<PAGE> 1
SEI TAX EXEMPT TRUST
KANSAS TAX FREE INCOME PORTFOLIO
OAKS, PENNSYLVANIA 19456
March 28, 1997
Dear Shareholder:
A Special Meeting of Shareholders of Kansas Tax Free Income Portfolio (the
"SEI Kansas Portfolio"), a series of the SEI Tax Exempt Trust (the "SEI Trust")
has been called for April 28, 1997 to address matters that are important to you.
As you may know, INTRUST Bank, N.A. ("INTRUST"), the investment adviser to
the SEI Kansas Portfolio, has taken steps to consolidate its mutual fund
investment advisory activities. In the first step of its consolidation process,
INTRUST has recently organized its own family of mutual funds, named INTRUST
Funds Trust ("INTRUST Funds"). INTRUST Funds is a Delaware business trust and an
open-end diversified management investment company. INTRUST Funds has multiple
series, one of which will be the Kansas Tax-Exempt Bond Fund (the "INTRUST
Kansas Portfolio"), a series with the same investment objectives as the SEI
Kansas Portfolio. INTRUST Funds have the ability to adopt a "master-feeder"
structure which means that each series of INTRUST Funds will seek to achieve its
investment objective by investing all of that series' investable assets in a
corresponding series of a master portfolio with the same investment objective of
the respective series of INTRUST Funds.
As the next step in the consolidation process, you are being asked to
consider and approve a proposed Agreement and Plan of Reorganization (the
"Reorganization Agreement"). The Reorganization Agreement provides that the SEI
Kansas Portfolio will transfer substantially all of its assets and its stated
liabilities to the newly created INTRUST Kansas Portfolio. If approved by
shareholders, the transaction is expected to occur on or after May 16, 1997.
The Board of Trustees of the SEI Trust has considered a variety of factors
and unanimously approved the Reorganization Agreement and transactions
contemplated thereby. The reorganization is expected to benefit shareholders
because:
- Shareholders will have a broader array of INTRUST-advised investment
options and distribution channels available to them.
- Immediately following the reorganization, shareholders will
experience the same actual total expense ratios.
- INTRUST has made a voluntary commitment that through its first year
of operation the actual total expense ratio for the INTRUST Kansas
Portfolio shall be no greater than the actual total expense ratio of
the SEI Kansas Portfolio.
You should consider the following in connection with the proposed
reorganizations:
- The reorganization transaction will not result in a change in the
value of your investment.
- The reorganization transaction will be tax-free and will not involve
any sales loads, commissions or transaction charges.
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- The investment policies and objective of the INTRUST Kansas
Portfolio are the same as the objective and policies of SEI Kansas
Portfolio.
- INTRUST will serve as the investment adviser to the INTRUST Kansas
Portfolio, thus providing continuity of investment management.
The Reorganization Agreement and other related matters are discussed in
detail in the enclosed Combined Proxy Statement/Prospectus, which you should
read carefully.
VOTING INSTRUCTIONS
Enclosed is a proxy card for the meeting. We urge you to read the enclosed
Combined Proxy Statement/Prospectus and to vote by completing, signing and
returning the enclosed proxy card in the prepaid envelope. Every vote counts.
We are excited about the reorganization and the potential benefits it
provides to shareholders who invest in INTRUST Funds. Hopefully, you will agree
by voting yes and returning your proxy card as soon as possible.
Sincerely,
/s/ David G. Lee
David Lee, President
<PAGE> 3
SEI TAX EXEMPT TRUST
KANSAS TAX FREE INCOME PORTFOLIO
OAKS, PENNSYLVANIA 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 28, 1997
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders of Kansas
Tax Free Income Portfolio (the "SEI Kansas Portfolio"), a series of SEI Tax
Exempt Trust (the "SEI Trust") will be held at the offices of BISYS Fund
Services, 3435 Stelzer Road, Columbus, Ohio 43219, on April 28, 1997, at 10:00
a.m. Eastern Time for the following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and
Plan of Reorganization and the transactions contemplated thereby, including (a)
the transfer of substantially all of the assets and stated liabilities of the
SEI Kansas Portfolio to the Kansas Tax-Exempt Bond Fund ("INTRUST Kansas
Portfolio"), a series of the newly organized INTRUST Funds Trust ("INTRUST
Funds") in exchange for shares of INTRUST Kansas Portfolio's Institutional
Service Class; and (b) the distribution of the Shares so received to
shareholders of the SEI Kansas Portfolio.
ITEM 2. To transact such other business as may properly come before the
Special Meeting or any adjournment(s) thereof.
The proposed reorganization and related matters are described in the
attached Combined Proxy Statement/Prospectus. Appendix A to the Combined Proxy
Statement/Prospectus is a copy of the Agreement and Plan of Reorganization. A
copy of the Prospectus for the INTRUST Kansas Portfolio is included with this
Combined Proxy Statement/Prospectus.
Shareholders of record of the SEI Kansas Portfolio as of the close of
business on March 21, 1997 are entitled to notice of, and to vote at, the
Special Meeting or any adjournment(s) thereof.
SHAREHOLDERS OF THE SEI KANSAS PORTFOLIO ARE REQUESTED TO EXECUTE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS
BEING SOLICITED BY THE SEI TRUST'S BOARD OF TRUSTEES. THIS ACTION WILL HELP
ENSURE THAT A QUORUM IS PRESENT AT THE SPECIAL MEETING. PROXIES MAY BE REVOKED
AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO SEI TAX EXEMPT TRUST A
WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING
THE SPECIAL MEETING AND VOTING IN PERSON.
By Order of the Trustees,
Richard W. Grant
Secretary
SEI TAX EXEMPT TRUST
March 28, 1997
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY............................................................................... 5
Background.......................................................................... 5
Summary of the Reorganization Agreement............................................. 5
Federal Income Tax Consequences..................................................... 6
Overview of the SEI Trust and the Intrust Funds..................................... 6
Certain Arrangements with Service Providers......................................... 6
Purchase and Redemption Procedures, Distributions and Exchange Privilege............ 7
Principal Risk Factors.............................................................. 10
INFORMATION RELATING TO THE PROPOSED REORGANIZATION................................... 10
Description of the Reorganization Agreement......................................... 10
Capitalization...................................................................... 12
Federal Income Tax Consequences..................................................... 13
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS.................................... 13
Investment Policies................................................................. 13
Risk Factors........................................................................ 14
OTHER INFORMATION..................................................................... 14
General............................................................................. 14
Term of Trustees.................................................................... 15
Liability of Trustees............................................................... 15
Shareholder Liability............................................................... 15
Voting.............................................................................. 15
Liquidation or Dissolution.......................................................... 15
Shareholder Meetings................................................................ 16
Rights of Inspection................................................................ 16
INFORMATION RELATING TO VOTING MATTERS................................................ 16
General Information................................................................. 16
Solicitation of Proxies............................................................. 16
Voting Securities And Principal Holders Thereof..................................... 17
Appraisal Rights.................................................................... 17
Quorum.............................................................................. 17
ADDITIONAL INFORMATION ABOUT THE SEI TRUST............................................ 18
FINANCIAL HIGHLIGHTS.................................................................. 19
OTHER BUSINESS........................................................................ 20
SHAREHOLDER INQUIRIES................................................................. 20
APPENDIX A -- AGREEMENT AND PLAN OF REORGANIZATION.................................... A-1
APPENDIX B -- ADDITIONAL INVESTMENT RESTRICTIONS...................................... B-1
</TABLE>
2
<PAGE> 5
COMBINED PROXY STATEMENT/PROSPECTUS
DATED MARCH 28, 1997
SEI TAX-EXEMPT TRUST
OAKS, PENNSYLVANIA 19456
(800) 342-5734
INTRUST FUNDS TRUST
3435 STELZER ROAD
COLUMBUS, OHIO 43219
(800) 266-8787
This Combined Proxy Statement/Prospectus is furnished in connection with
the solicitation of proxies by the Board of Trustees of SEI Tax-Exempt Trust
("SEI Trust") in connection with a Special Meeting (the "Meeting") of
shareholders of Kansas Tax Free Income Portfolio (the "SEI Kansas Portfolio"), a
series of the SEI Trust, to be held on April 28, 1997 at 10:00 a.m. Eastern Time
at the offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219,
at which shareholders of the SEI Kansas Portfolio will be asked to consider and
approve a proposed Agreement and Plan of Reorganization dated March 10, 1997
(the "Reorganization Agreement") by and between the SEI Trust and the newly
organized INTRUST Funds Trust (the "INTRUST Funds"), as further described below.
SEI Trust and the INTRUST Funds are registered, open-end, management
investment companies. INTRUST Bank, N.A. ("INTRUST") currently provides
investment advisory services to the SEI Kansas Portfolio and to the INTRUST
Funds.
The Reorganization Agreement provides that the SEI Kansas Portfolio (the
"Reorganizing Fund") will transfer substantially all its assets and its stated
liabilities to the Kansas Tax-Exempt Bond Fund, (the "INTRUST Kansas Portfolio")
a series of the INTRUST Funds (the "Acquiring Fund"). The INTRUST Kansas
Portfolio is a new fund with no operating history.
In exchange for the transfer of these assets and liabilities of the
Reorganizing Fund pursuant to the Reorganization Agreement, the INTRUST Funds
will simultaneously issue shares of the Acquiring Fund to the Reorganizing Fund.
The Reorganizing Fund will then distribute shares of the Acquiring Fund to its
shareholders, in liquidation of the Reorganizing Fund. As a result, upon
completion of the transaction, the Reorganizing Fund will cease to operate and
its shareholders will be shareholders of the Acquiring Fund.
The SEI Trust offers the following two classes of shares: Class A and Class
B. The Reorganizing Fund currently offers only Class A Shares. Financial
institutions may acquire Class A Shares for their own account, or as a record
owner on behalf of fiduciary agency or custody accounts. The INTRUST Funds
currently offers the following two classes of Shares: Institutional Service
Class and Institutional Premium Class. The INTRUST Funds are offered at net
asset value without a sales load only to certain institutional investors, or
other investors who at the time of purchase have a balance of $1,000 or more
invested in any of the INTRUST Funds, are purchased through a trust investment
manager or account manager or administered by INTRUST, are employees of BISYS,
or any other service provider, or employees of INTRUST Financial Corporation or
any of its affiliates. Shareholders in the Institutional Premium Class of shares
may be subject to an additional shareholder servicing charge of up to 0.50% of
average net assets. As part of the Reorganization, SEI Kansas Portfolio will
receive shares of the INTRUST Kansas Portfolios' Institutional Service Class
shares.
This Combined Proxy Statement/Prospectus sets forth the information that a
Shareholder of the SEI Kansas Portfolio should know before voting on the
Reorganization Agreement, and should be retained for
3
<PAGE> 6
future reference. The INTRUST Kansas Portfolio's Prospectus dated January 8,
1997 is included with this Combined Proxy Statement/Prospectus and is
incorporated herein by reference. The Statement of Additional Information
relating to INTRUST Kansas Portfolio dated January 8, 1997, and this Combined
Proxy Statement/Prospectus dated March 28, 1997, and the Prospectus and
Statement of Additional Information relating to the SEI Kansas Portfolio dated
December 31, 1996, are on file with the Securities and Exchange Commission (the
"SEC"), and are available without charge upon oral or written request by writing
or calling either SEI Trust or INTRUST Funds at the applicable address and
telephone number indicated above. The above mentioned Prospectuses and
Statements of Additional Information are incorporated herein by reference.
This Combined Proxy Statement/Prospectus constitutes the proxy statement of
SEI Trust for its meeting of shareholders and INTRUST Funds' prospectus for
shares of the Acquiring Fund that have been registered with the SEC and are
being issued in connection with the Reorganization. This Combined Proxy
Statement/Prospectus is expected to first be sent to shareholders on or about
March 28, 1997.
THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE
IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
THE SECURITIES OF THE INTRUST FUNDS 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 COMBINED PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT/PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY
REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY SEI TRUST OR THE INTRUST FUNDS.
SHARES OF THE INTRUST FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, INTRUST OR ANY OF ITS AFFILIATES. SHARES OF THE
INTRUST FUNDS ARE NOT FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR
OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL VARY AS A RESULT OF MARKET CONDITIONS
OR OTHER FACTORS SO THAT SHARES OF THE INTRUST FUNDS WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. AN INVESTMENT IN THE INTRUST FUNDS
INVOLVES INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED. IN ADDITION, THE AMOUNT OF DIVIDENDS PAID BY A FUND WILL INCREASE AND
DECREASE.
4
<PAGE> 7
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, related transactions, and the parties thereto, and is qualified
by reference to the more complete information contained elsewhere in this
Combined Proxy Statement/Prospectus, the Prospectuses and Statements of
Additional Information of the SEI Kansas Portfolio and INTRUST Kansas Portfolio
and the form of Reorganization Agreement attached to this Combined Proxy
Statement/Prospectus as Appendix A.
BACKGROUND.
INTRUST is the investment adviser to the SEI Kansas Portfolio and to the
newly organized INTRUST Funds. After careful consideration of the investment
portfolios of the funds, the multi-class structures of and distribution
functions performed for the funds, the shareholder servicing requirements of
each fund, compliance functions and other factors relating to the operation of
SEI Trust and the INTRUST Funds, INTRUST concluded that the SEI Kansas Portfolio
and the INTRUST Kansas Portfolio could achieve operating efficiencies and would
benefit from being managed and marketed on a coordinated basis.
Accordingly, INTRUST recommended to the Trustees of SEI Trust that they
approve the Reorganization and submit the Reorganization to the shareholders of
the Reorganizing Fund for approval. Likewise, INTRUST recommended to the
Trustees of the INTRUST Funds that they approve the Reorganization. At a meeting
held on September 16, 1996, after due consideration of the information presented
to them concerning the Reorganization, the Trustees of SEI Trust (a) determined
that the Reorganization was in the best interests of the Reorganizing Fund, and
that the interests of shareholders would not be diluted thereby, (b) approved
the Reorganization Agreement and the Reorganization, and (c) authorized the
submission of the Reorganization to shareholders of the Reorganizing Fund for
their approval. At a meeting held on November 25, 1996, after consideration of
information substantially similar to that presented to the Trustees of SEI
Trust, the Trustees of the INTRUST Funds (a) determined, on the basis of
information provided by INTRUST, that the Reorganization was in the best
interests of the Acquiring Fund and that the interests of shareholders would not
be diluted thereby and (b) approved the Reorganization Agreement and the
Reorganization.
SUMMARY OF THE REORGANIZATION AGREEMENT.
The Reorganization will be effected pursuant to a Reorganization Agreement,
a copy of which is included as Appendix A. The Reorganization Agreement
contemplates that the assets of the Reorganizing Fund will be acquired by the
Acquiring Fund in a tax-free exchange for shares issued by the Acquiring Fund
and the assumption by the Acquiring Fund of the stated liabilities of the
Reorganizing Fund.
Immediately following such transfer and exchange, the shares of the
Acquiring Fund then held by the Reorganizing Fund will be distributed to the
Reorganizing Fund's shareholders. Upon consummation of the Reorganization, each
holder of Class A Shares of the Reorganizing Fund will receive full and
fractional shares of the Institutional Service Class of the Acquiring Fund equal
in value to the value of the investor's shares of the Reorganizing Fund
immediately prior to the transaction. In this manner, the Acquiring Fund will
succeed to the assets and stated liabilities formerly held by the Reorganizing
Fund, and the Reorganizing Fund's shareholders will become shareholders of the
Acquiring Fund.
The Reorganization will not be effected until certain conditions are
satisfied. These conditions include: the approval of the shareholders of the
Reorganizing Fund, the receipt by SEI Trust and the INTRUST Funds of certain
opinions of legal counsel, the receipt from the SEC of certain exemptive relief,
the
5
<PAGE> 8
confirmation of the accuracy of various representations and warranties made in
the Reorganization Agreement, and the parties' performance of their agreements
and undertakings made in the Reorganization Agreement. See "Information Relating
to the Proposed Reorganization."
FEDERAL INCOME TAX CONSEQUENCES.
Shareholders of the Reorganizing Fund will recognize no gain or loss for
federal income tax purposes on their receipt of shares of the Acquiring Fund.
Shareholders of the Acquiring Fund will experience no tax consequences from the
Reorganization. The Reorganizing Fund will incur no federal tax liability as a
result of the Reorganization, and the Acquiring Fund will recognize no gain or
loss for federal tax purposes on its issuance of shares in the Reorganization.
See "Information Relating to the Proposed Reorganizations -- Federal Income Tax
Consequences" for more information.
OVERVIEW OF THE SEI TRUST AND THE INTRUST FUNDS.
INVESTMENT OBJECTIVES. The Reorganizing Fund and the Acquiring Fund have
the same investment objectives and policies. Since the Acquiring Fund is a newly
created mutual fund, it is expected that immediately after the reorganization,
the investment portfolio of the Acquiring Fund will be identical to the
Reorganizing Fund.
Each of the Reorganizing Fund and the Acquiring Fund's investment objective
is preservation of capital while producing current income for investors that is
exempt from both federal and Kansas State income taxes.
See "Comparison of Investment Policies and Risk Factors" below, for further
information on the identical investment objectives and policies of the
Reorganizing Fund and the Acquiring Fund. Additional information is also set
forth in the Acquiring Fund's Prospectus, which is included with this Combined
Proxy Statement/Prospectus, the Reorganizing Fund's Prospectus, which is
available upon request (as noted above) and the Statements of Additional
Information of the Acquiring and Reorganizing Funds, which are also available
upon request (as noted above).
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS.
SEI TRUST. INTRUST serves as investment adviser to the Reorganizing Fund.
INTRUST is entitled to receive advisory fees from the Reorganizing Fund,
computed daily, at a fixed annual rate, expressed as a percentage of average
daily net assets. CoreStates Bank, N.A. serves as the custodian of the
Reorganizing Fund's assets.
SEI Trust has entered into an Administrative Services Contract with SEI
Fund Management ("SEI") pursuant to which SEI provides certain management and
administrative services necessary for the operation of the Reorganizing Fund.
SEI also assists the Reorganizing Fund with certain transfer and dividend
disbursing agent and fund accounting functions. In addition, the Reorganizing
Fund may pay fees to various service organizations which provide them with other
administrative services, such as maintaining shareholder accounts and records.
SEI Financial Services Company ("SFS") serves as the distributor of the shares
of the Reorganizing Fund.
The Reorganizing Fund has adopted a shareholder servicing plan. Under the
plan, the Reorganizing Fund pays SFS a fee at an annual rate based on the
average daily net assets of the Reorganizing Fund attributable to Class A
Shares, in return for provision of a broad range of shareholder and
administrative services.
6
<PAGE> 9
See the SEI Trust Prospectus, which is incorporated herein and available
upon request, for more information on the Fund's arrangements with service
providers.
INTRUST FUNDS. INTRUST will serve as investment adviser to the Acquiring
Fund and will be entitled to receive advisory fees from the Acquiring Fund,
computed daily and paid monthly, at a fixed annual rate, expressed as a
percentage of average daily net assets. INTRUST will also serve as the custodian
of the Acquiring Fund's assets.
INTRUST Funds has entered into an Administrative Agreement with BISYS Fund
Services Limited Partnership ("BISYS") pursuant to which BISYS will provide the
Acquiring Fund with a range of management and administrative services necessary
for the operation of the Acquiring Fund. BISYS Fund Services, Inc. (the
"Transfer Agent"), an affiliate of BISYS, acts as transfer and dividend
disbursing agent and fund accountant for the Acquiring Fund. BISYS will be the
distributor for the Acquiring Fund.
The Acquiring Fund has adopted a Rule 12b-1 Plan and Agreement pursuant to
which the Acquiring Fund may pay BISYS in connection with the distribution and
marketing of the Acquiring Fund's shares. The Acquiring Fund has adopted a Rule
12b-1 Distribution Plan and Agreement (the "Plan") pursuant to which the Fund
may reimburse BISYS on a monthly basis for costs and expenses of BISYS in
connection with the distribution and marketing of shares. These costs and
expenses, which are subject to a maximum limit of 0.25% per annum of the average
daily net assets of the Acquiring Fund, include (i) advertising by radio,
television, newspapers, magazines, brochures, sales literature, direct mail or
any other form of advertising, (ii) expenses of employees, or agents of the
Distributor, including salary, commissions, travel and related expenses, (iii)
payments to broker-dealers and financial institutions for services in connection
with the distribution of shares, including promotional incentives and fees
calculated with reference to the average daily net asset value of shares held by
shareholders who have a brokerage or other service relationship with the
broker-dealer or other institution receiving such fees, (iv) costs of printing
prospectuses, statements of additional information and other materials to be
given or sent to prospective investors, (v) such other similar services as the
Trustees determine to be reasonably calculated to result in the sale of shares
of the Acquiring Fund, (vi) costs of shareholder servicing which may be incurred
by broker-dealers, banks or other financial institutions, and (vii) other direct
and indirect distribution-related expenses, including the provision of services
with respect to maintaining the assets of the Acquiring Fund. The Acquiring Fund
will not be liable for distribution expenditures made by the BISYS in any given
year in excess of the maximum amount payable under the Plan for that year. The
Fund has undertaken not to incur any distribution expenses during its first year
of operation.
Acquiring Fund shareholders may also be subject to service organization
fees based on the net asset value of shares owned by shareholders with whom the
service organization has a servicing relationship. See the INTRUST Fund's
Prospectuses, which is included with this Combined Proxy Statement/Prospectus,
for more information on the Acquiring Fund's arrangements with service
providers.
PURCHASE AND REDEMPTION PROCEDURES, DISTRIBUTIONS AND EXCHANGE PRIVILEGE.
SEI TRUST. Shares may be purchased through SEI, as transfer agent for the
SEI Trust, on each day that the New York Stock Exchange is open for business
("Business Day"). Orders for purchases are executed at the net asset value per
share next determined after the order is received by SEI. Shareholders who
desire to purchase shares must place their orders with SEI prior to the close of
trading on the New York Stock Exchange (presently 4:00 p.m. Eastern Time).
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<PAGE> 10
Shares may be redeemed in whole or in part on any Business Day. Redemption
will occur at the net asset value next determined after a redemption request in
good order has been received by the SEI Trust. Shares may be redeemed through
SEI. Shareholders who desire to redeem shares must place their redemption orders
with SEI prior to the closing of the New York stock Exchange.
The Reorganizing Fund pays dividends at least once annually. The
Reorganizing Fund intends to distribute, at least annually, substantially all
net capital gains, if any. Shareholders may elect to receive dividends and
capital gains in additional shares or cash.
THE INTRUST FUNDS. Shares may be purchased on any Business Day through
authorized brokers, investment advisers and service organizations. Orders for
purchase of shares will be executed at the net asset value next determined after
an order has been received. Orders received by your broker, investment advisor
and service organization in proper order and transmitted to BISYS prior to the
close of its Business Day (which is currently 5:00 p.m., Eastern Time), will
become effective that day. Subject to certain limited exceptions, the minimum
initial investment is $1,000 ($50 for IRAs). The minimum subsequent investment
is $50.
Shares may be redeemed in whole or in part on any Business Day. Redemption
will occur at the net asset value determined after a redemption request in good
order has been received by the Transfer Agent. Shareholders may redeem through
an authorized broker, investment adviser or service organization, or by
contacting the Acquiring Fund directly. Shareholders may request that the
proceeds be wired to a shareholder's personal bank. The Acquiring Fund reserves
the right to redeem, on not less than 30 days' notice, an account that has been
reduced by a shareholder to $500 or less.
The Acquiring Fund declares dividends daily and pays them monthly. The
Acquiring Fund declares and pays capital gains, if any, at least once annually.
The Acquiring Fund intends to distribute at least, annually, substantially all
net capital gains. Shareholders may elect to receive dividends and capital gains
in additional shares or cash.
Shareholders may exchange from one fund in the INTRUST Funds to another
within the same class of shares. The INTRUST Funds retain the right to terminate
or modify the exchange privilege in accordance with relevant regulatory
restrictions.
See "Purchase of Fund Shares," "Redemption of Fund Shares" and "Exchange of
Fund Shares" in the Acquiring Fund's Prospectuses incorporated in and
accompanying this Combined Proxy/Prospectus for additional information on
purchase and redemption procedures and exchange privilege.
COMPARATIVE FEE TABLES. The table below is designed to assist an investor
in understanding the various direct and indirect costs and expenses associated
with an investment in the relevant class of shares of the Reorganizing Fund and
the Acquiring Fund; the table also includes pro forma information for the
combined fund resulting from the Reorganization (the "Combined Fund") assuming
the Reorganization took place on December 31, 1996 and after adjusting such
information to reflect current fees. The expense information for the
Reorganizing Fund is based upon expenses for the fiscal year ended August 31,
1996, and expense information for the Acquiring Fund is based on estimated
expenses for its first year of operation. The Acquiring Fund has not commenced
operations as of the date of this Combined Proxy Statement/Prospectus.
As indicated in the table below, immediately upon consummation of the
Reorganization and absent waivers and reimbursements, the Pro Forma "Total Fund
Operating Expenses" for the Combined Fund are expected to be higher than the
"Total Fund Operating Expenses" for the Reorganizing Fund based on the
information for the respective periods presented. INTRUST has voluntarily agreed
to limit the Combined
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<PAGE> 11
Fund's actual total operating expense ratio through May 16, 1998 to the actual
total operating expense ratio of the Reorganizing Fund as of December 31, 1996.
Subject to the foregoing, the applicable fee waivers and expense reimbursements
may be reduced or discontinued in the future.
<TABLE>
<CAPTION>
SEI
KANSAS PORTFOLIO INTRUST KANSAS PORTFOLIO
CLASS A INSTITUTIONAL SERVICE CLASS
---------------- ---------------------------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage
of offering price)...................................... None None
Maximum Sales Load Imposed on Reinvested Dividends (as a
percentage of offering price)........................... None None
Deferred Sales Load (as a percentage of redemption
proceeds)............................................... None None
Redemption Fees........................................... None None(1)
Exchange Fees............................................. None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average
net assets)
Management Fees (after waivers and reimbursements)(2)..... 0.15% 0.00%
12b-1 Fees (after waiver)(3).............................. 0.00% 0.00%
Other Expenses (after waivers and reimbursements)(2)...... 0.06% 0.21%
---- ----
Total Portfolio Operating Expenses (after waivers and
reimbursements)(2)...................................... 0.21% 0.21%
==== ====
</TABLE>
The purpose of this table is to assist a shareholder in understanding the
various costs and expenses that an investor in the Fund will bear.
- ---------------
(1) Shareholders may be charged a wire redemption fee by their bank for
receiving a wire payment on their behalf.
(2) INTRUST has committed to waive fees and/or reimburse expenses to maintain
Total Portfolio Operating Expenses for the Institutional Service Class at
0.21% for the Fund's first year of operation. Absent such waivers and
reimbursements, for the INTRUST Kansas Portfolio, Management Fees would be
0.30%, Other Expenses would be 0.45% and Total Portfolio Operating Expenses
would be 0.75%. For the INTRUST Kansas Portfolio, Other Expenses includes
shareholder servicing fees of 0.08%. Absent waivers and reimbursements, for
the SEI Kansas Portfolio, Management Fees would be 0.45%, other expenses
would be 0.31% and Total Operating Expenses would be 0.76%. For the SEI
Kansas Portfolio, Other Expenses includes shareholding servicing fees of
0.25%.
(3) The fee under the INTRUST Funds Distribution Plan and Agreement is
calculated on the basis of average net assets of the Fund at an annual rate
not to exceed 0.25%. The INTRUST Kansas Portfolio will not incur any
distribution expenses during its first year of operation.
9
<PAGE> 12
Example:*
You would pay the following expenses on a $1,000 investment, assuming (1)
5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
INTRUST KANSAS PORTFOLIO SEI KANSAS PORTFOLIO
INSTITUTIONAL SERVICE CLASS SHARES CLASS A SHARES
---------------------------------- --------------------
<S> <C> <C>
1 year.................................. $ 2 $ 2
3 years................................. $ 7 $ 7
5 years................................. $ 12 $ 12
10 years................................ $ 27 $ 27
Without waivers and reimbursements
1 year.................................. $ 8 $ 8
3 years................................. $ 24 $ 24
5 years................................. $ 42 $ 42
10 years................................ $ 94 $ 94
</TABLE>
- ---------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
PRINCIPAL RISK FACTORS
The investment objectives and policies of the Reorganizing and Acquiring
Funds are the same. As a result, the risks associated with an investment in the
Acquiring Fund are substantially similar to those associated with an investment
in the Reorganizing Fund. The investment risks are those typically associated
with an investment in a managed portfolio of the specific types of securities
and other investments in which the Reorganizing and Acquiring Funds invest. The
following highlights the principal risk factors associated with an investment in
the Reorganizing Fund and the Acquiring Fund and is qualified in its entirety by
the more extensive discussion of risk factors in "Comparison of Investment
Policies and Risk Factors" below and in Appendix B and the discussion of risks
in the Prospectus and Statements of Additional Information for the Reorganizing
and Acquiring Funds.
The risk associated with investing in the Acquiring Fund (as in the
Reorganizing Fund) is that it will have considerable investments in Kansas
municipal obligations, and will be more susceptible to factors which adversely
effect issuers of Kansas obligations than a mutual fund which does not have as
great a concentration in the municipal obligations of one particular state.
The Acquiring Fund will be affected by factors that affect the financial
condition of the State of Kansas, its counties, municipalities and school
districts. In addition, since the Acquiring Fund will be invested primarily in
bonds, the value of its assets can be expected to vary inversely to changes in
interest rates.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
DESCRIPTION OF THE REORGANIZATION AGREEMENT. The following summary of the
Reorganization Agreement is qualified in its entirety by reference to the
Reorganization Agreement attached to this Combined Proxy Statement/Prospectus as
Appendix A. The Reorganization Agreement provides that the Acquiring
10
<PAGE> 13
Fund will acquire all or substantially all of the assets of the Reorganizing
Fund in exchange for shares of the Acquiring Fund and the assumption by the
Acquiring Fund of certain stated liabilities of the Reorganizing Fund on the
Closing Date (as defined in the Reorganization Agreement) or such later date as
the parties may require as provided for in the Reorganization Agreement.
The number of full and fractional shares of the Acquiring Fund to be issued
to shareholders of the Reorganizing Fund will be determined on the basis of the
relative net asset values per share, computed as of the time on the Closing Date
at which the Acquiring Fund ordinarily determines it net asset values (currently
4:15 Eastern Time). The net asset value per share for the Acquiring Fund and the
Reorganizing Fund will be determined by dividing each fund's respective assets,
less liabilities, by the total number of its respective outstanding shares. The
assets of the Acquiring Fund and the Reorganizing Fund will be valued in
accordance with the valuation practices of the Acquiring Fund using the
valuation procedures described under "Pricing and Purchase of Shares" in the
current Prospectus of the Acquiring Fund, which accompanies this Combined Proxy
Statement/Prospectus.
Prior to the Closing Date, the Reorganizing Fund will endeavor to discharge
all of its known liabilities and obligations. The Acquiring Fund will assume
only those liabilities, expenses, costs, charges and reserves reflected on an
unaudited statement of assets and liabilities of the Reorganizing Fund as of the
time on the Closing Date at which the Acquiring Fund ordinarily determines its
net asset values (4:15 Eastern Time) prepared by SEI as administrator of the
Reorganizing Fund, in accordance with generally accepted accounting principles
consistently applied from the prior audited period. The Acquiring Fund will
assume only those liabilities of the Reorganizing Fund reflected in that
unaudited statement of assets and liabilities and will not assume any other
liabilities, whether absolute or contingent.
As soon after the Closing Date as practicable, the Reorganizing Fund will
liquidate and distribute pro rata to its shareholders of record as of the close
of business on the Closing Date the full and fractional shares of the Acquiring
Fund received by the Reorganizing Fund. Such liquidation and distribution will
be accomplished by the establishment of accounts in the name of the Reorganizing
Fund's shareholders on the share records of the Acquiring Fund's transfer agent.
Each account will represent the respective pro rata number of full and
fractional shares of the Acquiring Fund due to such Reorganizing Fund's
shareholders.
The consummation of the transaction contemplated by the Reorganization
Agreement is subject to the conditions set forth in the Reorganization
Agreement, including the condition that the parties shall have received
exemptive relief from the SEC with respect to the issues raised by Section 17(a)
of the 1940 Act and concerning the applicability of Rule 17a-8 of the 1940 Act.
On February 25, 1997, an application was filed for an exemption that, if
granted, would permit the Reorganization to be completed as described in this
Combined Proxy Statement/Prospectus. There can be no assurance that the relief
sought will be obtained, although the type of relief sought has been obtained by
others in similar situations. The Reorganizing Fund and the Acquiring Fund do
not currently intend to proceed with the Reorganization unless the relief
requested from the SEC has been obtained. The Reorganization Agreement may be
terminated and the Reorganization abandoned prior to January 1, 1998 by mutual
consent of the Boards of Trustees of the SEI Trust and the INTRUST Funds and
after that date, by either party upon written notice to the other. In addition,
either party may terminate if any condition set forth in the Reorganization
Agreement has not been fulfilled or waived by the party entitled to its benefits
any time before the Closing Date.
The obligations of SEI Trust and the INTRUST Funds under the Reorganization
Agreement with respect to the Reorganization are also subject to various other
conditions provided therein, including the approval of the Reorganization
Agreement by the shareholders of the Reorganizing Fund, the receipt of
11
<PAGE> 14
certain opinions of legal counsel (including an opinion regarding the Federal
income tax consequences of the Reorganization to be provided by Baker &
McKenzie, counsel to the INTRUST Funds), the receipt from the SEC of the
regulatory relief described above, the redemption of all Class B Shares of the
Reorganizing Fund held by SEI, confirmation of the accuracy of various
representations and warranties made therein and the parties' performance of
their agreements and undertakings made in the Reorganization Agreement.
The expenses of the transactions contemplated by the Reorganization,
including the cost of proxy solicitation, will be borne by INTRUST. No portion
of such expenses will be paid by the Reorganizing Fund or Acquiring Fund.
Approval of the Reorganization Agreement with respect to the Reorganizing
Fund will require the affirmative vote of a majority of the outstanding voting
securities present at the Meeting in person or by proxy. If the Reorganization
Agreement is not approved by the Reorganizing Fund, the Board of Trustees of SEI
Trust will consider the possible courses of action, including submission to
shareholders of a proposal to liquidate the Reorganizing Fund.
In its consideration and approval of the Reorganization at a meeting on
September 16, 1996, the Board of Trustees of SEI Trust considered the
recommendation of SEI and INTRUST with respect to the proposed Reorganization;
the fact that INTRUST is the investment adviser of both the Reorganizing and
Acquiring Funds; the fact that the investment objectives, policies, and
portfolios of the Reorganizing and Acquiring Funds will be the same; the fact
that the Acquiring Fund is permitted to adopt the master-feeder structure; the
shareholder servicing requirements of each fund, compliance functions and other
factors relating to the operation of SEI Trust and the INTRUST Funds; the fact
that the Reorganization would constitute a tax-free reorganization; the
Reorganization is in the best interests of the Reorganizing Fund; and that
interests of shareholders would not be diluted as a result of the
Reorganization.
After consideration of all of the foregoing factors, together with certain
other factors and information considered to be relevant, SEI Trust's Board of
Trustees unanimously approved the Reorganization Agreement and directed that it
be submitted to shareholders of the Reorganizing Fund for approval. SEI Trust's
Board of Trustees recommends that shareholders vote "FOR" approval of the
Reorganization Agreement.
At a meeting held on November 25, 1996, the Board of Trustees of the
INTRUST Funds considered the proposed Reorganization with respect to the
Acquiring Funds. Based upon their evaluation of the relevant information
provided to them, and in light of their fiduciary duties under federal and state
law, the Board of Trustees unanimously determined, on the basis of information
provided by INTRUST that the proposed reorganization was in the best interests
of the Acquiring Fund and its shareholders, if any, and that the interests of
existing shareholders of the Acquiring Fund, if any, would not be diluted as a
result of effecting the transaction.
CAPITALIZATION. Because the Reorganizing Fund will be combined in the
Reorganization with the Acquiring Fund and because the Acquiring Fund is a newly
created investment company, the total capitalization of the Acquiring Fund after
the Reorganization is expected to be equal to that of the Reorganizing Fund
before the reorganization. The following table sets forth as of February 18,
1997, (i) the capitalization of the Reorganizing Fund, (ii) the capitalization
of the Acquiring Fund, and (iii) the pro forma capitalization of the Acquiring
Fund giving effect to the Reorganization. At the time the Reorganization is
completed, the resulting capitalization of the Acquired Fund is likely to differ
from the pro forma
12
<PAGE> 15
capitalization shown in the table because of the effects of shareholder activity
and market price fluctuations in the interim.
<TABLE>
<CAPTION>
SEI KANSAS
PORTFOLIO INTRUST KANSAS PRO FORMA
(CLASS A) PORTFOLIO COMBINED
(000) (INSTITUTIONAL CLASS) (000)
---------- ----------------------- ---------
<S> <C> <C> <C>
Total Net Assets........................ $ 81,129 NONE $81,129
Shares outstanding...................... 7,590 NONE 7,590
Net Asset Value Per Share............... $ 10.69 NONE $ 10.69
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES. The Reorganization should be a tax-free
transaction from the standpoint of the Reorganizing and Acquiring Fund and their
shareholders within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended, which means that: (1) no gain or loss will be recognized by
the Reorganizing Fund upon the transfer of its assets and liabilities to the
Acquiring Fund; (2) the tax basis of the assets of the Reorganizing Fund in the
hands of the Acquiring Fund will be the same as the tax basis of such assets in
the hands of the Reorganizing Fund immediately prior to the transfer; (3) the
Acquiring Fund's holding period of the assets of the Reorganizing Fund will
include the period during which such assets were held by the Reorganizing Fund;
(4) no gain or loss will be recognized by the Acquiring Fund upon the receipt of
the assets of the Reorganizing Fund in exchange for shares of the Acquiring Fund
and the assumption by the Acquiring Fund of the liabilities and obligations of
the Reorganizing Fund; (5) no gain or loss will be recognized by the
shareholders of the Reorganizing Fund upon the receipt of shares of the
Acquiring Fund in exchange for shares of the Reorganizing Fund; (6) the basis of
the shares of the Acquiring Fund received by the shareholders of the
Reorganizing Fund will be the same as the basis of the shares of the
Reorganizing Fund exchanged therefor; and (7) the holding period of the shares
of the Acquiring Fund received by the shareholders of the Reorganizing Fund will
include the holding period of the shares of the Reorganizing Fund exchanged
therefor, provided that, at the time of the exchange, the shares of the
Reorganizing Fund were held as capital assets. Pursuant to the Reorganization
Agreement, as a condition to the consummation of the Reorganization, the
Reorganizing Fund and Acquiring Fund must receive a favorable opinion of Baker &
McKenzie, counsel to the INTRUST Funds, as to the foregoing tax consequences.
SEI Trust and the INTRUST Funds have not sought a tax ruling from the
Internal Revenue Service (the "IRS"), but intend to act in reliance upon the
opinion of counsel discussed in the previous paragraph. That opinion will not be
binding on the IRS and will not preclude the IRS from adopting a contrary
position.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
INVESTMENT POLICIES. The investment objectives and policies of the
Reorganizing Fund are the same as those of the Acquiring Fund. The following
discussion summarizes the investment policies and risk factors for the
Reorganizing Fund and the Acquiring Fund. A more complete comparison of the
investment restrictions and policies of the Reorganizing and the Acquiring Fund
appears in Appendix B. Both the discussion below and the information in Appendix
B are qualified in its entirety by discussion elsewhere herein, and in the
Prospectus and Statements of Additional Information for the Reorganizing Fund
and the Acquiring Fund.
The Acquiring Fund and the Reorganizing Fund have the same investment
objective. Both the Reorganizing Fund's and the Acquiring Fund's investment
objective is to preserve capital while producing current income that is exempt
from both federal and Kansas state income taxes. Under normal conditions, at
least 80% of their net assets will be invested in municipal obligations which
produce interest that is exempt
13
<PAGE> 16
from Federal income tax. This investment policy is a fundamental policy of each
fund and may only be charged with the approval of shareholders. At least 65% of
their assets will be invested in municipal obligations which are exempt from
Federal and Kansas state income taxes. The remainder of their assets may be
invested in municipal obligation of other states.
Both the Reorganizing Fund and the Acquiring Fund may purchase (i)
municipal bonds rated A or better by Standard and Poor's Corporation ("S&P") or
Moody's Investors Service, Inc. ("Moody's"), and a maximum of 10% of their total
assets may be invested in municipal bonds rated BBB by S&P or Baa by Moody's;
(ii) municipal notes rated at least SP-2 by S&P or MIG-2 or V-MIG-2 by Moody's;
and (iii) tax-exempt commercial paper rated at least A-1 by S&P or Prime-1 by
Moody's.
The Reorganizing Fund's and the Acquiring Fund's average maturity will be
between seven and twelve years.
RISK FACTORS. The Reorganizing Fund and Acquiring Fund are subject to the
same risk factors. The price per share of each fund will fluctuate with changes
in value of the investments held by the fund. For example, the value of shares
of each fund will generally fluctuate inversely with the movements in interest
rates.
There is, of course, no assurance that either fund will achieve its
investment objective or be successful in preventing or minimizing the risk of
loss that is inherent in investing in particular types of investment products.
Because they concentrate their investments in Kansas municipal obligations,
each fund may be affected by political, economic or regulatory factors that may
impair the ability of Kansas issuers to pay interest on or to repay the
principal of their debt obligations. Kansas municipal obligations may be subject
to greater price volatility than municipal obligations in general as a result of
the effect of supply and demand for these securities which, in turn, could cause
greater volatility in the value of the shares of the respective fund.
Obligations of issuers of Kansas municipal obligations are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors, such as the Federal Bank Reform Act of 1978. In addition,
the obligations of such issuers may become subject to the laws enacted in the
future by Congress or the Kansas legislature or by referenda extending the time
for payment of principal and/or interest, or imposing other constraints upon
enforcement of such obligations or upon municipalities to levy taxes. There is
also the possibility that, as a result of legislation, litigation involving the
taxation of municipal obligations or the rights of municipal obligation holders,
or other conditions, the power or ability of any issuer to pay, when due, the
principal of and interest on its Kansas municipal obligations may be materially
affected. Additional considerations relating to the risks of investing in Kansas
municipal obligations can be found in the Prospectus and Statement of Additional
Information for the Reorganizing Fund and the Acquiring Fund.
OTHER INFORMATION
GENERAL. SEI Trust and the INTRUST Funds are each open-end management
investment companies registered under the 1940 Act. SEI Trust is organized as a
business trust under the laws of the Commonwealth of Massachusetts; INTRUST
Funds is organized as a business trust under the laws of Delaware. SEI Trust and
the INTRUST Funds are governed by a Declaration of Trust, respectively (each a
"Trust Agreement"), By-Laws and Boards of Trustees.
14
<PAGE> 17
TERM OF TRUSTEES. The term of office of each Trustee of SEI Trust or the
INTRUST Funds are unlimited as to duration unless the Trustees themselves adopt
a limited term. Assuming that the term remains of unlimited duration, a person
serving as a Trustee of SEI Trust or the INTRUST Funds will continue as Trustee
until such person resigns, dies or is removed by a written instrument signed by
at least two-thirds of the Trustees, by vote of the shareholders holding not
less than two-thirds of the shares then outstanding in person or by proxy at any
meeting called for that purpose, or by a written declaration signed by
shareholders holding not less than two-thirds of the shares then outstanding.
Vacancies on either Board may be filled by a majority of the Trustees remaining
in office.
LIABILITY OF TRUSTEES. A Trustee of SEI Trust or the INTRUST Funds will be
personally liable only for his or her own willful malfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee. Under the Trust Agreements for SEI Trust and the INTRUST
Funds, Trustees and officers will be indemnified for the expenses of litigation
against them unless it is determined that the person did not act in good faith
in the reasonable belief that the person's actions were in or not opposed to the
best interests of the trust or his or her conduct is determined to constitute
willful misfeasance, bad faith, gross negligence or reckless disregard of his or
her duties.
SHAREHOLDER LIABILITY. Although, as discussed below, the likelihood is
remote, it is possible that, under Massachusetts law, shareholders of a
Massachusetts business trust could, under certain circumstances, be held
personally liable for the obligations of SEI Trust. However, the Trust Agreement
of SEI Trust disclaims shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Trust or the Trustees.
The Trust Agreement also provides for indemnification out of SEI Trust property
for all losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered remote since it is
limited to circumstances in which a disclaimer is inoperative and SEI Trust
itself would be unable to meet its obligations. Under Delaware law, shareholders
of a Delaware business trust, such as the INTRUST Funds, do not have such
potential remote liability. A substantial number of mutual funds in the United
States are organized as Delaware business trusts.
VOTING. On each matter submitted to a vote of the shareholders of SEI
Trust or the INTRUST Funds, each holder of a share of one of the funds is
entitled to one vote for each whole share and to a proportionate fractional vote
for each fractional share outstanding in the shareholder's name on the books of
the respective Trust. Generally, shares of each of the SEI Trust and the INTRUST
Funds vote on a fund-by-fund basis on all matters except (1) matters affecting
only the interests of one or more of the funds, in which case only shares of the
affected fund or funds would be entitled to vote or (2) when the 1940 Act
requires that shares of the funds be voted in the aggregate. There are
ordinarily no meetings of shareholders of the SEI Trust or the INTRUST Funds.
LIQUIDATION OR DISSOLUTION. In the event of the liquidation or dissolution
of the SEI Trust or INTRUST Funds, the shareholders of the funds are entitled to
receive, when, and as declared by the Trustees, the excess of the assets
belonging to the funds over the liabilities belonging to the funds. In either
case, the assets so distributable to shareholders of the funds will be
distributed among the shareholders in proportion to the number of shares of the
funds held by them and recorded on the books of the SEI Trust or INTRUST Funds.
Such action may be taken with respect to the SEI Trust or INTRUST Funds by
action of the Board of Trustees, without shareholder approval.
15
<PAGE> 18
SHAREHOLDER MEETINGS. Neither the SEI Trust or the INTRUST Funds are
required to hold annual meetings of their shareholders. Special meetings of SEI
Trust and the INTRUST Funds may be called upon written request of shareholders
owning at least one-tenth of the Outstanding shares entitled to vote.
RIGHTS OF INSPECTION. Under Delaware law, shareholders of the INTRUST
Funds have the right to inspect all books and records. Under Massachusetts law,
SEI Trust Shareholder have the same rights to inspect the records accounts and
books of SEI Trust as are permitted shareholders of a Massachusetts Corporation
under Massachusetts Corporate law. Currently, each shareholder of a
Massachusetts corporation is permitted to inspect the articles, bylaws, stock
records, and minutes of shareholder meetings. In either jurisdiction a court may
order discovery of all information relevant to a litigation claim.
The foregoing is only a summary of certain characteristics of the
operations of SEI Trust and the INTRUST Funds, the Trust Agreement, By-Laws and
applicable state law. The foregoing is not a complete description of the
documents cited. Shareholders should refer to the provisions of the SEI Trust
and the INTRUST Fund's Trust Agreement, By-Laws and Delaware and Massachusetts
law directly for a more complete description.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION. This Combined Proxy Statement/Prospectus is being
furnished in connection with the solicitation of proxies by SEI Trust's Board of
Trustees in connection with the Special Meeting. Only shareholders of record at
the close of business on March 21, 1997, will be entitled to vote at the
Meeting. On that date there were outstanding and entitled to be voted
7,647,605.700 shares of the Reorganizing Fund.
With respect to Fund shares held in any trust account over which SEI has
voting power, SEI has advised the INTRUST Funds that (a) if such account is
subject to the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") and SEI is not the plan sponsor, SEI will pass voting power through to
the plan sponsor, (b) if such account is subject to ERISA and SEI is the plan
sponsor, SEI will pass its voting power to an independent third party fiduciary,
and (c) with respect to all other such trust accounts, SEI will vote Fund shares
in the same manner and proportion as all other Fund shares are voted.
SOLICITATION OF PROXIES. Proxy solicitations will be made primarily by
mail, but proxy solicitations may also be made by telephone, telegraph or
personal solicitations conducted by officers and employees of INTRUST or its
affiliates or other representatives of the Reorganizing Fund (who will not be
paid for their solicitation activities).
If you wish to participate in the Meeting and any adjournments thereof, but
do not wish to give your proxy by telephone, you may still submit the proxy card
included with this Proxy Statement or attend the Meeting in person. Any proxy
given by you, whether in writing or by telephone may be revoked at any time
before it is voted by a written instruction received by the Secretary of SEI
Trust by properly executing a later-dated proxy or by attending the Special
Meeting and voting in person.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF. Based on holdings and
total shares outstanding as of February 18, 1997, the Trustees and officers of
SEI Trust owned as a group less than 1% of the outstanding voting securities of
the Reorganizing Fund. If the Reorganization was consummated as of February 18,
1997, the Trustees and officers of SEI Trust would own less than 1% of the
outstanding voting securities of the resulting pro forma Combined Fund based on
their holdings and total shares outstanding as of February 18, 1997. Based on
holdings and total shares outstanding as of February 18, 1997, and assuming
consummation of
16
<PAGE> 19
the Reorganization on February 18, 1997, the following persons would own
beneficially or of record 5% or more of the outstanding shares of the
Reorganizing Fund or the Combined Fund as indicated:
<TABLE>
<CAPTION>
PERCENTAGE OWNED SHARES HELD
---------------- -------------
<S> <C> <C>
Transco & Company 99.10% 7,520,567.357
c/o INTRUST Bank, N.A.
Attn.: Kerry Weis
P.O. Box 48698
Wichita, Kansas 67201
</TABLE>
17
<PAGE> 20
APPRAISAL RIGHTS. Shareholders are not entitled to any rights of share
appraisal under SEI Trust's Trust Agreement or under the laws of the State of
Massachusetts in connection with the Reorganization. Shareholders have, however,
the right to redeem their Reorganizing Fund shares at net asset value until the
Reorganization and thereafter former Reorganizing Fund shareholders may redeem
the Acquiring Fund shares acquired by them in the Reorganization at net asset
value as in effect from time to time.
QUORUM. A quorum for the transaction of business at the Meeting is
constituted with respect to the Reorganizing Fund by the presence in person or
by proxy of the holders of not less than a majority of the outstanding shares of
such fund entitled to vote at the Meeting. If, by the time scheduled for the
Meeting, a quorum of shareholders of the Reorganizing Fund is not present or if
a quorum of the Reorganizing Fund's shareholders is present but sufficient votes
in favor of the Reorganization are not received, the persons named as proxies
may propose one or more adjournments of the Meeting to permit further
solicitation of proxies from shareholders. Any such adjournment will require the
affirmative vote of a majority of the shares present in person or represented by
proxy. The persons named as proxies will vote in favor of any such adjournment
if they determine that such adjournment and additional solicitation are
reasonable and in the interests of the Reorganizing Fund's shareholders. Notice
of adjournment of the Meeting with another time and place need not be given, if
the time and place are announced at the Meeting and reasonable notice is given
to persons present at the Meeting and the adjourned Meeting is held within a
reasonable time after the date set for the original Meeting.
Shareholders of the Reorganizing Fund will vote separately to approve or
reject the Reorganization with respect to the Acquiring Fund. The vote of the
shareholders of the Acquiring Fund is not being solicited because their approval
or consent is not necessary for the Reorganization to be consummated. Each share
of the Reorganizing Fund is entitled to one vote and each fractional share
thereof is entitled to a fractional vote, on each matter submitted to a vote of
its shareholders at the Meeting; no shares have cumulative voting rights. Shares
held by two or more persons (whether joint tenants, co-fiduciaries or otherwise)
will be voted as follows unless a written instrument or court order providing to
the contrary has been filed with the Secretary of SEI Trust: (1) If only one
votes, his or her vote will bind all; (2) if more than one votes, the vote of
the majority will bind all; and (3) if more than one votes and the vote is
evenly divided, the shares will be voted in accordance with the determination of
a majority of such persons and any person appointed to act by a court of
competent jurisdiction, or in the absence of such appointment, the vote will be
cast proportionately.
Shares represented by duly appointed proxies in the form included with this
Combined Proxy Statement/Prospectus will be voted in accordance with the
specifications made. If no specification is made, shares will be voted in
accordance with the recommendations of the Trustees of SEI Trust. Proxies may be
revoked at any time before they are voted by a written revocation received by
the Secretary of SEI Trust, by properly executing a later-dated proxy or by
attending the Meeting and voting in person. SEI Trust will request broker-dealer
firms, custodians, nominees and fiduciaries to forward proxy material to the
beneficial owners of the shares of record held by such persons.
Approval of the Reorganization requires with respect to the Reorganizing
Fund, the affirmative vote of a majority of the outstanding voting securities
present at the Meeting in person or by proxy.
In tallying shareholder votes, abstentions and broker non-votes (i.e.,
proxies sent in by brokers and other nominees which cannot be voted on a
proposal because instructions have not been received from the beneficial owners)
will be counted for purposes of determining whether a quorum is present for the
purposes of convening the Meeting. If a proposal must be approved by a
percentage of "votes cast" on the proposal, abstentions and broker non-votes
will not be counted as "votes cast" on the proposal and will have no effect on
18
<PAGE> 21
the result of the vote. If a proposal must be approved by (i) a percentage of
voting securities present at the Meeting, or (ii) a majority of the shares
issued and outstanding (i.e., the Reorganization), abstentions and broker
non-votes will be considered to be both present and issued and outstanding and,
as a result, will have the effect of counting as votes against such proposal.
If the accompanying form of proxy is properly executed and returned in time
to be voted at the Meeting, the shares covered thereby will be voted in
accordance with the instructions marked thereon by the shareholder. Executed
proxies that are unmarked will be voted FOR each proposal submitted to a vote of
the shareholders.
ADDITIONAL INFORMATION ABOUT THE SEI TRUST
Information about the INTRUST Funds is included in the Prospectus
accompanying this Combined Proxy Statement/Prospectus. Additional information
about these Funds is included in its Statement of Additional Information dated
January 8, 1997. Copies of the Statement of Additional information and financial
statements may be obtained without charge by writing to INTRUST Funds
Distributors, Inc., 3435 Stelzer Road, Columbus, Ohio 43219, or by calling
INTRUST Funds at 1-888-266-8787. INTRUST Funds is subject to the informational
requirements of the Securities Exchange Act of 1934 and the 1940 Act, as
applicable, and, in accordance with such requirements, files proxy materials,
reports and other information with the SEC. These materials can be inspected and
copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, NW, Washington, D.C. 20549, and at the offices of INTRUST Funds listed
above and at the SEC's Regional Offices at 7 World Trade Center, Suite 1300, New
York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can also be obtained from the Public Reference
Branch, office of Consumer Affairs and Information Services, Securities and
Exchange Commission, Washington, D.C. 20549, at prescribed rates.
Information about SEI Trust is incorporated herein by reference from its
Prospectus and Combined Statement of Additional Information, each dated December
31, 1996. The financial statements for the Reorganizing Fund for the period
ended August 31, 1996, is incorporated by reference in the Organizing Fund's
Statement of Additional Information; the Reorganizing Fund's audited financial
statements for the fiscal period ended August 31, 1996, is incorporated by
reference into the statement of Additional Information to this Combined Proxy
Statement/Prospectus. Copies of the Reorganizing Fund's Prospectus, Statement of
Additional Information and financial statements may be obtained without charge
by writing or calling SEI Trust at the address and telephone number shown on the
cover page of this Combined Proxy Statement/Prospectus. Reports and other
information filed by SEI Trust can be inspected and copied at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, NW, Washington,
D.C. 20549, and copies of such material can be obtained from the Public
Reference Branch, office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates.
FINANCIAL HIGHLIGHTS
SEI TRUST FINANCIAL HIGHLIGHTS. The tables set forth below present
financial information for the Class A Shares of the Reorganizing Fund. This
information is derived from SEI Trust's audited financial statements for the
fiscal year ended August 31, 1996. The data should be read in conjunction with
the audited financial statements and related notes. The financial highlights for
the Reorganizing Fund for prior periods are contained in SEI Trust's Prospectus
dated December 31, 1996, and the financial statements for the Reorganizing Fund
for prior periods are contained in SEI Trust's Annual Report to Shareholders and
are
19
<PAGE> 22
incorporated by reference into SEI Trust's Statement of Additional Information
dated December 31, 1996, which Prospectus and Statement of Additional
Information are incorporated herein by reference. The INTRUST Funds have no
operating history and therefore no financial highlights or financial statements.
<TABLE>
<CAPTION>
INVESTMENT NET REALIZED AND
ACTIVITIES DISTRIBUTIONS UNREALIZED GAIN
NET ASSET ---------- ------------------------------------ (LOSS) ON
VALUE NET NET NET INVESTMENTS NET ASSET
BEGINNING INVESTMENT INVESTMENT REALIZED TOTAL AND CAPITAL VALUE END OF
OF PERIOD INCOME INCOME GAIN DISTRIBUTIONS TRANSACTIONS PERIOD
--------- ---------- ---------- -------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
KANSAS TAX FREE
INCOME PORTFOLIO
- ---------------
For the Year Ended
August 31, 1996 $ 10.63 $ 0.56 $ (0.56) $ -- $ (0.56) $ (0.12) $10.51
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF RATIO OF INVESTMENT
EXPENSES TO NET INCOME TO
RATIO OF AVERAGE NET INVESTMENT AVERAGE NET
NET ASSET EXPENSES TO ASSETS INCOME TO ASSETS
END OF AVERAGE NET (EXCLUDING FEE AVERAGE NET (EXCLUDING PORTFOLIO
PERIOD (000) ASSETS WAIVERS) ASSETS FEE WAIVERS) TURNOVER RATE
------------ ----------- -------------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
KANSAS TAX FREE
INCOME PORTFOLIO
---------------
For The Year Ended
August 31, 1996 $ 72,066 0.21% 0.51% 5.31% 5.01% 12.71%
</TABLE>
OTHER BUSINESS
The Board of Trustees of SEI Tax-Exempt Trust knows of no other business to
be brought before the Meeting. However, if any other matters come before the
Meeting, proxies which do not contain specific restrictions to the contrary will
be voted on such maters in accordance with the judgment of the persons named in
the enclosed proxy card.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to SEI Tax-Exempt Trust in writing
at the address on the cover page of this Combined Proxy Statement/Prospectus or
by telephoning 1-800-342-5734.
20
<PAGE> 23
APPENDIX A -- AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 10th day of March, 1997, by and between SEI Tax Exempt Trust, a
Massachusetts business trust, with its principal place of business at Oaks,
Pennsylvania, 19456 ("SEI Trust"), and The INTRUST Funds Trust, a Delaware
business trust, with its principal place of business at 3435 Stelzer Road,
Columbus, Ohio 43219 ("INTRUST Trust").
The INTRUST Trust consists of six separate series, one of which, the
INTRUST Kansas Tax-Exempt Bond Fund, is the subject of this Agreement
(hereinafter, the "Acquiring Fund"). SEI Trust consists of nine separate series,
one of which, the SEI Kansas Tax Free Income Portfolio, is the subject of this
Agreement (hereinafter, the "Acquired Fund").
This Agreement governs the proposed issuance of shares of the Acquiring
Fund in exchange for all of the assets of the Acquired Fund.
This Agreement is intended to be and is adopted as a plan of reorganization
and liquidation within the meaning of Section 368 of the United States Internal
Revenue Code of 1986, as amended (the "Code"). The reorganization
("Reorganization") will consist of the transfer of all or substantially all of
the assets of the Acquired Fund in exchange solely for shares of beneficial
interest, $.001 par value per share, of the Institutional Service Class Shares
(the "Institutional Service Class Shares") of the Acquiring Fund (the "Acquiring
Fund's Shares") and the assumption by the Acquiring Fund of certain liabilities
of the Acquired Fund and the distribution, after the closing date provided in
paragraph 3.1 (the "Closing Date"), of the Acquiring Fund's Shares to the
shareholders of the Acquired Fund in liquidation of the Acquired Fund as
provided herein, all upon the terms and conditions hereinafter set forth in this
Agreement. Shareholders of the Acquired Fund's Class A Shares shall receive only
shares of the Acquiring Fund's Institutional Service Class Shares.
WHEREAS, INTRUST Trust and SEI Trust are open-end, registered management
investment companies and the Acquired Fund owns securities which generally are
assets of the character in which the Acquiring Fund is permitted to invest;
WHEREAS, both INTRUST Trust and SEI Trust are authorized to issue shares of
beneficial interest;
WHEREAS, the Board of Trustees of INTRUST Trust has determined that the
exchange of all or substantially all of the assets of the Acquired Fund for the
Acquiring Fund's Shares and the assumption of the stated liabilities of the
Acquired Fund is in the best interests of the Acquiring Fund's shareholders and
that the interests of the existing shareholders of the Acquiring Fund would not
be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees of SEI Trust has determined that the
exchange of all of the assets and certain of the liabilities of the Acquired
Fund for the Acquiring Fund's Shares and the assumption of such liabilities by
the Acquiring Fund is in the best interests of the Acquired Fund's shareholders
and that the interests of the existing shareholders of the Acquired Fund would
not be diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
A-1
<PAGE> 24
1. TRANSFER OF ASSETS, ASSUMPTION OF LIABILITIES AND TERMINATION
1.1. Subject to the requisite approval of the shareholders of the Acquired
Fund and to the other terms and conditions herein set forth and on the basis of
the representations and warranties contained herein, SEI Trust shall transfer to
INTRUST Trust, and INTRUST Trust shall acquire from SEI Trust, at the Closing
Date, all or substantially all of the Assets (as such term is hereinafter
defined) of the Acquired Fund in exchange for that number of Shares of the
Acquiring Fund determined in accordance with Section 2.1 hereof, and the
assumption by the Acquiring Fund of the Liabilities (as such term is hereinafter
defined) of the Acquired Fund. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "Closing"). SEI Trust will (i) pay or cause
to be paid to INTRUST Trust on behalf of the Acquiring Fund any interest
received on or after the Closing Date with respect to the Assets of the Acquired
Fund and (ii) transfer to INTRUST Trust on behalf of the Acquiring Fund any
distributions, rights, stock dividends or other property received by SEI Trust
after the Closing Date as distributions on or with respect to the Assets of the
Acquired Fund. Any such interest, distributions, rights, stock dividends or
other property so paid or transferred, or received directly by INTRUST Trust,
shall be allocated by INTRUST Trust to the account of the Acquiring Fund that
acquired the Assets to which such property relates.
1.2 (a) The Assets of the Acquired Fund to be acquired by the Acquiring
Fund (the "Assets") shall consist of all property, including without limitation,
all cash, securities, commodities and futures, interests and dividends or
interest receivables which are owned by the Acquired Fund on the Closing Date,
but shall not include corporate books, records or minutes of the Acquired Fund.
(b) SEI Trust has provided INTRUST Trust with a list of all the Assets
of the Acquired Fund as of the date of execution of this Agreement. SEI Trust
reserves the right to sell any of the securities held by the Acquired Fund but
will not, without the prior approval of INTRUST Trust, acquire any additional
securities for the Acquired Fund other than securities of the type in which the
Acquiring Fund is permitted to invest and which satisfy the investment policies,
restrictions and other guidelines applicable to the Acquiring Fund. INTRUST
Trust will, within a reasonable time prior to the Closing Date, furnish SEI
Trust with a statement of the Acquiring Fund's investment objectives, policies
and restrictions and a list of the securities, if any, on the Acquired Fund's
lists referred to in the first sentence of this paragraph which do not conform
to the Acquiring Fund's individual investment objectives, policies, restrictions
and guidelines. In the event that the Acquired Fund holds any investments which
the Acquiring Fund may not hold, the Acquired Fund will dispose of such
securities prior to the Closing Date to the extent practicable and to the extent
the Acquired Fund would not be affected adversely by such a disposition. In
addition, if it is determined that the portfolio of the Acquired Fund and the
Acquiring Fund, when aggregated, would contain investments exceeding certain
percentage limitations imposed upon the Acquiring Fund with respect to such
investments, the Acquired Fund, if requested by the Acquiring Fund, will dispose
of and/or reinvest a sufficient amount of such investments as may be necessary
to avoid violating such limitations as of the Closing Date.
1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund shall
assume all liabilities, expenses, costs, charges and reserves reflected on
unaudited statements of assets and liabilities of the Acquired Fund prepared by
SEI Fund Management ("SEI"), as administrator of the Acquired Fund, as of the
Valuation Date (as defined in paragraph 2.1), in accordance with generally
accepted accounting principles consistently applied from the prior audited
period. The Acquiring Fund shall assume only those liabilities of the Acquired
Fund reflected in those unaudited statements of assets and liabilities and shall
not assume any other liabilities, whether absolute or contingent (the
"Liabilities").
A-2
<PAGE> 25
1.4 As provided in paragraph 3.4, as soon after the Closing Date as is
practicable (the "Liquidation Date"), SEI Trust will effect the liquidation of
the Acquired Fund in the manner provided in its Declaration of Trust and
prospectus and in accordance with applicable law, and on and after the Closing
Date it shall not conduct any business on behalf of the Acquired Fund except in
connection with its liquidation and termination. The Acquired Fund shall
distribute pro rata to its shareholders of record determined as of the close of
business on the Closing Date (the "Acquired Fund's Shareholders") the Acquiring
Fund's Shares received by the Acquired Fund pursuant to paragraph 1.1.
Shareholders of the Acquired Fund's Class A Shares shall receive only shares of
the Acquiring Fund's Institutional Service Class Shares. Such liquidation and
distribution will be accomplished by the transfer of the Acquiring Fund's Shares
then credited to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the name of
the Acquired Fund's Shareholders and representing the respective pro rata number
and class of the Acquiring Fund's Shares due such shareholders. All issued and
outstanding shares of the Acquired Fund will simultaneously be canceled on the
books of the Acquired Fund, although after the closing any share certificates
representing interests in the Acquired Fund will be deemed to represent the
number of the Acquiring Fund's Shares as may be determined in accordance with
Section 2.3. INTRUST Trust shall not issue certificates representing the
Acquiring Fund's Shares in connection with such exchange.
1.5 Ownership of the Acquiring Fund's Shares will be shown on the books of
the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued
in the manner described in the Acquiring Fund's current prospectus and statement
of additional information.
1.6 Any transfer taxes payable upon issuance of the Acquiring Fund's
Shares in a name other than the registered holder of the Acquired Fund's shares
on the books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom the Acquiring Fund's Shares
are to be issued and transferred.
1.7 Any reporting responsibility of the Acquired Fund is and shall remain
the responsibility of SEI Trust up to and including the Closing Date and such
later dates on which SEI Trust is dissolved and deregistered.
2. VALUATION
2.1 The value of the Assets and Liabilities of the Acquired Fund shall be
the value of such assets, less liabilities, computed on the Closing Date, using
the valuation procedures (including applicable times) set forth in INTRUST
Trust's Trust Agreement and then current prospectus or statement of additional
information applicable to the Institutional Service Class Shares of the
Acquiring Fund.
2.2 The net asset value of the Acquiring Fund's Shares shall be the net
asset value per share of the Institutional Service Class Shares computed on the
Closing Date, using the valuation procedures (including applicable times) set
forth in INTRUST Trust's Trust Agreement and then current prospectus or
statement of additional information applicable to the Institutional Service
Class Shares of the Acquiring Fund.
2.3 The number of the Acquiring Fund's Shares to be issued (including
fractional shares, if any) in exchange for the net assets of the Acquired Fund
and the assumption of its liabilities shall be determined by dividing the value
of the net assets of the Acquired Fund determined by using the same valuation
procedures referred to in paragraph 2.1 by the net asset value of the Acquiring
Fund's Shares determined in accordance with paragraph 2.2.
A-3
<PAGE> 26
2.4 All computations of value shall be made by BISYS Fund Services. Inc.
in accordance with its regular practices as administrator for INTRUST Trust.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be the next Friday that is a full business day
following satisfaction of all of the conditions set forth in Sections 6, 7 and 8
of this Agreement (other than those conditions which may by their terms be
satisfied only at the Closing), or such later date as the parties may agree in
writing. All acts taking place at the Closing shall be deemed to take place
simultaneously on the Closing Date at 3 p.m. (Central time), unless otherwise
provided. The Closing shall be held at such time on the Closing Date at the
offices of Baker & McKenzie, New York, New York or at such other time(s) and/or
place as the parties may agree.
3.2 CoreStates Bank, N. A., as custodian for SEI Trust (the "Custodian"),
shall deliver at the Closing a certificate of an authorized officer stating
that: (a) the Acquired Fund's portfolio securities, cash and any other assets
shall have been presented for examination to the Acquiring Fund prior to the
Closing Date and shall have been delivered in proper form to the Acquiring Fund
on the Closing Date and (b) all necessary taxes including all applicable federal
and state stock transfer stamps, if any, shall have been paid, or provision for
payment shall have been made, in conjunction with the delivery of portfolio
securities.
3.3 In the event that on the Closing Date (a) the New York Stock Exchange
or another primary trading market for portfolio securities of the Acquiring Fund
or the Acquired Fund shall be closed to trading or trading thereon shall be
restricted or (b) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the Closing
Date with respect to the Reorganization shall be postponed until the first
business day after the day when trading shall have been fully resumed and
reporting shall have been restored.
3.4 SEI Trust shall cause SEI, as transfer agent for SEI Trust, to deliver
at the Closing a certificate of an authorized officer stating that its records
contain the names and addresses of the Acquired Fund's Shareholders and the
number, class and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. INTRUST Trust shall issue and
deliver a confirmation evidencing the Acquiring Fund's Shares to be credited on
the Closing Date to the Secretary of SEI Trust, or provide evidence satisfactory
to SEI Trust that the Acquiring Fund's Shares have been credited to the Acquired
Fund's accounts on the books of the Acquiring Fund. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, if any, receipts or other documents as such other party or its
counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
4.1 SEI Trust, on behalf of the Acquired Fund, represents and warrants to
INTRUST Trust, on behalf of the Acquiring Fund, as follows:
(a) SEI Trust is a voluntary association with transferable shares of
the type commonly referred to as a Massachusetts business trust, duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts;
(b) SEI Trust is a registered investment company classified as a
management company of the open-end type, and its registration with the
Securities and Exchange Commission (the "Commission") as an
A-4
<PAGE> 27
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act") is in full force and effect;
(c) The current prospectus and statement of additional information of
SEI Trust with respect to the Acquired Fund conform in all material
respects to the applicable requirements of the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(d) SEI Trust is not, and the execution, delivery and performance of
this Agreement will not result, in material violation of its Declaration of
Trust or By-Laws, as each may have been amended to the date hereof or of
any agreement, indenture, instrument, contract, lease or other undertaking
with respect to the Acquired Fund to which SEI Trust is a party or by which
it or any of its series is bound;
(e) Neither SEI Trust nor any of its series has any material contracts
or other commitments which will be terminated with liability to SEI Trust
or any series thereof prior to the Closing Date;
(f) Except as otherwise disclosed in writing to and accepted by
INTRUST Trust, no litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against SEI Trust or any of its series with respect to
the Acquired Fund or any of the Acquired Fund's properties or assets which
if adversely determined would materially and adversely affect its financial
condition or the conduct of its business. SEI Trust knows of no facts which
might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially or adversely affects its
business or its ability to consummate the transactions herein contemplated;
(g) The statements of assets and liabilities of the Acquired Fund for
the period from the commencement of operations to August 31, 1996 (the
"1996 Statement") has been audited by Arthur Andersen L.L.P., independent
public accountants, and is and will be in accordance with generally
accepted accounting principles consistently applied, and the 1996 Statement
(copies of which have been furnished to INTRUST Trust) fairly and
accurately reflect the financial condition of the Acquired Fund as of such
date, and there are no known contingent liabilities of the Acquired Fund as
of such date not disclosed therein;
(h) Since August 31, 1996, there has not been any material adverse
change with respect to the Acquired Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date that such indebtedness was
incurred, provided that for the purposes of this subparagraph (h), a
decline in net asset value per share of the Acquired Funds shall not
constitute a material adverse change;
(i) At the Closing Date, all federal and other tax returns and reports
of the Acquired Fund required by law to have been filed by such dates shall
have been filed, and all federal and other taxes shall have been paid so
far as due, or provision shall have been made for the payment thereof and,
to the best of SEI Trust's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(j) For each fiscal year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company;
A-5
<PAGE> 28
(k) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, the Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the Acquired Fund) by SEI Trust. All of the
issued and outstanding shares of the Acquired Fund will, at the time of
Closing, be held by the persons and in the amounts set forth in the records
of the transfer agent as provided in paragraph 3.4. The Acquired Fund does
not have outstanding any options, warrants or other rights to subscribe for
or purchase any of the Acquired Fund's Shares, nor is there outstanding any
security convertible into any of the Acquired Fund's Shares;
(l) At the Closing Date, SEI Trust, on behalf of the Acquired Fund,
will have good and marketable title to the Assets and full right, power and
authority to sell, assign, transfer and deliver such Assets hereunder and,
upon delivery and payment for such Assets, INTRUST Trust, on behalf of the
Acquiring Fund, will acquire good and marketable title thereto, subject to
no restrictions on the full transfer thereof, including such restrictions
as might arise under the 1933 Act, other than as disclosed to the Acquiring
Fund;
(m) The execution, delivery and performance of this Agreement has been
duly authorized as of the date hereof by all necessary action on the part
of SEI Trust's Board of Trustees, and, subject to the receipt of any
necessary exemptive relief or no-action assurances requested from the
Commission or its Staff with respect to Section 17(a) and 17(d) of the 1940
Act and Rule 17d-1 thereunder, this Agreement will constitute a valid and
binding obligation of SEI Trust on behalf of the Acquired Fund, enforceable
in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general principles of equity;
(n) The information to be furnished by SEI Trust on behalf of the
Acquired Fund for use in no-action requests, applications for orders,
registration statements, proxy materials and other documents which may be
necessary in connection with the transactions contemplated hereby shall be
accurate and complete in all material respects and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto;
(o) The proxy statement of SEI Trust (the "Proxy Statement") to be
included in the Registration Statement referred to in paragraph 5.7 (only
insofar as it relates to SEI Trust and the Acquired Fund) will, on the
effective date of the Registration Statement and on the Closing Date, (i)
comply in all material respects with the applicable provisions of the 1933
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), and
the 1940 Act and the regulations thereunder, and (ii) not contain any
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,
in light of the circumstances under which such statements were made, not
materially misleading;
(p) SEI Trust has no authorized series other than the Acquired Fund,
Intermediate-Term Municipal Portfolio, Tax Free Portfolio, Institutional
Tax Free Portfolio, California Intermediate Term Municipal Portfolio,
California Tax Exempt Portfolio, Pennsylvania Municipal Portfolio, New York
Intermediate-Term Municipal Portfolio and Pennsylvania Tax Free Portfolio;
(q) The Acquired Fund has no authorized classes other than the Class A
Shares and Class B Shares and all of the issued and outstanding shares of
the Class B Shares are, as of the date of this Agreement, held by SEI.
A-6
<PAGE> 29
4.2 INTRUST Trust, on behalf of the Acquiring Fund, represents and warrants
to SEI Trust, on behalf of the Acquired Fund, as follows:
(a) INTRUST Trust is a voluntary association with transferable shares
of the type commonly referred to as a Delaware business trust, duly
organized and validly existing under the laws of the State of Delaware;
(b) INTRUST Trust is registered as an investment company classified as
a management company of the open-end type, and its registration with the
Commission as an investment company under the 1940 Act is, or on the date
of the Closing will be, in full force and effect;
(c) The current prospectus and statement of additional information of
INTRUST Trust with respect the Acquiring Fund conforms in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act
and the rules and regulations of the Commission thereunder and do not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not materially misleading;
(d) INTRUST Trust is not, and the execution, delivery and performance
of this Agreement will not result, in material violation of its Trust
Agreement or By-Laws, as each may have been amended to the date hereof or
of any agreement, indenture, instrument, contract, lease or other
undertaking with respect to the Acquiring Fund to which INTRUST Trust is a
party or by which it is bound;
(e) Except as otherwise disclosed in writing to and accepted by SEI
Trust, no litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or threatened
against INTRUST Trust with respect to the Acquiring Fund or the Acquiring
Fund's properties or assets which if adversely determined would materially
and adversely affect its financial condition or the conduct of their
business. INTRUST Trust knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability to
consummate the transactions contemplated herein;
(f) The statement of assets and liabilities of Acquiring Fund as of
December 6, 1996 has been audited by KPMG Peat Marwick LLP, independent
public accountants, and are in accordance with generally accepted
accounting principles consistently applied, and such statement (copies of
which have been furnished to SEI Trust), fairly and accurately reflect the
financial condition of the Acquiring Fund as of such date, and there are no
known contingent liabilities of the Acquiring Fund as of such date not
disclosed therein;
(g) Since December 6, 1996, there has not been any material adverse
change with respect to the Acquiring Fund's financial condition, assets,
liabilities or business other than changes occurring in the ordinary course
of business, or any incurrence by the Acquiring Fund of indebtedness
maturing more than one year from the date that such indebtedness was
incurred, except as otherwise disclosed to and accepted by SEI Trust,
provided that for the purposes of this subparagraph (g), a decline in net
asset value per share of the Acquiring Fund shall not constitute a material
adverse change;
(h) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Fund required by law to have been filed by such dates
shall have been filed, and all federal and other taxes shall have been paid
so far as due, or provision shall have been made for the payment thereof
and, to the best of
A-7
<PAGE> 30
INTRUST Trust's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to such returns;
(i) Since inception, the Acquiring Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company;
(j) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to ownership
thereof (recognizing that, under Delaware law, the Acquiring Fund's
Shareholders could, under certain circumstances, be held personally liable
for obligations of the Acquiring Fund) by INTRUST Trust. The Acquiring Fund
does not have outstanding any options, warrants or other rights to
subscribe for or purchase any of the Acquiring Fund's Shares, nor is there
outstanding any security convertible into any of the Acquiring Fund's
Shares;
(k) The execution, delivery and performance of this Agreement has been
duly authorized as of the date hereof by all necessary action on the part
of INTRUST Trust's Board of Trustees, and, subject to receipt of any
necessary exemptive relief or no-action assurances requested from the
Commission or its Staff with respect to Section 17(a) and 17(d) of the 1940
Act and Rule 17d-1 thereunder, this Agreement will constitute a valid and
binding obligation of INTRUST Trust on behalf of the Acquiring Fund,
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general principles of equity;
(l) The information to be furnished by INTRUST Trust for use in
no-action requests, application for orders, registration statements, proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto; and
(m) The Proxy Statement (only insofar as it relates to INTRUST Trust
and the Acquiring Fund) will, on the effective date of the Registration
Statement and on the Closing Date, (i) comply in all material respects with
the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act
and the regulations thereunder, and (ii) not contain any 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, in light of the
circumstances under which such statements were made, not materially
misleading.
5. COVENANTS OF INTRUST TRUST AND SEI TRUST
5.1 INTRUST Trust and SEI Trust will operate the businesses of the
Acquiring Fund and the Acquired Fund, respectively, in the ordinary course
between the date hereof and the Closing Date, it being understood that such
ordinary course of business will include the declaration and payment of
customary dividends and distributions.
5.2 SEI Trust will call a meeting of the Acquired Fund's shareholders to
consider and act upon this Agreement and to take all other action necessary to
obtain approval of the transactions contemplated herein.
5.3 SEI Trust covenants that the Acquiring Fund's Shares to be issued
hereunder are not being acquired for the purpose of making any distribution
thereof other than in accordance with the terms of this Agreement.
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<PAGE> 31
5.4 SEI Trust will assist INTRUST Trust in obtaining such information as
INTRUST Trust reasonably requests concerning the beneficial ownership of the
Acquired Fund's shares.
5.5 Subject to the provisions of this Agreement, INTRUST Trust and SEI
Trust each will take, or cause to be taken, all action, and do or cause to be
done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement.
5.6 As promptly as practicable, but in any case within sixty days after
the Closing Date, SEI Trust shall furnish INTRUST Trust, in such form as is
reasonably satisfactory to INTRUST Trust, statements of the earnings and profits
of the Acquired Fund for federal income tax purposes which will be carried over
to the Acquiring Fund as a result of Section 381 of the Code, and which will be
certified by SEI Trust's President and its Treasurer.
5.7 SEI Trust will provide INTRUST Trust with information reasonably
necessary for the preparation of a prospectus (the "Prospectus") which will
include the Proxy Statement referred to in paragraph 4.1(o), all to be included
in a Registration Statement on Form N-14 of INTRUST Trust (the "Registration
Statement"), in compliance with the 1933 Act, the 1934 Act and the 1940 Act, in
connection with the meeting of the Acquired Fund's Shareholders to consider
approval of this Agreement and the transactions contemplated herein.
5.8 INTRUST Trust, on behalf of the Acquiring Fund, agrees to use all
reasonable efforts to obtain the approvals and authorizations required by the
1933 Act, the 1940 Act and such of the state Blue Sky or securities laws as it
may deem appropriate in order to continue its operations after the Closing Date.
5.9 From and after the date of this Agreement, SEI Trust will not issue
any additional shares of the Class B Shares of the Acquired Fund. As
contemplated by Section 1.4, the Acquired Fund shall redeem all of its shares of
the Class B Shares held by SEI immediately prior to the Closing with respect to
the Acquired Fund.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SEI TRUST
The obligations of SEI Trust to consummate the transactions provided for
herein shall be subject, at its election, to the performance by INTRUST Trust of
all of the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following further conditions:
6.1 All representations and warranties of INTRUST Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
6.2 INTRUST Trust shall have delivered to SEI Trust a certificate executed
in its name by its President or the President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to SEI Trust and dated as of the
Closing Date, to the effect that the representations and warranties of INTRUST
Trust made in this Agreement are true and correct at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement and as to such other matters as SEI Trust shall reasonably request;
6.3 SEI Trust shall have received on the Closing Date a favorable opinion
from Baker & McKenzie, counsel to INTRUST Trust, dated as of the Closing Date,
in a form reasonably satisfactory to Morgan Lewis & Bockius, counsel to SEI
Trust, that:
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<PAGE> 32
(a) INTRUST Trust is a voluntary association with transferable shares
of the type commonly referred to as a Delaware business trust organized
pursuant to its Trust Agreement and validly existing under the laws of the
State of Delaware with legal power to own all of its properties and assets
and to carry on its business, including that of the Acquiring Fund, as
presently conducted.
(b) The Agreement has been duly authorized, executed and delivered by
INTRUST Trust on behalf of the Acquiring Fund and, assuming that the
Registration Statement complies with the 1933 Act, the 1934 Act and the
rules and regulations thereunder, is a valid and binding obligation of
INTRUST Trust enforceable against INTRUST Trust in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and to general principles of equity.
(c) The Acquiring Fund's Shares to be issued and delivered to SEI
Trust, which SEI Trust will thereafter transfer to the shareholders of the
Acquired Fund, all as provided by the Agreement, are duly authorized and
upon such delivery will be validly issued and outstanding and fully paid
and nonassessable by INTRUST Trust, and no shareholder of INTRUST Trust has
any preemptive right to subscription or purchase in respect thereof.
(d) The execution and delivery of the Agreement did not, and the
consummation of the transactions contemplated therein will not, violate
INTRUST Trust's Trust Agreement or By-Laws, or any material provision of
any material agreement known to such counsel to which INTRUST Trust is a
party or by which it is bound with respect to the Acquiring Fund or, to
such counsel's knowledge, result in the acceleration of any obligation or
the imposition of any penalty, under any material agreement, judgment or
decree to which INTRUST Trust is a party or by which it is bound with
respect to the Acquiring Fund.
(e) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by INTRUST Trust of
the transaction contemplated in the Agreement, except such as have been
obtained under the 1933 Act, the 1934 Act, and be 1940 Act, and such as may
be required under state securities laws.
(f) The descriptions in the Proxy Statement of statutes, legal and
governmental proceedings and contracts and other documents, if any, only
insofar as they relate to INTRUST Trust or the Acquiring Fund, are accurate
and fairly present the information required to be shown.
(g) The Registration Statement has become effective under the 1933
Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act.
(h) To such counsel's knowledge (A) no legal or governmental
proceedings existing on or before the date of mailing the Proxy Statement,
only insofar as they relate to INTRUST Trust or the Acquiring Fund, are
required to be described in the Proxy Statement which are not described as
required and (B) there are no contracts or documents, only insofar as they
relate to INTRUST Trust or the Acquiring Fund, of a character required to
be described in the Proxy Statement to be as exhibits to the Registration
Statement which are not described or filed as required.
(i) INTRUST Trust is a duly registered investment company and, to
such counsel's knowledge, its registration with the Commission as an
investment company under the 1940 Act is in full force and effect.
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<PAGE> 33
(j) To such counsel's knowledge (A) no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to INTRUST Trust or any of its
properties or assets and (B) INTRUST Trust is not a party to or subject to
the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects its business.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF INTRUST TRUST
The obligations of INTRUST Trust to complete the transactions provided for
herein shall be subject, at its election, to the performance by SEI Trust of all
the obligations to be performed by it hereunder on or before the Closing Date
and, in addition thereto, the following conditions:
7.1 All representations and warranties of SEI Trust contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
7.2 SEI Trust shall have delivered to INTRUST Trust the 1996 Statements
and related report and certificate as and when contemplated by Section 5.9 and
statements of assets and liabilities of the Acquired Fund together with a list
of the Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer or Assistant Treasurer of SEI Trust;
7.3 SEI Trust shall have delivered to INTRUST Trust on the Closing Date a
certificate executed in its name by its President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to INTRUST
Trust and dated as of the Closing Date, to the effect that the representations
and warranties of SEI Trust made in this Agreement are true and correct at and
as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as INTRUST Trust
shall reasonably request;
7.4 INTRUST Trust shall have received on the Closing Date a favorable
opinion of Morgan Lewis & Bockius, counsel to SEI Trust, in a form satisfactory
to Baker & McKenzie, counsel to INTRUST Trust, that:
(a) SEI Trust is a voluntary association with transferable shares of
the type commonly referred to as a Massachusetts business trust organized
pursuant to its Declaration of Trust and validly existing and in good
standing under the laws of the Commonwealth of Massachusetts with legal
power to own all of its properties and assets and to carry on its business,
including that of the Acquired Fund, as presently conducted.
(b) The Agreement has been duly authorized, executed and delivered by
SEI Trust on behalf of the Acquired Fund and, assuming that the
Registration Statement complies with the 1933 Act, the 1934 Act and the
rules and regulations thereunder, is a valid and binding obligation of SEI
Trust enforceable against SEI Trust in accordance with its terms, subject
as to enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to
general principles of equity.
(c) The execution and delivery of the Agreement did not, and the
consummation of the transactions contemplated therein will not, violate SEI
Trust's Declaration of Trust or By-Laws, as each may have been amended to
the date hereof, or any material provision of any material agreement known
to such counsel to which SEI Trust is a party or by which it is bound with
respect to the Acquired Fund or,
A-11
<PAGE> 34
to such counsel's knowledge, result in the acceleration of any obligation
or the imposition of any penalty, under any material agreement, judgment,
or decree to which SEI Trust is a party or by which it is bound with
respect to the Acquired Fund.
(d) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by SEI Trust of the
transactions contemplated in the Agreement, except such as have been
obtained under the 1933 Act, the 1934 Act, and the 1940 Act, and such as
may be required under state securities laws.
(e) The descriptions in the Proxy Statement of statutes, legal and
governmental proceedings and contracts and other documents, if any, only
insofar as they relate to SEI Trust or the Acquired Fund, are accurate and
fairly present the information required to be shown.
(f) To such counsel's knowledge (A) no legal or governmental
proceedings existing on or before the date of mailing the Proxy Statement,
only insofar as they relate to SEI Trust or the Acquired Fund, are required
to be described in the Proxy Statement which are not described as required
and (B) there are no contracts or documents, only insofar as they relate to
SEI Trust or the Acquired Fund, of a character required to be described in
the Proxy Statement or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(g) SEI Trust is a duly registered investment company and, to such
counsel's knowledge, its registration with the Commission as an investment
company under the 1940 Act is in full force and effect.
(h) To such counsel's knowledge (A) no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or threatened as to SEI Trust or any of its properties or
assets and (B) SEI Trust is not a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body which
materially and adversely affects its business.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF INTRUST TRUST AND SEI TRUST
If any of the conditions set forth below have not been satisfied on or
before the Closing Date with respect to SEI Trust or INTRUST Trust, the other
party to this Agreement shall, at its option, not be required to consummate the
transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of the
Acquired Fund in accordance with the provisions of SEI Trust's Declaration of
Trust and the 1940 Act and certified copies of the resolutions evidencing such
approval shall have been delivered to INTRUST Trust. Notwithstanding anything
herein to the contrary, neither INTRUST Trust nor SEI Trust may waive the
conditions set forth in this paragraph 8.1;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 (a) The parties shall have received (i) an Order from the Commission
on an Application Pursuant to Section 17(b) of the 1940 Act for an Order
Exempting Proposed Transactions from Section 17(a) of the Act and pursuant to
Section 17(d) of the Act and Rule 17d-1 thereunder or, alternatively, (ii) an
opinion of counsel reasonably satisfactory to all parties that such an order is
not required;
(b) All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities,
A-12
<PAGE> 35
including "no-action" positions of and exemptive orders from such federal and
state authorities) deemed necessary by INTRUST Trust or SEI Trust to permit
consummation, in all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain any such consent, order
or permit would not involve a risk of a material adverse effect on the assets or
properties of INTRUST Trust or SEI Trust, provided that either party hereto may
for itself waive any of such conditions;
8.4 The Registration Statement shall have become effective under the 1933
Act, and no stop orders suspending the effectiveness thereof shall have been
issued, and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act;
8.5 The parties shall have received a favorable opinion of Baker &
McKenzie, addressed to INTRUST Trust and SEI Trust, substantially to the effect
that for federal income tax purposes:
(a) The transfer of all or substantially all of the Acquired Fund's
assets in exchange for the Acquiring Fund's Shares and the assumption by
the Acquiring Fund of certain identified liabilities of the Acquired Fund
will constitute a "reorganization" within the meaning of Section 368 of the
Code, and INTRUST Trust and SEI Trust are each a "party to a
reorganization" within the meaning of Section 368 of the Code:
(b) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's Assets to the Acquiring Fund in exchange
for the Acquiring Fund's Shares and the assumption by the Acquiring Fund of
certain identified liabilities of the Acquired Fund or upon the
distribution (whether actual or constructive) of the Acquiring Fund's
Shares to the Acquired Fund's Shareholders in exchange for their shares of
the Acquired Fund;
(c) The tax basis of the Acquired Fund's assets acquired by an
Acquiring Fund will be the same as the tax basis of such assets to the
Acquired Fund immediately prior to the Reorganization, and the holding
period of the assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the
Acquired Fund;
(d) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the
Acquiring Fund's Shares and the assumption by the Acquiring Fund of certain
identified liabilities of the Acquired Fund:
(e) No gain or loss will be recognized by shareholders of the
Acquired Fund upon the issuance of the Acquiring Fund's Shares to such
shareholders; and
(f) The aggregate tax basis for the Acquiring Fund's Shares received
by each shareholder of the Acquired Fund pursuant to the Reorganization
will be the same as the aggregate tax basis of the Acquired Fund's Shares
held by such shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund's Shares to be received by each
shareholder of the Acquired Fund will include the period during which the
Acquired Fund's Shares exchanged therefor were held by such shareholder
(provided that the Acquired Fund's Shares were held as capital assets on
the date of the Reorganization).
Notwithstanding anything herein to the contrary, neither INTRUST Trust nor
SEI Trust may waive the conditions set forth in this paragraph 8.5 unless the
Board of Trustees of either INTRUST Trust or SEI Trust (including the Trustees
who are not "interested persons" thereof), shall have determined that the waiver
thereof would not materially affect the shareholders of the Acquired Fund or
Acquiring Fund.
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<PAGE> 36
9. INDEMNIFICATION
9.1 The Acquired Fund will indemnify and hold harmless, out of its assets
but no other assets, the Acquiring Fund, its trustees and its officers (for
purposes of this paragraph 9.1, the "Indemnified Parties") against any and all
expenses, losses, claims, damages and liabilities at any time imposed upon or
reasonably incurred by any one or more of the Indemnified Parities in connection
with, arising out of, or resulting from any claim, action, suit or proceeding in
which any one or more of the Indemnified Parties may be involved or with which
any one or more of the Indemnified Parties may be threatened by reason of any
untrue statement or alleged untrue statement of a material fact relating to the
Acquired Fund contained in the Registration Statement, the Prospectus or the
Proxy Statement or any amendment or supplement to any of the foregoing, or
arising out of or based upon the omission or alleged omission to state in any of
the foregoing a material fact relating to the Acquired Fund required to be
stated therein or necessary to make the statements relating to the Acquired Fund
therein not misleading, including, without limitation, any amounts paid by any
one or more of the Indemnified Parties in a reasonable compromise or settlement
of any such claim, action, suit or proceeding, or threatened claim, action, suit
or proceeding made with the consent of the Acquired Fund. The Indemnified
Parties will notify the Acquired Fund in writing within ten days after the
receipt by any one or more of the Indemnified Parties of any notice of legal
process or any suit brought against or claim made against such Indemnified
Parties as to any matters covered by this paragraph 9.1. The Acquired Fund shall
be entitled to participate at its own expense in the defense of any claim,
action, suit or proceeding covered by this paragraph 9.1, or, if it so elects,
to assume at its expense by counsel satisfactory to the Indemnified Parties the
defense of any such claim, action, suit or proceeding, and if the Acquired Fund
elects to assume such defense, the Indemnified Parties shall be entitled to
participate in the defense of any such claim, action, suit or proceeding at
their expense. The Acquired Fund's obligation under this paragraph 9.1 to
indemnify and hold harmless the Indemnified Parties shall constitute a guarantee
of payment so that the Acquired Fund will pay in the first instance any
expenses, losses, claims, damages and liabilities required to be paid by it
under this paragraph 9.1 without the necessity of the Indemnified Parties' first
paying the same.
9.2 The Acquiring Fund will indemnify and hold harmless, out of its assets
but no other assets, the Acquired Fund, its trustees and its officers (for
purposes of this paragraph 9.2, the "Indemnified Parties") against any and all
expenses, losses, claims, damages and liabilities at any time imposed upon or
reasonably incurred by any one or more of the Indemnified Parties in connection
with, arising out of, or resulting from any claim, action, suit or proceeding in
which any one or more of the Indemnified Parties may be involved or with which
any one or more of the Indemnified Parities may be threatened by reason of any
untrue statement or alleged untrue statement of a material fact relating to the
Acquiring Fund contained in the Registration Statement, the Prospectus or the
Proxy Statement, or any amendment or supplement to any thereof, or arising out
of, or based upon, the omission or alleged omission to state in any of the
foregoing a material fact relating to the Acquiring Fund required to be stated
therein or necessary to make the statements relating to the Acquiring Fund
therein not misleading, including without limitation any amounts paid by any one
or more of the Indemnified Parties in a reasonable compromise or settlement of
any such claim, action, suit or proceeding, or threatened claim, action, suit or
proceeding made with the consent of the Acquiring Fund. The Indemnified Parties
will notify the Acquiring Fund in writing within ten days after the receipt by
any one or more of the Indemnified Parties of any notice of legal process or any
suit brought against or claim made against such Indemnified Party as to any
matters covered by this paragraph 9.2. The Acquiring Fund shall be entitled to
participate at its own expense in the defense of any claim, action, suit or
proceeding covered by this paragraph 9.2, or, if it so elects, to assume at its
expense by counsel satisfactory to the Indemnified Parties the defense of any
such claim, action, suit or proceeding, and, if the Acquiring Fund elects to
assume such defense, the Indemnified Parties shall be entitled to participate in
the defense of any such claim, action, suit or
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<PAGE> 37
proceeding at their own expense. The Acquiring Fund's obligation under this
paragraph 9.2 to indemnify and hold harmless the Indemnified Parties shall
constitute a guarantee of payment so that the Acquiring Fund will pay in the
first instance any expenses, losses, claim, damages and liabilities required to
be paid by it under this paragraph 9.2 without the necessity of the Indemnified
Parties' first paying the same.
10. BROKERAGE FEES AND DEFENSES
10.1 INTRUST Trust and SEI Trust each represents and warrants to the other
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
10.2 Except as otherwise provided herein, all expenses of the Acquiring
Fund and the Acquired Fund contemplated by this Agreement will be borne by
INTRUST. Such expenses include, without limitation: (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Agreement; (ii) expenses incurred in filing of exemption applications, if
necessary, with the Securities and Exchange Commission; (iii) expenses
associated with the preparation and filing of the Registration Statement under
the 1933 Act covering the Acquiring Fund's Shares to be issued pursuant to the
provisions of this Agreement; (iv) registration or qualification fees and
expenses of preparing and filing such forms as are necessary under applicable
state securities laws to qualify the Acquiring Fund's Shares to be issued in
connection herewith in each state in which the Acquired Fund's Shareholders are
resident as of the date of the mailing of the Proxy Statement to such
shareholders; (v) postage in connection with the Registration Statement/Proxy
Statement; (vi) printing in connection with the Registration Statement/Proxy
Statement; (vii) accounting fees in connection with the transactions; (viii)
legal fees in connection with the transactions; and (ix) solicitation costs of
the transactions.
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 INTRUST Trust and SEI Trust agree that neither party has made any
representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
11.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
12. TERMINATION
12.1 Prior to January 1, 1998, this Agreement may be terminated by the
mutual agreement of INTRUST Trust and SEI Trust. After that date, either SEI
Trust or INTRUST Trust may terminate this Agreement upon written notice to the
other party. In addition, either INTRUST Trust or SEI Trust may at its option
terminate this Agreement at or prior to the Closing Date, because:
(a) of a material breach by the other of any representation, warranty
or agreement contained herein to be performed at or prior to the Closing
Date; or
(b) condition herein expressed to be precedent to the obligations of
the terminating party has not been met and it reasonably appears that it
will not or cannot be met.
12.2 In the event of any such termination, there shall be no liability for
damages on the part of either INTRUST Trust or SEI Trust or their respective
Directors, Trustees or officers, to the other party.
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<PAGE> 38
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by SEI Trust and INTRUST Trust; provided,
however, that following the meeting of the Acquired Fund's shareholders called
by SEI Trust pursuant to paragraph 5.2 of this Agreement, no such amendment may
have the effect of changing the provisions for determining the number of the
Acquiring Fund's Shares to be issued to the Acquired Fund's Shareholders under
this Agreement to the detriment of such shareholders without their further
approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to INTRUST Trust, 3435 Stelzer
Road, Columbus, Ohio 43219 (with a copy to Baker & McKenzie, 805 Third Avenue,
New York, New York 10022, Attention: Steven R. Howard, Esq.), or to SEI Trust,
Oaks, Pennsylvania 19456 (with a copy to Morgan Lewis Bockius, 1800 M Street,
N.W., Washington, DC 20036, Attention: Edward B. Baer, Esq.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
15.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
15.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
15.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
15.5 (a) It is expressly agreed that the obligations of the Acquiring Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of INTRUST Trust personally, but bind only the
trust property of INTRUST Trust and the Acquiring Fund, as provided in the Trust
Agreement of INTRUST Trust. The execution and delivery of this Agreement have
been authorized by the Trustees of INTRUST Trust and executed by authorized
officers of INTRUST Trust on behalf of the Acquiring Fund, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the trust
property of the Acquiring Fund as provided in the Trust Agreement of INTRUST
Trust.
(b) It is expressly agreed that the obligations of the Acquired Fund
hereunder shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents or employees of SEI Trust personally, but bind only property of
the Acquired Fund, as provided in the Declaration of Trust of SEI Trust. The
execution and delivery of this Agreement have been authorized by the Trustees of
SEI Trust and executed by authorized
A-16
<PAGE> 39
officers of SEI Trust on behalf of the Acquired Fund, acting as such, and
neither such authorization by such Trustees nor such execution and delivery by
such officers shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the
property of the Acquired Fund as provided in the Declaration of Trust of SEI
Trust.
(c) With respect to the obligations of INTRUST Trust on behalf of the
Acquiring Fund or of SEI Trust on behalf of the Acquired Fund arising out of
this Agreement. the parties hereto shall look for payment or satisfaction of
such obligation solely to the assets of property of the Acquiring Fund or
Acquired Fund (as applicable) to which such obligation relates.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its Chairman of the Board, President or Vice President and its
seal to be affixed thereto and attested by its Secretary or Assistant Secretary.
<TABLE>
<S> <C>
Attest: INTRUST Funds Trust on behalf of the
Acquiring Fund
- ---------------------------------------------
By: Name:
----------------------------------------- ---------------------------------------------
Secretary Title:
---------------------------------------------
Attest: SEI Tax Exempt Trust on behalf of the
Acquiring Fund
- ---------------------------------------------
By: Name:
----------------------------------------- ---------------------------------------------
Secretary Title:
---------------------------------------------
Agreed and Acknowledged as to Sections 10.2 and 11.2:
INTRUST BANK, N.A.
By:
-----------------------------------------
Name:
Title:
</TABLE>
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<PAGE> 40
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<PAGE> 41
APPENDIX B -- ADDITIONAL INVESTMENT RESTRICTIONS
ADDITIONAL INVESTMENT RESTRICTIONS. Both the Reorganizing and Acquiring
Funds have investment policies restricting the scope of their investments in
addition to those discussed in the body of this Combined Proxy
Statement/Prospectus. Neither the Reorganizing Fund nor the Acquiring Fund may
change fundamental investment policies without the affirmative vote of the
holders of a majority of the outstanding shares (as defined in the 1940 Act) of
the particular Reorganizing or corresponding Acquiring Fund. However, investment
policies that are not fundamental may be changed by the Board of Trustees
without shareholder approval. The formal investment restrictions of the
Reorganizing Funds and their corresponding Acquiring Funds are identical. The
tables below presents restrictions of the Reorganizing Fund and corresponding
Acquiring Fund. Fundamental policies are followed by an (F); non-fundamental
policies are followed by an (NF).
THE FUND MAY NOT:
1. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of total assets. This borrowing
provision is included solely to facilitate the orderly sale of portfolio
securities to accommodate heavy redemption requests if they should occur and
is not for investment purposes. All borrowings of the Portfolios, in excess
of 5% of its total assets, will be repaid before making additional
investments and any interest paid on such borrowings will reduce income. (F)
2. Purchase securities of other investment companies except that the Fund
purchase securities of money market funds as permitted by the 1940 Act and
the rules and regulations thereunder. (NF) In addition, notwithstanding any
other policy, unlike the Reorganization Fund Portfolio, the Acquiring Fund
will adopt fundamental policy such that it may invest all of its investable
assets in an investment company.
3. Make loans, except that the Fund may purchase or hold debt instruments in
accordance with its investment objective and policies and may enter into
repurchase agreements, provided that repurchase agreements maturing in more
than seven days, restricted securities and other illiquid securities are not
to exceed, in the aggregate, 10% of the Portfolio's net assets. (F)
4. Pledge, mortgage or hypothecate assets except to secure temporary borrowings
permitted by (1) above in aggregate amounts not to exceed 10% of the net
assets of such Portfolio taken at current value at the time of the
incurrence of such loan. (NF)
5. Invest in companies for the purpose of exercising control. (F)
6. Acquire more than 10% of the voting securities of any one issuer. (NF)
7. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts including futures contracts. (F)
However, subject to its permitted investments, the Fund may invest in
municipal securities or other obligations secured by real estate or other
interests therein.
8. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Fund may obtain short-term credits as
necessary for the clearance of security transactions. (NF)
9. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter in selling a portfolio security. (F)
B-1
<PAGE> 42
10. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described in the Prospectuses and its Statement
of Additional Information or as permitted by rule, regulation or order of
the SEC. (F)
11. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of the
shares or securities of such issuer and all such officers, trustees, shares
or securities of such issuer and all such officers, trustees, partners and
directors owning more than 1/2 of 1% of such shares or securities together
own more than 5% of such shares or securities. (NF)
12. Purchase securities of any company which has (with predecessors) a record of
less than three years continuing operations (except (i) obligations issued
or guaranteed by the United States Government, its agencies or
instrumentalities, or (ii) municipal securities which are rated by at least
two nationally recognized municipal bond rating services or determined by
the Adviser to be of "high quality") if, as a result, more than 5% of the
total assets (taken at current value) would be invested in such securities.
(NF)
13. Purchase warrants, calls, straddles, spreads or combinations thereof. (NF)
14. Invest in interests in oil, gas or other mineral exploration mineral leases
or development programs. (NF)
The foregoing percentages will apply at the time of the purchase of a
security.
B-2
<PAGE> 43
SEI TAX EXEMPT TRUST
KANSAS TAX FREE INCOME PORTFOLIO
OAKS, PENNSYLVANIA 19456
(800) 342-5734
STATEMENT OF ADDITIONAL INFORMATION
RELATING TO SPECIAL MEETING OF
SHAREHOLDERS OF THE SEI TAX EXEMPT TRUST
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Proxy Statement/Prospectus dated March 28,
1997 for the Special Meeting of Shareholders of Kansas Tax Free Income Portfolio
(the "Fund" or the "Reorganizing Fund"), a series of SEI Tax Exempt Trust ("SEI
Trust"), to be held on April 28, 1997. Copies of the Combined Proxy
Statement/Prospectus may be obtained at no charge by calling SEI Financial
Services Company at 800-341-5734.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined Proxy
Statement/Prospectus.
Further information about the Reorganizing Fund is contained in and
incorporated by reference to SEI Tax Exempt Trust's Statement of Additional
Information dated December 31, 1996, which is included herewith. The audited
financial statements for the Reorganizing Fund contained in their Annual Report,
dated August 21, 1996 and their unaudited financial statements contained in
their Semi-Annual Report dated February 29, 1996 are incorporated herein by
reference and included herewith. No other parts of the Annual Report or
Semi-Annual Report are incorporated herein by reference.
Further information about INTRUST Funds Trust is contained in, and
incorporated herein by reference to, the Statement of Additional Information for
Kansas Tax Exempt Bond Fund (the "Acquiring Fund"). The Acquiring Fund was not
operational as of March 28, 1997.
The date of this Statement of Additional Information is March 28, 1997.
<PAGE> 44
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information................................................................ 3
</TABLE>
2
<PAGE> 45
GENERAL INFORMATION
The Shareholders of the SEI Tax Exempt Trust are being asked to consider
and approve an Agreement and Plan of Reorganization (the "Reorganization
Agreement") by and between SEI Tax Exempt Trust and INTRUST Funds Trust and the
transactions contemplated thereby.
The Reorganization Agreement provides that the Reorganizing Fund will
transfer substantially all its assets and its stated liabilities to the
Acquiring Fund.
In exchange for the transfers of these assets and liabilities pursuant to
the Reorganization Agreement, INTRUST Funds Trust will simultaneously issue
shares of the Acquiring Fund to the Reorganizing Fund. The Reorganizing Fund
will then distribute shares of the Acquiring Fund to its shareholders, in
liquidation of the Reorganizing Fund. As a result upon effectiveness of the
reorganization, the Reorganizing Fund will cease to exist and its shareholders
will be shareholders of the corresponding Acquiring Fund.
The INTRUST Kansas Tax Exempt Bond Fund will not be operational before the
Reorganization. Accordingly, no pro forma financial information showing the
impact of the Reorganization is presented.
The Special Shareholders Meeting of SEI Tax Exempt Trust to consider the
Reorganization Agreement and the related transactions will be held at the
offices of BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio 43219, on
April 28, 1997 at 10:00 a.m. Eastern Time.
For further information about these transactions, see the Combined Proxy
Statement/Prospectus.
3
<PAGE> 46
SEI TAX EXEMPT TRUST
KANSAS TAX FREE INCOME PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS -- APRIL 28, 1997
The undersigned appoints David Bunstine and Bruce Treff and each of
them, attorneys and proxies of the undersigned, with power of
substitution, to vote all shares of KANSAS TAX FREE INCOME PORTFOLIO
(the "Fund") which the undersigned is entitled to vote at the Special
Meeting of Shareholders to be held on April 28, 1997 at 10:00 a.m.,
Eastern time, and at any adjournment thereof.
Please Complete, Sign and Date on Reverse Side and Mail in
Accompanying Postpaid Envelope.
THE BOARD OF TRUSTEES FAVORS A VOTE FROM EACH PROPOSAL
1. To approve the proposed Agreement and Plan of Reorganization with
respect to the Fund and the transactions contemplated thereby as
described in the accompanying Combined Proxy Statement/Prospectus.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. To consider and act upon any other business as may properly come
before the Special Meeting and any adjournment thereof.
(Continued on other side)
(Continued from other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. WHEN
PROPERLY EXECUTED, IT SHALL BE VOTED IN THE MANNER SPECIFIED. IF NO
SPECIFICATION IS MADE, IT SHALL BE VOTED "FOR" THE APPROVAL OF
PROPOSAL 1 AND IN THE DISCRETION OF THE PERSONS NAMED AS PROXIES AS TO
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY
ADJOURNMENTS THEREOF.
NOTE: THIS INSTRUMENT MUST BE
SIGNED BY THE REGISTERED
HOLDER(S). WHEN SIGNING AS
ATTORNEY, ADMINISTRATOR,
TRUSTEE OR GUARDIAN,
PLEASE GIVE YOUR TITLE AS
SUCH.
--------------------------------
Date
--------------------------------
--------------------------------
Signature(s)
P
R
O
X
Y
