<PAGE>
As filed with the Securities and Exchange Commission on December 21, 1999
Securities Act File No. 333-70423
Investment Company Act of 1940 File No. 811-09195
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 1 / X /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
Amendment No. 3 / X /
SA Funds - Investment Trust
(Formerly known as RWB Funds - Investment Trust)
(Exact Name of Registrant as Specified in Charter)
1190 Saratoga Avenue, Suite 200
San Jose, California 95129
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number (408) 260-3143
Stephen Schuyler
Vice President and Associate Counsel
State Street Bank and Trust Company
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
(Name and Address of Agent for Service)
Copies to:
Julie Allecta, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, CA 94104-2635
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after this
Registration Statement is declared effective.
It is proposed that this filing will become effective: (check appropriate box)
immediately upon filing pursuant to paragraph (b)
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on pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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x 75 days after filing pursuant to paragraph (a)(2)
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on pursuant to paragraph (a)(2) of Rule 485.
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If appropriate, check the following box:
This post-effective amendment designates a new effective date
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for a previously filed post-effective amendment.
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Items in Part A of Form N-1A Heading
- ---------------------------- -------
<S> <C>
1. Front and Back Cover Pages Cover
2. Risk/Return Summary: Investments, Risks, and Risk/Return Summary - Goal, Principal
Performance Investment Strategies, Principal Risks
3. Risk/Return Summary: Fee Table Risk/Return Summary - Fees and Expenses
4. Investment Objectives; Principal Investment Risk/Return Summary - Goal, Principal
Strategies, and Related Risks Investment Strategies, Principal Risks;
More About SA Funds
5. Management's Discussion of Fund Performance Not Applicable
6. Management, Organization, and Capital Management
Structure
7. Shareholder Information Your Account
8. Distribution Arrangements Your Account
9. Financial Highlights Information Not Applicable
</TABLE>
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) (CONTINUED)
<TABLE>
<CAPTION>
Items in Part B of Form N-1A Heading
- ---------------------------- -------
<S> <C>
10. Cover Page and Table of Contents Cover and Table of Contents
11. Fund History History and General Information
12. Description of the Fund and Its Investments Description of the Funds and Their
and Risks Investments and Risks
13. Management of the Fund Management of the Trust
14. Control Persons and Principal Holders of Control Persons and Principal Holders of
Securities Securities
15. Investment Advisory and Other Services Investment Advisory and Other Services
16. Brokerage Allocation and Other Practices Brokerage Allocation and Other Practices
17. Capital Stock and Other Securities Information Concerning Shares
18. Purchase, Redemption and Pricing of Shares Purchase, Redemption and Pricing of Shares
19. Taxation of the Fund Taxes
20. Underwriters Investment Advisory and Other Services -
Distribution
21. Calculation of Performance Data Performance Information
22. Financial Statements Not Applicable
</TABLE>
<PAGE>
SA FUNDS - INVESTMENT TRUST
CROSS-REFERENCE SHEET
Pursuant to Rule 495(a) (CONTINUED)
<TABLE>
<CAPTION>
Items in Part C of Form N-1A Heading
- ---------------------------- -------
<S> <C>
23. Exhibits Exhibits
24. Persons Controlled by or Under Common Persons Controlled by or Under
Control with Registrant Common Control with Registrant
25. Indemnification Indemnification
26. Business and Other Connections of the Business and Other Connections of the
Investment Advisor Investment Advisor
27. Principal Underwriters Principal Underwriters
28. Location of Accounts and Records Location of Accounts and Records
29. Management Services Management Services
30. Undertakings Undertakings
</TABLE>
<PAGE>
SA FUNDS
/ / SA U.S. GROWTH FUND
/ / SA U.S. VALUE FUND
PROSPECTUS
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities, nor passed upon the accuracy or
adequacy of this prospectus. It is a criminal offense to state otherwise.
March 6, 2000
<PAGE>
TABLE OF CONTENTS
2 RISK/RETURN SUMMARY
SA U.S. GROWTH FUND
SA U.S. VALUE FUND
FEES AND EXPENSES
PERFORMANCE
6 MANAGEMENT
7 YOUR ACCOUNT
9 PRICING OF FUND SHARES
10 DISTRIBUTIONS
11 FEDERAL TAX CONSIDERATIONS
12 MORE ABOUT THE FUNDS
BACK COVER FOR ADDITIONAL INFORMATION
<PAGE>
RISK/RETURN SUMMARY
- -------------------------------------------------------------------------------
This Risk/Return Summary briefly describes the goals and principal investment
strategies of the Funds and the principal risks of investing in the Funds. For
further information on these and the Funds' other investment strategies and
risks, please read the section entitled More About the Funds starting on page
12.
U.S. GROWTH FUND
GOAL
The Fund's goal is long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing under normal circumstances at
least 65% of its assets in common stocks of U.S. companies that the sub-adviser
believes have above-average growth potential. The Fund will emphasize
large-capitalization companies with market capitalizations that exceed $10
billion. The Fund will also invest in stocks of smaller companies that offer
good expansion prospects.
The Fund may invest in stocks that are convertible to common stocks.
Stocks are bought and sold based on the sub-adviser's judgment about the
companies and their financial prospects, and about the stock market and the
economy in general.
PRINCIPAL RISKS
The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.
The principal risks that apply to the Fund are:
- - STOCK MARKET RISK: The value of the securities in which the Fund
invests may decline in response to the prospects of individual
companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
- - LARGE COMPANY STOCK RISK: Larger, more established companies are
generally not nimble and may be unable to respond quickly to
competitive challenges, such as changes in technology and consumer
tastes.
- - SMALLER COMPANY STOCK RISK: The stocks of small or medium-size
companies may have more risks than those of larger companies. Small
and medium-size companies often have narrower markets and more limited
managerial and financial resources than larger, more established
companies. As a result, they may be more sensitive to changing
economic conditions, which could increase the volatility of the Fund's
portfolio. In addition, small company stocks typically trade in lower
volume making them more difficult to sell. Generally, the smaller the
company size, the greater these risks.
- - INVESTMENT STYLE RISK: Returns from growth stocks may trail returns
from other asset classes (for example, value stocks) or the overall
stock market. Each type of asset class tends to experience periods of
doing better or worse than common stocks in general.
2
<PAGE>
U.S. VALUE FUND
GOAL
The Fund's goal is long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES
The Fund intends to pursue its goal by investing under normal circumstances at
least 65% of its assets in common stocks of U.S. companies that the sub-adviser
believes are value stocks. The Fund defines value stocks as those of companies
with relatively low price/earnings ratios, reasonable financial strength and
strong cash flows. The Fund will emphasize medium - capitalization companies
with market capitalizations between $1 billion and $10 billion.
The sub-adviser selects companies that have strong sales and earnings records or
that have performed well during certain market cycles.
PRINCIPAL RISKS
The share price of the Fund may change daily based on market conditions and
other factors. Therefore, you may lose money if you invest in the Fund.
The principal risks that apply to the Fund are:
- - STOCK MARKET RISK: The value of the securities in which the Fund
invests may decline in response to the prospects of individual
companies and/or general economic conditions. Price changes may be
temporary or last for extended periods.
- - MEDIUM-SIZE COMPANY STOCK RISK: The stocks of medium-size companies
may be more susceptible to market downturns, and their prices may be
more volatile than the stocks of larger companies.
- - INVESTMENT STYLE RISK: Returns from value stocks may trail returns
from other asset classes (for example, growth stocks) or the overall
stock market. Each type of asset class tends to experience periods of
doing better or worse than common stocks in general.
3
<PAGE>
FEES AND EXPENSES
The table below describes the fees and expenses that you may pay if you buy
and hold shares of a Fund. The Funds have no sales charge (load), redemption
fees or exchange fees, although some institutions may charge you a fee for
shares you buy or sell through them.
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Annual Account Maintenance Fee
(for accounts under $100,000) (1)........................$100.00
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
(AS A % OF NET ASSETS)
- --------------------------------------------------------------------------------------------------
U.S. GROWTH FUND U.S. VALUE FUND
CLASS S CLASS I CLASS S CLASS I
<S> <C> <C> <C> <C>
Management/Advisory Fee 1.32% 1.32% 1.32% 1.32%
Other Expenses (2)
Shareholder Servicing Fees .25% .05% .25% .05%
Other Operating Expenses 1.52% 1.46% 1.52% 1.46%
----- ----- ----- -----
Total Other Operating Expenses 1.77% 1.51% 1.77% 1.51%
----- ----- ----- -----
Total Annual Fund Operating Expenses 3.09% 2.83% 3.09% 2.83%
Fee Waiver and/or Expense Reimbursement 1.50% 1.50% 1.50% 1.50%
----- ----- ----- -----
Net Expenses (3) 1.59% 1.33% 1.59% 1.33%
</TABLE>
- -------------------
(1) The Funds may deduct an annual maintenance fee of $100.00 from accounts
with a value of less than $100,000. The account value is determined by
aggregating accounts with SA Funds. The Funds expect to value accounts on
the second Friday in November of each year. Accounts opened after September
30 will not be subject to the fee for that year. The fee is payable to the
Funds and is designed to offset in part the relatively higher costs of
servicing smaller accounts. The Funds reserve the right to waive the fee.
(2) Other expenses are based on estimates for the current fiscal year and
include an administration fee paid to the manager and all other ordinary
operating expenses not listed above.
(3) The manager has contractually agreed to waive its management fees and/or to
reimburse expenses to the extent necessary to limit the Fund's total annual
operating expenses to the amounts shown in the above table. This agreement
will remain in effect until July 7, 2009. The manager may elect to
recapture any amounts waived or reimbursed subject to the following
conditions: (1) the manager must request reimbursement within three years
from the year in which the waiver/reimbursement is made, (2) the Board of
Trustees must approve the reimbursement and (3) the Fund must be able to
make the reimbursement and still stay within the operating expense
limitation.
EXAMPLE
- --------------------------------------------------------------------------------
This example is intended to help you compare the cost of investing in a
Fund to the cost of investing in other mutual funds. The example assumes that
you invest $10,000 in the Fund for the time periods indicated and then sell all
of your shares at the end of those periods. The example also assumes that your
investment has a 5% return each year, that the Fund's operating expenses remain
the same and that all dividends and distributions are reinvested. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
1 YEAR 3 YEARS
------ -------
U.S. GROWTH FUND
CLASS S SHARES $317 $968
CLASS I SHARES $290 $889
U.S. VALUE FUND
CLASS S SHARES $317 $968
CLASS I SHARES $290 $889
4
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PERFORMANCE
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The Funds have not commenced operations as of the date of this prospectus
and, therefore, do not have annual returns for a full calendar year. For this
reason, a bar chart and performance table showing performance information and
information on each Fund's best and worst calendar quarters is not provided in
this prospectus.
[The remainder of this page is intentionally left blank.]
5
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MANAGEMENT
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RWB Advisory Services, Inc., 1190 Saratoga Avenue, San Jose, California 95129,
is the Funds' investment manager. Founded in 1975, the manager provides
investment advisory services to individuals, pension and profit sharing plans,
trusts, estates, charitable organizations and other business entities. As of
November 30, 1999, the firm had more than $1.34 billion in assets under
management.
The manager, in its capacity as investment adviser, handles the business affairs
of the Funds and has general responsibility for the management of the Funds'
investments. In its capacity as administrator, the manager provides
administrative services to the Funds. The manager is also the manager of six
other mutual funds.
The manager has engaged [ ], to act as investment sub-adviser to the U.S. Growth
Fund. Since its organization in [date], [name] has provided investment
management services to institutional investors and to other mutual funds.
Currently, [name] manages over $[ ] billion in assets, including over $[ ]
billion in mutual fund assets.
The manager has engaged [ ], to act as investment sub-adviser to the U.S. Value
Fund. Since its organization in [date], [name] has provided investment
management services to institutional investors and to other mutual funds.
Currently, [name] manages over $[ ] billion in assets, including over $[ ]
billion in mutual fund assets.
Each sub-adviser, subject to the supervision of the manager, is responsible for
managing the assets of the applicable Fund.
[PORTFOLIO MANAGERS]
The following chart shows the aggregate annual investment management fees that
each Fund will pay to the manager and the sub-adviser. Fees are stated before
any waiver. Please refer to the Fees and Expenses Table in the Risk/Return
Summary section of this prospectus for more information about fee waivers.
INVESTMENT MANAGEMENT FEE
(EXPRESSED AS PERCENTAGE OF AVERAGE DAILY NET ASSETS)
-------------------------------------------------------
U.S. Growth Fund 1.32%
U.S. Value Fund 1.32%
6
<PAGE>
YOUR ACCOUNT
- --------------------------------------------------------------------------------
This section describes how to do business with SA Funds and the services that
are available to shareholders.
HOW TO REACH SA FUNDS
By telephone: (800) 366-7266
Call for account information 8:00
a.m. to 5:00 p.m. Pacific time
Monday through Friday.
By mail: 1190 Saratoga Avenue
Suite 200
San Jose, California 95129
SHARE CLASSES
Each Fund offers two classes of shares: Class S and Class I. Both of the classes
are offered without a sales charge (load). Different shareholder servicing fees,
which are payable to the manager as the Funds' shareholder servicing agent, and
different operating expenses are payable by each class. Shareholder servicing
fees will be paid at an annual rate of up to 0.25% and 0.05% of the daily net
assets of the Class S and Class I shares, respectively. Other operating expenses
paid by Class S shares will exceed those paid by Class I shares by 0.06% of
their respective daily net assets.
Investors who maintain aggregate accounts of at least $5,000,000 (or less at the
discretion of SA Funds) may purchase Class I shares. All other investors must
purchase Class S shares.
PURCHASING SHARES
Only clients of investment advisers are eligible to purchase shares of the
Funds.
If you are making an initial investment, you must complete and submit an account
application.
If you purchase shares through an omnibus account maintained by a securities
firm, the firm may charge you an additional fee which will reduce your
investment, accordingly.
MINIMUM INVESTMENTS
The minimum initial investment is $100,000, unless waived by SA Funds.
There is no minimum for additional investments.
TIMING OF REQUESTS
All requests received by SA Funds' transfer agent, or other authorized
intermediary, before 4:00 p.m. Eastern time will be executed the same day, at
that day's net asset value per share ("NAV"). Orders received after 4:00 p.m.
Eastern time will be executed the following day, at that day's NAV. Authorized
intermediaries acting on a purchaser's behalf are responsible for transmitting
orders by the deadline.
SELLING SHARES
You or your financial representative may sell shares at any time by furnishing a
redemption request to the manager in the form required by the manager.
INCOMPLETE SELL REQUESTS
SA Funds will attempt to notify you or your financial representative promptly if
any information necessary to process your request is missing. Once the
information is obtained, you will receive the next-determined NAV.
TIMING OF REQUESTS
All requests received (in the form required by the manager) by SA Funds, or
authorized intermediary, before 4:00 p.m. Eastern time will be executed the same
day, at that day's NAV. Requests received after 4:00 p.m. Eastern time will be
executed the following day, at that day's NAV.
WIRE TRANSACTIONS
A fee of $10 will be deducted from all proceeds sent by wire, and your bank may
charge an additional fee to receive wired funds.
SELLING SHARES RECENTLY PURCHASED
If you sell shares before the check or electronic funds transfer (ACH) for those
shares has been collected, you will not receive the proceeds until your initial
payment has cleared. This may take up to 15 days after your purchase was
recorded (in rare cases, longer). If you open an account with shares purchased
by wire, you cannot sell those shares until your application has been processed.
7
<PAGE>
ACCOUNTS WITH LOW BALANCES
If the value of your total account with SA Funds falls below $10,000 as a result
of selling or exchanging shares, SA Funds may send you a notice asking you to
bring the account back up to $10,000 or to close it out. If you do not take
action within 60 days, SA Funds may sell your shares and mail the proceeds to
you at the address of record.
EXCHANGES
There is no fee to exchange shares among SA Funds. The exchange privilege is not
intended as a way to speculate on short-term movements in the markets.
You may acquire shares of the Funds by exchanging shares of the SSgA Money
Market Fund and may exchange your shares of the Funds for shares of the SSgA
Money Market Fund, if such shares are offered in your state of residence. The
SSgA Money Market Fund is a portfolio of the SSgA Funds. The SSgA Funds is an
open-end management investment company with multiple portfolios advised by State
Street Bank and Trust Company, 225 Franklin Street, Boston MA 02110, and is not
affiliated with SA Funds or SA Funds' distributor. Prior to making such an
exchange, you should carefully read the prospectus for the SSgA Money Market
Fund. You can obtain a copy of the prospectus through your financial
representative or by calling the manager at (800) 366-7266. The exchange
privilege is not an offering or recommendation on the part of the SA Funds or
the distributor of an investment in the SSgA Money Market Fund.
The SSgA Money Market Fund's fundamental investment objective is to maximize
current income, to the extent consistent with the preservation of capital and
liquidity and the maintenance of a stable $1.00 per share net asset value, by
investing in dollar denominated securities with remaining maturities of one year
or less.
An investment in the SSgA Money Market Fund is neither insured nor guaranteed by
the U.S. Government or by State Street Bank and Trust Company. There is no
assurance that the SSgA Money Market Fund will maintain a stable net asset value
of $1.00 per share.
ADDITIONAL POLICIES FOR PURCHASES, SALES AND EXCHANGES
- - SA Funds reserves the right to reject any purchase order.
- - At any time, SA Funds may change any of its purchase, redemption or
exchange procedures, and may suspend sale of its shares.
- - SA Funds may delay sending your redemption proceeds for up to seven days,
or longer if permitted by the Securities and Exchange Commission.
- - To limit the Funds' expenses, SA Funds does not issue share certificates.
- - If accepted by a Fund, you may purchase shares of the Fund with securities
that the Fund may hold. The sub-adviser will determine if the securities
are consistent with the Fund's objectives and policies. If accepted, the
securities will be valued the same way the Fund values portfolio securities
that it already owns.
- - SA Funds reserves the right to make payment for redeemed shares wholly or
in part by giving the redeeming shareholder portfolio securities. The
shareholder may pay transaction costs to dispose of these securities.
- - SA Funds may authorize certain financial intermediaries to accept purchase,
redemption and exchange orders from their customers on behalf of the SA
Funds. Other intermediaries may also be designated to accept such orders,
if approved by SA Funds. Authorized intermediaries are responsible for
transmitting orders on a timely basis. A Fund will be deemed to have
received an order when the order is accepted in proper form by the
authorized intermediary, and the order will be priced at the Fund's NAV
next determined.
8
<PAGE>
PRICING OF FUND SHARES
- --------------------------------------------------------------------------------
Each Fund's NAV is calculated on each day the New York Stock Exchange is open.
NAV is calculated separately for each class of shares. NAV is the value of a
single share of a Fund. NAV is calculated by (1) taking the current market value
of a Fund's total assets allocated to each class, (2) subtracting the
liabilities and expenses charged to each class and (3) dividing that amount by
the total number of shares of each class owned by shareholders.
The Funds calculate NAV as of the close of business on the New York Stock
Exchange, normally 4:00 p.m. Eastern time. If the New York Stock Exchange closes
early, the Funds accelerate calculation of NAV transaction deadlines to that
time.
The NAV of each Fund is generally based on the market value of the securities
held in the Fund. If market values are not readily available or if the
sub-adviser believes that events occurring after the close of a foreign exchange
have rendered the quotations unreliable, the Fund may use fair-value estimates
instead. A Fund that uses fair value to price securities may value those
securities higher or lower than a fund that uses market quotations.
Trading in foreign securities may be completed at times that vary from the
closing of the New York Stock Exchange. The Funds value foreign securities at
the latest closing price on the exchange on which they are traded immediately
prior to the closing of the New York Stock Exchange. Certain foreign currency
exchange rates may also be determined at the latest rate prior to the closing of
the New York Stock Exchange. Foreign securities quoted in foreign currencies are
translated into U.S. dollars at current rates. Occasionally, events that affect
these values and exchange rates may occur between the times at which they are
determined and the closing of the New York Stock Exchange. If such events
materially affect the value of portfolio securities, these securities may be
valued at their fair value as determined in good faith by, or following
procedures approved by, the Board of Trustees.
Foreign securities may trade in their primary markets on weekends or other days
when the Fund does not price its shares. Therefore, the value of the portfolio
of a Fund holding foreign securities may change on days when shareholders will
not be able to buy or sell their shares.
9
<PAGE>
DISTRIBUTIONS
- --------------------------------------------------------------------------------
As a shareholder, you are entitled to your share of a Fund's net income and
gains on its investments. Each Fund passes substantially all of its earnings
along to its shareholders as distributions. When a Fund earns dividends from
stocks and interest from debt securities and distributes these earnings to
shareholders, it is called a DIVIDEND DISTRIBUTION. A Fund realizes capital
gains when it sells securities for a higher price than it paid. When these gains
are distributed to shareholders, it is called a CAPITAL GAIN DISTRIBUTION.
Each Fund pays dividends, if any, at least annually.
Each Fund distributes capital gains, if any, at least annually.
You will receive distributions from a Fund in additional shares of that Fund
unless you elect to receive your distributions in cash. If you wish to receive
distributions in cash, you may either indicate your request on your account
application or you or your financial representative may notify the manager by
calling (800) 366-7266.
10
<PAGE>
FEDERAL TAX CONSIDERATIONS
- -------------------------------------------------------------------------------
Your investment in a Fund will have tax consequences that you should consider.
Some of the more common federal tax consequences are described here, but you
should consult your tax adviser about your own particular situation.
TAXES ON DISTRIBUTIONS
You will generally have to pay federal income tax on all Fund distributions.
Shareholders not subject to tax on their income generally will not be required
to pay any tax on distributions. Your distributions will be taxed in the same
manner whether you receive the distributions in cash or in additional shares of
the Fund. Distributions that are derived from net long-term capital gains
generally will be taxed as long-term capital gains. Dividend distributions and
short-term capital gains generally will be taxed as ordinary income. The tax you
pay on a given capital gain distribution generally depends on how long the Fund
held the portfolio securities it sold. It does not depend on how long you held
your Fund shares.
The Funds expect that their distributions will consist primarily of capital
gains.
You generally are required to report all Fund distributions on your federal
income tax return. Each year SA Funds will send you information detailing the
amount of ordinary income and capital gains paid to you for the previous year.
TAXES ON SALES OR EXCHANGES
If you sell your shares of a Fund or exchange them for shares of another Fund,
you generally will be subject to tax on any taxable gain. Your taxable gain is
computed by subtracting your tax basis in the shares from the redemption
proceeds (in the case of a sale) or the value of the shares received (in the
case of an exchange). Because your tax basis depends on the original purchase
price and on the price at which any dividends may have been reinvested, you
should be sure to keep your account statements so that you or your tax preparer
will be able to determine whether a sale or exchange will result in a taxable
gain.
OTHER CONSIDERATIONS
If you buy shares of a Fund just before the Fund makes any distribution, you
will pay the full price for the shares and then receive back a portion of the
money you have just invested in the form of a taxable distribution.
If you have not provided complete, correct taxpayer information, by law the
Funds must withhold a portion of your distributions and redemption proceeds to
pay federal income taxes.
Dividends and certain interest income earned from foreign securities by a Fund
may be subject to foreign withholding or other taxes. A Fund may be permitted to
pass on to its shareholders the right to a credit or deduction for income or
other tax credits earned from foreign investments and will do so if possible.
These deductions and credits may be subject to tax law limitations.
11
<PAGE>
MORE ABOUT THE FUNDS
- --------------------------------------------------------------------------------
The Funds' principal investment strategies and risks are summarized above in the
section entitled "Risk/Return Summary". A more complete description of each
Fund's investments and strategies and their associated risks is provided below.
The Funds may also invest in other securities and are subject to further
restrictions and risks that are described in the Statement of Additional
Information. Each Fund's objective may be changed without shareholder approval.
EQUITY SECURITIES. The Funds may invest in all types of equity securities. These
include common and preferred stocks publicly traded in the United States or in
foreign countries, warrants, convertible securities, foreign government
authorized pooled investment vehicles, shares of other investment companies and
depository receipts.
CONVERTIBLE SECURITIES. A convertible security is a bond or preferred stock that
may be converted (exchanged) into the common stock of the issuing company within
a specified time period for a specified number of shares. Convertible securities
offer the Funds a way to participate in the capital appreciation of the common
stock into which the securities are convertible, while earning higher current
income than is available from the common stock.
DERIVATIVE RISKS. "Derivative" instruments are financial contracts whose value
is based on an underlying security, a currency exchange rate, an interest rate
or a market index. Many types of instruments representing a wide range of
potential risks and rewards are derivatives, including futures contracts,
options on futures contracts, options, swaps and forward currency contracts.
INVESTMENT STRATEGY. All Funds may use derivative instruments. Derivatives
can be used for hedging (attempting to reduce risk by offsetting one
investment position with another) or speculation (taking a position in the
hope of increasing return). The Funds may, but are not required to, use
derivatives for hedging purposes or for the purpose of remaining fully
invested or maintaining liquidity. The Funds will not use derivatives for
speculative purposes.
SPECIAL RISKS. The use of derivative instruments exposes a Fund to
additional risks and transaction costs. Risks of derivative instruments
include: (1) the risk that interest rates, securities prices and currency
markets will not move in the direction that a portfolio manager
anticipates; (2) imperfect correlation between the price of derivative
instruments and movements in the prices of the securities, interest rates
or currencies being hedged; (3) the fact that skills needed to use these
strategies are different than those needed to select portfolio securities;
(4) the possible absence of a liquid secondary market for any particular
instrument and possible exchange imposed price fluctuation limits, either
of which may make it difficult or impossible to close out a position when
desired; (5) the risk that adverse price movements in an instrument can
result in a loss substantially greater than the Fund's initial investment
in that instrument (in some cases, the potential loss is unlimited); (6)
particularly in the case of privately-negotiated instruments, the risk that
the counterparty will not perform its obligations, which could leave the
Fund worse off than if it had not entered into the position; and (7) the
inability to close out certain hedged positions to avoid adverse tax
consequences.
FOREIGN INVESTMENT RISK. Foreign securities include investments in non-U.S.
dollar-denominated securities traded outside of the United States and
dollar-denominated securities of foreign issuers traded in the United States.
Foreign securities also include investments such as American Depository Receipts
("ADRs"), European Depository Receipts ("EDRs") and Global Depository Receipts
("GDRs"). ADRs are U.S. dollar-denominated receipts representing shares of
foreign-based corporations. ADRs are issued by U.S. banks or trust companies,
and entitle the holder to all dividends and capital gains that are paid out on
the underlying foreign shares. EDRs and GDRs are receipts issued by non-U.S.
financial institutions that often trade on foreign exchanges. They represent
ownership in an underlying foreign or U.S. security and are generally
denominated in a foreign currency.
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INVESTMENT STRATEGY. The Funds may invest in foreign securities.
SPECIAL RISKS. Foreign securities involve special risks and costs.
Investment in the securities of foreign governments involves the risk that
foreign governments may default on their obligations or may otherwise not
respect the integrity of their debt.
Investment in foreign securities may involve higher costs than investment
in U.S. securities, including higher transaction and custody costs as well
as the imposition of additional taxes by foreign governments. Foreign
investments may also involve risks associated with the level of currency
exchange rates, less complete financial information about the issuers, less
market liquidity, more market volatility and political instability. Future
political and economic developments, the possible imposition of withholding
taxes on dividend income, the possible seizure or nationalization of
foreign holdings, the possible establishment of exchange controls or
freezes on the convertibility of currency, or the adoption of other
governmental restrictions might adversely affect an investment in foreign
securities. Additionally, foreign issuers may be subject to less stringent
regulation, and to different accounting, auditing and recordkeeping
requirements.
Currency exchange rates may fluctuate significantly over short periods of
time causing a Fund's net asset value to fluctuate as well. A decline in
the value of a foreign currency relative to the U.S. dollar will reduce the
value of a foreign currency-denominated security. To the extent that a Fund
is invested in foreign securities while also maintaining currency
positions, it may be exposed to greater combined risk. The Funds'
respective net currency positions may expose them to risks independent of
their securities positions.
Additional risks are involved when investing in countries with emerging
economies or securities markets. In general, the securities markets of
these countries are less liquid, are subject to greater price volatility,
have smaller market capitalizations and may have problems with securities
registration and custody. In addition, because the securities settlement
procedures are less developed in these countries, a Fund may be required to
deliver securities before receiving payment and may also be unable to
complete transactions during market disruptions. As a result of these and
other risks, investments in these countries generally present a greater
risk of loss to the Fund.
A further risk of investing in foreign securities is the risk that a Fund
may be adversely affected by the conversion of certain European currencies
into the Euro. This conversion, which is under way, is scheduled to be
completed in the year 2002. However, problems with the conversion process
and delays could increase volatility in world markets and affect European
markets in particular.
FUTURES CONTRACTS AND RELATED OPTIONS. A futures contract is a type of
derivative instrument that obligates the holder to buy or sell an asset in the
future at an agreed upon price. When a Fund purchases an option on a futures
contract, it has the right to assume a position as a purchaser or seller of a
futures contract at a specified exercise price during the option period. When a
Fund sells an option on a futures contract, it becomes obligated to purchase or
sell a futures contract if the option is exercised.
INVESTMENT STRATEGY. The Funds may invest in futures contracts and options
on futures contracts on domestic or foreign exchanges or boards of trade.
These instruments may be used for hedging purposes, to maintain liquidity
to meet potential shareholder redemptions, to invest cash balances or
dividends, or to minimize trading costs.
A Fund will not purchase or sell a futures contract unless, after the
transaction, the sum of the aggregate amount of margin deposits on its
existing futures positions and the amount of premiums paid for related
options used for non-hedging purposes is 5% or less of the Fund's total
assets.
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SPECIAL RISKS. Futures contracts and related options present the following
risks: imperfect correlation between the change in market value of a Fund's
securities and the price of futures contracts and options; the possible
inability to close a futures contract when desired; losses due to
unanticipated market movements, which are potentially unlimited; and the
possible inability of the advisor or sub-advisor to correctly predict the
direction of securities prices, interest rates, currency exchange rates and
other economic factors.
BORROWING AND REVERSE REPURCHASE AGREEMENTS. The Funds can borrow money from
banks and enter into reverse repurchase agreements with banks and other
financial institutions. Reverse repurchase agreements involve the sale of
securities held by a Fund subject to the Fund's agreement to repurchase them at
a mutually agreed upon date and price (including interest).
INVESTMENT STRATEGY. Each Fund may borrow money up to 33 1/3% of its
assets. This is a fundamental policy which can be changed only by
shareholders.
SPECIAL RISKS. Borrowings and reverse repurchase agreements by a Fund may
involve leveraging. If the securities held by the Fund decline in value
while these transactions are outstanding, the Fund's net asset value will
decline in value by proportionately more than the decline in value of the
securities. In addition, reverse repurchase agreements involve the risks
that the interest income earned by the Fund (from the investment of the
proceeds) will be less than the interest expense of the transaction, that
the market value of the securities sold by the Fund will decline below the
price the Fund is obligated to pay to repurchase the securities, and that
the securities may not be returned to the Fund.
ILLIQUID SECURITIES. Illiquid securities include private placements or other
securities that are subject to legal or contractual restrictions on resale or
for which there is no readily available market.
INVESTMENT STRATEGY. Each Fund may invest up to 15% of its net assets in
securities that are illiquid.
SPECIAL RISKS. To the extent that a Fund invests in illiquid securities,
the Fund risks not being able to sell the securities at the time and the
price that it would like. The Fund may have to lower the price, sell
substitute securities or forego an investment opportunity, each of which
may cause a loss to the Fund.
INVESTMENT COMPANIES. To the extent consistent with their respective investment
objectives and policies, the Funds may invest in securities issued by other
investment companies.
INVESTMENT STRATEGY. Investments by a Fund in other investment companies
will be subject to the limitations of the 1940 Act.
SPECIAL RISKS. As a shareholder of another investment company, a Fund would
be subject to the same risks as any other investor in that company. In
addition, it would bear a proportionate share of any fees and expenses paid
by that company. These would be in addition to the advisory and other fees
paid directly by the Fund.
YEAR 2000 RISK. Like other mutual funds, financial institutions, business
organizations and individuals around the world, the Funds could be adversely
affected if the computer systems used by the manager and the Funds' other
service providers do not properly process and calculate date-related information
and data from and after January 1, 2000. The manager is taking steps that it
believes are reasonably designed to address year 2000 computer-related problems
with respect to the computer systems that it uses and to obtain assurances that
comparable steps are being taken by the Funds' other, major service providers.
Although there can be no assurances, the manager believes that these steps will
be sufficient to avoid any adverse impact on any of the Funds. Similarly, there
can be no assurances that year 2000 issues will not affect the companies and
other issuers in which the Funds invest or affect worldwide markets and
economies.
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DEFENSIVE INVESTING. During unusual market conditions, each Fund may place up to
100% of its total assets in cash or high-quality, short-term debt securities.
SPECIAL RISKS. To the extent that the Fund invests its assets in short-term
obligations, it may not achieve its investment objective.
SECURITIES LENDING. In order to generate additional income, each Fund may lend
securities on a short-term basis to qualified institutions. By reinvesting any
cash collateral it receives in these transactions, the Fund could realize
additional income gains or losses.
INVESTMENT STRATEGY. Securities lending may represent no more than 25% of
the value of a Fund's total assets (including the loan collateral).
SPECIAL RISKS. The main risk when lending securities is that if the
borrower fails to return the securities or the invested collateral has
declined in value, the Fund could lose money.
SHORT TERM TRADING. Each Fund may engage in active and frequent trading to
achieve its investment goal.
SPECIAL RISKS. A high rate of portfolio turnover (100%) or more) could
increase transaction costs and taxable distribution, which could detract
from the Fund's performance.
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FOR MORE INFORMATION
More information on SA Funds is available free upon request, including the
following:
STATEMENT OF ADDITIONAL INFORMATION (SAI)
Provides more details about the funds and their policies. A current SAI is on
file with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
TO OBTAIN INFORMATION:
- --------------------------------------------------------------------------------
BY TELEPHONE
Call 1-800-366-7266
BY MAIL
SA Funds
1190 Saratoga Avenue
Suite 200
San Jose, California 95129
ON THE INTERNET Text-only versions of fund
documents can be viewed online or
downloaded from:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-800-SEC-0330) or by sending your request and a
duplicating fee to the SEC's Public Reference Section, Washington, DC 2054-6009.
- --------------------------------------------------------------------------------
SA FUNDS -INVESTMENT TRUST
SEC FILE NUMBER: 811-09195
<PAGE>
SA FUNDS
SA U.S. Growth Fund
SA U.S. Value Fund
STATEMENT OF ADDITIONAL INFORMATION
March 6, 1999
This Statement of Additional Information ("SAI") provides supplementary
information pertaining to all shares representing interests in each of the
no-load mutual funds listed above (the "Funds"). SA Funds Investment Trust (the
"Trust") currently offers a selection of eight Funds, two of which are described
in this SAI. This SAI is not a prospectus, and should be read only in
conjunction with the Trust's Prospectus dated March 6, 1999. A copy of the
Prospectus may be obtained by calling (800) 366-7266.
<PAGE>
TABLE OF CONTENTS
PAGE
1. History and General Information........................................3
2. Description of the Funds and Their Investments and Risks...............3
Investments, Strategies and Risks...................................3
Fund Policies.......................................................9
3. Management of the Trust...............................................11
Trustees and Officers..............................................11
Compensation Table.................................................13
4. Control Persons and Principal Holders of Securities...................13
5. Investment Advisory and Other Services................................14
Investment Manager and Sub-Advisers................................14
Distributor........................................................15
Shareholder Servicing Arrangements.................................15
Administration.....................................................15
Custodian..........................................................15
Transfer Agent and Dividend Disbursing Agent.......................15
Counsel............................................................16
Independent Auditors...............................................16
6. Brokerage Allocations and Other Practices.............................16
7. Information Concerning Shares.........................................17
8. Purchase, Redemption and Pricing of Shares............................17
Purchase and Redemption Information................................17
9. Taxes.................................................................18
Tax Status of the Funds............................................18
Taxation of Fund Distributions.....................................19
Disposition of Shares..............................................20
Information Relating to Foreign Investments........................20
Information Relating to Fund Investments...........................21
Backup Withholding.................................................23
Other Taxation.....................................................23
10. Performance Information...............................................23
No person has been authorized to give any information or to make any
representations not contained in this SAI or in the Prospectus in connection
with the offering made by the Prospectus and, if given or made, such information
or representations must not be relied upon as having been authorized by the
Funds. The Prospectus does not constitute an offering by the Funds in any
jurisdiction in which such offering may not lawfully be made.
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HISTORY AND GENERAL INFORMATION
The Trust was organized as a Delaware business trust on June 16, 1998 under
the name RWB Funds Investment Trust which was changed on June 7, 1999 to SA
Funds-Investment Trust.
The Trust is an open-end, management investment company. The Declaration of
Trust permits the Trust to offer separate portfolios ("Funds") of shares of
beneficial interest and different classes of shares of each Fund. The Trust
currently offers eight Funds, each of which is a diversified mutual fund. The
following Funds are described in this SAI: SA U.S. Growth Fund and SA U.S. Value
Fund
The investment manager of each Fund is RWB Advisory Services Inc. ("RWBAS"
or the "Manager"). _________ serves as sub-adviser for the SA U.S. Growth Fund.
_____ serves as sub-adviser for the SA U.S. Value Fund (each, a "Sub-Adviser").
RWB Securities, Inc. is the distributor of shares of the Funds.
DESCRIPTION OF THE FUNDS AND THEIR INVESTMENTS AND RISKS
INVESTMENTS, STRATEGIES AND RISKS
The following supplements the information contained in the Prospectus
concerning the investments and investment techniques of the Funds. Each Fund's
investment objective is a non-fundamental policy and may be changed without the
approval of the Fund's shareholders. There can be no assurance that a Fund will
achieve its objective.
BORROWING. The Funds are authorized to borrow money in amounts up to 5% of
the value of their total assets at the time of such borrowings for temporary
purposes, and are authorized to borrow money in excess of the 5% limit as
permitted by the Investment Company Act of 1940, as amended (the "1940 Act").
This borrowing may be unsecured. The 1940 Act requires the Funds to maintain
continuous asset coverage of 300% of the amount borrowed. If the 300% asset
coverage should decline as a result of market fluctuations or other reasons, the
Funds may be required to sell some of their portfolio holdings within three days
to reduce the debt and restore the 300% asset coverage, even though it may be
disadvantageous from an investment standpoint to sell securities at that time.
Borrowed funds are subject to interest costs that may or may not be offset by
amounts earned on the borrowed funds. A Fund may also be required to maintain
minimum average balances in connection with such borrowing or to pay a
commitment or other fees to maintain a line of credit; either of these
requirements would increase the cost of borrowing over the stated interest rate.
Each Fund may, in connection with permissible borrowings, transfer as collateral
securities owned by the Funds.
FOREIGN SECURITIES. As stated in the Prospectus, the Funds may invest in
foreign securities. Investors should consider carefully the substantial risks
involved in securities of companies and governments of foreign nations, which
are in addition to the usual risks inherent in domestic investments.
There may be less publicly available information about foreign companies
comparable to the reports and ratings published about companies in the United
States. Foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to U.S. companies.
Foreign markets have substantially less volume than U.S. markets and securities
of some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. In many foreign countries, there is less government
supervision and regulation of stock exchanges, brokers, and listed companies
than in the United States. Such concerns are particularly heightened for
emerging markets and Eastern European countries.
Investments in companies domiciled in developing countries may be subject
to potentially higher risks than investments in developed countries. These risks
include: (i) less social, political and economic stability; (ii) the small
current size of the markets for such securities and the currently low or
nonexistent volume of trading, which
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result in a lack of liquidity and in greater price volatility; (iii) certain
national policies which may restrict a Fund's investment opportunities,
including restrictions on investment in issuers or industries deemed sensitive
to national interest; (iv) foreign taxation; (v) the absence of developed legal
structures governing private or foreign investment or allowing for judicial
redress for injury to private property; (vi) the absence, until recently in
certain Eastern European countries, of a capital market structure or
market-oriented economy; and (vii) the possibility that recent favorable
economic developments in Eastern Europe may be slowed or reversed by
unanticipated political or social events in such countries.
Investments in Eastern European countries may involve risks of
nationalization, expropriation and confiscatory taxation. The Communist
governments of a number of Eastern European countries expropriated large amounts
of private property in the past, in many cases without adequate compensation,
and there can be no assurance that such expropriation will not occur in the
future. In the event of such expropriation, a Fund could lose a substantial
portion of any investments it has made in the affected countries. Further, no
accounting standards exist in Eastern European countries. Finally, even though
certain Eastern European currencies may be convertible into United States
dollars, the conversion rates may be artificial to the actual market values and
may be adverse to a Fund.
Each Sub-Adviser endeavors to buy and sell foreign currencies on as
favorable a basis as practicable. Some price spread on currency exchange (to
cover service charges) may be incurred, particularly when the Fund changes
investments from one country to another or when proceeds of the sale of Fund
shares in U.S. dollars are used for the purchase of securities in foreign
countries. Also, some countries may adopt policies which would prevent the Fund
from transferring cash out of the country or withhold portions of interest and
dividends at the source. There is the possibility of expropriation,
nationalization or confiscatory taxation, withholding and other foreign taxes on
income or other amounts, foreign exchange controls (which may include suspension
of the ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments that could affect investments in securities of issuers in foreign
nations.
Foreign securities markets have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of a Fund are uninvested and no return is earned
thereon. The inability of a Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due to settlement
problems could result either in losses to a Fund due to subsequent declines in
value of the portfolio security or, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.
A Fund may be affected either unfavorably or favorably by fluctuations in
the relative rates of exchange between the currencies of different nations, by
exchange control regulations and by indigenous economic and political
developments. Changes in foreign currency exchange rates will influence values
within a Fund from the perspective of U.S. investors, and may also affect the
value of dividends and interest earned, gains and losses realized on the sale of
securities, and net investment income and gains, if any, to be distributed to
shareholders by a Fund. The rate of exchange between the U.S. dollar and other
currencies is determined by the forces of supply and demand in the foreign
exchange markets. These forces are affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors. Each Sub-Adviser will attempt to avoid
unfavorable consequences and to take advantage of favorable developments in
particular nations where, from time to time, it places a Fund's investments.
The exercise of this flexible policy may include decisions to purchase
securities with substantial risk characteristics and other decisions such as
changing the emphasis on investments from one nation to another and from one
type of security to another. Some of these decisions may later prove profitable
and others may not. No assurance can be given that profits, if any, will exceed
losses.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Funds may enter
into futures contracts and options on futures contracts only for the purpose of
remaining fully invested and to maintain liquidity to pay
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<PAGE>
redemptions. Futures contracts provide for the future sale by one party and
purchase by another party of a specified amount of defined securities at a
specified future time and at a specified price. Futures contracts which are
standardized as to maturity date and underlying financial instrument are traded
on national futures exchanges. A Fund will be required to make a margin deposit
in cash or government securities with a broker or custodian to initiate and
maintain positions in futures contracts. Minimal initial margin requirements are
established by the futures exchange and brokers may establish margin
requirements which are higher than the exchange requirements. After a futures
contract position is opened, the value of the contract is marked to market
daily. If the futures contract price changes, to the extent that the margin on
deposit does not satisfy margin requirements, payment of additional "variation"
margin will be required. Conversely, reduction in the contract value may reduce
the required margin resulting in a repayment of excess margin to a Fund.
Variation margin payments are made to and from the futures broker for as long as
the contract remains open. The Funds expect to earn income on their margin
deposits. To the extent that a Fund invests in futures contracts and options
thereon for other than bona fide hedging purposes, no Fund will enter into such
transactions if, immediately thereafter, the sum of the amount of initial margin
deposits and premiums paid for open futures options would exceed 5% of the
Fund's net assets, after taking into account unrealized profits and unrealized
losses on such contracts it has entered into; provided, however, that, in the
case of an option that is in-the-money at the time of purchase, the in-the-money
amount may be excluded in calculating the 5%. Pursuant to published positions of
the Securities and Exchange Commission, the Funds may be required to identify
liquid assets, such as cash or liquid securities (or, as permitted under
applicable regulation, enter into offsetting positions) in an account maintained
with the Fund's custodian in connection with their futures contract transactions
in order to cover their obligations with respect to such contracts.
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract an any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price movements, a Fund would continue to be required to
make variation margin deposits. In such circumstances, if a Fund has
insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
A Fund may purchase and sell options on the same types of futures in which
it may invest.
Options on futures are similar to options on underlying instruments except
that options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract (a long position if the option
is a call and a short position if the option is a put), rather than to purchase
or sell the futures contract, at a specified exercise price at any time during
the period of the option. Upon exercise of the option, the delivery of the
futures position by the writer of the option to the holder of the option will be
accompanied by the delivery of the accumulated balance in the writer's futures
margin account which represents the amount by which the market price of the
futures contract, at exercise, exceeds (in the case of a call) or is less than
(in the case of a put) the exercise price of the option on the futures contract.
Purchasers of options who fail to exercise their options prior to the exercise
date suffer a loss of the premium paid.
As an alternative to writing or purchasing call and put options on stock
index futures, a Fund may write or purchase call and put options on stock
indices. Such options would be used in a manner similar to the use of options on
futures contracts.
SPECIAL RISKS OF TRANSACTIONS IN OPTIONS ON FUTURES CONTRACTS. The risks
described above for futures contracts are substantially the same as the risks of
using options on futures. In addition, where a Fund seeks to close out an option
position by writing or buying an offsetting option covering the same underlying
instrument, index or contract and having the same exercise price and expiration
date, its ability to establish and close out positions on such options will be
subject to the maintenance of a liquid secondary market. Reasons for the absence
of a liquid secondary market on an exchange include the following: (i) there may
be insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of
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<PAGE>
options, or underlying instruments; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on the exchange that had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at times, render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by an exchange of
special procedures which may interfere with the timely execution of customers'
orders.
ADDITIONAL FUTURES AND OPTIONS CONTRACTS. Although the Funds have no
current intention of engaging in futures or options transactions other than
those described above, they reserve the right to do so. Such futures and options
trading might involve risks which differ from those involved in the futures and
options described above.
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS, OPTIONS AND FORWARD FOREIGN
EXCHANGE CONTRACTS. Certain option, futures, and forward foreign exchange
contracts, including options and futures on currencies, which are Section 1256
contracts, may result in a Fund entering into straddles.
Open Section 1256 contracts at fiscal year end will be considered to have
been closed at the end of the Fund's fiscal year and any gains or losses will be
recognized for tax purposes at that time. Such gains or losses from the normal
closing or settlement of such transactions will be characterized as 60%
long-term capital gain or loss and 40% short-term capital gain or loss
regardless of the holding period of the instrument. The Fund will be required to
distribute net gains on such transactions to shareholders even though it may not
have closed the transaction and received cash to pay such distributions.
Options, futures and forward foreign exchange contracts, including options
and futures on currencies, which offset a security or currency position may be
considered straddles for tax purposes, in which case a loss on any position in a
straddle will be subject to deferral to the extent of unrealized gain in an
offsetting position. The holding period of the securities or currencies
comprising the straddle may be deemed not to begin until the straddle is
terminated. The holding period of the security offsetting an "in-the-money
qualified covered call" option will not include the period of time the option is
outstanding.
Losses on written covered calls and purchased puts on securities, excluding
certain "qualified covered call" options, may be long-term capital loss, if the
security covering the option was held for more than twelve months prior to the
writing of the option.
ILLIQUID SECURITIES. Each Fund may invest up to 15% of the value of its net
assets (determined at time of acquisition) in securities that are illiquid.
Illiquid securities would generally include securities for which there is a
limited trading market, repurchase agreements and time deposits with
notice/termination dates in excess of seven days, and certain securities that
are subject to trading restrictions because they are not registered under the
Securities Act of 1933, as amended (the "Act"). If, after the time of
acquisition, events cause this limit to be exceeded, the Fund will take steps to
reduce the aggregate amount of illiquid securities as soon as reasonably
practicable in accordance with the policies of the Securities and Exchange
Commission.
A Fund may invest in commercial obligations issued in reliance on the
"private placement" exemption from registration afforded by Section 4(2) of the
Act ("Section 4(2) paper"). A Fund may also purchase securities that are not
registered under the Act, but which can be sold to qualified institutional
buyers in accordance with Rule 144A under the Act ("Rule 144A securities").
Section 4(2) paper is restricted as to disposition under the Federal securities
laws, and generally is sold to institutional investors who agree that they are
purchasing the paper for investment and not with a view to public distribution.
Any resale by the purchaser must be in an exempt transaction. Section 4(2) paper
normally is resold to other institutional investors through or with the
assistance of the issuer or investment dealers which make a market in the
Section 4(2) paper, thus providing liquidity. Rule 144A securities generally
must be sold only to other qualified institutional buyers. If a particular
investment in Section
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4(2) paper or Rule 144A securities is not determined to be liquid, that
investment will be included within the Fund's limitation on investment in
illiquid securities. Each Sub-Adviser will determine the liquidity of such
investments pursuant to guidelines established by the Board of Trustees. It is
possible that unregistered securities purchased by a Fund in reliance upon Rule
144A could have the effect of increasing the level of the Fund's illiquidity to
the extent that qualified institutional buyers become, for a period,
uninterested in purchasing these securities.
INVESTMENT COMPANY SECURITIES. Each Fund may invest in securities issued by
other investment companies. As a shareholder of another investment company, a
Fund would bear its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the expenses
each Fund bears directly in connection with its own operations. Each Fund
currently intends to limit its investments in securities issued by other
investment companies so that, as determined immediately after a purchase of such
securities is made: (i) not more than 5% of the value of the Fund's total assets
will be invested in the securities of any one investment company; (ii) not more
than 10% of the value of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Fund.
LENDING OF PORTFOLIO SECURITIES. To enhance the return on its portfolio,
each of the Funds may lend securities in its portfolio (subject to a limit of 33
1/3% of the total assets) to securities firms and financial institutions,
provided that each loan is secured continuously by collateral adjusted daily to
have a market value at least equal to the current market value of the securities
loaned. These loans are terminable at any time, and the Funds will receive any
interest or dividends paid on the loaned securities. In addition, it is
anticipated that a Fund may share with the borrower some of the income received
on the collateral for the loan or the Fund will be paid a premium for the loan.
The risk in lending portfolio securities, as with other extensions of credit,
consists of possible delay in recovery of the securities or possible loss of
rights in the collateral or loss on sale of the collateral should the borrower
fail financially. In determining whether the Funds will lend securities, each
Sub-Adviser will consider all relevant facts and circumstances. The Funds will
only enter into loan arrangements with broker-dealers, banks or other
institutions which the Manager has determined are creditworthy under guidelines
established by the Board of Trustees.
MONEY MARKET INSTRUMENTS. Each Fund may invest from time to time in "money
market instruments," a term that includes, among other instruments, bank
obligations, commercial paper, variable amount master demand notes and corporate
bonds with remaining maturities of 397 days or less.
Bank obligations include bankers' acceptances, negotiable certificates of
deposit and non-negotiable time deposits, including U.S. dollar-denominated
instruments issued or supported by the credit of U.S. or foreign banks or
savings institutions. Although the Funds will invest in obligations of foreign
banks or foreign branches of U.S. banks only where the Sub-Adviser deems the
instrument to present minimal credit risks, such investments may nevertheless
entail risks that are different from those of investments in domestic
obligations of U.S. banks due to differences in political, regulatory and
economic systems and conditions. All investments in bank obligations are limited
to the obligations of financial institutions having more than $1 billion in
total assets at the time of purchase.
The Funds may also purchase variable amount master demand notes which are
unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, a Fund
may demand payment of the principal of the instrument at any time. The notes are
not typically rated by credit rating agencies, but issuers of variable amount
master demand notes must satisfy the same criteria as set forth above for
issuers of commercial paper. If an issuer of a variable amount master demand
note defaulted on its payment obligation, a Fund might be unable to dispose of
the note because of the absence of a secondary market and might, for this or
other reasons, suffer a loss to the extent of the default. The Funds invest in
variable amount master notes only when a Sub-Adviser deems the investment to
involve minimal credit risk.
NON-DOMESTIC BANK OBLIGATIONS. Non-domestic bank obligations include
Eurodollar Certificates of Deposit ("ECDs"), which are U.S. dollar-
denominated certificates of deposit issued by offices of foreign and domestic
banks located outside the United States; Eurodollar Time Deposits ("ETDs"),
which are U.S. dollar-
7
<PAGE>
denominated deposits in a foreign branch of a U.S. bank or a foreign bank;
Canadian Time Deposits ("CTDs"), which are essentially the same as ETDs
except they are issued by Canadian offices of major Canadian banks; Schedule
Bs which are obligations issued by Canadian branches of foreign or domestic
banks; Yankee Certificates of Deposit ("Yankee CDs"), which are U.S.
dollar-denominated certificates of deposit issued by a U.S. branch of a
foreign bank and held in the United States; and Yankee Bankers' Acceptances
("Yankee BAs"), which are U.S. dollar denominated bankers' acceptances issued
by a U.S. branch of a foreign bank and held in the United States.
REPURCHASE AGREEMENTS. Each Fund may agree to purchase securities from
financial institutions such as member banks of the Federal Reserve System or any
foreign bank or any domestic or foreign broker/dealer that is recognized as a
reporting government securities dealer, subject to the seller's agreement to
repurchase them at an agreed-upon time and price ("repurchase agreements"). Each
Sub-Adviser will review and continuously monitor the creditworthiness of the
seller under a repurchase agreement, and will require the seller to maintain
liquid assets segregated on the books of the Fund or the Fund's custodian in an
amount that is greater than the repurchase price. Default by, or bankruptcy of,
the seller would, however, expose a Fund to possible loss because of adverse
market action or delays in connection with the disposition of underlying
obligations except with respect to repurchase agreements secured by U.S.
Government securities.
The repurchase price under repurchase agreements generally equals the price
paid by a Fund plus interest negotiated on the basis of current short-term rates
(which may be more or less than the rate on the securities underlying the
repurchase agreement).
Securities subject to repurchase agreements will be held, as applicable, by
the Fund's custodian in the Federal Reserve/Treasury book-entry system or by
another authorized securities depositary. Repurchase agreements are considered
to be loans by a Fund under the 1940 Act.
REVERSE REPURCHASE AGREEMENTS. Each Fund may borrow funds for temporary or
emergency purposes by selling portfolio securities to financial institutions
such as banks and broker/dealers and agreeing to repurchase them at a mutually
specified date and price ("reverse repurchase agreements"). Reverse repurchase
agreements involve the risk that the market value of the securities sold by a
Fund may decline below the repurchase price. A Fund will pay interest on amounts
obtained pursuant to a reverse repurchase agreement. While reverse repurchase
agreements are outstanding, a Fund will maintain cash, U.S. Government
securities or other liquid high-grade securities earmarked on the books of the
Fund or the Fund's custodian in an amount at least equal to the market value of
the securities, plus accrued interest, subject to the agreement.
U.S. GOVERNMENT OBLIGATIONS. Each Fund may purchase obligations issued or
guaranteed by the U.S. Government and U.S. Government agencies and
instrumentalities. Obligations of certain agencies and instrumentalities of the
U.S. Government, such as those of the GNMA, are supported by the full faith and
credit of the U.S. Treasury. Others, such as those of the Export-Import Bank of
the United States, are supported by the right of the issuer to borrow from the
U.S. Treasury; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the agency or instrumentality
issuing the obligation. No assurance can be given that the U.S. Government would
provide financial support to U.S. government-sponsored instrumentalities if it
is not obligated to do so by law. Examples of the types of U.S. Government
obligations that may be acquired by the Funds include U.S. Treasury Bills,
Treasury Notes and Treasury Bonds and the obligations of Federal Home Loan
Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing
Administration, Farmers Home Administration, Export-Import Bank of the United
States, Small Business Administration, FNMA, Government National Mortgage
Association, General Services Administration, Student Loan Marketing
Association, Central Bank for Cooperatives, FHLMC, Federal Intermediate Credit
Banks and Maritime Administration.
WARRANTS. Warrants are privileges issued by corporations enabling the
owners to subscribe to and purchase a specified number of shares of the
corporation at a specified price during a specified period of time. The purchase
of warrants involves the risk that a Fund could lose the purchase value of a
warrant if the right to subscribe to additional shares is not exercised prior to
the warrant's expiration. Also, the purchase of warrants involves the risk that
the effective price paid for the warrant added to the subscription price of the
related security may exceed
8
<PAGE>
the value of the subscribed security's market price such as when there is no
movement in the level of the underlying security.
WHEN-ISSUED PURCHASES AND FORWARD COMMITMENTS (DELAYED-DELIVERY
TRANSACTIONS). Each Fund may purchase securities on a when-issued or delayed
delivery basis. When-issued purchases and forward commitments (delayed-delivery
transactions) are commitments by a Fund to purchase or sell particular
securities with payment and delivery to occur at a future date (perhaps one or
two months later). These transactions permit the Fund to lock-in a price or
yield on a security, regardless of future changes in interest rates.
When a Fund agrees to purchase securities on a when-issued or forward
commitment basis, the Fund will earmark cash or liquid portfolio securities
equal to the amount of the commitment. Normally, the Fund will earmark portfolio
securities to satisfy a purchase commitment, and in such a case the Fund may be
required subsequently to earmark additional assets in order to ensure that the
value of the account remains equal to the amount of the Fund's commitments. It
may be expected that the market value of the Fund's net assets will fluctuate to
a greater degree when it earmarks portfolio securities to cover such purchase
commitments than when it earmarks cash.
A Fund will purchase securities on a when-issued or forward commitment
basis only with the intention of completing the transaction and actually
purchasing the securities. If deemed advisable as a matter of investment
strategy, however, a Fund may dispose of or renegotiate a commitment after it is
entered into, and may sell securities it has committed to purchase before those
securities are delivered to the Fund on the settlement date. In these cases the
Fund may realize a taxable capital gain or loss.
When a Fund engages in when-issued and forward commitment transactions, it
relies on the other party to consummate the trade. Failure of such party to do
so may result in the Fund's incurring a loss or missing an opportunity to obtain
a price considered to be advantageous.
The market value of the securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
a Fund starting on the day the Fund agrees to purchase the securities. The Fund
does not earn interest on the securities it has committed to purchase until they
are paid for and delivered on the settlement date.
YIELDS AND RATINGS. The yields on certain obligations, including the money
market instruments in which the Funds may invest (such as commercial paper and
bank obligations), are dependent on a variety of factors, including general
money market conditions, conditions in the particular market for the obligation,
the financial condition of the issuer, the size of the offering, the maturity of
the obligation and the ratings of the issue. The ratings of S&P, Moody's, Duff &
Phelps Credit Rating Co., Thomson Bank Watch, Inc., and other nationally
recognized statistical rating organizations ("NRSROs") represent their
respective opinions as to the quality of the obligations they undertake to rate.
Ratings, however, are general and are not absolute standards of quality.
Consequently, obligations with the same rating, maturity and interest rate may
have different market prices.
OTHER. Subsequent to its purchase by a Fund, a rated security may cease to
be rated or its rating may be reduced below the minimum rating required for
purchase by the Fund. The Board of Trustees or each Sub-Adviser, pursuant to
guidelines established by the Board, will consider such an event in determining
whether the Fund should continue to hold the security in accordance with the
interests of the Fund and applicable regulations of the Securities and Exchange
Commission.
FUND POLICIES
FUNDAMENTAL POLICIES. Each Fund is subject to the investment limitations
enumerated in this section which may be changed with respect to a particular
Fund only by a vote of the holders of a majority of such Fund's outstanding
shares. As used in this SAI and in the Prospectus, a "majority of the
outstanding shares" of a Fund means the lesser of (a) 67% of the shares of the
particular Fund represented at a meeting at which the holders of
9
<PAGE>
more than 50% of the outstanding shares of such Fund are present in person or by
proxy, or (b) more than 50% of the outstanding shares of such Fund.
1. No Fund may invest more than 25% of its total assets in any
one industry (securities issued or guaranteed by the United
States Government, its agencies or instrumentalities are not
considered to represent industries).
2. No Fund may with respect to 75% of the Fund's assets, invest
more than 5% of the Fund's assets (taken at a market value at
the time of purchase) in the outstanding securities of any
single issuer or own more than 10% of the outstanding voting
securities of any one issuer, in each case other than
securities issued or guaranteed by the United States
Government, its agencies or instrumentalities.
3. No Fund may borrow money or issue senior securities (as
defined in the 1940 Act) except that the Funds may borrow
amounts not exceeding 33 1/3% of its total assets (including
the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) valued at
the time the borrowing is made and additionally for temporary
or emergency purposes in amounts not exceeding 5% of its total
assets.
4. No Fund may pledge, mortgage or hypothecate its assets other
than to secure borrowings permitted by investment limitation 3
above (collateral arrangements with respect to margin
requirements for options and futures transactions are not
deemed to be pledges or hypothecations for this purpose).
5. No Fund may make loans of securities to other persons in
excess of 33 1/3% of a Fund's total assets; provided the Funds
may invest without limitation in short-term debt obligations
(including repurchase agreements) and publicly distributed
debt obligations.
6. No Fund may underwrite securities of other issuers, except
insofar as a Fund may be deemed an underwriter under the
Securities Act of 1933, as amended, in selling portfolio
securities.
7. No Fund may purchase or sell real estate or any interest
therein, including interests in real estate limited
partnerships, except securities issued by companies (including
real estate investment trusts) that invest in real estate or
interests therein.
8. No Fund may purchase securities on margin, except for the use
of short-term credit necessary for the clearance of purchases
and sales of portfolio securities, but the Funds may make
margin deposits in connection with transactions in options,
futures and options on futures.
9. No Fund may invest in commodities or commodity futures
contracts, provided that this limitation shall not prohibit
the purchase or sale by the Fund of forward foreign currency
exchange contracts, financial futures contracts and options on
financial futures contracts, foreign currency futures
contracts, and options on securities, foreign currencies and
securities indices, as permitted by the Fund's prospectus.
NON-FUNDAMENTAL POLICIES. Additional investment restrictions adopted by
each Fund, which may be changed by the Board of Trustees, provide that a Fund
may not:
1. Invest more than 15% of its net assets (taken at market value
at the time of purchase) in securities which cannot be readily
sold or disposed of within the ordinary course of business
within seven days at approximately the value at which the Fund
has valued the investment;
2. Purchase or sell interests in oil, gas or other mineral
exploration or development plans or leases;
10
<PAGE>
3. Make investments for the purpose of exercising control or
management; or
4. Invest in other investment companies except as permitted under
the 1940 Act.
If a percentage limitation is satisfied at the time of investment, a later
increase or decrease in such percentage resulting from a change in the value of
a Fund's investments will not constitute a violation of such limitation, except
that any borrowing by a Fund that exceeds the fundamental investment limitations
stated above must be reduced to meet such limitations within the period required
by the 1940 Act (currently three days). Otherwise, a Fund may continue to hold a
security even though it causes the Fund to exceed a percentage limitation
because of fluctuation in the value of the Fund's assets.
MANAGEMENT OF THE TRUST
The management of the Trust is supervised by the Board of Trustees under
the laws of the State of Delaware. Subject to the provisions of the Declaration
of Trust, the business of the Trust shall be managed by the Trustees, and they
shall have all powers necessary or convenient to carry out that responsibility.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the Trust and their principal
occupations during the past five years are as set forth below. An asterisk
indicates a Trustee who may be deemed to be an "interested person" (as defined
by the 1940 Act) of the Trust.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bryan W. Brown Trustee Self Employed Management Consultant
950 Hayman Place (since 1992)
Los Altos, CA 94024
DOB: 02/09/45
David G. Booth* Trustee President and Chairman-Chief Executive
1299 Ocean Avenue Officer of the following companies:
Santa Monica, CA 90401 Dimensional Fund Advisors Inc., DFA
DOB: 12/02/46 Securities Inc., DFA Australia Limited,
DFA Investment Dimensions Group Inc.,
Dimensional Investment Group Inc. and
Dimensional Emerging Markets Value Fund
Inc.; Trustee, President and Chairman-Chief
Executive Officer of the DFA Investment Trust
Company (registered investment company);
Chairman and Director, Dimensional Fund
Advisors Ltd.
11
<PAGE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John J. Bowen, Jr.* Trustee, President Chief Executive Officer and President,
1190 Saratoga Avenue, Suite 200 and Chief Executive Officer Assante Capital Management Inc. (holding
San Jose, CA 95120 company) (since July 1998); Chief
DOB: 10/01/55 Executive Officer, Registered Principal
and President, RWB Securities Inc. (since
July 1998); Chief Executive Officer and
President, RWB Advisory Services Inc.
(since July 1998); Chief Executive
Officer, Registered Principal and
President, Reinhardt Werba Bowen
Securities, Inc. (December 1993 to
October 1998); Chief Executive Officer,
Director and President, Reinhardt, Werba,
Bowen, Inc. (investment adviser) (July
1980 to October 1998).
Patrick Keating* Trustee Director, Assante Corporation (financial
Commodity Exchange Tower services company) (since September 1998);
1500-360 Main Street President and Chief Executive Officer,
Winnipeg, Manitoba, Canada Loring Ward Investment Counsel Ltd.
R3C3Z3 ("Loring Ward") (since September 1998);
DOB: 12/21/54 Executive Vice President, Loring Ward
(January 1996 to September 1998);
Manager, Client Services, Loring Ward
(May 1995 to December 1995); General
Manager, Advance Electronics Ltd.
(retail organization) (until May 1995).
Charles M. Roame Trustee Managing Principal, The Tiburon Group
The Tiburon Group (management consulting to financial
1735 Tiburon Blvd. institutions) (since April 1998); Vice
Tiburon, CA 94920 President, Charles Schwab & Co. (discount
DOB: 09/17/65 brokerage and mutual funds) (July 1995 to
April 1998); Senior Engagement Manager,
McKinsey & Co. (management consulting to
financial institutions) (February 1994 to
July 1995).
Harold M. Shefrin Trustee Professor of Finance, Santa Clara
Leavey School of Business University.
Santa Clara University
Santa Clara, CA 95053
DOB: 07/27/48
Alexander B. Potts Vice President and Secretary Vice President of Advisor Services and
1190 Saratoga Avenue, Suite 200 Investment Operations, RWB Advisory
San Jose, CA 95120 Services Inc. (since October 1998); Vice
DOB: 06/14/67 President of Advisor Services and
Investment Operations, Reinhardt, Werba,
Bowen Inc. (April 1990 - October 1998).
12
<PAGE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND DATE OF BIRTH POSITION(S) HELD WITH FUND PAST 5 YEARS
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Michael R. Clinton Treasurer and Chief Financial Treasurer and Chief Financial Officer,
1190 Saratoga Avenue, Suite 200 and Accounting Officer RWB Advisory Services Inc. (since October
San Jose, CA 95129 1998); Treasurer and Chief Financial
DOB: 10/06/66 Officer, Reinhardt, Werba, Bowen Inc.
(June 1995 to October 1998); CPA,
Crawford, Pimentel & Co., Inc.
(accounting firm) (September 1989 to June
1995).
Ronald G. Reynolds Assistant Secretary and Chief Operating Officer, RWB Advisory
1190 Saratoga Avenue, Suite 200 Assistant Treasurer Services Inc. (since July 1998); Chief
San Jose, CA 95129 Operating Officer, Reinhardt, Werba,
DOB: 6/20/41 Bowen, Inc. (January 1997 to October
1998); Consultant (February 1995 to
January 1997); Vice President
Operations/Corporate Secretary, Coastcom
(telecommunications) (August 1994 to
February 1995); Vice President
Operations, Litton Corporation (February
1967 to August 1994).
</TABLE>
COMPENSATION TABLE
For their services as trustees, the trustees who are not "interested
persons" (as defined in the 1940 Act) receive a $5,000 annual retainer fee and
$1,000 per meeting attended, as well as reimbursement for expenses incurred in
connection with attendance at such meetings. The interested trustees receive no
compensation for their services as trustees. The following table summarizes the
estimated compensation to be paid by the Trust to its trustees during the
current fiscal year. The aggregate compensation is provided for the Trust, which
is comprised of eight Funds.
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM PENSION OR RETIREMENT BENEFITS
NAME OF TRUSTEE THE TRUST
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Bryan W. Brown $9,000 None
David G. Booth None None
John J. Bowen, Jr. None None
Patrick Keating None None
Charles M. Roame $9,000 None
Harold M. Shefrin $9,000 None
</TABLE>
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the date of this SAI, RWBAS may be deemed to control the Funds
because it is the record and beneficial owner of 100% of each class of each
Fund. As a result, RWBAS will be able to affect the outcome of matters presented
for a vote of each Fund's shareholders.
13
<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT MANAGER AND SUB-ADVISERS
The Trust, on behalf of each Fund, has entered into an Investment
Advisory and Administrative Services Agreement (the "Agreement") with the
Manager, an indirect, wholly-owned subsidiary of Assante Corporation, which is a
publicly held financial services company located in Winnipeg, Canada.
The Agreement will continue in effect for a period of two years from
its effective date. If not sooner terminated, the Agreement will continue in
effect for successive one year periods thereafter, provided that its continuance
is specifically approved annually by (a) the vote of a majority of the Board of
Trustees who are not parties to the Agreement or interested persons (as defined
in the 1940 Act), cast in person at a meeting called for the purpose of voting
on approval, and (b) either (i) the vote of a majority of the outstanding voting
securities of the affected Fund, or (ii) the vote of a majority of the Board of
Trustees. The Agreement is terminable with respect to a Fund by vote of the
Board of Trustees, or by the holders of a majority of the outstanding voting
securities of the Fund, at any time without penalty, on 60 days' written notice
to the Manager. The Manager may also terminate its advisory relationship with
respect to a Fund without penalty on 90 days' written notice to the Trust, as
applicable. The Advisory Agreement terminates automatically in the event of its
assignment (as defined in the 1940 Act).
For the advisory services provided pursuant to the Agreement, the
Manager is entitled to a fee from each Fund computed daily and payable monthly
at the rate of .85% of the average daily net assets of each Fund.
For the administrative services provided, the Manager is entitled to a
fee from each Fund computed daily and payable monthly at the rate of .10% of the
average daily net assets of each Fund.
_________ is the Sub-Adviser, respectively for the SA U.S. Growth Fund
and SA U.S. Value Fund. _______ is a [entity] and ________ is a [entity]. Each
is registered with the Securities and Exchange Commission as an investment
adviser.
The Trust has entered into a sub-advisory agreement (the "Sub-Advisory
Agreement") with each Sub-Adviser. Under the terms of the Sub-Advisory
Agreements, each Sub-Adviser provides sub-advisory services to the Funds.
Subject to supervision of the Manager, each Sub-Adviser is responsible for the
management of each the Fund's portfolio, including decisions regarding purchases
and sales of portfolio securities by the Funds. Each Sub-Adviser is also
responsible for arranging the execution of portfolio management decisions,
including the selection of brokers to execute trades and the negotiation of
brokerage commissions in connection therewith.
Each Sub-Advisory Agreement will continue in effect with respect to a
Fund for a period of two years from its effective date. If not sooner
terminated, each Sub-Advisory Agreement will continue in effect for successive
one year periods thereafter, provided that each continuance is specifically
approved annually by (a) the vote of a majority of the Board of Trustees who are
not parties to the Sub-Advisory Agreement or interested persons (as defined in
the 1940 Act), cast in person at a meeting called for the purpose of voting on
approval, and (b) the vote of a majority of the Board of Trustees. Each
Sub-Advisory Agreement is terminable by vote of the Board of Trustees, or, with
respect to a Fund, by the holders of a majority of the outstanding voting
securities of that Fund, at any time without penalty, on 60 days' written notice
to the Sub-Adviser. Once each Sub-Advisory Agreement has been in effect for a
period of not less than four years, it may be terminated by the Manager or the
Sub-Adviser as to a particular Fund by giving not less than twelve month's
written notice. Each Sub-Advisory Agreement terminates automatically in the
event of its assignment (as defined in the 1940 Act).
For the sub-advisory services provided, the Sub-Adviser is entitled to
a fee computed daily and payable monthly at an annual rate based on the Fund's
average daily net assets as set forth below of [.37%] from SA U.S.
Growth Fund and [.37%] from SA U.S. Value Fund.
14
<PAGE>
The following individuals are affiliated persons of the Trust and of
the Manager: John J. Bowen, Jr.; Patrick Keating; Alexander B. Potts; Michael R.
Clinton and Ronald G. Reynolds. David G. Booth is an affiliated person of the
Trust. The capacities in which each such individual is affiliated with the Trust
and the Manager is set forth above under "Trustees and Officers."
DISTRIBUTOR
RWB Securities, Inc. (the "Distributor") and the Trust have entered
into a distribution agreement, under which the Distributor, as agent, sells
shares of each Fund on a continuous basis. The Distributor's principal offices
are located at 1190 Saratoga Avenue, Suite 200, San Jose, CA 95129. The
Distributor is an indirect, wholly-owned subsidiary of Assante Capital
Management, Inc. and is an affiliate of RWBAS. The Distributor receives no
compensation for distribution of the Funds shares.
John J. Bowen, Jr. is an affiliated person of the Trust and of the
Distributor.
SHAREHOLDER SERVICING ARRANGEMENTS
Under a Shareholder Servicing Agreement with the Trust, the Manager
performs various services for the Funds, including establishing a toll-free
telephone number for shareholders of each Fund to use to obtain up-to-date
account information; providing to shareholders quarterly and other reports with
respect to the performance of each Fund; and providing shareholders with such
information regarding the operations and affairs of each Fund, and their
investment in its shares, as the shareholders or the Board of Trustees may
reasonably request. The Manager is paid an annual service fee at the rate of up
to 0.25% of the value of average daily net assets of the Class S shares, and an
annual service fee at the rate of up to 0.05% of the value of average daily net
assets of the Class I shares of each Fund.
ADMINISTRATION
State Street Bank and Trust Company ("State Street"), whose principal
business address is 225 Franklin Street, Boston, Massachusetts, 02110, serves as
sub-administrator for the Trust, pursuant to a sub-administration agreement (the
"Sub-Administration Agreement") with the manager and the Trust.
Under the Sub-Administration Agreement, State Street has agreed to
oversee the computation of each Fund's net asset value, net income and realized
capital gains, if any; furnish statistical and research data, clerical services,
and stationery and office supplies; prepare and file various reports with the
appropriate regulatory agencies; and prepare various materials required by the
Securities and Exchange Commission. For providing these services, State Street
receives a fee which is calculated daily and paid monthly at an annual rate
based on the average daily net assets of each Fund as follows: 0.06% on the
first $750 million of net assets, plus 0.04% for net assets between $750 million
and $1.5 billion, plus 0.02% on net assets over $1.5 billion. There is a minimum
charge of $85,000 per fund.
CUSTODIAN
State Street is the custodian of each Fund's assets pursuant to a
custodian agreement (the "Custody Contract") with the Trust. State Street is
also the custodian with respect to the custody of foreign securities held by the
Funds. Under the Custody Contract, State Street (i) holds and transfers
portfolio securities on account of each Fund, (ii) accepts receipts and makes
disbursements of money on behalf of each Fund, (iii) collects and receives all
income and other payments and distributions on account of each Fund's securities
and (iv) makes periodic reports to the Board of Trustees concerning the Funds'
operations.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street serves as the transfer agent and dividend disbursing agent
for the Funds.
15
<PAGE>
COUNSEL
The law firm of Paul, Hastings, Janofsky & Walker LLP, 345 California
Street, San Francisco, California 94104, has passed upon certain legal matters
in connection with the shares offered by the Funds and serves as counsel to the
Trust.
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLC, 555 California Street, San Francisco,
California 94101, serves as the independent auditors for the Trust, providing
audit and accounting services including: examination of each Fund's annual
financial statements, assistance and consultation with respect to the
preparation of filings with the Securities and Exchange Commission; and
preparation of income tax returns.
BROKERAGE ALLOCATIONS AND OTHER PRACTICES
Subject to the general supervision of the Trustees, each Sub-Adviser
makes decisions with respect to and places orders for all purchases and sales of
portfolio securities for the Funds.
Transactions on U.S. stock exchanges involve the payment of negotiated
brokerage commissions. On exchanges on which commissions are negotiated, the
cost of transactions may vary among different brokers.
Over-the-counter issues, including corporate debt and government
securities, are normally traded on a "net" basis (i.e., without commission)
through dealers, or otherwise involve transactions directly with the issuer of
an instrument. With respect to over-the-counter transactions, each Sub-Adviser
will normally deal directly with dealers who make a market in the instruments
involved except in those circumstances where more favorable prices and execution
are available elsewhere. The cost of foreign and domestic securities purchased
from and sold to dealers include a dealer's mark-up or mark-down.
Each Sub-Adviser will place portfolio transaction with a view to
receiving the best price and execution.
Transactions may be placed with brokers who provide a Sub-Adviser with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. Each
Sub-Advisory Agreement permits the Sub-Adviser to cause the Funds to pay a
broker or dealer which furnishes brokerage and research services a higher
commission than that which might be charged by another broker or dealer for
effecting the same transaction, provided that each Sub-Adviser determines in
good faith that such commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either the particular transaction or the overall responsibilities of
each Sub-Adviser to the Funds.
Supplementary research information so received is in addition to, and
not in lieu of, services required to be performed by each Sub-Adviser and does
not reduce the advisory fees payable to the Sub-Adviser. It is possible that
certain of the supplementary research or other services received will primarily
benefit one or more other investment companies or other accounts for which
investment discretion is exercised. Conversely, a Fund may be the primary
beneficiary of the research or services received as a result of portfolio
transactions effected for such other account or investment company.
Investment decisions for each Fund and for other investment accounts
managed by a Sub-Adviser are made independently of each other in the light of
differing conditions. However, the same investment decision may be made for two
or more of such accounts. In such cases, simultaneous transactions are
inevitable. Purchases or sales are then averaged as to price and allocated as to
amount in a manner deemed equitable to each such account. While in some cases
this practice could have a detrimental effect on the price or value of the
security as far as a Fund is concerned, in other cases it is believed to be
beneficial to a Fund. To the extent permitted by law, each Sub-Adviser may
aggregate the securities to be sold or purchased for a Fund with those to be
sold or purchased for other investment companies or accounts in executing
transactions.
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<PAGE>
Portfolio securities will not be purchased from or sold to the Manager,
Sub-Advisers Declaration of Trust authorizes the Board of Trustees to classify
or reclassify any unissued shares of the Trust into one or more classes by
setting or changing, in any one or more respects, their respective designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations, qualifications and terms and conditions of redemption. Currently,
the Trust's Board of Trustees has authorized the issuance of an unlimited number
of shares of beneficial interest in the Trust, representing interests in eight
separate series, each of which is a Fund. Each Fund currently offers two classes
of shares.
In the event of a liquidation or dissolution of the Trust, shareholders
of a particular Fund would be entitled to receive the assets available for
distribution belonging to such Fund, and a proportionate distribution, based
upon the relative net asset values of the Funds, of any general assets not
belonging to any particular Fund which are available for distribution.
Shareholders of a Fund are entitled to participate in the net distributable
assets of the particular Fund involved on liquidation, based on the number of
shares of the Fund that are held by each shareholder.
Shares of the Trust have noncumulative voting rights and, accordingly,
the holders of more than 50% of the Trust's outstanding shares (irrespective of
class) may elect all of the trustees. Shares have no preemptive rights and only
such conversion and exchange rights as the Board may grant in its discretion.
When issued for payment as described in the applicable Prospectus, shares will
be fully paid and non-assessable by the Trust.
Shareholder meetings to elect trustees will not be held unless and
until such time as required by law. At that time, the trustees then in office
will call a shareholders' meeting to elect trustees. Except as set forth above,
the trustees will continue to hold office and may appoint successor trustees.
Meetings of the shareholders, shall be called by the trustees upon the written
request of shareholders owning at least 10% of the outstanding shares entitled
to vote.
PURCHASE, REDEMPTION AND PRICING OF SHARES
PURCHASE AND REDEMPTION INFORMATION
Purchases and redemptions are discussed in the Funds' Prospectus and
such information is incorporated herein by reference.
RETIREMENT PLANS. Shares of any of the Funds may be purchased in
connection with various types of tax deferred retirement plans, including
individual retirement accounts ("IRAs"), 401(k) plans, deferred compensation for
public schools and charitable organizations (403(b) plans) and simplified
employee pension IRAs (SEP-IRAs). An individual or organization considering the
establishment of a retirement plan should consult with an attorney and/or an
accountant with respect to the terms and tax aspects of the plan. A $10.00
annual custodial fee is also charged on IRAs. This custodial fee is due by
December 15 of each year and may be paid by check or shares liquidated from a
shareholder's account.
IN-KIND PURCHASES. Payment for shares may, in the discretion of each
Sub-Adviser, be made in the form of securities that are permissible investments
for the Funds as described in the Prospectuses. For further information about
this form of payment please contact the Manager. In connection with an in-kind
securities payment, a Fund will require, among other things, that the securities
(a) meet the investment objectives and policies of the Funds; (b) are acquired
for investment and not for resale; (c) are liquid securities that are not
restricted as to transfer either by law or liquidity of markets; (d) have a
value that is readily ascertainable by a listing on a nationally recognized
securities exchange; and (e) are valued on the day of purchase in accordance
with the pricing methods used by the Fund and that the Fund receive satisfactory
assurances that (i) it will have good and marketable title to the securities
received by it; (ii) that the securities are in proper form for transfer to the
Fund; and (iii) adequate information will be provided concerning the basis and
other tax matters relating to the securities.
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<PAGE>
REDEMPTION IN-KIND. Redemption proceeds are normally paid in cash;
however, each Fund reserves the right to pay the redemption price in whole or
part by a distribution in kind of securities from the portfolio of the
particular Fund, in lieu of cash. Redemption in-kind will be made in conformity
with applicable rules of the Securities and Exchange Commission taking such
securities at the same value employed in determining net asset value and
selecting the securities in a manner the Board of Trustees determines to be fair
and equitable. The Trust has elected to be governed by Rule 18f-1 under the 1940
Act under which the Fund is obligated to redeem shares for any one shareholder
in cash only up to the lesser of $250,000 or 1% of the class' net asset value
during any 90-day period. If shares are redeemed in kind, the redeeming
shareholder might incur transaction costs in converting the assets into cash.
OTHER REDEMPTION INFORMATION. The Funds reserve the right to suspend or
postpone redemptions during any period when: (i) trading on the New York Stock
Exchange (the "NYSE") is restricted by applicable rules and regulations of the
Securities and Exchange Commission; (ii) the NYSE is closed for other than
customary weekend and holiday closings; (iii) the Securities and Exchange
Commission has by order permitted such suspension or postponement for the
protection of the shareholders; or (iv) an emergency, as determined by the
Securities and Exchange Commission, exists, making disposal of portfolio
securities or valuation of net assets of a Fund not reasonably practicable.
The Funds may involuntarily redeem an investor's shares if the net
asset value of such shares is less than $10,000; provided that involuntary
redemptions will not result from fluctuations in the value of an investor's
shares. A notice of redemption, sent by first-class mail to the investor's
address of record, will fix a date not less than 60 days after the mailing date,
and shares will be redeemed at the net asset value at the close of business on
that date unless sufficient additional shares are purchased to bring the
aggregate account value up to $10,000 or more. A check for the redemption
proceeds payable to the investor will be mailed to the investor at the address
of record.
TAXES
The following summarizes certain additional federal and state income
tax considerations generally affecting the Funds and their shareholders that are
not described in the Funds' Prospectuses. No attempt is made to present a
detailed explanation of the tax treatment of the Funds or their shareholders,
and the discussion here and in the Prospectus is not intended as a substitute
for careful tax planning. This discussion is based upon present provisions of
the Code, the regulations promulgated thereunder, and judicial and
administrative ruling authorities, all of which are subject to change, which
change may be retroactive. Prospective investors should consult their own tax
advisors with regard to the federal tax consequences of the purchase, ownership
and disposition of Fund shares, as well as the tax consequences arising under
the laws of any state, foreign country, or other taxing jurisdiction.
TAX STATUS OF THE FUNDS
Each Fund intends to elect and qualify to be taxed separately as a
regulated investment company under the Code. As a regulated investment company,
each Fund generally is exempt from federal income tax on its net investment
income and realized capital gains which it distributes to shareholders, provided
that it distributes an amount equal to the sum of (a) at least 90% of its
investment company taxable income (net investment income and the excess of net
short-term capital gain over net long-term capital loss), if any, for the year
and (b) at least 90% of its net tax-exempt interest income, if any, for the year
(the "Distribution Requirement") and satisfies certain other requirements of the
Code that are described below. Distributions of investment company taxable
income and net tax-exempt interest income made during the taxable year or, under
specified circumstances, within twelve months after the close of the taxable
year will satisfy the Distribution Requirement.
In addition to satisfaction of the Distribution Requirement, each Fund
must derive with respect to a taxable year at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and gains
from the sale or other disposition of stock or securities or foreign currencies,
or from other income derived with respect to its business of investing in such
stock, securities, or currencies (the "Income Requirement").
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<PAGE>
In addition to the foregoing requirements, at the close of each quarter
of its taxable year, at least 50% of the value of each Fund's assets must
consist of cash and cash items, U.S. Government securities, securities of other
regulated investment companies, and securities of other issuers (as to which a
Fund has not invested more than 5% of the value of its total assets in
securities of such issuer and as to which a Fund does not hold more than 10% of
the outstanding voting securities of such issuer) and no more than 25% of the
value of each Fund's total assets may be invested in the securities of any one
issuer (other than U.S. Government securities and securities of other regulated
investment companies), or in two or more issuers which such Fund controls and
which are engaged in the same or similar trades or businesses.
If for any taxable year any Fund does not qualify as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate rates without any deduction for distributions to shareholders. In such
event, all distributions (whether or not derived from exempt-interest income)
would be taxable as ordinary income and would be eligible for the dividends
received deduction in the case of corporate shareholders to the extent of such
Fund's current and accumulated earnings and profits.
Although a Fund expects to qualify as a "regulated investment company"
and to be relieved of all or substantially all Federal income taxes, depending
upon the extent of its activities in states and localities in which its offices
are maintained, in which its agents or independent contractors are located or in
which it is otherwise deemed to be conducting business, a Fund may be subject to
the tax laws of such states or localities.
TAXATION OF FUND DISTRIBUTIONS
Distributions of net investment income received by a Fund from
investments in debt securities and any net realized short-term capital gains
distributed by a Fund will be taxable to shareholders as ordinary income and
will not be eligible for the dividends received deduction for corporations.
Each Fund intends to distribute to shareholders any excess of net
long-term capital gain over net short-term capital loss ("net capital gain") for
each taxable year. Such gain is distributed as a capital gain dividend and is
taxable to shareholders as gain from the sale or exchange of a capital asset
held for more than one year, regardless of the length of time a shareholder has
held his or her Fund shares and regardless of whether the distribution is paid
in cash or reinvested in shares. The Funds expect that capital gain dividends
will be taxable to shareholders as long-term gain. Capital gain dividends are
not eligible for the dividends received deduction.
In the case of corporate shareholders, distributions of a Fund for any
taxable year generally qualify for the dividends received deduction to the
extent of the gross amount of "qualifying dividends" received by such Fund for
the year and if certain holding period requirements are met. Generally, a
dividend will be treated as a "qualifying dividend" if it has been received from
a domestic corporation.
Amounts not distributed on a timely basis in accordance with a calendar
year distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, a Fund must distribute during each
calendar year an amount equal to the sum of (1) at least 98% of its ordinary
income (not taking into account any capital gains or losses) for the calendar
year, (2) at least 98% of its capital gains in excess of its capital losses
(adjusted for certain ordinary losses, as prescribed by the Code) for the
one-year period ending on October 31 of the calendar year, and (3) any ordinary
income and capital gains for previous years that was not distributed during
those years. A distribution will be treated as paid on December 31 of the
current calendar year if it is declared by a Fund in October, November or
December with a record date in such a month and paid by a Fund during January of
the following calendar year. Such distributions will be taxable to shareholders
in the calendar year in which the distributions are declared, rather than the
calendar year in which the distributions are received. To prevent application of
the excise tax, a Fund intends to make its distributions in accordance with the
calendar year distribution requirement.
Shareholders will be advised annually as to the federal income tax
consequences of distributions made by the Funds each year.
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DISPOSITION OF SHARES
Upon a redemption, sale or exchange of his or her shares, a shareholder
will realize a taxable gain or loss depending upon his or her basis in the
shares. Such gain or loss will be treated as capital gain or loss if the shares
are capital assets in the shareholder's hands and will be long-term or
short-term, generally, depending upon the shareholder's holding period for the
shares. Any loss realized on a redemption, sale or exchange will be disallowed
to the extent the shares disposed of are replaced (including through
reinvestment of dividends) within a period of 61 days beginning 30 days before
and ending 30 days after the shares are disposed of. In such a case, the basis
of the shares acquired will be adjusted to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of Fund shares held by the shareholder for
six months or less will be treated as a long-term capital loss to the extent of
any distributions of net capital gains received or treated as having been
received by the shareholder with respect to such shares and treated as long-term
capital gains. Furthermore, a loss realized by a shareholder on the redemption,
sale or exchange of shares of a Fund with respect to which exempt-interest
dividends have been paid will, to the extent of such exempt-interest dividends,
be disallowed if such shares have been held by the shareholder for six months or
less.
INFORMATION RELATING TO FOREIGN INVESTMENTS
Income received by a Fund from sources within foreign countries may be
subject to withholding and other foreign taxes. The payment of such taxes will
reduce the amount of dividends and distributions paid to the Funds'
shareholders. So long as a Fund qualifies as a regulated investment company,
certain distribution requirements are satisfied, and more than 50% of the value
of the Fund's assets at the close of the taxable year consists of securities of
foreign issuers, the Fund may elect, subject to limitation, to pass through its
foreign tax credits to its shareholders. The Fund may qualify for and make this
election in some, but not necessarily all, of its taxable years. If a Fund were
to make an election, an amount equal to the foreign income taxes paid by the
Fund would be included in the income of its shareholders and the shareholders
would be entitled to credit their portions of this amount against their U.S. tax
due, if any, or to deduct such portions from their U.S. taxable income, if any.
Shortly after any year for which it makes such an election, a Fund will report
to its shareholders, in writing, the amount per share of such foreign tax that
must be included in each shareholder's gross income and the amount which will be
available for deduction or credit. No deduction for foreign taxes may be claimed
by a shareholder who does not itemize deductions. Certain limitations are
imposed on the extent to which the credit (but not the deduction) for foreign
taxes may be claimed.
Shareholders who choose to utilize a credit (rather than a deduction)
for foreign taxes will be subject to limitations, including the restriction that
the credit may not exceed the shareholder's United States tax (determined
without regard to the availability of the credit) attributable to his or her
total foreign source taxable income. For this purpose, the portion of dividends
and distributions paid by the Fund from its foreign source income will be
treated as foreign source income. The Fund's gains and losses from the sale of
securities will generally be treated as derived from United States sources and
certain foreign currency gains and losses likewise will be treated as derived
from United States sources. The limitation on the foreign tax credit is applied
separately to foreign source "passive income", such as the portion of dividends
received from the Fund which qualifies as foreign source income. In addition,
only a portion of the foreign tax credit will be allowed to offset any
alternative minimum tax imposed on corporations and individuals. Because of
these limitations, shareholders may be unable to claim a credit for the full
amount of their proportionate shares of the foreign income taxes paid by the
Fund.
Certain Funds may invest in shares of foreign corporations that may be
classified under the Code as passive foreign investment companies ("PFICs"). In
general, a foreign corporation is classified as a PFIC if at least one-half of
its assets constitute passive assets, or 75% or more of its gross passive
income. If a Fund receives a so-called "excess distribution" with respect to
PFIC stock, the Fund itself may be subject to a tax on a portion of the excess
distribution, whether or not the corresponding income is distributed by the Fund
to shareholders. In general, under the PFIC rules, an excess distribution is
treated as having been realized ratably over the period during which the Fund
held the PFIC shares. Each Fund will itself be subject to tax on the portion, if
any, of an excess distribution that is so allocated to prior Fund taxable years
and an interest factor will be added to the tax, as if the tax had been payable
in such prior taxable years. Certain distributions from a PFIC as well as gain
from the sale of PFIC shares
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are treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
excess distributions might have been classified as capital gain.
The Funds may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis, regardless of whether
distributions were received from the PFIC in a given year. If this election were
made, the special rules, discussed above, relating to the taxation of excess
distributions, would not apply. In addition, another election would involve
marking to market the Fund's PFIC shares at the end of each taxable year, with
the result that unrealized gains would be treated as though they were realized
and reported as ordinary income. Any mark-to market losses and any loss from an
actual disposition of Fund shares would be deductible as ordinary losses to the
extent of any net mark-to-market gains included in income in prior years.
Income received by a Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries.
INFORMATION RELATING TO FUND INVESTMENTS
TAXATION OF CERTAIN FINANCIAL INSTRUMENTS. Special rules govern the
Federal income tax treatment of financial instruments that may be held by some
of the Funds. These rules may have a particular impact on the amount of income
or gain that the Funds must distribute to their respective shareholders to
comply with the Distribution Requirement and on the income or gain qualifying
under the Income Requirement.
ORIGINAL ISSUE DISCOUNT. The Funds may purchase debt securities with
original issue discount. Original issue discount represents the difference
between the original issue price of the debt instrument and the stated
redemption price at maturity. Original issue discount is required to be accreted
on a daily basis and is considered interest income for federal income tax
purposes and, therefore, such income would be subject to the distribution
requirements applicable to regulated investment companies.
MARKET DISCOUNT. The Funds may purchase debt securities at a discount
in excess of the original issue discount, or at a discount to the stated
redemption price at maturity (for debt securities without original issue
discount). This discount is called "market discount". Market discount is
permitted to be recorded daily or at time of disposition of the debt security.
If market discount is to be recognized at time of disposition of the debt
security, accrued market discount is recognized to the extent of gain on the
disposition of the debt security.
HEDGING TRANSACTIONS. The taxation of equity options and
over-the-counter options on debt securities is governed by Code section 1234.
Pursuant to Code section 1234, the premium received by a Fund for selling a put
or call option is not included in income at the time of receipt. If the option
expires, the premium is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received is short-term capital gain or loss. If a
call option written by a Fund is exercised, thereby requiring the Fund to sell
the underlying security, the premium will increase the amount realized upon the
sale of such security and any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term depending upon the holding period of
the security. With respect to a put or call option that is purchased by a Fund,
if the option is sold, any resulting gain or loss will be a capital gain or
loss, and will be long-term or short-term, depending upon the holding period of
the option. If the option expires, the resulting loss is a capital loss and is
long-term or short-term, depending upon the holding period of the option. If the
option is exercised, the cost of the option, in the case of a call option, is
added to the basis of the purchased security and, in the case of a put option,
reduces the amount realized on the underlying security in determining gain or
loss.
Any regulated futures and foreign currency contracts and certain
options (namely, nonequity options and dealer equity options) in which a Fund
may invest may be "section 1256 contracts." Gains or losses on section 1256
contracts are generally considered 60% long-term and 40% short-term capital
gains or losses; however, foreign currency gains or losses arising from certain
section 1256 contracts may be treated as ordinary income or loss. Also, section,
1256 contracts held by a Fund at the end of each taxable year (and generally for
purposes of the 4%
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excise tax, on October 31 of each year) are "marked-to-market" with the result
that unrealized gains or losses are treated as though they were realized.
Generally, hedging transactions, if any, undertaken by a Fund may
result in "straddles" for U.S. federal income tax purposes. The straddle rules
may affect the character of gains (or losses) realized by the Funds. In
addition, losses realized by a Fund on positions that are part of a straddle may
be deferred under the straddle rules, rather than being taken into account in
calculating the taxable income for the taxable year in which such losses are
realized. Because only a few regulations implementing the straddle rules have
been promulgated, the tax consequences of hedging transactions to the Funds are
not entirely clear. The hedging transactions may increase the amount of
short-term capital gain realized by the Funds which is taxed as ordinary income
when distributed to shareholders.
The Funds may make one or more of the elections available under the
Code which are applicable to straddles. If a Fund makes any of the elections,
the amount, character and timing of the recognition of gains or losses from the
affected straddle positions will be determined under rules that vary according
to the election(s) made. The rules applicable under certain of the elections may
operate to accelerate the recognition of gains or losses from the affected
straddle positions.
Because application of the straddle rules may affect the character of
gains or losses, defer losses and/or accelerate the recognition of gains or
losses from the affected straddle positions, the amount which must be
distributed to shareholders, and which will be taxed to shareholders as ordinary
income or long-term capital gain, may be increased or decreased substantially as
compared to a fund that did not engage in such hedging transactions.
The diversification requirements applicable to the Funds' assets may
limit the extent to which the Funds will be able to engage in transactions in
options, futures or forward contracts.
CONSTRUCTIVE SALES. Recently enacted rules may affect the timing and
character of gain if a Fund engages in transactions that reduce or eliminate its
risk of loss with respect to appreciated financial positions. If the Fund enters
into certain transactions in property while holding substantially identical
property, the Fund would be treated as if it had sold and immediately
repurchased the property and would be taxed on any gain (but not loss) from the
constructive sale. The character of gain from a constructive sale would depend
upon the Fund's holding period in the property. Loss from a constructive sale
would be recognized when the property was subsequently disposed of, and its
character would depend on the Fund's holding period and the application of
various loss deferral provisions of the Code.
CURRENCY FLUCTUATIONS - "SECTION 988" GAINS OR LOSSES. Under the Code,
gains or losses attributable to fluctuations in exchange rates which occur
between the time a Fund accrues receivables or liabilities denominated in a
foreign currency and the time the Fund actually collects such receivables or
pays such liabilities generally are treated as ordinary income and loss.
Similarly, on disposition of debt securities denominated in a foreign currency
and on disposition of certain futures, forward contracts and options, gains or
losses attributable to fluctuations in the value of the foreign currency between
the date of acquisition of the security or contract and the date of disposition
also may be treated as ordinary gain or loss. These gains or losses, referred to
under the Code as "Section 988" gains or losses, may increase or decrease the
amount of a Fund's investment company taxable income to be distributed to its
shareholders as ordinary income.
BACKUP WITHHOLDING
The Trust will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable distributions, including gross
proceeds realized upon sale or other dispositions paid to any shareholder (i)
who has provided an incorrect tax identification number or no number at all,
(ii) who is subject to backup withholding by the Internal Revenue Service for
failure to report the receipt of taxable interest or dividend income properly,
or (iii) who has failed to certify that he is not subject to backup withholding
or that he is an "exempt recipient."
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OTHER TAXATION
The foregoing discussion relates only to U.S. federal income tax law
and certain state taxes as applicable to U.S. persons (i.e., U.S. citizens and
residents and domestic corporations, partnerships, trusts and estates).
Distributions by the Funds, and dispositions of Fund shares also may be subject
to other state and local taxes, and their treatment under state and local income
tax laws may differ from the U.S. federal income tax treatment. Shareholders
should consult their tax advisers with respect to particular questions of U.S.
federal, state and local taxation. Shareholders who are not U.S. persons should
consult their tax advisers regarding U.S. and foreign tax consequences of
ownership of shares of the Fund, including the likelihood that distributions to
them would be subject to withholding of U.S. federal income tax at a rate of 30%
(or at a lower rate under a tax treaty). Future legislative or administrative
changes or court decisions may significantly change the conclusions expressed
herein, and any such changes or decisions may have a retroactive effect with
respect to the transactions contemplated herein.
PERFORMANCE INFORMATION
The 30-day (or one month) standard yield is calculated for the Fixed
Income Fund in accordance with the method prescribed by the SEC for mutual
funds:
6
YIELD = 2 [( a-b + 1) - 1]
---
cd
Where:
a =dividends and interest earned by the Fund during the period;
b =expenses accrued for the period (net of reimbursements and waivers);
c =average daily number of shares outstanding during the period
entitled to receive dividends;
d =maximum offering price per share on the last day of the period.
For the purpose of determining interest earned on debt obligations
purchased by the Fund at a discount or premium (variable "a" in the formula),
the Fund computes the yield to maturity of such instrument based on the market
value of the obligation (including actual accrued interest) at the close of
business on the last business day of each month, or, with respect to obligations
purchased during the month, the purchase price (plus actual accrued interest).
Such yield is then divided by 360 and the quotient is multiplied by the market
value of the obligation (including actual accrued interest) in order to
determine the interest income on the obligation for each day of the subsequent
month that the obligation is in the portfolio. It is assumed in the above
calculation that each month contains 30 days. The maturity of a debt obligation
with a call provision is deemed to be the next call date on which the obligation
reasonably may be expected to be called or, if none, the maturity date. For the
purpose of computing yield on equity securities held by the Fund, dividend
income is recognized by accruing 1/360 of the stated dividend rate of the
security for each day that the security is held by the Fund.
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original issue discount (market discount), the yield to maturity
is the imputed rate based on the original issue discount calculation. On the
other hand, in the case of tax-exempt obligations that are issued with original
issue discount but which have the discounts based on current market value that
are less than the then-remaining portion of the original issue discount (market
premium), the yield to maturity is based on the market value.
With respect to mortgage or other receivables-backed debt obligations
purchased at a discount or premium, the formula generally calls for amortization
of the discount or premium. The amortization schedule will be adjusted monthly
to reflect changes in the market value of such debt obligations. Expenses
accrued for the period (variable "b" in the formula) include all recurring fees
charged by the Fund to all shareholder accounts in proportion to the length of
the base period and the Fund's mean (or median) account size. Undeclared earned
income will be subtracted from the offering price per share (variable "d" in the
formula).
TOTAL RETURN
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Each Fund that advertises its "average annual total return" computes
such return by determining the average annual compounded rate of return during
specified periods that equates the initial amount invested to the ending
redeemable value of such investment according to the following formula:
n
P (1 + T) = ERV
Where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year (or other) periods at the end of
the applicable period (or a fractional portion thereof)
P = hypothetical initial payment of $1,000
n = period covered by the computation, expressed in years.
Each Fund that advertises its "aggregate total return" computes such
returns by determining the aggregate compounded rates of return during specified
periods that likewise equate the initial amount invested to the ending
redeemable value of such investment.
The calculations are made assuming that (1) all dividends and capital
gain distributions are reinvested on the reinvestment dates at the price per
share existing on the reinvestment date, (2) all recurring fees charged to all
shareholder accounts are included, and (3) for any account fees that vary with
the size of the account, a mean (or median) account size in the Fund during the
periods is reflected. The ending redeemable value is determined by assuming
complete redemption of the hypothetical investment after deduction of all
non-recurring charges at the end of the measuring period.
The performance of any investment is generally a function of portfolio
quality and maturity, type of investment and operating expenses.
From time to time, the performance of a Fund may be compared in
publications to the performance of various indices and investments for which
reliable performance data is available. The performance of a Fund may also be
compared in publications to averages, performance rankings, or other information
prepared by recognized mutual fund statistical services.
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PART C: OTHER INFORMATION
<TABLE>
ITEM 23. EXHIBITS
<S> <C>
(i) Agreement and Declaration of Trust(1)
(ii) Amendment to Agreement and Declaration of Trust(3)
(b)(i) By-Laws(1)
(ii) Amendment to By-Laws(3)
(c) Not Applicable
(d) (i) Investment Advisory and Administrative Services Agreement
with RWB Advisory Services Inc. is filed herewith.
(ii) Investment Sub-Advisory Agreement with Dimensional Fund Advisors, Inc. is filed herewith.
(iii) Form of Investment Sub-Advisory Agreement(4)
(iv) Form of Investment Sub-Advisory Agreement(4)
(e) Distribution Agreement with RWB Securities Inc. is filed herewith.
(f) Not Applicable
(g) Custodian Contract with State Street Bank and Trust Company(3)
(h)(i) Sub-Administration Agreement with State Street Bank Trust Company is filed herewith.
(ii) Form of Transfer Agency and Service Agreement with State Street Bank and Trust Company(2)
(iii) Shareholder Servicing Agreement is filed herewith.
(i)(i) Opinion and Consent of Paul, Hastings, Janovsky & Walker
LLP with respect to SA Fixed Income Fund, SA U.S. Market Fund,
SA U.S. HBtM Fund, SA U.S. Small Company Fund, SA
International HBtM Fund and SA International Small Company
Fund(3)
(ii) Opinion and Consent of Paul, Hastings, Janovsky & Walker LLP
with respect to SA U.S. Growth Fund and SA U.S. Value Fund(4)
(j) Not Applicable
(k) Not Applicable
(l) Initial Capital Agreement(3)
(m) Not Applicable
(n) Not Applicable
(o) Multi-Class Plan(3)
(p) Powers of Attorney(2)
</TABLE>
- -------------------------------
(1) Incorporated herein by reference from Registrant's Registration Statement on
Form N-1A (the "Registration Statement") (File Nos. 333-70423, 811-09195) as
filed with the U.S. Securities and Exchange Commission on January 11, 1999.
(2) Incorporated herein by reference from Pre-Effective Amendment No. 1 to the
Registration Statement as filed with the Securities and Exchange Commission on
June 9, 1999.
(3) Incorporated herein by reference from Pre-Effective Amendment No. 2 to the
Registration Statement as filed with the Securities and Exchange Commission on
July 15, 1999.
(4) To be filed by Amendment.
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE REGISTRANT
Not applicable.
ITEM 25. INDEMNIFICATION
Indemnification of Registrant's principal underwriter against certain
losses is provided for in the Distribution Agreement incorporated herein by
reference to Exhibit (e) hereto.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
Registrant, Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Trustees shall not be responsible or liable in any event for any
neglect or wrong-doing of any officer, agent, employee, Investment Adviser or
principal underwriter of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee, and the Trust out of its assets shall
indemnify and hold harmless each and every Trustee from and against any and all
claims, demands and expenses (including reasonable attorneys' fees) whatsoever
arising out of or related to each Trustee's performance of his or her duties as
a Trustee of the Trust; provided that nothing herein contained shall indemnify,
hold harmless or protect any Trustee from or against any liability to the Trust
or any Shareholder to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.
Every note, bond, instrument, certificate or undertaking and every
other act or thing whatsoever issued, executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
RWB Advisory Services Inc. performs investment advisory services for Registrant
and institutional and individual investors.
Dimensional Fund Advisors Inc. performs investment advisory services for
Registrant with respect to SA Fixed Income Fund, SA U.S. Market Fund, SA U.S.
HBtM Fund, SA U.S. Small Company Fund, SA International HBtM Fund and SA
International Small Company Fund and other investment companies and
institutional and individual investors.
<PAGE>
See the information concerning RWB Advisory Services Inc. set forth in Parts A
and B of this Registration Statement.
RWB Advisory Services Inc. and Dimensional Fund Advisors Inc. are both
investment advisers registered under the Investment Advisers Act of 1940, as
amended (the "Advisers Act"). The list required by this Item 26 of directors,
officers or partners of RWB Advisory Services Inc. and Dimensional Fund Advisors
Inc., together with any information as to any business profession, vocation or
employment of a substantial nature engaged in by such directors, officers or
partners during the past two years, is incorporated herein by reference from
Schedules B and D of Forms ADV filed by RWB Advisory Services Inc. (SEC File No.
801-55934) and Dimensional Fund Advisors Inc. (SEC File No. 801-16283), pursuant
to the Advisers Act.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Not Applicable
(b)
<TABLE>
<CAPTION>
(1) (2) (3)
NAME AND PRINCIPAL BUSINESS POSITIONS AND OFFICES WITH POSITIONS AND OFFICES
ADDRESS UNDERWRITER WITH FUND
<S> <C> <C>
John J. Bowen, Jr. Chief Executive Officer, Chief Executive Officer,
RWB Securities Inc. Registered Principal and President and Trustee
1190 Saratoga Avenue President
Suite 200
San Jose, CA 95129
</TABLE>
(c) Not Applicable
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
The following entities prepare, maintain and preserve the records required by
Section 31(a) of the 1940 Act for the Registrant. These services are provided to
the Registrant through written agreements between the parties to the effect that
such records will be maintained on behalf of the Registrant for the periods
prescribed by the rules and regulations of the Commission under the 1940 Act and
that such records are the property of the entity required to maintain and
preserve such records and will be surrendered promptly on request:
(1) RWB Advisory Services Inc.
1190 Saratoga Avenue, Suite 200
San Jose, California 95129
(2) Dimensional Fund Advisors Inc.
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
<PAGE>
(3) State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(4) Boston Financial Data Services, Inc.
Two Heritage Drive
North Quincy, Massachusetts 02171
ITEM 29. MANAGEMENT SERVICES
Not Applicable.
ITEM 30. UNDERTAKING
Not Applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Registrant has duly
caused this Post-Effective Amendment No. 1 to the Registration Statement to be
signed on its behalf by the undersigned, duly authorized, in the City of Boston
and the Commonwealth of Massachusetts, on the 22nd day of December, 1999.
SA FUNDS - INVESTMENT TRUST
By: * /s/ John J. Bowen, Jr.
-------------------------
John J. Bowen, Jr.
President and Chief Executive Officer
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this amendment to the registration statement has been signed below by the
following person in the capacities and on the date indicated:
SIGNATURES TITLE DATE
* /s/ John J. Bowen, Jr. Trustee December 22, 1999
- ------------------------
John J. Bowen, Jr.
* /s/ Bryan W. Brown Trustee December 22, 1999
- --------------------
Bryan W. Brown
* /s/ David G. Booth Trustee December 22, 1999
- --------------------
David G. Booth
* /s/ Patrick Keating Trustee December 22, 1999
- ---------------------
Patrick Keating
* /s/ Harold M. Shefrin Trustee December 22, 1999
- -----------------------
Harold M. Shefrin
* /s/ Michael Clinton Treasurer and Chief December 22, 1999
- --------------------- Financial and Accounting
Michael Clinton Officer
*By: /s/ Stephen Schuyler
--------------------
Stephen Schuyler
As Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(d)(i) Investment Advisory & Administrative Services Agreement
(d)(ii) Investment Sub-Advisory Agreement
(e) Distribution Agreement
(h)(i) Sub-Administration Agreement
(h)(iii) Shareholder Servicing Agreement
<PAGE>
INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES AGREEMENT
THIS INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES AGREEMENT made
as of the 8th day of July 1999, by and between SA Funds - Investment Trust, a
Delaware business trust (the "Trust"), on behalf of each series of the Trust
listed in APPENDIX A hereto, as may be amended from time to time (each, a
"Fund") and RWB Advisory Services Inc., a Corporation organized and existing
under the laws of the State of Maryland (the "Manager").
WITNESSETH:
WHEREAS, the Trust is an open-end management investment company,
registered as such under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Manager is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and is engaged in the
business of supplying investment advice, investment management and
administrative services, as an independent contractor; and
WHEREAS, the Trust desires to retain the Manager to render
investment management and administrative services to the Funds pursuant to
the terms and provisions of this Agreement, and the Manager is willing to
furnish such advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto, intending to be legally
bound hereby, mutually agree as follows:
1. APPOINTMENT OF MANAGER. The Manager is hereby appointed to serve
as the investment adviser and administrator to the Funds, to provide
investment advisory and administrative services with respect to each Fund for
the period and on the terms set forth in this Agreement, subject to the
supervision and direction of the Trust's Board of Trustees. The Manager
hereby accepts such employment.
<PAGE>
2. RETENTION OF SUB-ADVISERS AND SUB-ADMINISTRATORS. Subject to the
provisions of the Trust's Agreement and Declaration of Trust and the 1940
Act, the Manager may (A) select and contract with: (i) one or more investment
advisers (the "Sub-Advisers") to provide to the Manager such investment
advice relating to the assets of a Fund and related services and (ii) one or
more administrators (the "Sub-Administrators") to provide certain
administrative services to assist the Manager in carrying out its
responsibilities as administrator to the Trust, as the Manager may from time
to time deem appropriate; or (B) delegate any or all of its functions
hereunder to one or more Sub-Advisers or Sub-Administrators, provided that
the Trust's Board of Trustees shall approve any such contract with a
Sub-Adviser or Sub-Administrator. So long as any Sub-Adviser or
Sub-Administrator serves as investment adviser or administrator to any Fund
pursuant to a subadvisory or subadministration agreement, the
responsibilities and obligations of the Manager under this Agreement shall
be, subject in any event to the control of the Trust's Board of Trustees, to
determine and review with such Subadviser the investment objectives, policies
and restrictions and placing of all orders for the purchase and sale of
portfolio securities for the Funds, all as further described in the
subadvisory agreement, and to determine and review with such Subadministrator
the policies related to the administration of the Funds, as further described
in the subadministration agreement. The retention of a Sub-Adviser or
Sub-Administrator shall in no way reduce the responsibilities and obligations
of the Manager under this Agreement and the Manager shall be responsible to
the Trust for all acts or omissions of the Sub-Adviser or Sub-Administrator
in connection with the performance of the Manager's duties under this
Agreement. The Manager may terminate the services of any Subadviser or
Subadministrator at any time, subject to the approval of the Trust's Board of
Trustees, and shall at such time assume the responsibilities and obligations
of such Subadviser or Subadministrator unless and until a successor
Subadviser or Subadministrator is selected.
2
<PAGE>
3. DUTIES OF MANAGER.
(a) INVESTMENT MANAGEMENT. The Manager shall act as
investment manager to the Funds and shall supervise and direct, or cause the
Sub-Adviser to supervise and direct, investment of the Funds' assets on
behalf of the Funds in accordance with applicable law, the Trust's governing
and documents, the investment objectives, investment program, policies and
restrictions of the Funds as provided in the then-current prospectus and the
then-current Statement of Additional Information contained in the Trust's
Registration Statement under the 1940 Act and the Securities Act of 1933, as
amended (the "1933 Act") and such other limitations as the Trustees may
impose from time to time in writing to the Manager. The Manager shall cause
the Sub-Adviser to formulate a continuing program for the management of each
Fund's assets, and the Manager shall supervise such investment programs
formulated by the Sub-Adviser and monitor the Sub-Adviser's implementation of
such investment programs. Without limiting the generality of the foregoing,
the Manager shall: (i) furnish, or cause or permit the Sub-Adviser to
furnish, the Funds with advice and recommendations with respect to the
investment of each Fund's assets and the purchase and sale of portfolio
securities for the Funds, including the taking of such other steps as may be
necessary to implement such advice and recommendations; (ii) furnish the
Funds with reports, statements and other data on securities, economic
conditions and other pertinent subjects which the Trust's Board of Trustees
may reasonably request; (iii) manage the investments of the Funds, subject to
the ultimate supervision and direction of the Trust's Board of Trustees; and
(iv) render to the Trust's Board of Trustees such periodic and special
reports with respect to each Fund's investment activities as the Board may
reasonably request.
(b) BROKERAGE. The Manager shall place orders, or cause or
permit the Sub-Adviser to place orders, for the purchase and sale of
securities either directly with the issuer or with a broker or dealer
selected by the Manager or the Sub-Adviser. In placing each Fund's securities
trades, it is recognized that the Manager or Sub-Adviser will give primary
consideration to securing the most
3
<PAGE>
favorable price and efficient execution, so that each Fund's total cost or
proceeds in each transaction will be the most favorable under all the
circumstances. Within the framework of this policy, the Manager or
Sub-Adviser may consider the financial responsibility, research and
investment information, and other services provided by brokers or dealers who
may effect or be a party to any such transaction or other transactions to
which other clients of the Manager or Sub-Adviser may be a party.
It is understood that it is desirable for the Funds that the Manager
and the Sub-Adviser have access to investment and market research and
securities and economic analyses provided by brokers and others. It is also
understood that brokers providing such services may execute brokerage
transactions at a higher cost to the Funds than might result from the
allocation of brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the purchase and sale of
securities for the Funds may be made with brokers who provide such research
and analysis, subject to review by the Trust's Board of Trustees from time to
time with respect to the extent and continuation of this practice to
determine whether each Fund benefits, directly or indirectly, from such
practice. The Manager or the Sub-Adviser may select broker-dealers for the
execution of the Funds' portfolio transactions who provide research and
analysis as the Manager or Sub-Adviser may lawfully and appropriately use in
its investment management and advisory capacities, whether or not such
research and analysis may also be useful to the Manager or Sub-Adviser in
connection with their services to other clients.
On occasions when the Manager or Sub-Adviser deems the purchase or
sale of a security to be in the best interests of one or more of the Funds as
well as of other clients, the Manager or Sub-Adviser, to the extent permitted
by applicable laws and regulations, may aggregate the securities to be so
purchased or sold in order to obtain the most favorable price or lower
brokerage commissions and the most efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by the Manager or Sub-Adviser in
the manner it considers to be the most equitable and consistent with its
fiduciary obligations to the Funds and to such other clients.
4
<PAGE>
(c) ADMINISTRATIVE SERVICES. The Manager shall oversee the
administration of all aspects of the Trust's business and affairs and shall
provide certain services required for effective administration of the Trust.
The Manager shall furnish, without cost to the Trust, services of persons to
perform the executive, administrative, compliance and clerical functions of
the Trust that are not performed by or through other persons or agents
engaged by the Trust (including, e.g., the transfer and dividend disbursing
agent or the depository agent or accounting agent).
The Manager shall provide suitable office space and
furnishing (which may be in the offices of the Manager), small office
equipment and utilities, supplies and postage as are necessary for the
performance of its duties to the Trust under this Agreement.
The Manager shall assist the Trust in selecting,
coordinating the activities of, supervising and acting as liason with any
other persons and agents engaged by the Trust, including the Trust's
depository agent or custodian, accounting agent, transfer agent, dividend
disbursing agent, sub-administrator, independent accountants and legal
counsel.
The Manager will ensure that all financial, accounting,
corporate and other records required to be maintained and preserved by the
Trust or on its behalf will be maintained in accordance with applicable laws
and regulations.
The Manager shall provide persons satisfactory to the
Trust's Board of Trustees to act as officers and employees of the Trust and
the Funds (such officers and employees, as well as certain trustees, may be
trustees, directors, officers, partners, or employees of the Manager or its
affiliates).
The Manager shall furnish to or place at the disposal of
the Trust such information, reports, evaluations, analyses and opinions
relating to its administrative functions as the Trust may, at any time or
from time to time, reasonably request or as the Manager may deem helpful to
the Trust.
5
<PAGE>
The Manager shall assist in the development and preparation
of all reports and communications by the Trust to the Funds' shareholders and
all reports and filings necessary to maintain the registrations and
qualifications of the Trust's shares under federal and state law. The Manager
will also prepare or assist in the preparation of all required tax returns,
proxy statements and reports or filings with any governmental agency.
The Manager shall respond to all inquires from shareholders
or otherwise answer communications from shareholders. If any such inquiry or
communication would be more properly answered by one of the agents listed
above, the Manager will oversee their response.
4. BEST EFFORTS AND JUDGMENT. The Manager shall use its best
judgment and efforts in rendering the advice and services to the Trust as
contemplated by this Agreement.
5. INDEPENDENT CONTRACTOR. The Manager shall, for all purposes
herein, be deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized to do so, have no authority to
act for or represent the Trust or the Funds in any way, or in any way be
deemed an agent for the Trust or for the Funds. It is expressly understood
and agreed that the services to be rendered by the Manager to the Funds under
the provisions of this Agreement are not to be deemed exclusive, and the
Manager shall be free to render similar or different services to others so
long as its ability to render the services provided for in this Agreement
shall not be impaired thereby.
6. MANAGER'S PERSONNEL. The Manager shall, at its own expense
(except as otherwise provided in this Agreement), maintain such staff and
employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Manager shall be deemed to include
persons employed or retained by the Manager to furnish statistical
information, research, and other factual information, advice regarding
economic factors
6
<PAGE>
and trends, information with respect to technical and scientific
developments, and such other information, advice and assistance as the
Manager or the Trust's Board of Trustees may desire and reasonably request.
7. REPORTS BY TRUST TO MANAGER. The Trust shall from time to time
furnish or otherwise make available to the Manager detailed statements of the
investments and assets, prospectuses, Statements of Additional Information,
financial reports, proxy statements, legal and other information relating to
the business and affairs of the Trust, with respect to each Fund, as may be
in its possession or available to it, together with such other information as
the Manager may reasonably request.
8. OWNERSHIP AND CONFIDENTIALITY OF RECORDS. All records required to
be maintained and preserved by the Trust pursuant to the provisions of rules
or regulations of the Securities and Exchange Commission under Section 31(a)
of the 1940 Act and maintained and preserved by the Manager on behalf of the
Trust are the property of the Trust and shall be surrendered by the Manager
promptly on request by the Trust. The Manager shall not disclose or use any
records or information obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized by this Agreement and applicable
law. The Manager shall keep confidential any information obtained in
connection with its duties hereunder and shall disclose such information only
if the Trust has authorized such disclosure or if such disclosure is
expressly required by applicable law or federal or state regulatory
authorities.
9. ALLOCATION OF EXPENSES.
(a) Expenses Paid by the Manager.
(1) SALARIES AND FEES OF TRUSTEES AND OFFICERS. As
between the Trust and the Manager, the Manager shall
pay all salaries, expenses, and fees, if any, of the
directors, officers, and employees of the Manager who
are Trustees, officers, or employees of the Trust.
7
<PAGE>
(2) WAIVER OR ASSUMPTION AND REIMBURSEMENT OF TRUST
EXPENSES BY THE MANAGER. The waiver or assumption and
reimbursement by the Manager of any expense of the
Trust that the Manager is not required by this
Agreement to waive, or assume or reimburse, shall not
obligate the Manager to waive, or assume or
reimburse, the same or any similar expense of the
Trust on any subsequent occasion, unless so required
pursuant to a separate agreement between the Trust
and the Manager.
(b) Expenses Paid by the Trust. The Trust, shall bear all
expenses of its organization, operation, and business not
specifically waived, assumed, or agreed to be paid by the
Manager as provided in this Agreement or any other agreement
between the Trust and the Manager. In particular, the expenses
that the Trust shall bear include, but are not limited to:
(1) CUSTODY AND ACCOUNTING SERVICES. All fees and
expenses of depositories, custodians, accounting
service agents and other agents for the transfer,
receipt, safekeeping, servicing of and accounting for
the Funds' cash, securities, and other property.
(2) DISTRIBUTION EXPENSES. Distribution expenses of
the Funds paid pursuant to any plan of distribution
that may be adopted in accordance with the provisions
of Rule 12b-1 under the 1940 Act.
(3) SHAREHOLDER SERVICE EXPENSES. Shareholder service
expenses of the Funds paid pursuant to the
Shareholder Service Agreement between the Trust and
the Manager and any similar agreement that the Trust
may adopt.
(4) TRANSFER AGENCY AND DIVIDEND DISBURSEMENT. All
costs of establishing, maintaining and servicing
accounts of shareholders of the Funds, all fees and
8
<PAGE>
expenses of the Trust's transfer agent,
sub-administrator, dividend disbursing agent and
any other agents engaged by the Trust to service
such accounts.
(5) SHAREHOLDER REPORTS AND OTHER COMMUNICATIONS.
All costs of preparing, setting in type, printing
and distributing reports and other communications
to shareholders of the Funds.
(6) PROSPECTUSES. All costs of preparing, setting in
type, printing and mailing to shareholders of the
Funds annual or more frequent revisions of the
Trust's prospectuses and Statements of Additional
Information and any supplements thereto.
(7) SHAREHOLDER MEETINGS. All costs incidental to
holding meetings of shareholders of the Funds,
including the printing of notices and proxy
materials, and proxy solicitations therefor.
(8) PRICING AND PORTFOLIO VALUATION. All costs of
daily valuation of the individual portfolio
securities of the Funds and daily computation of
the net asset value per share of the Funds,
including the cost of any equipment obtained by the
Trust, the Manager, or agents of the Trust, or a
proportionate share of the cost of any equipment
currently owned by the Manager, that will be used
to price the Funds' shares or value the Funds'
assets or the cost of the services of any agents
engaged by the Trust for the purpose of pricing
Fund shares or valuing the assets of the Funds.
(9) COMMUNICATIONS. All charges for equipment or
services used for communications with respect to
the Funds between the Manager or the Trust and the
depository agent or custodian, accounting pricing
agent, transfer agent,
9
<PAGE>
dividend disbursing agent, sub-administrator or any
other agent engaged by the Trust to provide
services to the Funds.
(10) INDEPENDENT LEGAL AND ACCOUNTING FEES. All
charges for services and expenses of the Trust's
independent legal counsel and independent
accountants.
(11) TRUSTEES' FEES AND EXPENSES. All compensation
of Trustees (other than those Trustees affiliated
with the Manager or the Sub-Adviser), all expenses
incurred in connection with their services as
Trustees, and all expenses of meetings of the Board
of Trustees of the Trust and committees of the
Board of Trustees.
(12) FEDERAL REGISTRATION FEES. All fees and expenses
of maintaining the registration of the Trust under
the 1940 Act and maintaining the registration of the
Fund's shares or registering additional shares of the
Fund under the 1933 Act, including all fees and
expenses incurred in connection with the preparation,
setting in type, printing and filing of any
post-effective amendments or supplements to the
Registration Statement, prospectuses and Statements
of Additional Information for the Trust under the
1933 Act or the 1940 Act that may be prepared from
time to time.
(13) BLUE SKY FEES. All fees and expenses (i) of
filing documentation to permit the offer and sale
of shares of the Trust or the Funds, as
appropriate, under the securities laws of various
states and jurisdictions and (ii) of maintaining
the registration and qualification of the Trust or
the Funds, as appropriate, under all other laws
applicable to the Trust or the Funds, as
appropriate, or its business activities.
10
<PAGE>
(14) ISSUE, REDEMPTION AND TRANSFER OF THE FUNDS'
SHARES. All expenses incurred in connection with
the issue, redemption and transfer of the Funds'
shares, including the expenses of confirming all
share transactions and of transmitting share
certificates, if any are issued, for the Funds.
(15) BONDING AND INSURANCE. All expenses of bond,
liability and other insurance coverage required by
law or regulation or deemed advisable by the Board
of Trustees of the Trust, including, without
limitation, such bond, liability and other
insurance expense that may from time to time be
allocated to the Trust in a manner approved by the
Board of Trustees of the Trust.
(16) BROKERAGE COMMISSIONS. All brokers'
commissions and other charges incident to the
purchase, sale, or lending of the Funds' portfolio
securities.
(17) TAXES. All taxes or governmental fees payable
to federal, state, or other governmental agencies,
domestic or foreign, including issue, stamp, or
transfer taxes.
(18) TRADE ASSOCIATION FEES. All fees, dues, costs
of attendance at meetings and conferences and other
expenses incurred in connection with the Trust's
membership in any trade association or other
investment organization.
(19) PERFORMANCE INFORMATION. Industry performance
reporting services fees reasonably necessary for
Board of Trustees of the Trust to keep current
regarding industry and regulatory requirements.
(20) NONRECURRING AND EXTRAORDINARY EXPENSES. Such
nonrecurring and extraordinary expenses as may arise,
including the costs of actions, suits, or proceedings
to which the Trust is a party and the expenses the
Trust may incur as
11
<PAGE>
a result of its legal obligation to provide
indemnification to its Trustees, officers,
employees and agents.
10. FEES.
(a) Each Fund shall pay to the Manager, and the Manager
agrees to accept, as full compensation for all administrative and investment
management services furnished or provided to such Fund pursuant to this
Agreement, the fees as set forth in the Fee Schedule attached hereto as
APPENDIX B, as may be amended in writing from time to time by the Trust and
the Manager.
(b) The fees shall be accrued daily by each Fund and paid
to the Manager monthly on the first business day of the next calendar month.
(c) If this Agreement becomes effective or terminates prior
to the end of any month, the fee to the Manager for the period from the
effective date to the end of such month or from the beginning of such month
to the date of termination, as the case maybe, shall be prorated according to
the proportion which such period bears to the full month in which such
effectiveness or termination occurs. In the case of termination, such fee
shall be payable within ten (10) days after the date of termination.
(d) The Manager may reduce any portion of the compensation
or reimbursement of expenses due to it pursuant to this Agreement and may
agree to make payments to limit the expenses which are the responsibility of
one or more Funds under this Agreement. Any such reduction or payment shall
be applicable only to such specific reduction or payment and shall not
constitute an agreement to reduce any future compensation or reimbursement
due to the Manager hereunder or to continue future payments. Any such
reduction will be agreed to prior to accrual of the related expense or fee
and will be estimated daily and reconciled and paid on a monthly basis. To
the extent such an expense limitation has been agreed to by the Manager and
such limit has been disclosed to shareholders of a Fund in a prospectus, the
Manager may not change the limitation without first disclosing the change in
an updated prospectus. Any fee withheld pursuant to this paragraph from the
Manager may be reimbursed by the
12
<PAGE>
appropriate Fund to the Manager in the first, second or third (or any
combination thereof) fiscal year next succeeding the fiscal year of the
withholding provided that the aggregate expenses for the next succeeding
fiscal year or second succeeding fiscal year or third succeeding fiscal year
do not exceed any more restrictive limitation to which the Manager has agreed
and the Board of Trustees of the Trust, including a majority of Trustees who
are not "interested persons" of the Manager, approves such reimbursement. The
Manager generally may request and receive reimbursement for the oldest
reductions and waivers before payment for fees and expenses for the current
year.
(e) The Manager may agree not to require payment of any
portion of the compensation or reimbursement of expenses otherwise due to it
pursuant to this Agreement prior to the time such compensation or
reimbursement has accrued as a liability of the Fund. Any such agreement
shall be applicable only with respect to the specific items covered thereby
and shall not constitute an agreement not to require payment of any future
compensation or reimbursement due to the Manager hereunder.
11. FUND SHARE ACTIVITIES OF MANAGERS PARTNERS, OFFICERS AND
EMPLOYEES. The Manager agrees that neither it nor any of its partners,
officers or employees shall take any short position in the shares of the
Funds. This prohibition shall not prevent the purchase of such shares by any
of the officers and partners or bona fide employees of the Manager or any
trust, pension, profit-sharing or other benefit plan for such persons or
affiliates thereof, at a price not less than the net asset value thereof at
the time of purchase, as allowed pursuant to rules promulgated under the 1940
Act.
12. CONFLICTS WITH TRUST'S GOVERNING DOCUMENTS AND APPLICABLE LAWS.
Nothing herein contained shall be deemed to require the Trust or the Funds to
take any action contrary to the Trust's Agreement and Declaration of Trust,
By-Laws, or any applicable statute or regulation, or to relieve or deprive
the Board of Trustees of the Trust of its responsibility for and control of
the conduct of the affairs of the Trust and Funds.
13
<PAGE>
13. MANAGER'S LIABILITIES.
(a) Neither the Manager nor any of its directors, officers,
employees or agents performing services for the Trust, with respect to the
Funds, at the direction or request of the Manager in connection with the
Manager's discharge of its obligations undertaken or reasonably assumed with
respect to this Agreement, shall be liable for any act or omission in the
course of or in connection with the Manager's services hereunder, including
any error of judgment or mistake of law or for any loss suffered by the Trust
in connection with the matters to which this Agreement relates; provided,
that nothing herein contained shall be construed to protect the Manager or
any such persons against any liability to the Trust or its shareholders to
which the Manager or such persons would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the obligations or duties under this Agreement in the performance of its or
their duties on behalf of the Trust or for failure by the Manager or any such
persons to exercise due care in rendering other services to the Trust.
(b) The Funds shall indemnify and hold harmless the Manager
and the shareholders, directors, officers and employees of each of them (any
such person, an "Indemnified Party") against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating and
defending any alleged loss, liability, claim, damage or expenses and
reasonable legal fees incurred in connection therewith) arising out of the
Indemnified Party's performance or non-performance of any duties under this
Agreement provided, however, that nothing herein shall be deemed to protect
any Indemnified Party against any liability to which such Indemnified Party
would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of reckless
disregard of the obligations and duties under this Agreement.
(c) No provision of this Agreement shall be construed to
protect any Trustee or officer of the Trust, or partner or officer of the
Manager, from liability in violation of Sections 17(h) and (i) of the 1940
Act.
14
<PAGE>
14. NON-EXCLUSIVITY. The Trust's employment of the Manager is not an
exclusive arrangement, and the Trust may from time to time employ other
individuals or entities to furnish it with the services provided for herein.
In the event this Agreement is terminated with respect to any Fund, this
Agreement shall remain in full force and effect with respect to all other
Funds listed on Appendix A hereto, as the same may be amended.
15. TERM. This Agreement shall become effective on the date that is
the latest of (1) the execution of this Agreement, (2) the approval of this
Agreement by the Board of Trustees of the Trust including a majority of the
Trustees who are not parties to this Agreement nor "interested persons" of
the Manager and (3) the approval of this Agreement by the shareholders of
each Fund in a special meeting of shareholders of the Fund. This Agreement
shall remain in effect for a period of two years, unless sooner terminated as
hereinafter provided. This Agreement shall continue in effect thereafter for
additional periods not exceeding one year so long as such continuation is
approved for each Fund at least annually by (i) the Board of Trustees of the
Trust or by the vote of a majority of the outstanding voting securities of
each Fund and (ii) the vote of a majority of the Trustees of the Trust who
are not parties to this Agreement nor "interested persons" of the Manager or
the Trust, cast in person at a meeting called for the purpose of voting on
such approval. Any approval of this Agreement by the holders of a majority of
the outstanding voting securities of a particular Fund shall be effective to
continue this Agreement, notwithstanding (i) that a comparable agreement has
not been approved by the holders of a majority of the outstanding shares of
any other Fund and (ii) that this Agreement has not been approved by the vote
of a majority of the outstanding shares of the Trust, unless such approval
shall be required by any other applicable law or otherwise. The Manager shall
furnish to the Trust, promptly upon its request, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment thereof.
15
<PAGE>
16. AMENDMENT OF AGREEMENT. Any amendment to this Agreement shall be
in writing and signed by the parties hereto; provided, that no material
amendment shall be effective unless authorized on behalf of the Trust (i) by
resolution of the Board of Trustees of the Trust, including a majority of the
non-interested Trustees and (ii) if required by law, by vote of a majority of
the outstanding voting securities of the Funds or a particular Fund.
17. TERMINATION. This Agreement may be terminated by the Trust on
behalf of any one or more of the Funds at any time without payment of any
penalty, by the Board of Trustees of the Trust or by vote of a majority of
the outstanding voting securities of the relevant Fund or Funds, upon sixty
(60) days' written notice to the Manager, and by the Manager upon sixty (60)
days' written notice to the Fund.
18. TERMINATION BY ASSIGNMENT. This Agreement shall terminate
automatically in the event of any transfer or assignment thereof.
19. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute or rule, or shall be otherwise
rendered invalid, the remainder of this Agreement shall not be affected
thereby.
20. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any, by
the United States courts or, in the absence of any controlling decision of
any such court by rules, regulations, or orders of the Securities and
Exchange Commission validly issued pursuant to the 1940 Act. Specifically,
the terms "vote of a majority of the outstanding voting securities,"
"interested person," "assignment" and "affiliated person" shall have the
meanings assigned to them by Section 2(a) of the 1940 Act. In addition, where
the effect of a requirement of the 1940 Act reflected in any provision of
this Agreement is relaxed by a rule, regulation, or order of the Securities
and Exchange Commission, whether of special or of
16
<PAGE>
general application, such provision shall be deemed to incorporate the effect
of such rule, regulation, or order.
21. NOTICE OF DECLARATION OF TRUST. The Manager agrees that the
Trust's obligations under this Agreement shall be limited to the Funds and to
their assets, and that the Manager shall not seek satisfaction of any such
obligation from the shareholders of the Funds nor from any trustee, officer,
employee or agent of the Trust or the Funds.
22. CAPTIONS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
23. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without
giving effect to the conflict of laws principles thereof; provided that
nothing herein shall be construed to preempt, or to be inconsistent with, any
federal law, regulation or rule, including the 1940 Act and the Investment
Advisors Act of 1940 and any rules and regulations promulgated thereunder.
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested by their duly authorized officers, all on the
day and year first above written.
SA Funds - Investment Trust RWB Advisory Services Inc.
By: /s/ John J. Bowen, Jr. By: /s/ John J. Bowen, Jr.
---------------------------- --------------------------------
John J. Bowen, Jr. John J. Bowen, Jr.
Title: President and Chief Title: President and Chief
Executive Officer Executive Officer
------------------------ ----------------------------
18
<PAGE>
APPENDIX A
FUND SCHEDULE
Fund Effective Date
---- --------------
SA Fixed Income Fund July 16, 1999
SA U.S. Market Fund July 16, 1999
SA U.S HBtM Fund July 16, 1999
SA U.S. Small Company Fund July 16, 1999
SA International HBtM Fund July 16, 1999
SA International Small Company Fund July 16, 1999
19
<PAGE>
APPENDIX B
FEE SCHEDULE
FUND Advisory Fee as a percentage of average
- ---- daily net assets
----------------
SA Fixed Income Fund %
SA U.S. Market Fund %
SA U.S. HBtM Fund %
SA U.S. Small Company Fund %
SA International HBtM Fund %
SA International Small Company Fund %
Administrative Fee as a percentage of
average daily net assets
------------------------
CLASS I CLASS S
------- -------
SA Fixed Income Fund % %
SA U.S. Market Fund % %
SA U.S. HBtM Fund % %
SA U.S. Small Company Fund % %
SA International HBtM Fund % %
SA International Small Company Fund % %
20
<PAGE>
SA FUNDS - INVESTMENT TRUST
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of July 27, 1999 by and among SA FUNDS
- -INVESTMENT TRUST (THE "TRUST"), RWB ADVISORY SERVICES ("RWBAS") and
DIMENSIONAL FUND ADVISORS INC., a Delaware corporation and registered
investment adviser ("Sub-Adviser").
WHEREAS, RWBAS is the investment manager for the Trust, an
open-end management investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, RWBAS desires to retain Sub-Adviser as agent to furnish
investment advisory services to the investment portfolios of the Trust listed
on Schedule A hereto and Sub-Adviser has agreed to act in such capacity (each
a "Fund" and collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. APPOINTMENT. RWBAS hereby appoints Sub-Adviser to provide
sub-investment advisory services to the Funds for the period and on the terms
set forth in this Agreement. Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided.
2. DELIVERY OF DOCUMENTS. RWBAS has furnished Sub-Adviser with
copies properly certified or authenticated of each of the following:
(a) the Trust's Declaration of Trust, as filed with the
Secretary of State of Delaware and all amendments thereto or
restatements thereof (such Declaration of Trust, as presently in effect
and as it shall from time to time be amended or restated, is herein
called the "Declaration of Trust");
(b) the Trust's By-Laws and amendments thereto;
(c) resolutions of the Trust's Board of Trustees authorizing
the appointment of Sub-Adviser and approving this Agreement;
(d) the Trust's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and Exchange Commission
(the "SEC") on January 11, 1999 and all amendments thereto;
(e) the Trust's Registration Statement on Form N-lA under the
Securities Act of 1933, as amended ("1933 Act") (File No. 33-70423) and
under the 1940 Act (File No. 811-09195) as filed with the SEC and all
amendments thereto insofar as such Registration Statement and such
amendments relate to the Funds; and
<PAGE>
(f) the Trust's most recent prospectus and Statement of
Additional Information for the Funds (such prospectus and Statement of
Additional Information, as presently in effect, and all amendments and
supplements thereto, are - herein collectively called the
"Prospectus").
RWBAS will furnish the Sub-Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject always to the supervision of Trust's Board of
Trustees and RWBAS, the Sub-Adviser will furnish an investment program in
respect of, and make investment decisions for, all assets of the Funds and
place all orders for the purchase and sale of securities, all on behalf of
the Funds. In the performance of its duties, the Sub-Adviser will satisfy its
fiduciary duties to the Funds and will monitor the Funds' investments, and
will comply with the provisions of Trust's Declaration of Trust and By-Laws,
as amended from time to time, and the stated investment objectives, policies
and restrictions of the Funds as contained in the Prospectus. The Sub-Adviser
and RWBAS will make their officers and employees available to the other from
time to time at reasonable times to review investment policies of the Funds
and to consult with each other regarding the investment affairs of the Funds.
The Sub-Adviser will report to the Board of Trustees and RWBAS to with
respect to the implementation of such program.
The Sub-Adviser further agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(b) will conform with all applicable U.S. rules and
regulations pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment
determinations for the Funds either directly with the issuer or with
any broker or dealer. The Sub-Adviser will place orders for the
purchase or sale of securities with a view to receiving the best price
and execution for such purchase or sale. Where the Sub-Adviser places
orders for the purchase or sale of securities for the Funds, in
selecting brokers or dealers to execute such orders, the Sub-Adviser is
expressly authorized to consider the fact that a broker or dealer has
been or will be furnishing research or other information or services
which assist the Sub-Adviser's performance of its investment
decision-making responsibilities generally, provided that the
commission cost is reasonable in relation to the brokerage and research
services provided. Compensation received by the Sub-Adviser pursuant to
this Agreement shall not be reduced by any benefits received by the
Sub-Adviser pursuant to this section. The Sub-Adviser may direct
brokerage to whomever it deems appropriate consistent with the
foregoing. In no instance will portfolio securities be purchased from
or sold to RWBAS or any of its affiliated brokers or dealers, the
Sub-Adviser or any affiliated person of either the Trust, RWBAS or
Sub-Adviser, except as may be permitted under the 1940 Act;
(d) will report regularly to RWBAS and to the Board of
Trustees and will make appropriate persons available for the purpose of
reviewing with representatives of RWBAS and the Board of Trustees on a
regular basis at reasonable times the management of the Funds,
including, without limitation, review of the general investment
strategy of the Funds, the performance of the Funds in relation to
standard industry indices, interest rate considerations and
<PAGE>
general conditions affecting the marketplace and will provide various
other reports from time to time as reasonably requested by RWBAS;
(e) will maintain books and records with respect to Trust's
securities transactions and will furnish RWBAS and the Trust's Board of
Trustees such periodic and/or special reports as the Board or RWBAS may
request;
(f) will act upon instructions from RWBAS not inconsistent
with its fiduciary duties hereunder;
(g) will treat confidentially and as proprietary information
of Trust all such records and other information relative to Trust
maintained by the Sub-Adviser, and will not use such records and
information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by Trust, which approval shall not be
unreasonably withheld and may not be withheld where the Sub-Adviser may
be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by Trust;
(h) will receive the research and recommendations of RWBAS
with respect to the investment and reinvestment of the assets of the
Funds; and
(i) will vote proxies received by the Sub-Adviser in
connection with securities held by the Funds consistent with its
fiduciary duties hereunder.
4. RWBAS'S DUTIES. RWBAS shall continue to have responsibility for
all other services to be provided to the Funds pursuant to its Investment
Management Agreements and shall oversee and review the Sub-Adviser's
performance of its duties under this Agreement. The Advisor shall also retain
direct portfolio management responsibility with respect to any assets of the
Series which are not allocated by it to the portfolio management of the
Sub-Adviser.
5. REFERENCES TO SUB-ADVISER. During the term of this Agreement,
RWBAS agrees to furnish to the Sub-Adviser at its principal office all
prospectuses, proxy statements, reports to stockholders, sales literature or
other material prepared for distribution to sales personnel, shareholders of
the Fund or the public, which refer to the Sub-Adviser or its clients in any
way, prior to use thereof and not to use such material if the Sub-Adviser
reasonably objects in writing five business days (or such other time as may
be mutually agreed upon) after receipt thereof. Sales literature may be
furnished to the Sub-Adviser hereunder by first-class or overnight mail,
facsimile transmission equipment or hand delivery, attn: Legal Department.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule
3la-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records
which it maintains for the Trust are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon the
Trust's request. Sub-Adviser further agrees to maintain the records required
to be maintained by subsections (b)(1), (b)(5), (b)(9), (b)(10), (b)(11), (e)
and (f) of Rule 3la-1 under the 1940 Act and preserve them for the periods
prescribed by Rule 3la-2 under the 1940 Act.
7. EXPENSES. During the term of this Agreement, Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities
<PAGE>
(including brokerage commissions, custodial fees and expenses and stamp
duties, if any) purchased for the Funds.
8. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, RWBAS Investment Trust will pay the Sub-Adviser,
and the Sub-Adviser agrees to accept as full compensation therefor, a
sub-advisory fee, accrued daily and payable monthly, in accordance with
SCHEDULE A hereto.
9. Services to Others. Subject to exclusivity clauses in the DFA
Services Agreement, RWBAS understands, and has advised Trust's Board of
Trustees, that the Sub-Adviser now acts, and may in the future act, as an
investment adviser to fiduciary and other managed accounts, and as investment
adviser, sub-investment adviser, and/or administrator to other investment
companies. RWBAS has no objection to the Sub-Adviser's acts in such
capacities, provided that whenever one or more of the Funds and one or more
other investment companies or accounts advised by Sub-Adviser have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with a manner believed by the Sub-Adviser to be
equitable consistent with its fiduciary obligations to the Funds and such
other investment entities. RWBAS recognizes, and has advised Trust's Board of
Trustees, that in some cases this procedure may adversely affect the size of
the position that the participating Fund(s) may obtain in a particular
security. In addition, RWBAS understands, and has advised Trust's Board of
Trustees, that the persons employed by the Sub-Adviser to assist in the
Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement will be deemed to limit
or restrict the right of the Sub-Adviser or any of its affiliates to engage
in and devote time and attention to other businesses or to render services of
whatever kind or nature.
10. CLIENT SUITABILITY. RWBAS understands and agrees that the
Sub-Adviser, as part of its duties hereunder, is not responsible for
determining whether or not any of the Funds are suitable and appropriate
investments for the clients who invest in such Funds.
11. LIMITATION OF LIABILITY. RWBAS will not take any action against
the Sub-Adviser to hold the Sub-Adviser liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
performance of the Sub-Adviser's duties under this Agreement, except a loss
resulting from the Sub-Adviser's willful misfeasance, bad faith, or gross
negligence in the performance of its duties under this Agreement.
12. INDEMNIFICATION. RWBAS and the Sub-Adviser each agree to
indemnify the other against any claim against, loss or liability to such
other party (including reasonable attorneys fees) arising out of any action
on the part of the indemnifying party which constitutes willful misfeasance,
bad faith or gross negligence.
13. DURATION AND TERMINATION. This Agreement will become effective
as to each Fund as to the date set forth opposite each Fund's name on
SCHEDULE A, provided that it has been approved by a vote of a majority of the
outstanding voting securities of such Fund in accordance with the
requirements under the 1940 Act and, unless sooner terminated as provided
herein, will continue in effect for two (2) years from such date.
Thereafter, if not terminated as to a Fund, this Agreement will
continue in effect as to a Fund for successive periods of twelve (12) months,
PROVIDED that such continuation is specifically approved at least annually
(a) by the vote of a majority of those members of the Trust's Board of
Trustees who are not
<PAGE>
interested persons of the Trust, the Sub-Adviser, or RWBAS, cast in person at
a meeting called for the purpose of voting on such approval, and (b) by the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of such Fund. Notwithstanding the foregoing, this Agreement may be
terminated as to the Fund at any time, without the payment of any penalty, on
sixty (60) days' written notice by the Trust. Once this Agreement has been in
effect for a period of not less than one (1) year, then unless otherwise
terminated in accordance with the foregoing, this Agreement may be terminated
by RWBAS or by the Sub-Adviser, as to all Funds, by giving not less than
sixty (60) days' notice. This Agreement will immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of
the outstanding voting securities", "interested persons" and "assignment"
have the same meaning of such terms in the 1940 Act.)
14. AMENDMENT OF THIS AGREEMENT. No provision this Agreement may be
changed, waived, discharged or, terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought.
15. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be
affected thereby. This Agreement will be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and will be
governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
SA FUNDS - INVESTMENT TRUST
By: /s/ John J. Bowen, Jr.
Name: John J. Bowen, Jr.
Title: President and Chief
Executive Officer
DIMENSIONAL FUND ADVISORS INC.
By: /s/ David Booth
Name: David Booth
Title:
RWB ADVISORY SERVICES INC.
By: /s/ John J. Bowen, Jr.
Name: John J. Bowen, Jr.
Title: President and Chief
Executive Officer
<PAGE>
SCHEDULE A
Fund Fee
- ---- ---
SA Fixed Income Fund 19.24 basis points annually
SA U.S. Market Fund 4.62 basis points annually
SA U.S. HBTM Fund 26.94 basis points annually
SA U.S. Small Company Fund 38.48 basis points annually
SA International HBTM Fund 38.48 basis points annually
SA International Small Company Fund 0 basis points annually
SA FUNDS - INVESTMENT TRUST
By: /s/ John J. Bowen, Jr.
Name: John J. Bowen, Jr.
Title: President and Chief
Executive Officer
DIMENSIONAL FUND ADVISORS INC.
By: /s/ David Booth
Name: David Booth
Title:
RWB ADVISORY SERVICES INC.
By: /s/ John J. Bowen, Jr.
Name: John J. Bowen, Jr.
Title: President and Chief
Executive Officer
<PAGE>
Exhibit 23(e)
SA FUNDS - INVESTMENT TRUST
DISTRIBUTION AGREEMENT
Distribution Agreement made this 8th day of July 1999, by and between SA
Funds - Investment Trust, a Delaware business trust (the "Trust"), and RWB
Securities Inc., a Maryland corporation (the "Distributor").
WHEREAS, the Trust is a registered open-end management investment company
organized as a series trust offering a number of portfolios of securities (each,
a "Fund"), having filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-1A under the Securities Act of
1933 (the "1933 Act") and the Investment Company Act of 1940, as amended;
WHEREAS, the Trust desires to retain the Distributor to act as the
distributor with respect to the issuance and distribution of units of beneficial
interest ("Shares") of each Fund;
WHEREAS, the Distributor is a registered broker-dealer under the Securities
Exchange Act of 1934 (the "1934 Act") and a member of the National Association
of Securities Dealers ("NASD"); and
WHEREAS, the Distributor desires to provide such services to the Trust;
NOW THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. APPOINTMENT. The Trust hereby appoints the Distributor as the exclusive
distributor for Shares of each Fund listed in Annex I hereto, as may be amended
by the parties from time to time, on the terms and for the period set forth in
this Agreement and subject to the registration requirements of the 1933 Act and
of the laws governing the sale of securities in the various states, and the
Distributor hereby accepts such appointment and agrees to act in such capacity
hereunder.
2. DEFINITIONS. Wherever they are used herein, the following terms have the
following respective meanings:
a. "1940 Act" means the Investment Company Act of 1940 and the rules and
regulations thereunder as amended from time to time;
b. "Prospectus" means the Prospectus and Statement of Additional
Information constituting parts of the Registration Statement of the Trust under
the 1933 Act as such Prospectus and Statement of Additional Information may be
amended or supplemented and filed with the Commission from time to time;
c. "Registration Statement" means the registration statement most
recently filed from time to time by the Trust with the Commission and effective
under the 1933 Act and the 1940 Act, as such registration statement is amended
by any amendments thereto at the time in effect.
3. DUTIES OF THE DISTRIBUTOR.
(a) The Trust grants to the Distributor the exclusive right to accept or
reject all orders for purchases of Shares of each Fund. The Distributor shall
issue or cause the Trust's transfer agent or
<PAGE>
shareholder service agent to issue confirmations of all accepted purchase orders
and to transmit a copy of such confirmations to the Trust. The Trust
acknowledges that the Distributor shall not be obligated to accept any certain
number of orders for Shares and nothing herein shall prevent the Distributor
from entering into like distribution arrangements with other investment
companies.
(b) The Distributor agrees to act as agent of the Trust with respect to
the distribution of Shares of each Fund as set forth in the Registration
Statement and in accordance with the provisions thereof.
(c) (i) The Distributor agrees to use its best efforts to encourage and
promote the sale of Shares of the Funds.
(ii) The Distributor shall, at its own expense, execute selected
dealer agreements ("Selected Dealer Agreements") with registered
broker-dealers and other eligible entities providing for the purchase of
Shares of the Funds in the form and as approved by the Board of Trustees
of the Trust, providing for activities which the Distributor deems
reasonable and appropriate and which are primarily intended to result in
the sale of such Shares. Pursuant to this Agreement, the Distributor
shall facilitate the coordination of the performance of any marketing
and promotional services, including advertising; the development and
implementation of any marketing plan; and clearing and filing all
advertising, sales, marketing and promotional materials of the Funds
with the NASD.
(d) All activities by the Distributor and its agents and employees which
are primarily intended to result in the sale of Shares shall comply with the
Registration Statement and Prospectus, the instructions of the Board of Trustees
of the Trust and all applicable laws, rules and regulations including, without
limitation, all rules and regulations made or adopted pursuant to the 1940 Act
by the Commission or any securities association registered under the 1934 Act,
including the NASD.
(e) Except as otherwise noted in the Registration Statement and
Prospectus, the offering price for all Shares will be the net asset value of the
Shares of the relevant Fund, as determined in the manner described in the
Registration Statement and Prospectus.
(f) If and whenever the determination of net asset value is suspended and
until such suspension is terminated, no further orders for Shares will be
accepted by the Distributor. In addition, the Trust reserves the right to
suspend sales and Distributor's authority to accept orders for Shares on behalf
of the Trust if, in the judgment of the Trust, it is in the best interests of
the Trust to do so. Suspension will continue for such period as may be
determined by the Trust.
(g) The Distributor is not authorized by the Trust to give any information
or to make any representations other than those contained in the Registration
Statement or Prospectus or contained in shareholder reports or other material
that may be prepared by or on behalf of the Trust for the Distributor's use.
The Distributor shall be entitled to rely on and shall not be responsible in any
way for information provided to it by the Trust and its respective service
providers and shall not be liable or responsible for the errors and omissions of
such service providers, provided that the foregoing shall not be construed to
protect the Distributor against any liability to the Trust or the Trust's
shareholders to which the Distributor would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
under this Agreement.
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(h) The Board of Trustees shall approve the form of any Soliciting Dealer
Agreement to be entered into by the Distributor.
(i) The Distributor shall ensure that all direct requests for Prospectuses
and Statements of Additional of Information are fulfilled.
(j) The Distributor agrees to make available, at the Trust's request, one
or more members of its staff to attend Board meetings of the Trust in order to
provide information with regard to the ongoing distribution process and for such
other purposes as may be requested by the Board of Trustees of the Trust.
4. DUTIES OF THE TRUST.
(a) The Trust agrees that it will take all action necessary to register an
indefinite number of shares under the 1933 Act. The Trust will make available
to the Distributor such number of copies of its then currently effective
Prospectus as the Distributor may reasonably request. The Trust will furnish to
the Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use in connection with the
distribution of Shares. The Trust shall keep the Distributor informed of the
jurisdictions in which the Trust has effected notice filings of shares of the
Trust for sale under the securities laws thereof.
(b) The Trust represents to the Distributor that the Registration
Statement and Prospectus filed by the Trust with the Commission with respect to
the Trust have been prepared in conformity with the requirements of the 1933
Act, the 1940 Act and the rules and regulations of the Commission thereunder.
The Trust will notify the Distributor promptly of any amendment to the
Registration Statement or supplement to the Prospectus and any stop order
suspending the effectiveness of the Registration Statement.
5. EXPENSES.
(a) The Distributor will bear the following costs and expenses relating to
the distribution of Shares of the Funds: (a) the costs of processing and
maintaining records of purchases of Shares; (b) the costs of maintaining the
records required of a broker-dealer registered under the 1934 Act; (c) the
expenses of maintaining its registration or qualification as a dealer or broker
under federal or state laws; (d) the expenses incurred by the Distributor in
connection with normal (non-expedited) NASD filing fees; (e) the cost of
printing and mailing of the Prospectus (other then those furnished to existing
shareholders) and any sales literature used by the Distributor; and (f) all
other expenses incurred in connection with the distribution services
contemplated herein, except as specifically provided in this Agreement.
6. INDEMNIFICATION.
(a) The Trust agrees to indemnify and hold harmless the Distributor and
any soliciting dealer that enters into a Soliciting Dealer Agreement with the
Distributor, which provides for such indemnification, in the form approved by
the Board of Trustees (each an "Indemnified Dealer") and each of the directors,
officers, agents and employees and any person who controls the Distributor or
the Indemnified Dealer within the meaning of Section 15 of the 1933 Act (any of
the Distributor, any Indemnified Dealer, their officers, agents, employees and
directors or such control persons, for purposes of this paragraph, an
"Indemnitee") against any loss, liability, claim, damages or expense (including
the
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reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith) arising out of or based upon the claim that the Registration
Statement, Prospectus, shareholder reports or other information filed or made
public by the Trust (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements not misleading under the 1933 Act, or
any other statute or the common law. However, the Trust does not agree to
indemnify the Distributor or hold it harmless to the extent that the statement
or omission was made in reliance upon, and in conformity with information
furnished to the Trust by or on behalf of the Distributor. The Trust will also
not indemnify any Indemnitee with respect to any untrue statement or omission
made in the Registration Statement or Prospectus that is subsequently corrected
in such document (or an amendment thereof or supplement thereto) if a copy of
the Prospectus (or such amendment or supplement) was not sent or given to the
person asserting any such loss, liability, claim, damage or expense at or before
the written confirmation to such person in any case where such delivery is
required by the 1933 Act and the Trust had notified the Distributor of the
amendment or supplement prior to the sending of the confirmation. In no case
(i) is the indemnity of the Trust in favor of any Indemnitee to be deemed to
protect the Indemnitee against any liability to the Trust or its shareholders to
which the Indemnitee would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of its reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Trust to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against any
Indemnitee unless the Indemnitee shall have notified the Trust in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon Indemnitee (or after Indemnitee shall have received notice of
service on any designated agent). However, failure to notify the Trust of any
claim shall not relieve the Trust from any liability which it may have to any
Indemnitee against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Trust shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any claims, but if the Trust elects
to assume the defense, the defense shall be conducted by counsel chosen by it
and satsfactory to Indemnitee, defendant or defendants in the suit. In the
event the Trust elects to assume the defense of any suit and retain counsel,
Indemnitee, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Trust does not
elect to assume the defense of any suit, it will reimburse the Indemnitee,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Trust agrees to notify the Distributor and any
Indemnified Dealer promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the issuance or
sale of any of the Shares.
(b) The Distributor agrees to indemnify and hold harmless the Trust and
each of its Trustees and officers and any person who controls the Trust within
the meaning of Section 15 of the 1933 Act (for purposes of this paragraph, the
Trust and each of its Trustees and officers and its controlling persons are
collectively referred to as the "Trust Affiliates") against any loss, liability,
claim, damages or expense (including the reasonable cost of investigating or
defending any alleged loss, liability, claim, damages or expense and reasonable
counsel fees incurred in connection therewith) which the Trust Affiliate may
incur under the 1933 Act or any other statute or common law, but only to the
extent that such loss, liability, claim, damages or expense shall arise out of
or be based upon (i) the allegation of any wrongful act of the Distributor or
any of its employees or (ii) allegation that the Registration Statement,
Prospectus, shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements not misleading, insofar as the statement or
omission was made in reliance upon, and in conformity with information furnished
to the Trust by or on
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behalf of the Distributor. In no case (i) is the indemnity of the Distributor
in favor of any Trust Affiliate to be deemed to protect any Trust Affiliate
against any liability to the Trust or its security holders to which such Trust
Affiliate would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or (ii)
is the Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against any Trust Affiliate unless the
Trust Affiliate shall have notified the Distributor in writing of the claim
within a reasonable time after the summons or the first written notification
giving information of the nature of the claim shall have been served upon the
Trust Affiliate (or after the Trust Affiliate shall have received notice of
service on any designated agent). However, failure to notify the Distributor of
any claim shall not relieve the Distributor from any liability which it may have
to the Trust Affiliate against whom the action is brought otherwise than on
account of its indemnity agreement contained in this paragraph. The Distributor
shall be entitled to participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce the claim, but if
the Distributor elects to assume the defense, the defense shall be conducted by
counsel chosen by it and satisfactory to the Trust, its officers and Board and
to any controlling person or persons, defendant or defendants in the suit. In
the event that Distributor elects to assume the defense of any suit and retain
counsel, the Trust or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel retained by
them. If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Trust, its officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify the
Trust promptly of the commencement of any litigation or proceedings against it
in connection with the issuance and sale of any of the Shares.
(c) No indemnified party shall settle any claim against it for which it
intends to seek indemnification from the indemnifying party, under the terms of
section 6(a) or 6(b) above, without the prior written notice to and consent from
the indemnifying party, which consent shall not be unreasonably withheld. No
indemnified or indemnifying party shall settle any claim unless the settlement
contains a full release of liability with respect to the other party in respect
of such action. This section 6 shall survive the termination of this Agreement.
7. REPRESENTATIONS.
(a) The Distributor represents and warrants that (i) it is duly organized
as a [ ]corporation and is and at all times will remain duly authorized and
licensed to carry out its services as contemplated herein; (ii) the execution,
delivery and performance of this Agreement are within its power and have been
duly authorized by all necessary action; and (iii) its entering into this
Agreement or providing the services contemplated hereby does not conflict with
or constitute a default or require a consent under or breach of any provision of
any agreement or document to which the Distributor is a party or by which it is
bound.
(b) The Trust represents and warrants that (i) it is duly organized as a
Delaware business trust and is and at all times will remain duly authorized to
carry out its obligations as contemplated herein; (ii) the execution, delivery
and performance of this Agreement are within its power and have been duly
authorized by all necessary action; and (iii) its entering into this Agreement
does not conflict with or constitute a default or require a consent under or
breach of any provision of any agreement or document to which the Trust is a
party or by which it is bound.
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8. DURATION, TERMINATION AND AMENDMENT.
(a) This agreement shall become effective on the effective date of the
Registration Statement and unless terminated as provided herein, shall continue
for two years from its effective date, and thereafter from year to year,
provided such continuance is approved annually by the vote of a majority of the
Board of Trustees, and by the vote of those Trustees who are not "interested
persons" of the Trust (the "Independent Trustees"), cast in person at a meeting
called for the purpose of voting on the approval. This Agreement may be
terminated at any time, without the payment of any penalty, as to each Fund (i)
by vote of a majority of the Independent Trustees or (ii) by vote of a majority
(as defined in the 1940 Act) of the outstanding voting securities of the Fund,
on at least sixty (60) days prior written notice to the Distributor. In
addition, this Agreement may be terminated at any time by the Distributor upon
at least sixty (60) days prior written notice to the Trust. This Agreement
shall automatically terminate in the event of its assignment. As used in this
paragraph, the terms "assignment" and "interested persons" shall have the
respective meanings specified in the 1940 Act.
(b) No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
9. NOTICE. Any notice or other communication authorized or required by this
Agreement to be given to either party shall be in writing and deemed to have
been given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other): if to the
Distributor: RWB Securities Inc., 1190 Saratoga Avenue, Suite 200, San Jose,
California 95120; if to the Trust: RWB Funds, 1190 Saratoga Avenue, Suite 200,
San Jose, California 95120.
10. CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California, without giving effect to
the choice of laws provisions thereof.
11. COUNTERPARTIES. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12. SEVERABILITY. If any provisions of this Agreement shall be held or made
invalid, in whole or in part, then the other provisions of this Agreement shall
remain in force. Invalid provisions shall, in accordance with this Agreement's
intent and purpose, be amended, to the extent legally possible, by valid
provisions in order to effectuate the intended results of the invalid
provisions.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first set forth
above.
SA FUNDS - INVESTMENT TRUST
By:/s/ John J. Bowen, Jr.
---------------------------
Name: John J. Bowen, Jr.
-------------------------
Title: President and Chief
Executive Officer
------------------------
RWB SECURITIES INC.
By:/s/ John J. Bowen, Jr.
---------------------------
Name: John J. Bowen, Jr.
-------------------------
Title: President and Chief
Executive Officer
------------------------
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ANNEX I
SA Fixed Income Fund - Class S Shares
SA U.S. Market Fund - Class S Shares
SA U.S. HBtM Fund - Class S Shares
SA U.S. Small Fund - Class S Shares
SA International HBtM Fund - Class S Shares
SA International Small Fund Class S Shares
SA Fixed Income Fund - Class I Shares
SA U.S. Fund - Class I Shares
SA U.S. HBtM Fund - Class I Shares
SA U.S. Small Fund - Class I Shares
SA International HBtM Fund - Class I Shares
SA International Small Fund - Class I Shares
As of July 8, 1999
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Exhibit 23(h)(i)
SUB-ADMINISTRATION AGREEMENT
Agreement dated as of July 8, 1999 among RWB Advisory Services, Inc.
(the "Company"), SA Funds - Investment Trust (the "Trust") and State Street Bank
and Trust Company, a Massachusetts trust company (the "Bank").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company Acts as administrator to the Trust;
WHEREAS, the Company and the Trust desire to retain the Bank to
furnish certain administrative services to the Trust, and the Bank is willing to
furnish such services, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
1. APPOINTMENT OF BANK
The Company and the Trust hereby appoint the Bank to act as
sub-administrator with respect to the Trust for purposes of providing certain
administrative services for the period and on the terms set forth in this
Agreement. The Bank accepts such appointment and agrees to render the services
stated herein.
The Trust will initially consist of the portfolio(s) and/or class(es)
of shares (each an "Investment Fund") listed in Schedule A to this Agreement.
In the event that the Trust establishes one or more additional Investment Funds
with respect to which the Company and the Trust wishes to retain the Bank to act
as administrator hereunder, the Company and the Trust shall notify the Bank in
writing. Upon written acceptance by the Bank, such Investment Fund shall become
subject to the provisions of this Agreement to the same extent as the existing
Investment Funds, except to the extent that such provisions (including those
relating to the compensation and expenses payable by the Trust and its
Investment Funds) may be modified with respect to each additional Investment
Fund in writing by the Company, the Trust and the Bank at the time of the
addition of the Investment Fund.
2. DELIVERY OF DOCUMENTS
The Trust will promptly deliver to the Bank copies of each of the
following documents and all future amendments and supplements, if any:
a. The Trust's Declaration of Trust;
b. The Trust's currently effective registration statement under the
Securities Act of 1933, as amended (the "1933 Act"), and the 1940
Act and the Trust's Prospectus(es) and Statement(s) of Additional
Information relating to all
<PAGE>
Investment Funds and all amendments and supplements thereto as in
effect from time to time;
c. Certified copies of the resolutions of the Board of Trustees of
the Trust (the "Board") authorizing (1) the Trust to enter into
this Agreement and (2) certain individuals on behalf of the Trust
to (a) give instructions to the Bank pursuant to this Agreement
and (b) sign checks and pay expenses;
d. A copy of the investment advisory agreement between the Trust and
its investment adviser, including any sub-advisory agreement
between the Trust and its investment sub-adviser, if any; and
e. Such other certificates, documents or opinions which the Bank
may, in its reasonable discretion, deem necessary or appropriate
in the proper performance of its duties.
3. REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank represents and warrants to the Trust that:
a. It is a Massachusetts trust company, duly organized and existing
under the laws of The Commonwealth of Massachusetts;
b. It has the corporate power and authority to carry on its business
in The Commonwealth of Massachusetts;
c. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Bank's ability to perform its
duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of the Bank or any law or regulation applicable to it.
4. REPRESENTATIONS AND WARRANTIES OF THE TRUST
The Trust represents and warrants to the Bank that:
a. It is a business trust, duly organized, existing and in good
standing under the laws of the State of Delaware;
b. It has the corporate power and authority under applicable laws
and by its Declaration of Trust and by-laws to enter into and
perform this Agreement;
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c. All requisite proceedings have been taken to authorize it to
enter into and perform this Agreement;
d. It is an investment company properly registered under the 1940
Act;
e. A registration statement under the 1933 Act and the 1940 Act has
been filed and will be effective and remain effective during the
term of this Agreement. The Trust also warrants to the Bank that
as of the effective date of this Agreement, all necessary filings
under the securities laws of the states in which the Trust offers
or sells its shares have been made;
f. No legal or administrative proceedings have been instituted or
threatened which would impair the Trust's ability to perform its
duties and obligations under this Agreement;
g. Its entrance into this Agreement will not cause a material breach
or be in material conflict with any other agreement or obligation
of the Trust or any law or regulation applicable to it; and
h. As of the close of business on the date of this Agreement, the
Trust is authorized to issue shares of beneficial interest, and
it will initially offer shares, in the authorized amounts as set
forth in Schedule A to this Agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Bank that:
a. It is a corporation, duly organized, existing and in good
standing under the laws of Delaware;
b. It has the power and authority under Delaware law and by its
charter and by-laws to enter into and perform this Agreement;
c. All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
d. No legal or administrative proceedings have been instituted or
threatened which would impair the Company's ability to perform
its duties and obligations under this Agreement; and
e. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of the Company or any law or regulation applicable to
it.
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<PAGE>
6. ADMINISTRATION SERVICES
The Bank shall provide the following services, in each case, subject
to the control, supervision and direction of the Trust and the Company and the
review and comment by the Trust's and the Company's auditors and legal counsel
and in accordance with procedures which may be established from time to time
between the Trust, the Company and the Bank:
a. Oversee the determination and publication of the Trust's net
asset value in accordance with the Trust's policy as adopted from
time to time by the Board;
b. Oversee the maintenance by the Trust's custodian of certain books
and records of the Trust as required under Rule 31a-1(b) of the
1940 Act;
c. Prepare the Trust's federal, state and local income tax returns
for review by the Trust's independent accountants and filing by
the Trust's treasurer;
d. Review calculation, submit for approval by officers of the Trust
and arrange for payment of the Trust's expenses;
e. Prepare for review and approval by officers of the Trust
financial information for the Trust's semi-annual and annual
reports, proxy statements and other communications required or
otherwise to be sent to Trust shareholders, and arrange for the
printing and dissemination of such reports and communications to
shareholders;
f. Prepare for review by an officer of and legal counsel for the
Trust the Trust's periodic financial reports required to be filed
with the Securities and Exchange Commission ("SEC") on Form N-SAR
and financial information required by Form N-1A and such other
reports, forms or filings as may be mutually agreed upon;
g. Prepare reports relating to the business and affairs of the Trust
as may be mutually agreed upon and not otherwise prepared by the
Trust's investment adviser, custodian, legal counsel or
independent accountants;
h. Make such reports and recommendations to the Board concerning the
performance of the independent accountants as the Board may
reasonably request;
i. Make such reports and recommendations to the Board concerning the
performance and fees of the Trust's custodian and transfer and
dividend disbursing agent ("Transfer Agent") as the Board may
reasonably request or deems appropriate;
j. Oversee and review calculations of fees paid to the Trust's
investment adviser, custodian and Transfer Agent;
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<PAGE>
k. Consult with the Trust's officers, independent accountants, legal
counsel, custodian and Transfer Agent in establishing the
accounting policies of the Trust;
l. Respond to, or refer to the Trust's officers or Transfer Agent,
shareholder inquiries relating to the Trust;
m. Provide periodic testing of portfolios to assist the Trust's
investment adviser in complying with Internal Revenue Code
mandatory qualification requirements, the requirements of the
1940 Act and Trust prospectus limitations as may be mutually
agreed upon;
n. Review and provide assistance on shareholder communications;
o. Maintain general calendar for the Trust;
p. Maintain copies of the Trust's charter and by-laws and copies of
minutes of meetings of the Board of Trustees of the Trust and
meeting of shareholders of the Trust;
q. File annual and semi-annual shareholder reports with the
appropriate regulatory agencies; review text of "President's
letters" to shareholders and "Management's Discussion of Trust
Performance" (which shall also be subject to review by the
Trust's legal counsel);
r. Organize, attend and prepare minutes of shareholder meetings;
s. Provide consultation on regulatory matters relating to portfolio
management, Trust operations and any potential changes in the
Trust's investment policies, operations or structure; act as
liaison to legal counsel to the Trust and, where applicable, to
legal counsel to the Trust's independent Board members;
t. Maintain continuing awareness of significant emerging regulatory
and legislative developments which may affect the Trust, update
the Board and the investment adviser on those developments and
provide related planning assistance where requested or
appropriate;
u. Develop or assist in developing guidelines and procedures to
improve overall compliance by the Trust and its various agents;
v. Counsel and assist the Trust in the handling of routine
regulatory examinations and work closely with the Trust's legal
counsel in response to any non-routine regulatory matters;
Subject to review and comment by the Trust's legal counsel:
w. Prepare and file with the SEC amendments to the Trust's
registration statement, including updating the Prospectus and
Statement of Additional Information, where applicable;
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<PAGE>
x. Prepare and file with the SEC proxy statements; provide
consultation on proxy solicitation matters;
y. Prepare agenda and background materials for Board meetings, make
presentations where appropriate, prepare minutes and follow-up on
matters raised at Board meetings; and
z. Prepare and file with the SEC Rule 24f-2 notices.
aa. Perform Blue Sky services pursuant to the specific instructions
of the Trust and as detailed in Schedule B to this Agreement.
The Bank shall provide the office facilities and the personnel required by it to
perform the services contemplated herein.
7. FEES; EXPENSES; EXPENSE REIMBURSEMENT
The Bank shall receive from the Company such compensation for the
Bank's services provided pursuant to this Agreement as may be agreed to from
time to time in a written fee schedule approved by the parties and initially set
forth in the Fee Schedule to this Agreement. The fees are accrued daily and
billed monthly and shall be due and payable upon receipt of the invoice. The
Trust shall pay to the Bank any and all compensation and reimbursement of
expense that are not paid to the Bank by the Company. Upon the termination of
this Agreement before the end of any month, the fee for the part of the month
before such termination shall be prorated according to the proportion which such
part bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. In addition, the Company shall reimburse the
Bank for its out-of-pocket costs incurred in connection with this Agreement.
The Company agrees promptly to reimburse the Bank for any equipment
and supplies specially ordered by or for the Trust, or the Company, through the
Bank and for any other expenses not contemplated by this Agreement that the Bank
may incur on the Trust's or Company's behalf, at the Trust's or the Company's
request or with the Trust's or the Company's consent.
The Trust will bear all expenses that are incurred in its operation
and not specifically assumed by the Bank. Expenses to be borne by the Trust,
include, but are not limited to: organizational expenses; cost of services
of independent accountants and outside legal and tax counsel (including such
counsel's review of the Trust's registration statement, proxy materials,
federal and state tax qualification as a regulated investment company and
other reports and materials prepared by the Bank under this Agreement); cost
of any services contracted for by the Trust directly from parties other than
the Bank; cost of trading operations and brokerage fees, commissions and
transfer taxes in connection with the purchase and sale of securities for the
Trust; investment advisory fees; taxes, insurance premiums and other fees and
expenses applicable to its operation; costs incidental to any meetings of
shareholders including, but not limited to, legal and accounting fees, proxy
filing fees and the costs of preparation, filing (edgarization), printing and
mailing of any proxy materials; costs incidental to Board meetings, including
fees and expenses of Board members; the salary and expenses of any officer,
director\trustee or employee of the Trust; costs incidental to the
preparation (other than pursuant to Section 6W. of this Agreement), filing
(edgarization), printing and distribution of the Trust's registration
statements and any amendments thereto and shareholder reports; cost of
typesetting
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<PAGE>
and printing of prospectuses; cost of preparation and filing of the Trust's
tax returns and Form N-SAR (other than pursuant to Section 6f. of this
Agreement), and all notices, registrations and amendments associated with
applicable federal and state tax and securities laws; all applicable
registration fees and filing fees required under federal and state securities
laws; fidelity bond and directors' and officers' liability insurance; and
cost of independent pricing services used in computing the Trust's net asset
value.
The Bank is authorized to and may employ or associate with such person or
persons as the Bank may deem desirable to assist it in performing its duties
under this Agreement; provided, however, that the compensation of such person or
persons shall be paid by the Bank and that the Bank shall be as fully
responsible to the Trust for the acts and omissions of any such person or
persons as it is for its own acts and omissions.
8. INSTRUCTIONS AND ADVICE
At any time, the Bank may apply to any officer of the Trust for
instructions and may consult with its own legal counsel or outside counsel for
the Trust or the independent accountants for the Trust at the expense of the
Trust, with respect to any matter arising in connection with the services to be
performed by the Bank under this Agreement. The Bank shall not be liable, and
shall be indemnified by the Trust, for any action taken or omitted by it in good
faith in reliance upon any such instructions or advice or upon any paper or
document believed by it to be genuine and to have been signed by the proper
person or persons. The Bank shall not be held to have notice of any change of
authority of any person until receipt of written notice thereof from the Trust.
Nothing in this paragraph shall be construed as imposing upon the Bank any
obligation to seek such instructions or advice, or to act in accordance with
such advice when received.
9. LIMITATION OF LIABILITY AND INDEMNIFICATION
The Bank shall be responsible for the performance of only such
duties as are set forth in this Agreement and, except as otherwise provided
under Section 6, shall have no responsibility for the actions or activities
of any other party, including other service providers. The Bank shall have
no liability for any error of judgment or mistake of law or for any loss or
damage resulting from the performance or nonperformance of its duties
hereunder unless solely caused by or resulting from the negligence or willful
misconduct of the Bank, its officers or employees. The Bank shall not be
liable for any special, indirect, incidental, or consequential damages of any
kind whatsoever (including, without limitation, attorneys' fees) under any
provision of this Agreement or for any such damages arising out of any act or
failure to act hereunder. In any event, the Bank's liability under this
Agreement shall be limited to its total annual compensation earned and fees
paid hereunder during the preceding twelve months for any liability or loss
suffered by the Trust including, but not limited to, any liability relating
to qualification of the Trust as a regulated investment company or any
liability relating to the Trust's compliance with any federal or state tax or
securities statute, regulation or ruling.
The Bank shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its control, including without
limitation, work stoppage, power or other mechanical failure, computer virus,
natural disaster, governmental action or communication disruption.
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The Company and the Trust shall indemnify and hold the Bank harmless
from all loss, cost, damage and expense, including reasonable fees and expenses
for counsel, incurred by the Bank resulting from any claim, demand, action or
suit in connection with the Bank's acceptance of this Agreement, any action or
omission by it in the performance of its duties hereunder, or as a result of
acting upon any instructions reasonably believed by it to have been duly
authorized by the Company and the Trust, provided that this indemnification
shall not apply to actions or omissions of the Bank, its officers or employees
in cases of its or their own gross negligence or willful misconduct.
The indemnification contained herein shall survive the termination of
this Agreement.
10. CONFIDENTIALITY
The Bank agrees that, except as otherwise required by law or in
connection with any required disclosure to a banking or other regulatory
authority, it will keep confidential all records and information in its
possession relating to the Trust or its shareholders or shareholder accounts and
will not disclose the same to any person except at the request or with the
written consent of the Trust.
11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS; RECORDS
The Trust assumes full responsibility for complying with all
securities, tax, commodities and other laws, rules and regulations applicable to
it.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Bank agrees that all records which it maintains for the Trust shall at all
times remain the property of the Trust, shall be readily accessible during
normal business hours, and shall be promptly surrendered upon the termination of
the Agreement or otherwise on written request. The Bank further agrees that all
records which it maintains for the Trust pursuant to Rule 31a-1 under the 1940
Act will be preserved for the periods prescribed by Rule 31a-2 under the 1940
Act unless any such records are earlier surrendered as provided above. Records
shall be surrendered in usable machine-readable form.
12. SERVICES NOT EXCLUSIVE
The services of the Bank to the Trust are not to be deemed exclusive,
and the Bank shall be free to render similar services to others. The Bank
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Trust from time to time, have no
authority to act or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
13. TERM, TERMINATION AND AMENDMENT
This Agreement shall become effective on the date of its execution and
shall remain in full force and effect from the effective date for an initial
term of three years from the effective date and shall automatically continue in
full force and effect after such initial term unless either party terminates
this Agreement by written notice to the other party at least sixty (60) days
prior to the expiration of the initial term. Either party may terminate this
Agreement at any time after the initial term upon at least sixty (60) days'
prior written notice to the other party. Termination of this Agreement with
respect to any given Investment Fund shall in no way affect the continued
validity of this Agreement with respect to any other Investment Fund. Upon
termination of this Agreement, the Company shall pay to the Bank such
8
<PAGE>
compensation and any reimbursable expenses as may be due under the terms hereof
as of the date of such termination, including reasonable out-of-pocket expenses
associated with such termination. Should this Agreement be terminated by the
Company or the Trust prior to the end of the initial three year term, the
Company shall pay to the Bank any fees which the Bank may have waived during the
initial three year term. The Trust shall pay to the Bank any and all
compensation and reimbursement of expense that are not paid to the Bank by the
Company. This Agreement may be modified or amended from time to time by mutual
written agreement of the parties hereto.
14. NOTICES
Any notice or other communication authorized or required by this
Agreement to be given to either party shall be in writing and deemed to have
been given when delivered in person or by confirmed facsimile, or posted by
certified mail, return receipt requested, to the following address (or such
other address as a party may specify by written notice to the other): If to the
Company: RWB Advisory Services, Inc., 1190 Saratoga Avenue, Suite 200, San Jose,
CA 95129, Attn: Alex Potts, (408)247-1108 if to the Trust: SA Funds - Investment
Trust, 1190 Saratoga Avenue, Suite 200, San Jose, CA 95129, Attn: Alex Potts,
fax (408) 247-1108; if to the Bank: State Street Bank and Trust Company, 2
Avenue de Lafayette, Boston, Massachusetts 02111-1724, Attn: Fund
Administration Legal Department, fax: (617)662-3805.
15. NON-ASSIGNABILITY
This Agreement shall not be assigned by any party hereto without the
prior consent in writing of the other two parties, except that the Bank may
assign this Agreement to a successor of all or a substantial portion of its
business, or to a party controlling, controlled by or under common control with
the Bank.
16. SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of
the Trust the Company and the Bank and their respective successors and permitted
assigns.
17. ENTIRE AGREEMENT
This Agreement contains the entire understanding between the parties
hereto with respect to the subject matter hereof and supersedes all previous
representations, warranties or commitments regarding the services to be
performed hereunder whether oral or in writing.
18. WAIVER
The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver nor shall it
deprive such party of the right thereafter to insist upon strict adherence to
that term or any term of this Agreement. Any waiver must be in writing signed
by the waiving party.
9
<PAGE>
19. YEAR 2000
State Street will take reasonable steps to ensure that its products
(and those of its third-party suppliers) reflect the available state of the
art technology to offer products that are Year 2000 compliant, including, but
not limited to, century recognition of dates, calculations that correctly
compute same-century and multi-century formulas and date values, and
interface values that reflect the date issues arising between now and the
next one hundred years.
If any changes are required, State Street will make the changes to
its products at no cost to Customer, and in a commercially reasonable time
frame and will require third-party suppliers to do likewise.
20. SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, the
balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
21. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
22. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
SA FUNDS-INVESTMENT TRUST
By: /s/ John J. Bowen, Jr.
--------------------------------
Name: John J. Bowen, Jr.
--------------------------------
Title: President and Chief Executive Officer
--------------------------------
RWB ADVISORY SERVICES, INC.
By: /s/ John J. Bowen, Jr.
--------------------------------
Name: John J. Bowen, Jr.
--------------------------------
Title: President and Chief Executive Officer
--------------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Kathleen C. Cuocolo
--------------------------------
Name: Kathleen C. Cuocolo
--------------------------------
Title: Senior Vice President
--------------------------------
10
<PAGE>
ADMINISTRATION AGREEMENT
SA FUNDS
SCHEDULE A
LISTING OF INVESTMENT FUNDS AND AUTHORIZED SHARES
Investment Fund Authorized Shares
SA Fixed Income Fund Unlimited
SA U.S. Market Fund Unlimited
SA U.S. HBtM Fund Unlimited
SA U.S. Small Fund Unlimited
SA International HBtM Fund Unlimited
SA International Small Fund Unlimited
11
<PAGE>
ADMINISTRATION AGREEMENT
SA FUNDS
SCHEDULE B
NOTICE FILING WITH
STATE SECURITIES BANKS
AT THE SPECIFIC DIRECTION OF THE TRUST, THE BANK WILL PREPARE REQUIRED
DOCUMENTATION AND MAKE NOTICE FILINGS IN ACCORDANCE WITH THE SECURITIES LAWS OF
EACH JURISDICTION IN WHICH TRUST SHARES ARE TO BE OFFERED OR SOLD PURSUANT TO
INSTRUCTIONS GIVEN TO THE BANK BY THE TRUST.
THE TRUST SHALL BE SOLELY RESPONSIBLE FOR THE DETERMINATION (i) OF THOSE
JURISDICTIONS IN WHICH NOTICE FILINGS ARE TO BE SUBMITTED AND (ii) THE NUMBER OF
TRUST SHARES TO BE PERMITTED TO BE SOLD IN EACH SUCH JURISDICTION. IN THE EVENT
THAT THE BANK BECOMES AWARE OF (a) THE SALE OF TRUST SHARES IN A JURISDICTION IN
WHICH NO NOTICE FILING HAS BEEN MADE OR (b) THE SALE OF TRUST SHARES IN EXCESS
OF THE NUMBER OF TRUST SHARES PERMITTED TO BE SOLD IN SUCH JURISDICTION, THE
BANK SHALL REPORT SUCH INFORMATION TO THE TRUST, AND IT SHALL BE THE TRUST'S
RESPONSIBILITY TO DETERMINE APPROPRIATE CORRECTIVE ACTION AND INSTRUCT THE BANK
WITH RESPECT THERETO.
The Blue Sky services shall consist of the following:
1. Filing of Trust's Initial Notice Filings, as directed by the Trust;
2. Filing of Trust's renewals and amendments as required;
3. Filing of amendments to the Trust's registration statement where
required;
4. Filing Trust sales reports where required;
5. Payment at the expense of the Trust of all Trust Notice Filing fees;
6. Filing the Prospectuses and Statements of Additional Information and
any amendments or supplements thereto where required;
7. Filing of annual reports and proxy statements where required; and
8. The performance of such additional services as the Bank and the Trust
may agree upon in writing.
Unless otherwise specified in writing by the Bank, Blue Sky services by the Bank
shall not include determining the availability of exemptions under a
jurisdiction's blue sky law. Any such determination shall be made by the Trust
or its legal counsel. In connection with the services described herein, the
Trust shall issue in favor of the Bank a power of attorney to submit Notice
Filings on behalf of the Trust, which power of attorney shall be substantially
in the form of Exhibit I attached hereto.
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<PAGE>
EXHIBIT I
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of _________________, 1998 that SA Funds -
Investment Trust with principal offices at 1190 Saratoga Avenue, Suite 200, San
Jose, CA 95129 (the "Trust") makes, constitutes, and appoints STATE STREET BANK
AND TRUST COMPANY (the "Bank") with principal offices at 225 Franklin Street,
Boston, Massachusetts its lawful attorney-in-fact for it to do as if it were
itself acting, the following:
1. REGISTRATION OF TRUST SHARES. The power to register shares of the Trust in
each jurisdiction in which Trust shares are offered or sold and in
connection therewith the power to prepare, execute, and deliver and file
any and all Trust applications, including without limitation, applications
to register shares, consents, including consents to service of process,
reports, including without limitation, all periodic reports, claims for
exemption, or other documents and instruments now or hereafter required or
appropriate in the judgment of the Bank in connection with the registration
of Trust shares.
2. AUTHORIZED SIGNERS. Pursuant to this Limited Power of Attorney, individuals
holding the titles of Officer, Blue Sky Manager, or Senior Blue Sky Bank at
the Bank shall have authority to act on behalf of the Trust with respect to
item 1 above.
The execution of this limited power of attorney shall be deemed coupled with an
interest and shall be revocable only upon receipt by the Bank of such
termination of authority. Nothing herein shall be construed to constitute the
appointment of the Bank as or otherwise authorize the Bank to act as an officer,
director or employee of the Trust.
IN WITNESS WHEREOF, the Trust has caused this Agreement to be executed in its
name and on its behalf by and through its duly authorized officer, as of the
date first written above.
SA FUNDS - Investment Trust
By:/s/ John J. Bowen, Jr.
---------------------------
Name: John J. Bowen, Jr.
-------------------------
Title: President
------------------------
13
<PAGE>
Exhibit 23(h)(iii)
SA FUNDS - INVESTMENT TRUST
SHAREHOLDER SERVICE AGREEMENT
AGREEMENT made this 8th day of July 1999, by and between SA FUNDS -
INVESTMENT TRUST, a Delaware business trust (the "Trust"), and RWB ADVISORY
SERVICES INC. ("RWB"), a Maryland corporation.
WHEREAS, the Trust has been organized and operates as an investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act")for the purpose of investing and reinvesting its assets in
securities, as set forth in its Registration Statement under the 1940 Act and
the Securities Act of 1933, as such Registration Statement may from time to time
be amended and supplemented; and
WHEREAS, the Trust desires to retain RWB to furnish certain shareholder
services to the Trust, and RWB is willing to furnish such services, on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF RWB. The Trust hereby appoints RWB to serve as
shareholder service agent to the Trust, subject to the direction of the Board of
Trustees and the officers of the Trust for the period and on the terms
hereinafter set forth. RWB hereby accepts such appointment and agrees to
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services described herein for the
compensation as provided in Section 3 of this Agreement.
The Trust will initially consist of the series and/or class(es) of
shares (each a "Fund") listed in Schedule A to this Agreement. In the event that
the Trust establishes one or more additional Funds with respect to which the
Trust wishes to retain RWB to act as service agent hereunder, the Trust shall
notify RWB in writing. Upon written acceptance by RWB, such Fund shall become
subject to the provisions of this Agreement to the same extent as the existing
Funds, except to the extent that such provisions (including those relating to
the compensation payable by the Trust and its Funds) may be modified with
respect to each additional Fund in writing by the Trust and RWB at the time of
the addition of the Fund.
2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following
services to each Fund:
A. Establish and maintain a toll-free telephone number for
shareholders of the Fund to use to obtain or receive up-to-date
account information;
B. Provide to shareholders of the Fund quarterly reports with
respect to the performance of the Fund, such reports to be
separate and apart from the Trust's semi-annual and annual
reports to shareholders; and
<PAGE>
C. Provide the shareholders of the Fund with such information
regarding the operation and affairs of the Fund, and their
investment in its shares, as they or the Trust may reasonably
request.
3. COMPENSATION OF RWB. For the services to be rendered by RWB as
provided in Section 2 of this Agreement, each Fund shall pay to RWB, at the end
of each month, a fee equal to one-twelfth of 0.25 percent of average daily net
assets of the Class S Shares of the Fund and one-twelfth of 0.05 percent of
average daily net assets of the Class I Shares of the Fund. If this Agreement is
terminated prior to the end of any month, the fee for such month shall be
prorated.
4. ACTIVITIES OF RWB. The services of RWB to the Trust or in respect of
a Fund are not to be deemed exclusive, and RWB shall be free to render similar
services to others as long as its services to the Trust or in respect of a Fund
are not impaired thereby.
5. RESPONSIBILITY OF RWB. In the performance of its duties hereunder,
RWB shall be obligated to exercise due care and diligence and to act in a timely
manner and in good faith to assure the accuracy and completeness of all services
performed under this Agreement. RWB shall be under no duty to take any action on
behalf of a Fund except as specifically set forth herein or as may be
specifically agreed to by RWB in writing. RWB shall be responsible for its own
negligent failure to perform its duties under this Agreement. In assessing
negligence for purposes of this Agreement, the parties agree that the standard
of care applied to RWB's conduct shall be the care that would be exercised by a
similarly situated service provider, supplying substantially the same services
under substantially similar circumstances.
No provision of this Agreement shall be deemed to protect RWB against
any liability to the Trust or its shareholders to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations under
this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective on
______, 1999, provided that prior to such date it shall have been approved by
the Board of Trustees of the Trust including a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust and shall
continue in effect until terminated by the Trust or RWB. This Agreement may at
any time be terminated without penalty by vote of the Board of Trustees of the
Trust on sixty days' written notice to RWB. This Agreement may be terminated by
RWB after ninety days' written notice to the Trust.
7. NOTICES. Any notices under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
<PAGE>
9. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
11. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the 8th day of July, 1999.
RWB ADVISORY SERVICES INC. SA FUNDS - INVESTMENT TRUST
By: /s/ John J. Bowen, Jr. By: /s/ John J. Bowen, Jr.
--------------------------- ----------------------------
John J. Bowen, Jr. John J. Bowen, Jr.
Title: President and Chief Title: President and Chief
Executive Officer Executive Officer
<PAGE>
SCHEDULE A
SA FUNDS - INVESTMENT TRUST
SA Fixed Income Fund - Class S Shares
SA U.S. Market Fund - Class S Shares
SA U.S. HBtM Fund - Class S Shares
SA U.S. Small Fund - Class S Shares
SA International HBtM Fund - Class S Shares
SA International Small Fund Class S Shares
SA Fixed Income Fund - Class I Shares
SA U.S. Fund - Class I Shares
SA U.S. HBtM Fund - Class I Shares
SA U.S. Small Fund - Class I Shares
SA International HBtM Fund - Class I Shares
SA International Small Fund - Class I Shares
