average daily net assets in excess of $1 billion. The anticipated overall expense ratio is shown in the "Expense Information" table in this Prospectus. In addition, the Adviser has voluntarily undertaken to limit the Fund's expenses (including the advisory fee but excluding extraordinary costs or expenses not incurred in the ordinary course of the Fund's operations) to 1.50% of the Fund's average daily net assets. The Adviser employs a team of investment professionals who participate in investment strategy formulation and security selection. The individual responsible for overseeing the implementation of the Adviser's strategy for the Fund is Richard M. Burridge. Mr. Burridge is chairman and chief investment officer of the Adviser. He has been engaged in the investment management business since 1974 and founded the Adviser in 1986. Mr. Burridge holds a B.S. from the University of Colorado and is a Chartered Financial Analyst. 13 On October 11, 1996, the Adviser entered into an agreement pursuant to which, subject to the satisfaction of certain conditions, substantially all of the Adviser's assets and liabilities, including its investment advisory agreement with the Trust, will be transferred to The Burridge Group LLC ("Burridge LLC"), a newly created Delaware limited liability company of which the Adviser is the Manager Member. Simultaneously with that asset transfer each of the seven stockholders (the "Stockholders") of the Adviser, each of whom is an officer and director of the Adviser, will sell his or her stock in the Adviser to Affiliated Managers Group, Inc. ("AMG") and, with AMG, will become members in Burridge LLC. Upon consummation of such proposed transactions (collectively, the "Transaction"), it is expected that Burridge LLC will operate with the same management personnel who are presently responsible for the investment policies and management of the Adviser and will become investment adviser to the Trust. The new investment advisory agreement between Burridge LLC and the Trust (the "New Agreement"), which has been approved by the Fund's initial stockholders, has terms and conditions (including the fee and expense provisions) identical to the terms and conditions of the existing agreement ("Existing Agreement"), except for the named adviser therein. The consummation of the Transaction is subject to several conditions set forth in the Purchase Agreement, of which the principal condition is approval of the Transaction by a certain minimum percentage of the clients of the Adviser. Additional conditions include: (i) the continued absence of certain proceedings that would be likely to restrain or prohibit consummation of the Transaction, and (ii) registration of Burridge LLC as an investment adviser under the Investment Advisers Act of 1940 and under the laws of such states as are necessary to permit Burridge LLC to carry on the business currently conducted by the Adviser. It is anticipated that the Transaction will be consummated around December 31, 1996. Following the consummation of the Transaction, the offices of Burridge LLC will be located at the same location as the offices of the Adviser, 115 South LaSalle Street, Chicago, Illinois 60603. Burridge LLC will be, effective upon the consummation of the Transaction, registered as an investment adviser under the Investment Advisers Act of 1940, as amended. Effective on consummation of the Transaction, the present officers of the Adviser will become officers of Burridge LLC and will have the authority to operate and administer the investment advisory business of Burridge LLC, and to provide investment management services. The Stockholders, as members of Burridge LLC, will initially hold member interests representing an interest in the aggregate of 45% of the profits of Burridge LLC, subject to reduction under certain conditions. The remaining interest in the profits of Burridge LLC, and 100% of the Adviser, the Manager Member of Burridge LLC, will be owned by AMG. 14 AMG is a Delaware corporation which has its offices at Two International Place, Boston, MA 02110. AMG may be deemed to have as its ultimate parent TA Associates, Inc., a Delaware corporation. The address of TA Associates, Inc. is High Street Tower, Suite 2500, 125 High Street, Boston, MA 02110. Administrator, Custodian and Transfer Agent. Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201, is the Fund's Administrator and generally assists the Fund in all aspects of its administration and operation. Firstar is also the Fund's custodian and transfer agent. Firstar is responsible for maintaining many of the Fund's books and records, handling compliance and regulatory issues, processing purchase and redemption requests, shareholder services and safekeeping of the Fund's securities. Distributor. Funds Distributor, Inc. (the "Distributor"), 60 State Street, Suite 1300, Boston, Massachusetts 02109, is the distributor of shares of the Fund. Fees for the Distributor's services are paid by the Adviser from its own resources. See the Statement of Additional Information for more information. Portfolio Transactions. Decisions as to the purchase and sale of securities for the Fund and the execution of these transactions, including the negotiation of brokerage commissions on such transactions, are the responsibility of the Adviser. In general, the Adviser seeks to obtain prompt and reliable execution of purchase and sale orders at the most favorable net prices or yields. In determining the best net price and execution, the Adviser may take into account a broker's or dealer's operational and financial capabilities and the type of transaction involved. The Adviser may consider research services provided by the broker or dealer, some of which may be useful to the Adviser in its other business functions. To the extent such research services are taken into account, the execution price paid may be higher, but only in reasonable relation to the benefit of such research services as determined in good faith by the Adviser. The Adviser is authorized to place portfolio transactions with brokers or dealers participating in the distribution of shares of the Fund, but only if the Adviser reasonably believes that the execution and commission are comparable to those available from other qualified firms. The Fund's portfolio turnover rate will vary from year to year, but is expected to be below 50% under normal market conditions. Performance. From time to time, in advertisements and sales literature, the Fund may present information regarding the total return on a hypothetical investment in the Fund for various periods of performance and may make comparisons of such total return to various stock indexes (groups of unmanaged common stocks), to the Consumer Price Index, or to groups of comparable mutual funds. Total return for a period is the percentage change in value during the period of an investment in the Fund shares, including the value of shares acquired through reinvestment of all dividends and capital gains distributions. The average annual total return for a given period may be calculated by finding the average annual compounded rate of return that would equate a hypothetical $1,000 investment to the value of that investment that could be redeemed at the end of the period, assuming reinvestment of all distributions. All of the calculations described above 15 will assume the reinvestment of dividends and distributions in additional shares of the Fund. Income taxes will not be taken into account. In addition to the figures described above, the Fund might use rankings or ratings determined by Lipper Analytical Services, Inc., Morningstar, Inc., or another service to compare the performance of the Fund with the performance of (i) other funds of similar size and investment objective or (ii) broader groups of funds. The Fund may also provide information about, or compare its performance to, the historical returns on various types of financial assets. Performance of the Fund will vary from time to time, and past results are not indicative of likely future performance. Performance information supplied by the Fund may not provide a basis of comparison with other investments using different reinvestment assumptions or time periods. THE FUND AND ITS SHARES The Fund was organized as a Massachusetts business trust on August 30, 1996 and is an open-end, diversified management investment company. Shares. Under the terms of the Agreement and Declaration of Trust, the Fund may issue an unlimited number of shares of beneficial interest without par value for each series of shares authorized by the trustees. Burridge Capital Development Fund is currently the only series authorized and outstanding. All shares issued will be fully paid and non-assessable and will have no preemptive or conversion rights. Each share of a series is entitled to participate pro rata in any dividends and other distributions declared by the Fund's board of trustees on shares of that series. All shares of a series have equal rights in the event of liquidation of that series. Under Massachusetts law, the shareholders of the Fund may, under certain circumstances believed to be remote, be held personally liable for the Fund's obligations. However, the Trust's Agreement and Declaration of Trust disclaims liability of shareholders, the Trust's trustees, or the Fund's officers for acts or obligations of the Trust or the Fund and requires that notice of such disclaimer be given in each agreement, obligation, or contract entered into or executed by the Trust or the board of trustees. The Trust's Agreement and Declaration of Trust provides for indemnification out of the assets of the Fund of all losses and expenses of any shareholder held personally liable for the obligations of the Fund. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is remote, since it is limited to circumstances in which the disclaimer is inoperative and the Fund itself is unable to meet its obligations. Voting Rights. Each share has one vote and fractional shares have fractional votes. The Fund does not intend to hold annual meetings of shareholders. Shareholder Inquiries. Inquiries should be addressed to Burridge Funds, c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201. Telephone inquiries may be made at (888) BURRIDGE (1-888-287-7434). 16
Shareholder Services: ----------------------------------------------------- BURRIDGE FUNDS Burridge Funds c/o Firstar Trust Company P.O. Box 701 Milwaukee, WI 53201 (888) BURRIDGE (1-888-287-7434) Investment Adviser: The Burridge Group Inc. Chicago, IL Distributor: Funds Distributor, Inc. BURRIDGE CAPITAL DEVELOPMENT FUND Boston, MA Custodian and Transfer Agent: ----------------------------------------------------- Firstar Trust Company PROSPECTUS Milwaukee, WI Independent Auditors: Arthur Andersen LLP Chicago, IL Legal Counsel: Bell, Boyd & Lloyd Chicago, IL ----------------------------------------------------- DECEMBER ___, 1996
BURRIDGE FUNDS 115 South LaSalle Street Chicago, Illinois 60603 (888) BURRIDGE (1-888-287-7434) STATEMENT OF ADDITIONAL INFORMATION December _____, 1996 - -------------------------------------------------------------------------------- Burridge Capital Development Fund (the "Fund") is a series of Burridge Funds (the "Trust"). The Fund represents shares of beneficial interest in a separate portfolio of securities and other assets, with its own investment objective and policies. This Statement of Additional Information is not a prospectus. It should be read in conjunction with the Fund's Prospectus dated December ____, 1996, and any supplement to that Prospectus. That Prospectus can be obtained without charge by calling or writing to the Trust.
Investment Objective and Policies..............................................2 Investment Techniques and Risk.................................................2 Investment Restrictions.......................................................10 Performance Information.......................................................13 Management of the Fund........................................................16 Investment Advisory Services..................................................17 Portfolio Transactions and Brokerage..........................................20 Purchase and Redemption of Shares.............................................21 Taxes.........................................................................22 General Information...........................................................22 Financial Statements..........................................................23
INVESTMENT OBJECTIVE AND POLICIES The Fund's investment objective is long-term capital appreciation. The Fund attempts to generate long-term capital appreciation. The Fund focuses on after-tax investment returns for its shareholders. The Fund employs a growth-oriented investment approach to create a diversified portfolio of medium and large capitalization common stocks. The Adviser believes that long-term capital appreciation can be achieved by purchasing stocks of companies with superior operating fundamentals relative to its industry group and the broad market, at attractive levels. In managing the Fund, the Adviser analyzes the tax consequences of position changes to the Fund and its shareholders subject to federal income tax. The Adviser attempts to maximize long-term capital gains and unrealized capital gains, and minimize short-term capital gains and ordinary income, as components of the Fund's investment returns. See "Investment Objective and Policies." Under normal market conditions, the Fund is expected to be substantially fully invested in common stocks of medium and large companies generally having a market capitalization in excess of $1 billion. INVESTMENT TECHNIQUES AND RISKS Foreign Securities The Fund may invest up to 10% of its total assets in foreign securities (including American Depository Receipts ("ADRs")), which may entail a greater degree of risk (including risks relating to exchange rate fluctuations, tax provisions, or expropriation of assets) than does investment in securities of domestic issuers. ADRs are receipts typically issued by an American bank or trust company evidencing ownership of the underlying securities. The Fund may invest in sponsored or unsponsored ADRs. In the case of an unsponsored ADR, the Fund is likely to bear its proportionate share of the expenses of the depository and it may have greater difficulty in receiving shareholder communications than it would have with a sponsored ADR. The Fund does not intend to invest more than 5% of its net assets in unsponsored ADRs. Short-Term Investments The Fund intends to be substantially fully invested in common stocks in ordinary circumstances, although the Fund may invest without limitation in high- quality fixed-income securities or hold assets in cash or cash equivalents pending investment, to meet anticipated cash requirements, or if the Adviser determines that a temporary defensive position is advisable. Because the Fund tries to minimize its ordinary income subject to income tax, the Fund's short- term investments may include short-term, high quality securities producing income exempt from federal income tax. B-2 Convertible Securities Convertible securities include any corporate debt security or preferred stock that may be converted into underlying shares of common stock. The common stock underlying convertible securities may be issued by a different entity than the issuer of the convertible securities. Convertible securities entitle the holder to receive interest payments paid on corporate debt securities or the dividend preference on a preferred stock until such time as the convertible security matures or is redeemed or until the holder elects to exercise the conversion privilege. The value of convertible securities is influenced by both the yield of non- convertible securities of comparable issuers and by the value of a convertible security viewed without regard to its conversion feature (i.e., strictly on the basis of its yield) is sometimes referred to as its "investment value." The investment value of the convertible security will typically fluctuate inversely with changes in prevailing interest rates. However, at the same time, the convertible security will be influenced by its "conversion value," which is the market value of the underlying common stock that would be obtained if the convertible security were converted. Conversion value fluctuates directly with the price of the underlying common stock. By investing in convertible securities, the Fund obtains the right to benefit from the capital appreciation potential in the underlying stock upon exercise of the conversion right, while earning higher current income than would be available if the stock were purchased directly. In determining whether to purchase a convertible security, the Adviser will consider the same criteria that would be considered in purchasing the underlying stock. Although convertible securities purchased by the Fund are frequently rated investment grade, the Fund also may purchase unrated securities or securities rated below investment grade if the securities meet the Adviser's other investment criteria. Convertible securities rated below investment grade (a) tend to be more sensitive to interest rate and economic changes, (b) may be obligations of issuers who are less creditworthy than issuers of higher quality convertible securities, and (c) may be more thinly traded due to such securities being less well known to investors than either common stock or conventional debt securities. As a result, the Adviser's own investment research and analysis tends to be more important in the purchase of such securities than other factors. The Fund will not invest more than 5% of its total assets in convertible securities rated below investment grade, or considered by the Adviser to be of comparable credit quality. Options on Securities and Indexes. The Fund may purchase and sell put options and call options on securities, indexes or foreign currencies in standardized contracts traded on recognized securities exchanges, boards of trade, or similar entities, or quoted on NASDAQ. The Fund may purchase agreements, sometimes called cash puts, that may accompany the purchase of a new issue of bonds from a dealer. The Fund will limit its use of options and futures so that not more than 5% of the Fund's total assets will be at risk. An option on a security (or index) is a contract that gives the purchaser (holder) of the option, in return for a premium, the right to buy from (call) or sell to (put) the seller (writer) of the option the security underlying the option (or the cash value of the index) at a specified exercise price at any time during the term of the option (normally not exceeding nine months). B-3 The writer of an option on an individual security or on a foreign currency has the obligation upon exercise of the option to deliver the underlying security or foreign currency upon payment of the exercise price or to pay the exercise price upon delivery of the underlying security or foreign currency. Upon exercise, the writer of an option on an index is obligated to pay the difference between the cash value of the index and the exercise price multiplied by the specified multiplier for the index option. (An index is designed to reflect specified facets of a particular financial or securities market, a specific group of financial instruments or securities, or certain economic indicators.) The Fund will write call options and put options only if they are "covered." For example, in the case of a call option on a security, the option is "covered" if the Fund owns the security underlying the call or has an absolute and immediate right to acquire that security without additional cash consideration (or, if additional cash consideration is required, assets of equivalent value are held in a segregated account by its custodian) upon conversion or exchange of other securities held in its portfolio. If an option written by the Fund expires, the Fund realizes a capital gain equal to the premium received at the time the option was written. If an option purchased by the Fund expires, the Fund realizes a capital loss equal to the premium paid. Prior to the earlier of exercise or expiration, an option may be closed out by an offsetting purchase or sale of an option of the same series (type, exchange, underlying security or index, exercise price, and expiration). There can be no assurance, however, that a closing purchase or sale transaction can be effected when the Fund desires. The Fund will realize a capital gain from a closing purchase transaction if the cost of the closing option is less than the premium received from writing the option, or, if it is more, the Fund will realize a capital loss. If the premium received from a closing sale transaction is more than the premium paid to purchase the option, the Fund will realize a capital gain or, if it is less, the Fund will realize a capital loss. The principal factors affecting the market value of a put or a call option include supply and demand, interest rates, the current market price of the underlying security or index in relation to the exercise price of the option, the volatility of the underlying security or index, and the time remaining until the expiration date. A put or call option purchased by the Fund is an asset of the Fund, valued initially at the premium paid for the option. The premium received for an option written by the Fund is recorded as a deferred credit. The value of an option purchased or written is marked-to-market daily and is valued at the closing price on the exchange on which it is traded or, if not traded on an exchange or no closing price is available, at the mean between the last bid and asked prices. Risks Associated with Options on Securities and Indexes. There are several risks associated with transactions in options. For example, there are significant differences between the securities markets, the currency markets, and the options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. A decision as to whether, when and how to use options involves the exercise of skill B-4 and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or expected events. There can be no assurance that a liquid market will exist when the Fund seeks to close out an option position. If the Fund were unable to close out an option that it had purchased on a security, it would have to exercise the option in order to realize any profit or the option would expire and become worthless. If the Fund were unable to close out a covered call option that it had written on a security, it would not be able to sell the underlying security until the option expired. As the writer of a covered call option on a security, the Fund foregoes, during the option's life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the exercise price of the call. If trading were suspended in an option purchased or written by the Fund, the Fund would not be able to close out the option. If restrictions on exercise were imposed, the Fund might be unable to exercise an option it has purchased. Futures Contracts and Options on Futures Contracts. The Fund may use interest rate futures contracts, index futures contracts, and foreign currency futures contracts. An interest rate, index or foreign currency futures contract provides for the future sale by one party and purchase by another party of a specified quantity of a financial instrument or the cash value of an index/1/ at a specified price and time. A public market exists in futures contracts covering a number of indexes (including, but not limited to: the Standard & Poor's 500 Index, the Value Line Composite Index, and the New York Stock Exchange Composite Index) as well as financial instruments (including, but not limited to: U.S. Treasury bonds, U.S. Treasury notes, Eurodollar certificates of deposit, and foreign currencies). Other index and financial instrument futures contracts are available and it is expected that additional futures contracts will be developed and traded. The Fund may purchase and write call and put futures options. Futures options possess many of the same characteristics as options on securities, indexes and foreign currencies (discussed above). A futures option gives the holder the right, in return for the premium paid, to assume a long position (call) or short position (put) in a futures contract at a specified exercise price at any time during the period of the option. Upon exercise of a call option, the holder acquires a long position in the futures contract and the writer is assigned the opposite short position. In the case of a put option, the opposite is true. The Fund might, for example, use futures contracts to hedge against or gain exposure to fluctuations in the general level of stock prices, anticipated changes in interest rates or currency fluctuations that might adversely affect either the value of the Fund's securities or the price of the securities that the Fund intends to - ------------------- /1/ All futures contract on an index is an agreement pursuant to which two 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 contract was originally written. Although the value of a securities index is a function of the value of certain specified securities, no physical delivery of those securities is made. B-5 purchase. Although other techniques could be used to reduce or increase the Fund's exposure to stock price, interest rate and currency fluctuations, the Fund may be able to achieve its exposure more effectively and perhaps at a lower cost by using futures contracts and futures options. The Fund will only enter into futures contracts and futures options that are standardized and traded on an exchange, board of trade, or similar entity, or quoted on an automated quotation system. The success of any futures transaction depends on the Adviser correctly predicting changes in the level and direction of stock prices, interest rates, currency exchange rates and other factors. Should those predictions be incorrect, the Fund's return might have been better had the transaction not been attempted; however, in the absence of the ability to use futures contracts, the Adviser might have taken portfolio actions in anticipation of the same market movements with similar investment results but, presumably, at greater transaction costs. When a purchase or sale of a futures contract is made by the Fund, the Fund is required to deposit with its custodian (or broker, if legally permitted) a specified amount of cash or U.S. Government securities or other securities acceptable to the broker ("initial margin"). The margin required for a futures contract is set by the exchange on which the contract is traded and may be modified during the term of the contract. The initial margin is in the nature of a performance bond or good faith deposit on the futures contract, which is returned to the Fund upon termination of the contract, assuming all contractual obligations have been satisfied. The Fund expects to earn interest income on its initial margin deposits. A futures contract held by the Fund is valued daily at the official settlement price of the exchange on which it is traded. Each day the Fund pays or receives cash, called "variation margin," equal to the daily change in value of the futures contract. This process is known as "marking-to-market." Variation margin paid or received by the Fund does not represent a borrowing or loan by the Fund but is instead settlement between the Fund and the broker of the amount one would owe the other if the futures contract had expired at the close of the previous day. In computing daily net asset value, the Fund will mark-to-market its open futures positions. The Fund is also required to deposit and maintain margin with respect to put and call options on futures contracts written by it. Such margin deposits will vary depending on the nature of the underlying futures contract (and the related initial margin requirements), the current market value of the option, and other futures positions held by the Fund. Although some futures contracts call for making or taking delivery of the underlying securities, usually these obligations are closed out prior to delivery by offsetting purchases or sales of matching futures contracts (same exchange, underlying security or index, and delivery month). If an offsetting purchase price is less than the original sale price, the Fund engaging in the transaction realizes a capital gain, or if it is more, the Fund realizes a capital loss. Conversely, if an offsetting sale price is more than the original purchase price, the Fund engaging in the transaction realizes a capital gain, or if it is less, the Fund realizes a capital loss. The transaction costs must also be included in these calculations. B-6 Risks Associated with Futures. There are several risks associated with the use of futures contracts and futures options. A purchase or sale of a futures contract may result in losses in excess of the amount invested in the futures contract. In trying to increase or reduce market exposure, there can be no guarantee that there will be a correlation between price movements in the futures contract and in the portfolio exposure sought. In addition, there are significant differences between the securities and futures markets that could result in an imperfect correlation between the markets, causing a given transaction not to achieve its objectives. The degree of imperfection of correlation depends on circumstances such as: variations in speculative market demand for futures, futures options and the related securities, including technical influences in futures and futures options trading and differences between the securities market and the securities underlying the standard contracts available for trading. For example, in the case of index futures contracts, the composition of the index, including the issuers and the weighting of each issue, may differ from the composition of the Fund's portfolio, and, in the case of interest rate futures contracts, the interest rate levels, maturities, and creditworthiness of the issues underlying the futures contract may differ from the financial instruments held in the Fund's portfolio. A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected stock price or interest rate trends. Futures exchanges may limit the amount of fluctuation permitted in certain futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of the current trading session. Once the daily limit has been reached in a futures contract subject to the limit, no more trades may be made on that day at a price beyond that limit. The daily limit governs only price movements during a particular trading day and therefore does not limit potential losses because the limit may work to prevent the liquidation of unfavorable positions. For example, futures prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of positions and subjecting some holders of futures contracts to substantial losses. Stock index futures contracts are not normally subject to such daily price change limitations. There can be no assurance that a liquid market will exist at a time when the Fund seeks to close out a futures or futures option position. The Fund would be exposed to possible loss on the position during the interval of inability to close, and would continue to be required to meet margin requirements until the position is closed. In addition, many of the contracts discussed above are relatively new instruments without a significant trading history. As a result, there can be no assurance that an active secondary market will develop or continue to exist. Limitations on Options and Futures. If other options, futures contracts, or futures options of types other than those described herein are traded in the future, the Fund also may use those investment vehicles, provided the board of directors determines that their use is consistent with the Fund's investment objective. The Fund will limit its use of options and futures so that not more than 5% of the Fund's total assets will be at risk. B-7 The Fund will not enter into a futures contract or purchase an option thereon if, immediately thereafter, the initial margin deposits for futures contracts held by the Fund plus premiums paid by it for open futures option positions, less the amount by which any such positions are "in-the-money,"/2/ would exceed 5% of the Fund's total assets. When purchasing a futures contract or writing a put option on a futures contract, the Fund must maintain with its custodian (or broker, if legally permitted) cash or cash equivalents (including any margin) equal to the market value of such contract. When writing a call option on a futures contract, the Fund similarly will maintain with its custodian cash or cash equivalents (including any margin) equal to the amount by which such option is in-the-money until the option expires or is closed out by the Fund. The Fund may not maintain open short positions in futures contracts, call options written on futures contracts or call options written on indexes if, in the aggregate, the market value of all such open positions exceeds the current value of the securities in its portfolio, plus or minus unrealized gains and losses on the open positions, adjusted for the historical relative volatility of the relationship between the portfolio and the positions. For this purpose, to the extent the Fund has written call options on specific securities in its portfolio, the value of those securities will be deducted from the current market value of the securities portfolio. In order to comply with Commodity Futures Trading Commission Regulation 4.5 and thereby avoid being deemed a "commodity pool operator," the Fund will use commodity futures or commodity options contracts solely for bona fide hedging purposes within the meaning and intent of Regulation 1.3(z), or, with respect to positions in commodity futures and commodity options contracts that do not come within the meaning and intent of Regulation 1.3(z), the aggregate initial margin and premiums required to establish such positions will not exceed 5% of the fair market value of the assets of the Fund, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into (in the case of an option that is in-the-money at the time of purchase, the in the-money amount (as defined in Section 190.01(x) of the Commission Regulations) may be excluded in computing such 5%). Taxation of Options and Futures. If the Fund exercises a call or put option that it holds, the premium paid for the option is added to the cost basis of the security purchased (call) or deducted from the proceeds of the security sold (put). For cash settlement options and futures options exercised by the Fund, the difference between the cash received at exercise and the premium paid is a capital gain or loss. - ------------------ /2/ A call option is "in-the-money" if the value of the futures contract that is the subject of the option exceeds the exercise price. A put option is "in-the-money" if the exercise price exceeds the value of the futures contract that is the subject of the option. B-8 If a call or put option written by the Fund is exercised, the premium is included in the proceeds of the sale of the underlying security (call) or reduces the cost basis of the security purchased (put). For cash settlement options and futures options written by the Fund, the difference between the cash paid at exercise and the premium received is a capital gain or loss. Entry into a closing purchase transaction will result in capital gain or loss. If an option written by the Fund is in-the-money at the time it was written and the security covering the option was held for more than the long- term holding period prior to the writing of the option, any loss realized as a result of a closing purchase transaction will be long-term. The holding period of the securities covering an in-the-money option will not include the period of time the option is outstanding. If the Fund writes an equity call option/3/ other than a "qualified covered call option," as defined in the Internal Revenue Code, any loss on such option transaction, to the extent it does not exceed the unrealized gains on the securities covering the option, may be subject to deferral until the securities covering the option have been sold. A futures contract held until delivery results in capital gain or loss equal to the difference between the price at which the futures contract was entered into and the settlement price on the earlier of delivery notice date or expiration date. If the Fund delivers securities under a futures contract, the Fund also realizes a capital gain or loss on those securities. For Federal income tax purposes, the Fund generally is required to recognize for each taxable year its net unrealized gains and losses as of the end of the year on futures, futures options and non-equity options positions ("year-end mark-to-market"). Generally, any gain or loss recognized with respect to such positions (either by year-end mark-to-market or by actual closing of the positions) is considered to be 60% long-term and 40% short-term, without regard to the holding periods of the contracts. However, in the case of positions classified as part of a "mixed straddle," the recognition of losses on certain positions (including options, futures and futures options positions, the related securities and certain successor positions thereto) may be deferred to a later taxable year. Sale of futures contracts or writing of call options (or futures call options) or buying put options (or futures put options) that are intended to hedge against a change in the value of securities held by the Fund may affect the holding period of the hedged securities. If the Fund were to enter into a short index future, short index futures option or short index option position and the Fund's portfolio were deemed to "mimic" the performance of the index underlying such contract, the option or futures contract position and the Fund's stock - ------------------ /3/ An equity option is defined to mean any option to buy or sell stock, and any other option the value of which is determined by reference to an index of stocks of the type that is ineligible to be traded on a commodity futures exchange (e.g., an option contract on a sub-index based on the price of nine hotel-casino stocks). The definition of equity option excludes options on broad-based stock indexes (such as the Standard & Poor's 500 index). B-9 positions may be deemed to be positions in a mixed straddle, subject to the above-mentioned loss deferral rules. In order for the Fund to continue to qualify for Federal income tax treatment as a regulated investment company, at least 90% of its gross income for a taxable year must be derived from qualifying income; i.e., dividends, interest, income derived from loans of securities, and gains from the sale of securities or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts). In addition, gains realized on the sale or other disposition of securities held for less than three months must be limited to less than 30% of the Fund's annual gross income. Any net gain realized from futures (or futures options) contracts will be considered gain from the sale of securities and therefore be qualifying income for purposes of the 90% requirement. In order to avoid realizing excessive gains on securities held less than three months, the Fund may be required to defer the closing out of certain positions beyond the time when it would otherwise be advantageous to do so. The Fund intends to distribute to shareholders annually any capital gains that have been recognized for Federal income tax purposes (including year-end mark-to-market gains) on options and futures transactions, together with gains on other Fund investments, to the extent such gains exceed recognized capital losses and any net capital loss carryovers of the Fund. Shareholders will be advised of the nature of such capital gain distributions. Portfolio Turnover Under normal market conditions, the Fund's portfolio turnover rate will vary from year to year, but is expected to be below 50%. Portfolio turnover can occur for a number of reasons such as general conditions in the securities markets, more favorable investment opportunities in other securities, or other factors relating to the desirability of holding or changing a portfolio investment. Because of the Fund's emphasis on minimizing the recognition of ordinary income, the Fund intends to keep portfolio turnover low. A high rate of portfolio turnover in the Fund, if it should occur, would result in increased transaction expense, which must be borne by the Fund. High portfolio turnover also may result in the realization of capital gains or losses and, to the extent net short-term capital gains are realized, any distributions resulting from such gains will be considered ordinary income for Federal income tax purposes. See "Taxes" in the prospectus, and "Additional Tax Information" in this statement of additional information. INVESTMENT RESTRICTIONS The Fund has adopted the following investment restrictions (which may not be changed without the approval of a majority of the Fund's outstanding shares), under which the Fund may not: 1. with respect to 75% of its total assets, invest more than 5% of its total assets, taken at market value at the time of a particular purchase, in the securities of a single issuer, except for securities issued or guaranteed by the Government of the U.S. or any of its agencies or instrumentalities or repurchase agreements for such securities; B-10 2. acquire more than 10%, taken at the time of a particular purchase, of the outstanding voting securities of any one issuer; 3. act as an underwriter of securities, except insofar as it may be deemed an underwriter for purposes of the Securities Act of 1933 on disposition of securities acquired subject to legal or contractual restrictions on resale; 4. purchase or sell real estate (although it may purchase securities secured by real estate or interests therein, or securities issued by companies which invest in real estate or interests therein), commodities, or commodity contracts, except that it may enter into (a) futures and options on futures and (b) forward contracts; 5. make loans, but this restriction shall not prevent the Fund from (a) investing in debt securities, (b) investing in repurchase agreements, or (c) lending portfolio securities, provided that it may not lend securities if, as a result, the aggregate value of all securities loaned would exceed 33 1/3% of its total assets (taken at market value at the time of such loan);/4/ 6. borrow (including entering into reverse repurchase agreements), except that it may (a) borrow up to 33 1/3% of its total assets, taken at market value at the time of such borrowing, as a temporary measure for extraordinary or emergency purposes, but not to increase portfolio income and (b) enter into transactions in options, futures, and options on futures;/5/ 7. invest in a security if more than 25% of its total assets (taken at market value at the time of a particular purchase) would be invested in the securities of issuers in any particular industry, except that this restriction does not apply to securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities; or 8. issue any senior security except to the extent permitted under the Investment Company Act of 1940. The Fund's investment objective is not a fundamental restriction and, therefore, a change in the objective is not subject to shareholder approval. However, investors in the Fund will receive written notification at least 30 days' prior to any change in the Fund's investment objective. Non-Fundamental Restrictions The Fund also is subject to the following non-fundamental restrictions and policies, which may be changed by the board of trustees, without shareholder approval. - --------------- /4/ The Fund has no present intention of investing in repurchase agreements or lending portfolio securities. /5/ The Fund will not purchase securities when total borrowings by the Fund are greater than 5% of its net asset value. B-11 The Fund may not: a. invest in companies for the purpose of exercising control or management; b. invest more than 10% of its total assets (valued at time of purchase) in securities of foreign issuers; B-12 c. purchase securities on margin (except for use of short-term credits as are necessary for the clearance of transactions), or sell securities short unless (i) the Fund owns or has the right to obtain securities equivalent in kind and amount to those sold short at no added cost or (ii) the securities sold are "when issued" or "when distributed" securities which the Fund expects to receive in recapitalization, reorganization, or other exchange for securities the Fund contemporaneously owns or has the right to obtain and provided that transactions in options, futures, and options on futures are not treated as short sales; or d. invest more than 15% of its net assets (taken at market value at the time of each purchase) in illiquid securities, including repurchase agreements maturing in more than seven days. In addition, the Investment Company Act of 1940 requires that the Fund not (i) purchase more than 3% of the stock of another investment company or (ii) purchase stock of other investment companies equal to more than 5% of the Fund's total assets (valued at time of purchase) in the case of any one other investment company or (iii) purchase stock of other investment companies equal to more than 10% of the Fund's total assets (valued at time of purchase) in the case of all other investment companies in the aggregate. PERFORMANCE INFORMATION From time to time the Fund may quote total return figures. Total return for a period is the percentage change in value during the period of an investment in shares of a fund, including the value of shares acquired through reinvestment of all dividends and capital gains distributions. An average annual total return for a given period may be computed by finding the average annual compounded rate that would equate a hypothetical initial amount invested of $1,000 to the value of that investment that could be redeemed at the end of the period, assuming reinvestment of all distributions. Average annual total return is computed as follows: ERV = P(l+T)/n/ Where: P = a hypothetical initial investment of $1,000 T = average annual total return n = number of years ERV = ending redeemable value of a hypothetical $1,000 investment made at the beginning of the period, at the end of the period (or fractional portion thereof) The Fund imposes no sales charges and pays no distribution expenses. Income taxes are not taken into account. Performance figures quoted by the Fund are not necessarily indicative of future results. The Fund's performance is a function of conditions in the securities markets, B-13 portfolio management and operating expenses. Although information about past performance is useful in reviewing the Fund's performance and in providing some basis for comparison with other investment alternatives, it should not be used for comparison with other investments using different reimbursement assumptions or time periods. In advertising and sales literature, the performance of the Fund may be compared with that of other mutual funds, indexes or averages of other mutual funds, indexes of related financial assets or data, other accounts, limited liability investment companies or partnerships managed or advised by the Adviser, and other competing investment and deposit products available from or through other financial institutions. The composition of these indexes, averages or accounts differs from that of the Fund. The comparison of the Fund to an alternative investment should consider differences in features and expected performance. All of the indexes and averages noted below will be obtained from the indicated sources or reporting services, which the Fund generally believes to be accurate. The Fund also may note (or provide reprints of articles or charts containing) its mention (including performance or other comparative rankings) in newspapers, magazines, or other media from time to time. However, the Fund assumes no responsibility for the accuracy of such data. Newspapers and magazines which might mention the Fund include, but are not limited to, the following: Business Week Money Changing Times The Mutual Fund Letter Chicago Mutual Fund Values (Morningstar) Chicago Tribune Newsweek Chicago Sun-Times The New York Times Crain's Chicago Business Pensions and Investments Consumer Reports Personal Investor Consumer Digest Smart Money Financial World Stanger Reports FA Advisor Time Forbes USA Today Fortune U.S. News and World Report Institutional Investor The Wall Street Journal Investor's Daily Worth Los Angeles Times When a newspaper, magazine, or other publication mentions the Fund, such mention may include: (i) listings of some or all of the Fund's holdings; (ii) descriptions of characteristics of some or all of the securities held by the Fund, including price-earnings ratios, earnings, growth rates and other statistical information, and comparisons of that information to similar statistics for the securities comprising any of the indexes or averages listed below; and (iii) descriptions of the Fund's or a portfolio manager's economic and market outlook, generally and for the Fund. The Fund may compare its performance to the Consumer Price Index (All Urban), a widely recognized measure of inflation. B-14 The performance of the Fund may be compared to stock market indexes or averages, including the following widely recognized indicators of general U.S. stock market results: Russell Mid-Cap Stock Index Russell Mid-Cap Growth Index Russell 1,000 Index Russell 1,000 Growth Index Standard & Poor's 500 Stock Index Standard & Poor's Mid-Cap 400 Index S&P/Barra Mid-Cap Growth Index The Fund's performance may also be compared to mutual fund industry indexes or averages, including the following: Value Line Index; Lipper Capital Appreciation Fund Average; Lipper Growth Funds Average; Lipper General Equity Funds Average; Lipper Equity Funds Average; Lipper Mid-Cap Average; Morningstar Growth Average; Morningstar Aggressive Growth Average; Morningstar U.S. Diversified Average; Morningstar Equity Fund Average; Morningstar Hybrid Fund Average; Morningstar All Equity Funds Average; and Morningstar General Equity Average; Morningstar MidCap/Value Average. The Lipper and Morningstar averages are unweighted averages of total return performance of mutual funds as classified, calculated, and published by Lipper and by Morningstar, Inc. ("Morningstar"), respectively. The Fund may also use comparative performance as computed in a ranking by Lipper or category averages and rankings provided by another independent service. Should Lipper or another service reclassify the Fund to a different category or develop (and place the Fund into) a new category, the Fund may compare its performance or ranking against other funds in the newly assigned category, as published by the service. Moreover, the Fund may compare its performance or ranking against all funds tracked by Lipper or another independent service, and may cite its rating, recognition or other mention by Morningstar or any other entity. Morningstar's rating system is based on risk-adjusted total return performance and is expressed in a star-rating format. The risk-adjusted number is computed by subtracting the Fund's risk score (which is a function of the Fund's monthly returns less the 3-month Treasury bill return) from the Fund's load-adjusted total return score. This numerical score is then translated into rating categories, with the top 10% labeled five star, the next 22.5% labeled four star, the next 35% labeled three star, the next 22.5% labeled two star and the bottom 10% one star. A high rating reflects either above-average returns or below-average risk, or both. To illustrate the historical returns on various types of financial assets, the Fund may use historical data provided by Ibbotson Associates, Inc. ("Ibbotson"), a Chicago-based investment firm. Ibbotson constructs (or obtains) very long-term (since 1926) total return data (including, for example, total return indexes, total return percentages, average annual total returns and standard deviations of such returns) for the following asset types: common stocks, small company stocks, long-term corporate bonds, long-term government bonds, intermediate-term government bonds and U.S. Treasury bills. Similarly, the Fund may use Ibbotson's historical data regarding the Consumer Price Index. The Fund may also use historical data compiled by B-15 sources believed by the Fund to be accurate, illustrating the past performance of small-capitalization stocks, large-capitalization stocks, common stocks, equity securities, growth stocks (small-capitalization, large-capitalization, or both) and value stocks (small-capitalization, large-capitalization, or both). MANAGEMENT OF THE FUND Trustees and officers of the Trust, and their principal business occupations during at least the last five (5) years, are shown below. Trustees deemed to be "interested persons" of the Trust for purposes of the Investment Company Act of 1940 are indicated with an asterisk.
Positions Held Principal Occupations during Name and Age with Registrant Past 5 Years - ------------ --------------- --------------------------- Richard M. Burridge (67) Chairman Chairman, The Burridge Group Inc. - ------------------------------------------------------------------------------------------------- Kenneth M. Arenberg* (67) Trustee, President and Vice Chairman, The Burridge Group Inc. Treasurer - ------------------------------------------------------------------------------------------------- J. Thomas Hurvis (58) Trustee Chairman, Old World Industries, Inc. - --------------------------------------------------------------------------------------------------- Angelo Spoto (67) Trustee Private investor, 1990 to present; Senior Vice President - Investments, Blunt, Ellis & Loewi, Inc., prior thereto. - --------------------------------------------------------------------------------------------------- Robert L. Underwood (51) Trustee Executive Vice President, North American Business Development Companies, LLC. - --------------------------------------------------------------------------------------------------- John H. Streur, Jr. (36) Senior Vice President and President, The Burridge Group Inc. Secretary - --------------------------------------------------------------------------------------------------- Robert L. Worthington (36) Vice President Senior Vice President, The Burridge Group Inc. - -------------------------------------------------------------------------------------------------- Bradley P. Schluter (39) Vice President Vice President, The Burridge Group Inc. - --------------------------------------------------------------------------------------------------
B-16 The only compensation paid to trustees and officers of the Trust for their services as such consists of a fee of $500 per meeting of the board or any committee thereof attended, paid to trustees who are not interested persons of the Trust or the Adviser. The Trust has no retirement or pension plans. The following table sets forth compensation expected to be paid by the Trust during the fiscal year ending June 30, 1997 to each of the trustees of the Trust. The Trust is not part of a complex of mutual funds.
AGGREGATE COMPENSATION NAME OF TRUSTEE FROM TRUST --------------- ------------ Kenneth M. Arenberg $ 0 ------------------------------------- J. Thomas Hurvis 3,000 ------------------------------------- Angelo Spoto 3,000 ------------------------------------- Robert L. Underwood 3,000 -------------------------------------
At the date of this Statement of Additional Information, Richard M. Burridge and Kenneth M. Arenberg, who provided the Fund's organizational capital, each owned 50% of the Fund's outstanding shares and therefore may be deemed to control the Fund. INVESTMENT ADVISORY SERVICES The Burridge Group Inc. (the "Adviser") provides investment advisory services to the Fund pursuant to an Investment Advisory Agreement dated December ____, 1996 (the "Advisory Agreement"). The Adviser is an Illinois corporation founded as a registered investment adviser in March, 1986 by Richard M. Burridge and Kenneth M. Arenberg. It employs a growth oriented investment approach in creating a diversified portfolio of equities for corporate, public and Taft- Hartley pension plans, endowments, foundations and private investors. As of October 31, 1996 it managed over $1.3 billion in assets for clients, including over $400 million for taxable accounts. The Adviser is privately owned by seven principals and has 25 employees. B-17 In return for its services and for providing shareholder and investor servicing the Adviser is paid a monthly fee from the Fund based on the Fund's average daily net assets. Under the Advisory Agreement, the Fund pays the Adviser a fee, accrued daily and paid monthly, at the annual rates of 1.00% of the first $500 million of its average daily net assets, 0.85% of the next $500 million, and 0.75% of average daily net assets in excess of $1 billion. The Agreement provides that the Adviser shall not be liable for any loss suffered by the Trust or its shareholders as a consequence of any act or omission in connection with investment advisory or portfolio services under the Advisory Agreement, except by reason of willful misfeasance, bad faith, or gross negligence on the part of the Adviser in the performance of its duties or from reckless disregard by the Adviser of its obligations and duties under the Advisory Agreement. The Advisory Agreement expires in December 1998, but may be continued from year to year only so long as the continuance of each is approved annually (a) by the vote of a majority of the trustees of the Trust who are not "interested persons" of the Trust or the Adviser cast in person at a meeting called for the purpose of voting on such approval, and (b) by the board of trustees of the Trust or by the vote of a majority (as defined in the 1940 Act) of the outstanding shares of the Fund. The Advisory Agreement is terminable without penalty, on 60 days' notice, by the trustees of the Trust or by vote of a majority of the outstanding shares of the Fund, or, on not less than 90 days' notice, by the Adviser. The Advisory Agreement automatically terminates in the event of its assignment (as defined in the 1940 Act). The Adviser employs a team of investment professionals who participate in investment strategy formulation and issue selection. The individual responsible for overseeing the implementation of the Adviser's strategy for the Fund is Richard M. Burridge. Mr. Burridge is chairman and chief investment officer of the Adviser. He has been engaged in the investment management business since 1974 and founded the Adviser in 1986. Mr. Burridge holds a B.S. from the University of Colorado and is a Chartered Financial Analyst. On October 11, 1996 the Adviser entered into an agreement pursuant to which, subject to the satisfaction of certain conditions, substantially all of the Adviser's assets and liabilities, including its investment advisory agreement with the Trust, will be transferred to The Burridge Group LLC ("Burridge LLC"), a newly created Delaware limited liability company of which the Adviser is the Manager Member. Simultaneously with that asset transfer each of the seven stockholders (the "Stockholders) of the Adviser, each of whom is an officer and director the B-18 Adviser, will sell his or her stock in the Adviser to Affiliated Managers Group, Inc. ("AMG") and, with AMG will become members in Burridge LLC. Upon consummation of such proposed transactions (collectively, the "Transaction"), it is expected that Burridge LLC will operate with the same management personnel who are presently responsible for the investment policies and management of the Adviser and will become investment adviser to the Trust. The new investment advisory agreement between Burridge LLC and the Trust (the "New Agreement"), which has been approved by the Fund's initial stockholders, has terms and conditions (including the fee and expense provisions) identical to the terms and conditions of the existing agreement ("Existing Agreement"), except for the named adviser therein. The consummation of the Transaction is subject to several conditions set forth in the Purchase Agreement, of which the principal condition is approval of the Transaction by a certain minimum percentage of the clients of the Adviser. Additional conditions include: (i) the continued absence of certain proceedings that would be likely to restrain or prohibit consummation of the Transaction, and (ii) registration of Burridge LLC as an investment adviser under the Investment Advisers Act of 1940 and under the laws of such states as are necessary to permit Burridge LLC to carry on the business currently conducted by the Adviser. It is anticipated that the Transaction will be consummated around December 31, 1996. Following the consummation of the Transaction, the offices of Burridge LLC will be located at the same location as the offices of the Adviser, 115 South LaSalle Street, Chicago, Illinois 60603. Effective on consummation of the Transaction, the present officers of the Adviser will become officers of Burridge LLC and will have the authority to operate and administer the investment advisory business of Burridge LLC, and to provide investment management services. The Stockholders, as members of Burridge LLC, will initially hold member interests representing an interest in the aggregate of 45% of the profits of Burridge LLC, subject to reduction under certain conditions. The remaining interest in the profits of Burridge LLC and 100% of the Adviser, the Manager Member of Burridge LLC, will be owned by AMG. AMG is a Boston-based private holding company that makes equity investments in investment management firms in which management personnel retain a significant interest in the future of the business. AMG is a Delaware corporation which has its offices at Two International Place, Boston, MA 02110. AMG may be deemed to have as its parent, Advent VII, L.P., a Delaware limited partnership, because Advent VII, L.P. owns greater than fifty percent of the voting stock of AMG. Advent VII, L.P. may be deemed to have, as its parent, its sole general partner - TA Associates VII, L.P., which is a Delaware limited partnership, and which in turn may be deemed to have, as its parent, its sole general partner - TA Associates, Inc., a Delaware corporation. The address of each of Advent VII, L.P., TA Associated VII, L.P. and TA Associates, Inc., is c/o TA Associates, Inc., High Street Tower, Suite 2500, 125 High Street, Boston, MA 02110. AMG has B-19 advised the Trust that TA Associates, Inc., which was founded in 1968, has invested directly or indirectly in over 200 enterprises prior to its investment in AMG. PORTFOLIO TRANSACTIONS AND BROKERAGE Portfolio transactions are placed with those securities brokers and dealers that the Adviser believes will provide the best value in transaction and research services either in a particular transaction or over a period of time. Although some transactions involve only brokerage services, many involve research services as well. In valuing brokerage services, the Adviser makes a judgment as to which brokers are capable of providing the most favorable net price (not necessarily the lowest commission considered alone) and the best execution in a particular transaction. Best execution connotes not only general competence and reliability of a broker, but specific expertise and effort of a broker in overcoming the anticipated difficulties in fulfilling the requirements of particular transactions, because the problems of execution and the required skills and effort vary greatly among transactions. In valuing research services, the Adviser makes a judgment of the usefulness of the research information provided by a broker to the Adviser in managing the Fund. Although the information, e.g., data or recommendations concerning particular securities, sometimes relates to the specific transaction placed with the broker, the research predominately consists of a wide variety of information concerning companies, industries, investment strategy, and economic, financial and political conditions and prospects useful to the Adviser in advising the Fund and other accounts. The reasonableness of brokerage commissions paid in relation to transaction and research services received is evaluated by the staff of the Adviser on an ongoing basis. The general level of brokerage charges and other aspects of the portfolio transactions for the Fund are reviewed periodically by Trust's board of trustees. The Adviser is the principal source of information and advice to the Fund and is responsible for making and initiating the execution of investment decisions. However, the board of trustees recognizes that it is important for the Adviser, in performing its responsibilities to the Fund, to continue to receive and evaluate the broad spectrum of economic and financial information which many securities brokers have customarily furnished in connection with brokerage transactions, and that in compensating brokers for their services, it is in the interest of the Fund to take into account the value of the information received for use in advising the Fund. Consequently, the Adviser is authorized to allocate the orders placed by it on behalf of the Trust to brokers and dealers who provide research services to the Trust or the Adviser and the commission paid to a broker providing research services may be greater than the amount of commission another broker would charge for the same transaction. The extent, if any, to which receipt of such information may reduce the expenses of the Adviser in providing management services to the Fund is not determinable. In addition, the board of trustees understands that other clients of the Adviser also may benefit from the information obtained for the Fund, in the same B-20 manner that the Fund also may benefit from information obtained by the Adviser in performing services for others. Transactions of the Fund in the over-the-counter market and the third market are executed with primary market makers acting as principals except where it is believed that better prices and execution may be obtained from others. Consistent with the Rules of Fair Practice of the National Association of Securities Dealers, Inc. and subject to the policy of seeking the best price and execution as stated above, sales of shares of the Fund by a broker-dealer may be considered by the Adviser in the selection of broker-dealers to execute portfolio transactions for the Fund. Although investment decisions for the Fund are made independently from those for other investment advisory clients of the Adviser, the same investment decision may be made for both the Fund and one or more other advisory clients. If both the Fund and other clients purchase or sell the same class of securities on the same day, the transactions will be allocated as to amount and price in a manner considered equitable to each. The Adviser may place brokerage transactions with brokers affiliated with the distributor, Funds Distributor, Inc. Commissions paid to such brokers on any transaction will not exceed those paid by the Fund in similar transactions to other brokers. PURCHASE AND REDEMPTION OF SHARES Purchases and redemptions are discussed in the prospectus under the headings "Purchasing Shares," "Redeeming Shares," "Shareholder Services," and "Net Asset Value." All of that information is incorporated herein by reference. You may purchase (or redeem) shares of the Fund through investment dealers, banks, or other institutions. However, these institutions may charge for their services or place limitations on the extent to which you may use the services offered by the Fund. The Fund imposes no charges other than those described in the Prospectus and this Statement of Additional Information if shares are purchased (or redeemed) directly from the Fund. Net Asset Value. The net asset value of the shares of the Fund is determined as of the close of regular session trading on the New York Stock Exchange ("NYSE") (currently 3:00 p.m., Chicago time) each day the NYSE is open for trading. The net asset value per share of the Fund is determined by dividing the value of all its securities and other assets, less its liabilities, by the number of shares of the Fund outstanding. B-21 Investments are stated at current value. Securities listed or admitted to trading on a national securities exchange or the Nasdaq National Market are valued at the last sales price or, if there has been no sale that day, at the most recent bid price. Other securities traded over-the-counter are valued at the last reported bid price. Money market instruments with sixty days or less remaining from the valuation date until maturity are valued on an amortized cost basis. Securities or other assets for which market quotations are not readily available will be valued at a fair value as determined in good faith by or under the direction of Trust's board of trustees. The NYSE is currently closed on weekends and on the following holidays: New Year's Day, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. Redemption in Kind. The Fund intends to pay all redemptions in cash and is obligated to redeem shares solely in cash up to the lesser of $250,000 or one percent of the net assets of the Fund during any 90-day period for any one shareholder. However, redemptions in excess of such limit may be paid wholly or partly by a distribution in kind of readily marketable securities. If redemptions are made in kind, the redeeming shareholders might incur brokerage fees in selling the securities received in the redemptions. TAXES The Fund intends to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code, and thus not be subject to federal income taxes on amounts which it distributes to shareholders. GENERAL INFORMATION Administrator. Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin 53202 (the "Administrator") is the Fund's Administrator. The Fund Administration Servicing Agreement entered into between the Fund and the Administrator relating to the Fund (the "Administration Agreement") will remain in effect until terminated by either party. The Administration Agreement may be terminated at any time, without the payment of any penalty, by the Board of Trustees of the Fund upon the giving of ninety (90) days' written notice to the Administrator, or by the Administrator upon the giving of ninety (90) days' written notice to the Fund. Under the Administration Agreement, the Administrator shall exercise reasonable care and is not liable for any error or judgment or mistake of law or for any loss suffered by the Corporation in connection with the performance of the Administration Agreement, except a loss resulting from willful misfeasance, bad faith or negligence on the part of the Administrator in the performance of its duties under the Administration Agreement. Custodian and Fund Accounting Agent. Firstar Trust Company ("Firstar"), P.O. Box 701, Milwaukee, Wisconsin 53201, acts as Custodian of the securities and other assets of the Fund. As Custodian, Firstar is responsible for, among other things, safeguarding and controlling the Fund's cash and securities, handling the receipt and delivery of securities, and collecting B-22 interest and dividends on the Fund's investments. Firstar also performs portfolio accounting services for the Fund. Firstar is not an affiliate of the Adviser or its affiliates. In addition the Fund has entered into a Fund Accounting Services Agreement with Firstar Trust Company pursuant to which Firstar Trust Company has agreed to maintain the financial accounts and records of the Fund and provide other accounting services to the Fund. Transfer Agent. Firstar Trust Company also serves as transfer agent and dividend disbursing agent for the Fund under a Transfer Agency Agreement. As transfer and dividend disbursing agent, Firstar Trust Company has agreed to (i) issue and redeem shares of the Fund, (ii) make dividend and other distributions to shareholders of the Fund, (iii) respond to correspondence by Fund shareholders and others relating to its duties, (iv) maintain shareholder accounts, and (v) make periodic reports to the Fund. Auditors. Arthur Andersen LLP, 33 West Monroe Street, Chicago, Illinois 60603 serves as the Trust's independent auditors, providing services including (i) audit of the annual financial statements, (ii) assistance and consultation in connection with Securities and Exchange Commission filings, and (iii) review of the annual income tax returns filed on behalf of the Fund. Distributor. The shares of the Fund are offered for sale on a continuous basis through Funds Distributor, Inc. ("Distributor"), 60 State Street, Boston, Massachusetts 02109, without any sales commissions or charges to the Fund or to their shareholders. The Distributor acts pursuant to a written Distribution Agreement with the Trust which expires in December, 1998, but may continue from year to year thereafter, provided such continuance is approved annually (i) by a majority of the trustees or by a majority of the outstanding voting securities of the affected Fund and (ii) by a majority of the trustees who are not parties to the Agreement or interested persons of any such party. The Adviser pays the fees and expenses of the Distributor and all sales and promotional expenses from its own resources. As agent, the Distributor offers the Fund's shares only on a best-efforts basis. The Distributor offers shares of the Fund to investors at net asset value, without sales commissions, sales loads or other sales charges. FINANCIAL STATEMENTS To the Shareholders and Board of Trustees of Burridge Funds B-23 We have audited the accompanying statement of net assets of Burridge Funds (a Massachusetts business trust) comprising the Burridge Capital Development Fund as of November 18, 1996. The statement of net assets is the responsibility of Burridge Funds' management. Our responsibility is to express an opinion on the statement of net assets based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of net assets is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of net assets. Our procedures included confirmation of cash held by the custodian as of November 18, 1996. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the statement of net assets referred to above presents fairly, in all material respects, the net assets of Burridge Capital Development Fund constituting the Burridge Funds as of November 18, 1996, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Chicago, Illinois November 18, 1996 BURRIDGE FUNDS STATEMENT OF NET ASSETS NOVEMBER 18, 1996 Burridge Capital Development Fund
ASSETS Cash $100,000 Prepaid Expenses 26,770 Deferred organizational costs 55,500 -------- Total Assets $182,270 ======== LIABILITIES Payable to Adviser 82,270 -------- NET ASSETS $100,000 ======== Shares Outstanding 10,000 -------- Net asset value, offering and redemption price per share $10.00 ========
NOTES TO STATEMENT OF NET ASSETS NOVEMBER 18, 1996 1.) The Trust: Burridge Funds (the Trust) was organized as a Massachusetts business trust on August 30, 1996 and has been inactive since that date except for matters relating to its organization, its registration as an open-end series investment company and the registration of its shares under the Investment Company Act of 1940, as amended, and the Securities Act of 1933, as amended, and the sale of the outstanding shares to two principals of The Burridge Group Inc., the Trust's investment adviser. Burridge Capital Development Fund (the Fund), a series of Burridge Funds, is authorized to issue an unlimited number of shares of beneficial interest, without par value. 2.) Deferred Organization Costs: The Trust expects to incur approximately $55,500 in organization costs. These costs will be amortized over a 60-month period beginning with the commencement of Trust operations. The Trust's initial shareholders have agreed that if any of the initial shares are redeemed during the first 60 months of the Trust's operations by any holder thereof, the proceeds of the redemption will be reduced by the pro rata share of the unamortized organization expenses as of the date of the redemption. The pro rata share by which the redemption proceeds shall be B-25 reduced shall be derived by dividing the number of original shares redeemed by the total number of original shares outstanding at the time of the redemption. 3.) Related Parties: The Burridge Group Inc. will act as investment adviser for and manage the investment and reinvestment of the assets of the Fund. For these services, the Fund has agreed to pay an annual management fee declining from 1.00% of its average daily net assets as described in the Prospectus. The Burridge Group Inc. expects, pursuant to an agreement, to transfer its assets, including the investment advisory agreement, to The Burridge Group LLC. The new investment advisory agreement between The Burridge Group LLC and the Fund has terms and conditions identical to the terms and conditions of the current agreement, except for the advisor named therein. 4.) Taxes: The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and make the requisite distributions of income to its shareholder which will be sufficient to relieve it from all or substantially all Federal income taxes. B-26 PART C OTHER INFORMATION ITEM 24. Financial Statements and Exhibits (a) Financial Statements: (1) Financial Statements included in Part A of this registration statement: None. (2) Financial Statements included in Part B of this amendment: Statement of Net Assets at November 18, 1996. (b) Exhibits: 1 Agreement and Declaration of Trust of the registrant/*/ 2 Bylaws, as amended, of the registrant 3 None 4 None (registrant does not issue share certificates.) 5 Form of Investment Advisory Agreement between the registrant and The Burridge Group Inc. - --------------------- * Incorporated by reference to previous filing of registration statement on Form N1-A filed by Burridge Funds on September 9, 1996 with the Securities and Exchange Commission pursuant to the Securities Act of 1933 (File No. 333- 11633). 1
5.1 Form of Investment Advisory Agreement between the registrant and The Burridge Group LLC 6 Form of Distributor Agreement between the registrant and Funds Distributor, Inc. 7 None 8 Form of Custodian Agreement between the registrant and Firstar Trust Company 9.1 Form of Transfer Agency Agreement between the registrant and Firstar Trust Company 9.2 Form of Fund Accounting Services Agreement between the registrant and Firstar Trust Company 9.3 Form of Fund Administration Servicing Agreement between the registrant and Firstar Trust Company 9.4 Form of Fulfillment Servicing Agreement between the registrant and Firstar Trust Company 10 Opinion and Consent of Counsel 11 Consent of Independent Auditors 12 None 13 Subscription Agreement 14 Burridge Funds Individual Retirement Account Custodial Agreement and Disclosure Statement and related applications 15 None 16 Not applicable 17 Financial Data Schedule 18 Form of account application
ITEM 25. Persons Controlled by or Under Common Control With Registrant. The registrant does not consider that there are any persons directly or indirectly controlling, controlled by, or under common control with, the registrant within the meaning of this item. The information in the prospectus under the caption "Management of the Fund" and in the Statement of Additional Information under the caption "Management of the Fund" and the first paragraph under the caption "Investment Advisory Services" is incorporated herein by reference. ITEM 26. Number of Holders of Securities. Number of Record Holders Title of Series as of November 18, 1996 --------------- ------------------------ Burridge Capital Development Fund 2 ITEM 27. Indemnification. See Article VIII of registrant's Agreement and Declaration of Trust. The registrant, its trustees and officers, the investment adviser to registrant and certain affiliated persons of the adviser are insured under a policy of insurance maintained by registrant and the adviser, within the limits and subject to the limitations of the policy, against certain expenses in connection with the defense of actions, suits or proceedings, and certain liabilities that might be imposed as a result of such actions, suits or proceedings, to which they are parties by reason of being or having been such trustees, directors or officers. The policy expressly excludes coverage for any trustee or officer whose personal dishonesty, fraudulent breach of trust, lack of good faith, or intention to deceive or defraud has been finally adjudicated or may be established or who willfully fails to act prudently. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the "Securities Act") may be permitted to trustees, officers, and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The general effect of the indemnification provisions of the Agreement and Declaration of Trust is to protect, out of assets of the Registrant, Registrant's officers and trustees from liabilities to which they would otherwise be subject. ITEM 28. Business and Other Connections of Investment Adviser. The information in the prospectus in the second, third and fourth paragraphs under the caption "Management of the Fund" is incorporated herein by reference. For a description of other business, profession, vocation or employment of a substantial nature in which any general partner, managing general partner, director or officer of The Burridge Group Inc. has engaged during the last two years for his account or in the capacity of director, officer, employee, partner or trustee, see the information under the caption "Management of the Fund" in the statement of additional information. ITEM 29. Principal Underwriters. (a) Funds Distributor, Inc. (the "Distributor") also acts as principal underwriter for the following investment companies: 3 BJB Investment Funds Burridge Funds Foreign Fund, Inc. Fremont Mutual Funds, Inc. Harris Insight Funds Trust HT Insight Funds, Inc., d/b/a Harris Insight Funds The JPM Advisor Funds The JPM Institutional Funds The JPM Pierpont Funds LKCM Fund The Munder Funds Trust The Munder Funds, Inc. The PanAgora Institutional Funds RCM Capital Funds, Inc. RCM Equity Funds, Inc. St. Clair Money Market Fund The Skyline Funds Waterhouse Investors Cash Management Fund, Inc. Funds Distributor is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers. Funds Distributor is an indirect wholly-owned subsidiary of Boston International Group, Inc., a holding company all of whose outstanding shares are owned by key employees. (b) The information required by this Item 29(b) with respect to each director, officer or partner of Funds Distributor is incorporated by reference to Schedule A of Form BD filed by Funds Distributor with the Securities and Exchange Commission pursuant to the Securities Act of 1934 (File No. 8-20518). (c) Not applicable. 4 ITEM 30. Location of Accounts and Records. (1) Firstar Trust Company P.O. Box 701 Milwaukee, Wisconsin 53201 (2) Kenneth M. Arenberg Burridge Funds 115 South LaSalle Street Chicago, Illinois 60603 ITEM 31. Management Services. Not applicable. ITEM 32. Undertakings. (a) Not applicable. (b) Registrant undertakes to file a post-effective amendment, using financial statements of the series designated Burridge Capital Development Fund that need not be certified, within four to six months after effectiveness of this registration statement. (c) Registrant undertakes to furnish to each person to whom a prospectus is delivered with a copy of the registrant's latest annual report to shareholders, upon request and without charge. 5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the registrant certifies that it has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Chicago and state of Illinois on November ___, 1996. Burridge Funds By /s/ Kenneth M. Arenberg ----------------------- President Pursuant to the requirements of the Securities Act of 1933, this amendment to the registration statement has been signed below by the following person in the capacities and on the date indicated. /s/ Kenneth M. Arenberg - ----------------------- Trustee and President (principal executive and accounting officer) November ___, 1996 Index of Exhibits Filed with this Registration Statement --------------------------------------------------------
Exhibit Sequential number Exhibit Page - ------- ------------------------------------------------------- ---------- 1 Agreement and Declaration of Trust of the registrant * 2 Bylaws, as amended, of the registrant 3 None 4 None (registrant does not issue share certificates.) 5 Form of Investment Advisory Agreement between the registrant and The Burridge Group Inc. 5.1 Form of Investment Advisory Agreement between the registrant and The Burridge Group LLC 6 Form of Distributor Agreement between the registrant and Funds Distributor, Inc. 7 None 8 Form of Custodian Agreement between the registrant and Firstar Trust Company 9.1 Form of Transfer Agency Agreement between the registrant and Firstar Trust Company 9.2 Form of Fund Accounting Services Agreement between the registrant and Firstar Trust Company 9.3 Form of Fund Administration Servicing Agreement between the registrant and Firstar Trust Company 9.4 Form of Fulfillment Servicing Agreement between the registrant and Firstar Trust Company 10 Opinion and Consent of Counsel 11 Consent of Independent Auditors 12 None 13 Subscription Agreement 14 The Burridge Funds Individual Retirement Account Custodial Agreement and Disclosure Statement and Related applications
- ------------------ * previously filed.
15 None 16 Not applicable 17 Financial Data Schedule 18 Form of account application
EX-9.2 2 BYLAWS, AS AMENDED, OF THE REGISTRANT Exhibit 2 BURRIDGE FUNDS BYLAWS ------ Table of Contents ----------------- Section 1. Agreement and Declaration of Trust and Principal Office.. 1 1.1 Agreement and Declaration of Trust................. 1 1.2 Principal Office of the Trust...................... 1 Section 2. Shareholders............................................. 1 2.1 Shareholder Meetings............................... 1 2.2 Place of Meetings.................................. 1 2.3 Notice of Meetings................................. 1 2.4 Ballots............................................ 2 2.5 Proxies............................................ 2 Section 3. Trustees................................................. 2 3.1 Committees......................................... 2 3.2 Regular Meetings................................... 2 3.3 Special Meetings................................... 2 3.4 Notice............................................. 2 3.5 Quorum............................................. 3 3.6 Trustee Retirement................................. 3 Section 4. Officers and Agents...................................... 3 4.1 Enumeration; Qualification......................... 3 4.2 Powers............................................. 3 4.3 Election........................................... 3 4.4 Tenure............................................. 3 4.5 Chairman........................................... 3 4.6 President.......................................... 4 4.7 Vice Presidents.................................... 4
AMENDED AND RESTATED -------------------- BYLAWS ------ OF -- BURRIDGE FUNDS -------------- Section 1. Agreement and Declaration of Trust and Principal Office -------------------------- 1.1 Agreement and Declaration of Trust. These Bylaws shall be subject to the Agreement and Declaration of Trust, as from time to time in effect (the "Declaration of Trust"), of Burridge Funds, a Massachusetts business trust established by the Declaration of Trust (the "Trust"). 1.2 Principal Office of the Trust. The principal office of the Trust shall be located in Chicago, Illinois. Section 2. Shareholders. ------------------------ 2.1. Shareholder Meetings. A meeting of the shareholders of the Trust or of any one or more series or classes of shares may be called at any time by the Trustees, by the chairman, the president or, if the Trustees, the chairman and the president shall fail to call any meeting of shareholders for a period of 30 days after written application of one or more shareholders who hold at least 10% of all outstanding shares of the Trust, if shareholders of all series are required under the Declaration of Trust to vote in the aggregate and not by individual series at such meeting, or of any series or class, if shareholders of such series or class are entitled under the Declaration of Trust to vote by individual series or class at such meeting, then such shareholders may call such meeting. If the meeting is a meeting of the shareholders of one or more series or classes of shares, but not a meeting of all shareholders of the Trust, then only the shareholders of such one or more series or classes shall be entitled to notice of and to vote at the meeting. Each call of a meeting shall state the place, date, hour and purposes of the meeting. 2.2 Place of Meetings. All meetings of the shareholders shall be held at the principal office of the Trust, or, to the extent permitted by the Declaration of Trust, at such other place within the United States as shall be designated by the Trustees or the president of the Trust. 2.3 Notice of Meetings. A written notice of each meeting of shareholders, stating the place, date and hour and the purposes of the meeting, shall be given at least seven days before the meeting to each shareholder entitled to vote thereat by leaving such notice with him or her or at his or her residence or usual place of business or by mailing it, postage prepaid, and addressed to such shareholder at his or her address as it appears in the records of the Trust. Such notice shall be given by the secretary or an assistant secretary or by an officer designated by the Trustees. No notice of any meeting of shareholders need be given to a shareholder if a written waiver of notice, executed before or after the meeting by such shareholder or his or her attorney thereunto duly authorized, is filed with the records of the meeting. 2.4 Ballots. No ballot shall be required for any election unless requested by a shareholder present or represented at the meeting and entitled to vote in the election. 2.5. Proxies. Shareholders entitled to vote may vote either in person or by proxy in writing dated not more than six months before the meeting named therein, which proxies shall be filed with the secretary or other person responsible to record the proceedings of the meeting before being voted. Unless otherwise specifically limited by their terms, such proxies shall entitle the holders thereof to vote at any add adjournment of such meeting but shall not be valid after the final adjournment of such meeting. Section 3. Trustees -------------------- 3.1 Committees. The Trustees may appoint from their number an executive committee and other committees. Except as the Trustees may otherwise determine, any such committee may make rules for conduct of its business. Unless otherwise provided by resolution of the Board of Trustees, the Executive Committee shall have and may exercise all powers of the Board of Trustees in the management of the business and affairs of the Trust that may lawfully be exercised by an executive committee, except the power to recommend to shareholders any matter requiring shareholder approval, amend the Declaration of Trust or By-Laws, or approve any merger or share exchange that does not require shareholder approval. 3.2 Regular Meetings. Regular meetings of the Trustees may be held without call or notice at such places and at such times as the Trustees may from time to time determine, provided that notice of the first regular meeting following any such determination shall be given to absent Trustees. 3.3 Special Meetings. Special meetings of the Trustees may be held at any time and at any place designated in the call of the meeting; when called by the chairman, the president or the treasurer or by two or more Trustees, sufficient notice thereof being given to each Trustee by the secretary or an assistant secretary or by the officer or one of the Trustees calling the meeting. 3.4 Notice. It shall be sufficient notice to a Trustee to send notice by mail at least forty-eight hours or by telegram at least twenty-four hours before the meeting addressed to the Trustee at his or her usual or last known business or residence address or to give notice to him or her in person or by telephone at least twenty-four hours before the meeting. Notice of a meeting need not be given to any Trustee if a written waiver of notice, executed by him or her before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him or her. Neither notice of a meeting nor a waiver of a notice need specify the purposes of the meeting. 3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then in office shall constitute a quorum; provided, however, a quorum shall not be less than two. Any meeting may 2 be adjourned from time to time by a majority of the votes cast upon the question, whether or not a quorum is present, and the meeting may be held as adjourned without further notice. 3.6 Trustee Retirement. Any Trustee shall retire as a Trustee as of the end of the calendar year in which the Trustee attains the age of 75 years. Section 4. Officers and Agents ------------------------------ 4.1 Enumeration; Qualification. The officers of the Trust shall be a chairman, president, a treasurer, a secretary and such other officers, if any, as the Trustees from time to time may in their discretion elect or appoint. The Trust may also have such agents, if any, as the Trustees from time to time may in their discretion appoint. Any officer may be but none need be a Trustee or shareholder. Any two or more offices may be held by the same person. 4.2 Powers. Subject to the other provisions of these Bylaws, each officer shall have, in addition to the duties and powers herein and in the Declaration of Trust set forth, such duties and powers as are commonly incident to his or her office as if the Trust were organized as a Massachusetts business corporation and such other duties and powers as the Trustees may from time to time designate, including without limitation the power to make purchases and sales of portfolio securities of the Trust pursuant to recommendations of the Trust's investment adviser in accordance with the policies and objectives of the Trust set forth in its prospectus and with such general or specific instructions as the Trustees may from time to time have issued. 4.3 Election. The chairman, president, the treasurer and the secretary shall be elected annually by the Trustees. Other officers, if any, may be elected or appointed by the Trustees at any time. 4.4 Tenure. The chairman, president, the treasurer and the secretary shall hold office until their respective successors are chosen and qualified, or in each case until he or she sooner dies, resigns, is removed or becomes disqualified. Each other officer shall hold office at the pleasure of the Trustees. Each agent shall retain his or her authority at the pleasure of the Trustees. 4.5 Chairman. The chairman shall preside at all the meetings of the Board of Trustees and all the shareholders' meetings. As a spokesman of the Trust, the chairman shall consult from time to time with the officers concerning the Trust's policies and business, as may be requested by the Board of Trustees or by the officers, or on his own initiative. The chairman shall engage or participate in a senior capacity in other matters of concern to the Board of Trustees or other officers, as may be requested. 4.6 President. The president shall be the chief executive officer of the Trust and shall have such duties as customarily pertain to that office. The president shall have general management and supervision of the property, business and affairs of the Trust and over its other officers. If there is no chairman or in the absence of the chairman, the president shall preside over all meetings of the Board of Trustees and all shareholders' meetings. 3 4.7 Vice Presidents. In the absence of the president, or in the event of the president's inability or refusal to act, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated, or in the absence of any designation, then in the order of their election) shall perform the duties of the president, and when so acting shall have all the powers of the president. Any vice president shall have such other duties and powers as shall be designated from time to time by the Trustees or the president. 4.8 Treasurer. The treasurer shall be the chief financial and accounting officer of the Trust and subject to any arrangement made by the Trustees with a bank or trust company or other organization as custodian or transfer or shareholder services agent, shall be in charge of its valuable papers and its books of account and accounting records, and shall have such duties and powers as shall be designated from time to time by the Trustees or the president. Any assistant treasurer shall have such duties and powers as shall be designated from time to time by the Trustees. 4.9 Secretary. The secretary shall record all proceedings of the shareholders and the Trustees in books to be kept therefor, which books shall be kept at the principal office of the Trust. In the absence of the secretary from any meeting of shareholders or Trustees, an assistant secretary, or if there be none or he or she is absent, a temporary clerk chosen at the meeting, shall record the proceedings thereof in the aforesaid books. Section 5. Resignations and Removals ------------------------------------- Any Trustee, officer or board committee member may resign at any time by delivering his or her resignation in writing to the president, the treasurer or the secretary or to a meeting of the Trustees. The Trustees may remove any officer elected by them with or without cause by the vote of a majority of the Trustees then in office. Except to the extent expressly provided in a written agreement with the Trust, no Trustee, officer, or board committee member resigning, and no officer, or board committee member removed, shall have any right to any compensation for any period following his or her resignation or removal, or any right to damages on account of such removal. Section 6. Vacancies --------------------- A vacancy in any office may be filled at any time. Each successor shall hold office for the unexpired term, and in the case of the president, the treasurer and the secretary, until his or her successor is chosen and qualified, or in each case until he or she sooner dies, resigns, is removed or becomes disqualified. Section 7. Shares of Beneficial Interest ----------------------------------------- 7.1 Share Certificates. No certificates certifying the ownership of shares shall be issued except as the Trustees may otherwise authorize. In the event that the Trustees authorize the issuance of share certificates, subject to the provisions of Section 7.3, each shareholder shall be entitled to a certificate stating the number of whole shares owned by him or her, in such form as shall be prescribed from time to time by the Trustees. Such certificate shall be signed by the 4 chairman, the president or a vice president and by the treasurer or secretary. Such signatures may be facsimiles if the certificate is signed by a transfer agent or by a registrar, other than a Trustee, officer or employee of the Trust. In case any officer who has signed or whose facsimile signature has been placed on such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Trust with the same effect as if he or she were such officer at the time of its issue. In lieu of issuing certificates for shares, the Trustees or the transfer agent may either issue receipts therefor or keep accounts upon the books of the Trust for the record holders of such shares, who shall in either case be deemed, for all purposes hereunder, to be the holders of certificates for such shares as if they had accepted such certificates and shall be held to have expressly assented and agreed to the terms hereof. 7.2 Loss of Certificates. In the case of the alleged loss or destruction or the mutilation of a share certificate, a duplicate certificate may be issued in place thereof, upon such terms as the Trustees may prescribe. 7.3 Discontinuance of Issuance of Certificates. The Trustees may at any time discontinue the issuance of share certificates and may, by written notice to each shareholder, require the surrender of share certificates to the Trust for cancellation. Such surrender and cancellation shall not affect the ownership of shares in the Trust. Section 8. Record Date and Closing Transfer Books -------------------------------------------------- The Trustees may fix in advance a time, which shall not be more than 60 days before the date of any meeting of shareholders or the date for the payment of any dividend or making of any other distribution to shareholders, as the record date for determining the shareholders having the right to notice and to vote at such meeting and any adjournment thereof or the right to receive such dividend or distribution, and in such case only shareholders of record on such record date shall have such right, notwithstanding any transfer of shares on the books of the Trust after the record date; or without fixing such record date the Trustees may for any of such purposes close the transfer books for all or any part of such period. Section 9. Seal ---------------- The seal of the Trust shall, subject to alteration by the Trustees, consist of a flat-faced circular die with the word "Massachusetts," together with the name of the Trust and the year of its organization, cut or engraved thereon; but, unless otherwise required by the Trustees, the seal shall not be necessary to be placed on, and its absence shall not impair the validity of, any document, instrument or other paper executed and delivered by or on behalf of the Trust. Section 10. Execution of Papers -------------------------------- Except as the Trustees may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, notes, checks, drafts and other obligations made, accepted or endorsed by the Trust shall be signed, and all transfers of 5 securities standing in the name of the Trust shall be executed, by the president or by one of the vice presidents or by the treasurer or by whomsoever else shall be designated for that purpose by the vote of the Trustees and need not bear the seal of the Trust. Section 11. Fiscal Year ------------------------ Except as from time to time otherwise provided by the Trustees, the fiscal year of the Trust shall end on June 30. Section 12. Amendments ----------------------- These Bylaws may be amended or repealed, in whole or in part, by a majority of the Trustees then in office at any meeting of the Trustees, or by one or more writings signed by such a majority. 6 EX-99.5 3 ADVISORY AGREEMENT WITH BURRIDGE GROUP INC. Exhibit 5 BURRIDGE FUNDS BURRIDGE CAPITAL DEVELOPMENT FUND INVESTMENT ADVISORY AGREEMENT THIS AGREEMENT, dated the ____ day of December 1996, is made and entered into by and between BURRIDGE FUNDS, a Massachusetts business trust (the "Trust") on behalf of its series Burridge Capital Development Fund (the "Fund"), and THE BURRIDGE GROUP INC., an Illinois corporation (the "Adviser"). 1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as manager and investment adviser to Burridge Capital Development Fund (the "Fund"), a series of the Trust, for the period and on the terms herein set forth. The Adviser accepts that appointment and agrees to provide the services set forth in this Agreement, for the compensation herein provided. 2. SERVICES OF ADVISER. (a) The Adviser shall manage the business and affairs of the Fund and the investment and reinvestment of the assets of the Fund, subject to the supervision of the board of trustees of the Trust, for the period and on the terms set forth in this agreement. The Adviser shall give due consideration to the investment policies and restrictions and the other statements concerning the Fund in the Trust's Agreement and Declaration of Trust, bylaws and registration statements under the 1940 Act and the Securities Act of 1933 (the "1933 Act"), and to the provisions of the Internal Revenue Code applicable to the Trust as a regulated investment company. The Adviser shall be deemed for all purposes to be an independent contractor and not an agent of the Trust or the Fund, and unless otherwise expressly provided or authorized, shall have no authority to act or represent the Trust or the Fund in any way. (b) The Adviser shall place all orders for the purchase and sale of portfolio securities for the account of the Fund with brokers or dealers selected by the Adviser, although the Fund will pay the actual brokerage commissions on portfolio transactions in accordance with Paragraph 4. In executing portfolio transactions and selecting brokers or dealers, the Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available for any transaction. The Adviser shall consider all factors it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any (for the specific transaction and on a continuing basis). (c) To the extent contemplated by the Trust's registration statement under the 1933 Act, in evaluating the best overall terms available, and in selecting the broker or dealer to execute a particular transaction, the Adviser may also consider the brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund and/or other accounts over which the Adviser or an affiliate of the Adviser exercises investment discretion. Consistent with the Rules of Fair Practice of the National Association of Securities Dealers, Inc. and subject to seeking the most favorable combination of net price and execution available, the Adviser may consider sales of shares of the Fund as a factor in the selection of broker-dealers to execute portfolio transactions for the Fund. The Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of that particular transaction or in terms of all of the accounts over which investment discretion is so exercised. 3. SERVICES OTHER THAN AS ADVISER. The Adviser (or an affiliate of the Adviser) may act as broker for the Trust in connection with the purchase or sale of securities by or to the Trust if and to the extent permitted by procedures adopted from time to time by the board of trustees of the Trust. Such brokerage services are not within the scope of the duties of the Adviser under this agreement, and, within the limits permitted by law and the trustees, the Adviser (or an affiliate of the Adviser) may receive brokerage commissions, fees or other remuneration from the Trust for such services in addition to its fee for services as Adviser. Within the limits permitted by law, the Adviser may receive compensation from the Trust for other services performed by or for the Trust which are not within the scope of the duties of the Adviser under this agreement. 4. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its own expense, office space to the Trust and all necessary office facilities, equipment, and personnel for managing the assets of the Fund, providing shareholder servicing and providing general administrative services to the Fund and to the Trust. The Adviser shall also assume and pay all other expenses incurred by it in connection with managing the assets of the Fund, all expenses of marketing shares of the Fund, all compensation of trustees who are "interested persons" of the Trust as defined in the Act and all expenses incurred in connection with their services to the Trust. 5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall assume and pay all other costs and expenses not specifically assumed by the Adviser, including, but not limited to: all accounting, auditing and legal services, clerical and statistical services, administrative costs; all costs attributable to shareholder and investor services relating to the Fund (including, without limitation, telephone and personnel expenses and the charges, if any, of third parties performing such services); all expenses of maintaining the registration of shares of the Fund under the 1933 Act and of qualifying and maintaining qualification of shares of the Fund under the securities laws of such United States jurisdictions as the Trust may from time to time reasonably designate; all expenses of determining daily price computations and performing related bookkeeping services; all charges of depositories, custodians, and other agencies for the safekeeping and servicing of the Fund's cash, securities, and other property and of the Trust's transfer, dividend disbursing, and redemption agents and registrars, if any; insurance expenses; all expenses of publication of notices and reports to the Trust's shareholders; all expenses of proxy solicitations of the Trust or its board of trustees; all expenses of maintaining the Trust's existence and maintaining the registration of the Trust under the Act; all fees and expenses incurred in connection with the services to the Trust of trustees who are not "interested persons" of the Trust as defined in the Act; the compensation to the Adviser provided in Section 6 of this Agreement; 2 all taxes and fees payable to federal, state, or other governmental agencies, domestic or foreign; all stamp or other transfer taxes; all interest charges; and any extraordinary costs or expenses such as legal, accounting, or other costs or expenses not incurred in the course of the Trust's ongoing operation. In addition to the payment of the foregoing expenses the Trust shall also pay all brokers' commissions and other portfolio transaction costs. Any expenses borne by the Trust that are attributable solely to the organization, operation or business of the Fund are charged against the Fund. Other expenses of the Trust are allocated among its portfolios on a reasonable basis as determined by the Trust's board of trustees. 6. COMPENSATION OF ADVISER. For the services to be rendered and the charges and expenses to be assumed and to be paid by the Adviser hereunder, the Trust shall pay out of Fund assets to the Adviser a fee, accrued daily and paid monthly, at the annual rate of (i) 1.00% of the first $500 million of the Fund's average daily net assets; (ii) 0.85% of the Fund's average daily net assets in excess of $500 million; and (iii) 0.75% of the average daily net assets in excess of $1 billion. The fee payable hereunder shall be reduced proportionately during any month in which this agreement is not in effect for the entire month. The fee for each calendar month or portion thereof shall be payable on the first business day of the next month. 7. SERVICES OF ADVISER NOT EXCLUSIVE. The services of the Adviser to the Trust hereunder are not exclusive, and the Adviser shall be free to render similar services to others so long as its services under this agreement are not impaired by such other activities. 8. LIABILITY OF ADVISER. The Adviser shall not be liable to the Trust or its shareholders for any loss suffered by the Trust or its shareholders from or as a consequence of any act or omission of the Adviser, or of any of the directors, officers, employees, or agents of the Adviser, in connection with, pursuant to or arising out of this Agreement, except by reason of willful misfeasance, bad faith, or gross negligence on the part of the Adviser in the performance of its duties or by reason of reckless disregard by the Adviser of such obligations and duties under this Agreement. 9. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents or employees of the Trust, personally, but shall bind only the assets and property of the Trust as provided in the Agreement and Declaration of Trust of the Trust. 10. USE OF ADVISER'S NAME. The Trust may use the name "Burridge Funds" or any other name derived from the name "Burridge," only for so long as this agreement or any extension, renewal or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the business of the Adviser as investment adviser. At such time as this agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Trust will (by amendment of its Agreement and Declaration of Trust, if necessary) cease to use any name derived from the name "Burridge," any name similar thereto or any other name indicating that it is advised by or otherwise connected with the Adviser, or with any organization which shall have succeeded to the Adviser's business as investment adviser. The consent of the Adviser to the use of such 3 name by the Trust shall not prevent the Adviser's permitting any other enterprise, including another investment company, to use such name or names. 11. DURATION AND RENEWAL. (a) Unless terminated as provided in section 13, this agreement shall continue in effect until December __, 1998, and thereafter from year to year only so long as such continuance is specifically approved at least annually (a) by a majority of those trustees who are not interested persons of the Trust or of the Adviser, voting in person at a meeting called for the purpose of voting on such approval, and (b) by either the board of trustees of the Trust or a vote of the holders of a majority of the outstanding shares of the Fund (which term as used throughout this agreement shall be construed in accordance with the definition of "vote of a majority of the outstanding voting securities of a company" in section 2(a)(42) of the 1940 Act). (b) Any approval of this agreement by the holders of a majority of the outstanding shares of the Fund shall be effective to continue this agreement notwithstanding that it has not been approved by the vote of a majority of the outstanding shares of the Trust, unless such approval shall be required by any other applicable law or otherwise. 12. TERMINATION. This agreement may be terminated at any time, without payment of any penalty, by the board of trustees of the Trust, or by a vote of the holders of a majority of the outstanding shares of the Fund, upon 60 days' written notice to the Adviser. This agreement may be terminated by the Adviser at any time upon 60 days' written notice to the Trust. This agreement shall terminate automatically in the event of its assignment (as defined in section 2(a)(4) of the 1940 Act). 13. AMENDMENT. This agreement may not be amended without the affirmative vote (a) of a majority of those trustees who are not "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of the Trust and (b) of the holders of a majority of the outstanding shares of the Fund. 14. GOVERNING LAW. The terms and provisions of this Agreement shall be interpreted under and governed by the law of the State of Illinois. 15. NOTICES. Any notices and communications required hereunder shall be in writing and shall be deemed given when delivered in person or when sent by first-class, registered or certified mail to the Adviser at 115 South LaSalle Street, Chicago, Illinois 60603 and to the Fund at 115 South LaSalle Street, Chicago, Illinois 60603, or at such address as either party may from time to time specify by notice to the other. 4 Dated: December __, 1996 BURRIDGE FUNDS _________________________________ Name: Kenneth M. Arenberg Title: President THE BURRIDGE GROUP INC. _________________________________ Name: Richard M. Burridge Title: Chairman 5 EX-99.5.1 4 ADVISORY AGREEMENT WITH BURRIDGE GROUP LLC Exhibit 5.1 BURRIDGE FUNDS BURRIDGE CAPITAL DEVELOPMENT FUND INVESTMENT ADVISORY AGREEMENT THIS AGREEMENT, dated the ____ day of December 1996, is made and entered into by and between BURRIDGE FUNDS, a Massachusetts business trust (the "Trust") on behalf of its series Burridge Capital Development Fund (the "Fund"), and THE BURRIDGE GROUP LLC, a Delaware limited liability company (the "Adviser"). 1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to act as manager and investment adviser to Burridge Capital Development Fund (the "Fund"), a series of the Trust, for the period and on the terms herein set forth. The Adviser accepts that appointment and agrees to provide the services set forth in this Agreement, for the compensation herein provided. 2. SERVICES OF ADVISER. (a) The Adviser shall manage the business and affairs of the Fund and the investment and reinvestment of the assets of the Fund, subject to the supervision of the board of trustees of the Trust, for the period and on the terms set forth in this agreement. The Adviser shall give due consideration to the investment policies and restrictions and the other statements concerning the Fund in the Trust's Agreement and Declaration of Trust, bylaws and registration statements under the 1940 Act and the Securities Act of 1933 (the "1933 Act"), and to the provisions of the Internal Revenue Code applicable to the Trust as a regulated investment company. The Adviser shall be deemed for all purposes to be an independent contractor and not an agent of the Trust or the Fund, and unless otherwise expressly provided or authorized, shall have no authority to act or represent the Trust or the Fund in any way. (b) The Adviser shall place all orders for the purchase and sale of portfolio securities for the account of the Fund with brokers or dealers selected by the Adviser, although the Fund will pay the actual brokerage commissions on portfolio transactions in accordance with Paragraph 4. In executing portfolio transactions and selecting brokers or dealers, the Adviser will use its best efforts to seek on behalf of the Fund the best overall terms available for any transaction. The Adviser shall consider all factors it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any (for the specific transaction and on a continuing basis). (c) To the extent contemplated by the Trust's registration statement under the 1933 Act, in evaluating the best overall terms available, and in selecting the broker or dealer to execute a particular transaction, the Adviser may also consider the brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund and/or other accounts over which the Adviser or an affiliate of the Adviser exercises investment discretion. Consistent with the Rules of Fair Practice of the National Association of Securities Dealers, Inc. and subject to seeking the most favorable combination of net price and execution available, the Adviser may consider sales of shares of the Fund as a factor in the selection of broker-dealers to execute portfolio transactions for the Fund. The Adviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for the Fund which is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Adviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer, viewed in terms of that particular transaction or in terms of all of the accounts over which investment discretion is so exercised. 3. SERVICES OTHER THAN AS ADVISER. The Adviser (or an affiliate of the Adviser) may act as broker for the Trust in connection with the purchase or sale of securities by or to the Trust if and to the extent permitted by procedures adopted from time to time by the board of trustees of the Trust. Such brokerage services are not within the scope of the duties of the Adviser under this agreement, and, within the limits permitted by law and the trustees, the Adviser (or an affiliate of the Adviser) may receive brokerage commissions, fees or other remuneration from the Trust for such services in addition to its fee for services as Adviser. Within the limits permitted by law, the Adviser may receive compensation from the Trust for other services performed by or for the Trust which are not within the scope of the duties of the Adviser under this agreement. 4. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish, at its own expense, office space to the Trust and all necessary office facilities, equipment, and personnel for managing the assets of the Fund, providing shareholder servicing and providing general administrative services to the Fund and to the Trust. The Adviser shall also assume and pay all other expenses incurred by it in connection with managing the assets of the Fund, all expenses of marketing shares of the Fund, all compensation of trustees who are "interested persons" of the Trust as defined in the Act and all expenses incurred in connection with their services to the Trust. 5. EXPENSES TO BE PAID BY THE TRUST. The Trust shall assume and pay all other costs and expenses not specifically assumed by the Adviser, including, but not limited to: all accounting, auditing and legal services, clerical and statistical services, administrative costs; all costs attributable to shareholder and investor services relating to the Fund (including, without limitation, telephone and personnel expenses and the charges, if any, of third parties performing such services); all expenses of maintaining the registration of shares of the Fund under the 1933 Act and of qualifying and maintaining qualification of shares of the Fund under the securities laws of such United States jurisdictions as the Trust may from time to time reasonably designate; all expenses of determining daily price computations and performing related bookkeeping services; all charges of depositories, custodians, and other agencies for the safekeeping and servicing of the Fund's cash, securities, and other property and of the Trust's transfer, dividend disbursing, and redemption agents and registrars, if any; insurance expenses; all expenses of publication of notices and reports to the Trust's shareholders; all expenses of proxy solicitations of the Trust or its board of trustees; all expenses of maintaining the Trust's existence and maintaining the registration of the Trust under the Act; all fees and expenses incurred in connection with the services to the Trust of trustees who are not "interested persons" of the Trust as defined in the Act; the compensation to the Adviser provided in Section 6 of this Agreement; 2 all taxes and fees payable to federal, state, or other governmental agencies, domestic or foreign; all stamp or other transfer taxes; all interest charges; and any extraordinary costs or expenses such as legal, accounting, or other costs or expenses not incurred in the course of the Trust's ongoing operation. In addition to the payment of the foregoing expenses the Trust shall also pay all brokers' commissions and other portfolio transaction costs. Any expenses borne by the Trust that are attributable solely to the organization, operation or business of the Fund are charged against the Fund. Other expenses of the Trust are allocated among its portfolios on a reasonable basis as determined by the Trust's board of trustees. 6. COMPENSATION OF ADVISER. For the services to be rendered and the charges and expenses to be assumed and to be paid by the Adviser hereunder, the Trust shall pay out of Fund assets to the Adviser a fee, accrued daily and paid monthly, at the annual rate of (i) 1.00% of the first $500 million of the Fund's average daily net assets; (ii) 0.85% of the Fund's average daily net assets in excess of $500 million; and (iii) 0.75% of the average daily net assets in excess of $1 billion. The fee payable hereunder shall be reduced proportionately during any month in which this agreement is not in effect for the entire month. The fee for each calendar month or portion thereof shall be payable on the first business day of the next month. 7. SERVICES OF ADVISER NOT EXCLUSIVE. The services of the Adviser to the Trust hereunder are not exclusive, and the Adviser shall be free to render similar services to others so long as its services under this agreement are not impaired by such other activities. 8. LIABILITY OF ADVISER. The Adviser shall not be liable to the Trust or its shareholders for any loss suffered by the Trust or its shareholders from or as a consequence of any act or omission of the Adviser, or of any of the directors, officers, employees, or agents of the Adviser, in connection with, pursuant to or arising out of this Agreement, except by reason of willful misfeasance, bad faith, or gross negligence on the part of the Adviser in the performance of its duties or by reason of reckless disregard by the Adviser of such obligations and duties under this Agreement. 9. LIABILITY OF TRUST. The obligations of the Trust hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents or employees of the Trust, personally, but shall bind only the assets and property of the Trust as provided in the Agreement and Declaration of Trust of the Trust. 10. USE OF ADVISER'S NAME. The Trust may use the name "Burridge Funds" or any other name derived from the name "Burridge," only for so long as this agreement or any extension, renewal or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the business of the Adviser as investment adviser. At such time as this agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Trust will (by amendment of its Agreement and Declaration of Trust, if necessary) cease to use any name derived from the name "Burridge," any name similar thereto or any other name indicating that it is advised by or otherwise connected with the Adviser, or with any organization which shall have succeeded to the Adviser's business as investment adviser. The consent of the Adviser to the use of such 3 name by the Trust shall not prevent the Adviser's permitting any other enterprise, including another investment company, to use such name or names. 11. DURATION AND RENEWAL. (a) Unless terminated as provided in section 13, this agreement shall continue in effect until December __, 1998, and thereafter from year to year only so long as such continuance is specifically approved at least annually (a) by a majority of those trustees who are not interested persons of the Trust or of the Adviser, voting in person at a meeting called for the purpose of voting on such approval, and (b) by either the board of trustees of the Trust or a vote of the holders of a majority of the outstanding shares of the Fund (which term as used throughout this agreement shall be construed in accordance with the definition of "vote of a majority of the outstanding voting securities of a company" in section 2(a)(42) of the 1940 Act). (b) Any approval of this agreement by the holders of a majority of the outstanding shares of the Fund shall be effective to continue this agreement notwithstanding that it has not been approved by the vote of a majority of the outstanding shares of the Trust, unless such approval shall be required by any other applicable law or otherwise. 12. TERMINATION. This agreement may be terminated at any time, without payment of any penalty, by the board of trustees of the Trust, or by a vote of the holders of a majority of the outstanding shares of the Fund, upon 60 days' written notice to the Adviser. This agreement may be terminated by the Adviser at any time upon 60 days' written notice to the Trust. This agreement shall terminate automatically in the event of its assignment (as defined in section 2(a)(4) of the 1940 Act). 13. AMENDMENT. This agreement may not be amended without the affirmative vote (a) of a majority of those trustees who are not "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of the Trust and (b) of the holders of a majority of the outstanding shares of the Fund. 14. GOVERNING LAW. The terms and provisions of this Agreement shall be interpreted under and governed by the law of the State of Illinois. 15. NOTICES. Any notices and communications required hereunder shall be in writing and shall be deemed given when delivered in person or when sent by first-class, registered or certified mail to the Adviser at 115 South LaSalle Street, Chicago, Illinois 60603 and to the Fund at 115 South LaSalle Street, Chicago, Illinois 60603, or at such address as either party may from time to time specify by notice to the other. 4 Dated: December __, 1996 BURRIDGE FUNDS _______________________________ Name: Kenneth M. Arenberg Title: President THE BURRIDGE GROUP LLC _______________________________ Name: Richard M. Burridge Title: Chairman 5 EX-99.6 5 DISTRIBUTION AGREEMENT WITH FUNDS DISTRIBUTOR, INC EXHIBIT 6 DISTRIBUTION AGREEMENT BURRIDGE FUNDS 115 South LaSalle Street Chicago, Illinois 60603 ____________, 1996 Funds Distributor, Inc. 60 State Street Suite 1300 Boston, Massachusetts 02109 Dear Sirs: This is to confirm that, in consideration of the agreements hereinafter contained, the above-named investment company (the "Fund") has agreed that you shall be, for the period of this agreement, the distributor of (a) shares of each Series of the Fund set forth on Exhibit A hereto, as such Exhibit may be revised from time to time (each, a "Series") or (b) if no Series are set forth on such Exhibit, shares of the Fund. For purposes of this agreement the term "Shares" shall mean the authorized shares of the relevant Series, if any, and otherwise shall mean the Fund's authorized shares. 1. Services as Distributor 1.1 You will act as agent for the distribution of Shares covered by, and in accordance with, the registration statement and prospectus then in effect under the Securities Act of 1933, as amended, and will transmit promptly any orders received by you for purchase or redemption of Shares to the Transfer and Dividend Disbursing Agent for the Fund of which the Fund has notified you in writing. 1.2 You agree to use your best efforts to solicit orders for the sale of Shares. It is contemplated that you may enter into sales or servicing agreements with securities dealers, financial institutions and other industry professionals, such as investment advisers, accountants and estate planning firms, and in so doing you will act only on your own behalf as principal. 1.3 You shall act as distributor of Shares in compliance with all applicable laws, rules and regulations, including, without limitations, the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended and the National Association of Securities Dealers, Inc.'s (the "NASD") Rules of Fair Practice, Constitution and By-Laws. You represent and warrant that you are a broker-dealer registered with the Securities and Exchange Commission and that you are registered with the relevant securities regulatory agencies in all fifty states, the District of Columbia and Puerto Rico. You also represent and warrant that you are a member of the NASD. 1 1.4 You shall file Fund advertisements, sales literature and other marketing and sales related materials with the appropriate regulatory agencies and shall obtain such approvals for their use as may be required by the Securities and Exchange Commission, the National Association of Securities Dealers, Inc. and/or state securities administrators. 1.5 Whenever in their judgment such action is warranted by unusual market, economic or political conditions, or by abnormal circumstances of any kind deemed by the parties hereto to render sales of a Fund's Shares not in the best interest of the Fund, the parties hereto may decline to accept any orders for, or make any sales of, any Shares until such time as those parties deem it advisable to accept such orders and to make such sales and each party shall advise promptly the other party of any such determination. 1.6 The Fund agrees to pay all costs and expenses in connection with the registration of Shares under the Securities Act of 1933, as amended, and all expenses in connection with maintaining facilities for the issue and transfer of Shares and for supplying information, prices and other data to be furnished by the Fund hereunder, and all expenses in connection with the preparation and printing of the Fund's prospectuses and statements of additional information for regulatory purposes and for distribution to shareholders; provided however, that the Fund shall not pay any of the costs of advertising or promotion for the sale of Shares. 1.7 The Fund agrees to execute any and all documents and to furnish any and all information and otherwise to take all actions which may be reasonably necessary in the discretion of the Fund's officers in connection with the qualification of Shares for sale in such states as you may designate to the Fund and the Fund may approve, and the Fund agrees to pay all expenses which may be incurred in connection with such qualification. You shall pay all expenses connected with your own qualification as a dealer under state or Federal laws and, except as otherwise specifically provided in this agreement, all other expenses incurred by you in connection with the sale of Shares as contemplated in this agreement. 1.8 The Fund shall furnish you from time to time, for use in connection with the sale of Shares, such information with respect to the Fund or any relevant Series and the Shares as you may reasonably request, all of which shall be signed by one or more of the Fund's duly authorized officers; and the Fund warrants that the statements contained in any such information, when so signed by the Fund's officers, shall be true and correct. The Fund also shall furnish you upon request with: (a) semi-annual reports and annual audited reports of the Fund's books and accounts made by independent public accountants regularly retained by the Fund, (b) quarterly earnings statements prepared by the Fund, (c) a monthly itemized list of the securities in the Fund's or, if applicable, each Series' portfolio, (d) monthly balance sheets as soon as practicable after the end of each month, and (e) from time to time such additional information regarding the Fund's financial condition as you may reasonably request. 1.9 The Fund represents to you that all registration statements and prospectuses filed by the Fund with the Securities and Exchange Commission under the Securities Act of 1933, as amended, and under the Investment Company Act of 1940, as amended, with respect to the Shares have been carefully prepared in conformity with the requirements of said Acts and rules and regulations of the Securities and Exchange Commission thereunder. As used in this 2 agreement the terms "registration statement" and "prospectus" shall mean any registration statement and prospectus, including the statement of additional information incorporated by reference therein, filed with the Securities and Exchange Commission and any amendments and supplements thereto which at any time shall have been filed with said Commission. The Fund represents and warrants to you that any registration statement and prospectus, when such registration statement becomes effective, will contain all statements required to be stated therein in conformity with said Acts and the rules and regulations of said Commission; that all statements of fact contained in any such registration statement and prospectus will be true and correct when such registration statement becomes effective; and that neither any registration statement nor any prospectus when such registration statement becomes effective will include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Fund may, but shall not be obligated to, propose from time to time such amendment or amendments to any registration statement and such supplement or supplements to any prospectus as, in the light of future developments, may, in the opinion of the Fund's counsel, be necessary or advisable. If the Fund shall not propose such amendment or amendments and/or supplement or supplements within fifteen days after receipt by the Fund of a written request from you to do so, you may, at your option, terminate this agreement or decline to make offers of the Fund's securities until such amendments are made. The Fund shall not file any amendment to any registration statement or supplement to any prospectus without giving you reasonable notice thereof in advance; provided, however, that nothing contained in this agreement shall in any way limit the Fund's right to file at any time such amendments to any registration statement and/or supplements to any prospectus, of whatever character, as the Fund may deem advisable, such right being in all respects absolute and unconditional. 1.10 The Fund authorizes you and any dealers with whom you have entered into dealer agreements to use any prospectus in the form furnished by the Fund in connection with the sale of Shares. The Fund agrees to indemnify, defend and hold you, your several officers and directors, and any person who controls you within the meaning of Section 15 of the Securities Act of 1933, as amended, free and harmless from and against any and all claims, demands, liabilities and expenses (including the reasonable cost of investigating or defending such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which you, your officers and directors, or any such controlling persons, may incur under the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, or common law or otherwise, arising out of or on the basis of any untrue statement, or alleged untrue statement, of a material fact required to be stated in either any registration statement or any prospectus or any statement of additional information, or arising out of or based upon any omission, or alleged omission, to state a material fact required to be stated in any registration statement, any prospectus or any statement of additional information or necessary to make the statements in any of them not misleading, except that the Fund's agreement to indemnify you, your officers or directors, and any such controlling person will not be deemed to cover any such claim, demand, liability or expense to the extent that it arises out of or is based upon any such untrue statement, alleged untrue statement, omission or alleged omission made in any registration statement, any prospectus or any statement of additional information in reliance upon information furnished by you, your officers, directors or any such controlling person to the Fund or its representatives for use in the preparation thereof, and except that the Fund's agreement to indemnify you and the Fund's representations and warranties set out in paragraph 1.9 of this Agreement will not be 3 deemed to cover any liability to the Funds or their shareholders to which you would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of your duties, or by reason of your reckless disregard of your obligations and duties under this Agreement ("Disqualifying Conduct"). The Fund's agreement to indemnify you, your officers and directors, and any such controlling person, as aforesaid, is expressly conditioned upon the Fund's being notified of any action brought against you, your officers or directors, or any such controlling person, such notification to be given by letter, by facsimile or by telegram addressed to the Fund at its address set forth above within a reasonable period of time after the summons or other first legal process shall have been served. The failure so to notify the Fund of any such action shall not relieve the Fund from any liability which the Fund may have to the person against whom such action is brought by reason of any such untrue, or alleged untrue, statement or omission, or alleged omission, otherwise than on account of the Fund's indemnity agreement contained in this paragraph 1.10. The Fund will be entitled to assume the defense of any suit brought to enforce any such claim, demand or liability, but, in such case, such defense shall be conducted by counsel of good standing chosen by the Fund and approved by you. In the event the Fund elects to assume the defense of any such suit and retain counsel of good standing approved by you, the defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them; but in case the Fund does not elect to assume the defense of any such suit, the Fund will reimburse you, your officers and directors, or the controlling person or persons named as defendant or defendants in such suit, for the reasonable fees and expenses of any counsel retained by you or them. The Fund's indemnification agreement contained in this paragraph 1.10 and the Fund's representations and warranties in this Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of you, your officers and directors, or any controlling person, and shall survive the delivery of any Shares. This agreement of indemnity will inure exclusively to your benefit, to the benefit of your several officers and directors, and their respective estates, and to the benefit of any controlling persons and their successors. The Fund agrees promptly to notify you of the commencement of any litigation or proceedings against the Fund or any of its officers or Board members in connection with the issue and sale of Shares. 1.11 You agree to indemnify, defend and hold the Fund, its several officers and Board members, and any person who controls the Fund within the meaning of Section 15 of the Securities Act of 1933, as amended, free and harmless from and against any and all claims, demands, liabilities and expenses (including the reasonable cost of investigating or defending such claims, demands or liabilities and any reasonable counsel fees incurred in connection therewith) which the Fund, its officers or Board members, or any such controlling person, may incur under the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, or under common law or otherwise, but only to the extent that such liability or expense incurred by the Fund, its officers or Board members, or such controlling person resulting from such claims or demands, (a) shall arise out of or be based upon any unauthorized sales literature, advertisements, information, statements or representations or any Disqualifying Conduct in connection with the offering and sale of any Shares, or (b) shall arise out of or be based upon any untrue, or alleged untrue, statement of a material fact contained in information furnished in writing by you to the Fund specifically for use in the Fund's registration statement and used in the answers to any of the items of the registration statement or in the corresponding statements made in the prospectus or statement of additional information, or shall arise out of or be based upon any omission, or alleged omission, to state a material fact in connection with such 4 information furnished in writing by you to the Fund and required to be stated in such answers or necessary to make such information not misleading. Your agreement to indemnify the Fund, its officers and Board members, and any such controlling person, as aforesaid, is expressly conditioned upon your being notified of any action brought against the Fund, its officers or Board members, or any such controlling person, such notification to be given by letter, by facsimile or by telegram addressed to you at your address set forth above within a reasonable period of time after the summons or other first legal process shall have been served. You shall have the right to control the defense of such action, with counsel of your own choosing, satisfactory to the Fund, if such action is based solely upon such alleged misstatement or omission on your part, and in any other event the Fund, its officers or Board members, or such controlling person shall each have the right to participate in the defense or preparation of the defense of any such action. The failure so to notify you of any such action shall not relieve you from any liability which you may have to the Fund, its officers or Board members, or to such controlling person by reason of any such untrue, or alleged untrue, statement or omission, or alleged omission, otherwise than on account of your indemnity agreement contained in this paragraph 1.11. This agreement of indemnity will inure exclusively to the Fund's benefit, to the benefit of the Fund's officers and Board members, and their respective estates, and to the benefit of any controlling persons and their successors. You agree promptly to notify the Fund of the commencement of any litigation or proceedings against you or any of your officers or directors in connection with the issue and sale of Shares. 1.12 No Shares shall be offered by either you or the Fund under any of the provisions of this agreement and no orders for the purchase or sale of such Shares hereunder shall be accepted by the Fund if and so long as the effectiveness of the registration statement then in effect or any necessary amendments thereto shall be suspended under any of the provisions of the Securities Act of 1933, as amended, or if and so long as a current prospectus as required by Section 10 of said Act, as amended, is not on file with the Securities and Exchange Commission; provided, however, that nothing contained in this paragraph 1.12 shall in any way restrict or have an application to or bearing upon the Fund's obligation to repurchase any Shares from any shareholder in accordance with the provisions of the Fund's prospectus or charter documents. 1.13 The Fund agrees to advise you immediately in writing: (a) of any request by the Securities and Exchange Commission for amendments to the registration statement or prospectus then in effect or for additional information; (b) in the event of the issuance by the Securities and Exchange Commission of any stop order suspending the effectiveness of the registration statement or prospectus then in effect or the initiation of any proceeding for that purpose; (c) of the happening of any event which makes untrue any statement of a material fact made in the registration statement or prospectus then in effect or which requires the making of a change in such registration statement or prospectus in order to make the statements therein not misleading; and 5 (d) of all actions of the Securities and Exchange Commission with respect to any amendments to any registration statement or prospectus which may from time to time be filed with the Securities and Exchange Commission. 2. Offering Price Shares of any class of the Fund offered for sale by you shall be offered at a price per share (the "offering price") approximately equal to (a) the net asset value (determined in the manner set forth in the Fund's charter documents) plus (b) a sales charge, if any and except to those persons set forth in the then-current prospectus, which shall be the percentage of the offering price of such Shares as set forth in the Fund's then-current prospectus. The offering price, if not an exact multiple of one cent, shall be adjusted to the nearest cent. In addition, Shares of any class of the Fund offered for sale by you may be subject to a contingent deferred sales charge as set forth in the Fund's then-current prospectus. You shall be entitled to receive any sales charge or contingent deferred sales charge in respect of the Shares. Any payments to dealers shall be governed by a separate agreement between you and such dealer and the Fund's then-current prospectus. 3. Term This Agreement shall become effective with respect to the Fund as of the date hereof and will continue for an initial two-year term and will continue thereafter so long as such continuance is specifically approved at least annually (i) by the Fund's Board or (ii) by a vote of a majority of the Shares of the Fund or the relevant Series, as the case may be, provided that in either event its continuance also is approved by a majority of the Board members who are not "interested persons" of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. This agreement is terminable with respect to a Fund, without penalty, on not less than sixty days' notice, by the Fund's Board of Trustees, by vote of a majority of the outstanding voting securities of such Fund, or by you. This Agreement will automatically and immediately terminate in the event of its "assignment." (As used in this Agreement, the terms "majority of the outstanding voting securities," "interested person" and "assignment" shall have the same meanings as such terms have in the Investment Company Act of 1940). You agree to notify the Fund immediately upon the event of your expulsion or suspension by the NASD. This Agreement will automatically and immediately terminate in the event of your expulsion or suspension by the NASD. 4. Miscellaneous 4.1 The Fund recognizes that, except to the extent otherwise agreed to by the parties hereto, your directors, officers and employees may from time to time serve as directors, trustees, officers and employees of corporations and business trusts (including other investment companies), and that you or your affiliates may enter into distribution or other agreements with such other corporations and trusts. 4.2 No provision of this Agreement may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which an enforcement of the change, waiver, discharge or termination is sought. 6 4.3 This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts without giving effect to principles of conflicts of laws. 4.4 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. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors. Please confirm that the foregoing is in accordance with your understanding and indicate your acceptance hereof by signing below, whereupon it shall become a binding Agreement between us. Very truly yours, BURRIDGE FUNDS By: ____________________________ Name: _________________________ Title: __________________________ Accepted: FUNDS DISTRIBUTOR, INC. By: ________________________________ Name: _____________________________ Title: ______________________________ 7 EXHIBIT A Series of Funds --------------- BURRIDGE FUNDS -------------- Burridge Capital Development Fund 8 Dear Sirs: As the principal underwriter of shares of certain registered investment companies presently or hereafter managed, advised or administered by The Burridge Group Inc. or its successor The Burridge Group LLC, shares of which companies are distributed by us at their respective net asset values plus sales charges as applicable, pursuant to our Distribution Agreements with such companies (the "Funds"), we invite you to participate as a non-exclusive agent in the distribution of shares of any and all of the Funds upon the following terms and conditions: 1. You are to offer and sell such shares only at the public offering prices that shall be currently in effect, in accordance with the terms of the then current prospectuses and statements of additional information of the Funds subject in each case to the delivery prior to or at the time of such sales of the then current prospectus. You agree to act only as agent in such transactions 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. In all transactions in these shares between you and us, we are acting as agent for the Fund and not as principal. All orders are subject to acceptance by us and become effective only upon confirmation by us. We reserve the right in our sole discretion to reject any order. The minimum dollar purchase of shares of the Funds shall be the applicable minimum amounts described in the then current prospectuses and statements of additional information and no order for less than such amounts will be accepted. 2. On each purchase of shares by you from us, the total sales charges and discount to selected dealer, if any, shall be as stated in each Fund's then current prospectus. Such sales charges and discount to selected dealers are subject to reductions under a variety of circumstances as described in each Fund's then current prospectus and statement of additional information. To obtain these reductions, we must be notified when the sale takes place which would qualify for the reduced charge. There is no sales charge or discount to selected dealers on the reinvestment of any dividends or distributions. 3. All purchases of shares of a Fund made under any cumulative purchase privilege as set forth in a Fund's then current effective Prospectus shall be considered an individual transaction for the purpose of determining the concession from the public offering price to which you are entitled as set forth in paragraph 2 hereof. 4. As an authorized agent to sell shares of the Fund, you agree to purchase shares of the Funds only through us or from your customers. Purchases through us shall be made only for your own investment purposes or for the purpose of covering purchase orders already received from your customers, and we agree that we will not place orders for the purchase of shares from a Fund except to cover purchase orders already received by us. Purchases from your 1 customers shall be at a price not less than the net asset value quoted by each such Fund at the time of such purchase. Nothing herein contained shall prevent you from selling any shares of a Fund for the account of a record holder to us or to such Fund at the net asset value quoted by us and charging your customer a fair commission for handling the transaction. 5. You agree that you will not withhold placing customers' orders so as to profit yourself as a result of such withholding. 6. You agree to sell shares of the Funds only (a) to your customers at the public offering prices then in effect or (b) to us as agent for the Funds or to each such Fund itself at the redemption price, as described in each Fund's then current effective Prospectus. 7. Settlement shall be made promptly, but in no case later than the time customary for such payments after our acceptance of the order or, if so specified by you, we will make delivery by draft on you, the amount of which draft you agree to pay on presentation to you. If payment is not so received or made, the right is reserved forthwith to cancel the sale or at our option to resell the shares to the applicable Fund, at the then prevailing net asset value in which latter case you agree to be responsible for any loss resulting to such Fund or to us from your failure to make payment as aforesaid. 8. If any shares sold to you under the terms of this Agreement are repurchased by a Fund or by us as agent, or purchased for the account of that Fund or tendered to that Fund for purchase at liquidating value under the terms of the Declaration of Trust or other document governing such Fund within seven (7) business days after the date of confirmation to you of your original purchase order therefor, you agree to pay forthwith to us the full amount of the concession allowed to you on the original sale and we agree to pay such amount to the Fund when received by us. We shall notify you of such repurchase within ten (10) days of the effective date of such repurchase. 9. 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 the offering of shares entirely, or to modify or cancel this Agreement. 10. No person is authorized to make any representations concerning the Funds or shares of the Funds except those contained in each Fund's then current effective Prospectus or Statement of Additional Information and any such information as may be released by a Fund as information supplemental to such Prospectus or Statement of Additional Information. In purchasing shares through us you shall rely solely on the representations contained in each Fund's then current effective Prospectus or Statement of Additional Information and above-mentioned supplemental information. 11. Additional copies of each such Prospectus or Statement of Additional Information and any printed information issued as supplemental to each such Prospectus or Statement of 2 Additional Information will be supplied by us to you and your selling agents in reasonable quantities upon request. 12. With respect to Funds offering shares subject to a front-end sales charge, shares subject to a contingent deferred sales charge, and/or institutional class shares not subject to a sales charge, you shall conform to such written compliance standards as we have provided you in the past or may from time to time provide to you in the future. 13. We, our affiliates and the Funds shall not be liable for any losses, expenses, damages, costs or other claims arising out of any redemption or exchange pursuant to telephone instructions from any person, or our refusal to execute such instructions for any reason. 14. All notices or other communications hereunder to either party shall be in writing and shall be deemed sufficient if mailed to such party at the address of such party set forth on page 5 of this Agreement or at such other address as such party may be designated by written notice to the other, or by telex, telecopier, telegram or similar means of same day delivery (with a confirming copy by mail as provided herein). 15. This Agreement may be terminated upon written notice by either party at any time, and shall automatically terminate upon its attempted assignment by you, whether by operation of law or otherwise, or by us otherwise than by operation of law. 16. By accepting this Agreement, you represent that you are registered as a broker-dealer under the Securities Exchange Act of 1934, are qualified to act as a broker or dealer in the states or other jurisdictions where you transact business, and are a member in good standing of the National Association of Securities Dealers, Inc., and you agree that you will maintain such registrations, qualifications, and membership in good standing and in full force and effect throughout the term of this Agreement. You further agree to comply with all applicable Federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder and with the Constitution, By-Laws and Rules of Fair Practice of the National Association of Securities Dealers, Inc., and that you will not offer or sell shares of the Funds in any state or jurisdiction where they may not lawfully be offered and/or sold. If you are offering and selling shares of the Funds in jurisdictions outside the several states, territories, and possessions of the United States and are not otherwise required to be registered, qualified, or a member of the National Association of Securities Dealers, Inc., as set forth above you, you nevertheless agree to observe the applicable laws of the jurisdiction in which such offer and/or sale is made, to comply with the full disclosure requirements of the Securities Act of 1933 and the regulations promulgated thereunder, to conduct your business in accordance with the spirit of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. You agree to indemnify and hold the Funds, their investment advisor, and us harmless from loss or damage resulting from any failure on your part to comply with applicable laws. 3 17. You agree to maintain records of all sales of shares made through you and to furnish us with copies of each record on request. 18. This Agreement and all amendments to this Agreement shall take effect with respect to and on the date of any orders placed by you after the date set forth below or, as applicable, after the date of the notice of amendment sent to you by the undersigned. 19. This Agreement shall be construed in accordance with the laws of the Commonwealth of Massachusetts and shall be binding upon both parties hereto when signed and accepted by you in the space provided below. For Funds Distributor, Inc. 60 State Street, Suite 1300 Boston, MA 02109 - --------------------------------------------------------------------------- By: Date FOR: - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- Address of Principal Office - --------------------------------------------------------------------------- City State Zip Code By: Its: - ----------------------------- ---------------------- -------------------- Authorized Signature Title Date - ----------------------------- Print Name 4 EX-99.8 6 CUSTODIAN AGREEMENT WITH FIRSTAR TRUST COMPANY Exhibit 8 CUSTODIAN AGREEMENT THIS AGREEMENT made on _______________________________, 1996, between Burridge Funds, a Massachusetts business trust and FIRSTAR TRUST COMPANY, a corporation organized under the laws of the State of Wisconsin (hereinafter called "Custodian"), WHEREAS, Burridge Funds is an open-ended management investment company under the Investment Company Act of 1940 currently having shares of a single series, Burridge Capital Development Fund, hereinafter called the "Fund"; and WHEREAS, the Fund desires that its securities and cash shall be hereafter held and administered by Custodian pursuant to the terms of this Agreement; NOW, THEREFORE, in consideration of the mutual agreements herein made, the Fund and Custodian agree as follows: 1. Definitions The word "securities" as used herein includes stocks, shares, bonds, debentures, notes, mortgages or other obligations, and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same, or evidencing or representing any other rights or interests therein, or in any property or assets. The words "officers' certificate" shall mean a request or direction or certification in writing signed in the name of Burridge Funds on behalf of the Fund by any two of the President, a Vice President, the Secretary and the Treasurer of Burridge Funds, or any other persons duly authorized to sign by the Board of Trustees. The word "Board" shall mean Board of Trustees of Burridge Funds. 2. Names, Titles, and Signatures of the Fund's Officers An officer of Burridge Funds will certify to Custodian the names and signatures of those persons authorized to sign the officers' certificates described in Section 1 hereof, and the names of the members of the Board, together with any changes which may occur from time to time. Additional Series. The Burridge Funds is authorized to issue separate classes of shares of beneficial interest representing interests in separate investment portfolios. In the event Burridge Funds establishes one or more additional series of shares with respect to which it desires to have the Custodian render services under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such services will be covered by the terms and conditions of this Agreement. 3. Receipt and Disbursement of Money A. Custodian shall open and maintain a separate account or accounts in the name of the Fund, subject only to draft or order by Custodian acting pursuant to the terms of this Agreement. Custodian shall hold in such account or accounts, subject to the provisions hereof, all cash received by it from or for the account of the Fund. Upon receipt of proper instructions, which may by their terms be continuing instructions when deemed appropriate by the parties, Custodian shall make payments of cash to, or for the account of, the Fund from such cash only: (a) for the purchase of securities for the portfolio of the Fund upon the delivery of such securities to Custodian, registered in the name of the Fund or of the nominee of Custodian referred to in Section 7 or in proper form for transfer; all securities accepted by Custodian shall be accompanied by payment of, or a "due bill" for, (a)any dividends, interest, or other distributions of the issuer, due the purchaser; (b)in the case of a purchase effected through a clearing agency or book entry system, in accordance with the conditions set forth in Section15 hereof; (c)in the case of repurchase agreements entered into between the Fund and Custodian, or another bank; (i)against delivery of the securities either in certificate form or through an entry crediting Custodian's account at the Federal Reserve Bank with such securities or (ii)against delivery of the receipt evidencing purchase by the Fund of securities owned by Custodian along with written evidence of the agreement by Custodian to repurchase such securities from the Fund. (b) for the repurchase or redemption of shares of beneficial interest of the Fund upon delivery thereof to Custodian, or upon proper instructions from Burridge Funds; (c) for the payment of interest, dividends, taxes, investment adviser's fees or operating expenses (including, without limitation thereto, fees for legal, accounting, auditing and custodian services and expenses for printing and postage); (d) for payments in connection with the conversion, exchange or surrender of securities owned or subscribed to by the Fund held by or to be delivered to Custodian; or (e) for other proper corporate purposes certified by resolution of the Board. Before making any such payment, Custodian shall receive (and may rely upon) an officers' certificate requesting such payment and stating that it is for a purpose permitted under 2 the terms of items (a), (b), (c), or (d) of this Subsection A, and also, in respect of item(e), upon receipt of an officers' certificate specifying the amount of such payment, setting forth the purpose for which such payment is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom such payment is to be made, provided, however, that an officers' certificate need not precede the disbursement of cash for the purpose of purchasing a money market instrument, or any other security with same or next-day settlement, if the President, a Vice President, the Secretary or the Treasurer of Burridge Funds issues appropriate oral or facsimile instructions to Custodian and an appropriate officers' certificate is received by Custodian within two business days thereafter. B. Custodian shall collect on a timely basis all income and other payments with respect to registered securities held hereunder to which the Fund shall be entitled either by law or pursuant to custom in the securities business, and shall collect on a timely basis all income and other payables. Custodian is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received by Custodian for the account of the Fund. Custodian shall collect on a timely basis all income and other payment with respect to bearer of securities if, on the date of payment by the issuer, such securities are held by Custodian and shall credit such income, as collected, to the Fund's custodian account. In any case in which Custodian does not receive any such due and unpaid income within a reasonable time after it has made proper demands for the same (which shall be presumed to consist of at least one demand letter and at least three telephonic demands), it shall so notify the applicable Fund in writing, including copies of all demand letters, any written responses thereto, and memoranda of all oral responses thereto and to telephonic demands, and await proper instructions; Custodian shall not be obliged to take legal action for collection unless and until reasonably indemnified to its satisfaction. It shall also notify the applicable Fund as soon as reasonably practicable whenever income due on securities, in respect to which such Fund requests such notice, is not collected in due course. C. Custodian shall, upon receipt of proper instructions, make federal funds available to the Fund as of specified times agreed upon from by the Fund and the custodian in the amount of checks received in payment for shares of the Fund which are deposited into the Fund's account. D. In any and every case where payment for purchase of securities for the account of the Fund is made by Custodian in advance of receipt of the securities purchased, in the absence of specific written instructions from Burridge Funds on behalf of the Fund to so pay in advance, Custodian shall be absolutely liable to the Fund for such securities to the same extent as if the securities had been received by Custodian, except that in the case of repurchase agreements entered into by the Fund with a bank which is a member of the Federal Reserve System, Custodian may transfer funds to the account of such bank prior to the receipt of written evidence that the securities subject to such repurchase agreement have been transferred by book-entry into a segregated non-proprietary account of Custodian maintained with a Federal Reserve Bank or of the safe-keeping receipt, provided that such securities have in fact been so transferred by book entry. 4. Receipt of Securities 3 Custodian shall hold in a separate account, and physically segregated at all times from those of any other persons, firms, or corporations, pursuant to the provisions of this Agreement, all non-cash property, including securities received by it from or for the account of the Fund, provided that securities may be maintained in a securities depository or book entry system in accordance with the conditions set forth in Section ___ of this Agreement. All such non-cash property, including securities, shall be held or disposed of by Custodian for, and subject at all times to the instructions, of Burridge Funds on behalf of the Fund and pursuant to the terms of this Agreement. Custodian shall have no power or authority to assign, hypothecate, pledge, or otherwise dispose of any such securities and investments, except pursuant to the direction of Burridge Funds on behalf of the Fund and only for the account of the Fund as set forth in paragraph5 of this Agreement. 5. Segregated Accounts Upon receipt of proper instructions, the Custodian shall establish and maintain a segregated account(s) for and on behalf of the portfolio, into which account(s) may be transferred cash and/or securities. 6. Transfer, Exchange, Redelivery, etc. of Securities Custodian shall have sole power to release or deliver any securities of the Fund held by it pursuant to this Agreement. Custodian agrees to transfer, exchange or deliver securities held by it hereunder only upon receipt of proper instructions, which may by their terms be continuing instructions when deemed appropriate by the parties, and only: (a) for sales of such securities for the account of the Fund upon receipt by Custodian of payment therefor; (b) when such securities are called, redeemed or retired or otherwise become payable; (c) for examination by any broker selling any such securities in accordance with "street delivery" custom; (d) in exchange for, or upon conversion into, other securities alone or other securities and cash whether pursuant to any plan of merger, consolidation, reorganization, recapitalization or readjustment, or otherwise; (e) upon conversion of such securities pursuant to their terms into other securities; 4 (f) upon exercise of subscription, purchase or other similar rights represented by such securities; (g) for the purpose of exchanging interim receipts or temporary securities for definitive securities; (h) for the purpose of redeeming in kind shares of common stock of the Fund upon delivery thereof to Custodian; (i) upon receipt of payment in connection with any repurchase agreement related to such securities entered into by the Funds; or (j) for other proper corporate purposes. As to any deliveries made by Custodian pursuant to items (a), (b), (d), (e), (f), and (g), securities or cash receivable in exchange therefore shall be deliverable to Custodian. Before making any such transfer, exchange or delivery, Custodian shall receive (and may rely upon) an officers' certificate requesting such transfer, exchange or delivery, and stating that it is for a purpose permitted under the terms of items (a), (b), (c), (d), (e), (f), (g), (h), or (i) of this Section 5 and also, in respect of item (j), upon receipt of an officers' certificate specifying the securities to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such securities shall be made, provided, however, that an officers' certificate need not precede any such transfer, exchange or delivery of a money market instrument, or any other security with same or next-day settlement, if the President, a Vice President, the Secretary or the Treasurer of the Fund issues appropriate oral or facsimile instructions to Custodian and an appropriate officers' certificate is received by Custodian within two business days thereafter. 7. Custodian's Acts Without Instructions Unless and until Custodian receives an officers' certificate to the contrary, Custodian shall: (a) present for payment all coupons and other income items held by it for the account of the Fund, which call for payment upon presentation and hold the cash received by it upon such payment for the account of the Fund; (b) collect interest and cash dividends received, with notice to the Fund, for the account of the Fund; (c) hold for the account of the Fund hereunder all stock dividends, rights and similar securities issued with respect to any securities held by it hereunder; and (d) execute, as agent on behalf of the Fund, all necessary ownership certificates required by the Internal Revenue Code or the Income Tax Regulations of the United States Treasury Department or under the laws of any state now or hereafter in effect, inserting the Fund's name on such certificates as the owner of the securities covered thereby, to the extent it may lawfully do so. 8. Registration of Securities 5 Except as otherwise directed by an officers' certificate, Custodian shall register all securities, except such as are in bearer form, in the name of the Fund or of any nominee for the Fund or of any registered nominee of Custodian as defined in the Internal Revenue Code and any Regulations of the Treasury Department issued hereunder or in any provision of any subsequent federal tax law exempting such transaction from liability for stock transfer taxes, and shall execute and deliver all such certificates in connection therewith as may be required by such laws or regulations or under the laws of any state. Custodian shall use its best efforts to the end that the specific securities held by it hereunder shall be at all times identifiable in its records. Burridge Funds shall from time to time furnish to Custodian appropriate instruments to enable Custodian to hold or deliver in proper form for transfer, or to register in the name of its registered nominee, any securities which it may hold for the account of the Fund and which may from time to time be registered in the name of the Fund. All securities accepted by Custodian on behalf of the Fund shall be in "street" or other good delivery form. 9. Voting and Other Action Neither Custodian nor any nominee of Custodian shall vote any of the securities held hereunder by or for the account of the Fund, except in accordance with the instructions contained in an officers' certificate. Custodian shall deliver, or cause to be executed and delivered, to the Fund all notices, proxies and proxy soliciting materials with relation to such securities, such proxies to be executed by the registered holder of such securities (if registered otherwise than in the name of the Fund), but without indicating the manner in which such proxies are to be voted. Custodian shall transmit promptly to the Fund all written information (including, without limitation, pendency of calls and maturities of securities and expirations of rights in connection therewith) received by Custodian from issuers of the securities being held for the Fund. With respect to tender or exchange offers, Custodian shall transmit promptly to the Fund all written information received by Custodian from issuers of the securities being held for the Fund. With respect to tender or exchange offers, Custodian shall transmit promptly to the Fund all written information received by Custodian from issuers of the securities whose tender or exchange is sought and from the party (or his agents) making the tender or exchange offer. If the fund desires to take action with respect to any tender offer, exchange offer or any other similar transaction, the Fund shall notify Custodian at least two business days prior to the date on which Custodian is to take action. 10. Transfer Tax and Other Disbursements The Fund shall pay or reimburse Custodian from time to time for any transfer taxes payable upon transfers of securities made hereunder and for all other necessary and proper disbursements and expenses made or incurred by Custodian in the performance of this Agreement. Custodian shall execute and deliver such certificates in connection with securities delivered to it or by it under this Agreement as may be required under the provisions of the 6 Internal Revenue Code and any Regulations of the Treasury Department issued thereunder, or under the laws of any state, to exempt from taxation any exemptable transfers and/or deliveries of any such securities. 11. Concerning Custodian Custodian shall be paid as compensation for its services pursuant to this Agreement such compensation as may from time to time be agreed upon in writing between the parties. Until modified in writing, such compensation shall be as set forth in Exhibit A attached hereto. So long as and to the extent that it exercises reasonable care, Custodian shall not be liable for any action taken in good faith upon any certificate herein described or certified copy of any resolution of the Board, and may rely on the genuineness of any such document which it may in good faith believe to have been validly executed. The Fund agrees to indemnify and hold harmless Custodian and its nominee from all taxes, charges, expenses, assessments, claims and liabilities (including counsel fees) incurred or assessed against it or by its nominee in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct. Custodian is authorized to charge any account of the Fund for such items. In the event of any advance of cash for any purpose made by Custodian resulting from orders or instructions of the Fund, or in the event that Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee's own negligent action, negligent failure to act or willful misconduct, any property at any time held for the account of the Fund shall be security therefore. Custodian agrees to indemnify and hold harmless Fund from all charges, expenses, assessments, and claims/liabilities (including counsel fees) incurred or assessed against it in connection with the performance of this agreement, except such as may arise from the Fund's own negligent action, negligent failure to act, or willful misconduct. 12. Subcustodians Custodian is hereby authorized to engage another bank or trust company as a Subcustodian for all or any part of the Fund's assets, so long as any such bank or trust company is a bank or trust company organized under the laws of any state of the United States, having an aggregate capital, surplus and undivided profit, as shown by its last published report, of not less than Two Million Dollars ($2,000,000) and provided further that, if the Custodian utilizes the services of a Subcustodian, the Custodian shall remain fully liable and responsible for any losses caused to the Fund by the Subcustodian as fully as if the Custodian was directly responsible for any such losses under the terms of the Custodian Agreement. Notwithstanding anything contained herein, if the Fund requires the Custodian to engage specific Subcustodians for the safekeeping and/or clearing of assets, the Fund agrees to 7 indemnify and hold harmless Custodian from all claims, expenses and liabilities incurred or assessed against it in connection with the use of such Subcustodian in regard to the Fund's assets, except as may arise from its own negligent action, negligent failure to act or willful misconduct. 13. Reports by Custodian Custodian shall furnish the Fund periodically as agreed upon with a statement summarizing all transactions and entries for the account of Fund. Custodian shall furnish to the Fund, at the end of every month, a list of the portfolio securities showing the aggregate cost of each issue and a list of all securities transactions that remain unsettled at such time. The books and records of Custodian pertaining to its actions under this Agreement shall be open to inspection and audit at reasonable times by officers of, and of auditors employed by, the Fund. 14. Termination or Assignment This Agreement may be terminated by the Fund, or by Custodian, on ninety (90) days notice, given in writing and sent by registered mail to Custodian at P.O. Box 2054, Milwaukee, Wisconsin 53201, or to the Fund at 115 South La Salle Street, Chicago, Illinois 60603, as the case may be. Upon any termination of this Agreement, pending appointment of a successor to Custodian or a vote of the shareholders of the Fund to dissolve or to function without a custodian of its cash, securities and other property, Custodian shall not deliver cash, securities or other property of the Fund to the Fund, but may deliver them to a bank or trust company, which is a "bank" defined in the Investment Company Act of 1940, of its own selection, having an aggregate capital, surplus and undivided profits, as shown by its last published report of not less than Twenty-five Million Dollars ($25,000,000) as a Custodian for the Fund to be held under terms similar to those of this Agreement, provided, however, that Custodian shall not be required to make any such delivery or payment until full payment shall have been made by the Fund of all liabilities constituting a charge on or against the properties then held by Custodian or on or against Custodian, and until full payment shall have been made to Custodian of all its fees, compensation, costs and expenses, subject to the provisions of Section 10 of this Agreement. This Agreement may not be assigned by Custodian without the consent of the Fund, authorized or approved by a resolution of its Board. 15. Deposits of Securities in Securities Depositories Custodian may deposit and/or maintain securities owned by the Funds in a clearing agency registered with the Securities and Exchange Commission under Section 17A of the system authorized by the U.S. Department of the Treasury and certain federal agencies, each of which is referred to herein as "a Securities System," in accordance with applicable Federal Reserve Board and Securities and Exchange Commission rules and regulations, if any, and subject to the following provisions: 8 1. Custodian may keep securities of the Fund in a Securities System provided that such securities are represented in an account ("Account") of Custodian in the Securities System which shall not include any assets of Custodian other than assets held as a fiduciary, custodian, or otherwise for customers; 2. The records of Custodian with respect to securities of the Fund which are maintained in the Securities System shall identify by book-entry those securities belonging to the Fund; 3. Custodian shall pay for securities purchased for the account of the Fund upon (i) receipt of advice from the Securities System that such securities have been transferred to the Account, and (ii) the making of an entry on the records of Custodian to reflect such payment and transfer for the account of the Fund. Custodian shall transfer securities sold or loaned for the account of a Fund upon (i)receipt of advice from the Securities System that payment or collateral for such securities has been transferred to the Account, and (ii) the making of an entry on the records of Custodian to reflect such transfer and payment for the account of the Fund. Copies of all advices from the Securities System of transfers of securities for the account of the Fund shall identify the Fund, be maintained for the Fund by Custodian and be provided to the Fund at its request. 4. Custodian shall promptly provide Burridge Funds with any report obtained by Custodian on the Securities System's accounting system, internal accounting control, and procedures for safeguarding securities deposited in the Securities System. 5. Anything to the contrary herein notwithstanding, Custodian shall be liable to the Fund for any loss or damage to the Fund resulting from use of the Securities System by reasons of any negligence, misfeasance, or misconduct or Custodian or any of its agents or of any of its or their employees or from failure of Custodian or any such agent to enforce effectively such rights as it may have against the Securities System; at the election of the Fund, it shall be entitled to be subrogated to the rights of Custodian with respect to any claim against the Securities System or any other person which Custodian may have as a consequence of any such loss or damage if and to the extent that the Fund has not been made whole for any such loss or damage. 6. Custodian shall not be authorized to act under this Section in the absence of an appropriate certificate of Burridge Funds that the Board has approved the use of a particular Securities Systems and any changes to arrangements in connection therewith. 16. Independent Accountants 9 Custodian shall provide the Fund, at such times as Burridge Funds may reasonably require, with reports by independent public accountants on the accounting system, internal accounting control and procedures for safeguarding securities, including securities deposited and/or maintained in a Securities System, relating to the services provided by Custodian under this Agreement; such reports, which shall be of sufficient scope and in sufficient detail, as may reasonably be required by Burridge Funds, to provide reasonable assurance that any material inadequacies would be disclosed by such examination, and, if there are not such inadequacies, shall so state. 17. Records Custodian shall prepare and maintain any records relating to its activities hereunder in such manner as will meet the obligations of Burridge Funds pursuant to the provisions of the Investment Company Act of 1940, as amended, or the rules and regulations promulgated thereunder, and applicable federal and state tax laws and regulations. To the extent that Custodian in any capacity prepares or maintains any records required to be maintained and preserved by the Fund pursuant to the provisions of the Investment Company Act of 1940, as amended, or the rules and regulations promulgated thereunder, Custodian agrees to make any such records available to the Fund, its auditors, and the Securities and Exchange Commission upon request and to preserve such records for the periods prescribed in Rule 31a-2 under the Investment Company Act of 1940, as amended and applicable federal and state tax laws and regulations. 18. Disclaimer of Liability This Agreement is executed on behalf of Burridge Funds by its officers in their capacity as officers and not individually. The obligations of Burridge Funds under this Agreement are not binding upon Burridge Funds' trustees, officers, or shareholders individually but are binding only upon the assets and property of the Fund. Burridge Funds' Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and their respective corporate seals to be affixed hereto as of the date first above-written by their respective officers thereunto duly authorized. Executed in several counterparts, each of which is an original. Attest: FIRSTAR TRUST COMPANY ________________________________ By ____________________________ Assistant Secretary Vice President Attest: BURRIDGE FUNDS ________________________________ By ____________________________ 11 EX-99.9.1 7 TRANSFER AGENCY AGREEMENT WITH FIRSTAR TRUST CO. Exhibit 9.1 TRANSFER AGENT AGREEMENT THIS AGREEMENT is made and entered into on this ___________________________ day of August, 1996, between Burridge Funds, a Massachusetts business trust and Firstar Trust Company, a corporation organized under the laws of the State of Wisconsin (hereinafter referred to as the "Agent"). WHEREAS, Burridge Funds is an open-ended management investment company which is registered under the Investment Company Act of 1940 currently having shares of a single series designated Burridge Capital Development Fund, hereinafter called the "Fund"; and WHEREAS, the Agent is a trust company and, among other things, is in the business of administering transfer and dividend disbursing agent functions for the benefit of its customers; NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as follows: 1. Terms of Appointment; Duties of the Agent Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints the Agent to act as transfer agent and dividend disbursing agent. The Agent shall perform all of the customary services of a transfer agent and dividend disbursing agent, and as relevant, agent in connection with accumulation, open account or similar plans (including without limitation any periodic investment plan or periodic withdrawal program), in accordance with the conditions and procedures set forth in the prospectus and Statement of Additional Information relating to the Fund as in effect from time to time (together, the "Prospectus") including but not limited to: A. Receive orders for the purchase of shares, with prompt delivery where appropriate, of payment and supporting documentation to the Fund's custodian; B. Process purchase orders and issue the appropriate number of certificated or uncertificated shares with such uncertificated shares being held in the appropriate shareholder account; C. Process redemption requests received in good order and, where relevant, deliver appropriate payment and supporting documentation to the Fund's custodian; D. Pay monies in accordance with the instructions of redeeming shareholders; E. Process transfers of shares in accordance with the shareholder's instructions; F. Process exchanges between funds within the same family of funds; G. Issue and/or cancel certificates as instructed; replace lost, stolen or destroyed certificates upon receipt of satisfactory indemnification or surety bond; H. Prepare and transmit or credit payments for dividends and distributions declared by the Fund; I. Make changes to shareholder records, including, but not limited to, address changes in plans (i.e., systematic withdrawal, automatic investment, dividend reinvestment, etc.); J. Record the issuance of shares of the Fund and maintain, pursuant to Securities Exchange Act of 1934 Rule 17ad-10(e), a record of the total number of shares of the Fund which are authorized, issued and outstanding; K. Prepare shareholder meeting lists and, if applicable, mail, receive and tabulate proxies; L. Mail shareholder reports and prospectuses to current shareholders; M. Prepare and file U.S. Treasury Department forms 1099 and other appropriate information returns required with respect to dividends and distributions for all shareholders; N. Provide shareholder account information upon request and prepare and mail confirmations and statements of account to shareholders for all purchases, redemptions and other confirmable transactions as agreed upon with the Fund; and O. Provide a Blue Sky System which will enable the Fund to monitor the total number of shares sold in each state. In addition, the Fund shall identify to the Agent in writing those transactions and assets to be treated as exempt from the Blue Sky reporting to the Fund for each state. The responsibility of the Agent for the Fund's Blue Sky state registration status is solely limited to the initial compliance by the Fund and the reporting of such transactions to the Fund. 2. Compensation The Fund agrees to pay the Agent for performance of the duties listed in this Agreement fees as may be agreed from time to time in writing and for reasonable out-of-pocket expenses which shall include, but are not limited to the following: printing, postage, forms, stationery, record retention, mailing, insertion, programming, labels, shareholder lists and proxy expenses. These fees and reimbursable expenses may be changed from time to time subject to mutual written agreement between the Fund and the Agent. The Fund agrees to pay all fees and reimbursable expenses within thirty (30) calendar days following the mailing of the billing notice. 3. Representations of Agent The Agent represents and warrants to the Fund that: A. It is a trust company duly organized, existing and in good standing under the laws of Wisconsin; B. It is a registered transfer agent under the Securities Exchange Act of 1934 as amended. C. It is duly qualified to carry on its business in the state of Wisconsin; -2- D. It is empowered under applicable laws and by its charter and bylaws to enter into and perform this Agreement; E. All requisite corporate proceedings have been taken to authorize it to enter and perform this Agreement; and F. It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement. G. It will comply with all applicable requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended, the Investment Company Act of 1940, as amended, and any laws, rules, and regulations of governmental authorities having jurisdiction. 4. Representations of the Fund The Fund represents and warrants to the Agent that: A. The Fund is an open-ended diversified investment company under the Investment Company Act of 1940; B. The Fund is a business trust organized, existing, and in good standing under the laws of Massachusetts; C. The Fund is empowered under applicable laws and by its Declaration of Trust and bylaws to enter into and perform this Agreement; D. All necessary proceedings required by the Declaration of Trust have been taken to authorize it to enter into and perform this Agreement; E. The Fund will comply with all applicable requirements of the Securities and Exchange Acts of 1933 and 1934, as amended, the Investment Company Act of 1940, as amended, and any laws, rules and regulations of governmental authorities having jurisdiction; and F. A registration statement under the Securities Act of 1933 is currently effective and will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all shares of the Fund being offered for sale. 5. Covenants of the Fund and Agent The Fund shall furnish the Agent a certified copy of the resolution of the Board of Trustees of the Fund authorizing the appointment of the Agent and the execution of this Agreement. The Fund shall provide to the Agent a copy of the Declaration of Trust, bylaws of the Trust, and all amendments thereto. The Agent shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable. To the extent required by Section 31 of the Investment Company Act of 1940, as amended, and the rules thereunder, the Agent agrees that all such records prepared or maintained by the Agent relating to the services to be performed by the Agent hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such section and rules and will be surrendered to the Fund on and in accordance with its request. -3- 6. Indemnification; Remedies Upon Breach The Agent shall exercise reasonable care and act in good faith in the performance of its duties under this Agreement. The Agent shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with matters to which this Agreement relates, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond the Agent's control, except a loss resulting from the Agent's refusal or failure to comply with the terms of this Agreement or from bad faith, negligence, or willful misconduct on its part in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, the Fund shall indemnify and hold harmless the Agent from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which the Agent may sustain or incur or which may be asserted against the Agent by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to the Agent by any duly authorized officer of the Fund, such duly authorized officer to be included in a list of authorized officers furnished to the Agent and as amended from time to time in writing by resolution of the Board of Trustees of the Fund. Further, the Fund will indemnify and hold the Agent harmless against any and all losses, claims, damages, liabilities or expenses (including reasonable counsel fees and expenses) resulting from any claim, demand, action, or suit as a result of the negligence of the Fund or the principal underwriter (unless contributed to by the Agent's breach of this Agreement or other Agreements between the Fund and the Agent, or the Agent's own negligence or bad faith); or as a result of the Agent acting upon telephone instructions relating to the exchange or redemption of shares received by the Agent and reasonably believed by the Agent under a standard of care customarily used in the industry to have originated from the record owner of the subject shares; or as a result of acting in reliance upon any genuine instrument or stock certificate signed, countersigned, or executed by any person or persons authorized to sign, countersign, or execute the same. In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, the Agent shall take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond the Agent's control. The Agent will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of the Agent. The Agent agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Fund shall be entitled to inspect the Agent's premises and operating capabilities at any time during regular business hours of the Agent, upon reasonable notice to the Agent. Regardless of the above, the Agent reserves the right to reprocess and correct administrative errors at its own expense. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the Fund may be asked to indemnify or hold the Agent harmless, the Fund shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that the Agent will use all reasonable care to notify the Fund promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the Fund. The Fund shall have the option to defend the Agent against any claim which may be the subject of this indemnification. In the event that the Fund so elects, it will so notify the Agent and -4- thereupon the Fund shall take over complete defense of the claim, and the Agent shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. The Agent shall in no case confess any claim or make any compromise in any case in which the Fund will be asked to indemnify the Agent except with the Fund's prior written consent. The Agent shall indemnify and hold the Fund harmless from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which may be asserted against the Fund by any person arising out of any action taken or omitted to be taken by the Agent as a result of the Agent's refusal or failure to comply with the terms of this Agreement, its bad faith, negligence, or willful misconduct. 7. Confidentiality The Agent agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its shareholders, which shall not be disclosed to any other party, except after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where the Agent may be exposed to civil or criminal contempt proceedings for failure to comply after being requested to divulge such information by duly constituted authorities. 8. Additional Series. The Burridge Funds is authorized to issue separate classes of shares of beneficial interest representing interests in separate investment portfolios. In the event Burridge Funds establishes one or more additional series of shares with respect to which it desires to have the Agent render services under the terms hereof, it shall so notify the Agent in writing, and if the Agent agrees in writing to provide such services, such services will be covered by the terms and conditions of this agreement. 9. Records The Agent shall keep records relating to the services to be performed hereunder, in the form and manner, and for such period as it may deem advisable and is agreeable to the Fund but not inconsistent with the rules and regulations of appropriate government authorities, in particular, Section 31 of The Investment Company Act of 1940 as amended (the "Investment Company Act"), and the rules thereunder. The Agent agrees that all such records prepared or maintained by the Agent relating to the services to be performed by the Agent hereunder are the property of the Fund and will be preserved, maintained, and made available with such section and rules of the Investment Company Act and will be promptly surrendered to the Fund on and in accordance with its request. 10. Wisconsin Law to Apply This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the state of Wisconsin. 11. Amendment, Assignment, Termination and Notice A. This Agreement may be amended by the mutual written consent of the parties. B. This Agreement may be terminated upon ninety (90) day's written notice given by one party to the other. -5- C. This Agreement and any right or obligation hereunder may not be assigned by either party without the signed, written consent of the other party. D. Any notice required to be given by the parties to each other under the terms of this Agreement shall be in writing, addressed and delivered, or mailed to the principal place of business of the other party. If to the agent, such notice should to be sent to Mutual Fund Services, 615 E. Michigan Street, Milwaukee, Wisconsin 53202. If to the Fund, such notice should be sent to Burridge Funds, 115 South La Salle Street, Chicago, Illinois 60603. E. In the event that the Fund gives to the Agent its written intention to terminate and appoint a successor transfer agent, the Agent agrees to cooperate in the transfer of its duties and responsibilities to the successor, including any and all relevant books, records and other data established or maintained by the Agent under this Agreement. F. Should the Fund exercise its right to terminate, all out-of-pocket expenses associated with the movement of records and material will be paid by the Fund. 12. Disclaimer of Liability This Agreement is executed on behalf of Burridge Funds by its officers in their capacity as officers and not individually. The obligations of Burridge Funds under this Agreement are not binding upon Burridge Funds' trustees, officers, or shareholders individually but are binding only upon the assets and property of the Fund. Burridge Funds' Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. BURRIDGE FUNDS FIRSTAR TRUST COMPANY By: ______________________________ By: ______________________________ Attest: __________________________ Attest: __________________________ Assistant Secretary -6- EX-99.9.2 8 ACCOUNTING SERVICES AGREEMENT WITH FIRSTAR TRUST Exhibit 9.2 FUND ACCOUNTING SERVICING AGREEMENT This contract between Burridge Funds, a Massachusetts business trust and Firstar Trust Company, a Wisconsin corporation, hereinafter called "FTC," is entered into on this _________ day of_________, 1996. WHEREAS, Burridge Funds, is an open-ended management investment company registered under the Investment Company Act of 1940 currently having shares of a single series designated Burridge Capital Development Fund, hereinafter called the "Fund"; and WHEREAS, FTC is in the business of providing, among other things, mutual fund accounting services to investment companies; NOW, THEREFORE, the parties do mutually promise and agree as follows: 1. Services. FTC agrees to provide the following mutual fund accounting services to the Fund: A. Portfolio Accounting Services: (1) Maintain portfolio records on a trade date +1 basis using security trade information communicated from the investment manager on a timely basis. (2) For each valuation date, obtain prices from a pricing source approved by the Board of Trustees and apply those prices to the portfolio positions. For those securities where market quotations are not readily available, the Board of Trustees shall approve, in good faith, the method for determining the fair value for such securities. (3) Identify interest and dividend accrual balances as of each valuation date and calculate gross earnings on investments for the accounting period. (4) Determine gain/loss on security sales and identify them as to short-short, short- or long-term status; account for periodic distributions of gains or losses to shareholders and maintain undistributed gain or loss balances as of each valuation date. B. Expense Accrual and Payment Services: (1) For each valuation date, calculate the expense accrual amounts as directed by the Fund as to methodology, rate or dollar amount. 1 (2) Record payments for Fund expenses upon receipt of written authorization from the Fund. (3) Account for fund expenditures and maintain expense accrual balances at the level of accounting detail, as agreed upon by FTC and the Fund. (4) Provide expense accrual and payment reporting. C. Fund Valuation and Financial Reporting Services: (1) Account for Fund share purchases, sales, exchanges, transfers, dividend reinvestments, and other Fund share activity as reported by the transfer agent on a timely basis. (2) Apply equalization accounting as directed by the Fund. (3) Determine net investment income (earnings) for the Fund as of each valuation date. Account for periodic distributions of earnings to shareholders and maintain undistributed net investment income balances as of each valuation date. (4) Maintain a general ledger for the Fund in the form as agreed upon. (5) For each day the Fund is open as defined in the prospectus relating to shares of the Fund as in effect from time to time, determine the net asset value per share of the Fund according to the accounting policies and procedures set forth in the prospectus. (6) Calculate per share net asset value, per share net earnings, and other per share amounts reflective of Fund operation at such time as required by the nature and characteristics of the Fund. (7) Communicate, at an agreed upon time, the per share price for each valuation date to parties as agreed upon from time to time. (8) Prepare monthly reports which document the adequacy of accounting detail to support month-end ledger balances. D. Tax Accounting Services: (1) Maintain accounting records for the investment portfolio of the Fund to support the tax reporting required for IRS-defined regulated investment companies, under the Internal Revenue Code of 1986, as amended, and regulations thereunder. (2) Maintain tax lot detail for the investment portfolio. 2 (3) Calculate taxable gain/loss on security sales using the tax lot relief method designated by the Fund. (4) Provide the necessary financial information to support the taxable components of income and capital gains distributions to the transfer agent to support tax reporting to the shareholders. E. Compliance Control Services: (1) Support reporting to regulatory bodies and support financial statement preparation by making the Fund accounting records available to Burridge Funds, the Adviser, the Securities and Exchange Commission, and the outside auditors. (2) Create and maintain accounting records according to the Investment Company Act of 1940 and regulations provided thereunder. 2. Pricing of Securities. For each valuation date, obtain prices from a pricing source selected by FTC but approved by the Fund's Board and apply those prices to the portfolio positions. For those securities where market quotations are not readily available, the Fund's Board shall approve, in good faith, the method for determining a fair value for such securities. If the Fund desires to provide a price which varies from the pricing source, the Fund shall promptly notify and supply FTC with the valuation of any such security on each valuation date. All pricing changes made by the Fund will be in writing and must specifically identify the securities to be changed by CUSIP, name of security, new price or rate to be applied, and, if applicable, the time period for which the new price is effective. 3. Changes in Accounting Procedures. Any resolution passed by the Burridge Funds' Board of Trustees that affects accounting practices and procedures under this agreement shall be effective upon written receipt and acceptance by the FTC. 4. Changes in Equipment, Systems, Service, Etc. FTC reserves the right to make changes from time to time, as it deems advisable, relating to its services, systems, programs, rules, operating schedules and equipment, so long as such changes do not adversely affect the service provided to the Fund under this Agreement. 5. Compensation. FTC shall be compensated for providing the services set forth in this Agreement in accordance with the Fee Schedule attached hereto as Exhibit A and as mutually agreed upon and amended from time to time. 6. Performance of Service. A. FTC shall exercise reasonable care in the performance of its duties under this Agreement. FTC shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with matters to which this 3 Agreement relates, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond FTC's control, except a loss resulting from FTC's refusal or failure to comply with the terms of this Agreement or from bad faith, negligence, or willful misconduct on its part in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, the Fund shall indemnify and hold harmless FTC from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which FTC may sustain or incur or which may be asserted against FTC by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to FTC by any duly authorized officer of the Fund, such duly authorized officer to be included in a list of authorized officers furnished to FTC and as amended from time to time in writing by resolution of the Board of Trustees of Burridge Funds. In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, FTC shall take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond FTC's control. FTC will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of FTC. FTC agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Fund shall be entitled to inspect FTC's premises and operating capabilities at any time during regular business hours of FTC, upon reasonable notice to FTC. Regardless of the above, FTC reserves the right to reprocess and correct administrative errors at its own expense. B. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the Fund may be asked to indemnify or hold FTC harmless, the Fund shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that FTC will use all reasonable care to notify the Fund promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the Fund. The Fund shall have the option to defend FTC against any claim which may be the subject of this indemnification. In the event that the Fund so elects, it will so notify FTC and thereupon the Fund shall take over complete defense of the claim, and FTC shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. FTC shall in no case confess any claim or make any compromise in any case in which the Fund will be asked to indemnify FTC except with the Fund's prior written consent. 4 C. FTC shall indemnify and hold the Fund harmless from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which may be asserted against the Fund by any person arising out of any action taken or omitted to be taken by FTC as a result of FTC's refusal or failure to comply with the terms of this Agreement, its bad faith, negligence, or willful misconduct. 7. Records. FTC shall keep records relating to the services to be performed hereunder, in the form and manner, and for such period as it may deem advisable and is agreeable to the Fund but not inconsistent with the rules and regulations of appropriate government authorities, in particular, Section 31 of The Investment Company Act of 1940 as amended (the "Investment Company Act"), and the rules thereunder. FTC agrees that all such records prepared or maintained by FTC relating to the services to be performed by FTC hereunder are the property of the Fund and will be preserved, maintained, and made available with such section and rules of the Investment Company Act and will be promptly surrendered to the Fund on and in accordance with its request. 8. Confidentiality. FTC shall handle in confidence all information relating to the Funds' business, which is received by FTC during the course of rendering any service hereunder. 9. Data Necessary to Perform Services. The Fund or its agent, which may be the Advisor or FTC, shall furnish to FTC the data necessary to perform the services described herein at times and in such form as mutually agreed upon. 10. Notification of Error. The Fund will notify FTC of any balancing or control error caused by FTC within three (3) business days after receipt of any reports rendered by FTC to the Fund, or within three (3) business days after discovery of any error or omission not covered in the balancing or control procedure, or within three (3) business days of receiving notice from any shareholder. 11. Additional Series. In the event that the Burridge Funds establishes one or more additional series of shares with respect to which it desires to have FTC render accounting services under the terms hereof, it shall so notify FTC in writing, and if FTC agrees in writing to provide such services, such series will be subject to the terms and conditions of this Agreement, and shall be maintained and accounted for by FTC on a discrete basis. The series currently covered by this Agreement are: Burridge Capital Development Fund. 12. Term of Agreement. This Agreement may be terminated by either party upon giving ninety (90) days prior written notice to the other party or such shorter period as is mutually agreed upon by the parties. However, this Agreement may be replaced or modified by a subsequent agreement between the parties. 13. Duties in the Event of Termination. In the event that in connection with termination a successor to any of FTC's duties or responsibilities hereunder is designated by Burridge Funds by written notice to FTC, FTC will promptly, upon such termination and at the 5 expense of the Fund, transfer to such successor all relevant books, records, correspondence and other data established or maintained by FTC under this Agreement in a form reasonably acceptable to Burridge Funds (if such form differs from the form in which FTC has maintained the same, the Fund shall pay any expenses associated with transferring the same to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from FTC's personnel in the establishment of books, records and other data by such successor. 14. Notices. Notices of any kind to be given by any party hereto to any of the other parties shall be in writing and shall be duly given if mailed or delivered as follows: Notice to FTC shall be sent to Mutual Fund Services, 615 E. Michigan Street, Milwaukee, Wisconsin 53202, and notice to Fund shall be sent to Burridge Funds, 115 South La Salle Street, Chicago, Illinois 60603. 15. Choice of Law. This Agreement shall be construed in accordance with the laws of the State of Wisconsin. 16. Disclaimer of Liability. This Agreement is executed on behalf of Burridge Funds by its officers in their capacity as officers and not individually. The obligations of Burridge Funds under this Agreement are not binding upon Burridge Funds trustees, officers, or shareholders individually but are binding only upon the assets and property of the Fund. Burridge Funds' Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. IN WITNESS WHEREOF, the due execution hereof on the date first above written. ATTEST: Firstar Trust Company __________________________________ By ___________________________________ ATTEST: Burridge Funds __________________________________ By ___________________________________ 6 EX-99.9.3 9 FUND ADMINISTRATION SERVICING AGREEMENT Exhibit 9.3 Fund Administration Servicing Agreement This Agreement is made and entered into on this _____________ day of __________________, 1996, by and between Burridge Funds, a Massachusetts business trust (the "Trust") and Firstar Trust Company, a corporation organized under the laws of the State of Wisconsin (hereinafter referred to as "FTC"). WHEREAS, the Trust is an open-ended management investment company which is registered under the Investment Company Act of 1940 currently having shares of a single series designated Burridge Capital Development Fund, hereinafter called the "Fund"; and WHEREAS, FTC is a trust company and, among other things, is in the business of providing fund administration services for the benefit of its customers; NOW, THEREFORE, the parties hereto do mutually promise and agree as follows: I. Appointment of Administrator The Fund hereby appoints FTC as Administrator of the Fund to perform certain administrative services, subject to the control and direction of the Trust's Board of Trustees (the "Board") on the terms and conditions set forth in this Agreement, and FTC hereby accepts such appointment and agrees to perform the services and assume the obligations set forth in this Agreement in consideration of the compensation provided for herein. FTC shall, for all purposes herein, be deemed to be an independent contractor and shall, except as expressly provided or authorized (whether herein or otherwise), have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. II. Duties and Responsibilities of FTC FTC undertakes to provide the following services and to assume the following obligations: A. General Fund Management 1. Act as liaison among all Fund service providers including custodian, distributor, transfer agent, and the Adviser 2. Coordinate Board communication by: a. Assisting fund counsel in establishing meeting agendas for the Board b. Preparing reports for the Board based on financial and administrative data c. Evaluating independent auditors d. Securing and monitoring fidelity bond and director and officers liability insurance coverage, and making the necessary filings with the Securities and Exchange Commission ("SEC") relating thereto 3. Audits a. Prepare appropriate schedules and assist the independent auditors as required b. Provide the appropriate information to the SEC and facilitate the audit process c. Provide office facilities for the Fund 4. Assist in overall administrative operations of the Fund B. Compliance 1. Regulatory Compliance a. Periodically monitor compliance with Investment Company Act of 1940 requirements including, but not limited to, the following: 1) Asset diversification tests 2) Total return and SEC yield calculations 3) Maintenance of books and records under Rule 31a-2 and Rule 31a-3 4) Code of ethics b. Periodically monitor the Fund's compliance with the policies and investment limitations of the Fund as set forth in its prospectus and statement of additional information 2 2. Blue Sky Compliance a. Prepare and file with the appropriate state securities authorities any and all required compliance filings relating to the registration of the securities of the Fund so as to enable the Fund to make a continuous offering of its shares b. Monitor status and maintain registrations in each state 3. SEC Registration and Reporting a. Assisting Fund's counsel in updating the Fund's prospectus and statement of additional information; and in preparing proxy statements, and Rule 24f-2 notices b. Prepare and file annual and semiannual reports 4. IRS Compliance a. Periodically monitor the Fund's status as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and regulations thereunder through review of the following: 1) Asset diversification requirements 2) Qualifying income requirements 3) Distribution requirements b. Monitor short short testing c. Calculate required distributions (including excise tax distributions) C. Financial Reporting 1. Provide financial data required by the Fund's prospectus and statement of additional information 2. Prepare financial reports for shareholders, the Board, the SEC, and independent auditors 3. Supervise the Fund's Custodian and Fund Accountants in the maintenance of the Fund's general ledger and in the preparation of the Fund's financial statements including oversight of expense accruals and payments, of the determination of net asset value of the Fund's net assets and of the Fund's shares, and of the declaration and payment of dividends and other distributions to shareholders 3 D. Tax Reporting 1. Prepare and file on a timely basis appropriate federal and state tax returns including Forms 1120 and 8610 with any necessary schedules 2. Prepare state income breakdowns where relevant 3. Prepare and file Form 1099 Miscellaneous for payments to directors and other service providers 4. Monitor wash losses 5. Calculate eligible dividend income for corporate shareholders E. Trust Organizational Existence 1. Maintain the Trust's governing documents including the Declaration of Trust, the Bylaws, and minutes of meetings of Trustees' committees of the Board or shareholders, and prepare certain materials for such meetings 2. Prepare and file any reports required to maintain the Trusts organizational existence with the appropriate regulatory bodies III. Compensation The Fund agrees to pay FTC for performance of the duties listed in this Agreement and the fees and out-of-pocket expenses as set forth in the attached Schedule A. These fees may be changed from time to time, subject to mutual written Agreement between the Trust and FTC. The Fund agrees to pay all fees and reimbursable expenses within ten (10) business days following the mailing of the billing notice. IV. Additional Series In the event that the Trust establishes one or more additional series of shares with respect to which it desires to have FTC render fund administration services under the terms hereof, it shall so notify FTC in writing, and if FTC agrees in writing to provide such services, such series will be subject to the terms and conditions of this Agreement, and shall be maintained and accounted for by FTC on a discrete basis. The fund currently covered by this Agreement is: Burridge Capital Development Fund V. Performance of Service; Limitation of Liability 4 A. FTC shall exercise reasonable care in the performance of its duties under this Agreement. FTC shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with matters to which this Agreement relates, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond FTC's control, except a loss resulting from FTC's refusal or failure to comply with the terms of this Agreement or from bad faith, negligence, or willful misconduct on its part in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, the Fund shall indemnify and hold harmless FTC from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which FTC may sustain or incur or which may be asserted against FTC by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to FTC by any duly authorized officer of the Trust, such duly authorized officer to be included in a list of authorized officers furnished to FTC and as amended from time to time in writing by resolution of the Board of Trustees of the Trust. In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, FTC shall take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond FTC's control. FTC will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of FTC. FTC agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Fund shall be entitled to inspect FTC's premises and operating capabilities at any time during regular business hours of FTC, upon reasonable notice to FTC. Regardless of the above, FTC reserves the right to reprocess and correct administrative errors at its own expense. B. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the Fund may be asked to indemnify or hold FTC harmless, the Fund shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that FTC will use all reasonable care to notify the Fund promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the Fund. The Fund shall have the option to defend FTC against any claim which may be the subject of this indemnification. In the event that the Fund so elects, it will so notify FTC and thereupon the Fund shall take over complete defense of the claim, and FTC shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. FTC shall in no case confess any claim or make any compromise in any case in which the Fund will be asked to indemnify FTC except with the Fund's prior written consent. 5 C. FTC shall indemnify and hold the Fund harmless from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which may be asserted against the Fund by any person arising out of any action taken or omitted to be taken by FTC as a result of FTC's refusal or failure to comply with the terms of this Agreement, its bad faith, negligence, or willful misconduct. VI. Confidentiality FTC shall handle, in confidence, all information relating to the Fund's business which is received by FTC during the course of rendering any service hereunder. VII. Data Necessary to Perform Service The Fund or its agent, which may be the Adviser or FTC, shall furnish to FTC the data necessary to perform the services described herein at times and in such form as mutually agreed upon. VIII. Terms of Agreement This Agreement shall become effective as of the date hereof and, unless sooner terminated as provided herein, shall continue automatically in effect for successive annual periods. The Agreement may be terminated by any party hereto upon giving ninety (90) days prior written notice to the other parties or such shorter period as is mutually agreed upon by the parties. IX. Duties in the Event of Termination In the event that, in connection with termination, a successor to any of FTC's duties or responsibilities hereunder is designated by the Trust by written notice to FTC, FTC will promptly, upon such termination and at the expense of the Fund, transfer to such successor all relevant books, records, correspondence, and other data established or maintained by FTC under this Agreement in a form reasonably acceptable to the Trust (if such form differs from the form in which FTC has maintained, the Fund shall pay any expenses associated with transferring the data to such form), and will cooperate in the transfer of such duties and responsibilities, including provision for assistance from FTC's personnel in the establishment of books, records, and other data by such successor. X. Choice of Law This Agreement shall be construed in accordance with the laws of the State of Wisconsin. 6 XI. Notices Notices of any kind to be given by any party hereto to the other parties shall be in writing and shall be duly given if mailed or delivered as follows: Notice to FTC shall be sent to ___________________, notice to the Fund shall be sent to Burridge Funds, 115 South LaSalle Street, Chicago, Illinois 60603. XII. Records FTC shall keep records relating to the services to be performed hereunder, in the form and manner, and for such period as it may deem advisable and is agreeable to the Fund but not inconsistent with the rules and regulations of appropriate government authorities, in particular, Section 31 of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules thereunder. FTC agrees that all such records prepared or maintained by FTC relating to the services to be performed by FTC hereunder are the property of the Fund and will be preserved, maintained, and made available in accordance with such section and rules of the Investment Company Act and will be promptly surrendered to the Fund on and in accordance with its request. XIII. Non-Liability of Trustees and Shareholders Any obligation of the Trust hereunder shall be binding upon the assets of the Trust (or applicable series thereof) and shall not be binding upon any trustee, officer, employee, agent, or shareholder of the Trust. Neither the authorization of any action by the trustees or shareholders of the Trust nor the execution of this agreement on behalf of the Trust shall impose liability upon any trustee, officer, or shareholder of the Trust. BURRIDGE FUNDS FIRSTAR TRUST COMPANY By: _____________________________ By: _____________________________________ Attest: _________________________ Attest: _________________________________ 7 EX-99.9.4 10 FULFILLMENT SRVICING AGREEMENT Exhibit 9.4 Fulfillment Servicing Agreement This Agreement between Firstar Trust Company (FTC) and Burridge Funds, a Massachusetts business trust is entered into on this _____day of _____________________, 1996. WHEREAS, Burridge Funds provides investment opportunities to prospective shareholders through a family of open end mutual funds and currently has shares of a single series designated Burridge Capital Development Fund, hereinafter called the "Fund"; and WHEREAS, FTC is in the business of providing, among other things, fulfillment services to mutual funds; NOW THEREFORE, the parties do mutually promise and agree as follows: Duties and responsibilities of FTC. FTC agrees to provide the following fulfillment services to the Fund: 1. Answer all prospective shareholder calls concerning the Fund listed in the attached Schedule A which may be modified from time to time. 2. Send all available Fund materials requested by the prospect which may include the prospectus, statement of additional information, reports to shareholders, and other materials, including advertising or sales literature, provided to FTC by the Fund from time to time, within 24 hours from time of call. 3. Receive and update all the Fund fulfillment literature so that most current information is sent and quoted. 4. Provide 24 hour answering service to record prospect calls made after hours (7 p.m. to 8 a.m. CT). 5. Maintain and store the Fund fulfillment inventory. 6. Send periodic fulfillment reports to the Fund as agreed upon between the parties. Duties and responsibilities of the Fund. Fund agrees to provide the following to FTC: 1. Provide the Fund fulfillment literature updates to FTC as necessary. 2. Supply FTC with sufficient inventory of fulfillment materials as requested from time to time by FTC. 3. Provide FTC with any sundry information about the Fund in order to answer prospect questions. Performance of Service; Limitation of Liability A. FTC shall exercise reasonable care in the performance of its duties under this Agreement. FTC shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with matters to which this Agreement relates, including losses resulting from mechanical breakdowns or the failure of communication or power supplies beyond FTC's control, except a loss resulting from FTC's refusal or failure to comply with the terms of this Agreement or from bad faith, negligence, or willful misconduct on its part in the performance of its duties under this Agreement. Notwithstanding any other provision of this Agreement, the Fund shall indemnify and hold harmless FTC from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which FTC may sustain or incur or which may be asserted against FTC by any person arising out of any action taken or omitted to be taken by it in performing the services hereunder (i) in accordance with the foregoing standards, or (ii) in reliance upon any written or oral instruction provided to FTC by any duly authorized officer of the Trust, such duly authorized officer to be included in a list of authorized officers furnished to FTC and as amended from time to time in writing by resolution of the Board of Trustees of the Trust. In the event of a mechanical breakdown or failure of communication or power supplies beyond its control, FTC shall take all reasonable steps to minimize service interruptions for any period that such interruption continues beyond FTC's control. FTC will make every reasonable effort to restore any lost or damaged data and correct any errors resulting from such a breakdown at the expense of FTC. FTC agrees that it shall, at all times, have reasonable contingency plans with appropriate parties, making reasonable provision for emergency use of electrical data processing equipment to the extent appropriate equipment is available. Representatives of the Fund shall be entitled to inspect FTC's premises and operating capabilities at any time during regular business hours of FTC, upon reasonable notice to FTC. Regardless of the above, FTC reserves the right to reprocess and correct administrative errors at its own expense. B. In order that the indemnification provisions contained in this section shall apply, it is understood that if in any case the Fund may be asked to indemnify or hold FTC harmless, the Fund shall be fully and promptly advised of all pertinent facts concerning the situation in question, and it is further understood that FTC will use all reasonable care to notify the Fund promptly concerning any situation which presents or appears likely to present the probability of such a claim for indemnification against the Fund. The Fund shall have the option to defend FTC against any claim which may be the subject of this indemnification. In the event that the Fund so elects, it will so notify FTC and thereupon the Fund shall take over complete defense of the claim, and FTC shall in such situation initiate no further legal or other expenses for which it shall seek indemnification under this section. FTC shall in no case confess any claim or make any compromise in any case in which the Fund will be asked to indemnify FTC except with the Fund's prior written consent. C. FTC shall indemnify and hold the Fund harmless from and against any and all claims, demands, losses, expenses, and liabilities (whether with or without basis in fact or law) of any and every nature (including reasonable attorneys' fees) which may be asserted against the Fund by any person arising out of any action taken or omitted to be taken by FTC as a result of FTC's refusal or failure to comply with the terms of this Agreement, its bad faith, negligence, or willful misconduct. Compensation The Fund agrees to compensate FTC for the services performed under this agreement in accordance with the attached Schedule B; the Fund agrees to pay all invoices within ten days of receipt. Proprietary and Confidential Information FTC agrees on behalf of itself and its directors, officers, and employees to treat confidentiality and as proprietary information of the Fund all records and other information relative to the Fund and prior, present, or potential shareholders of the Fund (and clients of said shareholders), and not to use such records and information for any purpose other than performance of its responsibilities and duties thereunder, except after prior notification to and approval in writing by Burridge Funds, which approval shall not be unreasonably withheld and may not be withheld where FTC may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by Burridge Funds. Additional Series In the event that the Trust establishes one or more additional series of shares with respect to which it desires to have FTC render fund administration services under the terms hereof, it shall so notify FTC in writing, and if FTC agrees in writing to provide such services, such series will be subject to the terms and conditions of this Agreement, and shall be maintained and accounted for by FTC on a discrete basis. The fund currently covered by this Agreement is: Burridge Capital Development Fund Termination This agreement may be terminated by any of the parties upon 30 days written notice to the parties. Notices Notices of any kind to be given to any party hereto to any of the other parties shall be in writing and shall be duly given if mailed or delivered as follows: Notice to FTC shall be sent to Mutual Fund Services, 615 E. Michigan Street, Milwaukee, Wisconsin 53202 and notice to Fund shall be sent to Burridge Funds, 115 South La Salle Street, Chicago, Illinois 60603. Non-Liability of Trustees and Shareholders Any obligation of Burridge Funds hereunder shall be binding upon the assets of Burridge Funds (or applicable series thereof) and shall not be binding upon any trustee, officer, employee, agent, or shareholder or Burridge Funds. Neither the authorization of any action by the trustees or shareholders of Burridge Funds nor the execution of this agreement on behalf of Burridge Funds shall impose liability upon any trustee, officer, or shareholder of Burridge Funds. Choice of Law This Agreement shall be construed in accordance with the laws of the State of Wisconsin. Dated this _____ day of _______________________, 1996. FIRSTAR TRUST COMPANY BURRIDGE FUNDS By: _____________________________ By: _____________________________________ Attest: _________________________ Attest: _________________________________ EX-99.10 11 OPINION AND CONSENT OF COUNSEL BELL, BOYD & LLOYD Three First National Plaza Suite 3300 Chicago, Illinois 60602-4207 312 372-1121 Fax 312 372-2098 JANET D. OLSEN 312 807-4311 jolsen@bbl.com November 20, 1996 Burridge Funds 115 South LaSalle Street Chicago, Illinois 60603 Ladies and Gentlemen: BURRIDGE FUNDS BURRIDGE CAPITAL DEVELOPMENT FUNDS We have acted as counsel for Burridge Funds (the "Trust") in connection with the registration under the Securities Act of 1933 (the "Act") of an indefinite number of shares of beneficial interest of the series of the Trust designated Burridge Capital Development Fund (the "Shares") in registration statement no. 333-11633 on form N-1A (the "Registration Statement"). In this connection we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate and other records, certificates and other papers as we deemed it necessary to examine for the purpose of this opinion, including the agreement and declaration of trust (the "Trust Agreement") and bylaws (the "Bylaws") of the Trust, actions of the sole trustee of the Trust authorizing the issuance of shares of the Funds and the Registration Statement. Based on the foregoing examination, we are of the opinion that upon the issuance and delivery of the Shares of each Fund in accordance with the Trust Agreement and the actions of the sole trustee authorizing the issuance of the Shares, and the receipt by the Trust of the authorized consideration therefor, the Shares so issued will be validly issued, fully paid and nonassessable (although shareholders of the Fund may be subject to liability under certain circumstances as described in the statement of additional information of the Trust included as Part B of the Registration Statement under the caption "The Trust"). In giving this opinion we have relied upon the opinion of Ropes & Gray to us dated November 20, 1996, and have made no independent inquiry with respect to any matter covered by such opinion. Burridge Funds November 20, 1996 Page 2 We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under section 7 of the Act. Very truly yours, BELL, BOYD & LLOYD [LETTERHEAD OF ROPES & GRAY] November 20, 1996 Bell, Boyd & Lloyd Three First National Plaza 70 West Madison Street, Suite 3300 Chicago, IL 60602 Ladies and Gentlemen: We are furnishing this opinion in connection with the proposed offer and sale from time to time by Burridge Capital Development Fund (the "Fund"), a series of Burridge Funds (the "Trust"), of an indefinite number of shares of beneficial interest, without par value, of the Fund (the "Shares"), pursuant to the Trust's Registration Statement on Form N-1A (No. 333-11633) under the Securities Act of 1933, as amended. We are familiar with the action taken by the Trustees of the Trust to authorize the issuance of the Shares. We have examined the Trust's records of Trustee action, its By-Laws and its Agreement and Declaration of Trust. We have examined such other documents as we deem necessary for the purposes of this opinion. We assume that, upon sale of the Shares, the Trust will receive the net asset value thereof. Based upon the foregoing, we are of the opinion that the Trust is authorized to issue an unlimited number of Shares, and that, when the Shares are issued and sold after the Registration Statement has been declared effective and the authorized consideration therefor is received by the Trust, they will be validly issued, fully paid and nonassessable by the Trust. The Trust is an entity of the type commonly known as a "Massachusetts business trust". Under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust or any series of the Trust (a "Series"). However, the Agreement and Declaration of Trust disclaims shareholder liability for acts or obligations of the Trust or any Series and requires that notice of such disclaimer be given in every note, bond, contract or other undertaking issued by or on behalf of the Trust. The Agreement and Bell, Boyd & Lloyd -2- November 20, 1996 Declaration of Trust provides for indemnification out of the property of the Trust or a particular Series for all loss and expense of any shareholder held personally liable for the obligations of the Trust or that particular Series. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the Trust or the particular Series itself would be unable to meet its obligations. We consent to the filing of this opinion as an exhibit to the aforesaid Registration Statement. Very truly yours, /s/ Ropes & Gray Ropes & Gray EX-99.11 12 CONSENT OF INDEPENDENT AUDITORS Exhibit 11 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report dated November 18, 1996, and to all references to our firm included in or made a part of this Registration Statement on Form N-1A of the Burridge Funds (comprising the Burridge Capital Development Fund). ARTHUR ANDERSEN LLP Chicago, Illinois November 18, 1996 EX-99.13 13 SUBSCRIPTION AGREEMENT Exhibit 13 BURRIDGE FUNDS Subscription Agreement 1. Subscription for Shares. Richard M. Burridge and Kenneth M. Arenberg (each, a "Purchaser") severally agree to purchase from Burridge Funds ("Burridge Funds") that number of share listed opposite his name shares of the series designated Burridge Capital Development Fund (the "Fund") for a price of $10.00 per share, on the terms and conditions set forth herein and in the preliminary prospectus described below, and agree to tender in payment therefor cash in an amount equal to $10.00 multiplied by the number of shares shown below at such time as the board of trustees or the president of Burridge Funds determines: Purchaser Number of Shares --------- ---------------- Richard M. Burridge 5,000 Kenneth M. Arenberg 5,000 Each Purchaser understands that Burridge Funds has filed a registration statement with the Securities and Exchange Commission (No. 333-11633) on Form N- 1A, which contains the preliminary prospectus describing Burridge Funds, the Fund and the shares. Each Purchaser acknowledges receipt of a copy of the preliminary prospectus. Each Purchaser recognizes that Burridge Funds will not be fully operational until it commences a public offering of its shares. Accordingly, a number of features of the Fund described in the preliminary prospectus, including redemption of shares upon request of shareholders, will not be available until Burridge Funds' registration statement becomes effective under the Securities Act of 1933. 2. Representations and Warranties. Each Purchaser represents and warrants as follows: (a) Each Purchaser is aware that no federal or state agency has made any finding or determination as to the fairness for investment, nor any recommendation nor endorsement, of the shares; (b) Each Purchaser has such knowledge and experience of financial and business matters as will enable each Purchaser to utilize the information made available to such Purchaser in connection with the offering of the shares to evaluate the merits and risks of the prospective investment and to make an informed investment decision; (c) Each Purchaser recognizes that Burridge Funds has only recently been organized, that the Fund has no financial or operating history and, further, that investment in the Fund involves certain risks, and each Purchaser has taken full cognizance of and understands all of the risks related to the purchase of the shares and each Purchaser acknowledges that he has suitable financial resources and anticipated income to bear the economic risks of such an investment; (d) Each Purchaser is purchasing the shares for his own account, for investment, and not with any intention of redemption, distribution, or resale of the shares, either in whole or in part; (e) Each Purchaser will sell the shares purchased by him without registration of them under the Securities Act of 1933 or exemption therefore; (f) Each Purchaser has been furnished with and has read this agreement, the preliminary prospectus and such other documents relating to the Fund and Burridge Funds as he has requested and as have been provided to him by Burridge Funds, and (g) Each Purchaser has also had the opportunity to ask questions of, and receive answers from, officers of Burridge Funds concerning Burridge Funds and the terms of the offering. 3. Rejection of Subscriptions. Each Purchaser recognizes that Burridge Funds reserves the right to reject or limit any subscription. 4. Limitation on Redemption. I acknowledge that redemption of the shares purchased pursuant to this subscription may be limited during the period in which any organizational expenses of the Fund remain unamortized, to the extent necessary to comply with applicable law or regulation, or interpretations thereof. 5. Social Security Number. Each Purchaser certifies under penalties of perjury that the number shown beside his name on this form is the correct social security number and that he is not subject to backup withholding as a result of a failure to report all interest and dividend income to the Internal Revenue Service. Purchaser Social Security Number --------- ---------------------- Richard M. Burridge ###-##-#### Kenneth M. Arenberg ###-##-#### Dated: November 18, 1996 /s/ Richard M. Burridge /s/ Kenneth M. Arenberg - ------------------------------- ------------------------------- Richard M. Burridge Kenneth M. Arenberg 2 EX-99.14 14 IRA AGREEMENT, DISCLOSURE AND APPLICATIONS BURRIDGE FUNDS ROLLOVER IRA PLAN December 15, 1996 - -------------------------------------------------------------------------------- 115 S. LaSalle Street Chicago, Illinois 60603 . 1-888-BURRIDGE - -------------------------------------------------------------------------------- HOW TO OPEN A BURRIDGE FUNDS ROLLOVER IRA ACCOUNT Fill out the application and beneficiary form at the back of this booklet and mail it, together with your check, to Firstar Trust Company at the address shown on the application. If you and your spouse are each setting up an IRA, two separate accounts will be required. Have your spouse fill out the extra application and beneficiary form, and return it along with yours to Firstar Trust Company. MINIMUM CONTRIBUTION The initial contribution must be at least $500,000. Subsequent investments must be at least $10,000. Because the minimum contributions exceed the maximum annual contributions that can be made to a regular IRA, a Burridge Rollover IRA can only be established by "rolling over" a distribution from a qualified retirement plan, a tax-sheltered annuity, or another IRA.
CUSTODIAN FEES Acceptance fee..................................... no charge Transfer to successor trustee...................... $15.00 Transfer from prior trustee........................ $12.00 Annual maintenance fee............................. $12.50 Distribution(s) to a participant (single annual charge for any number of distributions)........... $15.00 Refund of excess contribution...................... $15.00 Periodic distributions per participant............. $ 2.50 Any outgoing wire.................................. $ 7.50
Note: Each IRA account is subject to the above fees, including accounts for spouses and each of multiple accounts for the same participant. The $12.50 annual maintenance fee will be charged to each account by the end of September for each year and enough Fund shares will be redeemed to cover this fee. You may also pay this fee by mailing a check for $12.50 made payable to Firstar Trust Company before September 15th. ROLLOVER CONTRIBUTIONS Because of the minimum required contribution, a Burridge Funds IRA can only be established by "rolling over" a distribution from a qualified employer retirement plan, tax-sheltered annuity, or IRA. If you receive a distribution from the qualified retirement plan of a former employer, you may be eligible to roll over the distribution to an IRA free of tax. You may under certain circumstances make a rollover again to the profit sharing or pension plan of a new employer. If you want to have that right, however, your rollover IRA derived from an employer's qualified plan must be kept separate from any other IRA you may have. Qualified retirement plans are required to withhold 20% of most distributions to you for payment of income taxes unless your plan balance is transferred directly to an IRA or another qualified plan. This means that a direct transfer may be preferable to a rollover for moving your qualified plan balance to a Burridge Funds IRA. See "Transfer From a Qualified Retirement Plan to a Burridge Funds IRA," below. Distributions from tax-sheltered annuity plans, also known as "403(b) plans", maintained by certain governmental and nonprofit employers, may also be eligible to be rolled over or transferred directly to a Burridge Funds IRA under rules similar to those applicable to distributions from qualified retirement plans. Finally, you may also make a rollover to a Burridge Funds IRA from another IRA. However, a rollover of the same funds from one IRA to another may be made no more than once during a 12-month period. Any rollover must be made within 60 days after receipt of the distribution from your employer's qualified plan or your previous IRA. Otherwise, the distribution will be subject to tax for the year you receive it. See Disclosure Statement, Section 2, "Requirements for Rollovers and Direct Transfers." TRANSFER FROM A RETIREMENT PLAN TO A BURRIDGE FUNDS IRA You may also make a direct transfer of funds from your employer's qualified retirement plan, or from a tax-sheltered annuity, to a Burridge Funds IRA. Retirement and annuity plans are required to transfer distributions directly to an IRA if the employee directs, and are also required to withhold 20% of the distribution for taxes if a distribution is not transferred directly to an IRA or another plan. Generally speaking, these rules regarding direct transfers apply to any distribution that could be rolled over into an IRA. The procedure for making a direct transfer from a retirement plan into a Burridge Funds IRA is the same as the procedure for a direct transfer from another IRA, discussed below. TRANSFER TO A BURRIDGE FUNDS IRA FROM ANOTHER IRA You may also make a direct transfer of funds from another IRA to a Burridge Funds IRA. The 12-month restriction on IRA rollovers does not apply to direct transfers. The transfer must be direct from your existing IRA to a Burridge Funds IRA without your having physical contact with the funds transferred. To make a transfer: 2 1) Follow the procedure for opening an account. 2) Complete the enclosed Transfer Form to instruct your present custodian or trustee to transfer the assets of your present account to Firstar Trust Company as successor custodian. Have your signature guaranteed if required by your present custodian. 3) Send the completed transfer form, along with the Burridge Funds IRA application and beneficiary form, to Firstar Trust Company. 4) Firstar Trust Company and your present custodian or trustee will complete the details of transferring your funds to your Burridge Funds IRA. TAX BENEFITS Rollover contributions are not in themselves tax-deductible, but may defer taxation of a distribution from a qualified employer plan, tax-sheltered annuity or IRA. The Burridge Funds IRA is in the form of IRS Form 5305-A, which is automatically deemed acceptable by the Internal Revenue Service. The approval by the IRS relates only to the form of the account and not to the merits of using the account as a retirement plan. WHEN CAN AN ACCOUNT BE OPENED? You can open your account and make a rollover contribution or direct transfer from another IRA or retirement plan at any time during the year, so long as a rollover contribution is made within 60 days after the distribution from the other IRA or retirement plan is received by you. A distribution from a qualified plan may be subject to income tax even if the distribution is rolled over to an IRA. See "Rollover Contributions" and "Transfer From a Qualified Plan to a Burridge Funds IRA," above. DO I PAY TAX ON DIVIDENDS AND DISTRIBUTIONS? No, all dividends and distributions accumulate tax-free. Tax is paid when you (or your beneficiary) withdraw your retirement benefits. See the Disclosure Statement, Section (5), "Income and Penalty Taxes." WHEN MAY I MAKE WITHDRAWALS? Withdrawals can start after age 59 1/2 without penalty, and must start by April 1 after the end of the year in which you (or your spouse, in the case of a spousal account) reach age 70 1/2. Withdrawals can be made in a lump sum or in installments. The Internal Revenue Code imposes complex limits on the length of time over which withdrawals from an IRA can be made. See the Disclosure Statement, Section (4), "Distributions from your IRA." Withdrawals are subject to tax as ordinary income, except for any portion rolled over to another IRA or considered to be a return of nondeductible contributions. See Disclosure Statement, Section (5), "Income and Penalty Taxes." 3 WHAT IF I MAKE A WITHDRAWAL BEFORE AGE 59 1/2? A withdrawal can be made without penalty before age 59 1/2 only in case of death or permanent disability, in the case of certain periodic payments, or to pay certain large medical expenses (including certain medical insurance premiums if you are unemployed). Otherwise, a withdrawal before age 59 1/2 is a premature withdrawal and is subject to a penalty tax of 10% of the portion that is included in your income, in addition to the regular income tax. But neither the regular income tax nor the 10% penalty tax applies to any portion rolled over to another IRA or considered as a return of your nondeductible contributions. HOW ARE DISTRIBUTIONS MADE AFTER MY DEATH? If you die on or after April 1 of the year after you reach age 70 1/2, the remaining balance of your IRA will continue to be distributed to your designated beneficiary at least as rapidly as under the method of distribution in effect before your death. If you die before April 1 of the year after you reach age 70 1/2, the entire balance of your IRA account must be distributed by December 31 of the year in which the 5th anniversary of your death occurs. However, distribution need not be made within this 5-year period if your beneficiary receives payments over a period measured by his or her life or life expectancy beginning no later than December 31 of the year following the year in which you die. If the beneficiary is your spouse, those installment payments don't have to begin until the later of December 31 of the year following the year in which you die or December 31 of the year in which you would have reached age 70 1/2. In addition, a distribution need not be made within 5 years of your death if your spouse is your beneficiary and he or she elects to treat the entire interest in the IRA (or the remaining part of such interest if distribution has already begun) as his or her own IRA subject to the regular IRA distribution requirements. In such a case, your spouse will be considered to be the covered individual under the IRA. If you die before the entire IRA has been distributed to you and your spouse is not your beneficiary, no additional cash contributions or rollover contributions may be accepted by the IRA. If distributions are made from your IRA to your surviving spouse (or to a trust of which your surviving spouse is the income beneficiary), the amount which your surviving spouse or the trust is entitled to receive in each year must be at least equal to the income of your IRA (or of the portion of your IRA which benefits your surviving spouse or the trust) for that year. You have the right to elect the manner in which your life expectancy and the life expectancy of your beneficiary will be calculated. This election must generally be made by the April 1 of the year following the year in which you reach age 70 1/2, and can have a significant effect on your tax and estate planning. If you have a substantial balance in your IRA, you should consult a qualified tax advisor before deciding how to calculate life expectancies. ------------------------------------ 4 The Burridge Funds IRA Plan is sponsored by Burridge Funds. This brief outline of the Plan is not intended as a full explanation of the Individual Retirement Plan, but we hope that we have answered some of the questions that occur to you. WE URGE YOU TO READ THE ENCLOSED MATERIAL THOROUGHLY. 5 BURRIDGE FUNDS ROLLOVER INDIVIDUAL RETIREMENT ACCOUNT Disclosure Statement -------------------- (December 15, 1996) This Disclosure Statement is being given to you to assure that you are informed and understand the nature of an Individual Retirement Account ("IRA"). This disclosure statement explains the rules governing IRAs. Your Right to Revoke this IRA. You may revoke this IRA at any time within seven days after the later of the date you received this Disclosure Statement or the day you established this IRA. For purposes of revocation, it will be assumed that you received the Disclosure Statement no later than the date of your check or transfer direction with which you opened your IRA. To revoke the IRA, you must either mail or deliver a notice of revocation to the following address: Firstar Trust Company, Custodian Burridge Funds P.O. Box 701 Milwaukee, Wisconsin 53201-0701 If a notice of revocation is mailed, it will be deemed mailed on the date of the postmark (or if sent by certified or registered mail, the date of certification or registration) if it is deposited in the mail in the United States, first class postage prepaid and properly addressed. If you revoke your IRA, you are entitled to a return of the entire amount contributed. (1) TYPES OF IRAS An individual retirement account, or IRA, is a trust or custodial account created in the United States for the exclusive benefit of the depositor and his beneficiaries. In order to be tax exempt, the trust or custodial agreement establishing the IRA must meet the following requirements under Section 408 of the Internal Revenue Code: (1) annual contributions must be limited as described below; (2) the trustee or custodian must either be a bank, or another financial institution that has been approved by the IRS; (3) no part of the IRA can be invested in life insurance contracts; (4) the interest of the depositor must be nonforfeitable; (5) the assets of the IRA cannot be commingled with other property except in a common trust fund or common investment fund; and (6) the IRA must satisfy the minimum distribution requirements summarized below. There are several types of IRAs. Many IRAs permit the depositor to make regular annual contributions, either directly to a regular IRA or through a simplified employee pension plan ("SEP-IRA") or, beginning January 1, 1997, a Salary Incentive Match Plan ("SIMPLE-IRA") established by your employer. The amount of contributions is limited by the Internal Revenue Code, and the contributions may or may not be tax deductible. Because the minimum contribution to a Burridge Funds Rollover IRA is $500,000, it is not suitable for use as a regular IRA, SEP-IRA or SIMPLE-IRA. A Burridge Funds IRA can only be used to receive a rollover 6 or direct transfer from a qualified retirement plan, a tax-sheltered annuity plan, or another IRA. For this reason, the limits on the contributions that can be made to other types of IRAs, and on the deductibility of such contributions, will not be described in this Disclosure Statement. You should be aware that some of the rules governing regular IRAs, SEP-IRAs, and SIMPLE-IRAs are different from those described in this Disclosure Statement. (2) REQUIREMENTS FOR ROLLOVERS AND DIRECT TRANSFERS A rollover contribution is a contribution made to an IRA within 60 days after a potentially taxable distribution is received from a qualified employer retirement plan, tax-sheltered annuity, or IRA. To the extent that it is rolled over, the original distribution will not be subject to tax. However, the rollover contribution is not itself tax-deductible. If the original distribution was subject to income tax withholding, you may still roll over the entire pre-tax amount of the distribution. For example, if you receive a lump sum distribution of $500,000 from a qualified retirement plan, the plan will be required to withhold 20%, or $100,000, for income taxes, and you will receive a net distribution of $400,000. You may still defer tax on the entire amount of the distribution by rolling over $500,000 to an IRA, in which event you may be eligible to receive a refund of the $100,000 withheld when you file your tax return for the year, depending on your total tax liability. You could also roll over only the $400,000 you actually received (or any lesser amount), but in that case the amount not rolled over will be subject to tax. There are three basic types of rollovers: rollovers from a qualified pension or profit-sharing plan, rollovers from another IRA, and rollovers from a tax-sheltered annuity. All distributions must be rolled over within 60 days after you receive the distribution to receive tax-free treatment. From a Qualified Plan. In general, you may roll over any portion of a distribution that you receive from a qualified employer-sponsored pension or profit-sharing plan (including a 401(k) plan), except that you cannot roll over (1) one of a series of substantially equal periodic payments (such as an annuity), (2) a minimum distribution required to be made after you reach the age of 70 1/2, or (3) the portion of a distribution that represents the return of your own after-tax contributions. If you receive a distribution of property rather than cash, you can sell the property and roll over the sale proceeds, as long as you complete the rollover within 60 days from the original date of distribution. Distributions from a self-employed retirement plan, commonly known as an "H.R. 10" or "Keogh" plan, are treated as distributions from a qualified employer retirement plan, and may also be rolled over. If you make a rollover from a qualified employer plan to an IRA, you may in turn, under certain circumstances, make a rollover from the IRA into the qualified plan of a subsequent employer. To preserve that right, however, you must keep the rollover IRA separate from any other IRA you may have, since you cannot make a rollover to an employer plan from an IRA to which you have made other types of contributions. 7 Instead of receiving a distribution from a qualified plan and rolling it over, you may also direct the trustee or custodian of any qualified retirement plan to transfer a distribution from the plan directly to an IRA. If a distribution from a plan can be rolled over, the plan is required by law to transfer the distribution directly to an IRA, or another employer's plan, if you so direct. If you do not direct the distribution to be transferred directly to an IRA or another plan, the plan making the distribution will be required to withhold 20% of the distribution for the payment of income taxes, even if you subsequently roll over the distribution. If you should die while still a participant in a qualified plan, in certain cases your spouse may be allowed to make a tax-free rollover to an IRA. However, your spouse may not subsequently roll that amount over into another employer's qualified plan. Beneficiaries other than your spouse are not allowed to roll over distributions they receive after your death. If you have a loan outstanding from your employer's plan when you receive a distribution, the taxable distribution will usually include the amount of the loan. You may roll over the entire taxable distribution, including the amount of the loan balance. However, you may not roll over an outstanding loan to an IRA, or otherwise borrow from an IRA. See "Income and Penalty Taxes - Prohibited Transactions and Pledging Account Assets" below. From Another IRA. In general, any distribution or withdrawal that you receive from an IRA can be rolled over into another IRA within 60 days, except that (1) you cannot roll over the minimum distributions you are required to receive after age 70 1/2, (2) you can only make a rollover from one IRA to another once in any twelve-month period, and (3) a distribution from a SIMPLE- IRA that is made within the first two years after you first begin to participate in the SIMPLE-IRA can only be rolled over to another SIMPLE-IRA. You may also request the trustee or custodian of an IRA to make a direct transfer to the trustee or custodian of another IRA. Such direct transfers are not limited to one in a twelve month period. Unlike the trustees of qualified retirement plans, trustees of IRAs are not legally required to make direct transfers, but most of them do. Your spouse may generally roll over distributions that he or she receives from your IRA after your death, but no beneficiaries other than your spouse may do so. Tax Sheltered Annuities. Tax-sheltered annuity plans, sometimes called "403(b) plans", are a retirement benefit offered by certain governmental and not-for-profit employers, such as schools and hospitals. If you receive a distribution from a tax sheltered annuity plan other than in the form of an annuity, it may generally be rolled over to an IRA under rules similar to those that apply to distributions from qualified employer plans, as described above. As with a rollover distribution from an employer plan, you should keep a rollover from a tax sheltered annuity plan in a separate IRA account and not make any other contributions to it (including rollovers from other types of plans) if you wish to preserve the right to roll over to another tax sheltered annuity plan in the future. Distributions from other types of governmental retirement plans may or may not be eligible for a rollover depending on whether the employer has chosen to comply with IRS guidelines. Distributions from voluntary deferred compensation plans maintained by government and not-for- profit employers, sometimes known as "Section 457 plans", are not eligible for a rollover to an IRA. 8 Strict requirements must be met to qualify for tax-free rollover treatment. You should consult your personal tax advisor in connection with rollovers to and from your IRA. (3) INVESTMENT AND HOLDING OF CONTRIBUTIONS Contributions to your IRA, and the earnings thereon, are invested in shares of Burridge Capital Development Fund, a series of Burridge Funds. The assets in your account are held in a custodial account exclusively for your benefit and the benefit of such beneficiaries as you may designate in writing delivered to the Custodian. The balance in your IRA represents a separate account which is clearly identified as your property and generally may not be combined for investment with the property of another individual. Your right to the entire balance in your account is nonforfeitable. No part of the assets of your account may be invested in life insurance contracts or in collectibles such as works of art, antiques, coins, stamps, etc. (4) DISTRIBUTIONS FROM YOUR IRA Distribution During Your Life. The law permits distributions to be made from an IRA at any time after you attain age 59 1/2 without penalty, and requires that distributions commence no later than April 1 following the calendar year in which you attain age 70 1/2. Distributions may be in the form of a single payment or, in accordance with regulations, in substantially equal monthly, quarterly or annual payments over your life or the joint lives of you and your designated beneficiary, or over a period certain not extending beyond your life expectancy or the joint and last survivor life expectancy of you and your designated beneficiary. However, if your beneficiary is not your spouse, the law imposes an additional requirement called the minimum distribution incidental benefit requirement. In general, this requirement puts a further limit on the maximum payout period. This further limit is based on a table in the income tax regulations, and if this limit applies to you, you should consult your tax advisor to determine your minimum distribution. If you direct distributions over your life or the joint lives of you and your designated beneficiary, the Custodian will use your IRA balance to purchase an immediate annuity contract from an insurance company you choose and your payments will be made under the annuity. You must provide a completed annuity application from the insurance company of your choosing. Any distribution instruction must specify the reason for the distribution. Examples of such reasons are: premature distributions (i.e., distributions before age 59 1/2), rollovers, disability, death, normal (59 1/2 or over), excess contribution returns and other. Distributions After Your Death. If you die after the April 1 after you reach age 70 1/2, but before the entire amount of your IRA has been distributed to you, the balance of your IRA must be distributed to your designated beneficiary at least as rapidly as under the method of distribution in effect before your death. If you die before the April 1 following the year in which you reach age 70 1/2, the entire balance of the account must be distributed by December 31 of the year in which the 5th an- 9 niversary of your death occurs. However, distribution need not be made within this 5-year period if your beneficiary receives payments over a period measured by his or her life or life expectancy beginning no later than December 31 of the year following the year in which you die. If the beneficiary is your spouse, those installment payments don't have to begin until the later of December 31 of the year following the year in which you die or December 31 of the year in which you would have reached age 70 1/2. In addition, a distribution need not be made within 5 years of your death if your spouse is your beneficiary and he or she elects to treat the entire interest in the IRA (or the remaining part of such interest if distribution has already begun) as his or her own IRA subject to the regular IRA distribution requirements. In such a case, your spouse will be considered to be the covered individual under the IRA. If you die before the entire IRA has been distributed to you and your spouse is not your beneficiary, no additional cash contributions or rollover contributions may be accepted by the IRA. If distributions are made from your IRA to your surviving spouse (or to a trust of which your surviving spouse is the income beneficiary), the amount which your surviving spouse or the trust is entitled to receive in each year must be at least equal to the income of your IRA (or of the portion of your IRA which benefits your surviving spouse or the trust) for that year. Calculations of Life Expectancy. As discussed above, the minimum amount that you or your beneficiary must withdraw from your IRA is in many cases determined by your life expectancy or your beneficiary's life expectancy. In general, life expectancies are determined based on actuarial tables issued by the IRS for each year in which you or your beneficiary is required to receive a minimum distribution. If you die before reaching age 70 1/2 and your beneficiary is your surviving spouse, your spouse will also generally recalculate his or her life expectancy for each year in which a minimum distribution is required. Since life expectancies go up as people get older, recalculating your or your spouse's life expectancy each year will ordinarily result in a lower required annual distribution. However, it can also result in an acceleration of the amount that must be distributed, and the tax that must be paid, when you or you and your primary beneficiary die. To avoid this, you (or your surviving spouse) may elect instead to calculate your life expectancy at the time that you are required to begin receiving mandatory distributions. This election must be made before the date on which mandatory distributions must begin, and can't be changed after that date. Accordingly, it is very important that you consult a qualified tax advisor before you are required to begin receiving distributions. (5) INCOME AND PENALTY TAXES Income Tax Treatment. Income tax on distributions that are rolled over into an IRA and earnings on the IRA account balance are generally deferred until you receive distributions. If you have made both deductible and nondeductible contributions to IRAs you maintain, a portion of each distribution you receive from any IRA (whether or not it is the one to which you made nondeductible contributions) will be considered to be a return of nondeductible contributions and therefore not included in your income for tax purposes. The balance of each distribution will be taxed as ordinary income regardless of its original source. The amount of any distribution which is considered to be a return of nondeductible contributions (and therefore not taxed) is determined by multiplying the amount of the distribution by a fraction. The 10 numerator of the fraction is the aggregate amount of nondeductible contributions you have made to all of your IRAs over the years and the denominator is the balance in all your IRAs at the end of the year (after adding back any distributions you received during the year). The aggregate amount which can be excluded from income for all years cannot exceed the amount of nondeductible contributions that you made in those years. Taxable distributions from your account are taxed as ordinary income regardless of their original source. They are not eligible for special tax treatment that may apply to lump sum distributions from qualified employer plans. Penalty Tax for Premature Distributions. Your IRA is intended to provide income for you upon retirement. Accordingly, the law generally imposes a penalty on premature distributions. If you receive a taxable distribution from the IRA before reaching age 59 1/2 and do not roll it over, a nondeductible 10% penalty will be imposed on the portion of the distribution which is included in your gross income. This penalty is in addition to any income tax you must pay on the distribution itself. The penalty does not apply to the extent that the distribution is considered a return of nondeductible contributions or a return of an excess contribution which is permitted tax-free (see below). The penalty also will not apply if the distribution is made due to your permanent disability or death or if the distribution is one of a series of substantially equal periodic payments made over your life (or life expectancy) or over the joint lives (or life expectancies) of you and your beneficiary. Beginning in 1997, the penalty does not apply to certain withdrawals used to pay medical insurance premiums after you have been unemployed for at least 12 weeks, or certain larger medical bills. Penalty Tax for Excess Contributions. Contributions to an IRA above the permissible limits are nondeductible and are subject to an annual nondeductible excise tax of 6% of the amount of such excess contributions for each year that the excess is not withdrawn or eliminated. The tax is paid by the person for whose benefit the IRA is established. If the person who contributed the excess takes no deduction for it and withdraws the excess amount plus the net earnings attributable to such excess on or before the due date (including extensions) for filing the Federal income tax return for the year for which the contribution was made, the 6% excise tax will not be applied but the 10% tax on premature distributions will be applied to the amount of net earnings. Generally, if the excess is withdrawn after the due date (including extensions) for filing the tax return for the year for which the contribution was made, not only will the excess contribution be subject to the 6% excise tax, but the amount of such excess and the net income attributable to it will also be includible in income; and if you have not attained the age of 59 1/2, or are not disabled, you will also be subject to the previously mentioned 10% penalty tax on premature distributions. The law provides, however, that if an individual has made a contribution to an IRA for a year which does not exceed $2,000 (excluding rollover amounts), all or part of which is an excess contribution for which he did not claim a deduction, and he does not correct the excess contribution before the due date (including extensions) for filing his tax return for the year, he nevertheless may withdraw the excess amount contributed (without the net income attributable thereto) at any time without incurring the 10% penalty tax on premature distributions or being required to include the amount withdrawn in income. The 6% excise tax 11 will be imposed even in this special situation for the year of the excess contribution and each subsequent year until the excess is withdrawn or eliminated. As noted above, a Burridge IRA is intended only for rollover contributions, which are not subject to the annual limit on contributions. However, if for any reason a contribution should fail to qualify as a rollover, the penalty tax would be potentially applicable. The law provides that an erroneous rollover contribution may be withdrawn on the same basis as other excess contributions, but the special rules applicable to an excess contribution withdrawn after the due date for filing your tax return apply to the withdrawal of a non-qualifying rollover only if you reasonably relied on erroneous information required to be supplied by the plan, trust or institution making the distribution that was the subject of the rollover. As an alternative to withdrawing excess contributions made to an IRA, such amounts may be eliminated by making reduced contributions in future years; however, you will be required to pay the 6% excise tax on the amount of the excess for the year of the contribution and for each subsequent year until the amount of the excess is deducted in a later year for which you have not contributed the maximum deductible amount. If a contribution is made to your account in an amount less than the permissible limit in order to correct an excess contribution for a previous year for which you did not claim a deduction, you may under certain circumstances, taking into account the limits on contributions, be allowed to treat the amount of the reduction in the current year's contribution as an additional contribution for the current taxable year. Penalty Tax for Under-Distribution. If after April 1 following the year in which you attain age 70 1/2, the amount distributed is less than the minimum amount required by law to be distributed, a 50% excise tax may be imposed on any such deficiency. The minimum amount required by law to be distributed is generally based on your life expectancy or the joint and survivor life expectancy of you and your beneficiary. However, if your beneficiary is not your spouse, the law imposes an additional requirement which is called the minimum distribution incidental benefit requirement. In general, this requirement is designed to prevent you from naming a beneficiary who is much younger than yourself in order to extend your payout period. You should consult your tax advisor to determine your maximum distribution. The Internal Revenue Service may waive the penalty tax for under- distribution if the deficiency was due to reasonable error and reasonable steps are being taken to correct the deficiency. Penalty Tax for Excess Distributions and Accumulations. A 15% penalty tax is generally imposed on annual distributions from retirement arrangements (including IRAs) to the extent that such distributions in a year are considered "excess distributions." A distribution is an "excess distribution" if it exceeds $160,000 (or such higher amount as may be specified by the IRS) during any calendar year. In addition, upon your death, your estate may be subject to a tax of 15% of the excess of the balance in all such retirement arrangements over an amount equal to the present value of an annuity of $160,000 per year. The tax on excess distributions (but not the additional estate tax on excess accumulations) has been suspended for distributions received 12 during 1997, 1998 and 1999. You should discuss how these rules apply to you with your tax advisor. Prohibited Transactions and Pledging Account Assets. If during any taxable year you engage in a so-called "prohibited transaction" with respect to your IRA, the account will lose its tax-exempt status. In this event, the fair market value of all account assets, valued as of the first day of such taxable year, will be deemed distributed to you and includible in your gross income. These prohibited transactions would include borrowing money from your account. If you pledge your account or any portion thereof as security for a loan, such pledged portion will be deemed distributed to you and, to the extent that it does not represent a return of nondeductible contributions, includible in your gross income. If you have not yet attained age 59 1/2, the 10% or 25% penalty tax on premature distributions discussed above will also apply. If your spouse engages in a prohibited transaction with respect to his or her account, the results will be the same. (6) MISCELLANEOUS Federal Income Tax Withholding. Distributions from an IRA to the covered individual or to a beneficiary are subject to Federal income tax withholding unless the covered individual or beneficiary elects to have no withholding apply. The current withholding rate required by the Internal Revenue Code is 10%. Additional information concerning withholding and election forms will be available no later than at the time a distribution is requested. Federal Estate and Gift Taxes. Generally, your IRA will be included in your estate for Federal estate tax purposes. If your spouse is your beneficiary, your IRA may qualify for a deduction for purposes of that tax. An election under an IRA to have a distribution payable to a beneficiary on the death of the covered individual will not be treated as a gift subject to Federal gift tax. Reports to the Internal Revenue Service. You are not required to file Form 5329 with the IRS unless you owe one of the IRA penalty taxes. These are the taxes on excess contributions, premature distributions, prohibited transactions and under distributions after age 70 1/2. Financial Information. The growth in value of the mutual fund shares held in your account can neither be guaranteed nor projected. Plan Sponsor. Burridge Funds is the sponsor of the Burridge Funds IRA and performs most of the ministerial functions in connection with the maintenance of the accounts established under the Burridge Funds IRA. Custodian Fees. Firstar Trust Company as the Custodian of your IRA currently charges an annual maintenance fee of $12.50 per account. You should refer to the fee schedule for other fees which may be applicable. Note that IRAs for spouses require separate accounts, even if only one spouse makes the contributions. Each spouse's account is subject to the above fees. 13 The $12.50 annual maintenance fee will be deducted from your account by the end of September for each year and enough Fund shares will be redeemed to cover this fee. You may also pay this fee by mailing a check for $12.50 payable to Firstar Trust Company before September 15. The Custodian may change any of the above fees from time to time. Requirements for Tax Qualification. The Burridge Funds IRA is in the form of IRS Form 5305-A, which is automatically deemed acceptable by the IRS as to form. The approval by the IRS relates only to the form of the account and not to the merits of using the account as a retirement plan. Additional Information. You may obtain additional information regarding the taxation of IRAs from any district office of the Internal Revenue Service. 14 Form 5305-A (Rev. October, 1992) Department of the Treasury Internal Revenue Service BURRIDGE FUNDS INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT (Under Section 408(a) of the Internal Revenue Code) (December 15, 1996) ARTICLE I The Custodian may accept additional cash contributions on behalf of the Depositor for a tax year of the Depositor. The total cash contributions are limited to $2,000 for the tax year unless the contribution is a rollover contribution described in section 402(c) (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified employee pension plan as described in section 408(k). Rollover contributions before January 1, 1993 include rollovers described in section 402(a)(5), 402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to a simplified employee pension plan as described in section 408(k). ARTICLE II The Depositor's interest in the balance in the custodial account is nonforfeitable. ARTICLE III 1. No part of the custodial funds may be invested in life insurance contracts, nor may the assets of the custodial account be commingled with other property except in a common trust fund or common investment fund (within the meaning of section 408(a)(5)). 2. No part of the custodial funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3) which provides an exception for certain gold and silver coins and coins issued under the laws of any state. ARTICLE IV 1. Notwithstanding any provision of this agreement to the contrary, the distribution of the Depositor's interest in the custodial account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and Proposed Regulations section 1.408-8, including the incidental death benefit provisions of Proposed Regulations section 1.401(a)(9)- 2, the provisions of which are incorporated by reference. 2. Unless otherwise elected by the time distributions are required to begin to the Depositor under paragraph 3, or to the surviving spouse under paragraph 4, other than in the case of a life annuity, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Depositor and the surviving spouse and shall apply to all subsequent years. The life expectancy of a nonspouse beneficiary may not be recalculated. 3. The Depositor's entire interest in the custodial account must be, or begin to be, distributed by the Depositor's required beginning date, (April 1 following the calendar year end in which the Depositor reaches age 70 1/2). By that date, the Depositor may elect, in a manner acceptable to the Custodian, to have the balance in the custodial account distributed in: (a) A single sum payment. (b) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the life of the Depositor. 15 (c) An annuity contract that provides equal or substantially equal monthly, quarterly, or annual payments over the joint and last survivor lives of the Depositor and his or her designated beneficiary. (d) Equal or substantially equal annual payments over a specified period that may not be longer than the Depositor's life expectancy. (e) Equal or substantially equal annual payments over a specified period that may not be longer than the joint life and last survivor expectancy of the Depositor and his or her designated beneficiary. 4. If the Depositor dies before his or her entire interest is distributed to him or her, the entire remaining interest will be distributed as follows: (a) If the Depositor dies on or after distribution of his or her interest has begun, distribution must continue to be made in accordance with paragraph 3. (b) If the Depositor dies before distribution of his or her interest has begun, the entire remaining interest will, at the election of the Depositor or, if the Depositor has not so elected, at the election of the beneficiary or beneficiaries, either (i) Be distributed by December 31 of the year containing the fifth anniversary of the Depositor's death, or (ii) Be distributed in equal or substantially equal payments over the life or life expectancy of the designated beneficiary or beneficiaries starting by December 31 of the year following the year of the Depositor's death. If, however, the beneficiary is the Depositor's surviving spouse, then this distribution is not required to begin before December 31 of the year in which the Depositor would have turned age 70 1/2. (c) Except where distribution in the form of an annuity meeting the requirements of section 408(b)(3) and its related regulations has irrevocably commenced, distributions are treated as having begun on the Depositor's required beginning date, even though payments may actually have been made before that date. (d) If the Depositor dies before his or her entire interest has been distributed and if the beneficiary is other than the surviving spouse, no additional cash contributions or rollover contributions may be accepted in the account. 5. In the case of a distribution over life expectancy in equal or substantially equal annual payments, to determine the minimum annual payment for each year, divide the Depositor's entire Interest in the Custodial account as of the close of business on December 31 of the preceding year by the life expectancy of the Depositor (or the joint life and last survivor expectancy of the Depositor and the Depositor's designated beneficiary, or the life expectancy of the designated beneficiary, whichever applies). In the case of distributions under paragraph 3, determine the initial life expectancy (or joint life and last survivor expectancy) using the attained ages of the Depositor and designated beneficiary as of their birthdays in the year the Depositor reaches age 70 1/2. In the case of a distribution in accordance with paragraph 4(b)(ii), determine life expectancy using the attained age of the designated beneficiary as of the beneficiary's birthday in the year distributions are required to commence. 6. The owner of two or more individual retirement accounts may use the "alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution requirements described above. This method permits an individual to satisfy these requirements by taking from one individual retirement account the amount required to satisfy the requirement for another. ARTICLE V 1. The Depositor agrees to provide the Custodian with information necessary for the Custodian to prepare any reports required under section 408(i) and Regulations section 1.408-5 and 1.408-6. 2. The Custodian agrees to submit reports to the Internal Revenue Service and the Depositor prescribed by the Internal Revenue Service. 16 ARTICLE VI Notwithstanding any other articles which may be added or incorporated, the provisions of Articles I through III and this sentence will be controlling. Any additional articles that are not consistent with section 408(a) and related regulations will be invalid. ARTICLE VII This agreement will be amended from time to time to comply with the provisions of the Code and related regulations. Other amendments may be made with the consent of the persons whose signatures appear below. ARTICLE VIII 1. Definitions. "Investment Company" shall mean an investment company as defined in Internal Revenue Code Section 851(a), shares of which Burridge Funds has agreed to offer for investment under this Account. "Investment Company Shares" or "Shares" shall mean shares of beneficial interest or capital stock of the Investment Company. 2. Investment of Account Assets. (a) Each contribution forwarded by the Depositor to the Custodian shall identify the Depositor's account number and be accompanied by a statement signed by the Depositor identifying the Investment Company Shares in which that contribution is to be invested. The Custodian may return to the Depositor, without liability for interest thereon, any contributions which are not accompanied by adequate account identification or an appropriate signed statement directing investment of those contributions. (b) Contributions shall be invested in whole and fractional Investment Company Shares at the price and in the manner in which such shares are then being publicly offered by the Investment Company. All distributions received on Investment Company Shares held in the Custodial Account shall be reinvested in like Shares and credited to such Account. If any distribution of Investment Company Shares may be received at the election of the shareholder in additional like Shares or in cash or other property, the Custodian shall elect to receive such distribution in additional like Investment Company Shares. (c) All Investment Company Shares acquired by the Custodian shall be registered in the name of the Custodian or its registered nominee. The Depositor shall be the beneficial owner of all Investment Company Shares held in the Custodial Account and the Custodian shall not vote any of such shares, except upon written direction of the Depositor. The Custodian agrees to forward to every Depositor a then current Prospectus, reports, notices, proxies and related proxy soliciting materials applicable to Investment Company Shares received by the Custodian. (d) The Depositor may at any time, by a manually signed direction delivered to the Custodian, redeem any number of Investment Company Shares held for his account and reinvest the proceeds in the Shares of any other Investment Company. Telephone redemptions and reinvestments shall be done at the price and in the manner in which such Shares are then being redeemed or offered by the respective Investment Companies. 3. Amendment and Termination. (a) Burridge Funds may, with the written approval of the Custodian, amend the Custodial Account in whole or in part (including retroactive amendments) by delivering to the Depositor written notice of such amendment setting forth the substance and effective date of the amendment. The Depositor shall be deemed to have consented to any such amendments not objected to in writing by the Depositor within thirty (30) days of receipt of the notice, provided that no amendment shall cause or permit any part of the assets of the Custodial Account to be diverted to purposes other than for the exclusive benefit of the Depositor or his beneficiaries, nor shall any amendment be made except in accordance with the applicable law and regulations affecting this Custodial Account. (b) The Depositor may at any time terminate the Custodial Account by delivering to the Custodian a written notice of such termination setting forth the effective date thereof, together with any required withholding information. 17 (c) The Custodial Account created by this Agreement shall automatically terminate upon distribution to the Depositor or the beneficiary designated under Paragraph 6 of Article VIII hereof of the entire balance in the Custodial Account. (d) The Custodian may be removed by the Depositor at any time upon thirty (30) days written notice to the Custodian. The Custodian may elect to terminate the Custodial Account upon thirty (30) days written notice to the Depositor. (e) In the event that the assets of any Investment Company in which the Custodial Account is invested are transferred to or acquired by any other investment company or other commingled investment fund which is a permissible investment for an individual retirement account, by merger or otherwise, the Custodian may make such amendments to this Agreement, or take such other action, as it may determined to be necessary or appropriate to accomplish such transaction and the exchange of Investment Company Shares for shares or other appropriate units of ownership in such successor fund. The consent of the Depositor shall not be required for any such amendment or action, but the Depositor shall be promptly notified thereof, and shall have the right to withdraw the funds in the Custodial Account without fee, charge, load or penalty of any kind. 4. Taxes and Custodial Fees. Any income taxes or other taxes of any kind whatsoever that may be levied or assessed upon or in respect of the assets of the Custodial Account, or the income arising therefrom, any transfer taxes incurred, all other administrative expenses incurred by the Custodian in the performance of its duties, including fees for legal services rendered to the Custodian, and the Custodian's compensation, shall be paid from the Custodial Account. Unusual administrative responsibilities not contemplated by the fee schedule will result in such additional charges as will reasonably compensate the Custodian for the services performed. The custodian fee listed in the fee schedule will be deducted by the Custodian from the initial contribution received from the Depositor. The annual maintenance fee will be deducted on the last business day in September for each year and enough fund shares will be redeemed to cover this fee. Fees as listed on the fee schedule will be deducted from the refund or redemption proceeds at the time of distribution or redemption and the remaining balance will be remitted to the Depositor in the case of distribution, or will be reinvested in accordance with the Depositor's instructions. 5. Reports and Notices. (a) The Custodian shall keep adequate records of transactions it is required to perform hereunder. No later than sixty (60) days after the close of each calendar year, or after the Custodian's resignation or removal pursuant to Article VIII, Paragraph 3, the Custodian shall render to Depositor a written report or reports reflecting the transactions effected by it during such period and the assets and liabilities of the Custodial Account at the close of the period. (b) All communications or notices required or permitted to be given herein shall be deemed to be given upon receipt by the Custodian at P.O. Box 701, Milwaukee, Wisconsin 53201-0701, the Investment Company and Burridge Funds at P.O. Box 701, Milwaukee, Wisconsin 53201-0701, or the Depositor at his most recent address shown in the Custodian's records. The Depositor agrees to advise the Custodian promptly, in writing, of any change of address. 6. Designation of Beneficiary. The Depositor shall have the right, by written notice to the Custodian, to designate a beneficiary or beneficiaries, primary and contingent, to receive any benefit to which such Depositor may be entitled in the event of his death prior to the complete distribution of such benefit. In the event the Depositor has not designated any beneficiaries, or if all beneficiaries shall predecease the Depositor, the following persons shall take in the order named: (a) Spouse of the Depositor; (b) If the spouse shall predecease the Depositor, then in equal shares to any children surviving the Depositor and to the descendants then living of a deceased child, by the right of representation, or (c) If the Depositor shall leave neither spouse nor descendants surviving, then to the personal representative of the Depositor's estate. 18 The determination of the Custodian as to the person entitled to receive any distribution from the Custodial Account following the death of the Depositor, if made in good faith, shall be conclusive and binding on all persons claiming an interest in the Depository Account; provided that nothing provided herein shall be construed to preclude the Custodian from filing an action in the nature of interpleader or other appropriate proceeding in a court of competent jurisdiction to determine the person entitled to receive such distribution. Any expenses incurred by the Custodian in determining the person entitled to receive a distribution from the Custodial Account, including without limitation attorneys fees in any such action, shall be reimbursed from the Custodial Account. 7. Inalienability of Benefits. The benefits provided hereunder shall not be subject to alienation, assignment, garnishment, attachment, execution or levy of any kind of any attempt to cause such benefits to be so subjected shall not be recognized except to the extent as may be required by law. 8. Rollover Contributions. The Custodian may receive rollover contributions as described in section 408(d)(3) or any other applicable provisions of the Code, and regulations promulgated thereunder. If any property is transferred to the Custodian as a rollover contribution, such property shall be sold by the Custodian and the proceeds reinvested as provided in section 2 of this Article VIII. The Custodian reserves the right to refuse to accept any contributions which are not in the form of cash. 9. Conflict in Provisions. To the extent that any of the provisions of Article VIII shall conflict with the provisions of Articles IV, V, or VII, the provisions of Article VIII shall prevail. 10. Status of Depositors. Neither the Depositor nor any other person shall have any legal or equitable right against the Custodian or the Investment Company except as provided herein. The Depositor agrees to indemnify and hold the Custodian harmless from and against any liability that the Custodian may incur in the administration of the Account unless arising from the Custodian's own negligence or misconduct. 11. Loss of Exemption. If the Custodian receives notice that the Depositor's Account has lost its tax-exempt status under section 408 of the Code for any reason, including by reason of a transaction prohibited by section 4975 of the Code, the Custodian shall distribute to the Depositor the entire balance in the Account, in cash or in kind, in the sole discretion of the Custodian no later than 90 days after the date the Custodian receives such notice. 12. Applicable State Law. This Custodial Account shall be construed, administered and enforced according to the laws of the State of Wisconsin except to the extent Federal law supersedes Wisconsin law. 13. Distributions to Surviving Spouse. If distributions from the Custodial Account are to be made to the Depositor's surviving spouse, or to a trust of which the Depositor's surviving spouse is the income beneficiary, the amount which the surviving spouse (or such trust) is entitled to receive in each year shall not be less than the income of the Custodial Account (or of the portion of the Custodial Account with respect to which the surviving spouse or such trust is the beneficiary) for such year, as determined under section 2056(b)(7) of the Code. 14. Minimum Distributions; Election not to Recalculate Life Expectancies. The following provisions supplement the provisions of Article IV with respect to minimum required distributions, and shall control over the provisions of Article IV in the event of any inconsistency. All paragraph references in this paragraph 14 are to paragraphs of Article IV unless otherwise provided. (a) If the Depositor fails to withdraw the entire balance in the Custodial Account by the April 1 of the year following the year in which he attains age 70 1/2, he shall be deemed to have elected to receive payments under paragraph 3(d) or, if he has a designated beneficiary (as determined under Part D of Proposed Regulations section 1.401(a)(9)-1) under paragraph 3(e). A beneficiary shall be deemed to have elected the method described in paragraph 4(b)(ii) if either he withdraws the minimum amount required for the first year under the method described in paragraph 4(b)(ii) and does not specifically elect the method described in paragraph 4(b)(i) by the end of such year, or if the date specified in paragraph 4(b)(i) occurs first and he has not withdrawn the entire balance in the Custodial Account by that time; otherwise, the beneficiary shall be deemed to have elected the method described in paragraph 4(b)(i). (b) If there is more than one beneficiary entitled to receive distributions on equal priority upon the death of the Depositor or a prior beneficiary then, to the extent permitted by Proposed Regulations section 19 1.401(a)(9)-1, Q&A H-2, and subject to such requirements and limitations as the Custodian may establish, the Custodial Account may be divided into separate accounts for purposes of Article IV and this paragraph. (c) Notwithstanding the references to "equal or substantially equal" payments, if the Depositor or a beneficiary is receiving distributions under paragraph 3(d), 3(e), or 4(b)(ii), he may withdraw amounts that exceed the minimum amount required by paragraph 5 in any year, provided that any excess shall not be credited against the minimum amount required to be withdrawn in subsequent years. Withdrawals may also be made at irregular intervals, provided that the minimum amount required for each year shall be withdrawn by the last day of such year, except that the minimum amount for the year in which the Depositor attains age 70 1/2, but no subsequent year, may be withdrawn by April 1 of the following year. (d) In lieu of the methods of recalculating life expectancies annually as specified in paragraph 2, the Depositor may elect for purposes of paragraph 3(c) or 3(d), and the Depositor's surviving spouse may elect for purposes of paragraph 4(b)(ii), to have his life expectancy, or his and his designated beneficiary's joint and last survivor life expectancy, or the surviving spouse's life expectancy, initially calculated in the year specified in paragraph 5 and thereafter reduced by one year in each subsequent year. All elections described in this paragraph 14(d) shall be made in writing in accordance with procedures established by the Custodian and the Proposed Regulations or successors thereto. Such elections must be made and, if made, shall be irrevocable after the date upon which distributions are required to commence under paragraph 3 or 4(b)(ii). (e) All references to the Proposed Regulations section 1.401(a)(9)-1 and 1.401(a)(9)-2 contained in Article IV and this paragraph 14 include the applicable provisions of Proposed Regulations section 1.408-8 applying such Proposed Regulations to individual retirement accounts, any subsequent amendments to any such Proposed Regulations, and the applicable provisions of the permanent Regulations, when issued, all of which are incorporated by reference and shall control over any contrary provision of this Agreement. Reference to specific provisions of the Proposed Regulations shall not be construed to limit reference to other provisions where appropriate in the interpretation of Article IV and this paragraph 14. 20 BURRIDGE FUNDS ROLLOVER IRA APPLICATION COMPLETE THIS APPLICATION AND SEND ALONG WITH YOUR CHECK MADE PAYABLE TO BURRIDGE FUNDS, TO: FIRSTAR TRUST COMPANY, Attn: Burridge Funds, P.O. Box 701, Milwaukee, Wisconsin, 53201-0701. 1. IRA APPLICANT Name of Individual: Social Security No.: -------------------------------------- ------------------------------------- Street Address: Birth Date: -------------------------------------- ------------------------------------- City: State: Zip Code: -------------------------------------- ------------------------------------- Home Phone: ( ) Business Phone: ( ) -------------------------------------- ------------------------------------- 2. CONTRIBUTION TYPE Contributions are limited to rollovers or direct transfers from qualified retirement plans, tax-sheltered annuities, and other IRAs. Indicate whether this is a [ ] rollover or [ ] direct transfer (CHECK ONE) and indicate the source of the funds below: [ ] Qualified employer plan or IRA derived from a rollover from such a plan [ ] Tax-sheltered annuity (403(b)) plan or IRA derived from a rollover from such a plan [ ] Other type of IRA (NOTE: certain distributions from a SIMPLE-IRA can only be rolled into another SIMPLE-IRA) 3. INVESTMENT OF CONTRIBUTIONS Your contribution will be invested in whole and fractional shares of Burridge Capitol Development Fund at the price and in the manner in which such shares are being offered by Burridge Funds Investment Minimums: $________________. There is an Annual Maintenance Fee charged by the Custodian of $12.50. This fee is paid automatically by redeeming shares from your account. 4. BENEFICIARY DESIGNATION I hereby designate the following as my Beneficiary(ies) under my Burridge Funds Rollover Individual Retirement Account (IRA): - -------------------------------------- --------------------------------------- Name Relationship - -------------------------------------- --------------------------------------- Street Address Social Security No. - ------------------- ------------------- ------------------- -------------- City State Zip Code Birth Date Every payment under my IRA by reason of my death shall be made to my Beneficiary if he or she is living at the time such payment becomes due; and if there is no designated Beneficiary living at the time any such payment becomes due, the payment shall be made to my estate. A Beneficiary Designation shall be valid only if dated, signed and filed with the Custodian under the Plan before my death. I understand that I may change my beneficiary designation by completing a new Beneficiary Designation and returning it to the Custodian. SIGNATURE OF APPLICANT: I hereby adopt the Burridge Funds Individual Retirement Plan and Custodial Agreement. I appoint Firstar Trust Company as Custodian and agree to be bound by the provisions of the Plan and Custodial Agreement. I certify that the foregoing information is correct and that I received a copy of the Disclosure Statement relating to the Plan and custodian fees, as well as a copy of the current prospectus(es) of the Fund(s) in which my initial investment is to be made. The terms, provisions and limitations of the IRA plan and Custodial Agreement, as amended from time to time, are controlling and shall always govern all rights of myself, my Beneficiaries and all persons claiming under, by or through them, or any of them. - ------------------------------ ------------------------------------------- Date Signature of Applicant THIS DOCUMENT WILL BE RETAINED BY FIRSTAR TRUST COMPANY. TRANSFER FORM BURRIDGE FUNDS COMPLETE THIS FORM TO TRANSFER AN EXISTING IRA OR PLAN BALANCE TO A BURRIDGE FUNDS ROLLOVER IRA PART I (To be completed by investor and mailed to Firstar Trust Company, Attention: Burridge Funds, P.O. Box 701, Milwaukee, Wisconsin 53201- 0701. If you are opening a new account, enclose a Burridge Funds IRA application.) TO: FIRSTAR TRUST COMPANY: IF THIS IS A DIRECT TRANSFER FROM AN EMPLOYER'S QUALIFIED PLAN, OR TAX-SHELTERED ANNUITY SEE THE NOTICE ON THE NEXT PAGE. The assets received are to be invested in: [ ] My existing Burridge Funds IRA in Burridge Funds Account No. ______________________________________________________. [ ] My new Burridge Funds IRA. (A signed IRA Application must be completed and returned with this Transfer Form.) - -------------------------------------- -------------------------------------- Investor's Name Daytime Phone - --------------------------- ---------------- --------------- ---------------- Street City State Zip Code Investor's Signature____________________________________ Date__________________ TO: NAME OF PRESENT CUSTODIAN/TRUSTEE: ---------------------------------------------------------------------------- Mutual Fund (if applicable)_______________________ Acct. No.___________________ Address _________________________________________ Phone No.___________________ Street _____________________________________ _______________ ______________ City State Zip Code Present Custodian/Trustee: I have established an account under the Burridge Funds Individual Retirement Account. Please transfer the assets (cash only) indicated below to Firstar Trust Company as successor custodian. [ ] All Assets [ ] $__________only [ ] At maturity date of ______________ [ ] Immediately (I am aware of any penalties which may occur) - -------------------------------------------------------------------------------- PART II (To be completed by Firstar Trust Company) TO: THE ABOVE-NAMED CUSTODIAN/TRUSTEE: Firstar Trust Company accepts its appointment as custodian for the above account. Please forward a check, as directed above by the investor, payable to: Firstar Trust Company, FBO_________________________________________________ Mail check and accompanying documents, if any, to: Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701 FIRSTAR TRUST COMPANY IMPORTANT NOTICE To recipients of Distributions from Qualified Retirement Plans or Tax-Sheltered (403(b)) Annuities: The law requires that 20% of your distribution from your employer's qualified retirement plan or tax-sheltered annuity eligible for rollover be withheld for tax purposes unless the distribution is made payable directly to the custodian of your rollover IRA or another qualified plan or tax-sheltered annuity. If you are about to receive a distribution from your employer plan or annuity which is eligible for rollover, that distribution may take one of the three forms: 1. Your employer or plan trustee may deliver a check to you. If so, make sure the check is payable as follows: Burridge Funds Firstar Trust Company, Custodian A/O ____________________________________________________ IRA Rollover (your name) and deliver it along with a completed application to the following: Firstar Trust Company P.O. Box 701 Milwaukee, WI 53201 2. Your employer or plan trustee may forward your distribution directly to us. If this occurs, follow the same instructions as above. 3. If your employer requires that an account is opened before sending the check, make sure that you have sent a completed application to Firstar Trust Company with the indication that you are about to receive a rollover. 4. If your employer will be wiring funds to Firstar Trust Company, the wiring instructions are as follows: Firstar Bank Milwaukee, N.A. For further credit to: ABA No. 0750-00022 ---------------------- BURRIDGE FUNDS For credit to: - -------------- FIRSTAR TRUST COMPANY ----------------------------------------- Account No. 112-950-027 (Your Name) ----------------------------------------- (Account Number) EX-27 15 FINANCIAL DATA SCHEDULE
6 This schedule contains summary financial information extracted from Statement of Net Assets-November 18, 1996 and is qualified in its entirety by reference to such financial statements. 01 Capital Development Fund OTHER JUN-30-1997 NOV-18-1996 NOV-18-1996 0 0 0 182,270 0 182,270 0 0 82,270 82,270 0 100,000 10,000 0 0 0 0 0 0 100,000 0 0 0 0 0 0 0 0 0 0 0 0 10,000 0 0 100,000 0 0 0 0 0 0 0 100,000 0 0 0 0 0 0 10.00 0 0 0
EX-99.18 16 FORM OF ACCOUNT APPLICATION Exhibit 18 Burridge Capital Development Fund PURCHASE APPLICATION Mail To: Burridge Funds Overnight Express Mail To: Burridge Funds C/O Firstar Trust Company Mutual Funds Services PO Box 701 615 E. Michigan St. Milwaukee, WI 53201-0701 Milwaukee, WI 53202 DO NOT USE FOR AN IRA Use this form for individual, custodial, trust, profit sharing or pension plan accounts. Do not use this form for the Burridge Funds sponsored IRA or SEP IRA account types. For any additional information please call Burridge Funds at 1-888-287-7343. ================================================================================ A. INVESTMENT [_] By check Payable to Burridge Funds [_] By wire: Call 1-888-287-7343. Indicate total amount and date of wire $___________ Date________________ The initial minimum investment is $500,000 Amount Minimum additions to the Fund are $10,000 $_______________________ DISTRIBUTION OPTIONS: Capital Gains Capital Gains Capital Gains Capital Gains & Dividends & Dividends Cash & Dividends Reinvested & Reinvested In Cash Reinvested Dividends In Cash [_] [_] [_] [_] Capital gains & dividends will be reinvested if no option is selected. ================================================================================ B. REGISTRATION 1._____________________________ _________ ____________________________________ FIRST NAME M.I. LAST NAME _____________________________ _______________________________________________ SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr) 1._____________________________ _________ ____________________________________ FIRST NAME M.I. LAST NAME _____________________________ _______________________________________________ SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr) *If two names are given, registration will be Joint Tenancy with Rights of Survivorship (JTWROS), unless otherwise specified. 2._____________________________________________________________ ______________ CUSTODIAN'S FIRST NAME (ONLY ONE PERMITTED) M.I. _____________________________________________________________ LAST NAME _____________________________________________________________ ______________ MINOR'S FIRST NAME (ONLY ONE PERMITTED) M.I. _____________________________________________________________ LAST NAME _____________________________________________ ______________________________ MINOR'S SOCIAL SECURITY # MINOR'S BIRTH DATE (Mo/Dy/Yr) _____________________________________________ STATE OF RESIDENCE 3.______________________________________________________________________________ NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION) ______________________________________________________________________________ NAME OF TRUST/CORPORATION/PARTNERSHIP _____________________________________________ ______________________________ SOCIAL SECURITY #/TAX ID# DATE OF AGREEMENT (Mo/Dy/Yr) * Additional documentation and certification may be requested **Corporate Resolution is required ================================================================================ C. ADDRESS Mailing Address ___________________________________________________ ________________________ STREET APT/SUITE _______________________________________ ________________________ __________ CITY STATE ZIP _______________________________________ ____________________________________ DAYTIME PHONE# EVENING PHONE# [_] Duplicate Confirmation to: _____________________________ _________ ___________________________________ FIRST NAME M.I. LAST NAME ___________________________________________________ ________________________ STREET APT/SUITE _______________________________________ ________________________ __________ CITY STATE ZIP ================================================================================ DO NOT WRITE BELOW THIS LINE, FOR FIRSTAR TRUST COMPANY USE ONLY. ================================================================================ D. TELEPHONE OPTIONS Please select the following option(s) that you would like on your account: INITIAL PURCHASES MAY NOT BE MADE BY TELEPHONE. Your signed Application must be received at least 15 business days prior to initial transaction. An unsigned voided check (for checking accounts) or a savings account deposit slip is required with your application. [_] TELEPHONE PURCHASE. Permits any subsequent purchase of shares to be made using your bank account to clear the transaction. Complete bank account information below. [_] TELEPHONE REDEMPTION. The proceeds (up to $50,000) will be mailed to the address in section C or deposited (via wire payment) to your bank account. Complete bank account information below. A $10.00 fee will be charged to your account for each wire payment. *To ensure proper crediting/debiting of your bank account, please attach a voided check or a deposit slip. ____________________________________________ _______________________________ STREET ROUTING NUMBER ____________________________________________ _______________________________ ADDRESS CITY ___________________________ _______________ _______________________________ STATE ZIP ACCOUNT NUMBER ================================================================================ E. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE I have received and read the Prospectus for the Burridge Capital Development Fund (the "Fund"). I understand the Fund's investment objectives and policies and agree to be bound by the terms of the prospectus. I am of legal age in my state of residence and have full authority to purchase shares of the Fund and to establish and use related privileges. Neither the Fund nor its transfer agent will be responsible for the authenticity of transaction instructions received by telephone, provided the reasonable security procedures have been followed. By selecting the option in Section D , I hereby authorize the Fund to initiate credits and debits to my account at the bank indicated in Section D and for the bank to credit or debit the same to such account through the Automated Clearing House ("ACH") system. UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER, AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. THE IRS DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. _____________________________________________________________________________ DATE (Mo/Dy/Yr) SIGNATURE OF OWNER* _____________________________________________________________________________ DATE (Mo/Dy/Yr) SIGNATURE OF CO-OWNER, if any *If shares are to be registered in (1) joint names, both persons should sign, (2) a custodian for a minor, the custodian should sign, (3) a trust, the trustee(s) should sign, or (4) a corporation or other entity, an officer should sign and print name and title on space provided below. _____________________________________________________________________________ PRINT NAMES AND TITLE OF OFFICER SIGNING FOR A CORPORATION OR OTHER ENTITY ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----